Investors Group Annual Report For the year ended 30 June 2023 19 Harris Street, Pyrmont, Sydney (NSW) Meeting of Securityholders The meeting of Securityholders will be held on Wednesday 25 October 2023 at 10:00am (Sydney time) at Level 1, Hart Room, Amora Hotel Jamison, 11 Jamison Street, Sydney NSW 2000. Acknowledgement of country Elanor is proud to work with the communities in which we operate, to manage and improve properties on land across Australia and New Zealand. We pay our respects to the traditional owners, their elders past, present and emerging and value their care and custodianship of these lands. Contents 04 — 2023 Highlights 06 — Environmental, Social and Governance Achievements 08 — Message from the Chair 10 — CEO’s Message 12 — Financial Report 13 — Directors’ Report 49 — Auditor’s Independence Declaration 50 — Consolidated Financial Statements 57 — Notes to the Consolidated Financial Statements 132 — Directors’ Declaration 133 — Independent Auditor’s Report 138 — Corporate Governance 139 — Securityholder Analysis 141 — Corporate Directory Financial Calendar OCT 25 October 2023 Meeting of Securityholders DEC FEB JUN AUG December 2023 Estimated interim distribution announcement and securities trade ex-distribution February 2024 Interim results announcement and interim distribution payment June 2024 Estimated final distribution announcement and securities trade ex-distribution August 2024 Full-year results announcement and final distribution payment SEP September 2024 Annual tax statements Responsible Entity Elanor Funds Management Limited (ABN 39 125 903 031). AFSL 398196. Elanor Investors Group comprises Elanor Investors Limited (ABN 33 169 308 187) and Elanor Investment Fund (ARSN 169 450 926). 3 2023 Highlights Growing the value of the funds management platform Strong growth in funds management EBITDA with material earnings accretion in FY24 from the Challenger transaction1. Actual FY23 Proforma FY23 (Post Challenger Transaction) $34.1m Recurring Funds Management Income (excl. acq fees) $17.1m Funds Management EBITDA $12.5m Core Earnings2 $20.9m Proforma FY23 Core Earnings3 19% on FY22 16% on FY22 31% on FY22 67% on FY23 actual 9.13cps FY23 Distribution per security $329m Managed Fund equity raised in FY23 relating to FUM of $591m $2.97bn Group FUM $6.2bn Proforma Group FUM4 32% on FY22 Well positioned for FUM growth 9% on FY22 109% on FY23 actual 1. Elanor acquired Challenger’s commercial real estate funds management business on 7 July 2023 2. Core Earnings for the prior comparative period included transactional income of $5.2 million 3. Proforma Core Earnings for FY23 assuming the acquisition of Challenger’s commercial real estate business completed on 1 July 2022 and generated incremental funds management EBITDA of $12m for the year ($8.4m after tax) 4. Post Challenger transaction which completed on 7 July 2023 4 Elanor Investors GroupAnnual Report 2023 Funds Under Management $6.2bn1 Retail $2.6bn Office $2.4bn Unlisted Retail Funds Listed and Unlisted Office Funds Hotels, Tourism & Leisure Healthcare Industrial $0.6bn Unlisted Hotel, Tourism and Leisure Funds $0.3bn $0.3bn Unlisted Healthcare Funds Unlisted Industrial Funds The Group’s investments are located across Australia and New Zealand Assets Hotels, Tourism & Leisure WA Commercial Retail Healthcare Industrial 1. Post Challenger transaction which completed on 7 July 2023 Darwin NT SA QLD Brisbane Auckland Sydney Canberra Wellington Adelaide VIC Melbourne TAS Hobart 5 5 Perth NSW Environmental, Social and Governance Achievements We continue to make positive and impactful social and environmental contributions to the communities in which we operate, and more broadly. Elanor’s ESG Committee is responsible for, and oversees, the Group’s ESG strategy. Elanor’s 2023 ESG Report summarises the Group’s achievements during the year and the direction for our future sustainability endeavours across our nine areas of focus. Environmental Elanor has now measured energy usage and scope 1 & 2 carbon emissions across its diverse and growing portfolio. In FY23 Elanor’s emissions intensity (using the location-based approach and excluding purchased carbon credits) was 33 kg-CO2e/m2, which was an improvement on FY22 of 35 kg-CO2e/m2. Elanor has incorporated climate change vulnerability assessments into the due diligence process for asset acquisitions. These important assessments look out to 2050 highlighting risks and mitigation strategies in relation to rising air temperatures, extreme rainfall, storm activity, flooding, bushfire and sea level rise. 6 Elanor's investment due diligence process incorporates comprehensive climate change vulnerability assessments Elanor Investors GroupAnnual Report 2023 Elanor continues to donate over 1% of core earnings to 'for purpose' organisations Social Elanor has strengthened its partnerships with The Smith Family and FSHD Global Research Foundation during the year. Elanor continues to donate over 1% of core earnings to 'for purpose' organisations. Elanor continues to enhance its employee engagement programs (including the Personal Growth Review program), wellness and mental health related initiatives, and learning and development resources for its people. Governance Elanor recently lodged its Modern Slavery Statement with the Australian Federal Government and further enhanced its ESG Policy outlining how ESG risks and opportunities are managed across the Group. Elanor strives to do business ‘the right way’ and with a robust ESG governance framework. Elanor recently acquired three significant institutional investment mandates, having satisfied extensive ESG due diligence reviews. 7 7 Message from the Chair On behalf of the Board, I am pleased to present Elanor Investors Group’s Annual Report, including its Financial Statements for the year ended 30 June 2023. We saw more challenging market conditions for the property sector over the year. Nonetheless, the Group has had another successful year financially, and even more so strategically. Financially, the Group grew funds under management by $250 million to $3.0 billion at 30 June 2023 and achieved Core Earnings of $12.5 million or 10.15 cents per security. Given the economic environment, this was a solid result. Strategically, we successfully executed a key objective of the Group, that is, to grow funds under management through strategic acquisitions, by completing the Challenger real estate funds management business acquisition on 7 July 2023. The successful completion of this ‘step-change’ transaction has grown the Group’s funds under management to $6.2 billion (a 128% increase from $2.7 billion at 30 June 2022) and positions the Group for continued success. Results The results for the 2023 Financial Year reflect the strength of the Group’s funds management platform. Funds management income grew strongly over the year, increasing 20% to $49.5 million, with recurring funds management revenues increasing by 19% to $34.1 million. Growing recurring management fees remains a major focus of the Group. The aggregate property valuations of the Group’s managed fund investments have proved resilient in the prevailing market conditions, decreasing by less than 0.7% over the year on a like-for-like basis. This result reflects improved market rents and the strength of the operating performance of the assets, particularly in the Retail, Healthcare and Hotel sectors. Notwithstanding challenging market conditions in the commercial office sector, valuations of the Group’s office portfolio reduced by only 5.0%. Elanor’s gearing of 31.7%, combined with the available capital from the realisation and recycling of Elanor’s managed fund co-investments, provides the Group with significant capacity to continue to grow funds under management. Delivering Securityholder Value In July 2023, we completed the acquisition of Challenger Limited’s (Challenger) Australian real estate funds management business for $37.7 million. Elanor issued new securities to Challenger representing 13.6% of the Group as consideration for the acquisition. As part of the transaction, Elanor and Challenger also entered into a strategic partnership whereby Elanor has become Challenger’s real estate funds management partner in Australia and New Zealand, with Fidante (Challenger’s multi-affiliate funds management business) now Elanor’s exclusive distribution partner for its real estate managed funds. The acquisition delivers a step-change in size and scale for Elanor, increasing funds under management to $6.2 billion with the addition of two significant institutional real estate mandates in Challenger Life Company and the Abu Dhabi Investment Council (ADIC). The strategic partnership with Fidante, Challenger’s market leading capital raising platform, further positions the Group for continuing growth. Further detail and commentary of the 2023 Financial Year results and specific achievements can be found in the CEO’s Message that follows. Funds Under Management Following completion of the Challenger transaction $6.2bn 8 Elanor Investors GroupAnnual Report 2023 Sustainability Elanor continues to make positive and impactful social and environmental contributions to the communities in which we operate, and more broadly. The Group’s Environmental, Social and Governance (ESG) Management Committee, chaired by the CEO, is responsible for, and oversees, the Group’s ESG strategy. Elanor will shortly publish its 2023 ESG Report which summarises our ESG achievements during the year and sets the direction for our future sustainability endeavours across our nine areas of ESG focus. Acknowledgements The strength of the Group’s results and the successful completion of the Challenger transaction is a testament to the capability of Elanor’s funds management platform, led by Elanor’s CEO and senior executives. I thank them for their dedication and energy in continuing to execute the Group’s key strategic objective, to become the leading Australian real estate funds management group known for driving exceptional investment returns for our capital partners. On behalf of the Elanor Board, I would like to thank our capital partners and Securityholders for your ongoing support this year. I look forward to discussing the business further at our Annual General Meeting in Sydney on 25 October 2023. Yours sincerely, Paul Bedbrook Independent Non-Executive Director and Chair Governance The Board continues to strengthen the Group’s corporate governance structure and processes consistent with Elanor’s growth, strategic intent and operating activities. Recently, the Group has appointed two new Non-Executive Directors to the Elanor Board, Victor Rodriguez in July 2023 (as Challenger’s nominee to the Board) and Ian Mackie as an Independent Non-Executive Director (and Chair-designate) in August 2023. Ian’s appointment follows my notification to the Board of my intention to retire as an Independent Non-Executive Director and Chair of Elanor at the end of 2023. It has been rewarding and enjoyable to have chaired Elanor Investors Group since its ASX Listing in 2014. Great to contribute and be part of a successful real estate funds management group, but now after nine years, and with the recent transformational transaction with Challenger, the timing is right for succession to a new Chair. Mayfair Hotel, Adelaide, SA 9 CEO’s Message I am pleased to report that over the year we made significant progress toward our mission for the Group: to grow Elanor into the leading real estate funds management group known for delivering exceptional investment returns and making positive and impactful social and environmental contributions to our communities. I am particularly pleased with the performance of our managed funds for our capital partners over the year. In challenging market conditions, valuations of the Group’s comparable managed funds assets decreased by less than 0.7% on a like-for-like basis. The Group achieved strong growth in funds management EBITDA in FY23 and is well positioned to achieve material earnings accretion in FY24 from the successful completion of the acquisition of Challenger Limited’s real estate funds management business. These achievements contribute significant value to Elanor’s funds management platform. Key Results • Core Earnings for the year of $12.5 million (10.15 cents per security) • Distribution for the year of 9.13 cents per security (90% payout ratio) • Funds management income of $49.5 million for the year (20% increase on FY22); recurring funds management income increased 19% to $34.1 million • Funds management EBITDA increased by 16% to $17.1 million 10 Funds under management has grown by 128% to $6.2 billion since 30 June 2022 following the acquisition of Challenger’s real estate funds management business on 7 July 2023. • Strengthened recurring funds management fees – increasing annualised run-rate base management fees to $40.7 million (from $23.6 million in FY23) • Step-change in size and scale – increasing funds under management from $3.0 billion to $6.2 billion • Positioning for growth – with Challenger becoming Elanor’s largest Securityholder (13.6%) and Abu Dhabi Investment Council holding 3% • Exclusive distribution agreement with Fidante combines Elanor’s leading real estate funds management platform with Challenger’s best in class capital raising capability Combining Elanor’s real estate funds management capability with Challenger’s market leading capital raising platform delivers significant size and scale benefits and positions us for further strong growth. Sustainability Elanor’s mission is to become the leading real estate funds management business known for delivering exceptional investment returns for its capital partners whilst making positive and impactful social and environmental contributions to the communities in which it operates, and more broadly. Funds Management We are pleased with the performance of the Group’s managed fund investments during a period of challenging market conditions. The resilience of the Group’s managed fund investments and stability of asset valuations reflect our risk first approach to real estate investing and highly active approach to asset management. Our differentiated real estate funds management capability positions us well for further growth. We believe that the prevailing economic environment will present an increasing number of deep value investment opportunities. Challenger Transaction The acquisition of Challenger’s real estate funds management business is a milestone achievement for Elanor Investors Group. Growing funds under management through strategic acquisitions is a key objective of the Group. The acquisition was completed on 7 July 2023 and successfully integrated into Elanor’s funds management platform during July 2023. The integration of Challenger’s real estate business into our funds management platform has realised significant transaction synergies for the Group and underpins our forecast incremental funds management EBITDA of over $12 million in FY24. The transaction delivers significant Securityholder value through: • Material Earnings Accretion – based on forecast incremental FY24 funds management EBITDA of $12 million, reflecting a transaction EBITDA multiple of ~3x Elanor Investors GroupAnnual Report 2023 We are pleased with the Group’s pipeline of high quality funds management opportunities emerging from the prevailing investment environment. We continue to pursue strategic opportunities to grow funds under management. The Group is well positioned to grow Securityholder value. I wish to sincerely thank my fellow executives across the Group, our Seniors Advisors, and my fellow Executive Management Committee and Board members. The progress we have achieved over the year is a testimony to our commitment to growing Elanor into the leading Australian real estate funds management group. Yours sincerely, Glenn Willis Managing Director and Chief Executive Officer With a strong presence across regional Australia, Elanor provides a significant number of employment opportunities for people in the regions from both the ongoing operation of our investments and the delivery of value-add capital expenditure projects at the assets. We have now measured energy usage and scope 1 and 2 carbon emissions across our managed fund portfolio. In FY23, Elanor’s emissions intensity (using the location-based approach and excluding purchased carbon credits) was 33 kg-CO2e/m2, which was an improvement on FY22 of 35 kg-CO2e/m2. Elanor has incorporated climate change vulnerability assessments into the due diligence process for all investment acquisitions. These important assessments look out to 2050 and highlight risks and mitigation strategies in relation to rising air temperatures, extreme rainfall, storm activity, flooding, bushfire and sea level rises. Furthermore, during the year we continued to drive initiatives to strengthen collaboration with the communities in which our investments are located. In addition, we are progressing initiatives to improve energy efficiency across our portfolio, including the installation of rooftop renewable energy generation at our retail shopping centres. Sustainable procurement initiatives at our hotels and leisure parks also remains a key focus. The Group’s strategic partnerships with The Smith Family to support disadvantaged youth and the FSHD Foundation to support treatment and medical research, are fundamental to the Group’s mission to make positive and impactful social contributions to our communities. Capital Management We remain focused on maintaining conservative gearing for the Group while retaining capacity to pursue funds management growth opportunities. The Group has significant capital management opportunities to unlock material Securityholder value through the realisation and recycling of our co-investments. Furthermore, we are focused on executing strategic, ‘capital-lite’, initiatives to grow ROE and EPS. Outlook The Group’s key strategic objective remains unchanged: to deliver strong investment returns for Elanor’s capital partners and grow Securityholder value. The resilience of the Group’s managed fund investments and stability of asset valuations reflect our risk first approach to real estate investing and highly active approach to asset management. Funds Management Income Recurring Funds Management Income (excl. acq fees) $49.5m $34.1m 20% on FY22 19% on FY22 11 Financial Report For the year ended 30 June 2023 13 — Directors’ Report 49 — Auditor’s Independence Declaration 50 — Consolidated Statements of Profit or Loss 51 — Consolidated Statements of Comprehensive Income 52 — Consolidated Statements of Financial Position 54 — Consolidated Statements of Changes in Equity 56 — Consolidated Statements of Cash Flows 57 — Notes to the Consolidated Financial Statements 132 — Directors’ Declaration to Stapled Securityholders 133 — Independent Auditor’s Report 12 12 Elanor Investors GroupAnnual Report 2023 Directors’ Report ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP DIRECTORS' REPORT ELANOR INVESTORS GROUP DIRECTORS' REPORT ELANOR INVESTORS GROUP DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT The Directors of Elanor Investors Limited (Company), and the Directors of Elanor Funds Management Limited The Directors of Elanor Investors Limited (Company), and the Directors of Elanor Funds Management Limited The Directors of Elanor Investors Limited (Company), and the Directors of Elanor Funds Management Limited (Responsible Entity or Manager), as responsible entity of the Elanor Investment Fund, present their report (Responsible Entity or Manager), as responsible entity of the Elanor Investment Fund, present their report The Directors of Elanor Investors Limited (Company), and the Directors of Elanor Funds Management Limited The Directors of Elanor Investors Limited (Company), and the Directors of Elanor Funds Management Limited The Directors of Elanor Investors Limited (Company), and the Directors of Elanor Funds Management Limited (Responsible Entity or Manager), as responsible entity of the Elanor Investment Fund, present their report The Directors of Elanor Investors Limited (Company), and the Directors of Elanor Funds Management Limited together with the consolidated financial report of Elanor Investors Group (Group, Consolidated Group or together with the consolidated financial report of Elanor Investors Group (Group, Consolidated Group or (Responsible Entity or Manager), as responsible entity of the Elanor Investment Fund, present their report The Directors of Elanor Investors Limited (Company), and the Directors of Elanor Funds Management Limited (Responsible Entity or Manager), as responsible entity of the Elanor Investment Fund, present their report The Directors of Elanor Investors Limited (Company), and the Directors of Elanor Funds Management Limited (Responsible Entity or Manager), as responsible entity of the Elanor Investment Fund, present their report together with the consolidated financial report of Elanor Investors Group (Group, Consolidated Group or (Responsible Entity or Manager), as responsible entity of the Elanor Investment Fund, present their report Elanor) and the consolidated financial report of the Elanor Investment Fund (EIF Group) for the year ended 30 Elanor) and the consolidated financial report of the Elanor Investment Fund (EIF Group) for the year ended 30 together with the consolidated financial report of Elanor Investors Group (Group, Consolidated Group or (Responsible Entity or Manager), as responsible entity of the Elanor Investment Fund, present their report together with the consolidated financial report of Elanor Investors Group (Group, Consolidated Group or (Responsible Entity or Manager), as responsible entity of the Elanor Investment Fund, present their report together with the consolidated financial report of Elanor Investors Group (Group, Consolidated Group or Elanor) and the consolidated financial report of the Elanor Investment Fund (EIF Group) for the year ended 30 together with the consolidated financial report of Elanor Investors Group (Group, Consolidated Group or June 2023 (year). June 2023 (year). Elanor) and the consolidated financial report of the Elanor Investment Fund (EIF Group) for the year ended 30 together with the consolidated financial report of Elanor Investors Group (Group, Consolidated Group or Elanor) and the consolidated financial report of the Elanor Investment Fund (EIF Group) for the year ended 30 together with the consolidated financial report of Elanor Investors Group (Group, Consolidated Group or Elanor) and the consolidated financial report of the Elanor Investment Fund (EIF Group) for the year ended 30 June 2023 (year). Elanor) and the consolidated financial report of the Elanor Investment Fund (EIF Group) for the year ended 30 June 2023 (year). Elanor) and the consolidated financial report of the Elanor Investment Fund (EIF Group) for the year ended 30 June 2023 (year). Elanor) and the consolidated financial report of the Elanor Investment Fund (EIF Group) for the year ended 30 June 2023 (year). The annual financial report of Elanor Investors Group comprises the Company and its controlled entities, June 2023 (year). The annual financial report of Elanor Investors Group comprises the Company and its controlled entities, June 2023 (year). June 2023 (year). The annual financial report of Elanor Investors Group comprises the Company and its controlled entities, including Elanor Investment Fund (Trust) and its controlled entities. The consolidated financial report of the including Elanor Investment Fund (Trust) and its controlled entities. The consolidated financial report of the The annual financial report of Elanor Investors Group comprises the Company and its controlled entities, The annual financial report of Elanor Investors Group comprises the Company and its controlled entities, The annual financial report of Elanor Investors Group comprises the Company and its controlled entities, including Elanor Investment Fund (Trust) and its controlled entities. The consolidated financial report of the The annual financial report of Elanor Investors Group comprises the Company and its controlled entities, EIF Group comprises Elanor Investment Fund and its controlled entities. EIF Group comprises Elanor Investment Fund and its controlled entities. including Elanor Investment Fund (Trust) and its controlled entities. The consolidated financial report of the The annual financial report of Elanor Investors Group comprises the Company and its controlled entities, including Elanor Investment Fund (Trust) and its controlled entities. The consolidated financial report of the The annual financial report of Elanor Investors Group comprises the Company and its controlled entities, including Elanor Investment Fund (Trust) and its controlled entities. The consolidated financial report of the EIF Group comprises Elanor Investment Fund and its controlled entities. including Elanor Investment Fund (Trust) and its controlled entities. The consolidated financial report of the EIF Group comprises Elanor Investment Fund and its controlled entities. including Elanor Investment Fund (Trust) and its controlled entities. The consolidated financial report of the EIF Group comprises Elanor Investment Fund and its controlled entities. including Elanor Investment Fund (Trust) and its controlled entities. The consolidated financial report of the EIF Group comprises Elanor Investment Fund and its controlled entities. Elanor Investors Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered EIF Group comprises Elanor Investment Fund and its controlled entities. Elanor Investors Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered EIF Group comprises Elanor Investment Fund and its controlled entities. EIF Group comprises Elanor Investment Fund and its controlled entities. Elanor Investors Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is Level 38, 259 George Street, Sydney NSW 2000. The Trust was office and principal place of business is Level 38, 259 George Street, Sydney NSW 2000. The Trust was Elanor Investors Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered Elanor Investors Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered Elanor Investors Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is Level 38, 259 George Street, Sydney NSW 2000. The Trust was Elanor Investors Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered registered as a managed investment scheme on 21 May 2014 and the Company was incorporated on 1 May registered as a managed investment scheme on 21 May 2014 and the Company was incorporated on 1 May office and principal place of business is Level 38, 259 George Street, Sydney NSW 2000. The Trust was Elanor Investors Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is Level 38, 259 George Street, Sydney NSW 2000. The Trust was Elanor Investors Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is Level 38, 259 George Street, Sydney NSW 2000. The Trust was registered as a managed investment scheme on 21 May 2014 and the Company was incorporated on 1 May office and principal place of business is Level 38, 259 George Street, Sydney NSW 2000. The Trust was 2014. 2014. registered as a managed investment scheme on 21 May 2014 and the Company was incorporated on 1 May office and principal place of business is Level 38, 259 George Street, Sydney NSW 2000. The Trust was registered as a managed investment scheme on 21 May 2014 and the Company was incorporated on 1 May office and principal place of business is Level 38, 259 George Street, Sydney NSW 2000. The Trust was registered as a managed investment scheme on 21 May 2014 and the Company was incorporated on 1 May 2014. registered as a managed investment scheme on 21 May 2014 and the Company was incorporated on 1 May 2014. registered as a managed investment scheme on 21 May 2014 and the Company was incorporated on 1 May 2014. registered as a managed investment scheme on 21 May 2014 and the Company was incorporated on 1 May 2014. The units of the Trust and the shares of the Company are combined and issued as stapled securities in the 2014. The units of the Trust and the shares of the Company are combined and issued as stapled securities in the 2014. 2014. The units of the Trust and the shares of the Company are combined and issued as stapled securities in the Group. The Group's securities are traded on the Australian Securities Exchange (ASX: ENN). The units of the Group. The Group's securities are traded on the Australian Securities Exchange (ASX: ENN). The units of the The units of the Trust and the shares of the Company are combined and issued as stapled securities in the The units of the Trust and the shares of the Company are combined and issued as stapled securities in the The units of the Trust and the shares of the Company are combined and issued as stapled securities in the Group. The Group's securities are traded on the Australian Securities Exchange (ASX: ENN). The units of the The units of the Trust and the shares of the Company are combined and issued as stapled securities in the Trust and shares of the Company cannot be traded separately and can only be traded as stapled securities. Trust and shares of the Company cannot be traded separately and can only be traded as stapled securities. Group. The Group's securities are traded on the Australian Securities Exchange (ASX: ENN). The units of the The units of the Trust and the shares of the Company are combined and issued as stapled securities in the Group. The Group's securities are traded on the Australian Securities Exchange (ASX: ENN). The units of the The units of the Trust and the shares of the Company are combined and issued as stapled securities in the Group. The Group's securities are traded on the Australian Securities Exchange (ASX: ENN). The units of the Trust and shares of the Company cannot be traded separately and can only be traded as stapled securities. Group. The Group's securities are traded on the Australian Securities Exchange (ASX: ENN). The units of the Although there is no ownership interest between the Trust and the Company, the Company is deemed to be Although there is no ownership interest between the Trust and the Company, the Company is deemed to be Trust and shares of the Company cannot be traded separately and can only be traded as stapled securities. Group. The Group's securities are traded on the Australian Securities Exchange (ASX: ENN). The units of the Trust and shares of the Company cannot be traded separately and can only be traded as stapled securities. Group. The Group's securities are traded on the Australian Securities Exchange (ASX: ENN). The units of the Trust and shares of the Company cannot be traded separately and can only be traded as stapled securities. Although there is no ownership interest between the Trust and the Company, the Company is deemed to be Trust and shares of the Company cannot be traded separately and can only be traded as stapled securities. the parent entity of the Group under Australian Accounting Standards. the parent entity of the Group under Australian Accounting Standards. Although there is no ownership interest between the Trust and the Company, the Company is deemed to be Trust and shares of the Company cannot be traded separately and can only be traded as stapled securities. Although there is no ownership interest between the Trust and the Company, the Company is deemed to be Trust and shares of the Company cannot be traded separately and can only be traded as stapled securities. Although there is no ownership interest between the Trust and the Company, the Company is deemed to be the parent entity of the Group under Australian Accounting Standards. Although there is no ownership interest between the Trust and the Company, the Company is deemed to be the parent entity of the Group under Australian Accounting Standards. Although there is no ownership interest between the Trust and the Company, the Company is deemed to be the parent entity of the Group under Australian Accounting Standards. Although there is no ownership interest between the Trust and the Company, the Company is deemed to be the parent entity of the Group under Australian Accounting Standards. The Directors' report is a combined Directors' report that covers both the Company and the Trust. The financial the parent entity of the Group under Australian Accounting Standards. The Directors' report is a combined Directors' report that covers both the Company and the Trust. The financial the parent entity of the Group under Australian Accounting Standards. The Directors' report is a combined Directors' report that covers both the Company and the Trust. The financial the parent entity of the Group under Australian Accounting Standards. information for the Group is taken from the consolidated financial reports and notes. information for the Group is taken from the consolidated financial reports and notes. The Directors' report is a combined Directors' report that covers both the Company and the Trust. The financial The Directors' report is a combined Directors' report that covers both the Company and the Trust. The financial The Directors' report is a combined Directors' report that covers both the Company and the Trust. The financial information for the Group is taken from the consolidated financial reports and notes. The Directors' report is a combined Directors' report that covers both the Company and the Trust. The financial information for the Group is taken from the consolidated financial reports and notes. The Directors' report is a combined Directors' report that covers both the Company and the Trust. The financial information for the Group is taken from the consolidated financial reports and notes. The Directors' report is a combined Directors' report that covers both the Company and the Trust. The financial information for the Group is taken from the consolidated financial reports and notes. information for the Group is taken from the consolidated financial reports and notes. 1. 1. information for the Group is taken from the consolidated financial reports and notes. information for the Group is taken from the consolidated financial reports and notes. 1. 1. 1. 1. The following persons have held office as Directors of the Responsible Entity and Company during the year 1. The following persons have held office as Directors of the Responsible Entity and Company during the year 1. The following persons have held office as Directors of the Responsible Entity and Company during the year 1. and up to the date of this report: and up to the date of this report: The following persons have held office as Directors of the Responsible Entity and Company during the year The following persons have held office as Directors of the Responsible Entity and Company during the year The following persons have held office as Directors of the Responsible Entity and Company during the year and up to the date of this report: The following persons have held office as Directors of the Responsible Entity and Company during the year • Paul Bedbrook (Chair) • Paul Bedbrook (Chair) and up to the date of this report: The following persons have held office as Directors of the Responsible Entity and Company during the year and up to the date of this report: The following persons have held office as Directors of the Responsible Entity and Company during the year and up to the date of this report: and up to the date of this report: • Paul Bedbrook (Chair) • Glenn Willis (Managing Director and Chief Executive Officer) • Glenn Willis (Managing Director and Chief Executive Officer) and up to the date of this report: • Paul Bedbrook (Chair) • Paul Bedbrook (Chair) and up to the date of this report: • Paul Bedbrook (Chair) • Glenn Willis (Managing Director and Chief Executive Officer) • Paul Bedbrook (Chair) • Nigel Ampherlaw • Nigel Ampherlaw • Glenn Willis (Managing Director and Chief Executive Officer) • Paul Bedbrook (Chair) • Glenn Willis (Managing Director and Chief Executive Officer) • Paul Bedbrook (Chair) • Glenn Willis (Managing Director and Chief Executive Officer) • Nigel Ampherlaw • Glenn Willis (Managing Director and Chief Executive Officer) • Anthony Fehon • Anthony Fehon • Nigel Ampherlaw • Glenn Willis (Managing Director and Chief Executive Officer) • Nigel Ampherlaw • Glenn Willis (Managing Director and Chief Executive Officer) • Nigel Ampherlaw • Anthony Fehon • Nigel Ampherlaw • Su Kiat Lim • Su Kiat Lim • Anthony Fehon • Nigel Ampherlaw • Anthony Fehon • Nigel Ampherlaw • Anthony Fehon • Su Kiat Lim • Anthony Fehon • Karyn Baylis • Karyn Baylis • Su Kiat Lim • Anthony Fehon • Su Kiat Lim • Anthony Fehon • Su Kiat Lim • Karyn Baylis • Su Kiat Lim • Victor Rodriguez (appointed on 7 July 2023) • Victor Rodriguez (appointed on 7 July 2023) • Karyn Baylis • Su Kiat Lim • Karyn Baylis • Su Kiat Lim • Karyn Baylis • Victor Rodriguez (appointed on 7 July 2023) • Karyn Baylis • Victor Rodriguez (appointed on 7 July 2023) • Karyn Baylis • Victor Rodriguez (appointed on 7 July 2023) • Karyn Baylis • Victor Rodriguez (appointed on 7 July 2023) • Victor Rodriguez (appointed on 7 July 2023) • Victor Rodriguez (appointed on 7 July 2023) • Victor Rodriguez (appointed on 7 July 2023) 2. 2. 2. 2. 2. The principal activities of the Group are the management of investment funds and syndicates and the 2. The principal activities of the Group are the management of investment funds and syndicates and the 2. 2. The principal activities of the Group are the management of investment funds and syndicates and the 2. investment in, and operation of, a portfolio of real estate assets and real estate backed businesses. investment in, and operation of, a portfolio of real estate assets and real estate backed businesses. The principal activities of the Group are the management of investment funds and syndicates and the The principal activities of the Group are the management of investment funds and syndicates and the The principal activities of the Group are the management of investment funds and syndicates and the investment in, and operation of, a portfolio of real estate assets and real estate backed businesses. The principal activities of the Group are the management of investment funds and syndicates and the investment in, and operation of, a portfolio of real estate assets and real estate backed businesses. The principal activities of the Group are the management of investment funds and syndicates and the investment in, and operation of, a portfolio of real estate assets and real estate backed businesses. The principal activities of the Group are the management of investment funds and syndicates and the investment in, and operation of, a portfolio of real estate assets and real estate backed businesses. investment in, and operation of, a portfolio of real estate assets and real estate backed businesses. 3. 3. investment in, and operation of, a portfolio of real estate assets and real estate backed businesses. investment in, and operation of, a portfolio of real estate assets and real estate backed businesses. 3. 3. 3. 3. Distributions relating to the year ended 30 June 2023 comprise: 3. Distributions relating to the year ended 30 June 2023 comprise: 3. Distributions relating to the year ended 30 June 2023 comprise: 3. Distributions relating to the year ended 30 June 2023 comprise: Distributions relating to the year ended 30 June 2023 comprise: Distributions relating to the year ended 30 June 2023 comprise: Distributions relating to the year ended 30 June 2023 comprise: Distribution Distribution Distributions relating to the year ended 30 June 2023 comprise: Distributions relating to the year ended 30 June 2023 comprise: Distribution Interim Distribution Interim Distribution Distribution Distribution Distribution Interim Distribution Amount paid (cents per stapled security) Distribution Amount paid (cents per stapled security) Interim Distribution Interim Distribution Distribution Interim Distribution Amount paid (cents per stapled security) Payment date Distribution Payment date Interim Distribution Amount paid (cents per stapled security) Amount paid (cents per stapled security) Interim Distribution Amount paid (cents per stapled security) Payment date Interim Distribution Final Distribution Amount paid (cents per stapled security) Final Distribution Payment date Payment date Amount paid (cents per stapled security) Payment date Final Distribution Amount paid (cents per stapled security) Amount payable (cents per stapled security) Payment date Amount payable (cents per stapled security) Final Distribution Final Distribution Payment date Final Distribution Amount payable (cents per stapled security) Payment date Payment date Payment date Final Distribution Amount payable (cents per stapled security) Amount payable (cents per stapled security) Final Distribution Amount payable (cents per stapled security) Payment date Final Distribution Amount payable (cents per stapled security) Payment date Payment date Amount payable (cents per stapled security) Payment date Amount payable (cents per stapled security) Payment date Payment date Payment date Year Ended 30 June 2023 Year Ended 30 June 2023 Year Ended 30 June 2023 Year Ended 30 June 2023 Year Ended 30 June 2023 Year Ended 30 June 2023 7.51 Year Ended 30 June 2023 7.51 Year Ended 30 June 2023 7.51 28 February 2023 Year Ended 30 June 2023 28 February 2023 7.51 7.51 7.51 28 February 2023 7.51 28 February 2023 28 February 2023 7.51 28 February 2023 7.51 1.62 28 February 2023 1.62 28 February 2023 1.62 28 February 2023 31 August 2023 31 August 2023 1.62 1.62 1.62 31 August 2023 1.62 31 August 2023 31 August 2023 1.62 31 August 2023 1.62 31 August 2023 The Final Distribution of 1.62 cents per stapled security brings distributions in respect of the year ended 30 The Final Distribution of 1.62 cents per stapled security brings distributions in respect of the year ended 30 31 August 2023 31 August 2023 The Final Distribution of 1.62 cents per stapled security brings distributions in respect of the year ended 30 June 2023 to 9.13 cents per stapled security (2022:13.48 cents). June 2023 to 9.13 cents per stapled security (2022:13.48 cents). The Final Distribution of 1.62 cents per stapled security brings distributions in respect of the year ended 30 The Final Distribution of 1.62 cents per stapled security brings distributions in respect of the year ended 30 The Final Distribution of 1.62 cents per stapled security brings distributions in respect of the year ended 30 June 2023 to 9.13 cents per stapled security (2022:13.48 cents). The Final Distribution of 1.62 cents per stapled security brings distributions in respect of the year ended 30 13 June 2023 to 9.13 cents per stapled security (2022:13.48 cents). The Final Distribution of 1.62 cents per stapled security brings distributions in respect of the year ended 30 June 2023 to 9.13 cents per stapled security (2022:13.48 cents). The Final Distribution of 1.62 cents per stapled security brings distributions in respect of the year ended 30 June 2023 to 9.13 cents per stapled security (2022:13.48 cents). June 2023 to 9.13 cents per stapled security (2022:13.48 cents). June 2023 to 9.13 cents per stapled security (2022:13.48 cents). 1 1 June 2023 to 9.13 cents per stapled security (2022:13.48 cents). 1 1 1 1 1 1 Principal activities Principal activities Principal activities Principal activities Principal activities Principal activities Principal activities Principal activities Principal activities Distributions Distributions Distributions Distributions Distributions Distributions Distributions Distributions Distributions Directors Directors Directors Directors Directors Directors Directors Directors Directors 1 Directors' Report ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT Operating and financial review Operating and financial review Operating and financial review 4. 4. 4. OVERVIEW AND STRATEGY OVERVIEW AND STRATEGY OVERVIEW AND STRATEGY Elanor is a real estate funds management group with an investment focus on acquiring and unlocking value in Elanor is a real estate funds management group with an investment focus on acquiring and unlocking value in Elanor is a real estate funds management group with an investment focus on acquiring and unlocking value in real estate assets that generate high quality income and strong capital growth. Elanor's highly active approach real estate assets that generate high quality income and strong capital growth. Elanor's highly active approach real estate assets that generate high quality income and strong capital growth. Elanor's highly active approach to asset management is fundamental to delivering investment outperformance. to asset management is fundamental to delivering investment outperformance. to asset management is fundamental to delivering investment outperformance. Elanor's key investment sectors of focus are the retail, commercial office, industrial, healthcare and the Elanor's key investment sectors of focus are the retail, commercial office, industrial, healthcare and the Elanor's key investment sectors of focus are the retail, commercial office, industrial, healthcare and the accommodation hotels, tourism and leisure real estate sectors. accommodation hotels, tourism and leisure real estate sectors. accommodation hotels, tourism and leisure real estate sectors. During the year, Elanor increased its funds under management from $2.7 billion to $3.0 billion. Following the During the year, Elanor increased its funds under management from $2.7 billion to $3.0 billion. Following the During the year, Elanor increased its funds under management from $2.7 billion to $3.0 billion. Following the acquisition of the Challenger real estate business on 7 July 2023, the Group’s funds under management is acquisition of the Challenger real estate business on 7 July 2023, the Group’s funds under management is acquisition of the Challenger real estate business on 7 July 2023, the Group’s funds under management is now $6.2 billion. The growth in funds under management has been supported by strong growth in the Group's now $6.2 billion. The growth in funds under management has been supported by strong growth in the Group's now $6.2 billion. The growth in funds under management has been supported by strong growth in the Group's institutional and private wholesale investors base (refer to page 16 for a table detailing the Group's funds institutional and private wholesale investors base (refer to page 16 for a table detailing the Group's funds institutional and private wholesale investors base (refer to page 16 for a table detailing the Group's funds under management and investments as at 30 June 2023). under management and investments as at 30 June 2023). under management and investments as at 30 June 2023). Acquisition of Challenger real estate funds management business Acquisition of Challenger real estate funds management business Acquisition of Challenger real estate funds management business In July 2023, Elanor completed the acquisition of Challenger Limited’s (Challenger) Australian real estate funds In July 2023, Elanor completed the acquisition of Challenger Limited’s (Challenger) Australian real estate funds In July 2023, Elanor completed the acquisition of Challenger Limited’s (Challenger) Australian real estate funds management business for a consideration of $37.7 million. As part of the transaction, Elanor and Challenger management business for a consideration of $37.7 million. As part of the transaction, Elanor and Challenger management business for a consideration of $37.7 million. As part of the transaction, Elanor and Challenger also entered into a strategic partnership whereby Elanor has become Challenger’s real estate funds also entered into a strategic partnership whereby Elanor has become Challenger’s real estate funds also entered into a strategic partnership whereby Elanor has become Challenger’s real estate funds management partner in Australia and New Zealand and Fidante (Challenger’s multi-affiliate funds management partner in Australia and New Zealand and Fidante (Challenger’s multi-affiliate funds management partner in Australia and New Zealand and Fidante (Challenger’s multi-affiliate funds management business) is now Elanor’s exclusive distribution partner for its real estate managed funds. On 3 management business) is now Elanor’s exclusive distribution partner for its real estate managed funds. On 3 management business) is now Elanor’s exclusive distribution partner for its real estate managed funds. On 3 August 2023 Elanor announced that the acquisition of Challenger’s Australian real estate funds management August 2023 Elanor announced that the acquisition of Challenger’s Australian real estate funds management August 2023 Elanor announced that the acquisition of Challenger’s Australian real estate funds management business had been successfully integrated into Elanor’s funds management platform, including the full business had been successfully integrated into Elanor’s funds management platform, including the full business had been successfully integrated into Elanor’s funds management platform, including the full realisation of cost savings that underpin forecast incremental funds management EBITDA of over $12 million realisation of cost savings that underpin forecast incremental funds management EBITDA of over $12 million realisation of cost savings that underpin forecast incremental funds management EBITDA of over $12 million for the year ending 30 June 2024. The business has been acquired on an EBITDA multiple of approximately for the year ending 30 June 2024. The business has been acquired on an EBITDA multiple of approximately for the year ending 30 June 2024. The business has been acquired on an EBITDA multiple of approximately 3 times. 3 times. 3 times. The acquisition delivers a step-change in size and scale for Elanor, increasing funds under management from The acquisition delivers a step-change in size and scale for Elanor, increasing funds under management from The acquisition delivers a step-change in size and scale for Elanor, increasing funds under management from $3.0 billion to $6.2 billion with the addition of two significant institutional real estate mandates in Challenger $3.0 billion to $6.2 billion with the addition of two significant institutional real estate mandates in Challenger $3.0 billion to $6.2 billion with the addition of two significant institutional real estate mandates in Challenger Life Company and the Abu Dhabi Investment Council (ADIC). The strategic partnership with Fidante, Life Company and the Abu Dhabi Investment Council (ADIC). The strategic partnership with Fidante, Life Company and the Abu Dhabi Investment Council (ADIC). The strategic partnership with Fidante, Challenger’s market leading capital raising platform, further positions the Group for strong growth. Challenger’s market leading capital raising platform, further positions the Group for strong growth. Challenger’s market leading capital raising platform, further positions the Group for strong growth. The acquisition was completed on 7 July 2023, with Elanor issuing 24.8 million ENN securities as The acquisition was completed on 7 July 2023, with Elanor issuing 24.8 million ENN securities as The acquisition was completed on 7 July 2023, with Elanor issuing 24.8 million ENN securities as consideration, representing 16.6% of securities on issue at that time. Challenger has transferred 4.5 million consideration, representing 16.6% of securities on issue at that time. Challenger has transferred 4.5 million consideration, representing 16.6% of securities on issue at that time. Challenger has transferred 4.5 million of the new securities in Elanor to ADIC, resulting in Challenger’s and ADIC’s holding in Elanor representing of the new securities in Elanor to ADIC, resulting in Challenger’s and ADIC’s holding in Elanor representing of the new securities in Elanor to ADIC, resulting in Challenger’s and ADIC’s holding in Elanor representing approximately 13.6% and 3.0% of securities on issue, respectively. Elanor has also granted ADIC options to approximately 13.6% and 3.0% of securities on issue, respectively. Elanor has also granted ADIC options to approximately 13.6% and 3.0% of securities on issue, respectively. Elanor has also granted ADIC options to acquire up to 7.5 million additional Elanor securities at exercise prices of between $2.25 to $2.75 per security, acquire up to 7.5 million additional Elanor securities at exercise prices of between $2.25 to $2.75 per security, acquire up to 7.5 million additional Elanor securities at exercise prices of between $2.25 to $2.75 per security, with vesting milestones linked to ADIC committing a further $0.5 billion in AUM. with vesting milestones linked to ADIC committing a further $0.5 billion in AUM. with vesting milestones linked to ADIC committing a further $0.5 billion in AUM. This acquisition is a milestone achievement for Elanor in the execution of its key strategic objective to become This acquisition is a milestone achievement for Elanor in the execution of its key strategic objective to become This acquisition is a milestone achievement for Elanor in the execution of its key strategic objective to become the leading Australian real estate funds management group known for delivering exceptional investment the leading Australian real estate funds management group known for delivering exceptional investment the leading Australian real estate funds management group known for delivering exceptional investment returns for its capital partners. returns for its capital partners. returns for its capital partners. The completion of the Challenger transaction delivers significant Securityholder value through: The completion of the Challenger transaction delivers significant Securityholder value through: The completion of the Challenger transaction delivers significant Securityholder value through: • Material Earnings Accretion; based on forecast incremental funds management EBITDA of $12 million • Material Earnings Accretion; based on forecast incremental funds management EBITDA of $12 million • Material Earnings Accretion; based on forecast incremental funds management EBITDA of $12 million p.a.; p.a.; p.a.; Size and Scale; the integration of Challenger’s real estate business into Elanor’s high calibre, scalable Size and Scale; the integration of Challenger’s real estate business into Elanor’s high calibre, scalable real estate funds management platform increases Elanor’s funds under management by more than 2 Size and Scale; the integration of Challenger’s real estate business into Elanor’s high calibre, scalable real estate funds management platform increases Elanor’s funds under management by more than 2 times to $6.2 billion; real estate funds management platform increases Elanor’s funds under management by more than 2 times to $6.2 billion; times to $6.2 billion; • • • 14 14 2 2 2 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP DIRECTORS' REPORT 4. Operating and financial review (continued) OVERVIEW AND STRATEGY (continued) • Growth; the addition of two significant institutional capital partners in conjunction with exclusive capital raising arrangements with Fidante, Challenger’s market leading funds management distribution platform; and • Strategic Alignment; Challenger holds a 13.6% and ADIC holds a 3.0% interest in Elanor. Funds Management Initiatives In addition to the Challenger transaction, the significant funds management initiatives completed during the year included: • • • • • • • • • the privatisation and delisting of the Elanor Retail Property Fund (ASX: ERF) (delivering ERF Securityholders a 15% premium to the trading price immediately prior to the privatisation announcement) and launch of the open-ended, unlisted, multi-sector Elanor Property Income Fund (EPIF) with an initial portfolio value of $117 million; the acquisition of the Tweed Mall shopping Centre by the Tweed Mall Mixed-use Real Estate Fund for $87 million; the recapitalisation of the $289 million Elanor Healthcare Real Estate Fund (EHREF) in December 2022 (providing a full liquidity event for investors) and establishment of a partnership with an Asian-based institutional real estate investor to grow EHREF’s portfolio of core healthcare real estate assets; the repositioning and refinancing of the Riverside Plaza shopping centre following execution of the value-add strategy at the Centre – generating a valuation uplift of $49 million and a capital return to investors of 52 cents per unit (reflecting an IRR of 45% since the Fund’s inception); the acquisition of four hotels, Sanctuary Inn Tamworth (NSW), Chateau Yering Hotel (Victoria), Wildes Boutique Hotel (NSW), and Leura Gardens Resort (NSW) by Elanor Hotel and Accommodation Fund (EHAF) for a combined $67.3 million (Leura Gardens Resort settled on 28 July 2023). Post-acquisition of the Leura Gardens Resort, EHAF has a diverse portfolio of 19 high investment quality accommodation hotel assets with a portfolio value of approximately $470 million; the acquisition by Elanor of the Country Place conference and events centre located in the Dandenong Ranges (Victoria) in November 2022, for $6 million. The conference facility is being converted and repositioned into a significant regional accommodation hotel suitable for EHAF, and has recently been rebranded as Panorama Retreat and Resort; acquisition of Riverton Forum shopping centre, a dominant convenience-based shopping centre situated on a 6.3 hectare Perth metropolitan site by the newly established Riverton Forum Fund for $98.8 million; establishment of the Riverside Mixed Use Development Fund for a mixed-use development on a strategic Queanbeyan CBD site. The development, expected to comprise 180 residential dwellings as well as street activated retail, has an estimated total project cost of $67 million; and addition of a new real estate funds management investment sector for the Group, with the establishment of an industrial real estate investment capability. Elanor's strong investment track record (average realised IRR of 21%) continues to drive demand from wholesale and institutional investors for the Group's funds. 15 3 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP Directors' Report DIRECTORS' REPORT DIRECTORS' REPORT Operating and financial review (continued) Operating and financial review (continued) 4. 4. MANAGED FUNDS AND INVESTMENT PORTFOLIO MANAGED FUNDS AND INVESTMENT PORTFOLIO Managed Funds Managed Funds The following table shows the Gross Asset Value of the Group’s Managed Funds, from which the Group The following table shows the Gross Asset Value of the Group’s Managed Funds, from which the Group generates funds management income. generates funds management income. Funds Funds Retail Real Estate Retail Real Estate Elanor Property Income Fund Elanor Property Income Fund Waverley Gardens Fund Waverley Gardens Fund Clifford Gardens Fund Clifford Gardens Fund Warrawong Plaza Fund Warrawong Plaza Fund Fairfield Centre Syndicate Fairfield Centre Syndicate Riverside Plaza Syndicate Riverside Plaza Syndicate Belconnen Markets Syndicate Belconnen Markets Syndicate Hunters Plaza Syndicate Hunters Plaza Syndicate Bluewater Square Syndicate Bluewater Square Syndicate Commercial Office Commercial Office Elanor Commercial Property Fund Elanor Commercial Property Fund (ASX: ECF) (ASX: ECF) Harris Street Fund Harris Street Fund Burke Street Fund Burke Street Fund Stirling Street Syndicate Stirling Street Syndicate Healthcare Real Estate Healthcare Real Estate Elanor Healthcare Real Estate Elanor Healthcare Real Estate Fund Fund Hotels, Tourism and Leisure Hotels, Tourism and Leisure Elanor Hotel and Accommodation Elanor Hotel and Accommodation Fund Fund Elanor Wildlife Park Fund Elanor Wildlife Park Fund Additions since 30 June 2022 Additions since 30 June 2022 Tweed Mall Mixed-Use Real Tweed Mall Mixed-Use Real Estate Fund Estate Fund Elanor Hotel and Accommodation Elanor Hotel and Accommodation Fund Fund Elanor Hotel and Accommodation Elanor Hotel and Accommodation Fund Fund Elanor Hotel and Accommodation Elanor Hotel and Accommodation Fund Fund Riverton Forum Fund Riverton Forum Fund Location2 Location2 NSW (2), QLD (2), TAS (1) NSW (2), QLD (2), TAS (1) Mulgrave, VIC Mulgrave, VIC Toowoomba, QLD Toowoomba, QLD Warrawong, NSW Warrawong, NSW Fairfield, NSW Fairfield, NSW Queanbeyan, NSW Queanbeyan, NSW Canberra, ACT Canberra, ACT Auckland, NZ Auckland, NZ Redcliffe, QLD Redcliffe, QLD Type Type Sub-regional and neighbourhood Sub-regional and neighbourhood shopping centres shopping centres Sub-regional shopping centre Sub-regional shopping centre Neighbourhood shopping centre Neighbourhood shopping centre Sub-regional shopping centre Sub-regional shopping centre Neighbourhood shopping centre Neighbourhood shopping centre Neighbourhood shopping centre Neighbourhood shopping centre Retail development Retail development Sub-regional shopping centre Sub-regional shopping centre Neighbourhood shopping centre Neighbourhood shopping centre QLD (5), SA (1), WA (1), ACT (1) QLD (5), SA (1), WA (1), ACT (1) Commercial office buildings Commercial office buildings Sydney, NSW Sydney, NSW Woolloongabba, QLD Woolloongabba, QLD Perth, WA Perth, WA QLD (4), WA (2) QLD (4), WA (2) NSW (7), ACT (2), SA (4), TAS (1), WA (1) NSW (7), ACT (2), SA (4), TAS (1), WA (1) NSW (3) NSW (3) Tweed Heads, NSW Tweed Heads, NSW Tamworth, NSW Tamworth, NSW Yarra Valley, VIC Yarra Valley, VIC Kangaroo Valley, NSW Kangaroo Valley, NSW Riverton, WA Riverton, WA Commercial office building Commercial office building Commercial office building Commercial office building Commercial office building Commercial office building Commercial healthcare properties Commercial healthcare properties Luxury and regional Luxury and regional accommodation hotels accommodation hotels Leisure parks Leisure parks Sub-regional shopping centre Sub-regional shopping centre Regional accommodation hotel Regional accommodation hotel Regional accommodation hotel Regional accommodation hotel Regional accommodation hotel Regional accommodation hotel Sub-regional shopping centre Sub-regional shopping centre Sub-regional shopping centre Sub-regional shopping centre Disposals since 30 June 2022 Disposals since 30 June 2022 Elanor Property Income Fund Elanor Property Income Fund Tweed Heads, NSW Tweed Heads, NSW Gross Asset Gross Asset Value Value 30 June 2023 30 June 2023 $'m $'m 206.5 206.5 222.9 222.9 177.0 177.0 173.8 173.8 123.7 123.7 118.8 118.8 95.4 95.4 56.7 56.7 56.0 56.0 492.8 492.8 172.2 172.2 84.2 84.2 35.4 35.4 307.7 307.7 419.3 419.3 65.5 65.5 91.5 91.5 16.5 16.5 1(cid:27).(cid:27) 1(cid:27).(cid:27) 1(cid:21).(cid:19) 1(cid:21).(cid:19) 114.3 114.3 (89.2) (89.2) Total Managed Funds1 2,971.8 Total Managed Funds1 2,971.8 Note 1: The funds under management balance of $2,971.8 million represents the gross asset value of the Group's Managed Funds at 30 Note 1: The funds under management balance of $2,971.8 million represents the gross asset value of the Group's Managed Funds at 30 June 2023, including those funds that have been consolidated in the Group's financial statements. As at 30 June 2023, Elanor Hotel and June 2023, including those funds that have been consolidated in the Group's financial statements. As at 30 June 2023, Elanor Hotel and Accommodation Fund (EHAF), Elanor Wildlife Park Fund (EWPF), Stirling Street Syndicate (Stirling) and the Bluewater Square Syndicate Accommodation Fund (EHAF), Elanor Wildlife Park Fund (EWPF), Stirling Street Syndicate (Stirling) and the Bluewater Square Syndicate (Bluewater) have been consolidated in the Group’s financial statements. (Bluewater) have been consolidated in the Group’s financial statements. Note 2: The numbers included in brackets under the 'Location' column represents the number of assets within each state for the Group's Note 2: The numbers included in brackets under the 'Location' column represents the number of assets within each state for the Group's multi-asset funds. multi-asset funds. 16 4 4 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP DIRECTORS' REPORT 4. Operating and financial review (continued) MANAGED FUNDS AND INVESTMENT PORTFOLIO (continued) Investment Portfolio The following table shows the Group’s investment portfolio, from which the Group receives distribution income. Carrying Value 30 June 2023 $'m 3.8 1.9 Co- Investments Value $'m 77.7 40.8 16.5 13.2 7.0 14.8 1.6 0.4 6.3 10.0 6.7 9.0 6.0 (4.1) 211.6 Asset 1834 Hospitality Cougal Street Location Adelaide, SA Southport, QLD Type Hotel management Commercial office building Note 2 Managed Fund Co-Investments Elanor Hotel and Accommodation Fund Elanor Commercial Property Fund (ASX: ECF) Elanor Property Income Fund NSW (9), ACT (3), SA (4), TAS (1), WA (1) QLD (5), SA (1), WA (1), ACT (1) Luxury and regional accommodation hotels Commercial office buildings NSW (1), QLD (2), TAS (1) Waverley Gardens Fund Bluewater Square Syndicate Elanor Wildlife Park Fund Hunters Plaza Syndicate Belconnen Markets Syndicate Stirling Street Syndicate Harris Street Fund Mulgrave, VIC Redcliffe, QLD NSW (3) Auckland, NZ Canberra, ACT Perth, WA Sydney, NSW Sub-regional and neighbourhood shopping centres Sub-regional shopping centre Neighbourhood shopping centre Leisure parks Sub-regional shopping centre Retail development Commercial office building Commercial office building 1,3 2 2 2 3 3 2 2 3 2 Additions since 30 June 2022 Elanor Healthcare Real Estate Fund QLD (4), WA (2) Commercial healthcare properties 2 Riverton Forum Fund Panorama Retreat & Resort Riverton, WA Dandenong Ranges, VIC Sub-regional shopping centre Regional accommodation hotel Disposals since 30 June 2022 Harris Street Fund Total Investment Portfolio Sydney, NSW Commercial office building 2 Note 1: All owner-occupied properties in the Hotel, Tourism and Leisure business are held for use by the Group for the supply of services and are classified as property, plant and equipment and stated at fair value in the financial statements. Note 2: Managed Fund co-investments are associates and accounted for using the equity method. Note 3: The co-investments in EHAF, EWPF, Stirling and the Bluewater have been consolidated in the financial statements. The amount shown assumes that the investments were accounted for using the equity method. 17 5 Directors' Report ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT Operating and financial review (continued) Operating and financial review (continued) Operating and financial review (continued) Operating and financial review (continued) Operating and financial review (continued) Operating and financial review (continued) Operating and financial review (continued) Operating and financial review (continued) Operating and financial review (continued) Operating and financial review (continued) Operating and financial review (continued) 4. 4. 4. 4. 4. 4. 4. 4. 4. 4. 4. MANAGED FUNDS AND INVESTMENT PORTFOLIO (continued) MANAGED FUNDS AND INVESTMENT PORTFOLIO (continued) MANAGED FUNDS AND INVESTMENT PORTFOLIO (continued) MANAGED FUNDS AND INVESTMENT PORTFOLIO (continued) MANAGED FUNDS AND INVESTMENT PORTFOLIO (continued) MANAGED FUNDS AND INVESTMENT PORTFOLIO (continued) MANAGED FUNDS AND INVESTMENT PORTFOLIO (continued) MANAGED FUNDS AND INVESTMENT PORTFOLIO (continued) MANAGED FUNDS AND INVESTMENT PORTFOLIO (continued) MANAGED FUNDS AND INVESTMENT PORTFOLIO (continued) MANAGED FUNDS AND INVESTMENT PORTFOLIO (continued) Update on the Group's Managed Funds Update on the Group's Managed Funds Update on the Group's Managed Funds Update on the Group's Managed Funds Update on the Group's Managed Funds Update on the Group's Managed Funds Update on the Group's Managed Funds Update on the Group's Managed Funds Update on the Group's Managed Funds Update on the Group's Managed Funds Update on the Group's Managed Funds Commercial Office Commercial Office Commercial Office Commercial Office Commercial Office Commercial Office Commercial Office Commercial Office Commercial Office Commercial Office Commercial Office The listed Elanor Commercial Property Fund (ASX: ECF) achieved its distribution guidance for the year, The listed Elanor Commercial Property Fund (ASX: ECF) achieved its distribution guidance for the year, The listed Elanor Commercial Property Fund (ASX: ECF) achieved its distribution guidance for the year, The listed Elanor Commercial Property Fund (ASX: ECF) achieved its distribution guidance for the year, The listed Elanor Commercial Property Fund (ASX: ECF) achieved its distribution guidance for the year, The listed Elanor Commercial Property Fund (ASX: ECF) achieved its distribution guidance for the year, The listed Elanor Commercial Property Fund (ASX: ECF) achieved its distribution guidance for the year, The listed Elanor Commercial Property Fund (ASX: ECF) achieved its distribution guidance for the year, The listed Elanor Commercial Property Fund (ASX: ECF) achieved its distribution guidance for the year, The listed Elanor Commercial Property Fund (ASX: ECF) achieved its distribution guidance for the year, reflecting the strength of the Fund’s high investment quality commercial office properties and tenants, and the The listed Elanor Commercial Property Fund (ASX: ECF) achieved its distribution guidance for the year, reflecting the strength of the Fund’s high investment quality commercial office properties and tenants, and the reflecting the strength of the Fund’s high investment quality commercial office properties and tenants, and the reflecting the strength of the Fund’s high investment quality commercial office properties and tenants, and the reflecting the strength of the Fund’s high investment quality commercial office properties and tenants, and the reflecting the strength of the Fund’s high investment quality commercial office properties and tenants, and the reflecting the strength of the Fund’s high investment quality commercial office properties and tenants, and the reflecting the strength of the Fund’s high investment quality commercial office properties and tenants, and the reflecting the strength of the Fund’s high investment quality commercial office properties and tenants, and the reflecting the strength of the Fund’s high investment quality commercial office properties and tenants, and the Fund’s prudent capital management and interest rate hedging. ECF has maintained high occupancy, well reflecting the strength of the Fund’s high investment quality commercial office properties and tenants, and the Fund’s prudent capital management and interest rate hedging. ECF has maintained high occupancy, well Fund’s prudent capital management and interest rate hedging. ECF has maintained high occupancy, well Fund’s prudent capital management and interest rate hedging. ECF has maintained high occupancy, well Fund’s prudent capital management and interest rate hedging. ECF has maintained high occupancy, well Fund’s prudent capital management and interest rate hedging. ECF has maintained high occupancy, well Fund’s prudent capital management and interest rate hedging. ECF has maintained high occupancy, well Fund’s prudent capital management and interest rate hedging. ECF has maintained high occupancy, well Fund’s prudent capital management and interest rate hedging. ECF has maintained high occupancy, well Fund’s prudent capital management and interest rate hedging. ECF has maintained high occupancy, well above industry occupancy levels, achieved strong like for like income growth, and delivered significant leasing Fund’s prudent capital management and interest rate hedging. ECF has maintained high occupancy, well above industry occupancy levels, achieved strong like for like income growth, and delivered significant leasing above industry occupancy levels, achieved strong like for like income growth, and delivered significant leasing above industry occupancy levels, achieved strong like for like income growth, and delivered significant leasing above industry occupancy levels, achieved strong like for like income growth, and delivered significant leasing above industry occupancy levels, achieved strong like for like income growth, and delivered significant leasing above industry occupancy levels, achieved strong like for like income growth, and delivered significant leasing above industry occupancy levels, achieved strong like for like income growth, and delivered significant leasing above industry occupancy levels, achieved strong like for like income growth, and delivered significant leasing above industry occupancy levels, achieved strong like for like income growth, and delivered significant leasing success with positive leasing spreads. Upward movements in capitalisation and discount rates have negatively above industry occupancy levels, achieved strong like for like income growth, and delivered significant leasing success with positive leasing spreads. Upward movements in capitalisation and discount rates have negatively success with positive leasing spreads. Upward movements in capitalisation and discount rates have negatively success with positive leasing spreads. Upward movements in capitalisation and discount rates have negatively success with positive leasing spreads. Upward movements in capitalisation and discount rates have negatively success with positive leasing spreads. Upward movements in capitalisation and discount rates have negatively success with positive leasing spreads. Upward movements in capitalisation and discount rates have negatively success with positive leasing spreads. Upward movements in capitalisation and discount rates have negatively success with positive leasing spreads. Upward movements in capitalisation and discount rates have negatively success with positive leasing spreads. Upward movements in capitalisation and discount rates have negatively impacted capital values, however this has been partially offset by positive upward movements in market rents. success with positive leasing spreads. Upward movements in capitalisation and discount rates have negatively impacted capital values, however this has been partially offset by positive upward movements in market rents. impacted capital values, however this has been partially offset by positive upward movements in market rents. impacted capital values, however this has been partially offset by positive upward movements in market rents. impacted capital values, however this has been partially offset by positive upward movements in market rents. impacted capital values, however this has been partially offset by positive upward movements in market rents. impacted capital values, however this has been partially offset by positive upward movements in market rents. impacted capital values, however this has been partially offset by positive upward movements in market rents. impacted capital values, however this has been partially offset by positive upward movements in market rents. impacted capital values, however this has been partially offset by positive upward movements in market rents. impacted capital values, however this has been partially offset by positive upward movements in market rents. Execution of the investment strategy for the Stirling Street and Harris Street Funds is in progress, with positive Execution of the investment strategy for the Stirling Street and Harris Street Funds is in progress, with positive Execution of the investment strategy for the Stirling Street and Harris Street Funds is in progress, with positive Execution of the investment strategy for the Stirling Street and Harris Street Funds is in progress, with positive Execution of the investment strategy for the Stirling Street and Harris Street Funds is in progress, with positive Execution of the investment strategy for the Stirling Street and Harris Street Funds is in progress, with positive Execution of the investment strategy for the Stirling Street and Harris Street Funds is in progress, with positive Execution of the investment strategy for the Stirling Street and Harris Street Funds is in progress, with positive Execution of the investment strategy for the Stirling Street and Harris Street Funds is in progress, with positive Execution of the investment strategy for the Stirling Street and Harris Street Funds is in progress, with positive leasing outcomes at both properties. Execution of the investment strategy for the Stirling Street and Harris Street Funds is in progress, with positive leasing outcomes at both properties. leasing outcomes at both properties. leasing outcomes at both properties. leasing outcomes at both properties. leasing outcomes at both properties. leasing outcomes at both properties. leasing outcomes at both properties. leasing outcomes at both properties. leasing outcomes at both properties. leasing outcomes at both properties. The value of the Group’s commercial managed fund portfolio decreased by $60.3 million during the year to The value of the Group’s commercial managed fund portfolio decreased by $60.3 million during the year to The value of the Group’s commercial managed fund portfolio decreased by $60.3 million during the year to The value of the Group’s commercial managed fund portfolio decreased by $60.3 million during the year to The value of the Group’s commercial managed fund portfolio decreased by $60.3 million during the year to The value of the Group’s commercial managed fund portfolio decreased by $60.3 million during the year to The value of the Group’s commercial managed fund portfolio decreased by $60.3 million during the year to The value of the Group’s commercial managed fund portfolio decreased by $60.3 million during the year to The value of the Group’s commercial managed fund portfolio decreased by $60.3 million during the year to The value of the Group’s commercial managed fund portfolio decreased by $60.3 million during the year to $749.7 million as at 30 June 2023. The valuation decrease was primarily driven by a 50-basis-point The value of the Group’s commercial managed fund portfolio decreased by $60.3 million during the year to $749.7 million as at 30 June 2023. The valuation decrease was primarily driven by a 50-basis-point $749.7 million as at 30 June 2023. The valuation decrease was primarily driven by a 50-basis-point $749.7 million as at 30 June 2023. The valuation decrease was primarily driven by a 50-basis-point $749.7 million as at 30 June 2023. The valuation decrease was primarily driven by a 50-basis-point $749.7 million as at 30 June 2023. The valuation decrease was primarily driven by a 50-basis-point $749.7 million as at 30 June 2023. The valuation decrease was primarily driven by a 50-basis-point $749.7 million as at 30 June 2023. The valuation decrease was primarily driven by a 50-basis-point $749.7 million as at 30 June 2023. The valuation decrease was primarily driven by a 50-basis-point $749.7 million as at 30 June 2023. The valuation decrease was primarily driven by a 50-basis-point decompression in the weighted average portfolio capitalisation rate. $749.7 million as at 30 June 2023. The valuation decrease was primarily driven by a 50-basis-point decompression in the weighted average portfolio capitalisation rate. decompression in the weighted average portfolio capitalisation rate. decompression in the weighted average portfolio capitalisation rate. decompression in the weighted average portfolio capitalisation rate. decompression in the weighted average portfolio capitalisation rate. decompression in the weighted average portfolio capitalisation rate. decompression in the weighted average portfolio capitalisation rate. decompression in the weighted average portfolio capitalisation rate. decompression in the weighted average portfolio capitalisation rate. decompression in the weighted average portfolio capitalisation rate. The total funds under management for commercial office was $784.6 million as at 30 June 2023. The total funds under management for commercial office was $784.6 million as at 30 June 2023. The total funds under management for commercial office was $784.6 million as at 30 June 2023. The total funds under management for commercial office was $784.6 million as at 30 June 2023. The total funds under management for commercial office was $784.6 million as at 30 June 2023. The total funds under management for commercial office was $784.6 million as at 30 June 2023. The total funds under management for commercial office was $784.6 million as at 30 June 2023. The total funds under management for commercial office was $784.6 million as at 30 June 2023. The total funds under management for commercial office was $784.6 million as at 30 June 2023. The total funds under management for commercial office was $784.6 million as at 30 June 2023. The total funds under management for commercial office was $784.6 million as at 30 June 2023. Healthcare Real Estate Healthcare Real Estate Healthcare Real Estate Healthcare Real Estate Healthcare Real Estate Healthcare Real Estate Healthcare Real Estate Healthcare Real Estate Healthcare Real Estate Healthcare Real Estate Healthcare Real Estate The Elanor Healthcare Real Estate Fund (EHREF) continues to perform strongly. During the year EHREF was The Elanor Healthcare Real Estate Fund (EHREF) continues to perform strongly. During the year EHREF was The Elanor Healthcare Real Estate Fund (EHREF) continues to perform strongly. During the year EHREF was The Elanor Healthcare Real Estate Fund (EHREF) continues to perform strongly. During the year EHREF was The Elanor Healthcare Real Estate Fund (EHREF) continues to perform strongly. During the year EHREF was The Elanor Healthcare Real Estate Fund (EHREF) continues to perform strongly. During the year EHREF was The Elanor Healthcare Real Estate Fund (EHREF) continues to perform strongly. During the year EHREF was The Elanor Healthcare Real Estate Fund (EHREF) continues to perform strongly. During the year EHREF was The Elanor Healthcare Real Estate Fund (EHREF) continues to perform strongly. During the year EHREF was The Elanor Healthcare Real Estate Fund (EHREF) continues to perform strongly. During the year EHREF was successfully recapitalised, providing full liquidity to Fund Investors (reflecting an IRR of 12.2% since the Fund’s The Elanor Healthcare Real Estate Fund (EHREF) continues to perform strongly. During the year EHREF was successfully recapitalised, providing full liquidity to Fund Investors (reflecting an IRR of 12.2% since the Fund’s successfully recapitalised, providing full liquidity to Fund Investors (reflecting an IRR of 12.2% since the Fund’s successfully recapitalised, providing full liquidity to Fund Investors (reflecting an IRR of 12.2% since the Fund’s successfully recapitalised, providing full liquidity to Fund Investors (reflecting an IRR of 12.2% since the Fund’s successfully recapitalised, providing full liquidity to Fund Investors (reflecting an IRR of 12.2% since the Fund’s successfully recapitalised, providing full liquidity to Fund Investors (reflecting an IRR of 12.2% since the Fund’s successfully recapitalised, providing full liquidity to Fund Investors (reflecting an IRR of 12.2% since the Fund’s successfully recapitalised, providing full liquidity to Fund Investors (reflecting an IRR of 12.2% since the Fund’s successfully recapitalised, providing full liquidity to Fund Investors (reflecting an IRR of 12.2% since the Fund’s inception). The Fund is now majority-owned by an Asian-based institutional real estate investor, with a strategy successfully recapitalised, providing full liquidity to Fund Investors (reflecting an IRR of 12.2% since the Fund’s inception). The Fund is now majority-owned by an Asian-based institutional real estate investor, with a strategy inception). The Fund is now majority-owned by an Asian-based institutional real estate investor, with a strategy inception). The Fund is now majority-owned by an Asian-based institutional real estate investor, with a strategy inception). The Fund is now majority-owned by an Asian-based institutional real estate investor, with a strategy inception). The Fund is now majority-owned by an Asian-based institutional real estate investor, with a strategy inception). The Fund is now majority-owned by an Asian-based institutional real estate investor, with a strategy inception). The Fund is now majority-owned by an Asian-based institutional real estate investor, with a strategy inception). The Fund is now majority-owned by an Asian-based institutional real estate investor, with a strategy inception). The Fund is now majority-owned by an Asian-based institutional real estate investor, with a strategy to grow the Fund’s portfolio of core healthcare real estate assets. inception). The Fund is now majority-owned by an Asian-based institutional real estate investor, with a strategy to grow the Fund’s portfolio of core healthcare real estate assets. to grow the Fund’s portfolio of core healthcare real estate assets. to grow the Fund’s portfolio of core healthcare real estate assets. to grow the Fund’s portfolio of core healthcare real estate assets. to grow the Fund’s portfolio of core healthcare real estate assets. to grow the Fund’s portfolio of core healthcare real estate assets. to grow the Fund’s portfolio of core healthcare real estate assets. to grow the Fund’s portfolio of core healthcare real estate assets. to grow the Fund’s portfolio of core healthcare real estate assets. to grow the Fund’s portfolio of core healthcare real estate assets. Investor demand for high quality healthcare real estate continued to remain strong given the defensive Investor demand for high quality healthcare real estate continued to remain strong given the defensive Investor demand for high quality healthcare real estate continued to remain strong given the defensive Investor demand for high quality healthcare real estate continued to remain strong given the defensive Investor demand for high quality healthcare real estate continued to remain strong given the defensive Investor demand for high quality healthcare real estate continued to remain strong given the defensive Investor demand for high quality healthcare real estate continued to remain strong given the defensive Investor demand for high quality healthcare real estate continued to remain strong given the defensive Investor demand for high quality healthcare real estate continued to remain strong given the defensive Investor demand for high quality healthcare real estate continued to remain strong given the defensive characteristics and secure income of the sector. Investor demand for high quality healthcare real estate continued to remain strong given the defensive characteristics and secure income of the sector. characteristics and secure income of the sector. characteristics and secure income of the sector. characteristics and secure income of the sector. characteristics and secure income of the sector. characteristics and secure income of the sector. characteristics and secure income of the sector. characteristics and secure income of the sector. characteristics and secure income of the sector. characteristics and secure income of the sector. The value of the healthcare real estate portfolio increased by $4.6 million during the year to $291.9 million as The value of the healthcare real estate portfolio increased by $4.6 million during the year to $291.9 million as The value of the healthcare real estate portfolio increased by $4.6 million during the year to $291.9 million as The value of the healthcare real estate portfolio increased by $4.6 million during the year to $291.9 million as The value of the healthcare real estate portfolio increased by $4.6 million during the year to $291.9 million as The value of the healthcare real estate portfolio increased by $4.6 million during the year to $291.9 million as The value of the healthcare real estate portfolio increased by $4.6 million during the year to $291.9 million as The value of the healthcare real estate portfolio increased by $4.6 million during the year to $291.9 million as The value of the healthcare real estate portfolio increased by $4.6 million during the year to $291.9 million as The value of the healthcare real estate portfolio increased by $4.6 million during the year to $291.9 million as at 30 June 2023. The value of the healthcare real estate portfolio increased by $4.6 million during the year to $291.9 million as at 30 June 2023. at 30 June 2023. at 30 June 2023. at 30 June 2023. at 30 June 2023. at 30 June 2023. at 30 June 2023. at 30 June 2023. at 30 June 2023. at 30 June 2023. The total funds under management for healthcare real estate increased from $304.3 million as at 30 June 2022 The total funds under management for healthcare real estate increased from $304.3 million as at 30 June 2022 The total funds under management for healthcare real estate increased from $304.3 million as at 30 June 2022 The total funds under management for healthcare real estate increased from $304.3 million as at 30 June 2022 The total funds under management for healthcare real estate increased from $304.3 million as at 30 June 2022 The total funds under management for healthcare real estate increased from $304.3 million as at 30 June 2022 The total funds under management for healthcare real estate increased from $304.3 million as at 30 June 2022 The total funds under management for healthcare real estate increased from $304.3 million as at 30 June 2022 The total funds under management for healthcare real estate increased from $304.3 million as at 30 June 2022 The total funds under management for healthcare real estate increased from $304.3 million as at 30 June 2022 to $307.7 million as at 30 June 2023. The total funds under management for healthcare real estate increased from $304.3 million as at 30 June 2022 to $307.7 million as at 30 June 2023. to $307.7 million as at 30 June 2023. to $307.7 million as at 30 June 2023. to $307.7 million as at 30 June 2023. to $307.7 million as at 30 June 2023. to $307.7 million as at 30 June 2023. to $307.7 million as at 30 June 2023. to $307.7 million as at 30 June 2023. to $307.7 million as at 30 June 2023. to $307.7 million as at 30 June 2023. Retail and Mixed-Use Real Estate Retail and Mixed-Use Real Estate Retail and Mixed-Use Real Estate Retail and Mixed-Use Real Estate Retail and Mixed-Use Real Estate Retail and Mixed-Use Real Estate Retail and Mixed-Use Real Estate Retail and Mixed-Use Real Estate Retail and Mixed-Use Real Estate Retail and Mixed-Use Real Estate Retail and Mixed-Use Real Estate The Group's retail and mixed-use real estate managed funds continue to focus on investments in non- The Group's retail and mixed-use real estate managed funds continue to focus on investments in non- The Group's retail and mixed-use real estate managed funds continue to focus on investments in non- The Group's retail and mixed-use real estate managed funds continue to focus on investments in non- The Group's retail and mixed-use real estate managed funds continue to focus on investments in non- The Group's retail and mixed-use real estate managed funds continue to focus on investments in non- The Group's retail and mixed-use real estate managed funds continue to focus on investments in non- The Group's retail and mixed-use real estate managed funds continue to focus on investments in non- The Group's retail and mixed-use real estate managed funds continue to focus on investments in non- The Group's retail and mixed-use real estate managed funds continue to focus on investments in non- discretionary focused neighbourhood and sub-regional shopping centre assets. The retail portfolio The Group's retail and mixed-use real estate managed funds continue to focus on investments in non- discretionary focused neighbourhood and sub-regional shopping centre assets. The retail portfolio discretionary focused neighbourhood and sub-regional shopping centre assets. The retail portfolio discretionary focused neighbourhood and sub-regional shopping centre assets. The retail portfolio discretionary focused neighbourhood and sub-regional shopping centre assets. The retail portfolio discretionary focused neighbourhood and sub-regional shopping centre assets. The retail portfolio discretionary focused neighbourhood and sub-regional shopping centre assets. The retail portfolio discretionary focused neighbourhood and sub-regional shopping centre assets. The retail portfolio discretionary focused neighbourhood and sub-regional shopping centre assets. The retail portfolio discretionary focused neighbourhood and sub-regional shopping centre assets. The retail portfolio experienced continued growth in customer visitation and trading activity over the year. discretionary focused neighbourhood and sub-regional shopping centre assets. The retail portfolio experienced continued growth in customer visitation and trading activity over the year. experienced continued growth in customer visitation and trading activity over the year. experienced continued growth in customer visitation and trading activity over the year. experienced continued growth in customer visitation and trading activity over the year. experienced continued growth in customer visitation and trading activity over the year. experienced continued growth in customer visitation and trading activity over the year. experienced continued growth in customer visitation and trading activity over the year. experienced continued growth in customer visitation and trading activity over the year. experienced continued growth in customer visitation and trading activity over the year. experienced continued growth in customer visitation and trading activity over the year. The security buy-back offer and delisting of the Elanor Retail Property Fund (ASX: ERF) was completed in The security buy-back offer and delisting of the Elanor Retail Property Fund (ASX: ERF) was completed in The security buy-back offer and delisting of the Elanor Retail Property Fund (ASX: ERF) was completed in The security buy-back offer and delisting of the Elanor Retail Property Fund (ASX: ERF) was completed in The security buy-back offer and delisting of the Elanor Retail Property Fund (ASX: ERF) was completed in The security buy-back offer and delisting of the Elanor Retail Property Fund (ASX: ERF) was completed in The security buy-back offer and delisting of the Elanor Retail Property Fund (ASX: ERF) was completed in The security buy-back offer and delisting of the Elanor Retail Property Fund (ASX: ERF) was completed in The security buy-back offer and delisting of the Elanor Retail Property Fund (ASX: ERF) was completed in The security buy-back offer and delisting of the Elanor Retail Property Fund (ASX: ERF) was completed in November 2022, creating the Elanor Property Income Fund (EPIF). The delisting of ERF has delivered to the The security buy-back offer and delisting of the Elanor Retail Property Fund (ASX: ERF) was completed in November 2022, creating the Elanor Property Income Fund (EPIF). The delisting of ERF has delivered to the November 2022, creating the Elanor Property Income Fund (EPIF). The delisting of ERF has delivered to the November 2022, creating the Elanor Property Income Fund (EPIF). The delisting of ERF has delivered to the November 2022, creating the Elanor Property Income Fund (EPIF). The delisting of ERF has delivered to the November 2022, creating the Elanor Property Income Fund (EPIF). The delisting of ERF has delivered to the November 2022, creating the Elanor Property Income Fund (EPIF). The delisting of ERF has delivered to the November 2022, creating the Elanor Property Income Fund (EPIF). The delisting of ERF has delivered to the November 2022, creating the Elanor Property Income Fund (EPIF). The delisting of ERF has delivered to the November 2022, creating the Elanor Property Income Fund (EPIF). The delisting of ERF has delivered to the ERF investors a 15% premium to the trading price prior to the privatisation announcement. EPIF is an open- November 2022, creating the Elanor Property Income Fund (EPIF). The delisting of ERF has delivered to the ERF investors a 15% premium to the trading price prior to the privatisation announcement. EPIF is an open- ERF investors a 15% premium to the trading price prior to the privatisation announcement. EPIF is an open- ERF investors a 15% premium to the trading price prior to the privatisation announcement. EPIF is an open- ERF investors a 15% premium to the trading price prior to the privatisation announcement. EPIF is an open- ERF investors a 15% premium to the trading price prior to the privatisation announcement. EPIF is an open- ERF investors a 15% premium to the trading price prior to the privatisation announcement. EPIF is an open- ERF investors a 15% premium to the trading price prior to the privatisation announcement. EPIF is an open- ERF investors a 15% premium to the trading price prior to the privatisation announcement. EPIF is an open- ERF investors a 15% premium to the trading price prior to the privatisation announcement. EPIF is an open- ended, multi-sector, property fund generating reliable income from a portfolio of high investment quality real ERF investors a 15% premium to the trading price prior to the privatisation announcement. EPIF is an open- ended, multi-sector, property fund generating reliable income from a portfolio of high investment quality real ended, multi-sector, property fund generating reliable income from a portfolio of high investment quality real ended, multi-sector, property fund generating reliable income from a portfolio of high investment quality real ended, multi-sector, property fund generating reliable income from a portfolio of high investment quality real ended, multi-sector, property fund generating reliable income from a portfolio of high investment quality real ended, multi-sector, property fund generating reliable income from a portfolio of high investment quality real ended, multi-sector, property fund generating reliable income from a portfolio of high investment quality real ended, multi-sector, property fund generating reliable income from a portfolio of high investment quality real ended, multi-sector, property fund generating reliable income from a portfolio of high investment quality real estate assets. ended, multi-sector, property fund generating reliable income from a portfolio of high investment quality real estate assets. estate assets. estate assets. estate assets. estate assets. estate assets. estate assets. estate assets. estate assets. estate assets. During the year, the Group also established the Riverton Forum Fund in March 2023 and two new mixed-use During the year, the Group also established the Riverton Forum Fund in March 2023 and two new mixed-use During the year, the Group also established the Riverton Forum Fund in March 2023 and two new mixed-use During the year, the Group also established the Riverton Forum Fund in March 2023 and two new mixed-use During the year, the Group also established the Riverton Forum Fund in March 2023 and two new mixed-use During the year, the Group also established the Riverton Forum Fund in March 2023 and two new mixed-use During the year, the Group also established the Riverton Forum Fund in March 2023 and two new mixed-use During the year, the Group also established the Riverton Forum Fund in March 2023 and two new mixed-use During the year, the Group also established the Riverton Forum Fund in March 2023 and two new mixed-use During the year, the Group also established the Riverton Forum Fund in March 2023 and two new mixed-use development funds (the Tweed Mall Mixed-Use Real Estate Fund (September 2022) and the Riverside Mixed- During the year, the Group also established the Riverton Forum Fund in March 2023 and two new mixed-use development funds (the Tweed Mall Mixed-Use Real Estate Fund (September 2022) and the Riverside Mixed- development funds (the Tweed Mall Mixed-Use Real Estate Fund (September 2022) and the Riverside Mixed- development funds (the Tweed Mall Mixed-Use Real Estate Fund (September 2022) and the Riverside Mixed- development funds (the Tweed Mall Mixed-Use Real Estate Fund (September 2022) and the Riverside Mixed- development funds (the Tweed Mall Mixed-Use Real Estate Fund (September 2022) and the Riverside Mixed- development funds (the Tweed Mall Mixed-Use Real Estate Fund (September 2022) and the Riverside Mixed- development funds (the Tweed Mall Mixed-Use Real Estate Fund (September 2022) and the Riverside Mixed- development funds (the Tweed Mall Mixed-Use Real Estate Fund (September 2022) and the Riverside Mixed- development funds (the Tweed Mall Mixed-Use Real Estate Fund (September 2022) and the Riverside Mixed- Use Development Fund (June 2023)) with wholesale private capital partners. development funds (the Tweed Mall Mixed-Use Real Estate Fund (September 2022) and the Riverside Mixed- Use Development Fund (June 2023)) with wholesale private capital partners. Use Development Fund (June 2023)) with wholesale private capital partners. Use Development Fund (June 2023)) with wholesale private capital partners. Use Development Fund (June 2023)) with wholesale private capital partners. Use Development Fund (June 2023)) with wholesale private capital partners. Use Development Fund (June 2023)) with wholesale private capital partners. Use Development Fund (June 2023)) with wholesale private capital partners. Use Development Fund (June 2023)) with wholesale private capital partners. Use Development Fund (June 2023)) with wholesale private capital partners. Use Development Fund (June 2023)) with wholesale private capital partners. 18 6 6 6 6 6 6 6 6 6 6 6 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP DIRECTORS' REPORT 4. Operating and financial review (continued) MANAGED FUNDS AND INVESTMENT PORTFOLIO (continued) The retail real estate portfolio increased in value by $216.6 million during the year to $1,297.5 million at 30 June 2023. The increase in the portfolio value reflects the acquisition of Riverton Forum and significant leasing deals at Riverside Plaza and Warrawong Plaza. Total retail real estate funds under management increased from $1,122.1 million at 30 June 2022 to $1,347.4 million as at 30 June 2023. Hotels, Tourism and Leisure The hotel accommodation sector continues to recover from the impacts of COVID-19. Hotel occupancy was impacted by a decline in traveller confidence following consecutive interest rate rises and cost of living pressures. However, average room rates continue to improve. Operating costs across the portfolio are being revised in line with prevailing market conditions to maximise profitability. The value of the hotels, tourism and leisure portfolio increased by $90.6 million during the year to $455.2 million at 30 June 2023 (of which $37.3 million was due to fair value movement on a like-for-like basis on the existing portfolio and $53.3 million due to acquisitions in the portfolio). The growth in the portfolio valuation includes the acquisitions of Wildes Boutique Hotel, Chateau Yering and Panorama Retreat, and value-add projects at EHAF’s Barossa Weintal, Clare Country Club and Parklands Resort hotels. Growth in the valuation of the portfolio also includes valuation improvements reflecting increased confidence in the growth of the business-to-business segments (corporate, wholesale, groups and conference and events) and average room rates at the Fund’s hotels. Total funds under management for hotels, tourism and leisure increased from $394.6 million as at 30 June 2022 to $466.6 million as at 30 June 2023. Elanor Wildlife Park Fund Featherdale Wildlife Park earnings recovered strongly over the financial year as global travel restrictions eased and international visitation increased. Earnings from Mogo Wildlife Park and Hunter Valley Wildlife Park have normalised following COVID-19 related peaks, when restrictions were in place on interstate and overseas travel. The value of the wildlife park portfolio decreased by $4.4 million during the year to $60.9 million at 30 June 2023. The valuation decrease reflects normalised earnings at Hunter Valley and Mogo Wildlife Parks. The total funds under management for Elanor Wildlife Park Fund was $65.5 million as at 30 June 2023. Summary Notwithstanding the prevailing market conditions, the Group's Managed Funds are well positioned to grow earnings as market conditions improve. The acquisition of Challenger’s real estate funds management business, on 7 July 2023, is a milestone achievement for Elanor in the execution of its key strategic objective to become the leading Australian real estate funds management group known for delivering exceptional investment returns for its capital partners. The combination of Elanor’s real estate funds management capability with Challenger’s market leading capital raising platform positions the Group for further strong growth. 19 7 ELANOR INVESTORS GROUP Directors' Report DIRECTORS' REPORT 4. Operating and financial review (continued) REVIEW OF FINANCIAL AND OPERATING RESULTS Statutory results The Consolidated Group recorded a net statutory loss after tax of $30.7 million for the year ended 30 June 2023 (30 June 2022: $4.2 million loss). At balance date, Elanor held a 30.60% (30 June 2022: 35.07%) interest in the Elanor Hotel Accommodation Fund (EHAF), a 42.82% (30 June 2022: 42.82%) interest in Elanor Wildlife Park Fund (EWPF), a 42.27% (30 June 2022: 42.27%) interest in the Bluewater Square Syndicate (Bluewater) and 42.98% (30 June 2022: 42.98%) in Stirling Street Syndicate (Stirling). For accounting purposes, Elanor is deemed to have a controlling interest in EHAF, EWPF, Bluewater and Stirling given its level of ownership and role as manager of the funds. This requires that the financial results and financial position of EHAF, EWPF, Bluewater and Stirling are consolidated into the financial statements of the Group. All other managed fund co-investments are accounted for using the equity method in the Group's consolidated financial statements. Revenue from operating activities for the Consolidated Group for the year ended 30 June 2023 was $139.1 million (30 June 2022: $92.2 million), including strong growth in the Group's funds management income as a result of the execution of a range of funds management initiatives. The Group's balance sheet as at year end reflects net assets of $352.3 million (30 June 2022: $341.3 million) and cash on hand of $25.3 million (30 June 2022: $27.8 million). The Group recorded a statutory net loss after tax for the year of $30.7 million (30 June 2022: $4.2 million loss). Revenue from operating activities and rental income has increased significantly from the prior year. Total expenses have increased with rises in borrowing costs as well as salary and employee benefit costs. A summary of the Group and EIF Group's statutory results for the year is set out below: Summary Financial Results Net (loss) / profit after tax ($'000) Net (loss) / profit attributable to ENN security holders ($'000) Statutory earnings per stapled security (cents) Statutory earnings per weighted average stapled security (cents) Net tangible assets ($ per stapled security) Gearing (net debt / total assets less cash) (%) Adjusted Statement of Profit and Loss ENN Group 30 June 2023 (30,674) (19,707) (15.88) (16.35) 2.83 47.1 ENN Group 30 June 2022 (4,234) 966 0.79 0.82 2.79 44.9 EIF Group 30 June 2023 17,245 (2,730) EIF Group 30 June 2022 18,337 12,799 2.69 45.3 2.56 40.6 The table below provides a reconciliation from the Group's statutory net loss after tax to the adjusted net loss after tax, presented on the basis that EHAF, EWPF, Bluewater and Stirling are equity accounted, rather than consolidated in accordance with Accounting Standards. Elanor considers that presenting the operating performance of the Group on this adjusted basis gives a representation of the Group that is consistent with the management and reporting of the Group. The results provided on this basis are presented as the 'ENN Group'. 20 8 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP DIRECTORS' REPORT ELANOR INVESTORS GROUP DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT Operating and financial review (continued) 4. Operating and financial review (continued) 4. Operating and financial review (continued) 4. Operating and financial review (continued) 4. Operating and financial review (continued) 4. Operating and financial review (continued) 4. REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) 4. Operating and financial review (continued) REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) ENN Group ENN Group 30 June ENN Group ENN Group 30 June ENN Group 2023 ENN Group 30 June 30 June 2023 30 June $'000 30 June 2023 ENN Group 2023 $'000 2023 2023 $'000 (30,674) 30 June $'000 (30,674) $'000 $'000 2023 (30,674) (30,674) 17,028 (30,674) (30,674) $'000 17,028 17,028 17,028 (5,631) (30,674) 17,028 17,028 (5,631) (5,631) (5,631) 17,028 (19,277) (5,631) (5,631) (19,277) (19,277) (19,277) (5,631) (19,277) (19,277) (19,277) ENN Group ENN Group 30 June ENN Group ENN Group 30 June ENN Group 2022 ENN Group 30 June 30 June 2022 30 June $'000 30 June 2022 ENN Group 2022 $'000 2022 2022 $'000 (4,234) 30 June $'000 (4,234) $'000 $'000 2022 (4,234) (4,234) 2,850 (4,234) (4,234) $'000 2,850 2,850 2,850 4,842 (4,234) 2,850 2,850 4,842 4,842 4,842 2,850 3,458 4,842 4,842 3,458 3,458 3,458 4,842 3,458 3,458 3,458 Statutory Net (Loss)/ Profit After Tax Adjustment to remove the impact of the consolidated statutory results of EHAF, EWPF, Statutory Net (Loss)/ Profit After Tax Statutory Net (Loss)/ Profit After Tax Statutory Net (Loss)/ Profit After Tax Stirling and Bluewater Adjustment to remove the impact of the consolidated statutory results of EHAF, EWPF, Adjustment to remove the impact of the consolidated statutory results of EHAF, EWPF, Statutory Net (Loss)/ Profit After Tax Adjustment to remove the impact of the consolidated statutory results of EHAF, EWPF, Statutory Net (Loss)/ Profit After Tax Adjustment to include the impact of recognising the investments in EHAF, EWPF, Stirling Stirling and Bluewater Stirling and Bluewater Stirling and Bluewater Adjustment to remove the impact of the consolidated statutory results of EHAF, EWPF, Adjustment to remove the impact of the consolidated statutory results of EHAF, EWPF, Statutory Net (Loss)/ Profit After Tax and Bluewater using the equity method Adjustment to include the impact of recognising the investments in EHAF, EWPF, Stirling Adjustment to include the impact of recognising the investments in EHAF, EWPF, Stirling Stirling and Bluewater Adjustment to include the impact of recognising the investments in EHAF, EWPF, Stirling Stirling and Bluewater Adjustment to remove the impact of the consolidated statutory results of EHAF, EWPF, and Bluewater using the equity method Adjusted Net (Loss)/ Profit After Tax and Bluewater using the equity method and Bluewater using the equity method Adjustment to include the impact of recognising the investments in EHAF, EWPF, Stirling Adjustment to include the impact of recognising the investments in EHAF, EWPF, Stirling Stirling and Bluewater Adjusted Net (Loss)/ Profit After Tax and Bluewater using the equity method and Bluewater using the equity method Adjusted Net (Loss)/ Profit After Tax Adjusted Net (Loss)/ Profit After Tax Adjustment to include the impact of recognising the investments in EHAF, EWPF, Stirling Adjusted Net (Loss)/ Profit After Tax Adjusted Net (Loss)/ Profit After Tax and Bluewater using the equity method Set out below is a build up by component of the adjusted net loss after tax. Set out below is a build up by component of the adjusted net loss after tax. Adjusted Net (Loss)/ Profit After Tax Set out below is a build up by component of the adjusted net loss after tax. Set out below is a build up by component of the adjusted net loss after tax. Set out below is a build up by component of the adjusted net loss after tax. Set out below is a build up by component of the adjusted net loss after tax. Set out below is a build up by component of the adjusted net loss after tax. ENN Group ENN Group 30 June ENN Group ENN Group 30 June ENN Group 2023 ENN Group 30 June 30 June 2023 30 June $'000 30 June 2023 ENN Group 2023 $'000 2023 49,481 2023 $'000 30 June $'000 49,481 $'000 (13,025) $'000 49,481 2023 49,481 309 (13,025) 49,481 49,481 (13,025) $'000 (13,025) 309 (45,459) 309 (13,025) 309 (13,025) 49,481 (45,459) 309 (45,459) (8,694) 309 (45,459) (13,025) (8,694) (45,459) (927) (45,459) (8,694) 309 (8,694) (927) (3,515) (927) (8,694) (45,459) (8,694) (927) (3,515) (927) (927) (3,515) (13,136) (3,515) (8,694) (13,136) (3,515) (936) (3,515) (927) (13,136) (13,136) (936) 1,150 (936) (13,136) (3,515) (13,136) (936) 1,150 (936) 847 (936) 1,150 1,150 (13,136) 847 1,150 (7,641) 1,150 847 (936) 847 (7,641) 847 847 (7,641) 1,150 (19,716) (7,641) (7,641) (19,716) (7,641) 439 847 (19,716) (19,716) 439 (19,716) (7,641) 439 (19,277) (19,716) 439 (19,277) 439 439 (19,277) (19,716) (19,277) (19,277) 439 (19,277) (19,277) ENN Group ENN Group 30 June ENN Group ENN Group 30 June ENN Group 2022 ENN Group 30 June 30 June 2022 30 June $'000 30 June 2022 ENN Group 2022 $'000 2022 41,315 Funds management income 2022 $'000 30 June $'000 41,315 Funds management income $'000 6,624 Share of (loss) / profit from equity accounted investments $'000 Funds management income 41,315 2022 41,315 Funds management income 1,626 6,624 Share of (loss) / profit from equity accounted investments Revenue from investment portfolio Funds management income 41,315 Funds management income 41,315 6,624 Share of (loss) / profit from equity accounted investments $'000 6,624 Share of (loss) / profit from equity accounted investments 1,626 Revenue from investment portfolio (33,355) Operating expenses 1,626 6,624 Share of (loss) / profit from equity accounted investments Revenue from investment portfolio 1,626 6,624 Share of (loss) / profit from equity accounted investments Revenue from investment portfolio 41,315 Funds management income (33,355) Operating expenses 1,626 Revenue from investment portfolio (33,355) Operating expenses 16,210 EBITDA 1,626 Revenue from investment portfolio (33,355) Operating expenses 6,624 Share of (loss) / profit from equity accounted investments 16,210 EBITDA (33,355) Operating expenses (3,855) Amortisation of contract asset (33,355) Operating expenses 16,210 EBITDA 1,626 Revenue from investment portfolio 16,210 EBITDA (3,855) Amortisation of contract asset (3,613) Depreciation and amortisation (3,855) Amortisation of contract asset 16,210 EBITDA (33,355) Operating expenses 16,210 EBITDA (3,855) Amortisation of contract asset (3,613) Depreciation and amortisation (3,855) Amortisation of contract asset (3,855) Amortisation of contract asset (3,613) Depreciation and amortisation 8,742 EBIT (3,613) Depreciation and amortisation 16,210 EBITDA 8,742 EBIT (3,613) Depreciation and amortisation (6,094) Fair value loss on revaluation of PP&E, investment property and financial liabilities (3,613) Depreciation and amortisation (3,855) Amortisation of contract asset 8,742 EBIT 8,742 EBIT (6,094) Fair value loss on revaluation of PP&E, investment property and financial liabilities 5,120 Gain on sale of investments (6,094) Fair value loss on revaluation of PP&E, investment property and financial liabilities 8,742 EBIT (3,613) Depreciation and amortisation 8,742 EBIT (6,094) Fair value loss on revaluation of PP&E, investment property and financial liabilities 5,120 Gain on sale of investments (6,094) Fair value loss on revaluation of PP&E, investment property and financial liabilities 1,039 Interest income (6,094) Fair value loss on revaluation of PP&E, investment property and financial liabilities 5,120 Gain on sale of investments 5,120 Gain on sale of investments 8,742 EBIT 1,039 Interest income 5,120 Gain on sale of investments (5,966) Interest expense 5,120 Gain on sale of investments 1,039 Interest income (6,094) Fair value loss on revaluation of PP&E, investment property and financial liabilities 1,039 Interest income (5,966) Interest expense 1,039 Interest income 1,039 Interest income (5,966) Interest expense 5,120 Gain on sale of investments 2,841 Net profit / (loss) before income tax expense (5,966) Interest expense (5,966) Interest expense 2,841 Net profit / (loss) before income tax expense (5,966) Interest expense 617 Income tax benefit 1,039 Interest income 2,841 Net profit / (loss) before income tax expense 2,841 Net profit / (loss) before income tax expense 617 Income tax benefit 2,841 Net profit / (loss) before income tax expense (5,966) Interest expense 617 Income tax benefit 3,458 Adjusted net (loss) / profit after income tax 2,841 Net profit / (loss) before income tax expense 617 Income tax benefit 3,458 Adjusted net (loss) / profit after income tax 617 Income tax benefit 617 Income tax benefit 3,458 Adjusted net (loss) / profit after income tax 2,841 Net profit / (loss) before income tax expense 3,458 Adjusted net (loss) / profit after income tax 3,458 Adjusted net (loss) / profit after income tax Core Earnings 617 Income tax benefit 3,458 Adjusted net (loss) / profit after income tax Core Earnings Core Earnings Adjusted net (loss) / profit after income tax 3,458 Core Earnings Core Earnings Core Earnings Core Earnings represents an estimate of the underlying recurring cash earnings of the Group. Core Earnings Core Earnings represents an estimate of the underlying recurring cash earnings of the Group. Core Earnings Core Earnings Core Earnings represents an estimate of the underlying recurring cash earnings of the Group. Core Earnings Core Earnings represents an estimate of the underlying recurring cash earnings of the Group. Core Earnings is used by the Board to make strategic decisions and as a guide to assessing appropriate distribution Core Earnings represents an estimate of the underlying recurring cash earnings of the Group. Core Earnings Core Earnings represents an estimate of the underlying recurring cash earnings of the Group. Core Earnings is used by the Board to make strategic decisions and as a guide to assessing appropriate distribution is used by the Board to make strategic decisions and as a guide to assessing appropriate distribution is used by the Board to make strategic decisions and as a guide to assessing appropriate distribution declarations. Core Earnings represents an estimate of the underlying recurring cash earnings of the Group. Core Earnings is used by the Board to make strategic decisions and as a guide to assessing appropriate distribution is used by the Board to make strategic decisions and as a guide to assessing appropriate distribution declarations. declarations. declarations. is used by the Board to make strategic decisions and as a guide to assessing appropriate distribution declarations. declarations. A summary of the Group Core Earnings' results for the year is set out below: A summary of the Group Core Earnings' results for the year is set out below: declarations. A summary of the Group Core Earnings' results for the year is set out below: A summary of the Group Core Earnings' results for the year is set out below: A summary of the Group Core Earnings' results for the year is set out below: A summary of the Group Core Earnings' results for the year is set out below: A summary of the Group Core Earnings' results for the year is set out below: Summary Financial Results Summary Financial Results Net (loss) / profit after tax ($'000) Summary Financial Results Summary Financial Results Net (loss) / profit after tax ($'000) Summary Financial Results Adjusted net (loss) / profit after tax ($'000) Summary Financial Results Net (loss) / profit after tax ($'000) Net (loss) / profit after tax ($'000) Adjusted net (loss) / profit after tax ($'000) Net (loss) / profit after tax ($'000) (EHAF, EWPF, Stirling and Bluewater equity accounted) Net (loss) / profit after tax ($'000) Adjusted net (loss) / profit after tax ($'000) Summary Financial Results Adjusted net (loss) / profit after tax ($'000) (EHAF, EWPF, Stirling and Bluewater equity accounted) Adjusted net (loss) / profit after tax ($'000) Core Earnings ($'000) Adjusted net (loss) / profit after tax ($'000) (EHAF, EWPF, Stirling and Bluewater equity accounted) Net (loss) / profit after tax ($'000) (EHAF, EWPF, Stirling and Bluewater equity accounted) Core Earnings ($'000) (EHAF, EWPF, Stirling and Bluewater equity accounted) Distributions paid / payable to Securityholders ($'000) (EHAF, EWPF, Stirling and Bluewater equity accounted) Core Earnings ($'000) Adjusted net (loss) / profit after tax ($'000) Core Earnings ($'000) Distributions paid / payable to Securityholders ($'000) Core Earnings ($'000) Core earnings per stapled security (cents) Core Earnings ($'000) Distributions paid / payable to Securityholders ($'000) (EHAF, EWPF, Stirling and Bluewater equity accounted) Distributions paid / payable to Securityholders ($'000) Core earnings per stapled security (cents) Core earnings per weighted average stapled security (cents) Distributions paid / payable to Securityholders ($'000) Distributions paid / payable to Securityholders ($'000) Core earnings per stapled security (cents) Core Earnings ($'000) Core earnings per stapled security (cents) Core earnings per weighted average stapled security (cents) Distributions (cents per stapled security / unit) Core earnings per stapled security (cents) Core earnings per weighted average stapled security (cents) Core earnings per stapled security (cents) Core earnings per weighted average stapled security (cents) Distributions paid / payable to Securityholders ($'000) Distributions (cents per stapled security / unit) Net tangible assets ($ per stapled security) Core earnings per weighted average stapled security (cents) Distributions (cents per stapled security / unit) Core earnings per weighted average stapled security (cents) Distributions (cents per stapled security / unit) Core earnings per stapled security (cents) Net tangible assets ($ per stapled security) Distributions (cents per stapled security / unit) (EHAF, EWPF, Stirling and Bluewater equity accounted) Distributions (cents per stapled security / unit) Net tangible assets ($ per stapled security) Net tangible assets ($ per stapled security) Core earnings per weighted average stapled security (cents) (EHAF, EWPF, Stirling and Bluewater equity accounted) Net tangible assets ($ per stapled security) Gearing (net debt / total assets less cash) (%) Net tangible assets ($ per stapled security) (EHAF, EWPF, Stirling and Bluewater equity accounted) Distributions (cents per stapled security / unit) (EHAF, EWPF, Stirling and Bluewater equity accounted) Gearing (net debt / total assets less cash) (%) (EHAF, EWPF, Stirling and Bluewater equity accounted) (EHAF, EWPF, Stirling and Bluewater equity accounted) (EHAF, EWPF, Stirling and Bluewater equity accounted) Gearing (net debt / total assets less cash) (%) Net tangible assets ($ per stapled security) Gearing (net debt / total assets less cash) (%) (EHAF, EWPF, Stirling and Bluewater equity accounted) Gearing (net debt / total assets less cash) (%) Gearing (net debt / total assets less cash) (%) (EHAF, EWPF, Stirling and Bluewater equity accounted) (EHAF, EWPF, Stirling and Bluewater equity accounted) (EHAF, EWPF, Stirling and Bluewater equity accounted) (EHAF, EWPF, Stirling and Bluewater equity accounted) (EHAF, EWPF, Stirling and Bluewater equity accounted) Gearing (net debt / total assets less cash) (%) (EHAF, EWPF, Stirling and Bluewater equity accounted) ENN Group ENN Group 30 June ENN Group ENN Group 30 June ENN Group 2023 ENN Group 30 June 30 June 2023 30 June (30,674) 30 June 2023 ENN Group 2023 (30,674) 2023 (19,277) 2023 (30,674) 30 June (30,674) (19,277) (30,674) (30,674) (19,277) 2023 (19,277) (19,277) 12,529 (19,277) (30,674) 12,529 11,276 12,529 (19,277) 12,529 11,276 12,529 10.15 12,529 11,276 11,276 10.40 10.15 11,276 11,276 10.15 12,529 10.15 9.13 10.40 10.40 10.15 10.40 10.15 11,276 9.13 9.13 1.23 10.40 9.13 10.40 10.15 9.13 1.23 9.13 1.23 10.40 1.23 1.23 9.13 31.7 1.23 31.7 31.7 1.23 31.7 31.7 31.7 31.7 ENN Group ENN Group 30 June ENN Group ENN Group 30 June ENN Group 2022 ENN Group 30 June 30 June 2022 30 June (4,234) 30 June 2022 ENN Group 2022 (4,234) 2022 3,458 2022 (4,234) 30 June (4,234) 3,458 (4,234) (4,234) 3,458 2022 3,458 3,458 18,259 3,458 (4,234) 18,259 16,433 18,259 3,458 18,259 16,433 18,259 14.98 18,259 16,433 16,433 15.56 14.98 16,433 16,433 14.98 18,259 14.98 13.48 15.56 15.56 14.98 15.56 14.98 16,433 13.48 13.48 1.40 15.56 13.48 15.56 14.98 13.48 1.40 13.48 1.40 15.56 1.40 1.40 13.48 30.2 1.40 30.2 30.2 1.40 30.2 30.2 30.2 30.2 21 9 9 9 9 9 9 9 ELANOR INVESTORS GROUP Directors' Report DIRECTORS' REPORT 4. Operating and financial review (continued) REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) The table below provides a reconciliation from adjusted net loss after tax to distributable Core Earnings: Adjusted Net (Loss)/ Profit After Tax Adjustments for items included in statutory profit / (loss) Increase in equity accounted investments to reflect distributions received / receivable Net (gain) / loss on disposals of equity accounted investments Profit on Sale of EHAF Profit on Sale of EHAF Retained Building depreciation expense Amortisation amounts Corporate transaction costs Tax and other non-cash adjustments Core Earnings ENN Group 30 June 2023 $'000 (19,277) ENN Group 30 June 2022 $'000 3,458 22,112 (825) – – 31 5,263 5,315 (90) 12,529 1,281 (5,120) 11,031 (2,659) 101 5,357 – 4,810 18,259 Note 2 3 4 4 5 6 7 8 1 Note 1: Core Earnings represents the Directors view of underlying earnings from ongoing operating activities of the group level for the year, being net profit / (loss) after tax, adjusting for one-off realised items (being formation or other transaction costs that occur infrequently or are outside the course of ongoing business activities), non-cash items (being fair value movements, depreciation charges on the buildings held by the Trust, amortisation of intangibles, straight lining of rental expense, and amortisation of equity settled STI and LTI amounts), and restating share of profit from equity accounted investments to reflect distributions received / receivable in respect of those investments. Note 2: Share of profit from equity accounted investments (including equity accounting of EHAF, EWPF, Stirling and Bluewater) of the Group's consolidated funds on an equity accounted basis includes depreciation and amortisation and fair value adjustments on investment property that were added back in the determination of distributable earnings for those managed funds. The Group's share of those adjustments to distributable earnings in the relevant managed funds have been added back for the purposes of calculating Core Earnings so that the Group's Core Earnings reflects the distribution received / receivable by the Group from those investments in Elanor managed funds. Note 3: Net (gain) / loss on disposals of equity accounted investments includes adjustments for realised non-cash accounting (gains) / losses on the sale of equity accounted investments during the year, so as to only include net cash profit for the purposes of calculating Core Earnings. Note 4: On 30 September 2021, the Group sold its holding in Elanor Luxury Hotel Fund (ELHF) and Albany Hotel Syndicate (Albany) to Elanor Metro and Prime Regional Hotel Fund (EMPR) to establish the Elanor Hotel Accommodation Fund. The hotel assets held by ELHF and Albany were accounted for by the Group on a fair value basis whereby revaluation increases arising from changes in the fair value of land and buildings are recognised in other comprehensive income and accumulated within equity as opposed to being reflected in the consolidated profit and loss of the Group. Consequently, and consistent with the Group's policy, the profit on divestment of ELHF and Albany ($10.5 million) was included in Core Earnings in the prior year. Furthermore, an amount of $2.7 million of this profit was retained to assist in achieving the future growth plans of the Group. Note 5: During the year, the Group (on the basis that EHAF, EWPF, Stirling and Bluewater are equity accounted) incurred total depreciation charges of $1.0 million, however only the depreciation expense on buildings of $0.03 million has been added back for the purposes of calculating Core Earnings. Note 6: During the year, the Group incurred non-cash profit and loss charges in respect of the amortisation of certain amounts including the equity component of the Group's Short Term Incentive (STI), Long Term Incentive (LTI) amounts, intangibles and borrowing costs. These amounts have been added back for the purposes of calculating Core Earnings. Note 7: During the year, the Group incurred non-recurring profit and loss charges in respect of corporate transaction costs, including in respect of the acquisition of the Challenger real estate business. These amounts have been added back for the purposes of calculating Core Earnings. Note 8: Tax and other non-cash adjustments include non-cash interest and depreciation in respect of the Group's leases, other non-cash profit and loss charges impacting the Group's result for the year, and the tax effect for non-cash items during the year. 22 10 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT Operating and financial review (continued) 4. Operating and financial review (continued) 4. 4. Operating and financial review (continued) REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) Funds Management Income Funds Management Income Funds Management Income The table below provides a breakdown of ENN Group's funds management income, including Group’s The table below provides a breakdown of ENN Group's funds management income, including Group’s consolidated funds. The table below provides a breakdown of ENN Group's funds management income, including Group’s consolidated funds. consolidated funds. ENN Group ENN Group 30 June ENN Group 30 June 2023 30 June 2023 $'000 2023 $'000 28,245 $'000 28,245 5,839 28,245 5,839 8,257 5,839 8,257 7,140 8,257 7,140 49,481 7,140 49,481 49,481 ENN Group ENN Group 30 June ENN Group 30 June 2022 30 June 2022 $'000 2022 $'000 23,610 Management fees and related cost recoveries $'000 Management fees and related cost recoveries 23,610 5,076 Leasing and development management fees 23,610 Management fees and related cost recoveries 5,076 Leasing and development management fees 12,629 Acquisition fees and related cost recoveries 5,076 Leasing and development management fees 12,629 Acquisition fees and related cost recoveries – Performance fees 12,629 Acquisition fees and related cost recoveries – Performance fees 41,315 Total funds management income Performance fees – 41,315 Total funds management income Note: Total funds management income includes $14.4 million (30 June 2022: $12.6 million) relating to the Group's consolidated funds Total funds management income 41,315 Note: Total funds management income includes $14.4 million (30 June 2022: $12.6 million) relating to the Group's consolidated funds (EHAF, EWPF, Bluewater and Stirling), which is eliminated upon consolidation into the Group's consolidated financial results. Note: Total funds management income includes $14.4 million (30 June 2022: $12.6 million) relating to the Group's consolidated funds (EHAF, EWPF, Bluewater and Stirling), which is eliminated upon consolidation into the Group's consolidated financial results. (EHAF, EWPF, Bluewater and Stirling), which is eliminated upon consolidation into the Group's consolidated financial results. The Group’s funds management income has grown strongly during the year as a result of the execution of a The Group’s funds management income has grown strongly during the year as a result of the execution of a range of funds management initiatives. Management fees generated from the Group’s hotel operating platform The Group’s funds management income has grown strongly during the year as a result of the execution of a range of funds management initiatives. Management fees generated from the Group’s hotel operating platform are expected to grow as the demand for domestic tourism and leisure continues to strengthen. Leasing and range of funds management initiatives. Management fees generated from the Group’s hotel operating platform are expected to grow as the demand for domestic tourism and leisure continues to strengthen. Leasing and development management fees continue to be a sustainable and growing income stream as a result of the are expected to grow as the demand for domestic tourism and leisure continues to strengthen. Leasing and development management fees continue to be a sustainable and growing income stream as a result of the breadth of development and repositioning projects across the Group’s Managed Funds in the Retail, Hotels development management fees continue to be a sustainable and growing income stream as a result of the breadth of development and repositioning projects across the Group’s Managed Funds in the Retail, Hotels and Commercial sectors. breadth of development and repositioning projects across the Group’s Managed Funds in the Retail, Hotels and Commercial sectors. and Commercial sectors. Distributions from Co-Investments Distributions from Co-Investments Distributions from Co-Investments The Group measures the performance of its co-investments based on distributions received / receivable from The Group measures the performance of its co-investments based on distributions received / receivable from these co-investments. The table below provides a breakdown of the Group's distributions received / receivable The Group measures the performance of its co-investments based on distributions received / receivable from these co-investments. The table below provides a breakdown of the Group's distributions received / receivable from its Managed Funds for the year ended 30 June 2023. these co-investments. The table below provides a breakdown of the Group's distributions received / receivable from its Managed Funds for the year ended 30 June 2023. from its Managed Funds for the year ended 30 June 2023. ENN Group ENN Group 30 June ENN Group 30 June 2022 30 June 2022 $'000 2022 $'000 3,737 Elanor Commercial Property Fund $'000 Elanor Commercial Property Fund 3,737 1,344 Elanor Hotel Accommodation Fund 3,737 Elanor Commercial Property Fund 1,344 Elanor Hotel Accommodation Fund 1,438 Elanor Property Income Fund 1,344 Elanor Hotel Accommodation Fund 1,438 Elanor Property Income Fund 399 Waverley Gardens Syndicate 1,438 Elanor Property Income Fund 399 Waverley Gardens Syndicate 25 Harris Street Fund 399 Waverley Gardens Syndicate 25 Harris Street Fund – Elanor Healthcare Real Estate Fund 25 Harris Street Fund – Elanor Healthcare Real Estate Fund – Riverton Forum Fund – Elanor Healthcare Real Estate Fund – Riverton Forum Fund 195 Stirling Street Syndicate – Riverton Forum Fund 195 Stirling Street Syndicate 32 Hunters Plaza Syndicate 195 Stirling Street Syndicate 32 Hunters Plaza Syndicate 400 Bluewater Square Syndicate 32 Hunters Plaza Syndicate 400 Bluewater Square Syndicate 195 Elanor Wildlife Park Fund 400 Bluewater Square Syndicate 195 Elanor Wildlife Park Fund 140 Warrawong Plaza Syndicate 195 Elanor Wildlife Park Fund 140 Warrawong Plaza Syndicate 7,905 Total distributions received / receivable from Managed Funds Warrawong Plaza Syndicate 140 7,905 Total distributions received / receivable from Managed Funds Note: As the Group consolidates Stirling, EHAF and Bluewater into its consolidated financial results, the distributions receivable from 7,905 Total distributions received / receivable from Managed Funds Note: As the Group consolidates Stirling, EHAF and Bluewater into its consolidated financial results, the distributions receivable from these funds are eliminated on consolidation. The distributions receivable relating to the other funds that are equity accounted are Note: As the Group consolidates Stirling, EHAF and Bluewater into its consolidated financial results, the distributions receivable from these funds are eliminated on consolidation. The distributions receivable relating to the other funds that are equity accounted are contained within the equity accounted investments balance and reduce the equity accounted investments balance when the distribution these funds are eliminated on consolidation. The distributions receivable relating to the other funds that are equity accounted are contained within the equity accounted investments balance and reduce the equity accounted investments balance when the distribution is received. contained within the equity accounted investments balance and reduce the equity accounted investments balance when the distribution is received. is received. Total co-investment distributions received or receivable during the year was $9.1 million. Total co-investment distributions received or receivable during the year was $9.1 million. Total co-investment distributions received or receivable during the year was $9.1 million. ENN Group ENN Group 30 June ENN Group 30 June 2023 30 June 2023 $'000 2023 $'000 3,737 $'000 3,737 3,125 3,737 3,125 694 3,125 694 643 694 643 342 643 342 263 342 263 171 263 171 75 171 75 37 75 37 – 37 – – – – – – – 9,087 – 9,087 9,087 23 11 11 11 ELANOR INVESTORS GROUP Directors' Report DIRECTORS' REPORT 4. Operating and financial review (continued) REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) Risk Management Elanor’s continued growth and success depends on its ability to evaluate, measure and manage risk. Good risk management practices will not only protect established value, but they will also assist in identifying and capitalising on opportunities to create value. By effectively evaluating and managing risk, the Group provides greater certainty and confidence for all Elanor Securityholders. Elanor regularly assesses the key business risks and opportunities that could impact performance and the ability to execute the Group’s strategy. Risks to the Group in the coming year primarily relate to the potential earnings variability associated with general economic and market conditions, domestic retail spending, the availability of capital for funds management opportunities, movement in property valuations, debt capital market conditions, the general increase in cyber security risks, climate related risks and possible weather- related events. The Group manages these risks in accordance with its Risk Management Framework and Risk Management Policy as well as through its highly active asset management approach across its investment portfolio, its continued focus on broadening the Group's capital partner base, insurance arrangements and through the active management of its capital structure. The current rising interest rate environment has the potential to impact earnings across both Elanor and its managed funds through higher borrowing costs and through downward pressure on property valuations as a result of softening valuation metrics and tightening debt and equity capital markets. The Group continues to monitor and actively manage this risk, primarily through the adoption of appropriate interest rate hedging strategies. Climate-related risks and opportunities As the owner and manager of a large portfolio of office, retail, hotel and leisure assets across Australia and New Zealand, Elanor recognises the impact that climate change is having on the environment and the importance of contributing to climate change mitigation initiatives. As part of Elanor’s commitment to sustainability and responsible business practices, the Group continues to progress disclosure on monitoring, measuring and reporting of climate related risks and opportunities in line with the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD) and in anticipation of an Australian equivalent of the recently released International Sustainability Standards. The following sections outline the measures Elanor has undertaken on climate change initiatives in line with the TCFD framework covering governance, strategy, risk management and targets and metrics. Governance The Elanor Investors Group Board takes responsibility for overseeing the Group’s sustainability strategy and policies, which includes managing climate change risks. The Group’s ESG Committee, operating under a Charter, reports to the Board as a Management Committee. The ESG Committee plays a pivotal role in assessing and overseeing the implementation of impactful ESG initiatives across the business, with a particular focus on sustainability matters, including climate-related risks and opportunities. 24 12 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT Operating and financial review (continued) 4. Operating and financial review (continued) 4. Operating and financial review (continued) 4. Operating and financial review (continued) 4. Operating and financial review (continued) 4. Operating and financial review (continued) 4. 4. Operating and financial review (continued) Operating and financial review (continued) 4. REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) Chaired by the CEO and Managing Director, the ESG Committee ensures the Group identifies, assesses, and Chaired by the CEO and Managing Director, the ESG Committee ensures the Group identifies, assesses, and Chaired by the CEO and Managing Director, the ESG Committee ensures the Group identifies, assesses, and manages material risks, including those related to climate change and sustainability, in accordance with Chaired by the CEO and Managing Director, the ESG Committee ensures the Group identifies, assesses, and Chaired by the CEO and Managing Director, the ESG Committee ensures the Group identifies, assesses, and Chaired by the CEO and Managing Director, the ESG Committee ensures the Group identifies, assesses, and manages material risks, including those related to climate change and sustainability, in accordance with Chaired by the CEO and Managing Director, the ESG Committee ensures the Group identifies, assesses, and Chaired by the CEO and Managing Director, the ESG Committee ensures the Group identifies, assesses, and manages material risks, including those related to climate change and sustainability, in accordance with Elanor's Risk Management Framework. Working closely with Elanor’s Executive Management Committee and manages material risks, including those related to climate change and sustainability, in accordance with manages material risks, including those related to climate change and sustainability, in accordance with manages material risks, including those related to climate change and sustainability, in accordance with Elanor's Risk Management Framework. Working closely with Elanor’s Executive Management Committee and manages material risks, including those related to climate change and sustainability, in accordance with manages material risks, including those related to climate change and sustainability, in accordance with Elanor's Risk Management Framework. Working closely with Elanor’s Executive Management Committee and key business unit managers, the ESG Committee collaborates to achieve the successful formulation and Elanor's Risk Management Framework. Working closely with Elanor’s Executive Management Committee and Elanor's Risk Management Framework. Working closely with Elanor’s Executive Management Committee and Elanor's Risk Management Framework. Working closely with Elanor’s Executive Management Committee and key business unit managers, the ESG Committee collaborates to achieve the successful formulation and Elanor's Risk Management Framework. Working closely with Elanor’s Executive Management Committee and Elanor's Risk Management Framework. Working closely with Elanor’s Executive Management Committee and key business unit managers, the ESG Committee collaborates to achieve the successful formulation and key business unit managers, the ESG Committee collaborates to achieve the successful formulation and implementation of Elanor's ESG initiatives. key business unit managers, the ESG Committee collaborates to achieve the successful formulation and key business unit managers, the ESG Committee collaborates to achieve the successful formulation and implementation of Elanor's ESG initiatives. key business unit managers, the ESG Committee collaborates to achieve the successful formulation and key business unit managers, the ESG Committee collaborates to achieve the successful formulation and implementation of Elanor's ESG initiatives. implementation of Elanor's ESG initiatives. implementation of Elanor's ESG initiatives. implementation of Elanor's ESG initiatives. implementation of Elanor's ESG initiatives. implementation of Elanor's ESG initiatives. Strategy Strategy Strategy Strategy Strategy Strategy Strategy Strategy Elanor’s mission is to become the leading real estate funds management business known for delivering Elanor’s mission is to become the leading real estate funds management business known for delivering Elanor’s mission is to become the leading real estate funds management business known for delivering exceptional investment returns for its capital partners whilst making positive and impactful social and Elanor’s mission is to become the leading real estate funds management business known for delivering Elanor’s mission is to become the leading real estate funds management business known for delivering Elanor’s mission is to become the leading real estate funds management business known for delivering exceptional investment returns for its capital partners whilst making positive and impactful social and Elanor’s mission is to become the leading real estate funds management business known for delivering Elanor’s mission is to become the leading real estate funds management business known for delivering exceptional investment returns for its capital partners whilst making positive and impactful social and environmental contributions to the communities in which it operates, and more broadly. exceptional investment returns for its capital partners whilst making positive and impactful social and exceptional investment returns for its capital partners whilst making positive and impactful social and exceptional investment returns for its capital partners whilst making positive and impactful social and environmental contributions to the communities in which it operates, and more broadly. exceptional investment returns for its capital partners whilst making positive and impactful social and exceptional investment returns for its capital partners whilst making positive and impactful social and environmental contributions to the communities in which it operates, and more broadly. environmental contributions to the communities in which it operates, and more broadly. environmental contributions to the communities in which it operates, and more broadly. environmental contributions to the communities in which it operates, and more broadly. environmental contributions to the communities in which it operates, and more broadly. environmental contributions to the communities in which it operates, and more broadly. With a strong presence across regional Australia, Elanor provides a significant number of employment With a strong presence across regional Australia, Elanor provides a significant number of employment With a strong presence across regional Australia, Elanor provides a significant number of employment opportunities for people in the regions from both the ongoing operation of investments and through the delivery With a strong presence across regional Australia, Elanor provides a significant number of employment With a strong presence across regional Australia, Elanor provides a significant number of employment With a strong presence across regional Australia, Elanor provides a significant number of employment opportunities for people in the regions from both the ongoing operation of investments and through the delivery With a strong presence across regional Australia, Elanor provides a significant number of employment With a strong presence across regional Australia, Elanor provides a significant number of employment opportunities for people in the regions from both the ongoing operation of investments and through the delivery of value-add capital expenditure projects. Climate-related issues are an integral part of Elanor’s strategic opportunities for people in the regions from both the ongoing operation of investments and through the delivery opportunities for people in the regions from both the ongoing operation of investments and through the delivery opportunities for people in the regions from both the ongoing operation of investments and through the delivery of value-add capital expenditure projects. Climate-related issues are an integral part of Elanor’s strategic opportunities for people in the regions from both the ongoing operation of investments and through the delivery opportunities for people in the regions from both the ongoing operation of investments and through the delivery of value-add capital expenditure projects. Climate-related issues are an integral part of Elanor’s strategic considerations, representing both risks and opportunities across the business. of value-add capital expenditure projects. Climate-related issues are an integral part of Elanor’s strategic of value-add capital expenditure projects. Climate-related issues are an integral part of Elanor’s strategic of value-add capital expenditure projects. Climate-related issues are an integral part of Elanor’s strategic considerations, representing both risks and opportunities across the business. of value-add capital expenditure projects. Climate-related issues are an integral part of Elanor’s strategic of value-add capital expenditure projects. Climate-related issues are an integral part of Elanor’s strategic considerations, representing both risks and opportunities across the business. considerations, representing both risks and opportunities across the business. considerations, representing both risks and opportunities across the business. considerations, representing both risks and opportunities across the business. considerations, representing both risks and opportunities across the business. considerations, representing both risks and opportunities across the business. Elanor’s inaugural ESG Annual report, released last year, set out the Group’s ESG strategy. Short, medium Elanor’s inaugural ESG Annual report, released last year, set out the Group’s ESG strategy. Short, medium Elanor’s inaugural ESG Annual report, released last year, set out the Group’s ESG strategy. Short, medium and long-term goals have been identified against 5 key areas of focus in the environmental space, including Elanor’s inaugural ESG Annual report, released last year, set out the Group’s ESG strategy. Short, medium Elanor’s inaugural ESG Annual report, released last year, set out the Group’s ESG strategy. Short, medium Elanor’s inaugural ESG Annual report, released last year, set out the Group’s ESG strategy. Short, medium and long-term goals have been identified against 5 key areas of focus in the environmental space, including Elanor’s inaugural ESG Annual report, released last year, set out the Group’s ESG strategy. Short, medium Elanor’s inaugural ESG Annual report, released last year, set out the Group’s ESG strategy. Short, medium and long-term goals have been identified against 5 key areas of focus in the environmental space, including energy and carbon management, ecological impacts, water management, waste impacts, climate change and long-term goals have been identified against 5 key areas of focus in the environmental space, including and long-term goals have been identified against 5 key areas of focus in the environmental space, including and long-term goals have been identified against 5 key areas of focus in the environmental space, including energy and carbon management, ecological impacts, water management, waste impacts, climate change and long-term goals have been identified against 5 key areas of focus in the environmental space, including and long-term goals have been identified against 5 key areas of focus in the environmental space, including energy and carbon management, ecological impacts, water management, waste impacts, climate change vulnerability. Currently, portfolio-wide energy and water usage data capture, carbon emission measurement energy and carbon management, ecological impacts, water management, waste impacts, climate change energy and carbon management, ecological impacts, water management, waste impacts, climate change energy and carbon management, ecological impacts, water management, waste impacts, climate change vulnerability. Currently, portfolio-wide energy and water usage data capture, carbon emission measurement energy and carbon management, ecological impacts, water management, waste impacts, climate change energy and carbon management, ecological impacts, water management, waste impacts, climate change vulnerability. Currently, portfolio-wide energy and water usage data capture, carbon emission measurement vulnerability. Currently, portfolio-wide energy and water usage data capture, carbon emission measurement and ESG resourcing are priorities. vulnerability. Currently, portfolio-wide energy and water usage data capture, carbon emission measurement vulnerability. Currently, portfolio-wide energy and water usage data capture, carbon emission measurement and ESG resourcing are priorities. vulnerability. Currently, portfolio-wide energy and water usage data capture, carbon emission measurement vulnerability. Currently, portfolio-wide energy and water usage data capture, carbon emission measurement and ESG resourcing are priorities. and ESG resourcing are priorities. and ESG resourcing are priorities. and ESG resourcing are priorities. and ESG resourcing are priorities. and ESG resourcing are priorities. Risk management Risk management Risk management Risk management Risk management Risk management Risk management Risk management To ensure that climate risks are managed in a coordinated manner, sustainability and climate related risks are To ensure that climate risks are managed in a coordinated manner, sustainability and climate related risks are To ensure that climate risks are managed in a coordinated manner, sustainability and climate related risks are integrated into Elanor’s Risk Management Framework and Risk Appetite Statement along with broader ESG, To ensure that climate risks are managed in a coordinated manner, sustainability and climate related risks are To ensure that climate risks are managed in a coordinated manner, sustainability and climate related risks are To ensure that climate risks are managed in a coordinated manner, sustainability and climate related risks are integrated into Elanor’s Risk Management Framework and Risk Appetite Statement along with broader ESG, To ensure that climate risks are managed in a coordinated manner, sustainability and climate related risks are To ensure that climate risks are managed in a coordinated manner, sustainability and climate related risks are integrated into Elanor’s Risk Management Framework and Risk Appetite Statement along with broader ESG, business-related and macro-economic matters. The Elanor Board and ESG Committee are responsible for integrated into Elanor’s Risk Management Framework and Risk Appetite Statement along with broader ESG, integrated into Elanor’s Risk Management Framework and Risk Appetite Statement along with broader ESG, integrated into Elanor’s Risk Management Framework and Risk Appetite Statement along with broader ESG, business-related and macro-economic matters. The Elanor Board and ESG Committee are responsible for integrated into Elanor’s Risk Management Framework and Risk Appetite Statement along with broader ESG, integrated into Elanor’s Risk Management Framework and Risk Appetite Statement along with broader ESG, business-related and macro-economic matters. The Elanor Board and ESG Committee are responsible for monitoring and managing climate-related risk. business-related and macro-economic matters. The Elanor Board and ESG Committee are responsible for business-related and macro-economic matters. The Elanor Board and ESG Committee are responsible for business-related and macro-economic matters. The Elanor Board and ESG Committee are responsible for monitoring and managing climate-related risk. business-related and macro-economic matters. The Elanor Board and ESG Committee are responsible for business-related and macro-economic matters. The Elanor Board and ESG Committee are responsible for monitoring and managing climate-related risk. monitoring and managing climate-related risk. monitoring and managing climate-related risk. monitoring and managing climate-related risk. monitoring and managing climate-related risk. monitoring and managing climate-related risk. To ensure the Group addresses climate-related issues more effectively, a climate change vulnerability analysis To ensure the Group addresses climate-related issues more effectively, a climate change vulnerability analysis To ensure the Group addresses climate-related issues more effectively, a climate change vulnerability analysis process has been integrated into due diligence procedures for all new asset acquisitions. This process includes To ensure the Group addresses climate-related issues more effectively, a climate change vulnerability analysis To ensure the Group addresses climate-related issues more effectively, a climate change vulnerability analysis To ensure the Group addresses climate-related issues more effectively, a climate change vulnerability analysis process has been integrated into due diligence procedures for all new asset acquisitions. This process includes To ensure the Group addresses climate-related issues more effectively, a climate change vulnerability analysis To ensure the Group addresses climate-related issues more effectively, a climate change vulnerability analysis process has been integrated into due diligence procedures for all new asset acquisitions. This process includes scenario analysis to identify and assess climate-related risks and opportunities. process has been integrated into due diligence procedures for all new asset acquisitions. This process includes process has been integrated into due diligence procedures for all new asset acquisitions. This process includes process has been integrated into due diligence procedures for all new asset acquisitions. This process includes scenario analysis to identify and assess climate-related risks and opportunities. process has been integrated into due diligence procedures for all new asset acquisitions. This process includes process has been integrated into due diligence procedures for all new asset acquisitions. This process includes scenario analysis to identify and assess climate-related risks and opportunities. scenario analysis to identify and assess climate-related risks and opportunities. scenario analysis to identify and assess climate-related risks and opportunities. scenario analysis to identify and assess climate-related risks and opportunities. scenario analysis to identify and assess climate-related risks and opportunities. scenario analysis to identify and assess climate-related risks and opportunities. In the coming year, this analysis will be extended to cover Elanor’s entire portfolio, evaluating climate-related In the coming year, this analysis will be extended to cover Elanor’s entire portfolio, evaluating climate-related In the coming year, this analysis will be extended to cover Elanor’s entire portfolio, evaluating climate-related risks and opportunities thoroughly from both a physical risk and transition risk perspective. In the coming year, this analysis will be extended to cover Elanor’s entire portfolio, evaluating climate-related In the coming year, this analysis will be extended to cover Elanor’s entire portfolio, evaluating climate-related In the coming year, this analysis will be extended to cover Elanor’s entire portfolio, evaluating climate-related risks and opportunities thoroughly from both a physical risk and transition risk perspective. In the coming year, this analysis will be extended to cover Elanor’s entire portfolio, evaluating climate-related In the coming year, this analysis will be extended to cover Elanor’s entire portfolio, evaluating climate-related risks and opportunities thoroughly from both a physical risk and transition risk perspective. risks and opportunities thoroughly from both a physical risk and transition risk perspective. risks and opportunities thoroughly from both a physical risk and transition risk perspective. risks and opportunities thoroughly from both a physical risk and transition risk perspective. risks and opportunities thoroughly from both a physical risk and transition risk perspective. risks and opportunities thoroughly from both a physical risk and transition risk perspective. Metrics and targets Metrics and targets Metrics and targets Metrics and targets Metrics and targets Metrics and targets Metrics and targets Metrics and targets Elanor is committed to reducing its environmental impact on the planet. Elanor is committed to reducing its environmental impact on the planet. Elanor is committed to reducing its environmental impact on the planet. Elanor is committed to reducing its environmental impact on the planet. Elanor is committed to reducing its environmental impact on the planet. Elanor is committed to reducing its environmental impact on the planet. Elanor is committed to reducing its environmental impact on the planet. Elanor is committed to reducing its environmental impact on the planet. Energy usage data and scope 1 and 2 carbon emissions has been collected for all Elanor-managed assets for Energy usage data and scope 1 and 2 carbon emissions has been collected for all Elanor-managed assets for Energy usage data and scope 1 and 2 carbon emissions has been collected for all Elanor-managed assets for Energy usage data and scope 1 and 2 carbon emissions has been collected for all Elanor-managed assets for financial years 2022 and 2023. In the coming year, this data collection will be expanded to include the newly Energy usage data and scope 1 and 2 carbon emissions has been collected for all Elanor-managed assets for Energy usage data and scope 1 and 2 carbon emissions has been collected for all Elanor-managed assets for financial years 2022 and 2023. In the coming year, this data collection will be expanded to include the newly Energy usage data and scope 1 and 2 carbon emissions has been collected for all Elanor-managed assets for Energy usage data and scope 1 and 2 carbon emissions has been collected for all Elanor-managed assets for financial years 2022 and 2023. In the coming year, this data collection will be expanded to include the newly acquired Challenger and ADIC portfolios. This data will help to establish energy consumption and carbon financial years 2022 and 2023. In the coming year, this data collection will be expanded to include the newly financial years 2022 and 2023. In the coming year, this data collection will be expanded to include the newly financial years 2022 and 2023. In the coming year, this data collection will be expanded to include the newly acquired Challenger and ADIC portfolios. This data will help to establish energy consumption and carbon financial years 2022 and 2023. In the coming year, this data collection will be expanded to include the newly financial years 2022 and 2023. In the coming year, this data collection will be expanded to include the newly acquired Challenger and ADIC portfolios. This data will help to establish energy consumption and carbon emission targets for the Group’s portfolio. acquired Challenger and ADIC portfolios. This data will help to establish energy consumption and carbon acquired Challenger and ADIC portfolios. This data will help to establish energy consumption and carbon acquired Challenger and ADIC portfolios. This data will help to establish energy consumption and carbon emission targets for the Group’s portfolio. acquired Challenger and ADIC portfolios. This data will help to establish energy consumption and carbon acquired Challenger and ADIC portfolios. This data will help to establish energy consumption and carbon emission targets for the Group’s portfolio. emission targets for the Group’s portfolio. emission targets for the Group’s portfolio. emission targets for the Group’s portfolio. emission targets for the Group’s portfolio. emission targets for the Group’s portfolio. Elanor is currently evaluating the impact of its business operations on the environment and exploring ways to Elanor is currently evaluating the impact of its business operations on the environment and exploring ways to Elanor is currently evaluating the impact of its business operations on the environment and exploring ways to minimise its carbon footprint. These efforts include: Elanor is currently evaluating the impact of its business operations on the environment and exploring ways to Elanor is currently evaluating the impact of its business operations on the environment and exploring ways to Elanor is currently evaluating the impact of its business operations on the environment and exploring ways to minimise its carbon footprint. These efforts include: Elanor is currently evaluating the impact of its business operations on the environment and exploring ways to Elanor is currently evaluating the impact of its business operations on the environment and exploring ways to minimise its carbon footprint. These efforts include: minimise its carbon footprint. These efforts include: minimise its carbon footprint. These efforts include: minimise its carbon footprint. These efforts include: minimise its carbon footprint. These efforts include: minimise its carbon footprint. These efforts include: • Energy efficiency improvements across Elanor’s portfolio of real estate investments • Energy efficiency improvements across Elanor’s portfolio of real estate investments • Energy efficiency improvements across Elanor’s portfolio of real estate investments • Energy efficiency improvements across Elanor’s portfolio of real estate investments • Energy efficiency improvements across Elanor’s portfolio of real estate investments • Energy efficiency improvements across Elanor’s portfolio of real estate investments • Energy efficiency improvements across Elanor’s portfolio of real estate investments • Energy efficiency improvements across Elanor’s portfolio of real estate investments 25 13 13 13 13 13 13 13 13 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP Directors' Report DIRECTORS' REPORT DIRECTORS' REPORT Operating and financial review (continued) 4. 4. Operating and financial review (continued) REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) • On-site renewable energy generation • On-site renewable energy generation • Power purchase agreements for renewable energy • Power purchase agreements for renewable energy Elanor's second ESG report, to be released later in 2023, will provide comprehensive details on the Group’s Elanor's second ESG report, to be released later in 2023, will provide comprehensive details on the Group’s energy and carbon management initiatives, achievements, and future plans across the portfolio. energy and carbon management initiatives, achievements, and future plans across the portfolio. By adhering to the TCFD recommendations and enhancing the Group’s focus on climate-related risks and By adhering to the TCFD recommendations and enhancing the Group’s focus on climate-related risks and opportunities, Elanor aims to foster sustainable and responsible business practices that benefit both the opportunities, Elanor aims to foster sustainable and responsible business practices that benefit both the Group’s stakeholders and the environment. Group’s stakeholders and the environment. Summary and Outlook Summary and Outlook The Group's key strategic objective remains unchanged: to deliver strong investment returns for Elanor’s The Group's key strategic objective remains unchanged: to deliver strong investment returns for Elanor’s capital partners and grow Securityholder value. Furthermore, the Group is acutely focused on growing funds capital partners and grow Securityholder value. Furthermore, the Group is acutely focused on growing funds management earnings and recycling co-investment capital to facilitate growth in a ‘capital-lite’ manner. management earnings and recycling co-investment capital to facilitate growth in a ‘capital-lite’ manner. The performance of Elanor’s managed portfolio has remained resilient in the face of an increasing interest rate The performance of Elanor’s managed portfolio has remained resilient in the face of an increasing interest rate environment. This reflects the high investment quality of the assets within the portfolio and Elanor’s highly environment. This reflects the high investment quality of the assets within the portfolio and Elanor’s highly active asset management approach in managing these assets. The Group continues to have a strong pipeline active asset management approach in managing these assets. The Group continues to have a strong pipeline of funds management opportunities and continues to actively pursue funds management opportunities in new of funds management opportunities and continues to actively pursue funds management opportunities in new real estate sectors in addition to pursuing strategic opportunities to deliver its growth objectives. real estate sectors in addition to pursuing strategic opportunities to deliver its growth objectives. The Group acquired Challenger’s Real Estate business on 7 July 2023 increasing the Group’s funds under The Group acquired Challenger’s Real Estate business on 7 July 2023 increasing the Group’s funds under management to $6.2 billion. The transaction delivers on several key strategic objectives of the business, management to $6.2 billion. The transaction delivers on several key strategic objectives of the business, delivering material earnings accretion and return on equity, and step-change growth in AUM with new strategic delivering material earnings accretion and return on equity, and step-change growth in AUM with new strategic capital partnerships. capital partnerships. Having completed the integration of the Challenger Real Estate business into Elanor’s funds management Having completed the integration of the Challenger Real Estate business into Elanor’s funds management platform and realised transaction cost savings, the acquisition delivers significant value to Elanor platform and realised transaction cost savings, the acquisition delivers significant value to Elanor Securityholders: Securityholders: • A 78% increase in forecast base management fee income for year ending 30 June 2024 with • A 78% increase in forecast base management fee income for year ending 30 June 2024 with incremental annualised base management fees of $16.1 million; incremental annualised base management fees of $16.1 million; • Forecast incremental EBITDA of over $12 million in FY24 (representing a transaction EBITDA multiple • Forecast incremental EBITDA of over $12 million in FY24 (representing a transaction EBITDA multiple of ~ 3x); of ~ 3x); • New institutional capital partners and Elanor Securityholders (Challenger 13.6% and Abu Dhabi • New institutional capital partners and Elanor Securityholders (Challenger 13.6% and Abu Dhabi Investment Council (“ADIC”) 3.0%); Investment Council (“ADIC”) 3.0%); • Grant of options to ADIC to acquire a further 7.5 million ENN securities at exercise prices of between • Grant of options to ADIC to acquire a further 7.5 million ENN securities at exercise prices of between $2.25 to $2.75 (options are linked to ADIC committing a further $0.5 billion in AUM); and $2.25 to $2.75 (options are linked to ADIC committing a further $0.5 billion in AUM); and • Exclusive capital raising agreement with Fidante to distribute Elanor’s real estate managed funds. • Exclusive capital raising agreement with Fidante to distribute Elanor’s real estate managed funds. The combination of Elanor’s real estate funds management capability with Challenger’s market leading capital The combination of Elanor’s real estate funds management capability with Challenger’s market leading capital raising platform positions the Group for further strong growth. raising platform positions the Group for further strong growth. 26 14 14 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP DIRECTORS' REPORT 4. Operating and financial review (continued) REVIEW OF FINANCIAL AND OPERATIONAL RESULTS (continued) This acquisition is a milestone achievement for Elanor as we execute on our key strategic objective to become the leading Australian real estate funds management group known for delivering exceptional investment returns for our capital partners. 5. Interests in the Group The movement in stapled securities of the Group during the year is set out below: Stapled securities on issue at the beginning of the year Stapled securities issued under the short term incentive scheme Stapled securities exercised under the long term incentive scheme Stapled securities on issue at the end of the year Consolidated Consolidated Group 30 June 2022 $'000 120,975 941 – 121,916 Group 30 June 2023 $'000 121,916 1,337 816 124,069 27 15 ELANOR INVESTORS GROUP Directors' Report DIRECTORS' REPORT 6. Directors Name Paul Bedbrook Particulars Independent Non-Executive Chairman Member, Audit and Risk Committee Member, Remuneration and Nomination Committee Member, Transaction Approval Committee Paul was appointed as a Director of both the Company and the Responsible Entity in June 2014. Paul has had a career of over 30 years in financial services, originally as an analyst, fund manager and then the GM & Chief Investment Officer for Mercantile Mutual Investment Management Ltd (ING owned) from 1987 to 1995. Paul was an executive for 26 years with the Dutch global banking, insurance and investment group, ING, retiring in 2010. Paul’s career included the roles of: President and CEO of ING Direct Bank, Canada (2000 – 2003), CEO of the ING Australia/ANZ Bank Wealth JV (2003 - 2008) and Regional CEO, ING Asia Pacific, Hong Kong (2008 – 2010). Paul was previously the Chairman of Zurich Financial Services Australia and its Life, General and Investment Companies. Paul is a non-executive director of the National Blood Authority. Former listed directorships in the last three years: Nil Interest in stapled securities: 306,137 Qualifications: B.Sc, F FIN, FAICD Glenn Willis Managing Director and Chief Executive Officer Member, Transaction Approval Committee Glenn has over 30 years' experience in the Australian and international capital markets. Glenn was the co-founder and Chief Executive Officer of Moss Capital, prior to its ASX listing as Elanor Investors Group in July 2014. Prior to Elanor, Glenn co-founded Grange Securities and led the team in his role as Managing Director and CEO. After 12 years of growth, Grange Securities was acquired by Lehman Brothers International in 2007 as the platform for Lehman's Australian investment banking and funds management operations. Glenn was appointed Managing Director and Country Head in March 2007. In 2008, Glenn was appointed executive Vice Chairman of Lehman Brothers Australia. Glenn is a Director of FSHD Global Research Foundation. Former listed directorships in the last three years: Nil Interest in stapled securities: 5,527,613 Qualifications: B.Bus (Econ & Fin) 28 16 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP DIRECTORS' REPORT 6. Directors (continued) Name Nigel Ampherlaw Particulars Independent Non-Executive Director Chairman, Audit and Risk Committee Nigel was appointed as a Director of both the Company and the Responsible Entity in June 2014. Nigel was a Partner of PricewaterhouseCoopers for 22 years where he held a number of leadership positions, including heading the financial services audit, business advisory services and consulting businesses. He also held a number of senior client Lead Partner roles. Nigel has extensive experience in risk management, technology, consulting and auditing in Australia and the Asia-Pacific region. Nigel is the chairman and independent Non-Executive Director of Great Southern Bank. Former listed directorships in the last three years: Nil Interest in stapled securities: 200,000 Qualifications: B.Com, FCA, MAICD Anthony (Tony) Fehon Independent Non-Executive Director Chairman, Remuneration and Nominations Committee Member, Audit and Risk Committee Chairman, Transaction Approval Committee Tony was appointed as a Director of both the Company and the Responsible Entity in August 2019. Tony has more than 30 years’ experience working in senior roles with some of Australia’s leading financial services and funds management businesses. He has broad experience in operational and leadership roles across many industries. Tony is a director of Elanor Hotel Accommodation Limited and Elanor Hotel Accommodation II Limited, enlighten Australia Pty Limited, BaaS Technology Limited, and numerous small companies. He was previously an Executive Director of Macquarie Bank Limited where he was involved in the formation and listing of several of Macquarie’s listed property trusts including being a director of the listed leisure trust. Former listed directorships in the last three years: Nil Interest in stapled securities: 55,797 Qualifications: B. Com, FCA 29 17 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP Directors' Report DIRECTORS' REPORT DIRECTORS' REPORT 6. 6. Directors (continued) Directors (continued) Name Name Su Kiat Su Kiat Lim Lim Karyn Karyn Baylis Baylis Particulars Particulars Non-Executive Director Non-Executive Director Su Kiat was appointed as a Director of both Elanor Investors Limited and the Responsible Su Kiat was appointed as a Director of both Elanor Investors Limited and the Responsible Entity in October 2021. Su Kiat is currently CEO of Firmus Capital Pte Ltd, a Singapore based Entity in October 2021. Su Kiat is currently CEO of Firmus Capital Pte Ltd, a Singapore based private equity real estate investment management firm founded in 2017. private equity real estate investment management firm founded in 2017. Su Kiat has been in the property industry for over 20 years with extensive direct real investment Su Kiat has been in the property industry for over 20 years with extensive direct real investment experience, executing strategies across direct real estate portfolios in Asia Pacific including experience, executing strategies across direct real estate portfolios in Asia Pacific including Australia. In 2011 Su Kiat co-founded Rockworth Capital Partners, with direct real estate AUM Australia. In 2011 Su Kiat co-founded Rockworth Capital Partners, with direct real estate AUM of circa $1bn by 2017. Prior to that, Su Kiat held key roles in investments management and of circa $1bn by 2017. Prior to that, Su Kiat held key roles in investments management and investment origination at Frasers Commercial Trust and ALLCO REIT. Su Kiat started his investment origination at Frasers Commercial Trust and ALLCO REIT. Su Kiat started his career in real estate as a Consultant in Retail Economics at Urbis. career in real estate as a Consultant in Retail Economics at Urbis. Su Kiat is a non-executive Director of Aspen Group Holdings Ltd a diversified group listed on Su Kiat is a non-executive Director of Aspen Group Holdings Ltd a diversified group listed on the SGX. the SGX. Former listed directorships in the last three years: Nil Former listed directorships in the last three years: Nil Interest in stapled securities: Nil Interest in stapled securities: Nil Qualifications: B.Bus, PhD (Econ) Qualifications: B.Bus, PhD (Econ) Independent Non-Executive Director Independent Non-Executive Director Member, Remuneration and Nominations Committee Member, Remuneration and Nominations Committee Member, Environmental, Social & Governance Management Committee Member, Environmental, Social & Governance Management Committee Member, Work, Health & Safety Committee Member, Work, Health & Safety Committee Karyn was appointed as Director of both the Company and the Responsible Entity in November Karyn was appointed as Director of both the Company and the Responsible Entity in November 2021. Karyn was most recently CEO of Jawun, a position she has held since 2009, and joined 2021. Karyn was most recently CEO of Jawun, a position she has held since 2009, and joined the Jawun Board in 2017. She retired from Jawun in January 2022. the Jawun Board in 2017. She retired from Jawun in January 2022. Karyn has led a distinguished business career in Australia and internationally, having held a range of senior management and C-suite executive roles in multinational businesses including Karyn has led a distinguished business career in Australia and internationally, having held a at Optus, Insurance Australia Group and Senior Vice President The Americas at Qantas range of senior management and C-suite executive roles in multinational businesses including Airways. In 2009 she was appointed CEO of Jawun and spent 12 years working with some of at Optus, Insurance Australia Group and Senior Vice President The Americas at Qantas the leading indigenous reform voices in the country along with outstanding organisations. She Airways. In 2009 she was appointed CEO of Jawun and spent 12 years working with some of retired from Jawun in January 2022. the leading indigenous reform voices in the country along with outstanding organisations. She retired from Jawun in January 2022. Karyn has received a number of awards, notably a Member in the General Division of the Order of Australia (AM) for significant service to the Indigenous community in the 2018 Karyn has received a number of awards, notably a Member in the General Division of the Queen’s Birthday Honours and The Australian Financial Review and Westpac 100 Women of Order of Australia (AM) for significant service to the Indigenous community in the 2018 Influence Award in Diversity in 2015. Karyn is also a current member of Chief Executive Queen’s Birthday Honours and The Australian Financial Review and Westpac 100 Women of Women (CEW) and Australian Institute of Company Directors (AICD). Influence Award in Diversity in 2015. Karyn is also a current member of Chief Executive Women (CEW) and Australian Institute of Company Directors (AICD). Previous Board positions include CARE Australia, Cure Cancer, Grocon Holdings Pty Ltd and NRMA Financial Management and Life Nominees. Previous Board positions include CARE Australia, Cure Cancer, Grocon Holdings Pty Ltd and NRMA Financial Management and Life Nominees. Former listed directorships in the last three years: Nil Former listed directorships in the last three years: Nil Interest in stapled securities: 35,000 Interest in stapled securities: 35,000 30 18 18 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP DIRECTORS' REPORT DIRECTORS' REPORT 6. 6. Directors (continued) Directors (continued) Name Name Victor Su Kiat Rodriguez Lim Karyn Baylis Particulars Particulars Non-Executive Director Non-Executive Director Victor was appointed a Director of both the Company and the Responsible Entity in July 2023. Su Kiat was appointed as a Director of both Elanor Investors Limited and the Responsible Entity in October 2021. Su Kiat is currently CEO of Firmus Capital Pte Ltd, a Singapore based Victor is currently Chief Executive, Funds Management of Challenger Limited (ASX:CFG) private equity real estate investment management firm founded in 2017. (Challenger), having been appointed to that role in August 2022, following five years as Head of Fixed Income within the Challenger Investment Management business. Su Kiat has been in the property industry for over 20 years with extensive direct real investment experience, executing strategies across direct real estate portfolios in Asia Pacific including Victor has over 30 years’ investment management experience. Prior to joining Challenger, Australia. In 2011 Su Kiat co-founded Rockworth Capital Partners, with direct real estate AUM Victor was head of Asia Pacific Fixed Income at Aberdeen Asset Management based in of circa $1bn by 2017. Prior to that, Su Kiat held key roles in investments management and Singapore between 2014 to 2017. There he led a team of more than 30 investment investment origination at Frasers Commercial Trust and ALLCO REIT. Su Kiat started his professionals across the region. He was also a Regional Director overseeing the wider career in real estate as a Consultant in Retail Economics at Urbis. Aberdeen business. Su Kiat is a non-executive Director of Aspen Group Holdings Ltd a diversified group listed on Prior to relocating to Singapore, Victor led Aberdeen’s Australian Fixed Income business. Victor the SGX. also held various roles over 13 years at Credit Suisse Asset Management in Australia, including Deputy Head of Fixed Income for three years up to 2009. Former listed directorships in the last three years: Nil Victor is a director of a number of Challenger Group entities. Interest in stapled securities: Nil Former listed directorships in the last three years: Nil. Qualifications: B.Bus, PhD (Econ) Interest in stapled securities: Nil. Independent Non-Executive Director Qualifications: B. Econ, GDip FINSIA Member, Remuneration and Nominations Committee Member, Environmental, Social & Governance Management Committee Member, Work, Health & Safety Committee Karyn was appointed as Director of both the Company and the Responsible Entity in November 2021. Karyn was most recently CEO of Jawun, a position she has held since 2009, and joined the Jawun Board in 2017. She retired from Jawun in January 2022. Karyn has led a distinguished business career in Australia and internationally, having held a range of senior management and C-suite executive roles in multinational businesses including at Optus, Insurance Australia Group and Senior Vice President The Americas at Qantas Airways. In 2009 she was appointed CEO of Jawun and spent 12 years working with some of the leading indigenous reform voices in the country along with outstanding organisations. She retired from Jawun in January 2022. Karyn has received a number of awards, notably a Member in the General Division of the Order of Australia (AM) for significant service to the Indigenous community in the 2018 Queen’s Birthday Honours and The Australian Financial Review and Westpac 100 Women of Influence Award in Diversity in 2015. Karyn is also a current member of Chief Executive Women (CEW) and Australian Institute of Company Directors (AICD). Previous Board positions include CARE Australia, Cure Cancer, Grocon Holdings Pty Ltd and NRMA Financial Management and Life Nominees. Former listed directorships in the last three years: Nil Interest in stapled securities: 35,000 31 19 18 ELANOR INVESTORS GROUP Directors' Report DIRECTORS' REPORT 7. Directors' relevant interests Paul Bedbrook Glenn Willis1 Nigel Ampherlaw Anthony Fehon Su Kiat Lim Karyn Baylis Victor Rodriguez Stapled securities at 1 July 2022 306,137 5,437,076 200,000 21,666 – 25,000 – Net Movement – 90,537 – 34,131 – 10,000 – Stapled securities at the date of this report 306,137 5,527,613 200,000 55,797 – 35,000 – 1 Glenn Willis has an entitlement to an additional 5,000,000 securities under equity based executive incentive plans. 8. Meetings of Directors Paul Bedbrook Glenn Willis Nigel Ampherlaw Anthony Fehon Su Kiat Lim Karyn Baylis Elanor Board (Responsible Entity & the Company) Audit & Risk Committee Remuneration and Nominations Committee Eligible to attend 14 14 14 14 14 14 Attended 14 14 13 13 13 14 Eligible to attend 7 - 7 7 - - Attended 7 - 7 5 - - Eligible to attend 8 - - 8 - 8 Attended 8 - - 8 - 8 During the year, the Board met 14 times including special purpose meetings in relation to various funds management related initiatives. 9. Remuneration Report The remuneration report for the year ended 30 June 2023 outlines the remuneration arrangements, philosophy and framework of the Elanor Investors Group (Group) in accordance with the requirements of the Corporations Act 2001 (Cth) and its regulations. The remuneration report is set out under the following main headings: a) b) c) d) e) f) g) h) Remuneration Policy and Approach Key Management Personnel Executive Remuneration Arrangements Executive Remuneration Outcomes Non-Executive Director Remuneration Arrangements and Outcomes Additional Disclosures Relating to Short Term Incentive Plans, Long Term Incentive Plans and Securities Loans to Key Management Personnel Other Transactions and Balances with Key Management Personnel and their Related Parties The information provided in the Remuneration Report has been audited as required by section 308 (3C) of the Corporations Act 2001 (Cth). 32 20 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP DIRECTORS' REPORT 9. a) Remuneration Report (continued) Remuneration Policy and Approach The Elanor Investors Group aims to attract, retain and motivate highly skilled people and therefore ensures remuneration is competitive with prevailing employment market conditions and also provides sufficient motivation by ensuring that remuneration is aligned to the Group's results. The Group's remuneration framework seeks to align executive reward with the achievement of strategic objectives and in particular, the creation of sustainable value and earnings growth for investors. In addition, the Board seeks to have reference to market best practice to ensure that executive remuneration remains competitive, fair and reasonable. The Group has a formally constituted Remuneration and Nomination Committee which comprises three Non- Executive Director (NED) members, Mr Anthony Fehon (Chair), Mr Paul Bedbrook and Mrs Karyn Baylis. The Remuneration and Nomination Committee met 8 times during the year for the purposes of reviewing and making recommendations to the Elanor Investors Group Board on the level of remuneration of the senior executives and the Directors. Specifically, the Board approves the remuneration arrangements of the Managing Director and other executives and all aggregate and individual awards made under the short term (STI) and long-term incentive (LTI) plans, following recommendations from the Remuneration and Nomination Committee. The Board also sets the aggregate remuneration of NED's, which is then subject to Securityholder approval. The Remuneration and Nomination Committee endeavours to ensure that the remuneration outcomes strike an appropriate balance between the interests of the Group's securityholders and rewarding, retaining and motivating the Group's executives and the Directors. Further information on the Remuneration and Nomination Committee's role and responsibilities can be viewed at www.elanorinvestors.com. b) Key Management Personnel The remuneration report details the remuneration arrangements for Key Management Personnel (KMP), who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including the directors (whether executive or otherwise). The KMP of Elanor Investors Group for the year ended 30 June 2023 were: Executive Mr Glenn Willis Mr Paul Siviour Mr Symon Simmons Non-Executive Mr Paul Bedbrook Mr Nigel Ampherlaw Mr Anthony Fehon Mr Su Kiat Lim Mrs Karyn Baylis Position Managing Director and Chief Executive Officer Chief Operating Officer Chief Financial Officer and Company Secretary Position Independent Chairman and Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Non-Executive Director Independent Non-Executive Director 33 21 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP Directors' Report DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT 9. 9. 9. c) c) c) Remuneration Report (continued) Remuneration Report (continued) Remuneration Report (continued) Executive Remuneration Arrangements Executive Remuneration Arrangements Executive Remuneration Arrangements The Group's executive remuneration framework has three components: The Group's executive remuneration framework has three components: The Group's executive remuneration framework has three components: • Base pay, including superannuation; • Base pay, including superannuation; • Base pay, including superannuation; • Short term incentives; and • Short term incentives; and • Short term incentives; and Long term incentives. • Long term incentives. • Long term incentives. • Remuneration levels are considered annually through an assessment of each executive based on the Remuneration levels are considered annually through an assessment of each executive based on the Remuneration levels are considered annually through an assessment of each executive based on the individual's performance and achievements during the financial year and taking into account the overall individual's performance and achievements during the financial year and taking into account the overall individual's performance and achievements during the financial year and taking into account the overall performance of the Elanor Investors Group and prevailing remuneration rates of executives in similar positions. performance of the Elanor Investors Group and prevailing remuneration rates of executives in similar positions. performance of the Elanor Investors Group and prevailing remuneration rates of executives in similar positions. Remuneration Structure Remuneration Structure Remuneration Structure - - - Base pay, including superannuation Base pay, including superannuation Base pay, including superannuation Base pay is determined by reference to appropriate benchmark information, taking into account an individual's Base pay is determined by reference to appropriate benchmark information, taking into account an individual's Base pay is determined by reference to appropriate benchmark information, taking into account an individual's responsibilities, performance, qualifications and experience. There are no guaranteed base pay increases in responsibilities, performance, qualifications and experience. There are no guaranteed base pay increases in responsibilities, performance, qualifications and experience. There are no guaranteed base pay increases in any executive's contracts. any executive's contracts. any executive's contracts. - - - Short term incentive Short term incentive Short term incentive The Group has an STI scheme (the STI Scheme), based on an annual profit share, which is available to all The Group has an STI scheme (the STI Scheme), based on an annual profit share, which is available to all The Group has an STI scheme (the STI Scheme), based on an annual profit share, which is available to all staff. The STI Scheme is based on a profit share pool, to be calculated each year based on the Group's staff. The STI Scheme is based on a profit share pool, to be calculated each year based on the Group's staff. The STI Scheme is based on a profit share pool, to be calculated each year based on the Group's financial performance for the relevant year. financial performance for the relevant year. financial performance for the relevant year. The purpose of the STI Scheme is to provide an annual bonus arrangement that incentivises and rewards The purpose of the STI Scheme is to provide an annual bonus arrangement that incentivises and rewards The purpose of the STI Scheme is to provide an annual bonus arrangement that incentivises and rewards management for achieving annual pre-tax ROE (Return on Equity) for securityholders in excess of 10% per management for achieving annual pre-tax ROE (Return on Equity) for securityholders in excess of 10% per management for achieving annual pre-tax ROE (Return on Equity) for securityholders in excess of 10% per annum. The profit share pool is based on 20% of ROE above 10%, 22.5% of the ROE above 15%, 25% of the annum. The profit share pool is based on 20% of ROE above 10%, 22.5% of the ROE above 15%, 25% of the annum. The profit share pool is based on 20% of ROE above 10%, 22.5% of the ROE above 15%, 25% of the ROE above 17.5% and 30% of the ROE above 20%. The STI Scheme provides that 50% of any awards to ROE above 17.5% and 30% of the ROE above 20%. The STI Scheme provides that 50% of any awards to ROE above 17.5% and 30% of the ROE above 20%. The STI Scheme provides that 50% of any awards to individuals from the profit share pool may be delivered in deferred securities, which vest two years after award, individuals from the profit share pool may be delivered in deferred securities, which vest two years after award, individuals from the profit share pool may be delivered in deferred securities, which vest two years after award, provided that the employee remains with the Group and maintains minimum performance standards. The provided that the employee remains with the Group and maintains minimum performance standards. The provided that the employee remains with the Group and maintains minimum performance standards. The holder of the securities is entitled to dividends during the two-year deferral period. holder of the securities is entitled to dividends during the two-year deferral period. holder of the securities is entitled to dividends during the two-year deferral period. The Elanor Investors Group Board monitors the appropriateness of the profit share scheme and any The Elanor Investors Group Board monitors the appropriateness of the profit share scheme and any The Elanor Investors Group Board monitors the appropriateness of the profit share scheme and any distribution of the profit share pool will be at the Board's absolute discretion, taking into consideration the distribution of the profit share pool will be at the Board's absolute discretion, taking into consideration the distribution of the profit share pool will be at the Board's absolute discretion, taking into consideration the forecast and actual financial performance and position of the Group. forecast and actual financial performance and position of the Group. forecast and actual financial performance and position of the Group. - - - Long term incentive Long term incentive Long term incentive The Group has an LTI scheme (the LTI Scheme), based on an executive loan security plan and an executive The Group has an LTI scheme (the LTI Scheme), based on an executive loan security plan and an executive The Group has an LTI scheme (the LTI Scheme), based on an executive loan security plan and an executive options plan. options plan. options plan. During the year, the Board reviewed the Group's LTI scheme and determined that the Loan Securities and During the year, the Board reviewed the Group's LTI scheme and determined that the Loan Securities and During the year, the Board reviewed the Group's LTI scheme and determined that the Loan Securities and Executive Options remained the most appropriate equity award vehicles for the 2023 LTI awards, encouraging Executive Options remained the most appropriate equity award vehicles for the 2023 LTI awards, encouraging Executive Options remained the most appropriate equity award vehicles for the 2023 LTI awards, encouraging a continued focus on security price growth, distributions and strong alignment of executives to Securityholders. a continued focus on security price growth, distributions and strong alignment of executives to Securityholders. a continued focus on security price growth, distributions and strong alignment of executives to Securityholders. No LTI Awards were granted to KMP's in FY23. No LTI Awards were granted to KMP's in FY23. No LTI Awards were granted to KMP's in FY23. Under the executive loan security plan, awards (comprising the loan of funds to eligible Elanor employees to Under the executive loan security plan, awards (comprising the loan of funds to eligible Elanor employees to Under the executive loan security plan, awards (comprising the loan of funds to eligible Elanor employees to acquire Securities which are subject to vesting conditions) have been issued to certain employees. Awards acquire Securities which are subject to vesting conditions) have been issued to certain employees. Awards acquire Securities which are subject to vesting conditions) have been issued to certain employees. Awards totalling 18.6 million Securities were on issue at 30 June 2023 (2022: 17.5 million). totalling 18.6 million Securities were on issue at 30 June 2023 (2022: 17.5 million). totalling 18.6 million Securities were on issue at 30 June 2023 (2022: 17.5 million). 34 22 22 22 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP DIRECTORS' REPORT 9. c) Remuneration Report (continued) Executive Remuneration Arrangements (continued) The limited recourse loan provided by the Group under the loan security plan carries interest of an amount equal to any cash dividend or distribution but not including any dividend or distribution of capital, or an abnormal distribution. In addition to the loan security plan, the Group has an executive option plan comprising rights to acquire Securities at a specified exercise price, subject to the achievement of vesting conditions, which may be offered to certain eligible employees (including the Chief Executive Officer, direct reports to the Chief Executive Officer and other selected key executives) as determined by the Board. No options were issued or exercised under the plan in 2023 (2022: Nil). The purpose of the LTI Scheme is to assist in attracting, motivating and retaining key management and employees. The LTI Scheme operates by providing key management and employees with the opportunity to participate in the future performance of Group securities. The vesting conditions of LTI plans and related awards include both a service-based hurdle and an absolute total securityholder return (TSR) performance hurdle. The service-based hurdle is 2, 3 and 4 years in the case of the loan security plan. The TSR is 10% per annum for the first year and 8% per annum thereafter in the case of the loan security plan and 15% per annum in the case of the options plan. TSR was selected as the LTI performance measure to ensure an alignment between the securityholder return and reward for executives. 35 23 ELANOR INVESTORS GROUP Directors' Report DIRECTORS' REPORT 9. d) Remuneration Report (continued) Executive Remuneration Outcomes The table below sets out summary information about the Group's earnings and movements in Securityholder returns for the year ended 30 June 2023: Net profit / (loss) before tax ($'000) Adjusted Net profit / (loss) before tax ($'000) (EHAF, EWPF, Stirling and Bluewater equity accounted) Net profit / (loss) after tax ($'000) Adjusted Net profit / (loss) after tax ($'000) (EHAF, EWPF, Stirling and Bluewater equity accounted) Core earnings ($'000) Security price at start of year Security price at end of year Interim distribution Final distribution Total distributions Basic earnings per security Basic earnings per security (EHAF, EWPF, Stirling and Bluewater equity accounted) 30 June 2023 (26,133) (19,716) (30,674) (19,277) 30 June 2022 (7,395) 2,841 (4,234) 3,458 30 June 2021 9,467 7,468 30 June 2020 (26,419) (18,151) 30 June 2019 19,867 22,412 7,817 5,939 (23,390) (17,988) 16,044 17,601 12,529 $1.65 $1.63 7.51 cents 1.62 cents 9.13 cents (16.35) cents (16.00) cents 18,259 $1.89 $1.65 9.05 cents 4.43 cents 13.48 cents 0.82 cents 2.95 cents 15,146 $1.12 $1.89 4.13 cents 7.14 cents 11.27 cents 6.73 cents 5.08 cents 15,434 $1.83 $1.12 9.51 cents – 9.51 cents (16.59) cents (17.39) cents 17,548 $2.06 $1.83 6.32 cents 9.74 cents 16.06 cents 16.04 cents 18.31 cents The financial performance measure driving STI payment outcomes is pre-tax return on equity (ROE). The required pre-tax return hurdle was not achieved for the financial year. Reported earnings for the year were ($26.1) million before tax or ($30.7) million after tax. This reflects a basic earnings per security of (16.35) cents based on average equity employed for the year. On 29 July 2022, the Board approved a retention based STI bonus pool of $5.1 million, utilising the Board’s discretion, which is incorporated into the Group’s results for the year ended 30 June 2023. For the year ended 30 June 2023 the Group achieved Core Earnings of $12.5 million. Total distributions per security during the year were 9.13 cents. The Group's closing trading price on 30 June 2023 was $1.63 per security, a 1.2% decrease on the $1.65 price at 1 July 2022. 36 24 Elanor Investors GroupAnnual Report 2023 $ l a t o T 2 0 1 , 2 8 5 , 1 4 0 7 , 0 1 8 , 1 2 6 9 , 3 1 2 , 1 5 0 0 , 0 4 2 , 1 9 8 6 , 2 5 1 , 1 6 7 3 , 3 6 1 , 1 – – – – $ 7 6 6 , 6 4 7 6 6 , 6 4 n o i t p O I T L 2 s t n e m y a P I T S d e r r e f e D y t i r u c e S $ 7 5 3 , 6 8 2 3 1 9 , 8 3 4 9 7 4 , 8 5 2 1 1 0 , 1 3 3 3 1 7 , 9 4 2 0 7 0 , 4 1 3 $ 5 7 7 , 4 8 1 0 5 9 , 2 4 3 3 6 2 , 5 8 0 4 6 , 6 8 7 4 9 , 3 6 0 8 9 , 4 6 n a o L I T L y t i r u c e S 2 s t n e m y a P g n o L i e c v r e S 1 e v a e L $ 5 7 9 , 2 4 1 5 1 , 2 4 4 8 4 , 5 2 6 9 5 , 2 2 9 5 4 , 3 3 4 6 4 , 0 3 $ l a u n n A 1 e v a e L 7 9 8 , 3 0 1 6 3 1 , 0 7 3 7 1 , 3 7 0 4 8 , 7 5 7 0 3 , 9 3 5 2 7 , 5 2 $ r e p u S 2 9 2 , 5 2 8 6 5 , 3 2 0 0 5 , 7 2 5 3 2 , 7 2 0 0 5 , 7 2 5 3 2 , 7 2 - n o N y r a t e n o M s u n o B h s a C I T S $ – – – – – – $ 0 0 0 , 0 5 1 0 0 0 , 5 7 1 0 0 0 , 0 5 1 0 0 0 , 5 7 1 0 0 0 , 0 5 1 0 0 0 , 5 7 1 $ y r a l a S 9 3 1 , 2 4 7 9 1 3 , 1 7 6 3 6 0 , 4 9 5 3 8 6 , 9 3 5 4 6 7 , 8 8 5 2 0 9 , 5 2 5 r a e Y 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 s t n e m y a p d e s a b - e r a h S s t i f e n e b s t i f e n e b l s t i f e n e b e e y o p m e m r e t - t r o h S l e e y o p m e m r e t - g n o L t n e m y o p m e l - t s o P g n i r u d n e k a t e v a e l s s e l l e n n o s r e p t n e m e g a n a m y e k e h t f o t n e m e l t i t n e e v a e l s ' r a e y t n e r r u c e h t g n e b i , r a e y e h t r o f l s e c n a a b e v a e l d e u r c c a e h t n i t n e m e v o m e h t s t n e s e r p e r e v a e l i e c v r e s g n o l s r e c i f f O e v i t u c e x E s i l l i W . G d n a e v a e l l a u n n A 1 . r a e y e h t s n o m m S i . S r u o v S i i . P s a d e s o c s d l i s t n u o m a e h T l i . n o i t a u m S o l r a C e t n o M a g n s u e i t a d t n a r g e h t t a s a l t d e a u c a c l s i n o i t a r e n u m e r r i e h t f o t r a p s a l e n n o s r e p t n e m e g a n a m y e k o t d e t n a r g s n o i t p o d n a s e i t i r u c e s n a o l e h t l f o e u a v e h T 2 . e t a d g n i t s e v o t d o i r e p e c n a m r o f r e p i f o g n n n g e b i e h t m o r f d o i r e p e h t r e v o i s s a b e n i l - t i h g a r t s a n o e u a v e l t a d t n a r g e h t 5 2 g n i t a c o l l a i y b d e n m r e t e d n e e b e v a h r a e y l i a c n a n i f e h t r o f n o i t a r e n u m e r e h t f o t r a p 37 P U O R G S R O T S E V N I R O N A L E T R O P E R ' S R O T C E R D I ) d e u n i t n o c ( s e m o c t u O n o i t a r e n u m e R e v i t u c e x E ) d e u n i t n o c ( t r o p e R n o i t a r e n u m e R . 9 ) d l e n n o s r e P t n e m e g a n a M y e K f o n o i t a r e n u m e R : 1 l e b a T ELANOR INVESTORS GROUP Directors' Report DIRECTORS' REPORT 9. d) Remuneration Report (continued) Executive Remuneration Outcomes (continued) Table 2: Remuneration components as a proportion of total remuneration on an annualised basis Executive Officers G. Willis P. Siviour S. Simmons Fixed remuneration % 57.79 44.58 59.33 52.21 59.78 52.38 Remuneration linked to performance % 42.21 55.42 40.67 47.79 40.22 47.62 Year 2023 2022 2023 2022 2023 2022 Total % 100.00 100.00 100.00 100.00 100.00 100.00 No key management personnel appointed during the year received a payment as part of their consideration for agreeing to hold the position. Remuneration and other terms of employment for the key management personnel are formalised in their employment contracts. The key provisions of the employment contracts for key management personnel are set out below. Table 3: Employment contracts of key management personnel Executive Position G. Willis P. Siviour S. Simmons Managing Director and Chief Executive Officer Chief Operating Officer Chief Financial Officer and Company Secretary Term No fixed term No fixed term No fixed term Salary (including Superannuation) Incentive remuneration $800,000 $650,000 $635,000 Eligible for an award of short term and long-term incentive remuneration (if any) as described above Eligible for an award of short term and long-term incentive remuneration (if any) as described above Eligible for an award of short term and long-term incentive remuneration (if any) as described above 38 26 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP DIRECTORS' REPORT 9. d) Remuneration Report (continued) Executive Remuneration Outcomes (continued) Executive Benefits Notice period G. Willis P. Siviour S. Simmons Entitled to participate in Elanor Investors Group benefit plans that are made available Entitled to participate in Elanor Investors Group benefit plans that are made available Entitled to participate in Elanor Investors Group benefit plans that are made available Employment shall continue with the Group unless either party gives 12 months' notice in writing Employment shall continue with the Group unless either party gives 9 months' notice in writing Employment shall continue with the Group unless either party gives 6 months’ notice in writing Restraint 12 months from the time of Termination N/A N/A e) Non-Executive Director Remuneration Arrangements and Outcomes The Elanor Board determines the remuneration structure for NED's based on recommendations from the Remuneration and Nomination Committee. The NED's individual fees are reviewed annually by the Remuneration and Nomination Committee taking into consideration the level of fees paid to NEDs by companies of similar size and stature. The maximum aggregate amount of fees that can be paid to NEDs is subject to approval by Securityholders at the Annual General Meeting (currently $750,000, as approved by securityholders in October 2019). The NEDs receive a fixed remuneration amount, in respect of their services provided to the Responsible Entity and Elanor Investors Limited. They do not receive any performance-based remuneration, or any retirement benefits other than statutory superannuation. Table 4: Remuneration of Non-Executive Directors Non-Executive Directors P. Bedbrook N. Ampherlaw A. Fehon S.K. Lim1 K. Baylis1 Year 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 Short-term employee benefits Salary $ 169,683 157,727 107,500 100,000 107,500 90,909 107,500 75,000 97,285 60,606 Committee Fees $ – 15,000 15,000 15,000 15,000 15,000 – – – – Total $ 169,683 172,727 122,500 115,000 122,500 105,909 107,500 75,000 97,285 60,606 Post- employment benefits Super $ 17,817 17,273 – – – 9,091 – – 10,215 6,061 1 Mr S. K. Lim and Mrs K. Baylis were appointed in FY22. Total $ 187,500 190,000 122,500 115,000 122,500 115,000 107,500 75,000 107,500 66,667 39 27 ELANOR INVESTORS GROUP Directors' Report DIRECTORS' REPORT 9. e) Remuneration Report (continued) Non-Executive Director Remuneration Arrangements and Outcomes (continued) During the year no options were issued to the NEDs. Remuneration and other items of appointment of the NEDs are formalised in contracts. The NEDs are employed on employment contracts with no fixed term. The NEDs employment is subject to the Constitution of the Group, the Corporations Act, and the 3 year cycle of the rotation and election of Directors. 40 28 Elanor Investors GroupAnnual Report 2023 P U O R G S R O T S E V N I R O N A L E T R O P E R ' S R O T C E R D I : r a e y l i a c n a n i f t n e r r u c e h t g n i r u d l e n n o s r e P t n e m e g a n a M y e K o t n o i t a s n e p m o c s e i t i r u c e s d e r r e f e d s a d e t s e v r o d e t n a r g s t n e m y a p n a P e v i t n e c n I l m r e T t r o h S f o s l i a t e D s e i t i r u c e S d n a s n a P e v l i t n e c n I m r e T g n o L , l s n a P e v i t n e c n I m r e T t r o h S o t g n i t a l e R s e r u s o l c s i D l a n o i t i d d A ) d e u n i t n o c ( t r o p e R n o i t a r e n u m e R . 9 ) f – – 9 7 4 , 3 9 6 3 4 , 9 1 – – 9 7 4 , 3 9 6 3 4 , 9 1 9 7 4 , 3 9 6 3 4 , 9 1 – – / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N / A N – – – – – – – – – – – – % 0 % 0 % 0 0 1 % 0 0 1 % 0 % 0 % 0 0 1 % 0 0 1 % 0 % 0 % 0 0 1 % 0 0 1 – – 9 4 5 , 3 4 2 5 2 3 , 5 6 3 – – 9 0 9 , 1 8 1 3 6 8 , 2 7 2 – – 6 1 9 , 7 6 1 4 7 8 , 1 5 2 7 7 . 1 6 0 . 2 8 8 . 1 7 1 . 1 7 7 . 1 6 0 . 2 8 8 . 1 7 1 . 1 7 7 . 1 6 0 . 2 8 8 . 1 7 1 . 1 n i d e s n e p x e 1 s r a e y e r u t u f e b o t e u l a v r i a F t n a r G f o % d e l l e c n a C d e l l e c n a C d e t s e V r e b m u N t n a r G f o % d e t s e V r e b m u N t a e u l a V e t a D t n a r G r e b m u N d e t n a r G 7 3 5 , 0 9 0 8 0 , 5 8 9 4 5 , 3 4 2 5 2 3 , 5 6 3 7 3 5 , 0 9 0 8 0 , 5 8 9 0 9 , 1 8 1 3 6 8 , 2 7 2 7 3 5 , 0 9 0 8 0 , 5 8 6 1 9 , 7 6 1 4 7 8 , 1 5 2 e t a D g n i t s e V e t a D t n a r G e p y T d r a w A 4 2 0 2 g u A 5 1 2 2 0 2 g u A 5 1 3 2 0 2 p e S 0 3 1 2 0 2 p e S 0 3 2 2 0 2 c e D 8 1 0 2 0 2 c e D 8 1 2 2 0 2 l u J 4 2 0 2 l u J 1 1 0 2 0 2 n u J 9 2 2 2 0 2 g u A 5 1 3 2 0 2 p e S 0 3 1 2 0 2 p e S 0 3 2 2 0 2 c e D 8 1 0 2 0 2 c e D 8 1 2 2 0 2 l u J 1 0 2 0 2 n u J 9 2 4 2 0 2 g u A 5 1 2 2 0 2 g u A 5 1 3 2 0 2 p e S 0 3 1 2 0 2 p e S 0 3 2 2 0 2 c e D 8 1 0 2 0 2 c e D 8 1 2 2 0 2 l u J 1 0 2 0 2 n u J 9 2 s e i t i r u c e S d e r r e f e D s e i t i r u c e S d e r r e f e D s e i t i r u c e S d e r r e f e D r a e y l a i c n a n i f e h t g n i r u D s i l l i W . G e m a N r u o v S i i . P s n o m m S i . S e r u t u f e h t s a l i n $ s i e u a v l e r u t u f i m u m n m e h T i . t n e m e t a t s e m o c n i d e t a d i l o s n o c ' s p u o r G e h t n i d e t c e l f e r e b o t t e y e t a d t n a r g e h t t a t n u o m a e u a v l r i a f e h t s i t s e v o t t e y s t n a r g e h t f o l e u a v m u m x a m e h T i 1 9 2 . e t a d t n a r g n o e c i r p e r a h s i g n s o c l e h t s i l s n a p e v i t n e c n i m r e T t r o h S e h t f o e u a v l r i a f e h T 41 . t e m e b t o n y a m s n o i t i d n o c e c v r e s d n a i e c n a m r o f r e p Directors' Report P U O R G S R O T S E V N I R O N A L E T R O P E R ' S R O T C E R D I : r a e y l i a c n a n i f t n e r r u c e h t g n i r u d l e n n o s r e P t n e m e g a n a M y e K o t n o i t a s n e p m o c y t i r u c e S n a o L s a d e t s e v r o d e t n a r g s t n e m y a p l n a P e v i t n e c n I m r e T g n o L f o s l i a t e D ) d e u n i t n o c ( s e i t i r u c e S d n a l s n a P e v i t n e c n I m r e T g n o L , l s n a P e v i t n e c n I m r e T t r o h S o t g n i t a l e R s e r u s o l c s i D l a n o i t i d d A ) d e u n i t n o c ( t r o p e R n o i t a r e n u m e R . 9 ) f 42 % 4 2 % 4 2 % 4 2 % 1 1 % 1 1 % 1 1 % 9 % 9 % 9 / A N / A N / A N / A N / A N / A N / A N / A N / A N – – – – – – – – – % 0 % 0 % 0 0 1 % 0 % 0 % 0 0 1 % 0 % 0 % 0 0 1 l a u t c a e h t f o % r o f n o i t a s n e p m o c s d r a w a f o d e l l e c n a C 1 d e l l e c n a C d e t s e V g n i t s i s n o c r a e y e h t t n a r G f o % r e b m u N t n a r G f o % – – d e t s e V r e b m u N – – 7 6 6 , 6 6 6 7 6 6 , 6 6 6 , 1 – – 0 0 0 , 0 0 5 t a e u l a V r i a F r e b m u N g n i t s e V f o d n E e t a D t n a r G d e t n a r G d o i r e P e t a D t n a r G e p y T d r a w A 9 1 . 0 9 1 . 0 9 1 . 0 2 1 . 0 2 1 . 0 2 1 . 0 2 1 . 0 2 1 . 0 2 1 . 0 6 6 6 , 6 6 6 , 1 7 6 6 , 6 6 6 , 1 7 6 6 , 6 6 6 , 1 6 6 6 , 6 6 6 7 6 6 , 6 6 6 7 6 6 , 6 6 6 0 0 0 , 0 0 5 0 0 0 , 0 0 5 0 0 0 , 0 0 5 4 2 0 2 n u J 0 3 0 2 0 2 t c O 1 2 3 2 0 2 n u J 0 3 0 2 0 2 t c O 1 2 2 2 0 2 n u J 0 3 0 2 0 2 t c O 1 2 4 2 0 2 n u J 0 3 0 2 0 2 g u A 8 2 3 2 0 2 n u J 0 3 0 2 0 2 g u A 8 2 2 2 0 2 n u J 0 3 0 2 0 2 g u A 8 2 4 2 0 2 n u J 0 3 0 2 0 2 g u A 8 2 3 2 0 2 n u J 0 3 0 2 0 2 g u A 8 2 2 2 0 2 n u J 0 3 0 2 0 2 g u A 8 2 s e i t i r u c e S n a o L s e i t i r u c e S n a o L s e i t i r u c e S n a o L r a e y l a i c n a n i f e h t g n i r u D s i l l i W . G e m a N r u o v S i i . P s n o m m S i . S . r a e y e c n a m r o f r e p t n a v e e r l e h t f o e t a d l a v o r p p a t n e m e t a t s l i a c n a n i f e h t h t i w e n i l n i e r a s e i t i r u c e S n a o L e h t f o e t a d g n i t s e v d e t c e p x e e h T i f e h C e h t f o h c a e r o f 9 1 . 0 $ ( 2 1 . 0 $ s a w y t i r u c e S n a o L h c a e f o t e a d t n a r g t a e u a v l r i a f e h T 0 3 . s n o i t p o ' e c n a t s b u s - n i ' s a r o f d e t n u o c c a n e e b s a h n a p l y t i r u c e S n a o L e h T . ) s e i t i r u c e S n a o L s ' r e c i f f O e v i t u c e x E Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP DIRECTORS' REPORT 9. f) Remuneration Report (continued) Additional Disclosures Relating to Short Term Incentive Plans, Long Term Incentive Plans and Securities (continued) Details of Long Term Incentive Plan payments granted or vested as option security compensation to Key Management Personnel during the current financial year: During the financial year Name G. Willis Award Type Options Year 2023 2022 Number Granted – – No options were granted in FY23. Number % of Grant Vested – – Vested Forfeited – – Number % of Grant Forfeited N/A N/A 0% 0% % of the actual compensation for the year consisting of awards 0% 0% The following table summarises the value of options granted during the financial year, in relation to options granted to Key Management Personnel as part of the remuneration: Name G. Willis Year 2023 2022 Value of options granted at the grant date1 $ – – Value of options granted at the exercise date2 $ – – 1 The value of options granted during the financial year is calculated as at the grant date using a Monte Carlo Simulation. This grant date value is allocated to the remuneration of key management personnel on a straight-line basis over the period from commencement of the performance period to vesting date. 2 The value of options exercised during the financial year is calculated as at the exercise date using a Monte Carlo Simulation. No options were exercised in the year to 30 June 2023. 43 31 ELANOR INVESTORS GROUP Directors' Report DIRECTORS' REPORT 9. f) Remuneration Report (continued) Additional Disclosures Relating to Short Term Incentive Plans, Long Term Incentive Plans and Securities (continued) Key Management Personnel equity holdings Changes to the interests of Key Management Personnel in the Group's Securities are set out below: Elanor Investors Group – Stapled Securities Name Non-Executive Directors P. Bedbrook N. Ampherlaw A. Fehon S.K. Lim K. Baylis Executive Officers G. Willis P. Siviour S. Simmons Opening Balance 1 July 2022 Acquired1 Disposed Closing Balance 30 June 2023 306,137 200,000 21,666 – 25,000 5,437,076 2,105,123 1,138,374 – – 34,131 – 10,000 90,537 90,537 90,537 – – – – – – – – 306,137 200,000 55,797 – 35,000 5,527,613 2,195,660 1,228,911 1 The number of stapled securities acquired during the year includes issues of securities under the Group's short term and long term incentive schemes, and securities acquired on market. No securities were issued to Non-Executive Directors in FY23. Options over Elanor Investors Group – Stapled Securities Name G. Willis Opening Balance 1 July 2022 2,000,000 Acquired under Exercised or the Group's Disposed or Closing Balance Cancelled 30 June 2023 2,000,000 – incentive plans – Balance vested at Closing – Vested but not exercisable – Options vested during the year – All options issued to Key Management Personnel were made in accordance with the provisions of the employee share option plan. No options were issued to Non-Executive Directors in FY23 (FY22: nil). g) Loans to Key Management Personnel No loans have been provided to Key Management Personnel of the Group during the year. h) Other Transactions and Balances with Key Management Personnel and their Related Parties There were no transactions with Key Management Personnel and their Related Parties during the financial year that are not otherwise referred to in the consolidated financial statements. 44 32 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP DIRECTORS' REPORT 10. Company Secretary Symon Simmons held the position of Company Secretary of the Responsible Entity during the year. Symon is the Chief Financial Officer of the Group, and holds a Bachelor of Economics with majors in Economics and Accounting, and has extensive experience as a company secretary, is a Justice of the Peace in NSW and is a Responsible Manager on the Australian Financial Services Licence held by the Responsible Entity. 11. Indemnification and insurance of officers and auditors During the financial year, the Group paid a premium in respect of a contract insuring the Directors of the Group (as named above), the Company Secretary, and all executive officers of the Company and of any related body corporate against a liability incurred in their capacity as Directors and officers of the Company to the extent permitted by the Corporations Act 2001 (Cth). The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. 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 of the Company or of any related body corporate against a liability incurred in their capacity as an officer. The Group and the EIF Group indemnifies the auditor (PricewaterhouseCoopers Australia) against any liability (including legal costs) for third party claims arising from a breach by Group or EIF Group of the auditor's engagement terms, except where prohibited by the Corporations Act 2001. 12. Environmental regulation To the best of their knowledge and belief after making due enquiry, the Directors have determined that the Group has complied with all significant environmental regulations applicable to its operations in the jurisdictions in which it operates. 13. Auditor's independence declaration A copy of the auditor's independence declaration, as required under section 307C of the Corporations Act 2001 (Cth), is included on the page following the Directors' Report. 45 33 Directors' Report ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT DIRECTORS' REPORT 14. Non audit services 14. Non audit services 14. Non audit services 14. Non audit services 14. Non audit services 14. Non audit services 14. Non audit services 14. Non audit services 14. Non audit services 14. Non audit services Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor 14. Non audit services 14. Non audit services Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in Note 29 to the consolidated financial statements. Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in Note 29 to the consolidated financial statements. are outlined in Note 29 to the consolidated financial statements. are outlined in Note 29 to the consolidated financial statements. Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in Note 29 to the consolidated financial statements. are outlined in Note 29 to the consolidated financial statements. are outlined in Note 29 to the consolidated financial statements. are outlined in Note 29 to the consolidated financial statements. Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in Note 29 to the consolidated financial statements. are outlined in Note 29 to the consolidated financial statements. The Directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by another are outlined in Note 29 to the consolidated financial statements. are outlined in Note 29 to the consolidated financial statements. The Directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by another The Directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by another The Directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by another The Directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by another The Directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by another The Directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by another 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 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 person or firm on the auditor's behalf) is compatible with the general standard of independence for auditors person or firm on the auditor's behalf) is compatible with the general standard of independence for auditors 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 person or firm on the auditor's behalf) is compatible with the general standard of independence for auditors person or firm on the auditor's behalf) is compatible with the general standard of independence for auditors person or firm on the auditor's behalf) is compatible with the general standard of independence for auditors The Directors are satisfied that the provision of non-audit services, during the year, by the auditor (or by another imposed by the Corporations Act 2001 (Cth). 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 (Cth). imposed by the Corporations Act 2001 (Cth). imposed by the Corporations Act 2001 (Cth). person or firm on the auditor's behalf) is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 (Cth). imposed by the Corporations Act 2001 (Cth). imposed by the Corporations Act 2001 (Cth). imposed by the Corporations Act 2001 (Cth). person or firm on the auditor's behalf) is compatible with the general standard of independence for auditors person or firm on the auditor's behalf) is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 (Cth). imposed by the Corporations Act 2001 (Cth). The Directors are of the opinion that the services as disclosed in Note 29 to the consolidated financial imposed by the Corporations Act 2001 (Cth). imposed by the Corporations Act 2001 (Cth). The Directors are of the opinion that the services as disclosed in Note 29 to the consolidated financial The Directors are of the opinion that the services as disclosed in Note 29 to the consolidated financial The Directors are of the opinion that the services as disclosed in Note 29 to the consolidated financial The Directors are of the opinion that the services as disclosed in Note 29 to the consolidated financial The Directors are of the opinion that the services as disclosed in Note 29 to the consolidated financial The Directors are of the opinion that the services as disclosed in Note 29 to the consolidated financial The Directors are of the opinion that the services as disclosed in Note 29 to the consolidated financial statements do not compromise the external auditor's independence, based on advice received from the Audit The Directors are of the opinion that the services as disclosed in Note 29 to the consolidated financial statements do not compromise the external auditor's independence, based on advice received from the Audit statements do not compromise the external auditor's independence, based on advice received from the Audit statements do not compromise the external auditor's independence, based on advice received from the Audit The Directors are of the opinion that the services as disclosed in Note 29 to the consolidated financial statements do not compromise the external auditor's independence, based on advice received from the Audit statements do not compromise the external auditor's independence, based on advice received from the Audit statements do not compromise the external auditor's independence, based on advice received from the Audit statements do not compromise the external auditor's independence, based on advice received from the Audit The Directors are of the opinion that the services as disclosed in Note 29 to the consolidated financial and Risk Committee, for the following reasons: The Directors are of the opinion that the services as disclosed in Note 29 to the consolidated financial statements do not compromise the external auditor's independence, based on advice received from the Audit and Risk Committee, for the following reasons: and Risk Committee, for the following reasons: and Risk Committee, for the following reasons: statements do not compromise the external auditor's independence, based on advice received from the Audit and Risk Committee, for the following reasons: and Risk Committee, for the following reasons: and Risk Committee, for the following reasons: and Risk Committee, for the following reasons: statements do not compromise the external auditor's independence, based on advice received from the Audit statements do not compromise the external auditor's independence, based on advice received from the Audit and Risk Committee, for the following reasons: and Risk Committee, for the following reasons: • All non-audit services have been reviewed and approved to ensure that they do not impact the integrity and Risk Committee, for the following reasons: and Risk Committee, for the following reasons: • All non-audit services have been reviewed and approved to ensure that they do not impact the integrity • All non-audit services have been reviewed and approved to ensure that they do not impact the integrity • All non-audit services have been reviewed and approved to ensure that they do not impact the integrity • All non-audit services have been reviewed and approved to ensure that they do not impact the integrity • All non-audit services have been reviewed and approved to ensure that they do not impact the integrity • All non-audit services have been reviewed and approved to ensure that they do not impact the integrity • All non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and • All non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and and objectivity of the auditor; and and objectivity of the auditor; and and objectivity of the auditor; and • All non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and and objectivity of the auditor; and and objectivity of the auditor; and • All non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and • 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 and objectivity of the auditor; and and objectivity of the auditor; and • None of the services undermine the general principles relating to auditor independence as set out in • None of the services undermine the general principles relating to auditor independence as set out in • None of the services undermine the general principles relating to auditor independence as set out in • None of the services undermine the general principles relating to auditor independence as set out in • None of the services undermine the general principles relating to auditor independence as set out in • None of the services undermine the general principles relating to auditor independence as set out in • None of the services undermine the general principles relating to auditor independence as set out in APES 110 'Code of Ethics for Professional Accountants' issued by the Accounting Professional & • None of the services undermine the general principles relating to auditor independence as set out in APES 110 'Code of Ethics for Professional Accountants' issued by the Accounting Professional & APES 110 'Code of Ethics for Professional Accountants' issued by the Accounting Professional & APES 110 'Code of Ethics for Professional Accountants' issued by the Accounting Professional & APES 110 'Code of Ethics for Professional Accountants' issued by the Accounting Professional & • None of the services undermine the general principles relating to auditor independence as set out in APES 110 'Code of Ethics for Professional Accountants' issued by the Accounting Professional & APES 110 'Code of Ethics for Professional Accountants' issued by the Accounting Professional & APES 110 'Code of Ethics for Professional Accountants' issued by the Accounting Professional & Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a • None of the services undermine the general principles relating to auditor independence as set out in APES 110 'Code of Ethics for Professional Accountants' issued by the Accounting Professional & • None of the services undermine the general principles relating to auditor independence as set out in Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a APES 110 'Code of Ethics for Professional Accountants' issued by the Accounting Professional & Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the Group, acting as advocate for the group or jointly APES 110 'Code of Ethics for Professional Accountants' issued by the Accounting Professional & Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a APES 110 'Code of Ethics for Professional Accountants' issued by the Accounting Professional & management or decision-making capacity for the Group, acting as advocate for the group or jointly management or decision-making capacity for the Group, acting as advocate for the group or jointly management or decision-making capacity for the Group, acting as advocate for the group or jointly management or decision-making capacity for the Group, acting as advocate for the group or jointly Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the Group, acting as advocate for the group or jointly management or decision-making capacity for the Group, acting as advocate for the group or jointly management or decision-making capacity for the Group, acting as advocate for the group or jointly sharing economic risks and rewards. Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the Group, acting as advocate for the group or jointly Ethical Standards Board, including reviewing or auditing the auditor's own work, acting in a sharing economic risks and rewards. sharing economic risks and rewards. sharing economic risks and rewards. sharing economic risks and rewards. management or decision-making capacity for the Group, acting as advocate for the group or jointly sharing economic risks and rewards. sharing economic risks and rewards. sharing economic risks and rewards. management or decision-making capacity for the Group, acting as advocate for the group or jointly sharing economic risks and rewards. management or decision-making capacity for the Group, acting as advocate for the group or jointly sharing economic risks and rewards. sharing economic risks and rewards. sharing economic risks and rewards. 15. Likely developments and expected results of operations 15. Likely developments and expected results of operations 15. Likely developments and expected results of operations 15. Likely developments and expected results of operations 15. Likely developments and expected results of operations 15. Likely developments and expected results of operations 15. Likely developments and expected results of operations 15. Likely developments and expected results of operations 15. Likely developments and expected results of operations 15. Likely developments and expected results of operations The financial statements have been prepared on the basis of the current known market conditions. The extent 15. Likely developments and expected results of operations 15. Likely developments and expected results of operations The financial statements have been prepared on the basis of the current known market conditions. The extent The financial statements have been prepared on the basis of the current known market conditions. The extent The financial statements have been prepared on the basis of the current known market conditions. The extent The financial statements have been prepared on the basis of the current known market conditions. The extent The financial statements have been prepared on the basis of the current known market conditions. The extent The financial statements have been prepared on the basis of the current known market conditions. The extent The financial statements have been prepared on the basis of the current known market conditions. The extent of any potential deterioration in either the capital or physical property markets on the future results of the Group The financial statements have been prepared on the basis of the current known market conditions. The extent of any potential deterioration in either the capital or physical property markets on the future results of the Group of any potential deterioration in either the capital or physical property markets on the future results of the Group of any potential deterioration in either the capital or physical property markets on the future results of the Group The financial statements have been prepared on the basis of the current known market conditions. The extent of any potential deterioration in either the capital or physical property markets on the future results of the Group of any potential deterioration in either the capital or physical property markets on the future results of the Group of any potential deterioration in either the capital or physical property markets on the future results of the Group of any potential deterioration in either the capital or physical property markets on the future results of the Group The financial statements have been prepared on the basis of the current known market conditions. The extent is unknown. Such results could include property market valuations, the ability of borrowers, including the The financial statements have been prepared on the basis of the current known market conditions. The extent of any potential deterioration in either the capital or physical property markets on the future results of the Group is unknown. Such results could include property market valuations, the ability of borrowers, including the is unknown. Such results could include property market valuations, the ability of borrowers, including the is unknown. Such results could include property market valuations, the ability of borrowers, including the of any potential deterioration in either the capital or physical property markets on the future results of the Group is unknown. Such results could include property market valuations, the ability of borrowers, including the is unknown. Such results could include property market valuations, the ability of borrowers, including the is unknown. Such results could include property market valuations, the ability of borrowers, including the is unknown. Such results could include property market valuations, the ability of borrowers, including the of any potential deterioration in either the capital or physical property markets on the future results of the Group Group, to raise or refinance debt, and the cost of such debt and the ability to raise equity. of any potential deterioration in either the capital or physical property markets on the future results of the Group is unknown. Such results could include property market valuations, the ability of borrowers, including the Group, to raise or refinance debt, and the cost of such debt and the ability to raise equity. Group, to raise or refinance debt, and the cost of such debt and the ability to raise equity. is unknown. Such results could include property market valuations, the ability of borrowers, including the Group, to raise or refinance debt, and the cost of such debt and the ability to raise equity. Group, to raise or refinance debt, and the cost of such debt and the ability to raise equity. Group, to raise or refinance debt, and the cost of such debt and the ability to raise equity. Group, to raise or refinance debt, and the cost of such debt and the ability to raise equity. Group, to raise or refinance debt, and the cost of such debt and the ability to raise equity. is unknown. Such results could include property market valuations, the ability of borrowers, including the is unknown. Such results could include property market valuations, the ability of borrowers, including the Group, to raise or refinance debt, and the cost of such debt and the ability to raise equity. Group, to raise or refinance debt, and the cost of such debt and the ability to raise equity. Group, to raise or refinance debt, and the cost of such debt and the ability to raise equity. 16. Fees paid to the Responsible Entity or its associates Group, to raise or refinance debt, and the cost of such debt and the ability to raise equity. 16. Fees paid to the Responsible Entity or its associates 16. Fees paid to the Responsible Entity or its associates 16. Fees paid to the Responsible Entity or its associates 16. Fees paid to the Responsible Entity or its associates 16. Fees paid to the Responsible Entity or its associates 16. Fees paid to the Responsible Entity or its associates 16. Fees paid to the Responsible Entity or its associates 16. Fees paid to the Responsible Entity or its associates 16. Fees paid to the Responsible Entity or its associates The fees paid to the responsible entity of EIF, Elanor Funds Management Limited, and its related entities 16. Fees paid to the Responsible Entity or its associates 16. Fees paid to the Responsible Entity or its associates The fees paid to the responsible entity of EIF, Elanor Funds Management Limited, and its related entities The fees paid to the responsible entity of EIF, Elanor Funds Management Limited, and its related entities The fees paid to the responsible entity of EIF, Elanor Funds Management Limited, and its related entities The fees paid to the responsible entity of EIF, Elanor Funds Management Limited, and its related entities The fees paid to the responsible entity of EIF, Elanor Funds Management Limited, and its related entities The fees paid to the responsible entity of EIF, Elanor Funds Management Limited, and its related entities The fees paid to the responsible entity of EIF, Elanor Funds Management Limited, and its related entities during the financial year are disclosed in Note 25 to the consolidated financial statements. The fees paid to the responsible entity of EIF, Elanor Funds Management Limited, and its related entities during the financial year are disclosed in Note 25 to the consolidated financial statements. during the financial year are disclosed in Note 25 to the consolidated financial statements. during the financial year are disclosed in Note 25 to the consolidated financial statements. The fees paid to the responsible entity of EIF, Elanor Funds Management Limited, and its related entities during the financial year are disclosed in Note 25 to the consolidated financial statements. during the financial year are disclosed in Note 25 to the consolidated financial statements. during the financial year are disclosed in Note 25 to the consolidated financial statements. during the financial year are disclosed in Note 25 to the consolidated financial statements. The fees paid to the responsible entity of EIF, Elanor Funds Management Limited, and its related entities The fees paid to the responsible entity of EIF, Elanor Funds Management Limited, and its related entities during the financial year are disclosed in Note 25 to the consolidated financial statements. during the financial year are disclosed in Note 25 to the consolidated financial statements. during the financial year are disclosed in Note 25 to the consolidated financial statements. 17. Events occurring after reporting date during the financial year are disclosed in Note 25 to the consolidated financial statements. 17. Events occurring after reporting date 17. Events occurring after reporting date 17. Events occurring after reporting date 17. Events occurring after reporting date 17. Events occurring after reporting date 17. Events occurring after reporting date 17. Events occurring after reporting date 17. Events occurring after reporting date 17. Events occurring after reporting date Distribution 17. Events occurring after reporting date 17. Events occurring after reporting date Distribution Distribution Distribution Distribution Distribution Distribution Distribution Distribution Distribution Subsequent to year end, a distribution of 1.62 cents per stapled security (full year distribution 9.13 cents per Distribution Distribution Subsequent to year end, a distribution of 1.62 cents per stapled security (full year distribution 9.13 cents per Subsequent to year end, a distribution of 1.62 cents per stapled security (full year distribution 9.13 cents per Subsequent to year end, a distribution of 1.62 cents per stapled security (full year distribution 9.13 cents per Subsequent to year end, a distribution of 1.62 cents per stapled security (full year distribution 9.13 cents per Subsequent to year end, a distribution of 1.62 cents per stapled security (full year distribution 9.13 cents per Subsequent to year end, a distribution of 1.62 cents per stapled security (full year distribution 9.13 cents per Subsequent to year end, a distribution of 1.62 cents per stapled security (full year distribution 9.13 cents per stapled security) has been declared by the Board of Directors. The total distribution amount of $2.0 million will Subsequent to year end, a distribution of 1.62 cents per stapled security (full year distribution 9.13 cents per stapled security) has been declared by the Board of Directors. The total distribution amount of $2.0 million will stapled security) has been declared by the Board of Directors. The total distribution amount of $2.0 million will stapled security) has been declared by the Board of Directors. The total distribution amount of $2.0 million will Subsequent to year end, a distribution of 1.62 cents per stapled security (full year distribution 9.13 cents per stapled security) has been declared by the Board of Directors. The total distribution amount of $2.0 million will stapled security) has been declared by the Board of Directors. The total distribution amount of $2.0 million will stapled security) has been declared by the Board of Directors. The total distribution amount of $2.0 million will stapled security) has been declared by the Board of Directors. The total distribution amount of $2.0 million will Subsequent to year end, a distribution of 1.62 cents per stapled security (full year distribution 9.13 cents per be paid on 31 August 2023 in respect of the six months ended 30 June 2023. Subsequent to year end, a distribution of 1.62 cents per stapled security (full year distribution 9.13 cents per stapled security) has been declared by the Board of Directors. The total distribution amount of $2.0 million will be paid on 31 August 2023 in respect of the six months ended 30 June 2023. be paid on 31 August 2023 in respect of the six months ended 30 June 2023. be paid on 31 August 2023 in respect of the six months ended 30 June 2023. stapled security) has been declared by the Board of Directors. The total distribution amount of $2.0 million will be paid on 31 August 2023 in respect of the six months ended 30 June 2023. be paid on 31 August 2023 in respect of the six months ended 30 June 2023. be paid on 31 August 2023 in respect of the six months ended 30 June 2023. be paid on 31 August 2023 in respect of the six months ended 30 June 2023. stapled security) has been declared by the Board of Directors. The total distribution amount of $2.0 million will stapled security) has been declared by the Board of Directors. The total distribution amount of $2.0 million will be paid on 31 August 2023 in respect of the six months ended 30 June 2023. be paid on 31 August 2023 in respect of the six months ended 30 June 2023. Acquisition of Challenger real estate funds management business be paid on 31 August 2023 in respect of the six months ended 30 June 2023. be paid on 31 August 2023 in respect of the six months ended 30 June 2023. Acquisition of Challenger real estate funds management business Acquisition of Challenger real estate funds management business Acquisition of Challenger real estate funds management business Acquisition of Challenger real estate funds management business Acquisition of Challenger real estate funds management business Acquisition of Challenger real estate funds management business Acquisition of Challenger real estate funds management business Acquisition of Challenger real estate funds management business Acquisition of Challenger real estate funds management business On 7 July 2023, Elanor completed the acquisition of Challenger Limited’s (Challenger) Australian real estate Acquisition of Challenger real estate funds management business Acquisition of Challenger real estate funds management business On 7 July 2023, Elanor completed the acquisition of Challenger Limited’s (Challenger) Australian real estate On 7 July 2023, Elanor completed the acquisition of Challenger Limited’s (Challenger) Australian real estate On 7 July 2023, Elanor completed the acquisition of Challenger Limited’s (Challenger) Australian real estate On 7 July 2023, Elanor completed the acquisition of Challenger Limited’s (Challenger) Australian real estate On 7 July 2023, Elanor completed the acquisition of Challenger Limited’s (Challenger) Australian real estate On 7 July 2023, Elanor completed the acquisition of Challenger Limited’s (Challenger) Australian real estate On 7 July 2023, Elanor completed the acquisition of Challenger Limited’s (Challenger) Australian real estate funds management business for a consideration of $37.7 million. As part of the transaction, Elanor and On 7 July 2023, Elanor completed the acquisition of Challenger Limited’s (Challenger) Australian real estate funds management business for a consideration of $37.7 million. As part of the transaction, Elanor and funds management business for a consideration of $37.7 million. As part of the transaction, Elanor and funds management business for a consideration of $37.7 million. As part of the transaction, Elanor and On 7 July 2023, Elanor completed the acquisition of Challenger Limited’s (Challenger) Australian real estate funds management business for a consideration of $37.7 million. As part of the transaction, Elanor and funds management business for a consideration of $37.7 million. As part of the transaction, Elanor and funds management business for a consideration of $37.7 million. As part of the transaction, Elanor and funds management business for a consideration of $37.7 million. As part of the transaction, Elanor and On 7 July 2023, Elanor completed the acquisition of Challenger Limited’s (Challenger) Australian real estate Challenger also entered into a strategic partnership whereby Elanor has become Challenger’s real estate funds On 7 July 2023, Elanor completed the acquisition of Challenger Limited’s (Challenger) Australian real estate funds management business for a consideration of $37.7 million. As part of the transaction, Elanor and Challenger also entered into a strategic partnership whereby Elanor has become Challenger’s real estate funds Challenger also entered into a strategic partnership whereby Elanor has become Challenger’s real estate funds Challenger also entered into a strategic partnership whereby Elanor has become Challenger’s real estate funds funds management business for a consideration of $37.7 million. As part of the transaction, Elanor and Challenger also entered into a strategic partnership whereby Elanor has become Challenger’s real estate funds Challenger also entered into a strategic partnership whereby Elanor has become Challenger’s real estate funds Challenger also entered into a strategic partnership whereby Elanor has become Challenger’s real estate funds Challenger also entered into a strategic partnership whereby Elanor has become Challenger’s real estate funds funds management business for a consideration of $37.7 million. As part of the transaction, Elanor and management partner in Australia and New Zealand and Fidante (Challenger’s multi-affiliate funds funds management business for a consideration of $37.7 million. As part of the transaction, Elanor and Challenger also entered into a strategic partnership whereby Elanor has become Challenger’s real estate funds management partner in Australia and New Zealand and Fidante (Challenger’s multi-affiliate funds management partner in Australia and New Zealand and Fidante (Challenger’s multi-affiliate funds management partner in Australia and New Zealand and Fidante (Challenger’s multi-affiliate funds Challenger also entered into a strategic partnership whereby Elanor has become Challenger’s real estate funds management partner in Australia and New Zealand and Fidante (Challenger’s multi-affiliate funds management partner in Australia and New Zealand and Fidante (Challenger’s multi-affiliate funds management partner in Australia and New Zealand and Fidante (Challenger’s multi-affiliate funds management partner in Australia and New Zealand and Fidante (Challenger’s multi-affiliate funds Challenger also entered into a strategic partnership whereby Elanor has become Challenger’s real estate funds management business) is now Elanor’s exclusive distribution partner for its real estate managed funds. Challenger also entered into a strategic partnership whereby Elanor has become Challenger’s real estate funds management partner in Australia and New Zealand and Fidante (Challenger’s multi-affiliate funds management business) is now Elanor’s exclusive distribution partner for its real estate managed funds. management business) is now Elanor’s exclusive distribution partner for its real estate managed funds. management business) is now Elanor’s exclusive distribution partner for its real estate managed funds. management partner in Australia and New Zealand and Fidante (Challenger’s multi-affiliate funds management business) is now Elanor’s exclusive distribution partner for its real estate managed funds. management business) is now Elanor’s exclusive distribution partner for its real estate managed funds. management business) is now Elanor’s exclusive distribution partner for its real estate managed funds. management business) is now Elanor’s exclusive distribution partner for its real estate managed funds. management partner in Australia and New Zealand and Fidante (Challenger’s multi-affiliate funds management partner in Australia and New Zealand and Fidante (Challenger’s multi-affiliate funds management business) is now Elanor’s exclusive distribution partner for its real estate managed funds. management business) is now Elanor’s exclusive distribution partner for its real estate managed funds. Elanor issued 24.8 million ENN securities as consideration for the transaction, representing 16.6% of securities management business) is now Elanor’s exclusive distribution partner for its real estate managed funds. management business) is now Elanor’s exclusive distribution partner for its real estate managed funds. Elanor issued 24.8 million ENN securities as consideration for the transaction, representing 16.6% of securities Elanor issued 24.8 million ENN securities as consideration for the transaction, representing 16.6% of securities Elanor issued 24.8 million ENN securities as consideration for the transaction, representing 16.6% of securities Elanor issued 24.8 million ENN securities as consideration for the transaction, representing 16.6% of securities Elanor issued 24.8 million ENN securities as consideration for the transaction, representing 16.6% of securities Elanor issued 24.8 million ENN securities as consideration for the transaction, representing 16.6% of securities Elanor issued 24.8 million ENN securities as consideration for the transaction, representing 16.6% of securities on issue at that time, with Challenger holding 20.3 million securities (13.6%) and the Abu Dhabi Investment Elanor issued 24.8 million ENN securities as consideration for the transaction, representing 16.6% of securities on issue at that time, with Challenger holding 20.3 million securities (13.6%) and the Abu Dhabi Investment on issue at that time, with Challenger holding 20.3 million securities (13.6%) and the Abu Dhabi Investment on issue at that time, with Challenger holding 20.3 million securities (13.6%) and the Abu Dhabi Investment Elanor issued 24.8 million ENN securities as consideration for the transaction, representing 16.6% of securities on issue at that time, with Challenger holding 20.3 million securities (13.6%) and the Abu Dhabi Investment on issue at that time, with Challenger holding 20.3 million securities (13.6%) and the Abu Dhabi Investment on issue at that time, with Challenger holding 20.3 million securities (13.6%) and the Abu Dhabi Investment on issue at that time, with Challenger holding 20.3 million securities (13.6%) and the Abu Dhabi Investment Elanor issued 24.8 million ENN securities as consideration for the transaction, representing 16.6% of securities Council (ADIC) holding the balance of 4.5 million securities (3.0%). The consideration paid is subject to claw- Elanor issued 24.8 million ENN securities as consideration for the transaction, representing 16.6% of securities on issue at that time, with Challenger holding 20.3 million securities (13.6%) and the Abu Dhabi Investment Council (ADIC) holding the balance of 4.5 million securities (3.0%). The consideration paid is subject to claw- Council (ADIC) holding the balance of 4.5 million securities (3.0%). The consideration paid is subject to claw- Council (ADIC) holding the balance of 4.5 million securities (3.0%). The consideration paid is subject to claw- on issue at that time, with Challenger holding 20.3 million securities (13.6%) and the Abu Dhabi Investment Council (ADIC) holding the balance of 4.5 million securities (3.0%). The consideration paid is subject to claw- Council (ADIC) holding the balance of 4.5 million securities (3.0%). The consideration paid is subject to claw- Council (ADIC) holding the balance of 4.5 million securities (3.0%). The consideration paid is subject to claw- Council (ADIC) holding the balance of 4.5 million securities (3.0%). The consideration paid is subject to claw- on issue at that time, with Challenger holding 20.3 million securities (13.6%) and the Abu Dhabi Investment back arrangements from Challenger of up to 63% over three years, based on performance milestones, on issue at that time, with Challenger holding 20.3 million securities (13.6%) and the Abu Dhabi Investment Council (ADIC) holding the balance of 4.5 million securities (3.0%). The consideration paid is subject to claw- back arrangements from Challenger of up to 63% over three years, based on performance milestones, back arrangements from Challenger of up to 63% over three years, based on performance milestones, back arrangements from Challenger of up to 63% over three years, based on performance milestones, Council (ADIC) holding the balance of 4.5 million securities (3.0%). The consideration paid is subject to claw- back arrangements from Challenger of up to 63% over three years, based on performance milestones, back arrangements from Challenger of up to 63% over three years, based on performance milestones, back arrangements from Challenger of up to 63% over three years, based on performance milestones, back arrangements from Challenger of up to 63% over three years, based on performance milestones, Council (ADIC) holding the balance of 4.5 million securities (3.0%). The consideration paid is subject to claw- including minimum base funds management fee targets. Council (ADIC) holding the balance of 4.5 million securities (3.0%). The consideration paid is subject to claw- back arrangements from Challenger of up to 63% over three years, based on performance milestones, including minimum base funds management fee targets. including minimum base funds management fee targets. including minimum base funds management fee targets. back arrangements from Challenger of up to 63% over three years, based on performance milestones, including minimum base funds management fee targets. including minimum base funds management fee targets. including minimum base funds management fee targets. including minimum base funds management fee targets. back arrangements from Challenger of up to 63% over three years, based on performance milestones, back arrangements from Challenger of up to 63% over three years, based on performance milestones, including minimum base funds management fee targets. 46 including minimum base funds management fee targets. including minimum base funds management fee targets. including minimum base funds management fee targets. 34 34 34 34 34 34 34 34 34 34 34 34 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP DIRECTORS' REPORT In addition, Elanor has also granted ADIC options to acquire up to 7.5 million in additional Elanor securities at exercise prices of between $2.25 to $2.75 per security, with vesting milestones linked to ADIC committing a further $0.5 billion in AUM. As at the signing date of these financial statements, the accounting assessment of the transaction is not yet complete, and the Group is currently finalising its determination of the nature of the transaction and the fair values of identifiable assets acquired and liabilities assumed. The transaction will be accounted for as a business combination under AASB 3 Business Combinations as follows: • • Identifiable assets will include intangible assets in relation to key Investment Management Agreements acquired. The amount that the consideration paid exceeds the (net) fair value of all identified assets and liabilities will be allocated to goodwill. In accordance with AASB112 Income Taxes, a deferred tax asset or liability will be recognised when a temporary difference arises between the carrying amount of an asset or liability and its tax base. The existence of a deferred liability on an intangible asset will result in an increase to goodwill. • The fair value of the consideration is $39.7 million and based on the fair value of the securities issued with reference to the share price ($1.60) on the day of the transaction completion. • The value of securities subject to claw-back arrangements will be classified as a financial liability based on the definitions in AASB 132 Financial Instruments: Presentation. The Group will finalise the accounting for the transaction in the ensuing reporting period in which the transaction completed. Acquisition of Leura Gardens Resort On 28 July 2023 EHAF settled the acquisition of the Leura Gardens Resort in the Blue Mountains, NSW for $20 million. Other matters Other than the events disclosed above, the directors are not aware of any other matters or circumstances not otherwise dealt with in the financial reports or the Directors' Report that has significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in the financial year subsequent to the year ended 30 June 2023. 47 35 ELANOR INVESTORS GROUP Directors' Report DIRECTORS' REPORT 18. Rounding of amounts to the nearest thousand dollars In accordance with Legislative Instrument 2022/519 issued by the Australian Securities and Investments Commission relating to the rounding off of amounts in the Directors’ Report, amounts in the Directors’ Report have been rounded to the nearest thousand dollars in accordance with that Legislative Instrument, unless otherwise indicated. The Directors’ report is made in accordance with a resolution of the Boards of Directors of Elanor Funds Management Limited and Elanor Investors Limited. The Financial Statements were authorised for issue by the Directors on 22 August 2023. Signed in accordance with a resolution of the Directors pursuant to section 298(2) of the Corporations Act 2001 (Cth). The Directors have the power to amend and re-issue the Financial Statements. Paul Bedbrook Chair Glenn Willis CEO and Managing Director Sydney, 22 August 2023 48 36 Elanor Investors GroupAnnual Report 2023 49 PricewaterhouseCoopers, ABN 52 780 433 757 One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001 T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124 T: +61 2 9659 2476, F: +61 2 8266 9999, www.pwc.com.au Liability limited by a scheme approved under Professional Standards Legislation. Auditor’s Independence Declaration As lead auditor for the audit of Elanor Investors Limited and Elanor Investment Fund for the year ended 30 June 2023, I declare that to the best of my knowledge and belief, there have been: (a)no contraventions of the auditor independence requirements of the Corporations Act 2001 inrelation to the audit; and(b)no contraventions of any applicable code of professional conduct in relation to the audit.This declaration is in respect of Elanor Investors Limited and the entities it controlled during the period. N R McConnell SydneyPartner PricewaterhouseCoopers 22 August 2023 Consolidated Statements of Profit or Loss For the year ended 30 June 2023 CONSOLIDATED STATEMENTS OF PROFIT OR LOSS FOR THE YEAR ENDED 30 JUNE 2023 ELANOR INVESTORS GROUP Revenue and other income Revenue from operating activities Interest income Rental income Share of profit from equity accounted investments Realised gain on disposal of investment Fair value gain on revaluation of PP&E and investment properties Fair value gain on revaluation of derivatives Other income Total revenue and other income Expenses Changes in inventories of finished goods Salary and employee benefits Property expenses Operator management costs Borrowing costs Depreciation Amortisation Marketing and promotion Repairs, maintenance and technology Share of loss from equity accounted investments Fair value loss on revaluation of PP&E and investment properties Fair value loss on revaluation of derivatives Impairment expense Corporate transaction costs Insurance expense Other expenses Total expenses Net profit / (loss) before income tax expense Income tax (expense) / benefit Net profit / (loss) for the year Attributable to security holders of: - Parent Entity - Non-controlling interest EIF Net profit / (loss) attributable to ENN security holders Attributable to security holders of: - External Non-controlling interest Net profit / (loss) for the year Basic earnings / (loss) per stapled security (cents) Diluted earnings / (loss) per stapled security (cents) Note 2 1 10 8,9 12 11,30 8 10 8,9 12 10 5 Consolidated Consolidated Group 30 June 2022 $'000 Group 30 June 2023 $'000 EIF Group 30 June 2023 $'000 EIF1 Group 30 June 2022 $'000 139,141 230 8,733 – 1,200 – – 2,108 151,412 9,678 68,449 14,416 9,341 20,166 13,430 670 4,047 2,806 7,042 6,856 1,295 2,831 4,071 3,269 9,178 177,545 (26,133) (4,541) (30,674) 92,164 405 6,293 10,050 1,635 – 2,621 2,268 115,436 6,335 51,366 9,503 4,428 16,217 12,554 444 2,660 2,673 – 2,447 – 753 – 2,819 10,632 122,831 (7,395) 3,161 (4,234) (16,977) (2,730) (19,707) (11,833) 12,799 966 (10,967) (30,674) (16.35) (13.91) (5,200) (4,234) 0.82 0.69 – 14 23,658 – 1,200 35,006 – 24 59,902 – 2,878 2,561 5,456 17,223 – 129 10 56 7,312 – 1,268 2,831 – – 2,933 42,657 17,245 – 17,245 (2,730) – (2,730) 19,975 17,245 (2.27) (1.93) – – 16,692 9,871 1,634 13,513 2,621 12,350 56,681 – 2,865 1,362 5,329 12,815 – 6 5 289 – – – – – – 15,673 38,344 18,337 – 18,337 12,799 – 12,799 5,538 18,337 10.91 9.19 Basic earnings / (loss) of the parent entity (cents) Diluted earnings / (loss) of the parent entity (cents) 1 EIF Group restated to reclassify $16.3 million revaluation gain on investment property from the consolidated statement of comprehensive income to the consolidated statement of profit or loss, with no impact on net assets or total equity. Refer to Note 30. (10.08) (8.50) (14.09) (11.98) The above Consolidated Statements of Profit or Loss should be read in conjunction with the accompanying notes 50 The above Consolidated Statements of Profit or Loss should be read in conjunction with the accompanying notes 38 Elanor Investors GroupAnnual Report 2023 Consolidated Statements of Comprehensive Income For the year ended 30 June 2023 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2023 ELANOR INVESTORS GROUP Net (loss) / profit for the year Other comprehensive income Items that may be reclassified subsequently to profit and loss Gain on revaluation of cash flow hedge Items that may not be reclassified to profit and loss Share of reserves of equity accounted investments Gain on revaluation of property, plant and equipment Other comprehensive income for the year, net of tax Total comprehensive income / (loss) for the year, net of tax Attributable to security holders of: - Parent entity - Non-controlling interest - EIF Total comprehensive income / (loss) for the year, net of tax, of ENN security holders Consolidated Consolidated Group 30 June 2022 $'000 (4,234) Group 30 June 2023 $'000 (30,674) EIF Group 30 June 2023 $'000 17,245 EIF1 Group 30 June 2022 $'000 18,337 – 361 – 359 (38) 28,286 28,248 (2,426) (6,964) (3,511) (10,475) 68 16,292 16,721 12,487 (5,636) 13,417 7,781 (781) – (781) 16,464 (3,511) – (3,511) 68 – 427 18,764 13,417 – 13,417 Attributable to security holders of: - External Non-controlling interest 8,049 4,706 19,975 5,348 18,765 Total comprehensive income / (loss) for the year, net of tax 1 EIF Group restated to reclassify $16.3 million revaluation gain on investment property from the consolidated statement of comprehensive income to the consolidated statement of profit or loss, with no impact on net assets or total equity. Refer to Note 30. (2,426) 12,487 16,464 The above Consolidated Statements of Comprehensive Income should be read in conjunction with the accompanying notes The above Consolidated Statements of Comprehensive Income should be read in conjunction with the accompanying notes 51 39 ELANOR INVESTORS GROUP Consolidated Statements of Financial Position For the year ended 30 June 2023 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2023 Current assets Cash and cash equivalents Trade and other receivables Other financial assets Inventories Other current assets Derivative financial instruments Total current assets Non-current assets Property, plant and equipment Contract assets Investment properties Derivative financial instruments Equity accounted investments Intangible assets Deferred tax assets Total non-current assets Total assets Current liabilities Payables Interest bearing liabilities Loan from the Company Lease liabilities Current provisions Other current liabilities Income tax payable Contract liabilities Total current liabilities Non-current liabilities Interest bearing liabilities Non-current provisions Lease liabilities Loan from the Company Total non-current liabilities Total liabilities Net assets Consolidated Consolidated Group 30 June 2022 $'000 Group 30 June 2023 $'000 25,269 18,157 4,095 1,893 3,207 1,353 53,974 521,054 3,618 91,875 – 97,834 1,478 10,083 725,942 779,916 17,987 8,542 – 1,887 5,401 16,656 610 2,196 53,279 372,159 296 1,870 – 374,325 427,604 352,312 27,774 17,653 2,186 1,809 2,241 1,898 53,561 437,454 4,545 93,875 723 110,394 1,448 12,150 660,589 714,150 15,569 – – 1,660 4,367 10,188 – 1,323 33,107 335,835 196 3,758 – 339,789 372,896 341,254 Note 6 19,30 13 12,30 8(a) 19 9,30 12,30 10,30 21 5 20,30 11 30 8 20 20,30 11,30 20 8 30 EIF Group 30 June 2023 $'000 1,182 41,902 – – 15 1,353 44,452 – – 591,870 – 93,610 – – 685,480 729,932 9,566 5,982 12,592 – – 13,130 – 276 41,546 312,633 – – 42,036 354,669 396,215 333,717 EIF Group 30 June 2022 $'000 9,008 47,528 – – 61 1,898 58,495 – – 498,382 723 107,182 – – 606,287 664,782 7,349 – 16,302 – – 9,826 – – 33,477 275,392 – – 43,950 319,342 352,819 311,963 The above Consolidated Statements of Financial Position should be read in conjunction with the accompanying notes 52 The above Consolidated Statements of Financial Position should be read in conjunction with the accompanying notes 40 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP CONSOLIDATED STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2023 Equity Equity Holders of Parent Entity Contributed equity Treasury shares Reserves Accumulated losses Parent entity interest Equity Holders of Non Controlling Interest Contributed equity - Elanor Investment Fund Treasury shares Reserves Accumulated losses Non-controlling interest Equity Holders of Non Controlling Interest - External Contributed equity - External Reserves Accumulated (losses) / Retained profits External Non-controlling interest Total equity attributable to stapled security holders: - Parent Entity - Non-controlling Interest - EIF Consolidated Consolidated Group 30 June 2022 $'000 Group 30 June 2023 $'000 Note 14 14 15 14 14 15 73,555 (759) 32,285 (73,403) 31,678 108,093 (2,610) 31,190 (24,739) 111,934 167,121 69,399 (27,820) 208,700 72,783 (1,682) 22,517 (56,424) 37,194 105,559 (5,086) 33,567 (7,528) 126,512 140,000 50,384 (12,836) 177,548 EIF Group 30 June 2023 $'000 108,093 (2,610) 31,190 (24,739) 111,934 – – – – – EIF1 Group 30 June 2022 $'000 105,559 (5,086) 33,567 (7,528) 126,512 – – – – – 166,120 21,854 33,809 221,783 145,646 21,855 17,950 185,451 31,678 111,934 37,194 126,512 111,934 – 126,512 – Total equity attributable to ENN security holders Total equity attributable to stapled security holders: 185,451 - Non-controlling interest - External Total equity 311,963 1 EIF Group restated to reclassify $16.3 million revaluation gain on investment property from the consolidated statement of comprehensive income to the consolidated statement of profit or loss, with no impact on net assets or total equity. Refer to Note 30. 177,548 341,254 208,700 352,312 221,783 333,717 111,934 126,512 143,612 163,706 The above Consolidated Statements of Financial Position should be read in conjunction with the accompanying notes The above Consolidated Statements of Financial Position should be read in conjunction with the accompanying notes 53 41 l a t o T y t i u q E - n o N l a n r e t x E l a t o T N N E g n i l l o r t n o c y t i t n E / s t i f o r p d e s a B e g d e H s e v r e s e R s e r a h s y t i u q e - n o N t n e r a P d e n i a t e R y t i r u c e S w o l f h s a C r e h t O y r u s a e r T d e t u b i r t n o C P U O R G S R O T S E V N I R O N A L E I Y T U Q E N I S E G N A H C F O S T N E M E T A T S D E T A D L O S N O C I 3 2 0 2 E N U J 0 3 D E D N E R A E Y E H T R O F g n i l l o r t n o c y t i u q E t s e r e t n i I F E 0 0 0 $ ' l a t o T 0 0 0 $ ' y t i u q E d e t a l u m u c c a ( t n e m y a P e v r e s e R 0 0 0 $ ' ) s e s s o l 0 0 0 $ ' e v r e s e R 0 0 0 $ ' 0 0 0 $ ' 0 0 0 $ ' 0 0 0 $ ' e t o N 0 0 0 $ ' 0 0 0 $ ' t s e r e t n i 4 5 2 , 1 4 3 0 5 5 , 7 7 1 ) 4 7 6 , 0 3 ( ) 7 6 9 , 0 1 ( 8 4 2 , 8 2 ) 6 2 4 , 2 ( 9 4 0 , 8 6 1 0 , 9 1 – ) 1 4 8 , 1 ( – – 2 3 2 , 6 3 7 2 5 , 9 2 9 4 9 4 ) 6 5 9 , 0 2 ( ) 5 7 4 , 6 ( 0 0 0 $ ' 2 3 2 , 9 4 0 7 , 3 6 1 ) 7 0 7 , 9 1 ( ) 5 7 4 , 0 1 ( – – 5 0 7 , 6 ) 1 4 8 , 1 ( ) 1 8 4 , 4 1 ( 2 1 5 , 6 2 1 2 9 1 , 7 3 ) 6 2 4 , 6 5 ( 3 9 1 , 3 ) 1 8 7 ( ) 0 3 7 , 2 ( ) 1 1 5 , 3 ( – – 0 1 0 , 5 ) 6 9 5 , 1 ( ) 1 8 4 , 4 1 ( – – 5 9 6 , 1 – ) 5 4 2 ( – – – – – ) 7 7 9 , 6 1 ( ) 7 7 9 , 6 1 ( 3 1 0 , 0 1 ) 4 6 9 , 6 ( – ) 7 7 9 , 6 1 ( – – – – – – – ) 5 4 2 ( – 3 1 0 , 0 1 3 1 0 , 0 1 – – – – – – 4 2 3 , 9 1 ) 2 8 6 , 1 ( 3 8 7 , 2 7 – – – – – – – – – – – – – 3 2 9 2 7 7 4 1 3 3 8 9 , 3 4 2 3 7 8 , 9 6 0 1 1 , 4 7 1 1 3 5 , 1 4 ) 7 0 6 , 4 4 ( 6 9 8 , 1 0 1 9 2 1 , 3 1 ) 4 0 2 , 1 ( 5 0 3 , 2 7 l a t o T y t i u q E - n o N l a n r e t x E l a t o T N N E g n i l l o r t n o c y t i t n E / s t i f o r p d e s a B e g d e H s e v r e s e R s e r a h s y t i u q e - n o N t n e r a P d e n i a t e R y t i r u c e S w o l f h s a C r e h t O y r u s a e r T d e t u b i r t n o C 0 0 0 $ ' 0 0 0 $ ' t s e r e t n i 0 0 0 $ ' I F E 0 0 0 $ ' g n i l l o r t n o c y t i u q E t s e r e t n i l a t o T 0 0 0 $ ' y t i u q E d e t a l u m u c c a ( t n e m y a P e v r e s e R 0 0 0 $ ' ) s e s s o l 0 0 0 $ ' e v r e s e R 0 0 0 $ ' 0 0 0 $ ' 0 0 0 $ ' 0 0 0 $ ' e t o N ) 4 3 2 , 4 ( 1 2 7 , 6 1 7 8 4 , 2 1 6 0 9 , 9 7 0 7 , 4 ) 9 9 1 , 5 ( – 6 3 1 , 4 – – 8 9 9 , 4 1 1 8 9 9 , 4 1 1 – – 6 6 9 6 1 8 , 6 2 8 7 , 7 ) 5 3 6 , 1 ( ) 5 3 6 , 1 ( – – ) 6 1 7 , 2 3 ( ) 0 9 3 , 0 1 ( ) 6 2 3 , 2 2 ( ) 6 2 3 , 2 2 ( – – 6 3 1 , 4 9 3 8 , 2 7 9 2 , 1 – – – – – 2 1 – – – 9 1 6 9 9 7 , 2 1 0 8 5 , 2 3 1 7 9 1 , 6 – ) 3 3 8 , 1 1 ( ) 3 3 8 , 1 1 ( 8 1 4 , 3 1 ) 6 3 6 , 5 ( ) 3 3 8 , 1 1 ( – – – – – – – 7 9 2 , 1 – 5 9 1 , 6 5 9 1 , 6 – – – – – – – – – – – – – – – – – – – ) 8 7 4 ( 8 7 4 4 1 3 – – – – – – – – – – – 2 2 – – – – – ) 2 1 ( : s r e n w o s a y t i c a p a c r i e h t n i s r e n w o h t i w s n o i t c a s n a r T r a e y e h t r o f ) e s n e p x e ( / e m o c n i e v i s n e h e r p m o c l a t o T i s g n n r a e i d e n a t e r d n a s e v r e s e r n e e w t e b s r e f s n a r T s t s o c e u s s i f o t e n , y t i u q e f o s n o i t u b i r t n o C r a e y e h t r o f e m o c n i i e v s n e h e r p m o c r e h t O l e b a y a p d n a i d a p s n o i t u b i r t s D i s t n e m y a p d e s a b - y t i r u c e S 2 2 0 2 l y u J 1 t a y t i u q e l a t o T p u o r G d e t a d i l o s n o C r a e y e h t r o f s s o L . . . . . t s e r e t n i g n i l l o r t n o c - n o n h t i w n o i t c a s n a r T : s r e n w o s a y t i c a p a c r i e h t n i s r e n w o h t i w s n o i t c a s n a r T r a e y e h t r o f ) e s n e p x e ( / e m o c n i e v i s n e h e r p m o c l a t o T r a e y e h t r o f ) e s n e p x e ( / e m o c n i i e v s n e h e r p m o c r e h t O i s g n n r a e i d e n a t e r d n a s e v r e s e r n e e w t e b s r e f s n a r T s t s o c e u s s i f o t e n , y t i u q e f o s n o i t u b i r t n o C l e b a y a p d n a i d a p s n o i t u b i r t s D i s t n e m y a p d e s a b - y t i r u c e S 1 2 0 2 l y u J 1 t a y t i u q e l a t o T r a e y e h t r o f ) s s o l ( / t i f o r P p u o r G d e t a d i l o s n o C . . . . . t s e r e t n i g n i l l o r t n o c - n o n h t i w n o i t c a s n a r T 4 5 2 , 1 4 3 0 5 5 , 7 7 1 4 0 7 , 3 6 1 2 1 5 , 6 2 1 2 9 1 , 7 3 ) 6 2 4 , 6 5 ( 3 9 1 , 3 4 2 3 , 9 1 ) 2 8 6 , 1 ( 3 8 7 , 2 7 2 2 0 2 e n u J 0 3 t a y t i u q e l a t o T 2 1 3 , 2 5 3 0 0 7 , 8 0 2 2 1 6 , 3 4 1 4 3 9 , 1 1 1 8 7 6 , 1 3 ) 3 0 4 , 3 7 ( 8 4 9 , 2 7 3 3 , 9 2 ) 9 5 7 ( 5 5 5 , 3 7 3 2 0 2 e n u J 0 3 t a y t i u q e l a t o T y t i u q E n i s e g n a h C f o s t n e m e t a t S d e t a d i l o s n o C 54 3 2 0 2 e n u J 0 3 d e d n e r a e y e h t r o F t s e o n i g n y n a p m o c c a e h t h t i w n o i t c n u n o c n j i d a e r l e b d u o h s y t i u q E n i s e g n a h C f o s t n e m e t a t S d e t a d i l o s n o C e v o b a e h T 2 4 s e t o n i g n y n a p m o c c a e h t h t i w n o i t c n u n o c j n i d a e r e b l d u o h s y t i u q E n i s e g n a h C f o s t n e m e t t a S d e a d t i l o s n o C e v o b a e h T Elanor Investors GroupAnnual Report 2023 l a t o T y t i u q E - n o N l a n r e t x E t n e r a P y t i t n E / s t i f o r p i d e n a t e R d e s a B y t i r u c e S g n i l l o r t n o c l a t o T l d e t a u m u c c a ( t n e m y a P w o l f h s a C r e h t O e g d e H e v r e s e R s e v r e s e R s e r a h s y r u s a e r T y t i u q e d e t u b i r t n o C P U O R G S R O T S E V N I R O N A L E I Y T U Q E N I S E G N A H C F O S T N E M E T A T S D E T A D L O S N O C I 3 2 0 2 E N U J 0 3 D E D N E R A E Y E H T R O F 0 0 0 $ ' 0 0 0 $ ' 0 0 0 $ ' 0 0 0 $ ' e t o N 0 0 0 $ ' ) 1 8 7 ( 5 4 2 , 7 1 4 6 4 , 6 1 3 6 9 , 1 1 3 0 0 0 $ ' t s e r e t n i 5 7 9 , 9 1 1 5 4 , 5 8 1 – 5 7 9 , 9 1 9 0 9 , 7 2 9 9 8 , 2 2 – ) 7 6 ( ) 6 9 5 , 1 ( ) 6 5 9 , 0 2 ( 7 1 7 , 3 3 3 – – ) 7 6 ( ) 5 7 4 , 6 ( 3 8 7 , 1 2 2 0 0 0 $ ' y t i u q E 2 1 5 , 6 2 1 ) 1 8 7 ( ) 0 3 7 , 2 ( ) 1 1 5 , 3 ( – – 0 1 0 , 5 ) 6 9 5 , 1 ( ) 1 8 4 , 4 1 ( 0 0 0 $ ' ) s e s s o l – ) 8 2 5 , 7 ( ) 0 3 7 , 2 ( ) 0 3 7 , 2 ( – – – – ) 1 8 4 , 4 1 ( 0 0 0 $ ' e v r e s e R 0 5 6 , 6 – – – – – – – ) 6 9 5 , 1 ( 4 3 9 , 1 1 1 ) 9 3 7 , 4 2 ( 4 5 0 , 5 – – – – – – – – – – – ) 1 8 7 ( ) 1 8 7 ( – – – – – – – – – – – 6 7 4 , 2 4 3 5 , 2 – – – – – – – – 7 1 9 , 6 2 ) 6 8 0 , 5 ( 9 5 5 , 5 0 1 4 1 3 : s r e n w o s a y t i c a p a c r i e h t n i s r e n w o h t i w s n o i t c a s n a r T r a e y e h t r o f ) e s n e p x e ( / e m o c n i e v i s n e h e r p m o c l a t o T i s g n n r a e i d e n a t e r d n a s e v r e s e r n e e w t e b s r e f s n a r T s t s o c e u s s i f o t e n , y t i u q e f o s n o i t u b i r t n o C r a e y e h t r o f e m o c n i i e v s n e h e r p m o c r e h t O l e b a y a p d n a i d a p s n o i t u b i r t s D i s t n e m y a p d e s a b - y t i r u c e S t s e r e t n i g n i l l o r t n o c - n o n h t i w n o i t c a s n a r T 6 3 1 , 6 2 ) 0 1 6 , 2 ( 3 9 0 , 8 0 1 3 2 0 2 e n u J 0 3 t a y t i u q e l a t o T y t i u q E n i s e g n a h C f o s t n e m e t a t S d e t a d i l o s n o C 3 2 0 2 e n u J 0 3 d e d n e r a e y e h t r o F 0 0 0 $ ' 7 3 3 , 8 1 2 3 9 , 3 1 2 7 2 4 4 6 7 , 8 1 8 3 5 , 5 ) 0 9 1 ( 8 4 3 , 5 2 5 3 , 1 8 6 6 9 , 0 1 1 6 6 9 , 0 1 1 – 8 4 6 , 2 ) 4 3 6 , 1 ( ) 4 1 7 , 2 3 ( 3 6 9 , 1 1 3 – ) 1 9 1 ( ) 4 3 6 , 1 ( ) 0 9 3 , 0 1 ( 1 5 4 , 5 8 1 9 9 7 , 2 1 0 8 5 , 2 3 1 8 1 6 7 1 4 , 3 1 – – – 9 3 8 , 2 ) 4 2 3 , 2 2 ( – 5 1 8 , 1 9 9 7 , 2 1 9 9 7 , 2 1 – – 1 8 1 – ) 4 2 3 , 2 2 ( 0 0 0 $ ' e v r e s e R 1 1 8 , 3 – – – – – – – 9 3 8 , 2 – 0 5 5 0 5 5 ) 9 6 3 ( – ) 1 8 1 ( – – – – i e v s n e h e r p m o c – 8 6 8 6 – – – – – – – – – – – ) 8 5 4 , 1 ( 8 5 4 , 1 – – – – – – – – 9 4 8 , 6 2 ) 8 2 6 , 3 ( 1 0 1 , 4 0 1 l a t o T y t i u q E - n o N l a n r e t x E t n e r a P y t i t n E / s t i f o r p i d e n a t e R d e s a B y t i r u c e S g n i l l o r t n o c l a t o T l d e t a u m u c c a ( t n e m y a P w o l f h s a C r e h t O e g d e H e v r e s e R 1 s e v r e s e R s e r a h s y r u s a e r T y t i u q e d e t u b i r t n o C 0 0 0 $ ' 1 t s e r e t n i 0 0 0 $ ' y t i u q E 0 0 0 $ ' 1 ) s e s s o l 0 0 0 $ ' 0 0 0 $ ' 0 0 0 $ ' 0 0 0 $ ' e t o N 4 1 3 : s r e n w o s a y t i c a p a c r i e h t n i s r e n w o h t i w s n o i t c a s n a r T r a e y e h t r o f ) e s n e p x e ( / e m o c n i e v i s n e h e r p m o c l a t o T i s g n n r a e i d e n a t e r d n a s e v r e s e r n e e w t e b s r e f s n a r T s t s o c e u s s i f o t e n , y t i u q e f o s n o i t u b i r t n o C r a e y e h t r o f e m o c n i i e v s n e h e r p m o c r e h t O l e b a y a p d n a i d a p s n o i t u b i r t s D i s t n e m y a p d e s a b - y t i r u c e S t s e r e t n i g n i l l o r t n o c - n o n h t i w n o i t c a s n a r T t e n n o t c a p m i o n h t i w , s s o l r o t i f o r p f o t n e m e a t t s d e t a d i l o s n o c e h t o t e m o c n i 2 1 5 , 6 2 1 ) 8 2 5 , 7 ( 0 5 6 , 6 t s e o n i g n y n a p m o c c a e h t h t i w n o i t c n u n o c n j i f o t n e m e t a t s d e t a d i l o s n o c e h t m o r f y t r e p o r p t n e m t s e v n i n o i n a g n o i t a u a v e r n o l i l l i l m 3 . 6 1 $ y f i s s a c e r o t d e t a t s e r p u o r G F E 1 I 7 1 9 , 6 2 ) 6 8 0 , 5 ( 9 5 5 , 5 0 1 2 2 0 2 e n u J 0 3 t a y t i u q e l a t o T d a e r l e b d u o h s y t i u q E n i s e g n a h C f o s t n e m e t a t S d e t a d i l o s n o C e v o b a e h T . 0 3 e t o N o t r e f e R . y t i u q e l a t o t r o s t e s s a 2 2 0 2 l y u J 1 t a y t i u q e l a t o T r a e y e h t r o f s s o L p u o r G F E I . . . . . 1 2 0 2 l y u J 1 t a y t i u q e l a t o T r a e y e h t r o f ) s s o l ( / t i f o r P p u o r G F E I . . . . . 3 4 s e t o n i g n y n a p m o c c a e h t h t i w n o i t c n u n o c j n i d a e r e b l d u o h s y t i u q E n i s e g n a h C f o s t n e m e t t a S d e a d t i l o s n o C e v o b a e h T 55 ELANOR INVESTORS GROUP Consolidated Statements of Cash Flows For the year ended 30 June 2023 CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2023 Cash flows from operating activities Receipts from customers Payments to suppliers and employees Interest received Finance costs paid Rental Receipts Income tax paid Net cash flows from operating activities Cash flows from investing activities Financial assets (provided) / repaid Payments for property, plant and equipment / investment properties Loans to associates Receipts for equity accounted investments Payments for equity accounted investments Payments for the business combination subsidiaries Receipts of cash held in trust Payments of corporate transaction costs Distributions received from equity accounted investments Loans from Company Net cash flows from investing activities Cash flows from financing activities Proceeds from borrowings Repayments of borrowings Payments for lease liability Proceeds from equity raisings Costs associated with equity raisings Distributions paid to securityholders Net cash flows from financing activities Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash at the end of the year Consolidated Consolidated Group 30 June 2022 $'000 Group 30 June 2023 $'000 168,310 (131,776) 525 (18,234) – (892) 17,933 (2,218) (72,719) (4,246) 19,333 (18,751) – 3,163 (1,171) 14,797 – (61,812) 100,585 (57,750) (2,029) 25,500 (669) (24,263) 41,374 (2,505) 27,774 25,269 106,561 (98,453) 324 (12,960) – (253) (4,781) 9,120 (21,972) (663) 49,301 (43,569) (9,952) – – 8,399 – (9,336) 317,101 (293,160) (2,077) 28,629 (1,946) (27,427) 21,120 7,003 20,771 27,774 EIF Group 30 June 2023 $'000 – (9,281) 14 (13,846) 23,658 – 545 – (64,732) 519 19,092 (18,724) – – – 14,799 (3,925) (52,971) 101,782 (57,750) – 25,500 (669) (24,263) 44,600 (7,826) 9,008 1,182 EIF Group 30 June 2022 $'000 – (8,563) – (8,161) 16,692 – (32) – (18,865) (1,072) 46,218 (43,516) (9,854) – – 8,399 (17,925) (36,615) 305,688 (261,242) – 28,629 (1,947) (27,427) 43,701 7,054 1,954 9,008 The above Consolidated Statements of Cash Flows should be read in conjunction with the accompanying notes 56 The above Consolidated Statements of Cash Flows should be read in conjunction with the accompanying notes 44 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 About this Report The notes to the consolidated Financial Statements have been organised into the following sections for reduced complexity and ease of navigation: RESULTS 1. 2. 3. 4. 5. 6. 7. Segment information Revenue from operating activities Distributions Earnings per stapled security Income tax Cash and cash equivalents Cash flow information OPERATING ASSETS 8. 9. 10. Property, plant and equipment Investment properties Equity accounted investments FINANCE AND CAPITAL STRUCTURE 11. 12. 13. 14. 15. 16. Interest bearing liabilities Derivative financial instruments Other financial assets Contributed equity Reserves Financial Risk Management GROUP STRUCTURE 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. Parent entity Subsidiaries and Controlled entities Trade and other receivables Payables and other liabilities Intangible assets Government grants Commitments Share-based payments Related parties Significant events Other accounting policies Events occurring after reporting date Auditor's remuneration Non-Parent disclosure 45 62 62 64 66 66 68 71 72 74 74 82 85 91 91 94 96 97 98 99 104 104 105 108 108 110 111 111 112 114 116 117 118 119 120 57 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 About this report (continued) About this report (continued) About this report (continued) About this report (continued) About this report (continued) About this report (continued) About this report (continued) About this report (continued) About this report (continued) About this report (continued) About this report (continued) About this report (continued) About this report (continued) Elanor Investors Group (Group, Consolidated Group or Elanor) is a 'stapled' entity comprising Elanor Investors About this report (continued) Elanor Investors Group (Group, Consolidated Group or Elanor) is a 'stapled' entity comprising Elanor Investors About this report (continued) Elanor Investors Group (Group, Consolidated Group or Elanor) is a 'stapled' entity comprising Elanor Investors Elanor Investors Group (Group, Consolidated Group or Elanor) is a 'stapled' entity comprising Elanor Investors Elanor Investors Group (Group, Consolidated Group or Elanor) is a 'stapled' entity comprising Elanor Investors Elanor Investors Group (Group, Consolidated Group or Elanor) is a 'stapled' entity comprising Elanor Investors Elanor Investors Group (Group, Consolidated Group or Elanor) is a 'stapled' entity comprising Elanor Investors Limited (EIL or Company) and its controlled entities (EIL Group) and Elanor Investment Fund (Trust) and its Elanor Investors Group (Group, Consolidated Group or Elanor) is a 'stapled' entity comprising Elanor Investors Elanor Investors Group (Group, Consolidated Group or Elanor) is a 'stapled' entity comprising Elanor Investors Elanor Investors Group (Group, Consolidated Group or Elanor) is a 'stapled' entity comprising Elanor Investors Limited (EIL or Company) and its controlled entities (EIL Group) and Elanor Investment Fund (Trust) and its Elanor Investors Group (Group, Consolidated Group or Elanor) is a 'stapled' entity comprising Elanor Investors Elanor Investors Group (Group, Consolidated Group or Elanor) is a 'stapled' entity comprising Elanor Investors Limited (EIL or Company) and its controlled entities (EIL Group) and Elanor Investment Fund (Trust) and its Limited (EIL or Company) and its controlled entities (EIL Group) and Elanor Investment Fund (Trust) and its Limited (EIL or Company) and its controlled entities (EIL Group) and Elanor Investment Fund (Trust) and its Elanor Investors Group (Group, Consolidated Group or Elanor) is a 'stapled' entity comprising Elanor Investors Elanor Investors Group (Group, Consolidated Group or Elanor) is a 'stapled' entity comprising Elanor Investors Limited (EIL or Company) and its controlled entities (EIL Group) and Elanor Investment Fund (Trust) and its Limited (EIL or Company) and its controlled entities (EIL Group) and Elanor Investment Fund (Trust) and its Elanor Investors Group (Group, Consolidated Group or Elanor) is a 'stapled' entity comprising Elanor Investors controlled entities (EIF Group). The units in the Trust are stapled to shares in the Company. The stapled Limited (EIL or Company) and its controlled entities (EIL Group) and Elanor Investment Fund (Trust) and its Limited (EIL or Company) and its controlled entities (EIL Group) and Elanor Investment Fund (Trust) and its Limited (EIL or Company) and its controlled entities (EIL Group) and Elanor Investment Fund (Trust) and its controlled entities (EIF Group). The units in the Trust are stapled to shares in the Company. The stapled Limited (EIL or Company) and its controlled entities (EIL Group) and Elanor Investment Fund (Trust) and its Limited (EIL or Company) and its controlled entities (EIL Group) and Elanor Investment Fund (Trust) and its controlled entities (EIF Group). The units in the Trust are stapled to shares in the Company. The stapled controlled entities (EIF Group). The units in the Trust are stapled to shares in the Company. The stapled controlled entities (EIF Group). The units in the Trust are stapled to shares in the Company. The stapled Limited (EIL or Company) and its controlled entities (EIL Group) and Elanor Investment Fund (Trust) and its Limited (EIL or Company) and its controlled entities (EIL Group) and Elanor Investment Fund (Trust) and its controlled entities (EIF Group). The units in the Trust are stapled to shares in the Company. The stapled controlled entities (EIF Group). The units in the Trust are stapled to shares in the Company. The stapled Limited (EIL or Company) and its controlled entities (EIL Group) and Elanor Investment Fund (Trust) and its securities cannot be traded or dealt with separately. The stapled securities of the Group are listed on the controlled entities (EIF Group). The units in the Trust are stapled to shares in the Company. The stapled controlled entities (EIF Group). The units in the Trust are stapled to shares in the Company. The stapled controlled entities (EIF Group). The units in the Trust are stapled to shares in the Company. The stapled securities cannot be traded or dealt with separately. The stapled securities of the Group are listed on the controlled entities (EIF Group). The units in the Trust are stapled to shares in the Company. The stapled controlled entities (EIF Group). The units in the Trust are stapled to shares in the Company. The stapled securities cannot be traded or dealt with separately. The stapled securities of the Group are listed on the securities cannot be traded or dealt with separately. The stapled securities of the Group are listed on the securities cannot be traded or dealt with separately. The stapled securities of the Group are listed on the controlled entities (EIF Group). The units in the Trust are stapled to shares in the Company. The stapled controlled entities (EIF Group). The units in the Trust are stapled to shares in the Company. The stapled securities cannot be traded or dealt with separately. The stapled securities of the Group are listed on the securities cannot be traded or dealt with separately. The stapled securities of the Group are listed on the controlled entities (EIF Group). The units in the Trust are stapled to shares in the Company. The stapled Australian Securities Exchange (ASX: ENN). As permitted by ASIC Corporations Instrument 2015/838 issued securities cannot be traded or dealt with separately. The stapled securities of the Group are listed on the securities cannot be traded or dealt with separately. The stapled securities of the Group are listed on the securities cannot be traded or dealt with separately. The stapled securities of the Group are listed on the Australian Securities Exchange (ASX: ENN). As permitted by ASIC Corporations Instrument 2015/838 issued securities cannot be traded or dealt with separately. The stapled securities of the Group are listed on the securities cannot be traded or dealt with separately. The stapled securities of the Group are listed on the Australian Securities Exchange (ASX: ENN). As permitted by ASIC Corporations Instrument 2015/838 issued Australian Securities Exchange (ASX: ENN). As permitted by ASIC Corporations Instrument 2015/838 issued Australian Securities Exchange (ASX: ENN). As permitted by ASIC Corporations Instrument 2015/838 issued securities cannot be traded or dealt with separately. The stapled securities of the Group are listed on the securities cannot be traded or dealt with separately. The stapled securities of the Group are listed on the Australian Securities Exchange (ASX: ENN). As permitted by ASIC Corporations Instrument 2015/838 issued Australian Securities Exchange (ASX: ENN). As permitted by ASIC Corporations Instrument 2015/838 issued securities cannot be traded or dealt with separately. The stapled securities of the Group are listed on the by the Australian Securities and Investments Commission (ASIC), this report is a combined report that presents Australian Securities Exchange (ASX: ENN). As permitted by ASIC Corporations Instrument 2015/838 issued Australian Securities Exchange (ASX: ENN). As permitted by ASIC Corporations Instrument 2015/838 issued Australian Securities Exchange (ASX: ENN). As permitted by ASIC Corporations Instrument 2015/838 issued by the Australian Securities and Investments Commission (ASIC), this report is a combined report that presents Australian Securities Exchange (ASX: ENN). As permitted by ASIC Corporations Instrument 2015/838 issued Australian Securities Exchange (ASX: ENN). As permitted by ASIC Corporations Instrument 2015/838 issued by the Australian Securities and Investments Commission (ASIC), this report is a combined report that presents by the Australian Securities and Investments Commission (ASIC), this report is a combined report that presents by the Australian Securities and Investments Commission (ASIC), this report is a combined report that presents Australian Securities Exchange (ASX: ENN). As permitted by ASIC Corporations Instrument 2015/838 issued Australian Securities Exchange (ASX: ENN). As permitted by ASIC Corporations Instrument 2015/838 issued by the Australian Securities and Investments Commission (ASIC), this report is a combined report that presents by the Australian Securities and Investments Commission (ASIC), this report is a combined report that presents Australian Securities Exchange (ASX: ENN). As permitted by ASIC Corporations Instrument 2015/838 issued the consolidated financial statements and accompanying notes of both Elanor Investors Group and the Elanor by the Australian Securities and Investments Commission (ASIC), this report is a combined report that presents by the Australian Securities and Investments Commission (ASIC), this report is a combined report that presents by the Australian Securities and Investments Commission (ASIC), this report is a combined report that presents the consolidated financial statements and accompanying notes of both Elanor Investors Group and the Elanor by the Australian Securities and Investments Commission (ASIC), this report is a combined report that presents by the Australian Securities and Investments Commission (ASIC), this report is a combined report that presents the consolidated financial statements and accompanying notes of both Elanor Investors Group and the Elanor the consolidated financial statements and accompanying notes of both Elanor Investors Group and the Elanor the consolidated financial statements and accompanying notes of both Elanor Investors Group and the Elanor by the Australian Securities and Investments Commission (ASIC), this report is a combined report that presents by the Australian Securities and Investments Commission (ASIC), this report is a combined report that presents the consolidated financial statements and accompanying notes of both Elanor Investors Group and the Elanor the consolidated financial statements and accompanying notes of both Elanor Investors Group and the Elanor by the Australian Securities and Investments Commission (ASIC), this report is a combined report that presents Investment Fund. the consolidated financial statements and accompanying notes of both Elanor Investors Group and the Elanor the consolidated financial statements and accompanying notes of both Elanor Investors Group and the Elanor the consolidated financial statements and accompanying notes of both Elanor Investors Group and the Elanor Investment Fund. the consolidated financial statements and accompanying notes of both Elanor Investors Group and the Elanor the consolidated financial statements and accompanying notes of both Elanor Investors Group and the Elanor Investment Fund. Investment Fund. Investment Fund. the consolidated financial statements and accompanying notes of both Elanor Investors Group and the Elanor the consolidated financial statements and accompanying notes of both Elanor Investors Group and the Elanor Investment Fund. Investment Fund. the consolidated financial statements and accompanying notes of both Elanor Investors Group and the Elanor Investment Fund. Investment Fund. Investment Fund. Investment Fund. Investment Fund. Investment Fund. Investment Fund. Statement of compliance Investment Fund. Statement of compliance Statement of compliance Statement of compliance Statement of compliance Statement of compliance Statement of compliance Statement of compliance Statement of compliance Statement of compliance Statement of compliance Statement of compliance Statement of compliance The financial report is a general purpose financial report that has been prepared in accordance with Australian Statement of compliance The financial report is a general purpose financial report that has been prepared in accordance with Australian Statement of compliance The financial report is a general purpose financial report that has been prepared in accordance with Australian The financial report is a general purpose financial report that has been prepared in accordance with Australian The financial report is a general purpose financial report that has been prepared in accordance with Australian The financial report is a general purpose financial report that has been prepared in accordance with Australian The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Interpretations, other authoritative pronouncements of the Australian The financial report is a general purpose financial report that has been prepared in accordance with Australian The financial report is a general purpose financial report that has been prepared in accordance with Australian The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Interpretations, other authoritative pronouncements of the Australian The financial report is a general purpose financial report that has been prepared in accordance with Australian The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Interpretations, other authoritative pronouncements of the Australian Accounting Standards, Australian Interpretations, other authoritative pronouncements of the Australian Accounting Standards, Australian Interpretations, other authoritative pronouncements of the Australian The financial report is a general purpose financial report that has been prepared in accordance with Australian The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Interpretations, other authoritative pronouncements of the Australian Accounting Standards, Australian Interpretations, other authoritative pronouncements of the Australian The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards Board (the Board or AASB) and the Corporations Act 2001. Accounting Standards, Australian Interpretations, other authoritative pronouncements of the Australian Accounting Standards, Australian Interpretations, other authoritative pronouncements of the Australian Accounting Standards, Australian Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (the Board or AASB) and the Corporations Act 2001. Accounting Standards, Australian Interpretations, other authoritative pronouncements of the Australian Accounting Standards, Australian Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (the Board or AASB) and the Corporations Act 2001. Accounting Standards Board (the Board or AASB) and the Corporations Act 2001. Accounting Standards Board (the Board or AASB) and the Corporations Act 2001. Accounting Standards, Australian Interpretations, other authoritative pronouncements of the Australian Accounting Standards, Australian Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (the Board or AASB) and the Corporations Act 2001. Accounting Standards Board (the Board or AASB) and the Corporations Act 2001. Accounting Standards, Australian Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (the Board or AASB) and the Corporations Act 2001. Accounting Standards Board (the Board or AASB) and the Corporations Act 2001. Accounting Standards Board (the Board or AASB) and the Corporations Act 2001. Accounting Standards Board (the Board or AASB) and the Corporations Act 2001. Accounting Standards Board (the Board or AASB) and the Corporations Act 2001. Accounting Standards Board (the Board or AASB) and the Corporations Act 2001. Accounting Standards Board (the Board or AASB) and the Corporations Act 2001. For the purposes of preparing the financial statements, the Group is a for-profit entity. The financial report has Accounting Standards Board (the Board or AASB) and the Corporations Act 2001. For the purposes of preparing the financial statements, the Group is a for-profit entity. The financial report has For the purposes of preparing the financial statements, the Group is a for-profit entity. The financial report has For the purposes of preparing the financial statements, the Group is a for-profit entity. The financial report has For the purposes of preparing the financial statements, the Group is a for-profit entity. The financial report has For the purposes of preparing the financial statements, the Group is a for-profit entity. The financial report has For the purposes of preparing the financial statements, the Group is a for-profit entity. The financial report has been presented in Australian dollars unless otherwise stated. For the purposes of preparing the financial statements, the Group is a for-profit entity. The financial report has For the purposes of preparing the financial statements, the Group is a for-profit entity. The financial report has For the purposes of preparing the financial statements, the Group is a for-profit entity. The financial report has been presented in Australian dollars unless otherwise stated. For the purposes of preparing the financial statements, the Group is a for-profit entity. The financial report has For the purposes of preparing the financial statements, the Group is a for-profit entity. The financial report has been presented in Australian dollars unless otherwise stated. been presented in Australian dollars unless otherwise stated. been presented in Australian dollars unless otherwise stated. For the purposes of preparing the financial statements, the Group is a for-profit entity. The financial report has For the purposes of preparing the financial statements, the Group is a for-profit entity. The financial report has been presented in Australian dollars unless otherwise stated. been presented in Australian dollars unless otherwise stated. For the purposes of preparing the financial statements, the Group is a for-profit entity. The financial report has been presented in Australian dollars unless otherwise stated. been presented in Australian dollars unless otherwise stated. been presented in Australian dollars unless otherwise stated. been presented in Australian dollars unless otherwise stated. been presented in Australian dollars unless otherwise stated. been presented in Australian dollars unless otherwise stated. been presented in Australian dollars unless otherwise stated. The Consolidated Financial Statements have been prepared on a going concern basis using historical cost been presented in Australian dollars unless otherwise stated. The Consolidated Financial Statements have been prepared on a going concern basis using historical cost The Consolidated Financial Statements have been prepared on a going concern basis using historical cost The Consolidated Financial Statements have been prepared on a going concern basis using historical cost The Consolidated Financial Statements have been prepared on a going concern basis using historical cost The Consolidated Financial Statements have been prepared on a going concern basis using historical cost The Consolidated Financial Statements have been prepared on a going concern basis using historical cost conventions, except for investment properties, investment properties within the equity accounted investments, The Consolidated Financial Statements have been prepared on a going concern basis using historical cost The Consolidated Financial Statements have been prepared on a going concern basis using historical cost The Consolidated Financial Statements have been prepared on a going concern basis using historical cost conventions, except for investment properties, investment properties within the equity accounted investments, The Consolidated Financial Statements have been prepared on a going concern basis using historical cost The Consolidated Financial Statements have been prepared on a going concern basis using historical cost conventions, except for investment properties, investment properties within the equity accounted investments, conventions, except for investment properties, investment properties within the equity accounted investments, conventions, except for investment properties, investment properties within the equity accounted investments, The Consolidated Financial Statements have been prepared on a going concern basis using historical cost The Consolidated Financial Statements have been prepared on a going concern basis using historical cost conventions, except for investment properties, investment properties within the equity accounted investments, conventions, except for investment properties, investment properties within the equity accounted investments, The Consolidated Financial Statements have been prepared on a going concern basis using historical cost property, plant and equipment (EHAF and EWPF), derivative financial instruments, and other financial assets conventions, except for investment properties, investment properties within the equity accounted investments, conventions, except for investment properties, investment properties within the equity accounted investments, conventions, except for investment properties, investment properties within the equity accounted investments, property, plant and equipment (EHAF and EWPF), derivative financial instruments, and other financial assets conventions, except for investment properties, investment properties within the equity accounted investments, conventions, except for investment properties, investment properties within the equity accounted investments, property, plant and equipment (EHAF and EWPF), derivative financial instruments, and other financial assets property, plant and equipment (EHAF and EWPF), derivative financial instruments, and other financial assets property, plant and equipment (EHAF and EWPF), derivative financial instruments, and other financial assets conventions, except for investment properties, investment properties within the equity accounted investments, conventions, except for investment properties, investment properties within the equity accounted investments, property, plant and equipment (EHAF and EWPF), derivative financial instruments, and other financial assets property, plant and equipment (EHAF and EWPF), derivative financial instruments, and other financial assets conventions, except for investment properties, investment properties within the equity accounted investments, or liabilities which are stated at their fair value. property, plant and equipment (EHAF and EWPF), derivative financial instruments, and other financial assets property, plant and equipment (EHAF and EWPF), derivative financial instruments, and other financial assets property, plant and equipment (EHAF and EWPF), derivative financial instruments, and other financial assets or liabilities which are stated at their fair value. property, plant and equipment (EHAF and EWPF), derivative financial instruments, and other financial assets property, plant and equipment (EHAF and EWPF), derivative financial instruments, and other financial assets or liabilities which are stated at their fair value. or liabilities which are stated at their fair value. or liabilities which are stated at their fair value. property, plant and equipment (EHAF and EWPF), derivative financial instruments, and other financial assets property, plant and equipment (EHAF and EWPF), derivative financial instruments, and other financial assets or liabilities which are stated at their fair value. or liabilities which are stated at their fair value. property, plant and equipment (EHAF and EWPF), derivative financial instruments, and other financial assets or liabilities which are stated at their fair value. or liabilities which are stated at their fair value. or liabilities which are stated at their fair value. or liabilities which are stated at their fair value. or liabilities which are stated at their fair value. or liabilities which are stated at their fair value. or liabilities which are stated at their fair value. Compliance with international reporting standards or liabilities which are stated at their fair value. Compliance with international reporting standards Compliance with international reporting standards Compliance with international reporting standards Compliance with international reporting standards Compliance with international reporting standards Compliance with international reporting standards Compliance with international reporting standards Compliance with international reporting standards Compliance with international reporting standards Compliance with international reporting standards Compliance with international reporting standards Compliance with international reporting standards The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Compliance with international reporting standards The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Compliance with international reporting standards The financial report complies with Australian Accounting Standards as issued by the Australian Accounting The financial report complies with Australian Accounting Standards as issued by the Australian Accounting The financial report complies with Australian Accounting Standards as issued by the Australian Accounting The financial report complies with Australian Accounting Standards as issued by the Australian Accounting The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Standards Board and International Financial Reporting Standards (IFRS) as issued by the International The financial report complies with Australian Accounting Standards as issued by the Australian Accounting The financial report complies with Australian Accounting Standards as issued by the Australian Accounting The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Standards Board and International Financial Reporting Standards (IFRS) as issued by the International The financial report complies with Australian Accounting Standards as issued by the Australian Accounting The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Standards Board and International Financial Reporting Standards (IFRS) as issued by the International Standards Board and International Financial Reporting Standards (IFRS) as issued by the International Standards Board and International Financial Reporting Standards (IFRS) as issued by the International The financial report complies with Australian Accounting Standards as issued by the Australian Accounting The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Standards Board and International Financial Reporting Standards (IFRS) as issued by the International Standards Board and International Financial Reporting Standards (IFRS) as issued by the International The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Accounting Standards Board. Standards Board and International Financial Reporting Standards (IFRS) as issued by the International Standards Board and International Financial Reporting Standards (IFRS) as issued by the International Standards Board and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. Standards Board and International Financial Reporting Standards (IFRS) as issued by the International Standards Board and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. Accounting Standards Board. Accounting Standards Board. Standards Board and International Financial Reporting Standards (IFRS) as issued by the International Standards Board and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. Accounting Standards Board. Standards Board and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. Accounting Standards Board. Accounting Standards Board. Accounting Standards Board. Accounting Standards Board. Accounting Standards Board. Accounting Standards Board. Comparative figures have been restated where appropriate to ensure consistency of presentation throughout Accounting Standards Board. Comparative figures have been restated where appropriate to ensure consistency of presentation throughout Comparative figures have been restated where appropriate to ensure consistency of presentation throughout Comparative figures have been restated where appropriate to ensure consistency of presentation throughout Comparative figures have been restated where appropriate to ensure consistency of presentation throughout Comparative figures have been restated where appropriate to ensure consistency of presentation throughout Comparative figures have been restated where appropriate to ensure consistency of presentation throughout the financial report. Comparative figures have been restated where appropriate to ensure consistency of presentation throughout Comparative figures have been restated where appropriate to ensure consistency of presentation throughout Comparative figures have been restated where appropriate to ensure consistency of presentation throughout the financial report. Comparative figures have been restated where appropriate to ensure consistency of presentation throughout Comparative figures have been restated where appropriate to ensure consistency of presentation throughout the financial report. the financial report. the financial report. Comparative figures have been restated where appropriate to ensure consistency of presentation throughout Comparative figures have been restated where appropriate to ensure consistency of presentation throughout the financial report. the financial report. Comparative figures have been restated where appropriate to ensure consistency of presentation throughout the financial report. the financial report. the financial report. the financial report. the financial report. the financial report. the financial report. New accounting standards and interpretations the financial report. New accounting standards and interpretations New accounting standards and interpretations New accounting standards and interpretations New accounting standards and interpretations New accounting standards and interpretations New accounting standards and interpretations New accounting standards and interpretations New accounting standards and interpretations New accounting standards and interpretations New accounting standards and interpretations New accounting standards and interpretations New accounting standards and interpretations New and amended standards adopted by the Group New accounting standards and interpretations New and amended standards adopted by the Group New accounting standards and interpretations New and amended standards adopted by the Group New and amended standards adopted by the Group New and amended standards adopted by the Group New and amended standards adopted by the Group New and amended standards adopted by the Group New and amended standards adopted by the Group New and amended standards adopted by the Group New and amended standards adopted by the Group New and amended standards adopted by the Group New and amended standards adopted by the Group New and amended standards adopted by the Group New and amended standards adopted by the Group There are no standards, interpretations or amendments to existing standards that are effective for the first time New and amended standards adopted by the Group There are no standards, interpretations or amendments to existing standards that are effective for the first time There are no standards, interpretations or amendments to existing standards that are effective for the first time There are no standards, interpretations or amendments to existing standards that are effective for the first time There are no standards, interpretations or amendments to existing standards that are effective for the first time There are no standards, interpretations or amendments to existing standards that are effective for the first time There are no standards, interpretations or amendments to existing standards that are effective for the first time for the financial year beginning 1 July 2022 that have a material impact on the amounts recognised in prior There are no standards, interpretations or amendments to existing standards that are effective for the first time There are no standards, interpretations or amendments to existing standards that are effective for the first time There are no standards, interpretations or amendments to existing standards that are effective for the first time for the financial year beginning 1 July 2022 that have a material impact on the amounts recognised in prior There are no standards, interpretations or amendments to existing standards that are effective for the first time There are no standards, interpretations or amendments to existing standards that are effective for the first time for the financial year beginning 1 July 2022 that have a material impact on the amounts recognised in prior for the financial year beginning 1 July 2022 that have a material impact on the amounts recognised in prior for the financial year beginning 1 July 2022 that have a material impact on the amounts recognised in prior There are no standards, interpretations or amendments to existing standards that are effective for the first time There are no standards, interpretations or amendments to existing standards that are effective for the first time for the financial year beginning 1 July 2022 that have a material impact on the amounts recognised in prior for the financial year beginning 1 July 2022 that have a material impact on the amounts recognised in prior There are no standards, interpretations or amendments to existing standards that are effective for the first time periods or will affect the current or future periods. for the financial year beginning 1 July 2022 that have a material impact on the amounts recognised in prior for the financial year beginning 1 July 2022 that have a material impact on the amounts recognised in prior for the financial year beginning 1 July 2022 that have a material impact on the amounts recognised in prior periods or will affect the current or future periods. for the financial year beginning 1 July 2022 that have a material impact on the amounts recognised in prior for the financial year beginning 1 July 2022 that have a material impact on the amounts recognised in prior periods or will affect the current or future periods. periods or will affect the current or future periods. periods or will affect the current or future periods. for the financial year beginning 1 July 2022 that have a material impact on the amounts recognised in prior for the financial year beginning 1 July 2022 that have a material impact on the amounts recognised in prior periods or will affect the current or future periods. periods or will affect the current or future periods. for the financial year beginning 1 July 2022 that have a material impact on the amounts recognised in prior periods or will affect the current or future periods. periods or will affect the current or future periods. periods or will affect the current or future periods. periods or will affect the current or future periods. periods or will affect the current or future periods. periods or will affect the current or future periods. periods or will affect the current or future periods. New standards, amendments and interpretations effective after 1 July 2023 and have not been early adopted periods or will affect the current or future periods. New standards, amendments and interpretations effective after 1 July 2023 and have not been early adopted New standards, amendments and interpretations effective after 1 July 2023 and have not been early adopted New standards, amendments and interpretations effective after 1 July 2023 and have not been early adopted New standards, amendments and interpretations effective after 1 July 2023 and have not been early adopted New standards, amendments and interpretations effective after 1 July 2023 and have not been early adopted New standards, amendments and interpretations effective after 1 July 2023 and have not been early adopted New standards, amendments and interpretations effective after 1 July 2023 and have not been early adopted New standards, amendments and interpretations effective after 1 July 2023 and have not been early adopted New standards, amendments and interpretations effective after 1 July 2023 and have not been early adopted New standards, amendments and interpretations effective after 1 July 2023 and have not been early adopted New standards, amendments and interpretations effective after 1 July 2023 and have not been early adopted New standards, amendments and interpretations effective after 1 July 2023 and have not been early adopted New standards, amendments and interpretations effective after 1 July 2023 and have not been early adopted A number of new standards, amendments to standards and interpretations are effective for annual periods New standards, amendments and interpretations effective after 1 July 2023 and have not been early adopted A number of new standards, amendments to standards and interpretations are effective for annual periods A number of new standards, amendments to standards and interpretations are effective for annual periods A number of new standards, amendments to standards and interpretations are effective for annual periods A number of new standards, amendments to standards and interpretations are effective for annual periods A number of new standards, amendments to standards and interpretations are effective for annual periods A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 July 2023, and have not been adopted early in preparing these financial statements. None A number of new standards, amendments to standards and interpretations are effective for annual periods A number of new standards, amendments to standards and interpretations are effective for annual periods A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 July 2023, and have not been adopted early in preparing these financial statements. None A number of new standards, amendments to standards and interpretations are effective for annual periods A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 July 2023, and have not been adopted early in preparing these financial statements. None beginning after 1 July 2023, and have not been adopted early in preparing these financial statements. None beginning after 1 July 2023, and have not been adopted early in preparing these financial statements. None A number of new standards, amendments to standards and interpretations are effective for annual periods A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 July 2023, and have not been adopted early in preparing these financial statements. None beginning after 1 July 2023, and have not been adopted early in preparing these financial statements. None A number of new standards, amendments to standards and interpretations are effective for annual periods of these are expected to have a material effect on the financial statements of the Group. beginning after 1 July 2023, and have not been adopted early in preparing these financial statements. None beginning after 1 July 2023, and have not been adopted early in preparing these financial statements. None beginning after 1 July 2023, and have not been adopted early in preparing these financial statements. None of these are expected to have a material effect on the financial statements of the Group. beginning after 1 July 2023, and have not been adopted early in preparing these financial statements. None beginning after 1 July 2023, and have not been adopted early in preparing these financial statements. None of these are expected to have a material effect on the financial statements of the Group. of these are expected to have a material effect on the financial statements of the Group. of these are expected to have a material effect on the financial statements of the Group. beginning after 1 July 2023, and have not been adopted early in preparing these financial statements. None beginning after 1 July 2023, and have not been adopted early in preparing these financial statements. None of these are expected to have a material effect on the financial statements of the Group. of these are expected to have a material effect on the financial statements of the Group. beginning after 1 July 2023, and have not been adopted early in preparing these financial statements. None of these are expected to have a material effect on the financial statements of the Group. of these are expected to have a material effect on the financial statements of the Group. of these are expected to have a material effect on the financial statements of the Group. of these are expected to have a material effect on the financial statements of the Group. of these are expected to have a material effect on the financial statements of the Group. of these are expected to have a material effect on the financial statements of the Group. of these are expected to have a material effect on the financial statements of the Group. Rounding of these are expected to have a material effect on the financial statements of the Group. Rounding Rounding Rounding Rounding Rounding Rounding Rounding Rounding Rounding Rounding Rounding Rounding The amounts in the consolidated financial statements have been rounded off to the nearest one thousand Rounding The amounts in the consolidated financial statements have been rounded off to the nearest one thousand Rounding The amounts in the consolidated financial statements have been rounded off to the nearest one thousand The amounts in the consolidated financial statements have been rounded off to the nearest one thousand The amounts in the consolidated financial statements have been rounded off to the nearest one thousand The amounts in the consolidated financial statements have been rounded off to the nearest one thousand The amounts in the consolidated financial statements have been rounded off to the nearest one thousand dollars, unless otherwise indicated, in accordance with ASIC Corporations (Rounding in Financial/Director's The amounts in the consolidated financial statements have been rounded off to the nearest one thousand The amounts in the consolidated financial statements have been rounded off to the nearest one thousand The amounts in the consolidated financial statements have been rounded off to the nearest one thousand dollars, unless otherwise indicated, in accordance with ASIC Corporations (Rounding in Financial/Director's The amounts in the consolidated financial statements have been rounded off to the nearest one thousand The amounts in the consolidated financial statements have been rounded off to the nearest one thousand dollars, unless otherwise indicated, in accordance with ASIC Corporations (Rounding in Financial/Director's dollars, unless otherwise indicated, in accordance with ASIC Corporations (Rounding in Financial/Director's dollars, unless otherwise indicated, in accordance with ASIC Corporations (Rounding in Financial/Director's The amounts in the consolidated financial statements have been rounded off to the nearest one thousand The amounts in the consolidated financial statements have been rounded off to the nearest one thousand dollars, unless otherwise indicated, in accordance with ASIC Corporations (Rounding in Financial/Director's dollars, unless otherwise indicated, in accordance with ASIC Corporations (Rounding in Financial/Director's The amounts in the consolidated financial statements have been rounded off to the nearest one thousand Reports) Instrument 2022/519. dollars, unless otherwise indicated, in accordance with ASIC Corporations (Rounding in Financial/Director's dollars, unless otherwise indicated, in accordance with ASIC Corporations (Rounding in Financial/Director's dollars, unless otherwise indicated, in accordance with ASIC Corporations (Rounding in Financial/Director's Reports) Instrument 2022/519. dollars, unless otherwise indicated, in accordance with ASIC Corporations (Rounding in Financial/Director's dollars, unless otherwise indicated, in accordance with ASIC Corporations (Rounding in Financial/Director's Reports) Instrument 2022/519. Reports) Instrument 2022/519. Reports) Instrument 2022/519. dollars, unless otherwise indicated, in accordance with ASIC Corporations (Rounding in Financial/Director's dollars, unless otherwise indicated, in accordance with ASIC Corporations (Rounding in Financial/Director's Reports) Instrument 2022/519. Reports) Instrument 2022/519. dollars, unless otherwise indicated, in accordance with ASIC Corporations (Rounding in Financial/Director's Reports) Instrument 2022/519. Reports) Instrument 2022/519. Reports) Instrument 2022/519. Reports) Instrument 2022/519. Reports) Instrument 2022/519. Reports) Instrument 2022/519. Reports) Instrument 2022/519. 58 Reports) Instrument 2022/519. 46 46 46 46 46 46 46 46 46 46 46 46 46 46 46 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 About this report (continued) Critical accounting judgements and key sources of estimation uncertainty The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively. In preparing the consolidated financial statements for the year ended 30 June 2023, significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amount recognised in the financial statements are consistent with those disclosed in the financial report of the previous financial year. Changing market conditions (high inflation pressure and expected further cash rate increases by the Reserve Bank of Australia) can result in continued elevated levels of uncertainty in the preparation of the financial statements. Where changing market conditions have heightened uncertainty in applying these accounting estimates and critical judgements for the year ended 30 June 2023, enhanced disclosures have been incorporated throughout the consolidated financial statements to enable users to understand the basis for the estimates and judgements utilised. In response to the recent market volatility, the appropriateness of the inputs to the valuation of the Group's property, plant and equipment (including average daily rate assumptions and occupancy levels) and investment properties (including vacancy allowances, lease renewal probabilities, levels of leasing incentives and market rent growth assumptions), and the impact of any changes in these inputs have been considered in detail in both independent and internal property valuations (including relevant sensitivity analysis) with respect to the fair value hierarchies. The fair value assessments as at the balance date include the best estimate of the changing market conditions using information available at the time of preparation of the financial statements and includes forward looking assumptions. Refer to Note 8 and 9 for further information. The recoverability of the Group's receivables from Elanor's Managed Funds applied the simplified approach to provide for expected credit losses. Refer to Note 16 Financial Risk Management for further discussion on the Group's management of credit risk. Enhanced disclosures have been incorporated throughout the consolidated financial statements to enable users to understand the basis for the estimates and judgements utilised. The estimates or assumptions which are material to the financial statements are discussed in the following notes: • Deferred taxes - assumptions underlying recognition and recoverability – Note 5c • Property, Plant and Equipment - assumptions underlying fair value – Note 8 Investment Properties - assumptions underlying fair value – Note 9 • • Equity accounted investments – impairment assessment – Note 10 • Derivative financial instruments - assumptions underlying fair value – Note 12 59 47 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 About this report (continued) Basis of Consolidation The consolidated Financial Statements of the Group incorporate the assets and liabilities of Elanor Investors Limited (the Parent) and all of its subsidiaries, including Elanor Investment Fund and its subsidiaries as at 30 June 2023. Elanor Investors Limited is the parent entity in relation to the stapling. The results and equity of Elanor Investment Fund (which is not directly owned by Elanor Investors Limited) have been treated and disclosed as a non-controlling interest. Whilst the results and equity of Elanor Investment Fund are disclosed as a non-controlling interest, the stapled securityholders of Elanor Investment Fund are the same as the stapled securityholders of Elanor Investors Limited. These consolidated Financial Statements also include a separate column representing the consolidated Financial Statements of EIF Group, incorporating the assets and liabilities of Elanor Investment Fund and all of its subsidiaries, as at 30 June 2023. Control of Elanor Hotel Accommodation Fund (EHAF), Elanor Wildlife Park Fund (EWPF), Bluewater Square Syndicate (Bluewater) and Stirling Street Syndicate (Stirling) Elanor Hotel Accommodation Fund (EHAF) EHAF comprises stapled securities in Elanor Hotel Accommodation Fund, Elanor Hotel Accommodation Fund II, Elanor Hotel Accommodation Fund III, Elanor Hotel Accommodation Limited, Elanor Hotel Accommodation II Limited. The Group holds 30.60% (2022: 35.07%) of the equity in EHAF. The Group's ownership interest in EHAF gives the Group the same percentage of voting rights in EHAF. EHAF is an unregistered trust for which Elanor Funds Management Limited acts as the Manager of the asset and Trustee of the trust. Elanor Wildlife Park Fund (EWPF) EWPF comprises stapled securities in Elanor Wildlife Park Fund and Elanor Wildlife Park Pty Limited. The Group holds 42.82% (2022: 42.82%) of the equity in EWPF. The Group's 42.82% ownership interest in EWPF gives the Group the same percentage of voting rights in EWPF. EWPF is an unregistered trust for which Elanor Funds Management Limited acts as the Manager and Trustee of the trust. 60 48 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 About this report (continued) Control of Elanor Hotel Accommodation Fund (EHAF), Elanor Wildlife Park Fund (EWPF), Bluewater Square Syndicate (Bluewater) and Stirling Street Syndicate (Stirling) (continued) Stirling Street Syndicate (Stirling) The Group holds 42.98% (2022: 42.98%) of the equity in Stirling. The Group's ownership interest in Stirling gives the Group the same percentage of the voting rights in Stirling. Stirling is an unregistered trust for which Elanor Funds Management Limited acts as the Manager of the asset and Trustee of the trust. Bluewater Square Syndicate (Bluewater) The Group holds 42.27% (2022: 42.27%) of the equity in Bluewater. The Group's ownership interest in Bluewater gives the Group the same percentage of voting rights in Bluewater. Bluewater is an unregistered trust for which Elanor Funds Management Limited acts as the Manager of the asset and Trustee of the trust. The responsible entity of EHAF, EWPF, Stirling and Bluewater is wholly owned by the Group and governed by the licencing and legal obligations of a professional asset manager. The powers of the Trustee are governed by the constitution of EHAF, EWPF, Stirling and Bluewater respectively which sets out the basis of fees that the relevant Trustee can receive. These fees include management fees, performance fees, and acquisition fees. Based on the assessment above, at the current level of equity investment in EHAF, EWPF, Stirling and Bluewater and the Group's ability to direct the relevant activities of these entities based on the powers of the Trustee, the AASB 10 definition of control for these investments is met, and therefore each of these investments are consolidated into Elanor Investors Group Financial Statements. 61 49 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 Results This section focuses on the operating results and financial performance of the Group. It includes disclosures of segmental information, revenue, distributions and cash flow including the relevant accounting policies adopted in each area. 1. Segment information OVERVIEW Segment information is presented on the same basis as that used for internal reporting purposes. The segments are reported in a manner that is consistent with internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the Board of Directors of Elanor Investors Limited and the Responsible Entity. The main income statement items used by management to assess each of the divisions are divisional revenue and divisional EBITDA. BUSINESS SEGMENTS The Group is organised into the following divisions by business type: Funds Management The Funds Management division manages third party owned investment funds and syndicates. As at 30 June 2023, the Funds Management division has $2,971.8 million of external investments under management. Hotels, Tourism and Leisure Hotels, Tourism and Leisure originates and manages investment and funds management assets. The current investment portfolio includes 1834 Hospitality, along with a co-investment in EHAF and EWPF. EHAF and EWPF are consolidated in the Financial Statements. Retail Retail originates and manages investment and funds management assets in the retail real estate sector. The current investment portfolio comprises co-investments in Elanor Property Income Fund, Bluewater, Hunters Plaza Syndicate, Waverley Gardens Fund, Riverton Forum Fund and Belconnen Markets Syndicate. Bluewater is consolidated in the Financial Statements. Commercial Office Commercial Office originates and manages investment and funds management assets in the commercial office real estate sector. The current investment portfolio comprises co-investments in the Elanor Commercial Property Fund (ASX: ECF), Stirling and the Harris Street Fund. Stirling is consolidated in the Financial Statements. Healthcare Healthcare originates and manages investment and funds management assets in the healthcare real estate sector. The current investment portfolio comprises a co-investment in the Elanor Healthcare Real Estate Fund. 62 50 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 Segment information (continued) Segment information (continued) Segment information (continued) Segment information (continued) Segment information (continued) Segment information (continued) 1. 1. 1. 1. 1. 1. The table below shows the Group's segment results: The table below shows the Group's segment results: The table below shows the Group's segment results: The table below shows the Group's segment results: The table below shows the Group's segment results: The table below shows the Group's segment results: Consolidated Group – 30 June 2023 Consolidated Group – 30 June 2023 Consolidated Group – 30 June 2023 Consolidated Group – 30 June 2023 Consolidated Group – 30 June 2023 Consolidated Group – 30 June 2023 Revenue from operating activities Revenue from operating activities Revenue from operating activities Rental income Revenue from operating activities Rental income Revenue from operating activities Rental income Revenue from operating activities Share of profit / (loss) of equity Rental income Share of profit / (loss) of equity Rental income Share of profit / (loss) of equity Rental income accounted investments Share of profit / (loss) of equity accounted investments Share of profit / (loss) of equity accounted investments Share of profit / (loss) of equity Operating expense accounted investments Operating expense accounted investments Operating expense accounted investments Divisional EBITDA Operating expense Operating expense Divisional EBITDA Operating expense Divisional EBITDA Depreciation Divisional EBITDA Depreciation Divisional EBITDA Depreciation Divisional EBITDA Amortisation Depreciation Amortisation Depreciation Amortisation Depreciation Amortisation Divisional EBIT from continuing Amortisation Divisional EBIT from continuing Amortisation Divisional EBIT from continuing operations Divisional EBIT from continuing operations Divisional EBIT from continuing operations Divisional EBIT from continuing Fair value adjustment on revaluation of operations Fair value adjustment on revaluation of operations Fair value adjustment on revaluation of operations investment property Fair value adjustment on revaluation of investment property Fair value adjustment on revaluation of investment property Fair value adjustment on revaluation of Fair value adjustment on revaluation of investment property Fair value adjustment on revaluation of investment property Fair value adjustment on revaluation of investment property derivatives Fair value adjustment on revaluation of derivatives Fair value adjustment on revaluation of derivatives Fair value adjustment on revaluation of Realised gain/(loss) on disposal of derivatives Realised gain/(loss) on disposal of derivatives Realised gain/(loss) on disposal of derivatives investment Realised gain/(loss) on disposal of investment Realised gain/(loss) on disposal of investment Interest income Realised gain/(loss) on disposal of investment Interest income investment Interest income investment Borrowing costs Interest income Borrowing costs Interest income Borrowing costs Interest income Net tax expense Borrowing costs Net tax expense Borrowing costs Net tax expense Borrowing costs Profit / (loss) for the year Net tax expense Profit / (loss) for the year Net tax expense Profit / (loss) for the year Net tax expense Total assets Profit / (loss) for the year Total assets Profit / (loss) for the year Total assets Profit / (loss) for the year Total liabilities Total assets Total liabilities Total assets Total liabilities Total assets Total liabilities Total liabilities Total liabilities Consolidated Group – 30 June 2022 Consolidated Group – 30 June 2022 Consolidated Group – 30 June 2022 Consolidated Group – 30 June 2022 Consolidated Group – 30 June 2022 Consolidated Group – 30 June 2022 Revenue from operating activities Revenue from operating activities Revenue from operating activities Rental income Revenue from operating activities Rental income Revenue from operating activities Rental income Share of profit / (loss) of equity Revenue from operating activities Rental income Share of profit / (loss) of equity Rental income Share of profit / (loss) of equity accounted investments Rental income Share of profit / (loss) of equity accounted investments Share of profit / (loss) of equity accounted investments Operating expense accounted investments Share of profit / (loss) of equity Operating expense accounted investments Operating expense accounted investments Divisional EBITDA Operating expense Divisional EBITDA Operating expense Divisional EBITDA Depreciation Operating expense Divisional EBITDA Depreciation Divisional EBITDA Depreciation Amortisation Divisional EBITDA Depreciation Amortisation Depreciation Amortisation Depreciation Amortisation Divisional EBIT from continuing Amortisation Divisional EBIT from continuing Divisional EBIT from continuing operations Amortisation Divisional EBIT from continuing operations Divisional EBIT from continuing operations Fair value adjustment on revaluation of operations Divisional EBIT from continuing operations Fair value adjustment on revaluation of Fair value adjustment on revaluation of investment property operations Fair value adjustment on revaluation of investment property Fair value adjustment on revaluation of investment property Fair value adjustment on revaluation of investment property Fair value adjustment on revaluation of investment property Fair value adjustment on revaluation of Fair value adjustment on revaluation of derivatives investment property Fair value adjustment on revaluation of derivatives Fair value adjustment on revaluation of derivatives derivatives Realised gain/(loss) on disposal of Fair value adjustment on revaluation of derivatives Realised gain/(loss) on disposal of Realised gain/(loss) on disposal of investment derivatives Realised gain/(loss) on disposal of investment Realised gain/(loss) on disposal of investment Interest income investment Realised gain/(loss) on disposal of Interest income investment Interest income Borrowing costs investment Interest income Borrowing costs Interest income Borrowing costs Net tax benefit Borrowing costs Interest income Net tax benefit Borrowing costs Net tax benefit Profit / (loss) for the year Net tax benefit Borrowing costs Profit / (loss) for the year Net tax benefit Profit / (loss) for the year Total assets Net tax benefit Profit / (loss) for the year Total assets Profit / (loss) for the year Total assets Total liabilities Total assets Profit / (loss) for the year Total liabilities Total assets Total liabilities Total liabilities Total assets Total liabilities Total liabilities Funds Funds Funds Management Funds Management Funds Funds Management Management Management Management $'000 $'000 $'000 34,117 $'000 34,117 $'000 34,117 $'000 – 34,117 – 34,117 – 34,117 – – – – – – – – (1,524) – (1,524) (1,524) 32,593 (1,524) (1,524) 32,593 (1,524) 32,593 – 32,593 – 32,593 – 32,593 – – – – – – – – 32,593 – 32,593 32,593 32,593 32,593 32,593 – – – – – – – – – – – – 1,089 1,089 1,089 1,089 1,089 – – 1,089 – – – – – – – – – – – – – 33,682 – 33,682 – 33,682 – 39,015 33,682 39,015 33,682 39,015 33,682 11,071 39,015 11,071 39,015 11,071 39,015 11,071 11,071 11,071 Hotels, Hotels, Hotels, Tourism Hotels, Tourism Hotels, Hotels, Tourism & Leisure Tourism & Leisure Tourism & Leisure Tourism $'000 & Leisure $'000 & Leisure $'000 & Leisure 105,024 $'000 105,024 $'000 105,024 $'000 749 105,024 749 105,024 749 105,024 749 749 152 749 152 152 152 152 (94,064) 152 (94,064) (94,064) 11,861 (94,064) (94,064) 11,861 (94,064) 11,861 (10,050) 11,861 (10,050) 11,861 (10,050) 11,861 – (10,050) – (10,050) – (10,050) – – 1,811 – 1,811 1,811 1,811 1,811 1,811 (5,672) (5,672) (5,672) (5,672) (5,672) (5,672) (1,268) (1,268) (1,268) (1,268) (1,268) (1,268) – – – – – – – – – – – – – – – – – – – – – (5,129) – (5,129) – (5,129) – 514,788 (5,129) 514,788 (5,129) 514,788 (5,129) 267,340 514,788 267,340 514,788 267,340 514,788 267,340 267,340 267,340 Funds Funds Funds Management Funds Management Funds Management Funds Management Management $'000 Management $'000 $'000 27,068 $'000 27,068 $'000 27,068 – $'000 27,068 – 27,068 – 27,068 – – – – – – – – (2,951) (2,951) – (2,951) 24,117 (2,951) 24,117 (2,951) 24,117 (150) (2,951) 24,117 (150) 24,117 (150) – 24,117 (150) – (150) – (150) – – 23,967 23,967 – 23,967 23,967 23,967 – 23,967 – – – – – – – – – – 1,478 – 1,478 1,478 1,478 1,478 – – – 1,478 – – – – – – – – – – – 25,445 – – 25,445 – 25,445 38,133 – 25,445 38,133 25,445 38,133 18,091 38,133 25,445 18,091 38,133 18,091 18,091 38,133 18,091 18,091 Hotels, Hotels, Hotels, Tourism Hotels, Tourism Hotels, Tourism & Leisure Hotels, Tourism & Leisure Tourism & Leisure $'000 Tourism & Leisure $'000 & Leisure $'000 65,096 & Leisure $'000 65,096 $'000 65,096 716 $'000 65,096 716 65,096 716 65,096 716 716 82 82 716 82 82 82 (56,287) (56,287) 82 (56,287) 9,607 (56,287) 9,607 (56,287) 9,607 (10,767) (56,287) 9,607 (10,767) 9,607 (10,767) – 9,607 (10,767) – (10,767) – (10,767) – – (1,160) (1,160) – (1,160) (1,160) (1,160) (5,127) (1,160) (5,127) (5,127) (5,127) (5,127) 2,621 (5,127) 2,621 2,621 2,621 2,621 (69) 2,621 (69) (69) (69) (69) – – – (69) – – – – – – – – – – – (3,735) – – (3,735) – (3,735) 392,698 – (3,735) 392,698 (3,735) 392,698 183,233 392,698 (3,735) 183,233 392,698 183,233 183,233 392,698 183,233 183,233 51 51 51 51 51 51 – (8,722) Retail Commercial Healthcare Unallocated Retail Commercial Healthcare Unallocated Retail Commercial Healthcare Unallocated Corporate Retail Commercial Healthcare Unallocated Corporate Retail Commercial Healthcare Unallocated Retail Commercial Healthcare Unallocated Corporate Corporate Corporate Corporate $'000 $'000 $'000 – $'000 – $'000 – $'000 310 – 310 – 310 – 310 310 – 310 – – – – (8,722) (8,722) (8,722) (8,412) (8,722) (8,722) (8,412) (8,412) (3,380) (8,412) (3,380) (8,412) (3,380) (8,412) (541) (3,380) (541) (3,380) (541) (3,380) (541) (541) (12,333) (541) (12,333) (12,333) (12,333) (12,333) (12,333) 2,416 2,416 2,416 2,416 2,416 2,416 (27) (27) (27) (27) (27) (27) 113 113 113 113 113 230 230 230 (20,166) 230 (20,166) 230 (20,166) 230 (4,541) (20,166) (4,541) (20,166) (4,541) (20,166) (34,308) (4,541) (34,308) (4,541) (34,308) (4,541) 128,188 (34,308) 128,188 (34,308) 128,188 (34,308) 89,212 128,188 89,212 128,188 89,212 128,188 89,212 89,212 89,212 Office Office Office Office Office Office $'000 $'000 $'000 – $'000 – $'000 – $'000 3,271 – 3,271 – 3,271 – 3,271 3,271 (5,979) 3,271 (5,979) (5,979) (5,979) (5,979) (10,441) (5,979) (10,441) (10,441) (13,149) (10,441) (10,441) (13,149) (10,441) (13,149) – (13,149) – (13,149) – (13,149) (118) – (118) – (118) – (118) (118) (13,267) (118) (13,267) (13,267) (13,267) (13,267) (13,267) 77 77 77 77 77 77 – – – – – – (2) (2) (2) (2) (2) – – (2) – – – – – – – – – – – – – (13,192) – (13,192) – (13,192) – 35,402 (13,192) 35,402 (13,192) 35,402 (13,192) 20,880 35,402 20,880 35,402 20,880 35,402 20,880 20,880 20,880 $'000 $'000 $'000 – $'000 – $'000 – $'000 – – – – – – – – (968) – (968) (968) (968) (968) (2,106) (968) (2,106) (2,106) (3,074) (2,106) (2,106) (3,074) (2,106) (3,074) – (3,074) – (3,074) – (3,074) – – – – – – – – (3,074) – (3,074) (3,074) (3,074) (3,074) (3,074) – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – (3,074) – (3,074) – (3,074) – 6,709 (3,074) 6,709 (3,074) 6,709 (3,074) – 6,709 – 6,709 – 6,709 – – – $'000 $'000 $'000 – $'000 – $'000 – $'000 4,403 – 4,403 – 4,403 – 4,403 4,403 (247) 4,403 (247) (247) (247) (247) (9,121) (247) (9,121) (9,121) (4,965) (9,121) (9,121) (4,965) (9,121) (4,965) – (4,965) – (4,965) – (4,965) (11) – (11) – (11) – (11) (11) (4,976) (11) (4,976) (4,976) (4,976) (4,976) (4,976) (3,677) (3,677) (3,677) (3,677) (3,677) (3,677) – – – – – – – – – – – – – – – – – – – – – – – – – – – (8,653) – (8,653) – (8,653) – 55,814 (8,653) 55,814 (8,653) 55,814 (8,653) 39,101 55,814 39,101 55,814 39,101 55,814 39,101 39,101 39,101 113 – Retail Commercial Healthcare Unallocated Retail Commercial Healthcare Unallocated Retail Commercial Healthcare Unallocated Corporate Retail Commercial Healthcare Unallocated Corporate Retail Commercial Healthcare Unallocated Corporate Retail Commercial Healthcare Unallocated Corporate Corporate $'000 $'000 Corporate $'000 $'000 $'000 $'000 – – $'000 $'000 – – $'000 $'000 – – 117 3,897 $'000 $'000 – – 117 3,897 – – 117 3,897 – – 3,897 117 3,897 117 – 3,228 – 3,228 117 3,897 – 3,228 3,228 – – 3,228 (9,724) (9,751) (9,724) (9,751) 3,228 (9,724) (9,751) (9,607) (2,626) (9,751) (9,724) (9,607) (2,626) (9,724) (9,751) (9,607) (2,626) (1,637) – (9,724) (9,751) (2,626) (9,607) (1,637) – (9,607) (2,626) (1,637) – (438) (6) (9,607) (2,626) – (1,637) (438) (6) – (1,637) (438) (6) – (1,637) (6) (438) (438) (6) (11,682) (2,632) (11,682) (2,632) (6) (438) (11,682) (2,632) (2,632) (11,682) (2,632) (11,682) 794 2,049 (11,682) (2,632) 794 2,049 794 2,049 2,049 794 2,049 794 – – 794 2,049 – – – – – – – – 68 – – 68 – 68 – – 68 68 – 405 – 405 – 405 – – (16,217) – – 405 (16,217) – 405 – (16,217) – 3,161 – – (16,217) – 405 3,161 – (16,217) – 3,161 – (23,471) (583) – 3,161 (16,217) – (23,471) (583) 3,161 – (23,471) (583) 190,093 58,407 – 3,161 (583) (23,471) 190,093 58,407 (583) (23,471) 190,093 58,407 113,771 37,574 58,407 190,093 (23,471) (583) 113,771 37,574 58,407 190,093 113,771 37,574 37,574 113,771 58,407 190,093 113,771 37,574 37,574 113,771 Office Office Office Office Office $'000 Office $'000 $'000 – $'000 – $'000 – 1,563 $'000 – 1,563 – 1,563 – 1,563 1,563 6,740 6,740 1,563 6,740 6,740 6,740 (9,820) (9,820) 6,740 (9,820) (1,517) (9,820) (1,517) (9,820) (1,517) – (9,820) (1,517) – (1,517) – – (1,517) – – – – – – – (1,517) (1,517) – (1,517) (1,517) (1,517) (163) (1,517) (163) (163) (163) (163) – (163) – – – – 155 – 155 155 155 155 – – – 155 – – – – – – – – – – – (1,525) – – (1,525) – (1,525) 34,819 – (1,525) 34,819 (1,525) 34,819 20,227 34,819 (1,525) 20,227 34,819 20,227 20,227 34,819 20,227 20,227 $'000 $'000 $'000 – $'000 – $'000 – – $'000 – – – – – – – – – – – – – (368) (368) – (368) (368) (368) (368) (368) (368) – (368) (368) – (368) – – (368) – – – – – – – (368) (368) – (368) (368) (368) – (368) – – – – – – – – – – 3 – 3 3 3 3 – – – 3 – – – – – – – – – – – (365) – – (365) – (365) – – (365) – (365) – – – (365) – – – – – – – 68 – Total Total Total Total Total Total 754 $'000 $'000 $'000 139,141 $'000 139,141 $'000 $'000 139,141 8,733 139,141 8,733 139,141 8,733 139,141 8,733 8,733 (7,042) 8,733 (7,042) (7,042) (7,042) (7,042) (125,978) (7,042) (125,978) (125,978) 14,854 (125,978) 14,854 (125,978) 14,854 (125,978) (13,430) 14,854 (13,430) 14,854 (13,430) 14,854 (670) (13,430) (670) (13,430) (670) (13,430) (670) (670) 754 (670) 754 754 754 754 (6,856) (6,856) (6,856) (6,856) (6,856) (1,295) (1,295) (1,295) (1,295) (1,295) (1,295) 1,200 1,200 1,200 1,200 1,200 230 230 1,200 230 (20,166) 230 (20,166) 230 (20,166) 230 (4,541) (20,166) (4,541) (20,166) (4,541) (20,166) (30,674) (4,541) (30,674) (4,541) (30,674) (4,541) 779,916 (30,674) 779,916 (30,674) 779,916 (30,674) 427,604 779,916 427,604 779,916 427,604 779,916 427,604 427,604 427,604 (6,856) Total Total Total Total Total Total 6,608 10,050 $'000 $'000 $'000 92,164 $'000 92,164 $'000 92,164 $'000 6,293 92,164 6,293 92,164 6,293 92,164 6,293 6,293 10,050 10,050 6,293 10,050 10,050 10,050 (88,901) (88,901) (88,901) 19,606 (88,901) 19,606 (88,901) 19,606 (12,554) (88,901) 19,606 (12,554) 19,606 (12,554) (444) 19,606 (12,554) (444) (12,554) (444) (12,554) (444) (444) 6,608 6,608 (444) 6,608 6,608 6,608 (2,447) (2,447) (2,447) (2,447) (2,447) 2,621 (2,447) 2,621 2,621 2,621 2,621 1,635 1,635 1,635 1,635 1,635 405 405 405 1,635 (16,217) 405 (16,217) 405 (16,217) 3,161 (16,217) 405 3,161 (16,217) 3,161 (4,234) 3,161 (16,217) (4,234) 3,161 (4,234) 714,150 (4,234) 3,161 714,150 (4,234) 714,150 372,896 714,150 (4,234) 372,896 714,150 372,896 372,896 714,150 372,896 372,896 2,621 63 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 2. 2. Revenue from operating activities Revenue from operating activities OVERVIEW OVERVIEW This note provides a breakdown of revenue from operating activities by activity type. This note provides a breakdown of revenue from operating activities by activity type. Revenue from Hotels operations Revenue from Hotels operations Revenue from Funds Management activities Revenue from Funds Management activities Revenue from Wildlife Parks operations Revenue from Wildlife Parks operations Amortisation of Contract Asset Amortisation of Contract Asset Total revenue from operating activities Total revenue from operating activities Consolidated Consolidated Consolidated Consolidated Group Group 30 June 30 June 2022 2022 $'000 $'000 54,279 54,279 28,706 28,706 10,817 10,817 (1,638) (1,638) 92,164 92,164 Group Group 30 June 30 June 2023 2023 $'000 $'000 87,569 87,569 35,044 35,044 17,455 17,455 (927) (927) 139,141 139,141 The below table provides a breakdown of revenue from fund management activities. The below table provides a breakdown of revenue from fund management activities. Management fees and related cost recoveries Management fees and related cost recoveries Leasing and development management fees Leasing and development management fees Acquisition fees and related cost recoveries Acquisition fees and related cost recoveries Performance fees Performance fees Total Funds Management activities Total Funds Management activities ACCOUNTING POLICY ACCOUNTING POLICY Revenue recognition Revenue recognition Consolidated Consolidated Consolidated Consolidated Group Group 30 June 30 June 2022 2022 $'000 $'000 14,769 14,769 4,842 4,842 9,095 9,095 – – 28,706 28,706 Group Group 30 June 30 June 2023 2023 $'000 $'000 17,324 17,324 4,191 4,191 6,389 6,389 7,140 7,140 35,044 35,044 The Group recognises revenue in each period for each of Elanor's activities based on the delivery of The Group recognises revenue in each period for each of Elanor's activities based on the delivery of performance obligations and when control has been transferred to customers in accordance with the set out performance obligations and when control has been transferred to customers in accordance with the set out in AASB 15 Revenue from Contracts with Customers as described below. in AASB 15 Revenue from Contracts with Customers as described below. Funds management fee revenue Funds management fee revenue Fund management fees Fund management fees Fund management fees are received for performance obligations fulfilled over time with revenue recognised Fund management fees are received for performance obligations fulfilled over time with revenue recognised accordingly. Fund management fees are determined in accordance with relevant agreements for each fund, accordingly. Fund management fees are determined in accordance with relevant agreements for each fund, based on the fund's monthly Gross Asset Value (GAV). Generally, invoicing of funds for management fees based on the fund's monthly Gross Asset Value (GAV). Generally, invoicing of funds for management fees occurs on a monthly basis and are receivable within 21 days. occurs on a monthly basis and are receivable within 21 days. Performance fees Performance fees Performance fee revenue is recognised to the extent that it is highly probable that the amount of variable Performance fee revenue is recognised to the extent that it is highly probable that the amount of variable consideration recognised will not be significantly reversed when the uncertainty is resolved. Detailed consideration recognised will not be significantly reversed when the uncertainty is resolved. Detailed calculations are completed to inform the assessment of the appropriate revenue to recognise. Invoicing of calculations are completed to inform the assessment of the appropriate revenue to recognise. Invoicing of funds for performance fees occurs in accordance with the contractual performance fee payment date. funds for performance fees occurs in accordance with the contractual performance fee payment date. 64 52 52 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 2. Revenue from operating activities (continued) Cost recoveries Accounting, marketing and administrative services provided to managed funds are charged as an expense recovery. Revenue is recognised over time as the performance obligations are fulfilled. Invoicing of funds for expense recoveries occur on a monthly or quarterly basis depending on the recovery type and are receivable within 21 days. Asset management fees Asset management services provided to managed funds are charged as an asset management fee. Revenue is recognised over time as the performance obligations are fulfilled. Invoicing of funds for asset management fees occur on a monthly basis and are receivable within 21 days. Leasing and development management fees Leasing and development management services provided to managed funds are charged as leasing and development management fees. Revenue is recognised over time as the performance obligations are fulfilled. Invoicing of funds for leasing and development management fees occur on a monthly basis and are receivable within 21 days. Acquisition fees Acquisition fee revenue is recognised over time depending on the fulfilment of the performance obligation in accordance with the constitutions of the managed funds. Invoicing of funds for acquisition fees occur in accordance with the contractual acquisition fee payment date. Equity raising fees Equity raising fee revenue is recognised over time depending on the fulfilment of the performance obligation in accordance with the constitutions of the managed funds. Invoicing of funds for equity raising fees occur in accordance with the contractual acquisition fee payment date. Hotel and wildlife park revenue The revenue of operations from the hotels primarily consists of room rentals, food and beverage sales and other ancillary goods and services from hotel properties. Room revenue is recognised over time when rooms are occupied, and food and beverage revenue is recognised at a point in time when goods and services have been delivered or rendered. The revenue of operations from the wildlife parks primarily consists of the sale of tickets, food and beverage sales and other ancillary goods and services from the wild parks. Ticket revenue is recognised at a point in time when tickets are sold to customers, and food and beverage revenue is recognised at a point in time when goods and services have been delivered or rendered. Rental income The Group is the lessor to a number of operating leases. Rental income arising from operating leases is recognised as revenue on a straight-line basis over the lease term. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the lease asset and recognised as an expense over the term of the lease on the same basis as the lease income. 65 53 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 3. Distributions OVERVIEW When determining distributions, the Group's Board considers a number of factors, including forecast earnings and expected economic conditions. Elanor Investors Group aims to distribute 90% of Core Earnings to its securityholders. Core Earnings reflects the Director's view of the underlying earnings from ongoing operating activities for the year. The following distributions were declared by the ENN Group either during the year or post balance sheet date: ENN Group Interim distribution (declared before year end) 1 Final distribution (declared after year end) 2 Distribution cents per Distribution cents per stapled security stapled security 30 June 2022 9.05 4.43 30 June 2023 7.51 1.62 Total Amount 30 June 2023 $'000 9,261 2,015 Total Amount 30 June 2022 $'000 11,037 5,397 1. The interim distribution of 7.51 cents per stapled security was declared on 31 December 2022 and paid on 28 February 2023. 2. The final distribution of 1.62 cents per stapled security was declared after 30 June 2023, but is recognised in the accounts at balance date. The final distribution will be paid on 31 August 2023. ACCOUNTING POLICY Distributions are recognised as a liability when declared or at the record date (if earlier). Distributions paid and payable are recognised as distributions within equity. Distributions paid are included in cash flows from financing activities in the consolidated statement of cash flows. 4. Earnings per stapled security OVERVIEW This note provides information about Elanor Investor Group's earnings on a per security basis. Earnings per security (EPS) is a measure that makes it easier for users of Elanor's financial report to compare Elanor's performance between different reporting periods. Accounting standards require the disclosure of two EPS measures, basic EPS and diluted EPS. EPS information provides a measure of interest of each issued ordinary security of the parent entity in the performance of the entity over the reporting period while diluted EPS information provides the same information but takes into account the impact of all potential dilutive, ordinary securities outstanding during the period, such as options. The tables below show the earnings per share of the Company, the parent entity of the Group and its controlled entities as required by accounting standards. 66 54 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 4. Earnings per stapled security (continued) The earnings / (losses) per stapled security measure shown below is based on the profit / (loss) attributable to securityholders: Basic (cents) Diluted (cents) Profit / (loss) attributable to security holders used in calculating basic and diluted earnings per stapled security ($'000) Weighted average number of stapled securities used as denominator in calculating basic earnings per stapled security Weighted average number of stapled securities used as denominator in calculating diluted earnings per stapled security Consolidated Consolidated Group 30 June 2022 0.82 Group 30 June 2023 (16.35) (13.91) (19,707) 0.69 966 120,513 117,337 141,693 139,203 The weighted average number of stapled securities and options granted used as the denominator in calculating basic and diluted earnings per stapled securities shown above is based on the number of stapled securities on issue and options outstanding during the year. The earnings / (losses) per stapled security measures shown below are based upon the profit / (loss) attributable to securityholders of the ENN Group: Basic (cents) Diluted (cents) Profit / (loss) attributable to security holders used in calculating basic and diluted earnings per stapled security ($'000) Weighted average number of stapled securities used as denominator in calculating basic earnings per stapled security Weighted average number of stapled securities used as denominator in calculating diluted earnings per stapled security ENN Parent 30 June 2023 (14.09) ENN Parent 30 June 2022 (10.08) (11.98) (8.50) (16,977) (11,833) 120,513 117,337 141,693 139,203 The weighted average number of stapled securities and options granted used as the denominator in calculating basic and diluted earnings/ (losses) per stapled securities shown above is based on the number of stapled securities on issue and options granted during the year. ACCOUNTING POLICY Basic earnings per stapled security is calculated as profit after tax attributable to securityholders divided by the weighted average number of ordinary stapled securities issued. Diluted earnings per stapled security is calculated as profit after tax attributable to securityholders adjusted for any profit recognised in the period in relation to potential dilutive stapled securities divided by the weighted average number of stapled securities and dilutive stapled securities. 67 55 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 Income tax Income tax Income tax Notes to the Consolidated Financial Statements For the year ended 30 June 2023 5. 5. OVERVIEW 5. OVERVIEW This note provides detailed information about the Group's income tax items including a reconciliation of income OVERVIEW This note provides detailed information about the Group's income tax items including a reconciliation of income tax expense, if Australia's company income tax rate of 30% was applied to the Group's (loss) / profit before tax expense, if Australia's company income tax rate of 30% was applied to the Group's (loss) / profit before income tax as shown in the income statement, to the actual income tax expense / (benefit). This note provides detailed information about the Group's income tax items including a reconciliation of income income tax as shown in the income statement, to the actual income tax expense / (benefit). tax expense, if Australia's company income tax rate of 30% was applied to the Group's (loss) / profit before (a) income tax as shown in the income statement, to the actual income tax expense / (benefit). (a) Income Tax Expense Income Tax Expense (a) Income Tax Expense Current tax expense Deferred tax expense / (benefit) Current tax expense Deferred tax expense / (benefit) Income tax expense / (benefit) Current tax expense Income tax expense / (benefit) Deferred tax expense / (benefit) Income tax expense / (benefit) (b) (b) Reconciliation of income tax expense to prima facie tax expense Reconciliation of income tax expense to prima facie tax expense (b) Reconciliation of income tax expense to prima facie tax expense Loss before income tax expense Loss before income tax expense Less: profit / (loss) from the Trust (which is not taxable) Loss before income tax expense Less: profit / (loss) from the Trust (which is not taxable) Prima facie loss Less: profit / (loss) from the Trust (which is not taxable) Prima facie loss Tax at the Australian tax rate of 30% Prima facie loss Tax at the Australian tax rate of 30% Tax effect of amounts which are not deductible / (taxable) in calculating taxable income: Tax at the Australian tax rate of 30% Tax effect of amounts which are not deductible / (taxable) in calculating taxable income: Tax effect of amounts which are not deductible / (taxable) in calculating taxable income: Entertainment Non-deductible depreciation and amortisation Entertainment Fair value adjustments to investment property in the Trust Non-deductible depreciation and amortisation Entertainment Non-deductible expenses Fair value adjustments to investment property in the Trust Non-deductible depreciation and amortisation Impact of consolidations Non-deductible expenses Fair value adjustments to investment property in the Trust Non-assessable income Impact of consolidations Non-deductible expenses Other Non-assessable income Impact of consolidations Other Non-assessable income Other Income tax expense / (benefit) Income tax expense / (benefit) Consolidated Consolidated Group Consolidated Consolidated 30 June Group Consolidated Consolidated 2022 30 June Group $'000 2022 30 June 827 $'000 2022 (3,988) 827 $'000 (3,988) (3,161) 827 (3,161) (3,988) Group 30 June Group 2023 30 June Group $'000 2023 30 June 3,275 $'000 2023 1,266 3,275 $'000 1,266 4,541 3,275 4,541 1,266 4,541 (3,161) Consolidated Consolidated Group Consolidated Consolidated 30 June Group Consolidated Consolidated 2022 30 June Group $'000 2022 30 June (7,395) $'000 2022 (7,395) $'000 (18,337) (7,395) (18,337) (25,732) (18,337) (25,732) (7,720) (25,732) (7,720) Group 30 June Group 2023 30 June Group $'000 2023 30 June (26,133) $'000 2023 (26,133) $'000 (17,245) (26,133) (17,245) (43,378) (17,245) (43,378) (13,013) (43,378) (13,013) (13,013) 64 2,138 64 9,783 2,138 64 3,677 9,783 2,138 (398) 3,677 9,783 – (398) 3,677 2,290 – (398) 2,290 4,541 – 4,541 2,290 (7,720) 61 1,574 61 4,857 1,574 61 (17) 4,857 1,574 (740) (17) 4,857 (151) (740) (17) (1,025) (151) (740) (1,025) (3,161) (151) (3,161) (1,025) 4,541 (3,161) Income tax expense / (benefit) ACCOUNTING POLICY ACCOUNTING POLICY Accounting standards require the application of the “balance sheet method” to account for Elanor's income ACCOUNTING POLICY Accounting standards require the application of the “balance sheet method” to account for Elanor's income tax. Accounting profit does not always equal taxable income. There are a number of timing differences between tax. Accounting profit does not always equal taxable income. There are a number of timing differences between the recognition of accounting expenses and the availability of tax deductions or when revenue is recognised Accounting standards require the application of the “balance sheet method” to account for Elanor's income the recognition of accounting expenses and the availability of tax deductions or when revenue is recognised for accounting and tax purposes. These timing differences reverse over time, but they are recognised as tax. Accounting profit does not always equal taxable income. There are a number of timing differences between for accounting and tax purposes. These timing differences reverse over time, but they are recognised as deferred tax assets and deferred tax liabilities in the balance sheet until they are fully reversed. This method the recognition of accounting expenses and the availability of tax deductions or when revenue is recognised deferred tax assets and deferred tax liabilities in the balance sheet until they are fully reversed. This method is referred to as the “balance sheet method”. for accounting and tax purposes. These timing differences reverse over time, but they are recognised as is referred to as the “balance sheet method”. deferred tax assets and deferred tax liabilities in the balance sheet until they are fully reversed. This method The Trust is not subject to Australian income tax provided their taxable income is fully distributed to the is referred to as the “balance sheet method”. The Trust is not subject to Australian income tax provided their taxable income is fully distributed to the unitholders each year. unitholders each year. The Trust is not subject to Australian income tax provided their taxable income is fully distributed to the 68 unitholders each year. 56 56 56 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 5. Income tax (continued) Income tax expense comprises current and deferred tax and is recognised in the statement of profit or loss and other comprehensive income. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of previous years. EIL and its wholly-owned Australian resident entities are part of a tax-consolidated group, formed on 11 July 2014, and are therefore taxed as a single entity, with any deferred tax assets and liabilities of these entities set off in the consolidated financial statements. The head entity within the tax-consolidated group is Elanor Investors Limited. Elanor Hotel Accommodation Limited (EHAF Company I; previously named 'EMPR Management Pty Limited') and its wholly-owned Australian resident entities are part of a tax-consolidated group, formed on 6 November 2017, and are therefore taxed as a single entity, with any deferred tax assets and liabilities of these entities set off in the consolidated financial statements. The head entity within the tax-consolidated group is EHAF Company I. Elanor Hotel Accommodation II Limited (EHAF Company II; previously named 'Elanor Luxury Hotel Fund Pty Limited') and its wholly-owned Australian resident entities are part of a tax-consolidated group, formed on 2 December 2019, and are therefore taxed as a single entity, with any deferred tax assets and liabilities of these entities set off in the consolidated financial statements. The head entity within the tax-consolidated group is EHAF Company II. Elanor Wildlife Park Management Pty Limited and its wholly-owned Australian resident entities are part of a tax-consolidated group, formed on 20 September 2019, and are therefore taxed as a single entity, with any deferred tax assets and liabilities of these entities set off in the consolidated financial statements. The head entity within the tax-consolidated group is Elanor Wildlife Park Fund management Pty Limited. (c) Deferred taxes OVERVIEW Management judgement is required in reviewing the recoverability of deferred tax assets carried by the Group, which involves estimates of key assumptions including cash flow projection, growth rates and discount rates. 69 57 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 5. Income tax (continued) Consolidated Consolidated Group 30 June 2022 $'000 Group 30 June 2023 $'000 1,656 278 1,208 7,409 1,770 12,321 17,173 (1,467) (3,365) (20) 12,321 4,399 7,922 117 2,121 2,238 5,023 (2,936) 151 2,238 117 2,121 1,282 2,710 1,707 10,774 700 17,173 10,310 2,034 4,858 (29) 17,173 3,554 13,619 154 4,869 5,023 2,422 2,404 197 5,023 154 4,869 10,083 12,150 4,961 3,638 172 1,312 4,044 5,879 384 1,843 10,083 12,150 (a) Deferred tax assets The balance comprises temporary differences attributable to: Employee entitlements Asset acquisitions and blackhole expenses Lease incentive Tax losses recognised Other Total deferred tax assets Movements: Opening balance at beginning of year Credited/(Debited) to the Consolidated Statements of Profit or Loss Tax losses (utilised)/recognised (Debited)/Credited to Equity Closing balance at the end of the year Deferred tax expected to be recovered within 12 months Deferred tax expected to be recovered after more than 12 months (b) Deferred tax liabilities The balance comprises temporary differences attributable to: Employee incentive plans Other Total deferred tax liabilities Movements: Opening balance at beginning of year Credited/(Debited) to the Consolidated Statements of Profit or Loss Tax losses (utilised)/recognised Closing balance at the end of the year Deferred tax expected to be recovered within 12 months Deferred tax expected to be recovered after more than 12 months Net deferred tax position (c) Deferred tax asset / liability per tax group Deferred tax asset / (liability) of the EIL tax group Deferred tax asset / (liability) of the EHAF tax group Deferred tax asset / (liability) of the ELHF tax group Deferred tax asset / (liability) of the EWPF tax group Net deferred tax position 70 58 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 5. Income tax (continued) ACCOUNTING POLICY Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following differences are not provided for: initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit; and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities within the tax groups, using tax rates enacted or substantively enacted at the reporting date. 6. Cash and cash equivalents OVERVIEW This note provides further information on the consolidated cash and cash equivalents of the Group. Group cash and cash equivalents Cash held in trust1 Total cash and cash equivalents Consolidated Consolidated Group 30 June 2022 $'000 27,774 – Group 30 June 2023 $'000 22,106 3,163 25,269 27,774 1 The cash held in trust balance is held on behalf of a related entity and was transferred to that entity subsequent to balance date. The funds are therefore not available for general use by the Group and a corresponding liability has been recognised to reflect the transfer obligation. 71 59 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 7. Cash flow information OVERVIEW This note provides further information on the consolidated cash flow statements of the Group. It reconciles (loss) / profit for the year to cash flows from operating activities, reconciles liabilities arising from financing activities and provides information about non-cash transactions. (a) Reconciliation of profit after income tax to net cash flows from operating activities Loss for the year Depreciation of non-current assets Amortisation Fair value adjustment on revaluation of investment property and derivatives Net unrealised revenue/(loss) from equity accounted investments Net realised loss on sale of investment Other non-cash items Employee costs funded directly through equity Net cash provided by operating activities before changes in assets and liabilities Movement in working capital: Decrease / (increase) in trade and other receivables Decrease / (increase) in stock Increase / (decrease) in other current assets Decrease / (increase) in deferred tax Increase / (decrease) in trade and other payables Increase / (decrease) in other liabilities Increase / (decrease) in other provision Increase / (decrease) in lease liabilities Net cash from operating activities Consolidated Consolidated Group 30 June 2022 $'000 (4,234) Group 30 June 2023 $'000 (30,674) 13,430 670 8,151 7,043 (1,200) 6,579 3,441 7,440 2,653 (84) (385) 2,067 5,895 873 1,134 (1,660) 17,933 12,554 3,070 (2,447) (10,050) (1,635) (2,982) 3,769 (1,955) (5,831) (1,631) (2,577) 2,079 1,866 201 1,223 1,844 (4,781) 72 60 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 7. Cash flow information (continued) (b) Reconciliation of liabilities arising from financing activities . . . . . . Bank loans Unsecured notes Lease liability 30 June 2022 Cash flows Acquisitions $'000 $'000 $'000 – 5,150 273,631 – (3,250) 62,204 – (2,029) 5,417 Consolidation of Wildlife Parks Fund and Stirling Street Syndicate $'000 – – – Proceeds from new liabilities $'000 40,935 – – Total liabilities from financing activities 341,252 (129) – 40,935 – . . . . . . Bank loans Unsecured notes Lease liability 30 June 2021 Cash flows Acquisitions $'000 $'000 $'000 – 45,772 207,718 – (21,831) 59,554 – (2,077) 3,575 Consolidation of Wildlife Parks Fund and Stirling Street Syndicate $'000 19,772 24,481 – Proceeds from new liabilities $'000 369 – 3,920 Total liabilities from financing activities 270,847 21,864 – 4,289 44,253 30 June 2023 $'000 319,716 58,954 3,388 382,058 30 June 2022 $'000 273,631 62,204 5,417 341,252 (c) Net debt reconciliation Cash and cash equivalents Borrowings Lease liabilities Net debt Cash and liquid investments Gross debt - fixed interest rates Gross debt - variable interest rates Net debt Consolidated Consolidated Group 30 June 2022 $'000 27,774 (335,835) (5,417) (313,478) Group 30 June 2023 $'000 25,269 (380,701) (3,757) (359,189) 25,269 (65,508) (318,950) (359,189) 27,774 (67,621) (273,631) (313,478) 73 61 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 Operating Assets This section includes information about the assets used by the Group to generate revenue and profits, specifically relating to its property, plant and equipment, and investments. 8. Property, plant and equipment OVERVIEW All owner-occupied investment properties held by the Group are deemed to be held for use by the Group for the supply of services, and are therefore classified as property, plant and equipment under Australian Accounting Standards. At balance date, the Group's owner-occupied investment property portfolio comprised 19 accommodation hotels and 3 wildlife parks in Australia. Of the 19 accommodation hotels, 16 accommodation hotels and all of the wildlife parks have been independently valued as at 30 June 2023. (a) Carrying value and movement in property, plant and equipment (including right-of-use asset) The carrying amount of property, plant and equipment (including the right-of-use asset) at the beginning and end of the current year is set out below: Opening balance Additions Transfers Revaluation increments / (decrements) Disposals Closing balance Accumulated depreciation at the beginning of the year Depreciation Accumulated depreciation at the end of the year Land and buildings equipment $'000 78,364 12,324 10,186 – (7) Plant and Right-of-use asset $'000 6,801 – – – – $'000 416,159 62,259 (10,186) 22,454 – Consolidated Group 30 June 2023 $'000 501,324 74,583 – 22,454 (7) 490,686 100,867 6,801 598,354 (26,635) (7,861) (34,496) (34,162) (4,374) (38,536) (3,073) (1,195) (4,268) (63,870) (13,430) (77,300) Total carrying value at the end of the year 456,190 62,331 2,533 521,054 i) Non-current assets pledged as security Refer to note 11 for information on non-current assets pledged as security by the Group. 74 62 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 8. Property, plant and equipment (continued) A reconciliation of the carrying amount of property, plant and equipment (including right-of-use assets) at the beginning and end of the 30 June 2022 year is set out below: Opening balance Business combination Additions Impairment Revaluation increments / (decrements) Disposals Closing balance Land and buildings equipment $'000 63,384 8,122 7,840 – – (982) 78,364 Plant and Right-of-use asset $'000 5,127 – 3,177 (1,503) – – 6,801 $'000 333,625 54,196 10,591 – 17,747 – 416,159 Consolidated Group 30 June 2022 $'000 402,136 62,318 21,608 (1,503) 17,747 (982) 501,324 Accumulated depreciation at the beginning of the year Depreciation Accumulated depreciation at the end of the year (21,347) (5,288) (26,635) (28,268) (5,894) (34,162) (1,701) (1,372) (3,073) (51,316) (12,554) (63,870) Total carrying value at the end of the year 389,524 44,202 3,728 437,454 75 63 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 8. Property, plant and equipment (continued) (b) Carrying value of property, plant and equipment The following table represents the total fair value of property, plant and equipment at 30 June 2023: Property Mayfair Hotel Cradle Mountain Lodge Byron Bay Hotel Narrabundah Hotel Eaglehawk Hotel Parklands Resort Mudgee Tamworth Hotel Port Macquarie Hotel Tall Trees Hotel Wollongong Hotel Clare Country Club Adabco Boutique Hotel Estate Tuscany Hotel Barossa Weintal Hotel Chateau Yering Hotel Wildes Boutique Hotel Pavilion Wagga Wagga Hotel Albany Hotel Featherdale Wildlife Park Hunter Valley Wildlife Park Mogo Wildlife Park Panorama Retreat Right-of-use asset Other Total Valuation Independent Independent Independent Independent Independent Independent Independent Independent Independent Independent Independent Independent Independent Independent Internal Internal Independent Internal Independent Independent Independent Independent Consolidated Consolidated Group 30 June 2022 $'000 87,000 73,500 34,500 32,000 21,000 19,500 – 15,000 14,000 13,500 10,500 13,000 12,750 7,500 – – 7,500 3,100 30,100 17,500 18,600 – 3,728 3,176 437,454 Group 30 June 2023 $'000 91,500 80,000 34,500 33,500 22,500 24,000 16,800 15,500 14,000 15,000 17,250 15,500 12,750 13,500 18,750 12,050 9,000 3,100 33,100 16,900 10,900 6,000 2,533 2,421 521,054 As at 30 June 2023, the Directors assessed the fair value of the properties above, supported by independent and internal valuations. 76 64 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 8. Property, plant and equipment (continued) Had the Consolidated Group's property, plant and equipment been measured on a historical cost less accumulated depreciation basis, their carrying amount would have been as follows: Land and buildings Plant and equipment Right-of-use asset Total (c) Leases / right of use assets This note provides information for leases where the group is a lessee. Amounts recognised in the balance sheet The balance sheet shows the following amounts relating to leases: Right-of-use assets Office premise lease Total Lease liabilities Current Non-current Total Consolidated Consolidated Group 30 June 2022 $'000 266,817 46,521 3,728 Group 30 June 2023 $'000 322,630 64,469 2,533 389,632 317,066 Consolidated Consolidated Group 30 June 2022 $'000 Group 30 June 2023 $'000 2,533 2,533 1,887 1,870 3,757 3,728 3,728 1,660 3,758 5,418 77 65 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 8. Property, plant and equipment (continued) Amounts recognised in the statement of profit or loss The statement of profit or loss shows the following amounts relating to leases: Depreciation charge of right-of-use assets Office premise lease Total Interest expense Office premise lease Total Consolidated Consolidated Group 30 June 2022 $'000 Group 30 June 2023 $'000 1,195 1,195 358 358 1,372 1,372 454 454 The total cash outflow for leases during the year ended 30 June 2023 was $2.1 million (2022: $2.1 million). ACCOUNTING POLICY Fair value of Property, Plant and Equipment Land and Buildings are carried at fair value with changes in fair value recognised in other comprehensive income in the statement of comprehensive income. Fair value is defined as the price at which an asset or liability could be exchanged in an arm's length transaction between knowledgeable, willing parties, other than in a forced or liquidation sale. In reaching estimates of fair value, management judgement needs to be exercised. The level of management judgement required in establishing fair value of the land and buildings for which there is no quoted price in an active market is reduced through the use of external valuations. Land and Buildings All owner-occupied properties in the Hotel, Tourism and Leisure class are held for use by the Group for the supply of services and are classified as land and buildings and stated at their revalued amounts under the revaluation model, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Fair value is the amount for which the land and buildings could be exchanged between knowledgeable, willing parties in an arm's length transaction. Revaluation increases arising from changes in the fair value of land and buildings are recognised in other comprehensive income and accumulated within equity, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in profit or loss, in which case the increase is credited to profit or loss to the extent of the decrease previously expensed. A decrease in the carrying amount arising on the revaluation of such land and buildings is recognised in profit or loss to the extent that it exceeds the balance, if any, held in the properties revaluation reserve relating to a previous revaluation of that asset. Furniture, fittings and equipment Furniture, fittings and equipment are stated at cost less accumulated depreciation. 78 66 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 8. Property, plant and equipment (continued) Right-of-use assets The Group recognises right-of-use assets at commencement of a lease which is considered to be the date at which the underlying asset is available for use. The initial measurement of right-of-use asset includes the amount of lease liabilities recognised, initial direct cost incurred, lease payments made at or before the commencement date, less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and is adjusted for any remeasurement of lease liabilities. The right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term unless the Group is reasonably certain that they will obtain ownership of the asset at the end of the lease term. Depreciation Land is not depreciated. Depreciation on other assets is calculated using the straight-line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives or, in the case of leasehold improvements and certain leased plant and equipment, the shorter lease term as follows: Buildings Plant and equipment: 40 years • Vehicles • Computer equipment • Furniture, fittings and equipment 8 years 3-5 years 3-25 years (d) Valuation technique and inputs The key inputs used to measure fair values of property, plant and equipment are disclosed below along with the fair value sensitivity to an increase or decrease of these key inputs. The property assets fair values presented are based on market values, which are derived using the capitalisation and the discounted cash flow methods. The Group's preferred or primary method is the capitalisation method. Property Assets The aim of the valuation process is to ensure that assets are held at fair value and the Group is compliant with applicable Australian Accounting Standards, regulations, and the Trust's Constitution and Compliance Plan. All properties are required to be internally valued every six months with the exception of those independently valued during that six-month period. The internal valuations are performed by utilising the information from a combination of asset plans and forecasting tools prepared by the asset management team. Appropriate capitalisation rate, terminal yield and discount rates based on comparable market evidence and recent external valuation parameters are used to produce a capitalisation-based valuation and a discounted cash flow valuation. Both valuations are considered to determine the final valuation. Senior Management provides the property valuations to the Audit, Risk & Compliance Committee for consideration. The Audit, Risk & Committee recommends the property valuations to the Board for adoption and inclusion in the financial Report in accordance with the Group's Property Valuation Policy. 79 67 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 8. Property, plant and equipment (continued) (d) Valuation technique and inputs (continued) Property Assets (continued) The Group's valuation policy requires that each property in the portfolio is valued by an independent valuer at least every three years. In practice, properties may be valued more frequently than every three years primarily where there may have been a material movement in the market and where there is a significant variation between the carrying value and the internal valuation. Independent valuations are performed by independent and external valuers who hold a recognised relevant professional qualification and have specialised expertise in the types of property assets valued. Capitalisation method Capitalisation rate is an approximation of the ratio between the net operating income produced by a property asset and its fair value. This excludes consideration of costs of acquisition or disposal. The net income is capitalised in perpetuity from the valuation date at an appropriate investment yield. The adopted percentage rate investment yield reflects the capitalisation rate and includes consideration of the property type, location, comparable sales and whether the property is subject to vacant possession (in the case of hotel properties). Discounted cash flows (DCF) Under the DCF method, a property's fair value is estimated using explicit assumptions regarding the benefits and liabilities of ownership over the asset's life including an exit or terminal value. The DCF method involves the projection of a series of cash flows on a real property interest. To this projected cash flow series, an appropriate discount rate is applied to establish the present value of the income stream associated with the property. The discount rate is the rate of return used to convert a monetary sum, payable or receivable in the future, into present value. The rate is determined with regard to market evidence and prior independent valuation. All property investments are categorised as level 3 in the fair value hierarchy. There were no transfers between the hierarchies during the year. Assets measured at fair value The significant unobservable inputs associated with the valuation of the Group's property, plant and equipment are as follows: Consolidated Group - Hotels Assets measured at fair value Property, plant and equipment Consolidated Group - Wildlife Parks Assets measured at fair value Property, plant and equipment 80 Discount Rate % Terminal Capitalisation Average Daily Rate $ Yield % Rate % Occupancy % 7.75 - 11.00 5.75 - 9.25 5.75 - 11.00 154 - 505 56 - 81 Discount Rate % Terminal Capitalisation Rate % Yield % 16.0 - 16.5 14.0 - 14.0 13.0 - 13.0 68 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 ELANOR INVESTORS GROUP FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 Fair value measurement Fair value measurement Fair value measurement sensitivity to increase sensitivity to increase Fair value measurement sensitivity to increase in input Fair value measurement in input sensitivity to increase Fair value measurement in input Fair value measurement Decrease sensitivity to increase Decrease in input sensitivity to increase Fair value measurement Decrease sensitivity to increase Decrease in input Decrease Decrease in input sensitivity to increase Decrease in input Decrease Decrease Decrease Decrease Decrease in input Decrease Decrease Increase Decrease Increase Decrease Decrease Decrease Increase Decrease Increase Decrease Increase Increase Decrease Decrease Increase Decrease Increase Increase Increase Decrease Increase Increase Increase Increase Increase Increase Property, plant and equipment (continued) Property, plant and equipment (continued) Property, plant and equipment (continued) Property, plant and equipment (continued) Valuation technique and inputs (continued) Property, plant and equipment (continued) Valuation technique and inputs (continued) Property, plant and equipment (continued) Property, plant and equipment (continued) Valuation technique and inputs (continued) Valuation technique and inputs (continued) Property, plant and equipment (continued) Valuation technique and inputs (continued) Valuation technique and inputs (continued) Valuation technique and inputs (continued) Valuation technique and inputs (continued) 8. 8. 8. 8. (c) 8. (c) 8. 8. (c) (c) 8. Sensitivity Information (c) Sensitivity Information (c) (c) Sensitivity Information Sensitivity Information (c) The key unobservable inputs to measure the fair value of property, plant and equipment are disclosed below Sensitivity Information The key unobservable inputs to measure the fair value of property, plant and equipment are disclosed below Sensitivity Information Sensitivity Information The key unobservable inputs to measure the fair value of property, plant and equipment are disclosed below along with sensitivity to a significant increase or decrease set out in the following table: The key unobservable inputs to measure the fair value of property, plant and equipment are disclosed below along with sensitivity to a significant increase or decrease set out in the following table: Sensitivity Information along with sensitivity to a significant increase or decrease set out in the following table: The key unobservable inputs to measure the fair value of property, plant and equipment are disclosed below The key unobservable inputs to measure the fair value of property, plant and equipment are disclosed below along with sensitivity to a significant increase or decrease set out in the following table: The key unobservable inputs to measure the fair value of property, plant and equipment are disclosed below Fair value measurement along with sensitivity to a significant increase or decrease set out in the following table: Fair value measurement The key unobservable inputs to measure the fair value of property, plant and equipment are disclosed below along with sensitivity to a significant increase or decrease set out in the following table: along with sensitivity to a significant increase or decrease set out in the following table: Fair value measurement sensitivity to decrease sensitivity to decrease Fair value measurement along with sensitivity to a significant increase or decrease set out in the following table: sensitivity to decrease in input Fair value measurement in input sensitivity to decrease Fair value measurement in input Fair value measurement Increase Discount rate (%) sensitivity to decrease Increase Discount rate (%) in input sensitivity to decrease Fair value measurement Discount rate (%) Increase sensitivity to decrease Increase Terminal yield (%) in input Increase Terminal yield (%) Discount rate (%) Increase in input sensitivity to decrease Increase Terminal yield (%) in input Increase Capitalisation rate (%) Discount rate (%) Increase Increase Capitalisation rate (%) Increase Terminal yield (%) Increase Discount rate (%) in input Increase Capitalisation rate (%) Discount rate (%) Increase Decrease Average daily rate ($) Increase Terminal yield (%) Decrease Average daily rate ($) Increase Capitalisation rate (%) Increase Terminal yield (%) Increase Discount rate (%) Decrease Average daily rate ($) Increase Terminal yield (%) Decrease Occupancy (%) Increase Capitalisation rate (%) Decrease Occupancy (%) Decrease Average daily rate ($) Increase Capitalisation rate (%) Increase Terminal yield (%) Decrease Occupancy (%) Increase Capitalisation rate (%) Decrease Average daily rate ($) Decrease Occupancy (%) Decrease Average daily rate ($) Capitalisation rate (%) Increase Decrease Average daily rate ($) Decrease Occupancy (%) Sensitivity Analysis Sensitivity Analysis Decrease Occupancy (%) Decrease Average daily rate ($) Decrease Occupancy (%) Sensitivity Analysis Sensitivity Analysis Occupancy (%) Decrease When calculating the capitalisation method, the net property income has a strong inter-relationship with the Sensitivity Analysis When calculating the capitalisation method, the net property income has a strong inter-relationship with the Sensitivity Analysis Sensitivity Analysis When calculating the capitalisation method, the net property income has a strong inter-relationship with the adopted capitalisation rate given the methodology involves assessing the total income receivable from the When calculating the capitalisation method, the net property income has a strong inter-relationship with the adopted capitalisation rate given the methodology involves assessing the total income receivable from the Sensitivity Analysis adopted capitalisation rate given the methodology involves assessing the total income receivable from the When calculating the capitalisation method, the net property income has a strong inter-relationship with the property and capitalising this in perpetuity to derive a capital value. In theory, an increase in the income and When calculating the capitalisation method, the net property income has a strong inter-relationship with the adopted capitalisation rate given the methodology involves assessing the total income receivable from the property and capitalising this in perpetuity to derive a capital value. In theory, an increase in the income and When calculating the capitalisation method, the net property income has a strong inter-relationship with the property and capitalising this in perpetuity to derive a capital value. In theory, an increase in the income and adopted capitalisation rate given the methodology involves assessing the total income receivable from the an increase (softening) in the adopted capitalisation rate could potentially offset the impact to the fair value. When calculating the capitalisation method, the net property income has a strong inter-relationship with the adopted capitalisation rate given the methodology involves assessing the total income receivable from the property and capitalising this in perpetuity to derive a capital value. In theory, an increase in the income and an increase (softening) in the adopted capitalisation rate could potentially offset the impact to the fair value. adopted capitalisation rate given the methodology involves assessing the total income receivable from the an increase (softening) in the adopted capitalisation rate could potentially offset the impact to the fair value. property and capitalising this in perpetuity to derive a capital value. In theory, an increase in the income and The same can be said for a decrease in the income and a decrease (tightening) in the adopted capitalisation adopted capitalisation rate given the methodology involves assessing the total income receivable from the property and capitalising this in perpetuity to derive a capital value. In theory, an increase in the income and an increase (softening) in the adopted capitalisation rate could potentially offset the impact to the fair value. The same can be said for a decrease in the income and a decrease (tightening) in the adopted capitalisation property and capitalising this in perpetuity to derive a capital value. In theory, an increase in the income and The same can be said for a decrease in the income and a decrease (tightening) in the adopted capitalisation an increase (softening) in the adopted capitalisation rate could potentially offset the impact to the fair value. rate. A directionally opposite change in the income and the adopted capitalisation rate could potentially magnify property and capitalising this in perpetuity to derive a capital value. In theory, an increase in the income and an increase (softening) in the adopted capitalisation rate could potentially offset the impact to the fair value. The same can be said for a decrease in the income and a decrease (tightening) in the adopted capitalisation rate. A directionally opposite change in the income and the adopted capitalisation rate could potentially magnify an increase (softening) in the adopted capitalisation rate could potentially offset the impact to the fair value. rate. A directionally opposite change in the income and the adopted capitalisation rate could potentially magnify The same can be said for a decrease in the income and a decrease (tightening) in the adopted capitalisation the impact to the fair value. an increase (softening) in the adopted capitalisation rate could potentially offset the impact to the fair value. The same can be said for a decrease in the income and a decrease (tightening) in the adopted capitalisation rate. A directionally opposite change in the income and the adopted capitalisation rate could potentially magnify the impact to the fair value. The same can be said for a decrease in the income and a decrease (tightening) in the adopted capitalisation the impact to the fair value. rate. A directionally opposite change in the income and the adopted capitalisation rate could potentially magnify The same can be said for a decrease in the income and a decrease (tightening) in the adopted capitalisation rate. A directionally opposite change in the income and the adopted capitalisation rate could potentially magnify the impact to the fair value. rate. A directionally opposite change in the income and the adopted capitalisation rate could potentially magnify When assessing a discounted cash flow, the adopted discount rate and adopted terminal yield have a strong the impact to the fair value. When assessing a discounted cash flow, the adopted discount rate and adopted terminal yield have a strong rate. A directionally opposite change in the income and the adopted capitalisation rate could potentially magnify the impact to the fair value. the impact to the fair value. When assessing a discounted cash flow, the adopted discount rate and adopted terminal yield have a strong interrelationship in deriving a fair value given the discount rate will determine the rate at which the terminal When assessing a discounted cash flow, the adopted discount rate and adopted terminal yield have a strong interrelationship in deriving a fair value given the discount rate will determine the rate at which the terminal the impact to the fair value. interrelationship in deriving a fair value given the discount rate will determine the rate at which the terminal When assessing a discounted cash flow, the adopted discount rate and adopted terminal yield have a strong value is discounted to the present value. The impact on the fair value of an increase (softening) in the adopted When assessing a discounted cash flow, the adopted discount rate and adopted terminal yield have a strong interrelationship in deriving a fair value given the discount rate will determine the rate at which the terminal value is discounted to the present value. The impact on the fair value of an increase (softening) in the adopted When assessing a discounted cash flow, the adopted discount rate and adopted terminal yield have a strong value is discounted to the present value. The impact on the fair value of an increase (softening) in the adopted interrelationship in deriving a fair value given the discount rate will determine the rate at which the terminal discount rate could potentially offset the impact of a decrease (tightening) in the adopted terminal yield. The When assessing a discounted cash flow, the adopted discount rate and adopted terminal yield have a strong interrelationship in deriving a fair value given the discount rate will determine the rate at which the terminal value is discounted to the present value. The impact on the fair value of an increase (softening) in the adopted discount rate could potentially offset the impact of a decrease (tightening) in the adopted terminal yield. The interrelationship in deriving a fair value given the discount rate will determine the rate at which the terminal discount rate could potentially offset the impact of a decrease (tightening) in the adopted terminal yield. The value is discounted to the present value. The impact on the fair value of an increase (softening) in the adopted same can be said for a decrease (tightening) in the adopted discount rate and an increase (softening) in the interrelationship in deriving a fair value given the discount rate will determine the rate at which the terminal value is discounted to the present value. The impact on the fair value of an increase (softening) in the adopted discount rate could potentially offset the impact of a decrease (tightening) in the adopted terminal yield. The same can be said for a decrease (tightening) in the adopted discount rate and an increase (softening) in the value is discounted to the present value. The impact on the fair value of an increase (softening) in the adopted same can be said for a decrease (tightening) in the adopted discount rate and an increase (softening) in the discount rate could potentially offset the impact of a decrease (tightening) in the adopted terminal yield. The adopted terminal yield. A directionally similar change in the adopted discount rate and adopted terminal yield value is discounted to the present value. The impact on the fair value of an increase (softening) in the adopted discount rate could potentially offset the impact of a decrease (tightening) in the adopted terminal yield. The same can be said for a decrease (tightening) in the adopted discount rate and an increase (softening) in the adopted terminal yield. A directionally similar change in the adopted discount rate and adopted terminal yield discount rate could potentially offset the impact of a decrease (tightening) in the adopted terminal yield. The adopted terminal yield. A directionally similar change in the adopted discount rate and adopted terminal yield same can be said for a decrease (tightening) in the adopted discount rate and an increase (softening) in the could potentially magnify the impact to the fair value. discount rate could potentially offset the impact of a decrease (tightening) in the adopted terminal yield. The same can be said for a decrease (tightening) in the adopted discount rate and an increase (softening) in the adopted terminal yield. A directionally similar change in the adopted discount rate and adopted terminal yield could potentially magnify the impact to the fair value. same can be said for a decrease (tightening) in the adopted discount rate and an increase (softening) in the could potentially magnify the impact to the fair value. adopted terminal yield. A directionally similar change in the adopted discount rate and adopted terminal yield same can be said for a decrease (tightening) in the adopted discount rate and an increase (softening) in the adopted terminal yield. A directionally similar change in the adopted discount rate and adopted terminal yield could potentially magnify the impact to the fair value. adopted terminal yield. A directionally similar change in the adopted discount rate and adopted terminal yield The average daily rate and occupancy percentage assumptions drive the forecast hotel revenue for the could potentially magnify the impact to the fair value. The average daily rate and occupancy percentage assumptions drive the forecast hotel revenue for the adopted terminal yield. A directionally similar change in the adopted discount rate and adopted terminal yield could potentially magnify the impact to the fair value. could potentially magnify the impact to the fair value. The average daily rate and occupancy percentage assumptions drive the forecast hotel revenue for the accommodation hotel assets. The average daily rate reflects the average rate for a room sold over a period of The average daily rate and occupancy percentage assumptions drive the forecast hotel revenue for the accommodation hotel assets. The average daily rate reflects the average rate for a room sold over a period of could potentially magnify the impact to the fair value. accommodation hotel assets. The average daily rate reflects the average rate for a room sold over a period of The average daily rate and occupancy percentage assumptions drive the forecast hotel revenue for the time, while the occupancy percentage reflects the number of rooms occupied by guests over a period of time. The average daily rate and occupancy percentage assumptions drive the forecast hotel revenue for the accommodation hotel assets. The average daily rate reflects the average rate for a room sold over a period of time, while the occupancy percentage reflects the number of rooms occupied by guests over a period of time. The average daily rate and occupancy percentage assumptions drive the forecast hotel revenue for the time, while the occupancy percentage reflects the number of rooms occupied by guests over a period of time. accommodation hotel assets. The average daily rate reflects the average rate for a room sold over a period of An increase in these assumptions will increase the forecast hotel revenue and valuation of the hotels, whilst a The average daily rate and occupancy percentage assumptions drive the forecast hotel revenue for the accommodation hotel assets. The average daily rate reflects the average rate for a room sold over a period of time, while the occupancy percentage reflects the number of rooms occupied by guests over a period of time. An increase in these assumptions will increase the forecast hotel revenue and valuation of the hotels, whilst a accommodation hotel assets. The average daily rate reflects the average rate for a room sold over a period of An increase in these assumptions will increase the forecast hotel revenue and valuation of the hotels, whilst a time, while the occupancy percentage reflects the number of rooms occupied by guests over a period of time. decrease in these assumptions will have the opposite effect on forecast hotel revenue and valuations. accommodation hotel assets. The average daily rate reflects the average rate for a room sold over a period of time, while the occupancy percentage reflects the number of rooms occupied by guests over a period of time. An increase in these assumptions will increase the forecast hotel revenue and valuation of the hotels, whilst a decrease in these assumptions will have the opposite effect on forecast hotel revenue and valuations. time, while the occupancy percentage reflects the number of rooms occupied by guests over a period of time. decrease in these assumptions will have the opposite effect on forecast hotel revenue and valuations. An increase in these assumptions will increase the forecast hotel revenue and valuation of the hotels, whilst a time, while the occupancy percentage reflects the number of rooms occupied by guests over a period of time. An increase in these assumptions will increase the forecast hotel revenue and valuation of the hotels, whilst a decrease in these assumptions will have the opposite effect on forecast hotel revenue and valuations. An increase in these assumptions will increase the forecast hotel revenue and valuation of the hotels, whilst a decrease in these assumptions will have the opposite effect on forecast hotel revenue and valuations. An increase in these assumptions will increase the forecast hotel revenue and valuation of the hotels, whilst a decrease in these assumptions will have the opposite effect on forecast hotel revenue and valuations. decrease in these assumptions will have the opposite effect on forecast hotel revenue and valuations. Increase by Decrease by Increase by Decrease by decrease in these assumptions will have the opposite effect on forecast hotel revenue and valuations. Increase by Decrease by 0.50% 0.50% Increase by Decrease by 0.50% % Increase by Decrease by % 0.50% Increase by Decrease by % Increase by Decrease by 0.7 0.50% 0.7 % 0.50% Increase by Decrease by 0.7 0.50% 7.0 % 7.0 0.7 % 0.50% 7.0 % 7.8 0.7 7.8 7.0 0.7 % 7.8 0.7 7.0 7.8 7.0 0.7 7.0 7.8 7.8 7.0 7.8 Increase by Decrease by Increase by Decrease by 7.8 Increase by Decrease by 2.50% 2.50% Increase by Decrease by 2.50% % Increase by Decrease by % 2.50% Increase by Decrease by % Increase by Decrease by (7.8) 2.50% (7.8) % 2.50% Increase by Decrease by (7.8) 2.50% (7.7) % (7.7) (7.8) % 2.50% (7.7) % (7.8) (7.7) (7.8) 81 % (7.8) (7.7) (7.7) (7.8) (7.7) (7.7) Increase by Decrease by Increase by Decrease by Increase by Decrease by 0.50% 0.50% Increase by Decrease by 0.50% $'000 Increase by Decrease by $'000 0.50% Increase by Decrease by $'000 Increase by Decrease by 3,218 0.50% 3,218 $'000 0.50% Increase by Decrease by 3,218 0.50% 31,832 $'000 31,832 3,218 $'000 0.50% 31,832 $'000 35,320 3,218 35,320 31,832 3,218 $'000 35,320 3,218 31,832 35,320 31,832 3,218 31,832 35,320 35,320 31,832 35,320 Increase by Decrease by Increase by Decrease by 35,320 Increase by Decrease by 2.50% 2.50% Increase by Decrease by 2.50% $'000 Increase by Decrease by $'000 2.50% Increase by Decrease by $'000 Increase by Decrease by (35,502) 2.50% (35,502) $'000 2.50% Increase by Decrease by (35,502) 2.50% (34,967) $'000 (34,967) (35,502) $'000 2.50% (34,967) $'000 (35,502) (34,967) (35,502) $'000 (35,502) (34,967) (34,967) (35,502) (34,967) (34,967) Fair value measurement sensitivity Fair value measurement sensitivity Fair value measurement sensitivity Fair value measurement sensitivity Fair value measurement sensitivity Fair value measurement sensitivity Fair value measurement sensitivity Fair value measurement sensitivity Fair value measurement sensitivity Fair value measurement sensitivity Fair value measurement sensitivity Fair value measurement sensitivity Fair value measurement sensitivity Fair value measurement sensitivity Fair value measurement sensitivity Fair value measurement sensitivity Discount rate (%) Discount rate (%) Discount rate (%) Terminal yield (%) Terminal yield (%) Discount rate (%) Terminal yield (%) Capitalisation rate (%) Discount rate (%) Capitalisation rate (%) Terminal yield (%) Discount rate (%) Capitalisation rate (%) Discount rate (%) Terminal yield (%) Capitalisation rate (%) Terminal yield (%) Discount rate (%) Terminal yield (%) Capitalisation rate (%) Capitalisation rate (%) Terminal yield (%) Capitalisation rate (%) Capitalisation rate (%) 0.50% 0.50% 0.50% $'000 $'000 0.50% $'000 (3,628) 0.50% (3,628) $'000 0.50% (3,628) 0.50% (29,528) $'000 (29,528) (3,628) $'000 0.50% (29,528) $'000 (31,862) (3,628) (31,862) (29,528) (3,628) $'000 (31,862) (3,628) (29,528) (31,862) (29,528) (3,628) (29,528) (31,862) (31,862) (29,528) (31,862) (31,862) 2.50% 2.50% 2.50% $'000 $'000 2.50% $'000 35,967 2.50% 35,967 $'000 2.50% 35,967 2.50% 35,950 $'000 35,950 35,967 $'000 2.50% 35,950 $'000 35,967 35,950 35,967 $'000 35,967 35,950 35,950 35,967 35,950 35,950 Average daily rate ($) Average daily rate ($) Average daily rate ($) Occupancy (%) Occupancy (%) Average daily rate ($) Occupancy (%) Average daily rate ($) Occupancy (%) Average daily rate ($) Average daily rate ($) Occupancy (%) Occupancy (%) Average daily rate ($) Occupancy (%) Occupancy (%) 0.50% 0.50% 0.50% % % 0.50% % (0.8) 0.50% (0.8) % 0.50% (0.8) 0.50% (6.5) % (6.5) (0.8) % 0.50% (6.5) % (7.0) (0.8) (7.0) (6.5) (0.8) % (7.0) (0.8) (6.5) (7.0) (6.5) (0.8) (6.5) (7.0) (7.0) (6.5) (7.0) (7.0) 2.50% 2.50% 2.50% % % 2.50% % 7.9 2.50% 7.9 % 2.50% 7.9 2.50% 7.9 % 7.9 7.9 % 2.50% 7.9 % 7.9 7.9 7.9 % 7.9 7.9 7.9 7.9 7.9 7.9 69 69 69 69 69 69 69 69 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 8. Property, plant and equipment (continued) Discount rate (%) Terminal yield (%) Capitalisation rate (%) Fair value measurement sensitivity Increase by Decrease by 0.50% $'000 200 1,500 3,600 0.50% $'000 (100) (1,200) (3,100) Increase by Decrease by 0.50% % 0.3 2.4 5.9 0.50% % (0.2) (1.9) (5.1) 9. Investment properties The carrying amount of investment properties at the beginning and end of the current year is set out below: Carrying amount at the beginning of the year Additions from consolidation of Stirling Additions Revaluation (decrements) / increments Carrying amount at the end of the year Consolidated Consolidated Group 30 June 2022 $'000 55,500 34,000 2,489 1,886 93,875 Group 30 June 2023 $'000 93,875 – 2,361 (4,361) 91,875 The following table represents the total fair value of investment properties at 30 June 2023: Property Bluewater Square Stirling Street Cougal Street Total Valuation Internal Independent Internal Consolidated Consolidated Group 30 June 2022 $'000 58,000 34,000 1,875 93,875 Group 30 June 2023 $'000 55,500 34,500 1,875 91,875 As at 30 June 2023, the Directors assessed the fair value of the investment property above, supported by internal and an independent external valuation report. The investment properties are categorised as level 3 in the fair value hierarchy. There were no transfers between hierarchies during the year. The independent valuation was completed with reference to both a discounted cash flow and capitalisation valuation methods. The property valuations were completed using detailed forecasts prepared by the Group's asset management team. Key valuation assumptions including capitalisation rates, terminal yields and discount rates were determined based on comparable market evidence and valuation parameters determined in external valuations completed for comparable properties. 82 70 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 9. Investment properties (continued) The internal valuations are performed by utilising the information from a combination of asset plans and forecasting tools prepared by the asset management team. Appropriate capitalisation rate, terminal yield and discount rates based on comparable market evidence and recent external valuation parameters are used to produce a capitalisation-based valuation and a discounted cash flow valuation. Both valuations are considered to determine the final valuation. The value of Bluewater Square decreased by 4.3% from $58.0 million as at 30 June 2022 to $55.5 million as at 30 June 2023. This decrease is mainly attributable to an increasing capitalisation rate. ACCOUNTING POLICY Fair value of Investment Properties Investment properties are properties held to earn rentals and / or for capital appreciation (including property under construction for such purposes). Investment properties are measured initially at its cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at fair value. Gains and losses arising from changes in the fair value of investment properties are included in profit or loss in the period in which they arise. In reaching estimates of fair value, management judgement needs to be exercised. At each reporting date, the carrying values of the investment properties are assessed by the Directors and where the carrying value differs materially from the Directors' assessment of fair value, an adjustment to the carrying value is recorded as appropriate. The Directors' assessment of fair value of each investment property takes into account latest independent valuations, with updates taking into account any changes in estimated yield, underlying income and valuations of comparable properties. In determining the fair value, the capitalisation of net income method and / or the discounting of future net cash flows to their present value have been used, which are based upon assumptions and judgements in relation to future rental income, property capitalisation rate or estimated yield and make reference to market evidence of transaction prices for similar properties. An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the asset. Any gain or loss arising on de-recognition 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. Fair value measurement The fair value measurement for investment properties has been categorised as Level 3 fair value based on the key inputs to the valuation techniques used below: Valuation Techniques Significant unobservable inputs 30 June 2023 30 June 2022 Discounted cash flows – involves the projection of a series of inflows and outflows to which a market-derived discount rate is applied to establish an indication of the present value of the income stream associated with the property. Adopted discount rate Adopted terminal yield 6.50% - 7.50% 5.75% - 6.75% 6.25% - 7.25% 5.50% - 6.50% Capitalisation method – involves determining the net market income of the investment property. This net market income is then capitalised at the adopted capitalisation rate to derive a core value. Adopted capitalisation rate 6.00% - 7.00% 5.25% - 6.50% 83 71 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 9. Investment properties (continued) Valuation technique Capitalisation method Capitalisation rate is an approximation of the ratio between the net operating income produced by an investment property and its fair value. This excludes consideration of costs of acquisition or disposal. The net income is capitalised in perpetuity from the valuation date at an appropriate investment yield. The adopted percentage rate investment yield reflects the capitalisation rate and includes consideration of the property type, location and comparable sales. Discounted cash flows (DCF) Under the DCF method, a property’s fair value is estimated using explicit assumptions regarding the benefits and liabilities of ownership over the asset's life including an exit or terminal value. The DCF method involves the projection of a series of cash flows on a real property interest. The cash flow projections reflect tenants currently in occupation or are contracted to meet lease commitments or are likely to be in occupation based on market’s general perception and relevant available market evidence. To this projected cash flow series, an appropriate discount rate is applied to establish the present value of the income stream associated with the property. The discount rate is the rate of return used to convert a monetary sum, payable or receivable in the future, into present value. The rate is determined with regard to market evidence and prior independent valuation. Sensitivity information The key unobservable inputs to measure the fair value of investment properties are disclosed below along with sensitivity to a significant increase or decrease set out in the following table: Fair value measurement sensitivity to increase in input Fair value measurement sensitivity to decrease in input Decrease Decrease Decrease Increase Increase Increase Discount rate (%) Terminal yield (%) Capitalisation rate (%) Sensitivity Analysis When calculating the capitalisation approach, the net property income has a strong inter-relationship with the adopted capitalisation rate given the methodology involves assessing the total income receivable from the property and capitalising this in perpetuity to derive a capital value. In theory, an increase in the income and an increase (softening) in the adopted capitalisation rate could potentially offset the impact to the fair value. The same can be said for a decrease in the income and a decrease (tightening) in the adopted capitalisation rate. A directionally opposite change in the income and the adopted capitalisation rate could potentially magnify the impact to the fair value. 84 72 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 9. Investment properties (continued) Sensitivity Analysis (continued) When assessing a discounted cash flow, the adopted discount rate and adopted terminal yield have a strong interrelationship in deriving a fair value given the discount rate will determine the rate at which the terminal value is discounted to the present value. The impact on the fair value of an increase (softening) in the adopted discount rate could potentially offset the impact of a decrease (tightening) in the adopted terminal yield. The same can be said for a decrease (tightening) in the adopted discount rate and an increase (softening) in the adopted terminal yield. A directionally similar change in the adopted discount rate and adopted terminal yield could potentially magnify the impact to the fair value. Discount rate (%) Terminal yield (%) Capitalisation rate (%) Fair value measurement sensitivity Increase by Decrease by 0.50% $'000 0.50% $'000 Increase by Decrease by 0.50% % 0.50% % (3,583) (4,285) (7,503) 5,389 4,724 7,449 (4.2) (5.0) (8.1) 6.3 5.5 8.9 10. Equity accounted investments OVERVIEW This note provides an overview and detailed financial information of the Group's investments that are accounted for using the equity method of accounting. The Group's equity accounted investments are as follows: 30 June 2023 Elanor Commercial Property Fund (ASX: ECF) Elanor Property Income Fund Waverley Gardens Fund Riverton Forum Fund Elanor Healthcare Real Estate Harris Street Fund 1834 Hospitality Hunters Plaza Syndicate Belconnen Markets Syndicate Total equity accounted investments Principal activity Commercial Office Properties Real Estate Properties Shopping Centre Shopping Centre Healthcare Properties Commercial Office Property Hotel Management Shopping Centre Shopping Centre Percentage Consolidated Group Ownership 30 June 2023 $'000 40,830 16,497 13,171 9,000 6,709 5,853 3,777 1,550 447 12.56% 23.39% 15.00% 15.00% 5.00% 9.41% 25.00% 5.87% 1.04% 97,834 85 73 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 10. Equity accounted investments (continued) 30 June 2022 Elanor Commercial Property Fund (ASX: ECF) Elanor Property Income Fund Waverley Gardens Fund Harris Street Fund 1834 Hospitality Hunters Plaza Syndicate Belconnen Markets Syndicate Total equity accounted investments Principal activity Commercial Office Properties Shopping Centres Shopping Centre Commercial Office Property Hotel Management Shopping Centre Shopping Centre Percentage Consolidated Group Ownership 30 June 2022 $'000 51,459 27,725 14,005 12,305 2,881 1,688 331 12.56% 18.03% 15.00% 13.88% 25.00% 5.49% 1.04% 110,394 The carrying amount of equity accounted investments at the beginning and end of the year is set out below: Carrying amount at the beginning of the year Consolidation of Elanor Wildlife Park Fund and Stirling Street Syndicate Share of (loss) / profit from equity accounted investments Distributions received Share of movement in reserves Net investment in / (sale of) equity accounted investments Realised gain on disposal of investments (Impairment) / reversal of Impairment of equity accounted investments1 Total carrying value at the end of the year 110,394 1 During the year Elanor’s investment in Elanor Commercial Property Fund was revised to reflect Elanor’s share of Elanor Commercial Property Fund’s net tangible assets. At 30 June 2023 a value in use calculation was performed to support the carrying value, using a discount rate of 10.0%. 97,834 Consolidated Consolidated Group 30 June 2022 $'000 92,588 (8,132) 10,050 (8,399) 68 21,998 1,482 739 Group 30 June 2023 $'000 110,394 – (7,042) (14,799) (38) 10,950 1,200 (2,831) Details of Material Associates Summarised financial information in respect of each of the Group's material associates is set out below. Materiality is assessed on the investments' contribution to Group income and net assets. The summarised financial information below represents amounts shown in the associate's financial statements prepared in accordance with accounting standards, adjusted by the Group for equity accounting purposes. The following information represents the aggregated financial position and financial performance of the Elanor Commercial Property Fund, Elanor Property Income Fund and Waverley Gardens Fund. This summarised financial information represents amounts shown in the associate's financial statements prepared in accordance with AASBs, adjusted by the Group for equity accounting purposes. 86 74 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 10. Equity accounted investments (continued) 30 June 2023 Financial position Current assets Non-current assets Total Assets Current liabilities Non-current liabilities Total Liabilities Contributed equity Retained profits / (accumulated losses) Total Equity Financial performance Profit / (loss) for the year Other comprehensive income for the year Total comprehensive income for the year Elanor Property Elanor Waverley Commercial Gardens Fund Income Fund Property Fund 30 June 2023 $'000 12,964 511,793 30 June 2023 $'000 6,679 110,386 117,065 524,757 45,654 – 45,654 121,462 (50,051) 71,411 94,995 111,963 206,958 369,493 (51,694) 317,799 30 June 2023 $'000 3,722 218,621 222,343 5,913 125,826 131,739 88,001 2,603 90,604 Elanor Property Elanor Waverley Commercial Gardens Fund Income Fund Property Fund 30 June 2023 $'000 30 June 2023 $'000 4,691 – 4,691 (32,176) – (32,176) 30 June 2023 $'000 (687) – (687) 731 Distributions received from the associates during the year 9,682 3,737 Reconciliation of the above summarised financial information to the carrying amount of the interest in each of the material associates recognised in the consolidated financial statements: Net assets of the associate Proportion of the Group's ownership interest Group's share of net assets of the associates Other movements not accounted for under the equity method 1 Carrying amount of the Group's interest Elanor Property Elanor Waverley Commercial Gardens Fund Income Fund Property Fund 30 June 2023 $'000 317,799 12.56% 39,916 914 40,830 30 June 2023 $'000 71,411 23.39% 16,703 (206) 16,497 30 June 2023 $'000 90,604 15.00% 13,591 (420) 13,171 1 Other movements are primarily due to the Funds issuing new units to external investors at a price above or below the underlying net assets of the fund, or where the Group has acquired units on-market at a price different to the fund's NTA. 87 75 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 10. Equity accounted investments (continued) Details of Material Associates (continued) 30 June 2022 Financial position Current assets Non-current assets Total Assets Current liabilities Non-current liabilities Total Liabilities Contributed equity Retained profits / (accumulated losses) Total Equity Financial performance Profit / (loss) for the year Other comprehensive income for the year Total comprehensive income for the year Elanor Property Elanor Commercial Gardens Fund Waverley Harris Street Fund Income Fund Property Fund 30 June 2022 $'000 13,136 567,194 580,330 30 June 2022 $'000 98,239 106,300 204,539 11,394 41,689 53,083 155,272 (3,816) 151,456 Elanor Property 11,727 188,869 200,596 369,496 10,238 379,734 Elanor 30 June 2022 $'000 5,447 215,271 220,718 6,537 118,615 125,152 88,001 7,565 95,566 30 June 2022 $'000 2,981 185,000 187,981 1,478 98,300 99,778 87,100 1,103 88,203 Commercial Gardens Fund Waverley Harris Street Fund Income Fund Property Fund 30 June 2022 $'000 43,948 825 44,773 30 June 2022 $'000 3,528 120 3,648 30 June 2022 $'000 23,773 – 23,773 30 June 2022 $'000 1,559 – 1,559 Distributions received from the associates during the year 4,340 3,414 350 – Reconciliation of the above summarised financial information to the carrying amount of the interest in each of the material associates recognised in the consolidated financial statements: Elanor Property Elanor Commercial Gardens Fund Waverley Harris Street Fund Net assets of the associate Proportion of the Group's ownership interest Group's share of net assets of the associates Other movements not accounted for under the equity method 1 Carrying amount of the Group's interest Income Fund Property Fund 30 June 2022 $'000 379,734 12.56% 47,691 3,768 51,459 30 June 2022 $'000 151,456 18.03% 27,308 417 27,725 30 June 2022 $'000 95,566 15.00% 14,335 (330) 14,005 30 June 2022 $'000 88,203 13.88% 12,243 62 12,305 1 Other movements are primarily due to the Funds issuing new units to external investors at a price above or below the underlying net assets of the fund, or where the Group has acquired units on-market at a price different to the fund's NTA. 88 76 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 10. Equity accounted investments (continued) Aggregate information of associates that are not individually material Profit / (loss) for the year Other comprehensive income for the year Total comprehensive income for the year Year ended 30 June 2023 $'000 (42,397) (18) (42,415) Year ended 30 June 2022 $'000 8,889 (67) 8,822 Aggregate carrying amount of the Group's interests in these associates 27,335 4,900 ACCOUNTING POLICY Investment in associates and joint ventures An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policy decisions. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. Management of the Group reviewed and assessed the classification of the Group's investment in the associated entities in accordance with AASB 128 on the basis that the Group has significant influence over the financial and operating policy decisions of the investee. The results, assets and liabilities of associates or joint ventures are incorporated in these financial statements using the equity method of accounting, except when the investment, or a portion thereof, is classified as held for sale, in which case it is accounted for in accordance with AASB 5. Under the equity method, an investment in an associate or a joint venture is initially recognised in the statement of financial position at cost and adjusted thereafter to recognise the Group's share of the profit or loss and other comprehensive income of the associate or joint venture. When the Group's share of losses of an associate or a joint venture exceeds the Group's interest in that associate or joint venture (which includes any long-term interests that, in substance, form part of the Group's net investment in the associate or joint venture), the Group discontinues recognising its share of further losses. Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture. When an entity transacts with an associate or a joint venture of the Group, profits and losses resulting from the transactions with the associate or joint venture are recognised in the Group's financial statements only to the extent of interests in the associate or joint venture that are not related to the Group. 89 77 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 10. Equity accounted investments (continued) ACCOUNTING POLICY (continued) Investment in associates and joint ventures (continued) Investments in associates and joint ventures are assessed for impairment when indicators of impairment are present. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with AASB 136 Impairment of Assets as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss recognised forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognised in accordance with AASB 136 to the extent that the recoverable amount of the investment subsequently increases. An assessment has been performed for each of the Managed Funds to ensure the underlying property assets of these Funds have been recognised at fair value, in accordance with the Group's accounting policy and methodology for fair value measurement of Property, Plant and Equipment and Investment Properties as described in Note 8 and 9 above. Furthermore, the forecast cash flows of the underlying assets of the Group's Managed Funds have been assessed. For the Group's retail and commercial office Managed Funds, recoverability risks have been assessed through detailed tenant specific reviews of the financial position of certain tenants in addition to maintaining active tenant engagement and observation of relevant market conditions and factored into the cash flow forecast of these funds. 90 78 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 Finance and Capital Structure This section provides further information on the Group's debt finance, financial assets and contributed equity. 11. Interest bearing liabilities OVERVIEW The Group borrows funds from financial institutions to partly fund the acquisition of income producing assets, such as investment properties, securities or the acquisition of businesses. The Group's borrowings are generally fixed, either directly or through the use of interest rate swaps and have a fixed term. This note provides information about the Group's debt facilities, including the facilities of EHAF, EWPF, Stirling and Bluewater. The EHAF, EWPF, Stirling and Bluewater facilities are secured by the assets of these entities. Current Bank loan - term debt Bank loan - borrowing costs less amortisation Total current Non-current Corporate notes Corporate notes - borrowing costs less amortisation Bank loan - term debt Bank loan - borrowing costs less amortisation Total non-current Consolidated Consolidated Group 30 June 2022 $'000 Group 30 June 2023 $'000 8,750 (208) 8,542 56,027 (1,483) 318,738 (1,123) 372,159 – – – 64,000 (1,796) 275,175 (1,544) 335,835 Total interest bearing liabilities 380,701 335,835 The term debt is secured by registered mortgages over all freehold property and registered security interests over all present and acquired property of key Group entities and companies. The terms of the debt also impose certain covenants on the Group including Loan to Value ratio and Interest Cover covenants. The Group is currently meeting all its covenants. Unsecured Notes On 30 June 2022, the Group has raised $40 million in unsecured medium-term notes in two tranches: a $25 million issue of 3.25-year fixed rate medium-term notes (7.75% p.a.), maturing 30 September 2025; a $15 million issue of 4-year floating rate medium-term notes (4.5% p.a. margin above BBSW), maturing 30 June 2026. The fair value of the unsecured notes is $25.7 million and $15.8 million respectively. The fair values of the unsecured notes are based on discounted cash flows using a current borrowing rate. Of the $40 million (2022: $40 million) corporate notes the Group has bought $1 million (2022: $1 million) as an investment in the Group's unsecured notes on issues. This has been deducted from the corporate notes balances to present the net position. The unsecured notes include Loan to Value Ratio and Interest Cover Covenants. The Group is currently meeting all of its covenants. 91 79 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 11. Interest bearing liabilities (continued) On 24 November 2019, the EWPF issued $25.0 million 7.2% secured 5-year fixed rate notes. The $25.0 million secured fix rate notes are due for repayment on 29 November 2024. During the year EWPF repaid $3.3 million. The fair value of the secured notes is $22.3 million. The fair value of the secured notes are based on discounted cash flows using a current borrowing rate. The unsecured notes include Loan to Value Ratio and Interest Cover Covenants. The EWPF is currently meeting all of its covenants. CREDIT FACILITIES As at 30 June 2023, the Group had unrestricted access to the following credit facilities: ENN Group Facility - ENN Total amount used Total amount unused - ENN EHAF Group Facility - EHAF Total amount used Total amount unused - EHAF Bluewater Facility - Bluewater Total amount used Total amount unused - Bluewater Stirling Facility - Stirling Total amount used Total amount unused - Stirling Consolidated Consolidated Group 30 June 2022 $'000 65,000 (59,850) 5,150 Group 30 June 2023 $'000 67,000 (67,000) – 210,020 (205,413) 4,607 165,000 (165,000) – 30,525 (30,525) – 19,800 (19,800) – 30,525 (30,525) – 19,800 (19,800) – Total amount unused - Consolidated Group 4,607 5,150 The ENN Group has access to a $2.0 million and a $65.0 million debt facility, with maturity dates of 14 April 2024 and 31 July 2025, respectively. The drawn amount at 30 June 2023 is $67.0 million and both facilities are not hedged. The fair value of this debt facility is $67.5 million. The fair value of the debt facility is based on discounted cash flows using a current borrowing rate. The debt facility includes Loan to Value Ratio and Interest Cover Covenants. The ENN Group is currently meeting all of its covenants. 92 80 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 11. Interest bearing liabilities (continued) The EHAF Group has access to secured debt facilities of $82.5 million, $109.5 million and an $18.0 million capex facility (from which both the EHAF hotel management companies and property trusts can draw) which will mature on 23 December 2024. The drawn amount at 30 June 2023 was $205.4 million. The $82.5 million secured debt facility was 100% hedged, the remaining debt facilities were not hedged as of 30 June 2023. The fair value of these debt facilities is $206.1 million. The fair value of the debt facilities is based on discounted cash flows using a current borrowing rate. The debt facilities include Loan to Value Ratio and Interest Cover Covenants. The EHAF Group is currently meeting all of its covenants. Bluewater has access to a $30.5 million facility. The drawn amount as at 30 June 2023 was $30.5 million which will mature on 31 August 2024. As at 30 June 2023, the drawn amount was not hedged. The fair value of this debt facility is $30.9 million. The fair value of the debt facility is based on discounted cash flows using a current borrowing rate. The debt facility includes Loan to Value Ratio and Interest Cover Covenants. Bluewater is currently meeting all of its covenants. Stirling has access to a $19.8 million facility. The drawn amount at 30 June 2023 was $19.8 million which will mature on 31 August 2024. As at 30 June 2023, the drawn amount was not hedged. The fair value of this debt facility is $20.1 million. The fair value of the debt facility is based on discounted cash flows using a current borrowing rate. The debt facility includes Loan to Value Ratio and Interest Cover Covenants. Stirling is currently meeting all of its covenants. BORROWING COSTS A breakdown of the borrowing costs included in the Group's Consolidated Statement of Profit or Loss is provided below: Interest expense Amortisation of debt establishment costs Total borrowing costs ACCOUNTING POLICY Interest bearing liabilities Consolidated Consolidated Group 30 June 2022 $'000 13,590 2,627 16,217 Group 30 June 2023 $'000 18,810 1,356 20,166 Interest bearing liabilities are recognised initially at fair value, being the consideration received net of transaction costs associated with the borrowing. After initial recognition, interest bearing liabilities are stated at amortised cost using the effective interest method. Under the effective interest method, any transaction fees, costs, discounts, and premiums directly related to the borrowings are recognised in the statement of profit or loss and other comprehensive income over the expected life of the borrowings. Interest bearing liabilities are classified as current liabilities where the liability has been drawn under a financing facility which expires within 12 months. Amounts drawn under financial facilities which expire after 12 months are classified as non-current. 93 81 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 11. Interest bearing liabilities (continued) ACCOUNTING POLICY (continued) Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. 12. Derivative financial instruments OVERVIEW The Group's derivative financial instruments consist of interest rate swap contracts to hedge its exposure to movements in variable interest rates. The interest rate swap agreements allow the Group to raise long term borrowings at a floating rate and effectively swap them into a fixed rate. Current assets / (liabilities) Interest rate swaps Non-current assets Interest rate swaps Consolidated Consolidated Group 30 June 2022 $'000 Group 30 June 2023 $'000 1,353 1,353 – – 1,898 1,898 723 723 Total derivative financial instruments 1,353 2,621 EHAF have entered into interest rate swap agreements with a notional principal amount totalling $83.8 million that entitles it to receive interest, at quarterly intervals, at a floating rate on the notional principal and oblige it to pay interest at a fixed rate. The interest rate swap agreements allow the raising of long-term borrowings at a floating rate and effectively swap them into a fixed rate. 94 82 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 12. Derivative financial instruments (continued) ACCOUNTING POLICY Derivatives Derivatives are initially recognised at fair value at the date the derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognised in profit or loss immediately. Financial Instruments The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is not applicable for the Group or the EIF Group. Specific valuation techniques used to value financial instruments include: • The use of quoted market prices or dealer quotes for similar instruments; and • The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves. All of the resulting fair value estimates of financial instruments are included in level 2. There are no level 3 financial instruments in either the Group or the EIF Group. 95 83 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 13. Other financial assets OVERVIEW The Group's other financial assets consist of short-term financing provided by the Group to certain managed funds. The Group's other financial assets as at 30 June 2023 are detailed below: Other financial assets and receivables Total other financial assets ACCOUNTING POLICY Consolidated Consolidated Group 30 June 2022 $'000 2,186 Group 30 June 2023 $'000 4,095 4,095 2,186 The Group measures its other financial assets at amortised cost. At initial recognition, the Group measures its other financial assets at fair value and subsequently at amortised cost. The Group assessed that the credit risk of its financial asset has not significantly increased since initial recognition. Hence, the Group applies the 3-stage expected credit loss impairment model under AASB 9 measuring the expected credit loss allowance (ECL) for the other financial assets. The loss allowances are based on assumptions about the risk of default and expected loss rates. The Group uses judgement in making these assumptions based on the Group's historical credit loss experience, adjusted for factors that are specific to the debtors and general economic conditions, where appropriate at reporting date. Refer to Note 16(b) for further discussion on the Group's management of credit risk, including that for its financial assets. 96 84 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 ELANOR INVESTORS GROUP FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 14. Contributed equity 14. Contributed equity OVERVIEW 14. Contributed equity OVERVIEW 14. Contributed equity 14. Contributed equity The shares of Elanor Investors Limited (Company) and the units of Elanor Investment Fund (EIF) are combined OVERVIEW The shares of Elanor Investors Limited (Company) and the units of Elanor Investment Fund (EIF) are combined OVERVIEW and issued as stapled securities. The shares of the Company and units of EIF cannot be traded separately and issued as stapled securities. The shares of the Company and units of EIF cannot be traded separately OVERVIEW The shares of Elanor Investors Limited (Company) and the units of Elanor Investment Fund (EIF) are combined and can only be traded as stapled securities. The shares of Elanor Investors Limited (Company) and the units of Elanor Investment Fund (EIF) are combined and can only be traded as stapled securities. and issued as stapled securities. The shares of the Company and units of EIF cannot be traded separately The shares of Elanor Investors Limited (Company) and the units of Elanor Investment Fund (EIF) are combined and issued as stapled securities. The shares of the Company and units of EIF cannot be traded separately Below is a summary of contributed equity of the Company and EIF separately and for Elanor's combined and can only be traded as stapled securities. Below is a summary of contributed equity of the Company and EIF separately and for Elanor's combined and issued as stapled securities. The shares of the Company and units of EIF cannot be traded separately and can only be traded as stapled securities. stapled securities. The basis of allocation of the issue price of stapled securities to Company shares and EIF stapled securities. The basis of allocation of the issue price of stapled securities to Company shares and EIF and can only be traded as stapled securities. Below is a summary of contributed equity of the Company and EIF separately and for Elanor's combined units post stapling is determined by agreement between the Company and EIF as set out in the Stapling Deed. Below is a summary of contributed equity of the Company and EIF separately and for Elanor's combined units post stapling is determined by agreement between the Company and EIF as set out in the Stapling Deed. stapled securities. The basis of allocation of the issue price of stapled securities to Company shares and EIF Below is a summary of contributed equity of the Company and EIF separately and for Elanor's combined stapled securities. The basis of allocation of the issue price of stapled securities to Company shares and EIF Contributed equity for the year ended 30 June 2023 units post stapling is determined by agreement between the Company and EIF as set out in the Stapling Deed. Contributed equity for the year ended 30 June 2023 stapled securities. The basis of allocation of the issue price of stapled securities to Company shares and EIF units post stapling is determined by agreement between the Company and EIF as set out in the Stapling Deed. units post stapling is determined by agreement between the Company and EIF as set out in the Stapling Deed. Contributed equity for the year ended 30 June 2023 Contributed equity for the year ended 30 June 2023 EIF EIF Contributed equity for the year ended 30 June 2023 30 June 30 June 2023 EIF 2023 EIF $'000 30 June $'000 30 June 105,559 EIF 2023 105,559 2023 1,829 30 June $'000 1,829 $'000 705 2023 105,559 705 105,559 $'000 108,093 1,829 108,093 1,829 105,559 705 705 1,829 108,093 108,093 705 108,093 Details Details Opening balance Opening balance 2023 STI Securities granted Details 2023 STI Securities granted 2023 LTI Securities exercised Opening balance 2023 LTI Securities exercised Opening balance Securities on issue 2023 STI Securities granted Securities on issue 2023 STI Securities granted Opening balance 2023 LTI Securities exercised 2023 LTI Securities exercised 2023 STI Securities granted Securities on issue Securities on issue 2023 LTI Securities exercised Securities on issue A reconciliation of treasury securities on issue at the beginning and end of the year is set out below: A reconciliation of treasury securities on issue at the beginning and end of the year is set out below: Date of Date of income income entitlement Date of entitlement Date of 1 Jul 2022 income 1 Jul 2022 income Date of 15 Aug 2022 entitlement 15 Aug 2022 entitlement income 28 Jun 2023 1 Jul 2022 28 Jun 2023 1 Jul 2022 entitlement 30 June 2023 15 Aug 2022 30 June 2023 15 Aug 2022 1 Jul 2022 28 Jun 2023 28 Jun 2023 15 Aug 2022 30 June 2023 30 June 2023 28 Jun 2023 30 June 2023 No. of No. of securities/ securities/ shares No. of shares No. of 121,915,824 securities/ 121,915,824 securities/ 1,336,940 No. of shares 1,336,940 shares 816,662 securities/ 121,915,824 816,662 121,915,824 shares 124,069,426 1,336,940 124,069,426 1,336,940 121,915,824 816,662 816,662 1,336,940 124,069,426 124,069,426 816,662 124,069,426 A reconciliation of treasury securities on issue at the beginning and end of the year is set out below: A reconciliation of treasury securities on issue at the beginning and end of the year is set out below: A reconciliation of treasury securities on issue at the beginning and end of the year is set out below: Details Details Details Details No. of No. of securities/ securities/ shares No. of shares No. of 4,746,414 securities/ 4,746,414 securities/ (2,384,738) No. of shares (2,384,738) shares 1,336,940 securities/ 4,746,414 1,336,940 4,746,414 (1,378,384) shares (2,384,738) (1,378,384) (2,384,738) 4,746,414 2,320,232 1,336,940 2,320,232 1,336,940 (2,384,738) (1,378,384) (1,378,384) 1,336,940 2,320,232 2,320,232 (1,378,384) Details Details Opening balance Opening balance 2020 STI Securities vested Details 2020 STI Securities vested 2023 STI Securities granted Opening balance 2023 STI Securities granted Opening balance 2021 STI Securities vested 2020 STI Securities vested 2021 STI Securities vested 2020 STI Securities vested Opening balance Treasury securities on issue 2023 STI Securities granted Treasury securities on issue 2023 STI Securities granted 2020 STI Securities vested 2021 STI Securities vested 2021 STI Securities vested 2023 STI Securities granted Treasury securities on issue Contributed equity for the year ended 30 June 2022 Treasury securities on issue Contributed equity for the year ended 30 June 2022 2021 STI Securities vested 2,320,232 Treasury securities on issue Contributed equity for the year ended 30 June 2022 Contributed equity for the year ended 30 June 2022 Contributed equity for the year ended 30 June 2022 Date of Date of income income entitlement Date of entitlement Date of 1 Jul 2022 income 1 Jul 2022 income Date of 1 Jul 2022 entitlement 1 Jul 2022 entitlement income 15 Aug 2022 1 Jul 2022 15 Aug 2022 1 Jul 2022 entitlement 18 Dec 2022 1 Jul 2022 18 Dec 2022 1 Jul 2022 1 Jul 2022 30 June 2023 15 Aug 2022 30 June 2023 15 Aug 2022 1 Jul 2022 18 Dec 2022 18 Dec 2022 15 Aug 2022 30 June 2023 30 June 2023 18 Dec 2022 30 June 2023 Details Details No. of No. of securities/ securities/ shares No. of shares No. of 120,974,515 securities/ 120,974,515 securities/ 941,309 No. of shares 941,309 shares securities/ 121,915,824 120,974,515 121,915,824 120,974,515 shares 941,309 941,309 120,974,515 121,915,824 121,915,824 941,309 121,915,824 No. of No. of securities/ securities/ shares No. of shares No. of 3,805,105 securities/ 3,805,105 securities/ 941,309 No. of shares 941,309 shares securities/ 4,746,414 3,805,105 4,746,414 3,805,105 shares 941,309 941,309 3,805,105 4,746,414 4,746,414 941,309 Details Details Opening balance Opening balance 2022 STI Securities granted Details 2022 STI Securities granted Securities on issue Opening balance Securities on issue Opening balance 2022 STI Securities granted 2022 STI Securities granted Opening balance Securities on issue Securities on issue 2022 STI Securities granted Securities on issue Details Details Details Details Opening balance Opening balance 2022 STI Securities granted Details 2022 STI Securities granted Treasury securities on issue Opening balance Treasury securities on issue Opening balance 2022 STI Securities granted 2022 STI Securities granted Opening balance Treasury securities on issue Treasury securities on issue 2022 STI Securities granted Date of Date of income income entitlement Date of entitlement Date of 1 Jul 2021 income 1 Jul 2021 income 30 Sep 2021 Date of entitlement 30 Sep 2021 entitlement income 30 Jun 2022 1 Jul 2021 30 Jun 2022 1 Jul 2021 entitlement 30 Sep 2021 30 Sep 2021 1 Jul 2021 30 Jun 2022 30 Jun 2022 30 Sep 2021 30 Jun 2022 Date of Date of income income entitlement Date of entitlement Date of 1 Jul 2021 income 1 Jul 2021 income 30 Sep 2021 Date of entitlement 30 Sep 2021 entitlement income 30 Jun 2022 1 Jul 2021 30 Jun 2022 1 Jul 2021 entitlement 30 Sep 2021 30 Sep 2021 1 Jul 2021 30 Jun 2022 30 Jun 2022 30 Sep 2021 30 Jun 2022 85 85 85 85 85 A reconciliation of treasury securities on issue at the beginning and end of the prior year is set out below: A reconciliation of treasury securities on issue at the beginning and end of the prior year is set out below: A reconciliation of treasury securities on issue at the beginning and end of the prior year is set out below: A reconciliation of treasury securities on issue at the beginning and end of the prior year is set out below: A reconciliation of treasury securities on issue at the beginning and end of the prior year is set out below: 4,746,414 Treasury securities on issue 6,768 1,682 5,086 Total Total Equity Equity 30 June Total 30 June Total 2023 Equity 2023 Equity $'000 Total 30 June $'000 30 June 178,342 Equity 2023 178,342 2023 2,367 30 June $'000 2,367 $'000 939 2023 178,342 939 178,342 $'000 181,648 2,367 181,648 2,367 178,342 939 939 2,367 181,648 181,648 939 181,648 Total Total Equity Equity 30 June Total 30 June Total 2023 Equity 2023 Equity $'000 Total 30 June $'000 30 June 6,768 Equity 2023 6,768 2023 (3,119) 30 June $'000 (3,119) $'000 2,367 2023 6,768 2,367 6,768 (2,647) $'000 (3,119) (2,647) (3,119) 6,768 3,369 2,367 3,369 2,367 (3,119) (2,647) (2,647) 2,367 3,369 3,369 (2,647) 3,369 Total Total Equity Equity 30 June Total 30 June Total 2022 Equity 2022 Equity $'000 Total 30 June $'000 30 June 176,406 Equity 2022 176,406 2022 1,936 30 June $'000 1,936 $'000 2022 178,342 176,406 178,342 176,406 $'000 1,936 1,936 176,406 178,342 178,342 1,936 178,342 Total Total Equity Equity 30 June Total 30 June Total 2022 Equity 2022 Equity $'000 Total 30 June $'000 30 June 4,832 Equity 2022 4,832 2022 1,936 30 June $'000 1,936 $'000 2022 6,768 4,832 6,768 4,832 $'000 1,936 1,936 4,832 6,768 6,768 1,936 Parent Parent Entity Entity 30 June Parent 30 June Parent 2023 Entity 2023 Entity $'000 Parent 30 June $'000 30 June 72,783 Entity 2023 72,783 2023 538 30 June $'000 538 $'000 234 2023 72,783 234 72,783 $'000 73,555 538 73,555 538 72,783 234 234 538 73,555 73,555 234 73,555 Parent Parent Entity Entity 30 June Parent 30 June Parent 2023 Entity 2023 Entity $'000 Parent 30 June $'000 30 June 1,682 Entity 2023 1,682 2023 (823) 30 June $'000 (823) $'000 538 2023 1,682 538 1,682 (638) $'000 (823) (638) (823) 1,682 759 538 759 538 (823) (638) (638) 538 759 759 (638) 759 Parent Parent Entity Entity 30 June Parent 30 June Parent 2022 Entity 2022 Entity $'000 Parent 30 June $'000 30 June 72,305 Entity 2022 72,305 2022 478 30 June $'000 478 $'000 2022 72,783 72,305 72,783 72,305 $'000 478 478 72,305 72,783 72,783 478 72,783 Parent Parent Entity Entity 30 June Parent 30 June Parent 2022 Entity 2022 Entity $'000 Parent 30 June $'000 30 June 1,204 Entity 2022 1,204 2022 478 30 June $'000 478 $'000 2022 1,682 1,204 1,682 1,204 $'000 478 478 1,204 1,682 1,682 478 EIF EIF 30 June 30 June 2023 EIF 2023 EIF $'000 30 June $'000 30 June 5,086 EIF 2023 5,086 2023 (2,296) 30 June $'000 (2,296) $'000 1,829 2023 5,086 1,829 5,086 (2,009) $'000 (2,296) (2,009) (2,296) 5,086 2,610 1,829 2,610 1,829 (2,296) (2,009) (2,009) 1,829 2,610 2,610 (2,009) 2,610 EIF EIF 30 June 30 June 2022 EIF 2022 EIF $'000 30 June $'000 30 June 104,101 EIF 2022 104,101 2022 1,458 30 June $'000 1,458 $'000 2022 105,559 104,101 105,559 104,101 $'000 1,458 1,458 104,101 105,559 105,559 1,458 105,559 EIF EIF 30 June 30 June 2022 EIF 2022 EIF $'000 30 June $'000 30 June 3,628 EIF 2022 3,628 2022 1,458 30 June $'000 1,458 $'000 2022 5,086 3,628 5,086 3,628 $'000 1,458 97 1,458 3,628 5,086 5,086 1,458 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 14. Contributed equity (continued) 14. Contributed equity (continued) 14. Contributed equity (continued) ACCOUNTING POLICY ACCOUNTING POLICY ACCOUNTING POLICY Equity-settled security-based payments to employees and others providing similar services are measured at Equity-settled security-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 of the equity instruments at the grant date. Equity-settled security-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 security-based payments is expensed on a The fair value determined at the grant date of the equity-settled security-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of equity instruments that will straight-line basis over the vesting period, based on the Group's estimate of equity instruments that will The fair value determined at the grant date of the equity-settled security-based payments is expensed on a eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Group revises eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Group revises straight-line basis over the vesting period, based on the Group's estimate of equity instruments that will its estimate of the number of equity instruments expected to vest. The impact of the revision of the original its estimate of the number of equity instruments expected to vest. The impact of the revision of the original eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Group revises estimate, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, estimate, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, its estimate of the number of equity instruments expected to vest. The impact of the revision of the original with a corresponding adjustment to the equity-settled employee benefits reserve. with a corresponding adjustment to the equity-settled employee benefits reserve. estimate, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve. 15. Reserves 15. Reserves 15. Reserves OVERVIEW OVERVIEW OVERVIEW Reserves are balances that form part of equity that record other comprehensive income amounts that are Reserves are balances that form part of equity that record other comprehensive income amounts that are retained in the business and not distributed until such time the underlying balance sheet item is realised. This retained in the business and not distributed until such time the underlying balance sheet item is realised. This Reserves are balances that form part of equity that record other comprehensive income amounts that are note provides information about movements in the other reserves line item of the balance sheet and a note provides information about movements in the other reserves line item of the balance sheet and a retained in the business and not distributed until such time the underlying balance sheet item is realised. This description of the nature and purpose of each reserve. description of the nature and purpose of each reserve. note provides information about movements in the other reserves line item of the balance sheet and a description of the nature and purpose of each reserve. Other reserves Other reserves Opening balance Opening balance Other reserves Asset revaluation Asset revaluation Opening balance Share of reserves of equity accounted investments Share of reserves of equity accounted investments Asset revaluation Closing balance Closing balance Share of reserves of equity accounted investments Closing balance Cash flow hedge reserve Cash flow hedge reserve Opening balance Opening balance Cash flow hedge reserve Revaluation Revaluation Opening balance Closing balance Closing balance Revaluation Closing balance Stapled security-based payment reserve Stapled security-based payment reserve Opening balance Opening balance Stapled security-based payment reserve Loan securities and option expense Loan securities and option expense Opening balance Short term incentive scheme expense Short term incentive scheme expense Loan securities and option expense Closing balance Closing balance Short term incentive scheme expense Closing balance Total reserves Total reserves Consolidated Consolidated Consolidated Consolidated Group Group Consolidated Consolidated 30 June 30 June Group 2022 2022 30 June $'000 $'000 2022 $'000 79,499 79,499 16,426 16,426 79,499 68 68 16,426 95,993 95,993 68 95,993 Group Group 30 June 30 June Group 2023 2023 30 June $'000 $'000 2023 $'000 95,993 95,993 28,286 28,286 95,993 (38) (38) 28,286 124,241 124,241 (38) 124,241 – – – – – – – – – 10,475 10,475 1,210 1,210 10,475 (3,052) (3,052) 1,210 8,633 8,633 (3,052) 8,633 132,874 132,874 (361) (361) 361 361 (361) – – 361 – 6,338 6,338 1,303 1,303 6,338 2,834 2,834 1,303 10,475 10,475 2,834 10,475 106,468 106,468 Total reserves The other reserves are used to record undistributed and unrealised earnings. The other reserves are used to record undistributed and unrealised earnings. The other reserves are used to record undistributed and unrealised earnings. The cash flow hedge reserve is used to recognise increments and decrements in the fair value of cash flow The cash flow hedge reserve is used to recognise increments and decrements in the fair value of cash flow hedges. In FY22 all cash flow hedges were discontinued, and no new hedge relationships have been hedges. In FY22 all cash flow hedges were discontinued, and no new hedge relationships have been The cash flow hedge reserve is used to recognise increments and decrements in the fair value of cash flow recognised. recognised. hedges. In FY22 all cash flow hedges were discontinued, and no new hedge relationships have been 98 recognised. 106,468 132,874 86 86 86 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 15. Reserves (continued) The stapled security-based payment reserve is used to recognise the fair value of loan, restricted securities and options issued to employees but not yet exercised under the Group's DSTI and LTIP. 16. Financial Risk Management OVERVIEW The Group's principal financial instruments comprise cash, receivables, financial assets carried at fair value through profit and loss, interest bearing loans, derivatives, payables and distributions payable. The Group's activities are exposed to a variety of financial risks: market risk (including interest rate risk and equity price risk), credit risk and liquidity risk. This note presents information about the Group's exposure to each of the above risks, the Group's objectives, policies and processes for measuring and managing risk and the Group's management of capital. Further quantitative disclosures are included through these consolidated financial statements. The Group's Board of Directors (Board) has overall responsibility for the establishment and oversight of the Group's risk management framework. The Board has established an Audit & Risk Committee (ARC), which is responsible for monitoring the identification and management of key risks to the business. The ARC meets regularly and reports to the Board on its activities. The Board has established Treasury Guidelines outlining principles for overall risk management and policies covering specific areas, such as mitigating foreign exchange, interest rate and liquidity risks. The Group's Treasury Guidelines provide a framework for managing the financial risks of the Group with a key philosophy of risk mitigation. Derivatives are exclusively used for hedging purposes, not as trading or other speculative instruments. The Group uses derivative financial instruments such as interest rate swaps where possible to hedge certain risk exposures. The Group uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate risk, ageing analysis for credit risk and cash flow forecasting for liquidity risk. There have been no other significant changes in the types of financial risks or the Group's risk management program (including methods used to measure the risks). (a) Market risk Market risk refers to the potential for changes in the value of the Group's financial instruments or revenue streams from changes in market prices. There are various types of market risks to which the Group is exposed including those associated with interest rates, currency rates and equity market price. (i) Interest rate risk Interest rate risk refers to the potential fluctuations in the fair value or future cash flows of a financial instrument because of changes in market interest rates. The Group's main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow interest rate risk. 99 87 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 16. Financial Risk Management (continued) (a) Market risk (continued) (i) Interest rate risk (continued) As at reporting date, the Consolidated Group had the following interest-bearing assets and liabilities: Consolidated Group 30 June 2023 Assets Cash and cash equivalents Other Financial assets Derivative financial instruments Total assets Weighted average interest rate Liabilities Interest bearing loans Total liabilities Weighted average interest rate Consolidated Group 30 June 2022 Assets Cash and cash equivalents Other Financial assets Derivative financial instruments Total assets Weighted average interest rate Liabilities Interest bearing loans Total liabilities Weighted average interest rate Maturity < 1 yr $'000 Maturity 1 - 5 yrs $'000 Maturity > 5 yrs $'000 25,269 4,095 1,353 30,717 – – – – 8,542 8,542 372,159 372,159 – – – – – – Maturity < 1 yr $'000 Maturity 1 - 5 yrs $'000 Maturity > 5 yrs $'000 27,774 2,186 1,898 31,858 – – 723 723 – – 335,835 335,835 – – – – – – Total $'000 25,269 4,095 1,353 30,717 1.06% 380,701 380,701 5.51% Total $'000 27,774 2,186 2,621 32,581 0.80% 335,835 335,835 4.47% The Group's main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow interest rate risk. As at 30 June 2023 $83.8 million (2022: $83.8 million) of the $318.9 million (2022: $273.6 million) of floating interest-bearing loans have been hedged using interest rate swap agreements. These agreements are in place to swap the variable / floating interest payable to a fixed rate to minimise the interest rate risk. 100 88 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 16. Financial Risk Management (continued) 16. Financial Risk Management (continued) (ii) (ii) Interest Rate Sensitivity Interest Rate Sensitivity At reporting date if Australian interest rates had been 1% higher / lower and all other variables were held At reporting date if Australian interest rates had been 1% higher / lower and all other variables were held constant, the impact on the Group in relation to cash and cash equivalents, derivatives, interest bearing loans constant, the impact on the Group in relation to cash and cash equivalents, derivatives, interest bearing loans and the Group's profit and equity would be: and the Group's profit and equity would be: Consolidated Group Consolidated Group 30 June 2023 30 June 2023 Cash and cash equivalents Cash and cash equivalents Derivative financial instruments Derivative financial instruments Interest bearing loans Interest bearing loans Total increase / (decrease) Total increase / (decrease) Consolidated Group Consolidated Group 30 June 2022 30 June 2022 Cash and cash equivalents Cash and cash equivalents Derivative financial instruments Derivative financial instruments Interest bearing loans Interest bearing loans Total increase / (decrease) Total increase / (decrease) (b) (b) Credit risk Credit risk Amount Amount $'000 $'000 25,269 25,269 1,353 1,353 380,701 380,701 407,323 407,323 Amount Amount $'000 $'000 27,774 27,774 2,621 2,621 335,835 335,835 366,230 366,230 Increase by 1% Increase by 1% Profit/ (loss) Profit/ (loss) $'000 $'000 Equity Equity $'000 $'000 Decrease by 1% Decrease by 1% Profit/ (loss) Profit/ (loss) $'000 $'000 Equity Equity $'000 $'000 253 253 838 838 (2,402) (2,402) (1,311) (1,311) – – – – – – – – (253) (253) (838) (838) 2,402 2,402 1,311 1,311 – – – – – – – – Increase by 1% Increase by 1% Profit/ (loss) Profit/ (loss) $'000 $'000 Equity Equity $'000 $'000 Decrease by 1% Decrease by 1% Profit/ (loss) Profit/ (loss) $'000 $'000 Equity Equity $'000 $'000 278 278 838 838 (1,622) (1,622) (506) (506) – – – – – – – – (278) (278) (838) (838) 1,622 1,622 506 506 – – – – – – – – Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. The Group manages credit risk on trade receivables and contract assets by performing credit reviews of The Group manages credit risk on trade receivables and contract assets by performing credit reviews of prospective debtors, obtaining collateral where appropriate and performing detailed reviews on any debtor prospective debtors, obtaining collateral where appropriate and performing detailed reviews on any debtor arrears. Credit risk on derivatives is managed through limiting transactions to investment grade counterparties. arrears. Credit risk on derivatives is managed through limiting transactions to investment grade counterparties. At balance date, the Group's outstanding debtors consists primarily of loans to Elanor's Managed Funds and At balance date, the Group's outstanding debtors consists primarily of loans to Elanor's Managed Funds and accrued funds management fees payable by these Managed Funds, rent receivables from its investment accrued funds management fees payable by these Managed Funds, rent receivables from its investment property Bluewater Square, and outstanding payments receivable from hotel guests across its hotel portfolio. property Bluewater Square, and outstanding payments receivable from hotel guests across its hotel portfolio. In respect of outstanding loans and trade debtor's receivable from its Managed Funds, the Group has In respect of outstanding loans and trade debtor's receivable from its Managed Funds, the Group has performed a detailed analysis of the recoverability of these amounts with reference to the cash flow forecasts performed a detailed analysis of the recoverability of these amounts with reference to the cash flow forecasts of each of these funds. For each of the Group's Managed Funds, the Group's management teams have of each of these funds. For each of the Group's Managed Funds, the Group's management teams have performed a detailed asset level analysis of the recoverability of the outstanding arrears at balance date for performed a detailed asset level analysis of the recoverability of the outstanding arrears at balance date for these assets. these assets. For the Group's retail investment property Bluewater Square, the Group applied the AASB 9 simplified For the Group's retail investment property Bluewater Square, the Group applied the AASB 9 simplified approach using the provision matrix for measuring the expected credit losses (ECL) which uses a lifetime approach using the provision matrix for measuring the expected credit losses (ECL) which uses a lifetime expected loss allowance. The ECL calculation is based on assumptions about risk of default and expected expected loss allowance. The ECL calculation is based on assumptions about risk of default and expected loss rates. The group has considered the following in assessing the expected credit loss: ageing of the debtor's loss rates. The group has considered the following in assessing the expected credit loss: ageing of the debtor's balances, tenant payment history, assessment of the tenant's financial position, existing market conditions and balances, tenant payment history, assessment of the tenant's financial position, existing market conditions and forward-looking estimates. forward-looking estimates. At balance date, the Group has recognised an expected credit loss provision of $1.4 million (2022: $0.9 million) At balance date, the Group has recognised an expected credit loss provision of $1.4 million (2022: $0.9 million) in respect to the rent receivables of Bluewater Square Syndicate. in respect to the rent receivables of Bluewater Square Syndicate. 101 89 89 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 Exposure to credit risk Exposure to credit risk Exposure to credit risk Credit risk (continued) Credit risk (continued) Credit risk (continued) 16. Financial Risk Management (continued) 16. Financial Risk Management (continued) 16. Financial Risk Management (continued) (b) (b) (b) For the Group's Hotels, Tourism and Leisure Managed Funds (HTL Funds), the group applied the AASB 9 For the Group's Hotels, Tourism and Leisure Managed Funds (HTL Funds), the group applied the AASB 9 simplified approach using the provision matrix for measuring the expected credit losses which uses a lifetime For the Group's Hotels, Tourism and Leisure Managed Funds (HTL Funds), the group applied the AASB 9 simplified approach using the provision matrix for measuring the expected credit losses which uses a lifetime expected loss allowance (ECL). The lifetime ECL calculation is based on the ageing of the debtors and forward- simplified approach using the provision matrix for measuring the expected credit losses which uses a lifetime expected loss allowance (ECL). The lifetime ECL calculation is based on the ageing of the debtors and forward- looking estimates. expected loss allowance (ECL). The lifetime ECL calculation is based on the ageing of the debtors and forward- looking estimates. looking estimates. At balance date, no provisions have been recognised in respect of loans and funds management fees At balance date, no provisions have been recognised in respect of loans and funds management fees receivable from the Group's HTL Funds and a provision of $0.5 million has been recognised in respect of the At balance date, no provisions have been recognised in respect of loans and funds management fees receivable from the Group's HTL Funds and a provision of $0.5 million has been recognised in respect of the consolidated HTL Funds' trade debtors (2022: $0.3 million). receivable from the Group's HTL Funds and a provision of $0.5 million has been recognised in respect of the consolidated HTL Funds' trade debtors (2022: $0.3 million). consolidated HTL Funds' trade debtors (2022: $0.3 million). (i) (i) (i) The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date is detailed below: The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date is detailed below: credit risk at the reporting date is detailed below: Consolidated Consolidated Consolidated Consolidated Group Group Consolidated Consolidated 30 June 30 June Group 2022 2022 30 June $'000 $'000 2022 27,774 Cash and cash equivalents Cash and cash equivalents 27,774 $'000 2,186 Other Financial assets 2,186 Other Financial assets 27,774 Cash and cash equivalents 17,653 Trade and other receivables 17,653 Trade and other receivables 2,186 Other Financial assets 47,613 Total 17,653 Trade and other receivables 47,613 Total Total 47,613 Where entities have the right to off-set and intend to settle on a net basis under netting arrangements, this off- Where entities have the right to off-set and intend to settle on a net basis under netting arrangements, this off- set has been recognised in the consolidated financial statements on a net basis. Details of the Group's Where entities have the right to off-set and intend to settle on a net basis under netting arrangements, this off- set has been recognised in the consolidated financial statements on a net basis. Details of the Group's commitments are disclosed in Note 23. set has been recognised in the consolidated financial statements on a net basis. Details of the Group's commitments are disclosed in Note 23. commitments are disclosed in Note 23. Trade and other receivables consist of GST, trade debtors and other receivables. Trade and other receivables consist of GST, trade debtors and other receivables. Trade and other receivables consist of GST, trade debtors and other receivables. At balance date there were no other significant concentrations of credit risk. At balance date there were no other significant concentrations of credit risk. At balance date there were no other significant concentrations of credit risk. No allowance has been recognised for the GST and trade debtors from the taxation authorities and related No allowance has been recognised for the GST and trade debtors from the taxation authorities and related parties respectively. Based on historical experience, there is no evidence of default from these counterparties No allowance has been recognised for the GST and trade debtors from the taxation authorities and related parties respectively. Based on historical experience, there is no evidence of default from these counterparties which would indicate that an allowance was necessary. parties respectively. Based on historical experience, there is no evidence of default from these counterparties which would indicate that an allowance was necessary. which would indicate that an allowance was necessary. (ii) (ii) (ii) The ageing of trade and other receivables at reporting date is detailed below: The ageing of trade and other receivables at reporting date is detailed below: The ageing of trade and other receivables at reporting date is detailed below: Group Group 30 June 30 June Group 2023 2023 30 June $'000 $'000 2023 25,269 25,269 $'000 4,095 4,095 25,269 18,157 18,157 4,095 47,521 18,157 47,521 47,521 Impairment losses Impairment losses Impairment losses Current Current Past due 31-61 days Past due 31-61 days Current Past due 61+ days Past due 61+ days Past due 31-61 days Total Past due 61+ days Total Provision for expected credit loss Provision for expected credit loss Total Net trade and other receivables Provision for expected credit loss Net trade and other receivables 102 Net trade and other receivables 90 90 90 Consolidated Consolidated Consolidated Consolidated Group Group Consolidated Consolidated 30 June 30 June Group 2022 2022 30 June $'000 $'000 2022 14,236 14,236 $'000 998 998 14,236 3,721 3,721 998 18,955 3,721 18,955 (1,302) (1,302) 18,955 17,653 (1,302) 17,653 17,653 Group Group 30 June 30 June Group 2023 2023 30 June $'000 $'000 2023 11,425 11,425 $'000 1,550 1,550 11,425 7,052 7,052 1,550 20,027 7,052 20,027 (1,870) (1,870) 20,027 18,157 (1,870) 18,157 18,157 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 16. Financial Risk Management (continued) (c) Liquidity risk The Group manages liquidity risk by maintaining sufficient cash including working capital and other reserves, as well as through securing appropriate committed credit facilities. The following are the undiscounted contractual cash flows of derivatives and non-derivative financial liabilities shown at their nominal amount (including future interest payable). Consolidated Group 30 June 2023 Derivatives Non derivative financial liabilities Payables Interest bearing loans Lease liability Total Consolidated Group 30 June 2022 Non derivative financial liabilities Payables Interest bearing loans Lease liability Total (d) Capital risk management Less than 1 year $'000 1,353 34,643 2,110 1,887 39,993 Less than 1 year $'000 1 to 2 years $'000 – – 308,068 1,870 309,938 1 to 2 years $'000 2 to 5 More than Contractual cash flows 5 years years $'000 $'000 $'000 – – – Carrying amount $'000 1,353 – 121,995 – 121,995 – – – – 34,643 432,173 3,757 470,573 34,643 380,701 3,757 420,454 2 to 5 More than Contractual cash flows 5 years years $'000 $'000 $'000 Carrying amount $'000 25,757 – 1,660 27,417 – 54,824 3,758 58,582 – 332,182 – 332,182 – – – – 25,757 387,006 5,418 418,181 25,757 335,835 5,418 367,010 The Group maintains its capital structure with the objective to safeguard its ability to continue as a going concern, to increase the returns for securityholders and to maintain an optimal capital structure. The capital structure of the Group consists of equity as listed in Note 14. The Group assesses its capital management approach as a key part of the Group's overall strategy, and it is continuously reviewed by management and the Directors. To achieve the optimal capital structure, the Board may use the following strategies: amend the distribution policy of the Group; issue new securities through a private or public placement; activate the Distribution Reinvestment Plan (DRP); issue securities under a Security Purchase Plan (SPP); conduct an on-market buyback of securities; acquire debt; or dispose of investment properties. 103 91 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 Group Structure Group Structure This section provides information about the Group's structure including parent entity information, Group Structure This section provides information about the Group's structure including parent entity information, information about controlled entities (subsidiaries) and business combination information relating to the This section provides information about the Group's structure including parent entity information, information about controlled entities (subsidiaries) and business combination information relating to the acquisition of controlled entities. information about controlled entities (subsidiaries) and business combination information relating to the acquisition of controlled entities. acquisition of controlled entities. 17. Parent entity 17. Parent entity 17. Parent entity OVERVIEW OVERVIEW OVERVIEW The financial information below on Elanor Investor Group's parent entity Elanor Investors Limited (the The financial information below on Elanor Investor Group's parent entity Elanor Investors Limited (the Company) and the Trust's parent entity Elanor Investment Fund (EIF) as stand-alone entities have been The financial information below on Elanor Investor Group's parent entity Elanor Investors Limited (the Company) and the Trust's parent entity Elanor Investment Fund (EIF) as stand-alone entities have been provided in accordance with the requirements of the Corporations Act 2001. The financial information of the Company) and the Trust's parent entity Elanor Investment Fund (EIF) as stand-alone entities have been provided in accordance with the requirements of the Corporations Act 2001. The financial information of the parent entities of the Group and the EIF Group have been prepared on the same basis as the consolidated provided in accordance with the requirements of the Corporations Act 2001. The financial information of the parent entities of the Group and the EIF Group have been prepared on the same basis as the consolidated financial statements. parent entities of the Group and the EIF Group have been prepared on the same basis as the consolidated financial statements. financial statements. (a) (a) (a) Summarised financial information Summarised financial information Summarised financial information Financial position Current assets Financial position Financial position Non-current assets Current assets Current assets Total Assets Non-current assets Non-current assets Total Assets Total Assets Current liabilities Non-current liabilities Current liabilities Current liabilities Total Liabilities Non-current liabilities Non-current liabilities Total Liabilities Total Liabilities Contributed equity Reserves Contributed equity Contributed equity Retained profits / (accumulated losses) Reserves Reserves Total Equity Retained profits / (accumulated losses) Retained profits / (accumulated losses) Total Equity Total Equity Elanor Investors Elanor Elanor Limited1 Investors Investors 30 June Limited1 Limited1 2023 30 June 30 June $'000 2023 2023 18,172 $'000 $'000 99,017 18,172 18,172 117,189 99,017 99,017 117,189 117,189 14,207 53,711 14,207 14,207 67,918 53,711 53,711 67,918 67,918 72,639 2,815 72,639 72,639 (26,182) 2,815 2,815 49,272 (26,182) (26,182) 49,272 49,272 Elanor Investors Elanor Elanor Limited1 Investors Investors 30 June Limited1 Limited1 2023 30 June 30 June $'000 2023 2023 1,007 $'000 $'000 – 1,007 1,007 1,007 – – 1,007 1,007 Elanor Investors Elanor Elanor Limited1 Investors Investors 30 June Limited1 Limited1 2022 30 June 30 June $'000 2022 2022 29,180 $'000 $'000 87,469 29,180 29,180 116,649 87,469 87,469 116,649 116,649 16,146 53,755 16,146 16,146 69,901 53,755 53,755 69,901 69,901 70,877 3,060 70,877 70,877 (27,189) 3,060 3,060 46,748 (27,189) (27,189) 46,748 46,748 Elanor Investors Elanor Elanor Limited1 Investors Investors 30 June Limited1 Limited1 2022 30 June 30 June $'000 2022 2022 290 $'000 $'000 (347) 290 290 (57) (347) (347) (57) (57) Elanor Investment Elanor Elanor Fund2 Investment Investment 30 June Fund2 Fund2 2023 30 June 30 June $'000 2023 2023 35,616 $'000 $'000 132,912 35,616 35,616 168,528 132,912 132,912 168,528 168,528 3,330 89,120 3,330 3,330 92,450 89,120 89,120 92,450 92,450 105,065 35,358 105,065 105,065 (64,346) 35,358 35,358 76,077 (64,346) (64,346) 76,077 76,077 Elanor Investment Elanor Elanor Fund2 Investment Investment 30 June Fund2 Fund2 2023 30 June 30 June $'000 2023 2023 (7,496) $'000 $'000 – (7,496) (7,496) (7,496) – – (7,496) (7,496) Elanor Investment Elanor Elanor Fund2 Investment Investment 30 June Fund2 Fund2 2022 30 June 30 June $'000 2022 2022 61,077 $'000 $'000 112,200 61,077 61,077 173,277 112,200 112,200 173,277 173,277 5,601 85,662 5,601 5,601 91,263 85,662 85,662 91,263 91,263 100,103 27,484 100,103 100,103 (45,573) 27,484 27,484 82,014 (45,573) (45,573) 82,014 82,014 Elanor Investment Elanor Elanor Fund2 Investment Investment 30 June Fund2 Fund2 2022 30 June 30 June $'000 2022 2022 (12,858) $'000 $'000 20,417 (12,858) (12,858) 7,559 20,417 20,417 7,559 7,559 Financial performance Profit / (loss) for the year Financial performance Financial performance Other comprehensive income for the year Profit / (loss) for the year Profit / (loss) for the year Total comprehensive income for the year Other comprehensive income for the year Other comprehensive income for the year Total comprehensive income for the year 1 Elanor Investors Limited is the parent entity of the Consolidated Group. Total comprehensive income for the year 2 Elanor Investment Fund is the parent entity of the EIF Group. 1 Elanor Investors Limited is the parent entity of the Consolidated Group. 1 Elanor Investors Limited is the parent entity of the Consolidated Group. 2 Elanor Investment Fund is the parent entity of the EIF Group. 2 Elanor Investment Fund is the parent entity of the EIF Group. (b) (b) (b) In April 2023, EHAF exchanged a purchase agreement to acquire Leura Gardens Resort (NSW) for $20.0 In April 2023, EHAF exchanged a purchase agreement to acquire Leura Gardens Resort (NSW) for $20.0 million (inclusive of deposits paid). The acquisition completed on 28 July 2023. As at 30 June 2023 EHAF had In April 2023, EHAF exchanged a purchase agreement to acquire Leura Gardens Resort (NSW) for $20.0 million (inclusive of deposits paid). The acquisition completed on 28 July 2023. As at 30 June 2023 EHAF had the commitment to purchase this hotel. Also, the Group has capital expenditure commitments related to EHAF, million (inclusive of deposits paid). The acquisition completed on 28 July 2023. As at 30 June 2023 EHAF had the commitment to purchase this hotel. Also, the Group has capital expenditure commitments related to EHAF, but not recognised as liabilities, as at 30 June of $0.7 million (2022: $5.9 million). the commitment to purchase this hotel. Also, the Group has capital expenditure commitments related to EHAF, but not recognised as liabilities, as at 30 June of $0.7 million (2022: $5.9 million). 104 but not recognised as liabilities, as at 30 June of $0.7 million (2022: $5.9 million). Commitments Commitments Commitments 92 92 92 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 17. Parent entity (continued) (c) Guarantees provided At balance date Elanor Investors Limited and Elanor Investment Fund had no outstanding guarantees (2022: nil). (d) Contingent liabilities At balance date Elanor Investors Limited and Elanor Investment Fund had no contingent liabilities (2022: nil). 18. Subsidiaries and Controlled entities This note provides information about the Group's subsidiaries and controlled entities. Details of the Group's material subsidiaries at the end of the reporting year are as follows: Elanor Investors Limited Name of Subsidiary Principal activity Place of incorporation and operation Elanor Asset Services Pty Limited1 Elanor Funds Management Limited1 Elanor Operations Pty Limited1 Elanor Hotel Operations Pty Limited Elanor Investment Nominees Pty Limited1 Asset services Responsible entity Operational services Operational services Trustee services Elanor Waverley Property Nominees Pty Limited1 Trustee services Elanor Investment Holdings Pty Limited1 Elanor Management Pty Limited1 Cougal Street Property Trust1 Country Place Management Pty Limited1 Albany Hotel Management Pty Limited1 Cradle Mountain Lodge Pty Limited2 Wollongong Hotel Management Pty Limited2 Port Macquarie Hotel Management Pty Limited2 Tall Trees Hotel Management Pty Limited2 Holding company Holding company Landholder Hotel operator Hotel operator Hotel operator Hotel operator Hotel operator Hotel operator Pavilion Wagga Wagga Hotel Management Pty Limited2 Hotel operator Parklands Resort Hotel Management Pty Limited2 Hotel operator EMPR II Management Pty Limited2 Holding company Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Proportion of ownership interest and voting power by the Group 30 June 2023 30 June 2022 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 31% 31% 31% 31% 31% 31% 31% 31% 100% 100% 100% 100% 100% 100% 100% 100% 100% 0% 35% 35% 35% 35% 35% 35% 35% 35% 1 Elanor Investors Limited (“EIL”) is the head entity within the EIL tax-consolidated group. The companies in which EIL has 100% ownership are members of the EIL tax-consolidated group. 2 EMPR II Management Pty Limited is the head entity of the old EMPR II tax-consolidated group. 105 93 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 18. Subsidiaries and Controlled entities (continued) Elanor Investors Limited (continued) Name of Subsidiary Principal activity Place of incorporation and operation Eaglehawk Hotel Management Pty Limited3 Narrabundah Hotel Management Pty Limited3 Byron Bay Hotel Management Pty Limited3 Elanor Hotel Accommodation Limited (formerly EMPR Management Pty Limited3) Elanor Hotel Accommodation II Limited (formerly Elanor Luxury Hotel Fund Pty Limited4) Mayfair Hotel Management Pty Ltd4 Wakefield Street Hotel Management Pty Ltd4 Cradle Mountain Lodge Management II Pty Ltd4 Barossa Weintal Hotel Management Pty Ltd Clare Country Club Management Pty Ltd Estate Tuscany Hotel Management Pty Ltd4 Yering Hotel Management Pty Ltd4 Kangaroo Valley Hotel Management Pty Ltd4 Tamworth Hotel Management Pty Ltd4 Hotel operator Hotel operator Hotel operator Holding company Australia Australia Australia Australia Hotel operator Hotel operator Hotel operator Hotel operator Hotel operator Hotel operator Hotel operator Hotel operator Hotel operator Australia Australia Australia Australia Australia Australia Australia Australia Australia Elanor Wildlife Park Management Pty Ltd Wildlife park operator Australia Mogo Zoo Management Pty Ltd Wildlife park operator Australia Hunter Valley Wildlife Park Management Pty Ltd Wildlife park operator Australia Proportion of ownership interest and voting power by the Group 30 June 2023 30 June 2022 31% 31% 31% 31% 35% 35% 35% 35% 31% 31% 31% 31% 31% 31% 31% 31% 31% 43% 43% 43% 35% 35% 35% 35% 35% 35% 0% 0% 0% 43% 43% 43% Holding company Australia 31% 35% 3 Elanor Hotel Accommodation Limited (EHAF Company I/ previously named 'EMPR Management Pty Limited') is the head entity of the EHAF tax-consolidated group. 4 Elanor Hotel Accommodation II Limited (EHAF Company II/ previously named 'Elanor Luxury Hotel Fund Pty Limited') is the head entity of the EHAF Company II tax-consolidated group. EIL does not have a 100% ownership in EHAF Company II (only rounded up to 100% in the above table), and hence this entity is not part of the EIL tax-consolidated group. 106 94 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 18. Subsidiaries and Controlled entities (continued) Elanor Investment Fund Name of Subsidiary Elanor Investment Trust Country Place Property Trust Albany Hotel Syndicate Wollongong Hotel Syndicate Elanor Hotel Accommodation Fund II (formerly Elanor Metro and Prime Regional Hotel Fund II) Wollongong Hotel Property Trust Port Macquarie Property Trust Tall Trees Property Trust Pavilion Wagga Wagga Property Trust Parklands Resort Property Trust Narrabundah Property Trust Byron Bay Hotel Property Trust Elanor Hotel Accommodation Fund I (formerly Elanor Metro and Prime Regional Hotel Fund) Elanor Hotel Accommodation Fund III (formerly Elanor Luxury Hotel Fund) Mayfair Hotel Property Trust Wakefield Street Hotel Property Trust Estate Tuscany Property Trust Cradle Mountain Lodge Property Trust Barossa Weintal Hotel Property Trust Clare Country Club Property Trust Tamworth Hotel Property Trust Yering Property Trust Kangaroo Valley Property Trust Bluewater Square Syndicate Stirling Street Syndicate Elanor Wildlife Park Fund Mogo Zoo Property Trust Principal activity Place of incorporation and operation Co-investment in Managed Funds Australia Hotel landholder Hotel landholder Hotel landholder Hotel landholder Hotel landholder Hotel landholder Hotel landholder Hotel landholder Hotel landholder Hotel landholder Hotel landholder Hotel landholder Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Proportion of ownership interest and voting power by the Group 30 June 2023 30 June 2022 100% 100% 100% 31% 31% 31% 31% 31% 31% 31% 31% 31% 31% 31% 0% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% 35% Hotel landholder Australia 31% 35% Hotel landholder Hotel landholder Hotel landholder Hotel landholder Hotel landholder Hotel landholder Hotel landholder Hotel landholder Hotel landholder Shopping centre Shopping centre Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Wildlife park landholder Australia Wildlife park landholder Australia Hunter Valley Wildlife Park Property Trust Wildlife park landholder Australia 95 31% 31% 31% 31% 31% 31% 31% 31% 31% 42% 43% 43% 43% 43% 35% 35% 35% 35% 35% 35% 0% 0% 0% 42% 43% 43% 43% 43% 107 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 19. Trade and other receivables OVERVIEW This note provides further information about assets that are incidental to the Group's trading activities, being trade and other receivables. Refer to Note 16(b) for discussion on the Group's management of credit risk, including that of the Group's trade and other receivables. Current Trade receivables Other receivables Provision for expected credit loss Total current Non-current Contract assets Total non-current Total trade and other receivables 20. Payables and other liabilities OVERVIEW Consolidated Consolidated Group 30 June 2022 $'000 Group 30 June 2023 $'000 15,621 4,406 (1,870) 18,157 16,979 1,976 (1,302) 17,653 3,618 3,618 4,545 4,545 21,775 22,198 This note provides further information about liabilities that are incidental to the Group's trading activities, being payables, other liabilities and provisions. Consolidated Consolidated Group 30 June 2022 $'000 5,107 7,581 2,881 15,569 Group 30 June 2023 $'000 5,947 9,874 2,166 17,987 Payables Trade creditors Accrued expenses GST payable Total payables 108 96 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 20. Payables and other liabilities (continued) Other liabilities Cash held in trust1 Distribution payable Distribution payable by consolidated Funds2 Other liabilities3 Total other current liabilities Consolidated Consolidated Group 30 June 2022 $'000 – 5,397 4,418 373 Group 30 June 2023 $'000 3,163 2,015 1,246 10,232 16,656 10,188 1 The cash held in trust balance is cash held on behalf of a related entity and was transferred to that entity subsequent to balance date. 2 The distribution payable is related to distributions declared by the consolidated Funds for the financial year ending 30 June 2023 (2022: included the guaranteed distribution payable by EHAF to the fund's investors). 3 $9.9 million included in Other liabilities represents arrangements with investors to acquire units in Managed Funds. Provisions Current Provision for annual leave Provision for long service leave Total current Non-current Provision for long service leave Total non-current Total provisions ACCOUNTING POLICY Consolidated Consolidated Group 30 June 2022 $'000 Group 30 June 2023 $'000 3,733 1,668 5,401 296 296 3,013 1,354 4,367 196 196 5,697 4,563 Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (where the effect of the time value of money is material). When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received, and the amount of the receivable can be measured reliably. 109 97 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 20. Payables and other liabilities (continued) ACCOUNTING POLICY (continued) Employee benefits A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave when it is probable that settlement will be required, and they are capable of being measured reliably. Liabilities recognised in respect of short-term employee benefits, are measured at their nominal values using the remuneration rate expected to apply at the time of settlement. Liabilities recognised in respect of long term employee benefits are measured as the present value of the estimated future cash outflows, using a high quality Corporate Bond rate as the discount rate, to be made in respect of services provided by employees up to reporting date. 21. Intangible assets OVERVIEW This note sets out the Intangible assets of the Group. Consolidated Group At 30 June 2021 Additions Amortisation charge At 30 June 2022 Additions Amortisation charge At 30 June 2023 Management rights $'000 450 – (150) 300 – (150) 150 Software $'000 878 564 (294) 1,148 571 (391) 1,328 Total $'000 1,328 564 (444) 1,448 571 (541) 1,478 Management rights represent the acquisition of funds management rights and associated licences at IPO for $1.5 million. At IPO, the estimated life of the acquired funds management rights was 10 years. ACCOUNTING POLICY Funds management rights Funds management rights have a finite useful life and are carried at cost less accumulated amortisation and impairment losses. Amortisation is calculated using the straight-line method to allocate the cost of licenses over their estimated useful lives of 10 years. Software Software expenditure is capitalised and recognised as finite life intangibles and is amortised using the straight- line method over its estimated life of 5 years. 110 98 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 22. Government grants During the year, the Group's Hotels, Tourism and Leisure Managed Funds (consolidated in the Group financial statements) received or accrued a total of $1.1 million (2022: $0.6 million) of government grants. ACCOUNTING POLICY Government grants are recognised when there is reasonable assurance the group will comply with the conditions attaching to them and the grant will be received. 23. Commitments OVERVIEW This note sets out the material commitments of the Group. Contingent liabilities and commitments In April 2023, EHAF exchanged a purchase agreement to acquire Leura Gardens Resort (NSW) for $20.0 million (inclusive of deposits paid). The acquisition completed on 28 July 2023. Additionally, the Group has capital expenditure commitments related to EHAF, but not recognised as liabilities, as at 30 June 2023 of $0.7 million (30 June 2022: $5.9 million). Lease commitments: the Group as lessor The Group has non-cancellable leases in respect of premises. The leases are for a duration of between 1 to 10 years and are classified as operating leases. The minimum lease commitments receivable are as follows: Within one year Year 2 Year 3 Year 4 Year 5 Later than 5 years Total lease commitments Consolidated Consolidated Group 30 June 2022 $'000 7,057 6,773 2,697 2,214 2,081 5,018 25,840 Group 30 June 2023 $'000 7,056 2,911 2,375 2,054 1,859 2,148 18,403 In the opinion of the Directors, there were no other commitments at the end of the reporting period. 111 99 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ELANOR INVESTORS GROUP FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 Notes to the Consolidated Financial Statements 24. Share-based payments 24. Share-based payments For the year ended 30 June 2023 24. Share-based payments 24. Share-based payments 24. Share-based payments OVERVIEW 24. Share-based payments 24. Share-based payments 24. Share-based payments OVERVIEW OVERVIEW 24. Share-based payments 24. Share-based payments OVERVIEW 24. Share-based payments 24. Share-based payments OVERVIEW 24. Share-based payments 24. Share-based payments The Group has short term and long-term ownership-based compensation schemes for executives and senior OVERVIEW OVERVIEW The Group has short term and long-term ownership-based compensation schemes for executives and senior OVERVIEW The Group has short term and long-term ownership-based compensation schemes for executives and senior OVERVIEW OVERVIEW employees. The Group has short term and long-term ownership-based compensation schemes for executives and senior OVERVIEW OVERVIEW The Group has short term and long-term ownership-based compensation schemes for executives and senior employees. OVERVIEW OVERVIEW employees. The Group has short term and long-term ownership-based compensation schemes for executives and senior employees. The Group has short term and long-term ownership-based compensation schemes for executives and senior The Group has short term and long-term ownership-based compensation schemes for executives and senior employees. The Group has short term and long-term ownership-based compensation schemes for executives and senior The Group has short term and long-term ownership-based compensation schemes for executives and senior employees. STI scheme The Group has short term and long-term ownership-based compensation schemes for executives and senior The Group has short term and long-term ownership-based compensation schemes for executives and senior employees. employees. STI scheme The Group has short term and long-term ownership-based compensation schemes for executives and senior The Group has short term and long-term ownership-based compensation schemes for executives and senior STI scheme employees. employees. STI scheme employees. employees. STI scheme employees. employees. The Group has implemented an STI scheme (the STI Scheme), based on an annual profit share. The STI STI scheme STI scheme The Group has implemented an STI scheme (the STI Scheme), based on an annual profit share. The STI STI scheme The Group has implemented an STI scheme (the STI Scheme), based on an annual profit share. The STI STI scheme STI scheme Scheme is based on a profit share pool, to be calculated each year based on the Group's financial performance The Group has implemented an STI scheme (the STI Scheme), based on an annual profit share. The STI STI scheme STI scheme The Group has implemented an STI scheme (the STI Scheme), based on an annual profit share. The STI Scheme is based on a profit share pool, to be calculated each year based on the Group's financial performance STI scheme STI scheme Scheme is based on a profit share pool, to be calculated each year based on the Group's financial performance The Group has implemented an STI scheme (the STI Scheme), based on an annual profit share. The STI for the relevant year. Scheme is based on a profit share pool, to be calculated each year based on the Group's financial performance The Group has implemented an STI scheme (the STI Scheme), based on an annual profit share. The STI The Group has implemented an STI scheme (the STI Scheme), based on an annual profit share. The STI Scheme is based on a profit share pool, to be calculated each year based on the Group's financial performance for the relevant year. The Group has implemented an STI scheme (the STI Scheme), based on an annual profit share. The STI The Group has implemented an STI scheme (the STI Scheme), based on an annual profit share. The STI for the relevant year. Scheme is based on a profit share pool, to be calculated each year based on the Group's financial performance The Group has implemented an STI scheme (the STI Scheme), based on an annual profit share. The STI The Group has implemented an STI scheme (the STI Scheme), based on an annual profit share. The STI for the relevant year. Scheme is based on a profit share pool, to be calculated each year based on the Group's financial performance Scheme is based on a profit share pool, to be calculated each year based on the Group's financial performance The Group has implemented an STI scheme (the STI Scheme), based on an annual profit share. The STI The Group has implemented an STI scheme (the STI Scheme), based on an annual profit share. The STI for the relevant year. Scheme is based on a profit share pool, to be calculated each year based on the Group's financial performance Scheme is based on a profit share pool, to be calculated each year based on the Group's financial performance The purpose of the STI Scheme is to provide an annual bonus arrangement that incentivises and rewards for the relevant year. Scheme is based on a profit share pool, to be calculated each year based on the Group's financial performance Scheme is based on a profit share pool, to be calculated each year based on the Group's financial performance for the relevant year. The purpose of the STI Scheme is to provide an annual bonus arrangement that incentivises and rewards for the relevant year. Scheme is based on a profit share pool, to be calculated each year based on the Group's financial performance Scheme is based on a profit share pool, to be calculated each year based on the Group's financial performance The purpose of the STI Scheme is to provide an annual bonus arrangement that incentivises and rewards for the relevant year. for the relevant year. management for achieving annual pre-tax ROE (Return on Equity) for securityholders in excess of 10% per The purpose of the STI Scheme is to provide an annual bonus arrangement that incentivises and rewards for the relevant year. for the relevant year. The purpose of the STI Scheme is to provide an annual bonus arrangement that incentivises and rewards management for achieving annual pre-tax ROE (Return on Equity) for securityholders in excess of 10% per for the relevant year. for the relevant year. management for achieving annual pre-tax ROE (Return on Equity) for securityholders in excess of 10% per The purpose of the STI Scheme is to provide an annual bonus arrangement that incentivises and rewards annum. The profit share pool is based on 20% of ROE above 10%, 22.5% of the ROE above 15%, 25% of the management for achieving annual pre-tax ROE (Return on Equity) for securityholders in excess of 10% per The purpose of the STI Scheme is to provide an annual bonus arrangement that incentivises and rewards The purpose of the STI Scheme is to provide an annual bonus arrangement that incentivises and rewards management for achieving annual pre-tax ROE (Return on Equity) for securityholders in excess of 10% per annum. The profit share pool is based on 20% of ROE above 10%, 22.5% of the ROE above 15%, 25% of the The purpose of the STI Scheme is to provide an annual bonus arrangement that incentivises and rewards The purpose of the STI Scheme is to provide an annual bonus arrangement that incentivises and rewards annum. The profit share pool is based on 20% of ROE above 10%, 22.5% of the ROE above 15%, 25% of the management for achieving annual pre-tax ROE (Return on Equity) for securityholders in excess of 10% per The purpose of the STI Scheme is to provide an annual bonus arrangement that incentivises and rewards ROE above 17.5% and 30% of the ROE above 20%. The STI Scheme provides that 50% of any awards to The purpose of the STI Scheme is to provide an annual bonus arrangement that incentivises and rewards annum. The profit share pool is based on 20% of ROE above 10%, 22.5% of the ROE above 15%, 25% of the management for achieving annual pre-tax ROE (Return on Equity) for securityholders in excess of 10% per management for achieving annual pre-tax ROE (Return on Equity) for securityholders in excess of 10% per The purpose of the STI Scheme is to provide an annual bonus arrangement that incentivises and rewards The purpose of the STI Scheme is to provide an annual bonus arrangement that incentivises and rewards annum. The profit share pool is based on 20% of ROE above 10%, 22.5% of the ROE above 15%, 25% of the ROE above 17.5% and 30% of the ROE above 20%. The STI Scheme provides that 50% of any awards to management for achieving annual pre-tax ROE (Return on Equity) for securityholders in excess of 10% per management for achieving annual pre-tax ROE (Return on Equity) for securityholders in excess of 10% per ROE above 17.5% and 30% of the ROE above 20%. The STI Scheme provides that 50% of any awards to annum. The profit share pool is based on 20% of ROE above 10%, 22.5% of the ROE above 15%, 25% of the management for achieving annual pre-tax ROE (Return on Equity) for securityholders in excess of 10% per individuals from the profit share pool may be delivered in deferred securities, which vest two years after award, management for achieving annual pre-tax ROE (Return on Equity) for securityholders in excess of 10% per ROE above 17.5% and 30% of the ROE above 20%. The STI Scheme provides that 50% of any awards to annum. The profit share pool is based on 20% of ROE above 10%, 22.5% of the ROE above 15%, 25% of the annum. The profit share pool is based on 20% of ROE above 10%, 22.5% of the ROE above 15%, 25% of the management for achieving annual pre-tax ROE (Return on Equity) for securityholders in excess of 10% per ROE above 17.5% and 30% of the ROE above 20%. The STI Scheme provides that 50% of any awards to management for achieving annual pre-tax ROE (Return on Equity) for securityholders in excess of 10% per individuals from the profit share pool may be delivered in deferred securities, which vest two years after award, annum. The profit share pool is based on 20% of ROE above 10%, 22.5% of the ROE above 15%, 25% of the annum. The profit share pool is based on 20% of ROE above 10%, 22.5% of the ROE above 15%, 25% of the individuals from the profit share pool may be delivered in deferred securities, which vest two years after award, ROE above 17.5% and 30% of the ROE above 20%. The STI Scheme provides that 50% of any awards to annum. The profit share pool is based on 20% of ROE above 10%, 22.5% of the ROE above 15%, 25% of the provided that the employee remains with the Group and maintains minimum performance standards. The annum. The profit share pool is based on 20% of ROE above 10%, 22.5% of the ROE above 15%, 25% of the individuals from the profit share pool may be delivered in deferred securities, which vest two years after award, ROE above 17.5% and 30% of the ROE above 20%. The STI Scheme provides that 50% of any awards to ROE above 17.5% and 30% of the ROE above 20%. The STI Scheme provides that 50% of any awards to annum. The profit share pool is based on 20% of ROE above 10%, 22.5% of the ROE above 15%, 25% of the individuals from the profit share pool may be delivered in deferred securities, which vest two years after award, annum. The profit share pool is based on 20% of ROE above 10%, 22.5% of the ROE above 15%, 25% of the provided that the employee remains with the Group and maintains minimum performance standards. The ROE above 17.5% and 30% of the ROE above 20%. The STI Scheme provides that 50% of any awards to ROE above 17.5% and 30% of the ROE above 20%. The STI Scheme provides that 50% of any awards to provided that the employee remains with the Group and maintains minimum performance standards. The individuals from the profit share pool may be delivered in deferred securities, which vest two years after award, ROE above 17.5% and 30% of the ROE above 20%. The STI Scheme provides that 50% of any awards to holder of the securities is entitled to dividends in the two-year deferral period. ROE above 17.5% and 30% of the ROE above 20%. The STI Scheme provides that 50% of any awards to provided that the employee remains with the Group and maintains minimum performance standards. The individuals from the profit share pool may be delivered in deferred securities, which vest two years after award, individuals from the profit share pool may be delivered in deferred securities, which vest two years after award, ROE above 17.5% and 30% of the ROE above 20%. The STI Scheme provides that 50% of any awards to provided that the employee remains with the Group and maintains minimum performance standards. The ROE above 17.5% and 30% of the ROE above 20%. The STI Scheme provides that 50% of any awards to holder of the securities is entitled to dividends in the two-year deferral period. individuals from the profit share pool may be delivered in deferred securities, which vest two years after award, individuals from the profit share pool may be delivered in deferred securities, which vest two years after award, holder of the securities is entitled to dividends in the two-year deferral period. provided that the employee remains with the Group and maintains minimum performance standards. The individuals from the profit share pool may be delivered in deferred securities, which vest two years after award, individuals from the profit share pool may be delivered in deferred securities, which vest two years after award, holder of the securities is entitled to dividends in the two-year deferral period. provided that the employee remains with the Group and maintains minimum performance standards. The provided that the employee remains with the Group and maintains minimum performance standards. The individuals from the profit share pool may be delivered in deferred securities, which vest two years after award, individuals from the profit share pool may be delivered in deferred securities, which vest two years after award, holder of the securities is entitled to dividends in the two-year deferral period. provided that the employee remains with the Group and maintains minimum performance standards. The provided that the employee remains with the Group and maintains minimum performance standards. The The Elanor Investors Group Board monitors the appropriateness of the profit share scheme and any holder of the securities is entitled to dividends in the two-year deferral period. provided that the employee remains with the Group and maintains minimum performance standards. The provided that the employee remains with the Group and maintains minimum performance standards. The holder of the securities is entitled to dividends in the two-year deferral period. The Elanor Investors Group Board monitors the appropriateness of the profit share scheme and any holder of the securities is entitled to dividends in the two-year deferral period. provided that the employee remains with the Group and maintains minimum performance standards. The provided that the employee remains with the Group and maintains minimum performance standards. The The Elanor Investors Group Board monitors the appropriateness of the profit share scheme and any holder of the securities is entitled to dividends in the two-year deferral period. holder of the securities is entitled to dividends in the two-year deferral period. distribution of the profit share pool will be at the Board's discretion, taking into consideration the forecast and The Elanor Investors Group Board monitors the appropriateness of the profit share scheme and any holder of the securities is entitled to dividends in the two-year deferral period. holder of the securities is entitled to dividends in the two-year deferral period. The Elanor Investors Group Board monitors the appropriateness of the profit share scheme and any distribution of the profit share pool will be at the Board's discretion, taking into consideration the forecast and holder of the securities is entitled to dividends in the two-year deferral period. holder of the securities is entitled to dividends in the two-year deferral period. distribution of the profit share pool will be at the Board's discretion, taking into consideration the forecast and The Elanor Investors Group Board monitors the appropriateness of the profit share scheme and any actual financial performance and position of the Group. distribution of the profit share pool will be at the Board's discretion, taking into consideration the forecast and The Elanor Investors Group Board monitors the appropriateness of the profit share scheme and any The Elanor Investors Group Board monitors the appropriateness of the profit share scheme and any distribution of the profit share pool will be at the Board's discretion, taking into consideration the forecast and actual financial performance and position of the Group. The Elanor Investors Group Board monitors the appropriateness of the profit share scheme and any The Elanor Investors Group Board monitors the appropriateness of the profit share scheme and any actual financial performance and position of the Group. distribution of the profit share pool will be at the Board's discretion, taking into consideration the forecast and The Elanor Investors Group Board monitors the appropriateness of the profit share scheme and any The Elanor Investors Group Board monitors the appropriateness of the profit share scheme and any actual financial performance and position of the Group. distribution of the profit share pool will be at the Board's discretion, taking into consideration the forecast and distribution of the profit share pool will be at the Board's discretion, taking into consideration the forecast and The Elanor Investors Group Board monitors the appropriateness of the profit share scheme and any The Elanor Investors Group Board monitors the appropriateness of the profit share scheme and any actual financial performance and position of the Group. distribution of the profit share pool will be at the Board's discretion, taking into consideration the forecast and distribution of the profit share pool will be at the Board's discretion, taking into consideration the forecast and LTI scheme actual financial performance and position of the Group. distribution of the profit share pool will be at the Board's discretion, taking into consideration the forecast and distribution of the profit share pool will be at the Board's discretion, taking into consideration the forecast and actual financial performance and position of the Group. actual financial performance and position of the Group. LTI scheme distribution of the profit share pool will be at the Board's discretion, taking into consideration the forecast and distribution of the profit share pool will be at the Board's discretion, taking into consideration the forecast and LTI scheme actual financial performance and position of the Group. actual financial performance and position of the Group. LTI scheme actual financial performance and position of the Group. actual financial performance and position of the Group. LTI scheme actual financial performance and position of the Group. actual financial performance and position of the Group. The Group has an LTI scheme (the LTI Scheme), based on an executive loan security plan and an executive LTI scheme LTI scheme The Group has an LTI scheme (the LTI Scheme), based on an executive loan security plan and an executive LTI scheme The Group has an LTI scheme (the LTI Scheme), based on an executive loan security plan and an executive LTI scheme LTI scheme options plan. The Group has an LTI scheme (the LTI Scheme), based on an executive loan security plan and an executive LTI scheme LTI scheme The Group has an LTI scheme (the LTI Scheme), based on an executive loan security plan and an executive options plan. LTI scheme LTI scheme options plan. The Group has an LTI scheme (the LTI Scheme), based on an executive loan security plan and an executive options plan. The Group has an LTI scheme (the LTI Scheme), based on an executive loan security plan and an executive The Group has an LTI scheme (the LTI Scheme), based on an executive loan security plan and an executive options plan. The Group has an LTI scheme (the LTI Scheme), based on an executive loan security plan and an executive The Group has an LTI scheme (the LTI Scheme), based on an executive loan security plan and an executive Under the executive loan security plan awards (comprising the loan of funds to eligible Elanor employees to options plan. The Group has an LTI scheme (the LTI Scheme), based on an executive loan security plan and an executive The Group has an LTI scheme (the LTI Scheme), based on an executive loan security plan and an executive options plan. Under the executive loan security plan awards (comprising the loan of funds to eligible Elanor employees to options plan. The Group has an LTI scheme (the LTI Scheme), based on an executive loan security plan and an executive The Group has an LTI scheme (the LTI Scheme), based on an executive loan security plan and an executive Under the executive loan security plan awards (comprising the loan of funds to eligible Elanor employees to options plan. options plan. acquire securities which are subject to vesting conditions) have been issued to certain employees. Under the executive loan security plan awards (comprising the loan of funds to eligible Elanor employees to options plan. options plan. Under the executive loan security plan awards (comprising the loan of funds to eligible Elanor employees to acquire securities which are subject to vesting conditions) have been issued to certain employees. options plan. options plan. acquire securities which are subject to vesting conditions) have been issued to certain employees. Under the executive loan security plan awards (comprising the loan of funds to eligible Elanor employees to acquire securities which are subject to vesting conditions) have been issued to certain employees. Under the executive loan security plan awards (comprising the loan of funds to eligible Elanor employees to Under the executive loan security plan awards (comprising the loan of funds to eligible Elanor employees to acquire securities which are subject to vesting conditions) have been issued to certain employees. Under the executive loan security plan awards (comprising the loan of funds to eligible Elanor employees to Under the executive loan security plan awards (comprising the loan of funds to eligible Elanor employees to The limited recourse loan provided by the Group under the loan security plan carries interest of an amount acquire securities which are subject to vesting conditions) have been issued to certain employees. Under the executive loan security plan awards (comprising the loan of funds to eligible Elanor employees to Under the executive loan security plan awards (comprising the loan of funds to eligible Elanor employees to acquire securities which are subject to vesting conditions) have been issued to certain employees. The limited recourse loan provided by the Group under the loan security plan carries interest of an amount acquire securities which are subject to vesting conditions) have been issued to certain employees. Under the executive loan security plan awards (comprising the loan of funds to eligible Elanor employees to Under the executive loan security plan awards (comprising the loan of funds to eligible Elanor employees to The limited recourse loan provided by the Group under the loan security plan carries interest of an amount acquire securities which are subject to vesting conditions) have been issued to certain employees. acquire securities which are subject to vesting conditions) have been issued to certain employees. equal to any cash dividend or distribution but not including any dividend or distribution of capital, or an abnormal The limited recourse loan provided by the Group under the loan security plan carries interest of an amount acquire securities which are subject to vesting conditions) have been issued to certain employees. acquire securities which are subject to vesting conditions) have been issued to certain employees. The limited recourse loan provided by the Group under the loan security plan carries interest of an amount equal to any cash dividend or distribution but not including any dividend or distribution of capital, or an abnormal acquire securities which are subject to vesting conditions) have been issued to certain employees. acquire securities which are subject to vesting conditions) have been issued to certain employees. equal to any cash dividend or distribution but not including any dividend or distribution of capital, or an abnormal The limited recourse loan provided by the Group under the loan security plan carries interest of an amount distribution. equal to any cash dividend or distribution but not including any dividend or distribution of capital, or an abnormal The limited recourse loan provided by the Group under the loan security plan carries interest of an amount The limited recourse loan provided by the Group under the loan security plan carries interest of an amount equal to any cash dividend or distribution but not including any dividend or distribution of capital, or an abnormal distribution. The limited recourse loan provided by the Group under the loan security plan carries interest of an amount The limited recourse loan provided by the Group under the loan security plan carries interest of an amount distribution. equal to any cash dividend or distribution but not including any dividend or distribution of capital, or an abnormal The limited recourse loan provided by the Group under the loan security plan carries interest of an amount The limited recourse loan provided by the Group under the loan security plan carries interest of an amount distribution. equal to any cash dividend or distribution but not including any dividend or distribution of capital, or an abnormal equal to any cash dividend or distribution but not including any dividend or distribution of capital, or an abnormal The limited recourse loan provided by the Group under the loan security plan carries interest of an amount distribution. The limited recourse loan provided by the Group under the loan security plan carries interest of an amount equal to any cash dividend or distribution but not including any dividend or distribution of capital, or an abnormal equal to any cash dividend or distribution but not including any dividend or distribution of capital, or an abnormal In addition to the loan security plan, the Group has implemented an executive option plan comprising rights to distribution. equal to any cash dividend or distribution but not including any dividend or distribution of capital, or an abnormal equal to any cash dividend or distribution but not including any dividend or distribution of capital, or an abnormal distribution. distribution. In addition to the loan security plan, the Group has implemented an executive option plan comprising rights to equal to any cash dividend or distribution but not including any dividend or distribution of capital, or an abnormal equal to any cash dividend or distribution but not including any dividend or distribution of capital, or an abnormal In addition to the loan security plan, the Group has implemented an executive option plan comprising rights to distribution. distribution. acquire securities at a specified exercise price, subject to the achievement of vesting conditions, which may In addition to the loan security plan, the Group has implemented an executive option plan comprising rights to distribution. distribution. In addition to the loan security plan, the Group has implemented an executive option plan comprising rights to acquire securities at a specified exercise price, subject to the achievement of vesting conditions, which may distribution. distribution. acquire securities at a specified exercise price, subject to the achievement of vesting conditions, which may In addition to the loan security plan, the Group has implemented an executive option plan comprising rights to be offered to certain eligible employees (including the Chief Executive Officer, direct reports to the Chief acquire securities at a specified exercise price, subject to the achievement of vesting conditions, which may In addition to the loan security plan, the Group has implemented an executive option plan comprising rights to In addition to the loan security plan, the Group has implemented an executive option plan comprising rights to acquire securities at a specified exercise price, subject to the achievement of vesting conditions, which may be offered to certain eligible employees (including the Chief Executive Officer, direct reports to the Chief In addition to the loan security plan, the Group has implemented an executive option plan comprising rights to In addition to the loan security plan, the Group has implemented an executive option plan comprising rights to be offered to certain eligible employees (including the Chief Executive Officer, direct reports to the Chief acquire securities at a specified exercise price, subject to the achievement of vesting conditions, which may In addition to the loan security plan, the Group has implemented an executive option plan comprising rights to Executive Officer and other selected key executives) as determined by the Board. Executive Options currently In addition to the loan security plan, the Group has implemented an executive option plan comprising rights to be offered to certain eligible employees (including the Chief Executive Officer, direct reports to the Chief acquire securities at a specified exercise price, subject to the achievement of vesting conditions, which may acquire securities at a specified exercise price, subject to the achievement of vesting conditions, which may In addition to the loan security plan, the Group has implemented an executive option plan comprising rights to be offered to certain eligible employees (including the Chief Executive Officer, direct reports to the Chief In addition to the loan security plan, the Group has implemented an executive option plan comprising rights to Executive Officer and other selected key executives) as determined by the Board. Executive Options currently acquire securities at a specified exercise price, subject to the achievement of vesting conditions, which may acquire securities at a specified exercise price, subject to the achievement of vesting conditions, which may Executive Officer and other selected key executives) as determined by the Board. Executive Options currently be offered to certain eligible employees (including the Chief Executive Officer, direct reports to the Chief acquire securities at a specified exercise price, subject to the achievement of vesting conditions, which may on issue are to the Chief Executive Officer only and equate to over 2.0 million securities. acquire securities at a specified exercise price, subject to the achievement of vesting conditions, which may Executive Officer and other selected key executives) as determined by the Board. Executive Options currently be offered to certain eligible employees (including the Chief Executive Officer, direct reports to the Chief be offered to certain eligible employees (including the Chief Executive Officer, direct reports to the Chief acquire securities at a specified exercise price, subject to the achievement of vesting conditions, which may acquire securities at a specified exercise price, subject to the achievement of vesting conditions, which may Executive Officer and other selected key executives) as determined by the Board. Executive Options currently on issue are to the Chief Executive Officer only and equate to over 2.0 million securities. be offered to certain eligible employees (including the Chief Executive Officer, direct reports to the Chief be offered to certain eligible employees (including the Chief Executive Officer, direct reports to the Chief on issue are to the Chief Executive Officer only and equate to over 2.0 million securities. Executive Officer and other selected key executives) as determined by the Board. Executive Options currently be offered to certain eligible employees (including the Chief Executive Officer, direct reports to the Chief be offered to certain eligible employees (including the Chief Executive Officer, direct reports to the Chief on issue are to the Chief Executive Officer only and equate to over 2.0 million securities. Executive Officer and other selected key executives) as determined by the Board. Executive Options currently Executive Officer and other selected key executives) as determined by the Board. Executive Options currently be offered to certain eligible employees (including the Chief Executive Officer, direct reports to the Chief be offered to certain eligible employees (including the Chief Executive Officer, direct reports to the Chief on issue are to the Chief Executive Officer only and equate to over 2.0 million securities. Executive Officer and other selected key executives) as determined by the Board. Executive Options currently Executive Officer and other selected key executives) as determined by the Board. Executive Options currently The purpose of the LTI Scheme is to assist in attracting, motivating and retaining key management and on issue are to the Chief Executive Officer only and equate to over 2.0 million securities. Executive Officer and other selected key executives) as determined by the Board. Executive Options currently Executive Officer and other selected key executives) as determined by the Board. Executive Options currently on issue are to the Chief Executive Officer only and equate to over 2.0 million securities. The purpose of the LTI Scheme is to assist in attracting, motivating and retaining key management and on issue are to the Chief Executive Officer only and equate to over 2.0 million securities. Executive Officer and other selected key executives) as determined by the Board. Executive Options currently Executive Officer and other selected key executives) as determined by the Board. Executive Options currently The purpose of the LTI Scheme is to assist in attracting, motivating and retaining key management and on issue are to the Chief Executive Officer only and equate to over 2.0 million securities. on issue are to the Chief Executive Officer only and equate to over 2.0 million securities. employees. The LTI Scheme operates by providing key management and employees with the opportunity to The purpose of the LTI Scheme is to assist in attracting, motivating and retaining key management and on issue are to the Chief Executive Officer only and equate to over 2.0 million securities. on issue are to the Chief Executive Officer only and equate to over 2.0 million securities. The purpose of the LTI Scheme is to assist in attracting, motivating and retaining key management and employees. The LTI Scheme operates by providing key management and employees with the opportunity to on issue are to the Chief Executive Officer only and equate to over 2.0 million securities. on issue are to the Chief Executive Officer only and equate to over 2.0 million securities. employees. The LTI Scheme operates by providing key management and employees with the opportunity to The purpose of the LTI Scheme is to assist in attracting, motivating and retaining key management and participate in the future performance of Group securities. The vesting conditions of LTI plans and related employees. The LTI Scheme operates by providing key management and employees with the opportunity to The purpose of the LTI Scheme is to assist in attracting, motivating and retaining key management and The purpose of the LTI Scheme is to assist in attracting, motivating and retaining key management and employees. The LTI Scheme operates by providing key management and employees with the opportunity to participate in the future performance of Group securities. The vesting conditions of LTI plans and related The purpose of the LTI Scheme is to assist in attracting, motivating and retaining key management and The purpose of the LTI Scheme is to assist in attracting, motivating and retaining key management and participate in the future performance of Group securities. The vesting conditions of LTI plans and related employees. The LTI Scheme operates by providing key management and employees with the opportunity to The purpose of the LTI Scheme is to assist in attracting, motivating and retaining key management and awards include both a service-based hurdle and an absolute total securityholder return (TSR) performance The purpose of the LTI Scheme is to assist in attracting, motivating and retaining key management and participate in the future performance of Group securities. The vesting conditions of LTI plans and related employees. The LTI Scheme operates by providing key management and employees with the opportunity to employees. The LTI Scheme operates by providing key management and employees with the opportunity to The purpose of the LTI Scheme is to assist in attracting, motivating and retaining key management and The purpose of the LTI Scheme is to assist in attracting, motivating and retaining key management and participate in the future performance of Group securities. The vesting conditions of LTI plans and related awards include both a service-based hurdle and an absolute total securityholder return (TSR) performance employees. The LTI Scheme operates by providing key management and employees with the opportunity to employees. The LTI Scheme operates by providing key management and employees with the opportunity to awards include both a service-based hurdle and an absolute total securityholder return (TSR) performance participate in the future performance of Group securities. The vesting conditions of LTI plans and related employees. The LTI Scheme operates by providing key management and employees with the opportunity to hurdle. The service-based hurdle is 2, 3 and 4 years in the case of the loan security plan. The TSR is 10% per employees. The LTI Scheme operates by providing key management and employees with the opportunity to awards include both a service-based hurdle and an absolute total securityholder return (TSR) performance participate in the future performance of Group securities. The vesting conditions of LTI plans and related participate in the future performance of Group securities. The vesting conditions of LTI plans and related employees. The LTI Scheme operates by providing key management and employees with the opportunity to awards include both a service-based hurdle and an absolute total securityholder return (TSR) performance employees. The LTI Scheme operates by providing key management and employees with the opportunity to hurdle. The service-based hurdle is 2, 3 and 4 years in the case of the loan security plan. The TSR is 10% per participate in the future performance of Group securities. The vesting conditions of LTI plans and related participate in the future performance of Group securities. The vesting conditions of LTI plans and related hurdle. The service-based hurdle is 2, 3 and 4 years in the case of the loan security plan. The TSR is 10% per awards include both a service-based hurdle and an absolute total securityholder return (TSR) performance participate in the future performance of Group securities. The vesting conditions of LTI plans and related annum for the first year and 8% per annum thereafter in the case of the loan security plan and 15% per annum participate in the future performance of Group securities. The vesting conditions of LTI plans and related hurdle. The service-based hurdle is 2, 3 and 4 years in the case of the loan security plan. The TSR is 10% per awards include both a service-based hurdle and an absolute total securityholder return (TSR) performance awards include both a service-based hurdle and an absolute total securityholder return (TSR) performance participate in the future performance of Group securities. The vesting conditions of LTI plans and related hurdle. The service-based hurdle is 2, 3 and 4 years in the case of the loan security plan. The TSR is 10% per participate in the future performance of Group securities. The vesting conditions of LTI plans and related annum for the first year and 8% per annum thereafter in the case of the loan security plan and 15% per annum awards include both a service-based hurdle and an absolute total securityholder return (TSR) performance awards include both a service-based hurdle and an absolute total securityholder return (TSR) performance annum for the first year and 8% per annum thereafter in the case of the loan security plan and 15% per annum hurdle. The service-based hurdle is 2, 3 and 4 years in the case of the loan security plan. The TSR is 10% per awards include both a service-based hurdle and an absolute total securityholder return (TSR) performance in the case of the options plan. awards include both a service-based hurdle and an absolute total securityholder return (TSR) performance annum for the first year and 8% per annum thereafter in the case of the loan security plan and 15% per annum hurdle. The service-based hurdle is 2, 3 and 4 years in the case of the loan security plan. The TSR is 10% per hurdle. The service-based hurdle is 2, 3 and 4 years in the case of the loan security plan. The TSR is 10% per awards include both a service-based hurdle and an absolute total securityholder return (TSR) performance annum for the first year and 8% per annum thereafter in the case of the loan security plan and 15% per annum awards include both a service-based hurdle and an absolute total securityholder return (TSR) performance in the case of the options plan. hurdle. The service-based hurdle is 2, 3 and 4 years in the case of the loan security plan. The TSR is 10% per hurdle. The service-based hurdle is 2, 3 and 4 years in the case of the loan security plan. The TSR is 10% per in the case of the options plan. annum for the first year and 8% per annum thereafter in the case of the loan security plan and 15% per annum hurdle. The service-based hurdle is 2, 3 and 4 years in the case of the loan security plan. The TSR is 10% per hurdle. The service-based hurdle is 2, 3 and 4 years in the case of the loan security plan. The TSR is 10% per in the case of the options plan. annum for the first year and 8% per annum thereafter in the case of the loan security plan and 15% per annum annum for the first year and 8% per annum thereafter in the case of the loan security plan and 15% per annum hurdle. The service-based hurdle is 2, 3 and 4 years in the case of the loan security plan. The TSR is 10% per in the case of the options plan. hurdle. The service-based hurdle is 2, 3 and 4 years in the case of the loan security plan. The TSR is 10% per annum for the first year and 8% per annum thereafter in the case of the loan security plan and 15% per annum annum for the first year and 8% per annum thereafter in the case of the loan security plan and 15% per annum No LTI's were issued to KMP's in FY23 (2022: Nil). in the case of the options plan. annum for the first year and 8% per annum thereafter in the case of the loan security plan and 15% per annum annum for the first year and 8% per annum thereafter in the case of the loan security plan and 15% per annum in the case of the options plan. in the case of the options plan. No LTI's were issued to KMP's in FY23 (2022: Nil). annum for the first year and 8% per annum thereafter in the case of the loan security plan and 15% per annum annum for the first year and 8% per annum thereafter in the case of the loan security plan and 15% per annum No LTI's were issued to KMP's in FY23 (2022: Nil). in the case of the options plan. in the case of the options plan. No LTI's were issued to KMP's in FY23 (2022: Nil). in the case of the options plan. in the case of the options plan. No LTI's were issued to KMP's in FY23 (2022: Nil). in the case of the options plan. in the case of the options plan. TSR was selected as the LTI performance measure to ensure an alignment between the securityholder return No LTI's were issued to KMP's in FY23 (2022: Nil). No LTI's were issued to KMP's in FY23 (2022: Nil). No LTI's were issued to KMP's in FY23 (2022: Nil). TSR was selected as the LTI performance measure to ensure an alignment between the securityholder return TSR was selected as the LTI performance measure to ensure an alignment between the securityholder return No LTI's were issued to KMP's in FY23 (2022: Nil). No LTI's were issued to KMP's in FY23 (2022: Nil). and reward for executives. TSR was selected as the LTI performance measure to ensure an alignment between the securityholder return No LTI's were issued to KMP's in FY23 (2022: Nil). No LTI's were issued to KMP's in FY23 (2022: Nil). TSR was selected as the LTI performance measure to ensure an alignment between the securityholder return and reward for executives. No LTI's were issued to KMP's in FY23 (2022: Nil). No LTI's were issued to KMP's in FY23 (2022: Nil). and reward for executives. TSR was selected as the LTI performance measure to ensure an alignment between the securityholder return and reward for executives. TSR was selected as the LTI performance measure to ensure an alignment between the securityholder return TSR was selected as the LTI performance measure to ensure an alignment between the securityholder return 112 and reward for executives. TSR was selected as the LTI performance measure to ensure an alignment between the securityholder return TSR was selected as the LTI performance measure to ensure an alignment between the securityholder return and reward for executives. TSR was selected as the LTI performance measure to ensure an alignment between the securityholder return TSR was selected as the LTI performance measure to ensure an alignment between the securityholder return 100 and reward for executives. and reward for executives. TSR was selected as the LTI performance measure to ensure an alignment between the securityholder return TSR was selected as the LTI performance measure to ensure an alignment between the securityholder return and reward for executives. and reward for executives. 100 100 and reward for executives. and reward for executives. 100 and reward for executives. and reward for executives. 100 100 100 100 100 100 100 100 100 100 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 24. Share-based payments (continued) LTI scheme (continued) The following share-based payment arrangements were in existence during the current reporting period: Employee Loan Securities Award Type Loan securities Loan securities Loan securities Loan securities Number Granted 1,975,000 750,000 11,725,000 5,000,000 Grant Date 9/09/2022 6/08/2021 28/08/2020 21/10/2020 End of Vesting Period 30/06/2026 30/06/2025 30/06/2024 30/06/2024 Vesting Conditions1 Service & market Service & market Service & market Service & market 1 Service and market conditions include financial and non-financial targets along with a deferred vesting period. Options Security Price at Grant Date $1.76 $1.92 $1.15 $1.33 Fair Value at Grant Date $0.22 $0.23 $0.12 $0.19 Award Type Options Tranche 2 Number Granted 2,000,000 Grant Date 21/10/2020 End of Vesting Period 30/06/2023 Vesting Conditions1 Service & market Exercise Price $1.65 1 Service and market conditions include financial and non-financial targets along with a deferred vesting period. Fair Value at Grant Date $0.07 No options were granted in FY23. The Group recognises the fair value at the grant date of equity settled securities above as an employee benefit expense proportionally over the vesting period with a corresponding increase in equity. Fair value of options is measured at grant date using a Monte-Carlo Simulation and Binomial option pricing model, performed by an independent valuer, and models the future price of the Group's stapled securities. Securities issued under STI plan Award Type FY19 STI Tranche 2 FY20 STI Tranche 1 FY20 STI Tranche 2 FY22 STI Tranche 1 - CEO FY22 STI Tranche 1 FY23 STI Tranche 1 Number Granted 317,165 2,092,764 1,395,176 85,080 856,229 1,336,940 Grant Date 19/12/2019 29/06/2020 18/12/2020 22/11/2021 30/09/2021 15/08/2022 1 Service conditions include a deferred vesting period. Vesting Date 19/12/2021 29/06/2022 18/12/2022 30/09/2023 30/09/2023 15/08/2024 Security Price at Vesting Allocation Date $2.15 $1.19 $1.19 $2.06 $2.06 $1.77 Conditions1 Service Service Service Service Service Service Fair Value at Grant Date $2.12 $1.17 $1.88 $2.34 $2.06 $1.77 The total expense recognised during the year in relation to the Group's equity settled share-based payments was $3,440,777 (2022: $3,770,702). 113 101 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 24. Share-based payments (continued) ACCOUNTING POLICY Share-Based Payments In accordance with AASB 2 Share-based Payment, 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, with a corresponding increase in equity. 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, if any, is recognised in the profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve. 25. Related parties OVERVIEW Related parties are persons or entities that are related to the Group as defined by AASB 124 Related Party Disclosures. This note provides information about transactions with related parties during the year. Elanor Investors Group Controlled entities Interests in controlled entities are set out in Note 18. Responsible Entity fees Elanor Funds Management Limited (EFML) is the Responsible Entity of the Elanor Investment Fund (EIF) (a wholly owned subsidiary of Elanor Investors Limited). In accordance with the Constitution of Elanor Investment Fund (EIF), EFML is entitled to receive a management fee equal to its reasonable costs in providing its services as Responsible Entity for which it is not otherwise reimbursed. For the year ended 30 June 2023, this amount is $129,996 (2022: $129,996). EFML makes payments for EIF from time to time. These payments are incurred by EFML in properly performing or exercising its powers or duties in relation to EIF. EFML has a right of indemnity from EIF for any liability incurred by EFML in properly performing or exercising any of its powers or duties in relation to EIF. The amount reimbursed for the year ended 30 June 2023 was nil (2022: nil). EFML acted as Trustee and Manager and/or Custodian of a number of registered and unregistered managed investment schemes, including schemes where the Group also held an investment. EFML is entitled to fee income, as set out in the Constitution of each scheme, including management fees, acquisition fees, equity raise fees and performance fees. EFML is also entitled to be reimbursed from each Scheme for costs incurred in properly performing or exercising any of its powers or duties in relation to each Scheme. 114 102 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 25. Related parties (continued) A summary of the income earned during the year from these managed investment schemes is provided below: Riverside Plaza Syndicate Elanor Commercial Property Fund Elanor Healthcare Real Estate Fund Elanor Property Income Fund Warrawong Plaza Syndicate Riverton Forum Fund Tweed Mall Mixed - Use Real Estate Fund Clifford Gardens Fund Harris Street Fund Waverley Gardens Fund Belconnen Markets Syndicate Fairfield Centre Syndicate Hunters Plaza Syndicate Burke Street Fund Total Consolidated Consolidated Group 30 June 2022 $ 1,137,641 5,979,712 3,141,069 5,210,146 4,743,724 – – 1,636,393 2,327,252 1,382,481 1,127,858 688,193 967,039 364,532 28,706,040 Group 30 June 2023 $ 7,721,553 5,236,126 3,906,318 3,160,394 3,054,400 2,114,401 1,865,272 1,768,722 1,748,196 1,187,041 1,081,986 926,960 685,235 587,101 35,043,705 Outstanding receivables balances with related parties The following balances arising through the normal course of business were due from related parties at balance date: Management Fees Other financial assets Other receivables Total Consolidated Consolidated Group 30 June 2022 $ 2,103,889 2,186,304 1,257,022 5,547,215 Group 30 June 2023 $ 5,472,865 4,095,236 2,204,056 11,772,157 115 103 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 25. Related parties (continued) Key Management Personnel (KMP) Executive Mr. Glenn Willis Mr. Paul Siviour Mr. Symon Simmons Non-Executive Mr. Paul Bedbrook Mr. Nigel Ampherlaw Mr. Anthony Fehon Mr. Su Kiat Lim Mrs. Karyn Baylis Position Managing Director and Chief Executive Officer Chief Operating Officer Chief Financial Officer and Company Secretary Position Independent Chairman and Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Non-Executive Director Independent Non-Executive Director The aggregate compensation made to the Key Management Personnel of the Group is set out below: Short term benefits Long term benefits Post-employment benefits Share-based payment Total 26. Significant events Consolidated Consolidated Group 30 June 2022 $ 2,843,551 112,685 135,976 1,625,231 4,717,443 Group 30 June 2023 $ 2,994,434 318,295 108,324 1,175,201 4,596,254 The significant funds management initiatives completed during the year included: the privatisation and delisting of the Elanor Retail Property Fund (ASX: ERF) and launch of the open- ended, unlisted, multi-sector Elanor Property Income Fund (EPIF) with an initial portfolio value of $117 million; the acquisition of the Tweed Mall shopping Centre by the newly established Tweed Mall Mixed-use Real Estate Fund for $87 million; the recapitalisation of the $289 million Elanor Healthcare Real Estate Fund (EHRE) in December 2022 (providing a full liquidity event for investors) and establishment of a partnership with an Asian-based institutional real estate investor to grow EHRE’s portfolio of core healthcare real estate assets; the repositioning and refinancing of the Riverside Plaza shopping centre following execution of the value-add strategy at the Centre – generating a valuation uplift of $49 million and a capital return to investors of 52 cents per unit (reflecting an IRR of 45% since the Fund’s inception); the acquisition of four hotels, Sanctuary Inn Tamworth (NSW), Chateau Yering Hotel (Victoria), Wildes Boutique Hotel (NSW), and Leura Gardens Resort (NSW) by EHAF for a combined $67.3 million (Leura Gardens Resort settled on 28 July 2023). Post-acquisition of Leura, EHAF has a diverse portfolio of 19 high investment quality accommodation hotel assets with a portfolio value of approximately $470 million; • • • • • 116 104 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 26. Significant events (continued) • • • the acquisition by the Group of the Country Place conference and events centre located in the Dandenong Ranges (Victoria) in November 2022, for $6 million. The conference facility is being converted and repositioned into a significant regional accommodation hotel suitable for EHAF, and has recently been rebranded as Panorama Retreat and Resort; acquisition of Riverton Forum shopping centre, a dominant convenience-based shopping centre situated on a 6.3 hectare Perth metropolitan site by the newly established Riverton Forum Fund for $98.8 million; and establishment of the Riverside Mixed Use Development Fund for a mixed-use development on a strategic Queanbeyan CBD site. The development, expected to comprise 180 residential dwellings as well as street activated retail, has an estimated total project cost of $67 million. 27. Other accounting policies Rental income The Group is the lessor in a number of operating leases. Rental income arising from operating leases is recognised as revenue on a straight-line basis over the lease term. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the lease asset and recognised as an expense over the term of the lease on the same basis as the lease income. Cash and cash equivalents For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, cash held by property managers in trust, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet. Inventories Inventories, which principally comprise beverage and consumables of the hotel and wildlife park businesses, are stated at the lower of cost and net realisable value. 117 105 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 28. Events occurring after reporting date 28. Events occurring after reporting date 28. Events occurring after reporting date Distribution Distribution Distribution Subsequent to year end, a distribution of 1.62 cents per stapled security (full year distribution 9.13 cents per Subsequent to year end, a distribution of 1.62 cents per stapled security (full year distribution 9.13 cents per Subsequent to year end, a distribution of 1.62 cents per stapled security (full year distribution 9.13 cents per stapled security) has been declared by the Board of Directors. The total distribution amount of $2.0 million will stapled security) has been declared by the Board of Directors. The total distribution amount of $2.0 million will stapled security) has been declared by the Board of Directors. The total distribution amount of $2.0 million will be paid on 31 August 2023 in respect of the six months ended 30 June 2023. be paid on 31 August 2023 in respect of the six months ended 30 June 2023. be paid on 31 August 2023 in respect of the six months ended 30 June 2023. Acquisition of Challenger real estate funds management business Acquisition of Challenger real estate funds management business Acquisition of Challenger real estate funds management business On 7 July 2023, Elanor completed the acquisition of Challenger’s Australian real estate funds management On 7 July 2023, Elanor completed the acquisition of Challenger’s Australian real estate funds management On 7 July 2023, Elanor completed the acquisition of Challenger’s Australian real estate funds management business for a consideration of $37.7 million. As part of the transaction, Elanor and Challenger also entered business for a consideration of $37.7 million. As part of the transaction, Elanor and Challenger also entered business for a consideration of $37.7 million. As part of the transaction, Elanor and Challenger also entered into a strategic partnership whereby Elanor has become Challenger’s real estate funds management partner into a strategic partnership whereby Elanor has become Challenger’s real estate funds management partner into a strategic partnership whereby Elanor has become Challenger’s real estate funds management partner in Australia and New Zealand and Fidante (Challenger’s multi-affiliate funds management business) is now in Australia and New Zealand and Fidante (Challenger’s multi-affiliate funds management business) is now in Australia and New Zealand and Fidante (Challenger’s multi-affiliate funds management business) is now Elanor’s exclusive distribution partner for its real estate managed funds. Elanor’s exclusive distribution partner for its real estate managed funds. Elanor’s exclusive distribution partner for its real estate managed funds. Elanor issued 24.8 million ENN securities as consideration for the transaction, representing 16.6% of securities Elanor issued 24.8 million ENN securities as consideration for the transaction, representing 16.6% of securities Elanor issued 24.8 million ENN securities as consideration for the transaction, representing 16.6% of securities on issue at that time, with Challenger holding 20.3 million securities (13.6%) and the Abu Dhabi Investment on issue at that time, with Challenger holding 20.3 million securities (13.6%) and the Abu Dhabi Investment on issue at that time, with Challenger holding 20.3 million securities (13.6%) and the Abu Dhabi Investment Council (ADIC) holding the balance of 4.5 million securities (3.0%). The consideration paid is subject to claw- Council (ADIC) holding the balance of 4.5 million securities (3.0%). The consideration paid is subject to claw- Council (ADIC) holding the balance of 4.5 million securities (3.0%). The consideration paid is subject to claw- back arrangements from Challenger of up to 63% over three years, based on performance milestones, back arrangements from Challenger of up to 63% over three years, based on performance milestones, back arrangements from Challenger of up to 63% over three years, based on performance milestones, including minimum base funds management fee targets. including minimum base funds management fee targets. including minimum base funds management fee targets. In addition, Elanor has also granted ADIC options to acquire up to 7.5 million in additional Elanor securities at In addition, Elanor has also granted ADIC options to acquire up to 7.5 million in additional Elanor securities at In addition, Elanor has also granted ADIC options to acquire up to 7.5 million in additional Elanor securities at exercise prices of between $2.25 to $2.75 per security, with vesting milestones linked to ADIC committing a exercise prices of between $2.25 to $2.75 per security, with vesting milestones linked to ADIC committing a exercise prices of between $2.25 to $2.75 per security, with vesting milestones linked to ADIC committing a further $0.5 billion in AUM. further $0.5 billion in AUM. further $0.5 billion in AUM. As at the signing date of these financial statements, the accounting assessment of the transaction is not yet As at the signing date of these financial statements, the accounting assessment of the transaction is not yet As at the signing date of these financial statements, the accounting assessment of the transaction is not yet complete, and the Group is currently finalising its determination of the nature of the transaction and the fair complete, and the Group is currently finalising its determination of the nature of the transaction and the fair complete, and the Group is currently finalising its determination of the nature of the transaction and the fair values of identifiable assets acquired and liabilities assumed. values of identifiable assets acquired and liabilities assumed. values of identifiable assets acquired and liabilities assumed. The transaction will be accounted for as a business combination under AASB 3 Business Combinations as The transaction will be accounted for as a business combination under AASB 3 Business Combinations as The transaction will be accounted for as a business combination under AASB 3 Business Combinations as follows: follows: follows: • • • Identifiable assets will include intangible assets in relation to key Investment Management Agreements Identifiable assets will include intangible assets in relation to key Investment Management Agreements Identifiable assets will include intangible assets in relation to key Investment Management Agreements acquired. The amount that the consideration paid exceeds the (net) fair value of all identified assets acquired. The amount that the consideration paid exceeds the (net) fair value of all identified assets acquired. The amount that the consideration paid exceeds the (net) fair value of all identified assets and liabilities will be allocated to goodwill. and liabilities will be allocated to goodwill. and liabilities will be allocated to goodwill. In accordance with AASB112 Income Taxes, a deferred tax asset or liability will be recognised when In accordance with AASB112 Income Taxes, a deferred tax asset or liability will be recognised when In accordance with AASB112 Income Taxes, a deferred tax asset or liability will be recognised when a temporary difference arises between the carrying amount of an asset or liability and its tax base. The a temporary difference arises between the carrying amount of an asset or liability and its tax base. The a temporary difference arises between the carrying amount of an asset or liability and its tax base. The existence of a deferred liability on an intangible asset will result in an increase to goodwill. existence of a deferred liability on an intangible asset will result in an increase to goodwill. existence of a deferred liability on an intangible asset will result in an increase to goodwill. • • • • The fair value of the consideration is $39.7 million and based on the fair value of the securities issued • The fair value of the consideration is $39.7 million and based on the fair value of the securities issued • The fair value of the consideration is $39.7 million and based on the fair value of the securities issued with reference to the share price ($1.60) on the day of the transaction completion. with reference to the share price ($1.60) on the day of the transaction completion. with reference to the share price ($1.60) on the day of the transaction completion. • The value of securities subject to claw-back arrangements will be classified as a financial liability based • The value of securities subject to claw-back arrangements will be classified as a financial liability based • The value of securities subject to claw-back arrangements will be classified as a financial liability based on the definitions in AASB 132 Financial Instruments: Presentation. on the definitions in AASB 132 Financial Instruments: Presentation. on the definitions in AASB 132 Financial Instruments: Presentation. The Group will finalise the accounting for the transaction in the ensuing reporting period in which the The Group will finalise the accounting for the transaction in the ensuing reporting period in which the The Group will finalise the accounting for the transaction in the ensuing reporting period in which the transaction completed. transaction completed. transaction completed. Acquisition of Leura Gardens Resort Acquisition of Leura Gardens Resort Acquisition of Leura Gardens Resort On 28 July 2023 EHAF settled the acquisition of the Leura Gardens Resort in the Blue Mountains, NSW for On 28 July 2023 EHAF settled the acquisition of the Leura Gardens Resort in the Blue Mountains, NSW for On 28 July 2023 EHAF settled the acquisition of the Leura Gardens Resort in the Blue Mountains, NSW for $20 million. $20 million. $20 million. 118 106 106 106 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 28. Events occurring after reporting date (continued) Other matters Other than the events disclosed above, the directors are not aware of any other matters or circumstances not otherwise dealt with in the financial reports or the Directors' Report that has significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs of the Group in the financial year subsequent to the year ended 30 June 2023. 29. Auditor's remuneration OVERVIEW PricewaterhouseCoopers (PwC) are the independent auditors of Elanor Investors Group (2022: PwC) and have provided a number of audit and other assurance related services as well as other non-assurance related services to Elanor Investors Group and the Trust during the year. Below is a summary of fees paid for various services to PwC (2022: PwC) during the year. Auditors of the Group - PwC Total audit and review of financial reports Other services Sustainability services Total other non-audit services Total services provided by PwC Consolidated Consolidated Group 30 June 2022 $ Group 30 June 2023 $ 858,800 813,044 113,728 113,728 102,410 102,410 972,528 915,454 119 107 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 30. Non-Parent disclosure 30. Non-Parent disclosure 30. Non-Parent disclosure OVERVIEW OVERVIEW OVERVIEW This note provides information relating to the non-parent EIF Group only. The accounting policies are This note provides information relating to the non-parent EIF Group only. The accounting policies are consistent with the Group, except as otherwise disclosed. This note provides information relating to the non-parent EIF Group only. The accounting policies are consistent with the Group, except as otherwise disclosed. consistent with the Group, except as otherwise disclosed. Segment information Segment information Segment information Chief operating decisions are based on the segment information as reported by the consolidated Group and Chief operating decisions are based on the segment information as reported by the consolidated Group and therefore EIF is deemed to only have one segment. Chief operating decisions are based on the segment information as reported by the consolidated Group and therefore EIF is deemed to only have one segment. therefore EIF is deemed to only have one segment. Distributions Distributions Distributions The following distributions were declared by the EIF Group either during the year or post balance date: The following distributions were declared by the EIF Group either during the year or post balance date: The following distributions were declared by the EIF Group either during the year or post balance date: Distribution Distribution cents per Distribution cents per stapled security stapled security cents per stapled security stapled security 30 June stapled security stapled security 30 June 2022 30 June 2022 9.05 2022 9.05 4.43 9.05 4.43 4.43 Distribution Distribution cents per Distribution cents per cents per 30 June 30 June 2023 30 June 2023 7.51 2023 7.51 1.62 7.51 1.62 1.62 Total Total Amount Total Amount 30 June Amount 30 June 2023 30 June 2023 $'000 2023 $'000 9,261 $'000 9,261 2,015 9,261 2,015 2,015 Total Total Amount Total Amount 30 June Amount 30 June 2022 30 June 2022 $'000 2022 $'000 11,037 $'000 11,037 5,397 11,037 5,397 5,397 Interim distribution (declared before year end) 1 Interim distribution (declared before year end) 1 Final distribution (declared after year end) 2 Interim distribution (declared before year end) 1 Final distribution (declared after year end) 2 1 The interim distribution of 7.51 cents per stapled security was paid on 28 February 2023. Final distribution (declared after year end) 2 1 The interim distribution of 7.51 cents per stapled security was paid on 28 February 2023. 2 The final distribution of 1.62 cents per stapled security was declared after 30 June 2023, but is recognised in the accounts at balance 1 The interim distribution of 7.51 cents per stapled security was paid on 28 February 2023. 2 The final distribution of 1.62 cents per stapled security was declared after 30 June 2023, but is recognised in the accounts at balance date. The final distribution will be paid on 31 August 2023. 2 The final distribution of 1.62 cents per stapled security was declared after 30 June 2023, but is recognised in the accounts at balance date. The final distribution will be paid on 31 August 2023. date. The final distribution will be paid on 31 August 2023. Taxation of the Trust Taxation of the Trust Taxation of the Trust Under current Australian income tax legislation, the Trust and its sub-trusts are not liable for income tax on Under current Australian income tax legislation, the Trust and its sub-trusts are not liable for income tax on their taxable income (including assessable realised capital gains) provided that the unitholders are presently Under current Australian income tax legislation, the Trust and its sub-trusts are not liable for income tax on their taxable income (including assessable realised capital gains) provided that the unitholders are presently entitled to the income of the Trust. Accordingly, the Group only pays tax on Company taxable earnings and their taxable income (including assessable realised capital gains) provided that the unitholders are presently entitled to the income of the Trust. Accordingly, the Group only pays tax on Company taxable earnings and there is no separate tax disclosure for the Trust. entitled to the income of the Trust. Accordingly, the Group only pays tax on Company taxable earnings and there is no separate tax disclosure for the Trust. there is no separate tax disclosure for the Trust. Investment Properties Investment Properties Investment Properties Movement in investment properties Movement in investment properties Movement in investment properties The carrying value of investment properties at the beginning and end of the current year is set out below: The carrying value of investment properties at the beginning and end of the current year is set out below: The carrying value of investment properties at the beginning and end of the current year is set out below: EIF EIF Group EIF Group 30 June Group 30 June 2022 30 June 2022 $'000 2022 $'000 384,825 Carrying amount at the beginning of the year $'000 Carrying amount at the beginning of the year 384,825 44,446 Additions from consolidation of Elanor Wildlife Park Fund 384,825 Carrying amount at the beginning of the year 44,446 Additions from consolidation of Elanor Wildlife Park Fund 34,000 Additions from consolidation of Stirling 44,446 Additions from consolidation of Elanor Wildlife Park Fund 34,000 Additions from consolidation of Stirling 16,073 Additions 34,000 Additions from consolidation of Stirling 16,073 Additions – Transfers 16,073 Additions – Transfers 19,038 Revaluation (decrements) / increments – Transfers 19,038 Revaluation (decrements) / increments 498,382 Carrying amount at the end of the year 19,038 Revaluation (decrements) / increments 498,382 Carrying amount at the end of the year Carrying amount at the end of the year 498,382 Refer to Note 8 Property, plant and equipment and Note 9 Investment properties for further details of the Refer to Note 8 Property, plant and equipment and Note 9 Investment properties for further details of the valuations of the underlying property assets. Refer to Note 8 Property, plant and equipment and Note 9 Investment properties for further details of the valuations of the underlying property assets. 120 valuations of the underlying property assets. EIF EIF Group EIF Group 30 June Group 30 June 2023 30 June 2023 $'000 2023 $'000 498,382 $'000 498,382 – 498,382 – – – – 68,668 – 68,668 (10,186) 68,668 (10,186) 35,006 (10,186) 35,006 591,870 35,006 591,870 591,870 108 108 108 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 30. Non-Parent disclosure (continued) ACCOUNTING POLICY Fair value of Investment Properties Investment property relates to the land and buildings owned by the EIF Group (being the Elanor Investment Fund and its controlled entities) only, in which rental income is earned from entities within the EIL Group. Valuation, technique and inputs Investment properties are categorised as level 3 in the fair value hierarchy. There were no transfers between hierarchies during the year. Fair value measurement The significant unobservable inputs associated with the valuation of the Group's investment properties are as follows: EIF Group Assets measured at fair value Investment properties 30 June 2023 $'000 Discount Rate % Terminal Capitalisation Average Daily Rate $ Yield % Rate % Occupancy % 591,870 6.5% - 16.5% 5.8% - 14.0% 5.2% - 13.0% $155 - $506 56% - 81% 121 109 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 30. Non-Parent disclosure (continued) Equity accounted investments The Trust's equity accounted investments are as follows: 30 June 2023 Elanor Commercial Property Fund (ASX: ECF) Elanor Property Income Fund Waverley Gardens Fund Riverton Forum Fund Elanor Healthcare Real Estate Harris Street Fund Hunters Plaza Syndicate Total equity accounted investments 30 June 2022 Elanor Commercial Property Fund (ASX: ECF) Elanor Property Income Fund Waverley Gardens Fund Harris Street Fund Hunters Plaza Syndicate Total equity accounted investments Principal activity Percentage Ownership Commercial Office Properties Real Estate Properties Shopping Centre Shopping Centre Healthcare properties Commercial Office Property Shopping Centre 12.56% 23.39% 15.00% 15.00% 5.00% 9.41% 5.87% Principal activity Percentage Ownership Commercial Office Properties Shopping Centres Shopping Centre Commercial Office Property Shopping Centre 12.56% 18.03% 15.00% 13.88% 5.49% EIF Group 30 June 2023 $'000 40,830 16,497 13,171 9,000 6,709 5,853 1,550 93,610 EIF Group 30 June 2022 $'000 51,459 27,725 14,005 12,305 1,688 107,182 The carrying amount of equity accounted investments at the beginning and end of the year is set out below: Carrying amount at the beginning of the year Consolidation of Elanor Wildlife Park Fund and Stirling Street Syndicate Share of (loss) / profit from equity accounted investments Distributions received Share of movement in reserves Net investment in / (sale of) equity accounted investments Realised gain on disposal of investments Impairment of equity accounted investments1 Total carrying value at the end of the year EIF Group 30 June 2023 $'000 107,182 – (7,312) (14,798) (781) 10,950 1,200 (2,831) 93,610 EIF Group 30 June 2022 $'000 88,647 (6,794) 9,871 (8,399) 68 22,307 1,482 – 107,182 1 During the year Elanor’s investment in Elanor Commercial Property Fund was revised to reflect Elanor’s share of Elanor Commercial Property Fund’s net tangible assets. At 30 June 2023 a value in use calculation was performed to support the carrying value, using a discount rate of 10.0%. 122 110 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 Elanor Elanor 30. Non-Parent disclosure (continued) 30. Non-Parent disclosure (continued) 30. Non-Parent disclosure (continued) Equity accounted investments (continued) 30. Non-Parent disclosure (continued) Equity accounted investments (continued) Equity accounted investments (continued) The following information represents the aggregated financial position and financial performance of the Elanor Equity accounted investments (continued) The following information represents the aggregated financial position and financial performance of the Elanor Retail Property Fund, Elanor Commercial Property Fund, Waverley Gardens Fund and the Harris Street Fund. Retail Property Fund, Elanor Commercial Property Fund, Waverley Gardens Fund and the Harris Street Fund. The following information represents the aggregated financial position and financial performance of the Elanor The following information represents the aggregated financial position and financial performance of the Elanor This summarised financial information represents amounts shown in the associate's financial statements This summarised financial information represents amounts shown in the associate's financial statements Retail Property Fund, Elanor Commercial Property Fund, Waverley Gardens Fund and the Harris Street Fund. Retail Property Fund, Elanor Commercial Property Fund, Waverley Gardens Fund and the Harris Street Fund. prepared in accordance with Australian Accounting Standards, adjusted by the Trust for equity accounting prepared in accordance with Australian Accounting Standards, adjusted by the Trust for equity accounting This summarised financial information represents amounts shown in the associate's financial statements This summarised financial information represents amounts shown in the associate's financial statements purposes. purposes. prepared in accordance with Australian Accounting Standards, adjusted by the Trust for equity accounting prepared in accordance with Australian Accounting Standards, adjusted by the Trust for equity accounting purposes. purposes. 30 June 2023 30 June 2023 30 June 2023 30 June 2023 Elanor Elanor Property Property Elanor Elanor Property 30 June Property 30 June 2023 2023 30 June $'000 30 June $'000 2023 6,679 2023 6,679 $'000 110,386 $'000 110,386 6,679 117,065 6,679 117,065 110,386 45,654 110,386 45,654 117,065 – 117,065 – 45,654 45,654 45,654 45,654 – 121,462 – 121,462 45,654 – 45,654 – 121,462 (50,051) 121,462 (50,051) – 71,411 – 71,411 (50,051) (50,051) 71,411 71,411 Elanor Elanor Property Property Elanor Elanor Property 30 June Property 30 June 2023 2023 30 June $'000 30 June $'000 2023 4,691 2023 4,691 $'000 – $'000 – 4,691 4,691 4,691 4,691 – 9,682 – 9,682 4,691 4,691 9,682 9,682 Financial position Financial position Current assets Current assets Financial position Non-current assets Financial position Non-current assets Current assets Total Assets Current assets Total Assets Non-current assets Current liabilities Non-current assets Current liabilities Total Assets Non-current liabilities Total Assets Non-current liabilities Current liabilities Total Liabilities Current liabilities Total Liabilities Non-current liabilities Contributed equity Non-current liabilities Contributed equity Total Liabilities Reserves Total Liabilities Reserves Contributed equity Retained profits / (accumulated losses) Contributed equity Retained profits / (accumulated losses) Reserves Total Equity Reserves Total Equity Retained profits / (accumulated losses) Retained profits / (accumulated losses) Total Equity Total Equity Elanor Income Fund Property Fund Elanor Income Fund Property Fund 30 June 30 June Income Fund Property Fund 2023 Income Fund Property Fund 2023 30 June $'000 30 June $'000 2023 12,964 2023 12,964 $'000 511,793 $'000 511,793 12,964 524,757 12,964 524,757 511,793 94,995 511,793 94,995 524,757 111,963 524,757 111,963 94,995 206,958 94,995 206,958 111,963 369,493 111,963 369,493 206,958 – 206,958 – 369,493 (51,694) 369,493 (51,694) – 317,799 – 317,799 (51,694) (51,694) 317,799 317,799 Elanor Elanor Waverley Waverley Commercial Gardens Fund Commercial Gardens Fund Waverley Waverley Commercial Gardens Fund 30 June Commercial Gardens Fund 30 June 2023 2023 30 June $'000 30 June $'000 2023 3,722 2023 3,722 $'000 218,621 $'000 218,621 3,722 222,343 3,722 222,343 218,621 5,913 218,621 5,913 222,343 125,826 222,343 125,826 5,913 131,739 5,913 131,739 125,826 88,001 125,826 88,001 131,739 – 131,739 – 88,001 2,603 88,001 2,603 – 90,604 – 90,604 2,603 2,603 90,604 90,604 Waverley Waverley Commercial Gardens Fund Commercial Gardens Fund Waverley Waverley Commercial Gardens Fund 30 June Commercial Gardens Fund 30 June 2023 2023 30 June $'000 Financial performance 30 June Financial performance $'000 2023 (687) Profit / (loss) for the year 2023 (687) Profit / (loss) for the year Financial performance $'000 – Other comprehensive income for the year $'000 Financial performance – Other comprehensive income for the year (687) Profit / (loss) for the year (687) Total comprehensive income for the year (687) Profit / (loss) for the year (687) Total comprehensive income for the year – Other comprehensive income for the year 731 Distributions received from the associates during the year – Other comprehensive income for the year 731 Distributions received from the associates during the year (687) Total comprehensive income for the year (687) Total comprehensive income for the year 731 Distributions received from the associates during the year Distributions received from the associates during the year 731 A reconciliation of the above summarised financial information to the carrying amount of the interest in Elanor A reconciliation of the above summarised financial information to the carrying amount of the interest in Elanor Retail Property Fund, Elanor Commercial Property Fund, Waverley Gardens Fund and the Harris Street Fund Retail Property Fund, Elanor Commercial Property Fund, Waverley Gardens Fund and the Harris Street Fund A reconciliation of the above summarised financial information to the carrying amount of the interest in Elanor A reconciliation of the above summarised financial information to the carrying amount of the interest in Elanor recognised in the consolidated financial statements is provided below: recognised in the consolidated financial statements is provided below: Retail Property Fund, Elanor Commercial Property Fund, Waverley Gardens Fund and the Harris Street Fund Retail Property Fund, Elanor Commercial Property Fund, Waverley Gardens Fund and the Harris Street Fund recognised in the consolidated financial statements is provided below: recognised in the consolidated financial statements is provided below: Waverley Waverley Commercial Gardens Fund Commercial Gardens Fund Waverley Waverley Commercial Gardens Fund 30 June Commercial Gardens Fund 30 June 2023 2023 30 June $'000 30 June $'000 2023 90,604 Net assets of the associate 2023 Net assets of the associate 90,604 $'000 15.00% Proportion of the Group's ownership interest $'000 15.00% Proportion of the Group's ownership interest Net assets of the associate 90,604 13,591 Group's share of net assets of the associates Net assets of the associate 90,604 13,591 Group's share of net assets of the associates Other movements not accounted for under the equity method 1 15.00% Proportion of the Group's ownership interest (420) 15.00% Proportion of the Group's ownership interest Other movements not accounted for under the equity method 1 (420) 13,591 Group's share of net assets of the associates 13,171 Carrying amount of the Group's interest 13,591 Group's share of net assets of the associates 13,171 Carrying amount of the Group's interest Other movements not accounted for under the equity method 1 (420) Other movements not accounted for under the equity method 1 (420) ¹ Other movements are primarily due to the issue of new units to external investors at a price above or below the underlying net assets of 13,171 Carrying amount of the Group's interest ¹ Other movements are primarily due to the issue of new units to external investors at a price above or below the underlying net assets of Carrying amount of the Group's interest 13,171 the fund, or where the Group has acquired units on-market at a price different to the fund's NTA. the fund, or where the Group has acquired units on-market at a price different to the fund's NTA. ¹ Other movements are primarily due to the issue of new units to external investors at a price above or below the underlying net assets of ¹ Other movements are primarily due to the issue of new units to external investors at a price above or below the underlying net assets of the fund, or where the Group has acquired units on-market at a price different to the fund's NTA. the fund, or where the Group has acquired units on-market at a price different to the fund's NTA. Elanor Income Fund Property Fund Elanor Income Fund Property Fund 30 June 30 June Income Fund Property Fund 2023 Income Fund Property Fund 2023 30 June $'000 30 June $'000 2023 317,799 2023 317,799 $'000 12.56% $'000 12.56% 317,799 39,916 317,799 39,916 12.56% 914 12.56% 914 39,916 40,830 39,916 40,830 914 914 40,830 40,830 Elanor Income Fund Property Fund Elanor Income Fund Property Fund 30 June 30 June Income Fund Property Fund 2023 Income Fund Property Fund 2023 30 June $'000 30 June $'000 2023 (32,176) 2023 (32,176) $'000 – $'000 – (32,176) (32,176) (32,176) (32,176) – 3,737 – 3,737 (32,176) (32,176) 3,737 3,737 Elanor Elanor Property Property Elanor Elanor Property 30 June Property 30 June 2023 2023 30 June $'000 30 June $'000 2023 71,411 2023 71,411 $'000 23.39% $'000 23.39% 71,411 16,703 71,411 16,703 23.39% (206) 23.39% (206) 16,703 16,497 16,703 16,497 (206) (206) 16,497 16,497 Elanor Elanor 123 111 111 111 111 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 30. Non-Parent disclosure (continued) Equity accounted investments (continued) 30 June 2022 Elanor Property Elanor Commercial Gardens Fund Waverley Harris Street Fund Financial position Current assets Non-current assets Total Assets Current liabilities Non-current liabilities Total Liabilities Contributed equity Retained profits / (accumulated losses) Total Equity Income Fund Property Fund 30 June 2022 $'000 13,136 567,194 580,330 11,727 188,869 200,596 369,496 10,238 379,734 30 June 2022 $'000 98,239 106,300 204,539 11,394 41,689 53,083 155,272 (3,816) 151,456 30 June 2022 $'000 5,447 215,271 220,718 6,537 118,615 125,152 88,001 7,565 95,566 30 June 2022 $'000 2,981 185,000 187,981 1,478 98,300 99,778 87,100 1,103 88,203 Elanor Property Elanor Commercial Gardens Fund Waverley Harris Street Fund Financial performance Profit for the year Other comprehensive income for the year Total comprehensive income for the year Distributions received from the associates during the year Income Fund Property Fund 30 June 2022 $'000 43,948 825 44,773 3,414 30 June 2022 $'000 3,528 120 3,648 4,340 30 June 2022 $'000 23,773 – 23,773 350 30 June 2022 $'000 1,559 – 1,559 – A reconciliation of the above summarised financial information to the carrying amount of the interest in Elanor Retail Property Fund, Elanor Commercial Property Fund and the Waverley Gardens Fund recognised in the consolidated financial statements is provided below: Elanor Property Elanor Commercial Gardens Fund Waverley Harris Street Fund Net assets of the associate Proportion of the Group's ownership interest Group's share of net assets of the associates Other movements not accounted for under the equity method 1 Carrying amount of the Group's interest Income Fund Property Fund 30 June 2022 $'000 379,734 12.56% 47,691 3,768 51,459 30 June 2022 $'000 151,456 18.03% 27,308 417 27,725 30 June 2022 $'000 95,566 15.00% 14,335 (330) 14,005 30 June 2022 $'000 88,203 13.88% 12,243 62 12,305 1 Other movements are primarily due to the Funds issuing new units to external investors at a price above or below the underlying net assets of the fund, or where the Group has acquired units on-market at a price different to the fund's NTA. 124 112 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ELANOR INVESTORS GROUP FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 30. Non-Parent disclosure (continued) 30. Non-Parent disclosure (continued) Aggregate information of associates that are not individually material 30. Non-Parent disclosure (continued) Aggregate information of associates that are not individually material 30. Non-Parent disclosure (continued) Aggregate information of associates that are not individually material Aggregate information of associates that are not individually material Profit / (loss) for the year Profit / (loss) for the year Other comprehensive income for the year Other comprehensive income for the year Total comprehensive income for the year Profit / (loss) for the year Total comprehensive income for the year Other comprehensive income for the year Profit / (loss) for the year Aggregate carrying amount of the Group's interests in these associates Total comprehensive income for the year Other comprehensive income for the year Aggregate carrying amount of the Group's interests in these associates Total comprehensive income for the year Aggregate carrying amount of the Group's interests in these associates Interest bearing liabilities Aggregate carrying amount of the Group's interests in these associates Interest bearing liabilities Year ended Year ended 30 June 30 June 2023 Year ended 2023 $'000 30 June Year ended $'000 (54,192) 2023 30 June (54,192) (761) $'000 2023 (761) (54,953) (54,192) $'000 (54,953) (761) (54,192) 23,111 (54,953) (761) 23,111 (54,953) 23,111 Year ended Year ended 30 June 30 June 2022 Year ended 2022 $'000 30 June Year ended $'000 6,049 2022 30 June 6,049 (67) $'000 2022 (67) 5,982 6,049 $'000 5,982 (67) 6,049 1,688 5,982 (67) 1,688 5,982 1,688 23,111 1,688 Interest bearing liabilities Interest bearing liabilities EIF EIF Group Group 30 June EIF 30 June 2022 Group EIF 2022 $'000 30 June Group $'000 Current 2022 30 June Current – Interest bearing liabilities $'000 2022 Interest bearing liabilities – 16,302 Loan from the company Current $'000 16,302 Loan from the company 16,302 Total current – Interest bearing liabilities Current 16,302 Total current 16,302 Loan from the company Interest bearing liabilities – Non-current 16,302 Total current 16,302 Loan from the company Non-current 19,591 Corporate notes 16,302 Total current 19,591 Corporate notes (445) Corporate notes - borrowing costs less amortisation Non-current (445) Corporate notes - borrowing costs less amortisation 257,775 Bank loan - term debt 19,591 Corporate notes Non-current 257,775 Bank loan - term debt (1,529) Bank loan - borrowing costs less amortisation (445) Corporate notes - borrowing costs less amortisation 19,591 Corporate notes (1,529) Bank loan - borrowing costs less amortisation 43,950 Loan from the company 257,775 Bank loan - term debt (445) Corporate notes - borrowing costs less amortisation 43,950 Loan from the company 319,342 Total non-current (1,529) Bank loan - borrowing costs less amortisation 257,775 Bank loan - term debt 319,342 Total non-current 43,950 Loan from the company (1,529) Bank loan - borrowing costs less amortisation 335,644 Total interest bearing liabilities 319,342 Total non-current 43,950 Loan from the company 335,644 Total interest bearing liabilities 319,342 Total non-current As part of the internal funding of the Fund, EIF entered into a long-term interest-bearing loan with EIL at arm's As part of the internal funding of the Fund, EIF entered into a long-term interest-bearing loan with EIL at arm's Total interest bearing liabilities 335,644 length terms, maturing in July 2024. As at 30 June 2023, the outstanding payable to the Company was $42.0 length terms, maturing in July 2024. As at 30 June 2023, the outstanding payable to the Company was $42.0 Total interest bearing liabilities 335,644 As part of the internal funding of the Fund, EIF entered into a long-term interest-bearing loan with EIL at arm's million (2022: $43.9 million). million (2022: $43.9 million). length terms, maturing in July 2024. As at 30 June 2023, the outstanding payable to the Company was $42.0 As part of the internal funding of the Fund, EIF entered into a long-term interest-bearing loan with EIL at arm's Derivative Financial instruments million (2022: $43.9 million). length terms, maturing in July 2024. As at 30 June 2023, the outstanding payable to the Company was $42.0 Derivative Financial instruments million (2022: $43.9 million). The EIF Group enters into derivative financial instruments to manage its exposure to interest rate risk. Derivative Financial instruments The EIF Group enters into derivative financial instruments to manage its exposure to interest rate risk. Derivative Financial instruments The EIF Group enters into derivative financial instruments to manage its exposure to interest rate risk. The EIF Group enters into derivative financial instruments to manage its exposure to interest rate risk. EIF EIF Group Group 30 June EIF 30 June 2023 Group EIF 2023 $'000 30 June Group $'000 2023 30 June 5,982 $'000 2023 5,982 12,592 $'000 12,592 18,574 5,982 18,574 12,592 5,982 18,574 12,592 13,322 18,574 13,322 (445) (445) 301,338 13,322 301,338 (1,582) (445) 13,322 (1,582) 42,036 301,338 (445) 42,036 354,669 (1,582) 301,338 354,669 42,036 (1,582) 373,243 354,669 42,036 373,243 354,669 373,243 373,243 Current assets / (liabilities) Current assets / (liabilities) Interest rate swaps Interest rate swaps Current assets / (liabilities) Interest rate swaps Current assets / (liabilities) Non-current assets / (liabilities) Interest rate swaps Non-current assets / (liabilities) Interest rate swaps Interest rate swaps Non-current assets / (liabilities) Interest rate swaps Non-current assets / (liabilities) Total derivative financial instruments assets / (liabilities) Interest rate swaps Total derivative financial instruments assets / (liabilities) Total derivative financial instruments assets / (liabilities) Total derivative financial instruments assets / (liabilities) EIF EIF Group Group 30 June EIF 30 June 2023 Group EIF 2023 $'000 30 June Group $'000 2023 30 June 1,353 $'000 2023 1,353 1,353 $'000 1,353 1,353 1,353 1,353 – 1,353 – – – – 1,353 – – 1,353 – 1,353 EIF EIF Group Group 30 June EIF 30 June 2022 Group EIF 2022 $'000 30 June Group $'000 2022 30 June 1,898 $'000 2022 1,898 1,898 $'000 1,898 1,898 1,898 1,898 723 1,898 723 723 723 723 2,621 723 723 2,621 723 125 2,621 113 113 113 113 1,353 2,621 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 30. Non-Parent disclosure (continued) Reserves Reserves are balances that form part of equity that record other comprehensive income amounts that are retained in the business and not distributed until such time the underlying balance sheet item is realised. This note provides information about movements in the other reserves line item of the balance sheet and a description of the nature and purpose of each reserve. Other reserves Opening balance Share of reserves of equity accounted investments Closing balance Cash flow hedge reserve Opening balance Revaluation Closing balance Stapled security-based payment reserve Opening balance Loan securities and option expense Short term incentive scheme expense Closing balance EIF Group 30 June 2023 $'000 48,772 (782) 47,990 – – – 6,650 549 (2,145) 5,054 Restated EIF Group 30 June 2022 $'000 48,704 68 48,772 (355) 355 – 3,811 705 2,134 6,650 Total reserves 53,044 55,422 The other reserves are used to record undistributed and unrealised earnings. The cash flow reserve presented in the comparatives was used to recognise increments and decrements in the fair value of cash flow hedges. In FY23 all cash flow hedges are discontinued, and no new hedge relationships are recognised. The stapled security-based payment reserve is used to recognise the fair value of loan, restricted securities and options issued to employees but not yet exercised under the Group's DSTI and LTIP. 126 114 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 30. Non-Parent disclosure (continued) Restatement Comparatives for the year end 30 June 2022 have been restated to reclass $16.3 million revaluation gain on investment property from the consolidated statement of comprehensive income to the consolidated statement of profit or loss. The reclass reduces other reserves and increases retained earnings by an equal and offsetting amount of $16.3 million. The reclass does not impact the opening balances as at 1 July 2021 and the restatement has no impact on total comprehensive income, net assets or total equity as at 30 June 2022. EIF Group 30 June 2022 $'000 (2,824) 2,000 6,557 (4,557) 16,337 16,764 18,764 EIF Group 30 June 2022 $'000 71,759 (5,915) 311,963 39,809 (13,770) EIF Group Increase/ (Decrease) $'000 16,337 16,337 6,242 10,095 Restated EIF Group 30 June 2022 $'000 13,513 18,337 12,799 5,538 (16,337) (16,337) – 427 – 18,764 EIF Group Increase/ (Decrease) $'000 (16,337) 16,337 – (6,242) 6,242 Restated EIF Group 30 June 2022 $'000 55,422 10,422 311,963 33,567 (7,528) 31,950 7,855 (10,095) 10,095 21,855 17,950 127 Consolidated statements of profit or loss (extract) Fair value gain / (loss) on revaluation of PP&E and investment properties Net profit / (loss) for the year Net Profit attributable to security holders of: - Parent Entity - External Non-controlling interest Consolidated statements of comprehensive income (extract) Gain on revaluation of property, plant and equipment Other comprehensive income for the year, net of tax Total comprehensive income / (loss) for the year, net of tax Consolidated statements of financial position (extract) Reserves Retained profits / accumulated (losses) Total equity Equity Holders of Parent Entity: Reserves Retain profits / accumulated (losses) Equity Holders of Non Controlling Interest - External Reserves Retained profits / accumulated (losses) 115 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 30. Non-Parent disclosure (continued) (1) Market Risk Interest rate risk As at reporting date, the EIF Group had the following interest-bearing assets and liabilities: EIF Group 30 June 2023 Assets Cash and cash equivalents Derivative financial instruments Total assets Weighted average interest rate Liabilities Interest bearing loans Total liabilities Weighted average interest rate EIF Group 30 June 2022 Assets Cash and cash equivalents Derivative financial instruments Total assets Liabilities Interest bearing loans Total liabilities Weighted average interest rate Maturity < 1 yr $'000 Maturity 1 - 5 yrs $'000 Maturity > 5 yrs $'000 1,182 1,353 2,535 – – – 18,574 18,574 312,633 312,633 – – – – – Maturity < 1 yr $'000 Maturity 1 - 5 yrs $'000 Maturity > 5 yrs $'000 9,008 1,898 10,906 – 723 723 16,302 16,302 275,392 275,392 – – – – – Total $'000 1,182 1,353 2,535 0.57% 331,207 331,207 4.51% Total $'000 9,008 2,621 11,629 291,694 291,694 3.99% Of the $221.3 million floating interest-bearing loans as at 30 June 2023 (2022: $217.7 million), $83.8 million (2022: $83.8 million) have been hedged using interest rate swap agreements. These agreements are in place to swap the variable / floating interest payable to a fixed rate to minimise the interest rate risk. 128 116 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 30. Non-Parent disclosure (continued) Interest Rate Sensitivity EIF Group 30 June 2023 Cash and cash equivalents Derivative financial instruments Interest bearing loans Total increase / (decrease) EIF Group 30 June 2022 Cash and cash equivalents Derivative financial instruments Interest bearing loans Total increase / (decrease) (2) Credit Risk Exposure to credit risk Increase by 1% Decrease by 1% Amount $'000 Profit/ (loss) $'000 Equity $'000 Profit/ (loss) $'000 Equity $'000 1,182 1,353 331,207 333,742 12 838 (2,213) (1,363) – – – – (12) (838) 2,213 1,363 – – – – Increase by 1% Decrease by 1% Amount $'000 Profit/ (loss) $'000 Equity $'000 Profit/ (loss) $'000 Equity $'000 9,008 2,621 291,695 303,324 90 838 (1,643) (716) – – – – (90) (838) 1,643 716 – – – – The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date is detailed below: Cash and cash equivalents Trade and other receivables Total Impairment losses The ageing of trade and other receivables at reporting date is detailed below: Current Past due 31-61 days Past due 61+ days Total Provision for expected credit loss Net trade and other receivables 117 EIF Group 30 June 2023 $'000 1,182 41,902 43,084 EIF Group 30 June 2023 $'000 41,853 180 1,266 43,299 (1,397) 41,902 EIF Group 30 June 2022 $'000 9,008 47,528 56,536 EIF Group 30 June 2022 $'000 47,490 118 774 48,382 (854) 47,528 129 ELANOR INVESTORS GROUP Notes to the Consolidated Financial Statements For the year ended 30 June 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 30. Non-Parent disclosure (continued) (3) Liquidity risk EIF Group 30 June 2023 Non derivative financial liabilities Payables Interest bearing loans Total EIF Group 30 June 2022 Non derivative financial liabilities Payables Interest bearing loans Total Less than 1 year $'000 1 to 2 years $'000 2 to 5 More than Contractual cash flows 5 years years $'000 $'000 $'000 Carrying amount $'000 22,696 13,596 36,292 – 297,388 297,388 – 54,040 54,040 – – – 22,696 365,024 387,720 22,696 331,207 353,903 Less than 1 year $'000 1 to 2 years $'000 2 to 5 More than Contractual cash flows 5 years years $'000 $'000 $'000 Carrying amount $'000 17,175 17,031 34,206 – 54,824 54,824 – 259,385 259,385 – – – 17,175 331,240 348,415 17,175 291,695 308,870 Other financial assets and liabilities This note provides further information about material financial assets and liabilities that are incidental to the EIF and the Trust's trading activities, being trade and other receivables and trade and other payables. Trade and Other Receivables Trade receivables Other receivables GST receivable Total trade and other receivables EIF Group 30 June 2023 $'000 40,844 613 445 41,902 EIF Group 30 June 2022 $'000 46,394 1,134 – 47,528 Trade receivables consists primarily of intercompany receivables between the landowning trusts of the Group's consolidated hotels and wildlife parks (which are held on the EIF Group side of the Group's stapled structure), and their respective operating entities (which are held on the EIL side of the Group's stapled structure). These intercompany receivables balances are eliminated upon consolidation into ENN Group balance sheet. 130 118 Elanor Investors GroupAnnual Report 2023 ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP ELANOR INVESTORS GROUP NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ELANOR INVESTORS GROUP FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2023 FOR THE YEAR ENDED 30 JUNE 2023 30. Non-Parent disclosure (continued) 30. Non-Parent disclosure (continued) Payables 30. Non-Parent disclosure (continued) Payables 30. Non-Parent disclosure (continued) Payables Payables EIF Group EIF 30 June Group EIF 2023 30 June Group EIF $'000 2023 30 June Group 7,323 $'000 2023 30 June 2,243 7,323 $'000 2023 – 2,243 7,323 $'000 9,566 – 2,243 7,323 – 9,566 2,243 – 9,566 9,566 EIF Group EIF 30 June Group EIF 2022 30 June Group EIF $'000 2022 30 June Group 5,022 $'000 2022 30 June 2,018 5,022 $'000 2022 309 2,018 5,022 $'000 7,349 309 2,018 5,022 309 7,349 2,018 309 7,349 7,349 Profit for the year Trade creditors Accrued expenses Trade creditors GST payable Accrued expenses Trade creditors Total payables GST payable Accrued expenses Trade creditors GST payable Total payables Accrued expenses GST payable Total payables Cash flow information Total payables Cash flow information This note provides further information on the consolidated cash flow statements of the Trust. It reconciles profit Cash flow information for the year to cash flows from operating activities and information about non-cash transactions. This note provides further information on the consolidated cash flow statements of the Trust. It reconciles profit Cash flow information This note provides further information on the consolidated cash flow statements of the Trust. It reconciles profit for the year to cash flows from operating activities and information about non-cash transactions. Reconciliation of profit after income tax to net cash flows from operating activities This note provides further information on the consolidated cash flow statements of the Trust. It reconciles profit for the year to cash flows from operating activities and information about non-cash transactions. for the year to cash flows from operating activities and information about non-cash transactions. Reconciliation of profit after income tax to net cash flows from operating activities EIF Reconciliation of profit after income tax to net cash flows from operating activities Group EIF Reconciliation of profit after income tax to net cash flows from operating activities 30 June Group EIF 2023 30 June Group EIF $'000 2023 30 June Group 17,245 $'000 2023 30 June $'000 17,245 2023 1,253 17,245 $'000 (35,980) 1,253 17,245 7,312 (35,980) 1,253 (1,200) 7,312 (35,980) 1,253 (708) (1,200) 7,312 (35,980) 220 (708) (1,200) 7,312 2,659 220 (708) (1,200) (9,199) 2,659 220 (708) 2,659 220 (9,199) 2,659 (9,199) 7,492 (9,199) 46 7,492 1,928 46 7,492 278 1,928 46 7,492 545 278 1,928 46 278 1,928 545 278 545 545 Profit for the year Amortisation Profit for the year Fair value adjustment on revaluation of investment property Amortisation Profit for the year Net unrealised revenue from equity accounted investments Fair value adjustment on revaluation of investment property Amortisation Net realised gain/(loss) on sale of investment Net unrealised revenue from equity accounted investments Fair value adjustment on revaluation of investment property Amortisation Other non cash items Net realised gain/(loss) on sale of investment Net unrealised revenue from equity accounted investments Fair value adjustment on revaluation of investment property Straight line lease expense and lease incentive income Other non cash items Net realised gain/(loss) on sale of investment Net unrealised revenue from equity accounted investments Employee costs funded directly through equity Straight line lease expense and lease incentive income Other non cash items Net realised gain/(loss) on sale of investment Net cash provided by operating activities before changes in assets and liabilities Employee costs funded directly through equity Straight line lease expense and lease incentive income Other non cash items Employee costs funded directly through equity Net cash provided by operating activities before changes in assets and liabilities Straight line lease expense and lease incentive income Movement in working capital: Employee costs funded directly through equity Net cash provided by operating activities before changes in assets and liabilities Decrease / (increase) in trade and other receivables Movement in working capital: Net cash provided by operating activities before changes in assets and liabilities Increase / (decrease) in other current assets Decrease / (increase) in trade and other receivables Movement in working capital: Increase / (decrease) in trade and other payables Increase / (decrease) in other current assets Decrease / (increase) in trade and other receivables Movement in working capital: Increase / (decrease) in other liabilities Increase / (decrease) in trade and other payables Increase / (decrease) in other current assets Decrease / (increase) in trade and other receivables Net cash from operating activities Increase / (decrease) in other liabilities Increase / (decrease) in trade and other payables Increase / (decrease) in other current assets Increase / (decrease) in other liabilities Net cash from operating activities Increase / (decrease) in trade and other payables Increase / (decrease) in other liabilities Net cash from operating activities Other expenses Net cash from operating activities Other expenses A breakdown of other expenses included in the EIF Group's Consolidated Statement of Profit or Loss is Other expenses provided below: A breakdown of other expenses included in the EIF Group's Consolidated Statement of Profit or Loss is Other expenses A breakdown of other expenses included in the EIF Group's Consolidated Statement of Profit or Loss is provided below: EIF A breakdown of other expenses included in the EIF Group's Consolidated Statement of Profit or Loss is provided below: Group EIF provided below: 30 June Group EIF 2022 30 June Group EIF $'000 2022 30 June Group 4,035 $'000 2022 30 June 11,638 4,035 $'000 2022 15,673 11,638 4,035 $'000 11,638 15,673 4,035 131 11,638 15,673 15,673 EIF Group EIF 30 June Group EIF 2022 30 June Group EIF $'000 2022 30 June Group 18,337 $'000 2022 30 June $'000 18,337 2022 1,924 18,337 $'000 2,824 1,924 18,337 (9,871) 2,824 1,924 (1,634) (9,871) 2,824 1,924 13,586 (1,634) (9,871) 2,824 128 13,586 (1,634) (9,871) 2,841 128 13,586 (1,634) 28,135 2,841 128 13,586 2,841 128 28,135 2,841 28,135 (15,223) 28,135 497 (15,223) 2,920 497 (15,223) (24) 2,920 497 (15,223) 16,305 (24) 2,920 497 (24) 2,920 16,305 (24) 16,305 16,305 General expenses Loan forgiveness expense General expenses Total other expenses Loan forgiveness expense General expenses Loan forgiveness expense Total other expenses General expenses Loan forgiveness expense Total other expenses Total other expenses EIF Group EIF 30 June Group EIF 2023 30 June Group EIF $'000 2023 30 June Group 2,933 $'000 2023 30 June – 2,933 $'000 2023 2,933 – 2,933 $'000 – 2,933 2,933 – 2,933 2,933 119 119 119 119 ELANOR INVESTORS GROUP Directors’ Declaration to Stapled Securityholders DIRECTORS' DECLARATION TO STAPLED SECURITYHOLDERS In the opinion of the Directors of Elanor Investors Limited and Elanor Funds Management Limited as responsible entity for the Elanor Investment Fund: a) the financial statements and notes set out on pages 50 to 131 are in accordance with the Corporations Act 2001 (Cth) including: i. ii. complying with Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and giving a true and fair view of the Group's and EIF's financial position as at 30 June 2023 and of their performance, for the financial year ended on that date; and b) c) there are reasonable grounds to believe that the Group and EIF will be able to pay their debts as and when they become due and payable. the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. d) The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by Section 295A of the Corporations Act 2001 (Cth). This declaration is made in accordance with a resolution of the Boards of Directors in accordance with Section 295(5) of the Corporations Act 2001 (Cth). Glenn Willis CEO and Managing Director Sydney 22 August 2023 132 120 Elanor Investors GroupAnnual Report 2023 133 PricewaterhouseCoopers, ABN 52 780 433 757 One International Towers Sydney, Watermans Quay, Barangaroo, GPO BOX 2650, SYDNEY NSW 2001 T: +61 2 8266 0000, F: +61 2 8266 9999 Level 11, 1PSQ, 169 Macquarie Street, Parramatta NSW 2150, PO Box 1155 Parramatta NSW 2124 T: +61 2 9659 2476, F: +61 2 8266 9999 Liability limited by a scheme approved under Professional Standards Legislation. Independent auditor’s report To the stapled securityholders of Elanor Investors Group Report on the audit of the financial reports Our opinion In our opinion: The accompanying financial reports of: (cid:404) Elanor Investors Limited (the Company) and its controlled entities (the Group or Elanor), and (cid:404) Elanor Investment Fund (the Registered Scheme) and its controlled entities (the EIF Group) are in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the financial positions of the Group and EIF Group as at 30 June 2023 and of their financial performance for the year then ended (b) complying with Australian Accounting Standards and the Corporations Regulations 2001. What we have audited The Group and EIF Group financial reports comprise: (cid:120) the consolidated statements of financial position as at 30 June 2023 (cid:120) the consolidated statements of comprehensive income for the year then ended (cid:120) the consolidated statements of profit or loss for the year then ended (cid:120) the consolidated statements of changes in equity for the year then ended (cid:120) the consolidated statements of cash flows for the year then ended (cid:120) the notes to the financial statements, which include significant accounting policies and other explanatory information (cid:120) the director’s declaration to stapled securityholders. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Group and the EIF Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & 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 reports in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. 134 Elanor Investors GroupAnnual Report 2023 Our audit approach for the Group An audit is designed to provide reasonable assurance about whether the financial report is free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report. We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial report as a whole, taking into account the geographic and management structure of the Group, its accounting processes and controls and the industry in which it operates. Group Materiality Group Audit Scope (cid:120) For the purpose of our audit of the Group and EIF Group, we used overall materiality of approximately $686,000 and $675,000 respectively, based on an average profit or loss before tax benchmark. (cid:120) We applied this threshold, together with qualitative considerations, to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements on the financial report as a whole. (cid:120) We chose this threshold because in our view, it provides a relevant measure of the performance of the Group and EIF Group over a period of time. (cid:120) Our audit focused on where the Group and EIF Group made subjective judgements; for example, significant accounting estimates involving assumptions and inherently uncertain future events. (cid:120) The audit team consisted of individuals with the appropriate skills and competencies needed for the audits, and this included industry expertise in real estate, as well as valuation and tax professionals. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the current period. The key audit 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. Further, any commentary on the outcomes of a particular audit procedure is made in that context. We communicated the key audit matters to the Audit and Risk Committee. 135 Key audit matter How our audit addressed the key audit matter Valuation of Property, plant and equipment and Investment property (Refer to notes 8, 9 and 30) Elanor’s property portfolio consists primarily of hotel and wildlife park properties classified as property, plant and equipment (PPE) and retail and commercial investment property as at 30 June 2023. EIF Group’s property portfolio comprises the same assets, however all are classified as investment property in its financial report. The fair value of PPE and investment property was determined using the valuation methodologies outlined in notes 8 and 9. This was a key audit matter because of the: (cid:404)relative size of PPE and investmentproperty to total assets and the relatedvaluation movements,(cid:404)inherent subjectivity in the determination offair value estimates; and(cid:404)the sensitivity of fair values to changes inkey assumptions.We assessed the design and implementation of the Group’s and EIF Group’s relevant controls over the PPE and investment property valuation process. We agreed the adopted fair values of all properties to the independent valuation report or internal valuation model (together, the ‘valuations’) and assessed the competency, capability and objectivity of the relevant independent or internal valuer. We met with management to discuss the specifics of the property portfolio including, amongst other things, property financial performance,(cid:3)capital expenditure occupancy and leasing activities. For a selection of properties, we engaged PwC Valuation experts to assist in assessing the appropriateness of valuation methodologies used and significant assumptions adopted in the valuations. For a sample of the property portfolio, we tested the mathematical accuracy of the valuations and a sample of inputs to underlying data. We considered the reasonableness of the disclosures made in relation to the significant assumptions in light of the requirements of Australian Accounting Standards. 136 Elanor Investors GroupAnnual Report 2023 Other Information The directors of the Company and Elanor Funds Management Limited as the Responsible Entity of the Registered Scheme (collectively referred to as the directors) are responsible for the other information. The other information comprises the information included in the annual report for the year ended 30 June 2023, but does not include the financial reports and our auditor’s report thereon. Prior to the date of this auditor’s report, the other information we obtained included the director’s report. We expect the remaining other information to be made available to us after the date of this auditor’s report. Our opinion on the financial reports does not cover the other information and accordingly we do not express any form of assurance conclusion thereon through our opinion on the financial reports. We have issued a separate opinion on the remuneration report. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial reports or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. When we read the other information not yet received, if we conclude that there is a material misstatement therein, we are required to communicate the matter to the directors and use our professional judgement to determine the action to take. Responsibilities of the directors for the financial reports The directors are responsible for the preparation of the financial reports that give a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial reports that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing the financial reports, the directors are responsible for assessing the ability of the Group and the EIF Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the EIF Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial reports Our objectives are to obtain reasonable assurance about whether the financial reports as a whole are 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 the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and 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 reports. 137 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 Our opinion on the remuneration report We have audited the remuneration report included in pages 32 to 44 of the directors’ report for the year ended 30 June 2023. In our opinion, the remuneration report of Elanor Investors Limited for the year ended 30 June 2023 complies with section 300A of the Corporations Act 2001.Responsibilities The directors are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards. PricewaterhouseCoopers N R McConnell SydneyPartner22 August 2023 Corporate Governance The Board of Directors of Elanor Investors Group (Group) have approved the Group’s Corporate Governance Statement as at 30 June 2023. In accordance with ASX Listing Rule 4.10.3, the Group’s Corporate Governance Statement can be found on its website at: www.elanorinvestors.com/sustainability/governance The Board of Directors is responsible for the overall corporate governance of the Group, including establishing and monitoring key strategy and performance goals. The Board monitors the operational and financial position and performance of the Group, and oversees its business strategy, including approving the Group’s strategic goals. The Board seeks to ensure that the Group is properly managed to protect and enhance securityholder interests, and that the Group, its Directors, officers and personnel operate in an appropriate environment of corporate governance. Accordingly, the Board has created a framework for managing the Group, including Board and Committee Charters and various corporate governance policies designed to promote the responsible management and conduct of the Group. 138 Elanor Investors GroupAnnual Report 2023 Securityholder Analysis As at 18 August 2023 Stapled Securities The units of the Trust and the shares of the Company are combined and issued as stapled securities in the Group. The Group’s securities are traded on the Australian Securities Exchange (ASX: ENN), having listed on 11 July 2014. The units of the Trust and shares of the Company cannot be traded separately and can only be traded as stapled securities. In accordance with the ASX’s requirements for stapled securities, the ASX reserves the right (but without limiting its absolute discretion) to remove the Company or the Trust or both from the ASX Official List if any of the units and the shares cease to be stapled together or any equity securities issued by the Company or the Trust which are not stapled to equivalent securities in the other entity. Top 20 Securityholders Number Securityholder 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 HSBC Custody Nominees (Australia) Ltd Fidante Partners Holdco1 Pty Ltd Rockworth Investment Holdings Pte Ltd CPU Share Plans Pty LtdAl Mehwar Commercial Investments LLC Perpetual Corporate Trust Ltd H & G Limited J P Morgan Nominees Australia Pty Limited BNP Paribas Nominees Pty Ltd Mr Glenn Willis Citicorp Nominees Pty Limited Armada Investments Pty Ltd National Nominees Limited Scanlon Capital Investments Pty Ltd Danissa Pty Ltd BNP Paribas Noms Pty Ltd
Kenxue Pty Ltd Verbena Bee Pty Ltd Danissa Pty Ltd Citano Pty Ltd Total Balance of Register Grand Total No. of Securities % 23,769,758 15.97 20,280,481 13.63 17,932,967 12.05 4,696,063 4,473,684 4,159,930 4,135,000 3,343,546 3,237,760 2,858,244 2,347,851 2,295,605 1,731,800 1,679,000 1,200,107 1,062,021 892,235 581,069 568,091 533,839 3.16 3.01 2.80 2.78 2.25 2.18 1.92 1.58 1.54 1.16 1.13 0.81 0.71 0.60 0.39 0.38 0.36 101,779,051 68.39 47,044,540 31.61 148,823,591 100.00 139 Securityholder Analysis 18 August 2023 Range Report Range No. of Securities % No. of Holders 100,001 and over 10,001 to 100,000 5,001 to 10,000 1,001 to 5,000 1 to 1,000 Total 117,118,883 26,148,735 3,686,436 1,718,735 150,802 78.70 17.57 2.48 1.15 0.10 98 948 472 562 349 % 4.03 39.03 19.43 23.14 14.37 148,823,591 100.00 2,429 100.00 The total number of Securityholders with an unmarketable parcel of securities was 146. Substantial Securityholders Securityholder No. of Securities Fidante Partners Holdco 1 Pty Limited Rockworth Capital Partners Pte Ltd Perpetual Limited 20,280,481 17,932,967 16,804,298 % 13.62% 12.05% 11.29% Voting rights On a poll, each Securityholder has, in relation to resolutions of the Trust, one vote for each unit held in the Trust and in relation to resolutions of the Company, one vote for each share held in the Company. On-Market Buy-back There is no current on-market buy-back program in place. 140 Elanor Investors GroupAnnual Report 2023 Corporate Directory Elanor Investors Group (ASX Code: ENN) Elanor Investors Limited (ACN 169 308 187) and Elanor Investment Fund (ARSN 169 450 926) (Elanor Funds Management Limited (ACN 125 903 031) is the Responsible Entity Level 38 259 George Street Sydney NSW 2000 T: +61 2 9239 8400 Directors of the Responsible Entity and Elanor Investors Limited Paul Bedbrook (Chair) Glenn Willis (Managing Director and CEO) Nigel Ampherlaw Anthony (Tony) Fehon Lim Su Kiat Karyn Baylis Victor Rodriguez Ian Mackie Company Secretary of the Responsible Entity and Elanor Investors Limited Symon Simmons Security Registry Computershare Investor Services Pty Limited Level 3 60 Carrington Street Sydney NSW 2000 Auditors PricewaterhouseCoopers One International Towers Watermans Quay Barangaroo NSW 2000 Custodian The Trust Company (Australia) Limited Level 18 123 Pitt Street Sydney NSW 2000 Website www.elanorinvestors.com 141 Level 38, 259 George Street Sydney NSW 2000 T: +61 2 9239 8400 elanorinvestors.com