GARDA PROPERTY GROUP Comprising the consolidated financial reports of Garda Holdings Limited (ACN 636 329 774) and Garda Diversified Property Fund (ABN 17 982 396 608, ARSN 104 391 273) Annual Financial Report 2024 GARDA PROPERTY GROUP (ASX: GDF) GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT CONTENTS CHAIRMAN’S REPORT .................................................................................................................................... 1 OPERATIONAL REVIEW.................................................................................................................................. 3 FINANCIAL SUMMARY .................................................................................................................................... 6 STRATEGY AND OUTLOOK ............................................................................................................................ 8 KEY RISKS ....................................................................................................................................................... 9 BOARD OF DIRECTORS ............................................................................................................................... 10 DIRECTORS’ REPORT .................................................................................................................................. 11 REMUNERATION REPORT (AUDITED) ........................................................................................................ 15 AUDITOR’S INDEPENDENCE DECLARATION ............................................................................................. 27 FINANCIAL REPORT ..................................................................................................................................... 28 NOTES TO FINANCIAL REPORT .................................................................................................................. 32 CONSOLIDATED ENTITY DISCLOSURE STATEMENT ............................................................................... 65 DIRECTORS’ DECLARATION ........................................................................................................................ 66 INDEPENDENT AUDITOR’S REPORT .......................................................................................................... 67 CORPORATE GOVERNANCE STATEMENT ................................................................................................ 71 SECURITYHOLDER INFORMATION ............................................................................................................. 72 GLOSSARY .................................................................................................................................................... 74 CORPORATE DIRECTORY ........................................................................................................................... 75 Garda Property Group Annual Financial Report 30 June 2024 Comprising the combined consolidated financial reports of Garda Holdings Limited ABN 92 636 329 774 Level 21, 12 Creek Street Brisbane QLD 4000 and Garda Diversified Property Fund ARSN 104 391 273 GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 1 CHAIRMAN’S REPORT 1 August 2024 Dear Securityholders, I am pleased to present Garda’s Annual Report for the year ended 30 June 2024 (FY24). The REIT market has again been dominated by uncertainty of underlying asset values as demonstrated by the material divergence between security prices and underlying value (NTA). The Garda security price has fluctuated widely throughout the year. Understandably investors continue to question book values and appropriate valuation inputs as there is little clarity on Australia’s pathway and timing through continuing high inflation and resultant high interest rates. However, these conditions will not persist forever, even if Australia does lag the rest of the world in what is expected to be a loosening bias globally in FY25. We expect the valuation cycle for industrial is nearing the bottom, although the difference of value from one asset to another has never been more acute with widely varying ranges of passing to market rents and the ability or timing to access rental reversion. The various property sectors have been impacted and responded differently with particularly the office sector suffering most. Industrial, which now comprises 83% of the Garda portfolio, has weathered this environment reasonably well as that sector continues to be structurally undersupplied nationally, both for built form and land. Historically high industrial rental growth has all but offset material capitalisation rate decompression. Garda’s industrial portfolio weighted average capitalisation rate has expanded from 4.27% to 5.58% since December 2022 and some further expansion is likely, as is continued offsetting rental growth. There has been a dearth of capital markets activity over the past two years with very few asset sales completed to provide confidence to market participants. I expect this to continue until the market can reasonably form a view that interest rates have peaked, and an environment exists that will allow these to fall. In early 2022 Garda formed a view that it must exit its Melbourne commercial office portfolio, and this was ultimately achieved by February this year. The sobering cost of this exit has been felt by all of us, however, the cost of retaining ownership was expected to have been far worse. A decision that can only be measured with the passage of time. Our sole remaining office building, the Cairns Corporate Tower continues to perform strongly, although it also is not entirely resistant to some valuation movement. Looking to the future, Garda is very well positioned as a develop-to-own industrial REIT, endowed with a substantial development pipeline (100,000m2+) underpinned by approved land and proven inhouse skills to deliver. This core activity is complemented by the market dominating Cairns Corporate Tower (17% of portfolio) and a small (~$30m allocated at year end) but revenue-important amount of property lending. Our already young modern industrial portfolio continues to be improved as each of our new projects is completed. Throughout the year the 14,777m2 Acacia Ridge construction got underway (completion expected December 2024) and our pre-leased 12,912m2 Richland facility was completed. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 2 Bulk earthworks were completed on our 25ha (100,000m2+ NLA) North Lakes project and civil works are underway and expected to be completed early in 2025. At that time development approvals for more than 40,000m2 of built form are likely to be held, providing substantial choice in the type of built form to meet the market. The site for the Pinnacle East project proposed at 372 Progress Road was unconditionally sold after year end and settlement is due in mid- August. With finite capital and numerous other development options the decision to re-allocate the capital invested in that land and the further required capital for construction, totaling some $50 million, to other higher returning projects was made. Construction costs appear to have stabilised and there is some possible evidence of a minor easing. Rents continue to increase, however, the volume of leasing activity has moderated while remaining historically very strong with vacancy rates continuing below accepted market equilibrium levels. Garda unwaveringly manages its business with a predominant focus on balance sheet and value per security. Gearing at year end was 36%, marginally above its targeted 30%-35% range. Value per security of $1.71 at year end compared to a high of $2.05 two years ago. This 16.6% reduction in value is felt by all of us but compares favourably to many peers in the sector. Throughout the year Garda undertook a security buy back acquiring ~9.6m securities at an average price of $1.21 some 30% below NTA. Importantly Garda has exited those assets that it believed would continue to lose value and has reallocated capital to the highest returning options. The heightened interest rate environment of the past two years has consumed much of the increased revenue generated from completion of new industrial buildings. Nevertheless, Garda beat its FY24 earnings guidance and met its distribution guidance of 6.3cps (98% payout ratio) while again providing this 100% tax deferred. I am hopeful that FY25 will see improved capital markets confidence and some recent activity is supportive of this. We expect industrial leasing demand and rental levels to remain robust and this will support the continued delivery of our industrial projects. The 15,000m2 Acacia Ridge project will be the only built form completion during FY25, thereafter followed by components of the substantial (100,000m2+ NLA) North Lakes Pinnacle North project commencing in FY26. Matthew Madsen Executive Chairman GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 3 OPERATIONAL REVIEW INVESTMENT PORTFOLIO Overview Industrial 30 June 2024 Established Projects Office Total Number of properties 8 3 1 12 Carrying value ($000) 285,802 139,782 83,080 508,664 Occupancy (%) 93.4 - 95.6 94.4 WALE (years) 5.6 - 3.2 4.8 At 30 June 2024, Garda’s investment property portfolio was valued at $508,664,000, with approximately 83% of the portfolio comprising industrial buildings and land. Transactions During FY24, Garda sold its three commercial office buildings in Melbourne and a land parcel in Townsville. Property Settlement Gross proceeds $000 Richmond: 572-576 Swan Street (Botanicca 7) 31 January 2024 80,000 Richmond: 588A Swan Street (Botanicca 9) Hawthorn East: 8-10 Cato Street 8 December 2023 24,100 Townsville: 39 Palmer Street 1 November 2023 2,000 Garda’s portfolio now comprises eight established industrial properties and three industrial development sites in Brisbane and Cairns Corporate Tower. One of the industrial development sites, Pinnacle East in Wacol with a carrying value of $13,298,000, was being held for sale at year end. An unconditional contract for sale was executed after year end, with settlement scheduled for 20 August 2024. Developments In December 2023, Garda completed the construction of its pre-leased 12,912m2 industrial facility at 56-72 Bandara Street, Richlands. Development activity is now focused on the in-construction 14,777m2 Acacia Ridge development and the North Lakes project. Project Estimated GFA Status of DA approval Estimated completion date Current independent valuation m2 $000 Development sites Acacia Ridge, 38-56 Peterkin Street 15,000 granted Q2 FY25 19,700 North Lakes 100,000 granted FY26-27 69,500 Established assets – infill opportunities Acacia Ridge, Stage 1B, 69 Peterkin Street 3,000 - - 4,100 Morningside 5,700 granted - 6,500 Total 123,700 - - 99,800 GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 4 Sustainability Garda continues to optimise the efficiency of its operationally controlled buildings through energy and water initiatives. Our efforts during the reporting period were rewarded with our rank in the NABERS Sustainable Portfolios index improving from 8th to 7th. The Australian government has introduced its mandatory climate-related financial disclosures legislation to Parliament. Known as Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024, it will be applicable to Group 1 entities for financial years commencing on or after 1 January 2025. While the new legislation does not apply to Garda due to not meeting the reporting thresholds, it is Garda’s intention to voluntarily adopt the new reporting regime, to the extent practicable, as though it was a “Group 3” entity. In the interim, Garda’s intention is to continue publishing an annual, standalone sustainability report. Leasing Garda’s lease expiry profile at 30 June 2024 was as follows: Tenant profile Garda has a diversified base of tenants by ownership structure and industry. The high proportion of tenants being government, listed or multinational, with none being heavily exposed to the retail and consumer discretionary sectors, provides resiliency to Garda’s rental income. Top 10 Tenants (30 June 2024) Type % of Gross Income Expiry Volvo Group Industrial 13.3% Jul 28 Ausdeck Industrial 9.9% Dec 33 Komatsu Industrial 9.5% Jul 26 Pinkenba Operations Industrial 8.5% Aug 33 Qld Govt (DTMR) Office 5.2% Nov 28 James Energies Industrial 4.6% Mar 28 CNW Industrial 4.3% Sep 28 YHI Industrial 4.3% Sep 31 Tas. Freight Industrial 3.1% Mar 30 BDO Office 2.9% Nov 29 Total Top 10 65.6% 6% 6% 6% 15% 7% 60% 0% 10% 20% 30% 40% 50% 60% 70% 80% Vacant FY25 FY26 FY27 FY28 FY29 GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 5 Valuations Six of Garda’s properties, or 44% of our properties by value, were externally valued for the FY24 Annual Report, with the balance of the portfolio being carried at directors’ valuation. Development and refurbishment costs (other than repairs and maintenance) are capitalised where they result in an enhancement in the future economic benefits of a property. Where those costs were incurred subsequently to last independent valuation, they are disclosed separately as value accretive expenditure. As at 30 June Valuation 2024 2023 Movement Type $000 $000 $000 Industrial Established Acacia Ridge 69 Peterkin Street Directors 22,120 21,400 720 Berrinba 1-9 Kellar Street External 16,000 15,400 600 Heathwood 67 Noosa Street External 16,900 15,500 1,400 Morningside 326 & 340 Thynne Road External 61,000 54,500 6,500 Pinkenba 70 - 82 Main Beach Road External 32,200 35,500 (3,300) Richlands 56 - 72 Bandara Street Directors 39,454 13,700 25,754 Wacol 41 Bivouac Place External 52,500 58,500 (6,000) Wacol 498 Progress Road (Pinnacle West) External 45,500 45,900 (400) Value accretive capital expenditure Directors 128 2,219 (2,091) Developments Acacia Ridge 38-56 Peterkin Street Directors 31,073 18,350 12,723 North Lakes 109 - 135 Boundary Road Directors 95,411 69,500 25,911 Wacol 372 Progress Road (Pinnacle East) - 11,000 (11,000) Value accretive capital expenditure Directors - 10,786 (10,786) Total industrial 412,286 372,255 40,031 Office Cairns 7-19 Lake Street Directors 83,080 87,750 (4,670) Hawthorn East 8-10 Cato Street Directors - 25,000 (25,000) Value accretive capital expenditure Directors - 3,778 (3,778) Total office 83,080 116,528 (33,448) Total investment properties (non-current assets) 495,366 488,783 6,583 Held for sale Wacol 372 Progress Road (Pinnacle East) Directors 13,298 - 13,298 Richmond 572-576 Swan Street (Botanicca 7) - 50,500 (50,500) Richmond 588A Swan Street (Botanicca 9) - 60,000 (60,000) Townsville 39 Palmer Street - 1,250 (1,250) Total investment properties held for sale (current assets) 13,298 111,750 (98,452) Total investment properties 508,664 600,533 (91,869) GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 6 FINANCIAL SUMMARY FINANCIAL PERFORMANCE Key metrics Year ended 30 June 2024 2023 Change FFO ($000) 13,280 14,933 (1,653) Distributions ($000) 12,945 15,027 (2,082) Payout ratio 97.5% 100.6% (3.1%) Funds from operations Garda recorded statutory net loss after tax for the year of $42,926,000 (FY23: loss of $4,934,000). This includes items which are non-cash in nature, incur infrequently and/or relate to realised or unrealised changes in the values of assets and liabilities. Accordingly, in the opinion of the Directors, statutory profit should be adjusted to allow securityholders to gain a better understanding of Garda’s operating profit or FFO. Year ended 30 June 2024 2023 $000 $000 Loss after tax (42,926) (4,934) Adjustments for non-cash items included in net profit after tax: Valuations – (deduct increases) / add back decreases: Investment properties 39,295 6,470 Derivatives 3,385 (638) Asset disposals – (deduct gains) / add back losses: Investment properties 11,163 11,729 Other accounting reversals – (deduct income) / add back expenses: Security based payments 1,637 719 Net lease contract and rental items 713 1,565 Other 13 22 FFO 13,280 14,933 FINANCIAL POSITION Key Metrics 2024 2023 NTA per stapled security $1.71 $1.96 Gearing 36.5% 33.7% LVR 46.1% 38.7% Net tangible assets Garda experienced a 12.8% decrease in NTA per security in FY24 driven by: movements in values of its investment properties; and losses incurred on its exit from the Melbourne office market. Borrowings Garda has a $270,000,000 syndicated debt facility which, at 30 June 2024, had headroom of $52,808,986. Garda’s weighted average cost of debt (fully drawn) at year end was approximately 4.66% (FY23: 4.68%) and its gearing 36.5% (FY23: 33.7%). GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 7 Derivatives Garda has in place $150,000,000 (30 June 2023: $150,000,000) of interest rate hedges comprising: $50,000,000 of interest rate swaps at a rate of 2.61%, expiring 3 June 2025; $10,000,000 of interest rate swaps at a rate of 0.80%, expiring 4 March 2027; $60,000,000 interest rate swaps at a rate of 0.82%, expiring 4 March 2027; and $30,000,000 interest rate swaps at a rate of 0.98%, expiring 4 March 2030. These derivatives are currently “in the money” with a valuation at 30 June 2024 of $12,142,000. Issued Capital Securities Total Garda issued stapled securities at 30 June 2024 217,651,293 Less: Stapled securities held as treasury stock (1,993,489) Stapled securities issued or transferred under the Garda Employee Security Plan (14,840,000) Stapled securities transferred under the Garda Equity Incentive Plan as deferred securities (unvested) (536,260) Garda stapled securities in accordance with Australian Accounting Standards1 200,281,544 On 17 April 2023, Garda commenced an on-market buy-back program for 12 months which was extended by a further 12 months, commencing on 22 April 2024. At 30 June 2024, 9,993,068 stapled securities had been bought back and cancelled, of which 9,584,419 were cancelled during the reporting period. 1 Pursuant to Australian Accounting Standards, treasury securities and ESP securities and the distributions attaching thereto are not included in statutory accounts. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 8 STRATEGY AND OUTLOOK STRATEGY Objective Garda’s objective is to deliver enduring value to securityholders through our expertise in real estate. Inherent in our objective is an unambiguous focus on capital management and optimisation of securityholder equity. Distributions are made within this balance sheet context. Significantly, all Directors and employees are securityholders, ensuring alignment with Garda’s objective and the interests of other securityholders. Strategic focus Garda is a long term investor but will actively adjust its investment focus in anticipation of, or in response to, changing economic conditions. In recent years, this agility allowed Garda to place early strategic emphasis on the industrial sector in south east Queensland. It also resulted in Garda acquiring scarce industrial development sites at a time when development was more value accretive than acquisition of established buildings. FY24 activities and outcomes In FY24 Garda continued to increase its exposure to the south east Queensland industrial sector through development activities at Acacia Ridge, North Lakes and Richlands. This industrial exposure was accentuated by Garda’s decision to exit the Melbourne office market. Garda is now a pure play industrial real estate group, with a single office building in Cairns and a small but profitable commercial lending operation. OUTLOOK At a macro-economic level, persistent inflation is negatively impacting interest rates and property valuations and is having an insidious effect on investor confidence. Nevertheless, the medium-term outlook for Garda is encouraging: Market rental growth in its established buildings continues to offset adverse valuation impacts from increasing capitalisation; 15,000m2 of prime industrial property at Acacia Ridge will be completed in the first half of FY25 with attractive starting rents expected; construction of industrial facilities at North Lakes may commence late in FY25 following completion of all bulk earth and civil works; and low vacancy rates continue to underpin tenant demand and rents for our existing and future industrial buildings. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 9 KEY RISKS RISK MANAGEMENT Risk management framework Effective risk management is critical to Garda achieving its objective. We are committed to high standards of risk management in the way we conduct business and actively identify and manage risks that may impact the realisation of our strategy. Garda conducts its activities within a risk management framework promulgated by the Board and overseen by the Audit, Risk and Sustainability Committee. Investment and operational decisions must fall within the ambit of our risk appetite statement and strategic priorities and day to day activities are regularly considered through our strategic and operational risk registers, respectively. Strategic risks In its most recent review of strategic risks, the Board prioritised risks according to their potential likelihood and the consequences for Garda. Common to the more highly ranked strategic risks was inflation and the possible ramifications of “higher for longer interest rates” on: i) capitalisation rates and valuations; ii) borrowing costs and covenants; iii) business conditions generally; iv) tenant financial viability; and v) industrial market rents. The Board’s assessment was that while these risks warranted a ‘high’ rating, adequate mitigants are in placed to manage them, including: a portfolio of sought-after industrial assets where market rent increases are largely offsetting capitalisation rate decompression; occupancy levels approaching 100%; financially sound tenants with material time left on their lease terms; headroom on borrowing facilities and covenants; and adequate interest rate hedges in place. Cyber risks While not currently considered high risk, cyber security is regularly assessed at a strategic and operational level. Board and management are satisfied that Garda has the appropriate infrastructure, data handling and storage protocols and training and education programs to sufficiently mitigate cyber risks. Sustainability Garda pursues its sustainability objectives through a framework comprising three pillars: environment pillar: acquire, develop and own properties that will stand the test of time and sustainably manage them in a manner that will satisfy stakeholder expectations; social pillar: understand the sustainability issues that matter to its stakeholders and respond appropriately; and governance pillar: pursue governance, risk and compliance activities that are best practice for its size, stage of development and ambitions. Within each pillar we have identified issues that may impact Garda’s operations and investments and prioritised them according to an assessment of: i) significance to Garda and its stakeholders; and ii) likely impact of action by the Garda Board and management to mitigate or remediate the particular issue. The five material topics that form the basis of Garda’s annual sustainability reporting are: i) efficient operations; ii) sustainable development; iii) aligned employees; iv) financial strength; and v) ESG reporting. As at the date of this Annual Report, Garda has not identified new or increased risks and issues that warrant inclusion in its sustainability reporting. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 10 BOARD OF DIRECTORS Matthew Madsen Executive Chairman Mark Hallett Executive Director Paul Leitch Independent Director Andrew Thornton Non-Executive Director Appointed September 2011. Appointed January 2011. Executive Director from February 2020. Appointed March 2020. Chair of the Audit, Risk and Sustainability Committee from March 2023. Chair of the Nomination and Remuneration Committee from March 2020. Appointed March 2020. Member of the Audit, Risk and Sustainability Committee Member of the Nomination and Remuneration Committee. Professional experience Professional experience Professional experience Professional experience Matthew has been Garda’s Managing Director and Executive Chairman since 2011. He has more than 25 years’ experience in real estate, real estate finance and funds management Matthew is Chair of the Advisory Board for residential land developer, Trask Development Corporation. Mark has more than 30 years’ industry and legal experience. After qualifying as a solicitor, he had a range of diverse industry experiences across all aspects of corporate litigation, restructuring and commercial property. Mark was legal practice director of Hallett Legal and is now a consultant at Macpherson Kelley. Mark has managed successful property syndicates for business associates and continues to advise participants in the industry on property investment and corporate restructuring. Paul has more than 20 years’ experience as a senior executive with public and private sector organisations. He has held leadership roles in financial services including as Chief Operating Officer for QIC. He has significant experience in professional services and is currently director of a private advisory firm. Paul’s company director roles have encompassed charity, family and listed entities. Paul is the independent director of Charles Porter and Sons. Andrew is a director of Great Western Corporation, a private group with interests in commercial and industrial property, general manufacturing, agricultural equipment and investments. He joined Great Western Corporation in 1995 before becoming Joint Managing Director in 2010. Andrew previously served as Treasurer of both the Volvo Truck & Bus Dealer Council and the Daimler Truck Dealer Council. He is a director of HGT Investments Pty Ltd, Garda’s largest securityholder. Listed entity directorships Listed entity directorships Listed entity directorships Listed entity directorships Listed entity directorships in the last three years: None. Listed entity directorships in the last three years: None. Listed entity directorships in the last three years: None. Listed entity directorships in the last three years: None. Qualifications Qualifications Qualifications Qualifications Diploma in Financial Services, Diploma in Financial Markets, Affiliate Member of the Securities Institute of Australia. Bachelor of Laws Bachelor of Arts (Music), post graduate qualifications in Education, Member of the AICD, Member of Australian Human Resources Institute. Bachelor of Business, Member of the AICD. Garda securities Garda securities Garda securities Garda securities Ordinary: 5,950,000 ESP securities: 10,960,000 Ordinary: 1,533,469 ESP securities: 1,000,000 Performance rights: 48,262 Ordinary: 47,411 Ordinary: 1,255,005 GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 11 DIRECTORS’ REPORT Introduction Garda Property Group (Garda or the Group) is an ASX-listed stapled entity whereby shares in Garda Holdings Limited (GHL or the Company) are stapled to units in Garda Diversified Property Fund (GDF or the Fund) on a one-for-one basis. Shares of the Company and units of the Fund cannot be traded separately and may only be traded together as stapled securities. The Directors of the Company and of Garda Capital Limited as responsible entity for the Fund present their report and the consolidated financial statements for the year ended 30 June 2024 for both: the Group - comprising the Company, the Fund and their controlled entities; and the Company - comprising only the Company and its controlled entities. The parent entity of the Group is the Fund. Directors The Directors of the Company and Garda Capital Limited at any time during the financial year and up to the date of this report are listed below. The Directors are also directors of all Group subsidiaries. Matthew Madsen Executive Chairman Mark Hallett Executive Director Paul Leitch Independent Director Andrew Thornton Non-executive Director Profiles of the Directors may be found on page 10. Company Secretary Garda’s Company Secretary and General Counsel throughout FY24 was Lachlan Davidson. He has been Company Secretary since July 2016. Lachlan has over 25 years’ experience in corporate law, fund raising and managed investments. He holds a Law degree, a BSc in Genetics and Biochemistry and an MBA. He is a Justice of the Peace (Qualified) and a Graduate of the AICD Directors Course. Principal activities Garda is an internally managed real estate investment, development and funds management group. The Fund invests in, owns, manages and develops industrial and commercial real estate in accordance with the provisions of the Fund’s constitution. The Company, through its subsidiaries, acts as the responsible entity of the Fund. Group strategy Garda’s objective is to deliver enduring value to securityholders through its expertise in real estate. In pursuing this objective, Garda acts as a long- term owner of real estate, being market cycle aware and seeking out only those risks it wishes to take. More information on Garda’s strategy is provided on page 8. Review of operations A detailed review of operations, including details of Garda’s properties, is provided in the Operational Review commencing on page 3. Financial result Garda recorded statutory net loss after tax for FY24 of $42,926,000 (FY23: net loss after tax $4,934,000). This includes items which are non- cash in nature, incur infrequently and/or relate to realised or unrealised changes in the values of assets and liabilities. After adjusting for these items, Garda’s funds from operations (FFO) for FY24 were $13,280,000 (FY23: $14,933,000) and a reconciliation to statutory net loss after tax is provided in the Financial Summary commencing on page 6. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 12 Dividends and Distributions The table below provides details of distributions2 paid by Garda in respect of the financial year: Dividend per security Distribution per security Total per security Total $000 Franked amount Record date Payment date 2024 Interim - 1.575c 1.575c 3,283 - 29 Sep 23 17 Oct 23 Interim - 1.575c 1.575c 3,304 - 29 Dec 23 18 Jan 24 Interim - 1.575c 1.575c 3,195 - 28 Mar 24 16 Apr 24 Final - 1.575c 1.575c 3,163 - 28 Jun 24 16 Jul 24 - 6.30c 6.30c 12,945 - 2023 Interim - 1.80c 1.80c 3,758 - 30 Sep 22 17 Oct 22 Interim - 1.80c 1.80c 3,759 - 30 Dec 22 17 Jan 23 Interim - 1.80c 1.80c 3,759 - 31 Mar 23 19 Apr 23 Final - 1.80c 1.80c 3,751 - 30 Jun 23 17 Jul 23 - 7.20c 7.20c 15,027 - Outlook Garda will continue to execute its strategy in FY24 with its key priorities being the delivery of its industrial development pipeline and managing ongoing capital requirements and gearing levels. Please refer to page 8 for more information. Subsequent events On 10 July 2024, Garda announced the unconditional sale of its Pinnacle East asset at Wacol with settlement scheduled for 20 August 2024. The net sale proceeds are $13,298,000. Otherwise, there are no matters or circumstances that have arisen since the end of the financial year that have significantly affected, or may significantly affect: Garda’s operations in future financial years; the results of those operations in future years; or the state of affairs of Garda in future years. Significant changes in state of affairs Other than as set out in this Annual Report, there were no significant changes in the operating activities of the Group (including controlled entities) during the year. Corporate governance Garda’s Corporate Governance Statement may be found on page 71 of this Annual Report. 2 Total distributions exclude distributions paid in respect of treasury securities and securities granted under the Garda ESP. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 13 Meetings of Directors Attendance at meetings of Directors during the year was as follows: Board of Directors Nomination and Remuneration Committee Audit, Risk and Sustainability Committee Meetings attended Meetings eligible to attend Meetings attended Meetings eligible to attend Meetings attended Meetings eligible to attend Matthew Madsen 10 10 0 invited 0 invited Mark Hallett 10 10 0 invited 0 invited Paul Leitch 10 10 3 3 2 2 Andrew Thornton 10 10 3 3 2 2 Directors’ remuneration Directors’ remuneration is set out in the Remuneration Report commencing on page 15. Remuneration of officers Remunerated officers of the Group other than the directors are the Chief Operating Officer and Company Secretary. Their remuneration arrangements, including equity grants, are described in the Remuneration Report on pages 15-26. Unissued securities under options or performance rights Details of performance rights issued to employees during the year, including performance rights outstanding at 30 June 2024 and up to the date of this report, are disclosed in Note 18. Securities issued on the exercise of options or performance rights There were no securities issued during the year and up to the date of the report as a result of the exercise of options or rights over unissued securities in Garda. Audit, Risk and Sustainability Committee The Audit, Risk and Sustainability Committee comprising independent and non-executive directors meets regularly with the management team and auditor to consider the nature and scope of the assurance activities, the effectiveness of the risk and control systems, and monitor Garda’s sustainability initiatives. Auditor Pitcher Partners is the auditor of the Group. Securityholder details A summary of Garda’s substantial securityholders and 20 largest securityholders is provided on page 72. Indemnification and insurance of directors, officers and auditor Garda has agreed to indemnify current and former directors and certain key officers against all liabilities to another person (other than the Group or a related entity) that may arise from their position as director or employee of the Group, except where the liability arises out of conduct involving lack of good faith. The agreement stipulates that the Group will meet the full amount of any such liabilities, including costs and expenses. The indemnities were limited as required under the Corporations Act 2001. The Group has paid insurance premiums on behalf of its officers for liability and legal expenses for the year ended 30 June 2024. The relevant insurance contracts insure against certain liability (subject to specified exclusions) for persons who are or have been directors or officers of the Group. Details of the nature of the liabilities covered or the amount of the premium paid have not been included, as such disclosure is prohibited under the terms of the relevant contracts. The Group has not indemnified its auditor. GARDA PROPERTY GROUP | 2021 ANNUAL FINANCIAL REPORT Page 14 Proceedings on behalf of the Group No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any proceedings to which the Group is a party for the purposes of taking responsibility on behalf of the Group for all or any part of those proceedings. Environmental regulation The Group’s operations were not subject to any significant environmental regulations under either Commonwealth or State legislation. However, the Directors believe Garda has adequate systems in place for the management of its environmental requirements and are not aware of any breach of those environmental requirements. Rounding The Group is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors Reports) Instrument 2016/191 and therefore the amounts contained in this report and in the financial report have been rounded to the nearest thousand dollars, or in certain cases, to the nearest dollar. Non-audit services Non-audit services in the form of regulatory services and business advisory services were provided by the Group’s auditor, Pitcher Partners, during the year (refer to Note 20 for details). The Directors are satisfied that the provision of non-audit services during the year by the auditor is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons: all non-audit services have been reviewed by the Audit, Risk and Sustainability Committee to ensure they do not impact the impartiality and objectivity of the auditor; and none of the services undermines the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants (including Independence Standards). Auditor's Independence Declaration The Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 may be found on page 27 following the Remuneration Report. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 15 REMUNERATION REPORT (AUDITED) CHAIR OF THE NOMINATION AND REMUNERATION COMMITTEE Dear Securityholders, As Chair of Garda’s Nomination and Remuneration Committee, I am pleased to present the Remuneration Report for the year ended 30 June 2024. Approach to remuneration Each year, the Committee reviews the Group’s executive remuneration practices to ensure they remain aligned with our strategic objectives and are consistent with the practices adopted by our ASX-listed peers. This ensures Garda continues to retain, attract and motivate talented individuals with the requisite talent, expertise, experience and relationships to take the Group forward. Review of remuneration practices Our remuneration practices in FY24 were consistent with prior years, with executive remuneration continuing to comprise a mix of fixed remuneration and short and long term incentives. In its annual review, the Committee was particularly engaged on prevailing economic conditions and the potential for factors outside Garda’s control to adversely and unfairly impact the likelihood of vesting of long term incentives. Ultimately, the Committee’s recommendation to the Board was that new long term incentives should comprise, at least temporarily, deferred security awards in lieu of performance rights. The Board accepted this adjustment would ensure long term incentives remained relevant and effective in the current environment. The key elements of Garda’s remuneration structure, which the Board believes are fit for purpose and align the interests of our people with those of our securityholders, are set out in section 6 below. FY24 outcomes Garda was particularly active in FY24, managing portfolio exposures and progressing its industrial development projects. Garda exited the Victorian market with the sales of Botanicca 7, Botanicca 9, and Hawthorn East, leaving only Cairns Corporate Tower in the Australian commercial office market. Proceeds from these disposals were earmarked for our industrial developments with Richlands now complete and material progress being made at North Lakes and Acacia Ridge. Considering the macro-economic environment, our portfolio has proven reasonably resilient with NTA per security falling 12.8% to $1.71, compared with $1.96 at 30 June 2023. This 12.8% decrease compares favourably with valuations and transactions recently announced by our peers. 5,000,000 ESP securities, 223,425 performance rights and 1,225,740 deferred security awards met their tenure hurdles during the year and vested. In addition, with all performance and services hurdles likely to be achieved, the final 223,435 performance rights from the December 2021 tranche is expected to vest in August 2024. Conclusion This Remuneration Report has been approved by the Board and is intended to be a useful and informative document, while also complying with our statutory obligations. I commend it to you. Yours sincerely, Paul Leitch Independent Director Chair of Nomination and Remuneration Committee 1 August 2024 GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 16 1. BASIS OF PREPARATION This Remuneration Report is in respect of the financial year ended 30 June 2024. It provides information about remuneration arrangements for key management personnel (KMP), including Non-executive Directors, Executive Directors and other senior executives. The Remuneration Report has been prepared in accordance with section 300A of the Corporations Act 2001 (Cth) (Act), has been audited as required by section 308(3C) of the Act, and forms part of the Directors’ Report. 2. KEY MANAGEMENT PERSONNEL The following persons had authority and responsibility for planning, directing and controlling the activities of Garda during the financial year: KMP Role Term Independent Directors and Non-executive Directors Paul Leitch Independent Director Full term Andrew Thornton Non-executive Director Full term Executive Directors Matthew Madsen Executive Chairman Full term Mark Hallett Executive Director Full term Other Senior Executives David Addis Chief Operating Officer Full term Lachlan Davidson General Counsel & Company Secretary Full term 3. REMUNERATION GOVERNANCE The Board has an established Nomination and Remuneration Committee (Committee) which operates under the delegated authority of the Board. The role of the Committee is captured in its Charter which is published on Garda’s website. The roles and responsibilities of the Committee pertaining to remuneration include: evaluating the performance of the Board, including committees and individual Non-executive Directors; making recommendations to the Board regarding the remuneration of Non-executive Directors; assessing the performance of Executive Directors and reviewing their remuneration arrangements; reviewing the appropriateness and application of short-term and long-term incentive schemes and policies for executives and staff; seeking to align remuneration to the values, risk appetite and performance of Garda and the individual performance of executives; and ensuring appropriate human resources management programs, including performance assessment programs, are in place. The Committee operates independently of Garda management and may engage remuneration advisers directly. Management may make recommendations to the Committee in relation to the development and implementation of reward strategy and structure. During FY24, the members of the Committee were: Director Role Term Paul Leitch Independent Director, Chair of Committee Full term Andrew Thornton Non-executive Director Full term GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 17 4. REMUNERATION PHILOSOPHY The Board recognises the critical role people play in the: execution of our strategy; achievement of our corporate objectives; and the delivery of enduring value to our securityholders. Our people are also a key differentiator and source of competitive advantage relative to our peers. Accordingly, a strategic priority is to attract, motivate and retain motivated individuals who have the requisite talent, expertise, experience and relationships. In practice this means that our remuneration must not only be market competitive but must also closely align the interests of our people with those of our securityholders. 5. APPROACH TO NON-EXECUTIVE DIRECTOR REMUNERATION Non-executive Directors are paid a fixed amount of remuneration comprising base salary or fees and statutory superannuation and are not eligible to receive cash incentives, security-based compensation or other retirement benefits. Factors that are considered when setting fees for Non-executive Directors include: the workload, skills and experience required for the role; fees paid to Non-executive Directors of comparable organisations; the attributes, profile and reasonable expectations of the individuals; and the quantum or pool formally approved by securityholders for remuneration of Non-executive Directors. The approved pool is currently $600,000 per annum of which $222,601 was utilised in FY24. 6. APPROACH TO EXECUTIVE REMUNERATION 6.1 Summary Within the context of Garda’s financial performance and position, the Board and Committee seek to find a balance between: fixed and at-risk remuneration; short-term and long-term incentives; and amounts paid in cash and equity interests. The table below summarises the current executive remuneration structure. Component Primary purpose Benchmarks and hurdles Delivery Fixed remuneration Attract and retain talent Comparable groups Individual employee attributes Base salary Superannuation Employment benefits Salary sacrifice benefits Short term incentive (STI) Align executive outcomes with annual goals for Group Reward individual achievement FY24 Group goals Funds from operations Net tangible assets Board discretion Cash Long term incentive (LTI) Align executive outcomes with longer term securityholder returns Return on equity Performance rights Deferred security awards Loan backed ESP securities GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 18 6.2 Fixed remuneration Fixed remuneration for employees is reviewed annually by the Executive Chairman, focusing on Group outcomes, individual performance and relevant comparative information in the market. The same process is used by the Committee when reviewing the fixed remuneration of the Executive Chairman. Employees are provided with the opportunity to receive their base salary in a variety of forms including cash and salary sacrifice items such as additional superannuation contributions. 6.3 Short term incentive The objective of the STI program is to link individual performance and the achievement of the Group’s annual goals with employee remuneration. The STI opportunity and targets have been specified for some executives, while noting STI is discretionary and determined by the Executive Chairman. Similarly, subject to behavioural, performance and financial hurdles, the Executive Chairman is eligible for an annual STI determined by the Committee. STIs are usually paid in cash and none is based on profit measures only. 6.4 Long term incentive Garda currently has two long term incentive plans in place: 1. Employee Security Plan (ESP) pursuant to which employees were granted LTIs in the form of stapled securities, backed by limited recourse loans; and 2. Equity Incentive Plan (EIP) pursuant to which senior executives may receive offers of performance rights and deferred security awards and all employees may receive offers of exempt securities. The primary objective of Garda’s LTI plans is to strengthen alignment between Garda executives and securityholders by incentivising executives to act like owners. Performance rights will only vest, and be convertible into stapled securities, if Garda exceeds minimum return on equity hurdles. These rights will typically have a three-year measurement period. However, following securityholder approval of the Equity Incentive Plan in November 2021, the Committee determined that transition arrangements should apply to the first tranche of performance rights (refer section 9.4). Deferred security awards granted for the first time in FY24 will only vest on satisfaction of employment tenure hurdles by the relevant employees. These awards, which are in the form of Garda stapled securities, typically have a three-year restriction period and are subject to a holding lock until vesting occurs. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 19 7. GROUP PERFORMANCE The key FY24 financial metrics considered by the Committee in determining remuneration outcomes included: 2024 2023 2022 2021 2020 NTA per security $ 1.71 1.96 2.05 1.45 1.18 FFO $000 13,280 14,933 16,653 16,167 15,680 Distributions per security cents 6.30 7.20 7.20 7.20 8.55 Return on equity % (9.5%) (0.9%) 46.3% 29% 23% Payout ratio % 97.5% 100.6% 90.2% 92.9% 104.8% Gearing % 36.5% 33.7% 35.6% 38.4% 36.4% Security price $ 1.125 1.30 1.54 1.29 1.00 These metrics were considered in the context of the strategic priorities and challenges highlighted in the Garda Chairman’s letter and Operational Review commencing on page 1 of this Annual Report, in particular: the relative strength of the industrial sector and Garda’s strategic priority of increasing its exposure through the development of Richlands, Acacia Ridge and North Lakes; the decision to exit the Melbourne commercial office market with the sales of Botanicca 7 and Botanicca 9 in Richmond and our building in Hawthorn East; successful leasing outcomes at the newly developed Richlands industrial building as well as our current and former office buildings in Cairns and Melbourne; an improved NABERS ratings on our operationally controlled office building in Cairns; continuing prudent management of our balance sheet and borrowing arrangements; and continued focus on our environmental, social and governance obligations and commitments. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 20 8. REMUNERATION OUTCOMES 8.1 Total KMP remuneration The table below summarises the total remuneration provided to KMP in FY24 and FY23, calculated in accordance with statutory obligations and accounting standards: Short-term benefits Long-term benefits Security-based payments Salary or fees STI cash award3 Annual leave Non- monetary benefits Super- annuation Long Service leave Equity Incentive Plan4 Employee Security Plan5 Total Performance related Non-executive Directors P Leitch FY24 122,916 - - - 13,521 - - - 136,437 - FY23 105,234 - - - 11,050 - - - 116,284 - M Parker6 FY24 - - - - - - - - - - FY23 76,869 - - - 8,071 - - - 84,940 - A Thornton FY24 86,164 - - - - - - - 86,164 - FY23 85,776 - - - - - - - 85,776 - Executive Directors M Madsen FY24 695,000 1,042,500 3,838 3,499 27,399 7,867 - 89,929 1,870,032 60.6% FY23 695,000 1,042,500 (25,083) 2,849 25,292 5,699 - 273,614 2,019,871 65.2% M Hallett FY24 150,000 - - - - - 2,712 - 152,712 1.8% FY23 150,000 - - - - - 2,105 21,290 173,395 13.5% Executives D Addis FY24 368,846 55,000 (2,960) 3,406 27,399 6,208 61,185 - 519,084 22.4% FY23 358,269 55,000 (2,495) 2,868 25,292 4,541 64,535 1,234 509,244 23.7% L Davidson FY24 288,269 30,000 16,114 - 27,399 13,106 34,480 - 409,368 15.8% FY23 273,846 30,000 (2,828) - 25,292 15,075 34,319 - 375,704 17.1% Total FY24 1,711,195 1,127,500 16,992 6,905 95,718 27,181 98,377 89,929 3,173,797 41.5% FY23 1,744,994 1,127,500 (30,406) 5,717 94,997 25,315 100,959 296,138 3,365,214 45.3% 8.2 STI outcomes The Committee determined that the Group achieved its corporate goals for FY24 and that the Executive Chairman satisfied his behavioural, performance and financial hurdles. The Committee also determined that because the Executive Chairman is already a substantial securityholder, it would be appropriate to grant all of his incentives for FY24 as a cash incentive. An incentive award equal to 150% of salary was granted and paid in FY24. For other executives or KMP, STI cash awards are at the discretion of the Board. 3 STIs are presented on a cash basis showing STIs actually paid during the financial year. The STI paid to the Executive Chairman was in respect of FY24 while the STIs paid to other executives were in respect of FY23. 4 Approved by securityholders on 25 November 2021. Includes fair value of performance rights, deferred security awards and exempt securities. 5 Comprises fair value of Garda securities granted with attaching non-recourse loans. 6 Retired from Board on 22 March 2023. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 21 8.3 LTI outcomes a) Summary Since LTIs were first awarded in FY18, Garda has awarded four different types of LTIs under its employee security plans: i) Garda ESP securities – loan-backed GDF stapled securities; ii) exempt security awards; iii) performance rights; and iv) deferred security awards. Details of LTIs awarded to KMP are set out in section 9 while details of all securities awarded to employees are set out in Note 18 of the financial statements. b) Deferred security awards In FY24, Garda awarded deferred security awards for the first time, in lieu of performance rights. These are restricted awards meaning the employee may not dispose of them prior to the satisfaction of a service-based hurdle, or restriction period. Satisfaction of the restriction period will be satisfied if the employee: a) remains employed with a Group Member during the period from the Offer Date to 31 August 2026 (Test Date); b) continues to be employed on the Test Date; and c) has not otherwise given or received notice of termination before the Test Date, or is otherwise a good leaver. If the employee is not a good leaver and does not satisfy the service-based hurdle, the Board may elect to buy back the Deferred Security Awards, for zero consideration. No amount is payable by the Company to the employee to buy back the Deferred Security Awards in these circumstances. c) Performance rights Details of performance rights issued in prior reporting periods are summarised below. Tranches: December 2021 September 2022 KMP participants: Mark Hallett, Executive Director David Addis, Chief Operating Officer Lachlan Davidson, General Counsel and Company Secretary Grant dates: 10-15 December 2021 19 September 2022 Instrument: Performance rights. The allocation of the LTI grants is on a face value basis using the volume weighted average price of Garda securities over the 10 days immediately following the release of Garda’s FY21 and FY22 Annual Reports. Each performance right is a right to acquire one stapled security in the Group, subject to the achievement of performance and service hurdles. Vesting period: December 2021 Tranche 3 years ending 30 June 2024 with 100% due to vest following period end September 2022 Tranche 3 years ending 30 June 2025 with 100% due to vest following period end GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 22 Transition arrangements: December 2021 Tranche One-third of the December 2021 tranche vest following the end of each of FY22, FY23 and FY24. If the performance hurdles at the end of FY22 and/or FY23 are not achieved, the relevant performance rights will carry forward to the next testing period. September 2022 Tranche There are no transition arrangements. Service hurdle: Vesting of the performance rights is subject to the employee: a) remaining employed during the Measurement Period; b) continuing to be employed on the relevant Test Date; and c) not giving or receiving notice of termination before the Test Date, or otherwise being a good leaver. Performance hurdle: Vesting of performance rights is subject to a return on equity (ROE) hurdle. ROE means the change in NTA plus distributions over the measurement period, divided by NTA at the commencement of the measurement period. Below lower ROE hurdle Nil Equal to lower ROE hurdle 50% Between lower and upper hurdles straight line pro rata At or above upper hurdle 100% Clawback: In prescribed circumstances, the Board has a discretion to ‘claw back’ securities (or the net proceeds from sale) allocated upon vesting or to cause unvested performance rights to lapse, to ensure no unfair benefit is obtained by a participant. Dividends and voting rights: Performance rights do not carry a right to vote or to distributions or, in general, a right to participate in other corporate actions such as entitlement issues. Change of control provisions: If a change of control event occurs, the Board has a discretion to determine the manner in which unvested rights and unexercised vested rights will be dealt with. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 23 9. EQUITY INTERESTS 9.1 Ordinary securities KMP equity interests, included all vested LTIs plus unvested deferred security awards, in ordinary Garda stapled securities as at 30 June 2024 are summarised below: As at 30 June 2024 As at 1 July 2023 Acquired Disposed LTI Grants7 Total Ordinary Securities ESP Securities Non-executive Directors P Leitch 47,411 - - - 47,411 47,411 - A Thornton 1,255,005 - - - 1,255,005 1,255,005 - Executive Directors M Madsen 17,060,000 - (150,000) - 16,910,000 5,950,000 10,960,000 M Hallett 2,533,469 - - - 2,533,469 1,533,469 1,000,000 Executives D Addis 1,217,507 - - 190,275 1,407,782 607,782 800,000 L Davidson 792,721 - - 121,087 913,808 353,808 560,000 Total number of securities 22,906,113 - (150,000) 311,362 23,067,475 9,747,475 13,320,000 9.2 ESP securities The Group did not make any awards of Garda ESP securities during FY24. Details of the Garda ESP securities awarded to KMP in years prior to FY24, together with attaching non-recourse loans, are set out in the following table: KMP Issue date8 Securities granted Exercise Price Fair value at grant date Loan value 30 June 2024 Vested9 Matthew Madsen 13 Nov 2017 960,000 0.63 0.70 365,076 13 Nov 2020 16 Apr 2020 5,000,000 1.00 0.06 4,718,177 16 Apr 2023 18 Nov 2020 5,000,000 1.16 0.10 5,729,724 19 Nov 2023 Mark Hallett 16 Apr 2020 1,000,000 1.00 0.06 954,216 16 Apr 2023 David Addis 3 Jun 2019 320,000 1.08 0.24 313,979 3 Jun 2021 23 Aug 2019 240,000 1.22 0.11 288,403 23 Aug 2021 23 Aug 2019 240,000 1.22 0.10 288,403 23 Aug 2022 Lachlan Davidson 13 Nov 2017 160,000 0.63 0.11 60,902 13 Nov 2019 13 Nov 2017 160,000 0.63 0.13 60,902 29 Nov 2019 23 Aug 2019 240,000 1.22 0.11 287,258 23 Aug 2021 Total 13,320,000 13,067,040 9.3 Exempt securities An Exempt Securities Award was made to all employees (other than those on the Board) in August 2023 under the Equity Incentive Plan. Each employee was granted $1,000 of securities which, based on 5-day volume weighted average security price of $1.21, equated to 827 securities each. 7 Includes stapled securities received by KMP during the reporting period in the form of exempt securities and deferred securities as well as stapled securities received on the vesting and exercise of performance rights. 8 ESP Securities issued prior to the internalisation transaction on 29 November 2019 were issued under the former Garda Capital Group employee security plan, with the number and exercise price of such securities being adjusted for the internalisation exchange ratio of 1.6x. 9 These securities have vested and are exercisable on repayment of the underlying non-recourse loan. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 24 Details of exempt securities awarded to KMP during the reporting period are set out in the following table: KMP Grant date Securities granted Value at grant date David Addis 4 Aug 23 827 $1.21 Lachlan Davidson 4 Aug 23 827 $1.21 Total 1,654 KMP may also not sell the securities before the earlier of the third anniversary of their grant or the date their employment with Garda ceases. 9.4 Performance rights The Group did not make any awards of performance rights during FY24. The table below shows the LTI grants made to KMP in the form of performance rights in financial years prior to FY24. Tranche Rights held at 30 June 2023 Rights granted during the year Rights vested and exercised during the year10 Rights forfeited during the year Rights held at 30 June 2024 Grant date Fair value per right at grant date Vesting date Fair value to be expensed in future years Executive Director M Hallett FY22 – 3 years 48,262 - - - 48,262 19 Sep 22 $1.32 31 Aug 25 3,164 Total 48,262 - - - 48,262 3,164 Chief Operating Officer David Addis FY21 – 2 years 36,231 - (36,231) - - 10 Dec 21 $1.46 31 Aug 23 - FY21 – 3 years 36,233 - - - 36,233 10 Dec 21 $1.39 31 Aug 24 3,148 FY22 – 3 years 96,525 - - - 96,525 19 Sep 22 $1.32 31 Aug 25 6,329 Total 168,989 - (36,231) - 132,758 9,477 General Counsel and Company Secretary Lachlan Davidson FY21 – 2 years 18,115 - (18,115) - - 15 Dec 21 $1.52 31 Aug 23 - FY21 – 3 years 18,117 - - - 18,117 15 Dec 21 $1.46 31 Aug 24 1,652 FY22 – 3 years 48,262 - - - 48,262 19 Sep 22 $1.32 31 Aug 25 3,164 Total 84,494 (18,115) - 66,379 4,816 9.5 Deferred securities During the year, 1,762,000 stapled securities were awarded to employees as deferred security awards, vesting on 31 August 2026. The deferred security awards made to KMP are summarised below: KMP Issue date Securities granted Exercise price Fair value at grant date Vesting date David Addis 13 Nov 2023 153,217 - $0.853 31 Aug 2026 Lachlan Davidson 13 Nov 2023 102,145 - $0.853 31 Aug 2026 Total 255,362 10 The exercise price for vested securities was $nil. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 25 10. KEY TERMS OF EMPLOYMENT 10.1 Executive Chairman The Executive Chairman, Matthew Madsen, entered into an executive services agreement effective 1 January 2020. Mr Madsen’s executive services agreement may be terminated by the Group with one year’s notice (or immediately for fraud, gross negligence, misconduct or criminal offence), or by Mr Madsen providing one year’s notice. There is a restraint on Mr Madsen competing with the Group or interfering with the relationship between the Group and its staff, customers, suppliers or contractors for one year following termination. Other major provisions of the executive services agreement include: term of agreement: commencing 1 January 2020 with no fixed termination date; base salary, exclusive of superannuation, of $695,000, to be reviewed annually by the Committee; entitlement to participate in short term incentives, expected to be in the form of cash bonus, and subject to achievement of behavioural, performance and financial hurdles determined by the Board; entitlement to participate in LTIs, at the discretion of the Board, subject to securityholder approval; and value of incentives granted in any financial year not to exceed 150% of salary for that year. 10.2 Directors The contracts with Garda’s Non-executive Directors, Messrs Leitch and Thornton, provide the following key terms: term: ongoing three-year terms, subject to re-election; remuneration (to be reviewed annually): • $85,000 per annum (assuming superannuation guarantee charge of 9.5%, increasing for any increases in the SGC above 9.5%); plus • $25,000 extra for the Chairs of each Board sub-committee; and termination: as permitted under constitution. The contract with Mr Hallett’s (Executive Director) company is largely identical to the contracts of the Non- executive Directors with two exceptions: remuneration: $150,000 per annum plus GST, reviewed annually; and entitlement to participate in LTIs, at the discretion of the Board. 10.3 Executives Remuneration and other terms of employment for other KMP executives are contained under standard employment contracts. It is Group policy that service contracts for salaried KMP are unlimited in term but capable of termination, with notice, by either party. The Group retains the right to terminate a service contract immediately and without notice if the KMP is at any time guilty of serious, willful, or persistent misconduct. On termination, salaried KMP are entitled to receive their statutory entitlements of accrued annual and long service leave, together with any superannuation benefits. Other than the Executive Chairman, the notice period for termination of a service contract by a KMP is three months. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 26 11. TRANSACTIONS WITH KMP AND THEIR RELATED PARTIES Other than as disclosed in this Remuneration Report, Garda did not participate in any transactions with KMP or related parties during the financial year. End of Remuneration Report The Directors’ Report, including the Remuneration Report, is signed in accordance with a resolution of the Directors. Matthew Madsen Executive Chairman 1 August 2024 GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 27 AUDITOR’S INDEPENDENCE DECLARATION GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 28 FINANCIAL REPORT CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Garda Company Year ended 30 June 2024 2023 2024 2023 Notes $000 $000 $000 $000 Revenue Rental revenue 3a 22,015 23,405 - - Recoverable rental outgoings 3b 5,114 5,376 - - Fund and real estate management revenue 3c - - 3,375 3,699 Recoveries and other fees 3d - - 2,605 2,784 Fee revenue 3e 1,658 1,012 1,658 1,012 Interest and lending business income 3f 1,989 1,763 - 59 Other revenue 3g 674 418 272 171 Net gain on sale of investment properties 11d - - 661 - 31,450 31,974 8,571 7,725 Net gain in fair value of financial instruments - 638 - - Revenue and fair value gains 31,450 32,612 8,571 7,725 Expenses Property expenses 4a (6,441) (6,915) - - Administration expenses (1,872) (1,945) (1,018) (1,124) Finance costs 4b (7,141) (6,313) (14) (2) Employee benefits expense 4c (3,374) (3,188) (5,979) (5,972) Security based payments expense 18b (1,637) (719) (1,637) (719) Depreciation (136) (150) (136) (150) Credit loss expense (76) - (76) - Net loss on sale of investment properties 11d (11,163) (11,729) - - (31,840) (30,959) (8,860) (7,967) Net loss in fair value of financial instruments (3,385) - - - Net loss in fair value of investment properties 11&12 (39,295) (6,470) - - Expenses and fair value losses (74,520) (37,429) (8,860) (7,967) Loss before income tax (43,070) (4,817) (289) (242) Income tax (expense) / benefit 5 144 (117) 144 (117) Loss after income tax (42,926) (4,934) (145) (359) Other comprehensive income, net of tax - - - - Total loss and other comprehensive income (42,926) (4,934) (145) (359) Total loss and other comprehensive income for the period attributable to: Securityholders of the Fund (42,781) (4,575) - - Shareholders of the Company (145) (359) (145) (359) Total loss and other comprehensive income (42,926) (4,934) (145) (359) Earnings per stapled security: Basic earnings per stapled security (cents) 6 (20.84) (2.37) (0.07) (0.17) Diluted earnings per stapled security (cents) 6 (20.84) (2.37) (0.07) (0.17) The Consolidated Statements of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 29 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION Garda Company As at 30 June 2024 2023 2024 Restated 202311 Notes $000 $000 $000 $000 ASSETS Current assets Cash and cash equivalents 21a 17,002 13,164 6,728 6,999 Trade and other receivables 9 150 257 539 1,985 Financial assets 10 26,177 11,953 - - Investment properties held for sale 12 13,298 111,750 - 1,250 Other assets 741 1,215 183 192 Derivative financial instruments 13 922 - - - Total current assets 58,290 138,339 7,450 10,426 Non-current assets Trade and other receivables 9 - 44 - - Investment properties 11 495,366 488,783 - - Derivative financial instruments 13 11,220 15,527 - - Right-of-use assets 284 - 284 - Deferred tax assets 5 444 300 444 300 Total non-current assets 507,314 504,654 728 300 Total assets 565,604 642,993 8,178 10,726 LIABILITIES Current liabilities Trade and other payables 14 2,092 4,430 1,325 5,619 Contract liabilities 253 1,232 - - Distribution payable 7 3,163 3,751 - - Provisions 152 51 152 51 Lease liabilities 133 - 133 - Total current liabilities 5,793 9,464 1,610 5,670 Non-current liabilities Other liabilities 347 739 - - Borrowings 15 216,622 224,269 - - Provisions 140 152 140 152 Lease liabilities 145 - 145 - Total non-current liabilities 217,254 225,160 285 152 Total liabilities 223,047 234,624 1,895 5,822 Net assets 342,557 408,369 6,283 4,904 EQUITY Contributed equity 17 342,886 354,495 (99) 45 Reserves 18c 4,209 2,541 4,209 2,541 (Accumulated losses) / retained earnings (4,538) 51,333 2,173 2,318 Total equity 342,557 408,369 6,283 4,904 Comprising: Total equity attributable to the Fund 336,274 403,465 - - Total equity attributable to the Company 6,283 4,904 6,283 4,904 Total equity 342,557 408,369 6,283 4,904 The Consolidated Statements of Financial Position should be read in conjunction with the accompanying notes. 11 Refer Note 18h) for discussion on restatement of comparative information for the Company in FY23. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 30 CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY Contributed equity Reserves (Accumulated losses)/ retained earnings Total equity12 Notes $000 $000 $000 $000 a) Garda 30 June 2024 Balance at 1 July 2023 354,495 2,541 51,333 408,369 Comprehensive income Loss for the financial year - - (42,926) (42,926) Other comprehensive income - - - - Transactions with owners in capacity as owners: Distributions paid or payable 7 - - (12,945) (12,945) Securities based payment expense - 1,637 - 1,637 Transfer to reserves (31) 31 - - Buy-back of securities (11,551) - - (11,551) Transaction costs for buy-back of securities (27) - - (27) Balance at 30 June 2024 342,886 4,209 (4,538) 342,557 30 June 2023 Balance at 1 July 2022 355,009 1,837 71,294 428,140 Comprehensive income Loss for the financial year - - (4,934) (4,934) Other comprehensive income - - - - Transactions with owners in capacity as owners: Distributions paid or payable 7 - - (15,027) (15,027) Securities based payment expense - 704 - 704 Sale of treasury stock 15 - - 15 Buy-back of securities (528) - - (528) Transaction costs for buy-back of securities (1) - - (1) Balance at 30 June 2023 354,495 2,541 51,333 408,369 b) The Company 30 June 2024 Balance at 1 July 2023 45 2,541 2,318 4,904 Comprehensive income Loss for the financial year - - (145) (145) Other comprehensive income - - - - Transactions with owners in capacity as owners: Buy-back of securities (113) - - (113) Securities based payment expense - 1,637 - 1,637 Transfer to reserves (31) 31 - - Balance at 30 June 2024 (99) 4,209 2,173 6,283 30 June 2023 Balance at 1 July 2022 19 - 2,677 2,696 Correction of error 18h 16 1,837 - 1,853 Restated balance at 1 July 2022 35 1,837 2,677 4,549 Comprehensive income Loss for the financial year - - (359) (359) Other comprehensive income - - - - Transactions with owners in capacity as owners: Buy-back of securities (5) - - (5) Securities based payment expense (restated) 18h - 704 - 704 Sale of treasury stock (restated) 18h 15 - - 15 Restated balance at 30 June 2023 45 2,541 2,318 4,904 The Consolidated Statements of Changes in Equity should be read in conjunction with the accompanying notes. 12 Total equity includes equity attributable to the Company, as shown in section b) of the Consolidated Statements of Changes in Equity. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 31 CONSOLIDATED STATEMENTS OF CASH FLOWS Garda Company Year ended 30 June 2024 2023 2024 2023 Notes $000 $000 $000 $000 Cash flows from operating activities Receipts from customers (incl. GST) 31,107 35,143 9,830 6,970 Payments in the course of operations (incl. GST) (16,538) (14,919) (7,378) (6,709) Interest received 579 367 237 120 Finance costs (10,465) (8,954) - - Net GST refund/ (paid) 1,789 159 (735) (543) Litigation proceeds 80 40 - - Net cash from / (used in) operating activities 21b 6,552 11,836 1,954 (162) Cash flows from investing activities Proceeds on sale of investment properties 106,100 75,820 2,000 - Payments for investment properties (54,791) (39,052) - - Selling costs of investment properties (7,689) (1,042) (89) - Payments for leasing fees (861) (961) - - Repayment of loans receivable from external parties 11,819 8,006 - 640 Loan advances to external parties (24,054) (10,584) - (10) Net cash from investing activities 30,524 32,187 1,911 630 Cash flows from financing activities Distributions paid (13,533) (15,030) - - Drawdowns from bank debt facilities 88,000 40,000 - - Repayment of bank debt facilities (95,986) (74,823) - - Bank debt facility transaction costs paid - (141) - - Payment of lease liabilities (141) (130) (141) (130) Payment for buyback of securities (11,551) (528) - - Payment for buyback transaction costs (27) (1) - - Repayment of loan by subsidiary of parent entity - - (3,995) - Net cash used in financing activities (33,238) (50,653) (4,136) (130) Net increase / (decrease) in cash and cash equivalents 3,838 (6,630) (271) 338 Cash and cash equivalents at beginning of year 13,164 19,794 6,999 6,661 Cash and cash equivalents at end of year 21a 17,002 13,164 6,728 6,999 The Consolidated Statements of Cash Flows should be read in conjunction with the accompanying notes. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 32 NOTES TO FINANCIAL REPORT NOTE 1 BASIS OF PREPARATION a) Regulatory context The consolidated financial statements for Garda Property Group (Garda or the Group), comprising Garda Diversified Property Fund and its controlled entity (GDF or the Fund) and Garda Holdings Limited and its controlled entities (GHL or the Company), have been jointly presented in accordance with ASIC Corporations (Stapled Group Reports) Instrument 2015/838 and the requirements of the Australian Securities Exchange. These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Interpretations and other applicable authoritative pronouncements issued by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001, as appropriate for for-profit oriented entities. Pursuant to Australian Accounting Standards, the Fund is the deemed parent entity of the Group. The financial statements comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. b) Going concern The consolidated financial statements have been prepared on a going concern basis, which assumes the Group will continue in operation for the foreseeable future. c) New or amended accounting standards and interpretations There are no standards, interpretations or amendments to existing standards that are effective for the first time for the financial year beginning 1 July 2023 that have a material impact on the amounts recognised in prior periods or will affect the current or future periods. New standards, amendments to standards and/ or interpretations effective for reporting periods beginning on or after 1 July 2024 have not been early adopted in preparing these financial statements. None would have had a material effect on the consolidated financial statements. d) Functional and presentation currency Items included in the consolidated financial statements are measured and presented in Australian dollars which is the functional currency of the Group. e) Rounding of amounts Garda is an entity of the kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191. Accordingly, amounts contained in this report have been rounded to the nearest thousand dollars, or in certain cases, to the nearest dollar. f) Historical cost convention The financial statements have been prepared on a going concern basis using historical cost conventions, except for investment properties and financial instruments which are stated at their fair value. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 33 g) Critical accounting estimates Determining the carrying amounts of some assets and liabilities requires estimation, at the reporting date, of the effects of uncertain future events. Outcomes within the next financial year that are different from the assumptions made could require a material adjustment to the carrying amounts of the specific assets and liabilities affected by the assumption. The key assumptions about the future, and other major sources of estimation uncertainty at the reporting date, that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year are outlined below: determining the fair value of share-based payments (refer Note 18); determining the fair value of financial assets at fair value through profit and loss (refer Note 10); determining the fair value of investment properties (refer Note 11); determining the fair value of investment properties held for sale (refer Note 12); determining the fair value of derivative financial instruments (refer Note 13); and estimating allowances for expected credit losses on trade and other receivables and financial assets held at amortised cost (refer Note 9 & 10). h) Goods and Services Tax (GST) Revenues and expenses are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the Australian Taxation Office. If it is not recoverable, it is recognised in the cost of acquisition of the asset or as an expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the Australian Taxation Office is included in other receivables or other payables in the Statement of Financial Position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the Australian Taxation Office, are presented as operating cash flows. Net GST paid or refunded to/from Australian Tax Office is shown separately in the operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the Australian Taxation Office. i) Climate-related financial disclosures The Australian government has introduced its mandatory climate-related financial disclosures legislation to Parliament. Known as Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024, it will be applicable to Group 1 entities for financial years commencing on or after 1 January 2025. While the new legislation does not apply to Garda due to not meeting the reporting thresholds, it is Garda’s intention to voluntarily adopt the new reporting regime, to the extent practicable, as though it was a “Group 3” entity. In the interim, Garda’s intention is to continue publishing an annual, standalone sustainability report. h) Registered office The registered office and principal place of business of the Group is Level 21, 12 Creek Street, Brisbane Qld 4000. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 34 NOTE 2 OPERATING SEGMENTS a) Operating segments The Group has identified three core operating segments. These segments are regularly reviewed by the Executive Chairman, who is the Chief Operating Decision Maker, to support decisions about resource allocation and to assess performance. The three operating segments are: direct property investment, debt investments and funds management. The business activities of each of these operating segments are as follows: Core Operating Segments Business Activity Direct investment Investment in Australian commercial and industrial property. Debt investment Investment in mortgages and loans into real estate development. External funds management Establishment and management of investment funds for external investors. In the current period, the external revenue and net profit contribution from the debt investment operating segment met the necessary quantitative thresholds to be considered a separate reportable segment and therefore have been separately disclosed. Comparatives for prior periods have been changed to conform to changes in disclosure. The external funds management operating segment was dormant during the year and does not have any assets or liabilities other than regulatory cash required for Australian Financial Service License purposes. Therefore, this is not a reportable segment and has been excluded from the information below. b) Segment results Direct investment Debt investment Total $000 $000 $000 Year ended 30 June 2024 Segment revenue: Lease revenue 22,729 - 22,729 Recoverable outgoings 5,114 - 5,114 Interest and lending business income - 1,989 1,989 Fee revenue - 1,658 1,658 Sundry income 60 - 60 Total segment revenue 27,903 3,647 31,550 Total segment expense (14,423) (381) (14,804) Segment profit 13,480 3,266 16,746 Year ended 30 June 2023 Segment revenue: Lease revenue 24,971 - 24,971 Recoverable outgoings 5,376 - 5,376 Interest and lending business income - 1,763 1,763 Fee revenue - 1,012 1,012 Sundry income 1 - 1 Total segment revenue 30,348 2,775 33,123 Total segment expense (14,049) (474) (14,523) Segment profit 16,299 2,301 18,600 Segment results include items directly attributable to the segment as well as those that may be allocated on a reasonable basis. They exclude non-segment specific non-cash expenses including fair value adjustments, security-based payments expense and depreciation. Corporate expenses pertaining to Group level functions such as finance and tax, legal, risk and compliance, company secretarial, marketing and other corporate services are also not allocated to core operation segments. These expenses form part of unallocated revenue and expenses in the reconciliation of segment profit to profit before income tax. Segment results are net of all internal revenue and expenses. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 35 c) Reconciliation of segment revenues to Group revenue Year ended 30 June 2024 2023 $000 $000 Total revenue and other income for segments 31,550 33,123 Unallocated amounts: Lease straight-lining revenue (249) (1,130) Lease costs and incentive amortisation (673) (771) Rent free income 208 335 Sundry income 35 35 Non-operating interest income 579 382 Net gain in fair value of financial instruments - 638 Total group revenue and other income 31,450 32,612 d) Reconciliation of segment profit to Group profit before tax Year ended 30 June 2024 2023 $000 $000 Segment profit 16,746 18,600 Unallocated amounts: Revenue: Lease straight-lining revenue (249) (1,130) Lease costs and incentive amortisation (673) (771) Rent free income 208 335 Sundry income 35 35 Non-operating interest income 579 382 Net gain in fair value of financial instruments - 638 Expenses: Finance costs (14) (2) Employee benefit expense (3,085) (2,914) Administration expenses (1,001) (922) Depreciation (136) (150) Security based payments expense (1,637) (719) Net loss on financial instrument held at fair value through profit and loss (3,385) - Net loss on sale of investment properties (11,163) (11,729) Net loss in fair value of investment properties (39,295) (6,470) Group loss before income tax (43,070) (4,817) GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 36 e) Segment assets and liabilities Direct investment Debt investment Total $000 $000 $000 As at 30 June 2024 Segment Assets 519,049 26,677 545,726 Segment Liabilities (222,181) (11) (222,192) Net Assets 296,868 26,666 323,534 As at 30 June 2023 Segment Assets 605,274 13,318 618,592 Segment Liabilities (233,568) (11) (233,579) Net Assets 371,706 13,307 385,013 Segment assets and liabilities are net of all internal loan balances. f) Reconciliation of segment assets to Group assets As at 30 June 2024 2023 $000 $000 Reportable segment assets 545,726 618,592 Unallocated amounts: Cash and cash equivalents 6,728 6,999 Other receivables 280 325 Investment properties13 - 1,250 Derivative financial instrument 12,142 15,527 Right-of-use assets 284 - Deferred tax assets 444 300 Total Group assets 565,604 642,993 g) Reconciliation of segment liabilities to Group liabilities As at 30 June 2024 2023 $000 $000 Reportable segment liabilities 222,192 233,579 Unallocated amounts: Trade and other payables 285 842 Provisions 292 203 Lease liability 278 - Total Group liabilities 223,047 234,624 13 Represents the value of land held by a subsidiary of the Company. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 37 NOTE 3 REVENUE a) Rental revenue The Group’s main revenue stream is property rental revenue and is derived from holding investment properties. Rental revenue is recognised on a straight-line basis over the lease term for leases with fixed rent review clauses. Rental revenue not received at reporting date is reflected in the Statements of Financial Position as a receivable or, if paid in advance, as contract liabilities. Contingent rents based on the future amount of a factor that changes other than with the passage of time, including turnover rents and CPI linked rental increases, are only recognised when contractually due. Prospective tenants may be offered incentives to enter into operating leases. The cost of incentives is recognised as a reduction of rental revenue on a straight-line basis from the lease commencement date to the end of the lease term. Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Revenue recognised under AASB 16 Leases Rental revenue 22,688 24,176 - - Lease costs and incentive amortisation (673) (771) - - Total rental revenue 22,015 23,405 - - b) Recoverable rental outgoings Revenue from investment properties also includes the recovery from tenants of operating costs or outgoings such as property management fees, land tax, council rates, utilities and insurance. Recoverable rental outgoings are recognised at a point in time when the Group incurs the operating cost or outgoing. Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Revenue recognised under AASB 15 Revenue from contracts with customers Recoverable rental outgoings 5,114 5,376 - - c) Fund and real estate management revenue The Company, through its subsidiaries, provides funds management and administration services to the Fund in accordance with the Fund’s constitution and relevant service agreements. The services are provided on an ongoing basis and revenue is based on agreement terms and recognised over time. Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Revenue recognised under AASB 15 Revenue from contracts with customers Fund and real estate management revenue - - 3,375 3,699 GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 38 d) Recoveries and other fees Recoveries and other fees represent the reimbursement of expenses by the Fund to the Company in accordance with the Fund’s constitution and relevant service agreements. This revenue is recognised at a point in time. Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Revenue recognised under AASB 15 Revenue from contracts with customers Recoveries and other fees - - 2,605 2,784 e) Fee revenue The Group and the Company are entitled to lending fees upon the successful completion of contracts. This revenue is recognised at a point in time. Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Revenue recognised under AASB 15 Revenue from contracts with customers Fees from lending 1,658 1,012 1,658 1,012 f) Interest and lending business income As disclosed in Note 10, financial assets consist of commercial loans receivable from external parties measured at either: amortised cost; or fair value through profit and loss (refer Note 8). Interest from commercial loans measured at amortised cost is recognised as revenue. This measurement uses the effective interest rate method less any allowance under the expected credit loss model. In contrast, interest and fee revenues associated with commercial loans measured at fair value are recognised as fair value gains. Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Revenue recognised under AASB 9 Financial Instruments Interest on commercial loans measured at amortised cost 1,908 1,763 - 59 Gain on commercial loans measured at fair value 81 - - - Total interest and lending business income 1,989 1,763 - 59 g) Other revenue Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Other revenue Non-operating interest income 579 382 237 136 Sundry income 95 36 35 35 Total other income 674 418 272 171 GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 39 h) Disaggregation of revenue from contracts with customers 2024 2023 Point in Time Over Time Total Point in Time Over Time Total $000 $000 $000 $000 $000 $000 Garda Recoverable rental outgoings 5,114 - 5,114 5,376 - 5,376 Fee revenue 1,658 - 1,658 1,012 - 1,012 Total 6,772 - 6,772 6,388 - 6,388 Company Fund and real estate management revenue - 3,375 3,375 - 3,699 3,699 Recoveries and other fees 2,605 - 2,605 2,784 - 2,784 Fee revenue 1,658 - 1,658 1,012 - 1,012 Total 4,263 3,375 7,638 3,796 3,699 7,495 GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 40 NOTE 4 EXPENSES a) Property expenses Investment property expenses are recognised as incurred. Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Rental outgoings 5,392 5,806 - - Direct expenses 745 692 - - Non-recoverable expenses 304 417 - - Property expenses 6,441 6,915 - - b) Finance costs Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in which they are incurred. A qualifying asset is an asset under development or construction where such development or construction takes a substantial period of time. To the extent that funds are borrowed to fund development and construction, the amount of borrowing costs to be capitalised to qualifying assets is determined by using an appropriate capitalisation rate. Interest payments in respect of financial instruments classified as liabilities at amortised cost are included in finance costs. Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Interest on borrowings 10,417 9,397 - - Amortisation of borrowing transaction costs 339 334 - - Interest expense on lease liabilities 14 2 14 2 Interest capitalised to properties under construction (3,629) (3,420) - - Finance costs 7,141 6,313 14 2 c) Employee benefits expense Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Superannuation guarantee expense 218 211 326 314 Other employee benefits 3,156 2,977 5,653 5,658 Employee benefits expense 3,374 3,188 5,979 5,972 In addition to these employee benefits expenses, a security-based payment expense of $1,637,000 (2023: $719,000) was incurred by the Company during the year. Refer Note 18b. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 41 NOTE 5 INCOME TAX a) Accounting policy Under current Australian income tax legislation, the Fund is not liable for income tax provided it satisfies certain legislative requirements, which were met in the current and previous financial years. The Company is liable for income tax and has formed a tax consolidated group with its wholly owned and controlled Australian entities. As a consequence, these entities are taxed as a single entity. Income tax expense is comprised of current and deferred tax expense which are recognised in the Consolidated Statements of Profit or Loss and Other Comprehensive Income. Current tax expense relates to the expected taxable income at the applicable rate of the financial year. Deferred tax expense represents the tax expense in respect of the future tax consequences of recovering or settling the carrying amount of an asset or liability. Deferred income tax liabilities are recognised for all taxable temporary differences. The carrying amount of deferred income tax assets is reviewed at balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to utilise them. Garda has made an election for the Fund and its wholly owned subsidiary, Garda Capital Trust, to be attribution managed investment trusts (AMITs). The AMIT regime is intended to reduce complexity, increase certainty and minimise compliance costs for AMITs and their investors. b) Income tax expense Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 The components of income tax benefit comprise: Current tax (expense)/ benefit - - - - Deferred income tax (expense)/ benefit 144 (117) 144 (117) Income tax benefit/ (expense) 144 (117) 144 (117) Deferred income tax expense included in income tax benefit: Decrease in deferred tax assets (58) (195) (58) (195) Decrease in deferred tax liabilities 202 78 202 78 Total deferred tax benefit/ (expense) 144 (117) 144 (117) c) Reconciliation of income tax expense to profit before income tax Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 The prima facie tax on loss before income tax is reconciled to income tax as follows: Loss before income tax (43,070) (4,817) (289) (242) Less loss attributed to Trusts not subject to tax 42,781 4,575 - - Loss subject to income tax (289) (242) (289) (242) Prima facie tax at 25.0% (2023: 25.0%) 72 61 72 61 Tax effect of amounts which are not (deductible)/ assessable: Security based payment expense (406) (172) (406) (172) Carried forward capital loss to offset capital gain 478 - 478 - Other expenses - (6) - (6) Income tax benefit/ (expense) 144 (117) 144 (117) GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 42 d) Deferred tax assets Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Composition of deferred tax assets Provision for employee benefits 136 113 136 113 Accrued expenses 144 133 144 133 Capital raising and transaction costs 12 29 12 29 Tax losses 233 413 233 413 Lease liabilities 105 - 105 - Deferred tax asset 630 688 630 688 Movements: Opening balance 688 883 688 883 Movement in deferred tax asset - temporary differences: Charged to profit or loss (58) (195) (58) (195) Closing balance at the end of the year 630 688 630 688 e) Deferred tax liabilities Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Composition of deferred tax liabilities Right of use asset 105 - 105 - Investment property - 313 - 313 Other 81 75 81 75 Deferred tax liabilities 186 388 186 388 Movements: Opening balance 388 466 388 466 Movement in deferred tax liabilities - temporary differences: Charged to profit and loss (202) (78) (202) (78) Closing balance at the end of the year 186 388 186 388 f) Net deferred tax asset Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Net deferred tax asset Deferred tax assets 630 688 630 688 Deferred tax liabilities (186) (388) (186) (388) Net deferred tax asset 444 300 444 300 GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 43 NOTE 6 EARNINGS PER STAPLED SECURITY Garda Company Year ended 30 June 2024 2023 2024 2023 Loss after tax attributable to securityholders ($000) (42,926) (4,934) (145) (359) Earnings per stapled security Basic (cents) (20.84) (2.37) (0.07) (0.17) Diluted (cents) (20.84) (2.37) (0.07) (0.17) Securities Basic14 (number) 206,022,925 208,405,220 206,022,925 208,405,220 WANOS15 (number) 221,474,189 223,580,323 221,474,189 223,580,323 14 The basic number of securities is calculated as total issued securities less treasury securities and Garda ESP securities, weighted according to the date and number of securities issued and bought back during the year. See Note 18 for further details. 15 The weighted average number of securities (WANOS) is determined as total issued securities less treasury securities, weighted according to the date and number of any securities issued and bought back during the financial year. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 44 NOTE 7 DISTRIBUTIONS AND DIVIDENDS a) Distributions payable A payable is recognised for any dividend or distribution declared, being appropriately authorised and no longer at the discretion of the Board of Directors, on or before the end of the financial year but not distributed as at balance date. Garda Company As at 30 June 2024 2023 2024 2023 $000 $000 $000 $000 2024: 1.575 cents per security (2023: 1.80 cents) 3,163 3,751 - - Movement in distribution payable: Opening balance at beginning of year 3,751 3,754 - - Distributions payable 12,945 15,027 - - Distributions paid (13,533) (15,030) - - Closing balance 3,163 3,751 - - b) Distributions paid and payable Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 September: 1.575 cents per security (2023: 1.80 cents) 3,283 3,758 - - December: 1.575 cents per security (2023: 1.80 cents) 3,304 3,759 - - March: 1.575 cents per security (2023: 1.80 cents) 3,195 3,759 - - June: 1.575 cents per security (2023: 1.80 cents) 3,163 3,751 - - Total distribution16 12,945 15,027 - - c) Franking credits Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Franking credits available 4,204 4,204 4,204 4,204 The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for: a) franking credits that will arise from the payment of the amount of the provision for income tax; b) franking credits that will arise from the payment of the amount of the income tax refunds; c) franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and d) franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date. 16 Total distributions exclude distributions paid in respect of treasury securities and securities granted under the Garda ESP. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 45 NOTE 8 FAIR VALUE DISCLOSURE a) Accounting policy Fair value is the price that would be received on sale of an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. It is based on the presumption that the transaction takes place either in the principal market for the asset or liability or, in the absence of a principal market, in the most advantageous market. The principal or most advantageous market must be accessible to, or by, the Group. Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they are acting in their best economic interest. The fair value measurement of a non-financial asset takes into account the market participant's ability to generate economic benefits by using the asset at its highest and best use, or by selling it to another market participant that would use the asset at its highest and best use. In measuring fair value, the Group uses valuation techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. Classifications are reviewed each reporting date and transfers between levels are determined based on a reassessment of the lowest level input that is significant to the fair value measurement. There are various methods used in estimating the fair value of a financial instrument: Level 1: fair value is calculated using quoted prices in active markets. Level 2: fair value is estimated using inputs that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices). Level 3: fair value is estimated using inputs for the asset or liability that are not based on observable market data. b) Assets and liabilities measured at fair value The following table sets out Garda’s assets and liabilities that are measured and recognised at fair value in the financial statements. Level 1 Level 2 Level 3 Total Notes $000 $000 $000 $000 30 June 2024 Assets Financial assets 10 - - 5,104 5,104 Investment properties (non-current) 11 - - 495,366 495,366 Investment properties held for sale (current) 12 - - 13,298 13,298 Derivative financial instruments 13 - 12,142 - 12,142 - 12,142 513,768 525,910 30 June 2023 Assets Financial assets 10 - - 4,452 4,452 Investment properties (non-current) 11 - - 488,783 488,783 Investment properties held for sale (current) 12 - - 111,750 111,750 Derivative financial instruments 13 - 15,527 - 15,527 - 15,527 604,985 620,512 There were no transfers during the year between Level 1 and Level 2 for recurring fair value measurements. Garda’s policy is to recognise transfers into and out of the different fair value hierarchy levels at the date the event or change in circumstances that caused the transfer occurred. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 46 NOTE 9 TRADE AND OTHER RECEIVABLES a) Accounting policy and critical accounting estimates Trade and other receivables include: funds management fees payable by the Fund to the Company; rent and outgoings receivable from tenants and which are generally due for settlement within 30 days; other receivables, including litigation proceeds and GST receivables. Under AASB 9, Garda applies the simplified approach for measuring the allowance for credit losses from rent and outgoings receivable from tenants. Under the simplified approach, the allowance for credit losses is based on the lifetime expected credit losses of the relevant receivable. Garda determines expected credit losses using a provision matrix based on the Group's historical credit loss experience, adjusted for factors that are specific to the financial asset as well as current and future expected economic conditions relevant to the financial asset. When material, the time value of money is incorporated into the measurement of expected credit losses. There has been no change in the estimation techniques or significant assumptions made during the reporting period. b) Trade and other receivables Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Current Fund management fees receivable - - 193 1,507 Rent and outgoings receivable 54 58 - - GST receivable 30 68 - - Other receivables 66 131 346 478 150 257 539 1,985 Non-Current Rent and outgoings - 44 - - - 44 - - Expected credit loss Allowance for expected credit losses - - - - - - - - GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 47 NOTE 10 FINANCIAL ASSETS a) Accounting policy and critical accounting estimates Financial assets consist of commercial loans receivable from external parties measured at either: amortised cost; or fair value through profit and loss (refer Note 8). Financial assets are measured at either amortised cost or fair value through profit and loss on the basis of the Group’s business model for managing the financial asset and the contractual cashflow characteristics. Fair value is determined by applying judgement and estimates in contractual cashflows other than principal and interest. All commercial loans with maturities greater than 12 months after balance date are classified as non-current assets. Commercial loans to external parties are primarily secured by a first registered mortgage and a general security agreement. Garda recognises an allowance for expected credit losses on its commercial loans to external parties measured at amortised cost. This allowance is measured using the three-stage model or general approach as per AASB 9 as follows: 12-Month Expected Credit Losses: For commercial loans where no significant increase in credit risk has been identified, the allowance reflects credit losses expected from default events that could occur within twelve months after the reporting period. Lifetime Expected Credit Losses: For commercial loans where a significant increase in credit risk has been identified, the allowance reflects credit losses expected from all possible default events over the life of the loan. Lifetime Expected Credit Losses – Credit Impaired: For commercial loans where there is no reasonable expectation of recovery, the allowance reflects the full amount of the loan to be written off. Management uses considerable judgment in assessing whether there has been a significant increase in credit risk on commercial loans to external parties. It measures expected credit losses based on its historical credit loss experience, adjusted for factors specific to the commercial loans such as days past due without repayment, recourse available such as the realisability of security, previous transactions with the borrower as well as current and future economic conditions affecting the underlying project for which the commercial loan was initially transacted. There have been no changes in the estimation techniques or significant assumptions used during the reporting period. b) Commercial loans Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Current Commercial loans to external parties at amortised cost 21,073 7,501 - - Commercial loans to external parties at fair value 5,104 4,452 - - 26,177 11,953 - - Expected credit loss Allowance for expected credit losses - - - - - - - - Garda’s consolidated financial statements for the year ending 30 June 2023 disclosed total commercial loans of $11,953,000, without disaggregating the loans between amortised cost and held at fair value through profit and loss. The prior year comparative figures have been aligned with current year disclosures to disaggregate the loans in its relevant categories. Expected credit losses have not been assessed as material based on the profile of Garda’s credit exposures, headroom on loan covenants, security received from borrowers and disciplined monitoring and assessment of all actual and potential commercial loan exposures. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 48 NOTE 11 INVESTMENT PROPERTIES a) Accounting policy Investment properties comprise properties held for long-term rental yields and/ or capital appreciation and properties being constructed or developed for future use as investment properties. Investment properties are initially recognised at cost, including transaction costs. Subsequently to initial recognition, investment properties are carried at fair value. Fair value is the price that would be received to sell the asset in an orderly transaction between market participants at the measurement date. Changes in fair values are recorded in the Consolidated Statement of Profit or Loss and Other Comprehensive Income. Subsequent development and refurbishment costs (other than repairs and maintenance) are capitalised to the investment property when they result in an enhancement in the future economic benefits of the property. Investment properties under construction are carried at fair value, which may be represented by cost where fair value cannot be reliably determined and the construction is incomplete. Finance costs attributable to these qualifying assets are capitalised as part of the asset. A qualifying asset is an asset under development or construction where such development or construction takes a substantial period of time. Leasing fees incurred and incentives provided are capitalised and amortised over the lease periods to which they relate. b) Reconciliation Year ended 30 June 2024 2023 Note $000 $000 Garda Investment properties at independent valuation 11f 224,100 359,250 Investment properties at Directors’ valuation 11f 271,266 129,533 495,366 488,783 Movements during the year: Opening balance 488,783 650,733 Acquisition of established investment properties 11c - - Sale of investment properties 11d (28,786) (86,507) Capital expenditure on properties under construction 51,766 41,490 Capital expenditure on established investment properties 3,817 2,191 Transfer to investment properties held for sale 12 (13,298) (111,750) Straight-lining of rental income (319) (1,130) Net movement in leasing costs and incentives 472 226 Net loss in fair value of investment properties (7,069) (6,470) Balance at the end of the year 495,366 488,783 Company Land at 39 Palmer Street, Townsville 12 - - - - Movements during the year: Opening balance - 1,250 Transfer to investment properties held for sale (current assets) - (1,250) Balance at the end of the year - - GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 49 c) Acquisitions Garda’s focus during the financial year was on development and the funding thereof. Accordingly, no investment properties were acquired during the year. d) Disposals The gain or loss on disposal of an investment property is calculated as the difference between the carrying amount of the asset at the date of disposal and the net proceeds from disposal and is included in the Consolidated Statement of Profit or Loss and Other Comprehensive Income in the year of disposal. During the financial year, the disposals of the following properties were settled: On 31 January 2024, settlement occurred for the disposals of Botanicca 7 and Botanicca 9 in Richmond, Victoria for $80,000,000, excluding transaction costs. Net loss from the sale of these properties was $6,895,000 On 8 December 2023, settlement occurred for the disposal of 8-10 Cato Street, Hawthorn East for $24,100,000, excluding transaction costs. Net loss from the sale of the property was $4,929,000. On 1 November 2023, settlement occurred for the disposal of a block of land in Townsville for $2,000,000, excluding transaction costs. Net gain from the sale of the property was $661,000. Except for 8-10 Cato Street, Hawthorn East, all these assets were designated as investment properties held for sale at 30 June 2023. They maintained this classification throughout the current reporting period until their respective settlement dates. e) Valuation methodology The Group obtains annual independent valuations for each property by a member of the Australian Property Institute of Valuers, except for properties under development properties where it may be deemed appropriate to extend beyond this term. Each valuation firm and its signatory valuer are appointed on the basis that they are engaged for no more than three consecutive valuations. Independent valuations may be undertaken earlier where the Group believes there is potential for a change in the fair value of the property. Directors’ valuations of each property are determined at each reporting period (interim and full year) unless the property has been independently externally valued. Directors’ valuations are based on the most recent independent external valuation adjusted for capital accretive expenditure and sales evidence since that last independent valuation. The valuation methodologies utilised by external valuers include the capitalisation approach (market approach) and the discounted cash flow approach (income approach). The valuation is also compared to, and supported by, direct comparison to recent market transactions. The adopted capitalisation rates and discount rates are determined based on industry expertise and knowledge and, where possible, a direct comparison to third party rates for similar assets in a comparable location. Rental revenue from current leases and assumptions about future leases, as well as any expected operational cash outflows in relation to the property, are also built into each asset assessment of fair value. In relation to development properties under construction for future use as investment property, fair value is determined based on costs incurred on the acquisition and development of the property. However, where reliably measurable, fair value is determined based on the market value of the property on the assumption it had already been completed at the valuation date (using the methodology as outlined above) less costs still required to complete the project, including an appropriate adjustment for industry benchmarked profit and development risk. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 50 f) Investment property valuations Six of Garda’s properties have been externally valued for the FY24 Annual Report, with the balance of the portfolio (including value accretive additions) being carried at Directors’ valuation. Development and refurbishment costs (other than repairs and maintenance) are capitalised where they result in an enhancement in the future economic benefits of a property. Where those costs were incurred subsequently to last independent valuation, they are disclosed separately as value accretive expenditure. As at 30 June Valuation 2024 2023 Movement Type $000 $000 $000 Industrial Established Acacia Ridge 69 Peterkin Street Directors 22,120 21,400 720 Berrinba 1-9 Kellar Street External 16,000 15,400 600 Heathwood 67 Noosa Street External 16,900 15,500 1,400 Morningside 326 & 340 Thynne Road External 61,000 54,500 6,500 Pinkenba 70 - 82 Main Beach Road External 32,200 35,500 (3,300) Richlands 56 - 72 Bandara Street Directors 39,454 13,700 25,754 Wacol 41 Bivouac Place External 52,500 58,500 (6,000) Wacol 498 Progress Road (Pinnacle West) External 45,500 45,900 (400) Value accretive capital expenditure Directors 128 2,219 (2,091) Developments Acacia Ridge 38-56 Peterkin Street Directors 31,073 18,350 12,723 North Lakes 109 - 135 Boundary Road Directors 95,411 69,500 25,911 Wacol 372 Progress Road (Pinnacle East) - 11,000 (11,000) Value accretive capital expenditure Directors - 10,786 (10,786) Total industrial 412,286 372,255 40,031 Office Cairns 7-19 Lake Street Directors 83,080 87,750 (4,670) Hawthorn East 8-10 Cato Street - 25,000 (25,000) Value accretive capital expenditure Directors - 3,778 (3,778) Total office 83,080 116,528 (33,448) Total investment properties 495,366 488,783 6,583 The registered titles to all assets of the Fund are held by The Trust Company (Australia) Limited, as custodian. This is an ASIC regulatory requirement. g) Fair value measurement and critical accounting estimates Garda’s investment properties are at Level 3 in the fair value hierarchy as their fair value is estimated using inputs for the assets that are not based on observable market data. The following table sets out the valuation techniques used to measure fair value within Level 3, including details of the significant unobservable inputs used and the relationship between unobservable inputs and fair value. Inputs used to measure fair value Range of unobservable inputs Relationship between unobservable inputs and fair value 2024 2023 Discount rate 7.00%-8.75% 5.75%-6.75% The higher the discount rate, capitalisation rate, terminal yield and expected vacancy rate, the lower the fair value. Capitalisation rate 5.25%-7.75% 4.50%-7.00% Terminal yield 5.63%-8.00% 5.00%-7.25% Expected vacancy rate 0% 0% Rental growth rate 3.15%-3.54% 2.68%-3.79% The higher the rental growth, the higher the fair value. Based on Gross Face Rental growth 10-year CAGR. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 51 Judgement is required in determining the following significant unobservable inputs: Capitalisation rate: the rate at which market net property income is capitalised to determine the value of a property. The rate is determined with regard to market evidence and the prior external valuation. Discount rate: the rate of return used to convert cash flows, payable or receivable in the future, into present value. For industrial and office properties, it reflects the opportunity cost of capital, that is, the rate of return the cash can earn if put to other uses having similar risk. The rate is determined with regard to market evidence and the prior external valuation. Terminal yield: the capitalisation rate used to convert the future market net property income into an indication of the anticipated value of the property at the end of the holding period when carrying out a discounted cash flow calculation. The rate is determined with regard to market evidence and the prior external valuation. Expected vacancy rate: the proportion of the property not expected to be earning market net property income. Rental growth rate: the annual movement in net market rent being the estimated amount for which a property should lease between a lessor and a lessee on appropriate lease terms in an arm’s length transaction. h) Climate considerations The Group engages independent valuation firms to assist in determining fair value of its investment property assets. As qualified valuers, they are required to follow both the RICS Valuation - Global Standards and the Australian Property Institute’s International Valuation Standards, and accordingly their valuations are required to take into account the sustainability features of properties being valued and the implications such factors could have on property values in the short, medium and longer term. Where relevant, the Group’s independent valuation firms note in their valuation reports that sustainability features are considered as part of the valuation approach and outline that sustainability features have been influencing value for some time. i) Contractual receivables Investment properties listed at f) above (excluding land and properties under construction) are typically leased to tenants under long-term operating leases with rentals payable monthly. Minimum lease payments receivable on leases of investment properties are disclosed below. Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Future minimum lease payments receivable: Within 1 year 19,342 24,659 - - Between 1 and 5 years 65,443 99,322 - - Later than 5 years 17,403 9,324 - - 102,188 133,305 - - j) Contractual payables Garda’s contractual obligations with respect to investment properties at 30 June 2024 were as follows: Properties Nature of Obligation $000 Acacia Ridge, 38-56 Peterkin Street Development 14,553 North Lakes, 109-135 Boundary Road Development 9,431 Cairns, 7-19 Lake Street Capex 201 Total contractual obligations 24,185 GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 52 NOTE 12 INVESTMENT PROPERTIES HELD FOR SALE a) Accounting policy Investment properties are classified as held for sale if their carrying values are expected to be recovered principally through a sale transaction rather than continuing use, and a sale is considered highly probable. Investment properties held for sale are presented separately in the Consolidated Statements of Financial Position as current assets and measured at fair value less cost to sell or net realisable value. The critical accounting estimates underpinning the values of properties held for sale are set out in Note 11g. b) Investment properties held for sale At 30 June 2024, Garda’s Pinnacle East property was classified as an asset held for sale. Year ended 30 June 2024 2023 $000 $000 Garda Property at 372 Progress Road, Wacol (Pinnacle East) 13,298 - Land at 39 Palmer Street, Townsville - 1,250 Property at 572-576 Swan Street, Richmond - 50,500 Property at 588A Swan Street, Richmond - 60,000 13,298 111,750 Movements during the year: Opening balance 111,750 - Transfer from investment properties at net realisable value 13,298 111,750 Land sold at 39 Palmer Street, Townsville (1,250) - Capital expenditure 1,087 - Straight-line lease income 70 - Net movement in leasing costs and incentives 106 - Net loss from fair value adjustments (32,226) - Disposal book value (79,537) - Balance at the end of the year 13,298 111,750 Company Land at 39 Palmer Street, Townsville - 1,250 - 1,250 Movements during the year: Opening balance 1,250 - Transfer from investment properties at fair value (non-current assets) - 1,250 Sale of property (1,250) - Balance at the end of the year - 1,250 GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 53 NOTE 13 DERIVATIVE FINANCIAL INSTRUMENTS a) Accounting policy The Group used derivative financial instruments (interest rate swaps) during the year to manage the risk of movements in variable interest rates on the Group’s Australian dollar denominated borrowings. The net fair value of derivative financial instruments at reporting date is recognised in the Consolidated Statements of Financial Position as a financial asset or financial liability. In accordance with AASB 9, any change in the fair value of a derivative is recognised in profit and loss. Garda does not perform hedge accounting. b) Fair value measurement and critical accounting estimates Garda’s interest rate swap derivatives are at Level 2 in the in the fair value hierarchy as their fair value is estimated using inputs that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices). The fair value of Garda’s derivatives has been determined by our banks using pricing models based on observable market data at balance date, including market expectations of future interest and discount rates adjusted for any specific features of the derivatives, counterparty or own credit risk. $150,000,000 (30 June 2023: $150,000,000) of interest rate hedges are currently in place, comprising: $50,000,000 of interest rate swaps at a rate of 2.61%, expiring 3 Jun 2025; $10,000,000 of interest rate swaps at a rate of 0.80%, expiring 4 March 2027; $60,000,000 interest rate swaps at a rate of 0.82%, expiring 4 March 2027; and $30,000,000 interest rate swaps at a rate of 0.98%, expiring 4 March 2030. These derivatives are currently “in the money” with a valuation at 30 June 2024 of $12,142,000. Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Current Interest rate swap contract asset 922 - - - Interest rate swap contract liability - - - - Non-Current Interest rate swap contract asset 11,220 15,527 - - Interest rate swap contract liability - - - - Total interest rate swap asset 12,142 15,527 - - NOTE 14 TRADE AND OTHER PAYABLES These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which remain unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is due more than 12 months after the reporting date. Garda Company Year ended 30 June 2024 2023 2024 Restated 2023 $000 $000 $000 $000 Trade creditors - 24 - 47 Other payables 2,092 4,406 1,325 1,692 Loan payable to parent entity - - - 3,880 2,092 4,430 1,325 5,619 GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 54 NOTE 15 BORROWINGS a) Accounting policy Borrowings are initially recognised at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Under the effective interest rate method, any transaction fees, costs, discounts and premiums directly related to the borrowings are capitalised to borrowings and amortised in the Consolidated Statements of Profit or Loss and Comprehensive Income over the expected life of the borrowings. Fees paid for establishing loan facilities are recognised as transaction costs and amortised over the period to which the facility relates. All borrowings with contractual maturities greater than 12 months after reporting date are classified as non-current liabilities. Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Non-current Bank loans (secured) 217,191 225,177 - - Less: unamortised transaction costs (569) (908) - - 216,622 224,269 - - b) Syndicated debt facility Garda’s borrowings comprise a $270,000,000 syndicated debt facility, expiring in March 2026. Facility Facility Limit Amount Drawn Amount Available 2024 2023 2024 2023 2024 2023 $000 $000 $000 $000 $000 $000 Total facilities 270,000 290,000 217,191 225,177 52,809 64,823 Loan repayments are interest only with a lump sum payment of all amounts outstanding due at maturity. The syndicated bank debt facility is secured by: a) a first registered general security deed in respect of all assets and undertakings of Garda; b) a first registered real property mortgage in respect of each property in the Fund portfolio; c) a first registered general security deed in respect of all assets and undertakings of the Company and its secured subsidiaries; and d) a specific security agreement over tenant security deposit accounts. Notwithstanding the terms of the facility, the registered title to all the assets of the Fund, including the properties, are held by The Trust Company (Australia) Limited, as custodian, who holds title for the relevant fund. This is an ASIC regulatory requirement. Key financial covenants and other metrics under the syndicated bank debt facility include: a) interest cover ratio is to remain above 1.50 times in FY24, above 1.75 times in FY25 and above 2.00 times in subsequent years; b) loan to value ratio (LVR) must remain under 50%; and c) adjusted gearing ratio is to remain under 1.20 times. The Group complied with its financial covenants throughout the year. Garda’s financial undertakings under the syndicated bank facility include the following: a) aggregate earnings before interest, taxes, depreciation and amortisation (EBITDA) of Garda borrowers must represents at least 90% of Group EBITDA; and b) aggregate total assets of Garda borrowers must represent at least 90% of Group total assets. The Group complied with these financial undertakings throughout the year. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 55 NOTE 16 FINANCIAL RISK MANAGEMENT a) Overview The Group’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market (interest rate) risk. The Group’s risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group from these risks. There have been no substantive changes from the previous period in the types of risks to which the Group is exposed, how these risks arise, or the Board’s objectives, policies and processes for managing or measuring the risks. b) Credit risk Credit risk is the risk that the counterparty to a financial instrument will fail to discharge its obligations, resulting in the Group incurring a financial loss. The Group has exposure to credit risk on financial assets included in the Consolidated Statements of Financial Position. The Group is exposed to credit risk on trade and other receivable balances (Note 9). The Group continuously assesses and monitors the credit quality of trade debtors on an ongoing basis. Given the historical profile and exposure of the trade and other receivables, it has been determined that no significant concentrations of credit risk exist for receivables balances. The maximum exposure to credit risk at 30 June 2024 is the carrying amounts of the trade and other receivables recognised on the Consolidated Statement of Financial Position. The Group is also exposed to credit risk on its commercial loan receivable balances (Note 10). This risk is managed by: undertaking a detailed assessment of counterparties, with consideration of qualitative factors as well as the counterparty’s credit rating; obtaining collateral in the form of security over real estate, bank guarantees, personal guarantees and other typical loan collateral; and continuously assessing and monitoring each loan and the associated counterparty. To assess whether there is a significant increase in credit risk, the Group compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. The following indicators are incorporated: the amount that is not expected to be recovered through collateral following default; and significant changes in the value of the collateral supporting the obligation or in the quality of third-party guarantees or credit enhancements. Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Group. c) Liquidity risk Liquidity risk is associated with ensuring that there are sufficient funds available to meet the Group’s financial commitments as and when they fall due and planning for any unforeseen events which may curtail cash flows. The Group manages this risk through the following mechanisms: preparing forward-looking cash flow analyses in relation to its operational, investing and financing activities; monitoring undrawn credit facilities; maintaining a reputable credit profile; managing credit risk related to financial assets; investing surplus cash with major financial institutions only; and comparing the maturity profile of financial liabilities with the realisation profile of financial assets. Refinancing risk is the risk that the Group: will be unable to refinance its debt facilities as they mature; and/ or will only be able to refinance its debt facilities at unfavourable interest rates and credit market conditions (margin price risk). The table below shows the contractual maturity of Garda’s fixed and floating rate financial liabilities. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 56 Garda Company 2024 2023 2024 Restated 2023 Note $000 $000 $000 $000 Less than one year Trade and other payables 14 2,092 4,430 1,325 5,619 Distribution payable 7 3,163 3,751 - - 5,255 8,181 1,325 5,619 Between one and five years Bank loans (secured) 15 217,191 225,177 - - 217,191 225,177 - - d) Market (or Interest Rate) Risk Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates. Garda’s asset and liability exposure to interest rate risk is summarised below. Interest bearing Non- interest bearing Total carrying amount Weighted average effective interest rate Fixed or variable Note $000 $000 $000 30 June 2024 Financial assets Cash 17,002 - 17,002 4.20% Variable Commercial loans 26,177 - 26,177 14.27% Fixed 43,179 - 43,179 Financial liabilities Bank borrowings 15 217,191 - 217,191 4.66% Variable Hedged borrowings (150,000) - (150,000) 1.45% Fixed 67,191 - 67,191 30 June 2023 Financial assets Cash 13,164 - 13,164 3.95% Variable Commercial loans 11,953 - 11,953 13.88% 25,117 - 25,117 3.95% Financial liabilities Bank borrowings 15 225,177 - 225,177 4.68% Variable Hedged borrowings (150,000) - (150,000) 1.68% Fixed 75,177 - 75,177 If interest rates were to increase/decrease by 0.5% basis points from the rates prevailing at the reporting date, assuming all other variables remain constant, then the impact on profit after tax and equity would be as follows: 30 June 2024 2023 $000 $000 Movement in interest rate: +/- 0.5% Impact on net profit after tax 259 319 Impact on equity 259 319 Garda uses interest rate swaps to manage risk associated with its variable rate bank borrowings, which effectively swaps the variable rate for a substantial amount of the borrowings to a fixed rate for a certain period of time. Refer Note 13. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 57 NOTE 17 CONTRIBUTED EQUITY a) Issued securities Garda Company Year ended 30 June 2024 2023 2024 2023 Securities Securities Shares Shares Issued securities as per ASX 217,651,293 227,235,712 217,651,293 227,235,712 Movements during the year Balance at beginning of year 227,235,712 227,644,361 227,235,712 227,644,361 Buy-back and cancellation of securities (9,584,419) (408,649) (9,584,419) (408,649) Total issued securities as per ASX 217,651,293 227,235,712 217,651,293 227,235,712 Treasury Securities (1,993,489) (3,990,492) (1,993,489) (3,990,492) Securities on issue under Garda ESP (14,840,000) (14,840,000) (14,840,000) (14,840,000) Securities issued under Garda EIP (536,260) - (536,260) - Total issued securities for financial statements 200,281,544 208,405,220 200,281,544 208,405,220 Total contributed equity ($000) 342,886 354,495 (99) 45 Garda securities comprise units in the Fund and shares in Company that have been stapled to each other on a one-for-one basis. Each Garda stapled security ranks equally with all other stapled securities for the purposes of distributions, dividends and corporate matters. Each stapled security also entitles the holder to vote in accordance with the provisions of the Fund and Company constitutions and the Corporations Act 2001. b) Securities buy-back On 17 April 2023, Garda commenced a on market buy-back program for 12 months which was extended by a further 12 months on 22 April 2024. At 30 June 2024, a total of 9,993,068 stapled securities had been bought back and cancelled, of which 9,584,419 were bought back and cancelled during the reporting period. c) Treasury securities The Fund owns 100% of Garda Capital Trust which, in turn, owned 1,993,489 stapled securities in Garda at 30 June 2024. In accordance with Australian Accounting Standards, these securities are designated as treasury securities and have been deducted from equity and total issued securities. d) Garda ESP At 30 June 2024, 14,840,000 securities had been issued under the Garda ESP, all of which have vested. In accordance with Australian Accounting Standards, all Garda ESP securities (including vested securities) are deducted from equity and excluded from total issued securities, until such time as the underlying limited recourse loans are repaid. e) Garda EIP During the reporting period, a total of 1,997,003 treasury securities were transferred to employees under the Garda EIP. The total includes 1,762,000 as deferred security awards, 223,425 as performance rights awards and 11,578 as exempt security awards. Of the 1,762,000 deferred security awards, 1,225,740 have since vested, with 536,260 remaining unvested at 30 June 2024. In accordance with Australian Accounting Standards, the issued securities are deducted from equity and excluded from total issued securities until such time the underlying restriction period or service period vesting conditions has ended. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 58 NOTE 18 SECURITY-BASED PAYMENTS a) Accounting policy and critical accounting estimates Garda employees may be entitled to incentives in the form of equity instruments issued under the Garda Employee Security Plan (Garda ESP) or Garda Equity Incentive Plan (Garda EIP). Awards under these incentive plans of stapled securities, performance rights, deferred securities and exempt securities to Garda employees are accounted for in accordance with AASB 2 Share-based Payment. Pursuant to AASB 2, the fair values at grant date for securities granted to employees are determined using the Black and Scholes option pricing model, taking into account exercise price, term of the security, security price at grant date, expected price volatility of the underlying security, expected dividend yield, risk-free interest rate for the term of the security and certain probability assumptions. Once the fair value has been determined, a security-based payment expense is recognised over the vesting period of the equity incentive, with a corresponding movement in a security-based payments reserve. b) Security-based payment expense The security-based payment expense for the year ended 30 June 2024, by underlying equity security, is set out in the following table. Garda Company Year ended 30 June Plan Note 2024 2023 2024 2023 $000 $000 $000 $000 Garda ESP securities ESP 18d 90 298 90 298 Exempt security awards EIP 18e 14 15 14 15 Performance rights EIP 18f 258 406 258 406 Deferred security awards EIP 18g 1,275 - 1,275 - Total Security-based payment expense 1,637 719 1,637 719 c) Security-based payment reserves The security-based payment expense reserve for the year ended 30 June 2024, by underlying equity security, is set out in the following table. Garda Company Year ended 30 June Plan Note 2024 2023 2024 Restated 2023 $000 $000 $000 $000 Garda ESP securities ESP 18d 1,873 1,783 1,873 1,783 Exempt security awards EIP 18e 45 - 45 - Performance rights EIP 18f 1,016 758 1,016 758 Deferred security awards EIP 18g 1,275 - 1,275 - Total Security-based payment reserves 4,209 2,541 4,209 2,541 d) Garda ESP securities Garda ESP securities are Garda stapled securities that were awarded to employees at market price, with an attaching non- recourse loan for the same amount. A total of 14,840,000 Garda ESP securities have been awarded, with the last award occurring in November 2020. The limited recourse loans attaching to the Garda ESP securities are not accounted for in the Consolidated Statements of Financial Position. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 59 Details of securities under the limited recourse loan funded Garda ESP and the Black and Scholes option pricing model inputs for securities granted are set out below. Grant date Vesting date Security price at effective grant date Exercise price Fair value at grant date Number of securities Limited recourse loan Expected volatility Dist’n yield Risk free rate 13 Nov 2017 13 Nov 2020 $1.395 $0.63 $0.70 1,440,000 $547,843 10% 6% 2% 3 Jun 2019 3 Jun 2021 $1.395 $1.08 $0.24 480,000 $471,055 10% 6% 2% 23 Aug 2019 23 Aug 2021 $1.395 $1.22 $0.11 1,280,000 $1,535,096 10% 6% 2% 23 Aug 2019 23 Aug 2022 $1.395 $1.22 $0.10 640,000 $769,074 10% 6% 2% 16 Apr 2020 16 Apr 2023 $0.87 $1.00 $0.06 6,000,000 $5,672,393 30% 9% 1% 18 Nov 2020 19 Nov 2023 $1.22 $1.16 $0.10 5,000,000 $5,729,724 18% 6% 1% 14,840,000 $14,725,185 e) Exempt securities An award of exempt securities was made to all employees (excluding directors) on 4 August 2023. Each employee was granted $1,000 of stapled securities which, based on five day volume weighted average security price of $1.209, equated to 827 securities each. Grant date Securities granted Value at grant date Total 04 Aug 2023 11,578 $1.209 $13,998 f) Performance Rights Awards of performance rights were made to employees in FY22 and FY23. No performance rights were awarded in FY24 and 321,750 were cancelled. Movements in performance rights during the reporting period are summarised below: Award date Securities awarded Balance at 30 June 2023 Vested Cancelled Balance at 30 June 2024 1 - 15 Dec 2021 670,285 446,860 (223,425) - 223,435 19 Sep 2022 643,450 643,498 - (321,750) 321,748 Total performance rights 1,313,735 1,090,358 (223,425) (321,750) 545,183 Details of performance rights which vested during the year, and the associated Black and Scholes option pricing model inputs, are set out below: Grant date range Vesting date Security price at effective grant date Exercise price Fair value at grant date range Number of securities Expected volatility Dist’n yield Risk free rate 10 - 15 Dec 2021 31 Aug 2023 1.57 - 1.64 - $1.46 - $1.52 223,425 13% 4.5% 2% All performance rights that vested during the year were exercised on the vesting date. Details of unvested performance rights, and the associated Black and Scholes option pricing model inputs, are set out below: Grant date range Vesting date Security price at effective grant date Exercise price Fair value at grant date range Number of securities Expected volatility Dist’n yield Risk free rate 10 - 15 Dec 2021 31 Aug 2024 1.57 - 1.64 - $1.39 - $1.46 223,435 13% 4.5% 2% 19 Sep 2022 31 Aug 2025 1.52 - $1.32 321,748 25% 4.7% 4% 545,183 The weighted average remaining contractual life of options outstanding at the end of period was 0.8 years (FY23: 1.6 years) AASB 2 requires the valuation of the rights to be recognised over the measurement period. The minimum value of the grant to participants will be nil if the vesting conditions are not met. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 60 g) Deferred securities 1,762,000 deferred security awards were made to employees on 13 November 2023, of which 1,225,740 vested during the financial year. No deferred security awards were made to employees previously. Details of vested deferred securities awarded to employees during the year, and the associated Black and Scholes option pricing model inputs, are set out below: Grant date range Vesting date Security price at effective grant date Exercise price Fair value at grant date range Number of securities Expected volatility Dist’n yield Risk free rate 13 Nov 2023 31 Jan 2024 $1.01 - $0.998 1,225,740 27.3% 6.2% 4.6% Details of unvested deferred securities, and the associated Black and Scholes option pricing model inputs, are set out below: Grant date range Vesting date Security price at effective grant date Exercise price Fair value at grant date range Number of securities Expected volatility Dist’n yield Risk free rate 13 Nov 2023 31 Aug 2026 $1.01 - $0.853 536,260 27% 6.2% 4.6% The weighted average remaining contractual life of options outstanding at the end of period was 2.2 years. AASB 2 requires the valuation of the deferred security awards to be recognised over the measurement period. The minimum value of the grant to participants will be nil if the vesting conditions are not met. h) Prior period error - security-based payment reserve The security-based payment reserve at 30 June 2024 was $4,209,000. This reserve is recognised in Garda’s equity accounts in the Consolidated Statements of Financial Position. In prior periods, commencing in FY20, Garda has incorrectly applied AASB 2 by designating the Fund as the entity with the obligation to settle security-based payment transactions with employees and recognising an intercompany loan between the Fund and the Company. While the Fund’s securities were used in these settlements, the obligation to settle the security- based transactions was with the employing entity i.e., the Company. The Company should have recognised the security- based premium reserve not the Fund. The error has no impact on the consolidated financial statements of the Group but resulted in the standalone Statement of Financial Position of the Company being understated primarily by the amount of the security-based premium reserve. The error has been corrected by restating the affected lines in the Statement of Financial Position of the Company for prior periods, as follows: Company 30 June 2023 Increase/ (decrease) Restated 30 June 2023 30 June 2022 Increase/ (decrease) Restated 1 July 2022 $000 $000 $000 $000 $000 $000 Trade and other payables 8,191 (2,572) 5,619 5,728 (1,853) 3,875 Net assets 2,332 2,572 4,904 2,696 1,853 4,549 Reserves - 2,541 2,541 - 1,837 1,837 Contributed equity 14 31 45 19 16 35 Total equity 2,332 2,572 4,904 2,696 1,853 4,549 GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 61 NOTE 19 RELATED PARTIES AND KEY MANAGEMENT PERSONNEL Any transactions between related parties occurred on standard commercial terms and conditions, unless otherwise stated. a) KMP compensation The aggregate remuneration paid to KMP is set out below: Garda Company Year ended 30 June 2024 2023 2024 2023 $ $ $ $ Short-term benefits 2,862,592 2,847,805 2,862,592 2,847,805 Post-employment benefits 95,718 94,997 95,718 94,997 Long-term benefits 27,181 25,315 27,181 25,315 Security based payments 188,306 397,097 188,306 397,097 Total remuneration paid 3,173,797 3,365,214 3,173,797 3,365,214 Details of equity incentives paid to KMP during the year may be found in the Remuneration Report and Note 18. b) Transactions with KMP and their related parties There were no transactions with KMP and their related parties during the year. NOTE 20 AUDITOR’S REMUNERATION Garda Company Year ended 30 June 2024 2023 2024 2023 $ $ $ $ Remuneration of the auditor for: Audit and review of the group financial report 132,500 127,000 66,250 63,500 Audit of stand-alone financial reports of the group entities 13,400 12,800 13,400 12,800 Total remuneration for financial audit services 145,900 139,800 79,650 76,300 Remuneration of the auditor for: AFSL audit of the group entities 12,000 11,400 12,000 11,400 Audit of compliance plan 22,000 20,000 22,000 20,000 Tax services 12,950 - 12,950 - Total remuneration for other services 46,950 31,400 46,950 31,400 GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 62 NOTE 21 CASH FLOW INFORMATION a) Composition of cash and cash equivalents Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Cash on hand - - - - Cash at bank 11,402 7,596 1,128 1,431 Regulatory cash and on-call deposit 5,600 5,568 5,600 5,568 Total 17,002 13,164 6,728 6,999 The above figures are reconciled to cash and cash equivalents at the end of the financial year as shown in the Consolidated Statements of Financial Position and the Consolidated Statements of Cash Flows. b) Cash flow from operations Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Reconciliation of cash flow from operations with loss after tax Loss after income tax (42,926) (4,934) (145) (359) Adjustments for items in profit or loss: Security based payment expense 1,637 719 1,637 719 Depreciation 136 150 136 150 Credit loss expense 76 - 76 - Net loss in fair value of investment properties 39,295 6,470 - - Net loss/ (gain) in fair value of derivative instruments 3,385 (638) - - Amortisation of borrowing transaction costs 339 334 - - Net loss/ (gain) on sale of investment properties 11,163 11,729 (661) - Lease rent free (208) (335) - - Lease straight-lining revenue 249 1,130 - - Lease costs and incentive amortisation 673 771 - - Interest expense on lease liabilities 14 2 14 2 Capitalised interest and fee income on commercial loans (1,989) (1,763) - - Capitalised interest expense on investment properties (3,629) (3,420) - (59) Movements in assets and liabilities: Trade and other receivables 72 (6) 1,370 (1,344) Other assets 294 306 9 (24) Contract liabilities (979) 625 - - Trade and other payables (602) 332 (426) 567 Other liabilities (392) 178 - - Provisions 89 69 89 69 Deferred tax balances (145) 117 (145) 117 Cash flow from / (used in) operations 6,552 11,836 1,954 (162) c) Non-cash financing and investing activities Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Additions to the right-of-use assets 420 - 420 - Total 420 - 420 - A right-of-use asset has been recognised for Garda’s lease of its head office under an agreement that commenced in July 2023 and expires in July 2026. There were no other non-cash investing and financing activities during the current and prior year. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 63 d) Reconciliation of liabilities arising from financing activities Liabilities arising from financing activities are liabilities for which cash flows are, or will be, classified as ‘cash flows from financing activities’ in the Statement of Cash Flows. Changes in the carrying amount of such liabilities, which comprise bank borrowings and loans payable to parent entities, are summarised below. Garda Company Year ended 30 June 2024 2023 2024 2023 $000 $000 $000 $000 Bank borrowings Balance at the beginning of the year 224,269 258,898 - - Net cash inflow/ (outflow) (7,986) (34,963) - - Non-cash changes - amortisation of borrowing costs 339 334 - - Loan from parent entity Balance at the beginning of the year - - 6,452 5,728 Net cash outflow - - (3,993) - Non-cash changes – Security based payment expense - - (2,572) 719 Non-cash changes – Security buy-back transaction costs - - 113 5 Balance at the end of the year 216,622 224,269 - 6,452 NOTE 22 PARENT ENTITY INFORMATION a) Parent Entity The Parent Entity of the Group is Garda Diversified Property Fund. 30 June 2024 Restated 202317 $000 $000 ASSETS Current assets 47,678 128,545 Non-current assets 515,195 514,848 Total assets 562,873 643,393 LIABILITIES Current liabilities 6,046 10,157 Non-current liabilities 216,970 225,008 Total liabilities 223,016 235,165 NET ASSETS 339,857 408,228 EQUITY Contributed equity 350,783 364,247 (Accumulated losses)/ Retained earnings (10,926) 43,981 Total equity 339,857 408,228 LOSS Loss for financial year (41,809) (4,355) Other comprehensive income - - TOTAL LOSS AND OTHER COMPREHENSIVE INCOME (41,809) (4,355) 17 Refer Note 18h. An adjustment for a prior period accounting error increased the Company’s standalone liabilities and equity at 30 June 2023 by $2,572,000, with a corresponding reduction in the standalone assets and equity of the Fund. There was no net impact on the consolidated financial statements of the Group. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 64 The financial information for the Fund has been prepared on the same basis as the consolidated financial statements. b) Controlled entities of the Parent Entity Ownership Interest Country of As at 30 June 2024 2023 Incorporation Garda Capital Limited 100% 100% Australia Garda Capital RE Limited 100% 100% Australia Garda Capital Trust 100% 100% Australia Garda Facilities Management Pty Ltd 100% 100% Australia Garda Finance Pty Ltd 100% 100% Australia Garda Funds Management Limited ATF Garda Capital Trust 100% 100% Australia Garda Holdings Limited 100% 100% Australia Garda Property Finance Pty Ltd * 0% 100% Australia Garda Real Estate Services Pty Ltd 100% 100% Australia Garda Services Pty Ltd 100% 100% Australia Garda TSV Pty Ltd ATF Garda TSV Unit Trust * 0% 100% Australia Garda TSV Unit Trust * 0% 100% Australia Note*: These dormant entities were wound up and deregistered during the reporting period. NOTE 23 CONTINGENT ASSETS AND LIABILITIES a) Contingent assets The Group did not have any material contingent assets as at 30 June 2024 (FY23: nil). b) Contingent liabilities The Group did not have any material contingent liabilities as at 30 June 2024 (FY23: nil). NOTE 24 EVENTS SUBSEQUENT TO THE END OF THE PERIOD On 10 July 2024, Garda announced the unconditional sale of its Pinnacle East asset at Wacol with settlement scheduled for 20 August 2024. The net sale proceeds are $13,298,000. Otherwise, there are no matters or circumstances that have arisen since the end of the financial year that have significantly affected, or may significantly affect: Garda’s operations in future financial years; the results of those operations in future years; or the state of affairs of Garda in future years. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 65 CONSOLIDATED ENTITY DISCLOSURE STATEMENT Garda Holdings Limited is required by Australian Accounting Standards to prepare consolidated financial statements in relation to the Company and its controlled entities (the consolidated entity). In accordance with subsection 295(3A) of the Corporations Act 2001, this Consolidated Entity Disclosure Statement provides information about each entity that was part of the consolidated entity at the end of the financial year. Consolidated Entity Disclosure Statement as at 30 June 2024 for Garda Holdings Limited Name of entity Type of entity Place formed or incorporated Percentage of share capital held Tax Residency Garda Holdings Limited Body corporate Australia na Australian Garda Capital Limited Body corporate Australia 100% Australian Garda Capital RE Limited Body corporate Australia 100% Australian Garda Facilities Management Pty Ltd Body corporate Australia 100% Australian Garda Finance Pty Ltd Body corporate Australia 100% Australian Garda Funds Management Limited Body corporate Australia 100% Australian Garda Real Estate Services Pty Ltd Body corporate Australia 100% Australian Garda Services Pty Ltd Body corporate Australia 100% Australian At the end of the financial year, no entity within the consolidated entity was a trustee of a trust within the consolidated entity, a partner in a partnership within the consolidated entity, or a participant in a joint venture within the consolidated entity. The Fund and its controlled entity are not required to be presented in the table above as they are not controlled entities of the Company. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 66 DIRECTORS’ DECLARATION In the opinion of the Directors of Garda Property Group: (a) the attached financial statements and notes are in accordance with the Corporations Act 2001, including: (i) complying with Australian Accounting Standards (including the Australian Accounting Interpretations), the Corporations Regulations 2001; and (ii) giving a true and fair view of Garda Property Group’s financial position as at 30 June 2024 and of its performance for the financial year ended on that date, (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1; (c) there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable; and (d) the Consolidated Entity Disclosure Statement required by subsection 295(3A) of the Corporation Act 2001 for Garda Holdings Limited is true and correct. The Directors have been given the declarations by the Chief Executive Officer and Chief Operating Officer required by section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the Directors. Matthew Madsen Executive Chairman 1 August 2024 GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 67 INDEPENDENT AUDITOR’S REPORT GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 68 GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 69 GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 70 GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 71 CORPORATE GOVERNANCE STATEMENT The Board and management of Garda consider it is crucial for the long-term performance and sustainability of the Group, and to protect and enhance the interests of its securityholders and other stakeholders, that it adopts an appropriate corporate governance framework pursuant to which it will conduct its operations with integrity, accountability and in a transparent and open manner. Garda regularly reviews its governance arrangements as well as developments in market practice, expectations and regulation. The governance arrangements were reviewed during 2024. The Corporate Governance Statement has been approved by the Boards of the Company and Garda Capital Limited (as responsible entity) and explain how the Garda addresses the requirements of the Corporations Act 2001, the ASX Listing Rules and the ASX Corporate Governance Council’s ‘Corporate Governance Principles and Recommendations – 4th Edition’ (the ‘ASX Principles and Recommendations’). It is current as at 30 June 2024. Garda’s ASX Appendix 4G, which is a checklist cross-referencing the ASX Principles and Recommendations to the relevant disclosures in this statement, the 2024 Annual Report of the Garda Property Group and other relevance governance documents and materials on the Garda website (together the ‘ASX Appendix 4G’), is provided in the corporate governance section of our website at https://gardaproperty.com.au. The Corporate Governance Statement together with the ASX Appendix 4G and this Annual Report, were lodged with the ASX on the same date. The Board strives to meet the highest standards of corporate governance but recognises that it is also crucial that the governance framework of Garda reflects the current size, operations and industry in which Garda and its related entities operate. Garda has complied with most of recommendations of the ASX Principles and Recommendations and has improved in many key areas during the year. The Board believes the areas of non-conformance, which are explained in the Corporate Governance Statement and the ASX Appendix 4G, will not materially impact the ability of the Group to achieve the highest standards of corporate governance nor its ability to meet the expectations of its securityholders and other stakeholders. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 72 SECURITYHOLDER INFORMATION Securityholder information as at 25 July 2024. Distribution of equity securities Range Securities No. of holders % 100,001 and over 169,515,153 185 5.54 10,001 to 100,000 40,907,723 1,318 39.45 5,001 to 10,000 4,276,583 564 16.88 1,001 to 5,000 2,810,474 986 29.51 1 to 1,000 141,360 288 8.62 Total 217,651,293 3,341 100.00 Unmarketable parcels 13,706 121 3.65 Top 20 securityholders The names of the twenty largest holders of stapled securities are listed below: Name Number Held Percentage of issued securities (%) HGT Investments Pty Ltd 37,340,745 17.16 HSBC Custody Nominees (Australia) Limited 11,931,862 5.48 Madsen Nominees Pty Ltd 10,960,000 5.04 Netwealth Investments Limited 10,137,921 4.66 J P Morgan Nominees Australia Pty Limited 6,441,718 2.96 Madsen Nominees Pty Ltd 5,050,000 2.32 Glenelg-Park Nominees Pty Ltd 5,013,869 2.30 Mr Peter Zinn 4,989,674 2.29 JJG Equities Pty Ltd 4,644,831 2.13 Citicorp Nominees Pty Limited 3,299,162 1.52 Extra Large Pty Ltd 3,052,074 1.40 Mr Peter John Zinn 3,000,000 1.38 Asia Union Investments Pty Limited 3,000,000 1.38 Pine Factory SF Pty Ltd 2,100,152 0.96 First Samuel Ltd 2,086,026 0.96 The Trust Company (Australia) Limited 1,993,489 0.92 Mr Richard Eaton-Wells & Ms Frances Catherine Economidis 1,970,000 0.91 Perrins Rap Pty Ltd 1,889,592 0.87 Mark Alexander Scammells 1,469,387 0.68 Haines Signature Investments Pty Ltd 1,461,516 0.67 Total 121,832,018 55.98 GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 73 Substantial holders The names of the substantial securityholders listed in the holding register are: Name Number Held Percentage of issued securities (%) HGT Investments Pty Ltd 37,340,745 17.16 Madsen Nominees Pty Ltd 16,910,000 7.76 HSBC Custody Nominees (Australia) Limited 11,931,862 5.48 Total 66,182,607 30.4 Voting rights Each securityholder confers the right to vote at meeting of Securityholders, subject to any voting restrictions imposed on a Securityholder under the Corporations Act 2001 and the ASX Listing Rules. On a show of hands, each Securityholder has one vote. On a poll, each Securityholder has one vote for each dollar value of securities held. The Group will follow the ASX recommendation that all significant resolutions will be conducted by poll. GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 74 GLOSSARY AASB Australian Accounting Standards Board Adjusted gearing Adjusted gearing ratio is calculated as adjusted total liabilities divided by adjusted total assets ARSC Audit, Risk and Sustainability Committee CAGR Compound annual growth rate Company Garda Holdings Limited (ACN 636 329 774) DA Development Application ESP Garda Employee Security Plan FFO Funds from operations are the Group’s underlying and recurring earnings from its operations. It is determined by adjusting statutory net profit (under AIFRS) for certain non-cash and other one-off items. FFO is not recognised or covered by Australian Accounting Standards and has not been audited or reviewed by the auditor of the Group. Fund Garda Diversified Property Fund (ARSN 104 391 273) Garda Garda Property Group GDF Garda Diversified Property Fund (ARSN 104 391 273) Gearing (Total drawn interesting-bearing debt less cash) / (total assets less cash) GHL Garda Holdings Limited (ACN 636 329 774) GFA Gross floor area Group Garda Property Group GST Goods and Services Tax LVR (Total drawn interest-bearing debt) / (total bank approved secured property) NRC Nomination and Remuneration Committee NLA Net lettable area NTA Net tangible assets ROE Return on equity. Calculated as (total distributions plus movement in NTA in financial year) divided by opening NTA. TSR Total securityholder return. Calculated as (total distributions plus movement in security price in financial year) divided by opening security price. WACD Weighted average cost of debt WACR Weighted average capitalisation rate WALE Weighted average lease expiry WANOS Weighted average number of securities GARDA PROPERTY GROUP | 2024 ANNUAL FINANCIAL REPORT Page 75 CORPORATE DIRECTORY DIRECTORS Matthew Madsen Executive Chairman and Managing Director Mark Hallett Executive Director Paul Leitch Independent Director Andrew Thornton Non-executive Director COMPANY SECRETARY Lachlan Davidson General Counsel and Company Secretary REGISTERED OFFICE Level 21, 12 Creek Street Brisbane QLD 4000 Ph: +61 7 3002 5300 Fax: +61 7 3002 5311 Web: www.gardaproperty.com.au AUDITOR Pitcher Partners Level 38, 345 Queen St Brisbane QLD 4000 Ph: +61 7 3222 8444 SHARE REGISTRY Link Market Services Level 12, 680 George Street Sydney NSW 2000 Ph: +61 1300 554 474 F: +61 2 9287 0303 STOCK EXCHANGE LISTING Garda Property Group is listed as a stapled security on the Australian Securities Exchange Limited (ASX: GDF) gardaproperty.com.au