Ingenia Communities Group
Annual Report 2024

Plain-text annual report

Annual Report 2024 As an owner, operator and developer of real estate across Australia, Ingenia Communities acknowledges the traditional custodians of the lands on which we operate. We recognise their ongoing connection to land, waters and community, and pay our respects to First Nations Elders past, present and emerging. Acknowledgement of Country About Ingenia Communities Ingenia Communities Group (ASX:INA) is a leading operator, owner and developer offering quality residential communities and holiday accommodation. Listed on the Australian Securities Exchange, the Group is included in the S&P/ ASX 200. Across Ingenia Lifestyle, Ingenia Gardens, Ingenia Holidays and Ingenia Rental, the Group’s $2.5 billion property portfolio includes 102* communities and development sites and is continuing to grow. Ingenia Communities Holdings Limited (ACN 154 444 925), Ingenia Communities Fund (ASRN 107 459 576) and Ingenia Communities Management Trust (ARSN 122 928 410). The Responsible Entity for each scheme is Ingenia Communities RE Limited (ACN 154 464 990) (AFSL415862). * Includes assets held through the Joint Venture with Sun Communities and managed funds. Excludes development sites secured or optioned. Image artist: Jake Simon Name: Journey About: The concept design integrates Ingenia’s brand colours into a vibrant canvas inspired by coastal landscapes, featuring warm earthy tones and black accents to honour First Nations heritage. Amongst other elements, meandering paths symbolise the life-giving rivers that intricately connect Ingenia’s communities and parks to their natural surroundings. It embodies sustainability, community, unity and harmony, resonating deeply with Ingenia’s core values. Contents 2 3 4 5 5 6 FY24 Key Financial Metrics Business Overview Our Portfolio Our Business Our Purpose and Values Chairman’s Letter 10 CEO & Managing Director’s Letter 14 Residential Communities 32 Ingenia Holidays 38 Sustainability 42 Board of Directors 46 Ingenia Communities Holdings Limited Annual Report 128 Ingenia Communities Fund & Ingenia Communities Management Trust Annual Report 185 Security Holder Information 188 Investor Relations 189 Corporate Directory Cover image: New 'Nature's Retreat' clubhouse at Ingenia Lifestyle Nature's Edge, QLD Annual Report Annual Report 2024 Annual Report 2024 2024 Annual Reporting Suite FY24 Property Portfolio PROPERTY PORTFOLIO FY24 Corporate Governance Statement 2024 Corporate Governance Statement 2024 Modern Slavery 2024* Modern Slavery 2024 Corporate reporting suite This Annual Report is part of our broader corporate reporting suite, including the following: Annual Report: This report provides information on the Group’s strategy, financial performance, individual business segments, remuneration and the Group’s financial statements. Results presentations: This includes Ingenia Communities’ strategy, financial and operating results for the period, portfolio updates and development pipeline. Property portfolio: This details real estate assets owned and managed, including the detailed development pipeline. Corporate Governance Statement: This outlines Ingenia’s main corporate governance practices. Modern Slavery Statement: This is a statement on the Group’s actions to assess and address modern slavery risks in Ingenia’s supply chain. Sustainability Report: This detailed report provides information on ESG strategy, initiatives and progress. Climate Disclosure Statement: This detailed report outlines the Group’s climate management approach and how the Group is managing climate-related risks and opportunities. Sustainability Report 2024 Sustainability Report 2024 *  To be issued in December 2024 1 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW FY24 Results RESULTS PRESENTATION FY24 20 AUGUST 2024 Image: Artist impression community clubhouse – Ingenia Lifestyle Archers Run, NSW * FY24 statutory result restated for recognition of deferred taxes and a non-current liability. Refer Note 1 in the 30 June 2023 Annual Financial Report for further detail. Note. EBIT (earnings before interest and tax), underlying profit and underlying EPS are non-IFRS measures which exclude non-operating items such as unrealised fair value gains/(losses) and gains/(losses) on asset sales. EBIT now includes movements arising from the settlement of contractual cashflows for ground leases of $1.5 million and financial liabilities of $0.8 million that flows to underlying profit. A corresponding adjustment has been made against the fair value gain/(loss) of investment properties and financial liabilities previously included as a statutory adjustment (below underlying profit). Prior year comparatives have been updated. Refer to financial statements and the FY24 Results presentation for more detail. 2 $472.3m REVENUE UP 19.7% ON FY23 $14.0m STATUTORY PROFIT DOWN 78.2% ON FY23 23.3cps UNDERLYING EPS UP 14.0% ON FY23 11.3cps DISTRIBUTION PER SECURITY UP 2.7% ON FY23 $125.7m EBIT UP 17.0% ON FY23 $94.8m UNDERLYING PROFIT UP 14.0% ON FY23 $3.69 NET TANGIBLE ASSETS PER SECURITY UP 4.9% ON FY23 32.3% LVR UP 0.9% ON FY23 FY24 Key Financial Metrics Business Overview1 1. Includes assets owned by Ingenia, the Joint Venture and funds managed by Ingenia. 2. Includes sites that are optioned or secured. 3 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW ~1.8m ‘ROOM NIGHTS’ INCOME GENERATING HOMES, VILLAS, CABINS AND SITES 15,930 OPERATIONS 102 COMMUNITIES AND SITES $2.5b INVESTMENT PROPERTY OWNED/MANAGED 5,311 DEVELOPMENT2 PIPELINE NEW LAND LEASE HOME SITES Solid foundation for growth Image: New home at Ingenia Lifestyle Sanctuary, QLD Our Portfolio Land lease communities catering to over 50s Affordable rental communities catering to all ages Seniors rental villages Holiday parks including holidays, annual and permanent sites 35 1 COMMUNITIES 10 COMMUNITIES 19 COMMUNITIES 38 1 HOLIDAY PARKS 1. Includes assets owned by Ingenia, the Joint Venture and funds managed by Ingenia. 2. Includes sites that are optioned or secured. Development provides a capital efficient way to create new land lease communities and grow the Group’s rental base DEVELOPMENT Our core businesses include residential communities that generate stable weekly rents (land lease and rental communities) and Holiday Parks that provide diverse revenue streams, including stable annual and permanent weekly rent and revenue from holiday cabins and sites. RESIDENTIAL COMMUNITIES TOURISM • >4,800 homes • 5,311 potential home sites2 • >1,700 homes • >170 tourism sites • 108 development sites • >4,600 tourism sites • >1,400 homes • >2,000 annual sites • >400 development sites • >1,000 homes 4 Our Business INGENIA AND OUR SITES ARE A PLACE WHERE PEOPLE HAVE A SENSE OF CONNECTION AND BELONGING. With a positive impact on our residents each and every day, our commitment to our customers, their families and security holders is to perform with integrity, foster respect for all and build community through continuous improvement in everything we do. With $2.5 billion assets owned/managed, our portfolio has expanded rapidly to include a total of 102* communities and sites located across Australia’s East Coast. More than 1,400 employees, predominantly in regional locations, are dedicated to creating community for our residents and guests. CUSTOMER OBSESSED WE BEFORE ME MAKE IT COUNT TODAY AND TOMORROW At Ingenia we build belonging * Includes assets held through the Joint Venture with Sun Communities and managed funds. Excludes development sites secured or optioned. Image: Ingenia Holidays White Albatross, NSW Our Purpose and Values 5 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW IN THIS, MY FINAL LETTER AS CHAIRMAN, I AM PLEASED TO REPORT THE DELIVERY OF STRONG FINANCIAL PERFORMANCE, WITH THE FY24 RESULT EXCEEDING GUIDANCE. THIS RESULT REFLECTS THE BENEFIT OF INCREASED DEVELOPMENT ACTIVITY AND NEW HOME SETTLEMENTS COMBINED WITH ONGOING PERFORMANCE FROM OUR OPERATING ASSETS WHICH CONTINUE TO DELIVER STABLE, RECURRING INCOME. The result was delivered against a backdrop of a challenging macroeconomic environment and significant internal change as we welcomed a new Chief Executive Officer and made a number of refinements to our structure and team in line with a focus on efficiency, execution and value creation via development. Our teams responded well in a period of change as we positioned the business for the future and the creation of sustainable long-term value for security holders. Financial performance and capital management The Group finished FY24 in a strong operational position with solid performance across the business, assisted by our new CEO John Carfi, who has driven significant focus on cost, efficiency and excellence in execution. Accelerating development activity and an increase in new home settlements (up 24% on FY23) were key drivers of our result. The Group’s residential communities continued to deliver stable recurring rental income as the portfolio benefited from ongoing demand, high occupancy levels and the addition of new rental contracts as our development activity introduced new homeowners into our land lease communities. Chairman’s Letter Jim Hazel Shane Gannon 6 Our Holiday Parks again performed strongly with both occupancy and rate up on the previous year, as families continued to be attracted to the ease and relative affordability of domestic drive travel. EBIT (up 17%) and underlying earnings per security of 23.3 cents, were both above forecast guidance. The distribution payment, of 11.3 cents per security, was up 2.7% on the prior year. Prudent capital management and financial discipline has been maintained, with the loan to value ratio at 30 June at the lower end of the 30% - 40% policy range, at 32.3%. Debt capacity was increased with the addition of $125 million of debt for a 5-year term, and the Group continues to hedge a portion of debt exposure, with hedging (via fixed rate debt and derivative instruments) of 47% at 30 June. An additional $50 million of hedging has been entered into post year end. Management and Board succession In November 2023 we announced that Managing Director and CEO Simon Owen would step down in 2024. Simon did a remarkable job growing Ingenia into a leading Australian property group, meeting the retirement needs of Australia’s ageing population, supporting an increasing demand for affordable housing and building a highly capable team. On behalf of the Board, we thank Simon for his commitment to the success of Ingenia. John Carfi joined the Group in April 2024 as CEO, bringing to the role more than 35 years of large company leadership experience and extensive real estate expertise, with a strong emphasis on development. The Board was impressed by his proven track record in leadership, strategic execution, and stakeholder management. We are pleased with John’s focus on security holder value and what he has achieved to date, including a clear plan for Ingenia which will serve as a roadmap for the future. The Board is confident John’s credentials are aligned to the Group’s future as we elevate the focus on development as the engine for future growth. John also joined the Board in August 2024 as Managing Director. Together with the Executive team, he is well positioned to lead the Group through its next phase of growth as an efficient operator and developer and to deliver long-term investor returns. Significant progress was made in 2024 with our Board renewal program to ensure we have the mix of skills and experience to guide the Group’s next phase of growth, with the right balance between continuity and change. Image: ‘Tallow Pod’ at Ingenia Holidays Byron Bay, NSW 7 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Amanda Heyworth stepped down from the Board on 20 June 2024 after 12 years. Amanda made a significant contribution to the Group, including serving as the Chair of both the Audit and Risk Committee and Remuneration and Nomination Committee during that time. Director, Sally Evans, has announced she will retire from the Board at the Annual General Meeting in November and Greg Hayes stepped down on 1 July 2024. The Board would like to thank Amanda, Sally and Greg for their significant contributions and commitment over a period of material expansion and growth. Three new directors were appointed during the year with Lisa Scenna commencing her role as a Non-Executive Director on 1 May. Lisa brings to the Group extensive experience in executive roles spanning property management, asset management and funds management in Australia and the United Kingdom working across listed and private entities. Two highly credentialed directors, Shane Gannon and Simon Shakesheff, with strong backgrounds in real estate and finance through both executive and Board positions, joined the Board on 28 June 2024. My intention to step down as Chairman was announced at the 2021 Annual General Meeting, with my term concluding at the 2024 Annual General Meeting. To provide a clear pathway for the transition of the Chair role, the Board has identified Shane as Chair-elect. Shane has an impressive track record with executive roles spanning 40 years. This experience includes working with ASX listed entities Mirvac Limited, Endeavour Group, Goodman Fielder and Dyno Nobel and he is currently a director of GPT Group. All new directors have already made valuable contributions to the Board, and I look forward to introducing them to security holders at the Annual General Meeting in November. Sustainability goals We are continuing to align our sustainability focus with an evolving business, to ensure that our actions benefit our stakeholders and continue to have a positive impact on our residents, staff and communities. Over the year it was particularly pleasing to see the level and engagement of our teams as we progressed preparation of our first Reconciliation Action Plan. Work continues on our climate data and disclosures as we prepare for regulatory change and progress our emissions reduction pathway, aiming to deliver our goal of net zero emissions (Scope 1 and 2) across our operations in 2035. Given material changes in the portfolio and the increased focus on development as a driver of growth, we will refine this pathway over the coming year and also consider Scope 3 emissions for the Group. Reflecting our goal of continuing to drive change through our most material areas, development activities have included progressing our first Green Star communities, finalising designs for our first Green Homes and introducing geothermal heating and cooling systems into two new developments. The creation of Sustainable Design Guidelines for development will support implementation of key initiatives as our development activity grows. Our leadership in gender diversity was again recognised with Ingenia ranking No.1 in the real estate sector for women in executive leadership team roles in the 2023 Chief Executive Women Senior Executive Census. In an eventful year we continued to see engagement and commitment from our teams who have embraced the changes made, are energised by a clear purpose and who continue to deliver performance, making a positive impact on a growing number of residents and guests. Outlook FY25 and beyond Ingenia is undergoing a period of change and renewal as the business moves to a greater focus on development as the engine for future growth and we respond to changes in our operating environment with increased competition from new players entering the market, cost pressures and regulatory change. As one of the first large land lease operators and developers we have built a business that, at its heart, seeks to enrich the lives of our residents and this remains key to our success. Our model is simple and transparent and provides a compelling proposition for our residents – home ownership with a weekly rent and no deferred management or exit fees combined with the benefit of engaged community living. We remain committed to leadership and responding to customer needs, through both the development of our homes and facilities and operating processes that remain transparent and support consumer rights for our residents. 8 Under the direction of our new CEO we have put in place a five-year roadmap to set expectations and steer our actions as we seek to realise greater value for our security holders, capitalising on the portfolio, platform and development pipeline that has been aggregated over the past years. We have a solid foundation, and an engaged team committed to our strategic goals. We enter FY25 in a strong financial position, with positive year to date results across the business, and clear financial goals. This is reflected in guidance for FY25, with the Group targeting growth in EBIT and underlying earnings per security again this year. I am enormously proud of how far the business has come and what has been achieved since its inception as an externally managed ING Fund, through internalisation in 2012 as a small independent player in the retirement industry with a market capitalisation of $110 million and $429 million in assets under management to an ASX 200 entity today. The business has been an innovator and evolved from a specialist ‘small cap’ stock to a market capitalisation of $2 billion. In addition to building a leading land lease portfolio with scale and a pipeline to deliver embedded growth, today Ingenia also benefits from a quality Holidays portfolio, and meets a growing need for affordable rental homes. I would like to thank everyone who has contributed to Ingenia’s journey during my time as Chair, particularly Simon Owen, who was a passionate leader of the business for more than 14 years. In closing I would like to thank the Board members who have served Ingenia, leaving the business well placed to execute on a bright future. Finally, I would like to thank Ingenia’s security holders for their support and the Ingenia team for their commitment. I look forward to the AGM in November and engaging with investors at that time. Jim Hazel | Chairman 9 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Image: Ingenia Holidays Cape Paterson, VIC I AM PLEASED TO PRESENT MY FIRST REPORT AS CEO OF INGENIA COMMUNITIES, HAVING JOINED THE GROUP ON 1 APRIL 2024. I WAS DELIGHTED TO ACCEPT THE ROLE AT SUCH AN IMPORTANT TIME IN THE GROUP’S EVOLUTION, AS INGENIA WAS TRANSITIONING FROM A FOCUS ON ACQUISITIONS TO EXECUTION AS THE DRIVER OF GROWTH. My first months with the Group have been busy and I am pleased with what has been achieved to date – we have established a clear roadmap for the future, progressed our strategic goals, and importantly delivered a result for FY24 exceeding guidance. As an incoming CEO it was clear that Ingenia has a lot of strengths and a solid foundation for the business. We have a strong position in the land lease market, with an established asset base, a secured growth pipeline and experienced team, and are one of the longest operators in this space. The last five months have proved to be a very rewarding experience for me. I inherited a strong team, great assets, a solid balance sheet and capacity to fund, with embedded growth in a sector that is gaining both consumer and investor acceptance and has strong tailwinds. Actions to date include a focus on simplification, delivery of operating efficiencies, restructuring to reduce overheads, enhancing productivity, resetting our financial targets, and ensuring our teams have clarity on our goals and strategy. Changes have also been made in development to improve future project returns, and address cost escalation and efficiency. Ingenia has built a strong asset base and operating platform as it grew via acquisition over the past 12 years and now has a pipeline of 5,311 development sites supplementing a portfolio of established communities, which puts us in an incredibly strong position in the land lease sector. The significant potential to capitalise on that pipeline was one of the things that attracted me to the role. CEO & Managing Director’s Letter John Carfi 10 Another strength of Ingenia is its diversity of assets, by location, sector and price point which supports consistent recurring income and underpins returns. Importantly, the segments we operate in have attractive tailwinds to support our growth – an ageing population; growing need for affordable housing and demand for domestic travel are all expected to continue to increase our customer base and drive demand for our products. The FY24 result demonstrates the groundwork that has been laid for accelerating development and delivering scalable growth as we have a solid foundation and the opportunity to deliver enhanced returns. FY24 financial performance In a period of significant change, it was great to deliver a result that exceeded guidance and was underpinned by an acceleration in our new home settlements, as well as the solid ongoing performance from our residential communities and Holiday Parks, which also achieved growth. The FY24 result demonstrated the focus on execution across the Group with EBIT and underlying earnings per security (EPS) both above guidance. EBIT growth was 17% on FY23, above guidance of 10% to 15% growth, while underlying EPS of 23.3 cents represented 14% growth on FY23 and was 1 cent above the upper end of the guidance range. Revenue grew 20% to $472.3 million, reflecting a material increase in new home settlements and ongoing growth in returns from the residential communities and holidays segments. Operating cash flow of $82.2 million was flat year on year, reflecting ongoing growth in inventory as settlements increase and new projects commence. Statutory profit of $14.0 million was down 78% on the FY23 result, primarily due to the impairment of goodwill associated with the 2021 Seachange acquisition. Underlying Profit of $94.8 million grew 14% on FY23 while Net Tangible Assets per security (NTA) increased to $3.69 (from $3.52 at 30 June 2023). The full year distribution of 11.3 cents per stapled security was 3% above the distribution paid in FY23. The focus on capital recycling (with $75 million of assets divested over FY24) and ongoing balance sheet management supported investment in the development pipeline. The Group closed FY24 with a solid balance sheet, with a loan to value ratio (LVR) of 32.3%, at the lower end of the Group’s target range of 30% - 40%). At year end, the Group had $201.9 million in cash and available undrawn debt, with no debt expiring till December 2025 and an additional $125 million in debt facilities secured over the year. These results demonstrated the resilient and growing portfolio the Group has in place and the early positive outcomes from recent changes to drive security holder returns, as outlined below. Residential communities Our residential communities, which include our land lease (Ingenia Lifestyle), all age rental (Ingenia Rental) and seniors rental (Ingenia Gardens) communities have maintained high occupancy, reflecting ongoing strong demand for affordable housing. Rental growth, largely underpinned by CPI linked rents, and the addition of new homes to the Lifestyle and Rental communities, expanded the rent base, contributing to earnings growth. The Lifestyle Rental segment (which includes Ingenia Lifestyle and Ingenia Rental) delivered EBIT growth of 14% on FY23 as the portfolio increased in scale, rental growth was achieved and further communities delivered new settlements. Ingenia Gardens was impacted by the sale of the portfolio’s six Western Australian assets in December 2023 (with EBIT falling 13% on FY23). Image: New home at Ingenia Lifestyle Nature’s Edge, QLD 11 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Growth in the land lease business remains the core strategic focus Development activity is a key driver of the Group’s rent base and is key to building a leading land lease portfolio. Development activity accelerated over FY24 with an increase in EBIT of 40%, to $59.2 million. Across the Group we have sixteen active projects and increased construction of new homes over the year, with 540 homes delivered. While the margin achieved on home sales fell slightly, new home settlements increased by more than 20%, to 462, and fees from the development Joint Venture also increased as activity increased, and settlements grew. Progress was also made on projects that will deliver first settlements in FY25, including the large Joint Venture project (over 600 homes) at Morisset in NSW. With sales volumes up and stable build times, we are progressing a range of activities to improve returns in response to the change in focus from small brownfield development to larger more complex greenfield projects and a material increase in construction pricing in recent years. We continue to improve our customer focus; building on an offer which provides simplicity and transparency with no exit or deferred management fees. I am encouraged by these results but there is more to do as we continue to drive towards greater efficiency and scale in development. Holiday Parks benefiting from resilient demand The holiday parks portfolio was refined over the year with the sale of two smaller holiday parks and the addition of a beach front park (Old Bar, NSW) with significant opportunity to enhance returns. New cabins were also installed across the portfolio and are delivering targeted returns, consistent with the densification strategy for this portfolio. We saw ongoing rate and occupancy growth, with EBIT up 5%. Our focus is continuing to expand marketing reach to capitalise further on demand for domestic travel and on selective investment via intensification to enhance value and revenue. Focus to drive performance This result and the Group’s $2.5 billion portfolio provides a strong foundation as we seek to deliver enhanced performance through growth. The clear opportunity for Ingenia is to continue to pivot from an aggregator to an operator and developer, creating development as a clear growth engine for the Group as we unlock the value embedded in our development pipeline. Unlocking the value inherent in our land bank will not only drive value creation but support our growth ambitions in the land lease space. Strategic priorities We have three areas of priority, from a strategy perspective, which will allow us to strengthen our foundation, optimise financial returns, enhance our customer offer and build scale: • Simplifying the business – this includes refining our focus, setting clear financial objectives and streamlining our structure. • Building capacity in development as the growth engine – development is the least mature part of the business and key to value creation in the land lease business, as we pivot from a focus on conversion and small brownfield additions to become a large-scale greenfield developer. This represents the greatest opportunity to capitalise on embedded growth and has been my main focus since joining the business. • Finally aligned to these objectives is building an unrelenting focus on operational efficiency – being clear on the attributes and returns we need from our portfolios, reducing costs and finding more efficient ways to do what we do are key to value creation and improved returns from assets across our entire business. Execution of strategy While there is a lot more to do to reach our optimal delivery model and returns, we have already made some progress. A new purpose and values have been launched with our teams which elevates our customer focus. Ensuring we are ‘brilliant at the basics’ and are aligning our service and product to customer needs remains key. We have streamlined our executive function to suit the future focus – this has also provided clearer lines of accountability and will contribute to productivity gains. The Executive team has been reduced from 12 to 8 roles, and combined with other headcount reductions will generate annualised savings of $6 million per annum. We have also been clear about our need to deliver scale and financial returns and we took the decision to exit the funds management business in FY25. We are continuing to review our portfolios to identify lower growth assets which can be divested as needed to allow for reinvestment in opportunities that meet our return hurdles. With development, which is my core focus, structure and resourcing have been changed as we move to an integrated delivery model. Acquisitions, marketing and sales as well as management of the Joint Venture with Sun Communities are all now embedded in our development function. This is an important step in creating greater customer focus and alignment. 12 We have made good progress but there is additional work to do. Clear return targets are now in place for each business, serving as a guide to the market of our medium term financial goals and an important management tool for our teams who have accountability for delivering these returns. As we scale development to unlock value, we are targeting a change in the mix between development and recurring revenue which will be reflected in how we allocate capital. Our longer term goal is to derive 50% to 60% of earnings from development activity, with the remaining 40% to 50% coming from recurring income derived from our operating assets. Delivering on our longer term goals We have put in place short and medium term goals to steer our actions and set expectations as we deliver on this strategy and move to a medium- term goal of an efficient operating model with a more stable cost base, greater development focus and diverse cash flows delivering targeted business returns. We have made progress as outlined above – with cost reductions, business simplification and efficiency initiatives in place. However, it will take some time to see the benefit of many of these initiatives. We expect gains from our earlier actions to accelerate into the medium term – in particular the work we are doing to refine the procurement process in development and optimise project returns will begin to deliver results. We will also be focused on our future pipeline. A number of current early-stage projects will become cash flow positive providing capital to reinvest within the development business and creating greater diversity in our pipeline returns. Importantly, we have ensured this business is not capital constrained and I am confident that funding will not be an impediment to meeting customer demand or inhibit growth. Outlook The full year result is an early indication of Ingenia’s potential, delivering outperformance against targets and improved returns. We have a solid foundation for future growth and a clear pathway to enhance investor returns as we deliver on our longer term goals. Ingenia enters FY25 poised for growth with a clear pathway to enhance returns, sufficient capital to fund growth, and a simplified business that will drive efficiency and productivity. Year to date performance is in line with our expectations and we are well placed to deliver on our strategic goals and our FY25 guidance - we are not constrained by capital; we have a committed team and a large and diverse asset base with identified embedded growth. We are targeting further growth in FY25 as we progress towards delivery of longer term goals and the delivery of security holder value and enhanced risk adjusted returns. Subject to no material change in the operating environment, the Group is targeting growth in EBIT of 10% to 15% and underlying EPS of 24.4 cents to 25.6 cents. I would like to thank the Ingenia team for their commitment and focus in a period of significant change as we transition and position for growth. Finally, I would like to thank security holders for their continued support. John Carfi | CEO & Managing Director Image: Clubhouse open day at Ingenia Lifestyle Nature’s Edge, QLD 13 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Residential Communities Image: Ingenia Lifestyle Lakeside Lara, VIC 14 THE GROUP’S RESIDENTIAL COMMUNITIES PROVIDE STABLE, RENT BASED CASH FLOWS AND FORM THE CORE FOCUS OF THE GROUP’S GROWTH. Through offering rental homes and land lease homes (where residents own the home and rent the land), Ingenia’s residential communities provide community-based living, largely focused on the growing over 50’s population. Development is a key driver of future rental income and the creation of sustainable, purpose-built land lease communities. 1. Includes Joint Venture and funds managed by Ingenia. 2. Includes Ingenia and Joint Venture sites subject to approvals and optioned or secured. Ingenia Lifestyle Ingenia Rental Ingenia Gardens Land Lease communities catering to over 50s Rental communities catering to all ages Seniors’ rental villages COMMUNITIES1 35 10 19 HOMES/SITES1 >4,800 >1,700 >1,000 DEVELOPMENT SITES2 5,311 108 – 15 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW RESIDENTIAL COMMUNITIES Ingenia Lifestyle INGENIA LIFESTYLE NOW REPRESENTS 47% OF THE GROUP’S INVESTMENT PROPERTY, WITH COMMUNITIES CONCENTRATED IN KEY COASTAL AND OUTER URBAN LOCATIONS. Ingenia’s Lifestyle portfolio offers land lease homes, providing both affordable and premium living with residents enjoying a range of community facilities and activities. Communities currently under development offer homes from $340,000 to over $1 million in attractive locations. The portfolio meets the need from a growing demographic of seniors who see the opportunity to downsize to release equity in their current home while benefiting from an attractive community-based lifestyle that has a simple financial model. Building a leading land lease portfolio through efficient operations and accelerating development to realise value is the focus of the Group’s strategy and growth. Image: Ingenia Lifestyle Sanctuary, QLD 16 17 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW ACCELERATING DEVELOPMENT CONTRIBUTED GROWTH IN NEW HOME SETTLEMENTS, SUPPORTING FURTHER GROWTH IN THE RENTAL BASE THROUGH THE CREATION OF MODERN, SUSTAINABLE COMMUNITIES. “Building a leading land lease portfolio remains a key priority as we build additional scale through a focus on the development of an efficient process and the achievement of targeted returns.” Gross new home development profit of $89.4 million was up from $65.5 million in FY23, contributing to an increase in EBIT of 40%, to $59.2 million. Development and sales fees derived from the Joint Venture also increased (from $2.1 million in FY23 to $3.7 million) with four communities now under construction and three delivering settlements in FY24. This contribution will continue to grow as projects progress, and the first home sales at Archer’s Run at Morisset in NSW, occur in FY25. With a strong focus on execution and improved construction conditions, the development business delivered 462 home settlements across Ingenia, the development Joint Venture with Sun Communities and the Group’s managed funds. This represented a 24% increase on FY23. The average home sale price was up 24% to $606,000 across the Ingenia owned projects and new home settlements will contribute further revenue to the rental base. Ingenia Lifestyle Development RESIDENTIAL COMMUNITIES Image: Construction underway at Ingenia Lifestyle Archer’s Run, NSW 18 The EBIT margin for the development business fell slightly, to 28.7% (from 29.9% in FY23) as EBIT was impacted by costs associated with accelerated activity in production and new developments, including investment into projects that will deliver settlements in FY25/26. The FY24 result benefited from stable construction conditions, with home construction averaging 22 weeks, allowing a smoother settlements profile over the year. Key milestones were delivered across a range of projects, including: • Clubhouse openings at five communities • Three new display villages • Project launches at three communities. The completion of 540 homes was a material step up in construction (representing an increase of 18% on prior year) and resulted in the availability of inventory as we move into FY25. Reflecting the focus on demand as the key driver of development activity, of the 108 completed homes on balance sheet at 30 June 2024, only 25 remained unsold at 16 August. Demand remains resilient, however the impact on market activity of rising interest rates, increased living costs and poor consumer sentiment, combined with extended days on market contributed to a longer lead time for settlements. We closed FY24 with 16 active projects and over 400 deposits and contracts to support settlements over FY25 and FY26. Progress was also made on enhancing the efficiency of the development function, including integrating sales, marketing and acquisitions into development. These changes and improvements in procurement practices and home and project design will support further efficiency gains as well as the delivery of targeted returns into the medium term. Moving into FY25 visibility on completions and the availability of inventory create a positive environment for sales, and we remain poised to benefit as the residential market improves. 1. At 30 June, includes the Joint Venture with Sun Communities and managed funds. 2. Ingenia owned communities only. Inclusive of GST. 462 HOME SETTLEMENTS1 >400 DEPOSITED/ CONTRACTED1 (UP 24%) $606k AVERAGE HOME PRICE2 Image: New home at Ingenia Lifestyle Nature’s Edge, QLD 19 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Longer-term drivers of demand remain intact. Housing affordability and the appeal of community living make Ingenia’s communities a highly attractive proposition. We remain focussed on meeting customer needs and see our model, which provides the simplicity of affordable homes and weekly rents, with no exit fees, as a compelling proposition for an ageing population seeking a connected community lifestyle and Belonging. Our target market is large, and growing, and our communities offer an engaged lifestyle with access to quality facilities and homes at a range of price points and locations with homes selling from $345,000 to over $1 million. We remain confident in the ability of our development business to deliver growth as we seek to unlock the value inherent in the Group’s large pipeline. The Group has accelerated activity in the development segment with projects in place to support a target of 1,600 - 2,000 home settlements over the three years to end FY26. RESIDENTIAL COMMUNITIES We expect margin and EBIT to begin to improve while we trade out of suboptimal projects, progress opportunities to drive efficiency gains, further refine the delivery model, and, over the medium term, build additional scale. DELIVER TARGETED RETURNS (MID-TEENS PROJECT IRR; EBIT MARGIN GROWTH) GROW SETTLEMENTS AS PROJECTS PROGRESS EMBED INTEGRATED MODEL TO DRIVE PRODUCTIVITY AND EFFICIENCY FURTHER REFINE DELIVERY MODEL FUTURE FOCUS Image: New home at Ingenia Lifestyle Parkside Lucas, VIC 20 Joint Venture THE JOINT VENTURE WITH U.S. BASED SUN COMMUNITIES WAS ESTABLISHED IN NOVEMBER 2018 AND EXTENDS TO NOVEMBER 2030. In addition to a 50% ownership in the Joint Venture, Ingenia, as manager, receives fees for services provided to the Joint Venture. Ingenia has the right to acquire communities from the Joint Venture once they have been fully developed and jointly owned for a period of five years. The Joint Venture generated total revenue of $61.1 million (up from $26.9 million in FY23), resulting in an operating profit of $21.4 million. Ingenia derived $4.1 million of fee income for services provided to the Joint Venture in FY24. The Joint Venture delivered 88 settlements in FY24, at an average home sale price (including GST) of $741,000, approximately 20% of Group settlements. Element at Fullerton Cove (NSW) settled its first homes, and the Freshwater and Bobs Farm projects continued to contribute settlements. The Joint Venture has 227 homes contributing rent across three growing communities. Work continued at the Group’s largest project, Archer’s Run at Morisset (NSW) which was launched in FY24 and will welcome its first residents in FY25. This large project will include over 600 homes and a range of community facilities on completion. Moving into FY25, the Joint Venture is anticipated to contribute approximately 30% of Group settlements, with four communities selling homes. This increased activity will also generate growing development and sales fees for the Group. Image: Construction underway at Ingenia Lifestyle Element Fullerton Cove, NSW 21 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW RESIDENTIAL COMMUNITIES Joint Venture continued Image: Clubhouse and open day at Ingenia Lifestyle Freshwater, QLD 22 The Group has 16 projects underway, with diverse locations and price points. These include projects on the New South Wales Coast, in South-East Queensland and Victoria. The development of new master planned communities and the expansion of existing communities is key to building a leading portfolio of land lease communities. Images: Artist impressions of community clubhouse, masterplan and launch event - Ingenia Lifestyle Element Fullerton Cove, NSW 23 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW RESIDENTIAL COMMUNITIES THE LIFESTYLE RENTAL SEGMENT, WHICH INCLUDES LAND LEASE COMMUNITIES (INGENIA LIFESTYLE) AND ALL AGE ‘BUILD TO RENT’ COMMUNITIES (INGENIA RENTAL) DELIVERED GROWTH IN EBIT AND EBIT MARGIN, SUPPORTED BY STRONG PERFORMANCE IN THE LIFESTYLE AND RENTAL COMMUNITIES. The EBIT contribution of $45.3 million was up on the prior year ($39.8 million) and EBIT margin also improved, moving to 53.8% at 30 June 2024 from 52.9% at 30 June 2023 on a stabilised basis (excluding communities which were less than 90% complete at 1 July 2022). Future growth will be generated as the portfolio benefits from the addition of 419 income producing sites in FY24 and new homes are added to existing and new communities via ongoing large-scale and infill development. Over FY24, the portfolio benefited from rent increases over FY23 and FY24, increased development activity and investment in additional rental homes. The portfolio now has a value of $956.1 million ($868.4 million at 30 June 2023) with further embedded growth. Revenue increased to $86.5 million (up 12.6% on FY23). The portfolio provides a resilient rental stream with high levels of occupancy and a significant portion of CPI linked rents across the majority of communities. Image: Ingenia Lifestyle Lakeside Lara, VIC Ingenia Lifestyle Rental 24 Image: Brisbane North Rental Village, QLD 25 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Ingenia Lifestyle THROUGH FY24 THE PORTFOLIO CONTINUED TO GROW REVENUE THROUGH CPI LINKED RENTAL GROWTH AND THE ADDITION OF 365 NEW HOMES THROUGH DEVELOPMENT. RESIDENTIAL COMMUNITIES Over the year, our team welcomed new residents and opened a range of new facilities as development activity accelerated. Rental growth across the portfolio is largely linked to inflation, with an average weekly rent increase of 7% over FY24 as rent reviews were undertaken. Combined with the increase in new residents entering our communities, this delivered an increase in revenue of more than 12%. An increasing driver of rental growth is the sale of new homes across the Group’s developments, with 365 new home settlements adding approximately $3.9 million in rent per annum to the portfolio. Ingenia’s team facilitated 227 resales across our established communities in FY24, generating $7 million in revenue with residents benefiting from the increase in value from the sale of their home. We continue to focus on delivering a positive lived experience for our Ingenia Lifestyle residents. Pleasingly, the annual resident satisfaction survey completed by over 2,500 residents in May 2024 resulted in stable average customer satisfaction levels of 79% being achieved. In FY25 the portfolio will benefit from further increases in home settlements and rental growth across established communities. Image: Ingenia Lifestyle Chambers Pines, QLD 26 GROW CUSTOMER AWARENESS OF THE BENEFITS OF LAND LEASE COMMUNITY LIVING CONTINUE TO FOCUS ON DELIVERING HIGH LEVELS OF CUSTOMER SATISFACTION IN EACH COMMUNITY DRIVE OPERATIONAL EFFICIENCIES THROUGH NEW COMMUNITY DESIGNS AND ENHANCED TECHNOLOGY FUTURE FOCUS 1. Includes all potential sites (on balance sheet or through the Joint Venture with Sun Communities – under option or secured). 4,460 HOMES 5,311 DEVELOPMENT SITES1 $203 WEEKLY RENT Image: Ingenia Lifestyle Freshwater, QLD 27 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Ingenia Rental THE GROUP’S RENTAL PORTFOLIO PROVIDES ALL AGE, AFFORDABLE RENTAL ACCOMMODATION. RESIDENTIAL COMMUNITIES The portfolio of 10 communities added 54 new rental homes in FY24. It is experiencing strong demand and a record high occupancy rate of over 99%. With limited rental options and constrained new supply while national vacancy rates remain low, the portfolio is positioned to continue to capture demand and maintain occupancy. Approvals are in place for a further 108 rental homes that will provide expansion across existing communities, enhancing returns. New homes are attracting higher rents and have strong demand, with wait lists for accommodation across the communities. Average annual rent growth of 9% was achieved on FY23, with average weekly rents increasing to $320 per week. The addition of 54 rental homes continued a focus on revenue and asset value growth, with new homes leased immediately on completion. New homes target a yield on cost of 14%. 28 DELIVER DA APPROVED ACCOMMODATION SITES ENHANCE COMMUNITY FACILITIES TO SUPPORT RESIDENT SATISFACTION, STRONG OCCUPANCY AND RENTAL GROWTH FUTURE FOCUS 1,419 TOTAL RENTAL HOMES 99.5% OCCUPANCY $320 AVERAGE WEEKLY RENT 10 NO. COMMUNITIES The portfolio is meeting a need for affordable rental accommodation. Over the course of FY25 this will continue to grow returns as new rental homes are added to existing communities and rent growth is achieved. Image: Brisbane North Rental Village, QLD 29 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Ingenia Gardens THE INGENIA GARDENS PORTFOLIO PROVIDES AFFORDABLE SENIORS RENTAL ACCOMMODATION, DELIVERING STABLE RECURRING CASH FLOWS UNDERPINNED BY GOVERNMENT PAYMENTS (PENSION AND RENT ASSISTANCE). RESIDENTIAL COMMUNITIES Over the year the divestment of six communities in Western Australia reduced the portfolio to a total of 19 communities with a value of $134.1 million ($168 million at 30 June 2023). Rental revenue declined to $21.6 million and like for like rent grew over the year, with average rent now at $383 per week. The EBIT contribution decreased 12.8% to $11.6 million, impacted by divestments and cost growth primarily across wages, utilities and rates. A focus on delivering efficiencies resulted in an increase in the EBIT margin to 49.1%, up from 48.6% at June 2023. Ingenia Gardens communities continue to be attractive to residents. It focuses on ensuring residents enjoy living in a connected and engaged community with a true sense of belonging. The portfolio is continuing to deliver stable, government backed rents with the majority of residents receiving a government pension and rent assistance. Image: Ingenia Gardens Bundaberg, QLD 30 Ingenia Connect 1,020 TOTAL VILLAS/UNITS 95.9% OCCUPANCY $383 AVERAGE WEEKLY RENT CONTINUE TO LEVERAGE THE INGENIA CONNECT SERVICE TO SUPPORT RESIDENTS EXTENDED LENGTH OF STAY DRIVE OPERATIONAL EFFICIENCIES THROUGH MEAL PROCUREMENT AND PREPARATION CONTINUE UNIT RENOVATIONS TO DRIVE UNIT OCCUPANCY AND RENTAL GROWTH FUTURE FOCUS Ingenia Connect, a ‘concierge’ style service offered to residents for no charge, is now offered across all the Group’s residential communities and continues to grow, assisting residents to age in place and supporting their health and wellbeing. Ingenia Connect now has 1,700 residents accessing the service, with more than 470 living in Ingenia Gardens communities. 31 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Ingenia Holidays Image: Ingenia Holidays Townsville, QLD 32 THE HOLIDAY PARKS PORTFOLIO PROVIDES DIVERSE REVENUE STREAMS AND A RANGE OF HOLIDAY EXPERIENCES, WITH PARKS DOTTED ALONG THE EAST COAST OF AUSTRALIA, FROM CAIRNS IN TROPICAL NORTH QUEENSLAND TO THE SEASIDE TOWN OF TORQUAY IN VICTORIA. 33 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW INGENIA HOLIDAYS The portfolio increased in value to $865.8 million, up from $757.5 million at 30 June 2023. Tourism rental income was up 8% to $105.1 million as the holidays business continued to perform strongly, with the majority of parks now being pet friendly and domestic travel continuing to be a popular family holiday in the face of rising living costs and the expense of international travel. While tourism cabins and sites benefited from the demand for domestic travel, the portfolio also grew the stable underlying revenue stream from the annual and permanent home sites across mixed use parks. An average rent increase of 6.6% across the 1,405 permanent and rental homes contributed to growth. The portfolio was refined with the sale of two smaller parks (Lake Hume and Broulee) and the addition of a NSW coastal park, Ingenia Holidays Old Bar Beach, which has exceeded forecasts and has considerable upside potential with further densification. The addition of a further 52 tourism cabins to existing parks has increased yield and introduced new accommodation types, in line with the Group’s densification strategy. Investment returns remain attractive, with new accommodation delivering returns in line with the targeted 14%+ yield on cost. Pleasingly, our Parks delivered occupancy and rate growth, outperforming the national average across Australia’s caravan industry, with 9% growth in cabin revenue compared to a national average of 2%. The portfolio benefited from ongoing demand for domestic travel and active management of the portfolio, contributing to increases in revenue and value. IN ADDITION TO TOURIST CABINS AND SITES, ANNUAL SITES, LAND LEASE AND RENTAL HOMES ARE OFFERED AT A NUMBER OF COMMUNITIES, PROVIDING A BASE OF STABLE REVENUE AND INCREASING THE GROUP’S EXPOSURE TO RENTAL CASH FLOWS. Image: Ingenia Holidays Queenscliff Beacon, VIC 34 MAINTAIN HIGH CUSTOMER SATISFACTION CONTINUE SELECT INVESTMENT TO ENHANCE REVENUE AND VALUE IMPROVE CUSTOMER ONLINE EXPERIENCE TO INCREASE CONVERSION AND REDUCE COST OF SALES UTILISE DIVERSE DISTRIBUTION CHANNELS AND TARGETED MARKETING TO GROW CUSTOMER BASE FUTURE FOCUS While we expect rate growth to moderate in FY25, growth in occupancy through non-peak periods, targeted marketing activity and the ability to continue to build out revenue streams through the addition of new accommodation will deliver ongoing returns. The Parks benefit from a strong base of ‘repeat’ holiday guests, and we are continuing to refine the accommodation mix within each community to ensure that individual assets maximise returns. As we enter FY25, we are seeing greater demand in non-peak periods, which will support annualised occupancy growth. The portfolio will also benefit from omnichannel marketing, additional cabins, diverse locations and a focus on guest experience. 38 HOLIDAY PARKS1 1.8m ROOM NIGHTS PA 64% AVERAGE CABIN OCCUPANCY 6% FORWARD BOOKINGS 1 Includes six parks owned by the Group’s managed funds. 2. At August 2024. ABOVE FY232 Image: Ingenia Holidays Rivershore Resort, QLD 35 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW INGENIA HOLIDAYS THE GROUP MANAGES AND HAS AN OWNERSHIP INTEREST IN FIVE FUNDS THAT COLLECTIVELY OWN FIVE HOLIDAY PARKS AND ONE LAND LEASE COMMUNITY. THE HOLIDAY PARKS BENEFIT FROM THE HOLIDAYS MARKETING PLATFORM AND MANAGEMENT. During FY24 we sold four homes at Coastal Palms on the NSW south coast completing the conversion of this holiday park to a land lease community. The Funds will reach the end of their term in August 2024 and, consistent with the Group’s focus on simplification and efficiency, will be wound up. The funds currently have $81.1 million in assets under management and contributed $1.9 million in income in FY24, comprising fee income of $1.6 million and distributions of $0.3 million. Managed Funds Image: Ingenia Holidays Moruya, NSW 36 North Queensland Fraser Coast Sunshine Coast North Coast NSW South Coast NSW Hunter Region Western Sydney The Murray Gippsland Great Ocean Road 4 2 2 Mid North Coast NSW 4 Port Stephens 3 Riverina 1 1 3 3 9 3 1 2 North & Far North Qld 1. Cairns Coconut 2. Townsville Fraser Coast 3. Hervey Bay Sunshine Coast 4. Noosa North 5. Noosa 6. Rivershore 7. Landsborough North Coast NSW 8. Kingscliff 9. Byron Bay Mid North Coast 10. White Albatross 11. South West Rocks 12. Bonny Hills 13. Old Bar Beach Port Stephens 14. Soldiers Point 15. Middle Rock 16. One Mile Beach Hunter 17. Hunter Valley 18. Lake Macquarie Western Sydney 19. Avina 20. Sydney Hills 21. Nepean South Coast 22. Lake Conjola 23. Eden Beachfront 24. Merry Beach 25. Moruya 26. Ocean Lake 27. Shoalhaven Heads 28. Tomakin 29. Ulladulla 30. Wairo Beach Riverina 31. Wagga Wagga Gippsland VIC 32. Inverloch 33. Cape Paterson 34. Phillip Island Great Ocean Road 35. Queenscliff Beacon 36. Swan Bay 37. Torquay The Murray, VIC 38. Murray Bend With a focus on the domestic family and grey nomad market, Ingenia Holidays is experiencing buoyant demand 37 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Sustainability Image: Ingenia Holidays Cairns Coconut, QLD 38 INGENIA REMAINS DEDICATED TO CREATING VALUE FOR BOTH EXTERNAL AND INTERNAL STAKEHOLDERS BY INTEGRATING INNOVATION, SUSTAINABILITY, AND EXCELLENCE INTO OUR BUSINESS PRACTICES. Our ongoing commitment to ESG initiatives continues to drive progress and positive impacts on our planet and communities, paving the way for more sustainable and resilient communities. 39 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Emissions and energy efficiency • Applying our Energy Strategy for future developments to include a holistic energy design model that targets carbon neutral communities and cost of living benefits for residents. • Cumulative investment in solar more than $4 million across more than 55 communities. In FY24, we rolled out new metering capability and monitoring function, to ensure our solar systems operate efficiently. • Implemented Fleet Card® for fuel purchases across our business. The data gathered will be included in our emissions disclosures in the 2024 Sustainability Report. Waste management • Improved waste diversion to 22% through recycling, scaling existing initiatives and data capture. Creating sustainable communities • Continued construction on first Ingenia Lifestyle projects targeting Green Star – Communities ratings and Green Star homes. Submitted certification applications to the Green Building Council of Australia (GBCA) for nine home designs to be delivered at our Beveridge community in Victoria. • First geothermal heating and cooling operational at Nature’s Edge (QLD). • Benchmarked existing projects against Sustainability Design Guidelines. Sustainable tourism • Continued to progress a Net Zero transportable cabin prototype in conjunction with Prefabulous and the University of Wollongong. • Continued focus on electrification – introducing first electric mowers, power tools and golf buggies. • Conducted energy audits at our parks in Cairns and Townsville which revealed opportunities for energy savings and carbon reduction via additional solar PV, improved heating systems, and enhanced cabin thermal performance. SUSTAINABILITY Key highlights FY24 ENVIRONMENT Image: Ingenia Holidays Hervey Bay, QLD 40 Our customers • Expanded the Ingenia Connect program in FY24, which now supports over 1,700 residents by providing free expert support to access health and wellbeing services to live independently and is offered across all our residential communities. • Continued to design and build to ‘age in place’ and support health and wellbeing of our residents with our new clubhouses in Parkside Lucas in Ballarat, Lakeside Lara, and The Hangar at Hervey Bay. Climate strategy • Continued delivery of actions under the Climate improvement roadmap and enhanced our physical risk management by integrating a Climate Hazard Exposure Assessment into our acquisitions process and implementing Sustainable Development Guidelines for new projects. Human rights • Released fourth Modern Slavery statement with progressed response and disclosures. • Continued to strengthen our Modern Slavery Responsible Sourcing Framework • Continued with Modern Slavery training as part of the onboarding process for new employees and offered ongoing annual training for all staff. Information technology and cyber security • Progressed cyber security roadmap - implemented phishing campaigns with automated training requirements and advanced cyber security mitigation strategies focussed on developing an industry aligned model as a base for further actions and initiatives in relation to cyber security. • Developed a business continuity plan and conducted business impact analysis. Our people • Offered Leadership programs – Inspire and Elevate with great success. Local communities • Progressed the preparation of our Reflect Reconciliation Action Plan (RAP) with the launch of our Vision for Reconciliation during National Reconciliation Week (NRW). • Ongoing corporate partnership for the seventh year with Ronald McDonald House Charities Australia (RMHC) with team volunteering opportunities. Diversity and inclusion • Became a signatory to the HESTA 40:40 Vision and published Ingenia’s first 2023 Gender Pay Gap Statement. SOCIAL GOVERNANCE 41 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW 42 Key Investment Committee Member Remuneration and Nomination Committee Member Audit, Risk and Sustainability Committee Member Committee Chair I R A I R I A Jim Hazel Chair and Independent Non-Executive Director Pippa Downes Independent Non-Executive Director Robert Morrison Independent Non-Executive Director and Deputy Chair Experience and expertise Mr Hazel was appointed to the Board in March 2012. Mr Hazel has had an extensive corporate career in both the banking and retirement sectors. His retirement village operations experience includes being Managing Director of Primelife Corporation Limited (now part of Lend Lease). Mr Hazel also serves as Deputy Chancellor of Adelaide University, as well as Chair of Barossa, Hills and Fleurieu Health Service, and is a director of COTA Australia, the peak policy development and advocacy organisation for older Australians. Mr Hazel holds a Bachelor of Economics and is a Senior Fellow of the Financial Services Institute of Australasia and a Fellow of the Australian Institute of Company Directors. In 2023 Mr Hazel was made a Life Member of the Retirement Living Council, and in 2024 a Member of the Hall of Fame of the Property Council of Australia, for his services to the Senior Housing sector. Other current listed company directorships Nil Former listed company directorships in the last three years Bendigo and Adelaide Bank Ltd (ASX:BEN) (October 2023) Special responsibilities as at 30 June 2024 Member of the Audit, Risk and Sustainability Committee Experience and expertise Ms Downes was appointed to the Board on 4 December 2019. Ms Downes is a professional company director who has held executive and non-executive roles across listed, not-for-profit and government enterprises. Ms Downes brings to the Board significant experience in international banking, finance and capital markets as well as broad industry knowledge across financial services, technology, infrastructure and property. Prior executive roles include Managing Director and Equity Partner at Goldman Sachs JB Were. Ms Downes currently serves on the boards of Australian Technology Innovators and Ms Downes is a member of the Australian Super Investment Committee as well as a member of the ASIC Consultative Panel. Ms Downes was previously a Director of Zip Co Limited, ALE Property Group and Windlab Limited. Ms Downes was formerly a Panel Member of the ASX Appeals Tribunal and served as a Director of ASX Clearing and Settlement Companies. She was also a Director of Sydney Olympic Park Authority, The Pinnacle Foundation, Swimming Australia Limited and its Foundation and served as a Commissioner of Sport Australia. Ms Downes holds a Masters in Applied Finance and a Bachelor of Science (Business Administration) and is a member of the Australian Institute of Company Directors, Chief Executive Women and Women Corporate Directors. Other current listed company directorships Nil Former listed company directorships in the last three years Zip Co Limited (ASX: ZIP) (June 2022) ALE Property Group (ASX: LEP) (December 2021) Special responsibilities as at 30 June 2024 Chair of the Audit, Risk and Sustainability Committee Member of the Investment Committee Experience and expertise Mr Morrison was appointed to the Board in February 2013. He brings to the Board extensive experience in property investments, property development, portfolio management and capital raisings as well as institutional funds management. Mr Morrison is a Founding Partner and Executive Director of alternative investments firm, Barwon Investment Partners, which invests in healthcare real estate, property finance and private equity on behalf of institutional and wholesale investors. Mr Morrison’s investment experience includes senior portfolio management roles where he managed both listed and unlisted property funds on behalf of institutional investors. Prior executive positions include Head of Property for Asia Pacific and Director of Asian Investments at AMP Limited. Mr Morrison was previously a Non- Executive Director of Mirvac Funds Management Limited, an Executive Director of AMP Capital Limited and a National Director of the Property Council of Australia. Mr Morrison holds a Bachelor of Town and Regional Planning (Hons) and a Master of Commerce. Other current listed company directorships Nil Former listed company directorships in the last three years Nil Special responsibilities as at 30 June 2024 Chair of the Investment Committee Member of the Remuneration and Nomination Committee A Board of Directors R I 43 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Gregory Hayes Independent Non-Executive Director Experience and expertise Mr Hayes was appointed to the Board on 17 September 2020 and stepped down on 1 July 2024. Mr Hayes is an experienced executive and company director, with more than 30 years’ experience across a range of industries including property, infrastructure, energy, and logistics in both listed and private entities. Mr Hayes’ prior roles include Chief Financial Officer and Executive Director of Brambles Limited, Chief Executive Officer & Group Managing Director of Tenix Pty Ltd, Chief Financial Officer and interim CEO of the Australian Gaslight Company (AGL), Chief Financial Officer Australia and New Zealand of Westfield Holdings, and Executive General Manager, Finance of Southcorp Limited. Mr Hayes brings to the Board skills and experience in the areas of strategy, finance, mergers and acquisitions, and strategic risk management, in particular in listed companies with global operations. He currently serves on the boards of HMC Capital, HomeCo Daily Needs REIT, Aurrum Holdings Pty Ltd and High Resolves. Mr Hayes holds a Master of Applied Finance, a Graduate Diploma in Accounting and a Bachelor of Arts and also completed an Advanced Management Programme (Harvard Business School, Massachusetts). Other current listed company directorships HMC Capital Limited (ASX: HMC) HomeCo Daily Needs REIT (ASX: HDN) Former listed company directorships in the last three years Nil Special responsibilities as at 30 June 2024 Member of the Investment Committee A R A Sally Evans Independent Non-Executive Director Lisa Scenna Independent Non-Executive Director Experience and expertise Ms Evans was appointed to the Board on 1 December 2020. Ms Evans is an experienced executive and company director, with expertise in health, aged care and financial services developed through roles with listed and private companies in New Zealand, the United Kingdom, Hong Kong, and Australia. Ms Evans’ prior roles include Head of Retirement at AMP, Investment Director at AMP Capital and Director, Westpac Institutional Bank. Prior director roles include Opal Specialist Aged Care, LifeCircle and Gateway Lifestyle, which delisted in November 2018. Ms Evans brings to the Board skills and experience in the areas of retirement and ageing, the delivery of digital solutions, customer experience, strategy, and risk. She currently serves on the boards of Healius Limited, Oceania Healthcare, Allianz Australia Life Holdings and Rest Superannuation, and is a member of the Aged Care Quality & Safety Commission Advisory Council. Ms Evans was previously also a member of the Australian Government’s Aged Care Financing Authority. Ms Evans holds a MSc in Business Leadership from the Compass Group, a Bachelor of Applied Science from the University of Otago, is a Fellow of the Australian Institute of Company Directors and a Graduate of the Australian Institute of Superannuation Trustees. Other current listed company directorships Healius Limited (ASX: HLS) Oceania Healthcare (NZX: OCA) Former listed company directorships in the last three years Nil Special responsibilities as at 30 June 2024 Chair of the Remuneration and Nomination Committee Member of the Audit, Risk and Sustainability Committee Experience and expertise Ms Scenna was appointed to the Board on 1 May 2024. Ms Scenna brings a wealth of experience to the Group, spanning more than 30 years developing strategy and driving performance in property management, asset management and funds management within Australia and the United Kingdom, across listed and private entities. Ms Scenna’s experience includes key executive and non-executive director roles with a focus on development, real estate and infrastructure. Ms Scenna’s previous executive roles include UK Joint Managing Director (Stockland), Head of Explore Investments Group (Laing O’Rourke) and Managing Director Morgan Sindall Investments (Morgan Sindal Group plc). She also currently serves as a non-executive director on the boards of Cromwell Property Group, Dexus Capital Funds Management and Investment Services, Harworth Group, Gore Street Energy Storage Fund and Genuit Group. Ms Scenna holds a Bachelor of Commerce and is a Fellow of Chartered Accountants Australia and New Zealand, as well as a Member of the Australian Institute of Company Directors. Other current listed company directorships Cromwell Property Group (ASX:CMW) Harworth Group (LSE:HWG) Gore Street Energy Storage Fund (LSE:GSF) Genuit Group (LSE:GEN) Former listed company directorships in the last three years Nil Special responsibilities as at 30 June 2024 Member of the Audit, Risk and Sustainability Committee (16 May 2024 – present) Member of the Remuneration and Nomination Committee (16 May 2024 – present) 44 Key Investment Committee Member Remuneration and Nomination Committee Member Audit, Risk and Sustainability Committee Member Committee Chair I R A Board of Directors John McLaren Non-Executive Director Experience and expertise Mr McLaren was appointed to the Board on 6 December 2021 and stepped down on 2 November 2023. Mr McLaren previously acted as Alternate Director for Gary Shiffman (February 2019 – December 2021). Mr McLaren has over 30 years of experience in executive and non-executive roles in financial and real estate public companies listed on the New York Stock Exchange. Formerly President and Chief Operating Officer, Mr McLaren is currently a Strategic Advisor for Sun Communities, Inc. (NYSE: SUI) and has been actively involved in the management, acquisition, construction and development of manufactured housing communities and recreational vehicle resorts as well as home sales and leasing operations within communities and resorts over the past twenty plus years. Mr McLaren holds a Bachelor of Arts degree in Geology from the University of Colorado, Boulder and a Master of Business Administration degree from Regis University, Denver. Other current listed company directorships Nil Former listed company directorships in the last three years Nil Special responsibilities as at 30 June 2024 Nil Shane Gannon Independent Non-Executive Director and Chair-elect Simon Shakesheff Independent Non-Executive Director Experience and expertise Mr Gannon was appointed to the Board on 28 June 2024. Mr Gannon is an experienced executive and company director, with more than 40 years’ experience working with leading ASX listed entities across industries including real estate, mining services, FMCG, and financial services. Mr Gannon’s prior roles include Chief Financial Officer with Mirvac Limited, Endeavour Group, Goodman Fielder, CSR Limited and Dyno Nobel. He also spent ten years at Lendlease in a range of divisional CFO and executive roles including the retail, commercial and financial services divisions. Mr Gannon brings to the board skills and experience in finance and real estate, equity and debt capital markets, commercial property transactions, corporate governance, and people management. Mr Gannon currently serves on the Board of GPT Group. Mr Gannon was previously a Director of CSR Limited. Mr Gannon is Chair-elect and will step into the role of Chair of Ingenia Communities Group following the 2024 Annual General Meeting. Mr Gannon holds a Bachelor of Business (Accounting) and is a Fellow of both the Australian Institute of Company Directors and CPA Australia. Other current listed company directorships GPT Group (ASX: GPT) Former listed company directorships in the last three years Nil Special responsibilities as at 30 June 2024 Nil Experience and expertise Mr Shakesheff was appointed to the Board on 28 June 2024. Mr Shakesheff is an experienced executive and company director with significant property and finance expertise covering strategy, debt and equity finance, and mergers and acquisitions developed through advisory and corporate executive roles. Mr Shakesheff’s prior roles include equities analyst covering listed real estate and retail companies at Macquarie Bank and JP Morgan, and corporate advisor to major real estate groups at UBS and Bank of America Merrill Lynch. He was formerly the Head of Strategy and Stakeholder Relations at Stockland Trust Group. Mr Shakesheff is Chair of Kiwi Property Trust and is the Chair of HomeCo Daily Needs REIT. He is also a non-executive director of Cbus Property, SGCH (formerly St George Community Housing) and Assembly Funds Management. Mr Shakesheff has a Master of Commerce degree in finance and accounting from UNSW. Other current listed company directorships HomeCo Daily Needs REIT (ASX: HDN) Kiwi Property Trust (NZX: KPG) Former listed company directorships in the last three years Nil Special responsibilities as at 30 June 2024 Nil continued 45 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Amanda Heyworth Independent Non-Executive Director Experience and expertise Ms Heyworth was appointed to the Board in April 2012 and stepped down from the Board on 20 June 2024. She is a professional company director with broad experience in high growth companies, M&A transactions and venture capital investments with expertise in developing and executing growth strategies and digital transformation. Ms Heyworth serves on the board of Heritage and People’s Choice and chairs boards in the university and Government sectors. Previously, Ms Heyworth ran a venture capital fund and held roles in investment banking and the Federal Treasury. Ms Heyworth holds a BA (Accounting) with a major in finance, post graduate qualifications in accounting and finance and an MBA from the Australian Graduate School of Management. Ms Heyworth is also a Fellow of the Australian Institute of Company Directors. Other current listed company directorships Nil Former listed company directorships in the last three years Nil Special responsibilities as at 30 June 2024 Member of the Audit, Risk and Sustainability Committee (until 20 June 2024) Member of the Remuneration and Nomination Committee (until 20 June 2024) Simon Owen Managing Director and Chief Executive Officer Experience and expertise Mr Owen joined the Group in November 2009 as the Managing Director and Chief Executive Officer. Mr Owen stepped down as MD on 21 February 2024. He initiated the strategy to focus on developing and acquiring a leading portfolio of lifestyle and holiday communities which has seen the Group’s market capitalisation grow from $30 million to over $1.7 billion. Mr Owen brings to the Group in-depth sector experience. He is a past member of the Retirement Living Division Council (part of the Property Council of Australia) and a former National President of the Retirement Villages Association (now part of the Retirement Living Council), the peak industry advocacy group for the owners, operators, developers and managers of retirement communities in Australia. He is also a prior director of BIG4 Holiday Parks, Australia’s leading holiday parks group. Mr Owen has over 30 years’ experience working in ASX listed groups with roles across finance, funds management, mergers and acquisitions, business development and sales and marketing. Prior to joining Ingenia Communities, he was the CEO of Aevum, a formerly listed seniors housing and aged care company. Mr Owen is a qualified accountant (CPA) with a Bachelor of Business (Accounting) and post graduate diplomas in finance and investment and advanced accounting. Other current listed company directorships Nil Former listed company directorships in the last three years Nil Special responsibilities as at 30 June 2024 Nil John Carfi Managing Director and Chief Executive Officer Experience and expertise Mr Carfi joined the Group in April 2024 as Chief Executive Officer and was appointed to the Board in August 2024. Mr Carfi is an experienced executive who brings to the Group more than 35 years of large company leadership and extensive real estate expertise with a strong focus on the development sector. Mr Carfi has significant experience in developing and operating property businesses in both global and local contexts and a demonstrated ability to set and deliver on strategy. Mr Carfi’s prior executive roles include CEO of Residential Development at Mirvac and construction and development roles at Lendlease Group. He was the CEO of Emaar Properties (USD $37B Dubai based real estate company) responsible for US$120 billion worth of multiple large-scale, mixed-use developments, and more recently, CEO of Aqualand Australia. Mr Carfi is currently a Non-Executive Director of City West Housing Pty Ltd, a not for profit Community Housing Provider. Mr Carfi holds a Bachelor of Applied Science in Building. Other current listed company directorships Nil Former listed company directorships in the last three years Nil Special responsibilities as at 30 June 2024 Nil R A Ingenia Communities Holdings Limited Annual Report For the year ended 30 June 2024 Directors’ Report.............................................................................................................................................................................................................47 Remuneration Report...................................................................................................................................................................................................58 Auditor’s Independence Declaration....................................................................................................................................................................73 Consolidated Statement of Comprehensive Income....................................................................................................................................74 Consolidated Balance Sheet.....................................................................................................................................................................................75 Consolidated Cash Flow Statement......................................................................................................................................................................76 Consolidated Statement of Changes in Equity................................................................................................................................................77 Notes to the Financial Statements.........................................................................................................................................................................78 1. Summary of material accounting policies..............................................................................................................................................78 2. Accounting estimates and judgements...................................................................................................................................................85 3. Segment information........................................................................................................................................................................................85 4. Earnings per security........................................................................................................................................................................................88 5. Other revenue.......................................................................................................................................................................................................88 6. Finance expense................................................................................................................................................................................................. 89 7. Income tax expense.......................................................................................................................................................................................... 89 8. Trade and other receivables.........................................................................................................................................................................90 9. Inventories.............................................................................................................................................................................................................90 10. Assets held for sale...........................................................................................................................................................................................90 11. Investment properties....................................................................................................................................................................................... 91 12. Plant and equipment.........................................................................................................................................................................................97 13. Intangibles and goodwill.................................................................................................................................................................................97 14. Right-of-use assets........................................................................................................................................................................................... 98 15. Investment in a joint venture........................................................................................................................................................................ 99 16. Other financial assets ...................................................................................................................................................................................100 17. Deferred tax assets and liabilities............................................................................................................................................................100 18. Trade and other payables............................................................................................................................................................................100 19. Borrowings .......................................................................................................................................................................................................... 101 20. Other financial liabilities................................................................................................................................................................................. 101 21. Issued Securities ...............................................................................................................................................................................................102 22. Reserves................................................................................................................................................................................................................102 23. Accumulated losses.........................................................................................................................................................................................103 24. Commitments.....................................................................................................................................................................................................103 25. Contingent liabilities........................................................................................................................................................................................103 26. Share based Payment Transactions.........................................................................................................................................................103 27. Capital management...................................................................................................................................................................................... 105 28. Financial instruments..................................................................................................................................................................................... 105 29. Fair value measurement................................................................................................................................................................................ 110 30. Auditor’s remuneration.................................................................................................................................................................................. 110 31. Related parties.....................................................................................................................................................................................................111 32. Company financial information...................................................................................................................................................................113 33. Notes to cashflow statement.......................................................................................................................................................................114 34. Subsidiaries...........................................................................................................................................................................................................115 35. Subsequent events...........................................................................................................................................................................................117 Consolidated Entity Disclosure Statement.......................................................................................................................................................118 Directors’ Declaration.................................................................................................................................................................................................122 Independent Auditor’s Report...............................................................................................................................................................................123 Contents 46 Directors’ Report For the year ended 30 June 2024 The Directors of Ingenia Communities Holdings Limited (“ICH” or the “Company”) present their report together with the Company’s financial report for the year ended 30 June 2024 (the “current period”) and the Independent Auditor’s Report thereon. The Company’s financial report comprises the consolidated financial report of the Company and its controlled entities, including Ingenia Communities Fund (“ICF” or the “Fund”) and Ingenia Communities Management Trust (“ICMT”) (collectively, the “Trusts”). The shares of the Company are “stapled” with the units of the Trusts and trade on the Australian Securities Exchange (“ASX”) as one security (ASX Code: INA). Ingenia Communities RE Limited (“ICRE” or “Responsible Entity”), a wholly owned subsidiary of the Company, is the responsible entity of the Trusts. In this report, the Company and the Trusts are referred to collectively as the Group. In accordance with Accounting Standard AASB 3 Business Combinations, the stapling of the Company and the Trusts was regarded as a business combination. The Company has been identified as the parent for preparing consolidated financial reports. Directors The Directors of the Company at any time during or since the end of the current period were: KMP Position Term Non-Executive Directors (NEDs) Jim Hazel Chairman Full year Robert Morrison Deputy Chairman Full year Pippa Downes Director Full year Sally Evans Director Full year Lisa Scenna Director Appointed, effective 1 May 2024 Shane Gannon Director Appointed, effective 28 June 2024 Simon Shakesheff Director Appointed, effective 28 June 2024 John McLaren Director 1 July 2023 to 2 November 2023 Amanda Heyworth Director 1 July 2023 to 20 June 2024 Gregory Hayes Director Full year (resigned, effective 1 July 2024) Executive Director John Carfi Managing Director Chief Executive Officer Appointed, effective 13 August 2024 Commenced 1 April 2024 Simon Owen Managing Director Chief Executive Officer 1 July 2023 to 21 February 2024 1 July 2023 to 31 March 2024(1) (1) Mr Owen remained in service through to 30 June 2024. Company Secretaries Natalie Kwok (Chief Investment Officer and General Counsel (CIO and GC)) Charisse Nortje Qualifications, experience and special responsibilities Please refer to pages 42 to 45. 47 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Directors’ Report For the year ended 30 June 2024 | continued Meetings The number of meetings of directors (including meetings of committees of directors) held during the year and the number of meetings attended by each director was as follows: Board Audit, Risk & Sustainability Committee Remuneration & Nomination Committee Investment Committee A B A B A B A B Jim Hazel 15 15 6 4 – – – – Robert Morrison 15 13 – – 5 4 6 6 Pippa Downes 15 15 6 6 – – 6 6 Gregory Hayes 15 13 – – – – 6 4 Sally Evans 15 14 6 6 5 5 – – Lisa Scenna 2 2 1 1 – – – – John McLaren 5 2 – – – – – – Amanda Heyworth 15 15 6 6 5 5 – – Simon Owen 12 10 – – – – – – Shane Gannon – – – – – – – – Simon Shakesheff – – – – – – – – A: Meetings eligible to attend  B: Meetings attended Interests of Directors Securities in the Group held by directors or their associates as at 30 June 2024 were: Issued stapled securities Rights Jim Hazel 439,445 – Robert Morrison 254,528 – Pippa Downes 40,868 – Gregory Hayes 32,000 – Sally Evans 43,882 – Lisa Senna – – Shane Gannon – – Simon Shakesheff – – Company Secretaries Natalie Kwok – CIO and GC Ms Kwok joined Ingenia in 2012 and is responsible for the Group’s capital transactions and corporate legal functions and is joint Company Secretary. She has responsibility for Ingenia’s acquisitions program, which has seen the Group successfully build a portfolio of lifestyle and holiday communities and a growing development pipeline. Ms Kwok has over 20 years’ experience in corporate and commercial dealings, having worked at PwC, Challenger Financial Services and a commercial law firm. She chairs the Residential Land Lease Alliance and is the Group’s representative on the Retirement Living Council and the Caravan & Camping Industry Association. Ms Kwok holds a Bachelor of Law (Honours) and a Bachelor of Commerce and is both a Chartered Accountant and a Solicitor. Charisse Nortje Ms Nortje has extensive company secretarial and governance experience, in both listed and private entity environments. Ms Nortje has worked mainly in the property and financial services sector for over 10 years and previous experience includes spending almost 8 years in the UK working for listed and unlisted organisations in similar roles, across logistics and manufacturing. Ms Nortje holds a Bachelor of Law as well as an MBA. Ms Nortje is also a Fellow of the Governance Institute of Australia as well as the Chartered Governance Institute (FGIA/FCG). 48 Directors’ Report For the year ended 30 June 2024 | continued Operating and Financial Review ICH overview The Group is an active owner, manager and developer of a diversified portfolio of lifestyle, rental and holiday communities along Australia’s east coast. The Group’s real estate assets at 30 June 2024 were valued at $2.3 billion, comprising 38 lifestyle rental and 33 holiday communities and 19 seniors rental communities (Ingenia Gardens). The Group also manages and has a co-investment in 11 assets through its development joint venture (JV) and funds management platform and provides management and development services to these entities. The Group was first included in the S&P/ASX 200 in December 2019 and had a market capitalisation of approximately $1.9 billion at 30 June 2024. The Group’s aim is to create Australia’s best residential communities and holiday park accommodation, with a strong focus on customer satisfaction. The Board is committed to delivering long-term growth to security holders while providing a supportive community environment for residents and guests and creating communities that have a positive impact on our stakeholders and planet. CUSTOMER OBSESSED WE BEFORE ME MAKE IT COUNT TODAY AND TOMORROW At Ingenia we build belonging Strategy The Group is positioning for scale and long-term sector leadership while enhancing the operational performance of its investment properties and developing new sustainable communities. The Group’s focus is on accelerating the transition from an aggregator of land and assets to an operationally efficient developer and operator. The Group will continue to refine its operating model and development delivery through business simplification, a focus on efficiency and financial performance, a focus on land lease development as a driver of growth and accessing capital strategic partnerships to release capital from lower growth assets. The immediate business priorities of the Group are: – Continued focus on business simplification through changes in structure to drive productivity and accountability; – Acceleration of the development pipeline in line with customer demand; – Optimisation of returns from development projects, through changes to design and procurement; – Select investment in all age rental and holidays communities to improve returns; – Improve performance of existing communities through maintainable rental growth, active cost management and a focus on customer needs; – Improve resident and guest experience by investing in our systems and processes; – Enhance competitive advantage through recruiting, retaining and developing industry leading talent; – Build on the Group’s sustainability program through environmental, social and governance initiatives which include progressing the construction of three communities targeting a Green Star – Communities rating, delivering emissions reductions and expanding charitable giving; and – Maintain focus on employee, resident and guest health and safety. 49 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Directors’ Report For the year ended 30 June 2024 | continued Portfolio Refinement, Integration and Development Pipeline Expansion The Group is well positioned for further expansion through development with 16 land lease communities currently underway and 4 communities commencing development over FY25. The Group will also look to expand the portfolio where feasible. During the year, in line with a focus on divesting assets and recycling capital into the Group’s development pipeline, the Group divested: – six Ingenia Gardens communities in WA; – one greenfield development site in QLD that was considered surplus to the Group’s needs; – holiday parks in Lake Hume and Broulee, NSW; and – two land parcels adjoining a NSW holiday park. The Group completed the acquisition of sites adjoining it’s Ingenia Lifestyle Plantations (NSW) and Millers Glen (QLD) communities and continues to look for new sites; in December 2023 a leasehold holiday park at Old Bar Beach (NSW) was acquired, complementing the existing network of holiday parks. FY24 Financial Results The twelve months to 30 June 2024 delivered total revenue of $472.3 million, up 20% on the prior year. The Group settled 370 turnkey homes (30 Jun 2023: 318 homes) delivering a gross new home development profit of $89.4 million (30 Jun 2023: $65.5 million). A further 88 homes were settled within the JV (30 Jun 2023: 46 homes), achieving a combined total of 4581 turnkey home settlements during the year (30 Jun 2023: 364 homes). Holidays income grew by 7% to $134.8 million (30 Jun 2023: $126.4 million) mainly due to an increase in tourism rental income which increased by 8% to $105.1 million (30 Jun 2023: $97.3 million). Lifestyle Rental income increased by 13% to $86.5 million (30 Jun 2023: $76.8 million), driven by the growth in residential rental income which grew by 10% to $68.3 million (30 Jun 2023: $62.3 million). Underlying profit of $94.8 million, up $11.7 million on the prior year, is primarily attributable to strong growth in the Lifestyle Development segment and the Joint Venture on account of an increase in home settlements and complemented by continued growth in the Lifestyle Rental and Ingenia Holidays operating segments. These results were partially offset by: a decline in Ingenia Gardens as a consequence of the sale of six communities in Western Australia; increases in the Group’s cost base, including above inflation rate increases to council rates and taxes and utilities; increases in insurance, employment costs, development marketing, investment in IT infrastructure and support; net finance expense; income tax expense, and; costs associated with business restructuring. Statutory profit of $14.0 million was down 78% on the prior year. The statutory result reflects the combination of growth in underlying earnings from the operating segments and fair value movements on investment properties offset by the impairment of goodwill of $96.6 million, relating to the Seachange acquisition in November 2021 and increased deferred income tax expense associated with the fair value gains on investment properties. Operating cash flow for the period was $82.2 million, consistent with the prior year reflecting the growth in cashflows from home settlements and the Lifestyle Rental and Ingenia Holidays operating segments, offset by investment in home inventory ahead of forecast settlements for FY25 and an increase in borrowing costs paid attributable to higher interest rates and additional borrowings. The Group’s net asset value (NAV) of $3.70 per security was down by 2% (30 Jun 2023: $3.77) and net tangible assets per security (NTA) increased 5% to $3.69 (30 Jun 2023: $3.52). Key metrics – More than 14,650 income generating sites across the Group as at 30 June 2024 – Statutory profit of $14.0 million, down 78% on the prior year due to the full impairment of Seachange goodwill – Underlying profit of $94.8 million, up 14% on the prior year – Basic earnings per security (Statutory) of 3.4 cps, down 78% on the prior year (30 Jun 2023: 15.8 cps) – Basic earnings per security (Underlying) of 23.3 cps, up 14% on the prior year (30 Jun 2023: 20.4 cps) – Operating cash flows of $82.2 million, in line with the prior year (30 June 2023: $82.5 million) – Full year distribution of 11.3 cps, up 3% on prior year (30 Jun 2023: 11.0 cps) 1 Excludes 4 (30 June 2023: 10) settlements at Ingenia Lifestyle Coastal Palms, part of the Funds Management business. 50 Directors’ Report For the year ended 30 June 2024 | continued Group results summary Underlying profit for the financial year has been calculated as follows, with a reconciliation to statutory profit: 30 Jun 2024 $’000 30 Jun 2023 $’000 Operating profit before interest and tax 127,977 109,267 Less: contractual cash flows for ground lease and financial liabilities(1) (2,273) (1,843) EBIT(1) 125,704 107,424 Share of underlying joint venture profit 8,879 3,098 Net finance expense (24,290) (17,321) Tax expense associated with underlying profit (15,527) (9,573) Share of associate loss – (514) Underlying profit(2) 94,766 83,114 Net gain/(loss) on change in fair value of:  Investment properties(1) 57,346 6,125  Acquisition costs (4,190) (4,383)  Financial liabilities(1) (2,185) (2,099)  Investment and other financial instruments (4,030) 1,388  Share of joint venture loss (14,836) (7,370) Impairment of goodwill (96,647) – Gain/(loss) on disposal of investment properties 4,694 (2,840) Tax expense associated with items below underlying profit (20,898) (11,182) Business combination transaction costs – 1,615 Statutory profit 14,020 64,368 (1) EBIT has been adjusted to include movements arising from the settlement of contractual cash flows for ground leases of $1.5 million (30 June 2023: $1.2 million) and financial liabilities of $0.8 million (30 June 2023: $0.6 million). This has been adjusted against the fair value gain/(loss) on investment properties and financial liabilities. Prior year comparatives have been updated to reflect this change. (2) Underlying Profit is a non-IFRS measure designed to present, in the opinion of the Directors, the results from the ongoing operating activities in a way that appropriately reflects underlying performance. Underlying Profit excludes items such as unrealised fair value gains/(losses) and adjustments arising from the effect of revaluing assets/liabilities (such as derivatives and investment properties). These items are required to be included in statutory profit in accordance with Australian Accounting Standards. Segment performance and priorities The Group has five reportable operating segments. During the year, a review of the operating segment results was conducted, and it was determined that support costs (People & Culture, Operational Finance, Technology and the costs associated with the Brisbane office) previously allocated to reportable operating segments would be adjusted. Only costs that can be directly attributed to a reportable operating segment are included in the reportable operating segment. Any indirect costs have now been reallocated and included in the Corporate and Other result. Historically, costs were allocated based on a proportion of segment revenue as a percentage of total revenue. There is no impact to Total EBIT. Comparative figures have been updated to be consistent with the current methodology. Residential Ingenia Lifestyle Development Development is currently underway at 16 communities and the Group has a strong development pipeline of 5,311 potential new home sites across 28 projects within Ingenia and the JV (30 Jun 2023: 5,778). The Group delivered 3702 new turnkey settlements (30 Jun 2023: 318) with a further 88 (30 Jun 2023: 46) settlements in the JV as construction timeframes stabilised and builders became more readily available. New home settlements across the Group and the JV increased by 26% on FY23 and gross new home development profit increased by 36% to $89.4 million. During the year, the Group has deployed significant operating cashflows in developing communities and building inventory ahead of home settlements in FY25. The Group is continuing to experience solid demand for its lifestyle offering from downsizers, with positive responses to new project releases having regard to both home product offerings and pricing. The carrying value of investment property currently under development in Lifestyle Rental at 30 June 2024 is $294.7 million (30 Jun 2023: $251.7 million). 2 Includes 5 settlements at Ingenia Holidays. 51 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Directors’ Report For the year ended 30 June 2024 | continued Performance 30 Jun 2024 30 Jun 2023 Change % Ingenia new home settlements (#) 370 318 16% Gross new home development profit ($m) 89.4 65.5 36% Other income(1) ($m) 3.7 2.1 76% EBIT contribution ($m) 59.2 42.3 40% EBIT margin (%) 28.7 29.9 (1%) (1) Fee income generated by the Group from the Joint Venture relating to asset development and sales management. Strategic priorities The key strategic priorities for Ingenia Lifestyle Development include: accelerating activity with the launch of projects in existing and new markets; managing home inventory to meet market demand; securing development approvals for new homes in the current pipeline; enhancing home and clubhouse designs to improve efficiency and sustainability of future communities; delivering an outstanding experience for new residents; enhancing efficiency and productivity through changes to the delivery model and team structure; and improving returns through a focus on project optimisation, design and procurement to deliver targeted returns. Ingenia Lifestyle Rental At 30 June 2024, Ingenia Lifestyle Rental comprises 38 communities offering an attractive land lease community lifestyle for active downsizers as well as affordable all age rental accommodation. Ingenia Lifestyle Rental EBIT increased 14% to $45.3 million. During FY24, the Group continued to expand its rental assets through the settlement of 365 new homes from the development business and the installation of 54 new all age rental cabins, 27 of which were installed at the Brisbane North Rental Village. Residential rental income grew by 10% on the prior year driven by new rental contracts from the settlement of new homes and investment in new rental cabins and contractual rent increases. The carrying value of the Lifestyle Rental investment property at 30 June 2024 is $956.1 million (30 Jun 2023: $868.4 million). Performance 30 Jun 2024 30 Jun 2023 Change % Permanent rental income ($m) 68.3 62.3 10% Tourism rental income ($m) 3.3 2.6 27% Other(1) ($m) 14.9 11.9 25% EBIT contribution ($m) 45.3 39.8 14% EBIT margin (%) 52.3 51.8 1% Stabilised EBIT margin(2) (%) 53.8 52.9 1% (1) Income from resales, commissions, ancillary guest and resident services and deferred management fees (DMF). (2) Excludes assets under development with less than 90% of homes sold prior to 1 July 2022. Strategic priorities The strategic priorities for Ingenia Lifestyle Rental are: increasing engagement and experience for new and current residents; maintaining high occupancy and sustainable rental growth; continued strategic investment in new rental homes. Ingenia Gardens Ingenia Gardens comprises 19 seniors rental communities located across the eastern states of Australia. Collectively, these communities offer 1,020 rental units. The portfolio maintained high occupancy as a result of the continuing demand for affordable seniors rental accommodation. Consistent with the Group’s focus on divesting non-core assets and recycling capital, six communities located in Western Australia were divested in December 2023. The result for the period was down 13% on prior year primarily as a result of the divestment of the 6 communities located in Western Australia in 1H24 and two communities in the prior year. On a comparative portfolio basis, rental growth was achieved at a rate aligned to growth in the aged pension. EBIT was impacted by higher staff costs driven by award wage increases. The carrying value of Ingenia Gardens assets at 30 June 2024 is $134.1 million (30 Jun 2023: $168.0 million). 52 Directors’ Report For the year ended 30 June 2024 | continued Performance 30 Jun 2024 30 Jun 2023 Change % Rental communities (#) 19 25 (24%) Occupancy (%) 95.9 97.0 (1%) Rental income ($m) 21.6 24.8 (13%) Catering income ($m) 2.0 2.5 (20%) EBIT contribution ($m) 11.6 13.3 (13%) EBIT margin (%) 49.1 48.6 1% Strategic priorities The strategic priorities of Ingenia Gardens are: maintaining high occupancy rates; maintaining sustainable rental income growth; maintaining and improving resident engagement, satisfaction and retention; and maintaining the wellbeing and safety of residents. Tourism Ingenia Holidays and Mixed Use At 30 June 2024, the Ingenia Holidays portfolio comprises 33 holiday communities that offer holiday accommodation, annual sites, permanent and rental homes. The Group continues to refine and consolidate the portfolio with the divestment of Ingenia Holidays Lake Hume and Ingenia Holidays Broulee NSW followed by the acquisition of Ingenia Holidays Old Bar Beach NSW shortly thereafter; and the installation of 52 new tourism cabins. Tourism rental income increased 8% driven by continuing strong demand for domestic holiday destinations reflecting growth in both occupancy and rate and EBIT increased by 5% reflecting the growth in revenues offset in part by higher property expenses, employee expenses and costs associated with higher occupancy. The carrying value of the Group’s Holidays investment property at 30 June 2024 is $865.8 million (30 Jun 2023: $757.5 million). Performance 30 Jun 2024 30 Jun 2023 Change % Tourism rental income ($m) 105.1 97.3 8% Permanent rental income ($m) 11.6 11.2 4% Annuals rental income ($m) 11.0 10.6 4% Other(1) ($m) 7.1 7.3 (3%) EBIT contribution ($m) 56.9 54.4 5% EBIT margin (%) 42.2 43.1 (1%) (1) Income from commissions, ancillary guest and resident services and commercial rent. Strategic priorities The strategic priorities for Ingenia Holidays are: to maximise tourism revenue by leveraging marketing opportunities within the guest database of 1.8 million guests; direct marketing efforts to enhance the booking experience through the website; implementing targeted campaigns through the year; strategic use of channels to attract new customers; nurturing relationships with existing guests; invest in park densification to improve returns and cater to growing demand; and commit to delivering unique products and services that set Ingenia apart in the market. Capital Partnerships Capital partnerships through co-investment and shared funding enables the Group to leverage the existing business platform, generate fee income and extend the Group’s asset base. Development Joint Venture The JV with Sun Communities (NYSE: SUI) leverages Ingenia’s capability and platform to generate fees and expands its development opportunities via co-investment. Once homes are sold, Ingenia provides operational services to the land lease communities. At completion of development, and following a holding period of not less than 5 years, Ingenia has the right to acquire the communities at market value. As at 30 June 2024, the JV has invested in five projects with four under active development. 53 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Directors’ Report For the year ended 30 June 2024 | continued The JV delivered $59.3 million (30 Jun 2023: $25.8 million) of revenue from the settlement of 88 (30 Jun 2023: 46) new homes at three sites in NSW and QLD. Rental income increased by 65% on prior year to $1.9 million in the current period, as a result of new home settlements. Performance 30 Jun 2024 30 Jun 2023 Change % Greenfield properties (#) 5 5 – Investment carrying value ($m) 76.9 61.8 24% New home settlements (#) 88 46 91% Fee income(1) ($m) 0.4 1.1 (64%) Joint venture revenue ($m) 61.1 26.9 127% Joint venture operating profit ($m) 21.4 8.5 152% Share of loss from joint venture(2) ($m) (6.0) (4.3) 40% (1) Asset management services and property services to the JV. Prior year fee income inclusive of origination fee. (2) Inclusive of the Groups 50% share of changes in the fair value of investment properties $14.8 million (30 Jun 2023: $7.4 million). Refer to Note 15 for further detail. Strategic priorities The strategic priorities for the JV are to continue to assess greenfield sites in key metro and coastal markets and to develop its significant portfolio of new land lease communities. Funds Management The Group’s funds and asset management business manages five funds that invest in lifestyle and holiday communities situated in NSW and QLD. The Group receives fees for the management and development of the assets and management of the funds. The Group also co-invests into each of the five funds, to increase alignment with fund investors. The investment in the funds generates asset ownership and development revenue streams. Performance 30 Jun 2024 30 Jun 2023 Change % Investment carrying value ($m) 6.4 6.3 2% Fee income ($m) 1.6 1.6 – Distribution income ($m) 0.3 0.5 (40%) Strategic priorities The funds will reach the end of their contracted management terms in FY25. Management will seek to maximise investor returns through the wind up of the funds and asset sale process. Food, Fuel & Beverage The Group’s service station and food & beverage operations are adjoined to Ingenia Holidays communities, with the offering contributing to an enhanced guest experience and providing a service to the greater local community. Performance 30 Jun 2024 30 Jun 2023 Change % Total revenue ($m) 19.3 19.3 – EBIT contribution ($m) 1.7 1.4 21% EBIT Margin (%) 8.9 7.2 2% 54 Directors’ Report For the year ended 30 June 2024 | continued Capital management of the Group At 30 June 2024, the Group had debt facilities with a combined limit of $905.0 million (30 Jun 2023: $780.0 million), with a weighted average term to maturity of 3 years, drawn to $695.9 million. The Group was able to take advantage of strong support for the business and increase the debt facilities available to the Group by $125.0 million, increase the tenor of selected facilities and negotiate improvements to selected covenants. During the year, the JV increased its debt facilities and the Group contributed an additional $21.0 million, to fund the development of the four projects currently underway. Interest rate exposure is managed through a combination of fixed rate debt and interest rate derivatives on 46.7% of the drawn debt. The Group’s Loan to Value Ratio (“LVR”) was 32.3% (covenant 55%). Financial position The following table provides a summary of the Group’s financial position as at 30 June 2024: 30 Jun 2024 $’000 30 Jun 2023 $’000 Change $’000 Cash and cash equivalents 14,458 45,716 (31,258) Inventories 86,467 54,147 32,320 Investment properties 2,250,687 2,045,630 205,057 Intangibles and goodwill 5,566 102,584 (97,018) Other assets 117,900 105,864 12,036 Assets held for sale – 24,190 (24,190) Total assets 2,475,078 2,378,131 96,947 Borrowings 754,153 661,668 92,485 Other liabilities 121,700 126,397 (4,697) Deferred tax liability 89,319 53,279 36,040 Total liabilities 965,172 841,344 123,828 Net assets/equity 1,509,906 1,536,787 (26,881) Investment property book value increased by $205.1 million from 30 June 2023 resulting from improved earnings and investment in capital works within communities under development and the addition of new greenfield sites adjoining existing communities offset in part by the realisation of value associated with the sale of homes in communities under development and the disposal of the Western Australia Ingenia Gardens portfolio (six communities) and land adjacent to Ingenia Holidays Avina. Borrowings increased by $92.5 million attributable to the Group investing in investment properties and home inventory, the acquisition of development sites and investment in additional all age rental and holiday cabins across the portfolio offset in part by the receipt of proceeds from the sale of the six Ingenia Gardens communities in Western Australia and other selected asset divestments. Following a review of the cashflows of the Lifestyle Rental and Lifestyle Development operating segments and having regard for the discount rate appropriate for cashflows associated with these segments it was necessary to impair the carrying value of goodwill of $96.6 million associated with the Seachange acquisition. Cash flow 30 Jun 2024 $’000 30 Jun 2023 $’000 Change $’000 Operating cash flow 82,195 82,497 (302) Investing cash flow (148,144) (168,053) 19,909 Financing cash flow 34,691 116,786 (82,095) Net change in cash and cash equivalents (31,258) 31,230 (62,488) Operating cash flow for the Group was flat year on year, $82.2 million compared to $82.5 million in prior year. Strong growth in cash flows from the settlement of homes and rental revenues was offset by continued investment in home inventory to support FY25 settlements, additional operating costs and additional borrowing costs attributable to higher interest rates and borrowings. 55 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Directors’ Report For the year ended 30 June 2024 | continued Cash outflows from investing activities decreased by $19.9 million compared to the prior year due to lower acquisition activity in the current year, additional proceeds from the divestment of investment properties and one-off transaction costs settled in FY23, offset in part by additional expenditure on investment properties and contributions to the Joint Venture of $21.0 million (30 Jun 2023: nil) to further the Joint Venture projects. Distributions The following distributions were made during or in respect of the year: – On 20 February 2024, the Directors declared an interim distribution of 5.2 cps, amounting to $21.2 million which was paid on 21 March 2024. – On 20 August 2024, the Directors declared a final distribution of 6.1 cps amounting to $24.9 million, to be paid on 19 September 2024. FY25 outlook The Group’s residential communities remain well placed for ongoing expansion with the demand for quality, affordable residential accommodation continuing from an ageing population. Incoming residents are seeking quality community living and affordable rental accommodation in metro, coastal and regional markets which the Group is well placed to deliver. Investment in inventory and new sites will enable us to capitalise on this demand and enables the generation of long-term sustainable rental cash flows. Investing in new rental homes remains a key priority for the Group. Ingenia will continue to grow its Lifestyle Rental business by building out its development pipeline, generating attractive returns, stable, resilient cashflows and increased scale. The strong demand for domestic holiday accommodation is expected to continue with Ingenia to benefit via an extensive portfolio of properties located in attractive holiday destinations. The priority for Ingenia Holidays is to enhance the customer experience by refurbishing existing cabins and investing in new tourism cabins and amenities. The Group’s solid balance sheet and deal flow provides ongoing opportunity for growth. The Group will increase its asset base by accelerating development and select investment in densification to deliver targeted returns. The Group will regularly assess market opportunities and the performance of existing assets, divesting and acquiring assets where superior longer-term returns are available. Ingenia will continue to evolve the Group’s ESG strategies and initiatives to align with the Group’s strategic focus and portfolio growth. Over FY25, key initiatives include refinement of the Group’s emissions reduction strategies to target portfolio specific outcomes, including the delivery of net zero emissions (Scope 1 and 2) for the Group’s operations by 2035, the evolution of reporting and data collection in preparation for additional climate related financial disclosure obligations and finalisation of the Group’s first Reconciliation Action Plan. Significant Changes in the State of Affairs Changes in the state of affairs during the financial year are set out in the various reports in this Financial Report. Refer to Note 11 for Australian investment properties acquired or disposed of during the period and Note 19 for details of debt facility. Events Subsequent to Reporting Date Final FY24 distribution On 20 August 2024, the Directors declared a final distribution of 6.1 cps amounting to $24.9 million, to be paid on 19 September 2024. Likely Developments The Group will continue to pursue strategies aimed at the longer term growth of its cash earnings, profitability and market share within the lifestyle, rental and tourism sectors through: – Developing greenfield sites in identified growth corridors and expanding existing lifestyle and rental communities; – Continued transition from an acquirer to an efficient developer and operator in line with the Group strategy; – Ongoing co-investment through the Group’s Joint Venture to fund growth and leverage scale and capability; and – Divesting non-core assets as needed to further support investment in growth and portfolio refinement. Detailed information about operations of the Group is included in the various reports in this financial report. 56 Directors’ Report For the year ended 30 June 2024 | continued Environmental Regulations The Group has policies and procedures in place to ensure that, where operations are subject to any particular and significant environmental regulation under the laws of Australia, those obligations are identified and appropriately addressed. The Directors have determined that there has not been any material breach of those obligations during the financial year. Group Indemnities The Group has purchased various insurance policies to cover a range of risks (subject to specified exclusions) for directors, officers and employees of the Group serving in their respective capacities. Key insurance policies include: directors and officers insurance, professional indemnity insurance and management liability insurance. Indemnification of Auditor To the extent permitted by law, the Company has agreed to indemnify its auditor, Ernst & Young, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Ernst & Young during or since the reporting period. Auditor’s Independence Declaration A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 73. Non-Audit Services During the year, non-audit services were provided by the Group’s auditor, Ernst & Young. The directors are satisfied that the provision of the non-audit services is compatible with, and did not compromise, the independence for auditors imposed by the Corporations Act 2001 for the following reasons: – the non-audit services were for taxation, regulatory and assurance related work, and none of this work created any conflicts with the auditor’s statutory responsibilities; – the Audit, Risk and Sustainability Committee resolved that the provision of non-audit services during the financial year by Ernst & Young as auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001; – the Board’s own review conducted in conjunction with the Audit, Risk and Sustainability Committee, having regard to the Board policy set out in this Report, concluded that it is satisfied the non-audit services did not impact the integrity and objectivity of the auditors; and – the declaration of independence provided by Ernst & Young, as auditor of ICH. Refer to Note 30 of the financial statements for details on the audit and non-audit fees. Rounding Amounts ICH is an entity of the kind referred to in ASIC Instrument 2016/191, and in accordance with that Class Order, amounts in the financial report and Directors’ Report have been rounded to the nearest thousand dollars, unless otherwise stated. Signed in accordance with a resolution of the Directors of the Responsible Entity. Jim Hazel Chairman Adelaide, 20 August 2024 57 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW On behalf of the Board and the Remuneration and Nomination Committee (“RNC”), I am pleased to present our Remuneration Report for the year ended 30 June 2024. Sally Evans Chair, Remuneration and Nomination Committee Ingenia has delivered a solid outcome for FY24 where we have continued to focus on driving value through the development business. The Group’s result exceeded FY24 guidance, with EBIT up 17% and underlying profit up 14% on prior year. A material increase in new home settlements was achieved as development accelerated. Our residential communities are continuing to deliver stable recurring rental income as the portfolio benefits from ongoing demand and high occupancy levels. A large portion of the land lease rental base achieved CPI plus rent growth and occupancy remains high across all age rental communities and Ingenia Gardens (at 99% and 96% respectively). Ingenia has more than 9,000 rent generating sites with communities continuing to meet the growing demand for housing affordability and an ageing population. The Group’s Holiday Parks continue to experience strong demand with solid performance and forward bookings remaining elevated as families continue to be attracted to the ease and relative affordability of domestic drive travel. Outlook for the Holidays business remains robust with long-term fundamentals supporting ongoing growth across eastern seaboard locations. This year has also seen significant evolution for the business from growth through acquisition to operational and development excellence. Furthermore, we welcomed our new CEO, John Carfi, to the business and farewelled founding CEO Simon Owen. Importantly we have continued to invest in and develop our people, be a leader in diversity, operate in a safe and responsible manner and invest in technology to support scale. SETTLEMENTS 462 (+24% over FY23) EBIT $125.7M (+17% over FY23) DIVERSITY WGEA Pay Gap <5% & Top 3 of the ASX 3oo in gender representation PEOPLE Engagement survey results remained consistent SAFETY Lost Time Injury Frequency Rate (LTIFR) 1% better than industry benchmark Remuneration outcomes for FY24 No change to fixed remuneration, STI or LTI opportunity has been made for Mr Carfi and Mr Mitchell. Ms Kwok received a fixed pay increase from $500,000 to $550,000 per annum effective 28 August 2023. STI outcomes consider both qualitative and quantitative metrics with the financial metrics being delivered above market guidance. Value driver goals are set across Strategy & Innovation and People and together with an overlay of Safety & Risk Management and delivery of our ESG initiatives are also considered in determining STI outcomes. Given our performance, FY24 STIs were awarded to KMPs at 79% of maximum. The Board determined the profit sustainability threshold had been met to allow FY22 deferred STI Rights to vest in full. As foreshadowed in last year’s remuneration report, the FY21 LTI award did not meet performance threshold and therefore lapsed. The FY22 LTI award will be formally tested on 1 October 2024 and disclosed in the FY25 Remuneration Report, however indicative forecast suggests these will vest around 15% - 20%. FY24 NED Board and committee fees increased on average by 3% to remain aligned with the benchmark peer group. Remuneration Report Directors’ Report For the year ended 30 June 2024 | continued 58 Strike against the FY23 Remuneration Report The Board acknowledges Ingenia Communities’ first ever strike against our FY23 Remuneration Report and has given significant thought and consideration to the feedback received and is committed to addressing these matters. The Board engaged extensively with major securityholders and proxy advisors to understand key concerns with our remuneration framework and its application. Section 2 details the concerns raised and how we have responded. We have also sought to enhance the readability of the 2024 Remuneration Report by changing its structure, to ensure we have responded clearly to concerns raised and provided transparent disclosure. We continue to engage with stakeholders and welcome further feedback on our FY24 Remuneration Report as we work to enhance our remuneration framework and disclosures. Executive Changes The FY24 period has seen significant change in our executive team which reflects our evolution and growth as we move from a period of accumulation and acquisition funded through new capital, to the next phase of our growth through execution of organic investment and asset recycling. Maintaining an engaged and focused executive team during a year of transition has been a priority for the Board. In July 2023, Mr Justin Mitchell was appointed as Chief Financial Officer. Mr Mitchell brings to the role extensive financial, real estate, and operating experience, built over a career across property, corporate finance, and professional services. In November 2023, founding Managing Director and Chief Executive Officer, Mr Simon Owen, advised the Board of his intention to step down after more than 14 years in the role. Mr Owen played a pivotal role in developing the land lease sector in Australia and guided Ingenia’s growth from a market capitalisation of $30 million to over $1.7 billion. Mr Owen’s entitlements on separation are set out in section 7 and are in accordance with his contractual terms and the normal operation of our incentive plans. Given the departure of our long-standing founder CEO, the Board gave significant consideration to the preservation of well recognised executive talent through this period of transition and determined a one-off transition award of Rights was appropriate for Ms Kwok and Mr Mitchell, which are subject to minimum securityholding requirements. Details on the awards appear in section 7. In January 2024, we were delighted to announce the appointment of Mr John Carfi as Chief Executive Officer, who brings significant large corporate leadership experience and extensive real estate expertise including at two of Australia’s leading property companies, Lendlease Group and Mirvac. Our People & Culture The Committee recognise Ingenia’s people and culture as a strong point of operational advantage in an increasingly competitive market segment. We take a holistic approach to driving people performance through investment in building capabilities, career development, and succession planning, in addition to ensuring we are remunerating our people responsibility. We are proud of our achievements in FY24 including: maintaining a solid employee engagement level through a significant leadership and operating transition period for the business; our position on gender diversity including our gender pay gap as measured by WGEA at less than 5%; and, for the seventh year, we awarded our people with Ingenia securities via the INVEST Plan. The INVEST Plan creates a strong connection between our people and business performance, with 99% of eligible team members holding INA securities. As announced to the market, we have continued the process of Board renewal, ensuring an appropriate range of Director diversity, skills and expertise aligned to the evolution of the business. Looking ahead The RNC continues to review our people practices, remuneration framework and performance metrics to ensure we focus on delivery of value to all stakeholders. Our focus for the new year will include further refinement of our STI metrics and consideration of the LTI design aligned to our five-year plan. Directors’ Report For the year ended 30 June 2024 | continued 59 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Remuneration Report (Audited) The Board is pleased to present the Remuneration Report for the Group for the year ended 30 June 2024, which forms part of the Directors’ Report and has been prepared in accordance with section 300A of the Corporations Act 2001 (Cth) (Corporations Act). The data provided in the Remuneration Report was audited as required under section 308(3C) of the Corporations Act. Contents Section Page 1 Key Management Personnel 60 2 Response to FY23 Remuneration Report Strike 61 3 Remuneration At a Glance 62 4 Remuneration Outcomes 63 5 Long Term Incentives 65 6 Non-Executive Director Remuneration 67 7 Executive KMP Employment Contracts 68 8 Statutory Tables 69 1. KEY MANAGEMENT PERSONNEL KMP of the Group for the year ended 30 June 2024 are as follows: KMP Position Term Non-Executive KMP Jim Hazel Chairman Full year Robert Morrison Deputy Chairman Full year Pippa Downes Director Full year Gregory Hayes Director Full year Sally Evans Director Full year Lisa Scenna Director Appointed, effective 1 May 2024 Shane Gannon Director Appointed, effective 28 June 2024 Simon Shakesheff Director Appointed, effective 28 June 2024 John McLaren Director 1 July 2023 to 2 November 2023 Amanda Heyworth Director 1 July 2023 to 20 June 2024 Executive KMP John Carfi Chief Executive Officer Appointed, effective 1 April 2024 Justin Mitchell Chief Financial Officer Appointed, effective 10 July 2023 Natalie Kwok CIO & General Counsel Full year Simon Owen Chief Executive Officer (1) 1 July 2023 to 31 March 2024 (1) Mr Owen was Managing Director for the period 1 July 2023 to 21 February 2024 and CEO for the period 1 July 2023 to 31 March 2024, with the appointment of the new CEO effective 1 April 2024. Mr Owen remained in service through to 30 June 2024. Directors’ Report For the year ended 30 June 2024 | continued 60 Remuneration Report (Audited) (continued) 2. RESPONSE TO STRIKE At the November 2023 Annual General Meeting (AGM), some concerns were expressed regarding our executive remuneration arrangements, with 35% of votes cast against the FY23 Remuneration Report, constituting a first strike under the Corporations Act. The Board has an established engagement program which involves regular meetings with our largest securityholders. We value the feedback obtained through these meetings. As shared during this process we are committed to increasing transparency in our reporting. The table below summarises the key concerns raised and outlines our response. Feedback Response Disclosure on Short Term Incentives Lack of disclosure of STI performance targets and outcomes making results difficult to reconcile. Whilst acknowledging some improvement to STI disclosure over the prior year, it was noted by stakeholders to be inadequate. As foreshadowed prior to our 2023 AGM, we have enhanced our disclosure of FY24 STI outcomes in this year’s remuneration report. In section 4.2 of this report, disclosure of performance against the FY24 STI scorecard is provided including weightings, targets, outcomes, and commentary on achievements. Use of Discretion Application of positive discretion for the CEO STI outcome was not considered aligned to securityholder outcomes. Last year, Board discretion was used to adjust the weightings of the STI scorecard in-year, to ensure executives were focused on the appropriate matters, reflecting the changing market conditions. This discretion resulted in increased FY23 STI outcomes. In the Board’s judgement, this use of in-year discretion had a positive impact on overall securityholder outcomes. However, it does accept the feedback that final STI outcomes were high relative to securityholder experience. The Board will continue to consider the appropriateness of STI outcomes in the future, in line with its discretion framework. Ex-gratia payment to former CFO Insufficient rationale for former CFO ex-gratia payment. Mr Noble was a long-standing executive, and the ex-gratia recognised his commitment and successful tenure as CFO through a key growth phase of the business. We acknowledge the sentiment was not aligned with market expectations and not a practice we anticipate applying in the future. Directors’ Report For the year ended 30 June 2024 | continued 61 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Remuneration Report (Audited) (continued) 3. REMUNERATION AT A GLANCE Ingenia’s remuneration framework is designed to deliver fair and responsible pay outcomes in delivery of strategic and operational objectives, to provide long-term value for securityholders. The components of the framework, and their link to Group performance, is outlined below: Principles Remuneration Component Link to performance Market competitive fixed remuneration is paid to attract, retain, and motivate high calibre executives that can execute Group strategy. Total Fixed Remuneration (TFR) Annual salary, calculated on a total cost basis to include salary-packaged benefits grossed up for FBT, employer superannuation contributions, Fixed Remuneration Rights (FRR) and other non-cash benefits that may be agreed from time to time. Competitive fixed remuneration is determined with support of external benchmarking and having regard for the complexity and scope of the role, and the responsibilities, skills, and performance that the executive brings. A significant portion of remuneration should be ‘at risk’ and awarded to executives based on the achievement of agreed objectives and hurdles. Remuneration should be aligned to the interests of all securityholders and build ownership and alignment. The Board maintains sole discretion over the granting of equity rights as remuneration to employees. Short-Term Incentive (STIs) Subject to the performance against the prescribed objectives, any STI payable is delivered as follows: CEO: one-third cash and two-thirds deferred equity rights. CFO and CIO & GC: 50% cash and 50% deferred equity rights. STI equity rights are deferred for 12 months. The deferral element is rights to INA stapled securities. STI equity rights vest subject to a Board assessment and a malus provision during the deferral period where Rights may be forfeited if underlying earnings growth is not sustainable or circumstances set out in the Rights Plan Rules occur (such as fraud, dishonesty, a breach of obligations or material misstatement of Ingenia’s financial position). Entering each financial year, a scorecard of financial and value driver metrics is approved by the Board, with the intention of reflecting key objectives for that year. These measures typically reflect financial performance, innovation and strategy, customer, and people, and require performance above a threshold level to be achieved to trigger a payment. An assessment of safety and risk management, as well as performance against our ESG strategy, is considered as part of STI performance. Long-Term Incentive (LTIs) The LTI is designed to encourage delivery of the strategy, and to provide alignment with long- term securityholder outcomes. The LTI is delivered in performance rights, and subject to performance measures assessed over a three-year period. LTI performance conditions are four equally weighted measures as follows: – Relative Total Securityholder Return (TSR) measured over three financial years. – Return on Equity (ROE) performance measured in the third year following the LTI grant. – Underlying Earnings per Security (EPS) growth over three financial years. – Group settlements growth measured in the third year following the LTI grant. Furthermore, the Board recognises the importance of aligning executives and directors’ interests with the long-term interests of Ingenia’s securityholders and have in place a minimum securityholding requirement. Executives and Non-Executive Directors are required to acquire, and thereafter maintain, a minimum securityholding level in Ingenia securities. The minimum securityholding level is 100% of their Fixed Pay or Base Fees. While the RNC obtained independent advice from remuneration consultants in FY24, no remuneration recommendations (as defined in the Corporations Act 2001 (Cth)) were provided. Directors’ Report For the year ended 30 June 2024 | continued 62 Remuneration Report (Audited) (continued) 4. REMUNERATION OUTCOMES 4.1. Financial performance The table below sets out further information about the Group’s earnings and movement in security holder wealth and the level of remuneration awarded to KMP for the five years to 30 June 2024: FY20 FY21 FY22 FY23 FY24 Financial results Revenue ($'000) 244,209 295,578 338,146 394,468 472,292 EBIT ($’000)(1) 71,892 94,351 101,736 107,424 125,704 Underlying profit ($'000)(1) 59,109 77,234 87,856 83,114 94,766 Statutory profit ($'000) 31,452 62,639 95,798 64,368 14,020 Security based metrics Underlying (Basic) EPS(1) (2) (cents) 22.1 23.6 23.3 20.4 23.3 Statutory (Basic) EPS(2) (cents) 11.8 19.2 25.4 15.8 3.4 Underlying ROE (%)(1) (3) 7.9 8.0 6.8 5.4 6.1 Statutory ROE (%) 4.2 6.5 7.4 4.2 0.9 Net asset value per security ($) 2.90 3.00 3.72 3.77 3.70 Security price at 30 June ($) 4.49 6.14 3.98 3.98 4.78 Distributions per security (cents) 10.0 10.5 11.0 11.0 11.3 Remuneration awards Average STI awarded to KMP (%) 66.3 76.9 79.3 68.3 79.0 Average LTI vested (%)(4) 79.8 70.0 86.7 40.0 Nil (1) EBIT, Underlying Profit and Underlying ROE for FY23 and FY24 has been adjusted to include movements arising from the settlement of contractual cash flows from ground leases and financial liabilities. (2) Basic earnings per security is based on the weighted average number of securities on issue during the period. (3) Underlying ROE is calculated as underlying profit divided by average net assets. The Underlying ROE performance hurdle for LTIPs is adjusted to remove the impact of investment property valuations on net assets over the vesting period. (4) Average LTI vested relates to grants from previous years. Directors’ Report For the year ended 30 June 2024 | continued 63 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Remuneration Report (Audited) (continued) 4.2. Performance against FY24 STI Scorecard We expect the executives to operate with strong due diligence, minimising risk and enhancing safety initiatives. Safety and Risk Management is modifier which reduces overall outcomes if standards are not achieved. After considering outcomes for FY24, no adjustment to STI outcomes is considered appropriate. SAFETY & RISK MANAGEMENT EBIT GROWTH Up 17% compared to FY23 25% 25% EPS Up 14% compared to FY23 EBIT GROWTH Up 17% compared to FY23 20% SETTLEMENTS Up 24% compared to FY23 Our ESG Strategy seeks to address all material areas of sustainability performance recognising these matters are dynamic, complex and often interconnected. We have progressed with our initial Reconciliation Action Plan reflect statement; finalised sustainable development guidelines for new communities; progressed with our Green Star Community in VIC and invested in renewable energy rollout including solar, LED and geothermal heating. After considering outcomes for FY24, no adjustment to STI outcomes is considered appropriate. ESG 10% PEOPLE Our people and capability strategy has delivered exceptional outcomes with retention of our top talent at 93% and our internal promotion rates hitting well above our target range, signalling our investment in leadership and capability development is yielding value. Gender diversity remains a core strength with Ingenia ranking in the top companies for Women in Executive Roles (CEW Census). We have maintained the HESTA 40/40/20 gender targets at Director and Executive level and our overall gender pay gap, as measured by WGEA, is within the high performing range of less than 5%. Over a year of significant change our culture and engagement scores have held strong and remain consistent on the prior year. 20% STRATEGY & INNOVATION The Group has continued to focus on capital recycling to fund growth in the land lease business. This included the divestment of the WA Garden Village portfolio. In addition, the Group increased its debt capacity by $125 million and extended the maturity of existing facilities. During the year Ingenia strategically invested in the holidays and rentals businesses to enhance returns by undertaking conversions and increasing density. METRIC WEIGHT THRESHOLD STRETCH OUTCOME 10% 20.8 cps 409 19% 23.8 cps 475 79% 83% 80% 65% 90% 79% Percentage of Maximum STI Outcome: 17% 23.3 462 Directors’ Report For the year ended 30 June 2024 | continued 64 Remuneration Report (Audited) (continued) Name FY24 STI - Cash Component FY24 STI - Equity Component % of Maximum STI forfeited J. Carfi $79,000 $158,000 21% J. Mitchell $168,389 $168,389 21% N. Kwok $130,350 $130,350 21% S. Owen $289,667 $579,333 21% The equity component of the FY24 STI is deferred into rights to INA stapled securities, for a period of 12 months. 5. LONG-TERM INCENTIVES 5.1. Vesting The FY21 LTIP was subject to two equally weighted performance metrics, Relative Total Securityholder Return and Underlying Return on Equity. These metrics were tested on 1 October 2023 and did not achieve threshold performance level to vest. 5.2. Long-Term Incentive Plan (LTIP) The objective of the Group’s LTIP is to align the ‘at risk’ compensation of executives with long-term securityholder returns whilst also acting as a mechanism to retain key talent. FY24 LTIP Rights will vest subject to the following Performance Conditions, consistent with the grant of rights to Mr Owen approved by securityholders at the November 2023 Annual General Meeting. Relative TSR Performance Condition (25%) The relative TSR performance condition assesses INA’s percentile performance ranking against the constituents of the S&P/ ASX 200 A-REIT Index. TSR is the growth in the security price plus distributions, assuming distributions are reinvested. To minimise the impact of any short-term volatility, lngenia’s TSR will be calculated using the volume-weighted average of the closing security price over the 30 days up to and including the trading day prior to the start and the 30 days up to and including the end trading day of the LTI Performance Period (being from 1 October 2023 to 30 September 2026). Performance will be measured relative to the TSR of companies comprising the S&P/ASX 200 A-REIT Index over 3 years. INA’s TSR % of LTIP Rights that vest Below Threshold Less than 50th percentile Nil At Threshold At 50th Percentile 50% Between Threshold and Maximum Greater than 50th percentile but less than 75th percentile 50% plus an additional amount progressively vesting on a straight-line basis between Threshold and Maximum Maximum At 75th percentile or above 100% ROE Performance Condition (25%) The ROE Performance Condition is intended to focus executive KMP on improving medium to long-term return on investment. ROE is defined as underlying profit (as disclosed in annual reports) divided by the weighted average net assets (excluding the impact of asset revaluations on net assets between the FY24 LTIP Rights issue date and the FY24 LTIP Rights vesting date). The Board has discretion to exclude the dilutive impact of acquisitions or capital raisings that are considered in the best interests of the company if these occur within the final 12 months of the performance period. Any discretion applied will be disclosed. For FY24, the relevant metric is ROE achieved for FY26 on the following basis: ROE % of LTIP Rights that vest At or below Threshold Less than 6% Nil Between Threshold and Maximum Between 6% and 9% 10% plus an additional amount progressively vesting on a straight-line basis between Threshold and Maximum Maximum Equal to or greater than 9% 100% Directors’ Report For the year ended 30 June 2024 | continued 65 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Remuneration Report (Audited) (continued) EPS Performance Condition (25%) EPS is defined as underlying profit (as disclosed in annual reports) divided by the weighted average number of securities over the financial year. The Board has discretion to exclude the dilutive impact of acquisitions or capital raisings that are considered in the best interest of the company if these occur within the final 12 months of the performance period. Any discretion applied will be disclosed. The relevant metric is Compound Underlying EPS Growth for the period FY23 to FY26 with the FY23 base year Underlying EPS being 20.8 cents per security. Compound underlying EPS growth % of LTIP Rights that vest Below Threshold Less than 5% Nil At Threshold At 5% 30% Between Threshold and Maximum Between 5% and 9% 30% plus an additional amount progressively vesting on a straight-line basis between Threshold and Maximum Maximum Greater than 9% 100% Group Settlements Growth Performance Condition (25%) Group Settlements Growth focuses on growing sales revenue and the creation of new yielding rental contracts across the Group from INA and the Development Joint Venture with Sun Communities. The hurdle measures the average annual growth in settlements of INA and the Development Joint Venture being measured over a three-year period ending on 30 June 2026, with 364 settlements from the base year ended 30 June 2023. INA Group Settlements Growth % of LTIP Rights that vest At or below Threshold 5% average annual growth over 3 years from base year (the year ended 30 June 2023) Nil Between Threshold and Maximum Between 5% and 10% average annual growth 10% plus an additional amount progressively vesting on a straight-line basis between Threshold and Maximum Maximum >10% average annual growth 100% The number of LTIP Rights granted in FY24 was calculated by dividing the LTIP award by the 30 day VWAP (volume weighted average price) of Ingenia securities in the trading period ending on 1 October 2023. 5.3. General Terms Particular events may affect the grant and vesting of equity awards (both deferred STI component and LTIP). The table below outlines how these grants may be treated; noting the Board, at all times, maintains an overriding discretion with respect to the incentive plans: Cessation of employment Where a participant holding unvested Rights ceases to be an employee of the Group, the participant may continue to hold those unvested Rights unless or until the Board exercises a discretion to determine that some or all Rights: – lapse; – are forfeited; – vest (immediately or subject to conditions); – are only exercisable for a specified period, and will otherwise lapse; or – are no longer subject to some of the restrictions (including vesting Conditions) that previously applied. Directors’ Report For the year ended 30 June 2024 | continued 66 Clawback Where, in the opinion of the Board, a Participant or former Participant acts fraudulently or dishonestly, or is in breach of his or her obligations to the Group or is knowingly involved in a material misstatement of financial statements, the Board may determine the conditions and/or period applying to the Rights should be altered or reset (as the case may be); – all or any Rights of the Participant that have not vested shall lapse; – all or any Rights of the Participant that have vested and have not been exercised shall lapse; – all or any Ingenia Securities held by the Participant following exercise of Rights are forfeited; and/or where Ingenia Securities that have been allocated to the Participant following vesting and exercise of Rights have been sold, that the Participant must repay all or part of the net proceeds of such a sale to Ingenia. Change of Control The Board may, in its absolute discretion, determine whether: – some or all unvested Rights vest or lapse (whether subject to Conditions or not); or – some or all of the unvested Rights remain subject to the applicable Conditions (or substitute Conditions), – having regard to any matter the Board considers relevant, including, without limitation, the circumstances of the Event, the extent to which the applicable Conditions have been satisfied and/or the proportion of the Period that has elapsed at that time. If an Event occurs after Rights vest, all vested Rights will be automatically exercised. If an Event occurs after Rights vest, all Ingenia Securities issued or transferred (as applicable) on exercise of the Rights that remain subject to a trading restriction under the Plan will be released from restriction. Vesting Upon the exercise of vested Rights, Ingenia will grant the relevant number of Ingenia securities to the participant. No amount is payable by the executive KMP for the grant of Ingenia securities. 6. NON-EXECUTIVE DIRECTORS’ REMUNERATION The Group’s remuneration policy for Non-Executive Directors aims to ensure that the Group attracts and retains suitably skilled and experienced individuals to serve on the Board and to remunerate them appropriately for their time, expertise and responsibilities and liabilities as public company directors. The Remuneration & Nomination Committee is responsible for reviewing and recommending to the Board any changes to Board and Committee remuneration, considering the size and scope of the Group’s activities and the responsibilities and liabilities of directors. In developing its recommendations, the Committee may take advice from external consultants. NEDs are remunerated by way of cash and mandated superannuation. They do not participate in performance-based remuneration plans. The Board has introduced a policy guideline for NEDs (and Executives) to hold the equivalent of one year’s gross fees in Ingenia securities within a period of three years from the date of appointment. All independent NEDs have self-funded the purchase of Ingenia securities on market as shown below in section 6.2. 6.1. Non-Executive Directors’ Fees The maximum aggregate fee pool available to NEDs is $1,600,000 as approved at the November 2022 AGM. The NED fees are reviewed annually with any changes effective 1 December. Annual NED fees, inclusive of superannuation, are detailed below: 1 Dec 2023 1 Dec 2022 Chairman $260,500 $252,000 Non-Executive Director $124,100 $120,000 Deputy Chairman $23,750 $23,000 Committee Chair $23,750 $23,000 Committee Member $11,900 $11,500 Remuneration Report (Audited) (continued) Directors’ Report For the year ended 30 June 2024 | continued 67 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Remuneration Report (Audited) (continued) 6.2. Non-Executive Directors’ Remuneration The following table outlines the remuneration provided to NEDs for FY24 and FY23, inclusive of superannuation. All Directors are compliant with the minimum securityholding policy. Total remuneration paid to Directors in FY24 was $1,055,054. NEDs – Directors’ fees FY24 ($) FY23 ($) Jim Hazel 256,958 247,000 Robert Morrison 181,000 172,500 Amanda Heyworth 142,161 140,083 Pippa Downes 157,563 149,917 Gregory Hayes 134,125 127,333 Sally Evans 157,563 143,875 Lisa Scenna 24,650 – Shane Gannon 517 – Simon Shakesheff 517 – Total 1,055,054 980,708 In addition to the above fees, all NEDs receive reimbursement for reasonable travel, accommodation and other incidental expenses incurred while undertaking Ingenia business. 7. EXECUTIVE KMP EMPLOYMENT CONTRACTS Contract terms The CEO and other Executive KMP are on rolling contracts until notice of termination is given by either Ingenia Communities Group or the relevant Executive KMP. The notice period for the CEO and other Executive KMP is twelve and six months respectively. In appropriate circumstances, payment may be made in lieu of notice, which would include pro rata fixed remuneration and statutory entitlements. Other contract terms are noted below: John Carfi Justin Mitchell Natalie Kwok Fixed remuneration Total fixed remuneration includes cash salary, superannuation, and other non-cash benefits. $1,200,000 $725,000 $550,000 Variable remuneration(1) – Eligible for STI of up to 100% for any one year of the fixed annual remuneration, of which two-thirds is in the form of deferred equity. – Eligible for LTI of up to 100% for any one year of fixed annual remuneration. – Eligible for STI of up to 60% for any one year of fixed annual remuneration, of which 50% is in the form of deferred equity. – Eligible for LTI of up to 60% for any one year of fixed annual remuneration. – Eligible for STI of up to 60% for any one year of fixed annual remuneration, of which 50% is in the form of deferred equity. – Eligible for LTI of up to 60% for any one year of fixed annual remuneration. Notice period 12 months 6 months 6 months Non-compete period 12 months 12 months 12 months Non-solicitation period 12 months 12 months 12 months (1) The Board may withdraw or vary the STI and LTI schemes at any time by written notice to the Executive, provided the scheme will not be varied or withdrawn part way through a financial year in respect of that same financial year. 7.1. Entitlement to former MD & CEO on separation On 1 July 2024, Mr Owen, separated after serving seven of his twelve months’ notice period. Mr Owen received his contractual entitlements which include: – The balance of five months’ notice period, being $452,721 (gross). – Accrued statutory annual leave and long-service leave entitlements. FY23 deferred STI Rights, FY24 deferred STI Rights, and unvested LTI Rights will remain on foot, with no accelerated vesting outcomes. The maximum remaining expense for future years of $1,043,856 has been accelerated and recognised in full during FY24 in accordance with accounting standards. There are no additional termination benefits being provided to Mr Owen. Directors’ Report For the year ended 30 June 2024 | continued 68 Remuneration Report (Audited) (continued) 7.2. Current CEO Commencement & KMP Transition arrangements Mr Carfi commenced as CEO on 1 April 2024. A summary of his key employment arrangements was disclosed to the ASX on 16 January 2024. This included a grant of 236,995 Rights issued under the FY24 LTI Plan approved at the November 2023 AGM. Recognising the risk associated with the departure of Mr Owen, and a focus on the need for business continuity, the Board considered it appropriate to issue a one-off incentive to Ms Kwok, being 104,278 Rights and to Mr Mitchell, being 137,458 Rights, of which vesting testing occurs at 50% in October 2025 and the balance in October 2027. The Rights vesting conditions include individual performance against KPIs and include a malus provision. These grants are subject to the minimum securityholding policy. On commencement in July 2023, Mr Mitchell was granted 59,249 Rights in recognition of him forfeiting a cash incentive on joining Ingenia. These Rights vest in FY25 and are subject to individual performance against KPIs, include a malus provision and are subject to the minimum securityholding policy. 8. STATUTORY TABLES 8.1. Ingenia Communities Group equity held by key management personnel The table below shows securities held indirectly or beneficially by each KMP, including their related parties (excluding unvested equity holdings where applicable – refer to section 8.2 and Note 31). This table highlights the direct exposure that each Director and executive KMP has to the Ingenia Communities security price. Balance 1 July 2023 Acquisitions Exercise of Rights Disposals Balance 30 June 2024 Non-Executive KMP Jim Hazel 439,445 – – – 439,445 Robert Morrison 254,528 – – – 254,528 Pippa Downes 40,868 – – – 40,868 Gregory Hayes 20,000 12,000 – – 32,000 Sally Evans 39,052 4,830 – – 43,882 Amanda Heyworth(1) 224,736 – – – 224,736 John McLaren(2) 41,779,555 – – (41,779,555) – Lisa Scenna(3) – – – – – Shane Gannon(4) – – – – – Simon Shakesheff(4) – – – – – Executive KMP John Carfi – – – – – Justin Mitchell – – – – – Natalie Kwok 59,899 – 12,322 – 72,221 Simon Owen(5) 1,392,976 6,400 – – 1,399,376 (1) Ms Heyworth was a Director for the period 1 July 2023 to 20 June 2024. The movement disclosed is for the period up to 20 June 2024. (2) Mr McLaren was a Director for the period 1 July 2023 to 2 November 2023. The movement disclosed is for the period up to 2 November 2023. The securities held by Mr McLaren were beneficially owned by Sun Communities. (3) Ms Scenna was appointed as a Director, effective 1 May 2024. The movement disclosed is from the date of commencement. (4) Mr Gannon and Mr Shakesheff were appointed as Directors, effective 28 June 2024. The movement disclosed is from the date of commencement. (5) Mr Owen was deemed to be KMP for the period 1 July 2023 to 31 March 2024. The movement disclosed is for the period up to 31 March 2024. Directors’ Report For the year ended 30 June 2024 | continued 69 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Remuneration Report (Audited) (continued) 8.2. Unvested Rights The below table summarises the Rights granted to date and not vested at 30 June 2024. Grant Grant Date Vesting date Number of Rights Fair value of Rights at grant Maximum expense in future years John Carfi FY24 LTIP 2-Apr-24 1-Oct-26 236,995 $681,048 $510,786 Justin Mitchell FY24 TRG 1-Oct-23 10-Jul-24 59,249 $250,000 $7,692 FY24 TRG - Tranche 1 1-Oct-23 1-Oct-25 68,729 $289,637 $181,023 FY24 TRG - Tranche 2 1-Oct-23 1-Oct-27 68,729 $290,444 $235,986 FY24 LTIP 1-Oct-23 1-Oct-26 103,093 $232,923 $174,692 Natalie Kwok FY23 STIP 1-Oct-23 1-Oct-24 26,662 $112,500 $12,500 FY24 TRG - Tranche 1 1-Oct-23 1-Oct-25 52,139 $219,724 $137,327 FY24 TRG - Tranche 2 1-Oct-23 1-Oct-27 52,139 $220,336 $179,023 FY22 LTIP 1-Oct-21 1-Oct-24 30,749 $142,221 – FY23 LTIP 1-Oct-22 1-Oct-25 70,828 $189,656 $79,023 FY24 LTIP 1-Oct-23 1-Oct-26 78,209 $176,702 $132,526 Simon Owen FY24 FRR 17-Nov-23 30-Jun-24 56,879 $240,000 – FY23 STIP 1-Oct-23 1-Oct-24 96,588 $407,550 – FY22 LTIP 11-Nov-21 1-Oct-24 116,805 $540,248 – FY23 LTIP 17-Nov-22 1-Oct-25 206,950 $554,150 – FY24 LTIP 17-Nov-23 1-Oct-26 260,695 $589,001 – Total 1,585,438 $5,136,140 $1,650,578 Upon his resignation, Mr Owen’s unvested Rights remained on foot and are subject to the natural performance hurdles. The maximum remaining expense for future years of $1,043,856 has been accelerated and recognised in full during FY24 in accordance with accounting standards. 8.3. Movement in unvested Rights The movement in unvested Rights held by KMP during the year are set out in the table below. Balance 1 July 2023 Granted Vested Lapsed Balance 30 June 2024 John Carfi – 236,995 – – 236,995 Justin Mitchell – 299,800 – – 299,800 Natalie Kwok 180,522 211,068 (45,308) (35,556) 310,726 Simon Owen(1) 565,232 416,841 (95,267) (148,889) 737,917 Total 745,754 1,164,704 (140,575) (184,445) 1,585,438 (1) Mr Owen was deemed to be KMP for the period 1 July 2023 to 31 March 2024. The movement in unvested Rights disclosed in the above table is for 9 month period that he was KMP. Upon his resignation, Mr Owen’s unvested Rights remained on foot and are subject to the natural performance hurdles. In addition, Ms Kwok holds 75,499 vested Rights that she has not exercised. Vested rights expire 15 years from the grant date of the Rights. Granted rights issued include both new issues and distribution entitlement factor on vested rights. Refer to Note 31 for a summary of all vested and unvested rights. Directors’ Report For the year ended 30 June 2024 | continued 70 Remuneration Report (Audited) (continued) 8.4. Executive Remuneration for FY24 The following statutory table outlines the remuneration provided to Executive KMP for FY23 and FY24 and has been calculated in accordance with the accounting standards, as such the information presented will differ from the information presented in the actual remuneration received table on page 72. Reported Remuneration - Statutory presentation Short-Term Post- employment Share-based payments Performance related Name Financial Year Salary(1) ($) STI Cash(2) ($) Super- annuation Benefits ($) FRR ($) STI Deferred(2) ($) LTI & TRG(3) ($) Total ($) STI, LTI & TRG (%) LTI & TRG (%) J. Carfi(4) 2024 315,700 79,000 6,850 – 71,111 170,262 642,923 50 26 2023 – – – – – – – – – J. Mitchell(5) 2024 728,276 168,389 29,430 – 77,333 460,411 1,463,839 48 31 2023 – – – – – – – – – N. Kwok(6) 2024 545,089 130,350 29,407 – 118,229 222,841 1,045,916 45 21 2023 463,041 112,500 25,292 – 93,717 128,175 822,725 41 16 S. Owen(7) 2024 892,812 289,667 31,117 240,000 483,705 331,967 2,269,268 49 15 2023 739,708 203,775 25,292 225,000 393,005 326,452 1,913,232 48 17 Total 2024 2,481,877 667,406 96,804 240,000 750,378 1,185,481 5,421,946 48 22 Total 2023 1,202,749 316,275 50,584 225,000 486,722 454,627 2,735,957 46 17 (1) Inclusive of accrued leave movements. (2) Cash STIs are accrued in the year ended 30 June 2024. Deferred STIs are evenly expensed over the respective performance period and deferral periods. (3) Deferred LTIP and TRG Rights are expensed evenly over the performance and deferral periods. (4) Mr Carfi commenced employment as CEO on 1 April 2024. (5) Mr Mitchell commenced employment as CFO on 10 July 2023. (6) Inclusive of accrued LSL movements $17,071. Excludes future separation payments of $381,901 and the accelerated Rights expense of $540,399 recognised in the current period in accordance with accounting standards. (7) Inclusive of gardening leave payments of $304,220 and accrued LSL movements of $42,201. Excludes the 5 month notice payment of $452,721 and the accelerated Rights expense of $1,043,856, recognised in the current period in accordance with accounting standards. Refer to section 7.1 for additional information. Directors’ Report For the year ended 30 June 2024 | continued 71 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Remuneration Report (Audited) (continued) Reported remuneration - Actual amounts received or realised The following table outlines the actual remuneration received by Executive KMP during FY23 and FY24. The figures in the below table will differ from those shown on the statutory table on the previous page, which includes an accounting value for all unvested Rights during the year. Name Financial Year TFR ($) FRR ($) STI awarded and received as cash(1) ($) Previous years’ STI that vested(2) ($) Previous years’ LTI & TRG that vested(2) ($) Total remuneration realised ($) Awards which lapsed or were forfeited(3) ($) J. Carfi(4) 2024 300,000 – 79,000 – – 379,000 – 2023 – – – – – – – J. Mitchell(5) 2024 715,682 – 168,389 – – 884,071 – 2023 – – – – – – – N. Kwok 2024 544,640 – 130,350 91,896 99,281 866,167 150,029 2023 488,333 – 112,500 50,104 29,850 680,787 41,744 S. Owen(6) 2024 1,081,140 240,000 289,667 401,979 – 2,012,786 628,237 2023 765,000 225,000 203,775 174,290 254,784 1,622,849 356,325 Total 2024 2,641,462 240,000 667,406 493,875 99,281 4,142,024 778,266 Total 2023 1,253,333 225,000 316,275 224,394 284,634 2,303,636 398,069 (1) Represents the apportioned cash component of STI, in line with contractual employment terms outlined in Section 7. (2) This represents the value of all prior years’ deferred Rights that vested during FY24 based on the 30 day VWAP up to the 1 October 2023 vesting date of $4.22 (1 October 2022: $4.07). (3) The value shown represents the value of any prior year Rights that lapsed or were forfeited during the financial year. The FY24 values are based on the 30 day VWAP up to the 1 October 2023 vesting date of $4.22 (1 October 2022: $4.07). (4) Mr Carfi commenced employment as CEO on 1 April 2024. (5) Mr Mitchell commenced employment as CFO on 10 July 2023. (6) Excludes the 5 month notice payment of $452,721 to Mr Owen. Refer to section 7.1 for additional information. Signed in accordance with resolution of the Directors. Sally Evans Chair - Remuneration and Nomination Committee Sydney, 20 August 2024 Directors’ Report For the year ended 30 June 2024 | continued 72 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au Auditor’s Independence Declaration to the Directors of Ingenia Communities Holdings Limited As lead auditor for the audit of the financial report of Ingenia Communities Holdings Limited for the financial year ended 30 June 2024, I declare to the best of my knowledge and belief, there have been: a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; b. No contraventions of any applicable code of professional conduct in relation to the audit; and c. No non-audit services provided that contravene any applicable code of professional conduct in relation to the audit. This declaration is in respect of Ingenia Communities Holdings Limited and the entities it controlled during the financial year. Ernst & Young Yvonne Barnikel Partner 20 August 2024 73 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Auditor’s Independence Declaration For the year ended 30 June 2024 Note 30 Jun 2024 $’000 30 Jun 2023 $’000 Land lease homes sales 202,090 139,261 Residential rental income 101,564 98,279 Tourism rental income 108,378 99,896 Annuals rental income 11,032 10,647 Other revenue 5 49,228 46,385 Revenue 472,292 394,468 Cost of land lease homes sold (112,714) (73,757) Employee expenses (108,107) (98,501) Property expenses (57,531) (54,302) Administrative expenses (29,088) (26,375) Operational, marketing and selling expenses (23,500) (18,482) Service station expenses (9,037) (9,371) Depreciation and amortisation expense 12,13,14 (4,338) (4,413) Operating profit before interest and tax 127,977 109,267 Interest income 683 357 Finance expense 6 (24,973) (17,678) Operating profit before tax 103,687 91,946 Share of joint venture loss 15 (5,957) (4,272) Net gain/(loss) on change in fair value of:  Investment properties 11(b) 55,890 4,906  Acquisition transaction costs 11(b) (4,190) (4,383)  Financial liabilities (3,002) (2,723)  Investments and other financial instruments (4,030) 1,388 Impairment of goodwill 13 (96,647) – Gain/(loss) on disposal of investment properties 4,694 (2,840) Business combination transaction costs – 1,615 Share of associate loss – (514) Profit before income tax 50,445 85,123 Income tax expense 7 (36,425) (20,755) Net profit for the year 14,020 64,368 Total comprehensive income for the year net of income tax 14,020 64,368 30 Jun 2024 Cents 30 Jun 2023 Cents Distributions per security paid(1) 11.0 11.0 Earnings/(loss) per security: Basic earnings/(loss)  Per security 4(a) 3.4 15.8  Per security attributable to parent 4(b) (2.2) (2.2) Diluted earnings/(loss) per security  Per security 4(a) 3.4 15.7  Per security attributable to parent 4(b) (2.2) (2.2) (1) Distributions relate to the amount paid during the financial year. A final FY24 distribution of 6.1 cps was declared on 20 August 2024 (payment due on 19 September 2024) resulting in a total FY24 distribution of 11.3 cps. Notes to the Consolidated Financial Statements are included on pages 78 to 117. Consolidated Statement of Comprehensive Income For the year ended 30 June 2024 74 Note 30 Jun 2024 $’000 30 Jun 2023 $’000 Current assets Cash and cash equivalents 14,458 45,716 Trade and other receivables 8 14,832 18,010 Inventories 9 86,467 54,147 Other financial assets 16 3,726 3,234 Tax receivable 2,030 29 Assets held for sale 10 – 24,190 Total current assets 121,513 145,326 Non-current assets Trade and other receivables 8 909 787 Investment properties 11 2,250,687 2,045,630 Investment in a joint venture 15 76,872 61,829 Other financial assets 16 6,357 10,207 Plant and equipment 12 10,597 9,199 Intangibles and goodwill 13 5,566 102,584 Right-of-use assets 14 2,577 2,569 Total non-current assets 2,353,565 2,232,805 Total assets 2,475,078 2,378,131 Current liabilities Trade and other payables 18 94,089 95,517 Borrowings 19 4,580 3,988 Employee liabilities 5,535 5,050 Other financial liabilities 20 795 659 Provision for income tax – 333 Total current liabilities 104,999 105,547 Non-current liabilities Borrowings 19 749,573 657,680 Other financial liabilities 20 16,665 16,941 Employee liabilities 981 993 Other payables 18 3,635 6,904 Deferred tax liability 17 89,319 53,279 Total non-current liabilities 860,173 735,797 Total liabilities 965,172 841,344 Net assets 1,509,906 1,536,787 Equity Issued securities 21(a) 1,704,188 1,704,212 Reserves 22 1,458 (2,010) Accumulated losses 23 (195,740) (165,415) Total equity 1,509,906 1,536,787 Net asset value per security ($) $3.70 $3.77 Notes to the Consolidated Financial Statements are included on pages 78 to 117. Consolidated Balance Sheet As at 30 June 2024 75 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Note 30 Jun 2024 $’000 30 Jun 2023 $’000 Cash flows from operating activities Rental and other property income 268,476 259,216 Property and other expenses (219,785) (189,579) Proceeds from sale of land lease homes 230,613 152,330 Purchase of land lease homes (162,869) (116,798) Proceeds from sale of service station inventory 11,662 11,820 Purchase of service station inventory (10,026) (10,292) Borrowing costs paid (33,840) (22,294) Income tax paid (2,719) (2,277) Interest received 683 371 33 82,195 82,497 Cash flows from investing activities Payments for acquisition of investment properties (39,941) (62,889) Additions to investment properties (159,374) (137,326) Purchase and additions of plant and equipment (4,615) (4,407) Proceeds from sale of investment properties 74,985 52,513 Net payments for acquisition of subsidiaries – (16,890) Investment in joint venture (21,000) – Other 1,801 946 (148,144) (168,053) Cash flows from financing activities Payments for security issue costs (24) (18) Distributions to security holders (44,834) (44,834) Proceeds from borrowings 404,750 289,130 Repayment of borrowings (318,030) (120,000) Payments for debt issue costs (933) (198) Payment for securities under security plan (725) (150) Other financial liabilities (5,513) (5,742) Payments for derivatives and financial instruments – (1,402) 34,691 116,786 Net (decrease)/increase in cash and cash equivalents (31,258) 31,230 Cash and cash equivalents at the beginning of the year 45,716 14,486 Cash and cash equivalents at the end of the year 14,458 45,716 Notes to the Consolidated Financial Statements are included on pages 78 to 117. Consolidated Cash Flow Statement For the year ended 30 June 2024 76 Attributable to security holders Ingenia Communities Holdings Limited ICF & ICMT $’000 Total Equity $’000 Note Issued Capital $’000 Reserves $’000 Retained Earnings $’000 Total $’000 Carrying value 1 Jul 2023 91,958 (2,010) 48,319 138,267 1,398,520 1,536,787 Net (loss)/profit – – (42,267) (42,267) 56,287 14,020 Total comprehensive income for the year – – (42,267) (42,267) 56,287 14,020 Transactions with security holders in their capacity as security holders: Issue of securities 21(a) (2) – – (2) (22) (24) Share based payment transactions 22 – 4,682 – 4,682 – 4,682 Lapsed rights 22,23 – (489) 489 – – – Payment of distributions to security holders 23 – – – – (44,834) (44,834) Payments to employee share trust 22 – (725) – (725) – (725) Carrying value 30 Jun 2024 91,956 1,458 6,541 99,955 1,409,951 1,509,906 Carrying value 1 Jul 2022 91,960 (4,312) 60,822 148,470 1,366,107 1,514,577 Net (loss)/profit – – (12,895) (12,895) 77,263 64,368 Total comprehensive income for the year – – (12,895) (12,895) 77,263 64,368 Transactions with security holders in their capacity as security holders: Issue of securities 21(a) (2) – – (2) (16) (18) Share based payment transactions 22 – 2,844 – 2,844 – 2,844 Lapsed rights 22,23 – (392) 392 – – – Payment of distributions to security holders 23 – – – – (44,834) (44,834) Payments to employee share trust 22 – (150) – (150) – (150) Carrying value 30 Jun 2023 91,958 (2,010) 48,319 138,267 1,398,520 1,536,787 Notes to the Consolidated Financial Statements are included on pages 78 to 117. Consolidated Statement of Changes in Equity For the year ended 30 June 2024 77 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW 1. Summary of material accounting policies (a) The Group The financial report of Ingenia Communities Holdings Limited (the “Company”) comprises the consolidated financial report of the Company and its controlled entities, including Ingenia Communities Fund (“ICF” or the “Fund”) and Ingenia Communities Management Trust (“ICMT”) (collectively, the “Trusts”). The shares of the Company are stapled with the units of the Trusts and trade on the Australian Securities Exchange (“ASX”) effectively as one security. Ingenia Communities RE Limited (“ICRE”), a wholly owned subsidiary of the Company, is the Responsible Entity of the Trusts. In this report, the Company and the Trusts are referred to collectively as the Group. The constitutions of the Company and the Trusts require that, for as long as they remain jointly quoted on the ASX, the number of shares in the Company and of units in each trust shall remain equal and those security holders in the Company and unitholders in each trust shall be identical. The stapling structure will cease to operate on the first to occur of: – the Company or either of the Trusts resolving by special resolution in accordance with its constitution to terminate the stapling provisions; or – the commencement of the winding up of the Company or either of the Trusts. The financial report as at and for the year ended 30 June 2024 was authorised for issue by the Directors on 20 August 2024. (b) Basis of preparation The financial report is a general purpose financial report, which has been prepared in accordance with Australian Accounting Standards, Australian Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001. The financial report complies with Australian Accounting Standards as issued by the AASB and International Financial Reporting Standards (“IFRS”) as  issued by the International Accounting Standards Board. As permitted by Instrument 2015/838, issued by the Australian Securities and Investments Commission, the financial statements and accompanying notes of the Group have been presented in the attached combined financial report. The financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars ($’000), unless otherwise stated as permitted by Instrument 2016/191. The financial report is prepared on a historical cost basis, except for investment properties, residents’ loans, derivative financial instruments, other financial assets and other financial liabilities, which are measured at fair value. (c) Adoption of new and revised accounting standards In the current period, the Group has adopted all the new and revised accounting standards, amendments to accounting standards, and interpretations that are relevant to its operations and effective for the current annual reporting period. New accounting standards and interpretations have been issued or amended but are not yet effective and have not been adopted by the Group for the year ended 30 June 2024. The Group is in the process of assessing the impact of the following: Summary Application date of standard Application date for Group AASB 2020-1 Amendment to Australian Accounting Standards - Classification of Liabilities as Current or Non- current and AASB 2022-6 Amendments to Australian Accounting standards - Non-current Liabilities with Covenants 1 January 2024 1 July 2024 AASB 18 Presentation and Disclosure in Financial Statements 1 January 2027 1 July 2027 (d) Principles of consolidation The Group’s consolidated financial statements comprise the Company and its subsidiaries (including the Trusts). Subsidiaries are all those entities (including special purpose entities) over which the Company or the Trusts have the power to govern the financial and operating policies, so as to obtain benefits from their activities. The financial statements of the subsidiaries are prepared for the same reporting period as the parent, using consistent accounting policies. Intercompany balances and transactions, including dividends and unrealised gains and losses from intragroup transactions, have been eliminated. Subsidiaries are consolidated from the date on which the parent obtains control. They are deconsolidated from the date that control ceases. Investments in subsidiaries are carried at cost in the parent’s financial statements. The Company was incorporated on 24 November 2011. In accordance with Accounting Standard AASB 3 Business Combinations, the stapling of the Company and the Trusts was regarded as a business combination. Under AASB 3, the stapling was accounted for as a reverse acquisition with ICF “acquiring” the Company and the Company subsequently being identified as the legal parent for preparing consolidated financial reports. The consolidated financial statements are a continuation of the financial statements of the Trusts, and include the results of the Company from the date of incorporation. Notes to the Financial Statements For the year ended 30 June 2024 78 Notes to the Financial Statements For the year ended 30 June 2024 | continued 1. Summary of material accounting policies (continued) (e) Goodwill Goodwill is initially measured at cost, being the excess of the aggregate consideration transferred and the amount recognised for non-controlling interest over the fair value of net identifiable assets acquired and liabilities assumed. Goodwill is tested annually for impairment, or more frequently if changes in circumstances indicate that it might be impaired. An impairment loss is recognised when the carrying amount of the asset exceeds its recoverable amount, calculated as the higher of fair value less costs of disposal and the value in use. Impairment losses are recognised in the Consolidated Statement of Comprehensive Income. For the purposes of assessing impairment, assets are grouped at the lowest levels for which goodwill is monitored for management purposes and allocated to cash generating units (“CGU”). The assumptions used for determining the recoverable amount of the CGU are based on the expectation for the future, utilising both internal and external sources of data and relevant market trends. (f) Assets held for sale Components of the entity are classified as held for sale if their carrying value will be recovered principally through a sale transaction rather than through continuing use. They are measured at the lower of their carrying value and fair value less costs to sell, except for assets such as investment property, which are carried at fair value. (g) Dividends and distributions A liability for any dividend or distribution declared on or before the end of the reporting period is recognised on the balance sheet, in the reporting period to which the dividend or distribution pertains. (h) Foreign currency Functional and presentation currencies The presentation currency of the Group, and functional currency of the Company, is the Australian dollar. Translation of foreign currency transactions Transactions in foreign currency are initially recorded in the functional currency at the exchange rate prevailing at the date of the transaction. Monetary assets denominated in foreign currency are retranslated at the rate of exchange prevailing at the balance date. (i) Leases The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets which are recognised as an expense on a straight-line basis over the lease term. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. Right-of-use assets The Group recognises right-of-use assets at the commencement date of the lease. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets. Lease liabilities At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses in the period in which the event or condition that triggers the payment occurs. In calculating the present value of lease payments, the Group uses the interest rate implicit in the lease. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. The Group’s lease liabilities are included in Borrowings (Note 19). Leases for investment property which apply the fair value model are classified as investment property per AASB 140 Investment Properties. (j) Plant and equipment Plant and equipment is stated at cost, net of accumulated depreciation and any accumulated impairment losses. Such cost includes the cost of replacing part of the property, plant and equipment, and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of property, plant and equipment require replacing at intervals, the Group recognises such parts as individual assets with specific useful lives and depreciates them accordingly. Likewise, when a major inspection is performed, the cost is recognised in the carrying value of the plant and equipment as a replacement, if the recognition criteria are satisfied. 79 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Notes to the Financial Statements For the year ended 30 June 2024 | continued 1. Summary of material accounting policies (continued) All other repair and maintenance costs are recognised in profit or loss as incurred. The present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met. (k) Financial assets and liabilities Current and non-current financial assets and liabilities within the scope of AASB 9 Financial Instruments are classified as; fair value through profit or loss; fair value through other comprehensive income; or amortised cost. The Group determines the classification of its financial assets and liabilities at initial recognition with the classification depending on the purpose for which the asset or liability was acquired or issued. Financial assets and liabilities are initially recognised at fair value plus directly attributable transaction costs, unless their classification is at fair value through profit or loss. They are subsequently measured at fair value or amortised cost using the effective interest method. The fair value of financial instruments actively traded in organised financial markets are determined by reference to quoted market bid prices at close of business on balance sheet date. For those with no active market, fair values are determined using valuation techniques. Such techniques include: using recent arm’s length market transactions; reference to the current market value of another substantially similar instruments; discounted cash flow analysis; option pricing models; making use of available and supportable market data and keeping judgemental inputs to a minimum. (l) Impairment of non-financial assets Assets other than investment property carried at fair value are tested for impairment whenever events or circumstance changes indicate that the carrying value may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying value exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Non- financial assets excluding goodwill which have suffered impairment are reviewed for possible reversal of the impairment at each reporting date. (m) Cash and cash equivalents Cash and cash equivalents in the balance sheet and cash flow statements comprise cash at bank, cash in hand, and short-term deposits that are readily convertible to known amounts of cash, and subject to an insignificant risk of changes in value. (n) Trade and other receivables Trade and other receivables are recognised initially at original invoice amount, and subsequently adjusted for ECL. An allowance is recognised by analysing the age of outstanding balances and applying historical default percentages. Historical loss rates are adjusted to reflect current and forward-looking observable data affecting the ability of customers to settle their debts. (o) Inventories The Group holds inventory in relation to the acquisition and development of land lease homes, as well as service station fuel and supplies. Inventories are held at the lower of cost and net realisable value. Costs of inventories comprise all acquisition costs, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Inventory includes work in progress and raw materials used in the production of land lease home units. Net realisable value is determined based on an estimated selling price in the ordinary course of business less estimated costs of completion and the estimated costs necessary to make the sale. (p) Derivative financial instruments The Group uses derivative financial instruments such as interest rate swaps to hedge its risks associated with interest rate fluctuations. Such derivative financial instruments are initially recognised at fair value on the date the contract is entered and are subsequently remeasured to fair value and included in the statement of comprehensive income in the period they arise, including the corresponding tax effect. (q) Investment property Land and buildings have the function of an investment and are regarded as composite assets. In accordance with applicable accounting standards, the buildings, including plant and equipment, are not depreciated. Investment property includes property under construction, tourism cabins and associated amenities. Investment properties are measured initially at cost, including transaction costs. Subsequently, investment properties are stated at fair value, reflecting market conditions at reporting date. Gains or losses arising from changes in the fair values of investment properties are included in the statement of comprehensive income in the period they arise, including the corresponding tax effect where applicable. Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at measurement date, in the principal market for the asset or liability, or the most advantageous market in its absence. In determining the fair value of certain assets, recent market offers have been taken into consideration. 80 Notes to the Financial Statements For the year ended 30 June 2024 | continued 1. Summary of material accounting policies (continued) It is the Group’s policy to have all investment properties independently valued at intervals of not more than two years. It is the policy of the Group to review the fair value of each investment property every six months and revalue investment properties to fair value when their carrying value materially differs to their fair values. In determining fair values, the Group considers relevant information including the capitalisation of rental streams using market assessed capitalisation rates, expected net cash flows discounted to their present value using market determined risk-adjusted discount rates, and other available market data such as recent comparable transactions. The assessment of fair value of investment properties does not take into account potential capital gains tax assessable. (r) Intangible assets An intangible asset arising from software development expenditure is recognised only when the Group can demonstrate: the technical feasibility of completing the intangible asset so that it will be available for use; how the asset will generate future economic benefits; the availability of resources to complete the asset; and the ability to measure reliably the expenditure during its development. Costs capitalised include external direct costs of materials and service, direct payroll, and payroll related costs of employee time spent on projects. Following the initial recognition of expenditure, the asset is carried at cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when the development is complete and the asset is available for use. Amortisation is over the period of expected future benefit. The Group’s policy applied to capitalised development costs is as follows. Software and associated development to capitalised development costs (assets in use) – Useful life: Finite amortisation method using seven years on a straight-line basis; and – Impairment test: Amortisation method reviewed at each financial year-end; closing carrying value reviewed annually for indicators of impairment. Subsequent expenditure on intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed, as incurred. Gains or losses arising from the derecognition of an intangible asset are measured as the difference between the net disposal proceeds, and the carrying value of the asset. They are recognised in profit or loss when the asset is derecognised. Intangible assets acquired separately, are initially recognised at cost. The cost of intangible assets acquired in a business combination are their fair values as at the date of acquisition. Following initial recognition, acquired intangible assets are carried at cost less any accumulated amortisation and impairment losses. (s) Trade and other payables Trade and other payables are carried at amortised cost, and due to their short-term nature, are not discounted. They represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. They are recognised when the Group becomes obliged to make future payments in respect of the purchase of the goods and services. (t) Provisions, including employee benefits General Provisions are recognised when: the Group has a present obligation (legal or constructive) as a result of a past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate can be made of the amount. When the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of comprehensive income net of any reimbursement. Wages, salaries, annual leave and sick leave Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled within twelve months of the reporting date, are recognised in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled. Expenses for non- accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable. Long service leave The liability for long service leave is recognised and measured as the present value of expected future payments made in respect of services provided by employees, up to the reporting date, using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employees departing, and period of service. Expected future payments are discounted using market yields on high quality corporate bonds at the reporting date, with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows. (u) Borrowings Borrowings are initially recorded at the fair value of the consideration received, less directly attributable transaction costs associated with the borrowings. After initial recognition, borrowings are subsequently measured at amortised cost using the effective interest rate method. Under this method, fees, costs, discounts and premiums that are yield related are included as part of the carrying value of the borrowing, and amortised over its expected life. Borrowings are classified as current liabilities, unless the Group has an unconditional right to defer settlement to more than twelve months after reporting date. 81 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Notes to the Financial Statements For the year ended 30 June 2024 | continued 1. Summary of material accounting policies (continued) Borrowing costs are expensed as incurred, except where they are directly attributable to the acquisition, construction or production of a qualifying asset. When this is the case, they are capitalised as part of the acquisition cost of that asset. (v) Issued equity Issued and paid up securities are recognised at the fair value of the consideration received by the Group. Any transaction costs arising on issue of ordinary securities are recognised directly in equity as a reduction of the security proceeds received. (w) Revenue Revenue from contracts with customers is recognised when performance obligations have been met and control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The following specific recognition criteria must also be met before revenue is recognised: Rental income Rental income from investment properties is recognised on a straight-line basis over the lease term. Fixed rental increases that do not represent direct compensation for underlying cost increases or capital expenditures are recognised on a straight-line basis until the next market review date. Rent paid in advance is recognised as unearned income. Sale of homes Revenue from the sale of land lease homes is recognised at the point in time when control of the land lease home is transferred to the customer, on settlement of the home. Management and other fee income Revenue from rendering of services is recognised in accordance with performance obligations under the terms and conditions of the service agreements. The Group recognises management and other fee income over time because the customer simultaneously receives and consumes the benefits provided to them. Distribution income Distribution income is recognised when the Group’s right to receive the payment is established. Interest income Interest income is recognised as the interest accrues, using the effective interest rate method. Service station sales Service station sales, food and beverage revenue represents the revenue earned from the provision of products and services to external parties. Sales revenue is only recognised at the point in time when control of the assets is transferred to the customer. (x) Share-based payment transactions Certain Group senior executives receive remuneration in the form of share-based payment transactions, whereby employees render services as consideration for equity instruments (equity-settled transactions). The Group does not have any cash-settled share-based payment transactions in the financial year. The cost of equity-settled transactions is recognised, together with a corresponding increase in reserves in equity, over the period the performance and service conditions are fulfilled. The cumulative expense recognised for these transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The statement of comprehensive income expense or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employee expenses. No expense is recognised for awards that do not ultimately vest, except for equity-settled transactions where vesting is conditional upon a market or non-vesting condition. These are treated as vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance and service conditions are satisfied. When the terms of an equity-settled transaction are modified, the minimum expense recognised is the expense as if the original terms of the award are met. An additional expense is recognised for any modification that increases the total fair value of the transaction, or is otherwise beneficial to the employee, as measured at the date of modification. When an equity-settled award is cancelled, it is treated as if it vested on the date of cancellation. Any expense not yet recognised for the award is recognised immediately. This includes any award where non-vesting conditions within the control of either the Group or the employee are not met. However, if a new award is substituted for the cancelled award, and designated as a replacement on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph. The dilutive effect of outstanding rights is reflected as additional share dilution in the computation of diluted earnings per share. (y) Income tax Current income tax The Company, ICMT and their respective subsidiaries are subject to Australian income tax. Under the current tax legislation, ICF and its subsidiaries are not liable to pay Australian income tax if their taxable income (including any assessable capital gains) is fully distributed to security holders each year. Tax allowances for building and fixtures depreciation are distributed to security holders via the tax-deferred component of distributions. 82 Notes to the Financial Statements For the year ended 30 June 2024 | continued 1. Summary of material accounting policies (continued) Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on the current period’s taxable income. The tax rates and laws used to compute the amount are those that are enacted, or substantively enacted at the reporting date. The subsidiaries that previously held the Group’s foreign properties may be subject to corporate income tax and withholding tax in the countries they operate. Under current Australian income tax legislation, security holders may be entitled to receive a foreign tax credit for this withholding tax. ICF has entered the Attribution Managed Investment Trust (AMIT) regime. Under current Australian income tax legislation, ICF is not liable for income tax provided it satisfies certain legislative requirements, which were met in the current and previous financial years. Deferred income tax Deferred income tax represents tax (including withholding tax) expected to be payable or recoverable by taxable entities on differences between tax bases of assets and liabilities, and their carrying value for financial reporting purposes. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised through continuing use, or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at reporting date. Income taxes related to items recognised directly in equity are not recognised against income. Tax consolidation The Company, ICMT, and their respective subsidiaries have formed a tax consolidation group with the Company or ICMT being the head entity. The head and controlled entities in the tax consolidation group continue to account for their own current and deferred tax amounts. Each tax consolidated group has applied a group allocation approach in determining the appropriate amount of current taxes and deferred taxes to allocate to the members therein. In addition to its own current and deferred tax amounts, the head entity of each tax consolidated group also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses, and unused tax credits assumed from entities in their respective tax consolidated group. Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from, or payable to, other entities in the Group. (z) Goods and services tax (“GST”) Revenue, expenses and assets (with the exception of receivables) are recognised net of the amount of GST, to the extent that the GST is recoverable from the taxation authority. Where GST is not recoverable, it is recognised as part of the cost of the acquisition, or as an expense. Receivables and payables are stated inclusive of GST. The net amount of GST recoverable from, or payable to the tax authority, is included in the balance sheet as an asset or liability. Cash flows are included in the cash flow statement on a gross basis. The GST components of cash flows arising from investing and financing activities, which are recoverable from, or payable to, the tax authorities, are classified as operating cash flows. (aa) Investment in a joint venture A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. The considerations made in determining significant influence or joint control are similar to those necessary to determine control over subsidiaries. The Group’s investment in its joint venture with Sun Communities is accounted for using the equity method. Under the equity method, the investment in a joint venture is initially recognised at cost. The carrying value of the investment is adjusted to recognise changes in the Group’s share of net assets of the joint venture since the acquisition date. Goodwill relating to the joint venture is included in the carrying value of the investment and is not tested for impairment separately. The statement of profit or loss reflects the Group’s share of the results of operations of the joint venture. Any change in other comprehensive income (“OCI”) of those investees is presented as part of the Group’s OCI. In addition, when there has been a change recognised directly in the equity of the joint venture, the Group recognises its share of any changes, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and the joint venture are eliminated to the extent of the interest in the joint venture. The aggregate of the Group’s share of profit or loss of a joint venture is shown on the face of the statement of profit or loss outside operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the joint venture. The financial statements of the joint venture are prepared for the same reporting period as the Group. When necessary, adjustments are made to bring the accounting policies in line with those of the Group. After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its joint venture. At each reporting date, the Group determines whether there is objective evidence that the investment in the joint venture is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the joint venture and its carrying value, and then recognises the loss within the statement of comprehensive income. 83 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Notes to the Financial Statements For the year ended 30 June 2024 | continued 1. Summary of material accounting policies (continued) Upon loss of joint control, the Group measures and recognises any retained investment at its fair value. Any difference between the carrying value of the joint venture upon loss of significant influence or joint control and the fair value of the retained investment and proceeds from disposal is recognised in profit or loss. (bb) Fair value measurement The Group measures financial instruments, such as derivatives, investment properties and certain non-financial assets and non-financial liabilities, at fair value at each balance sheet date. Refer to Note 29. Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability 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 for the asset or liability. The principal or the most advantageous market must be accessible to the Group. The fair value of an asset or a liability is measured using the assumptions market participants use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its best use, or by selling it to another market participant that would use the asset in its best use. The Group uses valuation techniques that are appropriate in the circumstances, and for which sufficient data are available to measure fair value - maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described below, based on the lowest level of input that is significant to the fair value measurement as a whole: – Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities. – Level 2 – Valuation techniques for which the lowest level of input that is significant to the fair value measurement is directly or indirectly observable. – Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by reassessing categorisation at the end of the reporting period. This is based on the lowest level input that is significant to the fair value measurement as a whole. External valuers are involved for valuation of significant assets, such as properties and significant liabilities. Selection criteria include market knowledge, experience and qualifications; reputation; independence; and whether professional standards are maintained. On a six month basis, management presents valuation results to the Investment Committee as well as the Audit, Risk and Sustainability Committee once approved. This includes a review of major assumptions used in the valuations. For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities based on nature, characteristics and risks of the asset or liability, and the level of the fair value hierarchy (see Note 29). (cc) Earnings per share (“EPS”) Basic EPS is calculated as net profit attributable to members of the Group, divided by the weighted average number of ordinary securities, adjusted for any bonus element. Diluted EPS is calculated as net profit attributable to the Group, divided by the weighted average number of ordinary securities and dilutive potential ordinary securities, adjusted for any bonus element. (dd) Current versus non-current classification The Group presents assets and liabilities in the balance sheet based on current/non-current classification. An asset is current when it is: – Expected to be realised, or intended to be sold, or consumed in the normal operating cycle; – Held primarily for the purpose of trading; – Expected to be realised within twelve months after the reporting period; or – Cash or cash equivalents, unless restricted from being exchanged or used to settle a liability for at least twelve months after reporting period. A liability is current when it is: – Expected to be settled in the normal operating cycle; – Held primarily for the purpose of trading; – Due to be settled within twelve months after the reporting period; or – There is no unconditional right to defer settlement of the liability for at least twelve months after the reporting period. All other assets and liabilities are classified as non-current. Deferred tax assets and liabilities are classified as non- current assets and liabilities. (ee) Government grants Government grants are recognised where there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense, it is recognised net of the related expense for which it is intended to compensate. There are no unfilled conditions or other contingencies attached to the grants. 84 Notes to the Financial Statements For the year ended 30 June 2024 | continued 2. Accounting estimates and judgements The preparation of financial statements requires the use of certain critical accounting estimates. It also requires the Group to exercise its judgement in the process of applying its accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed below. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. (a) Critical accounting estimates and assumptions The Group makes estimates and assumptions concerning the future. The resulting accounting estimates, by definition, may not equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying value of assets and liabilities within the next financial year are discussed below. i. Valuation of investment property, other financial assets and other financial liabilities The Group has investment properties and assets held for sale which together represent the estimated fair value of the Group’s investment property. Other financial assets represent the Groups investment in a number of unlisted property funds. Other financial liabilities relate to a profit share arrangement with a third-party which is carried at fair value. The carrying value of these assets reflect certain assumptions about expected future rentals, rent-free periods, operating costs and appropriate discount and capitalisation rates. The valuation assumption for properties to be developed reflect sales prices for new homes, sales rates, new rental tariffs, estimates of capital expenditure, discount rates and projected property growth rates. The valuation assumptions for deferred management fee villages reflect average length of stay, unit market values, estimates of capital expenditure, contract terms with residents, discount rates and projected property growth rates. In forming these assumptions, the Group considered information about recent sales activity, current market rents, discount rates, capitalisation rates for properties similar to those owned by the Group, as well as independent valuations of the Group’s property. ii. Valuation of inventories The Group has inventory primarily in the form of land lease homes which it carries at the lower of cost or net realisable value. Estimates of net realisable value are based on the most reliable evidence available at the time of estimation, the amount the inventories are expected to realise and the estimated costs of completion. Key assumptions require the use of management judgement, and are continually reviewed. iii. Fair value of derivatives The fair value of derivative assets and liabilities is based on assumptions of future events, and involves significant estimates. Given the complex nature of these instruments, and various assumptions that are used in calculating mark-to-market values, the Group rely on counterparty valuations for derivative values. The counterparty valuations are usually based on mid-market rates, and calculates using the main variables of the forward market curve, time and volatility. (b) Critical judgements in applying the entity’s accounting policies There were no judgements, apart from those involving estimations, that management has made in the process of applying the entity’s accounting policies that had a significant effect on the amounts recognised in the financial report. 3. Segment information (a) Description of segments The Group has five reportable operating segments. During the year, a review of the operating segment results was conducted, and it was determined that support costs (People & Culture, Operational Finance, Technology and the costs associated with the Brisbane office) previously allocated to reportable operating segments would be adjusted. Only costs that can be directly attributed to a reportable operating segment are included in the reportable operating segment. Any indirect costs have now been reallocated and included in the Corporate and Other result. Historically, costs were allocated based on a proportion of segment revenue as a percentage of total revenue. There is no impact to Total EBIT. Comparative figures have been updated to be consistent with the current methodology. The five reportable operating segments are as noted below: – Lifestyle Development – comprising the development and sale of land lease homes and fees from the management of development and sales in the joint venture; – Lifestyle Rental – comprising long-term accommodation within land lease and all age rental communities; – Ingenia Gardens – seniors rental villages; – Holidays & Mixed Use – comprising tourism and rental accommodation within holiday parks; – Fuel, Food & Beverage Services – consisting of service station and food & beverage operations adjoined to Ingenia Holiday communities. Corporate & Other comprises the Groups support and corporate office functions including funds and joint venture management. 85 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Notes to the Financial Statements For the year ended 30 June 2024 | continued 3. Segment information (continued) (b) 2024 Residential Lifestyle Gardens Tourism Other Lifestyle Development $’000 Lifestyle Rental $’000 Ingenia Gardens $’000 Holidays & Mixed Use $’000 Fuel, Food & Beverage $’000 Corporate & Other $’000 Total $’000 Segment revenue Land lease home sales 202,090 – – – – – 202,090 Residential rental income – 68,287 21,628 11,649 – – 101,564 Tourism rental income – 3,259 – 105,119 – – 108,378 Annual rental income – 43 – 10,989 – – 11,032 Other revenue 3,718 14,906 2,044 7,078 19,261 2,221 49,228 Total revenue 205,808 86,495 23,672 134,835 19,261 2,221 472,292 Segment underlying profit External segment revenue 205,808 86,495 23,672 134,835 19,261 2,221 472,292 Cost of land lease homes sold (112,714) – – – – – (112,714) Employee expenses (19,062) (14,564) (5,287) (36,407) (4,209) (28,578) (108,107) Property expenses (2,451) (19,545) (5,171) (29,590) (928) (2,119) (59,804) Administrative expenses (2,525) (3,784) (1,427) (4,851) (145) (16,356) (29,088) Operational, marketing and selling expenses (9,655) (2,975) (167) (6,201) (3,326) (1,176) (23,500) Service station expenses – – – (137) (8,900) – (9,037) Depreciation and amortisation expense (248) (377) (1) (792) (47) (2,873) (4,338) Earnings before interest and tax 59,153 45,250 11,619 56,857 1,706 (48,881) 125,704 Share of profit of a joint venture 8,879 Interest income 683 Finance expense (24,973) Income tax expense (15,527) Total underlying profit 94,766 Net gain/(loss) on change in fair value of:  Investment properties 57,346  Acquisition transaction costs (4,190)  Financial liabilities (2,185)  Investments and other financial instruments (4,030) Share of joint venture loss (14,836) Impairment of goodwill(1) (96,647) Gain on disposal of investment properties 4,694 Income tax expense (20,898) Profit after tax 14,020 Segment assets Segment assets 379,071 1,024,890 138,549 848,151 368 84,049 2,475,078 Total assets 379,071 1,024,890 138,549 848,151 368 84,049 2,475,078 (1) Comprising of goodwill impaired at the Rentals CGU ($91.8 million) and Development CGU ($4.8 million). Refer to Note 13 for further detail. 86 Notes to the Financial Statements For the year ended 30 June 2024 | continued 3. Segment information (continued) (c) 2023 Residential Lifestyle Gardens Tourism Other Lifestyle Development $’000 Lifestyle Rental $’000 Ingenia Gardens $’000 Holidays & Mixed Use $’000 Fuel, Food & Beverage $’000 Corporate & Other $’000 Total $’000 Segment revenue Land lease home sales 139,261 – – – – – 139,261 Residential rental income – 62,258 24,846 11,175 – – 98,279 Tourism rental income – 2,593 – 97,303 – – 99,896 Annual rental income – 53 – 10,594 – – 10,647 Other revenue 2,061 11,927 2,602 7,279 19,258 3,258 46,385 Total revenue 141,322 76,831 27,448 126,351 19,258 3,258 394,468 Segment underlying profit External segment revenue 141,322 76,831 27,448 126,351 19,258 3,258 394,468 Cost of land lease homes sold (73,757) – – – – – (73,757) Employee expenses (15,772) (13,620) (5,586) (34,869) (4,254) (24,400) (98,501) Property expenses (1,782) (18,286) (6,429) (26,573) (895) (2,180) (56,145) Administrative expenses (1,052) (3,331) (1,232) (4,378) (135) (16,247) (26,375) Operational, marketing and selling expenses (6,215) (1,457) (863) (5,294) (3,258) (1,395) (18,482) Service station expenses – – – (91) (9,280) – (9,371) Depreciation and amortisation expense (475) (365) (1) (750) (47) (2,775) (4,413) Earnings before interest and tax 42,269 39,772 13,337 54,396 1,389 (43,739) 107,424 Share of profit of a joint venture 3,098 Interest income 357 Finance expense (17,678) Income tax expense (9,573) Share of associate loss (514) Total underlying profit 83,114 Net gain/(loss) on change in fair value of:  Investment properties 6,125  Acquisition transaction costs (4,383)  Financial liabilities (2,099)  Investments and other financial instruments 1,388 Share of joint venture loss (7,370) Business combination transaction costs 1,615 Loss on disposal of investment properties (2,840) Income tax expense (11,182) Profit after tax 64,368 Segment assets Segment assets 326,050 1,005,319 172,350 740,219 317 109,686 2,353,941 Assets held for sale – 11,200 – 12,990 – – 24,190 Total assets 326,050 1,016,519 172,350 753,209 317 109,686 2,378,131 87 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Notes to the Financial Statements For the year ended 30 June 2024 | continued 4. Earnings per security 30 Jun 2024 30 Jun 2023 (a) Per security Profit attributable to security holders ($’000) 14,020 64,368 Weighted average number of securities outstanding (thousands):  Issued securities (thousands) 407,583 407,583  Dilutive securities (thousands): Long-term incentives 2,516 1,988 Short-term incentives 517 421 Talent Rights Grant 920 441 Fixed Remuneration Rights 137 89 Weighted average number of issued and dilutive potential securities outstanding (thousands) 411,673 410,522 Basic earnings per security (cents) 3.4 15.8 Dilutive earnings per security (cents) 3.4 15.7 (b) Per security attributable to parent Loss attributable to security holders ($’000) (9,022) (8,783) Weighted average number of securities outstanding (thousands):  Issued securities (thousands) 407,583 407,583  Dilutive securities (thousands): Long-term incentives 2,516 1,988 Short-term incentives 517 421 Talent Rights Grant 920 441 Fixed Remuneration Rights 137 89 Weighted average number of issued and dilutive potential securities outstanding (thousands) 411,673 410,522 Basic loss per security (cents) (2.2) (2.2) Dilutive loss per security (cents) (2.2) (2.2) 5. Other revenue 30 Jun 2024 $’000 30 Jun 2023 $’000 Ancillary guest and resident income 15,327 15,286 Fuel, food and beverage sales 19,247 19,254 Fee income(1) 5,642 4,781 Refurbished home sales 4,122 2,887 Other(2) 4,890 4,177 Total other revenue 49,228 46,385 (1) Fees from the provision of property management, asset development and sales management services to the funds and the Joint Venture. (2) Other income includes distributions from investment in funds and deferred management fees. 88 Notes to the Financial Statements For the year ended 30 June 2024 | continued 6. Finance expense 30 Jun 2024 $’000 30 Jun 2023 $’000 Debt facility interest expense 34,183 24,733 Lease interest expense(1) 2,280 2,053 Capitalised interest (11,490) (9,108) Finance expense 24,973 17,678 (1) Lease interest expense relates to lease of right-of-use assets and certain ground leases for investment properties that are long-term in nature. 7. Income tax expense 30 Jun 2024 $’000 30 Jun 2023 $’000 (a) Income tax expense Current tax expense 385 3,835 Increase in deferred tax liability 36,040 16,920 Income tax expense 36,425 20,755 (b) Reconciliation between tax expense and pre-tax profit Profit before income tax (50,445) (85,123) Less amounts not subject to Australian income tax 51,520 21,829 1,075 (63,294) Income tax (benefit)/expense at 30% (30 Jun 2023: 30%) (323) 18,989 Tax effect of amounts that are not deductible/(taxable) in calculating taxable income:  Prior period income tax return true-ups 6,604 5,425  Goodwill impairment 27,544 1,450  Other 2,600 832  Recognition of previously unrecognised tax losses – (5,941) Income tax expense 36,425 20,755 (c) Tax consolidation Effective from 1 July 2011, ICH and its Australian domiciled wholly owned subsidiaries formed a tax consolidation group with ICH being the head entity. Under the tax funding agreement the funding of tax within the tax group is based on taxable income as if that entity was not a member of the tax group. Effective from 1 July 2012, ICMT and its Australian domiciled owned subsidiaries formed a tax consolidation group with ICMT being the head entity. Under the tax funding agreement the funding of tax within the tax group is based on taxable income as if that entity was not a member of the tax group. 89 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Notes to the Financial Statements For the year ended 30 June 2024 | continued 8. Trade and other receivables 30 Jun 2024 $’000 30 Jun 2023 $’000 Current Trade receivables 4,140 2,610 Prepayments 8,741 8,678 Deposits 370 4,106 Other receivables 1,581 2,616 Total current trade and other receivables 14,832 18,010 Non-current Other receivables 909 787 9. Inventories 30 Jun 2024 $’000 30 Jun 2023 $’000 Land lease homes:  Completed 42,004 19,756  Display homes 7,257 3,368  Under construction 36,817 30,711 Fuel, food and beverage supplies 389 312 Total inventories 86,467 54,147 The land lease home balance includes: – 108 completed homes (30 Jun 2023: 65) – 26 display homes (30 Jun 2023: 11) – Land lease homes under construction includes 221 partially completed homes at different stages of development (30 Jun 2023: 208). It also includes demolition, site preparation costs, buybacks on future development sites and refurbished/ renovated/annual homes. 10. Assets held for sale 30 Jun 2024 $’000 30 Jun 2023 $’000 Investment properties held for sale:  Broulee, Broulee, NSW – 7,698  Lake Hume, Bowna, NSW – 5,292  Seachange Hervey Bay, Urangan, QLD – 11,200 Total assets held for sale – 24,190 90 Notes to the Financial Statements For the year ended 30 June 2024 | continued 11. Investment properties (a) Summary of carrying value 30 Jun 2024 $’000 30 Jun 2023 $’000 Completed properties 1,930,893 1,770,328 Properties under development 319,794 275,302 Total carrying value 2,250,687 2,045,630 (b) Movements in carrying value Note 30 Jun 2024 $’000 30 Jun 2023 $’000 Carrying value at the beginning of the year 2,045,630 1,937,888 Acquisitions 38,569 48,834 Expenditure capitalised 159,206 135,549 Net gain/(loss) on change in fair value:  Investment properties 55,890 4,906  Acquisition transaction costs (4,190) (4,383) Disposals (44,418) (52,974) Transfer to assets held for sale 10 – (24,190) Carrying value at the end of the year 2,250,687 2,045,630 Fair value hierarchy disclosures for investment properties have been provided in Note 29(a). (c) Reconciliation of fair value Ingenia Gardens $’000 Lifestyle Rental $’000 Holidays & Mixed use $’000 Total $’000 Carrying value at the beginning of the year 168,010 1,120,113 757,507 2,045,630 Acquisitions – 31,021 7,548 38,569 Expenditure capitalised 2,397 134,868 21,941 159,206 Net gain/(loss) on change in fair value of:  Investment properties 2,229 (31,297) 84,958 55,890  Acquisition transaction costs – (3,921) (269) (4,190) Disposals (38,576) – (5,842) (44,418) Carrying value at the end of the year 134,060 1,250,784 865,843 2,250,687 91 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Notes to the Financial Statements For the year ended 30 June 2024 | continued 11. Investment properties (continued) (d) Individual property carrying value Carrying value Completed properties 30 Jun 2024 $’000 30 Jun 2023 $’000 Ingenia Gardens: Brooklyn, Brookfield, VIC 6,460 5,450 Jefferis, Bundaberg North, QLD 5,560 5,170 Oxley, Port Macquarie, NSW 6,850 6,550 Townsend, St Albans Park, VIC 6,100 6,000 Goulburn, Goulburn, NSW 6,540 6,120 Coburns, Brookfield, VIC 6,720 5,540 Hertford, Sebastopol, VIC 4,990 5,000 St Albans Park, St Albans Park, VIC 6,750 6,900 Taloumbi, Coffs Harbour, NSW 7,850 7,000 Wheelers, Dubbo, NSW 6,960 6,900 Taree, Taree, NSW 6,550 6,480 Grovedale, Grovedale, VIC 6,680 6,350 Marsden, Marsden, QLD 16,470 15,600 Dubbo, Dubbo, NSW 6,600 6,450 Sovereign, Ballarat, VIC 6,140 5,890 Wagga, Wagga Wagga, NSW 5,860 5,950 Bathurst, Bathurst, NSW 6,350 6,100 Warrnambool, Warrnambool, VIC 5,650 5,400 Carrum Downs, Carrum Downs, VIC 8,980 10,740 Carey Park, Bunbury, WA – 6,040 Yakamia, Yakamia, WA – 5,770 Seascape, Erskine, WA – 6,500 Seville Grove, Seville Grove, WA – 5,400 Swan View, Swan View, WA – 9,800 Ocean Grove, Mandurah, WA – 4,910 134,060 168,010 92 Notes to the Financial Statements For the year ended 30 June 2024 | continued 11. Investment properties (continued) Carrying value Completed properties 30 Jun 2024 $’000 30 Jun 2023 $’000 Ingenia Lifestyle Rental: The Grange, Morisset, NSW 34,199 33,859 Ettalong Beach, Ettalong Beach, NSW(1) 1,312 1,557 Stoney Creek, Marsden Park, NSW 28,150 29,695 Chambers Pines, Chambers Flat, QLD 91,646 72,146 Bethania, Bethania, QLD 45,800 50,179 Lara, Lara, VIC 48,725 47,573 Latitude One, Port Stephens, NSW(2) 43,650 44,000 Blueys Beach, Blueys Beach, NSW 1,221 1,050 Durack, Durack, QLD 48,500 44,300 Eight Mile Plains, Eight Mile Plains, QLD 47,000 47,000 Plantations, Woolgoolga, NSW 31,000 28,250 Hervey Bay (Lifestyle), Hervey Bay, QLD 41,400 26,846 Brisbane North, Aspley, QLD 48,750 44,659 Bevington Shores, Halekulani, NSW 30,410 29,000 Taigum, Taigum, QLD 26,500 23,333 Sunnylake Shores, Halekulani, NSW 15,575 15,648 Redlands, Thornlands, QLD 7,750 7,000 Natures Edge, Buderim, QLD 43,650 29,894 Anna Bay, Anna Bay, NSW 1,821 4,331 Arundel, Arundel, QLD 70,600 69,639 Emerald Lakes, Carrara, QLD 22,300 23,119 Coomera, Upper Coomera, QLD 21,388 20,123 Toowoomba, Harristown, QLD 19,752 8,771 Carrum Downs (Rentals), Carrum Downs, VIC 26,150 25,920 Chelsea, Bonbeach, VIC 25,250 25,457 Frankston, Carrum Downs, VIC 27,000 25,606 Glenroy, Glenroy, VIC 32,866 31,461 Sunshine, Albion, VIC 23,500 23,911 Werribee, Werribee, VIC 34,735 30,868 Parkside, Ballarat, VIC 8,931 3,216 Drift, Bargara, QLD 424 – Sanctuary, Victoria Point, QLD 4,465 – Millers Glen, Beaudesert, QLD 1,670 – 956,090 868,411 (1) Includes a land component that is leased from the local municipality and is recognised as investment property with an associated ground lease. The value of the capitalised lease carried within investment property is $0.8 million (30 June 2023: $1.0 million). (2) The carrying value of Latitude One represents 100% of the property value. A profit share arrangement is in place with a third-party, the liability for which is carried at fair value and classified as a financial liability. Refer to Note 20 for further details. 93 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Notes to the Financial Statements For the year ended 30 June 2024 | continued Carrying value Completed properties 30 Jun 2024 $’000 30 Jun 2023 $’000 Ingenia Holidays and Mixed Use: Nepean River, Emu Plains, NSW 17,300 13,500 Kingscliff, Kingscliff, NSW 14,647 14,000 One Mile Beach, One Mile, NSW(1) 48,220 33,335 Hunter Valley, Cessnock, NSW 10,900 11,500 White Albatross, Nambucca Heads, NSW 48,303 37,530 Noosa, Tewantin, QLD 32,804 27,500 Lake Macquarie (Holidays), Mannering Park, NSW 18,000 13,700 Sydney Hills, Dural, NSW 14,500 17,500 Conjola Lakeside, Lake Conjola, NSW 70,000 64,700 Soldiers Point, Port Stephens, NSW 37,416 23,244 South West Rocks, South West Rocks NSW(1) 36,747 31,919 Ocean Lake, Ocean Lake, NSW 15,300 13,700 Avina Van Village, Vineyard, NSW 21,000 17,000 Hervey Bay (Holidays), Hervey Bay, QLD 13,611 13,750 Cairns Coconut, Woree, QLD 84,761 77,600 Bonny Hills, Bonny Hills, NSW 22,150 17,600 Rivershore, Diddillibah, QLD 23,500 24,850 Byron Bay, Byron Bay, NSW(1) 31,662 25,380 Middle Rock, One Mile, NSW 29,000 22,500 Inverloch, Inverloch, VIC(1) 47,155 41,603 Townsville, Deeragun, QLD 10,039 9,700 Merry Beach, Kioloa, NSW(1) 36,557 32,870 Noosa North, Tewantin, QLD(1) 15,551 14,551 Eden, Eden, NSW(1) 9,876 10,268 Torquay, Torquay, VIC(1) 20,909 20,536 Phillip Island, Newhaven, VIC(1) 12,033 13,273 Cape Paterson, Cape Paterson, VIC(1) 8,412 8,161 Ulladulla, Ulladulla, NSW 12,500 13,000 Beacon, Queenscliff, VIC 31,850 30,877 Murray Bend, Koonoomoo, VIC 15,245 15,600 Swan Bay, Swan Bay, VIC 9,590 9,260 Big 4 Wagga, Wagga Wagga, NSW 14,000 13,400 Old Bar Beach, Old Bar, NSW(1) 7,205 – 840,743 733,907 Total completed properties 1,930,893 1,770,328 (1) Includes a land component that is leased from the Crown, local municipalities or private lessors and are recognised as investment property with an associated ground lease. The value of the capitalised lease carried within investment property is $57.4 million (30 June 2023: $51.2 million). 11. Investment properties (continued) 94 Notes to the Financial Statements For the year ended 30 June 2024 | continued 11. Investment properties (continued) The figures shown above are the fair values of the operating rental streams associated with each property and exclude any valuation attributed to the development component of the investment property. The values attributed to development properties are separately disclosed in the note below. Carrying value Properties under development 30 Jun 2024 $’000 30 Jun 2023 $’000 Ingenia Lifestyle Rental: Chambers Pines, Chambers Flat, QLD 4,720 10,405 Lara, Lara, VIC 14,858 15,451 Latitude One (Lot 25), Port Stephens, NSW 24,000 2,500 Blueys Beach, Blueys Beach, NSW 17,249 9,137 Hervey Bay (Lifestyle), Hervey Bay, QLD 12,677 21,191 Parkside, Ballarat, VIC 36,210 15,974 Redlands, Thornlands, QLD 1,000 2,100 Beveridge, Beveridge, VIC 25,635 19,994 Natures Edge, Buderim, QLD 1,588 11,943 Drift, Bargara, QLD 13,673 13,159 Rochedale, Rochedale, QLD 25,119 25,284 Coomera, Upper Coomera, QLD 2,400 2,662 Toowoomba, Harristown, QLD 5,403 11,802 Sanctuary, Victoria Point, QLD 34,115 40,348 Millers Glen, Beaudesert, QLD 18,433 8,459 Branyan, Branyan, QLD 6,551 5,860 Sunbury, Sunbury, VIC 12,280 12,500 Gordonvale, Cairns, QLD 19,504 19,674 Plantations, Woolgoolga, NSW 17,100 – Anna Bay, Anna Bay, NSW 2,179 – Bethania, Bethania, QLD – 1,574 Sunnylake Shores, Halekulani, NSW – 1,685 294,694 251,702 Ingenia Holidays and Mixed Use: Avina, Vineyard, NSW 17,850 17,000 Cairns Coconut, Woree, QLD 2,400 2,400 Rivershore, Diddillibah, QLD 3,950 4,200 White Albatross, Nambucca Heads, NSW 900 – 25,100 23,600 Total properties under development 319,794 275,302 Total investment properties 2,250,687 2,045,630 Investment properties are carried at fair value in accordance with the Group’s accounting policy Note 1 (q). Fair value is the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date in the principal market for the asset or liability, or in its absence, the most advantageous market. In determining fair values, the Group considers relevant information including the capitalisation of rental streams using market assessed capitalisation rates. For investment properties under development, the Group assesses fair value based on the expected net development cashflows discounted to their present value using market determined risk-adjusted discount rates and other available market data such as recent comparable transactions. There are three primary cashflow components that determine the fair value: Present Value of Unsold Homes’ net operating income (“NOI”); Present Value of future Home Sales Profits; and, Present Value of Remaining Underground CAPEX. The fair value of an investment property under development will vary depending on the movements of these three components, which are influenced by various factors including, but not limited to, the number of settlements realised, home sale profit margins and the status of the overall development. Refer to Note 11(e) for inputs used in determining fair value. 95 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Notes to the Financial Statements For the year ended 30 June 2024 | continued 11. Investment properties (continued) (e) Description of valuations techniques used and key inputs to valuation on investment properties Range and weighted average Valuation technique Significant unobservable inputs 30 Jun 2024 30 Jun 2023 Relationship of unobservable input to fair value Ingenia Gardens Capitalisation method Stabilised occupancy 92% - 98% (96.0%) 88% - 99% (96.0%) As costs are fixed in nature, occupancy has a direct correlation to valuation (i.e. the higher the occupancy, the greater the value). Capitalisation rate 7.80% - 9.00% (8.4%) 7.2% - 9.5% (8.9%) Capitalisation has an inverse relationship to valuation. Holidays & Mixed Use Capitalisation method (for existing rental streams) Short-term occupancy 20% - 80% for powered and camp sites; 30% - 80% for tourism and short term rental 20% - 80% for powered and camp sites; 30% - 80% for tourism and short term rental The higher the occupancy, the greater the value. Residential occupancy 100% 100% Operating profit margin 22% - 60% dependent upon short-term and residential accommodation mix 22% - 63% dependent upon short-term and residential accommodation mix The higher the adopted operating margin, the greater the value. Capitalisation rate 6.75% - 11.78% (8.2%) 6.75% - 11.50% (7.6%) Capitalisation has an inverse relationship to valuation. Lifestyle Rental Capitalisation method (for existing income streams) Short-term occupancy 20% - 80% for powered and camp sites; 30% - 95% for tourism and short term rental 20% - 80% for powered and camp sites; 30% - 95% for tourism and short term rental The higher the occupancy, the greater the value. Residential occupancy 100% 100% Operating profit margin – Stabilised 41% - 74% dependent upon short-term and residential accommodation mix 39% - 75% dependent upon short-term and residential accommodation mix The higher the adopted operating margin, the greater the value. Capitalisation rate 4.99% - 7.74% (5.5%) 4.90% - 7.27% (5.3%) Capitalisation has an inverse relationship to valuation. Lifestyle Development Home Sales profit Profit margin 23% - 49% (38%) 27% - 50% (36%) The higher the margin, the greater the contribution to overall development value. Discounted cash flow Discount rate 13.5% - 20.0% (16.9%) 6.5% - 22.5% (16.8%) Discount rate has an inverse relationship to valuation. 96 Notes to the Financial Statements For the year ended 30 June 2024 | continued 11. Investment properties (continued) Capitalisation method Under the capitalisation method, fair value is estimated using assumptions regarding the expectation of future benefits. This method involves estimating a sustainable net operating income profile of a property and applying a capitalisation rate into perpetuity. The capitalisation rate is based on current market evidence. The sustainable net operating income profile of a property takes into account occupancy, rental income and operating expenses. Discounted cash flow method Under the discounted cash flow method, fair value is estimated using assumptions regarding the benefits and liabilities of ownership over the asset’s life including an exit or terminal value. This method involves the projection of a series of cash flows on a real property interest. To this projected cash flow series, a market-derived discount rate is applied to establish the present value of the income stream associated with the asset. The exit yield normally reflects the exit value expected to be achieved upon selling the asset and is a function of the risk-adjusted returns of the asset and expected capitalisation rate. The duration of the cash flows and the specific timing of inflows and outflows are determined by events such as rent reviews, lease renewal and related re-letting, redevelopment or refurbishment as well as the development of new units. The appropriate duration is typically driven by market behaviour that is a characteristic of the class of real property. Periodic cash flow is typically estimated as gross income less vacancy, non-recoverable expenses, collection losses, lease incentives, maintenance cost, agent and commission costs and other operating and management expenses. The series of periodic net underlying cash flows, along with an estimate of the terminal value anticipated at the end of the projection period, is then discounted. 12. Plant and equipment 30 Jun 2024 $’000 30 Jun 2023 $’000 (a) Summary of carrying value Plant and equipment 16,899 15,603 Less: accumulated depreciation (6,302) (6,404) Total plant and equipment 10,597 9,199 (b) Movements in carrying value Carrying value at the beginning of the year 9,199 7,415 Additions 4,604 4,509 Disposals (563) (503) Depreciation expense (2,643) (2,222) Carrying value at the end of the year 10,597 9,199 13. Intangibles and goodwill 30 Jun 2024 $’000 30 Jun 2023 $’000 (a) Summary of carrying value Software & development 4,917 5,025 Goodwill 4,672 101,319 Less: accumulated amortisation (4,023) (3,760) Total intangibles and goodwill 5,566 102,584 (b) Movements in carrying value Carrying value at the beginning of the year 102,584 103,203 Additions – – Disposals (2) – Amortisation expense (369) (619) Impairment of goodwill (96,647) – Carrying value at the end of the year 5,566 102,584 97 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Notes to the Financial Statements For the year ended 30 June 2024 | continued 13. Intangibles and goodwill (continued) Goodwill is initially measured at cost, being the excess of the aggregate consideration transferred and the amount recognised for non-controlling interest over the fair value of net identifiable assets acquired and liabilities assumed. Goodwill is tested annually for impairment, or more frequently if changes in circumstances indicate that it might be impaired. An impairment loss is recognised when the carrying amount of the asset exceeds its recoverable amount, calculated as the higher of fair value less costs of disposal and the value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which goodwill is monitored for management purposes and allocated to cash generating units (CGU). The assumptions used for determining the recoverable amount of the CGU are based on the expectation for the future, utilising both internal and external sources of data and relevant market trends. Eighth Gate Funds CGU The recoverable amount of the Eighth Gate Funds CGU has been determined based on a discounted cash flow basis. This method involves the projection of a series of cash flows of the funds management business. The projected cash flows have been updated to reflect an expected change in cash flows from the funds management business. Rental CGU The recoverable amount of the Lifestyle Rental business has been assessed on a discounted cash flow basis, involving the projection of a series of cash flows to the of the Lifestyle Rental business. As a result of this analysis, the goodwill allocated to the rental CGU was fully impaired at 30 June 2024. There was no further impairment to the underlying assets of the CGU which have a recoverable amount of $906.6 million. The key determinant of the impairment was the higher discount rates applied to the future cash flows. For the year ended 30 June 2024, a discount rate of 8.6% (30 Jun 2023: 7%) was deemed appropriate, resulting in the full impairment of the rental CGU goodwill. Development CGU The recoverable amount of the development CGU has been determined based on a discounted cash flow basis. This method involves the projection of a series of cash flows of the Lifestyle Development business. To this projected cash flow series, a pre-tax market-derived discount rate of 41% (30 Jun 2023: 30%) was applied to establish the present value of the income stream associated with the CGU. Changes to the future cash outflows relating to the quantum and timing of construction costs, resulted in the full impairment of goodwill allocated to the development CGU at 30 June 2024. There was no further impairment to the underlying assets of the CGU which have a recoverable amount of $242.3 million. 14. Right-of-use assets 30 Jun 2024 $’000 30 Jun 2023 $’000 (a) Summary of carrying value Plant and equipment 1,154 1,154 Buildings 5,157 5,129 Less: accumulated amortisation (3,734) (3,714) Total right-of-use asset 2,577 2,569 (b) Movements in carrying value Carrying value at the beginning of the year 2,569 4,153 Additions 1,334 – Depreciation expense (1,326) (1,572) Disposals – (12) Carrying value at the end of the year 2,577 2,569 98 Notes to the Financial Statements For the year ended 30 June 2024 | continued 15. Investment in a joint venture The Group holds a 50% interest in a joint venture with Sun Communities for the development of greenfield communities. The Group’s interest in the joint venture is accounted for using the equity method in the consolidated financial statements. The valuation methodology of the Joint Venture’s assets and liabilities are consistent with that of the Group. The following table illustrates the summarised financial information of the Group’s investment in the joint venture entities: Balance Sheet 30 Jun 2024 $’000 30 Jun 2023 $’000 Cash 12,610 7,769 Trade and other receivables 1,036 1,293 Inventory 34,412 16,942 Current assets 48,058 26,004 Investment property 162,746 139,568 Other non-current assets 815 500 Non-current assets 163,561 140,068 Trade and other payables (17,845) (7,670) Current liabilities (17,845) (7,670) Borrowings (40,031) (34,744) Non-current liabilities (40,031) (34,744) Net assets/equity 153,743 123,658 Group’s share in equity – 50% 76,872 61,829 Group’s carrying value in investment 76,872 61,829 Statement of Comprehensive Income 30 Jun 2024 $’000 30 Jun 2023 $’000 Land lease home sales 59,250 25,807 Residential rental income 1,852 1,124 Cost of sales (28,882) (11,193) Operating costs (10,676) (7,099) Depreciation (141) (100) Operating profit before interest and tax 21,403 8,539 Net finance expense (2,141) (811) Net loss on change in fair value of investment property (29,672) (14,741) Income tax expense (1,504) (1,531) Net loss for the year (11,914) (8,544) Total comprehensive loss for the year net of income tax (11,914) (8,544) Group’s share of loss for the year (5,957) (4,272) 99 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Notes to the Financial Statements For the year ended 30 June 2024 | continued 16. Other financial assets 30 Jun 2024 $’000 30 Jun 2023 $’000 Current Derivatives 3,726 3,234 Total current 3,726 3,234 Non-current Unlisted property funds 6,357 6,340 Derivatives – 3,867 Total non-current 6,357 10,207 Refer to Note 2 for valuation assumptions on the Group’s investment in unlisted property funds. 17. Deferred tax assets and liabilities 30 Jun 2024 $’000 30 Jun 2023 $’000 Deferred tax assets Tax losses 25,346 24,994 Accruals 5,322 4,830 Other 4,591 4,238 Deferred tax liabilities DMF receivable – (5) Investment properties (119,566) (81,156) Other (5,012) (6,180) Net deferred tax liabilities (89,319) (53,279) Tax effected carried forward tax losses for which no deferred tax asset has been recognised 2,773 3,058 The tax effected carried forward tax losses for which no deferred tax asset has been recognised in the current year relates to capital losses of $2.8 million (30 Jun 2023: $3.1 million). The availability of carried forward tax losses to the ICMT tax consolidated group is subject to recoupment rules at the time of recoupment. Further, the rate at which certain of the revenue losses can be utilised is determined by reference to market values at the time of tax consolidation and subsequent events. The carried forward capital losses can only be recouped from future capital gains. The Group offsets tax assets and liabilities, if and only if, it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority. 18. Trade and other payables 30 Jun 2024 $’000 30 Jun 2023 $’000 Current Trade payables and accruals 67,836 73,644 Deposits 23,950 19,598 Other 2,303 2,275 Total current 94,089 95,517 Non-current Other 3,635 6,904 Total non-current 3,635 6,904 100 Notes to the Financial Statements For the year ended 30 June 2024 | continued 19. Borrowings 30 Jun 2024 $’000 30 Jun 2023 $’000 Current Lease liabilities – Right-of-use assets 1,288 1,094 Lease liabilities – Ground leases 3,292 2,894 Total current 4,580 3,988 Non-current Bank debt 695,850 609,130 Prepaid borrowing costs (2,759) (3,015) Lease liabilities – Right-of-use assets 1,530 1,672 Lease liabilities – Ground leases 54,952 49,893 Total non-current 749,573 657,680 The Group’s available facilities as at 30 June 2024 was $905.0 million (30 Jun 2023: $780.0 million). (a) Bank debt As at 30 June 2024, the Group’s debt balance, drawn from the facilities, was $695.9 million (30 Jun 2023: $609.1 million). The carrying value of investment properties and inventories at reporting date pledged as security is $2,178.1 million (30 Jun 2023: $1,912.5 million). Maturity date Amount December 2025 $74.5 million September 2026 $175.4 million January 2027 $200.0 million February 2027 $100.0 million December 2027 $55.0 million February 2028 $75.0 million May 2028 $100.1 million May 2029 $125.0 million (b) Bank guarantees The Group has the ability to utilise its bank facilities to provide bank guarantees, which at 30 June 2024 were $21.7 million (30 Jun 2023: $24.1 million). 20. Other financial liabilities 30 Jun 2024 $’000 30 Jun 2023 $’000 Current Financial liabilities 795 659 Total current 795 659 Non-current Financial liabilities 16,665 16,941 Total non-current 16,665 16,941 Other financial liabilities relate to a profit share arrangement with a third-party which is carried at fair value. 101 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Notes to the Financial Statements For the year ended 30 June 2024 | continued 21. Issued Securities 30 Jun 2024 $’000 30 Jun 2023 $’000 (a) Carrying values Balance at beginning of the year 1,704,212 1,704,230 Issued during the year:  Equity raising and distribution costs (24) (18) Balance at end of the year 1,704,188 1,704,212 The closing balance is attributable to the security holders of: Ingenia Communities Holding Limited 91,956 91,958 Ingenia Communities Fund 1,473,432 1,473,451 Ingenia Communities Management Trust 138,800 138,803 1,704,188 1,704,212 30 Jun 2024 ’000 30 Jun 2023 ’000 (b) Number of issued securities Balance at beginning of the year 407,583 407,583 Issued during the year:  Distribution Reinvestment Plan (“DRP”) – – Balance at end of the year 407,583 407,583 (c) Term of securities All securities are fully paid and rank equally with each other for all purposes. Each security entitles the holder to one vote, in person or by proxy, at a meeting of security holders. 22. Reserves Note 30 Jun 2024 $’000 30 Jun 2023 $’000 Balance at the beginning of year (2,010) (4,312) Payments to employee share trust (725) (150) Lapsed rights 23 (489) (392) Share-based payment expense 4,682 2,844 Balance at the end of year 1,458 (2,010) The share-based payment reserve records the value of equity-settled share-based payment transactions provided to employees, including key management personnel, as part of their remuneration. 102 Notes to the Financial Statements For the year ended 30 June 2024 | continued 23. Accumulated losses Note 30 Jun 2024 $’000 30 Jun 2023 $’000 Balance at beginning of the year (165,415) (185,341) Net profit for the year 14,020 64,368 Distributions (44,834) (44,834) Lapsed rights 22 489 392 Balance at end of the year (195,740) (165,415) The closing balance is attributable to the security holders of:  Ingenia Communities Holding Limited 6,541 48,319  Ingenia Communities Fund (316,495) (359,808)  Ingenia Communities Management Trust 114,214 146,074 (195,740) (165,415) 24. Commitments There were commitments for capital expenditure on investment properties and inventories contracted but not provided for at reporting date of $77.8 million (30 Jun 2023: $79.3 million). In FY23, Ingenia entered into an arrangement to acquire land adjoining Ingenia Lifestyle Plantations for a purchase price of $18.8 million (inclusive of GST) on or before 30 April 2024. As at 30 June 2024, the acquisition was completed and the adjoining land is held in investment properties (refer Note 11). 25. Contingent liabilities The Group has the following contingent liabilities: – Bank guarantees totalling $21.7 million provided for under the $905.0 million bank facility. Bank guarantees primarily relate to the Responsible Entity’s AFSL capital requirements ($10.0 million). 26. Share based Payment Transactions The Group’s current Rights Plan provides for the issuance of rights to eligible employees, which upon a determination by the Board that the performance conditions attached to the rights have been met, result in the issue of stapled securities in the Group for each right. The Rights Plan was approved at the 17 November 2023 Annual General Meeting and contains the following: (a) Short-Term Incentive Plan (STIP) STIP performance rights are awarded to eligible employees whose achievements, behaviour, and focus meet the Group’s business plan and individual Key Performance Indicators (KPIs) measured over the financial year. STIP rights are subject to a one year vesting deferral period from the issue date and allow for certain lapsing conditions within the deferral period, should certain conditions occur. Under the STI offer, 33.3% of the maximum STI for the CEO and 50.0% for the CFO and CIO & GC will be paid in cash, with the balance being a deferred equity element. The deferred expense for conditional STIP rights recognised for the period is $0.7 million (30 Jun 2023: $0.6 million) and is based on an estimate of the Group’s and individual employee’s current period performance. The total value of STIP rights is subject to adjustment up until the final full-year audited result is known and KPIs reliably measured, being 1 October 2024. (b) Long-Term Incentive Plan (LTIP) LTIP performance rights are granted to individuals to align their focus to increase alignment with security holder’s interests. The FY24 LTIP Rights are subject to the following LTIP Performance Conditions: – 25% based on Total Shareholder Return (TSR); – 25% based on Return on Equity (ROE). – 25% based on underlying Earnings Per Security (EPS); and – 25% based on home settlements growth. 103 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Notes to the Financial Statements For the year ended 30 June 2024 | continued 26. Share based Payment Transactions (continued) TSR is benchmarked against the constituents of the ASX 200 A-REIT Index whilst ROE, Underlying EPS and home settlements growth is benchmarked against internal targets. The number of LTIP rights that will vest will depend on the performance of each hurdle. The fair value of LTIPs is recognised as an employee benefit expense with a corresponding increase in reserves. The fair value is expensed on a straight-line basis over the vesting period. The total LTIP expense recognised for the financial year was $2.2 million (30 Jun 2023: $1.1 million). (c) Talent Rights Grant (TRG) TRG are granted for the purpose of retaining and incentivising employees who have been identified as having a key role in the successful achievement of the Group’s strategy. In order to vest, the TRG Rights are subject to the Group’s Rights Plan, employees remaining in service and their satisfactory performance. The fair value is expensed on a straight-line basis over the relevant vesting period. The total TRG expense recognised for the financial year was $1.0 million (30 Jun 2023: $0.6 million). (d) Fixed Remuneration Rights (FRR) Fixed Remuneration of executive KMP is reviewed annually, with any adjustments subject to Board approval. When an adjustment to Fixed Remuneration is approved by the Board, the delivery of all or part of any increase in Fixed Remuneration may, at the Board’s discretion, be in the form of an annual grant of Rights to INA Securities. The Board considers that delivery in Rights, instead of cash, further aligns the interests of the executive with security holders. The total FRR expense recognised for the financial year was $0.2 million (30 Jun 2023: $0.2 million). One Right equates to one security in the Group. Movements in rights during the year were as follows: (i) 30 June 2024 STIP Thousands LTIP Thousands TRG Thousands FRR Thousands Outstanding at beginning of year 440 2,132 501 101 Lapsed during the year – (484) (70) – Granted during the year 127 1,135 669 57 Exercised during the year (25) (3) (26) – Outstanding at end of year 542 2,780 1,074 158 Weighted average remaining life of outstanding rights (years) 0.3 1.3 1.5 – (ii) 30 June 2023 STIP Thousands LTIP Thousands TRG Thousands FRR Thousands Outstanding at beginning of year 330 1,547 302 69 Lapsed during the year – (305) (61) (43) Granted during the year 140 986 268 100 Exercised during the year (30) (96) (8) (25) Outstanding at end of year 440 2,132 501 101 Weighted average remaining life of outstanding rights (years) 0.3 1.3 1.5 – The fair value of STIP, LTIP and TRG Rights granted during the year was estimated using Monte Carlo and Binomial simulation models. Assumptions made in determining the fair value, and the results are: STIP Grant Date 1 Oct 2023 Security price at grant date $4.17 30 day Volume Weighted Average Price (VWAP) at start of performance period $4.22 Expected remaining life at grant date (years) 1 Risk-free interest rate at grant date 4.26% Share price volatility 30.0% STIP fair value $4.18 104 Notes to the Financial Statements For the year ended 30 June 2024 | continued 26. Share based Payment Transactions (continued) LTIP Grant Date 1 Oct 2023 17 Nov 2023 2 Apr 2024 Security price at grant date $4.17 $4.30 $5.19 30 day Volume Weighted Average Price (VWAP) at start of performance period $4.22 $4.22 $4.22 Expected remaining life at grant date 3 2.9 2.54 Risk-free interest rate at grant date 3.87% 4.03% 3.24% Distribution yield 2.89% 2.89% 2.57% Share price volatility 30.0% 30.0% 30.0% LTIP fair value $2.25 $2.28 $2.87 TRG Grant Date 1 Oct 2023 1 Oct 2023 Security price at grant date $4.17 $4.17 30 day Volume Weighted Average Price (VWAP) at start of performance period $4.22 $4.22 Expected remaining life at grant date 2.0 4.0 Risk-free interest rate at grant date 3.94% 3.91% Share price volatility 30.0% 30.0% TRG fair value $3.99 $3.77 27. Capital management The Group aims to meet its strategic objectives, operational needs and maximise returns to security holders through the appropriate use of debt and equity, taking account of the additional financial risks of higher debt levels. In determining the optimal capital structure, the Group takes into account a number of factors, including the views of investors and the market in general, the capital needs of its portfolio, the relative cost of debt versus equity, the execution risk of raising equity or debt, and the additional financial risks of debt including increased volatility of earnings due to exposure to interest rate movements, the refinance risk of maturing debt facilities and the potential for acceleration prior to maturity. In assessing this risk, the Group takes into account the relative stability of its income flows, the predictability of its expenses, its debt maturity profile, the degree of hedging and the overall level of debt as measured by gearing. The actual capital structure at a point in time is the product of a number of factors, many of which are market driven and to various degrees outside of the control of the Group, particularly the impact of revaluations, the availability of new equity and the liquidity in real estate markets. While the Group periodically determines the optimal capital structure, the ability to achieve the optimal structure may be impacted by market conditions and the actual position may often differ from the optimal position. One measure of the Group’s capital position is through the Loan to Value Ratio (LVR) which is a key covenant (less than 55%) under the Group’s common terms deed governing the debt facilities. LVR is calculated as the sum of bank debt, bank guarantees and interest rate swaps, less cash at bank, as a proportion of the investment properties, based on the most recent external valuation, and inventories pledged as security and expressed as a percentage. The Group’s strategy is to maintain an LVR range of 30-40%. As at 30 June 2024, the LVR of 32.3% (30 June 2023: 31.4%). In addition, the Group monitors Interest Cover Ratio (ICR) as defined under the common terms deed. At 30 June 2024, the Total Interest Cover Ratio was 4.26x (30 Jun 2023: 4.67x) and the Core Interest Cover Ratio was 3.97x (30 Jun 2023: 5.30x). The covenant for total ICR and Core ICR is greater than 2x. 28. Financial instruments (a) Introduction The Group’s principal financial instruments comprise cash and short-term deposits, receivables, payables, interest bearing liabilities, other financial liabilities, and derivative financial instruments. 105 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Notes to the Financial Statements For the year ended 30 June 2024 | continued 28. Financial instruments (continued) The main risks arising from the Group’s financial instruments are interest rate risk, foreign exchange risk, credit risk and liquidity risk. The Group manages its exposure to these risks primarily through its Investment, Derivatives, and Borrowing policy. The policy sets out various targets aimed at restricting the financial risk taken by the Group. Management reviews actual positions of the Group against these targets on a regular basis. If the target is not achieved, or the forecast is unlikely to be achieved, a plan of action is, where appropriate, put in place with the aim of meeting the target within an agreed timeframe. Depending on the circumstances of the Group at a point in time, it may be that positions outside of the Investment, Derivatives, and Borrowing policy are accepted and no plan of action is put in place to meet the treasury targets, because, for example, the risks associated with bringing the Group into compliance outweigh the benefits. The adequacy of the Investment, Derivatives, and Borrowing policy in addressing the risks arising from the Group’s financial instruments is reviewed on a regular basis. While the Group aims to meet its Investment, Derivatives, and Borrowing policy targets, many factors influence its performance, and it is probable that at any one time it will not meet all its targets. For example, the Group may be unable to negotiate the extension of bank facilities sufficiently ahead of time, so that it fails to achieve its liquidity target. When refinancing loans it may be unable to achieve the desired maturity profile or the desired level of flexibility of financial covenants, because of the cost of such terms or their unavailability. Hedging instruments may not be available, or their cost may outweigh the benefit of risk reduction or they may introduce other risks such as mark to market valuation risk. Changes in market conditions may limit the Group’s ability to raise capital through the issue of new securities or sale of properties. (b) Interest rate risk The Group’s exposure to the risk of changes in market interest rates arises primarily from its use of borrowings. The main consequence of adverse changes in market interest rates is higher interest costs, reducing the Group’s profit. In addition, one or more of the Group’s loan agreements may include minimum interest cover covenants. Higher interest costs resulting from increases in market interest rates may result in these covenants being breached, providing the lender the right to call in the loan or to increase the interest rate applied to the loan. The Group manages the risk of changes in market interest rates by maintaining an appropriate mix of fixed and floating rate borrowings. Fixed rate debt is achieved either through fixed rate debt funding or through derivative financial instruments permitted under the Investment, Derivatives, and Borrowing policy. At 30 June 2024, approximately 11% of the Group’s borrowings are at a fixed rate (30 June 2023: 12%) with interest rate derivatives in place to provide further rate protection. Consequently, exposure to interest rates on 46.7% of the drawn debt has been managed (30 Jun 2023: 53%). Exposure to changes in market interest rates also arises from financial assets such as cash deposits and loan receivables subject to floating interest rate terms. Changes in market interest rates will also change the fair value of any interest rate hedges. (c) Interest rate risk exposure The Group’s exposure to interest rate risk and the effective interest rates on financial instruments at reporting date was: Fixed interest maturing in: 30 Jun 2024 $’000 Floating interest rate Less than 1 year 1 to 5 years More than 5 years Total Financial assets Cash at bank 14,458 – – – 14,458 Financial liabilities Bank debt 620,850 – 75,000 – 695,850 Interest rate derivatives (250,000) 50,000 200,000 – – Fixed interest maturing in: 30 Jun 2023 $’000 Floating interest rate Less than 1 year 1 to 5 years More than 5 years Total Financial assets Cash at bank 45,716 – – – 45,716 Financial liabilities Bank debt 534,130 – 75,000 – 609,130 Interest rate derivatives (250,000) – 250,000 – – Other financial instruments of the Group not included in the above tables are non-interest bearing and are therefore not subject to interest rate risk. 106 Notes to the Financial Statements For the year ended 30 June 2024 | continued 28. Financial instruments (continued) (d) Interest rate sensitivity analysis The impact of an increase or decrease in average interest rates of 1% (100 bps) at reporting date, with all other variables held constant, is illustrated in the tables below. This analysis is based on the interest rate risk exposures in existence at balance sheet date. Effect on profit before tax higher/(lower) 30 Jun 2024 $’000 30 Jun 2023 $’000 Increase in average interest rates of 100 bps: Variable interest rate bank debt (AUD) (6,209) (5,341) Fair value of interest rate derivatives (AUD) 2,674 216 Decrease in average interest rates of 100 bps: Variable interest rate bank debt (AUD) 6,209 5,341 Fair value of interest rate derivatives (AUD) (2,161) (154) (e) Foreign exchange risk The Group’s The Group’s exposure to foreign exchange risk is limited to foreign denominated cash balances. These amounts are unhedged. (f) Net foreign currency exposure The Group’s net foreign currency monetary exposure as at reporting date is shown in the following table. The net foreign currency exposure reported is of foreign currencies held by entities whose functional currency is not the Australian dollar. It excludes assets and liabilities of entities, including equity accounted investments, whose functional currency is not the Australian dollar. Net foreign currency assets 30 Jun 2024 $’000 30 Jun 2023 $’000 Net foreign currency exposure:  United States dollars 1,552 1,530  New Zealand dollars – 234 The impact of an increase or decrease in average foreign exchange rates of 10% at reporting date, with all other variables held constant, is considered to be limited based on the foreign exchange risk exposures in existence at balance sheet date. The Group believes that the reporting date risk exposures are representative of the risk exposure inherent in its financial instruments. (g) Credit risk Credit risk refers to the risk that a counterparty defaults on its contractual obligations resulting in a financial loss to the Group. The major credit risk for the Group is default by tenants, resulting in a loss of rental income while a replacement tenant is secured and further loss if the rent level agreed with the replacement tenant is below that previously paid by the defaulting tenant. The Group assesses the credit risk of prospective tenants, the credit risk of in-place tenants when acquiring properties and the credit risk of existing tenants renewing upon expiry of their leases. Factors taken into account when assessing credit risk include the financial strength of the prospective tenant and any form of security, for example a rental bond, to be provided. The decision to accept the credit risk associated with leasing space to a particular tenant is balanced against the risk of the potential financial loss of not leasing up vacant space. Rent receivable balances are monitored on an ongoing basis and arrears actively followed up in order to reduce, where possible, the extent of any losses should the tenant subsequently default. The Group believes that its receivables that are neither past due nor impaired do not give rise to any significant credit risk. Credit risk also arises from deposits placed with financial institutions and derivatives contracts that may have a positive value to the Group. The Group’s Investment, Derivatives, and Borrowing policy sets target limits for credit risk exposure with financial institutions and minimum counterparty credit ratings. 107 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Notes to the Financial Statements For the year ended 30 June 2024 | continued 28. Financial instruments (continued) Counterparty exposure is measured as the aggregate of all obligations of any single legal entity or economic entity to the Group, after allowing for appropriate set offs which are legally enforceable. The Group’s maximum exposure to credit risk at reporting date in relation to each class of financial instrument is its carrying value as reported in the balance sheet. (h) Liquidity risk The main objective of liquidity risk management is to reduce the risk that the Group does not have the resources available to meet its financial obligations and working capital and committed capital expenditure requirements. The Group’s Investment, Derivatives, and Borrowing policy sets a target for the level of cash and available undrawn debt facilities to cover future committed capital expenditure in the next year, loan maturities within the next year and an allowance for unforeseen events such as tenant default. The Group may also be exposed to contingent liquidity risk under its term loan facilities, where term loan facilities include covenants which if breached give the lender the right to call in the loan, thereby accelerating a cash flow which otherwise was scheduled for the loan maturity. The Group monitors adherence to loan covenants on a regular basis, and the Investment, Derivatives, and Borrowing policy sets targets based on the ability to withstand adverse market movements and remain within loan covenant limits. In addition, the Group ensures resilience against breaking its covenants on its primary debt facilities by assessing the following sensitivities: – 10% reduction in value of assets for LVR covenants; and – 2% nominal increase in interest rates combined with a 5% fall in income for ICR covenants. The contractual maturities of the Group’s non-derivative financial liabilities at reporting date are reflected in the following table. It shows the undiscounted contractual cash flows required to discharge the liabilities at market rates. 30 Jun 2024 Less than 1 year $’000 1 to 5 years $’000 More than 5 years $’000 Total $’000 Trade and other payables 94,089 3,635 – 97,724 Borrowings(1) 40,308 791,619 – 831,927 Other financial liabilities 795 16,665 – 17,460 Right-of-use asset leases(1) 1,374 1,614 – 2,988 Ground leases (excluding perpetual leases) 3,354 13,159 64,016 80,529 Ground leases (perpetual leases)(2) 420 1,680 – 2,100 140,340 828,372 64,016 1,032,728 30 Jun 2023 Less than 1 year $’000 1 to 5 years $’000 More than 5 years $’000 Total $’000 Trade and other payables 95,517 6,904 – 102,421 Borrowings(1) 15,435 717,824 – 733,259 Other financial liabilities 659 16,941 – 17,600 Right-of-use asset leases(1) 1,159 1,715 – 2,874 Ground leases (excluding perpetual leases) 2,948 11,846 57,261 72,055 Ground leases (perpetual leases)(2) 260 1,041 – 1,301 115,978 756,271 57,261 929,510 (1) The balance above will not agree to the balance sheet as it includes the implied interest component. (2) For the purpose of the table above, lease payments for five years are included for perpetual leases. 108 Notes to the Financial Statements For the year ended 30 June 2024 | continued 28. Financial instruments (continued) (i) Other financial instrument risk The Group carries Residents’ loans at fair value with resulting fair value adjustments recognised in the statement of comprehensive income. The fair value of these loans is dependent on market prices for the related retirement village units. The impact of an increase or decrease in these market prices of 10% at reporting date, with all other variables held constant, is shown in the table below. This analysis is based on the residents’ loans in existence at reporting date. Effect on profit after tax higher/(lower) 30 Jun 2024 $’000 30 Jun 2023 $’000 Increase in market prices of investment properties of 10% – (8) Decrease in market prices of investment properties of 10% – 8 These effects are largely offset by corresponding changes in the fair value of the Group’s investment properties. The effect on equity would be the same as the effect on profit. (j) Fair Value The Group uses the following fair value measurement hierarchy: Level 1: Fair value is calculated using quoted prices in active markets for identical assets or liabilities; Level 2: Fair value is calculated using inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); and Level 3: Fair value is calculated using inputs for the asset or liability that are not based on observable market data. Quoted market price represents the fair value determined based on quoted prices on active markets as at the reporting date without any deduction for transaction costs. The following table presents the Group’s financial instruments that were measured and recognised at fair value at reporting date: Financial assets/ financial liabilities Valuation technique(s) and key inputs Significant unobservable inputs Relationship of unobservable inputs to fair value Interest rate derivatives Net present value of future cash flows discounted at market rates adjusted for the Group's credit risk. N/A N/A Unlisted property funds Capitalisation method for existing rental streams and discounted cash flow for properties in development. Refer to Note 11. Capitalisation rate adopted normalised operating profit and discount rate. Refer Note 11. The higher the capitalisation rate and discount rate, the lower the value. The higher the adopted normalised operating profit, the higher the value. Other financial liabilities Capitalisation method for existing rental streams. Refer to Note 11. Capitalisation rate adopted normalised operating profit and discount rate. Refer Note 11. The higher the capitalisation rate and discount rate, the lower the value. The higher the adopted normalised operating profit, the higher the value. Valuation of unlisted property funds is linked to the underlying investment property value. Other financial liabilities relate to ongoing obligations for the Latitude One investment property and is linked to the underlying property value. The associated financial liability will move in line with the fair value of the property. There has been no movement from Level 3 to Level 2 during the year. The carrying value of the Group’s other financial instruments approximate their fair values. 109 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Notes to the Financial Statements For the year ended 30 June 2024 | continued 29. Fair value measurement The following table provides the fair value measurement hierarchy of the Group’s assets and liabilities: (a) Assets measured at fair value Date of valuation Fair value measurement using: Total $’000 30 Jun 2024 Quoted prices in active markets (Level 1) $’000 Significant observable inputs (Level 2) $’000 Significant unobservable inputs (Level 3) $’000 Investment properties 30-Jun-24 Note 11 – – 2,250,687 2,250,687 Assets held for sale - investment property 30-Jun-24 Note 10 – – – – Other financial assets 30-Jun-24 Note 16 – 3,726 6,357 10,083 30 Jun 2023 Investment properties 30-Jun-23 Note 11 – – 2,045,630 2,045,630 Assets held for sale - investment property 30-Jun-23 Note 10 – – 24,190 24,190 Other financial assets 30-Jun-23 Note 16 – 7,101 6,340 13,441 (b) Liabilities measured at fair value Date of valuation Fair value measurement using: Total $’000 Quoted prices in active markets (Level 1) $’000 Significant observable inputs (Level 2) $’000 Significant unobservable inputs (Level 3) $’000 30 Jun 2024 Resident loans 30-Jun-24 – – – – Other financial liabilities 30-Jun-24 Note 20 – – 17,460 17,460 30 Jun 2023 Resident loans 30-Jun-23 – – 59 59 Other financial liabilities 30-Jun-23 Note 20 – – 17,600 17,600 There have been no transfers between Level 1 and Level 2 during the year. 30. Auditor’s remuneration 30 Jun 2024 $ 30 Jun 2023 $ Fees for auditing the statutory financial report 917,300 825,197 Fees for assurance services that are required by legislation:  Australian Financial Services Licence 48,375 45,759 Fees for other services(1):  Agreed upon procedures – 14,025  Other 63,200 6,965 Total fees to Ernst & Young 1,028,875 891,946 (1) Fees for other assurance services and agreed upon procedures services under other legislation or contractual arrangements where there is discretion as to whether the service is provided by the auditor or other firm. 110 Notes to the Financial Statements For the year ended 30 June 2024 | continued 31. Related parties (a) Key management personnel Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director of the Responsible Entity. The names of the directors and KMP of ICRE, and their dates of appointment or resignation if they were not directors for all of the financial year, are:   KMP Position Term Non-Executive KMP  Jim Hazel Chairman Full year  Robert Morrison Deputy Chairman Full year  Pippa Downes Director Full year  Gregory Hayes Director Full year  Sally Evans Director Full year  Lisa Scenna Director Appointed, effective 1 May 2024  Shane Gannon Director Appointed, effective 28 June 2024  Simon Shakesheff Director Appointed, effective 28 June 2024  John McLaren Director 1 July 2023 to 2 November 2023  Amanda Heyworth Director 1 July 2023 to 20 June 2024 Executive KMP  John Carfi Chief Executive Officer Appointed, effective 1 April 2024  Justin Mitchell Chief Financial Officer Appointed, effective 10 July 2023  Natalie Kwok CIO & General Counsel Full year  Simon Owen Chief Executive Officer(1) 1 July 2023 to 31 March 2024 (1) Mr Owen was Managing Director for the period 1 July 2023 to 21 February 2024 and CEO for the period 1 July 2023 to 31 March 2024, with the appointment of the new CEO effective 1 April 2024. Mr Owen remained in service through to 30 June 2024. The aggregate compensation paid to Key Management Personnel (“KMP”) of the Group is as follows: 30 Jun 2024 $ 30 Jun 2023 $ Directors fees 1,055,054 980,708 Salaries and other short-term benefits 2,481,877 1,433,780 Short-term incentives (payable in cash) 667,406 413,775 Superannuation benefits 96,804 69,553 Share-based payments 2,175,859 1,549,363 6,477,000 4,447,179 The amounts in the table exclude KMP termination benefits of $2,418,877 (30 Jun 2023: $630,678). 111 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Notes to the Financial Statements For the year ended 30 June 2024 | continued 31. Related parties (continued) The aggregate rights outstanding of the Group held directly by KMP and other eligible staff are as follows: Number outstanding Issue date Right Type Vesting date 30 Jun 2024 30 Jun 2023 FY17(1) LTIP FY20 1,923 1,923 FY17(1) STIP FY19 2,437 2,437 FY18(1) LTIP FY21 170,367 170,367 FY18(1) STIP FY20 34,300 34,300 FY19(1) LTIP FY22 219,717 219,717 FY19(1) STIP FY21 111,020 111,020 FY20(1) LTIP FY23 113,747 116,326 FY20(1) STIP FY22 111,092 111,092 FY21(1) FRR FY22 7,778 7,778 FY21(1) LTIP FY24 – 332,563 FY21(1) TRG FY23 83,952 83,952 FY21(1) TRG FY24 92,610 121,212 FY21(1) STIP FY23 42,863 42,863 FY22(1) FRR FY22 37,121 37,121 FY22(1) LTIP FY25 366,149 377,213 FY22 TRG FY25 44,605 44,605 FY22 TRG FY26 47,072 47,072 FY22(1) STIP FY24 117,046 138,240 FY23(1) FRR FY23 56,980 56,980 FY23 LTIP FY26 824,183 915,280 FY23 TRG FY26 71,320 102,062 FY23 TRG FY28 71,320 102,061 FY23 STIP FY25 123,250 – FY24(1) FRR FY24 56,879 – FY24 LTIP FY27 1,086,151 – FY24 TRG FY25 59,249 – FY24 TRG FY26 301,996 – FY24 TRG FY28 301,997 – 4,557,124 3,176,184 (1) Rights are fully vested but not exercised. All other rights are still subject to vesting conditions. 112 Notes to the Financial Statements For the year ended 30 June 2024 | continued 31. Related parties (continued) (b) Fee income During the year, the Group generated fee income from the joint venture with Sun Communities and the management of funds. 30 Jun 2024 Note Fee income $ Amounts owed by related parties $ Joint venture 4,089,969 2,545,961 Funds management 1,551,632 469,884 5 5,641,601 3,015,845 30 Jun 2023 Note Fee income $ Amounts owed by related parties $ Joint venture 3,136,545 999,110 Funds management 1,644,436 464,827 5 4,780,981 1,463,937 32. Company financial information Summary financial information about the Company is: 30 Jun 2024 $’000 30 Jun 2023 $’000 Current assets 6,819 4,387 Total assets 67,727 72,564 Current liabilities (3,391) (3,161) Total liabilities (3,391) (3,161) Net assets 64,336 69,403 Security holders’ equity:  Issued securities 91,956 91,958  Reserves 1,458 (2,010)  Accumulated losses (29,078) (20,545) Total security holders’ equity 64,336 69,403 Loss from continuing operations (9,022) (8,783) Net loss attributable to security holders (9,022) (8,783) Total comprehensive loss (9,022) (8,783) Closed Group disclosures The Company, INA Development Pty Ltd and INA Latitude One Development Pty Limited (collectively the “Closed Group”), entered into a deed of cross guarantee on 18 June 2020. Pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785, relief was granted to INA Development Pty Ltd and INA Latitude One Development Pty Limited from the Corporations Act 2001 requirements for the preparation, audit and lodgement of their financial report. On 27 September 2022, INA Latitude One Development Pty resolved to revoke the deed. As at 30 June 2023 and 30 June 2024 the Closed Group comprises the Company and INA Development Pty Limited only. The effect of the deed is that the Company has guaranteed to pay any deficiency in the event of winding up of an entity subject to the deed of cross guarantee if they do not meet their obligations under the terms of overdrafts, loans, leases or other liabilities subject to the guarantee. The controlled entities have also given a similar guarantee in the event that the Company is wound up or if it does not meet its obligations under the terms of overdrafts, loans, leases or other liabilities subject to the guarantee. 113 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Notes to the Financial Statements For the year ended 30 June 2024 | continued 32. Company financial information (continued) The consolidated results of the entities that are members of the Closed Group are as follows: 30 Jun 2024 $’000 30 Jun 2023 $’000 Current assets 8,061 2,341 Total assets 112,074 68,567 Current liabilities (3,405) (3,505) Total liabilities (47,610) (3,505) Net assets 64,464 65,062 Security holders’ equity:  Issued securities 91,956 91,958  Reserves 1,458 (2,010)  Accumulated losses (28,950) (24,886) Total security holders’ equity 64,464 65,062 Revenue 12,217 9,786 Operating expenses (27,349) (15,354) Loss from continuing operations (15,132) (5,568) Total comprehensive loss (15,132) (5,568) 33. Notes to cashflow statement Reconciliation of profit to net cash flow from operating activities: 30 Jun 2024 $’000 30 Jun 2023 $’000 Net profit for the year 14,020 64,368 Adjustments for: Share of joint venture profit 5,957 4,272 Share of associate profit – 514 Impairment of goodwill 96,647 – Net (gain)/loss on change in fair value of:  Investment properties (55,890) (4,906)  Acquisition transaction costs 4,190 4,383  Financial liabilities 3,002 2,723  Investments and other financial instruments 4,030 (1,388) Income tax expense 36,425 20,755 (Gain)/loss on disposal of investment properties (4,694) 2,840 Business combination transaction costs – (1,615) Operating profit before tax 103,687 91,946 Depreciation and amortisation 4,338 4,413 Share-based payments expense 4,682 2,844 Finance costs (8,867) (4,602) Operating cash flow before changes in working capital 103,840 94,601 Changes in working capital:  Increase in receivables (2,178) (8,517)  Increase in inventory (32,320) (34,612)  Increase in other payables and provisions 12,853 31,025 Net cash provided by operating activities 82,195 82,497 114 Notes to the Financial Statements For the year ended 30 June 2024 | continued Notes to the Financial Statements For the year ended 30 June 2024 | continued 34. Subsidiaries The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in Note 1(d): Ownership interest Country of residence 30 Jun 2024 % 30 Jun 2023 % Bridge Street Trust Australia 100 100 Browns Plains Road Trust Australia 100 100 Casuarina Road Trust Australia 100 100 Edinburgh Drive Trust Australia 100 100 Garden Villages Management Trust Australia 100 100 INA Community Living Lynbrook Trust Australia 100 100 INA Community Living Subsidiary Trust Australia 100 100 INA Garden Villages Pty Ltd Australia 100 100 INA Kiwi Communities Pty Ltd Australia 100 100 INA Kiwi Communities Subsidiary Trust No. 1 Australia 100 100 INA Management Pty Ltd Australia 100 100 INA Settlers Co Pty Limited Australia 100 100 INA Sunny Communities Pty Ltd Australia 100 100 INA Sunny Trust Australia 100 100 Ingenia Communities RE Limited Australia 100 100 Jefferis Street Trust Australia 100 100 Lovett Street Trust Australia 100 100 Settlers Operations Trust Australia 100 100 Settlers Subsidiary Trust Australia 100 100 SunnyCove Gladstone Unit Trust Australia 100 100 SunnyCove Rockhampton Unit Trust Australia 100 100 Ridge Estate Trust Australia 100 100 Taylor Street (2) Trust Australia 100 100 INA Subsidiary Trust No.1 Australia 100 100 INA Subsidiary Trust No.3 Australia 100 100 INA Operations Pty Ltd Australia 100 100 INA Operations Trust No.1 Australia 100 100 INA Operations Trust No.2 Australia 100 100 INA Operations Trust No.3 Australia 100 100 INA Operations Trust No.4 Australia 100 100 INA Operations Trust No.6 Australia 100 100 INA Operations Trust No.7 Australia 100 100 INA Operations Trust No.8 Australia 100 100 INA Operations Trust No.9 Australia 100 100 INA Operations Trust No.10 Australia 100 100 INA Operations Trust No.11 Australia 100 100 INA DMF Management Pty Ltd Australia 100 100 INA Latitude One Pty Ltd Australia 100 100 INA Latitude One Development Pty Ltd Australia 100 100 INA Soldiers Point Pty Ltd Australia 100 100 INA Operations No.3 Pty Limited Australia 100 100 115 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Notes to the Financial Statements For the year ended 30 June 2024 | continued Ownership interest Country of residence 30 Jun 2024 % 30 Jun 2023 % INA Community Living Subsidiary Trust No. 2 Australia 100 100 INA Development Pty Limited Australia 100 100 INA Development Management Pty Limited Australia 100 100 INA Plantations Development Pty Limited Australia 100 100 INA Hervey Bay Development Pty Limited Australia 100 100 INA Natures Edge Development Pty Limited Australia 100 100 INA Bargara Development Pty Limited Australia 100 100 INA Beveridge Development Pty Limited Australia 100 100 INA Ballarat Development Pty Limited Australia 100 100 INA Development No.3 Pty Limited Australia 100 100 INA Lara Development Pty Limited Australia 100 100 INA Lifestyle Operations Pty Limited Australia 100 100 INA Lifestyle Landowner Pty Limited Australia 100 100 INA Subsidiary Trust No.4 Australia 100 100 INA Subsidiary Trust No.5 Australia 100 100 INA Subsidiary Trust No.6 Australia 100 100 INA Subsidiary Trust No.7 Australia 100 100 INA Subsidiary Trust No.8 Australia 100 100 INA Lifestyle Landowner Trust Australia 100 100 INA Lifestyle Operations Trust Australia 100 100 INA Operations Management Trust Australia 100 100 Emmetlow Pty Ltd Australia 100 100 Park Trust Australia 100 100 Eighth Gate Capital Management Pty Ltd Australia 100 100 Eighth Gate Pty Ltd Australia 100 100 Eighth Gate Capital Management No. 3 Pty Ltd Australia 100 100 Eighth Gate Capital Management No. 4 Pty Ltd Australia 100 100 Eighth Gate Capital Management No. 5 Pty Ltd Australia 100 100 Eighth Gate Capital Management No. 6 Pty Ltd Australia 100 100 Eighth Gate Capital Management No. 7 Pty Ltd Australia 100 100 Eighth Gate Capital Management No. 8 Pty Ltd Australia 100 100 Allswell Communities Pty Ltd Australia 100 100 IDCF Land Trust No. 1 Australia 100 100 IDCF Management Company No 1 Pty Ltd Australia 100 100 Ingenia Diversified Communities Head Company Pty Limited Australia 100 100 Ingenia Diversified Communities Trust Australia 100 100 INA Development No. 6 Pty Ltd Australia 100 100 INA Millers Glen Development Pty Limited (formerly INA Development No. 7 Pty Ltd) Australia 100 100 INA Development No. 8 Pty Ltd Australia 100 100 INA Development No. 9 Pty Ltd Australia 100 100 INA Operations Trust No.12 Australia 100 100 INA Operations Trust No.13 Australia 100 100 34. Subsidiaries (continued) 116 Notes to the Financial Statements For the year ended 30 June 2024 | continued Ownership interest Country of residence 30 Jun 2024 % 30 Jun 2023 % INA Rochedale Development Pty Ltd Australia 100 100 INA Coomera Development Pty Ltd Australia 100 100 INA Toowoomba Development Pty Ltd Australia 100 100 Seachange (Land) Pty Ltd Australia 100 100 The Seachange (Land) Unit Trust Australia 100 100 PPV Coomera Land Pty Ltd Australia 100 100 PPV Coomera Land Unit Trust Australia 100 100 PPV Hervey Bay Land Pty Ltd Australia 100 100 PPV Hervey Bay Land Unit Trust Australia 100 100 PPV Inlet Land Pty Ltd Australia 100 100 PPV Inlet Land Unit Trust Australia 100 100 PPV Toowoomba Land Pty Ltd Australia 100 100 PPV Toowoomba Land Unit Trust Australia 100 100 PPV Victoria Point Land Pty Ltd Australia 100 100 PPV Victoria Point Land Unit Trust Australia 100 100 Eighth Gate Federation Village Park Trust Australia 100 100 Eighth Gate Residences Fund No. 6 Australia 100 100 Residences Fund No. 6 Pty Ltd Australia 100 100 Ingenia Holiday Parks Company No. 1 Pty Limited Australia 100 100 Ingenia Holiday Parks Trust No 1 Australia 100 100 INA Development No. 10 Pty Ltd Australia 100 100 INA Development No. 11 Pty Ltd Australia 100 100 INA Development No. 12 Pty Ltd Australia 100 100 INA Community Living LLC USA – 100 Financial information of ICF and ICMT and their controlled entities are provided below: ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Current assets 6,757 53,082 32,310 45,816 Non-current assets 1,897,360 1,719,709 1,462,522 1,373,810 Total assets 1,904,117 1,772,791 1,494,832 1,419,626 Current liabilities 10,392 10,324 81,782 92,650 Non-current liabilities 725,749 637,785 1,160,036 1,042,799 Total liabilities 736,141 648,109 1,241,818 1,135,449 Net assets/equity 1,167,976 1,124,682 253,014 284,177 Revenue 96,765 57,874 329,022 281,638 Expenses (8,618) (18,831) (360,882) (243,417) Profit/(loss) after tax 88,147 39,043 (31,860) 38,220 Total comprehensive income/(loss) 88,147 39,043 (31,860) 38,220 35. Subsequent events Final FY24 distribution On 20 August 2024, the Directors declared a final distribution of 6.1 cps amounting to $24.9 million, to be paid on 19 September 2024. 34. Subsidiaries (continued) 117 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Consolidated Entity Disclosure Statement For the year ended 30 June 2024 In accordance with subsection 295(3A) of the Corporations Act 2001, the Consolidated Entity Disclosure Statement provides information about entities that were part of the consolidated Group as at 30 June 2024. Entity Name Entity Type Trustee/ Partnership/ JV Body Corporate country of incorporation(1) Body Corporate % of share capital held(1),(2) Country of tax residence(3) Ingenia Communities Holdings Limited(2) Body Corporate N/A Australia N/A Australia Ingenia Communities Fund(2) Trust N/A N/A N/A Australia Ingenia Communities Management Trust(2) Trust N/A N/A N/A Australia Bridge Street Trust Trust N/A N/A N/A Australia Browns Plains Road Trust Trust N/A N/A N/A Australia Casuarina Road Trust Trust N/A N/A N/A Australia Edinburgh Drive Trust Trust N/A N/A N/A Australia Garden Villages Management Trust Trust N/A N/A N/A Australia INA Community Living Lynbrook Trust Trust N/A N/A N/A Australia INA Community Living Subsidiary Trust Trust N/A N/A N/A Australia INA Garden Villages Pty Ltd Body Corporate Trustee Australia 100 Australia INA Kiwi Communities Pty Ltd Body Corporate Trustee Australia 100 Australia INA Kiwi Communities Subsidiary Trust No.1 Trust N/A N/A N/A Australia INA Management Pty Ltd Body Corporate Trustee Australia 100 Australia INA Settlers Co Pty Limited Body Corporate Trustee Australia 100 Australia INA Sunny Communities Pty Ltd Body Corporate Trustee Australia 100 Australia INA Sunny Trust Trust N/A N/A N/A Australia Ingenia Communities RE Limited Body Corporate Trustee Australia 100 Australia Jefferis Street Trust Trust N/A N/A N/A Australia Lovett Street Trust Trust N/A N/A N/A Australia Settlers Operations Trust Trust N/A N/A N/A Australia Settlers Subsidiary Trust Trust N/A N/A N/A Australia SunnyCove Gladstone Unit Trust Trust N/A N/A N/A Australia SunnyCove Rockhampton Unit Trust Trust N/A N/A N/A Australia Ridge Estate Trust Trust N/A N/A N/A Australia Taylor Street (2) Trust Trust N/A N/A N/A Australia INA Subsidiary Trust No.1 Trust N/A N/A N/A Australia INA Subsidiary Trust No.3 Trust N/A N/A N/A Australia INA Operations Pty Ltd Body Corporate Trustee Australia 100 Australia (1) Place of incorporation and percentage of share capital held only applicable to Body Corporate entities. (2) The Group consists of three stapled entities (ICH, ICF and ICMT), as such the percentage of share capital held may refer to the percentage of share capital held by any of the stapled entities. (3) Australian income tax laws do not provide a test for determining the tax residency of a trust entity. The country of tax residence disclosed for trusts is based on the residence of the responsible entity or trustee. 118 Entity Name Entity Type Trustee/ Partnership/ JV Body Corporate country of incorporation(1) Body Corporate % of share capital held(1),(2) Country of tax residence(3) INA Operations Trust No.1 Trust N/A N/A N/A Australia INA Operations Trust No.2 Trust N/A N/A N/A Australia INA Operations Trust No.3 Trust N/A N/A N/A Australia INA Operations Trust No.4 Trust N/A N/A N/A Australia INA Operations Trust No.6 Trust N/A N/A N/A Australia INA Operations Trust No.7 Trust N/A N/A N/A Australia INA Operations Trust No.8 Trust N/A N/A N/A Australia INA Operations Trust No.9 Trust N/A N/A N/A Australia INA Operations Trust No.10 Trust N/A N/A N/A Australia INA Operations Trust No.11 Trust N/A N/A N/A Australia INA DMF Management Pty Ltd Body Corporate N/A Australia 100 Australia INA Latitude One Pty Ltd Body Corporate N/A Australia 100 Australia INA Latitude One Development Pty Ltd Body Corporate N/A Australia 100 Australia INA Soldiers Point Pty Ltd Body Corporate N/A Australia 100 Australia INA Operations No.3 Pty Limited Body Corporate N/A Australia 100 Australia INA Community Living Subsidiary Trust No.2 Trust N/A N/A N/A Australia INA Development Pty Limited Body Corporate N/A Australia 100 Australia INA Development Management Pty Limited Body Corporate N/A Australia 100 Australia INA Plantations Development Pty Limited Body Corporate N/A Australia 100 Australia INA Hervey Bay Development Pty Limited Body Corporate N/A Australia 100 Australia INA Natures Edge Development Pty Limited Body Corporate N/A Australia 100 Australia INA Bargara Development Pty Limited Body Corporate N/A Australia 100 Australia INA Beveridge Development Pty Limited Body Corporate N/A Australia 100 Australia INA Ballarat Development Pty Limited Body Corporate N/A Australia 100 Australia INA Development No.3 Pty Limited Body Corporate N/A Australia 100 Australia INA Lara Development Pty Limited Body Corporate N/A Australia 100 Australia INA Lifestyle Operations Pty Limited Body Corporate Trustee Australia 100 Australia Consolidated Entity Disclosure Statement For the year ended 30 June 2024 | continued (1) Place of incorporation and percentage of share capital held only applicable to Body Corporate entities. (2) The Group consists of three stapled entities (ICH, ICF and ICMT), as such the percentage of share capital held may refer to the percentage of share capital held by any of the stapled entities. (3) Australian income tax laws do not provide a test for determining the tax residency of a trust entity. The country of tax residence disclosed for trusts is based on the residence of the responsible entity or trustee. 119 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Entity Name Entity Type Trustee/ Partnership/ JV Body Corporate country of incorporation(1) Body Corporate % of share capital held(1),(2) Country of tax residence(3) INA Lifestyle Landowner Pty Limited Body Corporate Trustee Australia 100 Australia INA Subsidiary Trust No.4 Trust N/A N/A N/A Australia INA Subsidiary Trust No.5 Trust N/A N/A N/A Australia INA Subsidiary Trust No.6 Trust N/A N/A N/A Australia INA Subsidiary Trust No.7 Trust N/A N/A N/A Australia INA Subsidiary Trust No.8 Trust N/A N/A N/A Australia INA Lifestyle Landowner Trust Trust N/A N/A N/A Australia INA Lifestyle Operations Trust Trust N/A N/A N/A Australia INA Operations Management Trust Trust N/A N/A N/A Australia Emmetlow Pty Ltd Body Corporate Trustee Australia 100 Australia Park Trust Trust N/A N/A N/A Australia Eighth Gate Capital Management Pty Ltd Body Corporate N/A Australia 100 Australia Eighth Gate Pty Ltd Body Corporate Trustee Australia 100 Australia Eighth Gate Capital Management No. 3 Pty Ltd Body Corporate Trustee Australia 100 Australia Eighth Gate Capital Management No. 4 Pty Ltd Body Corporate Trustee Australia 100 Australia Eighth Gate Capital Management No. 5 Pty Ltd Body Corporate Trustee Australia 100 Australia Eighth Gate Capital Management No. 6 Pty Ltd Body Corporate Trustee Australia 100 Australia Eighth Gate Capital Management No. 7 Pty Ltd Body Corporate Trustee Australia 100 Australia Eighth Gate Capital Management No. 8 Pty Ltd Body Corporate Trustee Australia 100 Australia Allswell Communities Pty Ltd Body Corporate N/A Australia 100 Australia IDCF Land Trust No. 1 Trust N/A N/A N/A Australia IDCF Management Company No 1 Pty Ltd Body Corporate Trustee Australia 100 Australia Ingenia Diversified Communities Head Company Pty Limited Body Corporate N/A Australia 100 Australia Ingenia Diversified Communities Trust Trust N/A N/A N/A Australia INA Development No. 6 Pty Ltd Body Corporate N/A Australia 100 Australia INA Millers Glen Development Pty Limited (formerly INA Development No. 7 Pty Ltd) Body Corporate N/A Australia 100 Australia INA Development No. 8 Pty Ltd Body Corporate N/A Australia 100 Australia Consolidated Entity Disclosure Statement For the year ended 30 June 2024 | continued (1) Place of incorporation and percentage of share capital held only applicable to Body Corporate entities. (2) The Group consists of three stapled entities (ICH, ICF and ICMT), as such the percentage of share capital held may refer to the percentage of share capital held by any of the stapled entities. (3) Australian income tax laws do not provide a test for determining the tax residency of a trust entity. The country of tax residence disclosed for trusts is based on the residence of the responsible entity or trustee. 120 Entity Name Entity Type Trustee/ Partnership/ JV Body Corporate country of incorporation(1) Body Corporate % of share capital held(1),(2) Country of tax residence(3) INA Development No. 9 Pty Ltd Body Corporate N/A Australia 100 Australia INA Operations Trust No.12 Trust N/A N/A N/A Australia INA Operations Trust No.13 Trust N/A N/A N/A Australia INA Rochedale Development Pty Ltd Body Corporate N/A Australia 100 Australia INA Coomera Development Pty Ltd Body Corporate N/A Australia 100 Australia INA Toowoomba Development Pty Ltd Body Corporate N/A Australia 100 Australia Seachange (Land) Pty Ltd Body Corporate Trustee Australia 100 Australia The Seachange (Land) Unit Trust Trust N/A N/A N/A Australia PPV Coomera Land Pty Ltd Body Corporate Trustee Australia 100 Australia PPV Coomera Land Unit Trust Trust N/A N/A N/A Australia PPV Hervey Bay Land Pty Ltd Body Corporate Trustee Australia 100 Australia PPV Hervey Bay Land Unit Trust Trust N/A N/A N/A Australia PPV Inlet Land Pty Ltd Body Corporate Trustee Australia 100 Australia PPV Inlet Land Unit Trust Trust N/A N/A N/A Australia PPV Toowoomba Land Pty Ltd Body Corporate Trustee Australia 100 Australia PPV Toowoomba Land Unit Trust Trust N/A N/A N/A Australia PPV Victoria Point Land Pty Ltd Body Corporate Trustee Australia 100 Australia PPV Victoria Point Land Unit Trust Trust N/A N/A N/A Australia Eighth Gate Federation Village Park Trust Trust N/A N/A N/A Australia Eighth Gate Residences Fund No.6 Trust N/A N/A N/A Australia Residences Fund No. 6 Pty Ltd Body Corporate N/A Australia 100 Australia Ingenia Holiday Parks Company No. 1 Pty Limited Body Corporate N/A Australia 100 Australia Ingenia Holiday Parks Trust No.1 Trust N/A N/A N/A Australia INA Development No. 10 Pty Ltd Body Corporate N/A Australia 100 Australia INA Development No. 11 Pty Ltd Body Corporate N/A Australia 100 Australia INA Development No. 12 Pty Ltd Body Corporate N/A Australia 100 Australia Ingenia Communities Employee Security Trust(4) Trust N/A N/A N/A Australia Consolidated Entity Disclosure Statement For the year ended 30 June 2024 | continued (1) Place of incorporation and percentage of share capital held only applicable to Body Corporate entities. (2) The Group consists of three stapled entities (ICH, ICF and ICMT), as such the percentage of share capital held may refer to the percentage of share capital held by any of the stapled entities. (3) Australian income tax laws do not provide a test for determining the tax residency of a trust entity. The country of tax residence disclosed for trusts is based on the residence of the responsible entity or trustee. (4) The Ingenia Communities Employee Security Trust (“EST”) was established to meet the Groups obligations for its employee security schemes. The Trustee is an external entity which is neither owned nor controlled by the Group. 121 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW In accordance with a resolution of the directors of Ingenia Communities Holdings Limited, I state that: 1. In the opinion of the directors: a) The financial statements and notes of Ingenia Communities Holdings Limited for the financial year ended 30 June 2024 are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of its financial position as at 30 June 2024 and of its performance for the year ended on that date; and (ii) complying with Accounting Standards (including Australian Accounting Interpretations) and Corporations Regulations 2001; and b) The financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 1(b). c) the consolidated entity disclosure statement required by section 295(3A) of the Corporations Act 2001 is true and correct. d) there are reasonable grounds to believe that Ingenia Communities Holdings Limited will be able to pay its debts as and when they become due and payable. e) at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed Group identified in Note 32 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee described in Note 32. 2. This declaration has been made after receiving the declarations required to be made to the directors from the Chief Executive Officer and Chief Financial Officer in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2024. On-behalf of the Board Jim Hazel Chairman Adelaide, 20 August 2024 Directors’ Declaration For the year ended 30 June 2024 122 Independent Auditor’s Report For the year ended 30 June 2024 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au Independent auditor’s report to the Members of Ingenia Communities Holdings Limited Report on the audit of the financial report Opinion We have audited the financial report of Ingenia Communities Holdings Limited (the “Company”) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2024, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information, the consolidated entity dis- closure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2024 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial report section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial report. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial report. 123 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Independent Auditor’s Report For the year ended 30 June 2024 | continued A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation 1. Valuation of Investment Property Why significant How our audit addressed the key audit matter As at 30 June 2024 Investment properties (both those recorded as investment properties and those included within equity accounted investments) comprise 90.9% of the Group’s total assets. These assets are carried at fair value, which was assessed by the directors with reference to either external independent valuations or internal valuations based on market conditions existing at reporting date. The Group has three categories of investment properties as disclosed in Note 11 of the financial report. • The Garden Villages portfolio consists of investment properties earning revenue predominantly from longer term rental agreements and the key valuation judgements include capitalisation rates, market and contractual rents and forecast occupancy levels. • The Lifestyle portfolio consists of investment properties earning revenue from a mix of longer-term land rental agreements and short-term accommodation rental. • The Tourism portfolio consists of ‘Holidays and Mixed Use’ investment properties earning revenue from short-term residential and tourism rentals. The valuation of investment properties is inherently subjective given that there are alternative assumptions and valuation methods that may result in a range of values. The key judgements in the valuations include assumptions related to the long and short-term rental income, capitalisation rates, discount rates, market and contractual rents, forecast short-term and residential occupancy levels, historical transactions and remaining development potential for vacant land. In assessing the development potential, additional key judgements include future new homes sales prices, estimated capital expenditure and allocation of costs between investment property and inventory, discount rates, projected property growth rates and operating profit margins. Accordingly, the valuation of investment properties was considered a key audit matter. Our audit procedures included the following: • Assessed the Group’s controls in place relevant to the valuation process; • Evaluated the suitability of the valuation methodology used across the portfolio and tested on a sample basis the valuation reports for mathematical accuracy; • Assessed the qualifications, competence and objectivity of the independent valuation experts used by the Group; • Assessed the Group’s internal valuation methodology and tested the mathematical accuracy of the valuation models. We also assessed the competence, qualifications and objectivity of the internal valuer; • On a sample basis, we compared the property related data used as input for both the external and internal valuations against actual and budgeted property performance; • On a sample basis, we assessed the key inputs and assumptions used in the valuations by comparing this information to external market data; • Our real estate valuation specialists reviewed a sample of internal and independent valuations to assess whether the key judgements and methodology used were reasonable. • Assessed the appropriateness of the allocation of capital expenditure between investment property and inventory assets. We also assessed the adequacy and appropriateness of the disclosures included in the Notes to the financial report. 2. Goodwill impairment testing Why significant How our audit addressed the key audit matter As at 30 June 2024, the Group’s consolidated balance sheet includes goodwill with a carrying value of $4.7 million, representing 0.2% of total assets. As disclosed in Note13 of the financial report, the Group have assessed goodwill for impairment at 30 June 2024. As a result of this assessment, the Group recorded an impairment loss of $96.6m. The assessment involved a value-in-use model, based upon discounted cash flow forecasts being used to calculate the recoverable amount of each of the Group’s cash generating units (CGUs). The assessment is a judgmental process which requires estimates concerning the forecast future cash flows associated with the CGUs, the discount rates and the growth Our audit procedures included the following: • Assessed the Group’s determination of the CGUs used in the impairment model, based on our understanding of the nature of the Group’s business and the economic environment in which the segments operate. We also considered internal reporting of the Group’s results to assess how earnings and goodwill are monitored and reported; • Evaluated whether the methodology met the requirements of Australian Accounting Standards; • Assessed the mathematical accuracy of the value-in-use cash flow models prepared by the Group to determine recoverable amount; 124 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Why significant How our audit addressed the key audit matter rate of revenue and costs to be applied in determining the value in use or fair value less cost of disposal. The estimates and assumptions relate to future performance, market and economic conditions. Significant assumptions used in the impairment testing referred to above are inherently subjective and in times of economic uncertainty the degree of subjectivity is higher than it might otherwise be. Changes in certain assumptions can lead to significant changes in the recoverable amount of these assets. The disclosures in the financial report provide important information about the assumptions made in the impairment testing and the market conditions at 30 June 2024. Accordingly, we considered the impairment testing of goodwill and related disclosures in the financial report to be a key audit matter. • Assessed the underlying assumptions regarding future cash flows and agreed the forecast used in the models to the Board approved business plans taking into consideration the historical accuracy of the Group’s cash flow forecasting; • Assessed the key assumptions such as the discount rates and growth rates (including terminal growth rates) applied in the models, with reference to external industry and market data and involvement from our valuation specialists; • Performed sensitivity analysis on key assumptions including discount rates, net operating income and development profit forecasts for relevant CGUs; and • We also evaluated the adequacy and appropriateness of the disclosures included in the Notes to the financial report including those made with respect to judgments and estimates. Information other than the financial report and auditor’s report thereon The directors are responsible for the other information. The other information comprises the information included in the Group’s 2024 annual report other than the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not and will not express any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed on the other information obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the financial report The directors of the Company are responsible for the preparation of: ► the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and ► the consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act 2001, and for such internal control as the directors determine is necessary to enable the preparation of: ► the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and ► the consolidated entity disclosure statement that is true and correct and is free of misstatement, whether due to fraud or error. Independent Auditor’s Report For the year ended 30 June 2024 | continued 125 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Independent Auditor’s Report For the year ended 30 June 2024 | continued A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: ► Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. ► Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. ► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. ► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. ► Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. ► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. 126 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated to the directors, we determine those matters that were of most significance in the audit of the financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the audit of the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 58 to 72 of the directors’ report for the year ended 30 June 2024. In our opinion, the Remuneration Report of Ingenia Communities Holdings Limited for the year ended 30 June 2024, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Ernst & Young Yvonne Barnikel Partner Sydney 20 August 2024 Independent Auditor’s Report For the year ended 30 June 2024 | continued 127 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Ingenia Communities Fund & Ingenia Communities Management Trust Annual Report For the year ended 30 June 2024 Contents Directors’ Report...........................................................................................................................................................................................................129 Auditor’s Independence Declaration..................................................................................................................................................................135 Consolidated Statement of Comprehensive Income..................................................................................................................................136 Consolidated Balance Sheet...................................................................................................................................................................................137 Consolidated Cash Flow Statement....................................................................................................................................................................139 Consolidated Statement of Changes in Equity............................................................................................................................................. 140 Notes to the Financial Statements........................................................................................................................................................................141 1. Summary of material accounting policies.............................................................................................................................................141 2. Accounting estimates and judgements.................................................................................................................................................147 3. Segment information......................................................................................................................................................................................149 4. Earnings per unit...............................................................................................................................................................................................153 5. Income tax expense.........................................................................................................................................................................................153 6. Trade and other receivables........................................................................................................................................................................154 7. Inventories............................................................................................................................................................................................................154 8. Assets held for sale..........................................................................................................................................................................................154 9. Investment properties.....................................................................................................................................................................................155 10. Plant and equipment.......................................................................................................................................................................................156 11. Intangibles and Goodwill...............................................................................................................................................................................156 12. Right-of-use assets..........................................................................................................................................................................................157 13. Investment in a joint venture.......................................................................................................................................................................158 14. Other financial assets ....................................................................................................................................................................................159 15. Deferred tax assets and liabilities.............................................................................................................................................................159 16. Trade and other payables............................................................................................................................................................................ 160 17. Borrowings ......................................................................................................................................................................................................... 160 18. Other financial liabilities..................................................................................................................................................................................161 19. Issued units...........................................................................................................................................................................................................161 20. Accumulated losses and retained earnings.........................................................................................................................................162 21. Commitments ....................................................................................................................................................................................................162 22. Contingent liabilities........................................................................................................................................................................................162 23. Capital management.......................................................................................................................................................................................162 24. Financial instruments......................................................................................................................................................................................163 25. Fair value measurement................................................................................................................................................................................167 26. Auditor’s remuneration..................................................................................................................................................................................168 27. Related parties...................................................................................................................................................................................................169 28. Parent entity financial information............................................................................................................................................................171 29. Subsidiaries..........................................................................................................................................................................................................172 30. Notes to the cash flow statements..........................................................................................................................................................174 31. Subsequent events...........................................................................................................................................................................................174 Directors’ Declaration.................................................................................................................................................................................................175 Independent Auditor’s Report...............................................................................................................................................................................176 128 Ingenia Communities Fund (“ICF” or the “Fund”) (ARSN 107 459 576) and Ingenia Communities Management Trust (“ICMT”) (ARSN 122 928 410) (together the “Trusts”) are Australian registered schemes. Ingenia Communities RE Limited (ACN 154 464 990; Australian Financial Services Licence number 415862), the Responsible Entity of the Trusts, is incorporated and domiciled in Australia. The parent company of Ingenia Communities RE Limited (“ICRE” or the “Responsible Entity”) is Ingenia Communities Holdings Limited (“ICH” or the “Company”). The shares of the Company are “stapled” with the units of the Trusts and trade on the Australian Securities Exchange (“ASX”) as one security (ASX Code: INA). The Company and the Trusts along with their subsidiaries are collectively referred to as the Group in this report. The Directors’ Report is a combined Directors’ Report that covers the Trusts for the year ended 30 June 2024 (the “current period”). Directors The Directors of the Responsible Entity at any time during or since the end of the current period were: KMP Position Term Non-Executive Directors (NEDs) Jim Hazel Chairman Full year Robert Morrison Deputy Chairman Full year Pippa Downes Director Full year Sally Evans Director Full year Lisa Scenna Director Appointed, effective 1 May 2024 Shane Gannon Director Appointed, effective 28 June 2024 Simon Shakesheff Director Appointed, effective 28 June 2024 John McLaren Director 1 July 2023 to 2 November 2023 Amanda Heyworth Director 1 July 2023 to 20 June 2024 Gregory Hayes Director Full year (resigned, effective 1 July 2024) Executive Director John Carfi Managing Director Chief Executive Officer Appointed, effective 13 August 2024 Commenced 1 April 2024 Simon Owen Managing Director Chief Executive Officer 1 July 2023 to 21 February 2024 1 July 2023 to 31 March 2024(1) (1) Mr Owen remained in service through to 30 June 2024. Company Secretaries Natalie Kwok (Chief Investment Officer and General Counsel (CIO and GC)) Charisse Nortje Operating and Financial Review ICF and ICMT Overview ICF and ICMT are two of the entities forming part of ICH, which is a triple staple structure traded on the ASX. The Group is an active owner, manager and developer of a diversified portfolio of lifestyle, rental and holiday communities along Australia’s east coast. The Group’s real estate assets at 30 June 2024 were valued at $2.3 billion, comprising 38 lifestyle rental and 33 holiday communities and 19 seniors rental communities (Ingenia Gardens). The Group also manages and has a co-investment in 11 assets through its development joint venture (JV) and funds management platform and provides management and development services to these entities. The Group was first included in the S&P/ASX 200 in December 2019 and had a market capitalisation of approximately $1.9 billion at 30 June 2024. The Group’s aim is to create Australia’s best residential communities and holiday park accommodation, with a strong focus on customer satisfaction. The Board is committed to delivering long-term growth to security holders while providing a supportive community environment for residents and guests and creating communities that have a positive impact on our stakeholders and planet. Directors’ Report For the year ended 30 June 2024 | continued 129 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Directors’ Report For the year ended 30 June 2024 Directors’ Report For the year ended 30 June 2024 | continued CUSTOMER OBSESSED WE BEFORE ME MAKE IT COUNT TODAY AND TOMORROW At Ingenia we build belonging Strategy The Group is positioning for scale and long-term sector leadership while enhancing the operational performance of its investment properties and developing new sustainable communities. The Group’s focus is on accelerating the transition from an aggregator of land and assets to an operationally efficient developer and operator. The Group will continue to refine its operating model and development delivery through business simplification, a focus on efficiency and financial performance, a focus on land lease development as a driver of growth and accessing capital strategic partnerships to release capital from lower growth assets. The immediate business priorities of the Group are: – Continued focus on business simplification through changes in structure to drive productivity and accountability; – Acceleration of the development pipeline in line with customer demand; – Optimisation of returns from development projects, through changes to design and procurement; – Select investment in all age rental and holidays communities to improve returns; – Improve performance of existing communities through maintainable rental growth, active cost management and a focus on customer needs; – Improve resident and guest experience by investing in our systems and processes; – Enhance competitive advantage through recruiting, retaining and developing industry leading talent; – Build on the Group’s sustainability program through environmental, social and governance initiatives which include progressing the construction of three communities targeting a Green Star – Communities rating, delivering emissions reductions and expanding charitable giving; and – Maintain focus on employee, resident and guest health and safety. Portfolio Refinement, Integration and Development Pipeline Expansion The Group is well positioned for further expansion through development with 16 land lease communities currently underway and 4 communities commencing development over FY25. The Group will also look to expand the portfolio where feasible. During the year, in line with a focus on divesting assets and recycling capital into the Group’s development pipeline, the Group divested: – six Ingenia Gardens communities in WA; – one greenfield development site in QLD that was considered surplus to the Group’s needs; – holiday parks in Lake Hume and Broulee, NSW; and – two land parcels adjoining a NSW holiday park. The Group completed the acquisition of sites adjoining it’s Ingenia Lifestyle Plantations (NSW) and Millers Glen (QLD) communities and continues to look for new sites; in December 2023 a leasehold holiday park at Old Bar Beach (NSW) was acquired, complementing the existing network of holiday parks. Directors’ Report For the year ended 30 June 2024 | continued 130 FY24 financial results The twelve months to 30 June 2024 delivered total revenue of $472.3 million, up 20% on the prior year. The Group settled 370 turnkey homes (30 Jun 2023: 318 homes) delivering a gross new home development profit of $89.4 million (30 Jun 2023: $65.5 million). A further 88 homes were settled within the JV (30 Jun 2023: 46 homes), achieving a combined total of 4581 turnkey home settlements during the year (30 Jun 2023: 364 homes). Holidays income grew by 7% to $134.8 million (30 Jun 2023: $126.4 million) mainly due to an increase in tourism rental income which increased by 8% to $105.1 million (30 Jun 2023: $97.3 million). Lifestyle Rental income increased by 13% to $86.5 million (30 Jun 2023: $76.8 million), driven by the growth in residential rental income which grew by 10% to $68.3 million (30 Jun 2023: $62.3 million). Underlying profit of $94.8 million, up $11.7 million on the prior year, is primarily attributable to strong growth in the Lifestyle Development segment and the Joint Venture on account of an increase in home settlements and complemented by continued growth in the Lifestyle Rental and Ingenia Holidays operating segments. These results were partially offset by: a decline in Ingenia Gardens as a consequence of the sale of six communities in Western Australia; increases in the Group’s cost base, including above inflation rate increases to council rates and taxes and utilities; increases in insurance, employment costs, development marketing, investment in IT infrastructure and support; net finance expense; income tax expense, and; costs associated with business restructuring. Statutory profit of $14.0 million was down 78% on the prior year. The statutory result reflects the combination of growth in underlying earnings from the operating segments and fair value movements on investment properties offset by the impairment of goodwill of $96.6 million, relating to the Seachange acquisition in November 2021 and increased deferred income tax expense associated with the fair value gains on investment properties. Operating cash flow for the period was $82.2 million, consistent with the prior year reflecting the growth in cashflows from home settlements and the Lifestyle Rental and Ingenia Holidays operating segments, offset by investment in home inventory ahead of forecast settlements for FY25 and an increase in borrowing costs paid attributable to higher interest rates and additional borrowings. The Group’s net asset value (NAV) of $3.70 per security was down by 2% (30 Jun 2023: $3.77) and net tangible assets per security (NTA) increased 5% to $3.69 (30 Jun 2023: $3.52). Key metrics – Net profit for the year for ICF $88.1 million (30 Jun 2023: $39.0 million) – Net loss for the year for ICMT of $31.9 million (30 Jun 2023: $38.2 million profit) – Full year distributions of 11.3 cents per unit by ICF, nil from ICMT. Segment performance and priorities Capital Partnerships Capital partnerships through co-investment and shared funding enables the Group to leverage the existing business platform, generate fee income and extend the Group’s asset base. Development Joint Venture The JV with Sun Communities (NYSE: SUI) leverages Ingenia’s capability and platform to generate fees and expands its development opportunities via co-investment. Once homes are sold, Ingenia provides operational services to the land lease communities. At completion of development, and following a holding period of not less than 5 years, Ingenia has the right to acquire the communities at market value. As at 30 June 2024, the JV has invested in five projects with four under active development. The JV delivered $59.3 million (30 Jun 2023: $25.8 million) of revenue from the settlement of 88 (30 Jun 2023: 46) new homes at three sites in NSW and QLD. Rental income increased by 65% on prior year to $1.9 million in the current period, as a result of new home settlements. Performance 30 Jun 2024 30 Jun 2023 Change % Greenfield properties (#) 5 5 – Investment carrying value ($m) 76.9 61.8 24% New home settlements (#) 88 46 91% Fee income1 ($m) 0.4 1.1 (64%) Joint venture revenue ($m) 61.1 26.9 127% Joint venture operating profit ($m) 21.4 8.5 152% Share of loss from joint venture2 ($m) (6.0) (4.3) 40% 1 Asset management services and property services to the JV. Prior year fee income inclusive of origination fee. 2 Inclusive of the Groups 50% share of changes in the fair value of investment properties $14.8 million (30 Jun 2023: $7.4 million). Refer to Note 13 for further detail. 1 Excludes 4 (30 June 2023: 10) settlements at Ingenia Lifestyle Coastal Palms, part of the Funds Management business. Directors’ Report For the year ended 30 June 2024 | continued 131 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Strategic priorities The strategic priorities for the JV are to continue to assess greenfield sites in key metro and coastal markets and to develop its significant portfolio of new land lease communities. Funds Management The Group’s funds and asset management business manages five funds that invest in lifestyle and holiday communities situated in NSW and QLD. The Group receives fees for the management and development of the assets and management of the funds. The Group also co-invests into each of the five funds, to increase alignment with fund investors. The investment in the funds generates asset ownership and development revenue streams. 30 Jun 2024 30 Jun 2023 Change % Investment carrying value ($m) 6.4 6.3 2% Fee income ($m) 1.6 1.6 – Distribution income ($m) 0.3 0.5 (40%) Strategic priorities The funds will reach the end of their contracted management terms in FY25. Management will seek to maximise investor returns through the wind up of the funds and asset sale process. Capital management of the Group At 30 June 2024, the Group had debt facilities with a combined limit of $905.0 million (30 Jun 2023: $780.0 million), with a weighted average term to maturity of 3 years, drawn to $695.9 million. The Group was able to take advantage of strong support for the business and increase the debt facilities available to the Group by $125.0 million, increase the tenor of selected facilities and negotiate improvements to selected covenants. During the year, the JV increased its debt facilities and the Group contributed an additional $21.0 million, to fund the development of the four projects currently underway. Interest rate exposure is managed through a combination of fixed rate debt and interest rate derivatives on 46.7% of the drawn debt. The Group’s Loan to Value Ratio (“LVR”) was 32.3% (covenant 55%). Distributions The following distributions were made during or in respect of the year: – On 20 February 2024, the Directors declared an interim distribution of 5.2 cps, amounting to $21.2 million which was paid on 21 March 2024. – On 20 August 2024, the Directors declared a final distribution of 6.1 cps amounting to $24.9 million, to be paid on 19 September 2024. FY25 outlook The Group’s residential communities remain well placed for ongoing expansion with the demand for quality, affordable residential accommodation continuing from an ageing population. Incoming residents are seeking quality community living and affordable rental accommodation in metro, coastal and regional markets which the Group is well placed to deliver. Investment in inventory and new sites will enable us to capitalise on this demand and enables the generation of long-term sustainable rental cash flows. Investing in new rental homes remains a key priority for the Group. Ingenia will continue to grow its Lifestyle Rental business by building out its development pipeline, generating attractive returns, stable, resilient cashflows and increased scale. The strong demand for domestic holiday accommodation is expected to continue with Ingenia to benefit via an extensive portfolio of properties located in attractive holiday destinations. The priority for Ingenia Holidays is to enhance the customer experience by refurbishing existing cabins and investing in new tourism cabins and amenities. The Group’s solid balance sheet and deal flow provides ongoing opportunity for growth. The Group will increase its asset base by accelerating development and select investment in densification to deliver targeted returns. The Group will regularly assess market opportunities and the performance of existing assets, divesting and acquiring assets where superior longer-term returns are available. Ingenia will continue to evolve the Group’s ESG strategies and initiatives to align with the Group’s strategic focus and portfolio growth. Over FY25, key initiatives include refinement of the Group’s emissions reduction strategies to target portfolio specific outcomes, including the delivery of net zero emissions (Scope 1 and 2) for the Group’s operations by 2035, the evolution of reporting and data collection in preparation for additional climate related financial disclosure obligations and finalisation of the Group’s first Reconciliation Action Plan. Directors’ Report For the year ended 30 June 2024 | continued 132 Significant Changes in the State of Affairs Changes in the state of affairs during the current period are set out in the various reports in this Financial report. Refer to Note 9 for investment properties acquired or disposed of during the period and Note 17 for details of debt facility. Events Subsequent to Reporting Date Final FY24 distribution On 20 August 2024, the Directors declared a final distribution of 6.1 cps amounting to $24.9 million, to be paid on 19 September 2024. Likely Developments The Trusts will continue to pursue strategies aimed at the longer term growth of its cash earnings, profitability and market share within the lifestyle, rental and tourism sectors through: – Developing greenfield sites in identified growth corridors and expanding existing lifestyle and rental communities; – Continued transition from an acquirer to an efficient developer and operator in line with the Group strategy; – Ongoing co-investment through the Group’s Joint Venture to fund growth and leverage scale and capability; and – Divesting non-core assets as needed to further support investment in growth and portfolio refinement. Detailed information about operations of the Group is included in the various reports in this financial report. Environmental Regulation The Trusts have policies and procedures in place to ensure that, where operations are subject to any particular and significant environmental regulation under the laws of Australia, those obligations are identified and appropriately addressed. The Directors have determined that there has not been any material breach of those obligations during the financial year. Group Indemnities The Group has purchased various insurance policies to cover a range of risks (subject to specified exclusions) for directors, officers and employees of the Group serving in their respective capacities. Key insurance policies include: directors and officers insurance, professional indemnity insurance and management liability insurance. Indemnification of Auditor To the extent permitted by law, the Company has agreed to indemnify its auditor, Ernst & Young, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Ernst & Young during or since the reporting period. Interests of Directors of the Responsible Entity Securities of the Group held by directors of the Responsible Entity or associates of the directors as at 30 June 2024 were: Issued stapled securities Rights Jim Hazel 439,445 – Robert Morrison 254,528 – Pippa Downes 40,868 – Gregory Hayes 32,000 – Sally Evans 43,882 – Lisa Scenna – Shane Gannon – – Simon Shakesheff – – Directors’ Report For the year ended 30 June 2024 | continued 133 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Other Information Fees paid to the Responsible Entity and its associates, and the number of securities in each Trust held by the Responsible Entity and its associates as at the end of the financial year are set out in Note 27 in the financial report. Auditor’s Independence Declaration A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 135. Non-Audit Services During the year, non-audit services were provided by the Group’s auditor, Ernst & Young. The directors are satisfied that the provision of the non-audit services is compatible with, and did not compromise, the independence for auditors imposed by the Corporations Act 2001 for the following reasons: – the non-audit services were for taxation, regulatory and assurance related work, and none of this work created any conflicts with the auditor’s statutory responsibilities; – the Audit, Risk and Sustainability Committee resolved that the provision of non-audit services during the financial year by Ernst & Young as auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001; – the Board’s own review conducted in conjunction with the Audit, Risk and Sustainability Committee, having regard to the Board policy set out in this Report, concluded that it is satisfied the non-audit services did not impact the integrity and objectivity of the auditors; and – the declaration of independence provided by Ernst & Young, as auditor of ICH. Refer to Note 26 of the financial statements for details on the audit and non-audit fees. Rounding of Amounts The Trusts are of the kind referred to in ASIC Instrument 2016/191, and in accordance with that Class Order, amounts in the financial report and Director’s Report have been rounded to the nearest thousand dollars, unless otherwise stated. Signed in accordance with a resolution of the Directors of the Responsible Entity. Jim Hazel Chairman Adelaide, 20 August 2024 Directors’ Report For the year ended 30 June 2024 | continued 134 EY Building a better working world Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au Auditor's Independence Declaration to the Directors of lngenia Communities RE Limited as Responsible Entity for lngenia Communities Fund and lngenia Communities Management Trust As lead auditor for the audit of the financial report of lngenia Communities Fund and lngenia Communities Management Trust for the financial year ended 30 June 2024, I declare to the best of my knowledge and belief, there have been: a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; b. No contraventions of any applicable code of professional conduct in relation to the audit; and c. No non-audit services provided that contravene any applicable code of professional conduct in relation to the audit. This declaration is in respect of lngenia Communities Fund and the entities it controlled during the financial year and lngenia Communities Management Trust and the entities it controlled during the financial year. Yvonne Barnikel Partner 20 August 2024 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation 135 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Auditor’s Independence Declaration For the year ended 30 June 2024 Consolidated Statement of Comprehensive Income For the year ended 30 June 2024 Note ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Land lease home sales – – 37,625 51,250 Residential rental income – – 101,564 98,279 Tourism rental income – – 108,378 99,896 Annuals rental income – – 11,032 10,647 Other revenue 41,632 40,087 68,580 55,442 Revenue 41,632 40,087 327,179 315,514 Cost of land lease homes sold – – (21,362) (27,284) Employee expenses – – (91,780) (88,116) Property expenses (885) (851) (67,790) (65,176) Administrative expenses (1,610) (1,544) (20,711) (18,979) Operational, marketing and selling expenses – – (22,462) (17,730) Service station expenses – – (9,037) (9,371) Responsible entity fee and expenses (8,993) (8,552) (6,156) (5,386) Depreciation and amortisation expense 10, 11, 12 – – (32,879) (32,162) Operating profit before interest and tax 30,144 29,140 55,002 51,310 Interest income 55,133 36,454 1,843 173 Finance expense (27,105) (18,667) (48,402) (34,049) Operating profit before tax 58,172 46,927 8,443 17,434 Share of joint venture (loss)/profit 13 (1,022) (9,060) 171 195 Net gain/(loss) on change in fair value of: Investment properties 9(b) 33,484 4,807 93,186 45,352 Acquisition transaction costs 9(b) (805) (4,383) (3,385) – Financial liabilities (2,325) (1,108) (677) (1,615) Investments and other financial instruments (3,983) 864 (47) 523 Impairment of goodwill – – (91,815) (4,832) Gain/(loss) on disposal of investment property 4,626 996 68 (3,836) Business combination transaction costs – – – 1,615 Profit before tax 88,147 39,043 5,944 54,836 Income tax expense 5 – – (37,804) (16,616) Net profit/(loss) for the year 88,147 39,043 (31,860) 38,220 Total comprehensive income/(loss) for the year net of income tax 88,147 39,043 (31,860) 38,220 Profit/(loss) attributable to unit holders of: Ingenia Communities Fund 86,017 37,050 – – Ingenia Communities Management Trust 2,130 1,993 (31,860) 38,220 88,147 39,043 (31,860) 38,220 Total comprehensive income/(loss) attributable to unit holders of: Ingenia Communities Fund 86,017 37,050 – – Ingenia Communities Management Trust 2,130 1,993 (31,860) 38,220 88,147 39,043 (31,860) 38,220 Earnings per unit: 30 Jun 2024 Cents 30 Jun 2023 Cents 30 Jun 2024 Cents 30 Jun 2023 Cents Basic earnings per unit 4 21.6 9.6 (7.8) 9.4 Diluted earnings per unit 4 21.4 9.5 (7.8) 9.3 Notes to the Consolidated Financial Statements are included on pages 141 to 174. 136 Consolidated Balance Sheet For the year ended 30 June 2024 Note ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Current assets Cash and cash equivalents 2,726 37,374 10,489 7,163 Trade and other receivables 6 305 1,274 7,914 11,122 Inventories 7 – – 13,907 14,541 Assets held for sale 8 – 11,200 – 12,990 Other financial assets 14 3,726 3,234 – – Total current assets 6,757 53,082 32,310 45,816 Non-current assets Trade and other receivables 6 257 733 144 144 Receivable from related party 27(e) 908,693 741,543 – – Investment properties 9 942,540 930,184 1,205,910 1,026,680 Investment in a joint venture 13 45,635 43,147 276 113 Other financial assets 14 235 4,102 17,136 17,119 Plant and equipment 10 – – 9,801 8,284 Intangibles and goodwill 11 – – 846 93,009 Right-of-use-assets 12 – – 228,409 228,461 Total non-current assets 1,897,360 1,719,709 1,462,522 1,373,810 Total assets 1,904,117 1,772,791 1,494,832 1,419,626 Current liabilities Trade and other payables 16 8,497 8,519 58,070 58,703 Borrowings 17 1,895 1,805 17,382 28,238 Employee liabilities – – 5,535 5,050 Other financial liabilities 18 – – 795 659 Total current liabilities 10,392 10,324 81,782 92,650 Non-current liabilities Payable to related party 27(e) – – 811,545 744,108 Borrowings 17 722,114 635,669 242,275 225,203 Other financial liabilities 18 – – 16,665 16,941 Employee liabilities – – 981 993 Trade and other payables 16 3,635 2,116 – 4,788 Deferred tax liability 15 – – 88,570 50,766 Total non-current liabilities 725,749 637,785 1,160,036 1,042,799 Total liabilities 736,141 648,109 1,241,818 1,135,449 Net assets 1,167,976 1,124,682 253,014 284,177 137 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Note ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Equity Issued units 19(a) 1,473,432 1,473,451 138,800 138,803 (Accumulated losses)/retained earnings 20 (320,861) (362,044) 114,214 146,074 Unit holders interest 1,152,571 1,111,407 253,014 284,877 Non-controlling interest 15,405 13,275 – (700) Total equity 1,167,976 1,124,682 253,014 284,177 Attributable to unit holders of: Ingenia Communities Fund 1,152,571 1,111,407 – (700) Ingenia Communities Management Trust 15,405 13,275 253,014 284,877 1,167,976 1,124,682 253,014 284,177 Notes to the Consolidated Financial Statements are included on pages 141 to 174. Consolidated Balance Sheet For the year ended 30 June 2024 | continued 138 Consolidated Cash Flow Statement For the year ended 30 June 2024 Note ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Cash flows from operating activities Rental and other property income – – 264,537 256,695 Property and other expenses (1,026) (1,470) (198,035) (186,354) Proceeds from sale of land lease homes – – 47,329 56,271 Purchase of land lease homes – – (28,794) (41,618) Proceeds from sale of service station inventory – – 11,662 11,820 Purchase of service station inventory – – (10,026) (10,292) Interest received 329 154 302 173 Borrowing costs paid (33,592) (22,071) (39) (62) Other – – – (19) 30 (34,289) (23,387) 86,936 86,614 Cash flows from investing activities Payments for investment properties (11,143) (43,364) (28,798) (19,525) Additions to investment properties (13,348) (5,184) (47,252) (55,470) Purchase and additions of plant and equipment – – (4,085) (4,355) Proceeds from sale of investment properties 54,263 12,040 20,722 40,473 Net payments for acquisition of Seachange – (16,890) – – Investment in joint venture (3,500) – – – Other 1,503 – 298 – 27,775 (53,398) (59,115) (38,877) Cash flows from financing activities Payments for security issue costs (19) (13) (3) (3) Distributions to unit holders (44,834) (44,834) – – Repayment of related party borrowings (68,602) (8,203) (21,733) (50,591) Proceeds from borrowings 404,750 289,130 – – Repayment of borrowings (318,030) (120,000) – – Payments for debt issue costs (933) (198) – – Payment for derivatives and financial instruments – (1,402) – – Other (466) (813) (2,759) (2,811) (28,134) 113,667 (24,495) (53,405) Net (decrease)/increase in cash and cash equivalents (34,648) 36,882 3,326 (5,668) Cash and cash equivalents at the beginning of the year 37,374 492 7,163 12,831 Cash and cash equivalents at the end of the year 2,726 37,374 10,489 7,163 Notes to the Consolidated Financial Statements are included on pages 141 to 174. 139 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Consolidated Statement of Changes in Equity For the year ended 30 June 2024 Attributable to security holders ICF Note Issued Capital Retained Earnings Total Non- controlling interest Total Equity $’000 $’000 $’000 $’000 $’000 Carrying value 1 Jul 2023 1,473,451 (362,044) 1,111,407 13,275 1,124,682 Net profit – 86,017 86,017 2,130 88,147 Total comprehensive income – 86,017 86,017 2,130 88,147 Transactions with security holders in their capacity as security holders:  Issue of securities 19(a) (19) – (19) – (19)  Payment of distributions to security holders 20 – (44,834) (44,834) – (44,834) Carrying value 30 Jun 2024 1,473,432 (320,861) 1,152,571 15,405 1,167,976 Carrying value 1 Jul 2022 1,473,464 (354,260) 1,119,204 11,282 1,130,486 Net profit – 37,050 37,050 1,993 39,043 Total comprehensive income – 37,050 37,050 1,993 39,043 Transactions with security holders in their capacity as security holders:  Issue of securities 19(a) (13) – (13) – (13)  Payment of distributions to security holders 20 – (44,834) (44,834) – (44,834)  Acquisition of subsidiaries – – – – – Carrying value 30 Jun 2023 1,473,451 (362,044) 1,111,407 13,275 1,124,682 Attributable to security holders ICMT Note Issued Capital Retained Earnings Total Non- controlling interest Total Equity $’000 $’000 $’000 $’000 $’000 Carrying value 1 Jul 2023 138,803 146,074 284,877 (700) 284,177 Net profit – (31,860) (31,860) – (31,860) Total comprehensive income – (31,860) (31,860) – (31,860) Transactions with security holders in their capacity as security holders:  Issue of securities 19(a) (3) – (3) – (3)  Other – – – 700 700 Carrying value 30 Jun 2024 138,800 114,214 253,014 – 253,014 Carrying value 1 Jul 2022 138,806 107,854 246,660 (700) 245,960 Net profit – 38,220 38,220 – 38,220 Total comprehensive income – 38,220 38,220 – 38,220 Transactions with security holders in their capacity as security holders:  Issue of securities 19(a) (3) – (3) – (3) Carrying value 30 Jun 2023 138,803 146,704 284,877 (700) 284,177 Notes to the Consolidated Financial Statements are included on pages 141 to 174. 140 Notes to the Financial Statements For the year ended 30 June 2024 1. Summary of material accounting policies (a) The Trusts Ingenia Communities Fund (“ICF” or the “Fund”) (ARSN 107 459 576) and Ingenia Communities Management Trust (“ICMT”) (ARSN 122 928 410) (together the Trusts) are Australian registered schemes. Ingenia Communities RE Limited (ACN 154 464 990; Australian Financial Services Licence number 415862), the Responsible Entity of the Trusts, is incorporated and domiciled in Australia. The parent company of Ingenia Communities RE Limited is Ingenia Communities Holdings Limited (the Company). The shares of the Company are stapled with the units of the Trusts and trade on the Australian Securities Exchange (“ASX”) effectively as one security. In this report, the Company and the Trusts are referred to collectively as the Group. The stapling structure will cease to operate on the first to occur of: – the Company or either of the Trusts resolving by special resolution in accordance with its constitution to terminate the stapling provisions; or – the commencement of the winding up of the Company or either of the Trusts. The financial report as at and for the year ended 30 June 2024 was authorised for issue by the Directors on 20 August 2024. (b) Basis of preparation The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards, Australian Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001. The financial report complies with Australian Accounting Standards as issued by the AASB and International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. As permitted by Instrument 2015/838, issued by the Australian Securities and Investments Commission, this financial report is a combined financial report that presents the financial statements and accompanying notes of both ICF and ICMT. The financial statements and accompanying notes of the Trusts have been presented within this financial report. The financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars ($’000), unless otherwise stated as permitted by Instrument 2016/191. The financial report is prepared on a historical cost basis, except for investment properties, residents’ loans, derivative financial instruments, other financial assets and other financial liabilities, which are measured at fair value. At 30 June 2024, ICF recorded a net current asset deficiency of $3.6 million. ICF has access to $187.4 million of available undrawn bank facilities. Accordingly, there are reasonable grounds to believe that ICF will be able to pay its debts as and when they become due and payable. As such, the financial report of ICF has been prepared on a going concern basis. At 30 June 2024, ICMT recorded a net current asset deficiency of $49.5 million. This deficiency will be satisfied by the forecast operating cashflows of ICMT, related party transactions and available undrawn debt facilities of the Group. Accordingly, there are reasonable grounds to believe that ICMT will be able to pay its debts as and when they become due and payable; and the financial report of the ICMT has been prepared on a going concern basis. (c) Adoption of new and revised accounting standards In the current period, the Trusts have adopted all the new and revised accounting standards, amendments to accounting standards, and interpretations that are relevant to its operations and effective for the current annual reporting period. New accounting standards and interpretations have been issued or amended but are not yet effective and have not been adopted by the Trusts for the year ended 30 June 2024. The Trusts are in the process of assessing the impact of the following: Summary Application date of standard Application date for Trusts AASB 2020-1 Amendment to Australian Accounting Standards - Classification of Liabilities as Current or Non-current and AASB 2022-6 Amendments to Australian Accounting standards - Non-current Liabilities with Covenants 1 January 2024 1 July 2024 AASB 18 Presentation and Disclosure in Financial Statements 1 January 2027 1 July 2027 141 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW 1. Summary of material accounting policies (continued) (d) Principles of consolidation ICF’s consolidated financial statements comprise ICF and its subsidiaries. ICMT’s consolidated financial statements comprise ICMT and its subsidiaries. Subsidiaries are all those entities (including special purpose entities) whose financial and operating policies are able to be governed by a trust, so as to obtain benefits from their activities. The financial statements of the subsidiaries are prepared for the same reporting period as the parent, using consistent accounting policies. Intercompany balances and transactions, including dividends and unrealised gains and losses from intragroup transactions, have been eliminated. Subsidiaries are consolidated from the date on which the parent obtains control. They are deconsolidated from the date that control ceases. Investments in subsidiaries are carried at cost in the parent’s financial statements. The Company was incorporated on 24 November 2011. In accordance with Accounting Standard AASB 3 Business Combinations, the stapling of the Company and the Trusts was regarded as a business combination. Under AASB 3, the stapling was accounted for as a reverse acquisition with ICF “acquiring” the Company and the Company subsequently being identified as the ongoing parent for preparing consolidated financial reports. Consequently, the consolidated financial statements are a continuation of the financial statements of the Trusts, and include the results of the Company from the date of incorporation. (e) Goodwill Goodwill is initially measured at cost, being the excess of the aggregate consideration transferred and the amount recognised for non-controlling interest over the fair value of net identifiable assets acquired and liabilities assumed. Goodwill is tested annually for impairment, or more frequently if changes in circumstances indicate that it might be impaired. An impairment loss is recognised when the carrying amount of the asset exceeds its recoverable amount, calculated as the higher of fair value less costs of disposal and the value in use. Impairment losses are recognised in the Consolidated Statement of Comprehensive Income. For the purposes of assessing impairment, assets are grouped at the lowest levels for which goodwill is monitored for management purposes and allocated to cash generating units (“CGU”). The assumptions used for determining the recoverable amount of the CGU are based on the expectation for the future, utilising both internal and external sources of data and relevant market trends. (f) Assets held for sale Components of the entity are classified as held for sale if their carrying value will be recovered principally through a sale transaction rather than through continuing use. They are measured at the lower of their carrying value and fair value less costs to sell, except for assets such as investment property, which are carried at fair value. (g) Dividends and distributions A liability for any distribution declared on or before the end of the reporting period is recognised on the balance sheet, in the reporting period to which the distribution pertains. (h) Foreign currency Functional and presentation currencies The functional currency and presentation currency of the Trusts and their subsidiaries, other than foreign subsidiaries, is the Australian dollar. Translation foreign currency transactions Transactions in foreign currency are initially recorded in the functional currency at the exchange rate prevailing at the date of the transaction. Monetary assets denominated in foreign currency are retranslated at the rate of exchange prevailing at the balance date. (i) Leases The Trusts assess at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Trusts applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets which are recognised as an expense on a straight-line basis over the lease term. The Trusts recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets. Right-of-use assets The Trusts recognises right-of-use assets at the commencement date of the lease. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets. Lease liabilities At the commencement date of the lease, the Trusts recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Trusts and payments of penalties for terminating the lease, if the lease term reflects the Trusts exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses in the period in which the event or condition that triggers the payment occurs. Notes to the Financial Statements For the year ended 30 June 2024 | continued 142 1. Summary of material accounting policies (continued) In calculating the present value of lease payments, the Trusts uses the interest rate implicit in the lease. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. The Trusts’ lease liabilities are included in Borrowings (Note 17). Leases for investment property which apply the fair value model are classified as investment property per AASB 140 Investment Properties. (j) Plant and equipment Plant and equipment is stated at cost, net of accumulated depreciation and any accumulated impairment losses. Such cost includes the cost of replacing part of the plant and equipment, and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of property, plant and equipment require replacing at intervals, the Trusts recognises such parts as individual assets with specific useful lives and depreciates them accordingly. Likewise, when a major inspection is performed, the cost is recognised in the carrying value of the plant and equipment as a replacement, if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in profit or loss as incurred. The present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met. (k) Financial assets and liabilities Current and non-current financial assets and liabilities within the scope of AASB 9 Financial Instruments are classified as; fair value through profit or loss; fair value through other comprehensive income; or amortised cost. The Trusts determine the classification of its financial assets and liabilities at initial recognition with the classification depending on the purpose for which the asset or liability was acquired or issued. Financial assets and liabilities are initially recognised at fair value plus directly attributable transaction costs, unless their classification is at fair value through profit or loss. They are subsequently measured at fair value or amortised cost using the effective interest method. The fair value of financial instruments actively traded in organised financial markets are determined by reference to quoted market bid prices at close of business on balance sheet date. For those with no active market, fair values are determined using valuation techniques. Such techniques include: using recent arm’s length market transactions; reference to the current market value of another substantially similar instruments; discounted cash flow analysis; option pricing models; making use of available and supportable market data and keeping judgemental inputs to a minimum. (l) Impairment of non-financial assets Assets other than investment property carried at fair value are tested for impairment whenever events or circumstance changes indicate that the carrying value may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying value exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows that are largely independent of the cash inflows from other assets or groups of assets. Non- financial assets excluding goodwill which have suffered impairment are reviewed for possible reversal of the impairment at each reporting date. (m) Cash and cash equivalents Cash and cash equivalents in the balance sheet and cash flow statements comprise cash at bank, cash in hand, and short-term deposits that are readily convertible to known amounts of cash, and subject to an insignificant risk of changes in value. (n) Trade and other receivables Trade and other receivables are recognised initially at original invoice amount, and subsequently adjusted for ECL. An allowance is recognised by analysing the age of outstanding balances and applying historical default percentages. Historical loss rates are adjusted to reflect current and forward-looking observable data affecting the ability of customers to settle their debts. (o) Inventories The Trusts hold inventory in relation to the acquisition and development of land lease homes, as well as and service station fuel and supplies. Inventories are held at the lower of cost and net realisable value. Costs of inventories comprise all acquisition costs, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Inventory includes work in progress and raw materials used in the production of land lease home units. Net realisable value is determined on the basis of an estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. (p) Derivative financial instruments The Trusts use derivative financial instruments such as interest rate swaps to hedge its risks associated with interest rate fluctuations. Such derivative financial instruments are initially recognised at fair value on the date the contract is entered and are subsequently remeasured to fair value and included in the statement of comprehensive income in the period they arise, including the corresponding tax effect. (q) Investment property Land and buildings have the function of an investment and are regarded as composite assets. In accordance with applicable accounting standards, the buildings, including plant and equipment, are not depreciated. Notes to the Financial Statements For the year ended 30 June 2024 | continued 143 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW 1. Summary of material accounting policies (continued) Investment property includes property under construction, tourism cabins and associated amenities. Investment properties are measured initially at cost, including transaction costs. Subsequently, investment properties are stated at fair value, reflecting market conditions at reporting date. Gains or losses arising from changes in the fair values of investment properties are included in the statement of comprehensive income in the period they arise, including the corresponding tax effect where applicable. Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at measurement date, in the principal market for the asset or liability, or the most advantageous market in its absence. In determining the fair value of assets held for sale recent market offers have been taken into consideration. It is the Trusts’ policy to have all investment properties externally valued at intervals of not more than two years. It is the policy of the Trusts to review the fair value of each investment property every six months, and revalued investment properties to fair value when their carrying value materially differs to their fair values. In determining fair values, the Trusts considers relevant information including the capitalisation of rental streams using market assessed capitalisation rates, expected net cash flows discounted to their present value using market determined risk-adjusted discount rates, and other available market data such as recent comparable transactions. The assessment of fair value of investment properties does not take into account potential capital gains tax assessable. (r) Intangible assets An intangible asset arising from software development expenditure is recognised only when the Trusts can demonstrate: the technical feasibility of completing the intangible asset so that it will be available for use; how the asset will generate future economic benefits; the availability of resources to complete the asset; and the ability to measure reliably the expenditure during its development. Costs capitalised include external direct costs of materials and service, direct payroll, and payroll related costs of employee time spent on projects. Following the initial recognition of expenditure, the asset is carried at cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when the development is complete and the asset is available for use. Amortisation is over the period of expected future benefit. The Trusts policy applied to capitalised development costs is as follows. Software and associated development to capitalised development costs (assets in use) – Useful life: Finite amortisation method using seven years on a straight-line basis; and – Impairment test: Amortisation method reviewed at each financial year end; closing carrying value reviewed annually for indicators of impairment. Subsequent expenditure on intangible assets is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed as incurred. Gains or losses arising from the derecognition of an intangible asset are measured as the difference between the net disposal proceeds, and the carrying value of the asset. They are recognised in profit or loss when the asset is derecognised. Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination are their fair values as at the date of acquisition. Following initial recognition, acquired intangible assets are carried at cost less any accumulated amortisation and impairment losses. (s) Trade and other payables Trade and other payables are carried at amortised cost, and due to their short-term nature, are not discounted. They represent liabilities for goods and services provided to the Trusts prior to the end of the financial year which are unpaid. They are recognised when the Trusts become obliged to make future payments in respect of the purchase of the goods and services. (t) Provisions, including for employee benefits General Provisions are recognised when: the Trusts have a present obligation (legal or constructive) as a result of a past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate can be made of the amount. When the Trusts expect some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of comprehensive income net of any reimbursement. Wages, salaries, annual leave and sick leave Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled wholly within twelve months of the reporting date, are recognised in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled. Expenses for non- accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable. Long service leave The liability for long service leave is recognised and measured as the present value of expected future payments made in respect of services provided by employees, up to the reporting date, using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employees departing, and period of service. Expected future payments are discounted using market yields on high quality corporate bonds at the reporting date, with terms to maturity and currencies that match, as closely as possible, the estimated future cash outflows. Notes to the Financial Statements For the year ended 30 June 2024 | continued 144 1. Summary of material accounting policies (continued) (u) Borrowings Borrowings are initially recorded at the fair value of the consideration received, less directly attributable transaction costs associated with the borrowings. After initial recognition, borrowings are subsequently measured at amortised cost using the effective interest rate method. Under this method, fees, costs, discounts and premiums that are yield related are included as part of the carrying value of the borrowing, and amortised over its expected life. Borrowings are classified as current liabilities, unless the Trusts do not have an unconditional right to defer settlement to more than twelve months after reporting date. Borrowing costs are expensed as incurred, except where they are directly attributable to the acquisition, construction or production of a qualifying asset. When this is the case, they are capitalised as part of the acquisition cost of that asset. (v) Issued equity Issued and paid up securities are recognised at the fair value of the consideration received by the Trusts. Any transaction costs arising on issue of ordinary securities are recognised directly in security holders’ interest as a reduction of the security proceeds received. (w) Revenue Revenue from contracts with customers is recognised when performance obligations have been met and control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The following specific recognition criteria must also be met before revenue is recognised: Rental income Rental income from investment properties is recognised on a straight-line basis over the lease term. Fixed rental increases that do not represent direct compensation for underlying cost increases or capital expenditures are recognised on a straight-line basis until the next market review date. Rent paid in advance is recognised as unearned income. Sale of homes Revenue from the sale of land lease homes is recognised at the point in time when control of the land lease home is transferred to the customer, on settlement of the home. Management and other fee income Revenue from rendering of services is recognised in accordance with performance obligations under the terms and conditions of the service agreements. The Group recognises management and other fee income over time because the customer simultaneously receives and consumes the benefits provided to them. Distribution income Distribution income is recognised when the Trusts right to receive the payment is established. Interest income Interest income is recognised as the interest accrues, using the effective interest rate method. Service station sales Service station sales, food and beverage revenue represents the revenue earned from the provision of products and services to external parties. Sales revenue is only recognised at the point in time when control of the assets is transferred to the customer. (x) Income tax Current income tax Under the current tax legislation, ICF and its subsidiaries are not liable to pay Australian income tax provided that their taxable income (including any assessable capital gains) is fully distributed to security holders each year. Tax allowances for building and fixtures depreciation are distributed to security holders in the form of the tax-deferred component of distributions. ICMT and its subsidiaries are subject to Australian income tax. Current tax assets and liabilities are measured at the amount expected to be recovered from, or paid to, the taxation authorities based on the current period’s taxable income. The tax rates and laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. The subsidiaries that previously held the Trusts’ foreign properties may be subject to corporate income tax and withholding tax in the countries in which they operate. Under current Australian income tax legislation, security holders may be entitled to receive a foreign tax credit for this withholding tax. ICF has entered the Attribution Managed Investment Trust (AMIT) regime. Under current Australian income tax legislation, ICF is not liable for income tax provided it satisfies certain legislative requirements, which were met in the current and previous financial years. Deferred income tax Deferred income tax represents tax (including withholding tax) expected to be payable or recoverable by taxable entities on differences between tax bases of assets and liabilities, and their carrying value for financial reporting purposes. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised through continuing use, or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at reporting date. Deferred tax assets are recognised for deductible temporary differences only if it is probable that future taxable amounts will be available to utilise those temporary differences. Income taxes related to items recognised directly in equity are not recognised against income. Critical accounting estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Trust and that are believed to be reasonable under the circumstances. Notes to the Financial Statements For the year ended 30 June 2024 | continued 145 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW 1. Summary of material accounting policies (continued) Tax consolidation The Company, ICMT, and their respective subsidiaries have formed a tax consolidation group with the Company or ICMT being the head entity. The head and controlled entities in the tax consolidation group continue to account for their own current and deferred tax amounts. Each tax consolidated group has applied a group allocation approach in determining the appropriate amount of current taxes and deferred taxes to allocate to the members therein. In addition to its own current and deferred tax amounts, the head entity of each tax consolidated group also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses, and unused tax credits assumed from entities in their respective tax consolidated group. Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from, or payable to, other entities in the Group. (y) Goods and services tax (“GST”) Revenue, expenses and assets (with the exception of receivables) are recognised net of the amount of GST, to the extent that the GST is recoverable from the taxation authority. Where GST is not recoverable, it is recognised as part of the cost of the acquisition, or as an expense. Receivables and payables are stated inclusive of GST. The net amount of GST recoverable from, or payable to the tax authority, is included in the balance sheet as an asset or liability. Cash flows are included in the cash flow statement on a gross basis. The GST components of cash flows arising from investing and financing activities, which are recoverable from, or payable to, the tax authorities, are classified as operating cash flows. (z) Investment in a joint venture A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. The considerations made in determining significant influence or joint control are similar to those necessary to determine control over subsidiaries. The Trusts’ investment in its joint venture with Sun Communities is accounted for using the equity method. Under the equity method, the investment in a joint venture is initially recognised at cost. The carrying value of the investment is adjusted to recognise changes in the Trusts’ share of net assets of the joint venture since the acquisition date. Goodwill relating to the joint venture is included in the carrying value of the investment and is not tested for impairment separately. The statement of profit or loss reflects the Trusts’ share of the results of operations of the joint venture. Any change in other comprehensive income (“OCI”) of those investees is presented as part of the Trusts’ OCI. In addition, when there has been a change recognised directly in the equity of the joint venture, the Group recognises its share of any changes, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and the joint venture are eliminated to the extent of the interest in the joint venture. The aggregate of the Trusts’ share of profit or loss of a joint venture is shown on the face of the statement of profit or loss outside operating profit and represents profit or loss after tax and non-controlling interests in the subsidiaries of the joint venture. The financial statements of the joint venture are prepared for the same reporting period as the Trusts. When necessary, adjustments are made to bring the accounting policies in line with those of the Trusts. Upon loss of joint control, the Trusts measure and recognise any retained investment at its fair value. Any difference between the carrying value of the joint venture upon loss of significant influence or joint control and the fair value of the retained investment and proceeds from disposal is recognised in profit or loss. (aa) Fair value measurement The Trusts measure financial instruments, such as derivatives, investment properties, certain non-financial assets and non-financial liabilities, at fair value at each balance sheet date. Refer to Note 25. Fair value is the price that would be received to sell an asset, or paid to transfer a liability, in an orderly transaction between market participants at measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability 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 for the asset or liability. The principal or the most advantageous market must be accessible to the Trusts. The fair value of an asset or a liability is measured using the assumptions market participants use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its best use or by selling it to another market participant that would use the asset in its best use. The Trusts use valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. Notes to the Financial Statements For the year ended 30 June 2024 | continued 146 1. Summary of material accounting policies (continued) All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described below, based on the lowest level input that is significant to the fair value measurement as a whole: – Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities. – Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. – Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For assets and liabilities that are recognised in the financial statements on a recurring basis, the Trusts determine whether transfers have occurred between Levels in the hierarchy by reassessing categorisation at the end of the reporting period. This is based on the lowest level input that is significant to the fair value measurement as a whole. The Trusts’ Audit, Risk and Sustainability Committee determines the policies and procedures for both recurring fair value measurement, such as investment properties, and for non-recurring measurement. External valuers are involved for valuation of significant assets, such as properties and significant liabilities. Selection criteria include market knowledge, experience and qualifications; reputation; independence; and whether professional standards are maintained. On a six month basis management presents valuation results to the Audit, Risk and Sustainability Committee as well as the Trusts’ auditors. This includes a review of the major assumptions used in the valuations. For the purpose of fair value disclosures, the Trusts have determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy (see Note 25). (bb) Earnings per share (“EPS”) Basic EPS is calculated as net profit attributable to members of the Trusts’, divided by the weighted average number of ordinary securities, adjusted for any bonus element. Diluted EPS is calculated as net profit attributable to the Trusts, divided by the weighted average number of ordinary securities and dilutive potential ordinary securities, adjusted for any bonus element. (cc) Current versus non-current classification The Trusts present assets and liabilities in the balance sheet based on current/non-current classification. An asset is current when it is: – Expected to be realised, or intended to be sold, or consumed in the normal operating cycle; – Held primarily for the purpose of trading; – Expected to be realised within twelve months after the reporting period; or – Cash or cash equivalents, unless restricted from being exchanged or used to settle a liability for at least twelve months after reporting period. A liability is current when: – It is expected to be settled in the normal operating cycle; – It is held primarily for the purpose of trading; – It is due to be settled within twelve months after the reporting period; or – There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period. All other assets are classified as non-current. The Trusts classify all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities. (dd) Government grants Government grants are recognised where there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense, it is recognised net of the related expense for which it is intended to compensate. There are no unfilled conditions or other contingencies attached to the grants. 2. Accounting estimates and judgements The preparation of financial statements requires the use of certain critical accounting estimates. It also requires the Trusts to exercise judgement in the process of applying its accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed below. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. (a) Critical accounting estimates and assumptions The Trusts makes estimates and assumptions concerning the future. The resulting accounting estimates, by definition, may not equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying value of assets and liabilities within the next financial year are discussed below. i. Valuation of investment property, other financial assets and other financial liabilities The Trusts have investment properties and assets held for sale which together represent the estimated fair value of investment property. Other financial assets represent ICMT’s investment in a number of unlisted property funds. Other financial liabilities relates to a profit share arrangement between ICMT and a third-party which is carried at fair value. Notes to the Financial Statements For the year ended 30 June 2024 | continued 147 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW 2. Accounting estimates and judgements (continued) These carrying value reflect certain assumptions about expected future rentals, rent-free periods, operating costs and appropriate discount and capitalisation rates. The valuation assumption for properties to be developed reflect sales prices for new homes, sales rates, new rental tariffs, estimates of capital expenditure, discount rates and projected property growth rates. The valuation assumptions for deferred management fee villages reflect average length of stay, unit market values, estimates of capital expenditure, contract terms with residents, discount rates and projected property growth rates. In forming these assumptions, the Trusts considered information about current and recent sales activity, current market rents, discount rates and capitalisation rates for properties similar to those owned by the Trusts, as well as independent valuations of the Trusts’ property. ii. Valuation of inventories The Trusts have inventory primarily in the form of land lease homes which it carries at the lower of cost or net realisable value. Estimates of net realisable value are based on the most reliable evidence available at the time of estimation, the amount the inventories are expected to realise, and the estimated costs of completion. Key assumptions require the use of management judgement, and are continually reviewed. iii. Fair value of derivatives The fair value of derivative assets and liabilities is based on assumptions of future events, and involves significant estimates. Given the complex nature of these instruments, and various assumptions that are used in calculating mark-to-market values, the Trusts rely on counterparty valuations for derivative values. The counterparty valuations are usually based on mid-market rates, and calculates using the main variables of the forward market curve, time and volatility. (b) Critical judgements in applying the entity’s accounting policies There were no judgements, apart from those involving estimations, that management has made in the process of applying the entity’s accounting policies that had a significant effect on the amounts recognised in the financial report. Notes to the Financial Statements For the year ended 30 June 2024 | continued 148 3. Segment information (a) Description of segments The Trusts have five reportable operating segments. During the year, a review of the operating segment results was conducted, and it was determined that support costs (People & Culture, Operational Finance, Technology and the costs associated with the Brisbane office) previously allocated to reportable operating segments would be adjusted. Only costs that can be directly attributed to a reportable operating segment are included in the reportable operating segment. Any indirect costs have now been reallocated and included in the Corporate and Other result. Historically, costs were allocated based on a proportion of segment revenue as a percentage of total revenue. There is no impact to Total EBIT. Comparative figures have been updated to be consistent with the current methodology. The Trusts invest predominantly in rental properties located in Australia with five reportable segments: – Lifestyle Development – comprising the development and sale of land lease homes and fees from the management of development and sales in the joint venture; – Lifestyle Rental – comprising long-term accommodation within land lease and all age rental communities; – Ingenia Gardens – seniors rental villages; – Holidays & Mixed Use – comprising tourism and rental accommodation within holiday parks; – Fuel, Food & Beverage Services – consisting of service station and food & beverage operations adjoined to Ingenia Holiday communities. Corporate & Other comprises the Trusts support and corporate office functions including funds and joint venture management. (b) ICF – 2024 Residential Lifestyle Gardens Tourism Other Lifestyle Rental $’000 Ingenia Gardens $’000 Holidays & Mixed Use $’000 Corporate & Other $’000 Total $’000 Segment revenue Rental income 20,273 11,801 8,973 585 41,632 Total revenue 20,273 11,801 8,973 585 41,632 Segment underlying profit Rental income 20,273 11,801 8,973 585 41,632 Property expenses – – (926) (885) (1,811) Administrative expenses – – – (1,610) (1,610) Earnings before interest and tax 20,273 11,801 8,047 (1,910) 38,211 Share of loss of a joint venture (743) Interest income 55,133 Finance expense (27,105) Total underlying profit 65,496 Net gain/(loss) on change in fair value of:  Investment properties 34,410  Acquisition transaction costs (805)  Financial liabilities (2,325)  Investments and other financial instruments (3,983) Share of joint venture loss (279) Gain on disposal of investment properties 4,626 Responsible entity fees (8,993) Profit after tax 88,147 Segment assets 668,529 134,060 178,027 923,501 1,904,117 Assets held for sale – – – – – Total assets 668,529 134,060 178,027 923,501 1,904,117 Notes to the Financial Statements For the year ended 30 June 2024 | continued 149 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW 3. Segment information (continued) (c) ICF – 2023 Residential Lifestyle Gardens Tourism Other Lifestyle Rental $’000 Ingenia Gardens $’000 Holidays & Mixed Use $’000 Corporate & Other $’000 Total $’000 Segment revenue Rental income 18,949 13,116 8,022 – 40,087 Total revenue 18,949 13,116 8,022 – 40,087 Segment underlying profit Rental income 18,949 13,116 8,022 – 40,087 Property expenses – – (828) (853) (1,681) Administrative expenses – – – (1,544) (1,544) Earnings before interest and tax 18,949 13,116 7,194 (2,397) 36,862 Share of loss of a joint venture (1,690) Interest income 36,454 Finance expense (18,667) Total underlying profit 52,959 Net gain/(loss) on change in fair value of:  Investment properties 5,637  Acquisition transaction costs (4,383)  Financial liabilities (1,108)  Investments and other financial instruments 864 Share of joint venture loss (7,370) Gain on disposal of investment properties 996 Responsible entity fees (8,552) Profit after tax 39,043 Segment assets 629,799 168,010 170,386 793,396 1,761,591 Assets held for sale 11,200 – – – 11,200 Total assets 640,999 168,010 170,386 793,396 1,772,791 Notes to the Financial Statements For the year ended 30 June 2024 | continued 150 3. Segment information (continued) (d) ICMT – 2024 Residential Total $’000 Lifestyle Gardens Tourism Other Lifestyle Development $’000 Lifestyle Rental $’000 Ingenia Gardens $’000 Holidays & Mixed Use $’000 Fuel, Food & Beverage Services $’000 Corporate & Other $’000 Segment revenue Land lease home sales 37,625 – – – – – 37,625 Residential rental income – 68,287 21,628 11,649 – – 101,564 Tourism rental income – 3,259 – 105,119 – – 108,378 Annuals rental income – 43 – 10,989 – – 11,032 Other revenue 24,621 14,906 2,044 7,078 19,261 670 68,580 Total revenue 62,246 86,495 23,672 134,835 19,261 670 327,179 Segment underlying profit External segment revenue 62,246 86,495 23,672 134,835 19,261 670 327,179 Cost of land lease homes sold (21,362) – – – – – (21,362) Employee expenses (16,772) (14,564) (5,287) (36,407) (4,209) (14,541) (91,780) Property expenses (1,004) (19,544) (5,171) (28,665) (928) (13,825) (69,137) Administrative expenses (2,118) (3,784) (1,427) (4,851) (145) (8,386) (20,711) Operational, marketing and selling expenses (8,636) (2,975) (167) (6,201) (3,326) (1,157) (22,462) Service station expenses – – – (137) (8,900) – (9,037) Depreciation and amortisation expense (160) (378) (1) (792) (47) (31,501) (32,879) Earnings before interest and tax 12,194 45,250 11,619 57,782 1,706 (68,740) 59,811 Share of profit of a joint venture 171 Interest income 1,843 Finance expense (48,402) Income tax expense (12,545) Total underlying profit 878 Net gain/(loss) on change in fair value of:  Investment properties 93,716  Acquisition transaction costs (3,385)  Financial liabilities 140  Investments and other financial instruments (47) Impairment of goodwill(1) (91,815) Gain on disposal of investment properties 68 Income tax expense (25,259) Responsible entity fees (6,156) Loss after tax (31,860) Segment assets Segment assets 58,381 501,516 4,489 670,124 368 259,954 1,494,832 Assets held for sale – – – – – – – Total assets 58,381 501,516 4,489 670,124 368 259,954 1,494,832 (1) Relates to goodwill impaired at the Rentals CGU ($91.8 million). Refer to Note 11 for further detail. Notes to the Financial Statements For the year ended 30 June 2024 | continued 151 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW 3. Segment information (continued) (e) ICMT – 2023 Residential Total $’000 Lifestyle Gardens Tourism Other Lifestyle Development $’000 Lifestyle Rental $’000 Ingenia Gardens $’000 Holidays & Mixed Use $’000 Fuel, Food & Beverage Services $’000 Corporate & Other $’000 Segment revenue Land lease home sales 51,250 – – – – – 51,250 Residential rental income – 62,263 24,846 11,170 – – 98,279 Tourism rental income – 2,592 – 97,304 – – 99,896 Annuals rental income – 53 – 10,594 – – 10,647 Other revenue 12,767 11,923 2,602 7,283 19,258 1,609 55,442 Total revenue 64,017 76,831 27,448 126,351 19,258 1,609 315,514 Segment underlying profit External segment revenue 64,017 76,831 27,448 126,351 19,258 1,609 315,514 Cost of land lease homes sold (27,284) – – – – – (27,284) Employee expenses (14,535) (13,620) (5,586) (34,869) (4,254) (15,252) (88,116) Property expenses (1,100) (18,285) (6,429) (25,745) (895) (13,736) (66,190) Administrative expenses (624) (3,331) (1,232) (4,378) (134) (9,280) (18,979) Operational, marketing and selling expenses (5,567) (1,457) (863) (5,294) (3,258) (1,291) (17,730) Service station expenses – – – (91) (9,280) – (9,371) Depreciation and amortisation expense (353) (365) (1) (750) (47) (30,646) (32,162) Earnings before interest and tax 14,554 39,773 13,337 55,224 1,390 (68,596) 55,682 Share of profit of a joint venture 195 Interest income 173 Finance expense (34,049) Income tax expense (6,481) Total underlying profit 15,520 Net gain/(loss) on change in fair value of:  Investment properties 45,742  Financial liabilities (991)  Investments and other financial instruments 523 Business combination transaction costs 1,615 Impairment of goodwill (4,832) Loss on disposal of investment properties (3,836) Income tax expense (10,135) Responsible entity fees (5,386) Profit after tax 38,220 Segment assets Segment assets 55,876 516,551 4,340 569,833 317 259,719 1,406,636 Assets held for sale – – – 12,990 – – 12,990 Total assets 55,876 516,551 4,340 582,823 317 259,719 1,419,626 Notes to the Financial Statements For the year ended 30 June 2024 | continued 152 4. Earnings per unit ICF ICMT 30 Jun 2024 30 Jun 2023 30 Jun 2024 30 Jun 2023 Profit/(loss) attributable to security holders ($’000) 88,147 39,043 (31,860) 38,220 Weighted average number of securities outstanding (thousands)  Issued securities (thousands) 407,583 407,583 407,583 407,583  Dilutive securities (thousands)   Long-term incentives 2,516 1,988 2,516 1,988   Short-term incentives 517 421 517 421   Talent Rights Grant 920 441 920 441   Fixed Remuneration Rights 137 89 137 89 Weighted average number of issued and dilutive potential units outstanding (thousands) 411,673 410,522 411,673 410,522 Basic earnings per unit (cents) 21.6 9.6 (7.8) 9.4 Dilutive earnings per unit (cents) 21.4 9.5 (7.8) 9.3 5. Income tax expense ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 (a) Income tax expense Current tax expense – – – 4 Increase in deferred tax liability – – 37,804 16,612 Income tax expense – – 37,804 16,616 (b) Reconciliation between tax expense and pre-tax net profit Profit before income tax (88,147) (39,043) (5,944) (54,836) Less amounts not subject to Australian income tax 88,147 39,043 – – – – (5,944) (54,836) Income tax expense at 30% (30 Jun 2023: 30%) – – 1,784 16,451 Tax effect of amounts that are not deductible/(taxable) in calculating taxable income:  Prior period income tax return true-ups – – 7,236 3,970  Goodwill impairment – – 27,544 1,450  Other – – 1,240 686  Recognition of previously unrecognised tax losses – – – (5,941) Income tax expense – – 37,804 16,616 (c) Tax consolidation Effective from 1 July 2012, ICMT and its Australian domiciled owned subsidiaries formed a tax consolidation group with ICMT being the head entity. Under the tax funding agreement the funding of tax within the tax group is based on taxable income as if that entity was not a member of the tax group. Notes to the Financial Statements For the year ended 30 June 2024 | continued 153 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW 6. Trade and other receivables ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Current Trade receivables – 12 1,386 1,314 Prepayments – – 4,591 4,794 Deposits – – 370 4,106 Other receivables 305 1,262 1,567 908 Total current trade and other receivables 305 1,274 7,914 11,122 Non-current Other receivables 257 733 144 144 Total non-current and other receivables 257 733 144 144 7. Inventories ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Land lease homes  Completed – – 5,500 8,553  Display homes – – 295 749  Under construction – – 7,723 4,927 Fuel, food and beverage – – 389 312 Total inventories – – 13,907 14,541 The land lease home balance includes: – 21 new completed homes (30 Jun 2023: 30) – 1 display homes (30 Jun 2023: 2) – Land lease homes under construction includes 42 partially completed homes at different stages of development (30 Jun 2023: 40). It also includes demolition, site preparation costs buybacks on future development sites and refurbished/renovated/annual homes. 8. Assets held for sale ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Investment properties held for sale:  Broulee, Broulee, NSW – – – 7,698  Lake Hume, Bowna, NSW – – – 5,292  Seachange Hervey Bay, Urangan, QLD – 11,200 – – Total assets held for sale – 11,200 – 12,990 Notes to the Financial Statements For the year ended 30 June 2024 | continued 154 9. Investment properties (a) Summary of carrying value ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Completed properties 812,975 790,491 1,158,803 981,369 Properties under development 129,565 139,693 47,107 45,311 Total carrying value 942,540 930,184 1,205,910 1,026,680 (b) Movements in carrying value ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Carrying value at beginning of the year 930,184 895,037 1,026,680 973,971 Acquisitions 10,805 48,834 27,764 – Expenditure capitalised 7,447 8,120 67,508 62,290 Net gain/(loss) on change in fair value:  Investment properties 33,484 4,807 93,186 45,352  Acquisition transaction costs (805) (4,383) (3,385) – Transfer to assets held for sale – (11,200) – (12,990) Disposals (38,575) (11,031) (5,843) (41,943) Carrying value at the end of the year 942,540 930,184 1,205,910 1,026,680 (c) Description of valuation techniques used and key inputs to valuation of investment properties Capitalisation method Under the capitalisation method, fair value is estimated using assumptions regarding the expectation of future benefits. This method involves estimating a sustainable net operating income profile of a property and applying a capitalisation rate into perpetuity. The capitalisation rate is based on current market evidence. The sustainable net operating income profile of a property takes into account occupancy, rental income and operating expenses. Discounted cash flow method Under the discounted cash flow method, fair value is estimated using assumptions regarding the benefits and liabilities of ownership over the asset’s life including an exit or terminal value. This method involves the projection of a series of cash flows on a real property interest. To this projected cash flow series, a market-derived discount rate is applied to establish the present value of the income stream associated with the asset. The exit yield normally reflects the exit value expected to be achieved upon selling the asset and is a function of the risk-adjusted returns of the asset and expected capitalisation rate. The duration of the cash flows and the specific timing of inflows and outflows are determined by events such as rent reviews, lease renewal and related re-letting, redevelopment or refurbishment as well as the development of new units. The appropriate duration is typically driven by market behaviour that is a characteristic of the class of real property. Periodic cash flow is typically estimated as gross income less vacancy, non-recoverable expenses, collection losses, lease incentives, maintenance cost, agent and commission costs and other operating and management expenses. The series of periodic net underlying cash flows, along with an estimate of the terminal value anticipated at the end of the projection period, is then discounted. Notes to the Financial Statements For the year ended 30 June 2024 | continued 155 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW 10. Plant and equipment ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 (a) Summary of carrying value Plant and equipment – – 14,787 13,405 Less: accumulated depreciation – – (4,986) (5,121) Total plant and equipment – – 9,801 8,284 (b) Movements in carrying value Carrying value at beginning of the year – – 8,284 6,121 Additions – – 4,203 4,400 Disposals – – (488) (440) Depreciation expense – – (2,198) (1,797) Carrying value at end of the year – – 9,801 8,284 11. Intangibles and Goodwill ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 (a) Summary of carrying value Software and development – – 4,767 4,874 Goodwill – – – 91,815 Less: accumulated amortisation – – (3,921) (3,680) Total intangibles and goodwill – – 846 93,009 (b) Movements in carrying value Carrying value at beginning of the year – – 93,009 98,438 Additions – – – – Disposals – – (1) – Impairment – – (91,815) (4,832) Amortisation expense – – (347) (597) Carrying value at end of the year – – 846 93,009 Goodwill is initially measured at cost, being the excess of the aggregate consideration transferred and the amount recognised for non-controlling interest over the fair value of net identifiable assets acquired and liabilities assumed. Goodwill is tested annually for impairment, or more frequently if changes in circumstances indicate that it might be impaired. An impairment loss is recognised when the carrying amount of the asset exceeds its recoverable amount, calculated as the higher of fair value less costs of disposal and the value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which goodwill is monitored for management purposes and allocated to cash generating units (CGU). The assumptions used for determining the recoverable amount of the CGU are based on the expectation for the future, utilising both internal and external sources of data and relevant market trends. Notes to the Financial Statements For the year ended 30 June 2024 | continued 156 11. Intangibles and Goodwill (continued) Rental CGU The recoverable amount of the Lifestyle Rental business has been assessed on a discounted cash flow basis, involving the projection of a series of cash flows to the of the Lifestyle Rental business. As a result of this analysis, the goodwill allocated to the rental CGU was fully impaired at 30 June 2024. There was no further impairment to the underlying assets of the CGU which have a recoverable amount of $546.6 million. The key determinant of the impairment was the higher discount rates applied to the future cash flows. For the year ended 30 June 2024, a discount rate of 10.4% (30 Jun 2023: 7.0%) was deemed appropriate, resulting in the full impairment of the rental CGU goodwill. 12. Right-of-use assets ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 (a) Summary of carrying amounts Plant and equipment – – 1,154 1,154 Land and buildings – – 333,059 304,710 Less: accumulated depreciation – – (105,804) (77,403) Carrying amount at end of the year – – 228,409 228,461 (b) Movements in carrying amount Carrying value at beginning of the year – – 228,461 210,421 Additions – – 30,282 47,808 Depreciation expense – – (30,334) (29,768) Carrying amount at end of the year – – 228,409 228,461 ICF has leased investment properties to ICMT in which it has been classified as operating leases. All leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions. Future minimum rentals receivable under non-cancellable operating leases as at 30 June 2024 are as follows: ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Within one year 22,160 33,400 – – Later than one year but not later than five years 85,830 77,010 – – Later than five years 173,959 173,220 – – Carrying amount at end of the year 281,949 283,630 – – Notes to the Financial Statements For the year ended 30 June 2024 | continued 157 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW 13. Investment in a joint venture Together, ICF and ICMT hold a 50% interest in a joint venture with Sun Communities for the development of greenfield communities. The Trusts’ interest in the Joint Venture is accounted for using the equity method in the consolidated financial statements. The following table illustrates the summarised financial information of the Trusts investment in the joint venture entities: Balance Sheet ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Cash 271 223 241 153 Trade and other receivables 675 560 274 88 Current assets 946 783 515 241 Investment property 93,001 92,487 – – Other non-current assets – – 480 226 Non-current assets 93,001 92,487 480 226 Trade and other payables (1,134) (384) (327) (187) Current liabilities (1,134) (384) (327) (187) Intercompany loans (1,544) (6,593) (117) (55) Non-current liabilities (1,544) (6,593) (117) (55) Net assets/equity 91,269 86,293 551 225 Trusts’ share in equity – 50% 45,635 43,147 276 113 Group’s carrying value in investment 45,635 43,147 276 113 Statement of Comprehensive Income ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Residential rental income – – 2,809 1,202 Other income 451 243 – – Cost of sales – – (545) – Expenses (2,035) (3,721) (1,899) (788) Depreciation – – (38) (27) (Loss)/profit before tax (1,584) (3,478) 327 387 Interest income 98 99 15 3 Net loss on change in fair value of investment property (558) (14,741) – – (Loss)/profit before income tax (2,044) (18,120) 342 390 Income tax expense – – – – Total comprehensive (loss)/income for the year (2,044) (18,120) 342 390 Group’s share of (loss)/profit for the year (1,022) (9,060) 171 195 Notes to the Financial Statements For the year ended 30 June 2024 | continued 158 14. Other financial assets ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Current Derivatives 3,726 3,234 – – Total current 3,726 3,234 – – Non-current Unlisted property funds 235 235 17,136 17,119 Derivatives – 3,867 – – Total non-current 235 4,102 17,136 17,119 Refer to Note 2(a)(i) for valuation assumptions on ICMT’s investment in unlisted property funds. 15. Deferred tax assets and liabilities ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Deferred tax assets Tax losses – – 25,346 24,994 Accruals – – 4,263 3,852 Other – – 3,821 3,575 Deferred tax liabilities DMF receivable – – – (5) Investment properties – – (119,505) (80,923) Other – – (2,495) (2,259) Net deferred tax liabilities – – (88,570) (50,766) Tax effected carried forward tax losses for which no deferred tax asset has been recognised – – 2,544 3,058 The tax effected carried forward tax losses for which no deferred tax asset has been recognised in the current year relates to capital losses of $2.5 million (30 Jun 2023: $3.1 million). The availability of carried forward tax losses to the ICMT tax consolidated group is subject to recoupment rules at the time of recoupment. Further, the rate at which certain of the revenue losses can be utilised is determined by reference to market values at the time of tax consolidation and subsequent events. The carried forward capital losses can only be recouped from future capital gains. The Group offsets tax assets and liabilities, if and only if, it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority. Notes to the Financial Statements For the year ended 30 June 2024 | continued 159 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW 16. Trade and other payables ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Current Trade payables and accruals 7,694 8,184 35,576 37,970 Deposits – – 20,994 18,793 Other unearned income 803 335 1,500 1,940 8,497 8,519 58,070 58,703 Non-current Other 3,635 2,116 – 4,788 17. Borrowings ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Current Lease liabilities – Right-of-use assets – – 15,985 27,149 Lease liabilities – Ground leases 1,895 1,805 1,397 1,089 Total current 1,895 1,805 17,382 28,238 Non-current Bank debt 695,850 609,130 – – Prepaid borrowing costs (2,759) (3,015) – – Lease liabilities – Right-of-use assets – – 216,346 204,864 Lease liabilities – Ground leases 29,023 29,554 25,929 20,339 Total non-current 722,114 635,669 242,275 225,203 The Group’s available facilities as at 30 June 2024 was $905.0 million (30 Jun 2023: $780.0 million). (a) Bank debt As at 30 June 2024, the Group’s debt balance, drawn from the facilities, was $695.9 million (30 Jun 2023: $609.1 million). The carrying value of investment properties and inventories at reporting date pledged as security is $2,178.1 million (30 Jun 2023: $1,912.5 million). Maturity date Amount December 2025 $74.5 million September 2026 $175.4 million January 2027 $200.0 million February 2027 $100.0 million December 2027 $55.0 million February 2028 $75.0 million May 2028 $100.1 million May 2029 $125.0 million (b) Bank guarantees The Group has the ability to utilise its bank facilities to provide bank guarantees, which at 30 June 2024 were $21.7 million (30 Jun 2023: $24.1 million). Notes to the Financial Statements For the year ended 30 June 2024 | continued 160 18. Other financial liabilities ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Current Financial liabilities – – 795 659 Total current – – 795 659 Non-current Financial liabilities – – 16,665 16,941 Total non-current – – 16,665 16,941 Other financial liabilities relate to a profit share arrangement with a third-party which is carried at fair value. 19. Issued units (a) Carrying values ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Balance at beginning of the year 1,473,451 1,473,464 138,803 138,806 Issued during the year:  Dividend Reinvestment Plan (“DRP”) – – – –  Equity raising and distribution costs (19) (13) (3) (3) Balance at end of the year 1,473,432 1,473,451 138,800 138,803 The closing balance is attributable to the security holders of:  Ingenia Communities Fund 1,473,432 1,473,451 – –  Ingenia Communities Management Trust – – 138,800 138,803 1,473,432 1,473,451 138,800 138,803 (b) Number of issued securities ICF ICMT 30 Jun 2024 ‘000 30 Jun 2023 ‘000 30 Jun 2024 ‘000 30 Jun 2023 ‘000 Balance at beginning of the year 407,583 407,583 407,583 407,583 Issued during the year:  Dividend Reinvestment Plan (“DRP”) – – – – Balance at end of the year 407,583 407,583 407,583 407,583 (c) Term of securities All securities are fully paid and rank equally with each other for all purposes. Each security entitles the holder to one vote, in person or by proxy, at a meeting of security holders. Notes to the Financial Statements For the year ended 30 June 2024 | continued 161 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW 20. Accumulated losses and retained earnings ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Balance at beginning of the year (362,044) (354,260) 146,074 107,854 Net profit/(loss) for the year 88,147 39,043 (31,860) 38,220 Distributions (44,834) (44,834) – – Profit of NCI (2,130) (1,993) – – Balance at end of the year (320,861) (362,044) 114,214 146,074 The closing balance is attributable to the security holders of:  Ingenia Communities Fund (325,227) (364,280) – –  Ingenia Communities Management Trust 4,366 2,236 114,214 146,074 (320,861) (362,044) 114,214 146,074 21. Commitments ICF has commitments for capital expenditure on investment properties contracted but not provided for at reporting date of $3.4 million (30 Jun 2023: $0.4 million). ICMT has commitments for capital expenditure on investment properties and inventories contracted but not provided for at reporting date of $10.0 million (30 Jun 2023: $4.8 million). In FY23, Ingenia entered into an arrangement to acquire land adjoining Ingenia Lifestyle Plantations for a purchase price of $18.8 million (inclusive of GST) on or before 30 April 2024. As at 30 June 2024, the acquisition was completed and the adjoining land is held in investment properties (refer Note 9). 22. Contingent liabilities The Trusts have the following contingent liabilities: – ICF has bank guarantees totalling $21.7 million provided for under the $905.0 million bank facility. Bank guarantees primarily relate to the Responsible Entity’s AFSL capital requirements ($10.0 million). – ICMT has guaranteed the drawn facilities, $717.6 million (30 Jun 2023: $633.2 million), of associates of the Responsible Entity. 23. Capital management The capital management of ICF and ICMT is managed at a consolidated Group level (ICH and subsidiaries). The Group aims to meet its strategic objectives, operational needs and maximise returns to security holders through the appropriate use of debt and equity, taking account of the additional financial risks of higher debt levels. In determining the optimal capital structure, the Group takes into account a number of factors, including the views of investors and the market in general, the capital needs of its portfolio, the relative cost of debt versus equity, the execution risk of raising equity or debt, and the additional financial risks of debt including increased volatility of earnings due to exposure to interest rate movements, the refinance risk of maturing debt facilities and the potential for acceleration prior to maturity. In assessing this risk, the Group takes into account the relative stability of its income flows, the predictability of its expenses, its debt maturity profile, the degree of hedging and the overall level of debt as measured by gearing. The actual capital structure at a point in time is the product of a number of factors, many of which are market driven and to various degrees outside of the control of the Group, particularly the impact of revaluations, the availability of new equity and the liquidity in real estate markets. While the Group periodically determines the optimal capital structure, the ability to achieve the optimal structure may be impacted by market conditions and the actual position may often differ from the optimal position. One measure of the Group’s capital position is through the Loan to Value Ratio (LVR) which is a key covenant (less than 55%) under the Group’s common terms deed governing the debt facilities. LVR is calculated as the sum of bank debt, bank guarantees and interest rate swaps, less cash at bank, as a proportion of the investment properties, based on the most recent external valuation, and inventories pledged as security and expressed as a percentage. The Group’s strategy is to maintain an LVR range of 30-40%. As at 30 June 2024, the LVR of 32.3% (30 June 2023: 31.4%). Notes to the Financial Statements For the year ended 30 June 2024 | continued 162 23. Capital management (continued) In addition, the Group monitors Interest Cover Ratio (ICR) as defined under the common terms deed. At 30 June 2024, the Total Interest Cover Ratio was 4.26x (30 Jun 2023: 4.67x) and the Core Interest Cover Ratio was 3.97x (30 Jun 2023: 5.30x). The covenant for total ICR and Core ICR is greater than 2x. 24. Financial instruments (a) Introduction The Trusts’ principal financial instruments comprise receivables, payables, interest bearing liabilities, other financial liabilities, cash and short-term deposits and derivative financial instruments. The main risks arising from the Trusts’ financial instruments are interest rate risk, foreign exchange risk, credit risk and liquidity risk. The Trusts manage the exposure to these risks primarily through the Investments, Derivatives, and Borrowing Policy. The policy sets out various targets aimed at restricting the financial risk taken by the Trusts. Management reviews actual positions of the Trusts against these targets on a regular basis. If the target is not achieved, or the forecast is unlikely to be achieved, a plan of action is, where appropriate, put in place with the aim of meeting the target within an agreed timeframe. Depending on the circumstances of the Trusts at a point in time, it may be that positions outside of the Investments, Derivatives, and Borrowing Policy are accepted and no plan of action is put in place to meet the treasury targets, because, for example, the risks associated with bringing the Trusts into compliance outweigh the benefits. The adequacy of the Investments, Derivatives, and Borrowing Policy in addressing the risks arising from the Trust’s financial instruments is reviewed on a regular basis. While the Trusts aim to meet the Investments, Derivatives, and Borrowing Policy targets, many factors influence the performance, and it is probable that at any one time, not all targets will be met. For example, the Trusts may be unable to negotiate the extension of bank facilities sufficiently ahead of time, so that they fail to achieve their liquidity target. When refinancing loans they may be unable to achieve the desired maturity profile or the desired level of flexibility of financial covenants, because of the cost of such terms or their unavailability. Hedging instruments may not be available, or their cost may outweigh the benefit of risk reduction or they may introduce other risks such as mark to market valuation risk. Changes in market conditions may limit the Trusts ability to raise capital through the issue of units or sale of properties. The main risks arising from ICMT’s financial instruments are interest rate risk, foreign exchange risk, credit risk and liquidity risk. These risks are not separately managed. Management of these risks for the ICF may result in consequential changes for ICMT. (b) Interest rate risk The Trusts’ exposure to the risk of changes in market interest rates arises primarily from its use of borrowings. The main consequence of adverse changes in market interest rates is higher interest costs, reducing the Trust’s profit. In addition, one or more of the Trust’s loan agreements may include minimum interest cover covenants. Higher interest costs resulting from increases in market interest rates may result in these covenants being breached, providing the lender the right to call in the loan or to increase the interest rate applied to the loan. The Trusts manage the risk of changes in market interest rates by maintaining an appropriate mix of fixed and floating rate borrowings. Fixed rate debt is achieved either through fixed rate debt funding or through derivative financial instruments permitted under the Investments, Derivatives, and Borrowing Policy. At 30 June 2024, approximately 11% of the Trust’s borrowings are at a fixed rate (30 June 2023: 12%) with interest rate derivatives in place to provide further rate protection. Consequently, exposure to interest rates on 46.7% of the drawn debt has been managed (30 Jun 2023: 53%). Exposure to changes in market interest rates also arises from financial assets such as cash deposits and loan receivables subject to floating interest rate terms. Changes in market interest rates will also change the fair value of any interest rate hedges. Notes to the Financial Statements For the year ended 30 June 2024 | continued 163 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW 24. Financial instruments (continued) (c) Interest rate risk exposure ICF’s exposure to interest rate risk and the effective interest rates on financial instruments at reporting date were: ICF Fixed interest maturing in: 30 Jun 2024 $’000 Floating interest rate Less than 1 year 1 to 5 Years More than 5 years Total Financial assets Cash at bank 2,726 – – – 2,726 Financial liabilities Bank debt 620,850 – 75,000 695,850 Interest rate derivatives (250,000) 50,000 200,000 – – 30 Jun 2023 $’000 Financial assets Cash at bank 37,374 – – – 37,374 Financial liabilities Bank debt 534,130 – 75,000 609,130 Interest rate derivatives (250,000) – 250,000 – – ICMT’s exposure to interest rate risk and the effective interest rates on financial instruments at reporting date were: ICMT Fixed interest maturing in: 30 Jun 2024 $’000 Floating interest rate Less than 1 year 1 to 5 Years More than 5 years Total Financial assets Cash at bank 10,489 – – – 10,489 30 Jun 2023 $’000 Financial assets Cash at bank 7,163 – – – 7,163 (1) For the purpose of the table above, lease payments for five years are excluded for perpetual leases. Other financial instruments of the Trusts not included in the above tables are non-interest bearing and are therefore not subject to interest rate risk. (d) Interest rate sensitivity analysis The impact of an increase or decrease in average interest rates of 1% (100 basis points) at reporting date, with all other variables held constant, is illustrated in the tables below. This analysis is based on the interest rate risk exposures in existence at balance sheet date. Effect on profit before tax higher/(lower) ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Increase in average interest rates of 100 bps: Variable interest rate bank debt (AUD) (6,209) (5,341) – – Fair value of interest rate derivatives (AUD) 2,674 216 – – Decrease in average interest rates of 100 bps: Variable interest rate bank debt (AUD) 6,209 5,341 – – Fair value of interest rate derivatives (AUD) (2,161) (154) – – Notes to the Financial Statements For the year ended 30 June 2024 | continued 164 24. Financial instruments (continued) (e) Foreign exchange risk The Trusts’ exposure to foreign exchange risk is limited to foreign denominated cash balances. These amounts are unhedged. (f) Net foreign currency exposure The Trusts net foreign currency monetary exposure as at reporting date is shown in the following table. The net foreign currency exposure reported is of foreign currencies held by entities whose functional currency is not the Australian dollar. It excludes assets and liabilities of entities, including equity accounted investments, whose functional currency is not the Australian dollar. Net foreign currency asset ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Net foreign currency exposure:  United States dollars 1,522 1,530 – –  New Zealand dollars – 234 – – The impact of an increase or decrease in average foreign exchange rates of 10% at reporting date, with all other variables held constant, is considered to be limited based on the foreign exchange risk exposures in existence at balance sheet date. The Trusts believe that the reporting date risk exposures are representative of the risk exposure inherent in its financial instruments. (g) Credit risk Credit risk refers to the risk that a counterparty defaults on its contractual obligations resulting in a financial loss to the Trusts. The major credit risk for the Trusts is default by tenants, resulting in a loss of rental income while a replacement tenant is secured and further loss if the rent level agreed with the replacement tenant is below that previously paid by the defaulting tenant. The Trusts’ assess the credit risk of prospective tenants, the credit risk of in-place tenants when acquiring properties and the credit risk of existing tenants renewing upon expiry of their leases. Factors taken into account when assessing credit risk include the financial strength of the prospective tenant and any form of security, for example a rental bond, to be provided. The decision to accept the credit risk associated with leasing space to a particular tenant is balanced against the risk of the potential financial loss of not leasing up vacant space. Rent receivable balances are monitored on an ongoing basis and arrears actively followed up in order to reduce, where possible, the extent of any losses should the tenant subsequently default. The Responsible Entity believes that the Trusts’ receivables that are neither past due nor impaired do not give rise to any significant credit risk. Credit risk also arises from deposits placed with financial institutions and derivatives contracts that may have a positive value to the Trusts. The Trusts’ investment, derivatives, and borrowing policy sets target limits for credit risk exposure with financial institutions and minimum counterparty credit ratings. Counterparty exposure is measured as the aggregate of all obligations of any single legal entity or economic entity to the Trusts, after allowing for appropriate set offs which are legally enforceable. The Trusts’ maximum exposure to credit risk at reporting date in relation to each class of financial instrument is the carrying value as reported in the balance sheet. (h) Liquidity risk The main objective of liquidity risk management is to reduce the risk that the Trusts do not have the resources available to meet their financial obligations and working capital and committed capital expenditure requirements. The Trusts’ investment, derivatives, and borrowing policy sets a target for the level of cash and available undrawn debt facilities to cover future committed expenditure in the next year, loan maturities within the next year and an allowance for unforeseen events such as tenant default. Notes to the Financial Statements For the year ended 30 June 2024 | continued 165 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW 24. Financial instruments (continued) The Trusts may also be exposed to contingent liquidity risk under its term loan facilities, where term loan facilities include covenants which if breached give the lender the right to call in the loan, thereby accelerating a cash flow which otherwise was scheduled for the loan maturity. The Trusts monitor adherence to loan covenants on a regular basis, and the investment, derivatives, and borrowing policy sets targets based on the ability to withstand adverse market movements and remain within loan covenant limits. In addition, the Trusts ensures resilience against breaking its covenants on its primary debt facilities by assessing the following sensitivities: – 10% reduction in value of assets for LVR covenants; and – 2% nominal increase in interest rates combined with a 5% fall in income for ICR covenants. The contractual maturities of the Trusts’ non-derivative financial liabilities at reporting date are reflected in the following table. It shows the undiscounted contractual cash flows required to discharge the liabilities including interest at market rates. ICF Less than 1 year $’000 1 to 5 years $’000 More than 5 years $’000 Total $’000 30 Jun 2024 Trade and other payables 8,497 3,635 – 12,132 Borrowings(1) 40,308 791,619 – 831,927 Ground leases (excluding perpetual lease) 1,926 8,280 29,886 40,092 50,731 803,534 29,886 884,151 30 Jun 2023 Trade and other payables 8,519 2,116 – 10,635 Borrowings(1) 15,435 717,824 – 733,259 Ground leases (excluding perpetual lease) 1,835 7,890 31,631 41,356 25,789 727,830 31,631 785,250 (1) The balances above will not agree to the balance sheet as it includes the implied interest component. ICMT Less than 1 year $’000 1 to 5 years $’000 More than 5 years $’000 Total $’000 30 Jun 2024 Trade and other payables 58,070 – – 58,070 Other financial liabilities 795 16,665 – 17,460 Right-of-use asset leases(1) 22,702 87,223 173,959 283,884 Ground leases (excluding perpetual lease) 1,429 4,879 34,130 40,438 Ground leases (perpetual lease)(2) 420 1,680 – 2,100 83,416 110,447 208,089 401,952 30 Jun 2023 Trade and other payables 58,703 4,788 – 63,491 Other financial liabilities 659 16,941 – 17,600 Right-of-use asset leases(1) 33,649 77,671 173,220 284,540 Ground leases (excluding perpetual lease) 1,114 3,956 25,630 30,700 Ground leases (perpetual lease)(2) 260 1,041 – 1,301 94,385 104,397 198,850 397,632 (1) The balances above will not agree to the balance sheet as it includes the implied interest component. (2) For purpose of the table above, the lease payments are included for five years for the perpetual lease. Notes to the Financial Statements For the year ended 30 June 2024 | continued 166 24. Financial instruments (continued) (i) Other financial instrument risk The Trusts carry residents’ loans at fair value with resulting fair value adjustments recognised in the statement of comprehensive income. The fair value of these loans is dependent on market prices for the related retirement village units. The impact of an increase or decrease in these market prices of 10% at reporting date, with all other variables held constant, is shown in the table below. This analysis is based on the residents’ loans in existence at reporting date. Effect on profit after tax ICF ICMT Higher/(lower) Higher/(lower) 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Increase in market prices of investment properties of 10% – – – (8) Decrease in market prices of investment properties of 10% – – – 8 These effects are largely offset by corresponding changes in the fair value of the Trusts’ investment properties. The effect on unit holders’ interest would have been the same as the effect on profit. 25. Fair value measurement (a) Ingenia Communities Fund The following table provides the fair value measurement hierarchy of Ingenia Communities Fund assets and liabilities: Date of valuation Fair value measurement using: Total i. Assets measured at fair value 30 Jun 2024 Quoted prices in active markets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) Investment properties 30-Jun-24 Note 9 – – 942,540 942,540 Assets held for sale - investment property 30-Jun-24 Note 8 – – – – Other financial assets 30-Jun-24 Note 14 – 3,726 235 3,961 30 Jun 2023 Investment properties 30-Jun-23 Note 9 – – 930,184 930,184 Assets held for sale - investment property 30-Jun-23 Note 8 – – 11,200 11,200 Other financial assets 30-Jun-23 Note 14 – 7,101 235 7,336 There have been no transfers between Level 1 and Level 2 during the year. Notes to the Financial Statements For the year ended 30 June 2024 | continued 167 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW 25. Fair value measurement (continued) (b) Ingenia Communities Management Trust The following table provides the fair value measurement hierarchy of Ingenia Communities Management Trust assets and liabilities: Date of valuation Fair value measurement using: Total i. Assets measured at fair value Quoted prices in active markets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) 30 Jun 2024 Investment properties 30-Jun-24 Note 9 – – 1,205,910 1,205,910 Assets held for sale - investment property 30-Jun-24 Note 8 – – – – Other financial assets 30-Jun-24 Note 14 – – 17,136 17,136 30 Jun 2023 Investment properties 30-Jun-23 Note 9 – – 1,026,680 1,026,680 Assets held for sale - investment property 30-Jun-23 Note 8 – – 12,990 12,990 Other financial assets 30-Jun-23 Note 14 – – 17,119 17,119 Date of valuation Fair value measurement using: Total ii. Liabilities measured at fair value Quoted prices in active markets (Level 1) Significant observable inputs (Level 2) Significant unobservable inputs (Level 3) 30 Jun 2024 Resident loans 30-Jun-24 – – – – Other financial liabilities 30-Jun-24 Note 18 – – 17,460 17,460 30 Jun 2023 Resident loans 30-Jun-23 – – 59 59 Other financial liabilities 30-Jun-23 Note 18 – – 17,600 17,600 There have been no transfers between Level 1 and Level 2 during the year. 26. Auditor’s remuneration ICF ICMT 30 Jun 2024 $ 30 Jun 2023 $ 30 Jun 2024 $ 30 Jun 2023 $ Fees for auditing the statutory financial report 300,766 270,206 300,767 270,206 Fees for assurance services that are required by legislation:  Australian Financial Services Licence 12,938 12,091 12,938 12,091 Fees for other services: Other – – 63,200 – Total fees to Ernst & Young 313,704 282,297 376,905 282,297 Notes to the Financial Statements For the year ended 30 June 2024 | continued 168 27. Related parties (a) Responsible entity The Responsible Entity for both Trusts from 4 June 2012 is Ingenia Communities RE Limited (“ICRE”). ICRE is an Australian domiciled company and is a wholly owned subsidiary of ICH. (b) Fees of the responsible entity and its related parties ICF ICMT 30 Jun 2024 $ 30 Jun 2023 $ 30 Jun 2024 $ 30 Jun 2023 $ Ingenia Communities RE Limited:  Asset management fees 8,993,053 8,552,237 6,156,436 5,386,443 The Responsible Entity is entitled to a fee of 0.5% of total assets. In addition, it is entitled to recover certain expenses. The gross amount accrued and recognised but unpaid at reporting date was: ICF ICMT 30 Jun 2024 $ 30 Jun 2023 $ 30 Jun 2024 $ 30 Jun 2023 $ Current trade payables 2,276,398 2,228,831 1,538,818 1,385,840 The above ICF balances are netted against the receivable from related party balance on the face of the balance sheet. The above ICMT balances are included in the payable to related party balance on the face of the balance sheet, which is shown net of related party receivables. (c) Holdings of the responsible entity and its related parties There were no holdings of the Responsible Entity and its related parties (including managed investment schemes for which a related party is the Responsible Entity) as at 30 June 2024 and 30 June 2023. (d) Joint venture During the year ICMT generated fee income from the joint venture with Sun Communities. ICF ICMT 30 Jun 2024 $ 30 Jun 2023 $ 30 Jun 2024 $ 30 Jun 2023 $ Fee income from joint venture – – 372,403 1,075,800 (e) Other related party transactions ICF has leased its investment property to ICMT. Rental villages have been classified as operating leases. Intercompany loans are subject to a loan deed, amended on and effective from 1 July 2015, encompassing ICH, ICF and ICMT and their respective subsidiaries. The revised deed stipulates that interest is calculated on the intercompany balances between ICH, ICF and ICMT for the preceding month. Interest is charged at a margin of 2.45% on the monthly Australian Bank Bill Swap Reference Rate. Intercompany loan balances are payable in the event of default or on termination date, being 30 June 2025 (or such other date as agreed by the parties in writing). ICMT has entered into development agreements with subsidiaries of ICH to develop land lease communities. These agreements are on arms-length terms and eliminate on consolidation in the Group results. Pursuant to the terms of the agreements, subsidiaries of ICH received a development fee of $9.4 million (30 June 2023: $3.8 million). There are a number of other transactions and balances that occur between the Trusts, which are detailed below: ICF ICMT 30 Jun 2024 $ 30 Jun 2023 $ 30 Jun 2024 $ 30 Jun 2023 $ Operating lease fees received or accrued/(paid or payable) for the year between ICF and ICMT 41,046,804 40,082,693 (41,400,127) (40,409,242) Interest on intercompany loans received or accrued/(paid or payable) between stapled entities 54,804,178 36,299,408 (49,232,100) (33,001,307) Intercompany loan balances between stapled entities 908,692,802 741,543,491 (811,545,457) (744,108,051) Notes to the Financial Statements For the year ended 30 June 2024 | continued 169 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW 27. Related parties (continued) (f) Key management personnel Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director of the Responsible Entity. The names of the directors and KMP of ICRE, and their dates of appointment or resignation if they were not directors for all of the financial year, are: KMP Position Term Non-Executive KMP Jim Hazel Chairman Full year Robert Morrison Deputy Chairman Full year Pippa Downes Director Full year Gregory Hayes Director Full year Sally Evans Director Full year Lisa Scenna Director Appointed, effective 1 May 2024 Shane Gannon Director Appointed, effective 28 June 2024 Simon Shakesheff Director Appointed, effective 28 June 2024 John McLaren Director 1 July 2023 to 2 November 2023 Amanda Heyworth Director 1 July 2023 to 20 June 2024 Executive KMP John Carfi Chief Executive Officer Appointed, effective 1 April 2024 Justin Mitchell Chief Financial Officer Appointed, effective 10 July 2023 Natalie Kwok CIO & General Counsel Full year Simon Owen Chief Executive Officer(1) 1 July 2023 to 31 March 2024 (1) Mr Owen was Managing Director for the period 1 July 2023 to 21 February 2024 and CEO for the period 1 July 2023 to 31 March 2024, with the appointment of the new CEO effective 1 April 2024. Mr Owen remained in service through to 30 June 2024. Mr Owen remained in service through to 30 June 2024. The aggregate compensation paid to Key Management Personnel (“KMP”) of the Group is as follows: 30 Jun 2024 $ 30 Jun 2023 $ Directors fees 1,055,054 980,708 Salaries and other short-term benefits 2,481,877 1,433,780 Short-term incentives (payable in cash) 667,406 413,775 Superannuation benefits 96,804 69,553 Share-based payments 2,175,859 1,549,363 6,477,000 4,447,179 The amounts in the table exclude KMP termination benefits of $2,418,877 (30 Jun 2023: $630,678). Notes to the Financial Statements For the year ended 30 June 2024 | continued 170 27. Related parties (continued) The aggregate Rights of the Group held directly by KMP and other eligible staff are as follows: Issue date Right Type Vesting date Number outstanding 30 Jun 2024 30 Jun 2023 FY17(1) LTIP FY20 1,923 1,923 FY17(1) STIP FY19 2,437 2,437 FY18(1) LTIP FY21 170,367 170,367 FY18(1) STIP FY20 34,300 34,300 FY19(1) LTIP FY22 219,717 219,717 FY19(1) STIP FY21 111,020 111,020 FY20(1) LTIP FY23 113,747 116,326 FY20(1) STIP FY22 111,092 111,092 FY21(1) FRR FY22 7,778 7,778 FY21(1) LTIP FY24 – 332,563 FY21(1) TRG FY23 83,952 83,952 FY21(1) TRG FY24 92,610 121,212 FY21(1) STIP FY23 42,863 42,863 FY22(1) FRR FY22 37,121 37,121 FY22 LTIP FY25 366,149 377,213 FY22 TRG FY25 44,605 44,605 FY22 TRG FY26 47,072 47,072 FY22(1) STIP FY24 117,046 138,240 FY23(1) FRR FY23 56,980 56,980 FY23 LTIP FY26 824,183 915,280 FY23 TRG FY26 71,320 102,062 FY23 TRG FY28 71,320 102,061 FY23 STIP FY25 123,250 – FY24(1) FRR FY24 56,879 – FY24 LTIP FY27 1,086,151 – FY24 TRG FY25 59,249 – FY24 TRG FY26 301,996 – FY24 TRG FY28 301,997 – 4,557,124 3,176,184 (1) Rights are fully vested but not exercised. All other rights are still subject to vesting conditions. 28. Parent entity financial information Summary financial information about the parent of each Trust is: ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Current assets 6,447 37,368 141 362 Total assets 1,772,959 1,700,570 25,338 29,687 Current liabilities (6,642) (6,708) (8,689) (15,303) Total liabilities (699,736) (612,825) (149,853) (96,945) Net assets/(liabilities) 1,073,223 1,087,745 (124,515) (67,258) Security holders’ equity:  Issued securities 1,473,432 1,473,451 138,800 138,803  Accumulated losses (400,209) (385,706) (263,315) (206,061) Total security holders’ equity 1,073,223 1,087,745 (124,515) (67,258) Profit/(loss) from continuing operations 30,330 24,380 (57,254) (32,907) Net profit/(loss) attributable to security holders 30,330 24,380 (57,254) (32,907) Total comprehensive income/(loss) 30,330 24,380 (57,254) (32,907) Notes to the Financial Statements For the year ended 30 June 2024 | continued 171 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW 29. Subsidiaries The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in Note 1(d): Country of residence 30 Jun 2024 % 30 Jun 2023 % Subsidiaries of ICF Bridge Street Trust Australia 100 100 Browns Plains Road Trust Australia 100 100 Casuarina Road Trust Australia 100 100 Edinburgh Drive Trust Australia 100 100 INA Community Living Subsidiary Trust Australia 100 100 INA Kiwi Communities Subsidiary Trust No. 1 Australia 100 100 INA Sunny Trust Australia 100 100 Jefferis Street Trust Australia 100 100 Lovett Street Trust Australia 100 100 Settlers Subsidiary Trust Australia 100 100 SunnyCove Gladstone Unit Trust Australia 100 100 SunnyCove Rockhampton Unit Trust Australia 100 100 Taylor Street (2) Trust Australia 100 100 INA Subsidiary Trust No.1 Australia 100 100 INA Subsidiary Trust No.4 Australia 100 100 INA Subsidiary Trust No.5 Australia 100 100 INA Subsidiary Trust No.6 Australia 100 100 INA Subsidiary Trust No.7 Australia 100 100 INA Subsidiary Trust No.8 Australia 100 100 INA Lifestyle Landowner Trust Australia 100 100 INA Community Living Subsidiary Trust No. 2 Australia 100 100 The Seachange (Land) Unit Trust Australia 100 100 PPV Inlet Land Unit Trust Australia 100 100 PPV Coomera Land Unit Trust Australia 100 100 PPV Toowoomba Land Unit Trust Australia 100 100 PPV Victoria Point Land Unit Trust Australia 100 100 PPV Hervey Bay Land Unit Trust Australia 100 100 Eighth Gate Residences Fund No. 6 Australia 100 100 Eighth Gate Federation Village Park Trust Australia 100 100 INA Community Living LLC USA – 100 Notes to the Financial Statements For the year ended 30 June 2024 | continued 172 Country of residence 30 Jun 2024 % 30 Jun 2023 % Subsidiaries of ICMT Garden Villages Management Trust Australia 100 100 INA Community Living Lynbrook Trust Australia 100 100 Settlers Operations Trust Australia 100 100 INA DMF Management Pty Ltd Australia 100 100 INA Operations Trust No.1 Australia 100 100 INA Operations Trust No.2 Australia 100 100 INA Operations Trust No.3 Australia 100 100 INA Operations Trust No.4 Australia 100 100 INA Operations Trust No.6 Australia 100 100 INA Operations Trust No.7 Australia 100 100 INA Operations Trust No.8 Australia 100 100 INA Operations Trust No.9 Australia 100 100 INA Operations Trust No.10 Australia 100 100 INA Operations Trust No.11 Australia 100 100 Ridge Estate Trust Australia 100 100 INA Subsidiary Trust No.3 Australia 100 100 INA Latitude One Pty Ltd Australia 100 100 INA Soldiers Point Pty Ltd Australia 100 100 INA Lifestyle Operations Trust Australia 100 100 INA Operations Management Trust Australia 100 100 Emmetlow Pty Ltd Australia 100 100 Park Trust Australia 100 100 IDCF Land Trust No.1 Australia 100 100 INA Operations Trust No.12 Australia 100 100 Residences Fund No. 6 Pty Ltd Australia 100 100 Ingenia Diversified Communities Trust Australia 100 100 INA Operations Trust No.13 Australia 100 100 Ingenia Diversified Communities Head Company Pty Limited Australia 100 100 Ingenia Holiday Parks Trust No.1 Australia 100 100 The Trusts’ voting interest in all other subsidiaries is the same as the ownership interest. 29. Subsidiaries (continued) Notes to the Financial Statements For the year ended 30 June 2024 | continued 173 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW 30. Notes to the cash flow statements Reconciliation of profit to net cash flows from operations: ICF ICMT 30 Jun 2024 $’000 30 Jun 2023 $’000 30 Jun 2024 $’000 30 Jun 2023 $’000 Net profit/(loss) for the year 88,147 39,043 (31,860) 38,220 Adjustments for: Share of joint venture loss/(profit) 1,022 9,060 (171) (195) Impairment of goodwill – – 91,815 4,832 Net (gain)/loss on change in fair value of:  Investment properties (33,484) (4,807) (93,186) (45,352)  Acquisition transaction costs 805 4,383 3,385 –  Financial liabilities 2,325 1,108 677 1,615  Investments and other financial instruments 3,983 (864) 47 (523) Income tax expense – – 37,804 16,616 (Gain)/loss on disposal of investment properties (4,626) (996) (68) 3,836 Business combination transaction costs – – – (1,615) Operating profit before tax 58,172 46,927 8,443 17,434 Depreciation and amortisation expense – – 32,879 32,162 Net Finance costs (61,291) (39,704) 263 111 Operating cash flow before changes in working capital (3,119) 7,223 41,585 49,707 Changes in working capital:  Decrease/(increase) in receivables 1,445 15 3,208 (4,812)  Decrease/(increase) in inventory – – 634 (9,728)  Increase/(decrease) in other payables and provisions 1,497 3,372 (5,421) (24,139)  (Decrease)/increase in loans to related parties (34,112) (33,997) 46,930 75,586 Net cash provided by operating activities (34,289) (23,387) 86,936 86,614 31. Subsequent events Final FY24 distribution On 20 August 2024, the Directors declared a final distribution of 6.1 cps amounting to $24.9 million, to be paid on 19 September 2024. Notes to the Financial Statements For the year ended 30 June 2024 | continued 174 Directors’ Declaration For the year ended 30 June 2024 In accordance with a resolution of the directors of Ingenia Communities Fund and of Ingenia Communities Management Trust, I state that: 1. In the opinion of the directors: (a) the financial statements and notes of Ingenia Communities Fund and of Ingenia Communities Management Trust for the financial year ended 30 June 2024 are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of each Trust’s financial position as at 30 June 2024 and of their performance for the year ended on that date; and (ii) complying with Accounting Standards and Corporations Regulations 2001; and (b) The financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 1(b). (c) there are reasonable grounds to believe that Ingenia Communities Fund and Ingenia Communities Management Trust will be able to pay their debts as and when they become due and payable. 2. This declaration has been made after receiving the declarations required to be made to the directors from the Chief Executive Officer and Chief Financial Officer in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2024. On behalf of the Board Jim Hazel Chairman Adelaide, 20 August 2024 175 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Independent Auditor’s Report For the year ended 30 June 2024 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au Independent auditor’s report to the unitholders of Ingenia Communities Fund Report on the audit of the financial report Opinion We have audited the financial report of Ingenia Communities Fund (the “Trust”) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2024, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2024 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial report section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial report. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial report. 176 Independent Auditor’s Report For the year ended 30 June 2024 | continued A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation 1. Valuation of Investment Properties Why significant How our audit addressed the key audit matter As at 30 June 2024 Investment properties (both those recorded as investment properties and those included within equity accounted investments) totalled $943 million and comprise 49.5% of the Group’s total assets. These assets are carried at fair value, which was assessed by the directors with reference to either external independent valuations or internal valuations based on market conditions existing at reporting date. The Group has three categories of investment properties as disclosed in Note 9 of the financial report. • The Garden Villages portfolio consists of investment properties earning revenue predominantly from longer term rental agreements and the key valuation judgements include capitalisation rates, market and contractual rents and forecast occupancy levels. • The Lifestyle portfolio consists of investment properties earning revenue from a mix of longer-term land rental agreements and short-term accommodation rental. Lifestyle home sales. • The Tourism portfolio consists of ‘Holidays and Mixed Use’ investment properties earning revenue from short-term residential and tourism rentals. The valuation of investment properties is inherently subjective given that there are alternative assumptions and valuation methods that may result in a range of values. The key judgements in the valuations include assumptions related to the long and short-term rental income, capitalisation rates, discount rates, market and contractual rents, forecast short-term and residential occupancy levels, historical transactions and remaining development potential for vacant land. In assessing the development potential, additional key judgements include future new homes sales prices, estimated capital expenditure and allocation of costs between investment property and inventory, discount rates, projected property growth rates and operating profit margins. Accordingly, the valuation of investment properties was considered a key audit matter. Our audit procedures included the following: • Assessed the controls in place relevant to the valuation process; • Evaluated the suitability of the valuation methodology used across the portfolio and tested the valuation reports for mathematical accuracy on a sample basis; • Assessed the qualifications, competence and objectivity of the independent valuation experts used by the Group; • Assessed the Group’s internal valuation methodology and tested the mathematical accuracy of the valuation models. We also assessed the competence, qualifications and objectivity of the internal valuer; • On a sample basis, we compared the property related data used as input for both the external and internal valuations against actual and budgeted property performance; • On a sample basis, we considered the key inputs and assumptions used in the valuations by comparing this information to external market data; • Our real estate valuation specialists reviewed a sample of internal and independent valuations to determine whether the key judgements and methodology used were reasonable. • Assessed the appropriateness of the allocation of capital expenditure between investment property and inventory assets. Information other than the financial report and auditor’s report thereon The directors are responsible for the other information. The other information comprises the information included in the Group’s 2024 annual report other than the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not and will not express any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. 177 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Independent Auditor’s Report For the year ended 30 June 2024 | continued A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation If, based on the work we have performed on the other information obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the financial report The directors of the Company are responsible for the preparation of: ► the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of: ► the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view and is free from material misstatement, whether due to fraud or error.. In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: ► Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. ► Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. ► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. ► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in 178 Independent Auditor’s Report For the year ended 30 June 2024 | continued A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. ► Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. ► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated to the directors, we determine those matters that were of most significance in the audit of the financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Ernst & Young Yvonne Barnikel Partner Sydney 20 August 2024 179 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Independent Auditor’s Report For the year ended 30 June 2024 | continued A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au Independent auditor’s report to the unitholders of Ingenia Communities Management Trust Report on the audit of the financial report Opinion We have audited the financial report of Ingenia Communities Management Trust (the “Trust”) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2024, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information, and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2024 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial report section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial report. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial report. 180 Independent Auditor’s Report For the year ended 30 June 2024 | continued A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation 1. Valuation of Investment Property Why significant How our audit addressed the key audit matter As at 30 June 2024 Investment properties (both those recorded as investment properties and those included within equity accounted investments) totalled $1,206 million and comprise 80.7% of the Group’s total assets. These assets are carried at fair value, which was assessed by the directors with reference to either external independent valuations or internal valuations based on market conditions existing at reporting date. The Group has three categories of investment properties as disclosed in Note 9 of the financial report. • The Garden Villages portfolio consists of investment properties earning revenue predominantly from longer term rental agreements and the key valuation judgements include capitalisation rates, market and contractual rents and forecast occupancy levels. • The Lifestyle portfolio consists of investment properties earning revenue from a mix of longer-term land rental agreements and short-term accommodation rental. In addition, the Group earns revenue from the sale of manufactured homes to residents of the properties. • The Tourism portfolio consists of ‘Holidays and Mixed Use’ investment properties earning revenue from short-term residential and tourism rentals. The valuation of investment properties is inherently subjective given that there are alternative assumptions and valuation methods that may result in a range of values. The key judgements in the valuations include assumptions related to the long and short-term rental income, capitalisation rates, discount rates, market and contractual rents, forecast short-term and residential occupancy levels, historical transactions and remaining development potential for vacant land. In assessing the development potential, additional key judgements include future new homes sales prices, estimated capital expenditure and allocation of costs between investment property and inventory, discount rates, projected property growth rates and operating profit margins. Accordingly, the valuation of investment properties was considered a key audit matter. Our audit procedures included the following: • Assessed the Group’s controls in place relevant to the valuation process; • Evaluated the suitability of the valuation methodology used across the portfolio and tested the valuation reports for mathematical accuracy on a sample basis; • Assessed the qualification, competence and objectivity of the independent valuation experts used by the Group; • Assessed the Group’s internal valuation methodology and tested the mathematical accuracy of the valuation models. We also assessed the competence, qualifications and objectivity of the internal valuer; • On a sample basis, we compared the property related data used as input for both the external and internal valuations against actual and budgeted property performance; • On a sample basis, we considered the key inputs and assumptions used in the valuations by comparing this information to external market data; • Our real estate valuation specialists reviewed a sample of internal and independent valuations to determine whether the key judgements and methodology used were reasonable; and • Assessed the appropriateness of the allocation of capital expenditure between investment property and inventory assets. 2. Goodwill impairment testing Why significant How our audit addressed the key audit matter As at 30 June 2024, the Group’s consolidated balance sheet includes goodwill with a carrying value of nil, representing 0.0% of total assets. As disclosed in Note 11 of the financial report, the Group have assessed goodwill for impairment at 30 June 2024. As a result of this assessment, the Group recorded an impairment loss of $91.8m. The assessment involved a value-in-use model, based upon discounted cash flow forecasts being used to calculate the recoverable amount of each of the Group’s of cash generating units (CGUs). Our audit procedures included the following: • Assessed the Group’s determination of the CGUs used in the impairment model, based on our understanding of the nature of the Group’s business and the economic environment in which the segments operate. We also considered internal reporting of the Group’s results to assess how earnings and goodwill are monitored and reported; • Evaluated whether the methodology met the requirements of Australian Accounting Standards; 181 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Independent Auditor’s Report For the year ended 30 June 2024 | continued A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Why significant How our audit addressed the key audit matter The assessment is a judgmental process which requires estimates concerning the forecast future cash flows associated with the CGUs, the discount rates and the growth rate of revenue and costs to be applied in determining the value in use or fair value less cost of disposal. The estimates and assumptions relate to future performance, market and economic conditions. Significant assumptions used in the impairment testing referred to above are inherently subjective and in times of economic uncertainty the degree of subjectivity is higher than it might otherwise be. Changes in certain assumptions can lead to significant changes in the recoverable amount of these assets. The disclosures in the financial report provide important information about the assumptions made in the impairment testing and the market conditions at 30 June 2024. Accordingly, we considered the impairment testing of goodwill and related disclosures in the financial report to be a key audit matter. • Assessed the mathematical accuracy of the value in use cash flow models prepared by the Group to determine recoverable amount; • Assessed the underlying assumptions regarding future cash flows and agreed the forecast used in the models to the Board approved business plans taking into consideration the historical accuracy of the Group’s cash flow forecasting; • Assessed the key assumptions such as the discount rates and growth rates (including terminal growth rates) applied in the models, with reference to external industry and market data and involvement from our valuation specialists; • Performed sensitivity analysis on key assumptions including discount rates, net operating income and development profit forecasts for relevant CGUs; and • Evaluated the adequacy of the related disclosures in the financial report including those made with respect to judgments and estimates. Information other than the financial report and auditor’s report thereon The directors are responsible for the other information. The other information comprises the information included in the Group’s 2024 annual report other than the financial report and our auditor’s report thereon. We obtained the directors’ report that is to be included in the annual report, prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the annual report after the date of this auditor’s report. Our opinion on the financial report does not cover the other information and we do not and will not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed on the other information obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the financial report The directors of the Company are responsible for the preparation of: ► the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of: ► the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and 182 Independent Auditor’s Report For the year ended 30 June 2024 | continued A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: ► Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. ► Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. ► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. ► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. ► Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. ► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. 183 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Independent Auditor’s Report For the year ended 30 June 2024 | continued A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated to the directors, we determine those matters that were of most significance in the audit of the financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Ernst & Young Yvonne Barnikel Partner Sydney 20 August 2024 184 Security Holder Information For the year ended 30 June 2024 Additional information required under ASX Listing Rule 4.10 and not shown elsewhere in this Annual Report is as follows. This information is current as at 30 August 2024. The information set out below applies equally to units in the trusts and shares in the company under the terms of the joint quotation on the Australian Securities Exchange. Twenty Largest Security Holders The twenty largest security holders of quoted equity securities are as follows: Security holder Number of securities held Percentage of issued capital HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 163,305,327 40.07 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 73,136,679 17.94 CITICORP NOMINEES PTY LIMITED 55,513,397 13.62 BUTTONWOOD NOMINEES PTY LTD 25,019,611 6.14 BRAHMAN PURE ALPHA PTE LTD 18,096,469 4.44 HMC CAPITAL PARTNERS HOLDINGS PTY LTD 7,914,504 1.94 BNP PARIBAS NOMINEES PTY LTD 7,814,400 1.92 BNP PARIBAS NOMS PTY LTD 7,808,494 1.92 NATIONAL NOMINEES LIMITED 6,877,731 1.69 CITICORP NOMINEES PTY LIMITED 3,928,292 0.96 BNP PARIBAS NOMS (NZ) LTD 2,979,865 0.73 UBS NOMINEES PTY LTD 2,182,388 0.54 PACIFIC CUSTODIANS PTY LIMITED 1,285,871 0.32 CUSTODIAL SERVICES LIMITED 891,626 0.22 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 882,088 0.22 BNP PARIBAS NOMINEES PTY LTD 849,597 0.21 PACIFIC CUSTODIANS PTY LIMITED 714,178 0.18 BOND STREET CUSTODIANS LIMITED 663,731 0.16 MOORGATE INVESTMENTS PTY LTD 634,522 0.16 BODIAM PROPERTIES PTY LTD 590,431 0.14 Total 381,089,201 93.50 Total Quoted Equity Securities 407,583,264 100.00 Less than marketable parcels of ordinary securities There are 423 security holders with unmarketable parcels totalling 7,414 securities. Distribution of Stapled Security holders The distribution of quoted stapled securities is as follows: Size of holding Number of holders Number of securities Percentage of securities 100,001 and Over 53 387,535,899 95.09 10,001 to 100,000 540 12,857,181 3.15 5,001 to 10,000 453 3,271,193 0.80 1,001 to 5,000 1,293 3,370,542 0.83 1 to 1,000 1,609 548,449 0.13 Total 3,948 407,583,264 100.00 185 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Security Holder Information For the year ended 30 June 2024 | continued Distribution of Long Term Incentive Plan Rights Holders The distribution of unquoted Long Term Incentive Plan Rights is as follows: Size of holding Number of holders Number of securities Percentage of securities 100,001 and Over 7 1,862,586 69.64 10,001 to 100,000 22 771,191 28.83 5,001 to 10,000 3 20,228 0.76 1,001 to 5,000 6 20,541 0.77 1 to 1,000 – – – Total 38 2,674,546 100.00 The Long Term Incentive Plan Rights on issue are unquoted and issued under the Ingenia Rights Plan. Distribution of Short Term Incentive Plan Rights Holders The distribution of unquoted Short Term Incentive Plan Rights is as follows: Size of holding Number of holders Number of securities Percentage of securities 100,001 and Over 1 416,084 76.77 10,001 to 100,000 2 125,924 23.23 5,001 to 10,000 – – – 1,001 to 5,000 – – – 1 to 1,000 – – – Total 3 542,008 100.00 The Short Term Incentive Plan Rights on issue are unquoted and issued under the Ingenia Rights Plan. Distribution of Talent Rights Grant Holders The distribution of unquoted Talent Rights is as follows: Size of holding Number of holders Number of securities Percentage of securities 100,001 and Over 2 347,364 36.64 10,001 to 100,000 14 591,915 62.43 5,001 to 10,000 1 8,775 0.93 1,001 to 5,000 – – – 1 to 1,000 – – – Total 17 948,054 100.00 The Talent Rights on issue are unquoted and issued under the Ingenia Rights Plan. Distribution of Fixed Remuneration Rights Holders The distribution of unquoted Fixed Remuneration Rights is as follows: Size of holding Number of holders Number of securities Percentage of securities 100,001 and Over 1 156,894 98.83 10,001 to 100,000 – – – 5,001 to 10,000 – – – 1,001 to 5,000 1 1,864 1.17 1 to 1,000 – – – Total 2 158,758 100.00 The Fixed Remuneration Rights on issue are unquoted and issued under the Ingenia Rights Plan. 186 Additional Information Security Holder Information For the year ended 30 June 2024 | continued Unquoted Equity Securities The Company had the following unquoted securities on issue as at 30 August 2024. 38 holders of Long Term Incentive rights issued as part of an incentive scheme 2,674,546 3 holders of Short Term Incentive rights issued as part of an incentive scheme 542,008 17 holders of Talent Rights issued as part of an incentive scheme 948,054 2 holders of Fixed Remuneration Rights issued as part of Total Fixed Remuneration package 158,758 Substantial Security holders The names of the Substantial Security holders pursuant to notices released to the ASX as at 30 August 2024: Security holder Number of securities Percentage of issued capital The Vanguard Group Inc 25,007,362 9.233 BlackRock Group 27,202,251 6.670 Cohen & Steers Inc 31,521,945 7.734 State Street 24,576,395 6.030 First Sentier 20,425,175 5.010 Mitsubishi UFJ Financial Group, Inc 20,425,175 5.010 CPPIB 24,958,113 6.120 Macquarie Group Limited 35,764,216 8.770 HMC Capital Group 32,617,158 8.000 Restricted Securities There are no restricted securities on issue as at 30 August 2024. Voting In accordance with the Constitution each member present at a meeting whether in person, or by proxy, or by power of attorney, or in a duly authorised representative in the case of a corporate member, shall have one vote on a show of hands, and one vote for each fully paid stapled security, on a poll. Holders of Long Term Incentive Plan Rights, Short Term Incentive Plan Rights, Talent Rights and Fixed Remuneration Rights have no voting rights. On-Market Buyback There is no current on-market buy-back in relation to the Group’s securities. 187 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Investor Relations For the year ended 30 June 2024 Enquiries relating to Ingenia Communities Group (ASX code: INA) can be directed to the Link Market Services Investor Information line on 1300 554 474 (or from outside Australia +61 1300 554 474). This service is available from 8:30am to 5:30pm (Sydney time) on all business days. Link Market Services can assist with: – Change of address details – Requests to receive communications online – Provision of tax file numbers – Changes to payment instructions – General enquiries about your security holding. www.ingeniacommunities.com.au Ingenia Communities’ corporate website provides investors with extensive information about the Group. You can visit the website to find: information on Ingenia and its property portfolios; virtual briefings and events; the latest financial information; reports; announcements; sustainability; and corporate governance information. Security holders can access their investment details, including holding balance and payment history, from the link to the Registry which is contained on the site. Distribution Payments Distribution payments are made twice a year, for the six months ending 30 June and the six months ending 31 December. Distributions are declared and paid in Australian dollars. The table below details distribution payments for the 2023/2024 financial year. A history of distribution payments made since 2005 is available from the Group’s website www.ingeniacommunities.com.au. Period Ended Date Paid Total Amount June 2024 19 September 2024 $0.061 December 2023 21 March 2024 $0.052 * Information on the tax components of distributions can be found on the Ingenia Communities Group website. AMMA Statements AMMA Statements, which summarise payments made during the year and include information required to complete an Australian tax return, are dispatched each September. Details of past distributions and relevant tax information are available on the Group’s website. Annual General Meeting The Annual General Meeting will be held on 14 November 2024. The Group will hold a physical meeting and information on how to attend and vote at the meeting will be provided to all investors in conjunction with the Notice of Meeting. 2024/2025 Security Holder Calendar 19 September 2024 Final FY24 distribution paid 19 September 2024 AMMA Statement dispatched 14 November 2024 Annual General Meeting February 2025 1H25 Result announced March 2025 Interim FY25 distribution paid Privacy Policy Ingenia Communities Group is committed to ensuring the confidentiality and security of your personal information. The Group’s Privacy Policy, detailing our handling of personal information, is available online at: www.ingeniacommunities.com.au. If you have any questions or concerns as to how Ingenia deals with your personal information please contact the Privacy Officer at privacy@ingeniacommunities.com.au. Complaints Any security holder wishing to register a complaint should direct it to Investor Relations in the first instance, at the Responsible Entity’s address listed in this Report or via telephone on 1300 132 946. Ingenia Communities RE Limited is a member of an independent dispute resolution scheme, the Australian Financial Complaints Authority (AFCA). If a security holder feels that a complaint remains unresolved or wishes it to be investigated further, AFCA can be contacted as detailed below: By telephone: 1800 931 678 Website: www.afca.org.au Corporate Governance Statement The Corporate Governance Statement was approved by the Board of Directors on 16 September 2024 and can be found at: ingeniacommunities.com.au/investor-centre/corporate-governance/ 188 Additional Information Corporate Directory For the year ended 30 June 2024 Ingenia Communities Group Ingenia Communities Group Ingenia Communities Holdings Limited ACN 154 444 925 Ingenia Communities Management Trust ARSN 122 928 410 Ingenia Communities Fund ARSN 107 459 576 Responsible Entity Ingenia Communities RE Limited ACN 154 464 990 (AFSL 415862) Registered Office Level 3, 88 Cumberland Street, The Rocks, NSW 2000 Telephone: 1300 132 946 Email: investor@ingeniacommunities.com.au Website: www.ingeniacommunities.com.au Directors of Ingenia Communities Group (as at 30 August 2024) J Hazel (Chairman) R Morrison (Deputy Chairman) P Downes S Evans S Gannon (Chair-elect) L Scenna S Shakesheff J Carfi (Managing Director) Secretaries (as at 30 August 2024) C Nortje N Kwok Security Registry Link Market Services Limited Level 12, 680 George Street Sydney NSW 2000 Locked Bag A14 Sydney South NSW 1235 Telephone: 1300 554 474 (local call cost) or from outside Australia: +61 1300 554 474 Facsimile: +61 2 9287 0303 Email: registrars@linkmarketservices.com.au Auditors Ernst & Young Level 34, 200 George Street Sydney NSW 2000 Stock Exchange Quotation Ingenia Communities Group is listed on the Australian Securities Exchange under ASX listing code: INA. 189 BOARD OF DIRECTORS DIRECTORS’ REPORT REMUNERATION REPORT FINANCIAL STATEMENTS SUSTAINABILITY YEAR IN REVIEW Disclaimer This report was prepared by Ingenia Communities Holdings Limited (ACN 154 444 925) and Ingenia Communities RE Limited (ACN 154 464 990) as responsible entity for Ingenia Communities Fund (ARSN 107 459 576) and Ingenia Communities Management Trust (ARSN 122 928 410) (together Ingenia Communities Group, INA or the Group). Information contained in this report is current as at 30 June 2024 unless otherwise stated. This report is provided for information purposes only and has been prepared without taking account of any particular reader’s financial situation, objectives or needs. Nothing contained in this report constitutes investment, legal, tax or other advice. Accordingly, readers should, before acting on any information in this report, consider its appropriateness, having regard to their objectives, financial situation and needs, and seek the assistance of their financial or other licensed professional adviser before making any investment decision. This report does not constitute an offer, invitation, solicitation or recommendation with respect to the subscription for, purchase or sale of any security, nor does it form the basis of any contract or commitment. www.ingeniacommunities.com.au Ingenia Communities Group Level 3, 88 Cumberland St, The Rocks NSW 2000 T. 1300 132 946 E. investor@ingeniacommunities.com.au

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