Better
experiences
come from
within.
AN N UAL R EP O R T 2022
Kiwis have a desire for better.
Our ambition at Oceania is to change the preconceived idea of getting ‘old’.
We’re reimagining retirement living and aged care for the better through
our human centred approach, designing spaces and experiences with
residents at the heart – driven by a desire to do better for our residents,
our team and our investors.
This desire is personal.
A committed desire from within our business for a better resident experience.
Kiwis have a desire for better.
It’s in our DNA.
CONTENTS
Letter from the Chair
Trading highlights
At a glance
Our timeline
Letter from the CEO
Change of balance date
COVID-19 leadership
02
06
08
10
14
18
20
How we create value
Board of Directors
Three year summary
Consolidated
Financial statements
Corporate governance
22
30
34
35
98
A N N U A L R E P O R T 2 0 2 2
LETTER FROM THE CHAIR
Results from
the heart.
I am pleased to present our Annual Report
for the year ended 31 March 2022.
Oceania has remained focused on providing a safe environment
for its people to live and work in and has continued to demonstrate
resilience and strength in its business model despite the demands of
the pandemic and macro environment. These factors have contributed
to a solid financial result for the year ended 31 March 2022.
Financial Performance
Last year Oceania changed its
balance date from 31 May to 31 March.
This Annual Report represents the first
full 12 month period under the new
balance date and has a comparative
reporting period of the 10 month
period to 31 March 2021.
Unaudited Underlying EBITDA of
$76.2m for the year ended 31 March
2022 was 16% higher than the prior
corresponding period of $65.6m.
This was largely as a result of strong
sales and resales despite the COVID
lockdowns and the increased premium
charges from previous developments
in the form of growing deferred
management fees.
Oceania’s total assets increased to
$2.2b as at 31 March 2022, compared
with $1.9b as at 31 March 2021.
This material increase is due to the
addition of the Waterford and Franklin
transactions in the period coupled with
growth in asset value on first time sales
of development sites.
For the year ended 31 March 2022,
operating cashflow was $105.5m,
compared to $96.0m for the 10 months
to 31 March 2021, reflecting strong
first time sales and resales during
the period.
Throughout the year, Oceania has
further strengthened its balance sheet
to ensure that it is fit for future growth,
0 2
with the issue of a second retail bond
and the refinance and increase in
its banking facilities. Building on the
successful inaugural issue of Oceania’s
$125m retail bond in October 2020,
Oceania issued a second retail bond
of $100m in September 2021. This
second retail bond was again heavily
oversubscribed and strengthens
Oceania’s position to support
future growth.
On 9 May 2022, Oceania announced
that it had entered into an amended
Facilities Agreement which provides
for an increase in facility size from
$350m to $500m and an extension
of maturity date to mid 2027. The
increased facilities will be used to
accelerate Oceania’s development
pipeline and are pivotal to Oceania’s
growth strategy moving forward.
As at 31 March 2022, Oceania had
current drawn down debt and bonds
of $379.8m and $9.7m of cash,
representing $204.9m of undrawn
net debt headroom.
On 9 May 2022, Oceania announced
that it had entered into conditional
agreements to purchase Remuera
Rise (Newmarket, Auckland) and
Bream Bay Village (Northland) for
approximately $57m. Remuera Rise
comprises 58 apartments and 12
care beds, while Bream Bay Village
currently comprises 75 villas, with
an additional eight villas under
construction and development
potential for an additional 124 villas.
This acquisition was undertaken
following exclusive negotiations with
the vendors and will deliver Oceania
an existing vertical village in the
heart of Newmarket, Auckland, with
significant embedded value, as well as
a recently developed village in Bream
Bay and a development opportunity in
the form of a neighbouring parcel of
land. The agreements are conditional
Better experiencesOCEANIA Strategy
With the current macro environment
and market context presenting
challenges for all businesses,
including Oceania, Oceania has
been reassessing its strategy and its
approach going forward. Oceania
has developed four key strategic
pillars – offer, resident experience,
people capability and growth – and
is working towards achieving specific
goals for each of these pillars.
With the completion and selldown of
many of its key developments in recent
years, Oceania is now moving beyond
its brownfield development pipeline
opportunities. The next cycle for
Oceania is in both the execution
of acquisitions of premium properties
as demonstrated by the recent
acquisitions of Remuera Rise and
Bream Bay Village together with
a greenfield development strategy.
The acquisition of premium properties
can deliver strong accretion to
underlying earnings per share.
A greenfield development strategy
is attractive to Oceania as it
In the coming years, Oceania will be seeking
to leverage its established operating platform
and accelerate its development pipeline,
by pursuing a range of both organic and
inorganic growth opportunities.
Elizabeth Coutts – Chair
upon Statutory Supervisor, Ministry
of Health and DHB consent and it is
expected that completion will occur
by July 2022.
Oceania is reviewing its current
portfolio of sites and its development
pipeline to create increased
optionality, which in turn will ensure
optimal capital allocation and the
recycling of cash within the business.
We will update the market on the
outcome of this review in due course.
The Directors have declared a final
dividend of 2.3 cents per share, taking
full year dividends (non-imputed) to
4.4 cents per share, which represents
53.9% of Underlying Net Profit After
Tax. This reflects strong trading and
operating cashflow throughout the
period. A dividend reinvestment plan
for our New Zealand and Australian
shareholders will apply to this dividend,
which is payable on 21 June 2022. This
provides a cost effective and convenient
way for our shareholders to increase
their investment in Oceania without
any brokerage fees, by reinvesting all
or part of any dividend paid on their
shares in additional Oceania shares
instead of receiving that distribution
in cash.
provides greater flexibility to stage
developments, product can be brought
to market more quickly and presales
will be easier to achieve. Oceania has
been investigating greenfield land
acquisitions in key population growth
areas of New Zealand. Any such
acquisitions must be on-strategy
and deliver sustainable value
to shareholders.
In the year ended 31 March 2022,
Oceania completed the acquisition
of 7.9 hectares of land at Franklin.
The development at Franklin represents
a transition to a full service, fully
integrated village including a range
of on-site amenity and community
facilities on a greenfield site.
As part of the greenfield development
strategy, there will be a reweighting
towards the construction of
0 3
come from within. independent living villas, rather than
apartments or care rooms. Our
experience in delivering units to market
has demonstrated that while the end
product itself is important, all product
delivered to our residents needs to be
designed, constructed and finished
in such a way as to enhance resident
experience. Initial work on the design
and staging of the development at
Franklin is being undertaken with an
enhanced resident experience in mind.
Oceania’s differentiating factor
has been its commitment to care.
Oceania is continuing to deliver
clinical excellence and explore new
initiatives in care to maximise resident
experience and the quality of care
provided to our residents.
In order to deliver quality care and
services to its residents, Oceania is
focused on attracting and retaining
the best people. Oceania is committed
to fostering and developing people
capabilities across Oceania.
In the coming years, Oceania will be
seeking to leverage its established
operating platform and accelerate its
development pipeline, by pursuing a
range of both organic and inorganic
growth opportunities.
Governance
We welcomed Rob Hamilton and Peter
Dufaur to the Board in September
2021. Rob and Peter bring extensive
experience in the capital markets,
finance and property development
sectors respectively and have made a
significant contribution since joining
the Board, particularly in relation to
the refinance and the acquisition of
Remuera Rise and Bream Bay Village.
Patrick McCawe resigned from the
Board with effect from 16 February
2022 and we thank him for his
contribution over the last five years,
in particular his work on Oceania’s
retail bonds and the capital raise in
recent years.
The updated materiality matrix set out
in this Annual Report forms the pillars
of our strategy and key performance
indicators for success.
As foreshadowed at the Annual
Shareholders Meeting in June 2021,
the Board has undertaken a review
of Director fees. A resolution to
authorise an increase in Directors’
fees will be put to shareholders at
the Annual Shareholders Meeting
on 23 June 2022. It is important to
note that fees paid to each Director
have not changed since Oceania’s
listing in 2017 and the workload has
increased significantly since that
time. The additional work undertaken
by Directors since 2017 has provided
Oceania with a strong platform for
growth. Looking forward, Directors’
workload is expected to continue to
increase with more legislative and
regulatory changes being proposed
and stakeholders’ expectations
increasing to consider and monitor
a broader range of non-financial
measures. It is also necessary to set
fees at a sufficient level to attract
directors with the necessary skills and
experience. Further information on the
resolution to authorise an increase in
Directors’ fees will be included in the
forthcoming Notice of Meeting.
Sustainability
We have also made significant
progress with our ESG initiatives
and reporting over the last six months.
With the changes in the macro
environment over the last two years,
we have updated the materiality
matrix, setting out what matters
most to our stakeholders, being our
residents and their families, our people
and local communities, our investors
and funders, our suppliers, industry
bodies and the Government.
Work is well underway on Oceania’s
sustainable finance framework,
including the development of key
performance indicators, and this will
be finalised in the coming months.
Oceania is also in the process
of developing its climate related
disclosures against the standards
based on the TCFD framework and this
will be available on Oceania’s website
later in the year.
Looking Ahead
In the five years since Oceania’s
listing on NZX and ASX, Oceania has
made tremendous progress having
completed a number of key brownfield
developments and has demonstrated
clinical excellence in the delivery
of care to its residents. As we look
beyond the COVID-19 lockdowns of
2020-2021, we are looking forward
to executing on Oceania’s strategic
priorities and developments in order to
deliver performance and growth.
On behalf of the Board, I would like
to thank the Directors and our team
of dedicated staff for their continued
hard work and effort during what has
been another demanding year.
Yours sincerely
Elizabeth Coutts
Chair
0 4
Better experiencesOCEANIAANNUAL REPORT 2022 come from within.
2 births, 19 deaths and
countless interventions that
saved lives...
Gary – Ex Volunteer Fire Chief and
St John's paramedic
Resident
opening
story.
Building
connections.
350-450 words
As you enter Gary and wife
Shirley’s apartment, there's a
plaque on the wall that says,
“Retirement is when you stop
living at work and begin to
work at living.”
Gary’s embracing that mantra at
The BayView and enjoying life within
the village.
A softly spoken, modest man with
kind blue eyes and a firm handshake,
Gary's a giver who understands the
value of community. Throughout his
life he’s given back more than most
and has always been connected to
the heart of his community. He knows
exactly what it means to be an active
community member.
In his home town of Piopio, he not only
owned the Four Square supermarket
where he was proprietor for 47 years,
(he sold the shop in 1998), but for 18
years was Volunteer Fire Chief and a
paramedic with St John's Ambulance
at the same time. As he puts it,
he attended “2 births, 19 deaths and
countless interventions that saved
lives. Typically, he gives the credit for
allowing him to do this to his family,
who helped run the Four Square.
“I like to get involved,” says Gary.
When he retired, he and Shirley moved
to Waihi Beach and Gary started
“working at living” in earnest. As he
puts it “the work just started then!”
He extensively remodelled the house
and built a substantial home with
room for all the family. He also built a
6-metre boat to take the family fishing.
His ‘man shed’ was a hive of activity,
“I’ve always enjoyed having a project,”
he says.
And of course, giving back to the
voluntary community continued too,
he got involved with building the Waihi
Beach RSA, putting in bar tops and
seating areas.
Now as a resident at The BayView
nothing has changed; Gary is finding
other ways to give back, and his story
continues… (page 113)
0 5
Better experiences
TRADING HIGHLIGHTS 12 months to 31 March 2022
A better experience
is the bottom line.
Financial 12 month period to 31 March 2022
Total assets
as at 31 March 2022
Underlying Earnings Before Interest,
Tax, Depreciation and Amortisation
12 months to 31 March 2022
$2.2bn $76.2m
16.6%
higher than 31 March 2021
total assets of $1.9bn
16.2%
ahead of 12 months to 31 March 2021
proforma underlying earnings before
interest, tax, depreciation and
amortisation of $65.6m
Reported Total
Comprehensive Income
12 months to 31 March 2022
Operating Cash Flow
12 months to 31 March 2022
$114.4m
compared to 10 months
to 31 March 2021 reported
total comprehensive
income of $167.9m
$105.5m
compared to 10 months
to 31 March 2021 reported
operating cash flow
of $96.0m
0 60 6
Better experiencesOCEANIAANNUAL REPORT 2022 come from within.
T R A D I N G H I G H LI G H T S
Operational 12 month period to 31 March 2022
Total sales
450
92
New units
118
Resale units
3.7%
ahead of total sales for the
comparative 12 month period
to 31 March 2021 of 434
174
New care
suites
66
Resale care
suites
Developments 12 month period to 31 March 2022
Consents
secured
Under
construction
Completed
80
Units + care suites
Resource consents
received during
FY2022:
– Waterford
(Hobsonville, Auckland)
– Woodlands (Motueka)
– St Johns Wood (Taupō)
171
Units + care suites
Units and care suites
completed in FY2022
at:
– Eden (Mt Eden,
Auckland)
– Gracelands Stage 3
(Hastings)
– Stoke (Nelson)
– The BayView Stage 2b
(Tauranga)
– Awatere Stage 2
(Hamilton)
550
Units + care suites
Units and care suites
under construction as
at 31 March 2022:
– Lady Allum Stage 1
(Milford, Auckland)
– The Helier
(St Heliers, Auckland)
– Redwood (Blenheim)
– The Bellevue Stage 2
(Christchurch)
– Elmwood Stage 1
(Manurewa, Auckland)
– Woodlands (Motueka)
– The BayView Stage 3
(Tauranga)
– Awatere Stage 3
(Hamilton)
To complete
in FY2023
300
Units + care suites
Units and care suites
expected to complete
in FY2023:
– Lady Allum Stage 1
(Milford, Auckland)
– The Helier
(St Heliers, Auckland)
– The Bellevue Stage 2
(Christchurch)
– Woodlands (Motueka)
– St Johns Wood (Taupō)
– Stoke (Nelson)
0707
come from within. Better experiences
AT A GLANCE
The belief in better.
In our quest to reimagine the aged care and
retirement living experience we constantly
challenge ourselves to deliver better. We have
committed to a future development delivery of
over 300 units per annum, underpinned by our
current development pipeline of over 1,957 new
residences of which 71.3% is already consented.
Staff
Residents
2,900
4,000
Care beds and care suites
Units
2,579
1,625
0 8
0 8
OCEANIAANNUAL REPORT 2022 come from within.
AT A G L A N C E
Existing sites with
mature operations
25
Existing sites
with brownfield
developments
(current and planned)
20
Undeveloped sites
1
Total sites
46
As at 31 March 2022
We drove up and loved
the location and the view.
Then we met Trudi, and
she was great. We bought
off the plans, and you
know, it couldn’t be nicer.
Shirley – The BayView resident
0 9
0 9
Better experiences
OUR TIMELINE
Celebrating our 5th
Listing Anniversary.
In the five years since Oceania listed on the NZX and
ASX a journey of performance and growth has seen a
significant number of proof points.
Appointment of
Sally Evans and
Greg Tomlinson
as Directors
Acquisition of
Waimarie Street
properties
OCA listed on
NZX and ASX on
5 May 2017
8
1
0
2
h
c
r
a
M
7
1
0
2
y
a
M
1 0
Completion of
new care centre
at The BayView,
Tauranga
(comprising
81 care suites)
8
1
0
2
r
e
b
o
t
c
O
Sale of five sites to
Heritage Lifecare
Sale of 95m
shares by Oceania
Healthcare
Holdings Limited
8
1
0
2
r
e
b
m
e
t
p
e
S
OCEANIAANNUAL REPORT 2022
come from within.
O U R T I M E L I N E
OCA joined
the NZX50 on
3 May 2019
Completion of
new care centre at
Awatere, Hamilton
(comprising 90
care suites)
Completion of The
Sands (comprising
63 apartments and
44 care suites)
Completion
of Green
Gables, Nelson
(28 apartments,
61 care suites)
Completion of
Meadowbank Stage
Five (26 apartments)
– the last stage of
independent living
apartments to be
constructed at
Meadowbank
Sale of 251m
shares by Oceania
Healthcare
Holdings Limited
Inaugural $125m
retail bond offer
9
1
0
2
y
a
M
0
2
0
2
y
r
a
u
n
a
J
0
2
0
2
y
a
M
0
2
0
2
r
e
b
m
e
t
p
e
S
11
Better experiences
OUR TIMELINE cont.
Appointment of Brent
Pattison as Chief
Executive Officer
Completion of
The Bellevue
(22 apartments and
71 care suites)
1
2
0
2
h
c
r
a
M
12
$100m capital raise
and acquisition
of Waterford
(Hobsonville Point,
Auckland) and
Franklin care centre
and adjacent land
(Pukekohe, Auckland)
Completion of
49 apartments at
Eden (Auckland)
1
2
0
2
l
i
r
p
A
1
2
0
2
y
a
M
Appointment of
Rob Hamilton
and Peter Dufaur
as Independent
Directors
$100m retail
bond offer
1
2
0
2
t
p
e
S
/
g
u
A
OCEANIAANNUAL REPORT 2022
come from within.
O U R T I M E L I N E
Oceania enters
into an agreement
with its lenders
to increase total
facility limits from
$350m to $500m
Oceania
announced that it
has entered into
agreements to
acquire Remuera
Rise, Auckland
and Bream Bay
Village, Northland
2
2
0
2
y
a
M
1 3
Completion of
72 Apartments
at The BayView,
Tauranga
Completion of
63 Apartments at
Awatere, Hamilton
Appointment
of Andrew
Buckingham as
Group General
Manager Property
and Development
2
2
0
2
y
r
a
u
n
a
J
2
2
0
2
r
p
A
/
r
a
M
1
2
0
2
r
e
b
m
e
c
e
D
Better experiences
LETTER FROM THE CEO
Our growth
and performance.
Oceania is committed to growing
critical infrastructure and services
that enhance our residents’
lives and provide a better living
experience for New Zealand’s
ageing population.
At Oceania we continue to invest
for the future. Instead of letting
current challenging times slow
our ambitions, we have prudently
increased our investment levels
demonstrating our commitment
to building an even better future
for Oceania, our residents,
their families, our people
and shareholders.
The year began with the completion
of the acquisition of Waterford
(Hobsonville Point, Auckland) in
April 2021. This property has added
significant value to the portfolio and
achieved 19 new apartment sales plus
a greenfield opportunity with consent
granted for the development of 50
independent living apartments to be
commenced in May 2022.
The strengthening of our balance
sheet has provided a solid platform for
ongoing growth and is a highlight of
the period. In addition to the second
retail bond of $100m in September
2021, we were pleased to announce
an increase in the banking facilities,
from $350m to $500m, and an
extension in tenor to mid 2027.
This will enable Oceania to accelerate
its development pipeline and grow
the business through organic and
inorganic opportunities.
John, a resident at Meadowbank, sharing some
stories with Brent, our Chief Executive Officer
1 4
OCEANIAANNUAL REPORT 2022 come from within.
LE T T E R F R O M T H E C E O
We are also very pleased to announce
that we have recently entered into
agreements to acquire a further two
prime retirement living properties and
a greenfield landbank.
Remuera Rise is a prestigious
retirement living apartment complex
located in Newmarket, Auckland
offering commanding views to the
Hauraki Gulf. Residences include
58 luxury independent living
apartments and 12 specialist care
residences. Bream Bay Village is in
Ruakaka, Northland. It comprises
75 quality independent living villas
and an additional 8 under
construction on 4.7 hectares.
Oceania has also entered into
an option agreement to acquire
6.7 hectares of greenfield
development land adjacent to
Bream Bay Village. Preliminary
design plans comprise 124 villas
and high-quality resident amenity.
The opportunity was a targeted
strategic investment and conducted
under exclusivity with the vendor
and successfully executed in a short
time frame, demonstrating the value
of Oceania’s belief in developing
positive partnerships.
These notable achievements were
achieved against a challenging
macroeconomic backdrop.
Oceania has continued to navigate
through the challenges arising from
COVID-19. Its upfront investment in its
clinical quality platform has proved to
be valuable for managing the risks of
COVID-19 over the last two years. We
adopted a risk management approach
to dealing with COVID-19 and allowed
family members and friends to
continue visiting our residents during
alert levels. This connection provided
significant wellness benefits to all.
This was also reflected in the results
of the InterRai data (the mandatory
clinical assessment data used by all
aged care operators in New Zealand)
which shows that Oceania’s residents
have felt happier and less lonely than
residents of other aged care providers.
In addition, the level of team absences
was low compared to other aged care
providers, which meant that our teams
could continue providing the same
high level of care to our residents.
We can’t express enough our gratitude
for our amazing people who continue
to go the extra mile during these
demanding times.
Our People
Oceania has always been, and
continues to be, a people business.
Our people are at the heart of
everything we do and are key to the
provision of high quality care and
other services to our residents. Given
the current employment market, we
are focused on ensuring Oceania
attracts the right people, and then
retains these people within our
business. The workforce crisis facing
the sector is ongoing, and we are
continuing to implement new initiatives
to address staff shortages, including
the introduction of additional learning
and development opportunities,
wellness initiatives and improved
employee benefits.
We were delighted to welcome
Andrew Buckingham as Group
General Manager Property and
Development in January 2022.
Andrew has been actively involved
in the initial work on the design of
the Franklin development, as well
as the acquisition of Remuera Rise
and Bream Bay Village. Andrew’s
Oceania has always
been, and continues to
be, a people business.
Our people are at the
heart of everything we
do and are key to the
provision of high quality
care and other services
to our residents.
Brent Pattison –
Chief Executive Officer
1 5
Oceania Waterford
Better experiences
passion is in the curation of great
resident experience that is evidenced
in intelligent, award winning and
sustainable living spaces for our
residents, staff and guests.
We have also made further investment
in our sustainability team, with the
appointment of a senior manager
who brings significant experience in
sustainability in the aged care sector
and will be instrumental in delivering
the next phases of Oceania’s
sustainability journey.
Our employee share scheme was
offered again to our people in late
2021. This scheme gives our people
the opportunity to own a stake in
Oceania and to share in our growth.
Permanent staff are invited to
participate in the scheme and receive
an allocation of $800 per annum (for
full-time employees) and $400 per
annum (for part-time employees)
of Oceania shares. There was a 82%
uptake in December 2021, which is
the highest uptake since the scheme
began in September 2019. We are
looking forward to the vesting of shares
in September 2022 for those employees
who joined the first scheme in 2019, and
are delighted that we can recognise our
people in this way for the crucial part
they play in Oceania’s success.
As noted in our Interim Report,
Oceania became a member of ACC’s
Accredited Employer Programme on
1 April 2021. During the year ended
31 March 2022, Oceania enjoyed
the benefits of this, with better case
management, early prevention and
a significant reduction in the number
of lost time injuries compared to prior
periods. Following the audit in April
2022, Oceania has been awarded
tertiary status in the programme,
which is the highest rating and an
outstanding achievement given
Oceania has only been in the
programme for one year. In the audit,
we were commended on the positive
health and safety culture within our
business. We are very pleased to
receive this result and look forward to
continuing to build upon the health
and safety culture within the business.
In addition to providing care and
village services to our residents,
Oceania has also invested in the
development and operation of
Wesley Institute of Nursing Education.
The Wesley Institute provides both a
16
conversion Competency Assessment
Programme for internationally
qualified nurses and provides a
route for these people to practice as
registered nurses in New Zealand, as
well as a Return to Nursing Programme
for New Zealand nurses wanting to
return to the workforce after five years
or more of absence. These courses
provide a valuable service to people
wishing to pursue nursing as a career
in New Zealand, at a time when
registered nurse shortages are at
an all-time high.
Developments
We continue to make good progress
on the execution of our development
pipeline in the year ended
31 March 2022.
In the year ended 31 March 2022,
171 units were completed across our
developments at Eden (Auckland),
Gracelands (Hastings), Stage Two at
The BayView (Tauranga) and Stage
Two at Awatere (Hamilton). The year
started with the completion of 50 new
independent living apartments at
Eden in April 2021 and we welcomed
our first residents into the Bremner
apartments at this time. 18 new villas
were completed at Gracelands in
September/October 2021 and these
have all been sold. This was the last
stage of development at Gracelands,
which now comprises 119 independent
living villas. 35 independent living
apartments were completed at
The BayView in March 2021 and the
remaining 39 apartments in Stage Two
were completed in December 2021.
Finally, 63 new independent living
apartments at Awatere were delivered
in March 2022.
As at 31 March 2022, there were 550
units under construction at 8 sites
across New Zealand.
The development of 113 new care suites
at Lady Allum (Milford, Auckland)
was initially scheduled to be delivered
in FY2022 but this project has been
Why it’s personal
for our CEO, Brent:
“My passion for the
sector began with
my grandparents
who were my biggest champions,
and for whom I had the deepest
respect. They were everyday
people, who lived in a railway house
alongside Paekakariki Station.
They understood the importance
of community and worked hard to
ensure that everyone around them
felt purpose and inclusion. I have
learnt some of my most important
life lessons from them including
overcoming adversity, always taking
a positive approach to life, and
the importance of forging strong
relationships. One of my happiest
memories is turning up to see Nana
and Grandad, chatting with them,
and helping them complete their
latest jigsaw puzzle. Now when you
turn up to my house, there’s always
a new jigsaw puzzle on the go.”
OCEANIAANNUAL REPORT 2022 come from within.
LE T T E R F R O M T H E C E O
delayed as a result of COVID-19
construction delays and this is now
expected to be completed in July 2022.
temporary reception) completed in
February 2022, and the care centre on
track for completion in March 2023.
The premium Waimarie Street
development in St Heliers, Auckland,
is progressing well and is expected
to be completed in March 2023.
This flagship village, comprising
79 premium independent living
apartments and 32 care suites, will
be called “The Helier” to reflect the
private label nature of this offering.
We are in the process of registering
the village and will start taking
applications for the independent living
apartments in the coming months.
The extension of the care centre at
Woodlands (Motueka) is progressing
well. Stage One, which involves the
construction of 14 new care suites,
is currently on track for completion
in June 2022. Stage Two, which
comprises the internal reconfiguration
of eight standard rooms to create four
new care suites, will commence at the
completion of Stage One.
Construction of 57 care suites at
Redwood (Blenheim) is well underway,
with Stage One (comprising the new
kitchen, staff room, dining room and
Stage Two of the development at The
Bellevue (Christchurch), comprising 46
new independent living apartments is
also progressing well, with completion
scheduled for March 2023.
The construction of 106 care suites
at Elmwood (Auckland) commenced
in September 2021 and is progressing
on programme at present. Construction
is expected to be completed by
July 2023.
Finally, following the conclusion of
Stage Two at The BayView (Tauranga)
in December 2021, we have started
detailed excavation work for the
building foundations of Stage Three,
comprising 28 independent living
apartments. This next stage of the
development is scheduled to be
complete in October 2023.
Resident Experience
Oceania’s ambition is to be the leader
in the delivery of resident centred
retirement and aged care living in
New Zealand.
Oceania has always been an innovator
in the sector and has led the evolution
of the resident experience including
the transformation from aged care
rooms to premium care suites and
the creation of Nurse Practitioners to
provide primary healthcare services to
our aged care residents.
And our “Believe in Better” promise
doesn’t stop there.
Oceania is now taking the concept
of resident experience further. Fresh
thinking has generated exciting
new innovative services that will be
launched at our premium site The
Helier (St Heliers, Auckland) in 2023.
Oceania is also intending to introduce
the concept of private hospital care
at The Helier. A private care model
will provide residents a world-leading
care experience and allow Oceania
to work outside of the restrictions of
the current DHB and Age Related
Residential Care funding model.
Outlook
The retirement village and aged care
sector continues to expand as the
New Zealand population ages. Whilst
there is a natural market growth
opportunity, the true opportunity
lies with innovation and consistently
delivering great resident experience.
Along with our ongoing growth and
performance ambitions, our focus is set
to reimagine the resident experience to
deliver unprecedented services across
both retirement and aged care living.
We will continue to confidently invest
in developing critical infrastructure to
support our ambitions.
We have an exciting future and I thank
you for your support.
Brent Pattison
Chief Executive Officer
17
Better experiences
CHANGE OF BALANCE DATE
This represents the second Annual Report since the
change of balance date to 31 March and the first for a
full 12 month period. Provided below are the proforma
underlying earnings positions for the 12 month period
to 31 March 2022 with comparative 12 month period to
31 March 2021.
Underlying Earnings 12 month comparative position
The following 12 month trading position as provided below
represents the trading position of the Company.
The periods represent:
• 12 months to 31 March 2022; and
• 12 months to 31 March 2021 (comparative period)
This forms the basis of the trading highlights pages in this Annual Report.
$NZ000’s
Care
Village Operating
Resales Cap Gain
Development Margin
Corporate
Group Underlying EBITDA
Interest
Depreciation
Underlying NPAT
Occupied Beds per day
Effective Bed Capacity per day
Effective Occupancy (%)
Existing ORAs sold
New ORAs sold
Existing Care Suites Sold
New Care Suites Sold
Total ORAs Sold
Audited
12 months to
31 March 2022
Unaudited
12 months to
31 March 2021
22,053
22,243
23,492
32,850
(24,397)
76,241
(9,303)
(10,217)
56,721
2,312
2,514
92.0%
92
118
174
66
450
21,313
1
16,458
18,959
29,524
(20,699)
2
1,2
65,555
(7,879)
(8,705)
48,971
1,2
2,305
2,504
92.0%
88
107
124
115
434
1. On 21 April 2020 the Group claimed, and received payment of, a COVID-19 wage subsidy totalling $1.8m. This amount has subsequently been
repaid in full on 18 May 2021 and as a result has been excluded from the table above. This proforma adjustment increases underlying EBITDA
and underlying earnings in relation to the 12 month period to 31 March 2022 by $1.8m. The proforma 12 month period to 31 March 2021 has been
restated to remove the impact of the subsidy claim.
2. Includes an adjustment for the impact in change in accounting policy in regards to the accounting for Software-as-a-Service arrangements.
Refer to note 1.2.
1 8
OCEANIAANNUAL REPORT 2022 come from within.
The connection
culture
The BayView Tauranga may be
one of our newer villages, but
already the residents are making
it their own, and the village
management and staff could not
be happier about it.
There is no ‘us’ (residents) and ‘them’
(staff), as can sometimes be the
case in retirement villages. At The
BayView, its genuinely one big family,
connected by a shared view to create
an environment that feels like a close
knit community, so they can enjoy
great experiences together.
Sales Manager Trudi explains.
“It’s all about the residents, we want to
hear what they want to do, and create
a village that they want to live in – it’s
their village. Linda (Village Manager)
has been instrumental in creating that
culture, she’s amazing.”
That cohesive vision is already taking
shape. The village has been designed
and built to cater for wide variety of
interests and activities, so residents
can ‘do their own thing’.
One example? The tools shed, (the
man cave), where resident Gary
(featured here) and mate Terry have
made bowls carriers for their fellow
bowlers. The newly-finished indoor
pool complex now hosts aqua aerobic
classes, which are a huge hit, and
the regular yoga classes are already
well attended.
“Not everything suits everyone, but
there’s something for everyone”, says
Trudi, explaining there’s a residents'
suggestion box in the café at The
BayView, where residents can suggest
any activities they want to do, or
movies they want see at the on-site
cinema. The village staff are only too
keen to make it happen. The latest
suggestion is Bridge classes and
matches - it’s underway.
The light, versatile and appealing
shared spaces encourage residents
to enjoy the company of others
and enjoy activities together. The
main lounge has breakout areas for
cards; there’s a private lounge which
residents can use to host family
gatherings, or just watch the tennis.
The library is a lovely space.
The bus is there for shopping and
any trips (suggestions in the box
please!). Happy hour on Fridays is
very popular!
Residents are empowered by this
connectivity culture. Early resident
Raewyn started teaching Mah-jong -
now there’s a game going regularly.
The construction manager at the
village bought a Mah-jong board on
Trade Me and brought it in for the
growing group of players to use.
Villa residents (with their own vege
patches) bring up avocados or
rhubarb they’ve grown to share with
everyone, other residents just take
what they want. That’s the culture
at The BayView and residents love it.
Trudi explains they know they’re
doing something right when visitors or
prospective residents coming into The
BayView feel the vibe and mention it.
They feel all the positivity of our
connection culture, there’s no better
statement I could make about our
village, they feel it, we all love it.
19
COVID-19 LEADERSHIP
Best practice for
a better industry.
Oceania has continued to successfully
navigate the challenges associated
with operating an aged care and
retirement village business throughout
the COVID-19 pandemic.
Its upfront investment in clinical
quality, as well as the adoption of
a risk management approach and
ethical reasoning in its decision
making, have served Oceania well
throughout this period.
We are very grateful to our people
for their hard work and going the
extra mile during these difficult times.
Oceania introduced its own vulnerable
staff assessments in March 2020. In
contrast to the then current guidance
from the Ministry of Health, Oceania
applied a risk assessment process
to determine which of our staff were
vulnerable and unable to continue
working during the COVID-19 outbreak
in early 2020. This model was later
adopted by the DHBs.
Oceania’s response to COVID-19 was
assisted by high levels of vaccination
for both residents and staff, including
boosters. We introduced mandatory
vaccination for our staff early on
in the pandemic, before this was
required by the Government mandate.
As part of this, our clinical team
spent a significant amount of time
communicating with our people and
educating them about the benefits
of vaccination.
Ana and Lois, Nurse Educators, enjoying connecting with colleagues at the
Oceania International Nurse’s Day Clinical Leaders Symposium
2 0
Oceania has adopted rigorous
procedures and infection control
practices to ensure the safety of our
residents and our people. Given the
high levels of vaccination and the risk
mitigants in place, Oceania chose to
adopt a risk management approach
based on a risk assessment framework
in responding to COVID-19 and
allowed visiting to continue during the
pandemic except where we had
outbreaks. Even during outbreaks,
compassionate visiting with full PPE
has always been permitted. This
meant that our residents were not
unnecessarily subjected to lockdown
measures and this has positively
impacted on our residents as
demonstrated in our feelings of
loneliness indicator through InterRai
where Oceania’s score was significantly
below the national average.
In late January 2022, we established
an Emergency Management Team (led
by Dr Frances Hughes) to provide a
coordinated response when more than
one site was affected by COVID-19.
All members of the Emergency
Management Team brought extensive
incident management experience from
across a range of industries including
healthcare, armed forces and
intelligence. The range of experiences
of the team members was pivotal in
providing a coordinated response to
our sites in managing the risks arising
from COVID-19. Having an Emergency
Management Team structure in place
meant that we were able to provide
early logistical support to our sites,
consolidate levels of PPE stock and
implement regional stockpiles, manage
discussions with the DHBs and Public
Health Units on a consistent basis,
identify when and where to deploy
staff and provide consistent decision-
Better experiencesOCEANIAANNUAL REPORT 2022 C O V I D - 19 L E A D E R S H I P
Dr Frances Hughes was awarded the Risk
Professional of the Year in the Risk New
Zealand Awards for her work in managing
COVID-19 risks for both Oceania and the
aged care industry as a whole.
making and advice to our people.
The Emergency Management Team
framework used by Oceania was
based on the Coordinated Incident
Management System (CIMS) model
used by Government agencies and
other organisations. During this
period, wider organisational personnel
attended a one day CIMS training
workshop to increase skill development
in the Emergency Management
Team and ensure sustainability.
The adoption of this Emergency
Management Team structure has led
to an overall improvement in Oceania’s
readiness to deal with other non-
pathogenic events in the future, such
as fires or earthquakes.
Our people continued coming to work
when it was safe to do so and, unlike
many other aged care providers, the
most staff we had off work at one time
was 87 (out of 2,900). This was as a
result of the Emergency Management
Team measures that we put in place,
as well as the provision of support to
our sites, including providing clear
guidelines on when people need
to be off work and when they can
safely come back to work again. We
provided pastoral care to our staff and
supported them in their return to work,
and provided mental health material
to explain how to manage stress.
We also provided bespoke recognition
to our people for their efforts, with
Brent Pattison and Dr Frances Hughes
personally calling sites where staff
were under pressure to acknowledge
the work and ensure our people were
feeling valued by the business. Our
residents were also very grateful for
the efforts of our people during this
time, with many stories shared of how
our people respected the residents’
personal preferences during isolation
periods, and how residents enjoyed
receiving their favourite meals in their
rooms accompanied by personalised
get well cards and best wishes from
our staff.
Our expertise in managing COVID-19
risks has also provided unique
opportunities for Oceania. One of our
independent living residents suffered a
medical event while in Australia in mid-
2021 and when this resident returned
to New Zealand, Oceania managed
the MIQ period for this resident in one
of our aged care centres, rather than
the resident staying in a Government
MIQ facility for the 14 day isolation
period. We worked in conjunction
with the Regional Public Health
Service and the DHB to facilitate this
outcome for the resident. We received
additional Government funding
for this arrangement, as well as
acknowledgement from the both the
Regional Public Health Service and the
DHB of Oceania’s high standards of
clinical care.
On 30 March 2022, Dr Frances
Hughes was awarded the Risk
Professional of the Year in the Risk
New Zealand Awards for her work in
managing COVID-19 risks for both
Oceania and the aged care industry
as a whole. The judges commended
Dr Hughes on thinking about the
important role of risk culture and noted
that that is what specifically stood out
in her nomination. We are delighted
that Dr Hughes’ hard work throughout
the pandemic has been recognised in
this way.
The lens of COVID-19 has given
Oceania a completely different risk
assessment process for everything
that we do. It means that we need
to constantly adapt and respond to
change and ensure that Oceania, as
an organisation, is nimble to respond
to any challenges that arise in
the future.
2 1
come from within. Better experiences
How we
create value
Our purpose
To reimagine the retirement and aged care living experience in New Zealand
Our value drivers
Our business
$ Yield +
From superior
care and
independent
living experiences
$ Growth
Development of
our landbank by
recycling capital
from sales
Our people
Highly motivated, passionate and safe staff
Our expertise
The capability of our people and quality
of our systems
Our villages
The quality of our villages and landbank
Our relationships
The strength of the relationships we have with
our key stakeholders and our brand reputation
Our financial capital
The combination of shareholder funds,
banking facilities and operating cash flow
employed to maintain and grow our business
Our natural capital
The quality of the natural resources we rely
on to run our business today and in the future
2 2
OCEANIAANNUAL REPORT 2022 come from within.
WO R K I N G O N W H AT M AT T E R S
Develop
The
pursuit
of
better
Sell
Our value outcomes
Residents love living in
our communities
We delight our residents
with hospitality inspired,
customer led services
We are passionate about
the wellbeing of our staff,
residents and their families
We lead the way in
how we do things
2 3
Better experiences
Working on
what matters
Strategy
We have refreshed our strategy, taking into consideration what
is important to key stakeholders and evaluating which risks and
opportunities have the greatest impact on our ability to create value in
the short and long term.
Our strategy is to achieve sustainable performance by delivering on our four
strategic pillars – Offer, Resident Experience, People Capability and Growth –
underpinned by technology, innovation and our sustainability framework.
2 4
OCEANIAANNUAL REPORT 2022 come from within.
WO R K I N G O N W H AT M AT T E R S
Our purpose
To reimagine the retirement and aged care living experience in New Zealand.
Our strategic pillars
Offer
To design, develop,
build and sell premium
properties for our
residents of the future
Our value outcomes
Residents love living
in our communities
Resident Experience
To be the leader
in the delivery of
resident experience in
retirement villages and
aged care centres
People Capability
To build capability
and develop a culture,
which enables our
people to perform their
life’s best work
Growth
To deliver outstanding
financial performance
and sustainable
growth
We delight our
residents with
hospitality inspired,
customer led services
We are passionate
about the wellbeing of
our staff, residents and
their families
We lead the way in
how we do things
Our drivers
Our people — Our expertise — Our villages — Our financial capital — Our natural capital
Our enablers
Technology – Innovation – our Sustainability Framework:
People
Planet
Prosperity
Our goals
We delight our residents and staff
by caring for them and making
a difference to their happiness
every day.
Our measure
Employee wellness engagement,
resident engagement, health
and safety.
Our goals
Through better use of our
resources we will substantially
reduce our environmental impact
enabling carbon neutrality in
the future.
Our measure
Waste to landfill, energy efficiency,
greenhouse gas emissions.
Our goals
Integrated thinking will be
embedded in our strategy,
decision making, long term
planning and reporting by 2022.
Our measure
Financial returns and shareholder
value growth.
2 5
Better experiences
Offer
We are curating great spaces
through the design, development
and provision of services to our
residents of the future and are
doing so in a sustainable manner.
Oceania has a well-established and
proven brownfield development-
led growth strategy, facilitated by
a strong development team and
investment in an operational platform
built for scale.
With the recent strategy to undertake
greenfield developments and
acquisitions, as well as brownfield
developments, Oceania is well
positioned to leverage its established
operational platform to pursue a
wide range of organic and inorganic
growth opportunities.
Building design and construction has a
significant impact on the sustainability
of our business in terms of our
future emissions, building efficiency,
revenue, profitability, safety, resident
satisfaction, staff engagement and
waste generation.
We evaluate the sustainable impact
of a project prior to undertaking
any acquisition, construction or
refurbishment project.
26
Resident Experience
We are leading in the delivery of
resident-centred aged care and
retirement village experience
in New Zealand through our
Model of Care and excellence
service offerings.
Oceania is committed to ensuring
that it provides outstanding clinical
excellence in care and enhanced
services to its residents.
Oceania continues to distinguish itself
from other aged care and retirement
village operators with its focus on the
provision of care and services, which
is a needs based product, rather than
the delivery of built form products.
Oceania provides resident-centred
care and services that enhance the
quality of our residents’ lives.
Oceania is focused on delivering
an incremental and sustained
improvement in the resident
experience, with an improvement
in clinical indicators, delivering an
evidence-based practice, and an
expansion in our clinical offerings
to cover full scope services.
Furthermore, Oceania’s reputation
for the delivery of high quality care is
providing opportunities for Oceania
to partner with other organisations to
bring a high quality care offering to
older New Zealanders in those regions
that need it most.
People Capability
We have a culture which enables
our people to be engaged,
included and valued and perform
their life’s best work at Oceania.
Our people are at the very heart
of what we do. It is the passion of
our people that allows Oceania to
continue to build on its success for
future growth.
Oceania maintains a strong focus on
learning and development as part of
our commitment to provide a career
development pathway for our staff.
Our Wesley Institute of Nursing
Education provides CAP (Competence
Assessment Programme) training
to internationally-qualified nurses
(IQNs) that meets Nursing Council
requirements and provides a route
for IQNs to practice in New Zealand.
Our aged care education centre is
generating research and opportunities
for partnerships with universities.
This evidence base is crucial to our
offering in the future for our residents
and staff.
We have also established good
relationships with some governments
overseas who are starting to refer IQNs
to our conversion courses through the
Wesley Institute of Nursing Education.
OCEANIAANNUAL REPORT 2022 come from within.
P R OV E N E X P E R I E N C E S
Materiality matrix
At the end of 2021, we refreshed our materiality matrix, building on the deep dive
work we started in 2020, where we looked into what mattered most to our key
stakeholders, and where Oceania could have the greatest impact.
These material topics inform both the pillars of our strategy, and our sustainability
framework that underpins our strategy. In the year ahead we will look to refresh our
sustainability framework goals and measures, aligned to the refreshed materiality matrix.
h
g
H
i
E
C
N
A
T
R
O
P
M
I
R
E
D
L
O
H
E
K
A
T
S
w
o
L
Low
People
1. Resident Experience
2. Product design and service
3. Selling practices
4. Competitive behaviour
5. Community relations
6. Access and affordability
Employee health, safety
7.
and wellbeing
8. Employee practices
9. Employee engagement
diversity and inclusion
10. Te Ao Maori
1
14
11
15
12
13
16
10
3
17
2
18
19
7
8
9
4
5
21
6
20
22
BUSINESS IMPACT
High
Prosperity
Planet
11. Governance oversight
and reporting
12. Critical incident
risk management
13. Systemic risk management
14. Management of legal and
regulatory requirements
15. Business ethics
16. Data security and privacy
17. Waste management
18. GHG emissions
19. Sustainable supply
chain management
20. Physical impacts of
climate change
21. Water management
22. Energy management
2 7
Better experiences
Key ESG highlights for FY22
We are building our new
developments to 6 HomeStar and
we are a member of the
New Zealand Green Building
Council. In the past year we
have achieved 6 HomeStar
rating across four of our sites.
We have completed a Task Force on
Climate-related Disclosures (TCFD)
maturity assessment, with an external
provider, in order to support our
climate-related disclosures journey.
From this we have established a TCFD
roadmap that we will implement
over the next two years. We are
also establishing a management
sustainability committee.
Following energy audits at a
selection of our high energy
consuming sites last year, we
have been working through
energy efficiency measures
starting with retrofitting LED
lighting and shower restrictors.
We have amended our car
procurement requirements
so that all new lease cars for
residents and corporates are
either EV or hybrid, and we
are working on incorporating
sustainability into our RFP
process for material suppliers.
Oceania continues its work with
MyNoke, a large worm farming
company, on an incontinence
product vermicomposting trial.
Waste from six care centres has
been processed and studied at
MyNoke’s Taupo worm farm.
The majority of our care
centres are now diverting
food waste through a
variety of methods including
onsite Bokashi composting,
vermicomposting, pig buckets
and commercial composting.
Our “I love music” programme now has over 600 residents
enrolled. Since the launch of the programme in 2017, we have
provided personalised playlists to over 1200 of our residents.
Remote sign-up options mean families can enroll and choose
music for their loved ones from anywhere in the world.
We have started rolling out
Oceania’s signature exercise
programme “Move & Groove”,
currently available at some of
our centres, to independent
living residents. Move & Groove
Village has been designed by
fitness industry professionals
and created against the
ACC criteria of 'Strength
and Balance' designed to
reduce falls and fractures
amongst over 65s.
2 8
OCEANIAANNUAL REPORT 2022 come from within.
P R OV E N E X P E R I E N C E S
Val got on board with the bowls
momentum at The BayView.
She’s energised by the bowling
group interaction and enjoys the
camaraderie and company. She
saw a need, and set about finding
a solution!
Val joined the growing bowling group
at The BayView, (there are now nine
players and more to come). She
quickly saw the need for the supply
of more essentials - the expanding
membership needed more bowls
to accommodate the influx of
new players at the Monday and
Wednesday morning rollups.
Val was onto it.
She placed an advertisement in
the local free newspaper and got a
reply from a retiring member of the
Bayswater Bowling Club, who as Val
says, was able to sell not only his wife’s
bowls, but his own as well.
Rolling
with it.
Val gratefully snapped up both sets.
So now the group has eight.
Linda (Village Manager) saw to it
that Val was not out of pocket for
her efforts. She was keen for the
centre to support the bowls group
in any way possible and ensured
Val was reimbursed.
Val’s on a roll now, she’s since
organised the supply of two more sets,
as and when needed, so everyone can
play. Gary and Terry could be busy
in the workshop building a few more
personalised carriers!
2 9
BOARD OF DIRECTORS
Leading with
heart.
Our Board has a broad and deep range of complementary
skills backed by years of experience. We were pleased
to announce two additional Board members with
Rob Hamilton and Peter Dufaur joining the Board
as Independent Directors during the year.
Elizabeth Coutts – Chair and Independent Director / ONZM, BMS, FCA
Liz Coutts has been a Director of Oceania since 5
November 2014 and was appointed Chair in 2014. Liz is
also the Chair of Skellerup Holdings Limited and EBOS
Group Limited. Liz is a Fellow of Chartered Accountants
Australia and New Zealand. She is a past President of
the Institute of Directors NZ Inc and was made an
Officer of the New Zealand Order of Merit in 2016.
Liz has previously been Chief Executive of Caxton
Group, Chairman of Meritec Group Limited, Industrial
Research Limited, Life Pharmacy Limited and Ports of
Auckland Limited, Deputy Chairman of Public Trust,
and a Commissioner of both the Commerce
Commission and Earthquake Commission. She has
been a Director of Sanford Limited, Ravensdown
Fertiliser Cooperative, the Health Funding Authority,
PHARMAC, Air New Zealand, Sport and Recreation
New Zealand and Trust Bank New Zealand, and a
member of both the Financial Reporting Standards
Board of the New Zealand Institute of Chartered
Accountants and the Monetary Policy Committee
of the Reserve Bank of New Zealand.
Liz is a member of all Board Committees.
Alan Isaac – Independent Director / CNZM, BCA, FCA
Alan Isaac has been a Director of Oceania since
1 October 2015. Alan is a professional director with
extensive experience in accounting, finance and
governance. He is the immediate past President of
the Institute of Directors NZ Inc. and is Chairman of
New Zealand Community Trust and Basin Reserve Trust.
He is also a former President of the International Cricket
Council. Alan is a Director of Scales Corporation Limited
and Skellerup Holdings Limited. He is also a Board
member of the Wellington Free Ambulance.
Alan is a former national Chairman of KPMG, and was
made a Companion of the New Zealand Order of Merit
(CNZM) in 2013. He is a Fellow of Chartered
Accountants Australia and New Zealand.
Alan is Chair of the Audit Committee and is a member
of the People and Culture Committee.
Dame Kerry Prendergast – Independent Director / DNZM, CNZM, MBA (VUW), NZRN, NZM
Dame Kerry Prendergast has been a Director of
Oceania since 22 December 2016. Dame Kerry is a
professional director. She was Mayor of Wellington
(2001-2010) and is currently the Chair of the New
Zealand Film Commission, Wellington Free Ambulance,
Wellington Opera and Royal New Zealand Ballet. Dame
Kerry is also a trustee of New Zealand Community Trust.
For 25 years Dame Kerry was an independent midwife
after training as a general nurse in 1970, and
consequently gaining a Diploma in Intensive Care.
She was made a Companion of the New Zealand
Order of Merit (CNZM) in 2011 and was promoted
to Dame Companion of the New Zealand Order of
Merit in January 2019 for services to governance
and the community.
Dame Kerry is Chair of the Clinical and Health &
Safety Committee.
3 0
Better experiencesOCEANIAANNUAL REPORT 2022 B OA R D O F D I R E C T O R S
Sally Evans – Independent Director / BHSc, MSc, FAICD, GAIST
Sally Evans has been a Director of Oceania since
23 March 2018. Sally has over 30 years’ experience
in the private, government and social enterprise sectors
in Australia, New Zealand, the United Kingdom and
Hong Kong.
Sally is a Director of Healius Limited in Australia, Rest
(Australian Super Fund), Allianz Australian Life Insurance
Limited and Ingenia Communities. She has previously
held Directorships on the boards of Opal Specialist
Aged Care and Blue Cross Aged Care, was an
inaugural member of the Australian Federal
Government’s Aged Care Financing Authority and
held executive roles as Healthcare Director at the
FTSE Compass Group plc and Head of Aged Care
at AMP Capital.
Sally is Chair of the People and Culture Committee
and is a member of the Clinical and Health &
Safety Committee.
Gregory Tomlinson – Independent Director / AME
Greg Tomlinson has been a Director of Oceania since
23 March 2018. Greg is a Christchurch domiciled
businessman and investor with experience in a variety
of New Zealand industries. One of the original pioneers
of the aquaculture industry in Marlborough, he has also
established construction and aged care businesses.
Greg established Qualcare before it was sold
into the Oceania Group in early 2008 and he
was a director of Oceania from 2008 until 2016.
Greg holds directorships on the boards of a number
of New Zealand based companies and is currently
a director of Heartland Bank Limited.
Greg is Chair of the Development Committee.
Rob Hamilton – Independent Director / BSc, BCom
Rob has been a Director of Oceania since
17 September 2021. He is a respected member
of the capital markets and finance community in
New Zealand, with more than 30 years’ experience
in senior executive roles. Rob is currently a Director
of Westpac New Zealand Limited and a Director of
Tourism Holdings Limited (including Chair of the
Audit Committee). He was previously Chief Financial
Officer at SkyCity Entertainment Group Limited and a
Managing Director and Head of Investment Banking at
Jarden (formerly First NZ Capital).
Rob is also a member of the Auckland Grammar School
Board of Trustees and has previously been a Board
member on the New Zealand Olympic Committee.
Rob is a member of the Audit Committee.
Peter Dufaur – Independent Director / BProp
Peter has been a Director of Oceania since
17 September 2021. He has over 25 years’ experience
in the New Zealand property market, including 10 years
as Head of Development for Goodman Property Trust.
During his time at Goodman Property Trust, Peter was
responsible for all of the Trust’s development activity
and oversaw more than $1.5 billion of successful
property development.
Peter also sits on several private enterprise boards,
including until recently, Chair of building products
manufacturer Thermakraft. Peter is currently the
Managing Director of Mayfair Group Limited, which is
involved in property development, asset management
and funds management across a wide variety of sectors
in the New Zealand property market.
Peter is a member of the Development Committee.
Our Board Skill Set.
Core Competencies
Core Strengths
Markets & Customers
Building & Maintaining Relationships
Delivering Sustainable Growth
Property & Construction
3 1
come from within.
Better experiences
Core Strengths
Governance
7/7
• Commitment to the highest standard of governance.
• Board experience (NZX 50 or equivalent) or experience
as an advisor to Boards for at least 5 years.
• An ability to assess effectiveness of senior management.
Finance and accounting
6/7
• Senior executive or board experience in financial accounting
and reporting, corporate finance and internal controls.
Risk management
Capital markets and structure
Regulatory knowledge and experience
Human resources
Health and safety
Markets & Customers
Customer advocacy
Aged care, hospitality & customer service market experience
Clinical experience
4/7
7/7
7/7
7/7
7/7
7/7
7/7
7/7
• Understanding of business and property valuation
principles and their implications on the financial
performance and position.
• Developing and overseeing an appropriate risk framework
and culture.
• Experience evaluating and managing financial and
non-financial risks.
• Experience with equity and debt markets, capital
structuring and investment analysis.
• An understanding of the regulatory environment in which
we operate and the role that plays in ensuring sustainable
custodianship of our assets and providing benefit to
our customers.
• Familiarity with people and best practice development and
performance structures.
• Experience and understanding of health and safety and
wellbeing requirements.
• Experience and understanding of sales, marketing and
brand strategy and practices.
• Experience and understanding (either at Board,
leadership or senior consulting level) of the dynamics of
the international and/or domestic aged care, hospitality
and customer services markets, and opportunities and
challenges within those markets.
• Experience and understanding of the clinical requirements
of the healthcare sector at a governance, leadership and/
or practitioner level.
3 2
Better experiencesOCEANIAANNUAL REPORT 2022 come from within.
B OA R D O F D I R E C T O R S
Building & Maintaining Relationships
Government relationships
5/7
Shareholder/investment community relationships
6/7
• An understanding of the functioning of Government
and experience developing and maintaining a
constructive relationship and interactions with
Government and regulators.
• Experience in and understanding of shareholder and
investment community concerns and developing
constructive relationships.
Delivering Sustainable Growth
Growth
Strategy
Operational leverage
Business model and technology disruption
7/7
7/7
7/7
7/7
• A track record of developing and implementing a
successful and sustainable strategy of growth in business.
• Ability to think strategically and assess strategic options
and business plans.
• Experience in leading or advising organisational
change and creating value for the benefit of
customers and shareholders.
• Understanding of differing business models and the
potential for disruptive models and practices to impact
customers and the supply chain.
• Understanding of the opportunity and risks provided by
technology development.
Property & Construction
Property and Construction
4/7
• Experience as an investor, leader or adviser in the property
development market
• Experience as an investor, leader or adviser in the
construction industry.
3 3
come from within. T H R E E Y E AR S U M M ARY
For the year ended 31 March 2022
Financial Metrics
$NZm
Underlying Net Profit after Tax 1,2,3,4
Underlying EBITDA 1,3,4
Profit / (loss) for the Period 4
Total Comprehensive Income 4
Total Assets 4
Operating Cash Flow 4
Operating Metrics
Units
Care Suites
Care Beds
Total
New Sales
Resales
Total
Occupancy
Better experiences
March 2022
12 months
March 2021
10 months
May 2020
12 months
56.7
76.2
61.1
114.4
2,197.7
105.5
41.9
56.0
85.7
167.9
1,882.2
96.0
43.7
64.3
(12.8)
10.7
1,547.3
98.4
March 2022
12 months
March 2021
10 months
May 2020
12 months
1,625
854
1,725
4,204
184
266
450
92.0%
1,367
847
1,807
4,021
194
194
388
92.4%
1,285
679
1,882
3,846
189
166
355
91.5%
1 This is a non-GAAP measure, refer to note 2.1 in the consolidated financial statements for further details.
2
Underlying Net Profit after Tax has been restated in the May 2020 comparative period to exclude depreciation in respect of care suites in line with the
current period.
On 21 April 2020 the Group claimed, and received payment of, a COVID-19 wage subsidy totalling $1.8m. This amount has subsequently been repaid
in full on 18 May 2021 and as a result has been excluded from the table above. This proforma adjustment increases underlying EBITDA and underlying
earnings in relation to the 12 month period to 31 March 2022 by $1.8m. Underlying EBITDA and underlying earnings in relation to the 12 months to 31 May
2020 has also been restated to remove the impact of the subsidy claim. The statutory comparative period of 10 months to 31 March 2021 is not impacted.
Includes an adjustment for the impact of change in accounting policy in regards to the accounting for Software-as-a-Service arrangements.
Refer to note 1.2.
3
4
3 4
OCEANIAANNUAL REPORT 2022 come from within.
Consolidated
Financial
Statements
For the year ended 31 March 2022
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
Consolidated Cash Flow Statement
Notes to the Consolidated Financial Statements
Independent Auditor's Report
36
37
38
39
41
91
3 5
FINANCIAL STATEMENTS C O N S O LI DAT E D S TAT E M E N T O F C O M P R E H E N S I V E I N C O M E
For the year ended 31 March 2022
$NZ000’s
Revenue
Change in fair value of investment property
Change in fair value of right of use investment property
Gain on purchase of business assets
Other income
Total income
Employee benefits and other staff costs
Depreciation (buildings)
Depreciation and amortisation
(chattels, leasehold improvements and software)
Impairment / (reversal of impairment) of property, plant and
equipment and right of use asset
Impairment of right of use investment property
Impairment of goodwill
Rental expenditure in relation to right of use investment property
Finance costs
Other expenses2
Total expenses
Profit before income tax
Income tax benefit
Profit for the period
Other comprehensive income
Items that will not be subsequently reclassified to profit or loss
Gain on revaluation of property, plant and equipment for the period,
net of tax
Gain on revaluation of right of use assets for the period, net of tax
Items that may be subsequently reclassified to profit or loss
Gain on cash flow hedges, net of tax
Other comprehensive income for the period, net of tax
Total comprehensive income for the period attributable
to shareholders of the parent
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Notes
March 2022
12 months
March 2021
10 months
2.2
3.1
3.4
1.3
2.3
2.4
2.4, 3.2, 3.4
2.4, 3.2, 3.4
2.4, 3.2
2.4
2.4, 5.2
2.4, 3.4
2.4
2.4
5.1
3.2, 5.1
3.4, 5.1
231,140
63,475
-
10,358
3,508
308,481
156,446
11,487
7,133
4,741
115
412
2,497
9,380
175,417
79,969
2,299
-
2,069
259,754
115,728
1
8,615
4,919
1
(4,267)
-
1,220
4,115
6,795
60,020
252,231
47,345
1
1
184,470
56,250
4,879
61,129
75,284
1
10,396
85,680
1
46,359
229
46,588
78,583
61
78,644
6,716
3,609
53,304
82,253
114,433
167,933
1
4.2
4.2
8.7
8.7
13.8
13.8
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
1
2
Comparatives have been restated for the impact of a change in accounting policy in regards to the accounting for Software-as-a-Service
arrangements. Refer to note 1.2.
Included in Other Expenses for the 12 months to 31 March 2022 is a repayment of $1.8m in respect of the COVID-19 wage subsidy.
3 6
Better experiencesOCEANIAANNUAL REPORT 2022 C O N S O LI DAT E D BAL AN C E S H E E T
As at 31 March 2022
$NZ000’s
Assets
Cash and cash equivalents
Trade and other receivables
Derivative financial instruments
Investment property
Property, plant and equipment
Right of use assets
Intangible assets
Total assets
Liabilities
Trade and other payables
Derivative financial instruments
Deferred management fee
Refundable occupation right agreements
Lease liabilities
Borrowings
Deferred tax liabilities
Total liabilities
Net assets
Equity
Contributed equity
Retained deficit
Reserves
Total equity
Notes
March 2022
March 2021
5.3
5.6
3.1
3.2
3.4
5.2
5.4
5.6
3.3
3.3
3.4
4.4
5.1
4.1
9,745
69,136
3,922
1,378,552
686,592
41,139
8,603
79,906
47,992
1
-
1,099,803
604,273
1
41,714
8,468
1
2,197,689
1
1,882,156
40,980
-
42,067
775,765
9,894
380,140
-
44,308
5,486
41,499
618,433
11,513
327,292
-
1,248,846
1,048,531
948,843
833,625
1
705,291
(54,735)
298,287
948,843
675,625
(86,983)
1
244,983
833,625
1
The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.
1
Comparatives have been restated for the impact of a change in accounting policy in regards to the accounting for Software-as-a-Service
arrangements. Refer to note 1.2.
3 7
come from within.FINANCIAL STATEMENTS C O N S O LI DAT E D S TAT E M E N T O F C HAN G ES I N EQ U I T Y
For the year ended 31 March 2022
Notes
Contributed
equity
Retained
deficit
Asset
revaluation
reserve
Cash flow
hedge
reserve
Total equity
588,389
1
(157,630)
170,205
(7,475)
593,489
1
$NZ000’s
Balance as at 31 May 2020
Profit for the period
Other comprehensive income
Revaluation of cash flow hedge
net of tax
Revaluation of assets net of tax
Revaluation of right of use assets
net of tax
Total comprehensive income
Transactions with owners
Dividends paid
Share issue
Directly attributable transaction costs
deducted from equity
Share issue: dividend reinvestment
scheme
Employee share scheme
Total transactions with owners
Balance as at 31 March 2021
Profit for the year
Other comprehensive income
Revaluation of cash flow hedge
net of tax
Revaluation of assets net of tax
Revaluation of right of use assets
net of tax
Total comprehensive income
Transactions with owners
Dividends paid
Share issue
Directly attributable transaction costs
deducted from equity
Share issue: dividend
reinvestment scheme
Employee share scheme
Total transactions with owners
3.2, 5.1
3.4, 5.1
4.1
4.1
4.1
4.1
4.1
3.2, 5.1
3.4, 5.1
4.1
4.1
4.1
4.1
4.1
-
-
-
-
-
85,680
1
-
-
-
-
-
78,583
61
-
85,680
1
3,609
-
-
3,609
78,583
61
85,680
1
78,644
3,609
167,933
1
-
(15,476)
80,000
(1,939)
9,175
-
-
-
-
443
-
-
-
-
-
87,236
(15,033)
-
-
-
-
-
-
-
(15,476)
80,000
(1,939)
9,175
443
72,203
675,625
(86,983)
1
248,849
(3,866)
833,625
1
61,129
-
-
-
-
-
46,359
229
-
61,129
6,716
-
-
6,716
46,359
229
61,129
46,588
6,716
114,433
-
-
-
-
-
-
20,000
(475)
10,141
-
(29,559)
-
-
-
678
29,666
(28,881)
-
-
-
-
-
-
-
-
-
-
-
-
(29,559)
20,000
(475)
10,141
678
785
Balance as at 31 March 2022
705,291
(54,735)
295,437
2,850
948,843
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
1
Comparatives have been restated for the impact of a change in accounting policy in regards to the accounting for Software-as-a-Service
arrangements. Refer to note 1.2.
3 8
Better experiencesOCEANIAANNUAL REPORT 2022 C O N S O LI DAT E D CAS H FLOW S TAT E M E N T
For the year ended 31 March 2022
$NZ000’s
Cash flows from operating activities
Receipts from residents for village and care fees
Payments to suppliers and employees
Rental payments in relation to right of use investment property
Receipts from new occupation right agreements
Payments for outgoing occupation right agreements
Net Goods and Services Tax paid
Interest received
Interest paid
Interest paid in relation to right of use assets
Net cash inflow from operating activities
Cash flows from investing activities
Proceeds from sale and / or disposal of property, plant and equipment
and investment property
Payments for property, plant and equipment and intangible assets
Payments for investment property and investment property under development
Payments for business assets
Net cash outflow from investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Proceeds from bond issuance
Repayment of bank borrowing from bond proceeds
Proceeds from share placement
Capitalised costs in relation to share placement
Capitalised borrowing costs
Principal payments for right of use assets
Dividends paid
Net cash inflow from financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at end of period
March 2022
12 months
March 2021
10 months
190,096
(207,814)
(2,497)
214,188
(69,998)
(7,672)
77
(10,171)
(680)
105,529
(6)
(56,289)
(106,317)
(56,208)
(218,820)
162,513
(115,476)
100,000
(100,000)
20,000
(475)
(1,194)
(2,820)
(19,418)
43,130
(70,161)
79,906
9,745
142,290
(145,324)
1
(4,115)
171,387
(52,157)
(8,088)
24
(7,307)
(757)
95,953
1
-
(36,185)
1
(66,005)
-
(102,190)
1
90,274
(89,652)
125,000
(125,000)
80,000
(1,939)
(1,861)
(2,002)
(6,301)
68,519
62,282
17,624
79,906
The above Consolidated Cash Flow Statement should be read in conjunction with the accompanying notes.
1
Comparatives have been restated for the impact of a change in accounting policy in regards to the accounting for Software-as-a-Service
arrangements. Refer to note 1.2.
3 9
come from within.FINANCIAL STATEMENTS C O N S O LI DAT E D CAS H FLOW S TAT E M E N T (continued)
For the year ended 31 March 2022
Reconciliation of profit after income tax to net cash inflow from operating activities
$NZ000’s
Profit for the period
Notes
March 2022
12 months
March 2021
10 months
61,129
85,680
1
Non cash items included in profit for the period
Deferred management fees accrued but not settled
Depreciation (buildings and care suites)
Depreciation and amortisation (chattels, leasehold improvements
and software)
Impairment of goodwill
Net loss on disposal of property, plant and equipment
Fair value adjustment to investment property
Fair value adjustment to right of use investment property and
right of use land and buildings
Impairment / (reversal of impairment) of property, plant and equipment
Loss allowance for trade and other receivables
Interest accrued but not paid
Fair value movement on residents’ share of resale gains
Fair value loss on cash flow hedges
Deferred tax benefit
Employee share scheme
Gain on purchase of business assets
Other non cash items
2.2
2.4
2.4
2.4
3.1
3.4
3.2
2.4
2.4
5.6
5.1
4.3
Cash items excluded from profit for the period
Receipts from new occupation right agreements
Payments for outgoing occupation right agreements
Increase in operating assets and liabilities
Increase / (Decrease) in trade and other receivables
(Decrease) / Increase in trade and other payables
Net cash inflow from operating activities
(57,527)
11,487
(32,901)
8,615
7,133
412
1,149
4,920
1
1,220
995
(63,475)
(79,969)
115
4,741
41
(2,097)
825
(58)
(4,879)
678
(10,358)
670
(2,262)
(4,304)
18
(1,723)
2,026
-
(10,396)
443
-
557
1
(111,143)
(112,761)
1
214,188
(69,998)
144,190
171,387
(52,157)
119,230
13,110
(1,757)
105,529
(2,271)
6,075
95,953
1
The Board of Directors of the Company authorised these consolidated financial statements for issue on 20 May 2022.
For and on behalf of the Board
Elizabeth Coutts
Chair
Alan Isaac
Director
The above Consolidated Cash Flow Statement should be read in conjunction with the accompanying notes.
1
Comparatives have been restated for the impact of a change in accounting policy in regards to the accounting for Software-as-a-Service
arrangements. Refer to note 1.2.
4 0
Better experiencesOCEANIAANNUAL REPORT 2022 come from within.
Notes to the
Consolidated
Financial
Statements
For the year ended 31 March 2022
1. General Information
1.1
Basis of Preparation
1.2 Accounting Policies
1.3 Significant Events and Transactions
2. Operating Performance
2.1 Operating Segments
2.2 Revenue
2.3 Other Income
2.4 Expenses
3. Property Assets
3.1
Village Assets: Investment Property
3.2 Care Assets: Property, Plan
and Equipment
3.3 Refundable Occupation
Right Agreements
3.4 Leases
4. Shareholder Equity and Funding
4.1
Shareholder Equity and Reserves
4.2 Earnings per Share
4.3 Employee Share Based Payments
4.4 Borrowings
5. Other Disclosures
5.1
Income Tax
5.2
Intangible Assets
5.3 Trade and Other Receivables
5.4 Trade and Other Payables
5.5 Related Party Transactions
5.6 Financial Risk Management
5.7 Contingencies and Commitments
5.8 Events After Balance Date
Independent Auditor's Report
42
42
43
44
46
46
54
55
56
58
60
64
69
71
74
74
76
76
77
80
80
83
85
86
86
87
90
90
91
41
FINANCIAL STATEMENTS
N OT ES TO T H E C O N S O LI DAT E D FI NAN C IAL S TAT E M E N T S
For the year ended 31 March 2022
1. General Information
1.1 Basis of Preparation
(i) Entities Reporting
The consolidated financial statements of the Group are for the economic entity comprising Oceania Healthcare Limited
(the ‘Company’) and its subsidiaries (together ‘the Group’). Refer to note 5.5 for details of the Group structure.
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Oceania Healthcare Limited
as at 31 March 2022 and the results of all subsidiaries for the year then ended.
The Group owns and operates various care centres and retirement villages throughout New Zealand. During the year the
Group Corporate Office functions were relocated to new premises. The Group's registered office is Level 11, 80 Queen
Street, Auckland 1010, New Zealand (31 March 2021: 2 Hargreaves Street, St Mary’s Bay, Auckland 1011).
(ii) Statutory Base
Oceania Healthcare Limited is a limited liability company which is domiciled and incorporated in New Zealand. It is
registered under the Companies Act 1993 and is a FMC Reporting Entity in terms of Part 7 of the Financial Markets Conduct
Act 2013. The Company is also listed on the NZX Main Board (‘NZX’) and the Australian Securities Exchange (‘ASX’) as a
foreign exempt listing. The consolidated financial statements have been prepared in accordance with the requirements of
the NZX and ASX listing rules, and Part 7 of the Financial Markets Conduct Act 2013.
The consolidated financial statements have been prepared in accordance with New Zealand Generally Accepted
Accounting Practice (‘NZ GAAP’). They comply with New Zealand equivalents to International Financial Reporting
Standards (‘NZ IFRS’), International Financial Reporting Standards (‘IFRS’) and other applicable New Zealand Financial
Reporting Standards, as appropriate for for-profit entities. The Group is a Tier 1 for-profit entity in accordance with XRB A1.
The consolidated financial statements have been prepared in accordance with the going concern basis of accounting,
which assumes that the Group will be able to realise its assets and discharge its liabilities in the normal course of business
as they come due into the foreseeable future.
The Consolidated Balance Sheet has been prepared using a liquidity format.
(iii) Measurement Basis
These consolidated financial statements have been prepared under the historical cost convention, as modified by the
revaluation of certain assets and liabilities, including investment properties, certain classes of property, plant and
equipment, right of use assets and derivatives.
(iv) Key Estimates and Judgements
The preparation of the consolidated financial statements in conformity with NZ IFRS requires the use of certain critical
accounting estimates. It also requires management to exercise their judgement in the process of applying the Group’s
accounting policies.
The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will,
by definition, seldom equal the related actual results. 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.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant
to the consolidated financial statements are disclosed in the following notes:
– Fair value of assets acquired in business combination (note 1.3)
– Classification of accommodation with a care or service offering (note 3)
– Fair value of investment property and investment property under development (note 3.1)
– Fair value of freehold land and buildings (note 3.2)
– Revenue recognition of deferred management fees (note 3.3)
– Fair value of right of use assets (note 3.4)
– Recognition of deferred tax (note 5.1)
42
Better experiencesOCEANIAANNUAL REPORT 2022 1.2 Accounting Policies
Accounting policies that summarise the measurement basis used and which are relevant to understanding the consolidated
financial statements are provided throughout the notes to these consolidated financial statements.
Other relevant policies are provided as follows:
(i) Principles of Consolidation
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group.
They are deconsolidated from the date that control ceases.
Intercompany transactions and balances between Group companies are eliminated. Accounting policies of subsidiaries
are consistent with the policies adopted by the Group.
(ii) Functional and Presentational Currency
These consolidated financial statements are presented in New Zealand Dollars which is the Company’s functional currency
and the Group’s presentation currency. Unless otherwise stated the consolidated financial statements are presented in
round thousands of dollars. The use of $m signifies millions of dollars.
(iii) Goods and Services Tax (‘GST’)
The Consolidated Statement of Comprehensive Income and Consolidated Cash Flow Statement have been prepared so
that all components are stated exclusive of any GST that can be claimed with the net amount of GST payments/receipts
being shown in the cash flow statement under operating activities. GST is only deductible by the Group to the extent
that it relates to care operations. All items in the Consolidated Balance Sheet are stated net of GST, with the exception of
receivables and payables, which include GST invoiced.
(iv) Comparative Information
Where a change has been made to the presentation of the consolidated financial statements to that used in prior periods,
comparative figures have been restated accordingly. Changes to comparative disclosures has been detailed in note 1.2 (v).
(v) New Accounting Standards
During the year, the Group revised its accounting policy in relation to upfront configuration and customisation costs
incurred in implementing Software-as-a-Service (‘SaaS’) arrangements. This was in response to the IFRIC agenda
decision in April 2021 clarifying its interpretation of how current accounting standards apply to these types of
arrangements. The new accounting policy is presented below.
No other changes to accounting policies have been made during the year and the Group has not early adopted any
standards, amendments or interpretations to existing standards that are not yet effective.
Software-as-a-Service (‘SaaS’) arrangements
SaaS arrangements are service contracts providing the Group with the right to access the cloud provider’s application
software over the contract period but where the Group does not control the underlying software used in the arrangement.
Under the new accounting policy, where costs incurred to configure or customise SaaS arrangements result in the creation
of a resource which is identifiable, and where the Group has the power to obtain the future economic benefits flowing from
the underlying resource and to restrict the access of others to those benefits, such costs are recognised as a separate
intangible software asset and amortised over the useful life of the software on a straight-line basis. If costs do not meet the
recognition criteria, they are expensed when incurred. The useful lives of the intangible assets are reviewed at least at the
end of each financial year, and any change accounted for prospectively as a change in accounting estimate.
During the year the Group reviewed the agreements supporting documentation for all capitalised software and associated
projects. In light of guidance from the IFRIC agenda decision, one item of software which was capitalised during the
year ended 31 May 2020 no longer met the criteria for capitalisation. The Group has applied the required treatment
retrospectively and the effect of this change in treatment is shown below.
Comparative information has been restated to reflect the retrospective application of SaaS guidance with respect to one
item of software held by the Group which was purchased in 2017.
The impact of this to the period ended 31 March 2021 profit and loss is a net increase to Net Profit after Tax of $146k comprising:
– a decrease to amortisation, recognised in depreciation and amortisation (chattels, leasehold improvements and
software), of $274k;
– an increase in staff costs, recognised in employee benefits and other staff costs, of $59k; and
– an increase to IT costs, recognised in other expenses, of $69k.
4 3
come from within.FINANCIAL STATEMENTS 1.2 Accounting Policies (continued)
A net decrease to Net Assets as at 31 March 2021 of $1.6m comprises a decrease in intangible assets of $2.1m, an increase
in chattels of $0.2m and an increase in prepayments, recognised in trade and other receivables, of $0.3m. The opening
retained deficit increased by $1.5m.
An increase in payments to suppliers and employees of $84k and a corresponding decrease in payments for property,
plant and equipment and intangible assets within the Consolidated Cash Flow Statement.
The balance of the impact to Net Profit after Tax was incurred in the periods from November 2017 to 31 May 2020.
The total impact on Net Profit after Tax comprised a decrease to amortisation of $0.3m offset by an increase in staff
costs of $1.2m and an increase to IT costs of $0.6m.
(vi) Measurement of Fair Value
The Group classifies its fair value measurement using the fair value hierarchy that reflects the significance of the inputs
used in making the measurements. The fair value hierarchy has the following levels:
Level 1: Quoted prices (unadjusted) in active markets for the identical assets or liabilities.
Level 2:
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3:
Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
1.3 Significant Events and Transactions
(i) COVID-19
On 11 March 2020, the World Health Organisation declared COVID-19 to be a global pandemic. COVID-19 has impacted
the health and wellbeing of people around the world and in turn the outbreak and the associated restrictions put in place to
fight the virus have had a significant adverse impact on the global economy.
The New Zealand Government’s initial overall public health strategy in respect of the COVID-19 pandemic affecting
New Zealand was elimination with the overall goal to stop community transmission in New Zealand. In the time from the
emergence of the virus in New Zealand during March 2020 until 2 December 2021 this strategy involved a framework of
Alert Levels and lockdowns which various regions moved through as cases were detected.
On 2 December 2021 the New Zealand Government moved to a strategy of minimisation and protection. This framework
aims to protect both those who are the most at risk of severe disease/outcomes as well as the health system that is required
to treat these people and continue to function to maintain other health services. Rather than Alert Levels and lockdowns the
minimisation and protection framework focuses on vaccinations and the use of traffic lights – 3 settings that are designed
to help prevent and managed outbreaks and cases. Rather than generalised lockdowns the traffic light system uses
vaccine mandates, capacity limits and localised protections and lockdowns.
The pandemic has had an immaterial impact on Oceania's income as providers of an essential service. There has however
been an impact on the Group's expenditure as wages increase as a result of staff absences and increased costs associated
with the provision of personal protective equipment.
Certain key judgements and estimates are applied in the consolidated annual financial statements
The Directors have assessed the impact of COVID-19 on these judgements and estimates and concluded that no changes
are necessary. This is primarily due to Oceania providing an essential service.
No changes to the methodology or input estimates in relation to expected credit losses have been required as a result of
continued strong collection levels in respect of private care fees and deferred settlement of Occupation Right Agreement
(“ORA”) contracts.
4 4
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022 (ii) Acquisition: Waterford on Hobsonville Point (‘Waterford’)
On 23 March 2021, Oceania Village Company Limited entered into a Sale and Purchase Agreement to purchase the
business assets of Waterford on Hobsonville Point. Waterford is an established retirement village with 64 independent living
villas and 36 independent living apartments. The Sale and Purchase Agreement was conditional on the parties obtaining
Statutory Supervisor consent. This consent was received on 8 April 2021 and the transaction was settled on
23 April 2021, being the date of acquisition.
The business assets have been recognised as at the date of settlement and the future operating results consolidated from
that point forward. The financial effects of this transaction have been recognised in these annual financial statements.
Purchase consideration and fair value of net assets acquired
The purchase price of $56.2m, settled in cash, was linked to the 31 March 2020 CBRE Limited valuation of Waterford.
The acquisition was accounted for using the acquisition method as prescribed in NZ IFRS 3 Business Combinations.
This standard requires that all identifiable assets and liabilities be assumed at their acquisition date fair value.
$NZ000’s
Assets
Investment Property
Development Land
Chattels
Liabilities
Resident liabilities
Employee entitlements
Net assets acquired
Total consideration
Gain on purchase of business asset
Fair value on
acquisition
104,022
8,950
63
(46,437)
(19)
66,579
56,221
10,358
The gain on acquisition is due to the difference in the key assumptions within CBRE Limited’s valuations, including growth
rate and discount rate, between 31 March 2020, being the reference date for the acquisition, and 23 April 2021 being the
settlement date, largely reflecting a reversal of COVID-19 impacts.
The above differs from what was disclosed in the 30 September 2021 interim consolidated financial statements due to a
revision of Deferred Tax treatment of DMF (Sept 2021: $8.5m).
The operation of Waterford added $13.2m to Net Profit before Tax in the period since acquisition to 31 March 2022, of which
$3.0m is operating revenue. The impact on the fair value movements in the year is disclosed in note 3.1.
Contingent liabilities
No material contingent liabilities with respect to this transaction were noted during the due diligence process or since
acquisition. Should any future contingent liabilities arise, they will be disclosed in future consolidated financial statements.
(iii) Balance Date
On 9 July 2020 the Group received approval from the Commissioner of Inland Revenue to change the balance date for the
Group and its subsidiaries to 31 March. The comparatives represent a period of ten months.
(iv) Capital Raise
On 16 April 2021, a total of 15,619,810 ordinary shares ($20.0m, $1.2796 per share) were issued in relation to the Retail Offer
announced on 24 March 2021. These shares rank equally in all aspects with existing shares.
(v) Retail Bond
On 30 August 2021 Oceania Healthcare Limited announced an offer of up to $75m (with the ability to accept up to an
additional $25m in oversubscriptions) of 7 year secured fixed rate bonds. On 13 September 2021 bonds totalling $100.0m
were issued to New Zealand retail investors. These bonds mature on 13 September 2028. A fixed interest rate of 3.3% per
annum applies to the Bonds. Refer to note 4.4 for the impact on the year to 31 March 2022.
4 5
come from within.FINANCIAL STATEMENTS 2. Operating Performance
2.1 Operating Segments
The Group's chief operating decision maker is the Board of Directors.
The operating segments have been determined based on the information reviewed by the Board of Directors for the
purposes of allocating resources and assessing performance. The assets and liabilities of the Group are reported to
the chief operating decision maker in total not by operating segment.
The Group operates in New Zealand and comprises three segments; care operations, village operations and other.
Care
Village
Includes traditional care beds
and care suites.
Includes independent living
and rental properties.
Other
N/A
The provision of
accommodation and related
services to independent
residents in the Group’s
retirement villages.
The Group derives Operating
Revenue from weekly service
fees and rental income.
Operating Revenue also
includes DMF accrued over
the expected occupancy
period for the relevant
accommodation.
Operating Expenses
include village property
maintenance, sales and
marketing, and administration
related expenses.
Provision of support services
to the Group (includes
administration, marketing
and operations).
In addition this segment
includes the provision of
training by the Wesley
Institute of Learning.
Includes corporate office
and corporate expenses and
rental costs relating to the
Group’s two leasehold sites
(2021: three).
Finance costs relate to the
cost of bank debt acquired
for the purchase and
development of villages.
Income and expenditure
relating to the Wesley Institute
of Learning is recognised in
this segment.
Fair value movements are
recognised in comprehensive
income (i.e. profit or loss).
N/A
The provision of
accommodation, care and
related services to Oceania’s
aged care residents.
Includes the provision of
services such as meals
and care packages to
independent living residents.
The Group derives Operating
Revenue from the provision
of care and accommodation.
The daily fee is set annually
by the Ministry of Health.
In relation to the provision
of superior accommodation
above the Government
specification the Group
derives revenue from Premium
Accommodation Charges
(‘PACs’) or, in the case of
care suites, through Deferred
Management Fees (‘DMF’).
Operating Expenses
primarily include staff costs,
resident welfare expenses
and overheads.
Fair value increases or
decreases are recognised in
other comprehensive income
(i.e. not in profit or loss) for the
fair value movement above
historical cost.
Impairments below historical
cost are recognised in
comprehensive income (i.e.
profit or loss).
Product
Services
Recognition of
Operating Revenue
and Expenses
Recognition of
Fair Value movements
on New Developments
4 6
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022 Care
Village
Recognition of Fair Value
movements on Existing
Care Centres and
Retirement Villages
Recognition in
Underlying Profit
(refer note 2.1 overleaf)
Fair value movements are
treated the same as above.
When sites are
decommissioned for
development this results in an
impairment of the buildings
and chattels which is
recognised in comprehensive
income (i.e. profit or loss).
Fair value movements
are removed.
Asset Categorisation
Assets used, or, in the case
of developments, to be used,
in the provision of care are
recognised as property, plant
and equipment.
Fair value movements are
recognised in comprehensive
income (i.e. profit or loss).
Fair value movements are
removed. Realised gains on
resales and the development
margins from the sale of
independent living units and
care suites are included,
reflective of the ownership
structure of the assets.
Assets used for village
operations are recognised as
investment property.
Other
N/A
No material adjustments.
Corporate office assets are
recognised as property, plant
and equipment. Assets include
intangibles (e.g. software).
Information regarding the operations of each reportable segment is included above. Amongst other criteria, performance is
measured based on segmental underlying earnings before interest, tax, depreciation and amortisation (‘EBITDA’), which is
the most relevant measure in evaluating the performance of segments relative to other entities that operate within the aged
care and retirement village industries.
Additional Segmental Reporting Information
Capital expenditure: Refer to notes 3.1, 3.2 and 3.4 for details on capital expenditure.
Goodwill: Goodwill is allocated to care cash generating units.
What is Total Comprehensive Income?
Total comprehensive income is a measure of the total performance of all segments under NZ GAAP.
It includes fair value movements relating to the Group’s care centres and cash flow hedges.
47
come from within.FINANCIAL STATEMENTS Care
Operations
187,434
-
-
1,270
188,704
(168,410)
(412)
-
(4,741)
15,141
-
-
(10,899)
(5,780)
(1,538)
1,156
Village
Operations
41,607
63,475
10,358
1,921
117,361
(23,719)
-
(115)
-
Other
2,099
-
-
240
2,339
Total
231,140
63,475
10,358
3,431
308,404
(26,834)
(218,963)
-
-
-
(412)
(115)
(4,741)
84,173
93,527
(24,495)
7
-
(3)
-
93,531
(4,380)
70
77
(9,380)
(9,380)
(585)
(11,487)
(1,353)
(35,743)
8,103
(7,133)
56,250
4,879
(382)
89,151
(27,640)
61,129
46,359
229
-
-
-
-
-
-
6,716
46,359
229
6,716
46,206
89,151
(20,924)
114,433
2.1 Operating Segments (continued)
12 months ended 31 March 2022
$NZ000’s
Revenue
Change in fair value of investment property
Gain on purchase of business assets
Other income
Total income
Operating expenses
Impairment of goodwill
Impairment of right of use investment property
Impairment of property, plant and equipment
Segment EBITDA
Interest income
Finance costs
Depreciation (buildings and care suites)
Depreciation and amortisation (chattels, leasehold
improvements and software)
(Loss) / profit before income tax
Income tax benefit
(Loss) / profit for the period attributable
to shareholders
Other comprehensive income
Gain on revaluation of property, plant and equipment
for the period, net of tax
Gain on revaluation of right of use asset for the period,
net of tax
Loss on cash flow hedges, net of tax
Total comprehensive income for the year
attributable to shareholders of the parent
4 8
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022 10 months ended 31 March 2021
$NZ000’s
Revenue
Change in fair value of investment property
Change in fair value of right of use investment property
Other income
Total income
Operating expenses
Impairment of goodwill
Reversal of impairment of property, plant and equipment
Segment EBITDA
Interest income
Finance costs
Depreciation (buildings and care suites)
Depreciation and amortisation
(chattels, leasehold improvements and software)
Profit / (loss) before income tax
Income tax benefit
Profit / (loss) for the period attributable to shareholders
Other comprehensive income
Gain on revaluation of property, plant and equipment
for the period, net of tax
Gain on revaluation of right of use asset for the period,
net of tax
Loss on cash flow hedges, net of tax
Total comprehensive income for the period
attributable to shareholders of the parent
Care
Operations
146,572
-
-
512
147,084
Village
Operations
28,199
79,969
2,299
1,524
111,991
Other
646
-
-
9
655
Total
175,417
79,969
2,299
2,045
259,730
(128,602)
(20,517)
(18,069)
1
(167,188)
1
(1,220)
4,169
21,431
-
-
(8,410)
(4,164)
8,857
10,112
18,969
78,583
61
-
-
98
-
-
91,572
(17,414)
1
20
(6,795)
(205)
4
-
-
-
(1,220)
4,267
95,589
1
24
(6,795)
(8,615)
(755)
1
(4,919)
1
91,576
594
92,170
1
(25,149)
(310)
(25,459)
1
75,284
1
10,396
85,680
1
-
-
-
-
-
3,609
78,583
61
3,609
97,613
92,170
(21,850)
1
167,933
1
1
Comparatives have been restated for the impact of a change in accounting policy in regards to the accounting for Software-as-a-Service
arrangements. Refer to note 1.2.
4 9
come from within.FINANCIAL STATEMENTS 2.1 Operating Segments (continued)
Underlying Net Profit after Tax (‘Underlying Profit’)
Underlying Profit and Underlying EBITDA are non-GAAP measures of financial performance and considered in the
determination of dividends. The calculation of Underlying Profit and Underlying EBITDA requires a number of estimates
to be approved by the Directors in their preparation. Both the methodology and the estimates may differ among
companies in the retirement village sector. Underlying Profit and Underlying EBITDA do not represent cash flow
generated during the period.
The Group calculates Underlying Profit and Underlying EBITDA by making the following adjustments to reported
Net Profit after Tax:
Remove
Add back
Add back
Add back /
remove
Add back
Add back
Add back
Net Profit after Tax
Change in fair value of investment property, right of use investment property assets and cash flow
hedges and impairment / reversal of impairment of property, plant and equipment and right of use
property, plant and equipment
Impairment of goodwill
Rental expenditure in relation to right of use investment property assets
Loss / gain on sale, decommissioning or purchase of assets and business assets
Depreciation (care suites)
Directors’ estimate of realised gains on the resale of units and care suites sold under an ORA
Directors’ estimate of realised development margin on the first sale of new ORA units or care suites
following the development of an ORA unit or care suite, conversion of an existing care bed to a care
suite or conversion of a rental unit to an ORA unit
Add back
Deferred taxation component of taxation expense so that only the current tax expense is reflected
=
Remove
Add back
Add back
=
Underlying Profit
Interest income
Finance costs (including lease interest under NZ IFRS 16 Leases but excluding hedge ineffectiveness)
Depreciation and amortisation (including right of use and property, plant and equipment)
Underlying EBITDA
Resale Gain – Underlying Profit
The Directors’ estimate of realised gains on resales of ORA units and care suites (i.e. the difference between the incoming
resident’s ORA licence payment and the ORA licence payment previously received from the outgoing resident) is calculated
as the net cash flow received, and receivable at the point that the ORA contract becomes unconditional and has either
‘cooled off’ (the contractual period in which the resident can cancel the contract) or where the resident is in occupation
at balance date.
5 0
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022 Development Margin – Underlying Profit
The Directors’ estimate of realised development margin is calculated as the ORA licence payment received, and receivable,
in relation to the first sale of new ORA units and care suites, at the point that the ORA contract becomes unconditional
and has either ‘cooled off’ or where the resident is in occupation at balance date, less the development costs associated
with developing the ORA units and care suites. Where the development has been acquired in a business combination the
development costs are equal to the purchase price.
The Directors’ estimate of realised development margin for conversions is calculated based on the difference between the
ORA licence payment received, and receivable, in relation to sales of newly converted ORA units and care suites, at the
point that the ORA contract becomes unconditional and has either ‘cooled off’ or where the resident is in occupation at
balance date, and the associated conversion costs.
The table below describes the composition of development and conversion costs.
Included
New builds:
– the construction costs directly attributable to the relevant project, including any required
infrastructure (e.g. roads) and amenities related to the units (e.g. landscaping) as well as any
demolition and site preparation costs associated with the project. The costs are apportioned
between the ORA units and care suites, in aggregate, using estimates provided by the project
quantity surveyor. The construction costs for the individual ORA units or care suites sold are
determined on a prorated basis using gross floor areas of the ORA units and care suites;
– an apportionment of land value based on the gross floor area of the ORA units and care suites
developed. The value for Brownfield1 development land is the estimated fair value of land at
the time a change of use occurred2 (from operating as a care centre or retirement village to a
development site), as assessed by an external independent valuer. Greenfield3 development
land is valued at historical cost; and
– capitalised interest costs to the date of project completion apportioned using the gross floor
area of ORA units and care suites developed.
Conversions:
– of care beds to care suites – the actual refurbishment costs incurred; and
– of rental units to ORA units – the actual refurbishment costs incurred and the fair value
of the rental unit prior to conversion.
Excluded
– construction, land (apportioned on a gross floor area basis) and interest costs associated
with common areas and amenities or any operational or administrative areas.
1 Brownfield land refers to land previously utilised by, or part of, an operational aged care centre or retirement village.
2
The timing of a change of use is a Directors’ estimate. It is based on a range of factors including evidence of steps taken to secure a resource consent
and/or building consent for a particular development or stage of a development and the decommissioning of existing operations (either through the
buy-back of existing village ORA units or decommissioning of an existing care centre). Note the cost of buybacks is not included in the development cost
as an independent fair value of the land on an unencumbered basis is used as the value ascribed to the development land.
Greenfield land refers to land not previously utilised by, or as part of, an operational aged care centre or retirement village. Greenfield land is typically
bare (undeveloped) land at the time of purchase.
3
51
come from within.FINANCIAL STATEMENTS 2.1 Operating Segments (continued)
12 months ended 31 March 2022
$NZ000’s
Total comprehensive income for the period
attributable to shareholders of the parent
Adjusted for Proforma items
Add: Repayment of Wage Subsidy1
Adjusted for Underlying Profit items
Less: Change in fair value of investment property,
right of use assets and cash flow hedges and
impairment of property, plant and equipment
Add: Impairment of goodwill
Add: Rental expenditure in relation to right of use asset
Add: Depreciation (care suites)
Add: Loss / gain on sale, decommissioning or
purchase of assets and business assets
Add: Realised resale gain
Add: Realised development margin
Underlying net profit before tax
Less: Deferred tax benefit
Underlying net profit after tax
Less: Interest income
Add: Finance costs (excluding hedge ineffectiveness)
Add: Depreciation (buildings)
Add: Depreciation and amortisation
(chattels, leasehold improvements and software)
Underlying EBITDA
Care
Operations
Village
Operations
Other
Total
46,206
89,151
(20,924)
114,433
1,768
-
-
1,768
(41,848)
(63,359)
(6,716)
(111,923)
412
-
8,403
(8)
-
-
14,933
(1,156)
13,777
-
-
2,496
5,780
22,053
-
2,497
-
(10,422)
23,492
32,850
74,209
4,380
78,589
(7)
-
3
-
-
-
-
98
-
-
(27,542)
(8,103)
(35,645)
(70)
9,380
585
1,353
78,585
(24,397)
412
2,497
8,403
(10,332)
23,492
32,850
61,600
(4,879)
56,721
(77)
9,380
3,084
7,133
76,241
1
On 21 April 2020 the Group claimed, and received payment of, a COVID-19 wage subsidy totalling $1.8m. This amount has subsequently been repaid in
full on 18 May 2021 and as a result has been excluded from the table above. This proforma adjustment increases underlying EBITDA and underlying NPAT
in relation to the 12 month period to 31 March 2022 by $1.8m and reduces the underlying EBITDA and underlying NPAT position in relation to the 12 month
period to 31 March 2021 by $1.8m. The statutory comparative period being the 10 months to 31 March 2021 is not impacted by this proforma adjustment.
5 2
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022 10 months ended 31 March 2021
$NZ000’s
Total comprehensive income for the period
attributable to shareholders of the parent
Care
Operations
Village
Operations
Other
Total
97,613
92,170
(21,850)
1
167,933
1
Adjusted for Underlying Profit items
Less: Change in fair value of investment property,
right of use assets and cash flow hedges and
impairment of property, plant and equipment
Add: Impairment of goodwill
Add: Rental expenditure in relation to right of use asset
Add: Depreciation (care suites)
Add: Loss / gain on sale, decommissioning or
purchase of assets and business assets
Add: Realised resale gain
Add: Realised development margin
Underlying net profit before tax
Less: Deferred tax benefit
Underlying net profit after tax
Less: Interest income
Add: Finance costs (excluding hedge ineffectiveness)
Add: Depreciation (buildings)
Add: Depreciation and amortisation
(chattels, leasehold improvements and software)
Underlying EBITDA
(82,811)
(82,367)
(3,609)
(168,787)
1,220
-
6,173
-
-
-
22,195
(10,112)
12,083
-
-
2,237
4,164
18,484
-
4,115
-
-
17,913
23,815
55,646
(594)
-
-
-
(84)
-
-
1,220
4,115
6,173
(84)
17,913
23,815
(25,543)
1
52,298
1
310
(10,396)
55,052
(25,233)
1
41,902
1
(4)
-
-
-
(20)
6,795
206
755
1
55,048
(17,497)
1
(24)
6,795
2,443
4,919
1
56,035
1
1
Comparatives have been restated for the impact of a change in accounting policy in regards to the accounting for Software-as-a-Service
arrangements. Refer to note 1.2.
5 3
come from within.FINANCIAL STATEMENTS 2.2 Revenue
How We Earn Revenue
Care
Village
Daily care fees for long term and
short term rest home, hospital and
dementia residents
Deferred management fees –
independent living
Other
Training income
Premium accommodation charges
Village service fees – independent living Interest income
Deferred management fees –
care suites
Rental income – residents without a
long term occupation right agreement
Accounting Policy
Revenue is recognised in accordance with NZ IFRS 15 Revenue from Contracts with Customers (‘NZ IFRS 15’). Deferred
management fees and rental income are considered leases under NZ IFRS 16 Leases (‘NZ IFRS 16’), and are therefore
excluded from the scope of NZ IFRS 15. None of the Group’s revenue, as defined by NZ IFRS 15, contains significant
financing components.
Rest Home and Hospital Service Fees
A contract is in place with all care residents by means of an admission agreement. The resident receives the benefit as the
care is administered and each resident incurs a contracted daily care fee set by the Government each year. Rest home and
hospital service fees are recognised at the point in time the services are rendered which is specifically linked to the day the
service is delivered. Where applicable these are recognised net of any associated rebates to residents.
Aged care subsidies received from the Ministry of Health, included in rest home, hospital and dementia fee revenue within
the care segment, for the year to March 2022 amounted to $99.7m (10 months to March 2021: $82.8m).
Premium Accommodation Charges
Premium accommodation charges are payable by residents who occupy a premium room above the level specified
by the Government. The charge is included in their admission agreement and the charge is recognised when the
accommodation is provided.
Deferred Management Fees
Deferred management fees are considered leases and are payable by residents of the Group's units, apartments and care
suites under the terms of their ORA or unit title rights. Refer to note 3.3.
Management fees are typically payable on termination of the ORA up to a maximum percentage of a resident's occupation
licence or unit title rights deposit for the right to share in the use and enjoyment of common facilities.
The timing of the recognition of deferred management fees is a critical accounting estimate and judgement. The deferred
management fee is recognised on a straight line basis over the longer of the term specified in a resident's ORA or the
average expected occupancy. The expected periods of occupancy are based on historical Group averages, for the relevant
accommodation they are estimated to be 7 years for units, 5 years for apartments and 3 years for care suites from the
date of occupation. Estimates of deferred management fee tenure are reviewed periodically. Where a change is made, it
is the Group’s policy to recognise the aggregate impact of this change in the period in which the change in estimate occurs.
Deferred management fees are recognised with respect to the leased retirement village site as per note 3.4.
5 4
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022 Village Service Fees
Village service fees are charged to residents to recover a portion of village operating costs associated with services
provided including staff wages, rates, and electricity. An ORA is in place with all village residents who receive the benefit
of services throughout their stay. Village service fees are recognised over time as services are rendered.
Training Income
Training income is received from students attending short term training courses at the Wesley Institute of Nursing
Education. Income is recognised when the course is provided.
Rental Income
Rental agreements are in place with all rental residents and set out the relevant weekly / monthly rental fee.
The resident receives the benefit throughout their stay and revenue is recognised as it is earned.
$NZ000’s
Rest home, hospital, dementia fees
Premium accommodation charge
Deferred management fees – independent living
Deferred management fees – care suites
Deferred management fees – leased site
Village service fees
Training income
Rental income
Other services provided to residents
2.3 Other Income
Interest Income
March 2022
12 months
March 2021
10 months
167,804
4,820
30,751
14,107
2,360
7,605
2,094
877
722
132,780
3,606
20,234
9,479
1,869
5,208
663
914
664
231,140
175,417
Interest income is recognised on an accruals basis using the effective interest method.
Other Income
Other income includes administration and legal income derived from the settlement of ORAs.
$NZ000’s
Interest income
Change in fair value of ineffective cash flow hedges
Other income
March 2022
12 months
March 2021
10 months
77
58
3,373
3,508
24
-
2,045
2,069
5 5
come from within.FINANCIAL STATEMENTS 2.4 Expenses
Accounting Policy
All operating expenses are recognised on an accrual basis.
$NZ000’s
Profit before income tax includes the following expenses:
Employee benefits and other staff costs
Wages and salaries
Termination benefits
Employee share scheme expense
Other staff costs1
Depreciation and amortisation
Depreciation of buildings
Depreciation of care suites
Depreciation of right of use assets (buildings)
Depreciation of chattels
Depreciation of right of use assets (chattels)
Amortisation of software
Finance costs
Interest on senior debt facilities
Interest on Retail Bond
Agency, commitment and line fees
Interest rate swaps
Capitalised interest and line fees
Amortisation of bank fees
Bank interest
Interest on right of use assets
Impairment / (reversal of impairment) of property, plant and equipment
Impairment of right of use investment property
Rental expenditure in relation to right of use investment property
Impairment of goodwill
3.2
3.4
5.2
Notes
March 2022
12 months
March 2021
10 months
4.3
3.2
3.2
3.4
3.2
3.4
5.2
151,693
3
113,183
2
686
414
3,653
156,446
2,210
8,403
874
4,827
1,867
439
281
255
2,009
1
115,728
2
1,948
6,173
494
3,136
1
1,609
174
2
18,620
13,534
2
3,427
4,681
2,990
2,236
(5,114)
626
-
534
9,380
4,741
115
2,497
412
3,468
1,291
2,782
2,302
(4,261)
455
1
757
6,795
(4,267)
-
4,115
1,220
1
2
3
Other staff costs include costs such as staff training, uniforms and recruitment.
Includes an adjustment for the impact in change in accounting policy in regards to the accounting for Software-as-a-Service arrangements.
Refer to note 1.2.
Includes the repayment of a Covid Subsidy.
5 6
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022 $NZ000’s
Other expenses
Fees paid to Auditor
Audit and review of consolidated financial statements
Other assurance services – Trustee reporting
Other services – Proxy voting (Annual Shareholders Meeting)
Task Force on Climate-Related Financial Disclosures (TCFD) gap analysis
and materiality matrix
Total fees paid to auditor
Repairs and maintenance of property, plant and equipment including
leasehold care centres
Repairs and maintenance of investment property including leasehold
investment property
Loss / (gain) on disposal of property, plant and equipment
Donations
Loss allowance for trade and other receivables
Resident consumables
Increase in Residents’ share of resale gains
Insurance
Legal and professional services
Other expenses (no items of individual significance)
Total Expenses
Notes
March 2022
12 months
March 2021
10 months
540
7
7
62
616
3,049
1,567
27
33
28
17,460
825
4,332
3,676
28,407
60,020
252,231
396
6
-
-
402
2,410
1,301
(84)
3
18
14,340
2,026
2,928
2,867
21,134
1
47,345
1
184,470
1
5.3
1
Includes an adjustment for the impact in change in accounting policy in regards to the accounting for Software-as-a-Service arrangements.
Refer to note 1.2.
57
come from within.FINANCIAL STATEMENTS 3. Property Assets
The Group operates care centres and retirement villages. As outlined in section 2.1, village sites are typically investment
property and care sites are typically property, plant and equipment.
What is Investment Property?
Land and buildings are classified as investment property when they are held to generate revenue either through
capital appreciation or through rental income.
As residents occupying our retirement villages live independently, the level of services provided is seen as secondary
to the provision of accommodation. Accordingly, these buildings are classified as investment property as they are
held primarily to generate DMF income.
What is Property, Plant and Equipment?
Land, buildings and chattels are classified as property, plant and equipment when they are used to generate revenue
through the provision of goods and services or for administration purposes.
As residents occupying our care centres, including care suites, require services including nursing care, meals and
laundry the buildings in which they live are considered to be operated by the Group to generate this revenue and
are classified as property, plant and equipment.
What is a Care Suite?
Care suites are a premium offering for a resident requiring rest home or hospital level care. The care suite is located
within a care centre. Rather than pay a daily premium accommodation charge for the provision of the premium room
the residents enter into an ORA with a net management fee.
5 8
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022 Classification of Serviced Apartments and Care Suites
Where services are provided to residents who occupy accommodation under an ORA, it is the Group’s policy to assess their
level of significance in the context of the overall income derived from the serviced apartment or care suite in ascertaining
whether the serviced apartment or care suite is freehold land and buildings (referred to as property, plant and equipment)
or investment property.
The Group applies the following principles when ascertaining the appropriate accounting treatment to be applied:
CLASSIFICATION
Investment Property
Village Assets
Property, Plant and Equipment
Care Assets
Independent living
(villa or apartment)
SCENARIO
Serviced apartment
Care suite
Traditional care bed
Additional services
are optional
Services are
compulsory but an
insignificant portion
of total revenue
from the unit
Services are
compulsory and a
significant portion
of the total revenue
from the unit
Full ARRC1 funded
care is compulsory
for that unit/bed
CONSIDERATION OF SIGNIFICANCE OF CASH FLOWS
Qualitatively the
business model is the
provision of retirement
accommodation
Quantitatively
insignificant
(a guideline of under
20% of total revenue
is adopted) and
qualitatively the
business model is the
provision of retirement
accommodation
Quantitatively
significant.
Qualitatively the
business model is the
provision of care
Qualitatively the
business model is
the provision of care.
Quantitative
assessment not
relevant as price of
accommodation does
not change overall
purpose of the
accommodation
1
ARRC refers to age-related residential care.
5 9
come from within.FINANCIAL STATEMENTS 3.1 Village Assets: Investment Property
Accounting Policy
Investment property includes both freehold land and buildings and land and buildings under development, comprising
independent units, serviced apartments and common facilities, provided for use by residents under the terms of an ORA.
Investment property is held for long-term yields and is not occupied by the Group. Investment property is held at fair value.
The fair value of investment property is determined by the Directors having taken into consideration the valuation
conducted by CBRE Limited as an independent registered valuer and the cost of work undertaken in relation to investment
property under development.
The movement in the carrying value of investment property, net of additions, transfers and disposals is recognised as a fair
value movement in the Consolidated Statement of Comprehensive Income.
Fair value measurement on investment property under development is only applied if the fair value is considered to be
reliably measurable. Where the fair value of a property under development can be determined, it is carried at fair value.
Where the fair value of investment property under development cannot be reliably determined, the carrying amount is
considered to be the fair value of the land plus the cost of work undertaken.
$NZ000’s
Notes
March 2022
March 2021
Investment property under development at fair value
Opening balance
Transfer from property, plant and equipment
Capitalised expenditure (including land acquisitions)
Capitalised interest and line fees
Transfer to completed investment property
Transfer to property, plant and equipment
Change in fair value during the period – developments as at balance date
Change in fair value during the period – developments completed during the period
Closing balance
Completed investment property at fair value
Opening balance
Acquisition1
Transfer from investment property under development
Transfer to property, plant and equipment
Capitalised expenditure
Capitalised interest and line fees
Disposals
Change in fair value during the period – existing villages
Change in fair value during the period – recently completed developments2
Closing balance
3.2
Total investment property
143,720
3,750
99,481
2,585
145,020
-
63,881
3,028
(89,626)
(99,512)
(65)
13,643
411
173,899
-
7,826
23,477
143,720
956,083
46,437
89,626
-
61,794
1,292
-
22,511
26,910
802,060
-
99,512
(1,329)
7,050
124
-
34,888
13,778
1,204,653
956,083
1,378,552
1,099,803
1
2
Relates to resident liabilities acquired on acquisition of Waterford on Hobsonville Point, the value of the underlying property is included within
capitalised expenditure. Refer to note 1.3 for details.
Recently completed developments refers to those developments which were being sold down during the period.
6 0
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022 Change in Fair Value Recognised in the Consolidated Statement of Comprehensive Income
$NZ000’s
Increase in fair value of investment property
Add: Transfers to property, plant and equipment and to right of use assets
during the period
Less: Capitalised expenditure including capitalised interest
Less: Resident obligations on acquisition
Add: Disposals
Change in fair value recognised in
Consolidated Statement of Comprehensive Income
March 2022
12 months
278,749
March 2021
10 months
152,003
(3,685)
(165,152)
(46,437)
-
1,329
(74,083)
-
720
63,475
79,969
Included in the above change in fair value is an amount of $9.8m (increase) in respect to fair value moments since acquisition
date of the Waterford site. The movement in fair value has arisen predominantly on first sell down of vacant apartments.
A reconciliation between the valuation and the amount recognised on the Consolidated Balance Sheet as investment
property is as follows:
$NZ000’s
Investment property under development
Valuation
Completed Investment Property
Valuation
Add: Refundable occupation licence payments
Add: Residents’ share of resale gains
Less: Management fee receivable
Less: Resident obligations for units not included in valuation
March 2022
March 2021
173,899
173,899
143,720
143,720
592,982
732,714
6,780
(113,066)
(14,757)
1,204,653
474,215
573,766
7,205
(84,433)
(14,670)
956,083
Total investment property at fair value
1,378,552
1,099,803
Where an incoming resident has an unconditional ORA in respect of a retirement village unit and the corresponding
outgoing resident for that same accommodation has not yet been refunded, the CBRE Limited valuation is adjusted for the
incoming resident balances only. In certain circumstances accommodation under an ORA is valued as development land.
In these situations the CBRE Limited valuation is not adjusted for the refundable amounts and consequently no offsetting
‘gross up’ is required. An adjustment of $14.8m (31 March 2021: $14.7m) is included in the above reconciliation to reflect this.
The valuation of investment property is adjusted for cash flows relating to refundable occupation licence payments,
residents' share of resale gains and management fee receivable recognised separately on the Consolidated Balance Sheet
and also reflected in the valuation model.
Why do we adjust for the liability to residents?
In the CBRE Limited valuation the fair value of investment property includes an allowance for the amount that is
payable by the Group to residents already in occupation within the property. However, this liability to existing residents
is recognised in the Group’s Consolidated Balance Sheet (referred to as refundable occupation right agreements –
refer to note 3.3). Accordingly, the Group adds this net liability to residents to the CBRE Limited valuation to ‘gross up’
the fair value of investment property and avoid double counting the liability to residents.
61
come from within.FINANCIAL STATEMENTS 3.1 Village Assets: Investment Property (continued)
Valuation Process and Key Inputs
Investment Property under Development
CBRE Limited provided valuations of development land in respect of investment property under development as at
31 March 2022.
The fair value of investment property is determined by the Directors having taken into consideration the valuation
conducted by CBRE Limited as an independent registered valuer and the cost of work undertaken in relation to investment
property under development.
The Group has applied the following methodology in relation to the measurement of investment property
under development:
Practical completion not achieved
Where the development still requires substantial work such that practical completion is not going to be achieved, and a
reliable estimate of fair value cannot be made, at or close to balance date, the fair value recognised is the fair value of the
development land per the Directors’ valuation plus the cost of any work in progress. An amount of $51.1m as at 31 March
2022 (31 March 2021: $51.6m) has been recognised in relation to these development sites.
Where an individual development is of both investment property and freehold buildings in nature, the fair value of land
and work in progress is apportioned between investment property under development and freehold land and buildings
under development, by applying the estimated gross floor area for these respective areas of the development based on
information obtained from the project quantity surveyors at the planning and design stages.
Practical completion achieved
Where a development is practically completed, or likely to be completed at, or close to, balance date the investment
property is measured at its completed fair value per the Directors’ valuation with an adjustment made for any estimated
costs, in accordance with the project budget, to be incurred to complete the development, and is then transferred to
completed investment property.
Completed Investment Property
As required by NZ IAS 40 Investment Property, the valuation of investment property is adjusted for cash flows relating to
refundable occupation licence payments, residents’ share of resale gains and management fees receivable recognised
separately on the Consolidated Balance Sheet and also reflected in the valuation model.
The Group's interest in all completed investment property was valued on 31 March 2022 by CBRE Limited at a total of
$592.9m (31 March 2021: $472.2m).
Investment Property Held for Sale
Investment property assets are classified as held for sale when their carrying amount is to be recovered principally through
a sale transaction and a sale is considered highly probable. They are stated at their fair value.
Property Specific Assumptions
Seismic Assessments
The CBRE Limited valuation, and accordingly the fair value of investment property, incorporates an allowance in relation
to remediation to properties where seismic strength testing has been carried out in prior years.
Key Accounting Estimates and Judgements
All investment properties have been determined to be Level 3 (2021: Level 3) in the fair value hierarchy as the fair value is
determined using inputs that are unobservable.
62
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022 Significant Unobservable Inputs
The significant unobservable input used in the fair value measurement of the Group's development land is the value per m2
assumption. Increases in the value per m2 rate result in the corresponding increases in the total valuation.
The significant unobservable inputs used in the fair value measurement of the Group's portfolio of completed investment
property are the discount rate and property price growth rate. There are no interdependencies or interplays between
unobservable inputs.
The following assumptions have been used to determine fair value:
Significant Input
Description
2022
2021
Discount rate
The pre-tax discount rate
Anticipated annual property price growth
over the cash flow period 0-4 years
Anticipated annual property price growth
over the cash flow period 5+ years
14.0% - 20.0%
(median: 15.0%)
14.0% - 20.0%
(median: 15.0%)
0.5% - 3.0%
0.5% - 3.5%
2.5% - 3.5%
2.5% - 3.5%
Property price
growth rate
Property price
growth rate
Sensitivities
At 31 March 2022
Completed investment
property
Valuation $NZ000’s
Difference $NZ000’s
Difference %
At 31 March 2021
Completed investment
property
Valuation $NZ000’s
Difference $NZ000’s
Difference %
Adopted
Value
Discount Rate
+0.5%
Discount Rate
-0.5%
Property
Growth Rate
+50 bp
Property
Growth Rate
-50 bp
592,982
(19,656)
(3.3%)
20,281
3.4%
32,693
5.5%
(30,888)
(5.2%)
Adopted
Value
Discount Rate
+0.5%
Discount Rate
-0.5%
Property
Growth Rate
+50 bp
Property
Growth Rate
-50 bp
474,215
(17,288)
(3.6%)
18,442
3.9%
18,025
3.8%
(31,516)
(6.6%)
The stabilised occupancy period is a key driver of the CBRE Limited valuation. A significant increase / (decrease) in the
occupancy period would result in a significantly lower/ (higher) fair value measurement.
Significant Input
Stabilised occupancy period
2022
2021
2.7 yrs - 8.8 yrs
(median: 7.1 yrs)
2.8yrs - 8.5yrs
(median: 7.0yrs)
Current ingoing price, for subsequent resales of ORAs, is a key driver of the CBRE Limited valuation. A significant increase
/ (decrease) in the ingoing price (as driven by the property growth rates) would result in a significantly higher / (lower) fair
value measurement.
6 3
come from within.FINANCIAL STATEMENTS 3.2 Care Assets: Property, Plant and Equipment
Accounting Policy
Property, plant and equipment comprises owner-occupied freehold land and buildings and plant and equipment operated
by the Group for the provision of care services, care suites and land and buildings that are to be developed into care
centres in the future.
Following initial recognition at cost, completed owner occupied freehold land and buildings and land and buildings under
development are carried at fair value. Independent valuations are performed with sufficient regularity to ensure that the
carrying amount does not differ materially from the assets’ fair value at balance date. Any depreciation at the date of
valuation is deducted from the gross carrying value of the asset, and the net amount is restated to the revalued amount of
the asset. In periods where no valuation is carried out, the asset is carried at its revalued amount plus any additions, less
any impairment and less any depreciation incurred since the date of the last valuation.
All other plant and equipment is stated at historical cost less depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
In relation to land and buildings under development, fair value is determined by the Directors having taken into
consideration the valuation conducted by CBRE Limited as an independent registered valuer and the cost of work
undertaken, whereas previously the fair value was held at the CBRE Limited valuation plus the cost of work undertaken
in relation to land and buildings under development.
A property under construction is classified as land and buildings within property, plant and equipment where the
completed development will be classified as such and as investment property where the completed development will be
classified as an investment property. Fair value measurement on property under construction is only applied if the fair
value is reliably measurable. Where the fair value of property under construction cannot be reliably determined the value
is the fair value of the land plus the cost of work undertaken. Property under construction classified as land and buildings
under development is revalued annually and is not depreciated.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can
be measured reliably. All other repairs and maintenance are expensed to the Consolidated Statement of Comprehensive
Income during the financial period in which they are incurred.
Increases in the carrying amount arising on revaluation of land and buildings above cost are credited to the asset
revaluation reserve in other comprehensive income; increases that offset previous decreases taken through profit or loss
are recognised in profit or loss. Decreases that offset previous increases of the same asset are charged against the asset
revaluation reserve in other comprehensive income; all other decreases are charged to profit or loss. When revalued assets
are sold, or held for sale, the amounts included in the reserve are transferred to retained earnings.
Land is not depreciated. Depreciation on other assets is calculated using the straight line method to allocate their cost,
net of their residual values, over their estimated useful lives, as follows:
Category
– Freehold buildings
– Chattels and leasehold improvements
– Motor vehicles
Useful Life Range
10 - 50 years
2 - 50 years
5 years
Weighted Average
Depreciation Rate
2.4% (31 March 2021: 2.75%)
20%
22%
6 4
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022 The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date.
No depreciation is charged in the year of sale for all assets other than buildings in which case depreciation is charged
to the earlier of the date of classification to held for sale or the date of sale.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing the net disposal proceeds with the carrying amount of the
asset. These are included in the Consolidated Statement of Comprehensive Income.
$NZ000’s
Year ended 31 March 2022
Opening net book amount
Additions
Capitalised interest and line fees
Disposals
Depreciation
Freehold Land
and Buildings
Under
Development
Notes
Freehold
Land
Freehold
Buildings
Chattels and
Leasehold
Improvements
Total
54,767
92,800
437,079
19,627
604,273
45,071
1,259
4,919
5,300
56,549
1,067
-
-
-
-
-
170
-
-
1,237
(115)
(115)
(10,613)
(4,827)
(15,440)
Transfer from investment property
3.1
65
(3,750)
-
Reclassification within property, plant
and equipment
Revaluation surplus
Comprehensive income
– Existing care centres
– Care centres recently developed /
under development
Other comprehensive income1
– Existing care centres
– Care centres recently developed /
under development
Closing net book amount
At 31 March 2022
Cost
Valuation
Accumulated depreciation
Net book amount
320
-
(320)
-
-
152
(4,963)
-
70
-
22,570
8,024
3,860
-
14,060
-
-
-
-
-
-
(3,685)
-
(4,811)
70
30,594
17,920
105,150
113,031
448,426
19,985
686,592
-
-
-
56,981
56,981
105,150
113,031
448,426
-
666,607
-
-
-
(36,996)
(36,996)
105,150
113,031
448,426
19,985
686,592
1
The revaluation noted in the Statement of Comprehensive Income differs from the above due to deferred tax, refer note 5.1.
6 5
come from within.FINANCIAL STATEMENTS 3.2 Care Assets: Property, Plant and Equipment (continued)
Freehold Land
and Buildings
Under
Development
Notes
Freehold
Land
Freehold
Buildings
Chattels and
Leasehold
Improvements
Total
54,206
77,496
339,916
18,372
489,990
$NZ000’s
Period ended 31 March 2021
Opening net book amount
Additions
Capitalised interest and line fees
Disposals
Depreciation
Transfer from investment property
3.1
Reclassification within property, plant
and equipment
Revaluation surplus
Comprehensive income
– Existing care centres
– Care centres recently developed /
under development
Other comprehensive income1
– Existing care centres
– Care centres recently developed /
under development
Closing net book amount
At 31 March 2021
Cost
Valuation
Accumulated depreciation
Net book amount
18,664
837
-
-
-
-
-
-
-
-
8,189
271
-
(8,121)
1,329
(32,998)
(2,105)
35,103
1,610
1,076
1,543
-
-
75
2,007
16,333
31,757
10,441
-
27,017
1
4,391
1
31,224
-
-
1,108
-
(3,136)
1
(11,257)
1
-
-
-
-
-
-
1,329
-
4,229
75
50,097
37,458
54,767
92,800
437,079
1
19,627
604,273
1
-
-
-
51,796
1
51,796
1
54,767
92,800
437,079
-
584,646
-
-
-
(32,169)
1
(32,169)
1
54,767
92,800
437,079
19,627
1
604,273
1
Land and Buildings Under Development
A valuation in respect of development land was provided by CBRE Limited as at 31 March 2022.
Any costs incurred to 31 March 2022 on the developments are included in arriving at the fair value as at 31 March 2022.
The Group has applied the following methodology in relation to the measurement of land and buildings under development:
Practical completion not achieved
Where the development still requires substantial work such that practical completion is not going to be achieved, and a
reliable estimate of fair value cannot be made, at or close to balance date, the fair value recognised is the fair value of the
development land per the Directors’ valuation plus the cost of any work in progress. An amount of $59.1m as at 31 March
2022 (31 March 2021: $16.2m) has been recognised in relation to these development sites.
Where an individual development is of both investment property and freehold buildings in nature, the fair value of land
and work in progress is apportioned between investment property under development and freehold land and buildings
under development, by applying the estimated gross floor area for these respective areas of the development based on
information obtained from the project quantity surveyors at the planning and design stages.
1
The revaluation noted in the Statement of Comprehensive Income differs from the above due to deferred tax, refer note 5.1.
6 6
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022 Practical completion achieved
Where a development is practically completed, or likely to be completed at, or close to, balance date the land and
buildings are measured at its completed fair value per the Directors’ valuation with an adjustment made for any estimated
costs, in accordance with the project budget, to be incurred to complete the development, and is then transferred to
completed land and buildings.
Completed Land and Buildings
A valuation in respect of completed land and buildings was provided by CBRE Limited as at 31 March 2022.
The valuation of the Group’s care centres was apportioned to land, buildings, chattels and goodwill. The fair value of
land and buildings as calculated by CBRE Limited is based on the level of rent able to be generated from the maintainable
net cash flow of the site subject to average efficient management. The fair value of the Group’s land and buildings
as determined by the Directors is based on these apportionments. However, chattels are carried at historic cost less
depreciation and the amount apportioned to goodwill by CBRE Limited is not recorded in the consolidated financial
statements. The CBRE Limited valuation included $12.4m of goodwill (31 March 2021: $10.4m) in respect of completed
land and buildings.
Care Suites and Serviced Apartments
As discussed earlier in note 3, where services are provided to residents who occupy accommodation under an ORA,
it is the Group’s policy to look at the significance of these services in the context of the overall revenue derived from the
care suite or serviced apartment in ascertaining whether the care suite or serviced apartment is property, plant and
equipment or investment property. Care suite residents occupying accommodation under an ORA receive a significant level
of services. Hence, they are included in property, plant and equipment. Care suite land and buildings are held at fair value.
Key Accounting Estimates and Judgements
All land and buildings have been determined to be Level 3 (31 March 2021: Level 3) in the fair value hierarchy as the fair
value is determined using inputs that are unobservable.
Critical Judgements and Estimates in Applying Accounting Policies
Classification of Care Suites
An area of significant judgement is determining the classification of those properties which are operated as care suites.
Refer note 3 for further information.
Valuation of Freehold Land and Buildings
The valuation approach for the freehold land and buildings as at 31 March 2022 was an income capitalisation approach
and/or discounted cash flow analysis supplemented by the direct comparison approach. The valuation is determined by
the capitalisation of net cash flow profit/earnings before interest, tax, depreciation, amortisation and rent (‘EBITDAR’) under
the assumption a positive cash flow will be generated into perpetuity. Capitalisation rates used for the 31 March 2022
valuation range from 11.5% to 16.5% with a median value of 13.0% (31 March 2021: 10.9% to 18.5% with a median value
of 13.6%). The valuation was apportioned between land, buildings, chattels / plant and equipment and goodwill to
determine the fair value of the assets.
The significant unobservable input used in the fair value measurement of the Group's development land is the value
per m2 assumption. Increases in the value per m2 rate result in corresponding increases in the total valuation.
The significant unobservable input used in the fair value measurement of the Group's portfolio of completed land
and buildings is the capitalisation rate applied to earnings. A significant decrease / (increase) in the capitalisation
rate would result in significantly higher / (lower) fair value measurement.
67
come from within.FINANCIAL STATEMENTS 3.2 Care Assets: Property, Plant and Equipment (continued)
Sensitivities
At 31 March 2022
Adopted Value
Capitalisation Rate +50 bp
Capitalisation Rate -50 bp
Freehold land and buildings
Valuation $NZ000’s
Difference $NZ000’s
Difference %
561,457
(34,642)
(6.2%)
38,684
6.9%
At 31 March 2021
Adopted Value
Capitalisation Rate +50 bp
Capitalisation Rate -50 bp
Freehold land and buildings
Valuation $NZ000’s
Difference $NZ000’s
Difference %
At 31 March 2022
Completed care suite property
Valuation $NZ000’s
Difference $NZ000’s
Difference %
At 31 March 2021
Completed care suite property
Valuation $NZ000’s
Difference $NZ000’s
Difference %
Assets Held for Sale
529,879
(32,694)
(6.2%)
36,509
6.9%
Adopted
Value
Discount Rate
+0.5%
Discount Rate
-0.5%
Property
Growth Rate
+50 bp
Property
Growth Rate
-50 bp
188,380
(6,244)
(3.3%)
6,443
3.4%
10,386
5.5%
(9,813)
(5.2%)
Adopted
Value
Discount Rate
+0.5%
Discount Rate
-0.5%
Property
Growth Rate
+50 bp
Property
Growth Rate
-50 bp
170,367
(6,211)
(3.6%)
6,625
3.9%
6,476
3.8%
(11,323)
(6.6%)
Assets are classified as held for sale when their carrying amount is to be recovered principally through a sale transaction
and a sale is considered highly probable. They are measured at the lower of carrying amount and fair value less costs to
sell, except for investment property assets held for sale which are carried at fair value.
Carrying Value of Assets
The carrying amount at which both land and buildings would have been carried had the assets been measured under
historical cost is as follows:
$NZ000’s
Carrying amount
– Historical cost 2022
Carrying amount
– Historical cost 2021
6 8
Freehold
Land
Freehold
Buildings
Freehold Land and
Buildings Under
Development
Total
31,161
277,026
35,138
343,325
32,008
245,872
3,052
280,932
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022 3.3 Refundable Occupation Right Agreements
What is an ORA?
An ORA is a contract which sets out the terms and conditions of occupation of an independent living unit or care suite.
A new resident is charged a refundable occupation licence payment in consideration for the right to occupy one of the
Group's units, apartments or care suites. On termination of the ORA the occupation licence payment is repaid to the
exiting resident.
What is DMF?
An amount equal to a capped percentage of the occupation licence payment is charged by the Group as a
management fee for the right of use and enjoy the common areas of the village. The deferred management fee is
payable by the resident on termination of the ORA.
Accounting Policy
The occupation licence payment becomes payable when the ORA is unconditional and has either ‘cooled off’ or where
the resident is in occupation. The Group has a legal right to set-off any amounts owing to the Group by a resident against
that resident's licence payment. Such amounts include deferred management fees, recovery of village operating costs and
recovery of outstanding obligations to the village.
The management fee receivable is recognised in accordance with the terms of the resident’s ORA.
The deferred management fee represents the difference between the management fees receivable under the ORA and the
portion of the management fee accrued which is recognised on a straight-line basis over the longer of the term specified
in a resident's ORA or the average expected occupancy for the relevant accommodation i.e. 7 years for units, 5 years for
apartments and 3 years for care suites (2021: 7yrs, 5yrs, 3yrs).
The management fee recognised in the Consolidated Statement of Comprehensive Income represents income earned in
line with the average expected occupancy.
Included in the obligation to residents is an estimate of the amount expected to be paid to those residents whose ORA or
unit title arrangement allows them to participate in the resale gain of the unit or apartment they occupy.
As the refundable occupation licence payment is repayable to the resident upon termination (subject to a new ORA being
issued to an incoming resident), the fair value is equal to the amortised cost, being the amount that can be demanded.
6 9
come from within.FINANCIAL STATEMENTS March 2022
March 2021
732,714
6,780
573,766
7,205
(149,636)
(117,300)
589,858
463,671
38,650
(9,019)
29,631
37,130
(6,647)
30,483
186,987
152,273
144
(30,855)
156,276
775,765
375
(28,369)
124,279
618,433
March 2022
March 2021
(149,636)
(117,300)
36,570
32,867
(113,066)
(84,433)
(9,019)
3,165
(5,854)
(6,647)
2,590
(4,057)
(30,855)
2,332
(28,369)
6,042
(28,523)
(22,327)
3.3 Refundable Occupation Right Agreements (continued)
$NZ000’s
Village
Refundable occupation licence payments
Residents’ share of resale gains
Less: Management fee receivable (per contract)
Leasehold Village
Refundable occupation licence payments
Less: Management fee receivable (per contract)
Care Suites
Refundable occupation licence payments
Accommodation rebate
Less: Management fee receivable (per contract)
Total refundable occupation right agreements
Reconciliation of Management Fees recognised under NZ IFRS and per ORA
$NZ000’s
Village
Management fee receivable (per contract)
Deferred management fee
Management fee receivable (per NZ IFRS)
Leasehold Villages
Management fee receivable (per contract)
Deferred management fee
Management fee receivable (per NZ IFRS)
Care Suites
Management fee receivable (per contract)
Deferred management fee
Management fee receivable (per NZ IFRS)
70
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022 3.4 Leases
What’s a right of use asset?
Right of use assets are assets held under a lease arrangement. It represents the value of the lessee’s right of use
an asset over the life of the lease. There is a corresponding lease liability on the Consolidated Balance Sheet which
represents the present value of the future lease payments.
Accounting Policy
Right of use assets and lease liabilities arising from a lease are initially measured on a present value basis. Lease liabilities
include the net present value of the remaining lease payments. Lease payments to be made under reasonably certain
extension options are also included in the measurement of the liabilities.
Right of use assets are initially recognised at cost, comprising of the initial amount of the lease liability less any lease
incentives received. Right of use assets relating to equipment and motor vehicles, recognised in chattels, are subsequently
depreciated using the straight line method from the commencement date to the end of the lease. Right of use assets
relating to care centres are subsequently measured at fair value as determined by the Directors having taken into
consideration the valuation performed by CBRE Limited. In considering the lease term, the Group applies judgement
in determining whether it is reasonably certain that an extension or termination option will be exercised.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined
the incremental borrowing rate at the commencement of the lease is used.
Right of Use Asset
12 months ended 31 March 2022
$NZ000’s
Opening net book value
Additions
Disposals
Depreciation
Revaluation for the period –
Comprehensive Income
Revaluation for the period1 –
Other Comprehensive Income
Net book value as at 31 March 2022
Notes
Investment
Property
33,446
42
-
-
Land and
Buildings
4,169
1,608
(1,034)
(874)
(115)
-
-
33,373
319
4,188
Chattels
4,099
1,346
-
(1,867)
-
-
Total
41,714
2,996
(1,034)
(2,741)
(115)
319
3,578
41,139
1 The revaluation noted in the Statement of Comprehensive Income differs from the above due to deferred tax, refer note 5.1.
7 1
come from within.FINANCIAL STATEMENTS 3.4 Leases (continued)
10 months ended 31 March 2021
$NZ000’s
Opening net book value
Additions
Disposals
Depreciation
Revaluation for the period –
Comprehensive Income
Revaluation for the period –
Other Comprehensive Income
Net book value as at 31 March 2021
31 March 2022
$NZ000’s
Cost
Valuation
Accumulated depreciation
Net book value as at 31 March 2022
Notes
Investment
Property
31,140
Land and
Buildings
4,837
7
-
-
2,299
-
33,446
33
(266)
(494)
(37)
96
4,169
Investment
Property
Land and
Buildings
-
33,373
-
33,373
-
4,188
-
4,188
Chattels
4,845
872
(9)
Total
40,822
912
(275)
(1,609)
(2,103)
-
-
4,099
Chattels
9,188
-
(5,610)
3,578
2,262
96
41,714
Total
9,188
37,561
(5,610)
41,139
A reconciliation between the valuation and the amount recognised on the Consolidated Balance Sheet as right of use
investment property is as follows:
$NZ000’s
Right of use Investment Property
Valuation
Add: Refundable occupation licence payments
Less: Management fee receivable
March 2022
March 2021
577
38,650
(5,854)
33,373
373
37,130
(4,057)
33,446
The valuation of right of use investment property is adjusted for cash flows relating to refundable occupation licence
payments and management fee receivable recognised separately on the Consolidated Balance Sheet and also reflected
in the valuation model.
72
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022 Lease Liabilities
12 months ended 31 March 2022
$NZ000’s
Opening net book value
Additions
Disposals
Interest
Lease payments made
Lease liabilities as at 31 March 2022
10 months ended 31 March 2021
$NZ000’s
Opening net book value
Additions and disposals
Interest
Lease payments made
Lease liabilities as at 31 March 2021
Investment
Property
Land and
Buildings
-
-
-
-
-
-
7,021
1,605
(1,750)
353
(1,243)
5,986
Investment
Property
Land and
Buildings
-
-
-
-
-
7,865
(349)
352
(847)
7,021
Chattels
4,492
1,346
-
327
(2,257)
3,908
Chattels
5,136
863
345
(1,852)
4,492
Total
11,513
2,951
(1,750)
680
(3,500)
9,894
Total
13,001
514
697
(2,699)
11,513
Lease of Investment Property
The Group leases one site, Everil Orr, which meets the definition of investment property. The site comprises both
apartments and common facilities provided for use by residents under the terms of an ORA. Payments to the lessor
under this lease are made as ORAs are sold. Subsequent cash flows upon the sale and resale of the units are shared
between the lessor and the Group.
Due to the variability of these payments both the right of use asset and the corresponding lease liability were initially
recognised at nil value. Rental payments are recognised as a rental expense through the Consolidated Statement of
Comprehensive Income. The right of use asset is held at fair value in accordance with NZ IAS 40 Investment Property.
The fair value is determined by the Directors having taken into consideration the valuation conducted by CBRE Limited.
The carrying value of the right of use asset as at 31 March 2022 in respect of this leased site is $33.4m (31 March 2021: $33.4m).
On 15 February 2021 the Group entered into a Sale and Purchase Agreement to purchase one leased site for a purchase
price of $5.0m. Date of settlement was 18 June 2021. In accordance with NZ IFRS 16 Leases any difference in purchase
price and the carrying amount of the lease liability immediately before the purchase shall be recorded as an adjustment
to the carrying amount of the asset. The carrying value at the date of acquisition was $1.0m with a corresponding
liability of $1.8m.
Lease of Property, Plant and Equipment
The Group leases two care centres (31 March 2021: three care centres) which are valued as right of use assets as well
as on one corporate office building and various equipment and motor vehicles. The Group’s Corporate office moved
in November 2021 to 80 Queen St, Auckland. A new lease was entered into at this time with the previous lease at
2 Hargreaves St, St Mary’s Bay expiring in May 2022.
A valuation in respect of right of use property assets was provided by CBRE Limited as at 31 March 2022.
73
come from within.FINANCIAL STATEMENTS
4. Shareholder Equity and Funding
4.1 Shareholder Equity and Reserves
Share capital
Authorised, issued and fully paid up capital
710,204,500
689,276,946
Total contributed equity
710,204,500
689,276,946
705,291
705,291
675,625
675,625
March 2022
Shares
March 2021
Shares
March 2022
$NZ000’s
March 2021
$NZ000’s
Movements
Opening balance of ordinary shares issued
689,276,946
618,056,183
675,625
588,389
Shares issued for employee share scheme
Shares issued for dividend reinvestment plan
Share issue (placement)
Capitalised costs in relation to share placement
Treasury shares reacquired
Share issue (rights issue)
Capitalised costs in relation to rights issue
937,213
7,525,087
-
-
(3,164,556)
15,629,810
-
1,193,045
8,489,256
61,538,462
-
-
-
-
-
10,141
-
-
-
20,000
(475)
-
9,175
80,000
(1,939)
-
-
-
Closing balance of ordinary shares issued
710,204,500
689,276,946
705,291
675,625
All ordinary shares are authorised and rank equally with one vote attached to each fully paid ordinary share. The shares
have no par value. The Company incurred no transaction costs issuing shares during the period (31 March 2021: nil).
Share Issue (Placement)
On 29 March 2021 a total of 61,538,462 shares with a value of $1.30 per share were issued in relation to an Institutional
Placement. These shares rank equally with existing shares. The Placement was fully underwritten. Fees incurred of $1.9m
have been offset against funds raised.
Share Issue (Rights Issue)
On 16 April 2021, a total of 15,619,810 ordinary shares with a value of $20.0m ($1.2796 per share) were issued in relation
to the Retail Offer. Fees incurred of $0.5m have been offset against funds raised.
Dividend Reinvestment Plan ( ‘DRP’)
On 25 July 2019, the Board approved the implementation of a dividend reinvestment plan for New Zealand and Australian
shareholders. This plan has been effective for all subsequent dividends. This plan shall also be effective for the dividend
payable on 21 June 2022 at a discount of 2% to the volume weighted average price of shares sold on the NZX Main Board
over a period of five trading days starting on 3 June 2022. The dividend reinvestment plan shall apply to those shareholders
who have provided a participation election by 5:00pm on the dividend election date, being 8 June 2022.
Reinvestment of final dividend for the prior period
Reinvestment of interim dividend for the period
$1.4040
$1.2837
3,963,659
3,561,428
$0.9910
$1.5331
March 2022
value
per share
March 2022
number of
shares
March 2021
value
per share
March 2021
number
of shares
2,613,632
1,399,054
Further, in the prior period 4,476,570 shares with a value of $0.9910 were issued in the six months to 30 November 2020
pursuant to an underwriting agreement with Macquarie Securities (NZ) Limited.
7 4
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022 Long Term Incentive (‘LTI’)
On 15 September 2020 the Board approved a new Long Term Incentive Scheme for its senior executives (‘LTI Scheme’).
The LTI Scheme has been established to:
– provide an incentive to key executives to commit to Oceania for the long term; and
– align these executives’ interests with the interests of Oceania’s shareholders.
Participants in the Scheme will be granted Share Rights from time to time which will, on vesting, convert into an entitlement
to receive ordinary shares. Vesting will depend on achievement of certain performance hurdles relating to Oceania’s total
shareholder return relative to the NZX50, and Oceania’s performance against EBITDA targets.
Share Rights become exercisable if the holder remains employed on the vesting date and performance hurdles are met
over the period from the commencement date to the measurement date, and in certain other exceptional circumstances.
On becoming exercisable, each Share Right will entitle the holder to receive one fully paid ordinary share in Oceania
Healthcare Limited, less an adjustment for tax paid on the holder’s behalf for the benefit received under the Scheme.
The Share Rights have a nil exercise price.
Performance Hurdles
The Share Rights in each grant are divided between two performance hurdles;
– Share Rights will qualify for vesting on a straight-line basis, from 0%, where the total shareholder return (TSR) from
the commencement date to the measurement date is equal to the 35th percentile of the NZX50 Group, to 100%
where the TSR is equal to or greater than the 75th percentile of the NZX50 Group; and
– For the second performance hurdle, Share Rights will qualify for vesting if the Group’s annual growth in underlying
earnings (before interest, tax, depreciation and amortisation) per share (UEPS) from the commencement date to the
measurement date is equal to or greater than the target for growth in UEPS for that period.
Lapse
– Share Rights will lapse where the performance hurdles are not met on a relevant measurement date or, in general,
where the participant ceases to be employed by the Group before the vesting date (except in certain circumstances).
Recognition and Measurement
– On 6 September 2021, 1,078,125 share rights were issued for nil consideration and a nil exercise price in relation to
the LTI Scheme for the provision of performance based remuneration.
– On 1 September 2021 the Group acquired 3,164,556 shares held by OCA Employees Trustee Limited, a subsidiary,
in relation to a previously cancelled long term incentive plan scheme. The shares had been classified as Treasury Shares
as the Group had a beneficial interest in the 3,164,556 shares.
– On 20 November 2020, 1,948,061 share rights were issued for nil consideration and a nil exercise price in relation to the
LTI Scheme for the provision of performance-based remuneration. Since that point a total of 1,252,325 share rights that
were granted at that time have lapsed as a consequence of executives leaving employment with the Company.
Group Structure
There are no major shareholders.
Dividends
On 20 May 2022, a final dividend of 2.3 cents per share (not imputed) was declared and will be paid on 21 June 2022.
The record date for entitlement is 7 June 2022.
Final dividend for the prior year
Interim dividend for period
Total dividends declared during the period1
March 2022
cents per share
March 2022
$NZ000’s
2.1
2.1
14,475
14,840
29,315
March 2021
cents per share
1.2
1.3
March 2021
$NZ000’s
7,417
8,142
15,559
1
Total dividends declared during each period differs to dividends paid per the Consolidated Statement of Changes in Equity as a result of
dividends payable on shares held within the Group.
7 5
come from within.FINANCIAL STATEMENTS 4.1 Shareholder Equity and Reserves (continued)
Asset Revaluation Reserve
The asset revaluation reserve is used to record the revaluation of freehold land and buildings and land and buildings
under development.
Cash Flow Hedge Reserve
The cash flow hedge reserve is used to record gains or losses on instruments used as cash flow hedges. The amounts are
recognised in the Consolidated Statement of Comprehensive Income when the hedged transaction affects profit or loss.
Refer to note 5.6.
4.2 Earnings per Share
Basic
Basic earnings per share is calculated by dividing the profit after tax of the Group by the weighted average number
of ordinary shares outstanding during the period.
Profit after tax ($’000)
Weighted average number of ordinary shares outstanding ('000s)
Basic earnings per share (cents per share)
Diluted
March 2022
12 months
March 2021
10 months
61,129
705,400
8.7
85,680
1
621,537
13.8
Diluted Earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to
assume conversion of all dilutive potential ordinary shares. As at 31 March 2022 there were no shares with a dilutive effect
(31 March 2021: nil).
Profit after tax ($’000)
Diluted weighted average number of ordinary shares outstanding ('000s)
Diluted earnings per share (cents per share)
March 2022
12 months
March 2021
10 months
61,129
705,400
8.7
85,680
1
621,537
13.8
4.3 Employee Share Based Payments
Employee Share Plan
On 7 December 2021 937,213 shares were issued as part of an employee share scheme (‘ESS’). All permanent employees
as at that date were invited to participate. Full time employee participants were allocated an equivalent of $800 of
shares and part time employee participants were allocated an equivalent of $400 of shares. The shares are held in trust
and will be transferred to the employee if the employee remains employed by Oceania (or any of its subsidiaries) for the
following three years.
In the comparative period, on 22 September 2020 1,193,045 shares were issued as part of the ESS.
1
Comparatives have been restated for the impact of a change in accounting policy in regards to the accounting for Software-as-a-Service
arrangements. Refer to note 1.2.
76
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022
4.4 Borrowings
Accounting Policy
Borrowings are initially recognised at fair value, including transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount
is recognised in the Consolidated Statement of Comprehensive Income over the period of the borrowings using the effective
interest method.
Specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost
of those assets, until such a time as the assets are substantially ready for their intended use. Other borrowing costs are
recognised in the Consolidated Statement of Comprehensive Income in the period in which they are incurred.
$NZ000’s
Secured
Bank loans
Deferred payment on acquisition
Capitalised loan costs
Retail Bond – OCA010
Retail Bond – OCA020
Capitalised bond costs
Total borrowings
Current
Non current
Total borrowings excluding capitalised loan costs
Recognition and Measurement
March 2022
March 2021
154,845
204,930
3,500
(270)
125,000
100,000
(2,935)
380,140
3,250
380,095
383,345
-
(473)
125,000
-
(2,165)
327,292
-
329,930
329,930
Bank Loans
Interest is charged using the BKBM Bill rate plus a margin and line fee. Interest rates applicable in the year to 31 March 2022
ranged from 2.48% to 3.70% (period to 31 March 2021: 2.40% to 2.58%).
Deferred Payment on Acquisition of Previously Leased Site
Relates to the purchase of a previously leased site. The deferred payment is secured by a first charge mortgage over the
property. No interest is charged unless the payment is in default. Refer to note 3.4.
Retail Bond
NZDX ID
OCAO10
OCA020
Issue Date
No. of Bonds
$NZ000’s
Maturity Fixed Interest
Trading
Interest at
March 2022
Trading
Interest at
March 2021
19 Oct 20
125.0m
$125,000
19 Oct 27
13 Sept 21
100.0m
$100,000
13 Sept 28
2.3%
3.3%
4.8%
4.7%
2.7%
-
The bonds are quoted on the NZX Debt Market and their fair value at balance date is based on their listed market price
as at balance date. Interest on OCA010 is payable quarterly in January, April, July and October in equal instalments.
Interest on OCA020 is payable quarterly in March, June, September and December in equal instalments.
7 7
come from within.FINANCIAL STATEMENTS 4.4 Borrowings (continued)
Debt Financing
Total debt facility limits are $350.0m. The General Corporate Facility limit is $85.0m, and the Development Facility limit
is $265.0m. The maturity of the Facilities is 31 July 2023.
On 9 May 2022 it was announced an agreement was entered into with the banking syndicate to increase total debt facility
limits from $350m to $500m as follows:
i. General Corporate Facility limit increased to $235m (formerly $85m); and
ii. Development Facility limit remains at $265m.
iii. The increased facilities will be held by a banking syndicate to be agreed between the Company and ANZ.
Financing Arrangements
At 31 March 2022, the Group held committed bank facilities with drawings as follows:
$NZ000’s
General Corporate Facility
Development Facility
Total
March 2022
March 2021
Committed
85,000
265,000
350,000
Drawn
21,500
133,345
154,845
Committed
85,000
265,000
350,000
Drawn
-
204,930
204,930
The Group’s revolving Development Facility is utilised to cover costs associated with current development projects.
The revolving General Corporate Facility is used for general corporate purposes as well as for development land and
initial costs for projects not currently funded by the Development Facility.
Interest on the General Corporate Facility is typically payable quarterly. Interest on the Development Facility is capitalised
and repaid together with principal using the ORA licence proceeds received upon settlement of initial sales of newly
developed units and care suites. Line fees are payable quarterly on the committed General Corporate Facility and the
Committed Development Facility.
The financial covenants in the Group’s senior debt facilities, with which the Group must comply include:
(a) Interest Cover Ratio – the ratio of Adjusted EBITDA to Net Interest Charges is not less than 2.0x;
(b) Loan to Value Ratio – the ratio of total bank indebtedness shall not exceed 50% of the total property value of all Group’s
properties (including the ‘as-complete’ valuations for projects funded under the Development Facility); and
(c) Guarantor Group Coverage – at all times the adjusted EBITDA of the Guaranteeing Group must be at least 90% of the
Adjusted EBITDA of the total tangible assets of the Group; and
(d) Development – at all times the outstanding principal amount under the Development Facility shall not exceed the
Development Value. Development Value (per the most recent valuation excluding any settled stock) is the aggregate
value of all Residential Facilities in all Developments that are being funded by the Development Facility less their cost
to complete.
The covenants are tested half yearly. All covenants have been complied with during the year. The Group has agreed with
its banks that the calculation of Adjusted EBITDA and Net Interest, for the purposes of the financial covenants, shall
continue to be based on the accounting treatment in use before the introduction of NZ IFRS 16 Leases.
Assets Pledged as Security
The bank loans and bonds of the Group are secured by mortgages over the Group’s care centre freehold land and
buildings and rank second behind the Statutory Supervisors where the land and buildings are classified as investment
property and investment property under development.
As at 31 March 2022 the balance of the bank loans over which the properties are held as security is $154.8m
(31 March 2021: $204.9m).
78
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022 Net Debt Reconciliation
Cash and cash equivalents include cash on hand. The following provides an analysis of net debt and the movements
in net debt for the year.
$NZ000’s
Cash and cash equivalents
Debt – repayable within one year
Debt – repayable after one year
Net debt
Cash and liquid investments
Gross debt – fixed interest rates
Gross debt – floating interest rates
Net debt
March 2022
March 2021
9,745
(5,743)
79,906
(2,431)
(387,495)
(339,012)
(383,493)
(261,537)
9,745
79,906
(238,393)
(154,845)
(136,513)
(204,930)
(383,493)
(261,537)
Liabilities from Financing Activities
$NZ000’s
Net debt as at 31 May 2020
Cash flows
Acquisitions – finance leases
Terminations – finance leases
Other non-cash movements
Finance
leases due
within
1 year
Finance
leases due
after
1 year
(2,407)
(10,594)
2,253
178
8,503
578
(3,132)
(10,595)
677
3,026
Cash
17,624
62,282
-
-
-
Net debt as at 31 March 2021
79,906
(2,431)
(9,082)
Net debt as at 31 March 2021
79,906
(2,431)
(9,082)
Cash flows
(70,161)
1,595
899
(3,143)
587
5,818
1,582
(7,786)
2,068
-
-
-
Acquisitions – finance leases
Terminations – finance leases
Other non-cash movements
Net debt as at 31 March 2022
Borrowings
due within
1 year
Borrowings
due after
1 year
Total
-
-
-
-
-
-
-
-
-
-
(326,686)
(322,063)
(592)
72,446
-
-
756
(13,727)
(2,652)
1,051
(329,930)
(261,537)
(329,930)
(261,537)
(47,037)
(109,785)
-
-
2,481
(10,929)
(3,250)
(3,128)
(3,723)
9,745
(2,493)
(7,400)
(3,250)
(380,095)
(383,493)
79
come from within.FINANCIAL STATEMENTS 5. Other Disclosures
5.1 Income Tax
What is Current Tax?
Current tax is an estimate of the tax that is payable to Inland Revenue for the current financial period.
What is Deferred Tax?
Deferred tax is an estimate of income tax that will be payable or recoverable in respect of temporary differences
relating to the accounting and tax values of the Group’s assets and liabilities. Deferred tax also includes the value
of tax losses that we consider we will use in the future to meet any income tax obligation.
Accounting Policy
The tax expense or benefit for the period comprises current and deferred tax. Tax is recognised in the calculation of
profit for the year in the Consolidated Statement of Comprehensive Income, except to the extent that it relates to
items recognised in other comprehensive income. In this case the tax is also recognised in other comprehensive income.
The current income tax charge is calculated on the basis of the tax laws enacted at the balance date. The Directors
periodically evaluate positions taken in tax returns with respect to situations in which applicable tax regulation is subject
to interpretation.
Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax base of
assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income
tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax
is determined using tax rates (and laws) that have been enacted or substantially enacted by the Balance Sheet date and
are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available
against which the temporary differences, and losses can be utilised.
8 0
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022 $NZ000’s
Income tax benefit
Current tax
Deferred tax
Taxation expense is calculated as follows:
Profit before income tax
Tax at the New Zealand tax rate of 28%
Adjusted by the tax effect of:
Non-taxable gain on purchase of business assets
Non-deductible impairment of goodwill
Non-deductible expenditure
Capitalised interest deductible for tax
Taxable deferred management fees
Non-assessable revaluation of investment property
Taxable depreciation
Accounting depreciation
Right of use asset
Non-deductible impairment / (reversal of non-deductible impairment)
of fixed asset
Adjustment for timing difference of provisions
Losses generated
Current tax expense
Impact of movements in investment property
Impact of movements in property, plant and equipment
Impact of movements in right of use assets
Other adjustments
Deferred management fee
(Reversal of other deferred tax assets not recognised) /
other deferred tax assets not recognised
Losses (recognised) / utilised or derecognised
Deferred tax benefit
Income tax benefit
March 2022
12 months
March 2021
10 months
-
(4,879)
(4,879)
56,250
15,750
(2,900)
115
563
(1,432)
(6,787)
(17,740)
(5,891)
4,473
(194)
1,327
1,006
11,710
-
(2,076)
(4,071)
218
(1,071)
6,787
(777)
(3,889)
(4,879)
-
(10,396)
(10,396)
1
75,284
1
21,080
-
342
387
(1,193)
(3,752)
(23,035)
(5,910)
1
3,213
28
(1,194)
683
9,351
-
(4,149)
(10,159)
1
(8)
(723)
3,752
777
1
114
(10,396)
(4,879)
(10,396)
1
Comparatives have been restated for the impact of a change in accounting policy in regards to the accounting for Software-as-a-Service
arrangements. Refer to note 1.2.
8 1
come from within.FINANCIAL STATEMENTS 5.1 Income Tax (continued)
Movement in the Deferred Tax Balance:
$NZ000’s
Investment property
Property, plant and equipment
Right of use assets
Provisions and other assets / liabilities
DMF revenue in advance
Tax losses
Deferred tax assets not recognised
Deferred tax (liabilities) / assets
$NZ000’s
Investment property
Property, plant and equipment
Right of use assets
Provisions and other assets / liabilities
DMF revenue in advance
Tax losses
Deferred tax assets not recognised
Deferred tax (liabilities) / assets
Recognition and Measurement
Balance
1 April 2021
3,189
(13,079)
902
7,979
1,786
-
(777)
-
Balance
1 June 2020
(960)
(14,266)
1
929
8,645
5,538
114
1
-
-
Recognised in
Consolidated
Statement of
Comprehensive
Income
Recognised
in Other
Comprehensive
Income
Balance
31 March 2022
2,076
4,071
(218)
1,071
(6,787)
3,889
777
4,879
-
(2,155)
(90)
(2,634)
-
-
-
(4,879)
5,265
(11,163)
594
6,416
(5,001)
3,889
-
-
Recognised in
Consolidated
Statement of
Comprehensive
Income
Recognised
in Other
Comprehensive
Income
Balance
31 March 2021
4,149
10,159
1
8
723
(3,752)
(114)
1
(777)
1
-
3,189
(8,972)
(13,079)
1
(35)
(1,389)
-
-
-
902
7,979
1,786
-
(777)
1
-
10,396
(10,396)
No income tax was paid or payable during the year (31 March 2021: nil).
Key Accounting Judgements
Deferred Tax on Investment Property and Care Suites
Deferred tax on investment property and care suites is assessed on the basis that the asset value will be realised through
use (‘Held for Use’). An initial recognition exemption has been applied to newly developed village sites in accordance with
NZ IAS 12 Income Taxes.
The Group’s ORAs comprise two distinct cash flows (being an ORA deposit upon entering the unit and the refund of this
deposit upon exit). In determining the tax base of investment property and care suites, the Group considered whether
taxable cash flows are received at the end of the ORA period (i.e. upon refund of the ORA deposit by way of set off on exit
by a resident) or at the beginning of the ORA period (i.e. at time of the receipt of the ORA deposit). The Group has carefully
evaluated all the available information and considers it appropriate to recognise and measure the tax base and associated
deferred tax based on the taxable cash flows being receivable at the end of the ORA period as this best represents the
Group’s contractual entitlement.
1
Comparatives have been restated for the impact of a change in accounting policy in regards to the accounting for Software-as-a-Service
arrangements. Refer to note 1.2.
8 2
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022 In calculating deferred tax under the Held for Use methodology, the Group has made significant judgements to determine
taxable temporary differences. The carrying value of the Group’s investment property is determined on a discounted cash
flow basis and includes cash flows that are both taxable and non-taxable in the future. The Group has recognised deferred
tax on the cash flows with a future tax consequence being DMF and deductible amounts as provided by CBRE Limited, to the
extent that it doesn’t relate to land. The Group uses the CBRE Limited valuation of land and improvements to estimate the
apportionment of cash flows arising from the depreciable (i.e. buildings) and non-depreciable components (i.e. land).
Recognition of Deferred Tax on Tax Losses
The Company and its subsidiaries exited the former OHHL tax consolidated group from 31 May 2015. All tax losses
incurred by the Company and its subsidiaries until 31 May 2015 are tax losses of the OHHL consolidated tax group
(of which the Group is no longer a member).
After taking into consideration losses generated in the period to 31 March 2022, the Group now has an estimated $130.3m
(31 March 2021: $86.9m) of available tax losses as at 31 March 2022.
The Group may recognise deferred tax assets to the extent that it is probable that the Group will generate future economic
profits to offset the deferred tax assets or to the extent that they offset deferred tax liabilities. A deferred tax asset of $3.9m
(31 March 2021: $nil) representing tax losses generated has been recognised as at 31 March 2022 in order to offset the net
deferred tax liability position. All other available tax losses generated are held off balance sheet and are noted below:
NZ$000’s
Opening balance – tax losses
Prior period adjustments: other
Losses per Inland Revenue
Losses utilised for the period
Losses forfeited during the period
Losses generated during the period
Closing balance – tax losses
5.2 Intangible Assets
Accounting Policy
March 2022
12 months
March 2021
10 months
86,875
1,637
88,512
-
-
41,821
130,333
53,435
43
53,478
-
-
33,397
86,875
Goodwill
Goodwill represents the excess of cost of an acquisition over the fair value of the Group's share of the net identifiable assets
of the acquired subsidiary or business at the date of acquisition. Goodwill is not amortised. Instead, goodwill is tested at
least once annually for impairment at 31 March and carried at cost less accumulated impairment losses. Impairments are
recognised in the Statement of Comprehensive Income. Gains and losses on the disposal of an entity or cash generating
unit (‘CGU’) include the carrying amount of goodwill relating to the entity or CGU sold. Goodwill is allocated to CGUs and
these CGUs are grouped where appropriate for the purpose of impairment testing. The allocation is made to those CGUs
or groups of CGUs that are expected to benefit from the business combination in which the goodwill arose.
8 3
come from within.FINANCIAL STATEMENTS 5.2 Intangible Assets (continued)
Computer Software
Costs associated with maintaining computer software programmes are recognised as an expense as incurred. Acquired
computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specified
software. Where computer software licences are housed in the cloud they are capitalised to the extent the Group controls
the licence and have rights to the software beyond rights to access. These costs are amortised on a straight line basis over
their estimated useful lives (2.5 - 8 years).
$NZ000’s
Period ended 31 March 2021
Opening net book amount
Additions
Amortisation
Impairment charge
Closing net book amount
As at 31 March 2021
At cost
Accumulated amortisation and impairment
Net book amount
Year ended 31 March 2022
Opening net book amount
Additions
Amortisation
Impairment charge
Disposal
Closing net book amount
As at 31 March 2022
At cost
Accumulated amortisation and impairment
Net book amount
Goodwill
Software
Total
6,565
-
-
(1,220)
5,345
1,986
1,311
1
1
(174)
1
-
3,123
1
8,551
1,311
1
1
(174)
1
(1,220)
8,468
1
207,387
(202,042)
6,017
1
213,404
1
(2,894)
1
(204,936)
1
5,345
3,123
1
8,468
1
5,345
-
-
(412)
-
4,933
3,123
986
(439)
-
-
8,468
986
(439)
(412)
-
3,670
8,603
207,387
(202,454)
4,933
4,655
(985)
3,670
212,042
(203,439)
8,603
Impairment Test for Goodwill
The carrying value of goodwill has been assessed on a site by site basis taking into account the sites as a whole.
An impairment is recognised when the carrying value of goodwill plus chattels is greater than the CBRE Limited value
of goodwill plus chattels.
The carrying amount of goodwill at each site is not significant in comparison to the total amount of goodwill. All goodwill
is allocated to the care CGUs.
Key Judgements in Applying the Accounting Policies
Care CGUs Recoverable Amount
The recoverable amount of the individual care sites has been determined based on an external valuation of fair value less
costs to sell by CBRE Limited as an external valuer. The fair value less costs to sell is considered level 3 in the fair value
hierarchy. This has been used for comparison to current carrying value. The assumptions used in determining the fair value
for care centres are disclosed in note 3.2.
1
Comparatives have been restated for the impact of a change in accounting policy in regards to the accounting for Software-as-a-Service
arrangements. Refer to note 1.2.
8 4
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022 5.3 Trade and Other Receivables
Accounting Policy
Trade receivables are amounts due from residents and various government agencies in the ordinary course of business and
are recognised initially at fair value, being its transaction price, plus transaction costs. Trade receivables are held with the
objective of collecting the contractual cash flows and therefore they are subsequently measured at amortised cost using
the effective interest method, less a provision for impairment.
Occupation licence payment receivables are recognised at the point in time that an ORA becomes unconditional and has
either ‘cooled off’ or where the resident is in occupation, and the resident has not yet made all of the contractual licence
payment to the Group. The long term portion of this receivable has been discounted by $0.5m (2021: $0.5m).
$NZ000’s
Net trade and other receivables
Trade receivables
Less: Loss allowance
Occupation licence payment receivable
Prepayments
Deposits on freehold land and buildings
Trade and other receivables
March 2022
March 2021
22,462
(450)
22,012
44,435
2,689
-
69,136
14,337
(454)
13,883
29,219
2,890
1
2,000
47,992
1
Recognition, Measurement and Judgements in Applying Accounting Policies
The Group applies the simplified approach to measuring expected credit losses which uses a lifetime expected loss
allowance for all trade receivables and requires recognition from initial recognition of the trade receivable. To measure
expected credit losses, trade receivables have been grouped and reviewed on the basis of the number of days since
resident departure and the funding stream and type of debtor. Judgement is used in selecting the inputs to the impairment
calculation and is based on past history and forward looking assumptions.
The Group has the following financial assets subject to the application of the expected credit loss model:
– Trade receivables from care operations for the provision of care fees revenue for rest home and hospital fees.
These are split between private amounts owed by residents and amounts due from agencies such as the Ministry
of Health and ACC.
– Trade receivables from village operations for the provision of weekly service fees and occupation licence payment
receivables. These are receivable from residents.
For the current year the Group has applied a simplified approach to calculating the expected loss rate expected by
applying a 2% allowance to trade receivables from care operations and 0% from village operations, adjusted for any
other known factors with respect to individual debts. In the prior period the Group used a matrix of percentages between
1% and 100% based on the class of debtor, funding stream and resident departure date.
There is no significant concentration of credit risk as trade receivables relate to individual residents and government agencies.
1
Comparatives have been restated for the impact of a change in accounting policy in regards to the accounting for Software-as-a-Service
arrangements. Refer to note 1.2.
8 5
come from within.FINANCIAL STATEMENTS 5.4 Trade and Other Payables
Accounting Policy
Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of financial
year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
Trade payables are recognised initially at fair value less transaction costs and subsequently measured at amortised cost
using the effective interest method.
Sundry payables include $0.1m (2021: $0.1m) relating to cash held on behalf of residents.
Wages and Salaries, Annual Leave and Long Service Leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave are recognised in other payables in
respect of employees' services up to the reporting date and are measured at the amounts expected to be paid when the
liabilities are settled.
The liability for employee entitlements is carried at the present value of the estimated future cash flow.
The liability for long service leave is recognised in the provision for employee entitlements and measured as the present
value of expected future payments to be made in respect of services provided by employees up to the reporting date.
Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.
$NZ000’s
Trade payables
Development accruals
Sundry payables and accruals
Accrued interest on external borrowings and derivatives
Employee entitlements
Trade and other payables
March 2022
March 2021
2,043
8,665
6,334
938
23,000
40,980
9,302
10,138
5,343
900
18,625
44,308
5.5 Related Party Transactions
The below entities are subsidiaries of Oceania Healthcare Limited.
Name of Entity
Principal Activities
Oceania Group (NZ) Limited
Corporate office functions
Oceania Care Company Limited
Operation of aged care centres
Oceania Village Company Limited
OCA Employees Trustee Limited
Ownership and operation of
retirement villages
Hold Employee Share Scheme
shares on behalf of employees
2022
100%
100%
100%
2021
100%
100%
100%
Class of
shares
Ordinary
Ordinary
Ordinary
100%
100%
Ordinary
All subsidiaries are incorporated in New Zealand and have a balance date of 31 March (2021: 31 March). There are no
significant restrictions on subsidiaries.
8 6
Better experiencesOCEANIAANNUAL REPORT 2022NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)For the year ended 31 March 2022 Key Management Personnel Compensation
Key management personnel are all executives with the authority for the strategic direction and management of the Group
and exclude those in an Acting capacity.
$NZ000’s
Directors' remuneration and expenses
Directors’ dividends including DRP
Salaries and other short term employee benefits
Key management personnel dividends including DRP
Termination benefits1
March 2022
12 months
March 2021
10 months
759
1,151
3,075
58
308
5,351
561
398
2,107
83
-
3,149
Transactions with Related Parties
There are no outstanding balances with related parties (31 March 2021: nil).
5.6 Financial Risk Management
The Group's activities expose it to a variety of financial risks: market risks (including cash flow interest rate risk), credit risk
and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses derivative financial
instruments such as interest rate swap contracts to hedge certain interest rate risk exposures. Derivatives are exclusively
used for hedging purposes, i.e. not as trading or other speculative instruments. The Group uses different methods to
measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rates
to determine market risk and aging analysis for credit risk.
Classification and Measurement
Financial assets are required to be classified into three measurement categories: those measured at fair value through
profit and loss, those measured at fair value through other comprehensive income and those measured at amortised cost.
The determination is made at initial recognition. The classification depends on the entity's business model for managing its
financial instruments and the contractual cash flow characteristics of the instrument. Trade receivables are amounts due
from residents and various government agencies held to collect contractual cash flows in the ordinary course of business.
These balances are held at amortised cost less a provision for impairment.
Risk management is carried out centrally by management under policies approved by the Board of Directors. The Directors
provide written principles for overall risk management, as well as policies covering specific areas, such as interest rate risk,
credit risk, use of derivative financial instruments and non-derivative financial instruments.
(a) Fair Value Estimation
All financial assets (cash and cash equivalents, trade and other receivables and certain right of use assets) and financial
liabilities (trade and other payables, lease liabilities and bank borrowings), other than derivatives, are measured at
amortised cost, which approximates to fair value. Financial liabilities measured at amortised cost are fair valued using the
contractual cash flows. In considering the fair value of interest bearing assets and liabilities the estimated future interest
rates approximate the discount rates used in a fair value assessment.
(b) Market Risk
Market risk is the risk that changes in market prices such as interest rates will affect the Group’s income. The objective of
market risk management is to manage and control market risk exposures within acceptable parameters, while optimising
the return on risk.
(c) Cash Flow Risk
The Group has no significant interest-bearing assets, as such the Group's income is substantially independent of changes
in market interest rates.
The Group's interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to
cash flow interest rate risk. The cash flow and interest rate risks are monitored by the Directors on a monthly basis. The
Directors monitor the existing interest rate profile with reference to the Group’s Treasury Policy and the Group’s underlying
interest rate exposure. Management present interest rate hedging analysis and strategies to the Directors for consideration
and seek Director approval prior to entering into any interest rate swaps.
1
Termination benefits in the 12 months to 31 March 2022 were made to three employees who met the definition of
‘key management’ and ceased to be employed by the Group during the year.
8 7
come from within.FINANCIAL STATEMENTS N OT ES TO T H E C O N S O LI DAT E D FI NAN C IAL S TAT E M E N T S (continued)
For the year ended 31 March 2022
5.6 Financial Risk Management (continued)
The following table shows the sensitivity of the Group's Profit / (Loss) and equity to a movement in interest rates of +/-1%.
This assumes all other variables remain constant.
$NZ000’s
2022
Interest expense
Change in fair value of cash flow hedges
2021
Interest expense
Change in fair value of cash flow hedges
Interest Rate Swaps
+1%
-1%
Profit / (loss)
Equity
Profit / (loss)
Equity
723
112
(136)
3,016
(723)
(112)
136
(3,119)
(33)
-
(33)
5,081
33
-
33
(5,284)
It is the Group's policy to manage interest rate risk through the use of interest rate swaps to reduce the impact of changes
in interest rates on its floating rate long term debt. The objective of the interest rate swaps is to protect the Group from the
short to medium term impact to cash flows which arises out of variability in floating interest rates.
Interest rate swaps are initially recognised at fair value on the date a contract is entered into and are subsequently
measured at fair value on each reporting date. The fair values of the interest rate swaps are determined based on cash
flows discounted to present value using current market interest rates.
Interest swaps are assessed for effectiveness at each reporting period. A retrospective calculation will be used to determine
the amount of any ineffectiveness to recognise in comprehensive income.
The expected causes of ineffectiveness are as follows:
- Credit risk of the bank;
- Insufficient level of floating rate debt;
- Differing interest settlement dates; or
-Inter Bank Offered Rate ("IBOR") reform if the BKBM rate is replaced with another measure.
When interest rate swaps meet the criteria for cash flow hedge accounting, the effective portion of the gain or loss on
the hedging instrument is recognised in other comprehensive income (gain of $6.7m, 31 March 2021: gain $3.6m), while
the ineffective portion is recognised in other income in the Consolidated Statement of Comprehensive Income (gain
$0.5m, 31 March 2021: nil). Amounts taken to the interest rate reserve are transferred out of the reserve and included in
the measurement of the hedged transaction when the forecast transaction occurs. When interest rate swaps do not meet
the criteria for cash flow hedge accounting, all movements in fair value of the hedging instruments are recognised in the
Consolidated Statement of Comprehensive Income.
Under the interest rate swap agreements, the Group has a right to receive interest at variable rates and an obligation
to pay interest at fixed rates. New interest rate swaps of $175.0m were put in place with an effective date of 1 June 2019
(with a trade date of 30 April 2019). Of the interest rate swaps in place at 31 March 2022, $175.0m (2021: 175.0m) are being
used to cover approximately 113% (2021: 85%) of the loan principal outstanding. These agreements effectively change the
Group’s interest exposure on the principal covered by the interest rate swaps from a floating rate to a fixed rate, with a
weighted average interest rate of 1.9%. Bank loans of the Group currently bear an average fixed interest rate (including
margin and line fees) of 4.1% (2021: 4.1%). The fair value of these agreements at 31 March 2022 is a $3.9m asset. The
agreements cover notional amounts for a period of 3 years, 5 years, and 7 years.
The notional principal amounts and the period of expiry of the interest rate swap contracts are as follows:
Less than 1 year
Between 1 and 3 years
Between 3 and 5 years
Over 5 years
8 8
Average contracted
fixed interest rate
March 2022
%
March 2021
%
Notional principal amount
March 2022
$NZ000’s
March 2021
$NZ000’s
3.04
3.17
3.35
-
-
3.04
3.17
3.35
75,000
50,000
50,000
-
-
75,000
50,000
50,000
Better experiencesOCEANIAANNUAL REPORT 2022 (d) Credit Risk
Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial
institutions, as well as credit exposure from trade and other receivables.
In the normal course of business, the Group has no significant concentrations of credit risk. Other than on a small number
of exceptions, the Group requires settlement of the ORA before allowing occupation of its villas or apartments. Therefore,
the Group does not face significant credit risk. The values attached to each financial asset in the Consolidated Balance
Sheet represent the maximum credit risk. No collateral is held with respect to any financial assets. The Group enters into
financial instruments with various counterparties in accordance with established limits as to credit rating and dollar limits
and does not require collateral or other security to support the financial instruments.
Concentrations
Cash and cash equivalents of the Group are deposited with one of the major trading banks. Non-performance of
obligations by the bank is not expected due to the credit rating of the counter party considered. The Standard and Poors
credit rating of the counter party as at 31 March 2022 is AA- (2021: AA-).
The Group’s receivables represent distinct trading relationships with each of the residents. There are no concentrations of
credit risk with residents. Large receivables generally relate to the residential care subsidies which are received in aggregate
via the various District Health Boards and Work and Income New Zealand. Neither of these entities has demonstrated, or is
considered, a credit risk.
(e) Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of
funding through an adequate amount of committed credit facilities and the ability to close-out market positions. Due
to the dynamic nature of the underlying businesses, the Directors aim at maintaining flexibility in funding by keeping
committed credit lines available.
Cash flow forecasting is regularly performed by management. Management monitors rolling forecasts of the Group's
liquidity requirements to ensure it has sufficient cash to meet operational needs, while maintaining headroom on its
undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants
on any of its borrowing facilities. Such forecasting takes into consideration the Group's debt financing plans and
covenant compliance.
The table below shows the maturity analysis of the Group's contractual undiscounted cash flows.
$NZ000’s
2022
Trade and other payables
Lease liabilities
Borrowings
Cash flow hedge – interest rate swaps
Refundable occupation right agreements
2021
Trade and other payables
Lease liabilities
Borrowings
Cash flow hedge - interest rate swaps
Refundable occupation right agreements
Less than
1 year
Between
1 and 2 years
Between
2 and 5 years
Over
5 years
17,042
3,080
12,326
148
775,765
24,783
3,108
7,942
2,772
618,433
-
2,296
169,993
(1,738)
-
-
1,521
8,394
2,386
-
-
2,977
18,525
(2,486)
-
-
4,213
214,215
1,497
-
-
4,194
237,350
-
-
-
6,373
127,875
-
-
Of the derivative financial instruments value on the Balance Sheet as at 31 March 2022, a credit balance of $0.1m is
classified as current and a debit balance of $4.0m is classified as non-current (31 March 2021: all non-current).
The refundable ORAs are repayable to the resident on vacation of the unit, apartment, care suite or on the termination of
the occupation right agreement and subsequent resale of the unit, apartment or care suite. The expected maturity of the
refundable ORAs is shown in note 3.3.
(f) Capital Risk Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern,
to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to
reduce the cost of capital. The consolidated financial statements are prepared on a going concern basis.
8 9
come from within.FINANCIAL STATEMENTS N OT ES TO T H E C O N S O LI DAT E D FI NAN C IAL S TAT E M E N T S (continued)
For the 10 month period ended 31 March 2022
5.7 Contingencies and Commitments
At 31 March 2022, the Group had no contingent liabilities or assets (31 March 2021: nil).
At 31 March 2022, the Group has a number of commitments to develop and construct certain sites totalling $82.7m
(31 March 2021: $131.4m) of which $82.7m (31 March 2021: $131.4m) relates to development sites.
As at 31 March 2022, a commitment of $7.9m (31 March 2021: $9.3m) exists in relation to Stage One and $3.0m
(31 March 2021: $5.8m) in relation to Stage Two in the form of future lease payments in respect of the development of
Everil Orr, a leasehold site. Lease payment obligations arise as ORAs are sold. Refer to note 3.4 for further details.
There are no significant unrecognised contractual obligations entered into for future repairs and maintenance at
balance date.
5.8 Events After Balance Date
Debt Financing
On 9 May 2022 it was announced an agreement was entered into with the banking syndicate to increase total debt facility
limits from $350m to $500m as follows:
(i) General Corporate Facility limit increased to $235m (formerly $85m); and
(ii) Development Facility limit remains at $265m.
The increased facilities will be for a period of 5 years and held by a banking syndicate to be agreed between the
Company and ANZ.
Acquisitions
On 6 May 2022, a number of Sale and Purchase Agreements were entered into in relation to certain assets:
a. Oceania Village Company Limited and Oceania Care Company Limited entered into a Sale and Purchase Agreement
with Remuera Rise Limited and Lifecare Residences NZ Limited to purchase the business assets in relation to Remuera
Rise for a value of $38.1m subject to purchase price adjustments. Remuera Rise is an established village with 58
independent living apartments and 12 rest home beds. The Sale and Purchase Agreement is subject to the parties
obtaining the consent of the Statutory Supervisor, the Ministry of Health and the Auckland District Health Board and
the Bream Bay Village agreement becoming unconditional. Settlement is expected in July 2022.
b. Oceania Village Company Limited entered into a Sale and Purchase Agreement with Private Health Care (NZ) Limited
and PBG Investments Limited to purchase the shares of Bream Bay Village Limited for a value of $18.9m subject to
purchase price adjustments. Bream Bay Village is an established village with 75 independent living villas. The Sale and
Purchase Agreement is subject to the parties obtaining Statutory Supervisor consent and the Remuera Rise agreement
becoming unconditional. Settlement is expected in July 2022.
c.
Oceania Village Company Limited entered into an option agreement, effective for six months, with GNLC Limited
to purchase 6.7 hectares of development land in Bream Bay, adjacent to Bream Bay Village. This agreement grants
Oceania Village Company Limited the option to acquire this land for a purchase price of $8.4m plus GST if any.
Oceania may exercise the option for the development land adjacent to Bream Bay Village within 20 working days of
the plan change being made operative by Whangarei District Council following settlement of any appeals.
(i) Provisional purchase consideration and fair value of net assets acquired
The purchase price was linked to the 31 March 2021 CBRE Limited valuation in respect of Remuera Rise and the 8 December
2021 Colliers valuation of Bream Bay Village Limited.
At the date of finalising the annual financial statements, due to the acquisition date having not passed, no acquisition date
valuations have been obtained and the purchase price allocation calculation has not yet been finalised.
This calculation will be finalised in the interim report for the six month period ended 30 September 2022.
(ii) Contingent liabilities
No material contingent liabilities with respect to this transaction were noted during the due diligence process. Should, on a
detailed review of the assets, any future contingent liabilities arise they will be disclosed in future financial statements.
Dividend
On 20 May 2022 a final dividend of 2.3 cents per share (not imputed) was declared and will be paid on 21 June 2022.
The record date for entitlement is 7 June 2022. Refer to note 4.1.
There have been no other significant events after balance date.
9 0
Better experiencesOCEANIAANNUAL REPORT 2022 I N D E P E N D E N T AU D I TO R ' S R E P O R T
To the shareholders of Oceania Healthcare Limited
AU D I T O R ' S R E P O R T
Independent auditor’s report
To the shareholders of Oceania Healthcare Limited
Our opinion
In our opinion, the accompanying consolidated financial statements of Oceania Healthcare Limited
Independent auditor’s report
(the Company), including its subsidiaries (the Group), present fairly, in all material respects, the
To the shareholders of Oceania Healthcare Limited
financial position of the Group as at 31 March 2022, its financial performance and its cash flows for the
year then ended in accordance with New Zealand Equivalents to International Financial Reporting
Our opinion
Standards (NZ IFRS) and International Financial Reporting Standards (IFRS).
In our opinion, the accompanying consolidated financial statements of Oceania Healthcare Limited
What we have audited
(the Company), including its subsidiaries (the Group), present fairly, in all material respects, the
The Group's consolidated financial statements comprise:
financial position of the Group as at 31 March 2022, its financial performance and its cash flows for the
●
the consolidated balance sheet as at 31 March 2022;
year then ended in accordance with New Zealand Equivalents to International Financial Reporting
Standards (NZ IFRS) and International Financial Reporting Standards (IFRS).
●
the consolidated statement of comprehensive income for the year then ended;
●
the consolidated statement of changes in equity for the year then ended;
What we have audited
The Group's consolidated financial statements comprise:
●
the consolidated cash flow statement for the year then ended; and
●
the consolidated balance sheet as at 31 March 2022;
●
the notes to the consolidated financial statements, which include significant accounting policies
and other explanatory information.
●
the consolidated statement of comprehensive income for the year then ended;
●
the consolidated statement of changes in equity for the year then ended;
Basis for opinion
●
the consolidated cash flow statement for the year then ended; and
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
(NZ)) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
●
the notes to the consolidated financial statements, which include significant accounting policies
further described in the Auditor’s responsibilities for the audit of the consolidated financial statements
and other explanatory information.
section of our report.
Basis for opinion
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
for our opinion.
(NZ)) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the audit of the consolidated financial statements
Independence
section of our report.
We are independent of the Group in accordance with Professional and Ethical Standard 1
International Code of Ethics for Assurance Practitioners (including International Independence
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
Standards) (New Zealand) (PES 1) issued by the New Zealand Auditing and Assurance Standards
for our opinion.
Board and the International Code of Ethics for Professional Accountants (including International
Independence
Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA
We are independent of the Group in accordance with Professional and Ethical Standard 1
Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements.
International Code of Ethics for Assurance Practitioners (including International Independence
Our firm carries out other services for the Group in the areas of trustee reporting, Task Force on
Standards) (New Zealand) (PES 1) issued by the New Zealand Auditing and Assurance Standards
Climate-Related Financial Disclosures (TCFD) gap analysis and materiality matrix work and agreed
Board and the International Code of Ethics for Professional Accountants (including International
upon procedures in respect of proxy voting at the Annual Shareholder Meeting. The provision of these
Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA
other services has not impaired our independence as auditor of the Group.
Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Key audit matters
Our firm carries out other services for the Group in the areas of trustee reporting, Task Force on
Key audit matters are those matters that, in our professional judgement, were of most significance in
Climate-Related Financial Disclosures (TCFD) gap analysis and materiality matrix work and agreed
our audit of the consolidated financial statements of the current year. These matters were addressed
upon procedures in respect of proxy voting at the Annual Shareholder Meeting. The provision of these
in the context of our audit of the consolidated financial statements as a whole, and in forming our
other services has not impaired our independence as auditor of the Group.
opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the consolidated financial statements of the current year. These matters were addressed
in the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.
PricewaterhouseCoopers, PwC Tower, 15 Customs Street West, Private Bag 92162, Auckland 1142 New Zealand
T: +64 9 355 8000, www.pwc.co.nz
9 1
PricewaterhouseCoopers, PwC Tower, 15 Customs Street West, Private Bag 92162, Auckland 1142 New Zealand
T: +64 9 355 8000, www.pwc.co.nz
come from within.
I N D E P E N D E N T AU D I TO R ' S R E P O R T (continued)
To the shareholders of Oceania Healthcare Limited
Description of the key audit matter
How our audit addressed the key audit matter
Valuation of investment property and
freehold land and buildings
As disclosed in notes 3.1 and 3.2 of the
consolidated financial statements, the
Group’s:
●
investment property portfolio was
valued at $1,378.6 million at 31 March
2022 and included completed
investment property and investment
property under development
freehold land and buildings were
valued at $666.6 million at 31 March
2022. This included freehold land and
buildings operated by the Group for
the provision of care services, care
suites, and land and buildings to be
developed into care facilities in the
future (together referred to as freehold
land and buildings).
●
The Group’s accounting policy is to
measure these assets at fair value.
Independent valuations of all investment
property and freehold land and buildings
were carried out by a third party valuer,
CBRE Limited (the Valuer).
Completed investment property and care
suites are recorded in the consolidated
financial statements at a Directors’
valuation which is based on the value
determined by the Valuer as at 31 March
2022, adjusted by the Directors for:
●
the estimated costs to be incurred to
complete development of any asset
not complete at the date of the
valuation, but valued by the Valuer as
if it was complete; and
● completed investment property,
refundable occupation licence
payments, residents’ share of resale
gains and management fees
receivable which are recognised
separately on the consolidated
balance sheet and also reflected in the
Valuer’s cash flow model.
9 2
PwC
Our audit procedures focused on obtaining sufficient
audit evidence to evaluate whether the inclusion of the
valuations in the consolidated balance sheet and
disclosures made in the consolidated financial
statements were materially appropriate.
Our procedures included:
External valuations
We read the valuation report and discussed it with the
Valuer. We assessed the valuation approach and
confirmed that this was in accordance with the
relevant accounting standards.
On a sample basis, we tested whether property
specific information supplied to the Valuer by the
Group reflected the underlying property records held
by the Group.
From our discussions with management and the
Valuer, and from our review of the valuation report,
assumptions (as detailed in the description of this Key
Audit Matter) were determined for each individual
property to reflect its characteristics, its overall quality,
geographic location and desirability as a whole.
Valuation adjustments
We tested, on a sample basis, the adjustments made
to the valuations determined by the Valuer as at 31
March 2022 as detailed in the description of this Key
Audit Matter. This testing included obtaining quantity
surveyors reports to support the estimated cost to
complete developments as at 31 March 2022. We also
obtained supporting documentation for a sample of
transactions included in work in progress as at 31
March 2022.
Assumptions and estimates
Our work over the assumptions focused on the largest
properties within the portfolio and those properties
where the assumptions used and/or period-on-period
fair value movement suggested a possible outlier
compared to the rest of the portfolio and the market
data for the sector.
We held discussions with the Valuer to gain an
understanding of the assumptions and estimates used
and the valuation methodology applied. This included
understanding any changes made to significant inputs
and assumptions. We also sought to understand and
consider restrictions imposed on the valuation process
(if any) and the market conditions at balance date.
2
Better experiencesOCEANIAANNUAL REPORT 2022
AU D I T O R ' S R E P O R T
How our audit addressed the key audit matter
We engaged our in-house expert to challenge the
work performed by the Valuer and assess the
reasonableness of the assumptions used based on
their knowledge gained from reviewing valuations of
similar properties, known transactions and available
market data.
We understood the apportionment of the valuations to
each class of assets and assessed the
reasonableness of this through discussions with the
Valuer and our in-house expert.
Valuation estimates
Because of the judgement involved in determining
valuations for individual properties and the existence
of alternative assumptions and valuation methods,
there is a range of values which can be considered
reasonable when evaluating the independent property
valuations used by the Group. If we identified an error
in a property valuation or determined that the valuation
was outside of a reasonable range, we evaluated the
error or difference to determine if there was a material
misstatement in the consolidated financial statements.
We considered whether there were any events
subsequent to the date of the Valuer’s report which
may have caused the valuation of investment property
and freehold land and buildings to be materially
different to those determined by the Valuer.
We considered the adequacy of the disclosures made
in note 3 to the consolidated financial statements.
These notes explain that there is significant estimation
uncertainty in relation to the valuation of investment
property and freehold land and buildings.
Description of the key audit matter
For each completed investment property
and each care suite, assumptions and
estimates were made in respect of:
● property price growth rate;
● stabilised occupancy periods; and
● discount rate.
Investment property under development
and land and buildings to be developed
into care facilities in the future are
recorded in the consolidated financial
statements at a Directors’ valuation which
is based on a range of values determined
by the Valuer as at 31 March 2022,
adjusted by management for the cost of
any work in progress.
For each asset under development,
assumptions and estimates were made in
respect of the price per square metre of
land.
Freehold land and buildings operated by
the Group for the provision of care
services are recorded in the consolidated
financial statements at a Directors’
valuation which is based on the value
determined by the Valuer as at 31 March
2022.
For each property, assumptions and
estimates are made in respect of:
●
forecast earnings before interest, tax,
depreciation, amortisation, and rent;
and
● capitalisation rate.
The valuation of the Group’s property
portfolio is inherently subjective. The
existence of significant estimation
uncertainty, coupled with the fact that only
a small percentage difference in
assumptions on individual properties,
when aggregated, could result in material
differences, is why we have given specific
audit focus and attention to this area.
PwC
9 3
3
come from within.
I N D E P E N D E N T AU D I TO R ' S R E P O R T (continued)
To the shareholders of Oceania Healthcare Limited
Description of the key audit matter
How our audit addressed the key audit matter
Deferred tax on investment property
and care suites
Determination of deferred tax balances
As disclosed in note 5.1 of the
consolidated financial statements, the
Group assesses deferred tax on
investment property and care suites on
the basis that the asset value will be
realised through use (‘Held for Use’).
In applying the Held for Use methodology,
the Group makes four key assumptions
which involve significant judgement:
1. Determining the amount of taxable
cash flows;
2. Timing of taxable cash flows, being at
the end of the Occupation Right
Agreement (ORA) period;
3. Apportionment of the value of
investment property between land and
buildings; and
4. Determining the number of years that
commercial investment property is
expected to be in use and depreciable
for tax purposes.
Due to the significant judgement
exercised by the Group in determining the
deferred tax on investment property and
care suites, we have given specific audit
focus and attention to this area.
Assumptions with respect to realisation through
held for use
With respect to the assumptions used in the
calculation of deferred tax, we engaged our in-house
tax specialist to challenge the work performed and
assess the reasonableness of the assumptions based
on their knowledge of the tax legislation and other
accepted approaches in the industry.
1. Determining the amount of taxable cash flows
We agreed the amount of taxable cash flows of
investment property and care suites to the Valuer’s
report, which is based on materially the same
assumptions and estimates used in the valuation of
investment property and care suites described above.
2. Timing of taxable cash flows
We tested a sample of new ORAs to confirm that the
Deferred Management Fees (DMF) are contractually
earned at the end of the ORA period.
3. Apportionment of investment property
We have agreed the inputs to the apportionment
calculation to the Valuer’s land valuation and
recalculated the apportionment between land and
buildings.
4. Determining the number of years that
commercial investment property is expected to
be depreciable for tax purposes
We determined a reasonable range for the expected
period in which the relevant assets will be in use and
depreciable for tax purposes. Management’s
judgement was within this range.
9 4
PwC
4
Better experiencesOCEANIAANNUAL REPORT 2022
AU D I T O R ' S R E P O R T
Our audit approach
Overview
Materiality
Group
Scoping
Overall group materiality: $2.3 million, which represents
approximately 1% of revenue.
We chose revenue as the benchmark because, in our view, it is a
key financial metric used in assessing the performance of the Group
and is not as volatile as other profit or loss measures.
We tailored the scope of our audit in order to perform sufficient work
to enable us to provide an opinion on the consolidated financial
statements as a whole, taking into account the structure of the
Group, the accounting processes and controls, and the industry in
which the Group operates.
Key Audit
Matters
As reported above, we have two key audit matters, being:
● Valuation of investment property and freehold land and buildings
● Deferred tax on investment property and care suites
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the consolidated financial statements. In particular, we considered where
management made subjective judgements; for example, in respect of significant accounting estimates
that involved making assumptions and considering future events that are inherently uncertain. As in all
of our audits, we also addressed the risk of management override of internal controls, including among
other matters, consideration of whether there was evidence of bias that represented a risk of material
misstatement due to fraud.
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance about whether the consolidated financial statements are free from material
misstatement. Misstatements may arise due to fraud or error. They are considered material if,
individually or in aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the consolidated financial statements as a whole as set out
above. These, together with qualitative considerations, helped us to determine the scope of our audit,
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate, on the consolidated financial statements as a whole.
How we tailored our group audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an
opinion on the consolidated financial statements as a whole, taking into account the structure of the
Group, the accounting processes and controls, and the industry in which the Group operates.
Other information
The Directors are responsible for the other information. The other information comprises the
information included in the Annual Report, but does not include the consolidated financial statements
and our auditor's report thereon.
PwC
9 5
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come from within.
I N D E P E N D E N T AU D I TO R ' S R E P O R T (continued)
To the shareholders of Oceania Healthcare Limited
Our opinion on the consolidated financial statements does not cover the other information and we do
not express any form of audit opinion or assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. If, based on the work we have performed on the other information
that we obtained prior to the date of this auditor’s report, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in
this regard.
Responsibilities of the Directors for the consolidated financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the consolidated financial statements in accordance with NZ IFRS and IFRS, and for such internal
control as the Directors determine is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Directors are responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Directors either intend to liquidate
the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements, as a whole, are free from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (NZ) and ISAs 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 these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is
located at the External Reporting Board’s website at:
https://www.xrb.govt.nz/assurance-standards/auditors-responsibilities/audit-report-1/
This description forms part of our auditor’s report.
9 6
PwC
6
Better experiencesOCEANIAANNUAL REPORT 2022
C O R P O R AT E G OV E R N A N C E
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Leopino Foliaki.
For and on behalf of:
Chartered Accountants
20 May 2022
Auckland
PwC
9 7
7
come from within.
C O R P O R AT E G OV E R NAN C E
This section of the Annual Report provides information on Directors’ independence, diversity and inclusion policies,
remuneration and statutory disclosures.
Oceania’s governance framework is guided by the recommendations set out in the 2020 edition of the NZX Corporate
Governance Code ("NZX Code"). Oceania has prepared a statement on the extent to which it has followed the
recommendations in the NZX Code. The Corporate Governance Statement is current as at 31 March 2022. Oceania
considers that it has followed the recommendations in the NZX Code in all respects during FY2022.
For detailed information on Oceania’s corporate governance policies, practices and processes please refer to the
Investors section on the Oceania website – www.oceaniahealthcare.co.nz/investor-centre/governance. This contains
the following documents:
Corporate Governance Statement
Constitution
Charters
– Board Charter
– Audit Committee Charter
– People and Culture Committee Charter
– Clinical and Health and Safety Committee Charter
– Development Committee Charter
Policies
– Code of Values and Conduct
– Health and Safety Policy
– Occupational Rehabilitation Policy
– Fraud Policy
– Whistleblowing Policy
– Diversity Policy
– Continuous Disclosure Policy
– Remuneration Policy
– Trading in Company Securities Policy
– External Auditor Independence Policy
– Privacy Policy
Dividend Reinvestment Plan Offer Document
Director Independence
As at 31 March 2022, the Board comprised seven Directors. All of the Directors are non-executive Directors. The Board has
considered which of the Directors are Independent Directors for the purposes of the NZX Listing Rules, having regard to the
rules, including the factors in the NZX Code. The Board has determined that, as at 31 March 2022, all seven Directors are
Independent Directors, including the Chair and the Chair of the Audit Committee. As at the date of this Annual Report,
the Directors are:
Elizabeth Coutts
Alan Isaac
Dame Kerry Prendergast
Sally Evans
Gregory Tomlinson
Robert Hamilton
Peter Dufaur
9 8
Chair, Independent Director
Appointed in November 2014
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Independent Director
Appointed in October 2015
Appointed in December 2016
Appointed in March 2018
Appointed in March 2018
Appointed in September 2021
Appointed in September 2021
Better experiencesOCEANIAANNUAL REPORT 2022 C O R P O R AT E G OV E R N A N C E
Committee Membership
The Board has four standing committees to assist in the execution of the Board’s duties, being the Audit Committee,
the People and Culture Committee, the Clinical and Health and Safety Committee and the Development Committee.
As at 31 March 2022, membership of the committees was as follows:
Audit Committee – Alan Isaac (Chair), Elizabeth Coutts, Robert Hamilton
People and Culture Committee – Sally Evans (Chair), Elizabeth Coutts, Alan Isaac
Clinical and Health and Safety Committee – Dame Kerry Prendergast (Chair), Elizabeth Coutts, Sally Evans
Development Committee – Gregory Tomlinson (Chair), Elizabeth Coutts, Peter Dufaur
Diversity
Oceania’s Diversity Policy is available on its website at www.oceaniahealthcare.co.nz/investor-centre/governance.
The Diversity Policy aims to ensure that Oceania has a focus on diversity throughout the organisation. This recognises
that a diverse workforce contributes to business growth and performance, helping to drive an inclusive, high performance
environment.
The Board considers that the Diversity Policy has been successfully implemented across the business with an excellent
balance of gender and ethnicity at Director and officer levels. As at 31 March 2022 (and 31 March 2021 for the prior
comparative period), the gender breakdown of the Directors, officers (as that term is defined in the NZX Listing Rules)
and employees is as follows:
Gender
Directors
Officers
Employees
31 March 2022
31 March 2021
Male
4
2
448
Female
3
3
2,421
Male
3
3
398
Female
3
5
2,375
Oceania is developing further internal systems and processes to allow regular and efficient monitoring of policy objectives.
9 9
come from within. C O R P O R AT E G OV E R NAN C E (continued)
Remuneration Report
Remuneration Overview
Oceania presents this remuneration overview for the year ended 31 March 2022. This overview provides details of Oceania’s
approach to remuneration including incentive plans for executives that were in place for the year ended 31 March 2022 and
remuneration received by the CEO and the Directors.
Remuneration Principles
It is recognised that in order to support the business and its strategy, Oceania must attract and retain people of a high
calibre. Accordingly, the Board sets the remuneration of executives with regard to this and other business objectives.
It is Oceania’s policy to align components of executive remuneration with the performance of Oceania. Executive
remuneration therefore comprises both fixed and “at risk” (or performance-based) elements which are both short and
long-term in nature. The purpose of this policy is to ensure that the interests of the executives, Oceania and its shareholders
are aligned during the period over which the business results are realised.
As a result, the remuneration framework is structured to promote the long-term sustainable growth of Oceania with a
portion of performance-based senior executive remuneration awarded as rights to equity.
Remuneration Governance
Oceania has established a People and Culture Committee to assist the Board in the conduct of the Board’s responsibilities
with regard to people and culture, including remuneration. The People and Culture Committee Charter can be found at
www.oceaniahealthcare.co.nz/investor-centre/governance.
The People and Culture Committee is responsible for:
– Reviewing and recommending changes to Oceania’s remuneration structure, people policies, procedures and practices,
objectives and performance;
– Reviewing and recommending changes to the remuneration of the CEO and executives, having regard to Oceania’s
strategy, vision, values, business objectives and performance, the responsibilities and performance of executives and
the general external market; and
– Reviewing and recommending changes to Director fees, taking into account the external market, work load, succession
planning and the need to offer competitive fees to attract and retain non-executive Directors of a high calibre.
The Board is responsible for:
– Approving changes to Oceania’s remuneration structure, people policies, procedures and practices, objectives
and performance;
– Approving changes to the remuneration of the CEO and executives; and
– Recommending changes to non-executive Director remuneration, for approval by shareholders.
The members of the People and Culture Committee during the year ended 31 March 2022 were Sally Evans (Chair),
Elizabeth Coutts and Alan Isaac.
Executive Remuneration Framework
Oceania’s remuneration structure for executives, including the Chief Executive Officer (“CEO”), comprises three elements:
– Total fixed remuneration ("TFR");
– Short term incentive (“STI”); and
– Long term incentive (“LTI”).
The following summarises each component of executive remuneration. A summary of the remuneration of the CEO,
Brent Pattison, is set out below.
a. Total Fixed Remuneration
Fixed remuneration includes base salary, the provision of a carpark, a vehicle allowance (in some cases) and KiwiSaver
contributions. Each Executive's fixed remuneration is set based on the individual's position, market relativity and the
individual's qualifications and experience. The TFR is reviewed annually.
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b. Short Term Incentive
The STI is currently a cash payment which is dependent on the achievement of a combination of Oceania and individual
performance measures and is capped at a maximum achievement of 100% of the STI.
The performance measures are set by reference to the executive’s responsibility and particular projects relevant to that
executive and the business or function for which they are responsible. The purpose of the STI is to reward executives for
meeting measurable objectives linked to a financial year.
The table below sets out the key terms for the STI plan granted to executives during the year ended 31 March 2022.
Feature
Purpose
Eligibility
Instrument
Performance criteria
c. Long Term Incentive
Approach
Align individual performance with Oceania objectives.
Provide individuals with a competitive market position for total reward (ie variable
and fixed pay components).
Those considered for participation in the STI programme must be able to impact
the performance of their work area or function and also contribute to Oceania’s
overall performance.
Cash.
The following criteria must be met before any payments are made:
– Underlying EBITDA target for the financial year
– Targets related to the delivery of strategic pillar initiatives
– Targets focused on delivery of key business projects
– Achievement of a health and safety target.
Oceania has as its LTI a performance share rights plan. The value and targets for the LTI plan are determined by the Board
and are designed to provide an incentive to executives, retain key talent within the executive team and align the interests
of the executive team and shareholders through the successful execution of Oceania’s strategy.
The table below sets out the key terms for the grants made to the executives under the LTI plan during the year ended
31 March 2022.
Feature
Eligibility
Instrument
Performance period
Performance hurdles
Approach
The Board determines whether an LTI plan will operate and the extent (if any)
to which each executive is invited to participate in an LTI plan each year.
Participants receive an allocation of Performance Share Rights.
Participants are granted a share right dollar allocation as assessed by the Board with
reference to external benchmarking. The number of Performance Share Rights to be
allocated to each participant is determined by applying an external valuation which
takes into account the probability of vesting and the probability of share value.
If the relevant performance hurdles are met at the end of a performance period,
some or all of the Performance Share Rights will become Qualifying Share Rights.
If the participant remains employed with Oceania until the vesting date, the
Qualifying Share Rights will vest and be eligible for conversion into ordinary shares
in Oceania for nil consideration.
On conversion, participants will receive one ordinary share per Qualifying Share
Right, less an adjustment for the amount of PAYE tax paid by Oceania on the
participant’s behalf for the benefit which the participant receives from the scheme.
Three years from 1 April 2021 to 31 March 2024.
There are two performance hurdles, with a 50% weighting for each:
– TSR Performance Hurdle: Oceania’s total shareholder return in the performance
period is greater than the 35th percentile total shareholder return of the NZX50
group of companies.
– EPS Performance Hurdle: Oceania’s annual growth in underlying earnings
before interest, tax, depreciation and amortisation per share over the relevant
performance period is equal to or greater than 10% per year.
Dividends and voting rights
Performance Share Rights do not have voting rights or entitlement to dividends.
1 0 1
come from within. C O R P O R AT E G OV E R NAN C E (continued)
Cessation of employment
Vesting
– If a participant ceases to be employed due to an Involuntary Event (such as
death, redundancy or total permanent illness or injury), the Board may, in its
absolute discretion determine whether the participant’s Qualifying Share Rights
and Performance Share Rights may be retained by the participant as if he or she
remained employed by Oceania, or whether the vesting of such Qualifying Share
Rights and Performance Share Rights may be accelerated. Any Performance
Share Rights that are not retained or vested will lapse.
– If a participant ceases to be employed for any other reason, all of the
participant’s Performance Share Rights and Qualifying Share Rights will lapse.
Although Performance Share Rights become Qualifying Share Rights at the end of
each year (subject to meeting the performance hurdles), participants must wait until
the vesting date for the Qualifying Share Rights to become eligible to convert into
ordinary shares.
The terms of the LTI plan will be amended for the year ended 31 March 2023. The table below sets out the key terms for the
invitation to executives to participate in the LTI plan during the year ended 31 March 2023.
Feature
Eligibility
Instrument
Performance period
Performance hurdle
Approach
The Board determines whether an LTI plan will operate and the extent (if any)
to which each executive is invited to participate in an LTI plan each year.
Participants receive an allocation of Performance Share Rights.
Participants are granted a share right dollar allocation as assessed by the Board
with reference to external benchmarking. The number of Performance Share Rights
to be allocated to each participant will be determined based on the volume weighted
average share price (VWAP) calculated over a 20 working day period on either side
of the year end results announcement.
If the performance hurdle is met at the end of a performance period, some or all of
the Performance Share Rights will become Qualifying Share Rights.
If the participant remains employed with Oceania until the vesting date, the
Qualifying Share Rights will vest and be eligible for conversion into ordinary shares
in Oceania for nil consideration.
On conversion, participants will receive one ordinary share per Qualifying Share
Right, less an adjustment for the amount of PAYE tax paid by Oceania on the
participant’s behalf for the benefit which the participant receives from the scheme.
Three years from 1 April 2022 to 31 March 2025.
TSR Performance Hurdle: Oceania’s total shareholder return in the performance
period relative to total shareholder return of the NZX50 group of companies. If
Oceania is in the bottom quartile of TSR performance for the NZX50 group, then
no Performance Share Rights will become Qualifying Share Rights. If Oceania is
between 25% and 75% of TSR performance for the NZX50 group, then Performance
Share Rights will become Qualifying Share Rights on a sliding scale. If Oceania is in
the top quartile of TSR performance for the NZX50 group, then 100% of Performance
Share Rights will become Qualifying Share Rights.
Dividends and voting rights
Performance Share Rights do not have voting rights or entitlement to dividends.
Cessation of employment
Vesting
102
– If a participant ceases to be employed due to an Involuntary Event (such as
death, redundancy or total permanent illness or injury), the Board may, in its
absolute discretion determine whether the participant’s Qualifying Share Rights
and Performance Share Rights may be retained by the participant as if he or she
remained employed by Oceania, or whether the vesting of such Qualifying Share
Rights and Performance Share Rights may be accelerated. Any Performance
Share Rights that are not retained or vested will lapse.
– If a participant ceases to be employed for any other reason, all of the
participant’s Performance Share Rights and Qualifying Share Rights will lapse.
Although Performance Share Rights become Qualifying Share Rights at the end of
each year (subject to meeting the performance hurdles), participants must wait until
the vesting date for the Qualifying Share Rights to become eligible to convert into
ordinary shares.
Better experiencesOCEANIAANNUAL REPORT 2022 C O R P O R AT E G OV E R N A N C E
CEO Remuneration
The remuneration for the CEO for the year ended 31 March 2022 is as follows1:
Total fixed remuneration
Other
Benefits
Base
Salary
STI
$601,839
$61,802
$292,500
Subtotal
$956,141
LTIP
Remuneration
Total
$252,926
$1,209,067
1
The total fixed remuneration and STI figures shown above include all monetary payments actually paid during the course of the year ended
31 March 2022, which include performance incentive payments for the ten month period ended 31 March 2021. The table does not include amounts
paid after 31 March 2022 that relate to the year ended 31 March 2022.
The remuneration for the CEO for the 10 month period ended 31 March 2021 (being the prior comparative period) was as follows:
Brent Pattison1
Earl Gasparich4
Total for CEO
Total fixed remuneration
Other
Benefits
Base
Salary
$28,9312
$1,3502
STI
03
$394,9805
$31,0735
$106,500
$423,911
$32,423
$106,500
Subtotal
$30,281
$532,553
$562,834
LTIP
$9,0322
-
$9,032
Remuneration
Total
$39,313
$532,553
$571,866
1
2
3
4
5
Mr Pattison became acting CEO on 6 March 2021 and CEO on 22 March 2021.
Salary, other benefits and LTIP pro-rated from Mr Pattison’s 6 March 2021 start date.
Mr Pattison’s STI received during the year is not included as the STI related to the period in which Mr Pattison was Chief Financial Officer.
Mr Gasparich resigned from the position as CEO on 6 March 2021.
Salary and other benefits pro-rated to the date that Mr Gasparich resigned as CEO (being 6 March 2021).
Fixed remuneration
In the year ended 31 March 2022, the CEO, Mr Pattison received fixed remuneration of $663,641. This includes a base salary,
the provision of a carpark, a vehicle allowance and KiwiSaver contributions.
STI payment
In the year ended 31 March 2022, Mr Pattison received an STI payment of $292,500 for the achievement of certain targets
in the 10 month period to 31 March 2021, during which time Mr Pattison held the role of Chief Financial Officer of Oceania
(until 6 March 2021).
In relation to the STI for the year ended 31 March 2022, targets were set with reference to a 10% increase in underlying
EBITDA, sales and resale volumes, occupancy rates, the number of units under construction, retention of key staff, the
number of care centres achieving three or four year certification, a health and safety target and an acquisition target.
Mr Pattison’s STI entitlement under the STI for the year ended 31 March 2022 is $292,500 and it is expected that Mr Pattison
will receive the STI entitlement in respect of the year ended 31 March 2022. This payment will be made in May 2022.
LTI payment
During the year ended 31 March 2022, Mr Pattison received long term incentive benefits (comprising of performance share
rights) of $252,926 value at the time of grant.
The performance conditions for the Performance Share Rights granted during the year ended 31 March 2022 are
described above.
Mr Pattison, together with other executives, will be issued with Performance Share Rights in relation to the performance
period 1 April 2022 to 31 March 2025.
Long term incentives in the form of equity instruments received by Mr Pattison to date are:
LTI 2021/2024
LTI 2020/2023
1 April 2021
31 March 2024
375,000 Performance Share Rights
15 September 2020
31 March 2023
521,739 Performance Share Rights
Grant Date
Vesting Date
Instrument
Status
Unvested
Unvested
Key terms of CEO employment contract
The table below sets out the key terms of Mr Pattison’s employment contract:
Contract
duration
Ongoing until terminated
by either party
Notice period
– company
6 months unless
for cause
Notice period
– CEO
6 months
Termination provision
(where notice provided)
6 months
Post-employment
restraint
12 months
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come from within. C O R P O R AT E G OV E R NAN C E (continued)
Directors’ Fees
Directors’ remuneration is paid in the form of fees. A higher level of fees is paid to the Chair to reflect the additional time and
responsibilities that this position involves. Additional fees are payable in respect of work carried out by the Chairs of the Audit
Committee, People and Culture Committee and the Clinical and Health and Safety Committee.
Non- executive Directors do not receive performance-based remuneration.
Total remuneration for non-executive Directors is subject to an aggregate fee pool limit. As at 31 March 2022, the maximum
fee pool for non-executive Directors was $762,500 per annum. The pool was last fixed five years ago at $582,500 per annum
when there were five Directors. The pool has increased and decreased since then with the appointment and resignation of
Directors in accordance with NZX Listing Rule 2.11.3.
Director Remuneration paid for the year ended 31 March 2022
Director
Board
Fees
Audit
Committee
Elizabeth Coutts (Chair)
$180,000
Alan Isaac
Dame Kerry Prendergast
Sally Evans
Patrick McCawe1
Gregory Tomlinson
Robert Hamilton2
Peter Dufaur2
$90,000
$90,000
$90,000
$78,750
$90,000
$48,452
$48,452
-
$20,000
-
-
-
-
-
-
1
2
Patrick McCawe resigned as a Director with effect from 16 February 2022.
Robert Hamilton and Peter Dufaur were appointed as Directors on 17 September 2021.
The above fees exclude GST and expenses.
Employees’ Remuneration
Clinical and
Health and
Safety
Committee
-
-
$15,000
-
-
-
-
-
People
and Culture
Committee
Total
Remuneration
-
-
-
$7,500
-
-
-
-
$180,000
$110,000
$105,000
$97,500
$78,750
$90,000
$48,452
$48,452
Oceania did not employ people directly in the year ended 31 March 2022. All employees are employed by the subsidiaries
of Oceania. The number of employees and former employees of Oceania’s subsidiaries, not being a Director of Oceania,
who received remuneration and other benefits the value of which was or exceeded $100,000 during the financial year ended
31 March 2022 is set out in the table of remuneration bands below.
The remuneration figures shown in the “Remuneration” column include all monetary payments actually paid during the
course of the year ended 31 March 2022, which include performance incentive payments for the ten month period ended
31 March 2021. The table does not include amounts paid after 31 March 2022 that relate to the year ended 31 March 2022.
Remuneration
Number of Employees
Remuneration
Number of Employees
$100,000 - $109,999
$110,000 - $119,999
$120,000 - $129,999
$130,000 - $139,999
$140,000 - $149,999
$150,000 - $159,999
$160,000 - $169,999
$170,000 - $179,999
$180,000 - $189,999
$190,000 - $199,999
$200,000 - $209,999
$210,000 - $219,999
104
19
13
12
13
10
9
2
3
2
1
4
3
$230,000 - $239,999
$240,000 - $249,999
$250,000 - $259,999
$280,000 - $289,999
$290,000 - $299,999
$300,000 - $309,999
$320,000 - $329,999
$350,000 - $359,999
$400,000 - $409,999
$410,000 - $419,999
$1,200,000 - $1,209,999
1
1
1
1
2
1
2
1
2
1
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Statutory Disclosures
Disclosure of Directors’ Interests
The following particulars were entered in the Interests Register kept for Oceania and its subsidiaries during the year ended
31 March 2022:
Alan Isaac: Disclosed he ceased to hold the following position: President of Institute of Directors.
Dame Kerry Prendergast: Disclosed she ceased to hold the following positions: Board Member of Wellington Phoenix
Football Club; Member of Three Waters Programme Advisory Board.
Disclosed the following new positions: Chair of Victoria University Foundation; Director of FINNZ.
Gregory Tomlinson: Disclosed the following new positions: Director of Villa Maria Estate Limited; Director of Terra Vitae
Vineyards Limited.
Robert Hamilton: Disclosed the following positions: Director of Tourism Holdings Limited; Director of Westpac New Zealand
Limited; Director of Stelvio Consulting Limited; Director of Kamari Consulting Limited; Board Trustee of Auckland Grammar
School; and Consultant to Synlait Milk Limited (through Stelvio Consulting Limited).
Peter Dufaur: Disclosed the following positions: Director of Rakino Way Investments Limited; Director of Mens Welding Club
Limited; Director of Ockleston Holdings Limited; Director of Ockleston Investments Limited; Director of Wellsford Welding
Club Limited; Director of Welding Holdings Limited; Director of Pagan Properties Limited; Director of Drury Lane GP Limited;
Director of Mayfair Investment 2101 Limited; Director of Mayfair Investment 1901 Limited; Director of Mayfair Group Limited;
Director of Druces Road Investment Limited; Director of MD Investment Holdings Limited; Director of Arch Hill Investment
Limited; Director of Dufaur Investment Trustee Limited; Director of Symonds Street Investments Limited; Director of Mayfair
Drury 2102 Limited; and Director of Bounty Lane Limited.
Specific Disclosures
There were no specific disclosures made by Directors during the year ended 31 March 2022 of any interests in transactions
with Oceania or any of its subsidiaries.
Use of Company Information
During the year ended 31 March 2022, the Board did not receive any notices from Directors requesting use of Oceania’s or
any of its subsidiaries’ information.
Securities Dealings of Directors
Dealings by Directors of Oceania in relevant interests in Oceania’s ordinary shares during the year ended 31 March 2022
are entered in the Interests Register:
Director
Elizabeth Coutts
Number of
ordinary shares
39,074
Nature of
relevant interest
Beneficial ownership Acquisition
Acquisition
/ disposal
Consideration
(per share)
$1.28
Date of
transaction
16 April 2021
Alan Isaac
15,339
Beneficial ownership Acquisition
Dame Kerry Prendergast
31,259
Gregory Tomlinson
Elizabeth Coutts
78,148
23,122
Registered and
beneficial ownership
Beneficial ownership Acquisition
Acquisition
Beneficial ownership Acquisition
$1.28
$1.28
$1.28
$1.40
16 April 2021
16 April 2021
16 April 2021
22 June 2021
Alan Isaac
2,862
Beneficial ownership Acquisition
$1.40
22 June 2021
Dame Kerry Prendergast
3,437
Sally Evans
828
Registered and
beneficial ownership
Registered and
beneficial ownership
Acquisition
$1.40
22 June 2021
Acquisition
$1.40
22 June 2021
Gregory Tomlinson
Alan Isaac
Gregory Tomlinson
358,936
10,000
668,674
Beneficial ownership Acquisition
Beneficial ownership Acquisition
Beneficial ownership Acquisition
$1.40
$1.48
$1.40
22 June 2021
28 July 2021
12 October 2021
105
come from within. C O R P O R AT E G OV E R NAN C E (continued)
Director
Gregory Tomlinson
Number of
ordinary shares
731,326
Nature of
relevant interest
Beneficial ownership Acquisition
Acquisition
/ disposal
Consideration
(per share)
$1.42
Date of
transaction
14 October 2021
Gregory Tomlinson
350,000
Beneficial ownership Acquisition
$1.41
15 October 2021
Gregory Tomlinson
55,000
Beneficial ownership Acquisition
$1.41
18 October 2021
Gregory Tomlinson
28,729
Beneficial ownership Acquisition
$1.41
19 October 2021
Elizabeth Coutts
25,000
Beneficial ownership Acquisition
$1.31
30 November 2021
Elizabeth Coutts
25,000
Beneficial ownership Acquisition
$1.31
3 December 2021
Sally Evans
Sally Evans
Peter Dufaur
19,100
12,000
74,800
Registered and
beneficial ownership
Registered and
beneficial ownership
Registered and
beneficial ownership
Acquisition
$1.33
7 December 2021
Acquisition
$1.33
8 December 2021
Acquisition
$1.34
8 December 2021
Elizabeth Coutts
25,667
Beneficial ownership Acquisition
$1.28
20 December 2021
Alan Isaac
3,272
Beneficial ownership Acquisition
$1.28
20 December 2021
Dame Kerry Prendergast
3,796
Sally Evans
917
Gregory Tomlinson
428,444
Directors’ Interests in Shares
Acquisition
Registered and
beneficial ownership
Registered and
beneficial ownership
Beneficial ownership Acquisition
Acquisition
$1.28
$1.28
$1.28
20 December 2021
20 December 2021
20 December 2021
Directors of Oceania have disclosed the following relevant interests in shares as at 31 March 2022:
Director
Elizabeth Coutts
Alan Isaac
Dame Kerry Prendergast
Sally Evans
Gregory Tomlinson1
Robert Hamilton
Peter Dufaur
Number of shares in which a relevant interest is held
1,644,692 shares
301,829 shares
350,203 shares
98,025 shares
26,618,649 shares
40,500 shares
74,800 shares
1
Gregory Tomlinson’s relevant interests are legally held by Tomlinson Group Investments Limited and Harrogate Trustee Limited.
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Better experiencesOCEANIAANNUAL REPORT 2022 C O R P O R AT E G OV E R N A N C E
Indemnity and Insurance
Oceania has granted indemnities, as permitted by the Companies Act 1993 and the Financial Markets Conduct Act
2013, in favour of each of its Directors. Oceania also maintains Directors’ and Officers’ liability insurance for its Directors
and officers.
Auditor’s Fees
Oceania’s external auditor is PricewaterhouseCoopers. Total fees paid to PricewaterhouseCoopers in its capacity as
auditor during the financial year ended 31 March 2022 were $540,000. Total fees paid to PricewaterhouseCoopers
for other professional services (being trustee reporting, requested procedures for the LTIP, advice on the Task Force on
Climate-Related Financial Disclosures (TCFD) gap analysis and materiality matrix workshop and agreed upon procedures
for the Annual Shareholders Meeting) during the financial year ended 31 March 2022 were $76,000. No other fees were
paid to PricewaterhouseCoopers for other professional services.
Donations
During the year ended 31 March 2022, Oceania paid a total of $32,573 in donations.
Listings
Oceania’s shares are listed on the NZX Main Board and the Australian Securities Exchange operated by ASX Limited.
Oceania is listed on ASX as a Foreign Exempt Listing, which means that Oceania is required to comply with the NZX Listing
Rules but it is exempt from the majority of the ASX Listing Rules. In accordance with ASX Listing Rule 1.15.3, Oceania
confirms that it has complied with the NZX Listing Rules for the financial year ended 31 March 2022.
NZX Waivers
Oceania did not apply for or rely upon any waivers from the requirements of the NZX Listing Rules during the financial year
ended 31 March 2022.
Credit Rating
Oceania currently has not sought a credit rating.
Former Directors
Patrick McCawe resigned as a Director of Oceania Healthcare Limited on 16 February 2022.
Jill Birch resigned as a Director of Oceania Village Company Limited, Oceania Care Company Limited and Oceania Group
(NZ) Limited on 1 June 2021.
Subsidiary Company Directors
Brent Pattison and Kathryn Waugh are the Directors of all Oceania’s subsidiaries as at 31 March 2022, with the exception
of OCA Employees Trustee Limited (the Directors of which are Elizabeth Coutts and Sally Evans).
No remuneration is payable, and there is no entitlement to other benefits, for any directorship of a subsidiary.
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come from within.
C O R P O R AT E G OV E R NAN C E (continued)
SHAREHOLDER AND BONDHOLDER INFORMATION
Twenty Largest Registered Shareholders
(as at 30 April 2022)
Registered Shareholder
New Zealand Central Securities Depository Limited
(see further table below)
FNZ Custodians Limited
Custodial Services Limited
Forsyth Barr Custodians Limited
Hobson Wealth Custodian Limited
Tomlinson Group Investments Limited1
New Zealand Depository Nominee Limited
JBWere (NZ) Nominees Limited
Lennon Holdings Limited
H & G Limited
FNZ Custodians Limited
Andrew Craig Strong and Alison Jean Strong
JBWere (NZ) Nominees Limited
Harrogate Trustee Limited1
M A Janssen Limited
Forsyth Barr Custodians Limited
Leveraged Equities Finance Limited
OCA Employees Trustee Limited
ASB Nominees Limited
Jinyue Zhang and Ting Wu
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Total
Number of Shares
% Shares
218,040,773
30.70
50,482,100
49,647,940
39,406,151
30,223,612
22,751,055
21,093,993
7,762,390
7,000,000
6,000,000
5,186,352
4,650,418
4,570,586
3,867,594
3,024,026
2,967,343
2,966,112
2,624,731
2,315,960
2,026,056
7.10
6.99
5.54
4.25
3.20
2.97
1.09
0.98
0.84
0.73
0.65
0.64
0.54
0.42
0.41
0.41
0.36
0.32
0.28
486,607,192
68.42
1
Gregory Tomlinson’s relevant interests are held by Tomlinson Group Investments Limited and Harrogate Trustee Limited.
108
Better experiencesOCEANIAANNUAL REPORT 2022 C O R P O R AT E G OV E R N A N C E
New Zealand Central Securities Depository Limited provides a custodial depository service that allows electronic trading
of securities to its members. It does not have a beneficial interest in these shares. Its major holdings of Oceania shares are
held on behalf of:
Name
Number of Shares
% Shares
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Citibank Nominees (New Zealand) Limited
HSBC Nominees (New Zealand) Limited
MFL Mutual Fund Limited
Accident Compensation Corporation
HSBC Nominees (New Zealand) Limited
Generate Kiwisaver Public Trust Nominees Limited
BNP Paribas Nominees (NZ) Limited
JP Morgan Chase Bank NA NZ
ANZ Wholesale Trans-Tasman Property Securities Fund
ANZ Wholesale Australasian Share Fund
TEA Custodians Limited Client Property Trust Account
Simplicity Nominees Limited
BNP Paribas Nominees (NZ) Limited
Public Trust Class 10 Nominees Limited
ANZ Wholesale Property Securities
Pathfinder Caresaver
Pathfinder Nominees Limited
BNP Paribas Nominees (NZ) Limited
Public Trust RIF Nominees Limited
ANZ Custodial Services New Zealand Limited
Spread of Registered Shareholdings
(as at 30 April 2022)
26,300,057
23,130,314
22,350,114
21,705,727
21,622,160
20,959,528
18,669,339
16,486,828
11,061,577
8,321,825
7,131,695
5,943,555
2,934,040
2,215,369
2,046,335
1,736,409
1,669,400
1,396,755
898,441
881,832
3.70
3.26
3.15
3.06
3.04
2.95
2.63
2.32
1.56
1.17
1.00
0.84
0.41
0.31
0.29
0.24
0.24
0.20
0.13
0.12
Size of Holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Number of
Shareholders
964
2,178
1,696
3,381
412
%
11.17
25.24
19.65
39.17
4.77
Number of
Shares
490,485
6,456,081
12,903,823
100,351,365
590,002,746
%
0.07
0.91
1.82
14.13
83.07
8,631
100.00
710,204,500
100.00
Substantial Product Holders
According to notices given under the Financial Markets Conduct Act 2013, the following were substantial product holders
of Oceania as at 31 March 2022:
Substantial Product Holder
Number of Shares
% of Shares Held at
Date of Notice
Date of Notice
ANZ New Zealand Investments Limited,
ANZ Bank New Zealand Limited and ANZ
Custodial Services New Zealand Limited
Jarden Securities Limited and Harbour Asset
Management Limited
44,885,700
6.360
13 September 2021
38,719,934
5.452
30 March 2022
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come from within. C O R P O R AT E G OV E R NAN C E (continued)
Twenty Largest Registered Bondholders OCA 010
(as at 30 April 2022)
Registered Bondholder
Custodial Services Limited
New Zealand Central Securities Depository Limited
(see further table below)
FNZ Custodians Limited
Hobson Wealth Custodian Limited
Forsyth Barr Custodians Limited
Investment Custodial Services Limited
JB Were (NZ) Nominees Limited
FNZ Custodians Limited
FNZ Custodians Limited
Forsyth Barr Custodians Limited
David James Foster and Linda Joyce Foster
F S Investments Limited
Craig John Thompson
Custodial Services Limited
Henry and William Williams Memorial Trust Incorporated
Hugh McCracken Ensor
William Leonard Wright and Gillian Wright
Hobson Wealth Custodian Limited
Robert Raymond Paterson
Gabriele Landvogt
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Total
Number of Bonds
% Bonds
44,530,000
25,543,000
35.62
20.43
17,522,000
14.01
10,883,000
5,435,000
2,249,000
1,375,000
640,000
620,000
570,000
500,000
500,000
500,000
401,000
400,000
370,000
350,000
250,000
200,000
170,000
8.70
4.34
1.79
1.10
0.51
0.49
0.45
0.40
0.40
0.40
0.32
0.32
0.29
0.28
0.20
0.16
0.13
113,008,000
90.34
New Zealand Central Securities Depository Limited provides a custodial depository service that allows electronic trading of
securities to its members. It does not have a beneficial interest in these bonds. Its major holdings of Oceania bonds are held
on behalf of:
TEA Custodians Limited Client Property Trust Account
Generate Kiwisaver Public Trust Nominees Limited
Queen Street Nominees ACF PIE Funds
Mint Nominees Limited
JP Morgan Chase Bank NA NZ Branch
Queen Street Nominees ACF Hobson Wealth
Public Trust RIF Nominees Limited
ANZ Custodial Services New Zealand Limited
BNP Paribas Nominees (NZ) Limited
Westpac Banking Corporate NZ Financial Markets Group
ANZ Bank New Zealand Limited
Number of Bonds
% Bonds
12,590,000
10.07
4,080,000
4,075,000
3,490,000
500,000
348,000
160,000
110,000
71,000
62,000
57,000
3.26
3.26
2.79
0.4
0.28
0.13
0.09
0.06
0.05
0.05
Name
1
2
3
4
5
6
7
8
9
10
11
11 0
Better experiencesOCEANIAANNUAL REPORT 2022 C O R P O R AT E G OV E R N A N C E
Spread of Registered Bondholdings OCA 010
(as at 30 April 2022)
Size of Holding
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Number of
Bondholders
14
93
297
35
439
%
3.19
21.19
67.65
7.97
100.00
Number of
Bonds
70,000
908,000
10,133,000
%
0.06
0.73
8.10
113,889,000
91.11
125,000,000
100.00
Twenty Largest Registered Bondholders OCA 020
(as at 30 April 2022)
Registered Bondholder
New Zealand Central Securities Depository Limited
(see further table below)
Custodial Services Limited
FNZ Custodians Limited
Forsyth Barr Custodians Limited
Hobson Wealth Custodian Limited
FNZ Custodians Limited
Investment Custodial Services Limited
Forsyth Barr Custodians Limited
JB Were (NZ) Nominees Limited
KIWIGOLD.CO.NZ Limited
Hobson Wealth Custodian Limited
Custodial Services Limited
JB Were (NZ) Nominees Limited
Paul Arnold Aitken
FNZ Custodians Limited
Forsyth Barr Limited
Forsyth Barr Custodians Limited
Lili Wang
Woodford Enterprises Limited
Visregen Technologies Limited
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Total
Number of Bonds
% Bonds
36,958,000
36.95
22,213,000
11,237,000
22.21
11.23
9,915,000
5,342,000
1,371,000
1,070,000
1,039,000
417,000
400,000
209,000
188,000
175,000
170,000
158,000
155,000
150,000
150,000
150,000
140,000
9.91
5.34
1.37
1.07
1.03
0.41
0.4
0.2
0.18
0.17
0.17
0.15
0.15
0.15
0.15
0.15
0.14
91,607,000
91.53
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come from within. C O R P O R AT E G OV E R NAN C E (continued)
New Zealand Central Securities Depository Limited provides a custodial depository service that allows electronic trading of
securities to its members. It does not have a beneficial interest in these bonds. Its major holdings of Oceania bonds are held
on behalf of:
Name
1
2
3
4
5
6
7
8
Generate Kiwisaver Public Trust Nominees Limited
National Nominees Limited
Westpac Banking Corporate NZ Financial Markets Group
TEA Custodians Limited Client Property Trust Account
BNP Paribas Nominees (NZ) Limited
Queen Street Nominees ACF PIE Funds
JP Morgan Chase Bank NA NZ Branch
Queen Street Nominees ACF Hobson Wealth
Spread of Registered Bondholdings OCA 020
(as at 30 April 2022)
Size of Holding
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Number of
Bondholders
53
134
273
29
489
%
10.84
27.4
55.83
5.93
100
Number of Bonds
% Bonds
12,200,000
12.20
9,553,000
5,815,000
5,470,000
1,860,000
1,250,000
700,000
110,000
Number of
Bonds
265,000
1,094,000
6,784,000
9.55
5.82
5.47
1.86
1.25
0.70
0.11
%
0.27
1.09
6.78
91,857,000
91.86
100,000,000
100
112
Better experiencesOCEANIAANNUAL REPORT 2022 come from within.
Building connections...
(Continued from page 05)
After 23 years by the coast,
Gary and wife Shirley have sold
up at Waihi Beach, and with
his hand-crafted boat finding a
new home in the Tasman region
(having traversed Cook Strait),
Gary is a resident at The BayView
and getting involved with a new
project; building and making
connections while he’s doing it.
New to bowls, he’s not only playing the
game, connecting with other residents and
forging new friendships, he’s also been
helping good friend Terry create bespoke
bowls containers for the bowling fraternity,
in the residents’ tools workshop (the ‘man
cave’) at The BayView. It’s a great initiative
that’s bringing even more community
energy to The BayView.
The individually named and meticulously
finished carved wooden carriers are a huge
hit with the bowlers.
“The boys” have thoughtfully designed and
built two styles of carrier, one large that
carries all four bowls in a single carrier,
and a 2-bowl version, predominantly for
the ladies, allowing them to carry a bowls
carrier in each hand and distribute their
weight evenly. Clever.
Gary of course, gives all the credit to Terry,
“he made it happen, I just like to help out”.
Yep, just helping out. A lifelong commitment
from a quietly spoken community hero.
At The BayView, Gary’s finding ways to
connect with his new home and contribute
to the village, and he might say he’s getting
plenty back.
I’ve always enjoyed
having a project...
Gary – Resident at The BayView
11 3
oceaniahealthcare.co.nz