Pilgrim's Pride
Annual Report 2023

Plain-text annual report

ANNUAL REPORT 2023 Contents Our Business FY23 Performance at a Glance Group Strategy Business Model National Reach Chairman’s Review Managing Director and CEO’s Review Operational and Financial Review Development Projects Funds Management Projects Joint Ventures Our Commitment to Sustainability Corporate Calendar FY24 Financials 2 4 6 7 8 10 12 16 18 20 22 26 28 Defining future places of belonging Image: Tonsley Village, SA PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 1 Our Business Peet is one of Australia’s leading residential real estate developers, creating places to live for thousands of Australians every year. Listed on the Australian Securities Exchange (ASX) since 2004, Peet develops masterplanned communities, townhouses and apartments in the major growth corridors across Australia. Established in 1895 by founder James Thomas Peet with a vision for Australians to build or buy their own home, Peet has enabled thousands of Australians to achieve their ownership dreams. Vision Imagine and realise future places where lives are enhanced by communities built on a sense of belonging. Purpose Defining future places of belonging. Image: Golden Bay, WA PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 2 Values People Centric People are always at the centre of our ideas, considerations and decisions. Creative Intelligence Unwavering Commitment We are tenacious, accountable and trusted to deliver quality. We are driven by imagination, innovation and future-focused thinking. We also apply a considered and deliberate approach to design and solve problems creatively. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 3 FY23 Performance at a Glance “The strong FY23 result is on the back of the Group’s continuing focus on monetising the high number of contracts on hand at the start of the financial year, many of which had high margins as a result of strong price growth.” Brendan Gore Managing Director and Chief Executive Officer Operational 1,339 LOTS SOLD1 COMPARED TO 3,163 IN FY22 2,594 LOTS SETTLED1 REVENUE OF $363.7m $$476.4m CONTRACTS ON HAND1 LAND BANK WEIGHTED TO UNDERSUPPLIED EAST COAST MARKETS TWO NEW PROJECTS COMMENCED DEVELOPMENT/SALES DURING FY23 1 Includes equivalent lots. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 4 Financial $70.1 million OPERATING AND STATUTORY PROFIT2 AFTER TAX 34% INCREASE ON FY22 $107.0 million EBITDA3 29.0% MARGIN OF NTA of $1.29 6% INCREASE ON FY22 OPERATING EARNINGS OF 14.79 CENTS PER SHARE 37% INCREASE ON FY22 OPERATING CASH INFLOW4 OF $89.0 MILLION FY23 DIVIDEND OF 7.50 CENTS PER SHARE FULLY FRANKED 20% INCREASE ON FY22 GEARING5 OF 27.7% 2 Operating profit is a non-IFRS measure that is determined to present the ongoing activities of the Group in a way that reflects its operating performance. Operating profit excludes unrealised fair value gains/(losses) arising from the effect of revaluing assets and liabilities and adjustments for realised/(unrealised) transactions outside the core ongoing business activities. 3 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in associates and joint ventures. 4 Before acquisitions. 5 Calculated as (Total interest-bearing liabilities (including land vendor liabilities) less cash) / (Total assets less cash, less intangible assets). PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 5 Group Strategy Strategic focus on optimising land bank for future growth and value creation. MAINTAIN STRONG CAPITAL  MANAGEMENT VALUE CREATION INVEST IN HIGH QUALITY LAND  IN STRATEGIC LOCATIONS ACROSS THE COUNTRY EXPAND PRODUCT OFFERING AND GEOGRAPHIC PRESENCE TO APPEAL TO A WIDER VARIETY  OF CUSTOMERS Strategic Pillars MASTERPLANNED COMMUNITIES TOWNHOUSES APARTMENTS ENABLED BY: Positive environmental and social impact Engaged and high-performing team PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 6 Image: Flagstone, QLD (Artist’s Impression) Business Model A unique funding model is one of Peet’s key differentiators. It funds development through a combination of Company-owned Development projects, Funds Management projects and Joint Ventures, resulting in a capital efficient business model. Peet pioneered retail land syndication in Australia and its Funds Management and Joint Ventures businesses manage more than 15,400 lots6 across 22 projects, providing opportunities for investors ranging from mums and dads to institutional and wholesale investors to participate in land development projects. S M U N ITIE F U A P A N D R T S M M N E A T S WHOLESALE/ INSTITUTIONAL 8,953 lots6 $2.8bn GDV N A G E M E N T NED CO M N LA P R E T S A M OWNED 20,238 lots6 $8.6bn GDV T N E M P O L E V E D RETAIL 4,362 lots6 $1.2bn GDV JOINT VENTURES 2,177 lots6 $1.0bn GDV TOWNHOUS E S 6 Includes equivalent lots. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 7 National Reach 35,730 LOTS7 $13.5b END VALUE 45 PROJECTS NATIONALLY WA ACT QLD VIC SA NSW PROJECTS: PROJECTS: PROJECTS: PROJECTS: PROJECTS: PROJECTS: 18 1 10 9 5 2 7 Includes equivalent lots. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 8 Leading Australian developer with a proven track record for nearly 130 years Large, nationally diverse land bank provides economies of scale to deliver a wide range of product at lower cost Proven ability to expand business into new opportunities such as townhouses and low-rise apartments Image: Brabham Estate, WA PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 9 Chairman’s Review Dear Shareholders, I am pleased to present Peet’s Annual Report for the year ended 30 June 2023. Peet is a leading national residential developer since commencing almost 130 years ago. We have a proven track record of creating high quality master planned communities, townhouses and apartments that are located in desirable urban locations and key growth corridors. Our geographically diverse pipeline of projects provides our management team with the ability to manage our comprehensive land bank and our capital through market cycles. Despite the challenging economic backdrop, I am pleased to present the high level details of our strong financial results: • FY23 dividends of 7.5 cents per share, fully franked, compared to 6.25 cents per share in FY22. The contributing factors behind our record profit performance, and outlook for FY24 and beyond, are covered in the Managing Director and CEO’s Review and in the Review of Operations forming part of the 2023 Directors’ Report. Focus on Value Creation Peet is uniquely positioned to respond quickly to market recovery and take advantage of a shortage of market supply, with key projects having environmental and planning approvals in place. We expect significant value to be unlocked through the Flagstone City Centre, the University of Canberra project and new project commencements currently programmed for the next four years. • A record financial result for FY23 of operating8 and statutory profit9 after tax of $70.1 million, representing an increase of 34% on FY22. Peet is well positioned for growth with its key strategic focus areas for FY24 and beyond continuing to be: • An operating and statutory earnings per share of 14.8 cents for FY23, compared to 10.8 cents in FY22. • Continued focus on capital management and monetising of contracts on hand, with increased positive cash flows from operations of $89.0 million (before acquisitions). • Gearing10 of 27.7% at 30 June 2023, compared with 29.9% at 30 June 2022. • Investing in high quality land in strategic locations across the country; • Expanding product offering and geographic presence to appeal to a wider variety of customers; and • Maintaining strong capital management. 8 9 Operating profit is a non-IFRS measure that is determined to present the ongoing activities of the Group in a way that reflects its operating performance. Operating profit excludes unrealised fair value gains / (losses) arising from the effect of revaluing assets and liabilities and adjustments for realised / unrealised transactions outside the core ongoing business activities. Statutory profit after tax means net profit measured in accordance with Australian Accounting Standards, attributable to the owners of Peet Limited. 10 Calculated as (Total interest-bearing liabilities (including land vendor liabilities) less cash) / (Total assets less cash, less intangible assets). PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 10 Strong Shareholder Returns Peet is pleased to have returned $173 million11 to shareholders since FY18 through fully franked dividends and our on-market share buy-back. The disciplined application of our capital management framework and strong balance sheet drives strong shareholder benefits as our financial performance improves. Dividends Subsequent to year end, the Directors declared a final dividend for FY23 of 4.0 cent per share, fully franked. This brings the total dividend for FY23 to 7.5 cents per share, fully franked. This compares to the FY22 dividend of 6.25 cents per share, fully franked. The final FY23 dividend is to be paid on Monday, 16 October 2023, with a record date of Monday, 11 September 2023. The Directors have resolved to keep the Company’s Dividend Reinvestment Plan deactivated. On-market share buy-back Our value driven on-market share buy-back continues and has reduced our shares on issue by c.4%. This further benefits our per-share dividends through time with the current book NTA of $1.29 and average buy-back price of c.$1.05 per share. “ We are focused on value creation for our shareholders, driven through a strong platform for growth and a portfolio of high quality, low cost base projects across the country.” I would like to thank my fellow Board members, including our Managing Director and CEO Brendan Gore and the entire Peet team for their continued commitment and focus to deliver on our Group strategy and achieve record earnings in FY23. Following nine years on the Board, Vicki Krause and Bob McKinnon have advised that they will retire at the upcoming Annual General Meeting (AGM). On behalf of the Board, I congratulate both Vicki and Bob on their professional and dedicated services to Peet and warmly wish them well for their future endeavours. I’d also like to extend a warm welcome to newly appointed Non-executive Directors, Margaret Kennedy, Michelle Tierney and Greg Wall. Their significant experience and skills across a broad range of industry sectors, including property, financial services and funds management, will complement and strengthen the Board’s experience and expertise. As required by the Peet Constitution, Margaret, Michelle and Greg will offer themselves for election by shareholders at the 2023 AGM. As part of the succession planning for the Board, and to ensure an orderly transition process, I have informed the Board of my intentions to retire as Chairman and Director in the next 12 to 18 months. Finally, I would like to extend our appreciation to our shareholders, partners and key stakeholders for their ongoing support of Peet and our management team, and we look forward to sharing our progress with you throughout the next 12 months. Tony Lennon Chairman 11 Includes final FY23 dividend of 4.0 cents per share. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 11 Managing Director and CEO’s Review Dear Shareholders, I am pleased to report on the Group’s performance for the year ended 30 June 2023 (FY23). FY23 Record Performance The Peet Group achieved a record operating profit12 and statutory profit13 after tax of $70.1 million for the year ended 30 June 2023, which represents an increase of 34% on the previous financial year which was also a record earnings performance. The Group reported EBITDA14 of $107.0 million during FY23, compared to $86.0 million in FY22, with an EBITDA14 margin of 29%, compared to the margin achieved in FY22 of 30%. The material improvement in profit was driven by: • prudent focus on monetising the high number of contracts on hand at the start of the financial year, many of which had high margins as a result of strong price growth; • the changing product mix, including an improved performance from medium density townhouse product; • continued focus on creating and unlocking value by appropriately managing the Group’s significant land bank; and • continued focus on cost management and operational efficiencies. Due to challenging economic conditions and Peet’s measured responses, sales activity during FY23 reduced from elevated levels in FY22. The Group sold 1,399 lots15 across its Funds Management, Development and Joint Venture projects, compared to 3,163 lots15 in FY22. Multiple interest rate rises and inflationary pressures contributed to more subdued market conditions during FY23, reducing the borrowing capacity of buyers, especially of first home buyers. This, together with continued supply chain constraints and labour shortages impacting builders, has negatively impacted consumer sentiment. Peet responded to the underlying market and broader economic conditions by reducing the number of new stage releases and allocating resources to the creation of lots pre-sold during the peak 2022 selling period. Peet proactively focused on protecting its balance sheet and its high level of contracts on hand during FY23, resulting in strong settlements of 2,594 lots15, compared to 2,514 lots15 in FY22. This was achieved by the close management of construction programs and the low cancellation rate for unconditional contracts. The Group enters FY24 in a strong capital position, with gearing16 at 30 June 2023 within the target range of 20% to 30% (at 27.7%), and a still solid level of contracts on hand with a value of $476.4 million. 12 Operating profit is a non-IFRS measure that is determined to present the ongoing activities of the Group in a way that reflects its operating performance. Operating profit excludes unrealised fair value gains / (losses) arising from the effect of revaluing assets and liabilities and adjustments for realised / unrealised transactions outside the core ongoing business activities. 13 Statutory profit after tax means net profit measured in accordance with Australian Accounting Standards, attributable to the owners of Peet Limited. 14 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in associates and joint ventures. 15 Includes equivalent lots. 16 Calculated as (Total interest-bearing liabilities (including land vendor liabilities) less cash) / (Total assets less cash, less intangible assets). PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 12 Capital Management Well-positioned for growth The Group’s continuing focus on capital management, and the monetising of contracts on hand during FY23, contributed to increased cash inflows from operations (prior to acquisitions) of $89.0 million, compared with $80.1 million in FY22. As at 30 June 2023 the Group had: Peet has a strong platform for growth with significant value to be unlocked as we deliver against our strategy: Investing in high quality land in strategic locations across the country • Land bank weighted to undersupplied east coast • gearing17 of 27.7% compared with 29.9% at 30 markets. June 2022; • net interest-bearing debt18 (including Peet Bonds) of $253.3 million, compared with $245.2 million at 30 June 2022; • cash and available debt facility headroom of $148.3 million; and • Recent acquisitions have resulted in increasing embedded margins. • Key projects have environmental and planning approvals in place. • Significant value creation to be unlocked through Flagstone Town Centre and University of Canberra project. • a weighted average debt maturity of more than • Continue to assess selective acquisitions to two years. restock the pipeline. The Group has a strong balance sheet and sufficient financial capacity to fund the current portfolio of projects, including accelerating delivery of product, if required, to meet increases in demand. During FY23, Peet extended its on-market share buy- back of up to 5% of its issued ordinary shares. As at 30 June 2023, the Company had acquired 18.6 million of its ordinary shares, representing approximately 76% of the total shares to be acquired. On 7 August 2023, the Company announced that the on-market buy-back has been extended for a further 12 months to 30 August 2024. Peet has $75 million of Peet Bonds maturing on 7 June 2024. They will be repaid on maturity via cash and available headroom in the senior debt facility and/or other refinancing options available. Expanding product offering and geographic presence to appeal to a wider variety of customers • Targeting infill projects of major capital cities. • Two new projects commenced development/sales during FY23. • First settlements from nine new projects over the next four years increasing activation of the landbank to c.83%. • Continued focus on increasing the Group’s townhouse pipeline - currently at 1,200 nationally. Maintaining strong capital management • $150m of liquidity available. • Gearing of 27.7% - within target range. • Focus on improving operating cash flows. • Maintaining a disciplined approach to capital management by aligning production levels and development spend with sales demand. • Group well positioned to consider capital management initiatives to further improve shareholder returns. 17 Calculated as (Total interest-bearing liabilities (including land vendor liabilities) less cash) / (Total assets less cash, less intangible assets). 18 Including net debt of syndicates consolidated under AASB10. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 13 Value creation Group Outlook • Good visibility of future earnings underpinned by a low-cost land bank. • Ability to leverage well established funds management capability where appropriate to unlock value. • Continue to assess opportunities to maximise cycles to unlock value as appropriate. ESG Commitment Peet has a long track-record of demonstrating our commitment to sustainability. We have a clear framework that focuses on sustainable practices that create long-term shared value for our communities, shareholders and people. Our social sustainability strategy focuses on issues that will have meaningful impact on both our residents and our team. Through our partnership with Black Dog Institute, we also know that mental health affects 1 in 5 Australians each year. Supporting mental wellbeing is a priority we share with the Perth Scorchers, where we are proud to be the Principal Partner of the men’s and women’s teams. It was a natural extension for us to bring the partnerships together to further the conversation around mental health by engaging players as mental health ambassadors. By having role models share their own experiences, we aim to break down the barriers for people to feel comfortable seeking support when they most need it. Environmental sustainability remains a key priority across the Group, with a broad range of initiatives and milestones achieved this year. We were pleased to be recognised for our commitments by being named Australia’s Most Sustainable Community Developer by Capital Finance International, and Brabham Estate being awarded the 2023 Platinum Waterwise Development of the Year, adding to its already impressive green credentials. As a values-driven organisation, our biggest asset is our people and fostering a culture that promotes engagement and sense of belonging. We encourage a culture of innovation and creativity, whilst demonstrating unwavering commitment to delivering high quality outcomes for our partners and stakeholders. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 14 Residential markets continue to adjust from their peak following interest rate increases, inflationary pressures and low consumer confidence. Despite markets being at or close to bottoming, and with an improvement in enquiry levels, we expect the market will require a stabilisation in interest rates before buyer confidence begins to return and market conditions begin to normalise. Markets remain undersupplied, with underlying fundamentals remaining positive including low unemployment, above-average wage growth, and increasing immigration. Peet will continue to focus on executing our strategic objectives and maintaining a disciplined approach to capital management. The Group remains well positioned to navigate the current environment, with a flexible delivery program in place to respond strongly to a recovery in activity and to take advantage of a shortage of market supply. Given the current economic backdrop, which Peet expects to persist throughout 1H24, Peet will continue to adopt a cautious approach as it enters FY24 with earnings expected to be strongly weighted to 2H24. I would like to thank Chairman Tony Lennon and our Board for their continued support and contribution. Thank you also to the management team and staff for their commitment and focus which has contributed to this strong FY23 performance. Lastly, thank you to our shareholders, customers and key stakeholders who continue to support Peet. I look forward to updating you on our progress during the coming year. Brendan Gore Managing Director and Chief Executive Officer “ Peet will continue to focus on executing our strategic objectives and maintaining a disciplined approach to capital management. The Group remains well positioned to navigate the current environment, with a flexible delivery program in place to respond strongly to a recovery in activity and to take advantage of a shortage of market supply.” Image: Tonsley Village, SA PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 15 OPERATIONAL AND FINANCIAL REVIEW Development Projects Peet’s Development projects are 100% owned by Peet and held on its balance sheet. 100% of returns are collected upon development, sale and settlement of these projects, generating solid margins. 48% of EBITDA19,20 COMPRISED21 57% OF GROUP’S LAND BANK 20,238 lots22 GDV23 $8.6 billion 19 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in associates and joint ventures. 20 Before inter-segment transfers and other unallocated items. 21 By number of lots. 22 Includes equivalent lots. 23 Gross Development Value. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 16 LOTS SOLD24 LOTS SETTLED24 FY23 616 FY23 769 Revenue of $265.1 million FY22 1,022 FY22 655 Revenue of $201.3 million EBITDA25 FY23 $58.2 million FY22 $43.8 million EBITDA25 MARGIN FY23 22% FY22 22% 24 Includes equivalent lots. 25 EBITDA is a non-IFRS measure. Calculated before intersegment transfers and other unallocated items. Image: Fort Largs, SA (Artist’s Impression) PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 17 OPERATIONAL AND FINANCIAL REVIEW Funds Management Projects The Peet Group manages a number of projects on behalf of land syndicates using funds raised from a combination of wholesale, institutional and retail investors. It also manages projects under project management and co- investment arrangements. This provides Peet a capital efficient profit source which is difficult to replicate while also providing long term earnings visibility. 34% of EBITDA26,27 COMPRISED28 37% OF GROUP’S LAND BANK 13,315 lots29 GDV30 $4.0 billion 26 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in associates. 27 Before inter-segment transfers and other unallocated items. 28 By number of lots. 29 Includes equivalent lots. 30 Gross Development Value. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 18 LOTS SOLD31 LOTS SETTLED31 FY23 521 FY23 1,137 FY22 1,513 FY22 1,338 REVENUE32 FY23 $33.9 million FY22 $48.2 million EBITDA33,34 FY23 $21.7 million FY22 $33.7 million EBITDA33,34 MARGIN FY23 64% FY22 70% 31 Includes equivalent lots. 32 Includes share of net profit of equity accounted investments. 33 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in associates. 34 Before intersegment transfers and other unallocated items. Image: Newhaven Tarneit, VIC PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 19 OPERATIONAL AND FINANCIAL REVIEW Joint Ventures The Peet Group has a number of high-profile joint venture projects, which are generally entered into with Governments, statutory authorities, private land owners or partner developers. 18% of EBITDA35,36 35 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in joint ventures. 36 Before inter-segment transfers and other unallocated items. 37 By number of lots. 38 Includes equivalent lots. 39 Gross Development Value. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 2 0 COMPRISED37 6% OF GROUP’S LAND BANK 2,177 lots38 GDV39 $1.0 billion LOTS SOLD40 LOTS SETTLED40 FY23 262 FY23 688 FY22 628 FY22 521 REVENUE41 FY23 $64.2 million FY22 $34.4 million EBITDA42,43 FY23 $41.3 million FY22 $19.6 million EBITDA42,43 MARGIN FY23 64% FY22 50% 40 Includes equivalent lots. 41 Includes share of net profit of equity accounted investments. 42 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in joint ventures. 43 Before intersegment transfers and other unallocated items. Image: Googong, NSW PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 21 Our Commitment to Sustainability Our Sustainability Approach: As a leading residential developer with a national footprint, our approach focuses on sustainable practices to create long-term shared value for our communities, shareholders and people. Our Purpose: Defining future places of belonging ENVIRONMENT SOCIAL GOVERNANCE Environmentally conscious development Positive social impact in our communities and team A trusted partner and sustainable business − Water conservation and recycling. − Use of solar and energy reduction in building design. − Long history of operating in highly environmentally regulated industry. − Biodiversity and land restoration. − Employee diversity, wellbeing and engagement. − Building strong community partnerships. − Providing opportunities for affordable housing for homebuyers. − Ethical and responsible business practices. − Robust risk management framework. − Board Charter and Corporate Governance Statement. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 2 2 Peet recognised as a leader in sustainable residential development In recognition of Peet’s Environmental, Social and Governance (ESG) commitments and focus on creating long-term shared value for shareholders, customers and partners, Peet was announced as the Best Sustainable Community Developer (Australia) 2023 by Capital Finance International (CFI). Judges highlighted Peet’s environmentally conscious development with particular focus on water conservation, energy efficiency, circular economies, biodiversity preservation and land restoration. Peet’s commitment to driving social outcomes and creating opportunities for inclusion and belonging within its communities contributed to the award win, including community engagement activities, its national grants program, and partnerships with the Perth Scorchers and Black Dog Institute. Initiatives promoting employee wellbeing and engagement were also highlighted by the judges. Brabham awarded Platinum Waterwise Development of the Year 2023 Brabham Estate added to its sustainability credentials having been awarded the Platinum Waterwise Development of the Year at the 2023 Waterwise Recognition Event, celebrating Western Australia’s most water efficient new urban areas. The award supports developers to implement best-practice water efficiency standards in the design and delivery of new land developments. Brabham Estate was recognised for its waterwise and sustainable initiatives. With a 6-Star ‘Green Star’ accreditation from the Green Building Council of Australia, Brabham Estate offers a Waterwise Front Landscaping Package that aims to save homeowners up to 50% of their total water usage in their gardens. The package includes a smart controller installed into every home that automatically adjusts watering times based on weather data received from the Weather Station installed in the Estate’s first Smart Park. The Estate is home to the Green Homes Display, Australia’s most sustainable two-storey display home*. This international award-winning display home showcases a waterwise garden display containing water-tolerant plant species, drought-tolerant lawn, treated soils to help retain moisture and even a worm farm and compost. Brabham Estate is developed in partnership with Development WA. *Based on CSIRO database and correct as at July 2022. Image: L-R: Hon. Simone Frances McGurk, Minister for Training, Water and Youth, Renato Colasante, Manager of Partnering Development WA, Luke Oliver, Senior Development Manager Peet Limited, Mr Ross Love, CEO at Water Corporation PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 2 3 Walking together towards reconciliation Peet is pleased to have launched its first Reflect Reconciliation Action Plan (RAP). to foster community inclusion, embracing and celebrating cultural diversity and promoting community wellbeing. Peet has a long history of consulting and collaborating with Aboriginal and Torres Strait Islander Peoples across the country. Since commencing our formal reconciliation journey, it has been important to listen, learn, and have conversations about how we can respect, recognise and celebrate Aboriginal and Torres Strait Islander culture and heritage within our operations and communities. Throughout this period we have worked in consultation with our Cultural Advisor and community consultants, along with the members of the RAP Working Group, who have helped guide and inform the engagement process and the outcomes included within the RAP. Chloe Watego, a Gubbi Gubbi-based woman was engaged to design custom artwork to support Peet’s RAP. The artwork shares the story of Peet’s purpose Defining future places of belonging, and the journey each person makes towards reconciliation through listening and engaging with Aboriginal and Torres Strait Islander Peoples. Peet’s approach to sustainability and driving positive social impact aligns with the commitments included in its RAP As we continue this journey of belonging together, we respect Aboriginal and Torres Strait Islander Peoples’ continued connection with Country and value the rich cultural contribution they make to the communities in which we live, work and play. Image: Managing Director and CEO, Brendan Gore, with artwork designed by Chloe Watego PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 24 Image: Celebrating NAIDOC Week at Brabham Estate, WA Driving energy efficient built form outcomes As Peet continues to focus on positive environmental outcomes across the portfolio, opportunities are proactively identified to reduce energy consumption in building design, reducing a project’s carbon footprint and delivering cost savings for homebuyers. Peet’s latest built form development in Adelaide, Woodville Rd, will be designed with all 185 homes to be 100% electric. All homes are designed to optimise solar orientation through the urban grid orientation and crossover location. The Little Eagle 82-townhouse development in Nudgee, Brisbane, will also feature 100% electric homes, as will the 36 townhouses at The Landing, Strathpine. Electric heat pump hot water systems, electric cooktops and LED lighting will be featured in all homes across both projects reducing operating greenhouse gas emissions and reducing energy peak demand. At Googong in regional NSW, Peet has committed to exceeding the legislated BASIX energy target, which sets a benchmark on energy saving requirements for the approval of all NSW homes. The compliance program is being delivered through a rebate program for all dwellings where occupants are incentivised to deliver to the requirements of the Googong Design guidelines. A rebate is provided to the owner at the time of occupancy on sufficient delivery of the sustainability incentives. Image: Little Eagle Nudgee, Brisbane, QLD (Artist Impression) Image: Woodville Rd, Adelaide, SA (Artist’s Impression) PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 2 5 Corporate Calendar FY24 24 August 2023 Release of results for FY23 11 September 2023 Record date for FY23 annual dividend of $0.04 per share 2 January 2024 Interest payment date for unlisted bonds issued in 2021 February 2024 Release of results for 1H24 22 September 2023 Annual Report and Notice of 2023 AGM dispatched to shareholders 1 April 2024 Interest payment date for unlisted bonds issued in 2021 2 October 2023 Interest payment date for unlisted bonds issued in 2021 7 June 2024 Final interest payment date and maturity date for unlisted bonds issued in 2019 16 October 2023 Payment date for FY23 final dividend of $0.04 per share 25 October 2023 2023 AGM 7 December 2023 Interest payment date for unlisted bonds issued in 2019 PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 2 6 Image: Tonsley Village, SA PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 27 Financials 2023 Contents Directors’ Report ............................................................................................................................................................... 29 Auditor’s Independence Declaration ................................................................................................................................. 57 Corporate Governance Statement .................................................................................................................................... 58 Financial Report ................................................................................................................................................................ 59 Directors’ Declaration ........................................................................................................................................................ 96 Independent Auditor’s Report to the Members of Peet Limited ...................................................................................... 97 Securityholder Information ............................................................................................................................................. 104 Corporate Directory ......................................................................................................................................................... 106 PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 2 8 Directors’ Report Year ended 30 June 2023 Your Directors present their report on the Consolidated Entity consisting of Peet Limited (“the Parent Entity” or “the Company”) and the entities it controlled at the end of, or during, the financial year ended 30 June 2023 (“the Group”). 1. DIRECTORS The following persons were Directors of the Company during part or the whole of the financial year and up to the date of this report: ANTHONY WAYNE LENNON (TONY), FAICD NON-EXECUTIVE CHAIRMAN Tony Lennon has extensive general commercial experience and particularly in the property industry. Mr Lennon is a Fellow of the Australian Institute of Company Directors and an Associate of the Australian Property Institute. His industry service has included State Government appointed roles as Chairman of both the Perth Inner City Living Taskforce and the Residential Densities Review Taskforce. He was also President of The Real Estate Institute of Western Australia and a Member of the Commercial Tribunal (Commercial Tenancies). Mr Lennon is a former President of Western Australia’s Shire of Peppermint Grove and Deputy Chairman of the National Board of the Australia Day Council. He is also a former Chairman of the Curtin Aged Persons Foundation and a founding Director of the Wearne and the Riversea Hostels for the Aged, both of which are locally initiated and managed community facilities. He is a World Fellow Member of The Duke of Edinburgh’s International Award. BRENDAN GORE, BComm, FAICD, FCPA, FCIS, FGIA MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER Brendan Gore has been Managing Director and Chief Executive Officer (“CEO”) of Peet Limited since 2007, successfully leading the company’s strategy through its land bank expansion, diversification of its product offering and developing key new partnerships with Government and major institutions. Mr Gore’s appointment to the position of Managing Director and CEO followed experience in two other key executive roles within the Company. He began with Peet as Chief Financial Officer and played a key role in expanding the Company’s scope of activities and growing its core residential development and land syndication businesses. Mr Gore’s period in senior executive roles at Peet Limited was preceded by more than two decades’ experience in a range of senior corporate, commercial, and operational positions where he gained extensive experience in large scale operations, strategy development and implementation, as well as expertise in debt and equity markets. He developed a reputation as a strong leader, with operational responsibilities across local and State Government relations, environmental and sustainability management and occupational health and safety. Mr Gore is a qualified accountant and a Fellow of CPA Australia. He is also a Fellow of the Australian Institute of Company Directors and a Fellow of the Governance Institute of Australia. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 2 9 Directors’ Report Year ended 30 June 2023 1. DIRECTORS continued ANTHONY JAMES LENNON (ANTHONY), BA, Grad Dip Bus Admin NON-EXECUTIVE DIRECTOR Anthony Lennon joined Peet in 1991 and became a Director in 1996. He moved to Victoria to establish Peet’s operations in Australia’s eastern states and oversaw significant expansion. Before joining the Company, Mr Lennon worked in the United Kingdom, working for major international construction and development company, John Laing PLC. His time with this global company saw him gain valuable experience in property planning, marketing, feasibility analysis and project management. Mr Lennon’s responsibilities during his career with Peet included project management, broadacre acquisitions, marketing, and financing and a six-year term as Chairman of one of WA’s largest conveyancing businesses. Until his transition from Executive to Non-executive Director, Mr Lennon was Peet Limited’s National Business Development Director. He is Chairman of Habitat for Humanity (Vic). Part of a worldwide organisation, it is a registered charity which assists low-income families into affordable home ownership and out of the rental market by providing zero interest mortgages. TREVOR ALLEN, BComm (Hons), CA, FF, FAICD INDEPENDENT NON-EXECUTIVE DIRECTOR Trevor Allen joined Peet in April 2012, with almost four decades of experience in the corporate and financial sectors, primarily as a corporate and financial advisor to Australian and international public and privately-owned companies. Mr Allen is a Non-executive Director of Eclipx Group Limited, where he chaired its Audit and Risk Management Committee from March 2015 to November 2022 and retired from that Committee in March 2023. He remains a member of its Remuneration Committee. He is also a Non-executive Director of TopCo Investments Pte Ltd, a Singapore company which is the holding company of Real Pet Food Company Limited, where he chairs its Risk and Sustainability Committee and is the Deputy Chair of its Finance and Audit Committee. During the last three years, Mr Allen was a Director of Freedom Foods Group Limited, retiring from that position in January 2021. Prior to Mr Allen’s non-executive roles, he held senior executive positions including Executive Director Corporate Finance at SBC Warburg (now part of UBS), at Baring Brothers and as a Corporate Finance Partner at KPMG. At the time of his retirement from KPMG in 2011 he was the lead partner in its National Mergers and Acquisitions group. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 3 0 VICKI KRAUSE, BJuris LLB W.Aust, GAICD INDEPENDENT NON-EXECUTIVE DIRECTOR Vicki Krause was appointed to the Board of Peet Limited in April 2014. An experienced commercial lawyer, Ms Krause had a 25 year career as a senior corporate executive with the Wesfarmers Group, including seven years as its Chief Legal Counsel. She supported successful outcomes in numerous significant acquisitions (including listed companies, trade sales and a privatisation) and divestments. As Chief Legal Counsel and a member of the Wesfarmers Executive Committee, Ms Krause led a large legal team and was responsible for the provision of legal advice and strategic planning in relation to the management of legal risk in the Wesfarmers Group with key outputs including the evaluation and completion of major business projects and major supply arrangements. Ms Krause has completed the PMD Management Course at Harvard Business School. She is a former director of Western Power. ROBERT McKINNON (BOB), FCPA, FCIS, FGIA, MAICD LEAD INDEPENDENT NON-EXECUTIVE DIRECTOR Appointed as Non-executive Director in May 2014, Bob McKinnon has 40 years’ experience in finance and general management positions in the light manufacturing and industrial sectors in Australia, New Zealand, and Canada. He is the former Managing Director of Austal Ships and Fleetwood Corporation Limited and spent 28 years with Capral Aluminium (formerly Alcan Australia) in various financial and senior executive positions. Mr McKinnon is a Director of DGL Group Limited; the former Non-executive Chairman of M8 Sustainable Limited; and was previously a Non-executive Director of Bankwest, Brierty Limited, Programmed Maintenance Services Limited and Tox Free Solutions Limited. 2. PRINCIPAL ACTIVITIES The Group acquires, develops and markets residential land, predominantly under a capital-efficient funds management model. Peet was founded in Western Australia in 1895 and has expanded over the years to become Australia’s largest pure-play residential developer. Peet has been listed on the ASX since 2004 and is focused on creating high-quality master-planned residential communities for homebuyers across Australia, and achieving the best possible results for its shareholders, investors and partners who include State and Federal Government agencies and major Australian institutions. As at 30 June 2023, the Group employed 194 people in offices throughout Australia and managed and marketed a land bank of more than 35,700 lots in the growth corridors of major mainland Australian cities. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 31 Directors’ Report Year ended 30 June 2023 3. REVIEW OF OPERATIONS AND CONSOLIDATED RESULTS OPERATING AND FINANCIAL REVIEW KEY RESULTS 1 • Operating profit 2 and statutory profit 3 after tax of $70.1 million • Earnings per share of 14.8 cents per share • FY23 dividends of 7.5 cents per share, fully franked • Revenue 4 of $363.7 million, with 2,594 lots settled 6 • EBITDA 5 margin of 29% on EBITDA 5 of $107.0 million • Net cash inflows from operations (before acquisitions) of $89.0 million • $476.4 million worth of contracts on hand 6 as at 30 June 2023 • Gearing 7 of 27.7% FINANCIAL COMMENTARY The Peet Group achieved a record operating profit 2 and statutory profit 3 after tax of $70.1 million for the year ended 30 June 2023 (“FY23”), which represents an increase of 34% on the previous financial year (“FY22”) which was also a record earnings performance. The material improvement in profit was driven by: • prudent focus on monetising the high number of contracts on hand at the start of the financial year, many of which had high margins as a result of strong price growth; • the changing product mix, including an improved performance from medium density townhouse product; • continued focus on unlocking value by appropriately managing the Group’s significant landbank; and • continued focus on cost management and operational efficiencies. The Group derived EBITDA 5 of $107.0 million during FY23, compared to $86.0 million in FY22, with an EBITDA 5 margin of 29%, compared to the margin achieved in FY22 of 30%. The performance has resulted in: • an operating and statutory earnings per share of 14.8 cents for FY23, compared to operating and statutory earnings per share of 10.8 cents in FY22; and • strong cash inflows from operations (before acquisitions) of $89.0 million, compared to $80.1 million in FY22. 1 Comparative period is 30 June 2022, unless stated otherwise. The non-IFRS measures have not been audited. 2 Operating profit is a non-IFRS measure that is determined to present the ongoing activities of the Group in a way that reflects its operating performance. Operating profit excludes unrealised fair value gains/ (losses) arising from the effect of revaluing assets and liabilities and adjustments for realised/unrealised transactions outside the core ongoing business activities. Includes statutory revenue of $318.9 million (FY22: $266.6 million) and share of net profits from associates and joint ventures of $44.8 million (FY22: $24.1 million). 3 Statutory profit after tax means net profit measured in accordance with Australian Accounting Standards, attributable to the owners of Peet Limited. 4 5 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in associates and joint ventures. 6 7 Calculated as (Total interest-bearing liabilities (including land vendor liabilities) less cash)/(Total assets less cash, less intangible assets). Includes equivalent lots. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 3 2 OPERATIONAL COMMENTARY Sales activity during FY23 reduced from elevated levels in FY22 (FY23: 1,399 lots 8, compared to FY22: 3,163 lots 8). This is attributable to a combination of external factors and the Company’s measured response to those factors. Multiple interest rate rises and inflationary pressures contributed to more subdued market conditions during FY23, reducing the borrowing capacity of buyers, especially of first home buyers. This, together with continued supply chain constraints and labour shortages impacting builders, has negatively impacted consumer sentiment. Peet has responded to the underlying market and broader economic conditions by reducing the number of new stage releases and allocating resources to the creation of lots pre-sold during the peak 2022 selling period. As previously communicated to the market, Peet pro-actively focused on protecting its balance sheet and its high level of contracts on hand during FY23, resulting in strong settlements (FY23: 2,594 lots 8, compared to FY22: 2,514 lots 8) during the year. This was achieved by the close management of construction programs and the low cancellation rate for unconditional contracts. The Group enters FY24 in a strong capital position, with gearing 9 at 30 June 2023 within the target range of 20% to 30% (27.7%, compared to 30 June 2022: 29.9%), and a still solid level of contracts on hand with a value of $476.4 million. Development projects Key highlights Lot sales 8 Lot settlements 8: – Land only – Medium Density Revenue EBITDA 10 EBITDA 10 margin FY23 616 769 682 87 $265.1m $58.2m 22% FY22 1,022 655 577 78 $201.3m $43.8m 22% Var (%) (40%) 17% 18% 12% 32% 33% 0% Earnings from Development projects are derived from settlements, and with the focus on creating lots to meet settlement targets, the Development business performed strongly during FY23. Lot settlements from Flagstone City (Qld), which was previously included in Funds Management prior to the purchase of the remaining 50% interest in the property, first settlements from new project commencements in Queensland and South Australia and the settlement of the New Beith (Qld) property contributed positively. Includes equivalent lots. 8 9 Calculated as (Total interest-bearing liabilities (including land vendor liabilities) less cash)/(Total assets less cash, less intangible assets). 10 EBITDA is a non-IFRIS measure and is calculated before inter-segment transfers and other unallocated items. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 3 3 Directors’ Report Year ended 30 June 2023 3. REVIEW OF OPERATIONS AND CONSOLIDATED RESULTS continued Funds Management projects Key highlights Lot sales 11 Lot settlements 11 Revenue Share of net profit of equity accounted investments EBITDA 12 EBITDA 12 margin FY23 521 1,137 $19.4m $14.5m $21.7m 64% FY22 1,513 1,338 $38.3m $10.0m $33.7m 70% Var (%) (66%) (15%) (49%) 45% (36%) (6%) The performance of the Group’s Funds Management projects is predominantly driven by sales from syndicates and settlements from co-investment projects. Lower sales in FY23, compared to FY22 has resulted in lower fee income. While overall settlements were lower in FY23, compared to FY22, the strong performance from Newhaven (Vic) contributed positively to the overall performance. Joint Ventures Key highlights Lot sales 11 Lot settlements 11 Revenue Share of net profit of equity accounted investments EBITDA 12 EBITDA 12 margin FY23 262 688 $34.4m $29.8m $41.3m 64% FY22 628 521 $25.8m $13.6m $19.6m 50% Var (%) (58%) 32% 33% 119% 111% 14% Joint ventures performed strongly on the back of increased lot settlements and equity accounted profits, particularly at Googong (NSW). Land portfolio metrics Lot sales 11 Lot settlements 11 Contracts on hand 11 as at 30 June – Value CAPITAL MANAGEMENT FY23 1,399 2,594 FY22 3,163 2,514 Var (%) (56%) 3% $476.4m $930.0m (49%) The Group’s continuing focus on capital management and the monetising of contracts on hand during FY23 contributed to increased cash inflows from operations (prior to acquisitions) of $89.0 million (FY22: $80.1 million). As at 30 June 2023, the Group had: • gearing 13 of 27.7% (30 June 2022: 29.9%); • net interest-bearing debt 14 (including Peet Bonds) of $253.3 million, compared with $245.2 million at 30 June 2022; • cash and available debt facility headroom of $148.3 million; and • a weighted average debt maturity of more than two years. Includes equivalent lots 11 12 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in associates and joint ventures and is calculated before inter-segment transfers and other unallocated items. 13 Calculated as (Total interest-bearing liabilities (including land vendor liabilities) less cash)/(Total assets less cash, less intangible assets). 14 Including net debt of syndicates consolidated under AASB10. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 3 4 The Group has a strong balance sheet and sufficient financial capacity to fund the current portfolio of projects, including accelerating delivery of product, if required, to meet increases in demand. During FY23, Peet Limited extended its on-market share buy-back of up to 5% of its issued ordinary shares. As at 30 June 2023, the Company had acquired 18.6 million of its ordinary shares, representing approximately 76% of the total shares to be acquired. On 7 August 2023, the Company announced that the on-market buy-back has been extended for a further 12 months to 30 August 2024. Peet has $75 million of Peet Bonds maturing on 7 June 2024. They will be repaid on maturity via cash and available headroom in the senior debt facility and/or other refinancing options available. DIVIDENDS Subsequent to year end, the Directors declared a final dividend for FY23 of 4.0 cents per share, fully franked. This brings the total dividend for FY23 to 7.5 cents per share, fully franked. This compares to the FY22 dividend of 6.25 cents per share, fully franked. The final FY23 dividend is to be paid on Monday, 16 October 2023, with a record date of Monday, 11 September 2023. The Directors have resolved to keep the Company’s Dividend Reinvestment Plan deactivated. RISKS The Group’s operating and financial performance is influenced by a number of risks impacting the property sector. These include bank lending conditions, general economic conditions, government policy influencing a range of matters including population growth (immigration policy), household income and consumer confidence, the employment market and land development conditions and requirements, including in relation to infrastructure, environmental, cultural heritage and climate-change management. In respect to climate change, the Group’s focus continues to be on understanding and mitigating climate change risks on development approvals processes, reputational matters and reporting obligations. Global and domestic economic factors which may influence capital markets and the movement of interest rates are also risks faced by the Group. At an individual project level, residential property developments also face a number of risks related to the price and availability of capital, the timeliness of approvals, delays in construction and the level of competition in the market. The Group has a long history of managing these risks at an individual project and portfolio level. The Group’s financial risk management policies are set out in note 17 to the Financial Report. Particular focus in the short-term continues on managing, and mitigating against, risks associated with rising development and labour costs and the potential for development programs to be extended. The property market is cyclical and, while the Group is impacted by fluctuations in the market, it has also proved its capacity to manage through various cycles over a very significant period of time. This continues to include managing risks associated with changing consumer preferences for products – size, location and product typology (house and land, medium density townhouses and low-rise apartments). GROUP STRATEGY Peet is well positioned for growth and value creation with its key strategic focus areas for FY24 and beyond continuing to be: • investing in high quality land in strategic locations across the country; • expanding product offering and geographic presence to appeal to a wider variety of customers; and • maintaining strong capital management. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 3 5 Directors’ Report Year ended 30 June 2023 3. REVIEW OF OPERATIONS AND CONSOLIDATED RESULTS continued OUTLOOK Residential markets continue to adjust from their peak as a result of interest rate increases, inflationary pressures and low consumer confidence. Despite markets being at or close to bottoming, and with an improvement in enquiry levels, we expect the market will require a stabilisation in interest rates before buyer confidence begins to return and market conditions begin to normalise. Markets remain undersupplied, with underlying fundamentals remaining positive including low unemployment, above- average wage growth, and increasing overseas migration. Peet will continue to focus on executing our strategic objectives and maintaining a disciplined approach to capital management. The Group remains well positioned to navigate the current environment, with a flexible delivery program in place to respond strongly to a recovery in activity and to take advantage of a shortage of market supply. Given the current economic backdrop, which Peet expects to persist throughout 1H24, Peet will continue to adopt a cautious approach as it enters FY24 with earnings expected to be strongly weighted to 2H24. 4. EARNINGS PER SHARE Basic and diluted earnings per share 2023 Cents 14.8 2022 Cents 10.8 Basic earnings per share is calculated after income tax expense based on the weighted average number of shares on issue for the year ended 30 June 2023. The weighted average number of shares on issue used to calculate earnings per share is discussed at note 7 to the Financial Report. 5. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There were no significant changes in the state of affairs of the Group during the year. 6. MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR Other than the final FY23 dividend (details of which are included below), no matters or circumstances have arisen since the end of the financial year, which have significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in subsequent financial years. 7. DIVIDENDS In August 2022, the Directors declared a final dividend of 4.0 cents per share, fully franked, in respect of the year ended 30 June 2022. The dividend of $19.0 million was paid on Friday, 14 October 2022. In February 2023, the Directors declared an interim dividend of 3.5 cents per share, fully franked, in respect to the year then ending 30 June 2023. The dividend of $16.5 million was paid on Thursday, 13 April 2023. Subsequent to year end, the Directors declared a final dividend for FY23 of 4.0 cents per share, fully franked. This brings the total dividend for FY23 to 7.5 cents per share, fully franked. This compares to the FY22 dividend of 6.25 cents per share, fully franked. The final FY23 dividend is to be paid on Monday, 16 October 2023, with a record date of Monday, 11 September 2023. The Directors have resolved to keep the Company’s Dividend Reinvestment Plan deactivated. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 3 6 8. ENVIRONMENTAL REGULATION The Group is subject to environmental regulation by way of the Environment Protection and Biodiversity Conservation Act 1999 in respect of its land subdivision activities nationally, as well as other environmental regulations under both Commonwealth and State legislation. The Group is not aware of any breaches of environmental regulations in respect of its activities. However, from time to time, statutory authorities make enquiries, issue notices requiring documents and/or material to be provided, and undertake investigations or audits to confirm compliance with relevant regulations. GREENHOUSE GAS AND ENERGY DATA REPORTING REQUIREMENTS The Group may be subject to the reporting requirements of the National Greenhouse and Energy Reporting Act 2007. This would require the Group to report its annual greenhouse gas (“GHG”) emissions and energy use if it had operational control of facilities (sites) that emit greenhouse gases, produce energy, or consume energy at or above the specified GHG emission and energy thresholds per financial year. The Group is not required to register and report to the Clean Energy Regulator as the Group does not have operational control for each of its projects, which is the responsibility of the relevant contractor undertaking the works, and the remainder of the Group’s activities fall below the reporting thresholds for the FY23 reporting period. 9. INFORMATION ON DIRECTORS AND GROUP COMPANY SECRETARY Please refer to the Board of Directors section of this report for information on Directors. GROUP COMPANY SECRETARY Dom Scafetta is a Chartered Accountant who has worked with Peet Limited since 1998. Mr Scafetta began his career with major accounting firm Coopers & Lybrand (now PwC) after completing a commerce degree in 1993. He held a senior role with the organisation in its Business Services division and advised a range of clients on accounting, taxation and general business matters. After four years at Coopers & Lybrand, Mr Scafetta joined Peet as Company Accountant and Company Secretary, which also required him to act as Company Secretary for the Company’s various syndicates and subsidiaries. Prior to Peet being listed on the Australian Securities Exchange, Mr Scafetta was appointed Chief Financial Officer and served in that role until February 2005, when he was appointed as Company Secretary of Peet Limited. 10. DIRECTORS’ MEETINGS The number of meetings of Directors (including meetings of committees of Directors) held during the year and the number of meetings attended by each Director were as follows: Board of Directors Audit & Risk Management Committee Remuneration Committee Nomination Committee Entitled to Attend Attended Entitled to Attend Attended Entitled to Attend Attended Entitled to Attend Attended 11 11 11 11 11 11 10 11 11 11 10 7 – – 6 6 – 6 – – 6 6 – 3 – – 3 3 3 3 – – 3 3 3 2 2 2 2 2 2 2 2 2 2 2 2 2 Director A W Lennon B D Gore A J Lennon T J Allen V Krause R J McKinnon On some occasions, Board and Committee meetings may have been called or rescheduled on short notice which meant that some Directors may not have been able to attend. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 37 Directors’ Report Year ended 30 June 2023 11. RETIREMENT, ELECTION AND CONTINUATION IN OFFICE OF DIRECTORS Directors are elected at the Annual General Meeting (“AGM”) of the Company. Retirement will occur on a rotational basis so that one third of the Directors, but not less than two, shall retire at each AGM. The Directors may also appoint a Director to fill a casual vacancy on the Board or in addition to the existing Directors, who will then hold office until the next AGM. No Director who is not the Managing Director, may hold office without re-election beyond the third AGM following the meeting at which the Director was last elected or re-elected. At this year’s AGM, Mr A J Lennon will retire by rotation and offer himself for re-election. Any other Board of Directors’- related matters will be announced separately to the market. 12. REMUNERATION Dear Shareholder, Peet is pleased to present its Remuneration Report for the year ended 30 June 2023. This report sets out remuneration information for Non-executive Directors (“NEDs”), the Managing Director and Chief Executive Officer (“MD”) and other key management personnel (“KMP”). It focuses on the remuneration decisions made by the Board and the pay outcomes that resulted. To ensure Peet delivers on its growth strategy it must have the right people to lead the Group over the long-term and a competitive remuneration framework that encourages our Leadership Team to continue to make decisions with a view to creating long-term value for shareholders and all stakeholders. In considering remuneration outcomes, the Board’s Remuneration Committee: (a) balances Peet’s financial performance with the development and implementation of strategies for the long-term benefit of the Group; and (b) takes into account the underlying scale of Peet’s operations which are not fully identifiable from a pure focus on the Group’s statutory accounts. Peet achieved an operating net profit after tax and a statutory profit after tax of $70.1 million for the 2023 financial year, compared to an operating net profit after tax and a statutory profit after tax of $52.3 million in the previous year. While the statutory financial statements show total revenue of $363.7 million and earnings before interest, tax, depreciation and amortisation (“EBITDA”) of $107.0 million for the 2023 financial year, Peet management remains responsible for a greater scale of business. In addition to its own land development projects, Peet is also responsible for the management of a significant portfolio of land development projects held within its Funds Management and Joint Arrangements businesses. These Funds Management and Joint Arrangement businesses generated revenues of $545.2 million and EBITDA of $189.1 million. Accordingly, the scale of business from which Peet derives its revenues and earnings, which drive its capacity to pay dividends to shareholders, is extensive. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 3 8 Key remuneration outcomes during the year ended 30 June 2023 included: • The MD’s base pay for the year ended 30 June 2023 was amended for the first time since the year ended 30 June 2015. • NEDs’ fees were increased during the year ended 30 June 2023 after last being increased in the year ended 30 June 2019. • During the year, long-term incentive performance conditions were tested as at 30 June 2022 in respect to the performance over the three years ended on that date, and following approval from shareholders at the 2022 Annual General Meeting, resulted in the full vesting of performance rights (FY20 performance rights). • Short-term incentives will be paid to KMP in respect of the year ended 30 June 2023, following a positive assessment of the individual KMP’s performance against a balanced scorecard, which includes consideration of Group financial and strategic targets. The short-term incentives paid in respect to the year ended 30 June 2023 are included in the tables on pages 44 and 45. There are no changes to the base pay of the KMP for the year ending 30 June 2024. We encourage our shareholders to use the cash value of remuneration realised table on page 44 to assess the remuneration outcomes for KMP in the year ended 30 June 2023 and the alignment of these outcomes with the Group’s performance. The key difference between the cash value of remuneration realised and the statutory remuneration is the value included in the statutory remuneration table for potential future outcomes under the long-term incentive. A value is required to be included in the statutory remuneration table to account for long-term incentives that may or may not vest in the future, while the value for long-term incentives included in the cash value of remuneration realised table represents the value of shares actually received by KMP following the vesting and exercise of performance rights. The Board is satisfied that these remuneration outcomes for the year ended 30 June 2023 are appropriately performance- based while at the same time recognising the strategic needs of the Group, and we commend this report to you. Robert McKinnon Chairman, Remuneration Committee PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 3 9 Directors’ Report Year ended 30 June 2023 13. REMUNERATION REPORT (AUDITED) The Remuneration report is set out under the following main headings: A. SERVICE AGREEMENTS B. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION C. DETAILS OF REMUNERATION D. SHARE-BASED COMPENSATION E. ADDITIONAL INFORMATION The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001. The key management personnel of the Group (“KMP”) include the Non-executive Directors (“NEDs”) of the Group, and the following executives (the “Executives”) who have authority and responsibility for planning, directing and controlling the activities of the Group. Name Position B D Gore Managing Director and Chief Executive Officer T Gallagher Chief Operating Officer (appointed 1 November 2022) B C Fullarton Chief Financial Officer D Scafetta Group Company Secretary P J Dumas Chief Investment Officer A. SERVICE AGREEMENTS Remuneration and other terms of employment for the Executives are formalised in service agreements. Each of these agreements provide for the provision of performance related cash bonuses and participation, when eligible, in the Peet Limited Employee Share Option Plan and/or the Peet Limited Performance Rights Plan. The major provisions of the agreements are set out below. All contracts with Executives may be terminated early by either party with 3 to 6 months’ notice, subject to termination payments as detailed below. Name B D Gore Terms of Agreement Base pay including Superannuation 1 Termination Benefit 2,3 On-going renewed 5 August 2011 $1,008,535 Refer below 4 T Gallagher 5 On-going appointed 1 November 2022 $525,000 3 months base pay inclusive of superannuation B C Fullarton On-going commenced 21 October 2013 $485,000 3 months base pay inclusive of superannuation D Scafetta On-going commenced 10 June 1998 P J Dumas On-going commenced 4 February 2008 $350,000 $485,000 3 months base pay inclusive of superannuation 3 months base pay inclusive of superannuation 1. Base pays, inclusive of superannuation, for the year ended 30 June 2023. Base pays are reviewed annually by the Remuneration Committee. 2. Termination benefits are payable on early termination by Peet Limited giving notice in writing. Payment may be made in lieu of notice, other than for gross misconduct. 3. Termination benefits referred to in the above table are in addition to any statutory entitlements payable (e.g. accrued annual leave and long service leave). 4. On 5 August 2011 B D Gore renewed his contractual arrangements with the Company. Under the agreement the components of his remuneration comprise fixed annual remuneration, short-term incentives and long-term incentives. There is no fixed termination date and the agreement is terminable on six months notice by either party. The Company may, at its option, make a payment in lieu of part or all of the notice period and certain conditions exist in relation to payment of long-term and short-term incentives upon termination. A summary of the key contractual terms and remuneration-related arrangements was disclosed to the market on 5 August 2011 with certain parts approved by shareholders at the 2011 AGM. 5. T Gallagher was appointed as Chief Operating Officer on 1 November 2022. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 4 0 B. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION The objective of the Company’s executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with achievement of strategic objectives for the long-term benefit of the Company and shareholders. The Board ensures that executive reward satisfies the following key criteria for good reward governance practices: • competitiveness and reasonableness; • acceptability to shareholders; • performance linkage/alignment to executive compensation; and • capital management. In consultation with external remuneration consultants in prior financial years, the Company has structured, and continues to evolve, an executive remuneration framework that is market competitive and complementary to our reward strategy through the following features. ALIGNMENT TO SHAREHOLDERS’ INTERESTS • has a relevant measurement of financial performance as a core component of plan design; • rewards implementation of strategy; • focuses the Executive on other key financial and non-financial drivers of long-term value; and • attracts and retains high-calibre executives. For the purpose of assessing Executives’ eligibility to short-term incentives, the Remuneration Committee and Board have traditionally agreed to the use of a balanced scorecard. This methodology has continued to be used for the 2023 financial year, and comprised a combination of financial and non-financial key performance indicators. During the 2018 financial year, the Remuneration Committee recommended to the Board, and it agreed, to assess financial performance for the purposes of long-term incentive awards against earnings per share (“EPS”) growth, together with funds under management (“FUM”) growth. These performance measures have been used for each year thereafter and will continue to be used for the 2024 financial year. The Remuneration Committee and the Board will continue to assess the applicability of all short-term and long-term related key performance indicators as they are applied in assessing performance for remuneration purposes. ALIGNMENT TO PROGRAM PARTICIPANTS’ INTERESTS • rewards capability and experience; • provides a clear structure for earning rewards; and • provides recognition for contribution. The framework provides a mix of fixed and variable pay, and a blend of short and long-term incentives. As employees are promoted to executive and senior management roles within the Company, the balance of this mix shifts to a higher proportion of ‘at risk’ rewards. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 41 Directors’ Report Year ended 30 June 2023 13. REMUNERATION REPORT (AUDITED) continued NEDs’ FEES (INCLUDING THE CHAIRMAN’S FEES) Fees and payments to NEDs reflect the demands which are made on, and the responsibilities of, the NEDs. NEDs’ fees and payments are reviewed periodically by the Remuneration Committee and the Board. The Remuneration Committee considers, as appropriate, the advice of independent remuneration consultants to ensure NEDs’ fees and payments are appropriate and in line with the market. NEDs do not receive share options or performance rights. The NEDs’ remuneration is inclusive of committee fees and fees for their membership on any subsidiary Boards. The fees payable to NEDs were amended with effect from 1 July 2022 (after previously being amended with effect from 1 July 2018). The fees payable to the Chairman of the Remuneration Committee and the Chairman of the Audit and Risk Management Committee were last amended with effect from 1 July 2018 (after previously being amended with effect from 1 July 2014). NEDs may also be entitled to fees where they represent Peet on the Board of Syndicates. NEDs’ fees are determined within an aggregate Directors’ fee pool limit, which is periodically recommended for approval by shareholders. Shareholders approved a resolution at the 2012 AGM to increase the aggregate NEDs’ fees pool to $900,000. The NEDs do not receive any form of retirement allowance. EXECUTIVE PAY The Company’s pay and reward framework for Executives has the following components: • base pay and benefits; • short-term performance incentives; and • long-term performance incentives. The combination of these comprises the total remuneration for the individual concerned. Base pay and benefits The base pay for Executives is structured as a total employment cost package, which may be delivered as a mix of cash and prescribed non-financial benefits and includes superannuation. Executives are offered a competitive base pay that comprises the fixed component of pay and rewards. As and when considered appropriate, external remuneration consultants provide analysis and advice to ensure base pay is set to reflect the market for a comparable role. Base pay is reviewed annually to ensure it remains competitive with the market. Short-term performance incentives (“STI”) Executives have a target STI opportunity depending on the accountabilities of their specific role and impact on the Group’s performance. The maximum target bonus opportunity for the Executives for the years’ ended 30 June 2023 and 2022 ranged between 50% and 100% of the relevant Executive’s base pay. However, the Board of Directors has the discretion to either pay over and above or less than these amounts. Each year, the Remuneration Committee considers the appropriate targets and key performance indicators (“KPIs”) to link to the STI plan and the level of payout if targets are met for the Managing Director and Chief Executive Officer (“MD”). This may include setting any maximum payout under the STI plan and minimum levels of performance to trigger payment of STI. The MD will then generally set the STI KPIs to apply to the other Executives. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 4 2 KPIs for the MD are set by reference to the following criteria: • financial; • strategy; • stakeholder engagement; • people, processes and culture; and • health, safety and environment. For the year ended 30 June 2023, the MD was assessed as follows against the KPIs: Category Financial Strategic Stakeholder People, processes and culture Health, safety and environment Weighting (%) Achieved (%) 70.00% 10.00% 7.50% 7.50% 5.00% 70.00% 10.00% 7.50% 7.50% 5.00% 100.00% 100.00% For the year ended 30 June 2022, the MD’s KPIs linked to the STI plan were based on similar criteria. For the year ended 30 June 2022 the MD was assessed to have been eligible to 100.00% of his maximum STI entitlement. For the year ended 30 June 2023, the KPIs for Executives were determined by the MD, based on the above criteria. The Executives were assessed to have been eligible for between 87.5% and 100% of their maximum STI entitlement in respect to FY23. For the year ended 30 June 2022, the KPIs for Executives were determined by the MD, based on the above criteria. The Executives were assessed to have been eligible for between 95% and 100% of their maximum STI entitlement. Long-term incentives (“LTI”) Traditionally, the Company has provided its Executives with LTI through participation in the Peet Limited Employee Share Option Plan (“PESOP”) and/or the Peet Limited Performance Rights Plan (“PPRP”). Executives have a target LTI opportunity depending on the accountabilities of their specific role and impact on the Group’s performance. The maximum target opportunity for the Executives for the years’ ended 30 June 2023 and 2022 ranged between 50% and 100% of the relevant Executive’s base pay. Each year, the Remuneration Committee considers the appropriate targets and KPIs to link to the LTI plan and the level of payout if targets are met for the Executives. This may include setting any maximum payout under the LTI plan and minimum levels of performance to trigger payment of LTI. Further details of the Company’s LTI structures are included in the section titled ‘Share-based compensation’. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 4 3 Directors’ Report Year ended 30 June 2023 13. REMUNERATION REPORT (AUDITED) continued C. DETAILS OF REMUNERATION Details of the statutory and cash value of remuneration of each member of the KMP of the Group are set out in the tables following. The statutory disclosures required by the Corporations Act 2001(Cth), as amended and its regulations are set out in the table on page 45. The Company believes that the additional information provided in the table below is useful to investors. The table below sets out the total cash value of remuneration realised for the KMP and provides shareholders with details of the “take-home” pay received/ receivable during the year. These earnings include cash salary and fees, bonus, superannuation, non-cash benefits received/ receivable during the year and the value of shares issued to, or acquired on behalf of, KMP following the exercise of vested Performance Rights (“PRs”) during the financial year. The table does not include the accounting value of share-based payments consisting of PRs granted in the current and prior years required for statutory purposes. This is because those share-based payments are dependent on the achievement of performance hurdles and so may or may not be realised. Cash salary and fees 1 $ Bonus 2 $ Value of PRs exercised 3 $ Other 4 $ Superannuation $ Directors A W Lennon T J Allen V Krause R J McKinnon A J Lennon B D Gore Total 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 218,008 218,774 121,721 130,487 99,097 92,517 121,721 115,244 159,097 152,517 983,243 913,732 – – – – – – – – – – – – – – – – – – – – 1,008,535 1,849,375 937,300 – 1,702,887 1,623,271 1,008,535 1,849,375 937,300 – Other key management personnel T Gallagher 5 P J Dumas D Scafetta B C Fullarton Total 2023 2023 2022 2023 2022 2023 2022 2023 2022 331,875 459,708 460,000 324,708 326,432 457,500 412,500 1,573,791 1,198,932 250,294 254,625 276,450 175,000 175,000 242,500 220,000 922,419 671,450 99,977 661,085 191,641 155,424 – 434,080 – 1,350,566 191,641 – – – – – – – – – – 10,000 10,000 10,000 10,000 – – – – – – – – – 22,891 21,877 12,781 13,049 10,405 9,252 12,781 11,524 10,405 9,252 25,292 23,568 94,555 88,522 19,167 25,292 25,000 25,292 23,568 27,500 27,500 97,251 76,068 Total 5 $ 240,899 240,651 134,502 143,536 109,502 101,769 134,502 126,768 169,502 161,769 3,876,445 1,884,600 4,665,352 2,659,093 701,313 1,400,710 953,091 680,424 525,000 1,161,580 660,000 3,944,027 2,138,091 1. Cash salary (including accrued annual leave) and fees, as well as fees paid to Directors for their directorship on Syndicate Boards. 2. All cash bonuses are earned in the financial year to which they relate and are paid during the following financial year. 3. Amount paid by the Company in order to settle the PRs exercised during years ended 30 June 2022 and June 2023. The Company purchased ordinary shares in the Company on-market on behalf of KMP. 4. Other includes motor vehicle costs, car-parking and other benefits. 5. T Gallagher was appointed as Chief Operating Officer on 1 November 2022. The remuneration shown above only includes the amounts attributable to the period as KMP. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 4 4 The table below is calculated in accordance with statutory obligations and Australian Accounting Standards. The amounts in the “Share-based payments” column relate to the component of the fair value of awards from the current year and prior years made under the various incentive plans attributable to the year measured in accordance with AASB 2 Share-based Payments. Short-term benefits Post-employment benefits Share-based payments Cash salary and fees 1 $ Bonus 2 $ Other 3 $ Superannuation $ Shares/ Options/ Performance Rights 4 $ Termination benefits $ Directors A W Lennon T J Allen V Krause R J McKinnon A J Lennon B D Gore Total 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 218,008 218,774 121,721 130,487 99,097 92,517 121,721 115,244 159,097 152,517 – – – – – – – – – – – – – – – – – – – – 983,243 1,008,535 913,732 937,300 1,702,887 1,008,535 1,623,271 937,300 10,000 10,000 10,000 10,000 Other key management personnel T Gallagher 5 P J Dumas D Scafetta B C Fullarton Total 2023 2023 2022 2023 2022 2023 2022 2023 2022 331,875 250,294 459,708 254,625 460,000 276,450 324,708 175,000 326,432 175,000 457,500 242,500 412,500 220,000 1,573,791 922,419 1,198,932 671,450 – – – – – – – – – 22,891 21,877 12,781 13,049 10,405 9,252 12,781 11,524 10,405 9,252 25,292 23,568 94,555 88,522 19,167 25,292 25,000 25,292 23,568 27,500 27,500 97,251 76,068 – – – – – – – – – – 1,039,017 1,276,523 1,039,017 1,276,523 277,552 314,054 396,317 188,864 238,336 246,103 299,621 1,026,543 934,274 – – – – – – – – – – – – – – – – – – – – – – – Total 5 $ 240,899 240,651 134,502 143,536 109,502 101,769 134,502 126,768 169,502 161,769 3,066,087 3,161,123 3,854,994 3,935,616 878,858 1,053,679 1,157,767 713,864 763,336 973,603 959,621 3,620,004 2,880,724 1. Cash salary (including accrued annual leave) and fees, as well as fees paid to Directors for their directorship on Syndicate Boards. 2. All cash bonuses are earned in the financial year to which they relate and are paid during the following financial year. 3. Other includes motor vehicle costs, car-parking and other benefits. 4. The value placed on options and performance rights in the table above is based on the valuation at the date of grant using a Black-Scholes model or Binomial Model, pro-rated over the period from grant date to vesting date. These do not represent the value of equity benefits that vested in favour of KMP during the year. 5. T Gallagher was appointed as Chief Operating Officer on 1 November 2022. The remuneration shown above only includes the amounts attributable to the period as KMP. Share based payments includes those granted in the period prior to becoming a KMP. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 4 5 Directors’ Report Year ended 30 June 2023 13. REMUNERATION REPORT (AUDITED) continued The relative proportions of remuneration that are linked to performance and those that are fixed based on the above table are as follows: Directors A W Lennon T J Allen V Krause R J McKinnon A J Lennon B D Gore Other key management personnel T Gallagher 2 P J Dumas D Scafetta B C Fullarton Fixed remuneration At risk STI At risk LTI 2023 2022 2023 2022 2023 1 2022 1 100% 100% 100% 100% 100% 33% 40% 46% 49% 50% 100% 100% 100% 100% 100% 30% 42% 46% 46% – – – – – 33% 28% 24% 25% 25% – – – – – 30% 24% 23% 23% – – – – – 34% 32% 30% 26% 25% – – – – – 40% 34% 31% 31% 1. Since LTI are provided exclusively by way of options and/or PRs, the percentages disclosed also reflect the value of remuneration consisting of options and/or PRs based on the value of options and/or PRs expensed during the year. 2. T Gallagher was appointed as Chief Operating Officer on 1 November 2022. The above split relates to his remuneration attributable to the period as KMP. D. SHARE-BASED COMPENSATION Options over shares in Peet Limited are granted under the PESOP, which was approved by the Board and shareholders during the 2004 financial year. PRs over shares in Peet Limited are granted under the PPRP, which was approved by shareholders at the 2008 AGM. Changes have been made since to allow for changes in taxation of PRs. Employees of any Group Company (including an Executive Director) will be eligible to participate in the PESOP and/or PPRP at the discretion of the Board. The PESOP and PPRP are designed to provide long-term incentives for employees to deliver long-term shareholder returns. Under the plans, participants are granted options and/or PRs, which only vest if the employees are still employed by the Group at the end of the vesting period and any set performance hurdles have been met, subject to the Board’s discretion. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 4 6 INVITATIONS TO APPLY FOR OPTIONS AND/OR PERFORMANCE RIGHTS Eligible employees, at the discretion of the Board, may be invited to apply for options and/or PRs on terms and conditions to be determined by the Board including as to: • the method of calculation of the exercise price of each option; • the number of options and/or PRs being offered and the maximum number of shares over which each option and/or PR is granted; • the period or periods during which any of the options and/or PRs may be exercised; • the dates and times when the options and/or PRs lapse; • the dates and times by which the application for options and/or PRs must be received by Peet; and • any applicable conditions which must be satisfied or circumstances which must exist before the options and/or PRs may be exercised. Eligible employees may apply for part of the options and/or PRs offered to them, but only in specified multiples. CONSIDERATION Unless the Board determines otherwise, no payment will be required for a grant of options and/or PRs under the PESOP and/or PPRP. EXERCISE CONDITIONS Generally, as a pre-condition to exercise, any exercise conditions in respect of an option and/or PR must be satisfied. However, subject to the ASX Listing Rules, the Board has the discretion to enable an option and/or PR holder to exercise options and/or PRs where the exercise conditions have not been met, including, for example, where a court orders a meeting to be held in relation to a proposed compromise or arrangement in respect of the Company, or a resolution is passed, or an order is made, for winding up the Company. During FY23, the Company received a waiver from the ASX Listing Rules that allowed the Board to apply discretion in respect to the vesting of PRs, subject to obtaining shareholder approval. This approval was obtained at the 2022 AGM. Refer to the notice of that meeting and results of that meeting for further information and to Note 3 on page 49. Options granted under the PESOP and PRs granted under the PPRP carry no dividend or voting rights. LAPSE OF OPTIONS AND/OR PRs Unexercised options and/or PRs will lapse upon the earlier to occur of a variety of events specified in the rules of the PESOP and PPRP including, on the date or in circumstances specified by the Board in the invitation, failure to meet the options’ or PRs’ exercise conditions in the prescribed period or on a specified anniversary date of grant of the options or PRs, as determined by the Board. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 47 Directors’ Report Year ended 30 June 2023 13. REMUNERATION REPORT (AUDITED) continued The table below summarises the status of the Company’s options and performance rights granted to Executives: d n a d e t s e V l i e b a s c r e x E e c n a a B l 2 3 4 3 4 3 4 3 4 3 4 3 4 3 4 3 4 0 0 0 , 0 0 2 1 , 0 0 0 , 0 0 2 1 , – 7 9 7 7 9 8 , 7 9 7 7 9 8 , – – – 4 5 7 , 4 4 2 1 , 7 6 6 , 2 9 8 8 0 8 , 5 3 3 1 , 9 8 0 7 5 6 , 9 8 0 7 5 6 , – – – 8 2 8 , 9 0 2 1 , 0 2 6 7 6 8 , 9 2 6 , 5 5 3 1 , 6 8 8 , 4 5 5 1 , , 2 9 1 1 6 4 , 8 6 8 8 , 4 5 7 , 2 , 2 9 1 1 6 6 , 9 – – – – – – – – – – – – – – – – – – – – – f o e t a d t a f o e t a d t a / d e s p a L s e t o N t r o p e r t r o p e r d e t i e f r o f d e s i c r e x E t e N e g n a h C 5 r e h t O – f o e t a d r a e y r o i r p t a e c n a a B l g n i t s e V t n a r G t a r e p e u a V l R P / n o i t p o d e t n a r G t r o p e r s n o i t i d n o c e t a D e s i c r e x E y r i p x E d o i r e P e c i v r e S / e c n a m r o f r e P t n a r G e u a v l e t a D – – – – – – 5 0 8 , 8 9 2 6 8 2 , 4 1 2 – – – – 8 0 8 , 5 3 3 , 1 – h t w o r G M U F 1 7 8 . 0 $ 0 0 . 0 $ h t w o r G S P E – – – h t w o r G S P E 9 8 0 , 7 5 6 h t w o r G M U F 4 0 . 1 $ 0 0 . 0 $ h t w o r G S P E 3 2 0 , 1 1 9 h t w o r G M U F 4 9 . 0 $ 0 0 . 0 $ 4 3 3 , 3 5 6 h t w o r G M U F 9 9 . 0 $ 0 0 . 0 $ h t w o r G S P E 7 9 7 , 7 9 8 h t w o r G M U F 1 4 0 . 1 $ 0 0 . 0 $ h t w o r G M U F h t w o r G S P E 4 5 7 , 4 4 2 , 1 h t w o r G S P E 1 4 9 . 0 $ 0 0 . 0 $ h t w o r G S P E 7 6 6 , 2 9 8 h t w o r G M U F 1 9 9 . 0 $ 0 0 . 0 $ 1 9 0 , 3 1 5 7 3 4 , 1 9 6 , 2 4 6 6 , 6 5 2 , 5 1 9 0 , 3 1 5 7 3 4 , 1 9 6 , 2 4 6 6 , 6 5 4 , 6 – 9 2 6 , 5 5 3 , 1 – h t w o r G M U F 7 8 . 0 $ 0 0 . 0 $ h t w o r G S P E v o N 0 2 d e d n e s r y 3 4 3 0 2 2 2 0 2 n u J 0 3 5 3 0 2 v o N 9 1 d e d n e s r y 3 3 2 0 2 n u J 0 3 6 3 0 2 v o N 6 1 7 3 0 2 t c O 6 2 d e d n e s r y 3 4 2 0 2 n u J 0 3 d e d n e s r y 3 5 2 0 2 n u J 0 3 v o N 0 2 d e d n e s r y 3 4 3 0 2 2 2 0 2 n u J 0 3 5 3 0 2 v o N 9 1 6 3 0 2 v o N 6 1 7 3 0 2 t c O 6 2 d e d n e s r y 3 3 2 0 2 n u J 0 3 d e d n e s r y 3 4 2 0 2 n u J 0 3 d e d n e s r y 3 5 2 0 2 n u J 0 3 1 1 0 2 v o N 0 3 0 0 0 , 0 0 2 , 1 d e s a b e m i T 2 1 . 1 $ 0 1 . 4 $ A / N o t p U 7 0 0 2 v o N 0 3 i s t h g R e c n a m r o f r e P 9 1 0 2 v o N 0 2 0 2 0 2 v o N 9 1 1 2 0 2 v o N 6 1 2 2 0 2 t c O 6 2 9 1 0 2 v o N 0 2 0 2 0 2 v o N 9 1 1 2 0 2 v o N 6 1 2 2 0 2 t c O 6 2 e r o G D B s e v i t u c e x E r e h t O s e v i t u c e x E s n o i t p O e r o G D B e c n a m r o f r e P d n a s n o i t p O l a t o T s t h g i R e c n a m r o f r e P l a t o T s t h g R i PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 4 8 NOTE 1 The issue of a share-based payment award to a Director requires shareholder approval and the value at grant date is taken as the date at which that approval is granted. Accordingly, the value of these PRs is calculated as at 20 November 2019, 19 November 2020, 16 November 2021 and 26 October 2022, being the dates of Peet Limited’s 2019, 2020, 2021 and 2022 AGMs, respectively. NOTE 2 These options are convertible to ordinary shares on a 1:1 basis at the exercise price after the fourth anniversary of the grant date. The exercise condition in respect of these options is that Mr Gore remains employed as Managing Director for a period of four years. Although the service period requirement has been met, the options have not been exercised. NOTE 3 The PRs granted in respect to the three-year period from 1 July 2019 to 30 June 2022 (“FY20 Performance Period”) are convertible to ordinary shares on a 1:1 basis, with 40% subject to the FUM growth vesting condition. The PRs granted in respect to the three-year period from 1 July 2020 to 30 June 2023 (“FY21 Performance Period”), 1 July 2021 to 30 June 2024 (“FY22 Performance Period”) and 1 July 2022 to 30 June 2025 (“FY23 Performance Period”) are convertible to ordinary shares on a 1:1 basis, with 25% subject to the FUM growth vesting condition. FUM growth is measured as the total of the following during the performance period: • the purchase price (ex GST) of land acquired by a Peet syndicate or Joint Venture; or • the market value (ex GST) of land for which Peet has been appointed development manager at the time of its appointment; or • the selling price (ex GST) of land sold by Peet, a Syndicate, a Joint Venture or Peet-managed project to a third party and Peet is appointed the development manager (and where applicable, to manage the leasing) of a commercial, industrial, retail or residential built-form project on that property; or • in all other property funds management-related transactions, as determined by the Board of Directors. The aggregate of the FUM growth during the relevant performance period is reduced by the equity interest retained by the Group and is then compared to the rolling three-year FUM growth target set by the Board for the relevant performance period. For the FY20 Performance Period, the proportion of PRs to vest subject to FUM growth was as follows: Performance level Less than the target Target Target – medium Medium – maximum Maximum Aggregate FUM growth target during performance period Proportion of performance rights that may be eligible to vest Less than $60 million $60 million $60 million to $100 million $100 million to $150 million Greater than $150 million 0% 50% Pro-rata between 50% and 70% Pro-rata between 70% and 100% 100% PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 4 9 Directors’ Report Year ended 30 June 2023 13. REMUNERATION REPORT (AUDITED) continued The Group achieved FUM growth below the target for the FY20 Performance Period and, as such, in accordance with their terms, none of the FY20 PRs subject to the FUM growth condition satisfied that condition. However, the Board was of the view that this was not indicative of the strong performance of Management during this period. On that basis, Peet applied to ASX for, and was granted, a waiver from ASX Listing Rule 6.23.3 to the extent necessary to permit the Board to vary the terms of the FY20 PRs subject to the FUM growth condition to vest at a higher percentage level than would otherwise vest under the terms of those PRs. This waiver from ASX was subject to Peet obtaining shareholder approval and the notice of the 2022 AGM for such shareholder approval including explanatory information satisfactory to ASX, including, at a minimum, a clear explanation of the rationale for the proposed amendment. Shareholders approved the amendment at the 2022 AGM. The FUM growth-related FY20 PRs were fully vested in FY23. For the FY21 and FY22 Performance Period the proportion of PRs to vest subject to FUM growth will be as follows: Performance level Less than the target Target Target – medium Medium – maximum Maximum Aggregate FUM growth target during performance period Proportion of performance rights that may be eligible to vest Less than $40 million $40 million $40 million to $60 million $60 million to $75 million Greater than $75 million 0% 50% Pro-rata between 50% and 70% Pro-rata between 70% and 100% 100% For the FY23 Performance Period the proportion of PRs to vest subject to FUM growth will be as follows: Performance level Less than the target Target Target – medium Medium – maximum Maximum Aggregate FUM growth target during performance period Proportion of performance rights that may be eligible to vest Less than $30 million $30 million $30 million to $50 million $50 million to $60 million Greater than $60 million 0% 50% Pro-rata between 50% and 70% Pro-rata between 70% and 100% 100% The FY21, FY22 and FY23 PRs remain unvested. NOTE 4 The PRs granted in respect to FY20 Performance Period were convertible to ordinary shares on a 1:1 basis, with 60% subject to the EPS growth vesting condition. The PRs granted in respect to the FY21, FY22 and FY23 Performance Periods are convertible to ordinary shares on a 1:1 basis, with 75% subject to the EPS growth vesting condition. The EPS growth vesting condition will be measured as the average growth in operating EPS over the relevant Performance Period, with the EPS derived for the previous financial year as the base year. The earnings component of EPS is calculated as net profit measured in accordance with Australian Accounting Standards, excluding write-downs of inventories and development costs and increases in the carrying value of inventories during the relevant financial year, and is subject to other adjustments at the Board’s discretion. EPS growth is then compared to the Board’s internal target EPS growth for the relevant performance period. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 5 0 Of the PRs subject to EPS growth, the proportion vested for the FY20 Performance Period and to vest for the FY21 and FY22 Performance Periods is as follows: Performance level Less than 80% of the EPS growth target 80% of the EPS growth target 80% to 100% of the EPS growth target 100% to 120% of the EPS growth target Proportion of performance rights that may be eligible to vest 0% 50% Pro-rata between 50% and 80% Pro-rata between 80% and 100% Greater than 120% of the EPS growth target 100% Of the PRs subject to EPS growth, the proportion to vest for the FY23 Performance Period will be as follows: Performance level Less than 67% of the EPS growth target 67% of the EPS growth target 67% to 100% of the EPS growth target 100% to 133% of the EPS growth target Proportion of performance rights that may be eligible to vest 0% 50% Pro-rata between 50% and 80% Pro-rata between 80% and 100% Greater than 133% of the EPS growth target 100% Additionally is it proposed that EPS growth of more than 133% of the EPS Target will be available to apply to any shortfall in the FUM growth targets (set out above), up to a maximum of 100% of the FY23 PRs granted. The Group achieved EPS growth of 35.2% for the FY20 Performance Period, compared to the EPS growth target of 5% for the period. The Board therefore resolved that 100% of the FY20 PRs subject to the EPS growth condition vested in accordance with their terms. FY21, FY22 and FY23 PRs remain unvested. NOTE 5 Net Change – Other shows T Gallagher’s PRs held prior to his appointment as COO on 1 November 2022. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 51 Directors’ Report Year ended 30 June 2023 13. REMUNERATION REPORT (AUDITED) continued OPTION AND PERFORMANCE RIGHTS HOLDINGS The number of options and PRs over unissued ordinary shares in the Company held during the financial year by the KMP of the Group, including their personally-related entities, is set out below. When exercisable, each option and PR is convertible into one ordinary share of Peet Limited. Balance at the start of the year Granted during the year Net Change – Other 1 Exercised during the year Lapsed/ forfeited during the year Balance at end of the year Vested and exercisable at the end of the year Directors A W Lennon T J Allen V Krause R J McKinnon A J Lennon B D Gore Other key management personnel T Gallagher P J Dumas D Scafetta B C Fullarton – – – – – – – – – – 6,172,243 1,335,808 – – – – – – – 1,634,750 729,486 1,167,070 417,219 385,430 231,788 321,192 599,298 – – – – – – – – (1,937,025) (86,207) (692,417) (162,790) (454,653) – – – – – – – – – – – – – – – – – – – – 5,571,026 2,097,797 930,310 1,327,763 798,484 1,033,609 – 278,736 167,625 210,728 1. Includes performance rights held by T Gallagher prior to his appointment as COO on 1 November 2022.. During the year ended 30 June 2023, 1,554,886 PRs (2022: 904,344) had vested and 3,333,092 (2022: 178,067) were exercised by KMP at $ Nil exercise price. In order to settle the PRs exercised during year ended 30 June 2023, the Company purchased ordinary shares in the Company on-market on behalf of KMP. On 26 October 2022, 1,335,808 FY23 PRs were granted to the Managing Director and Chief Executive Officer, B D Gore. The grant was approved by shareholders under ASX Listing Rule 10.14. Any additional persons to whom ASX Listing Rule 10.14 applies and who became entitled to participate in a grant of PRs under the PPRP after the approval of Resolution 4 considered at the 2022 AGM and who was not named in the Notice of AGM will not participate until approval is obtained under ASX Listing Rule 10.14. Since 30 June 2023, no PRs (includes PRs exercisable by non-KMP) have vested or are exercisable at the date of this report. No other options and PRs have been issued. Refer note 25 of the financial report for the total options and PRs outstanding. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 5 2 E. ADDITIONAL INFORMATION PERFORMANCE OF PEET LIMITED The overall level of executive compensation takes into account the performance of the Group. STI is generally based on an assessment of performance over a 12-month period, while LTI is generally assessed over a three-year period. The high-level performance of the Group over the last five years is compared below: Net profit/(loss) after tax (NPAT) NPAT growth $’000 Growth% Net operating profit after tax (NOPAT) $’000 NOPAT growth Basic EPS Basic EPS growth Operating EPS Operating EPS growth Dividends paid/payable Share price 30 June Share price growth Growth% cents per share Growth% cents per share Growth% cents per share $ Growth% 2019 47,549 (3.2%) 47,549 (3.2%) 9.79 (2.3%) 9.79 (2.3%) 5.00 1.12 2020 (30,056) (163.2%) 15,060 (68.3%) (6.19) 2021 28,500 194.8% 28,500 89.2% 5.90 (163.2%) 195.3% 3.10 (68.3%) 1.50 0.97 5.90 90.3% 3.50 1.20 2022 52,316 83.6% 52,316 83.6% 10.83 83.6% 10.83 83.6% 6.25 0.94 2023 70,143 34.1% 70,143 34.1% 14.79 36.6% 14.79 36.6% 7.50 1.24 (15.1%) (13.4%) 23.7% (21.7%) 31.9% DETAILS OF REMUNERATION: CASH BONUSES, OPTIONS AND PRs For each cash bonus, grant of options and/or PRs included in the tables within the remuneration report, the percentage of the available bonus or grant that was paid, or that vested and the percentage that was forfeited because the person did not meet the service and performance criteria, is set out below. Generally, no part of the bonuses forfeited is payable in future years. Subject to the rules of the PESOP and PPRP no options or PRs will vest if the conditions are not satisfied, subject to the discretion of the Board (and ASX Listing Rules, as applicable) hence the minimum value of the option and PRs yet to vest is nil. The maximum value of the options and PRs yet to vest has been determined as the amount of the grant date fair value of the options and PRs that is yet to be expensed. Cash Bonus Options & Performance Rights Paid/ payable % Forfeited/ deferred % Financial year Granted Vested 1 % Forfeited 2 % Financial years in which options/PRs may vest Maximum total Value of grant yet to expense $ Directors A W Lennon T J Allen V Krause R J McKinnon A J Lennon B D Gore – – – – – – – – – – 100% 0% – – – – – 2023 2022 2021 2020 – – – – – – – – 100% – – – – – – – – – – – – – – 2025 2024 2023 2022 – – – – – 778,686 295,118 – – 1. 2. Includes performance rights for which performance conditions were met for the performance period and confirmed by the Directors after balance date. Includes performance rights for which performance conditions were not met for the performance period. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 5 3 Directors’ Report Year ended 30 June 2023 13. REMUNERATION REPORT (AUDITED) continued Cash Bonus Options & Performance Rights Paid/ payable % Forfeited/ deferred % Financial year Granted Vested 1 % Forfeited 2 % Financial years in which options/PRs may vest Maximum total Value of grant yet to expense $ Other key management personnel T Gallagher 3 95% 5% P J Dumas 88% 12% D Scafetta 100% 0% B C Fullarton 100% 0% 2023 2022 2021 2020 2023 2022 2021 2020 2023 2022 2021 2020 2023 2022 2021 2020 – – 100% – – – 100% – – – 100% – – – 100% – – – – – – – – – – – – – – – 2025 2024 2023 2022 2025 2024 2023 2022 2025 2024 2023 2022 2025 2024 2023 2022 234,210 70,843 – – 224,680 91,624 – – 135,117 55,100 – – 187,233 69,269 – – Includes performance rights for which performance conditions were met for the performance period and confirmed by the Directors after balance date. Includes performance rights for which performance conditions were not met for the performance period. 1. 2. 3. T Gallagher was appointed as Chief Operating Officer on 1 November 2022. The Maximum total Value of grant yet to expense includes performance rights held prior to becoming a KMP. Further details relating to options and/or PRs, either granted, exercised or lapsed during the year, are set out below. The amounts below are calculated in accordance with Australian Accounting Standards. Please refer to previous pages of the Remuneration Report for commentary on vesting conditions met during the performance period ended 30 June 2023. Directors B D Gore Other key management personnel T Gallagher 4 P J Dumas D Scafetta B C Fullarton Remuneration consisting of options & performance rights 1 Value of options & performance rights granted 2 $ Value of options & performance rights exercised 3 $ 34% 32% 30% 26% 25% 1,167,496 1,808,451 364,649 336,866 202,583 280,722 90,000 661,308 176,465 434,094 1. The percentage of the value of remuneration consisting of options and PRs, based on the value of options and PRs expensed during the current year. 2. The value at grant date calculated in accordance with AASB 2 Share-based payments of options and/or PRs granted during the year as part of remuneration. 3. The value at exercise date of options and/or PRs that were granted as part of remuneration and were exercised during the year, being the intrinsic value of the options and/or PRs at that date. 4. T Gallagher was appointed as Chief Operating Officer on 1 November 2022. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 5 4 LOANS TO DIRECTORS AND OTHER KEY MANAGEMENT PERSONNEL There were no loans made to KMP, or their personally-related entities, during the financial year. VOTING AND COMMENTS MADE AT THE COMPANY’S 2022 ANNUAL GENERAL MEETING The instructions given to validly appointed proxies in respect of the resolution pertaining to the Company’s 2022 Remuneration Report were as follows: For 237,070,362 85.88% Against 38,863,065 14.08% Proxy’s discretion 122,280 0.04% Abstain 55,518 The motion was carried as an ordinary resolution on a poll. INTERESTS IN THE SHARES AND BONDS OF THE COMPANY Directors A W Lennon T J Allen V Krause R J McKinnon B D Gore A J Lennon Shares Received during the year on exercise of PRs Other changes during the year 1 Balance at the end of the year Balance at the start of the year Bonds Other changes during the year Balance at the end of the year – 97,764,685 1,875 (1,875) Balance at the start of the year 97,764,685 142,054 – 50,000 – – – – 18,264 160,318 – – – – – 50,000 7,243,704 1,331,344 5,306,679 1,937,025 1,331,344 – – – – – – – – – – – – – – – – – – – – – – – – – – – – – Other key management personnel T Gallagher P J Dumas D Scafetta B C Fullarton – 1,265,949 1,020,000 603,850 86,207 692,417 162,790 454,653 540,702 626,909 – – – 1,958,366 1,182,790 1,058,503 1. Includes shares held by T Gallagher prior to his appointment as COO on 1 November 2022. Since 30 June 2023, no PRs (includes PRs exercisable by non-KMP) have vested or are exercisable at the date of this report. No other options and PRs have been issued. END OF REMUNERATION REPORT (AUDITED) PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 5 5 Directors’ Report Year ended 30 June 2023 14. INDEMNITY OF OFFICERS AND AUDITORS During the financial year, the Company paid a premium in respect of a Directors’ and Officers’ insurance policy that insures Directors and Officers of the Company. The liabilities insured are costs and expenses that may be incurred in defending civil or criminal proceedings that may be brought against the Directors and Officers in their capacity as such. The Directors have not included more specific details of the nature of the liabilities covered or the amount of the premium paid in respect of Directors’ and Officers’ liability, as such disclosure is prohibited under the terms of the contract. To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). The indemnity does not apply to any loss in respect of any matters which are finally determined to have resulted from the auditors’ negligent, wrongful or willful acts or omissions. No payment has been made to indemnify the auditors during or since the financial year. 15. NON-AUDIT SERVICES The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Company and/or the Group are considered important. The Board of Directors has considered the position and, in accordance with the advice received from the Audit and Risk Management Committee, is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons: • all non-audit services have been reviewed by the Audit and Risk Management Committee to ensure they do not impact the impartiality and objectivity of the auditor; and • none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants. The fees that were paid or payable for services provided by the auditors of the Group, its related practices and non- related audit firms is set out in note 22 of the Financial Report. 16. AUDITOR’S INDEPENDENCE DECLARATION A copy of the auditor’s independence declaration, as required under section 307C of the Corporation Act 2001, is set out on page 57. 17. ROUNDING OF AMOUNTS The Company is of a kind referred to in ASIC Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to the “rounding off” of amounts in the Director’s Report. Amounts in the Director’s Report have been rounded off in accordance with that legislative instrument to the nearest thousand dollars, or in certain cases, the nearest dollar. Signed for and on behalf of the Board in accordance with a resolution of the Board of Directors. Brendan Gore Managing Director and Chief Executive Officer Perth, Western Australia 23 August 2023 PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 5 6 Auditor’s Independence Declaration PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 57 Corporate Governance Statement Year ended 30 June 2023 A copy of the Group’s corporate governance policies and practices in place during the financial year ended 30 June 2023 is available at the following link: https://www.peet.com.au/-/media/peet/documents/corporate/corporate/corporate-governance/ 22082551ppc2023corporategovernancestatement.pdf Unless otherwise stated, these are consistent with the 4th edition of the ASX Corporate Governance Council’s Principles and Recommendations. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 5 8 Financial Report Contents Consolidated Statement of Profit or Loss and Other Comprehensive Income ................................................................ 60 Consolidated Balance Sheet ............................................................................................................................................. 61 Consolidated Statement of Changes in Equity ................................................................................................................. 62 Consolidated Statement of Cash Flows ............................................................................................................................ 63 Notes to the Consolidated Financial Statements .............................................................................................................. 64 This financial report covers the consolidated financial statements for the Group consisting of Peet Limited and its subsidiaries. The financial report is presented in Australian currency. Peet Limited is a for profit company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is Level 7, 200 St Georges Terrace, Perth WA 6000. The financial report was authorised for issue by the Directors on 23 August 2023. The Directors have the power to amend and reissue the financial report. Through the use of the internet, we have ensured that our corporate reporting is timely and complete. All press releases, financial reports and other information are accessible via our website: www.peet.com.au PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 5 9 Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended 30 June 2023 Revenue Expenses Finance costs (net of capitalised borrowing costs) Share of net profit of associates and joint ventures Profit before income tax Income tax expense Profit for the year Attributable to: Owners of Peet Limited Non-controlling interests Profit for the year Notes 5 6 6 10 8 2023 $’000 318,908 (266,351) (2,502) 44,775 94,830 (24,918) 69,912 70,143 (231) 69,912 2022 $’000 266,608 (215,624) (3,085) 24,095 71,994 (19,913) 52,081 52,316 (235) 52,081 Total comprehensive income for the year 69,912 52,081 Earnings per share for profit attributable to the ordinary equity holders of the Company Basic and diluted earnings per share Notes 7 Cents 14.79 Cents 10.83 The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 6 0 Consolidated Balance Sheet As at 30 June 2023 Current assets Cash and cash equivalents Receivables Contract assets Inventories Total current assets Non-current assets Receivables Inventories Investments accounted for using the equity method Property, plant and equipment Right-of-use assets Intangible assets Total non-current assets Total assets Current liabilities Payables Land vendor liabilities Borrowings Lease liabilities Other financial liabilities Current tax liabilities Provisions Total current liabilities Non-current liabilities Land vendor liabilities Borrowings Lease liabilities Other financial liabilities Deferred tax liabilities Provisions Total non-current liabilities Total liabilities Net assets Equity Contributed equity Reserves Retained profits Capital and reserves attributable to owners of Peet Limited Non-controlling interest Total equity 1. Refer to note 2 (g). Notes 11 12 9 11 9 10 13 14 17 17 10 15 14 17 17 10 8 15 18 18 24 2023 $’000 38,790 19,535 6,139 181,305 245,769 45,879 537,349 194,353 2,962 2,209 1,778 784,530 1,030,299 48,733 8,841 74,445 1,562 2,650 12,332 23,911 172,474 12,277 217,656 1,249 4,688 19,872 13,192 268,934 441,408 588,891 366,416 327 200,760 567,503 21,388 588,891 Restated 1 2022 $’000 55,380 23,046 16,970 205,400 300,796 41,977 451,693 188,006 2,938 2,507 1,922 689,043 989,839 27,679 14,808 49,935 1,958 – 10,028 17,397 121,805 19,554 250,683 1,766 3,162 16,760 13,031 304,956 426,761 563,078 374,733 584 166,142 541,459 21,619 563,078 The above consolidated balance sheet should be read in conjunction with the accompanying notes. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 61 Consolidated Statement of Changes in Equity For the year ended 30 June 2023 Contributed equity $’000 Reserves $’000 Retained profits $’000 Notes Total $’000 Non- controlling interest $’000 Total equity $’000 Balance at 1 July 2021 – Restated 2(g) 378,916 (1,449) 136,783 514,250 16,314 530,564 Profit for the year Other comprehensive income Total comprehensive income for the year – – – Share buyback, including transaction costs (4,183) – – – – 3,323 (635) (655) – 584 52,316 52,316 (235) 52,081 – – – – 52,316 52,316 (235) 52,081 – – – – (4,183) 3,323 (635) (655) – – – 5,540 (4,183) 3,323 (635) 4,885 (22,957) (22,957) – (22,957) 166,142 541,459 21,619 563,078 – – – – 374,733 374,733 584 166,142 541,459 21,619 563,078 – – – (8,317) – – – 366,416 – – – – 3,439 (3,696) – 327 70,143 70,143 (231) 69,912 – – – – 70,143 70,143 (231) 69,912 – – – (8,317) 3,439 (3,696) (35,525) (35,525) – – – – (8,317) 3,439 (3,696) (35,525) 200,760 567,503 21,388 588,891 18 18,25 18 19 Share-based payments Vesting of performance rights Transactions with non-controlling interest Dividends paid Balance at 30 June 2022 Balance at 1 July 2022 Profit for the year Other comprehensive income Total comprehensive income for the year Share buyback, including transaction costs Share-based payments Vesting of performance rights Dividends paid Balance at 30 June 2023 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 6 2 Consolidated Statement of Cash Flows For the year ended 30 June 2023 Cash flow s from operating activities Receipts from customers (inclusive of GST) Payments to suppliers and employees (inclusive of GST) Payments for purchase of land Interest and other finance costs paid Distributions and dividends received from associates and joint ventures Interest received Income tax paid Net cash inflow from operating activities Cash flows from investing activities Payments for property, plant and equipment Payments for investment in associates and joint ventures Payment for acquisition of Peet Flagstone City Pty Ltd (net of cash acquired) Proceeds from capital returns from associates and joint ventures Loans to associates and joint ventures Repayment of loans by associates and joint ventures Net cash inflow/(outflow ) from investing activities Cash flows from financing activities Dividends paid Repayment of borrowings Proceeds from borrowings Repayment of Peet bonds Payment of principal portion of lease liabilities Proceeds from share issue to non-controlling interest (net of transaction costs) Share buy back (including transaction costs) Net cash outflow from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year Notes 2023 $’000 2022 $’000 20 338,787 (242,622) (51,906) (25,304) 36,903 749 (19,541) 37,066 (900) – (9,230) 1,525 (5,000) 15,052 1,447 (35,525) (120,649) 161,420 (50,000) (1,978) – (8,371) (55,103) (16,590) 55,380 38,790 276,715 (177,363) (33,917) (21,593) 16,210 21 (13,877) 46,196 (1,163) (13,766) (14,908) 4,663 (650) 4,975 (20,849) (22,957) (122,635) 112,500 – (1,797) 4,931 (4,134) (34,092) (8,745) 64,125 55,380 The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 6 3 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 CONTENTS BASIS OF REPORTING 1. Reporting entity .......................................................................................................................................................... 65 2. Basis of preparation .................................................................................................................................................... 65 3. How to read the financial report ................................................................................................................................. 67 PERFORMANCE FOR THE YEAR 4. Segment information .................................................................................................................................................. 68 5. Revenue ...................................................................................................................................................................... 70 6. Expenses .................................................................................................................................................................... 71 7. Earnings per share ...................................................................................................................................................... 71 8. Taxes ........................................................................................................................................................................... 72 OPERATING ASSETS AND LIABILITIES 9. Inventories .................................................................................................................................................................. 74 10. Investments accounted for using the equity method ................................................................................................ 74 11. Receivables ................................................................................................................................................................. 77 12. Contract assets ........................................................................................................................................................... 77 13. Payables ...................................................................................................................................................................... 78 14. Land vendor liabilities ................................................................................................................................................. 78 15. Provisions ................................................................................................................................................................... 78 16. Interests in joint operations ........................................................................................................................................ 79 CAPITAL MANAGEMENT 17. Financial liabilities ....................................................................................................................................................... 80 18. Contributed equity and reserves ................................................................................................................................ 83 19. Dividends .................................................................................................................................................................... 84 20. Reconciliation of profit after income tax to net cash inflow from operating activities ............................................... 84 21. Fair value measurement ............................................................................................................................................. 85 OTHER NOTES 22. Remuneration of auditors ........................................................................................................................................... 86 23. Contingencies and commitments .............................................................................................................................. 86 24. Parent entity financial information and subsidiaries ................................................................................................... 87 25. Share-based payments ............................................................................................................................................... 89 26. Matters subsequent to the end of the financial year ................................................................................................. 91 27. Other accounting policies ........................................................................................................................................... 92 PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 6 4 BASIS OF REPORTING A. GOING CONCERN BASIS This section of the financial report sets out the basis of $245.8 million, current liabilities of $172.5 million, cash preparation of the consolidated financial statements. and available headroom in its senior bank debt facility of Where an accounting policy is specific to one note, the $148.3 million. Further, for the year ended 30 June 2023 policy is described in the note to which it relates. the Group generated operating cash flows of $89.0 million At 30 June 2023, the Group had current assets of before land acquisitions. On 4 April 2019, Peet Limited issued 75,000 notes with a face value of $1,000 per note (the Notes). The Notes are unsecured and carry a fixed interest rate of 6.75%. The Notes are due to be repaid on 7 June 2024 and as such the Notes are classified as a current liability on the Group’s balance sheet at 30 June 2023. Peet is assessing several alternatives including utilising senior debt facility capacity and/or raising new debt from existing or new sources to refinance the Notes. Given the existing cash and available headroom in its senior bank debt facility and the other options available, the Directors are confident the Group will be able to repay the Notes by the maturity date. As such, it is appropriate to prepare the financial statements on a going concern basis. 1. REPORTING ENTITY This financial report covers the consolidated financial statements for the Consolidated Entity consisting of Peet Limited and its subsidiaries (Group). The Financial Report is presented in the Australian currency. Peet Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is; Level 7, 200 St Georges Terrace, Perth WA 6000. The nature of the operations and principal activities of the Group are described in the Directors’ Report. Peet Limited is a for- profit entity. 2. BASIS OF PREPARATION The Financial Report is a general purpose financial report which: • has been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001; • complies with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB); • has been prepared under the historical cost convention, except for some financial assets and liabilities which have been measured at fair value; • provides comparative information in respect of the previous period; and • is rounded off to the nearest thousand dollars or in certain cases to the nearest dollar in accordance with ASIC Corporations Instrument 2016/191. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 6 5 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 2. BASIS OF PREPARATION continued The Group’s share of its associates’ post-acquisition B. PRINCIPLES OF CONSOLIDATION The consolidated financial statements comprise the financial statements of the Group and the entities it controlled at the end of, or during the year ended 30 June 2023. The Group controls an investee if and only if the Group has: profits or losses are recognised in the consolidated statement of profit or loss, and its share of post-acquisition other comprehensive income is recognised in other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from associates are recognised as a reduction in the carrying amount of the • power over the investee (i.e. existing rights that give it investment. the current ability to direct the relevant activities of the investee); • exposure, or rights, to variable returns from its involvement with the investee; and When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations • the ability to use its power over the investee to affect or made payments on behalf of the associate. its returns. Unrealised gains on transactions between the Group and The Group re-assesses whether or not it controls an its associates are eliminated to the extent of the Group’s investee if facts and circumstances indicate that there are interest in the associates. Unrealised losses are also changes to one or more of the three elements of control. eliminated unless the transaction provides evidence of an Consolidation of a subsidiary begins when the Group obtains impairment of the asset transferred. control over the subsidiary and ceases when the Group D. INVESTMENTS IN JOINT ARRANGEMENTS loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary. Joint arrangements are arrangements of which two or more parties have joint control. Joint control is the contractual agreed sharing of control which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. Joint arrangements are Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the classified as either a joint operation or joint venture, based on the rights and obligations arising from the contractual parent of the Group and to the non-controlling interests, obligations between the parties to the arrangement. even if this results in the non-controlling interests having a deficit balance. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. C. ASSOCIATES To the extent the joint arrangement provides the Group with rights to the individual assets and obligations arising from the joint arrangement, the arrangement is classified as a joint operation and as such, the Group recognises its: • assets, including its share of any assets held jointly; • liabilities, including its share of any liabilities incurred Associates are all entities over which the Group has jointly; significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. In the case of syndicates, significant influence can exist with a lower shareholding by virtue of the Group’s position as project manager. Investments in associates are accounted for using the equity method of accounting. • share of revenue from the sale of the output by the joint operation; and • expenses, including its share of any expenses incurred jointly. To the extent the joint arrangement provides the Group with rights to the net assets of the arrangement, the investment is classified as a joint venture and accounted for using the equity method. Under the equity method, the cost of the investment is adjusted by the post-acquisition changes in the Group’s share of the net assets of the venture. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 6 6 E. CHANGES IN OWNERSHIP INTERESTS 3. HOW TO READ THE FINANCIAL REPORT The Group treats transactions with non-controlling The notes to the financial statements are set out in four interests that do not result in a gain or loss of control as specific sections: transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling • Performance for the year • Operating assets and liabilities interests to reflect their relative interests in the subsidiary. • Capital management Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate reserve within equity attributable to owners of Peet Limited. F. CHANGES IN ACCOUNTING POLICIES • Other notes Where an accounting policy is specific to one note, the policy is described in the note to which it relates. Key estimates are described in the following notes: The accounting policies adopted in the preparation of the financial report are consistent with those followed in the • Note 5 – constraints on project management & selling fees and estimates on percentage completion preparation of the Group’s annual financial statements • Note 9 – net realisable value for the year ended 30 June 2022, except for changes arising from the adoption of new and amended accounting standards and interpretations effective as at 1 July 2022. Several other amendments and interpretations apply for the first time on 1 July 2022, but do not have a material impact on the Group. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective. G. RESTATEMENT OF COMPARATIVES The prior period comparatives have been restated to reduce contract assets, deferred tax liability and opening retained earnings as at 1 July 2021 by an amount of $2.9 million, $0.9 million and $2.0 million, respectively, to eliminate the Group’s historic ownership interest in contract assets. The restatement has no impact on the Consolidated Statement of Profit or Loss and Other Comprehensive income, basic and diluted earnings per share and the Consolidated Statement of Cash Flows. • Note 11 – ECL allowance • Note 15 – provision for development costs to complete • Note 21 – fair value estimation Financial risks and its management are detailed in the respective notes it pertains to. The Group’s activities expose it to financial risks including (note 17): • liquidity risk • credit risk; and • interest rate risk. Related party transactions are disclosed within the notes they relate to. Transactions which occur between the Group and significant controlled entities are classified as related party transactions. Significant controlled entities are interests held in associates and joint ventures, which are set out in note 10. Details relating to the key management personnel, including remuneration paid, are set out in note 6. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 67 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 PERFORMANCE FOR THE YEAR FUNDS MANAGEMENT This section focuses on the results and performance of with external capital providers. Peet and/or the external Peet enters into asset and funds management agreements the Group. 4. SEGMENT INFORMATION Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the executive management group. The executive management group assesses the performance of the operating segments based on multiple measures including earnings before interest (including interest and finance charges amortised through cost of sales), tax, depreciation and amortisation (“EBITDA”), earnings before interest (including interest and finance charges amortised through cost of sales) and tax (“EBIT”) and profit after tax. The share of profits from associates and joint ventures is included as segment revenue as it is treated as revenue for internal reporting purposes. The Group operates only in Australia. capital provider commit equity funds towards the acquisition of land and this is generally supplemented with debt funds either at the time of acquisition or during the development phase of a project. The Group derives fees from underwriting, capital raising and asset identification services. Ongoing project related fees (mainly project management and selling fees as well as performance fees) are then derived by the Group for the duration of a particular project. COMPANY-OWNED PROJECTS The Group acquires parcels of land in Australia, primarily for residential development purposes. Certain land holdings will also produce non-residential blocks of land. JOINT ARRANGEMENTS Joint arrangements are entered into with government, statutory authorities and private landowners. The form of these arrangements can vary from project to project but generally involves Peet undertaking the development of land on behalf of the landowner or in conjunction with the co-owner. The Group is typically entitled to ongoing fees for management of the development project and also a The executive management group considers the business share of the profits. to have the following reportable business segments: INTER-SEGMENT TRANSFERS AND OTHER UNALLOCATED Segment revenue, expenses and results include transfers between segments. Such transfers are based on an arm’s length basis and are eliminated on consolidation. Certain property syndicates are consolidated where the Group is considered to have control. These entities however, continue to be managed and reported to the executive management group as part of the funds management business segment. Adjustments are included in “Inter - segment transfers and other unallocated” to reconcile reportable business segment information to the Group’s consolidated statement of profit or loss. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 6 8 e n u J 2 2 0 2 0 0 0 ’ $ e n u J 3 2 0 2 0 0 0 ’ $ d e t a d i l o s n o C e n u J 2 2 0 2 0 0 0 ’ $ e n u J 3 2 0 2 0 0 0 ’ $ 4 5 3 , 5 5 9 0 , 4 2 3 0 9 , 9 5 7 7 , 4 4 – 6 1 5 4 5 2 1 6 2 , 5 0 0 , 9 0 3 4 0 2 1 , 3 0 7 , 0 9 2 3 8 6 , 3 6 3 0 2 7 1 , ) 1 5 0 1 1 , ( ) 8 3 8 , 3 1 ( ) 1 5 0 1 1 , ( ) 0 8 ( 8 6 5 4 4 8 3 ) 8 3 8 , 3 1 ( s r e f s n a r t t n e m g e s - r e t n I d e t a c o l l a n u r e h t o d n a i t n o J s t n e m e g n a r r a d e n w o - y n a p m o C s t c e o r p j s d n u F t n e m e g a n a m e n u J 2 2 0 2 0 0 0 ’ $ 4 1 1 6 3 7 , 5 2 7 9 5 , 3 1 7 4 4 , 9 3 e n u J 3 2 0 2 0 0 0 ’ $ 5 4 4 , 1 3 2 8 9 , 2 1 1 8 , 9 2 8 3 2 , 4 6 e n u J 2 2 0 2 0 0 0 ’ $ e n u J 3 2 0 2 0 0 0 ’ $ e n u J 2 2 0 2 0 0 0 ’ $ 4 9 4 , 9 9 1 0 2 1 , 4 6 2 0 2 8 , 4 3 – 9 0 8 , 1 – 1 0 0 , 1 1 3 4 , 3 2 8 9 , 9 3 0 3 , 1 0 2 1 2 1 , 5 6 2 3 3 2 , 8 4 e n u J 3 2 0 2 0 0 0 ’ $ 0 2 5 , 3 1 2 1 9 , 5 8 0 5 , 4 1 0 4 9 , 3 3 4 9 9 , 1 7 ) 3 1 9 , 9 1 ( 1 8 0 , 2 5 5 3 2 0 3 8 , 4 9 ) 8 1 9 , 4 2 ( 2 1 9 , 9 6 1 3 2 6 1 3 , 2 5 3 4 1 0 7 , 1 4 0 , 6 8 ) 4 6 4 , 2 ( 7 7 5 , 3 8 ) 3 8 5 1 1 , ( 7 0 0 7 0 1 , ) 8 4 0 , 1 1 ( ) 0 0 2 , 4 1 ( 9 7 5 , 9 1 1 2 3 , 1 4 6 7 7 , 3 4 3 8 1 , 8 5 4 3 7 , 3 3 3 0 7 , 1 2 ) 6 7 4 , 2 ( ) 5 6 7 1 , ( ) 8 0 8 1 , ( ) 1 5 2 ( ) 6 2 ( ) 7 9 3 ( ) 4 6 5 ( ) 0 5 ( ) 8 7 ( ) 1 0 7 9 , ( 1 3 5 , 4 0 1 ) 3 1 8 , 2 1 ( ) 8 0 0 , 6 1 ( 8 2 3 , 9 1 5 9 2 , 1 4 9 7 3 , 3 4 9 1 6 , 7 5 4 8 6 , 3 3 5 2 6 , 1 2 s V J d n a s e t a i c o s s a f o t fi o r p t e n f o e r a h S l a t o T s e i t r a p l a n r e t x e o t s e l a S t n e m g e s y b e u n e v e R e u n e v e r r e h t O n o i t a s i t r o m a d n a n o i t a i c e r p e D ) 2 T I B E ( t l u s e r t n e m g e S s d a e h r e v o e t a r o p r o C 1 A D T I B E s t s o c e c n a n fi d n a t s e r e t n i s e d u l c n i ( s t s o c g n i c n a n i F ) s e l a s f o t s o c h g u o r h t d e s n e p x e d e t i m i L t e e P f o s r e n w o o t e b a t u b i r t t a t fi o r P l s t s e r e t n i g n i l l o r t n o c - n o n o t e l b a t u b i r t t a s s o L x a t e m o c n i e r o f e b t fi o r P x a t e m o c n i r e t f a t fi o r P e s n e p x e x a t e m o c n I . n o i t a s i t r o m A d n a n o i t a i c e r p e D , x a T , ) s e l a s f o t s o c h g u o r h t d e s i t r o m a s e g r a h c e c n a n fi d n a t s e r e t n i g n i d u l c n i ( t s e r e t n I e r o f e B s g n i n r a E : ) e r u s a e m S R F I - n o n a s i ( A D T I B E . x a T d n a ) s e l a s f o t s o c h g u o r h t d e s i t r o m a s e g r a h c e c n a n fi d n a t s e r e t n i g n i d u l c n i ( t s e r e t n I e r o f e B s g n i n r a E : ) e r u s a e m S R F I - n o n s i ( T I B E . 1 . 2 PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 6 9 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 5. REVENUE SALE OF LAND AND BUILT FORM 2023 $’000 2022 $’000 Revenue from the sale of land and built form is recognised on settlement of the sale. This represents the point when Revenue from contracts with customers control (title) has passed to the customer. – Sales of land and built form 1 – Project management and selling services 2 Other income 283,566 213,331 25,439 47,923 9,903 5,354 318,908 266,608 1. Revenue from sales of land in the reporting period includes the settlement revenue of New Beith, Qld ($76.1 million). 2. Revenue reduction in the reporting period is consistent with the lower lot sales volumes. RECOGNITION AND MEASUREMENT The main streams of revenue recognised by the Group relate to the sale of land and built form, and the provision PROJECT MANAGEMENT Project management represents a single performance obligation that is satisfied over time for the oversight and management of the development. The consideration receivable under the contract allocated to project management is variable and is measured using an expected value approach subject to a constraint. The transaction price is based on the relative standalone selling price. Revenue is recognised using an output method based on development milestones reached. Payment is received on settlement. of management and selling services. Revenue from SELLING SERVICES contracts with customers is recognised when or as the Group transfers control of the goods and services to a customer at an amount that reflects the consideration to which the Group is expected to be entitled in exchange for those goods and services. Revenue is recognised when or as each performance obligation is satisfied at the amount of the transaction price allocated to that performance obligation. If the consideration in the contract includes a variable amount, the Group estimates the amount of the consideration to which it is entitled in exchange for transferring the goods and services to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal of the amount of the cumulative revenue This service represents a performance obligation to facilitate the sale of an individual lot which is satisfied over the short period of time relating to the procedural steps of finalising the sale of the property to a purchaser. The consideration receivable under the contract allocated to selling services is considered to be variable consideration and is measured on a portfolio basis using an expected value approach subject to a constraint. The transaction price is based on the relative standalone selling price of the service. Payment is received on settlement. KEY ESTIMATES Constraints on project management & selling fees recognised will not occur when the associated uncertainty An analysis of sales fall over rates and minimum with the variable consideration is subsequently resolved. selling prices is performed for all business When a performance obligation is satisfied by transferring segments by location. This analysis, on a portfolio a promised good or service to the customer before the basis, is used to determine an appropriate customer pays consideration or before payment is due, constraint for revenue recognised against project the Group presents the revenue as a contract asset, management and selling fees. unless the Group’s rights to the amount of consideration are unconditional, in which case the Group recognises a receivable. Percentage completion An analysis of development milestones is performed to determine an appropriate percentage The Group recognises contract fulfilment costs as an asset of completion for completed lots. only if the costs relate directly to a contract, the costs generate or enhance resources of the Group that will be used to satisfy future performance obligations and the costs are expected to be recovered. If not capitalised, contract fulfilment costs are expensed as incurred. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 70 Revenue from related parties included above: Related party expenses 2023 $’000 2022 $’000 Revenue from related parties ¹ Associates KMP remuneration 1 Short-term employee benefits Project management and selling services 13,379 32,949 Post-employment benefits Syndicate administration services 950 1,174 Share-based payments Joint arrangements Project management and selling services 2,019 16,348 3,786 37,909 1. Refer to note 3 for information about related party transactions. 2023 $’000 5,218 192 2,066 7,476 2022 $’000 4,441 165 2,211 6,817 1. Refer to note 3 for how information on related party transactions is disclosed. 6. EXPENSES LAND AND DEVELOPMENT COSTS Land and development costs represent the portion of the land and development costs associated with the lots sold 2023 $’000 2022 $’000 during the year (cost of sales). BORROWING COSTS Profit before income tax includes the following specific expenses: Land and development costs 188,099 141,275 Net realisable value adjustments Amortised interest and finance expense – 7,199 1,941 8,499 Total land and development cost 195,298 151,715 Depreciation 1 – Right-of-use assets – Property, plant and equipment Amortisation 1,364 947 165 1,341 956 167 Total depreciation and amortisation 2,476 2,464 32,503 17,441 18,633 68,577 30,887 15,294 15,264 61,445 Employee benefits expense 2 Project management, selling and other operating costs Other expenses 3 Total other expenses Total expenses Finance costs Interest and finance charges – Bank borrowings – Lease liabilities Interest on corporate bonds Amount capitalised Total finance costs Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed in the period they are incurred. The capitalisation rate used to determine the amount of finance costs to be capitalised is the weighted average interest rate applicable to the Group’s outstanding borrowings during the year (refer note 17). 7. EARNINGS PER SHARE Profit attributable to the ordinary equity holders of the Company ($’000) Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share Basic and diluted earnings per share (cents) 2023 70,143 2022 52,316 474,145,115 483,029,946 14.79 10.83 266,351 215,624 There are 1,200,000 options excluded from the calculation of diluted earnings per share as they are anti-dilutive. They could potentially dilute basic earnings per share in the future. Refer to note 25 for the number of Performance Rights (PRs) outstanding at 30 June 2023. These PRs are contingently issuable shares and accordingly not included in diluted earnings per share. 14,207 203 7,814 318 12,221 11,790 (24,129) (16,837) 2,502 3,085 1. Refer to note 27 (b), (c) and (d) for accounting policies. 2. Refer to note 27 (e) for accounting policies. 3. This includes fair value adjustments on Other Financial Liabilities (refer to note 10 (b)). PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 71 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 8. TAXES RECOGNITION AND MEASUREMENT A. INCOME TAX EXPENSE Current taxes 2023 $’000 2022 $’000 22,311 17,566 (507) (32) 21,804 17,534 The income tax expense for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and 2,322 settle the liability simultaneously. Major components of tax expense Current income tax expense Current tax Adjustments for prior periods Deferred income tax expense Deferred tax Adjustments for prior periods Deferred income tax expense included in income tax expense comprises: Decrease/(increase) in deferred tax assets Increase in deferred tax liabilities Tax reconciliation Profit before income tax Tax at Australian tax rate of 30% Tax effect of amounts which are not assessable or deductible: Share of net profit of associates Employee benefits Franking credits Deferred tax assets not recognised Sundry items Under/(over) provision in prior periods 2,779 335 3,114 24,918 57 2,379 19,913 1,040 (516) 2,074 3,114 2,895 2,379 94,830 28,449 71,994 21,598 (237) (118) (2,777) 206 (433) (172) (1,608) 806 (692) 232 (448) 25 24,918 19,913 Deferred taxes Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply, when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction by the end of the reporting period. The relevant tax rates are applied to the amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arise in a transaction other than a business combination that at the time of the transaction did not affect either accounting profit or taxable profit or loss. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 72 B. DEFERRED TAX ASSETS Inventory $’000 3,916 201 – 4,117 4,117 (225) – 3,892 At 1 July 2021 Credited/(charged): – to profit or loss – to equity Total deferred tax assets Set off against deferred tax liabilities pursuant to set off provisions At 30 June 2022 At 1 July 2022 Credited/(charged): – to profit or loss – to equity Total deferred tax assets Set off against deferred tax liabilities pursuant to set off provisions At 30 June 2023 C. DEFERRED TAX LIABILITIES Movements At 1 July 2021 – Restated Charged/(credited): – to profit or loss Total deferred tax liabilities Set off against deferred tax liabilities pursuant to set off provisions At 30 June 2022 At 1 July 2022 Charged/(credited): – to profit or loss Total deferred tax liabilities Set off against deferred tax liabilities pursuant to set off provisions At 30 June 2023 Cash flow hedges $’000 Receivables $’000 Tax losses $’000 Property, plant and equipment (including leases) $’000 459 13,531 1,409 3,995 1,658 – 15,189 338 – 1,747 (1,038) – 2,957 (459) – – – – – – 15,189 1,747 2,957 93 24,103 (2,457) – 12,732 758 – 2,505 (206) – 2,751 1,090 2 1,185 Other $’000 242 (184) 35 93 Total $’000 23,552 516 35 24,103 (24,103) – (1,040) 2 23,065 (23,065) – Total $’000 37,968 2,895 40,863 (24,103) 16,760 Finance charges $’000 28,114 Accrued income $’000 Inventory $’000 Share of joint arrangements $’000 3,724 2,511 3,464 2,450 30,564 272 3,996 (635) 1,876 808 4,272 Other $’000 155 – 155 30,564 3,996 1,876 4,272 155 40,863 5,391 35,955 (3,235) 761 (2,104) (228) 2,022 6,294 – 155 2,074 42,937 (23,065) 19,872 PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 73 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 KEY ESTIMATES Net realisable value The Group is required to carry inventory at lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. Estimates of net realisable value are based on the most reliable evidence available at the time the estimates are made, of the amount the inventories are expected to realise and the estimate of costs to complete. The key assumptions require the use of management judgement and are reviewed annually. OPERATING ASSETS AND LIABILITIES This section shows the assets used to generate the Group’s trading performance and the liabilities incurred as a result. Liabilities relating to the Group’s financing activities are addressed in the capital management section. 2023 $’000 452,399 198,327 94,475 745,201 2022 $’000 466,388 141,688 76,490 684,566 9. INVENTORIES Cost of acquisition Capitalised development costs Capitalised finance costs Total inventory at cost Provision for write-downs to net realisable value 1 Total inventory Current Non-current Total inventory (26,547) (27,473) 10. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD 718,654 657,093 Investments in associates and joint ventures are accounted for using the equity method of accounting. 181,305 537,349 718,654 205,400 451,693 657,093 A. MOVEMENTS IN CARRYING AMOUNTS OF INVESTMENTS IN ASSOCIATES AND JOINT VENTURES 1. The write-downs are from several non-core projects that are to be divested. The estimated net realisable values used to calculate the write- down provisions are based on the latest valuations and management’s assessment of the market for each project. 2023 $’000 2022 $’000 RECOGNITION AND MEASUREMENT Carrying amount at 1 July 188,006 232,622 Land held for development and resale is stated at the lower of cost and net realisable value. Cost includes the cost of acquisition, development and borrowing costs during development. When development is completed, borrowing costs and other holding charges are expensed as incurred. Land is initially classified as non-current. It is subsequently reclassified to current if the development/subdivided lots Acquisitions Dividends Capital returns Share of profit after income tax Derecognition of investment in Peet Flagstone City Pty Ltd – (36,903) (1,525) 44,775 – 16,927 (16,210) (4,663) 24,095 (64,765) Carrying amount at 30 June 194,353 188,006 are expected to be sold within the next 12 months. The Group assesses, at each balance date, the carrying value of investments in associates and joint ventures to ensure the assets are not impaired. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 74 B. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (JVs) INCLUDING SUMMARISED FINANCIAL INFORMATION s t e s s a t n e r r u c - n o N s e i t i l i b a i l t n e r r u C s e i t i l i b a i l t n e r r u c - n o N s t e s s a t e N s t e s s a t n e r r u C p i h s r e n w O e r u t n e v t n o i j i r o e t a c o s s a n i t s e r e t n i l f o e u a v g n i y r r a C e u n e v e R x a t r e t f a ) s s o l ( / t fi o r p t e N ) s s o l ( / t fi o r p f o e r a h S As at 30 June 2023 % $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 Associates Peet Alkimos Pty Limited, WA 45 18,683 254,989 6,232 76,219 191,222 85,194 17,055 Peet Caboolture Syndicate Limited, QLD 20 11,577 27,551 12,216 1,900 25,013 Peet Werribee Land Syndicate, VIC 17 6,126 15,094 4,366 304 16,549 5,376 2,839 17,500 26,713 503 2,931 6,318 200 528 1,083 Joint Ventures* Peet No.1895 Pty Limited, VIC Peet Golden Bay Pty Limited, WA Peet Mt Barker Pty Limited, SA Googong Township Unit Trust, NSW Peet Brabham Pty Ltd, WA Other associates and JVs Total 50 50 50 50 50 As at 30 June 2022 Associates 4,279 136,100 5,085 107,738 27,555 14,996 84,843 13,191 10,214 5,537 5,818 14,708 16,564 1,230 4,468 – 19,015 382 17,532 9,507 8,766 8,251 18,038 1,459 1,155 727 577 4,196 155,699 9,711 20,000 130,185 65,093 173,211 59,625 29,811 25,148 48,211 25,273 45,780 2,306 1,153 1,429 194,353 5,431 1,570 798 837 44,775 Peet Alkimos Pty Limited, WA 45 8,479 296,495 79,267 34,986 190,721 84,971 19,349 (2,514) (1,093) Peet Caboolture Syndicate Limited, QLD 20 7,445 28,380 12,643 696 22,486 Peet Werribee Land Syndicate, VIC 17 11,249 14,460 10,318 1,157 14,234 4,870 2,700 21,271 47,330 1,346 8,082 Joint Ventures* Peet No.1895 Pty Limited, VIC Peet Golden Bay Pty Limited, WA Peet Mt Barker Pty Limited, SA Googong Township Unit Trust, NSW Peet Brabham Pty Ltd, WA Other associates and JVs Total 50 50 50 50 50 21,931 149,947 83,100 64,420 24,358 14,500 52,174 5,771 6,998 15,520 15,497 1,731 3,121 – 19,560 476 18,898 9,780 9,449 10,262 22,164 7,291 1,151 1,647 6,536 175,897 6,869 54,000 121,564 60,782 96,485 27,587 13,794 16,720 43,660 197 59,472 711 355 599 188,006 4,262 431 216 4,469 24,095 269 1,387 3,653 576 824 * Refer to note 10(c) for further breakdown of financial information of joint ventures The associates and joint ventures finance their operations through unitholder/shareholder contributions and also through external banking facilities. The Group also provides a loan facility to some of these entities as disclosed in note 11. In FY22, Peet Limited provided a cash advance facility to a shareholder of Peet Alkimos Pty Ltd. At 30 June 2023, the liability is measured at fair value of $7.3 million (Current: $2.6 million, non-current: $4.7 million; 30 June 2022 non-current: $3.2 million) which is based on the net present value of all estimated cash inflows and outflows over the term of the facility. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 75 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 10. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD continued C. ADDITIONAL SUMMARISED INFORMATION IN RELATION TO AMOUNTS INCLUDED IN ASSETS, LIABILITIES AND PROFIT/(LOSS) OF JOINT VENTURES As at 30 June 2023 Googong Township Unit Trust Peet Golden Bay Pty Limited Peet Mt Barker Pty Limited Peet No. 1895 Pty Limited Peet Brabham Pty Limited As at 30 June 2022 Googong Township Unit Trust Peet Golden Bay Pty Limited Peet Mt Barker Pty Limited Peet No. 1895 Pty Limited Peet Brabham Pty Limited 1 Excluding trade and other payables and provisions Cash and cash equivalents $’000 Current financial liabilities 1 $’000 4,055 5,483 4,998 4,223 43 6,230 5,664 6,660 21,835 313 – – – – 25,254 338 – 628 21,500 – Non-current financial liabilities 1 $’000 20,000 – – 97,962 42,570 54,000 – – 61,290 56,789 Interest expense $’000 Income tax expense/ (benefit) $’000 – – – – 61 – – – – 57 (7) 621 492 5,653 (316) 134 491 706 3,137 299 PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 76 11. RECEIVABLES Related party balances with associates and joint ventures Current Trade receivables at amortised cost 1 Other receivables at amortised cost 1 Loans to associates and joint ventures 2 – At amortised cost – ECL allowance – At fair value Non-current Loans to associates and joint ventures 2 – Amortised cost – ECL allowance – At fair value Total receivables 2023 $’000 8,218 1,420 3,522 (522) 6,897 19,535 23,832 (2,279) 24,326 45,879 65,414 2022 $’000 7,314 105 8,022 (3,434) 11,039 23,046 19,124 (1,971) 24,824 41,977 65,023 included above: Current Trade receivables Loans to associates and joint ventures – At amortised cost (net of ECL allowance) – At fair value Non-current 2023 $’000 2022 $’000 582 648 3,000 6,897 4,588 11,039 Loans to associates and joint ventures – At amortised cost (net of ECL allowance) 21,553 – At fair value Total 24,326 56,358 17,153 24,824 58,252 Movements in loans to associates and joint ventures: 2023 $’000 57,604 5,000 (15,052) 8,224 55,776 2022 $’000 64,300 650 (4,975) (2,371) 57,604 1. Trade and other receivables are non-interest bearing and generally have 30-60 day terms. There were no past due or impaired trade receivables at the end of the year (2022: $Nil). 2. The Group has entered into financing arrangements (including loans and equity contributions in cash) with certain associates and JVs of the Group on commercial terms. The loans provided to associates and JVs are unsecured with interest rates based on Bank Bill Swap Bid Rate (BBSY) plus a margin up to 8%. Carrying amount at 1 July Loans advanced Loan repayments Other 1 Refer to note 27(a) for accounting policy on financial assets Carrying amount at 30 June and note 21 for fair value disclosures. 1. This includes movements in ECL allowance and fair value adjustments. KEY ESTIMATES ECL allowance ECL allowance is determined on a probability of default on a loan by loan basis. 12. CONTRACT ASSETS Current Accrued income 1 Total contract assets 2023 $’000 6,139 6,139 2022 $’000 16,970 16,970 1. These amounts represent project management and performance fees payable from associates and other managed entities for services provided. They are recognised for the earned consideration that is conditional under AASB 15. Refer to note 5 for revenue related accounting policies. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 77 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 13. PAYABLES RECOGNITION AND MEASUREMENT Current Trade payables and accruals Advance from joint operators Total payables 2023 $’000 2022 $’000 Where the Group enters into unconditional contracts with land vendors to purchase properties for future development 45,116 3,617 48,733 24,936 2,743 27,679 that contain deferred payment terms, these borrowings are initially measured at fair value and subsequently carried at amortised cost. The unwinding of the discount applied to the acquisition price is included in finance costs. Generally, the land vendor holds the title over the property until settlement has occurred. Refer note 21 for fair value disclosures. The below table analyses the maturity of the Group’s land vendor liability obligation: RECOGNITION AND MEASUREMENT These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. These amounts are unsecured and usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method. 0 – 1 years 1 – 2 years 2 – 5 years Total contractual cash flows In some joint arrangement contracts, costs are reimbursed Carrying amount of liabilities as incurred during development. As revenue is only recognised on settlements, reimbursements received are recognised as advance from joint operators until 15. PROVISIONS settlement. Refer note 21 for fair value disclosures. 14. LAND VENDOR LIABILITIES Current Instalments for purchase of development property Non-current Instalments for purchase of development property Future interest component of deferred payment 1 Total land vendor liabilities Current Rebates Employee entitlements 2023 $’000 2022 $’000 Provision for development costs to complete 8,841 14,808 Non-current 8,841 14,808 Employee entitlements Provision for development costs to complete 13,845 23,075 Provision – Other (1,568) (3,521) Total provisions 2023 $’000 9,230 13,845 – 23,075 21,118 2023 $’000 3,162 4,070 2022 $’000 15,197 9,230 13,845 38,272 34,362 2022 $’000 3,165 3,947 16,679 10,285 23,911 17,397 242 149 12,450 12,882 500 13,192 37,103 – 13,031 30,428 12,277 21,118 19,554 34,362 Movements in provisions during the financial year are set out below: 1. Relating to the asset acquisition of Peet Flagstone City Pty Ltd in FY22. Carrying amount at 1 July – Additional provision recognised – Paid during year – Expired during the year 2023 $’000 30,428 17,216 (6,997) (3,544) 2022 $’000 25,963 13,730 (7,888) (1,377) Carrying amount at 30 June 37,103 30,428 PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 78 KEY ESTIMATES Provision for development costs to complete Costs not yet incurred for lots settled are taken into account in the cost of sales for these lots. The portion of cost of sales relating to these future costs are recognised as a provision in the Statement of Financial Position. The actual costs may vary from the estimated future costs due to variations in estimates. RECOGNITION AND MEASUREMENT Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses. EMPLOYEE ENTITLEMENTS The liability for long service leave and annual leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the balance date. Consideration is given to expected future wage and salary levels, experience of the employee, departures and periods of service. Expected future payments are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Liabilities for wages and salaries, including non-monetary benefits and accumulating sick leave expected to be settled within 12 months of the balance date are measured at the amounts expected to be paid when the liabilities are settled. DEVELOPMENT COSTS TO COMPLETE Provisions for development costs not yet incurred for lots Provisions are measured at the present value of settled are recognised at each reporting date based on the management’s best estimate of the expenditure required estimated costs to complete. to settle the present obligation at the balance date. The discount rate used to determine the present value reflects 16. INTERESTS IN JOINT OPERATIONS current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as Details of aggregate share of assets, liabilities, revenue, expenses and results of joint operations. interest expense. REBATES The Group may be required under the terms of certain sale contracts to provide rebates for expenditures undertaken by land holders in respect of developments. These expenditures relate to landscaping and fencing and are generally payable where the land purchaser completes the construction of their dwelling within a specified period of time. This period is generally 12 to 18 months from the date of settlement. A liability is recorded for rebates at settlement and is measured at the amount of consideration receivable under the sales contract for which the Group does not expect to be entitled. The provision is updated at the end of each reporting period for changes in circumstances. Total assets $’000 Total liabilities $’000 Revenue $’000 Expenses $’000 6,533 1,935 5,679 4,009 107 19 1 (469) 18,965 266 20,595 15,615 7,615 2,176 7,815 6,659 590 372 4,396 1,350 22,567 4,099 7,269 6,516 As at 30 June 2023 The Village at Wellard, WA Lightsview Joint Venture, SA Redbank Plains Joint Venture, QLD As at 30 June 2022 The Village at Wellard, WA Lightsview Joint Venture, SA Redbank Plains Joint Venture, QLD PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 79 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 CAPITAL MANAGEMENT RECOGNITION AND MEASUREMENT Borrowings are initially recognised at fair value, net of This section outlines how the Group manages its capital transaction costs incurred. Borrowings are subsequently and related financing costs. For the purpose of the Group’s capital management, capital includes: • issued capital; • debt facilities; and measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the statement of profit or loss over the period of the borrowings using the effective interest method. For the purpose of presentation in the statement of cash • other equity reserves attributable to the equity holders flows, cash and cash equivalents includes cash on hand, of the parent. The Group’s objectives when managing capital are to: deposits held at call with financial institutions, other short- term, highly liquid investments with original maturities of three months or less that are readily convertible to known • safeguard its ability to continue as a going concern; amounts of cash and which are subject to an insignificant • continue to provide returns to shareholders and benefits risk of changes in value, and bank overdrafts. for other stakeholders; Refer note 21 for fair value disclosures. • maintain an efficient capital structure to reduce the cost of capital; and • ensure all covenants are complied with. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as total interest-bearing liabilities (including deferred payment obligations) less cash, divided by total assets adjusted for market value, net of cash and cash equivalents less intangible assets. The market value is based on the latest independent mortgage valuations, adjusted for settlements, development costs and titled stock between the date of valuation and 30 June 2023. At 30 June 2023, the bank covenant gearing ratio was 26.4% (2022: 28.6%). DEBT FACILITIES The following provides details of the loans and borrowings utilised as at 30 June 2023: Facility amount $’000 Utilised amount 2 $’000 Effective interest rate % Bank loans 1 – note a 300,000 143,360 7.8 Peet notes – note b Peet notes 2019 Peet notes 2021 Face value $’000 Carrying amount 3 $’000 Effective interest rate % 75,000 75,000 74,445 74,296 150,000 148,741 7.2 9.3 17. FINANCIAL LIABILITIES NET DEBT 1. Secured. During the reporting period, the Group’s main bank facility was increased from $175 million to $275 million and was extended to 1 October 2025. The bank loan in Peet Flagstone City Pty Ltd was repaid. 2. Excludes bank guarantees at 30 June 2023 of $36.7 million (30 June 2022 $33.7 million). Refer note 23 for bank guarantees information. 3. Net of transaction and finance costs. Borrowings – Current Borrowings – Non-current Total borrowings* Cash and cash equivalents Net debt 2023 $’000 74,445 217,656 292,101 2022 $’000 49,935 250,683 300,618 (38,790) (55,380) 253,311 245,238 * Excludes vendor financing. Refer note 14 for vendor financing on deferred payment terms. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 8 0 A. BANK LOANS The bonds and notes are presented in the balance sheet The bank facilities are secured by a first registered fixed and floating charge over the assets and undertakings of the Group with a carrying amount of $835 million (2022: $807 million). Under these facilities the Group is required to meet bank covenants relating to interest cover, gearing ratio, real property ratio and minimum shareholders’ equity. All bank covenants have been met during the reporting period and as at 30 June 2023. The Group’s main bank facility of $275 million expires on 1  October 2025. The Group also has bank facilities associated with Peet Yanchep Land Syndicate ($17 million, expires on 31 October 2024) and Peet R B Plains Pty Ltd ($6 million, expires on 30 June 2024). The table below analyses the maturity of the Group’s bank loans based on the remaining period at reporting date to the contractual maturity date: 0 – 1 years 1 – 2 years 2 – 5 years Total contractual cash flows 2023 $’000 11,117 23,795 132,524 167,436 2022 $’000 6,011 32,414 76,725 115,150 Carrying amount of liabilities 143,360 102,355 B. PEET BONDS AND NOTES Peet bonds Series 2, Tranche 1 FY22 borrowings included Peet issued 500,000 Bonds at a face value of $100 per bond with a maturity date of 5 October 2022. These bonds were unsecured and carry a floating interest rate of BBSW+4.65% margin. The bonds were fully repaid in October 2022. Peet Notes 2019 On 4 April 2019, Peet issued 75,000 notes to eligible professional and sophisticated investors at a face value of $1,000 per note with a maturity date of 7 June 2024. These notes are unsecured and carry a fixed interest rate of 6.75%. These notes are classified as a current liability as at 30 June 2023. Refer to note 2(a) for the repayment of these notes. Peet Notes 2021 as follows: Face value of bonds and notes issued 150,000 200,000 2023 $’000 2022 $’000 Transaction costs Cumulative interest expense Cumulative coupon payable (2,504) (3,499) 147,496 196,501 32,537 36,179 (31,292) (34,417) 1,245 1,762 Total bonds and notes liability 148,741 198,263 The bonds and notes are repayable as follows: 0 – 1 years 1 – 2 years 2 – 5 years 2023 $’000 86,199 6,424 83,043 2022 $’000 59,523 83,579 83,583 Total contractual cash flows Carrying amount of liabilities 175,666 226,685 148,741 198,263 C. LEASE LIABILITIES Current Office space leases Non-current Office space leases Total lease liabilities 2023 $’000 2022 $’000 1,562 1,958 1,249 2,811 1,766 3,724 During the year, total cash outflows for these leases is $2.2 million (2022: $2.1 million). The below table analyses the maturity of the Group’s lease liabilities based on the remaining period at reporting date to the contractual maturity date: 0 – 1 years 1 – 2 years 2 – 5 years 2023 $’000 1,811 642 1,199 3,652 2,811 2022 $’000 2,149 1,465 385 3,999 3,724 On 4 June 2021, Peet issued 75,000 notes to eligible Total contractual cash flows professional and sophisticated investors at a face value Carrying amount of liabilities of $1,000 per note with a maturity date of 30 September 2026. These notes are unsecured and carry a floating interest rate of BBSW+4.85% margin. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 81 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 17. FINANCIAL LIABILITIES continued INTEREST RATE RISK CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES The Group’s main interest rate risk arises from cash, loans to associates and joint ventures measured at fair value and Borrowings $’000 Lease liabilities $’000 300,618 (9,229) – 712 292,101 3,724 (1,978) 1,065 – 2,811 long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. The Group manages its interest rate risk by both variable and fixed rate debt instruments. The Group’s fixed rate borrowings and certain loans to associates and joint ventures at fixed rate are not subject to interest rate risk. 1 July 2022 Cash flows Lease renewal Others 30 June 2023 LIQUIDITY RISK Liquidity risk includes the risk that the Group, as a result of INTEREST RATE SENSITIVITY their operations: • will not have sufficient funds to settle a transaction on its due date; The sensitivity analysis below has been determined based on the exposure to interest rates in existence at balance date, and the stipulated change taking place at the beginning of the financial year and held constant throughout • will be forced to sell financial assets at a value which is the reporting period. A 100 basis point increase and 50 less than what they are worth; or • may be unable to settle or recover a financial asset at all. Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities to meet obligations when due, and the ability to close-out market positions. Due to the dynamic nature of the underlying business, the Group aims at maintaining flexibility in funding by keeping committed credit lines available, and regularly updating and reviewing its cash flow forecasts to assist in managing its liquidity. The Group has unused borrowing facilities which can further reduce liquidity risk (refer to note 17 for analysis of basis point decrease used in the interest rate sensitivity analysis were determined based on the level of debt that was renewed and forecasters’ economic expectations and represents management’s assessment of the possible change in interest rates. At 30 June 2023, the Group had the following mix of financial assets and liabilities exposed to variable interest rates: Financial assets Cash and cash equivalents (floating) Loans to associates and joint ventures measured at fair value 2023 $’000 2022 $’000 38,790 31,223 55,380 35,863 maturities on borrowing facilities). Financial liabilities CREDIT RISK Borrowings (floating, unhedged) (217,656) (226,405) The cash component of financial assets is considered The potential impact of a change in interest rates by +100/ to have low credit risk as the counterparties are banks -50 basis points on profit and equity has been tabulated with high credit ratings assigned by international credit- below: rating agencies. An expected credit loss provision of $2.8 million (2022: $5.4 million) has been recognised for loans measured at amortised cost of $27.3 million (2022: $27.1 million) (refer to note 11 and 27). Post-tax profits Increase/ (decrease) Equity Increase/ (decrease) -50 basis points 2023 $’000 517 2022 $’000 476 2023 $’000 517 +100 basis points (1,034) (953) (1,034) 2022 $’000 476 (953) PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 8 2 18. CONTRIBUTED EQUITY AND RESERVES A. MOVEMENTS IN ORDINARY SHARE CAPITAL Date Details 30 June 2021 Closing balance Share buyback 30 June 2022 Closing balance Share buyback 30 June 2023 Closing balance Number of shares 483,300,489 (4,167,796) 479,132,693 (7,791,331) 471,341,362 $’000 378,916 (4,183) 374,733 (8,317) 366,416 THE NATURE OF THE GROUP’S CONTRIBUTED EQUITY Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares of options and/or performance rights are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares, options and/or performance rights for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration. Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share held is entitled to one vote. B. RESERVES At 1 July 2021 Share based payment Buyback on vesting of performance rights 3 Transactions with non-controlling interest At 30 June 2022 At 1 July 2022 Share based payment Buyback on vesting of performance rights 4 At 30 June 2023 Share-based payments reserve 1 $’000 Non- controlling interest reserve 2 $’000 13,998 (15,447) 3,323 (635) – 16,686 16,686 3,439 (3,696) 16,429 – – (655) (16,102) (16,102) – – (16,102) Total $’000 (1,449) 3,323 (635) (655) 584 584 3,439 (3,696) 327 1. The share-based payments reserve is used to recognise the fair value of options and performance rights granted. 2. The non-controlling interest reserve is used to record the differences described in note 2(e) which may arise as a result of transactions with non-controlling interests that do not result in a loss of control. 3. 4. During the year, the Company purchased 3,756,353 shares to settle the vesting of FY16, FY17, FY18, FY19 and FY20 Performance Rights. In FY22, the Company purchased 540,660 shares to settle the vesting of FY16, FY18 and FY19 Performance Rights. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 8 3 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 19. DIVIDENDS Declared and paid during the period Prior year fully franked dividend 4.0 cents, paid on 14 October 2022 (2022: 2.5 cents) 3.5 cents, paid on 13 April 2023 (2022: 2.25 cents) 2023 $’000 19,023 16,502 35,525 2022 $’000 12,083 10,874 22,957 Dividend not recognised at year end Final dividend 4.0 cents per share to be paid on 16 October 2023 (2022: 4.0 cents per share) 18,854 19,165 Franking credit balance Franking account balance as at the end of the financial year at 30% (2022: 30%) Franking credits that will arise from the payment of income tax Impact on the franking account of dividends proposed before the financial report was issued but not recognised as a distribution to equity holders during the period 70,331 12,332 (8,080) 63,239 10,028 (8,214) 74,583 65,053 20. RECONCILIATION OF PROFIT AFTER INCOME TAX TO NET CASH INFLOW FROM OPERATING ACTIVITIES Profit after income tax Adjustments to reconcile profit after tax to net operating cash flows: Depreciation Amortisation of intangible assets Net realisable value adjustments Employee share-based payments Equity accounting for investments in associates and joint ventures Derivative instrument fair value adjustment Interest received Peet bonds and notes effective interest rate adjustment Distributions and dividends from associates and joint ventures Fair value adjustments an ECL provision Loss on disposal of property, plant and equipment Other Change in operating assets and liabilities during the financial year Decrease in receivables Increase in inventories Increase in tax liabilities Increase/(decrease) in payables Increase in provisions Increase in deferred tax liabilities Net cash inflow from operating activities PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 8 4 2023 $’000 69,912 2,311 165 – (257) (44,775) – 234 479 36,903 (3,547) – (41) 8,612 (61,562) 2,304 16,999 6,175 3,154 37,066 2022 $’000 52,081 2,297 167 1,941 2,688 (24,095) (1,529) 160 608 16,210 (67) 721 (57) 3,913 (7,538) 3,657 (9,677) 2,337 2,379 46,196 21. FAIR VALUE MEASUREMENT VALUATION OF FINANCIAL INSTRUMENTS For financial assets and liabilities, the Group uses the following fair value measurement hierarchy: • Level 1: the fair value is calculated using quoted prices in active markets for identical assets and liabilities. • Level 2: the fair value is determined using inputs other than quoted prices included in level 1 that are observable for the asset or liability either directly (as prices) or indirectly (derived from prices). • Level 3: the fair value is based on inputs for the asset or liability that are not based on observable market data. There have been no transfers between levels during the period. FINANCIAL ASSETS Certain loans to associates and joint ventures are carried at fair value through profit or loss. The fair values of these financial assets have been estimated using discounted cashflows with significant unobservable inputs at each reporting date (level 3 of the fair value hierarchy). At 30 June 2023, the fair value of these loans to associates and joint ventures is $31.2 million (30 June 2022: $35.9 million). LAND VENDOR LIABILITIES The Group measures its land vendor liabilities at fair value at each reporting date. The land vendor liability resulting from the acquisition of the remaining share of Peet Flagstone City Pty Ltd in FY22 is measured as the net present value of remaining contracted instalments with significant unobservable inputs (level 3 of the fair value hierarchy). The fair value as at 30 June 2023 for this liability is $21.1 million (30 June 2022: $28.4 million). PEET BONDS AND NOTES The fair value of Peet bonds and notes as at 30 June 2023 is detailed below. Peet bonds Series 2, Tranche 1 Peet Notes 2019 Peet Notes 2021 Total fair value Total carrying value 2023 $’000 – 71,069 73,130 144,200 148,741 2022 $’000 49,000 74,777 75,295 199,072 198,263 For the above table, the fair value of Peet bonds is measured using quoted market value on ASX (level 1) and the fair value of Peet notes is measured using significant observable inputs (level 2). OTHER FINANCIAL LIABILITIES The financial liabilities are measured at fair value through profit or loss using discounted cashflows with significant unobservable inputs at each reporting date (level 3). PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 8 5 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 21. FAIR VALUE MEASUREMENT continued OTHER NOTES valuation techniques. The Group uses a variety of Fees for other services methods and makes assumptions that are based on market conditions existing at each balance date. – Tax compliance – Tax advice 22. REMUNERATION OF AUDITORS Fees to Ernst & Young (Australia) Fees for auditing the statutory financial report of the parent covering the group and auditing the statutory financial reports of any controlled entities Fees for assurance services that are required by legislation to be provided by the auditor – Compliance Plan & AFSL audits Fees for other assurance and agreed- upon-procedures services under other legislation or contractual arrangements Total Fees to Ernst & Young (Australia) 2023 $ 2022 $ 385,357 393,000 8,346 54,222 7,800 51,406 92,501 98,350 97,479 56,423 638,776 606,108 23. CONTINGENCIES AND COMMITMENTS Details of the estimated maximum amounts of contingent liabilities (for which no amounts are recognised in the financial statements) are as follows: Bank guarantees outstanding Insurance bonds outstanding 2023 $’000 36,716 27,789 64,505 2022 $’000 33,713 20,082 53,795 All contingent liabilities are expected to mature within 1 year. The Directors are not aware of any circumstances or information, which would lead them to believe that these contingent liabilities will eventuate and consequently no provisions are included in the accounts in respect of these matters. KEY ESTIMATES Fair value estimation The fair value of financial instruments traded in active markets (such as publicly traded derivatives and trading and available for sale securities) is based on quoted market prices at the balance date. The quoted market price used for financial assets held by the Group is the current bid price; the appropriate quoted market price for financial liabilities is the current ask price. Fair value of the Peet bonds is based on price quotations at the reporting date. The fair value of financial instruments that are not traded in an active market is determined using Receivables/borrowings are evaluated by the Group based on parameters such as interest rates and individual creditworthiness of the counter party. Based on this evaluation, allowances are taken into account for the expected losses of these receivables. The carrying amount of trade receivables and payables less impairment provision of trade receivables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 8 6 COMMITMENTS B. SUBSIDIARIES On 30 June 2023, the Group had a commitment of SIGNIFICANT INVESTMENTS IN SUBSIDIARIES $65.6 million (30 June 2022: $67.1 million) to pay for the acquisition of approximately 15 hectares of land from the University of Canberra in ACT. The purchase price is expected to be paid in instalments over six years commencing in 2023. A further $5.5 million collaboration payment is to be paid by the Group to the University of Canberra in equal instalments between 2023 and 2030. The consolidated financial statements incorporate the assets, liabilities and results of the following significant subsidiaries in accordance with the accounting policy described in note 2(a): These payments are subject to settlement, which remains Name of Subsidiary conditional at balance date, therefore no liability has been CIC Australia Pty Limited 1 recognised at 30 June 2023. 24. PARENT ENTITY FINANCIAL INFORMATION AND SUBSIDIARIES A. PARENT ENTITY FINANCIAL INFORMATION SUMMARY FINANCIAL INFORMATION Peet Craigieburn Pty Limited 2 Peet Southern JV Pty Limited 2 Peet No. 108 Pty Limited 2 Peet No. 112 Pty Limited 2 Peet Treasury Pty Limited 2 Peet Estates (VIC) Pty Limited 2 The individual financial statements for the parent entity Peet Development Management Pty Limited show the following aggregate amounts: Restated 2022 $’000 2023 $’000 Peet Estates (QLD) Pty Limited 2 Peet Estates (WA) Pty Limited 2 Peet Estates (SA) Pty Limited 1 Peet Funds Management Limited 2 Peet R B Plains Pty Limited 2 25,099 60,933 Peet No. 73 Pty Limited 2 860,278 556,625 Peet No. 127 Pty Limited 2 104,684 209,970 59,032 121,557 Lightsview Apartments Pty Limited 1 Peet Tonsley Pty Limited 2 JTP Homes Pty Limited 2 366,416 374,732 Peet Tonsley Apartments Pty Limited 2 16,429 267,463 16,686 43,650 Peet Keysborough Pty Limited 2 Peet Jumping Creek Pty Limited 2 Peet 2018 No.2 Pty Limited 2 650,308 435,068 Peet FL Pty Ltd 2 259,338 259,338 10,788 10,788 Peet Flagstone City Pty Ltd 2 Peet Yanchep Land Syndicate 2 Balance sheet Current assets Total assets Current liabilities Total liabilities Shareholders’ equity Issued capital Reserves Share-based payments reserve Retained profits Total equity Profit for the year Total comprehensive income Holding 2023 % 2022 % 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 66.4 66.4 1. 2. Incorporated in ACT. Incorporated in WA. GUARANTEES ENTERED INTO BY THE PARENT ENTITY Details of the estimated maximum amounts of contingent liabilities (for which no amounts are recognised in the financial statements) are as follows: Bank guarantees outstanding 2023 $’000 1,837 2022 $’000 923 PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 87 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 24. PARENT ENTITY FINANCIAL DEED OF CROSS GUARANTEE INFORMATION AND SUBSIDIARIES continued B. SUBSIDIARIES continued MATERIAL PARTLY-OWNED SUBSIDIARIES Financial information of subsidiaries that have material non- controlling interests is provided below. This information is based on amounts before inter-company eliminations. Peet Limited and certain wholly-owned subsidiaries are parties to a deed of cross guarantee under which each company guarantees the debts of the other. By entering into the deed, the wholly-owned entities have been relieved from the requirements to prepare a financial report and directors’ report under ASIC Corporations (Wholly- owned Companies) Instrument 2016/785 issued by the Australian Securities and Investments Commission. Current assets Non-current assets Current liabilities Non-current liabilities Non-controlling interest Revenue Loss after tax Loss attributable to non-controlling interest Summarised cash flow information: Peet Yanchep Land Syndicate The companies represent a ‘closed group’ for the purposes of the Class Order. 2023 $’000 8,867 84,933 1,319 28,823 21,388 224 (688) 231 2022 $’000 1,802 85,210 1,423 21,243 21,619 1,343 (699) 235 Consolidated statement of profit or loss Revenue Expenses Finance costs Share of net profit of associates accounted for using the equity method 2023 $’000 2022 $’000 318,236 235,507 (260,652) (192,398) (6,678) 44,319 (3,085) 23,579 Net realisable value adjustments – (4,129) Profit before income tax Income tax expense Profit for the year Peet Yanchep Land Syndicate Total comprehensive income for the year 95,225 59,474 (24,967) (19,852) 70,258 70,258 39,622 39,622 Operating Investing Financing Net outflow 2023 $’000 (7,829) (46) 7,821 (54) 2022 $’000 (3,710) – 3,656 (54) Peet Limited has provided a $2.4 million loan to Peet Yanchep Land Syndicate as at 30 June 2023 (30 June 2022: $2.4 million) and no loans to other partly-owned subsidiaries. Peet has granted a guarantee of $6.0 million to Peet Yanchep Land Syndicate as at 30 June 2023 (30 June 2022: $6.0 million). The Group has no further contractual obligations to provide ongoing financial support. Summary of movement in consolidated retained profits Retained profits at the beginning of the financial year Subsidiaries joining the deed of cross guarantee Profit for the year Dividends paid Retained profits at the end of the financial year 152,775 136,110 12,586 – 70,257 39,622 (35,525) (22,957) 200,093 152,775 PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 8 8 CONSOLIDATED BALANCE SHEET 25. SHARE-BASED PAYMENTS Set out below is a consolidated balance sheet at 30 June 2023 of the closed group consisting of Peet Limited and certain wholly owned subsidiaries. PEET EMPLOYEE SHARE OPTION PLAN (PESOP) AND PEET PERFORMANCE RIGHTS PLAN (PPRP) Current assets Cash and cash equivalents Receivables Inventories Total current assets Non-current assets Receivables Inventories Investments Right-of-use assets Property, plant and equipment Intangible assets Total non-current assets Total assets Current liabilities Payables Land vendor liabilities Borrowings Lease liabilities Other financial liabilities Current tax liabilities Provisions Total current liabilities Non-current liabilities Land vendor liabilities Borrowings Lease liabilities Other financial liabilities Deferred tax liabilities Provisions Restated 2022 $’000 2023 $’000 38,731 25,837 172,591 237,159 48,279 453,355 236,623 2,209 2,924 1,778 51,887 41,686 182,366 275,939 51,355 227,200 343,484 2,507 2,734 1,922 745,168 629,202 982,327 905,141 48,340 8,841 74,445 1,562 2,650 12,332 23,325 24,076 14,808 49,935 1,958 – 9,220 13,378 The establishment of the PESOP was approved by the Board and shareholders during the 2004 financial year and the Peet Limited PPRP was approved by shareholders at the 2008 AGM. Employees of any Group Company (including Executive Directors) will be eligible to participate in the PESOP and/or PPRP at the discretion of the Board. INVITATIONS TO APPLY FOR OPTIONS AND/ OR PERFORMANCE RIGHTS Eligible employees, at the discretion of the Board, may be invited to apply for options and/or performance rights on terms and conditions to be determined by the Board including as to: • the method of calculation of the exercise price of each option; • the number of options and/or performance rights being offered and the maximum number of shares over which each option and/or performance rights is granted; • the period or periods during which any of the options and/or performance rights may be exercised; • the dates and times when the options and/or performance rights lapse; • the date and time by which the application for options and/or performance rights must be received by Peet; 171,495 113,375 • any applicable conditions which must be satisfied or 12,277 204,296 1,249 4,688 19,962 745 19,554 221,143 1,766 3,161 17,120 150 circumstances which must exist before the options and/or performance rights may be exercised. Eligible employees may apply for part of the options and/or performance rights offered to them, but only in specified multiples. CONSIDERATION Total non-current liabilities 243,217 262,894 Unless the Board determines otherwise, no payment will Total liabilities Net assets Equity Contributed equity Reserves Retained profits Total equity 414,712 567,615 376,269 528,872 366,415 374,733 1,107 1,364 200,093 152,775 567,615 528,872 be required for a grant of options and/or performance rights under the PESOP and/or PPRP. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 8 9 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 25. SHARE-BASED PAYMENTS continued respect of the Company, or a resolution is passed or an VESTING AND EXERCISE CONDITIONS Under the plans, options and/or PRs only vest if the employees are still employed by the Group at the end of the vesting period, subject to the Board’s discretion, and any set performance hurdles have been met. order is made for winding up the Company. Options granted under the PESOP and performance rights under the PPRP carry no dividend or voting rights. LAPSE OF OPTIONS AND PERFORMANCE RIGHTS Generally, as a pre-condition to exercise, any exercise Unexercised options and/or performance rights will lapse conditions in respect of an option and/or performance right upon the earlier to occur of a variety of events specified in must be satisfied. However, the Board has the discretion the rules of the PESOP and PPRP including, on the date or to enable an option and/or performance right holder to in circumstances specified by the Board in the invitation, exercise options and/or performance rights where the failure to meet the options’ or performance rights’ exercise exercise conditions have not been met, including, for conditions in the prescribed period or on the expiry date example, where a court orders a meeting to be held in of options and/ or performance rights, as determined by relation to a proposed compromise or arrangement in the Board. FAIR VALUE OF OPTIONS AND PERFORMANCE RIGHTS GRANTED The fair value of an option and PRs at grant date is determined using a Black-Scholes option pricing model and the value of a performance right at grant date is determined using a Binomial pricing model. The models take into account the exercise price, the term of the option and/or performance right, the vesting and performance criteria, the impact of dilution, the non- tradeable nature of the option or performance right, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option and/or performance right. The inputs for assessing the fair value of the performance rights issued during the year under the PPRP were: Grant Date 26 Oct 22 Exercise Price Expiry date Share price at grant date Risk free interest rate $0.00 26 Oct 37 $1.10 2.99% Assessed fair value $0.87 The expected price volatility is based on the historic volatility (based on the remaining life of the options and/or performance rights), adjusted for any expected changes to future volatility due to publicly available information. Total expenses arising from share-based payment transactions recognised during the year as part of employee benefits expense is $3,439,209 (2022: $3,322,585). PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 9 0 Set out below are summaries of options and performance rights granted under the plans: Grant value date Expiry date Exercise Price $ Assessed fair value $ Balance at 1 July Granted during the year Exercised during the year Lapsed/ forfeited during the year Balance at 30 June Exercisable at 30 June – – – – – – – – – – – – – – – – – – – 30 June 2023 Options 30 Nov 07 Performance rights N/A $4.10 $1.12 1,200,000 21 Dec 30 21 Dec 31 21 Dec 31 5 Dec 32 5 Dec 32 21 Nov 33 21 Nov 34 19 Nov 35 16 Nov 36 26 Oct 37 – – – – – – – – – – $0.96 $0.80 $0.85 $1.33 $1.30 $0.94 91,036 1,065,114 580,682 349,739 255,970 904,344 $1.04 2,253,147 $0.94 3,243,407 $0.99 2,325,987 21 Dec 15 23 Nov 16 21 Dec 16 29 Nov 17 5 Dec 17 21 Nov 18 21 Nov 19 19 Nov 20 16 Nov 21 26 Oct 22 30 June 2022 Options 30 Nov 07 – (91,036) (1,065,114) (580,682) (349,739) (255,970) (904,344) (509,468) – – – – – – – – 1,200,000 1,200,000 – – – – – – – – – – – – 1,743,679 1,743,679 – – – (298,805) 2,944,602 (214,286) 2,111,701 – 3,193,501 – – – $0.87 – 3,193,501 11,069,426 3,193,501 (3,756,353) (513,091) 9,993,483 1,743,679 12,269,426 3,193,501 (3,756,353) (513,091) 11,193,483 2,943,679 N/A $4.10 $1.12 1,200,000 Performance rights 21 Dec 15 23 Nov 16 21 Dec 16 29 Nov 17 5 Dec 17 21 Nov 18 21 Nov 19 19 Nov 20 16 Nov 21 21 Dec 30 21 Dec 31 21 Dec 31 5 Dec 32 5 Dec 32 21 Nov 33 21 Nov 34 19 Nov 35 16 Nov 36 – – – – – – – – – $0.96 $0.80 $0.85 $1.33 $1.30 269,103 1,065,114 580,682 349,739 264,590 $0.94 2,097,201 $1.04 2,253,147 $0.94 3,243,407 $0.99 – 2,325,987 – (178,067) – – – (8,620) – – – – – – 1,200,000 1,200,000 91,036 91,036 1,065,114 1,065,114 580,682 349,739 255,970 (353,974) (838,883) 904,344 – – – – – – 2,253,147 3,243,407 2,325,987 580,682 349,739 255,970 904,344 – – – 10,122,983 2,325,987 (540,661) (838,883) 11,069,426 3,246,885 11,322,983 2,325,987 (540,661) (838,883) 12,269,426 4,446,885 26. MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR The Directors have declared a final fully franked dividend of 4.0 cents per share in respect to the year ended 30 June 2023. The dividend is to be paid on Monday, 16 October 2023, with a record date of Monday, 11 September 2023. No provision has been made for this dividend in the financial report as the dividend was not declared or determined by the directors on or before the end of the financial year. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 91 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 27. OTHER ACCOUNTING POLICIES Financial assets at amortised cost (debt instruments) A. FINANCIAL ASSETS INITIAL RECOGNITION AND MEASUREMENT Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through profit or loss. The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both of the following conditions are met: • The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and • The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding managing them. With the exception of trade receivables Financial assets at amortised cost are subsequently that do not contain a significant financing component or for measured using the effective interest (EIR) method and are which the Group has applied the practical expedient, the subject to impairment. Gains and losses are recognised in Group initially measures a financial asset at its fair value profit or loss when the asset is derecognised, modified or plus, in the case of a financial asset not at fair value through impaired. profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determined under AASB 15. In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level. The Group’s financial assets at amortised cost includes trade receivables, and loans to associates and JVs included under Receivables. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or The Group’s business model for managing financial assets repurchasing in the near term. Derivatives, including refers to how it manages its financial assets in order to separated embedded derivatives, are also classified as generate cash flows. The business model determines held for trading unless they are designated as effective whether cash flows will result from collecting contractual hedging instruments. Financial assets with cash flows cash flows, selling the financial assets, or both. SUBSEQUENT MEASUREMENT that are not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of the business model. Notwithstanding the For purposes of subsequent measurement, financial criteria for debt instruments to be classified at amortised assets are classified in four categories: • Financial assets at amortised cost (debt instruments) cost or at fair value through OCI, as described above, debt instruments may be designated at fair value through profit or loss on initial recognition if doing so eliminates, or • Financial assets at fair value through OCI with recycling significantly reduces, an accounting mismatch. of cumulative gains and losses (debt instruments) • Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments) • Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in the statement of profit or loss. This category includes loans to associates and joint ventures. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 9 2 IMPAIRMENT B. LEASES The Group recognises an allowance for expected credit For leases with a lease term greater than 12 months that losses (ECLs) for all debt instruments not held at fair value are not considered low value leases (see below), right-of- through profit or loss. ECLs are based on the difference use assets and associated lease liabilities are recognised at between the contractual cash flows due in accordance with the commencement of the lease. the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms. Right-of-use assets are measured at cost initially and then depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or ECLs are recognised in two stages. For credit exposures for before the commencement date less any lease incentives which there has not been a significant increase in credit risk received. Right-of-use assets are subject to impairment. since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL). The lease liability is initially measured at net present value of future lease payments using the Group’s incremental borrowing rate. The lease payments include fixed payments less any lease incentives receivable and variable lease payments that depend on an index or a rate. The lease payments are allocated between repayment of lease liability and interest expense (charged to profit or loss over the lease period). In addition, the carrying amount of For trade receivables and contract assets, the Group applies lease liabilities is remeasured if there is a modification or a a simplified approach in calculating ECLs. Therefore, the change in the lease term. For short-term leases and leases of low-value assets, lease payments are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 month or less. Low-value assets are generally small items of office equipment. Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. The Group considers a financial asset in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 9 3 Notes to the Consolidated Financial Statements For the year ended 30 June 2023 27. OTHER ACCOUNTING POLICIES continued E. TERMINATION BENEFITS C. INTANGIBLE ASSETS Intangible assets primarily consist of software and are shown at historical costs less depreciation. Depreciation on intangible assets is calculated using the straight-line method over their estimated useful lives as below. • Software – 5 years Where costs incurred to configure or customise Software- Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits because of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after balance date are discounted to as- a Service (SaaS) arrangements result in the creation of a resource which is identifiable, and where the company has present value. the power to obtain the future economic benefits flowing F. GOODS AND SERVICES TAX (GST) 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. The amortisation is reviewed at least at the end of each reporting period and any changes are treated as changes in accounting estimates. Where costs incurred to configure or customise do not result in the recognition of an intangible software asset, then those costs that provide the Group with a distinct service (in addition to the SaaS access) are now recognised as expenses when the supplier provides the services. D. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are shown at historical cost Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating less depreciation. Historical cost includes expenditure that cash flows. is directly attributable to the acquisition of the items. Depreciation on property, plant and equipment is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives, as follows: • Fixtures and fittings – 3 to 10 years G. GOVERNMENT GRANTS Government grants are recognised where there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs • Leasehold improvements – 10 years are expensed. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date. 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 proceeds with carrying amount. These are included in the statement of profit or loss. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 9 4 H. PARENT ENTITY FINANCIAL INFORMATION TAX CONSOLIDATION LEGISLATION Peet Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation as of 1 July 2003. Peet Limited is the head entity of the tax consolidated group. Members of the group are taxed as a single entity and the deferred tax assets and liabilities of the entities are set-off in the consolidated financial statements. I. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE Other than below amendments, there are no new and amended accounting standards that are not yet effective and that are expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions. AMENDMENTS TO IAS 1: CLASSIFICATION OF The entities in the tax consolidated group entered into a LIABILITIES AS CURRENT OR NON-CURRENT In January 2020 and October 2022, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non- current. The amendments are effective for annual reporting periods beginning on or after 1 January 2024 and must be applied retrospectively. The Group is currently assessing the impact the amendments will have on current practice. However, the Group does not expect a material impact based on current arrangements and this will assessed at each balance date going forward. tax sharing agreement which limits the joint and several liability of the wholly-owned entities in the case of a default by the head entity, Peet Limited. At the balance sheet date the possibilities of default were remote. Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from or payable to other entities in the Group. Any difference between the amount assumed and amounts receivable or payable under the tax funding agreement are recognised as a contribution to (or distribution from) the wholly-owned entity. INVESTMENTS IN SUBSIDIARIES Investments in subsidiaries are accounted for at cost in the separate financial statements of Peet Limited. Such investments include both investments in shares issued by the subsidiary and other parent entity interests that in substance form part of the parent entity’s investment in the subsidiary. These include investments in the form of interest-free loans which have no fixed repayment terms and which have been provided to subsidiaries as an additional source of long-term capital. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 9 5 Directors’ Declaration Year ended 30 June 2023 In the Directors’ opinion: a. the financial statements and notes set out on pages 59 to 95 are in accordance with the Corporations Act 2001, including: i. complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and ii. giving a true and fair view of the Consolidated Entity’s financial position as at 30 June 2023 and of its performance for the financial year ended on that date; and b. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and c. at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group identified in note 24 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee described in note 24. Note 2 discloses that the financial statements and notes also comply with International Financial Reporting Standards. The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the Directors. Brendan Gore Managing Director and Chief Executive Officer Perth, Western Australia 23 August 2023 PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 9 6 Independent Auditor’s Report PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 97 Independent Auditor’s Report PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 9 8 PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 9 9 Independent Auditor’s Report PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 10 0 PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 101 Independent Auditor’s Report PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 10 2 PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 10 3 Securityholder Information DISTRIBUTION OF ORDINARY SHARES As at 29 August 2023 there were 2,131 current holders of ordinary shares and these holdings were distributed in the following categories: 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 % of Issued Shares 561 582 317 592 79 2,131 0.03 0.37 0.52 3.75 95.33 100.00 There were 404 shareholdings of less than a marketable parcel of $500 (414 shares). SHAREHOLDERS The names of the 20 largest holders of ordinary shares as at 29 August 2023 are listed below. Number of Shares Held % of Shares Held 86,582,433 74,912,544 49,862,654 38,984,384 37,794,964 20,703,836 18,913,127 18,152,705 17,459,881 12,707,352 11,927,977 8,656,230 7,278,678 7,240,842 5,000,000 4,543,295 3,252,090 1,877,764 1,872,758 1,528,344 429,251,858 42,011,568 471,263,426 18.37 15.90 10.59 8.27 8.03 4.39 4.01 3.85 3.70 2.70 2.53 1.84 1.54 1.54 1.06 0.96 0.69 0.40 0.40 0.32 91.09 8.91 100.00 Name Scorpio Nominees Pty Ltd Citicorp Nominees Pty Limited HSBC Custody Nominees (Australia) Limited J P Morgan Nominees Australia Pty Limited HSBC Custody Nominees (Australia) Limited – A/C 2 Hurose Pty Ltd PM Nominees C Pty Ltd Argo Investments Limited Mr Warwick Donald Hemsley Ian Murray Charles Palmer + Helen Christina Palmer National Nominees Limited Golden Years Holdings Pty Ltd UBS Nominees Pty Ltd Mr Brendan David Gore Mirrabooka Investments Limited BNP Paribas Noms Pty Ltd Netwealth Investments Limited BNP Paribas Nominees Pty Ltd Neweconomy Com Au Nominees Pty Limited <900 Account> Mr Julian Charles Peet Total for 20 largest shareholders Total other shareholders Total ordinary shares on issue PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 10 4 SUBSTANTIAL SHAREHOLDERS As disclosed in substantial holding notices lodged with ASX (as applicable) as at 29 August 2023: Date of Last Notice Received Number of Shares Held % of Issued Shares Held 1 13 November 2018 99,156,523 14 August 2020 88,722,096 13 June 2023 39,277,916 7 June 2022 28,624,760 18 April 2023 24,159,122 20.50 18.36 8.33 5.95 5.12 Name Scorpio Nominees Pty Ltd and its associates Allan Gray Australia Pty Ltd and its associates L1 Capital Pty Ltd Regal Funds Management Pty Ltd and its associates Retail Employees Superannuation Pty Limited as trustee for the Retail Employees Superannuation Trust 1. Percentage of issued shares held as at the date notice provided. VOTING RIGHTS OF ORDINARY SHARES The constitution provides for votes to be cast: • on a show of hands, one vote for each shareholder; and • on a poll, one vote for each fully paid ordinary share. SECURITIES EXCHANGE LISTINGS Peet Limited’s ordinary shares are listed on the Australian Securities Exchange (“ASX”). The Company’s ASX code is PPC. OPTIONS AND PERFORMANCE RIGHTS As at 29 August 2023, Peet Limited had 1,200,000 options on issue, held by one key management person, as disclosed elsewhere in the Annual Report. As at 29 August 2023, Peet Limited had 9,721,107 performance rights on issue, held by a total of nine KMP and other senior managers. These options and performance rights, which are not listed, were issued under the PESOP and PPRP, respectively. PEET BONDS As at as at 29 August 2023, Peet Limited had 75,000 unsecured and unsubordinated, 6.75% fixed-rate bonds on issue, with a maturity date of 7 June 2024 and 75,000 unsecured and unsubordinated floating rate bonds on issue, with a maturity date of 30 September 2026. Bondholders are not entitled to vote at general meetings, however, are entitled to vote on certain matters that affect their rights under the bonds’ Trust Deed. The bonds were issued to professional and sophisticated investors and are not listed. WEBSITE ADDRESS www.peet.com.au The Peet Limited website offers the following features: • investor relations page with the latest Company announcements; • news service providing up to date information on the Company’s activities and projects; and • access to annual and half year reports. PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 10 5 Corporate Directory PEET LIMITED A.B.N. 56 008 665 834 Website Address – www.peet.com.au DIRECTORS Tony Lennon, FAICD, Non-executive Chairman Brendan Gore, BComm, FAICD, FCPA, FCIS, FGIA, Managing Director and Chief Executive Officer Anthony Lennon, BA, Grad Dip Bus Admin, Non-executive Director Trevor Allen, BComm (Hons), CA, FF, FAICD, Non-executive Director Vicki Krause, BJuris LLB W.Aust, GAICD, Non-executive Director (retiring on 25 October 2023) Robert McKinnon, FCPA, FCIS, FGIA, MAICD, Non-executive Director (retiring on 25 October 2023) Margaret Kennedy, BComm, GAICD, Non-executive Director Michelle Tierney, B.Arts Journalism & Communication, Post Grad Dip. Bus Admin., MBA, GAICD, Non-executive Director Greg Wall AM, MA, GAlCD FFlN, Non-executive Director GROUP COMPANY SECRETARY Dom Scafetta, BComm, CA REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS 7th Floor, 200 St Georges Terrace Perth, Western Australia 6000 Tel. (08) 9420 1111 SHARE REGISTER Computershare Investor Services Pty Limited Level 17, 221 St Georges Terrace Perth, Western Australia 6000 Tel: (08) 9323 2000 AUDITOR Ernst & Young Ernst & Young Building 11 Mounts Bay Road Perth, Western Australia 6000 PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 10 6 Notes PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 107 Notes PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 10 8 Notes PEE T L IMIT ED | A NNUA L REPOR T 2 0 2 3 | 10 9 Peet Limited ACN 008 665 834 Level 7, 200 St Georges Terrace Perth WA 6000 Telephone +61 8 9420 1111 | Facsimile +61 8 9481 4712 www.peet.com.au Perth | Melbourne | Brisbane | Canberra | Adelaide 

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