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Centuria Capital Group Annual Report 2021

Centuria Capital Group – Annual Report 2021[| ] A

Contents	Contents
01	About Centuria
02	Our values and capabilities
04	Vision & Strategy
05	Australasian Real Estate Platform
08	Chairman’s Report
10	Key Metrics
12	Joint CEO Report
18	Key Financial Metrics
20	Expanding Our Funds Management Platform
23	Major direct real estate and corporate acquisitions
24	Proven growth through corporate initiatives
26	Leveraging strong capital transaction and
	asset management capabilities
28	Development pipeline
30	Real estate funds management platform
32	Sustainability at Centuria
36	Board of Directors
39	Senior Executives
44	Centuria’s people
47	Directors’ Report
69	Lead Auditor’s Independence Declaration
72	Financial Statements
117	Directors’ Declaration
118	Independent Auditor’s Report
124	Corporate Governance Statement
126	Additional Stock Exchange Information
127	Corporate Directory & Disclaimers

A C K N O W L E D G E M E N T O F C O U N T RY

Our group manages property throughout Australia and New Zealand. Accordingly, Centuria pays its respects to the traditional owners of the land in each country, to their unique cultures and to their elders past and present.

The artwork on the cover of this report was commissioned by Centuria and created by Toby Bishop, a young Kungarakan artist who lives on the South Coast of NSW. The design uses dots and lines to represent tracks and journeys. It depicts people walking in similar directions towards a positive future.

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B[| ] Centuria Capital Group – Annual Report 2021

About Centuria

Centuria Capital Group (ASX: CNI) is a leading Australasian fund manager included in the S&P/ASX 200 Index (GICS code – Diversified Real Estate), formed over 23 years ago.

We are a specialist, external funds manager with a suite of investment products include listed and unlisted real estate funds, investment bonds and more latterly real estate debt.

By FY21 close, CNI grew to $17.4billion¹ of assets under management, of which, 95% comprises real estate funds across industrial, healthcare, decentralised office, agriculture, large-format retail and daily-needs retail sectors within Australia and New Zealand.

Centuria is the manager of Australia’s largest listed pure-play industrial and office REITs, Centuria Industrial REIT (ASX: CIP) and Centuria Office REIT (ASX: COF), and New Zealand diversified listed REIT, Asset

Plus Limited (NZX: APL). CIP and COF are included in the S&P/ASX 200 and 300 Indices, respectively. CIP and COF are also included in the FTSE EPRA Nareit Global Index, enabling them to be readily compared with international peers. Collectively, the listed REITs comprised a $5.5billion platform.

Centuria’s $11billion unlisted real estate funds platform includes a series of singleasset funds, multi-asset closed funds and multi-asset open ended funds. Significantly, the breadth of these funds expanded during the year following the merger of Perthbased, Primewest Group, which increased the Group’s portfolio weighting in West Australia. Additionally, the Group services four institutional mandates, collectively totalling $2.3billion.

Centuria further diversified its product suite through a 50% acquisition of Bass Capital, now known as Centuria Bass Credit, which provides unlisted real estate debt fund opportunities to high net worth investors.

The corporate expansion of the Group through the Primewest and Bass acquisitions, has allowed Centuria to expand into new asset classes and increase the geographic reach of its platform.

In addition, during FY21, Centuria acquired a record $2.5billion² of real estate for the various funds it manages. These properties were throughout Australia and New Zealand and were in each of the asset classes described above.

Centuria was active in acquiring healthcare real estate assets which support the growth of Centuria Healthcare (established following the 63% acquisition of Heathley Limited in 2019) and Centuria New Zealand (following the 2020 acquisition of Augusta Capital).

Throughout FY21, Centuria’s investment bond platform increased its fund options by 25% while increasing its adviser approved product lists by 85%, which has expanded its assets under management to $0.9billion.

With a 23-year track record, Centuria continues to provide compelling investment products to its broad network of investors.

A strong start to FY22 has resulted in CNI’s assets under management increasing to more than $18billion³. Real estate funds management continues to underpin CNI’s external funds management platform, comprising of more than $17billion of AUM that is split between approximately $6billion of listed real estate and $11billion of unlisted real estate.

1 Includes commenced development projects valued on an as if completed basis, cash and other assets, assets exchanged but not settled

2 Includes Primewest acquisitions post April 2021 merger announcement. Includes assets exchanged but not settled

3 AUM as at 30 September 2021. All figures above are in Australian dollars (currency exchange ratio of AU$1.000:NZ$1.0486). Numbers presented may not add up precisely to the totals provided due to rounding. Includes commenced development projects valued on an as if completed basis, cash and other assets, assets exchanged but not settled. Does not include assets exchanged post 30 September 2021

CENTURIA CAPITAL (CNI) FUNDS MANAGEMENT PLATFORM

bn $17.4 GROUP ASSETS UNDER MANAGEMENT (AUM) 30 JUNE 2021

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$16.5bn REAL ESTATE AUM [1]
$5.5bn $11.0bn $0.9bn
LISTED REAL ESTATE UNLISTED REAL ESTATE INVESTMENT BONDS
CENTURIA LIFE
$3.1bn $2.1bn $0.3bn $7.9bn $1.6bn $1.5bn INVESTMENT BONDSCENTURIA
CENTURIA CENTURIA ASSET PLUS SINGLE MULTI MULTI
INDUSTRIAL REIT OFFICE REIT LIMITED ASSET ASSET CLOSED ASSET OPEN GUARDIAN FRIENDLY
ASX:CIP ASX:COF NZX:APL FUNDS ENDED FUNDS END FUNDS SOCIETY
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Note: AUM as at 30 June 2021. All figures above are in Australian dollars (currency exchange ratio of AU$1.000:NZ$1.0753) Numbers presented may not add up precisely to the totals provided due to rounding

1 Includes commenced development projects valued on an as if completed basis, cash and other assets, assets exchanged but not settled

2 Based on the respective close prices for COF, CIP and APL at Wednesday, 30 June 2021. Includes ownership by associates of Centuria Capital Group

$1.1bn

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ON BALANCE SHEET
$250m
CASH ON HAND
Centuria Office
(ASX:COF)
$240m (19.9%) [2]
Centuria Industrial
(ASX:CIP)
$350m (17.1%) [2]
Asset Plus
(NZX:APL)
$612m $22m (19.9%) [2]
Primewest unlisted
real estate
$30m
Centuria unlisted
real estate and debt
$162m
Centuria properties
$246m held for development
$54m
LISTED CO- INVESTMENTS
UNLISTED CO- INVESTMENTS
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Centuria Capital Group – Annual Report 2021[| ] 01

Our values and capabilities

WE ARE HONEST, TRANSPARENT & RESPECTFUL

WE WORK & THRIVE AS AN INTEGRATED & AGILE TEAM

WE SUPPORT EACH OTHER TO GROW

WE DO WHAT IT TAKES

As Centurians, we take pride in how we develop strong and lasting relationships within our business and with our investors, tenants, and partners. We do this in how we communicate with, support, and respect one another.

At Centuria, we are bigger than the individual parts. We embrace diversity and collaborate with colleagues and partners to achieve success.

We seek opportunities to encourage personal development and support collective growth. We reward and celebrate success and like to promote from within.

We love challenges and finding unique ways to solve problems. We have a focus on growth and a commitment to always act ethically and in the best interests of our stakeholders.

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02[| ] Centuria Capital Group – Annual Report 2021

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LISTED: 2 WOOLWORTHS WAY, WARNERVALE, NSW
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WE ARE HONEST, WE WORK & THRIVE
TRANSPARENT & AS AN INTEGRATED
RESPECTFUL & AGILE TEAM
WE DO WHAT WE SUPPORT EACH
IT TAKES OTHER TO GROW
OPERATION TRANSAC
O T
C I
T ON
N A
RE L
A V
E
L
P
S
N O
A CI
T
Y
R
T
N T
OIT ROH
C O
A U
R G
E H
T
N P
I R
L O
ANO SEC
SREP S
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Centuria Capital Group – Annual Report 2021[| ] 03

V I S I O N

A leading Australasian property funds manager

Our people are leaders in their field throughout Australia and New Zealand. We leverage our geographic diversity, our in-depth market knowledge in favoured sectors, and our access to capital to grow funds under management with a strong focus on earnings growth.

E X E C U T I O N

SIX MAJOR REAL ESTATE ASSET CLASSES

We utilise our balance sheet to support expansion across healthcare, large format retail, daily needs retail, office and industrial markets

STRONG DISTRIBUTION NETWORK

Service and further realise the potential of our market-leading retail investor network across east and west coast Australia and New Zealand

DELIVER RECURRING REVENUES, UNLOCK PERFORMANCE FEES

Strong recurring revenue fees underpin distributions

Realise underlying performance fees embedded in unlisted funds

PLATFORM EXPANSION

Expand the Australia and NZ unlisted platforms.

Maintain strong A-REIT presence. Initiate new vehicle(s) based on sector, scalability and market viability.

GROWTH

OPPORTUNITIES

Utilise expanded Capital Transactions team to identify and execute on direct real estate opportunities Select corporate acquisitions where accretive

C L E A R & S I M P L E T H E M E S

Deliver income and capital growth from carefully selected, highgrowth asset sectors to a broad range of Centuria investor profiles

Committed to building Centuria’s brand and portfolios throughout Australia and NZ

CNI platform now highly scalable with ASX 200 index inclusion

Focus on long term, predictable earnings growth

Increased alignment to alternative’s including Healthcare and Agriculture while building out traditional Industrial, Office and Retail markets

Further diversify capital sources – grow $2.3 billion institutional mandates

LISTED/UNLISTED: 203 PACIFIC HIGHWAY, ST LEONARDS, NSW

04[| ] Centuria Capital Group – Annual Report 2021

Australasian real estate platform

Real estate platform expansion to $16.5B ¹ | +106% over FY21

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Geographies

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Asset Sectors Geographies
$16.5B AUM
0.1 Agriculture $16.5B AUM
0.8 Other² 0.1 Other³
1.1
Healthcare 2.2
1.3
Large format retail New Zealand
1.3 14.2
Daily needs retail
4.8
$8.0B
0.2 $8.0B
0.6
0.1 0.2 Industrial 1.7
2.2 7.1
6.3
4.6
Office Australia
FY20 FY21 FY20 FY21
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Fund Types Capital Sources
$16.5B AUM
$16.5B AUM
1.5
Multi asset open
ended funds 1.7
1.6 Unlisted
Multi asset closed institutional
ended funds
4.7
5.5
Unlisted
$8.0B 4.6 wholesale
Listed REITS
0.6 7.9 $8.0B
0.5
4.0
0.3 Unlisted
3.7 retail
5.5
4.0
2.9
Single asset funds Listed REITS
FY20 FY21 FY20 FY21
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Note: AUM as at 30 June 2021. All figures above are in Australian dollars (currency exchange ratio of AU$1.000:NZ$1.0753). Numbers presented may not add up precisely to the totals provided due to rounding

1 Includes commenced development projects valued on an as if completed basis, cash and other assets, assets exchanged but not settled

2 Includes Centuria Bass, tourism, shopping centres and land syndicates in the US, NZ and WA

3 Includes US syndicates from Primewest merger

Centuria Capital Group – Annual Report 2021[| ] 05

Enhanced sector diversifcation creates new growth opportunities $16.5B REAL ESTATE PLATFORM1,2	Enhanced sector diversifcation creates new growth opportunities $16.5B REAL ESTATE PLATFORM1,2	Enhanced sector diversifcation creates new growth opportunities $16.5B REAL ESTATE PLATFORM1,2	Enhanced sector diversifcation creates new growth opportunities $16.5B REAL ESTATE PLATFORM1,2

OFFICE $7.1B AUM 43% FY21	INDUSTRIAL $4.8B AUM 29% FY21			INDUSTRIAL $4.8B AUM 29% HEALTHCARE $1.1B AUM ~~7%~~ FY21
		DAILY NEEDS RETAIL (‘DNR’) $ 1.3B AUM 8% FY21
58% FY20	28% FY20	2% FY20	1% FY20	8% FY20

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UNLISTED: 1521 FOREST ROAD, ORANGE, NSW
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06 [| ] Centuria Capital Group – Annual Report 2021
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A $16.5bn leading Australasian real estate platform[1]

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NT
QLD
WA
SA
NSW
ACT
North
Island
VIC
South
TAS
Island
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New South Wales

$2,990m ACROSS 70 PROPERTIES

Queensland

$2,845m ACROSS 82 PROPERTIES

Victoria

$2,778m ACROSS 56 PROPERTIES Western Australia $3,992m ACROSS 111 PROPERTIES

ACT

$469m ACROSS 6 PROPERTIES South Australia

$631m ACROSS 19 PROPERTIES Tasmania

$21m ACROSS 2 PROPERTIES

Auckland

$1,581m ACROSS 39 PROPERTIES Other New Zealand $580m ACROSS 28 PROPERTIES

Note: Figures as at 30 June 2021. All figures above are in Australian dollars (currency exchange ratio of AU$1.000:NZ$1.0753) Numbers presented may not add up precisely to the totals provided due to rounding. Summary excludes Centuria Bass AUM and US syndicates from Primewest merger 1 Includes commenced development projects valued on an as if completed basis, cash and other assets, assets exchanged but not settled

Centuria Capital Group – Annual Report 2021[| ] 07

Chairman’s report

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GARRY CHARNY Chairman

Dear Investor,

On behalf of the Board, it is my pleasure to introduce Centuria Capital Group’s 2021 annual report.

As I write this report, the fog of COVID-19 seems to be lifting and work will be able to return to normal or, at least, the new normal. That will be a blessing as FY 2021 presented its own source of unique travails and challenges- which I am pleased to say the Group as a whole has dealt with resolutely and successfully.

THE YEAR THROUGH COVID-19

Centuria benefitted from a strong start to FY21, which continued as we saw some early signs of the pandemic unwinding however this proved a little optimistic as the year progressed and much of Australia soon endured lockdowns or State isolation by the year end.

As a group we reflected on how best to execute our long-term goals in these conditions. Whilst business confidence in certain sectors was diminished, Centuria’s portfolio, whilst diverse, suffered limited exposure to the worst-affected asset classes. Our decentralised office assets have proven very resilient, and we while we were pleased to support the State and Federal government initiatives to provide rental support to, for example, small retail premises within our office investments vacancy was low and revenues continued to be strong.

Our Industrial portfolio benefitted from a massive swing towards logistics investment as Australia moved to online purchasing and supply chain infrastructure was identified as the sector most likely to benefit. The decision to enter the industrial sector in 2017 has turned out to be remarkably prescient with CIP our industrial manager-REIT becoming a class leader and making a record level of acquisitions in FY21.

In addition to organic growth we continued with our multi-faceted approach by completing the acquisition of the Perth-based Primewest Group, and a 50% acquisition of unlisted credit fund provider Bass Capital (now known as Centuria Bass Credit). Primewest , in particular, brought us a successful complementary business driven by likeminded principals, with a geographic emphasis in the west. Centuria has now become a true Australasian entity.

PERFORMANCE

Centuria’s strong performance and growth was recognised with the Group’s milestone inclusion in the S&P/ASX200 Index inclusion (July 2021), GICS re-classification to Diversified Real Estate (September 2020) and MSCI small cap index inclusion (November 2020).

Throughout the 2021 Financial Year, the Group doubled its Assets Under Management (AUM) to $17.4billion¹ (+98% on FY20). More specifically, across our real estate platform, unlisted funds increased 175% to $11 billion while listed fund increased 37% to $5.5 billion. This is in addition to our investment bonds business contributing a steady $0.9 billion.

The Group continued to broaden its investment product offering with the launch of six unlisted funds, expanding its development pipeline to $1.9 billion² and branched into new asset classes including agriculture, Large Format Retail (LFR) and Daily Needs Retail (DNR), via our merger with Primewest.

Additionally, Centuria Industrial REIT (ASX: CIP) was included in the Financial Times Stock Exchange (FTSE) European Public Real Estate Association (EPRA) National Association of Real Estate Investment Trusts (Nareit) Global Real Estate Index in June 2021 with Centuria Office REIT (ASX: COF) included in September 2021.

Since year end, the Centuria Office REIT (ASX: COF) has also been admitted to the EPRA Nareit index. The FTSE EPRA Nareit inclusion enables our REITs to be more easily compared to international peers. The Augusta Capital business has now been fully integrated and has made a strong contribution to FY21 earnings. We have a strong commitment to our New Zealand platform (now renamed Centuria NZ) and we are grateful to the New Zealand team which is ably led by local CEO Mark Francis. Mark and the co-founder of Augusta, Bryce Barnett, contribute strongly to our group strategy and earnings.

08[| ] Centuria Capital Group – Annual Report 2021

ESG

Our Environmental, Social and Governance (ESG) initiatives continue to be a critical focus of attention during FY21.

Prior to our AGM we will deliver our first Sustainability Report, which will outline in detail our framework and ongoing commitments. The Report will, inter alia, highlight the Group’s:

Support for the Taskforce on Climate-Related Financial Disclosure (TCFD) recommendations
Continued diversity drive including its membership of the Diversity Council of Australia; and
Commitment to delivering sustainable properties with high Greenstar and NABERS ratings through our $1.9billion development pipeline and maximising sustainability in our existing portfolio.

During FY22, the Group will continue to focus on wider sustainability initiatives across our New Zealand and Western Australian portfolios and we note that:

COF has achieved an average portfolio 4.7-star NABERS energy rating and 3.2-star NABERS water rating
CIP delivered one of Australia’s first 5-Star Green Star Design & As-Built ratings under the new version 1.3 guidelines for its recently completed industrial facility in Bundamba, QLD.

CULTURE, GOVERNANCE AND DIVERSITY

As part of our ESG initiatives, Centuria is pleased to report it has further diversified its Board and Responsible Entity Boards. This year we welcomed Kristie Brown to the Centuria Capital Group Board (CNI), which now has a 29% female representation. Gender and diversity remain a critical focus throughout the organization as we continue to make improvements.

We also welcomed Nicole Green to the Centuria Property Funds Limited’s (CPFL) Board and Jennifer Cook to Centuria Property Funds No.2 Limited’s (CPF2L) Board. These Responsible Entity Boards are led by independent chairmen, Matthew Hardy and Roger Dobson, respectively.

Finally, Natalie Collins, a current CPF2L member has kindly agreed to also join the Centuria Healthcare Asset Management Limited Board.

After eight years with Centuria, Nicholas Collishaw stepped down as a non-executive director of CNI and its responsible entities on 30 August 2021. Nick remains a good friend of Centuria, we thank him for his invaluable contribution and wish him well in all his future endeavours.

Last, but certainly not least, during FY21 Centuria established a Culture and ESG Board Committee comprising independent non-executive directors, which complements the existing ESG management committee. This Board Committee will help drive policy and culture across the entire Group including the fundamental areas of diversity and inclusion, climate initiatives, employee engagement and satisfaction, modern slavery, and related issues and is led by CNI Independent Non-Executive Director, Susan Wheeldon.

MANAGEMENT AND INTEGRATION

Centuria’s New Zealand team has now been fully integrated into the Group. Already the New Zealand platform expanded by 35% within FY21 to $2.3billion in assets under management (AUM). The Board and I would like to congratulations to Mark Francis, Centuria NZ CEO, and his team for such a successful first year within the Group, again in trying circumstances.

Equally, the Board and I warmly welcome our new West Australian team. The transfer of all Primewest securities completed on 19 July 2021 and integration into the wider Group is well underway. Since our off-market offer in April 2021 until 30 June 2021, Primewest’s AUM expanded 12% to $5.6billion. The organisation built by David Schwartz, John Bond and Jim Litis is a testament to their abilities and we appreciate the trust they have shown us in becoming part of a bigger and hopefully better group.

We warmly welcome our new Centuria Bass Credit colleagues who have joined our Sydney and Melbourne offices. Founders Giles Borten and Nicholas Goh bring a wealth of experience across unlisted, non-bank credit funds, which further broadens Centuria’s suite of unlisted vehicles.

Emphasising the breadth of our offering, during the year, Centuria Healthcare continued to grow from under the direction of managing director, Andrew Hemming. Our healthcare portfolio expanded 35% during FY21 to $1.1billion. We congratulate Andrew and the healthcare team for delivering a strong performance. Centuria retains a 64% interest in Centuria Healthcare following our investment in the original Heathley Limited entity in 2019.

I would also like to congratulate Ross Lees in his role as Head of Funds Management, for the exceptional work his has done on our core office and industrial assets.

CONCLUSION

Finally, the Board thanks you, our loyal investors, for your commitment to Centuria – not only throughout this financial year but the many years we have benefited from your support. We do not take that support lightly and we strive to make Centuria not only a leader in our sector but a company that better reflects the values and mores of modern society.

I would also like to thank my fellow Board members and Responsible Entity Board members for your commitment and leadership throughout this unchartered, pandemic-impacted environment. Not least of all, my thanks also to the Senior Management team who has been at the coalface of it all. in this trying year. In particular, our joint CEO’s whose complementary skills and dedication have ensured another successful year of growth.

With rising vaccination rates and lifting of restrictions, we remain optimistic the effects of COVID will diminish throughout Australia and New Zealand. Australia has benefited from a remarkably resilient economy throughout FY21 and Centuria remains well-poised for future growth throughout FY22.

We look forward to welcoming you all to Centuria’s upcoming Virtual AGM on in late November 2021.

GARRY CHARNY Chairman

1 Includes commenced development projects valued on an as if completed basis, cash and other assets, assets exchanged but not settled

2 Development projects and development capex pipeline, including fund throughs

Centuria Capital Group – Annual Report 2021[| ] 09

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LISTED: ARNOTT’S, 23-41 GALWAY
AVENUE, MARLESTON, SA
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10[| ] Centuria Capital Group – Annual Report 2021

1 AUM as at 30 June 2021. Includes commenced development projects valued on an as if completed basis, cash and other assets, assets exchanged but not settled

2 Source: Moelis Australia. Based on movement in security price from ASX closing on 1 July 2020 to ASX closing on 30 June 2021 plus distributions per security paid during the respective period(s) assuming re-investment of all distributions. Past performance is not a reliable indicator of future performance

3 Operating EPS (OEPS) is calculated based on the Operating NPAT of the Group divided by the weighted average number of securities

4 Initial FY21 Distribution per security (DPS) guidance of 8.5 cents announced on 12 August 2020. FY21 DPS guidance upgraded to

9.0cps on 22 October 2020. FY21 DPS guidance upgraded to 10.0cps on 10 February 2021

5 Includes Primewest acquisitions post April 2021 merger announcement. Includes assets exchanged but not settled

6 Development projects and development capex pipeline, including fund throughs

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Centuria Capital Group – Annual Report 2021[| ] 11

Joint CEOs letter

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JASON HULJICH Joint CEO

JOHN MCBAIN

Joint CEO

Dear Security Holder,

It is our pleasure to present the 2021 Centuria Capital Group Annual Report.

Despite challenges arising from the Covid-19 pandemic, including State lockdowns and border closures, Centuria delivered a strong FY21 performance.

By year end the Group doubled its assets under management (AUM) to $17.4 billion¹ (+98% on FY20), integrated two new corporate acquisitions and acquired $2.5 billion² in direct real estate on behalf of our funds management vehicles. These totals have continued to grow during FY22.

The financial year was bookended with the start of FY21 seeing COVID affects unwind only to end with restrictions re-introduced. Whilst these headwinds affected all businesses, Centuria’s performance proved highly resilient, owing in part to its geographic dispersion, with operating offices across Queensland, New South Wales, Victoria, New Zealand and now Western Australia. This meant our teams could continue to effectively asset manage within their jurisdiction as well as inspect and transact on potential acquisitions.

This flexibility enabled us to continue to execute our growth strategy with corporate acquisitions providing expansion into new markets, where we have built Centuria market share by adding new funds management businesses, which have a proven asset acquisition and distribution capability.

During the period, we completed the integration of Centuria New Zealand (formerly Augusta Capital), which expanded its AUM by 35% to $2.3billion with the support of the Group’s strong balance sheet

In April, Centuria completed an off-market merger with Western Australia based property fund manager Primewest Group. Primewest’s AUM increased 12% to $5.6billion by year end and the integration of this business is near completion.

Pleasingly, this business has continued to perform strongly into FY22 and the quality of assets it has executed on coupled with the investment capacity of its loyal investor base, has fully vindicated the decision to combine the businesses.

12[| ] Centuria Capital Group – Annual Report 2021

In April, we acquired 50% of real estate credit funds provider, Bass Capital, which is now known as Centuria Bass Credit. This entity contributed $0.4 million to the Group’s FY21 operating earnings, as part of the group’s new Development Finance business segment, and has performed well to date in FY22 in favourable market conditions.

FY21 also saw Centuria diversify its capital sources with the issuance of our first listed debt notes – Centuria Capital No.2 Fund (ASX: C2FHA). The notes mature in 2026, raised $190 million and the listed security has performed positively at a premium to issue price to date.

Combined corporate and funds management activity culminated in the Group delivering a 62% - 12-month Total Shareholder Return³, outperforming the S&P/ASX 200 Index (+27.8%) and the S&P/ASX200 AREIT Index (+33.2%). Centuria delivered a total securityholder return of 130% over the three-year period FY19 - FY21 outperforming the wider S&P/ASX 200 Index (ASX: XJO) by circa 105%.

During FY21 Centuria Capital was included in the S&P/ASX200 Index. The Centuria Industrial REIT (ASX: CIP) was also included in the Financial Times Stock Exchange (FTSE) European Public Real Estate (EPRA) National Association of Real Estate Investment Trusts (Nareit) Global Developed Index. Inclusion in the FTSE EPRA Nareit enables CIP to be more easily compared with its international peers. The Centuria Office REIT (ASX:COF) was admitted to the EPRA Nareit Global Developed Index post FY21 in September this year.

SOCIAL AND ENVIRONMENTAL CONSIDERATIONS

Centuria takes its role as a responsible corporate steward very seriously. During FY21, the Board and management made a concerted effort to increase focus on our social, environmental and governance initiatives. In executing on this commitment during FY21 we appointed a General Manager - Sustainability who of course comprises a significant additional member of the existing Management ESG Committee.

During FY21, Centuria established a Culture and ESG Board Committee comprising a majority of non-executive directors and chaired by CNI non-executive director Susan Wheeldon. The board through these committees directly oversees Centuria’s ESG policies including Modern Slavery, diversity and inclusion, employee engagement, climate change and related issues.

This year Centuria releases its first Sustainability Report alongside our Sustainability Framework. These documents detail how the entire Centuria Group intends to approach and collaborate with our investors and tenants, our response to climate change and our community endeavours.

The Sustainability Report will be released prior to our 2021 Annual General Meeting and will be available on the Centuria website.

FINANCIAL RESULTS

During FY21, the Group delivered a $143.5 million⁴ Statutory Net Profit After Tax with a $70.2 million⁵ operating NPAT. Operating profit attributable to property funds management increased 40% to $45.9 million.

Operating Earnings Per Security⁶ (OEPS) of 12.0 cents along with a distribution of 10.0 cents per stapled security, were underpinned by continued growth in recurring revenues accounting for 92% of total Group revenues (FY20: 86%). FY21 OEPS, was delivered with reduced contributions by performance fees as a source of operating revenues, reflecting the Group’s focus on achieving scale and improving margins.

Centuria Group’s total operating revenues rose 40% to $212.7 million and Operating Profit After Tax rose 32% to $70.2 million⁵. The merger of Primewest strengthened the Group’s balance sheet, with net asset value per security⁷ increasing from $1.44 to $1.92 during the year.

As at 30 June 2021, cash reserves increased to almost $250 million, representing an operating gearing ratio⁸ of 3.9%. The strong cash on hand provides the Group with flexibility to consider future platform growth opportunities and continued support for our unlisted property funds.

Balance sheet flexibility increased as a result of the $198.7million listed notes issuance, which repaid a portion of Centuria’s legacy corporate bonds and extended the majority of our debt maturity to beyond four years. As a result of the new listed debt, the Group’s operating gearing ratio increased slightly to 3.9%, however, our operating interest cover ratio⁹ has increased to 7.0 times compared to 5.4 times for FY20, as the Group benefited from increased recurring operating EBIT, as well as the lower interest rate environment.

Centuria recognised $17.9 million of performance fee income, in line with expected fund expiries across the Group’s unlisted real estate division. A further $21.4 million[10] of unrecognised performance fees remain latent within our unlisted portfolio. The Group’s co-investment earnings into its listed REITs, namely CIP, COF and APL and unlisted investments yielded $36.4m, up from $32.1 million for the prior year. Development profit contributed an operating profit of $4.5 million, representing a 150% increase compared with the previous period and is further supported by a growing $1.9 billion development pipeline.

The Investment bond division’s reduced profitability to $0.9 million, reflects the lower prevailing interest rates impacting our capital guaranteed products. During FY21 policyholders approved a restructure of the capital guaranteed bonds to convert them to unit-linked products and we have also created distribution cost efficiencies which will combine to optimise policyholder returns and divisional profitability.

This is an enduring commitment and sustainability is a journey – one which will continue to evolve as the business grows and will impact all aspects of our business.

Note: AUM as at 30 June 2021. All figures above are in Australian dollars (currency exchange ratio of AU$1.000:NZ$1.0753).

Numbers presented may not add up precisely to the totals provided due to rounding
1 Includes commenced development projects valued on an as if completed basis, cash and other assets, assets exchanged but not settled
2 Includes Primewest acquisitions post April 2021 merger announcement. Includes assets exchanged but not settled
3 Source: Moelis Australia. Based on movement in security price from ASX closing on 1 July 2020 to ASX closing on 30 June 2021 plus distributions per security paid during the respective period(s) assuming re-investment of all distributions. Past performance is not a reliable indicator of future performance
4 Attributable to Securityholders
5 Operating NPAT of the Group comprises of the results of all operating segments and excludes non-operating items such as transaction costs, mark to market
movements on property and derivative financial instruments, the results of Benefit Funds, Controlled Property Funds and share of equity accounted net profit in excess of distributions received
6 Operating EPS is calculated based on the Operating NPAT of the Group divided by the weighted average number of securities
7 Number of securities on issue 30 June 2021: 787,802,693 (at 30 June 2020: 509,998,482)
8 Gearing ratio is calculated based on (operating borrowings less cash) divided by (operating total assets less cash)
9 Operating interest cover ratio is calculated based on operating finance costs divided by operating profit before tax excluding finance costs (excluding reverse mortgages)
10 The underlying property funds managed by Centuria Capital Group have accrued total performance fees of $45.6m as at 30 June 2021. $24.2m of this amount has been recognised life to date with the latent unrecognised performance fees being $21.4m estimated over the next two financial years

Centuria Capital Group – Annual Report 2021[| ] 13

CORPORATE INTEGRATIONS

In April 2021, Centuria made an off-market cash and scrip takeover offer for 100% of Primewest Group securities. By 19 July 2021, all Primewest securities were acquired by Centuria, resulting in the company delisting from the ASX.

Primewest has a 26-year history and brings a $5.6billion real estate platform into the Group. With assets predominantly in Western Australia, Primewest’s property portfolio complements Centuria’s largely East Coast Australia and New Zealand platform, creating a geographically diversified Australasian real estate platform.

Primewest’s Large Format Retail (LFR), Daily Needs Retail (DNR) and Agriculture real estate investments complement Centuria’s exposure to healthcare, industrial and decentralised office real estate assets across listed and unlisted funds – further diversifying the merged group by asset class, fund type, tenant profiles and investor profiles. Additionally, Primewest’s three institutional mandates collectively total $1.8 billion with over $670 million of investment capacity.

The Primewest team is successfully integrating into the Centuria fold. Both Primewest and Centuria share many symmetries. Both businesses were established in the 1990s with small property syndications, with each growing to managing substantial unlisted funds and in the case of Centuria three REIT’s. The combined business has greater scale across each of our asset classes and delivers more efficient operations through pooled resources.

Primewest’s three founding partners, David Schwartz, Jim Litis and John Bond, remain part of the fabric of the Primewest business. Additionally, Bruce McCully has been promoted to General Manager of the Western Australia office. All Primewest funds continue to operate on the same terms, conditions, and covenants and we are engaging well with Primewest’s investor clients.

Like our successfully integrated Augusta Capital (now known as Centuria New Zealand) and Heathley Limited (now Centuria Healthcare), the Primewest team will benefit from the Group’s larger balance sheet, enabling further expansion particularly across the LFR, DNR and agricultural sectors.

Centuria’s New Zealand business has also successfully expanded by 35% throughout FY21 now with $2.3billion of AUM. FY21 was punctuated by the acquisition of Visy’s Glass Manufacturing facility in Auckland for NZ$178 million. It was the largest New Zealand singleasset retail fund to date. The Visy fund raised NZ$110million, from 820 retail investors. The NZ business has an experienced management team led by CEO Mark Francis and fellow founder Bryce Barnett and we see good potential to continue to grow this business.

PLATFORM EXPANSION

Strong growth has been the dominant theme for Centuria throughout FY21 across each of its pillars. Across all real estate entities, AUM doubled (106%) to $16.5billion. In particular, our listed real estate platform increased by 37% to $5.5 billion and unlisted real estate increased by 175% to $11.0bn. In addition, our investment bonds business expanded 12.5% to $0.9billion.

This growth was underpinned by strong organic acquisition activity with 50 high-quality assets secured for $2.5 billion[11] (+108%, FY20). Landmark acquisitions included the $417m Telstra Data Centre, Clayton VIC, the NZ$178m Visy Glass Manufacturing facility, Auckland NZ, the $224m Footscray A-Grade office building, which is 91% leased to the VIC Government, and $416 million in healthcare acquisitions, notably including $190million of assets for CHPF and a doctor-led JV with Medibank for a private hospital with an estimated value on development completion of $64million.

Complementing these acquisitions was a $1.5billion valuation gain, underlining the quality of Centuria’s property portfolio.

Over FY21 the Group’s real estate portfolio[12] increased 143% to 340 assets with 2,280 tenants. The portfolio provides a healthy six-year weighted average lease expiry (WALE)[12,13] and 94.6% occupancy[12,13] . Impressively, Centuria achieved a 98.8%[13] average rent collection through this covid-affected period. Through Centuria’s in-house property management capabilities, more than 437,000sqm[13] was leased across 215 leasing transactions.

Demonstrating alignment with our investors, Centuria Capital continues to be the largest shareholder of its managed REITs, Centuria Office REIT (ASX: COF) with a 19.9% co-investment, Centuria Industrial REIT (ASX: CIP), a 17.7% co-investment and Asset Plus Limited (NZX: APL) a 19.99% co-investment.

COF remains Australia’s largest listed pure-play office REIT with a 22-asset portfolio worth $2billion. The REIT is exposed to Australia’s better performing office markets in metropolitan, regional and nearcity markets, which lend themselves to good workforce commutability and attractive, affordable rents.

During FY21, COF achieved a record year of leasing with 61 transactions across 52,077sqm, accounting for 18.1% of its portfolio Net Lettable Area (NLA). The high level of leasing activity was complemented by a $16.3million valuation increase in the second half of FY21, which contributed to COF’s Net Tangible Assets (NTA) of $2.48 per unit and $76.9million statutory net profit. Most recently, COF secured a significant $405milllion debt refinance, which increases its weighted average debt maturity to 4.2 years (from 2.3 years) and signifies strong support and confidence in the quality of its office portfolio.

CIP remains Australia’s largest listed pure-play industrial REIT with a 62-asset portfolio worth $2.9billion as at 30 June 2021. However, CIP began FY22 by further expanding its portfolio to 67 high-quality industrial assets worth $3.1billion. During FY21, CIP transacted 18 high-quality acquisitions worth $966million[14] . This included $631million worth of assets across two new high conviction industrial sub-sectors, Data Centres and Cold Storage, as well as $335million worth of urban infill logistics acquisitions.

The quality of CIP’s portfolio was illustrated with more than a half-billion-dollar valuation uplift ($587million) during the period. Additionally, the REIT’s portfolio Weighted Average Capitalisation Rate (WACR) compressed 151bps from 6.05% to 4.54% during FY21. CIP delivered strong leasing transactions of nearly 240,000sqm across 33 deals, which accounted for more than a fifth (22%) of the portfolio’s gross lettable area (GLA). Major long term leasing transactions were undertaken with, Woolworths and Visy amongst others.

11 Includes transactions post April 2021 Primewest merger announcement, assets exchanged but not settled

12 Excludes Land, Development Assets, Indirect Holdings and Primewest Tourism Assets, assets exchanged but not settled at 30 June 2021 13 Excludes Primewest assets, assets exchanged but not settled at 30 June 2021

14 Before transaction costs. Includes assets exchanged but not settled as at 30 June 2021. 95-105 South Gippsland Highway, Dandenong South development as is complete value

14[| ] Centuria Capital Group – Annual Report 2021

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UNLISTED: 1 MCNAB AVENUE, FOOTSCRAY, VIC
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The diversified APL NZ REIT performed well throughout FY21, providing a NZ$15.95million profit (FY20, -NZ$14.96million loss). It comprises a $0.3billion AUM platform including $130million in committed projects. These include an office development currently being constructed at Munroe Lane, Albany, which is 63% pre-let to the Auckland Council on a 15-year lease, and an office redevelopment asset at 35 Graham Street, Auckland.

Centuria’s unlisted platform continued to broaden its product offering with the launch of six funds including:

Single-asset – Centuria Government Income Fund No.1
Single-asset – Visy Penrose Fund
Multi-asset – Centuria Healthcare Property Fund
Multi-asset – Centuria Industrial Income Fund
Multi-asset – Centuria NZ Property Fund

The Group services more than 12,000 Australasian investors throughout its unlisted platform. The majority of the unlisted funds (c.72%) are single-asset funds, with the remainder of the platform comprising multi-asset closed-ended funds (14.5%) and multi-asset open-ended funds (13.5%). Of the latter, Centuria Healthcare Property Fund generated a portfolio of nine assets worth $190million during the period.

Centuria has also grown its institutional mandate capital to $2.3billion. Through our merger with Primewest, the Group has two mandates with a southeast Asian investment group including a $930million DNR mandate and $587million office mandate. Primewest also established a $272million joint venture with Blackrock for the purchase of 140 St George’s Terrace, Perth. These mandates add to Centuria’s existing $500m healthcare mandate with AXA / Grosvenor.

In addition to the expanding real estate funds, Centuria’s Development division completed $127million worth of industrial, LFR and social infrastructure developments. It has a further $1.9billion pipeline comprising office developments (25.1%), industrial developments (8.3%), healthcare properties (37.8%), LFR centres (4.8%) and other developments outside these asset classes (24%). The development team is committed to delivering high quality, sustainable, energy-efficient real estate that minimises carbon emissions.

FY22 OUTLOOK

Centuria Capital has begun FY22 with a strengthened corporate profile arising from S&P/ASX 200 Index inclusion and with strong growth across Australasia, as Centuria NZ and Primewest contribute to total performance.

Our increased platform size, greater asset-class diversity, enlarged geographic footprint and stronger capital transactions team have all combined to increase deal flow significantly, deal flow being a core driver of revenue growth. By virtue of the Centuria platform coming of scale through FY21 we will begin to witness the benefit of higher revenues against relatively fixed costs.

Our larger in-house distribution networks throughout Australia and New Zealand have continued to show strong support for Centuria unlisted funds and the recent oversubscription of the $224 million Centuria Government Income Fund No1 is a prime example of the momentum Centuria has in the current deposit rate climate. We anticipate this will continue during FY22 and will extend the scale of our open-ended unlisted funds i.e. Diversified, Healthcare and Industrial (NZ).

Centuria Capital Group – Annual Report 2021[| ] 15

Both COF and CIP concluded successful capital raisings in early FY22 acquiring $700 million of very high quality assets and we are confident that as Australia returns to work, sentiment towards office investment will steadily build and that confidence in the industrial sector will remain strong.

We also believe the additional sector-diversity offered by our entry into the DNR and LFR sectors will help promote a wider opportunity set for our investors. Primewest have also successfully launched a second unlisted agriculture fund (PWAT2). We believe the agricultural sector operates on sound demand-led fundamentals and this is a sector we intend to further expand into on a group-wide basis in both Australia and New Zealand.

Our achievements throughout FY21, namely the expansion of our business, leading to increased management fee revenues, have laid the foundations for providing FY22 Operating earnings per security guidance of 13.2 cents and distribution guidance of 10 cents per security, both up 10% on the prior corresponding period.

We are well-positioned to unlock further growth and create additional value into FY22 and beyond consolidating our leading position in the Australasian funds management market. We remain committed to building the Centuria brand across Australasia with increased market relevance in the direct property and equity capital markets. At the same time, we are committed to build on the ESG initiatives we will set out in the soon to be released Sustainability Framework and Sustainability Report and we encourage Investors to access these important documents on our website.

In conclusion, FY21 has proved the resilience of the Group and the strength of the team’s ability to deliver strong results despite the challenges faced by the ongoing pandemic. We would like to thank the people at the heart of the Centuria business – our Team.

In addition, we thank the Chairmen and the Directors of both the Group and Responsible Entity boards and external committees across our organisation. Their support and guidance remain paramount to the ongoing evolution and success of our organisation.

Finally, we sincerely thank securityholders and all our stakeholders for your on-going support and the confidence you place in our organisation. We look forward to engaging with you in the year ahead.

JOHN MCBAIN

JASON HULJICH Joint CEO

Joint CEO

16[| ] Centuria Capital Group – Annual Report 2021

UNLISTED: 1 WILLIAM STREET, PERTH, WA

Centuria Capital Group – Annual Report 2021[| ] 17

Key financial metrics

Strong performance in COVID-19 backdrop

FY22 guidance

Operating EPS 13.2cps Distribution per security 11.0cps Announced 11 August 2021

LISTED: 100 BROOKES ST, FORTITUDE VALLEY, QLD

18[| ] Centuria Capital Group – Annual Report 2021

OPERATING NET PROFIT AFTER TAX ($m)[1]

OPERATING EARNINGS PER SECURITY[2] (CENTS)

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70.2
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53.3
45.1 45.7
15.5
FY17 FY18 FY19 FY20 FY21
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16.3
12.7 12.0 12.0
10.3
FY17 FY18 FY19 FY20 FY21
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STATUTORY NET PROFIT AFTER TAX ($m)[3]

NET ASSETS PER SECURITY ($)

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143.5
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54.8
50.9
21.1
17.3
FY17 FY18 FY19 FY20 FY21
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1.92
1.44
1.29 1.32
1.16
FY17 FY18 FY19 FY20 FY21⁴
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DISTRIBUTIONS PER SECURITY (CENTS)

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10.0
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9.70
9.25
8.20
7.50
FY17 FY18 FY19 FY20 FY21
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1 Operating NPAT of the Group comprises of the results of all operating segments and excludes non-operating items such as transaction costs, mark to market movements on property and derivative financial instruments, the results of Benefit Funds, Controlled Property Funds and share of equity accounted net profit in excess of distributions received
2 Operating EPS is calculated based on the Operating NPAT of the Group divided by the weighted average number of securities

TOTAL SECURITYHOLDER RETURN (%) CNI S&P/ASX A-REIT 200 Index (accum.)

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61.8%
34.4%
33.2%
24.3% 23.3% 19.3%
13.0%
6.1%
FY17 FY18 FY19 FY20 FY21 [5]
-6.3%
3 Attributable to securityholders
4 Number of securities on issue at 30 June 2021: -21.3%
787,802,693 (at 30 June 2020: 509,998,482)
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5 Source: Moelis Australia. Based on movement in security price from ASX closing on 1 July 2020 to ASX closing on 30 June 2021 plus distributions per security paid during the respective period(s) assuming re-investment of all distributions. Past performance is not a reliable indicator of future performance

Centuria Capital Group – Annual Report 2021[| ] 19

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Expanding our funds management platform

ASSETS UNDER MANAGEMENT (AU$ billion)

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$17.4B
11.0
46%
CAGR [1]
$8.8B
4.0
$6.2B
Unlisted real estate
2.6 5.5
$4.9B
$3.8B 1.9 4.0
1.5
2.7
2.1
1.5
Listed real estate
0.8 0.9 0.9 0.8 0.9
Investment Bonds
FY17 FY18 FY19 FY20 FY21
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1 CAGR calculated from 30 June 2017 to 30 June 2021

20[| ] Centuria Capital Group – Annual Report 2021

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LISTED: 1 LAHRS ROAD, ORMEAU, QLD
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GROUP AUM MOVEMENT (AU$ billion)

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0.2 0.1 $17.4B
5.0 0.9 -0.3 0.8
-0.4 17.4
1.5
2.5
$8.8B
8.8
FY20 Property Valuations [2] Primewest Bass Capital Investment VitalHarvest Property FY21
Acquisitions [1] Merger Merger Bonds AUM Divestments [3]
1 Includes Primewest acquisitions post April 2021 merger announcement. Includes assets exchanged but not settled
2 Includes Primewest assets
3 Divestment of 465 Victoria Avenue, Chatswood, NSW reflected as 100% interest
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Centuria Capital Group – Annual Report 2021[| ] 21

UNLISTED: VISY FACILITY, PENROSE AUCKLAND, NZ

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22 [| ] Centuria Capital Group – Annual Report 2021
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Major direct real estate and corporate acquisitions

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FY17 FY19 FY20 FY21
$1.4B $0.6B $1.7B $5.2B
AUM AUM AUM AUM
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CORPORATE

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FY19 FY20 FY21
$0.6B $0.5B $1.1B
AUM AUM AUM
NISHI
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Centuria Capital Group – Annual Report 2021[| ] 23

Proven growth through corporate initiatives

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Centuria Industrial REIT
A SX : C I P
32%
CAGR $3.1B
$0.9B
ASSETS UNDER MANAGEMENT [1]
HY17 FY21
244% AUM growth
Recurring revenues: ~$5.9m (HY17) ~$20.2m (FY21)
Australia’s largest listed pure play industrial REIT
NTA per unit: $2.36 (HY17) $3.83 (FY21)
1 Includes commenced development projects valued on an as if completed
basis, cash and other assets, assets exchanged but not settled LISTED: TELSTRA DATA CENTRE
COMPLEX, CLAYTON, VIC
Centuria Healthcare
35%
CAGR $1.1B
$0.6B
ASSETS UNDER MANAGEMENT [1]
FY19 FY21
63.06% economic interest acquired May 2019
83% AUM growth
Recurring revenues: $9.8m (FY21)
Established $209m CHPF, $500m institutional mandate,
$0.7bn development pipeline
1 Includes commenced development projects valued on an as if completed
UNLISTED: 1521 FOREST basis, cash and other assets, assets exchanged but not settled
ROAD, ORANGE, NSW
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24[| ] Centuria Capital Group – Annual Report 2021

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Centuria New Zealand
35%
INCREASE
$2.3B
$1.7B
ASSETS UNDER MANAGEMENT [1]
FY20 FY21
Augusta acquisition in July 2020
35% AUM growth, record period for NZ business
Recurring revenues: $24.0m (HY21) $24.4m (FY21)
CNI support enables: Visy (Penrose Fund), APL co-investment
NZ$147m Munroe Lane development underway
1 Includes commenced development projects valued on an as if completed
basis, cash and other assets, assets exchanged but not settled LISTED: 6-8 MUNROE LANE,
ALBANY, AUKLAND, NZ
Primewest
12% $5.6B
INCREASE
$5.0B
ASSETS UNDER MANAGEMENT [1]
APR. 21 FY21
SINCE MERGER ANNOUNCEMENT (APRIL 2021)
Merger completed June 2021
12% AUM growth
$35.7m pro-rata annualised recurring revenues
1 Includes commenced development projects valued on an as if completed
UNLISTED: 140 ST GEORGES basis, cash and other assets, assets exchanged but not settled
TERRACE, PERTH, WA
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Centuria Capital Group – Annual Report 2021[| ] 25

$2.5bn 50 assets acquired, 75% via off market or select campaigns Includes transactions post April 2021 Primewest merger announcement, assets exchanged but not settled

Leveraging strong capital transaction capabilities

FY21 RECORD GROSS REAL ESTATE ACQUISITIONS

$2.5B

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$1.2B
$0.9B
FY19 FY20 FY21¹
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108% ABOVE FY20 PERIOD

1 Includes Primewest acquisitions post April 2021 merger announcement. Includes assets exchanged but not settled 26[| ] Centuria Capital Group – Annual Report 2021

98.8% Avg rent collected over entire real estate platform²

July 2020 – June 2021

UNLISTED: VERMONT PRIVATE HOSPITAL, BURWOOD HWY, VIC

Leveraging strong active asset management capabilities

CENTURIA PLATFORM’S TOP 10 TENANTS BY INCOME (%)[1]

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GOVERNMENT 15.0%
WOOLWORTHS LIMITED 3.2%
TELSTRA CORPORATION LIMITED 3.0% 6.0 year
ARNOTT’S 2.4%
CENTURIA PLATFORM’S
WEIGHTED AVERAGE
VISY 2.2% LEASE EXPIRY (WALE)
BY INCOME [1,2 ]
HEALIUS 1.8%
94.6%
SEVEN NETWORK 1.4%
CENTURIA
PLATFORM’S TOTAL
BENDIGO AND ADELAIDE BANK LTD 1.3% OCCUPANCY BY
AREA [1,2]
AWH PTY LTD 1.2%
Office Industrial Healthcare Retail
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1 Excludes Land, Development Assets, Indirect Holdings and Primewest Tourism Assets, assets exchanged but not settled at 30 June 2021 2 Excludes Primewest assets, assets exchanged but not settled at 30 June 2021

Centuria Capital Group – Annual Report 2021[| ] 27

$1.9 billion development pipeline to seed funds

Development fees and profits provide growing income

$442m est. value on completion of CNI balance sheet development assets.6 committed projects, (107,000sqm GLA)

CNI will selectively use its balance sheet to seed and expand its property funds

$53.7m carrying value of CNI balance sheet development assets

LISTED: 6-8 MUNROE LANE, ALBANY, AUCKLAND, NZ ( ARTIST IMPRESSION)

28[| ] Centuria Capital Group – Annual Report 2021

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LISTED: 42 HOEPNER ROAD, BUNDAMBA, QLD
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BALANCE SHEET PROPERTIES HELD FOR DEVELOPMENT GENERATE NO FEE INCOME. PROJECTS INCLUDE:

CARDIFF, NEWCASTLE MANN ST, EAST GOSFORD

COOK ST, AUCKLAND

MAN ST, QUEENSTOWN

LAKEVIEW, QUEENSTOWN KEW, MELBOURNE PRIVATE HOSPITAL

	FY21		COMMITTED		FUTURE		TOTAL	TOTAL
	COMPLETIONS	AREA	PIPELINE	AREA	PIPELINE	AREA	PIPELINE	AREA
ASSET CLASS	(AUD $M)	SQM	(AUD $M) 1,2,3	SQM	(AUD $M)1,3	SQM	(AUD $M)1,2	SQM
Offce	$ -	-	$198	25,600	$281	26,000	$479	51,600
Industrial	$18	10,500	$130	62,200	$28	7,200	$158	69,360
Healthercare	$ -	-	$366	49,600	$357	32,450	$722	82,050
Large Format Retail	$56	12,250	$20	6,800	$72	18,700	$92	25,500
Other/Social Infrastructure²	$53	18,750	$437	102,500	$20	4,500	$457	107,000
Total¹	$127	41,500	$1,150	246,700	$758	88,850	$1,908	335,510

Note: All figures above are in Australian dollars (currency exchange ratio of AU$1.000:NZ$1.0753). Numbers presented may not add up precisely to the totals provided due to rounding

1 Development projects and development capex pipeline, including fund throughs

2 Lakeview Queenstown JV reflected at a 25% interest
3 Estimated value at completion

Centuria Capital Group – Annual Report 2021[| ] 29

Unlisted property: AUM growth to $11 billion (+175% for FY21)

31%

$2.0m $17.9m $21.4m

57%

FY21 FY21 FY21 UNLISTED AUM WITH UNLISTED PERFORMANCE FEE RECOGNISED LATENT UNDERLYING EXPIRY REVIEW DATES AT AUM WITH NO FUND CASH COLLECTED PERFORMANCE FEES PERFORMANCE FEES[1] OR BEYOND FIVE YEARS EXPIRY REVIEW DATE

ASSET SECTORS

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ASSET SECTORS
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$4.0bn $11.0bn in FY20 in FY21

$billions $billions Office - 2.3 Industrial - 0.6 Healthcare - 0.6 Office - 4.8 Industrial - 1.7 Healthcare - 1.1 Agriculture - 0.1 Daily needs retail - 0.2 Large format retail - 0.1 Other - 0.2 Daily needs retail - 1.3 Large format retail - 1.3 Other - 0.7 5 4 FUND TYPES FUND TYPES

$billions Office - 2.3 Industrial - 0.6 Healthcare - 0.6 Daily needs retail - 0.2 Large format retail - 0.1 Other - 0.2

$4.0bn $11.0bn in FY20 in FY21 $billions $billions Single asset funds - 2.9 Multi asset closed ended funds - 0.5 Single asset funds - 7.9 Multi asset closed ended funds - 1.6 Multi asset open ended funds - 0.6 Multi asset open ended funds - 1.5 1 The underlying property funds managed by Centuria Capital Group have accrued total performance fees of $45.6m as at 30 June 2021. $24.2m of this amount has been recognised life to date with the latent unrecognised performance fees being $21.4m estimated over the next two financial years 73 73

30[| ] Centuria Capital Group – Annual Report 2021

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ARTIST IMPRESSION
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Australia’s largest Australia’s largest Targeting long
pure-play Office REIT pure-play Industrial REIT term total returns
A QUALITY PORTFOLIO OF A QUALITY PORTFOLIO OF FIT FOR A YIELD PLUS GROWTH
DE-CENTRALISED, HIGHLY PURPOSE INDUSTRIAL ASSETS, INVESTMENT STRATEGY
CONNECTED AND AFFORDABLE SITUATED IN INFILL LOCATIONS THROUGH SELECT NEW
OFFICE SPACE WITH CLOSE KEY INFRASTRUCTURE ZEALAND REAL ESTATE
$2.0bn $3.1bn $0.3bn
AUM AUM AUM [3]
22 68 6
HIGH QUALITY ASSETS HIGH QUALITY ASSETS [3,4] HIGH QUALITY ASSETS [3,4]
19.9% 17.1% 19.99%
CNI CO-INVESTMENT¹ CNI CO-INVESTMENT¹ CNI CO-INVESTMENT¹
98.3% $966m $130m
FY21 AVG. RENT COLLECTED [2] ACQUISITIONS | 18 HIGH QUALITY ASSETS ACTIVE INITIATIVES UNDERWAY
INCLUDED IN THE INCLUDED IN THE
$0.1bn
S&P/ASX 300 INDEX S&P/ASX 200 INDEX
MARKETCAPITALISATION [5]
AND FTSE EPRA NAREIT INDEX AND FTSE EPRA NAREIT INDEX
82% 63% 71%
PORTFOLIO INCOME FROM GOVERNMENT, PORTFOLIO INCOME FROM TELCO, PORTFOLIO INCOME FROM GOVERNMENT,
ASX LISTED & MULTINATIONAL TENANTS CONSUMER STAPLES & PHARMACEUTICALS NZX LISTED & MULTINATIONAL TENNANTS
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1 Includes associates of Centuria Capital Group
2 As COVID-19 impacts and the National Code of Conduct on Commercial Leases remained active, it is possible that further rent relief claims could be received for FY21 period

3 Includes commenced development projects valued on an as if completed basis 4 Includes assets exchanged but not settled at 30 June 2021

5 Based on the respective APL close price on 30 June 2021

Centuria Capital Group – Annual Report 2021[| ] 31

Sustainability at Centuria

Centuria Capital will be releasing its first Sustainability Report this year. Highlights to be featured in this report are summarised here.

Centuria Capital’s sustainability framework flows through to the listed REITs (ASX:CIP and ASX:COF).

ENVIRONMENTAL

ESG REPORTING

Centuria Capital to release its first Sustainability Report

CLIMATE ACTION

Centuria supports the recommendations of the TCFD

ENVIRONMENTAL DATA

Energy, emission (scope 1 & 2), and water data collected for assets within COF

CENTURIA OFFICE REIT

NABERS Sustainability Portfolio Index Ratings Energy 4.7 Stars | Water 3.2 Stars

CENTURIA INDUSTRIAL REIT

42 Hoepner Road, Bundamba: One of Australia’s first 5 Star Green Star Industrial assets

SOCIAL MEMBER Of the Diversity Council of Australia

TENANT ENGAGEMENT[1]

91% of surveyed tenants would recommend Centuria as an asset manager

SPECIALISED HEALTHCARE REAL ESTATE UNDER MANAGEMENT

COMPLETED $72.2M OF SOCIAL AND AFFORDABLE HOUSING

EMPLOYEE ENGAGEMENT[2] 94% of employees enjoy working at Centuria

GOVERNANCE

BOARD DIVERSIFICATION

Appointment of 4 independent directors to Group and RE Boards

(ASX:CNI) CENTURIA CAPITAL: Kristie Brown (ASX:COF) CPFL: Nicole Green (ASX:CIP) CPF2L: Jennifer Cook, Natalie Collins

CULTURE & ESG BOARD COMMITTEE ESTABLISHED[3]

Oversight of modern slavery, diversity & inclusion, climate change

FIRST MODERN SLAVERY STATEMENT DELIVERED

Over a third of cleaning contracts by value assessed using the Property Council of Australia Informed 365 platform

GENDER DIVERSITY AT CENTURIA 63% male employees | 37% female employees

EMPLOYEE TRAINING

Code of Conduct Financial Education Cyber Security

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LISTED: 100 BROOKE ST, FORTITUDE VALLEY, QLD
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1 Centuria Capital undertakes regular tenant surveys. The figure reported from the Group’s FY21 survey
2 Centuria Capital undertakes regular employee engagement surveys The reported figure is from the Group’s FY21 survey
3 The Centuria Culture and ESG Board Committee is chaired by Susan Wheeldon, Independent Non-Executive Director of Centuria Capital Limited

32[| ] Centuria Capital Group – Annual Report 2021

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LISTED: 818 BOURKE STREET, DOCKLANDS, VIC
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Our Group-wide (all entities) approach to Sustainability is overseen by Centuria Capital (ASX:CNI), its Board, Committees and Executive Management team.

Regular monitoring and review of the Group’s Sustainability initiatives is undertaken by Centuria’s ESG Management Committee¹, Culture and ESG Board Committee comprised of independent directors and ultimately by the Centuria Capital Board.

CENTURIA’S BOARD GROUP

CENTURIA CAPITAL (ASX:CNI)

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				UNLISTED
CNI	CPFL	CPF2L	ASSET PLUS	FUNDS &
BOARD	BOARD	BOARD	BOARD	OPERATIONS
ARCC	CPFL	CPF2L	ASSET PLUS
AUDIT, RISK & COMPLIANCE	ARCC	ARCC	ARCC
COMMITTEE	ASX:COF	ASX:CIP	NZX:APL
NOMINATION &
REMUNERATION
COMMITTEE	CENTURIA CAPITAL BOARD COMMITTEES PROVIDE OVERSIGHT OF ALL LISTED AND
CULTURE & ESG COMMITTEE	UNLISTED ENTITIES UNDER CENTURIA CAPITAL AS PART OF THEIR RESPONSIBILITIES UNDER ASX:CNI
	CONFLICTS COMMITTEE / MANAGEMENT ESG COMMITTEE
	CENTURIA CAPITAL EXECUTIVE MANAGEMENT TEAM

All of Centuria’s listed REITs have an independent Audit, Risk and Compliance Committee

Centuria Capital (ASX:CNI) various Committees provide ESG strategy and indirect oversight of ASX:COF and ASX:CIP as a governing body of CNI

Centuria Executive Management Team jointly reports into CNI, COF and CIP Independent Boards

1 The Centuria Culture and ESG Board Committee is chaired by Susan Wheeldon, Independent Non-Executive Director of Centuria Capital Limited

Centuria Capital Group – Annual Report 2021[| ] 33

Sustainability at Centuria

ST LUCY’S SCHOOL

Centuria has focused efforts on reputable and repeated volunteering and fundraising programmes. We aim to create long term partnerships with community based organisations.

St Lucy’s School is a primary and secondary school for students with disabilities. It provides excellence in education that empowers students with the values, knowledge, attitudes and skills to flourish and participate fully in society. Centuria have supported St Lucy’s School since 2011. Throughout the year, the Centuria team helped raise over $140,000 in donations and our staff have regularly participated in activities to support the school.

The flagship event is our annual trivia night, when all our partners and peers come together to fundraise. During the reporting period, the Centuria team were unable to physically attend St Lucy’s School due to COVID-19 and had limited participation on the team volunteer day. However, we practiced virtual volunteering by wrapping Christmas presents in a remote manner.

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MEMBERSHIPS, ASSOCIATIONS & EXTERNAL INITIATIVES

AUSTRALIA MEMBERSHIPS

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MEMBER OF THE PROPERTY COUNCIL OF AUSTRALIA

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MEMBER OF THE DIVERSITY Supporter of the recommendations COUNCIL AUSTRALIA of the TASKFORCE ON CLIMATERELATED FINANCIAL DISCLOSURES

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MEMBER OF THE PROPERTY FUNDS ASSOCIATION OF AUSTRALIA GROUP

NEW ZEALAND MEMBERSHIPS

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MEMBER OF THE PROPERTY COUNCIL OF NEW ZEALAND

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MEMBER OF THE NEW ZEALAND GREEN BUILDING COUNCIL

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MEMBER OF MATES IN CONSTRUCTION

34[| ] Centuria Capital Group – Annual Report 2021

Social and affordable housing case study

PARTNERING WITH COMPASS HOUSING (TIER 1 SERVICE PROVIDER) AND TETRIS CAPITAL

CNI equity contribution circa $20m
Centuria: Developer
Compass: Community housing provider (Tenant)

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In FY21, Centuria’s development division completed four social and affordable housing developments, providing 190 new affordable homes through four projects, across NSW’s Hunter and Central Cost, collectively worth $72.2 million. The schemes delivered vital housing for the Gosford and Newcastle communities, accommodating over 300 frontline and key workers and their families.

Centuria was responsible for sourcing the development sites, providing development funding and implementing its development expertise to deliver these projects.

DEVELOPMENT OF 316 MAITLAND ROAD, MAYFIELD, NSW

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Tetris: Upfront take out party

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318 MAITLAND ROAD,
MAYFIELD, NEWCASTLE
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45 PENDLEBURY ROAD,
CARDIFF, NEWCASTLE
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23-25 YOUNG STREET,
WEST GOSFORD
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357-359 MANN STREET,
WEST GOSFORD
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Centuria Capital Group – Annual Report 2021[| ] 35

Board of directors

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Garry Charny CHAIRMAN

Garry was appointed as Chairman of the Centuria Capital Group Board on 30 March 2016. He has significant boardlevel experience with listed and unlisted companies across a diverse range of sectors including property (Trafalgar Corporate, which became 360 Capital), and Manboom; retail (Apparel Group, Sportscraft, and Saba); technology (General Electric EcXpress and 1st Available) and media (Boost Media, Macquarie Radio, and April Entertainment).

Currently, he is Managing Director and founder of Wolseley Corporate, an Australian corporate advisory and investment house that consults on local and international transactions in the USA, United Kingdom, Malaysia, India and throughout South-East Asia. Wolseley specialises in mergers and acquisitions, strategic corporate advice and contentious matters resolution.

Garry is also Chairman of Spotted Turquoise Films, an international Film and Television Company based in Sydney and Los Angeles, and Chairman of Shero Investments, a Sydney based investment company.

Previously, he was co-founder and Chairman of Boost Media International, an international media advisory business with offices in Sydney, New York, Toronto, Kuala Lumpur and Delhi. He was also President of Boost Media LLC (USA).

From 1983-1995, Garry practised as a Barrister-at Law at the Sydney Bar specialising in corporate, commercial, equity and media. He was an Adjunct Lecturer in Law at the University of NSW.

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John McBain

EXECUTIVE DIRECTOR & JOINT CEO

Joint CEO John McBain’s 40-year real estate career in both Australasia and the UK spans the commercial and industrial markets and more latterly the healthcare and agriculture real estate sectors.

He is an executive director of Centuria Capital Limited, Centuria Life Limited, Centuria Healthcare Limited and Primewest Management Limited and a non-executive director of Centuria Bass Credit Limited. John is a director of NZX-listed Asset Plus Limited and an alternate director of Centuria Funds Management NZ Limited and Centuria NZ Industrial Fund Limited. He also serves on the Centuria NZ and Centuria Healthcare Management committees as well as the Centuria Life Investment Committee.

John and Jason Huljich founded Centuria Capital together and the Group now oversees more than $17 billion of assets under management including four separate publicly listed vehicles and 300 staff throughout Australia, New Zealand and The Philippines.

John is chiefly responsible for Centuria’s corporate team including corporate acquisitions and mergers. His responsibilities include corporate strategy as well as leadership of the Finance, Company Secretarial, Compliance and Governance, Corporate Investor Relations, Marketing, Communications and Centuria Life teams, who report directly to him. He jointly steers the Senior Executive Committee and serves on the Sustainability and Non-Financial Risks Committee and the ESG Management Committee.

Since 2007, John has been instrumental in the integration of several businesses into the Group, including the 360 Capital Group (2016), a majority interest in Heathley Limited (now Centuria Healthcare) (2019), New Zealandbased Augusta Capital Limited (2020) and Primewest Group (2021).

This corporate acquisition strategy, together with a highly successful asset acquisition and funds management programme overseen by fellow CEO Jason Huljich, has seen the pair oversee significant growth in both the company’s size and shareholder returns culminating in Centuria Capital Limited entering the S&P/ASX 200 Index in July 2021.

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Jason Huljich

EXECUTIVE DIRECTOR & JOINT CEO

Joint CEO Jason Huljich’s 25-year real estate career spans the commercial and industrial real estate sectors. He co-founded Centuria Capital, with Joint CEO, John McBain.

He is an executive director of Centuria Capital Group, Centuria Life Limited, Centuria Healthcare Limited, Centuria Healthcare Asset Management Limited, Primewest Management Limited, as well as director of Centuria Funds Management (NZ) Ltd, Centuria NZ Industrial Fund Limited and non-executive director of Centuria Bass Credit Limited.

Jason shares the helm of Centuria with John, collectively overseeing more than $17 billion of assets under management and c.300 staff throughout Australia, New Zealand and the Philippines.

Jason is chiefly responsible for the company’s real estate portfolio and funds management operations including the listed Centuria Industrial REIT (ASX: CIP) and Centurial Office REIT (ASX: COF), as well as Centuria’s extensive range of unlisted funds across Australia and New Zealand. Several unlisted funds regularly feature in the Top 10 Performing Core Funds in the Property Council of Australia / MSCI Australia Unlisted Retail Quarterly Property Funds Index.

Since Centuria was established, Jason has been pivotal in raising over $5 billion for the listed and unlisted vehicles. He has been central to positioning Centuria as Australia’s fourth largest external manager. Centuria Capital Group (CNI) and CIP are included in the S&P/ASX 200 Index and CIP is also part of the FTSE EPRA Nareit Global Index. COF is included in the S&P/ ASX 300 Index.

Jason has a hands-on approach to the real estate operations throughout the company’s platform. The Transactions, Development, Funds Management, Distribution and Asset Management teams all report directly to him.

Jason’s career began after graduating with a Bachelor of Commerce (Commercial Law major) from the University of Auckland. He is a Property Funds Association (PFA) of Australia Past President. The PFA is the peak industry body representing the $125 billion direct property investment industry. Jason currently sits on the Property Council of Australia’s Global Investment Committee.

John has a property valuation qualification from The University of Auckland.

36[| ] Centuria Capital Group – Annual Report 2021

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Susan Wheeldon

INDEPENDENT NON-EXECUTIVE DIRECTOR

Susan joined the Centuria Capital Group Board as an Independent Non-Executive Director in August 2016. She brings extensive experience across international commercial markets within ICT, real estate, legal, aviation and online retail sectors.

Currently, Susan is Country Manager for Australia, New Zealand and Oceania at Airbnb. Previously, she served in a number of roles, including Head of Government & Performance and Head of Agency at Google, working with major national and global companies to develop and deliver growth strategies that future-proof and build clients’ businesses and brands in a constantly changing environment.

During her career Susan has held a number of senior roles in Australia and the United Kingdom across a diverse range of industries including global law firms DLA Piper and King & Wood Mallesons, working with the Virgin Australia & Virgin Atlantic airline brands, as Vice President of Groupon, and as Head of Brand & Retail at AMP Capital Shopping Centres.

She holds an MBA from the Australian Graduate School of Management (AGSM) and is a member of Australian Institute of Company Directors.

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Nicholas Collishaw

NONEXECUTIVE DIRECTOR retired 30.8.21

Nicholas has been a Non-Executive Director of Centuria Capital Group since October 2017. Previously he was Centuria Capital’s CEO of Listed Property Funds, joining in May 2013. Nicholas brings to the Boards more than 30 years experience across domestic and international real estate and investment markets.

Between 2008 and 2012, he was Mirvac Group’s CEO and Managing Director, responsible for successfully guiding the real estate development and investment company through the Global Financial Crisis and implementing sustained growth strategies.

Nicholas has held senior positions with James Fielding Group, Paladin Australia, Schroders Australia and Deutsche Asset Management. He has extensive experience in all major real estate markets in Australia and investment markets in the United States, United Kingdom and the Middle East.

Nicholas is currently Executive Director and Co-Founder of Lincoln Place, an Australian funds manager specialising in the retirement sector, as well as Chairman of Redcape Hotel Group.

Following the reporting date, Nicholas resigned from the Centuria Capital Board effective 30 August 2021.

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Peter Done

INDEPENDENT NON-EXECUTIVE DIRECTOR

Peter joined the Centuria Capital Group Board as an Independent Non-Executive Director in November 2007. He is also Chairman of Centuria Capital Group’s Audit, Risk Management and Compliance Committee.

He has extensive knowledge in accounting, audit and financial management in the property development and financial services industries, corporate governance, regulatory issues and Board processes through his many senior roles.

Peter hails from a 38-year career at KPMG. From 1979, he held the position of Partner until his retirement in 2006. During his 27 years as Partner, Peter was the lead audit partner for many clients, including those involved in property development, primary production and television and film production and distribution.

Peter holds a Bachelor of Commerce (Accounting) from the University of New South Wales and is a Fellow of Chartered Accountants Australia and New Zealand.

Centuria Capital Group – Annual Report 2021[| ] 37

Board of directors

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Kristie Brown

INDEPENDENT NON-EXECUTIVE DIRECTOR

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John Slater

INDEPENDENT NON-EXECUTIVE DIRECTOR

Kristie is an experienced real estate investment and legal professional who joined the Centuria Board as an Independent Non-Executive Director as well as a member of the Group’s Audit, Risk and Compliance Committee (ARCC).

Ms Brown is a founding partner of investment firm, Couloir Capital, and established Danube View Investments following 16 years at blue-chip law firms.

John was appointed to the Board on 22 May 2013 having previously been an adviser to the Centuria Life Friendly Society since 2011.

John was a senior executive at KPMG Financial Services prior to establishing a financial advisory practise. Since its acquisition he has focused on consulting activities and he has been a Board Member of Centuria Capital Limited since 2016. He also serves on the Nominations and Remuneration Committee

John has deep experience in all financial market sectors gained over a 35 year career. He serves on the Investment Committees of Centuria Life and the Over Fifty Guardian Friendly Society and continues to be active in Investment Committee activities in reflect of other non-aligned financial group’s.

UNLISTED: EXCHANGE TOWER, 2 THE ESPLANADE PERTH, WA

38[| ] Centuria Capital Group – Annual Report 2021

Senior Executives

John McBain EXECUTIVE DIRECTOR & JOINT CEO Refer to bio on page 36.

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Refer to bio on page 36.

Jason Huljich EXECUTIVE DIRECTOR & JOINT CEO

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Simon Holt CHIEF FINANCIAL OFFICER

Simon joined Centuria Capital as Chief Financial Officer in May 2016. He brings with him a wealth of local and global experience covering the corporate, treasury and listed securitisation areas.

He is accountable for financial and treasury management of the Group and, with the Joint CEOs, is also tasked with a specific focus on expanding the parent company, Centuria Capital.

Simon was most recently Chief Financial Officer of WorleyParsons where he spent eight years. Previously, he held a range of senior Finance positions at Westfield Group and Westfield Trust, again spanning eight years.

Simon is a Chartered Accountant and holds a degree in Business (major in Accounting and Marketing). He is also a Member of Australian Institute of Company Directors.

Centuria Capital Group – Annual Report 2021[| ] 39

Senior Executives

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Anna Kovarik

GROUP CHIEF RISK OFFICER & COMPANY SECRETARY

Anna joined Centuria in July 2018 in the role of General Counsel and Company Secretary. In July 2020 Anna was promoted to Group Chief Risk Officer and Company Secretary. Prior to joining Centuria, Anna held the position of Group Risk Manager at Mirvac Group and was previously Head of Group Insurance for AMP and General Counsel and Company Secretary at AMP Capital Brookfield.

Anna holds a Masters of Information Technology, a BA (Hons) in Systems Management, and was awarded a distinction in the Global Executive MBA program at the University of Sydney. She is qualified as a solicitor in both the UK and NSW and was a senior associate at Allens law firm in Sydney where she specialised in the areas of real estate and funds management.

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Ross Lees

HEAD OF FUNDS MANAGEMENT

Ross is the Head of Centuria’s Real Estate Funds Management business, responsible for both listed and unlisted property funds, which include two ASX-listed REITs as well as 22 unlisted funds, worth just under $7 billion.

Ross joined the company in 2017 as Centuria Industrial REIT (ASX: CIP) Fund Manager, transforming the REIT into Australia’s largest domestic pure play industrial REIT.

He brings more than 16 years of investment management experience to Centuria, having held senior transactional and portfolio management positions for peers including Dexus, LOGOS Group and Stockland.

Ross holds a Master of Applied Finance from Macquarie University and Bachelor of Business (Property Economics) from UWS.

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Andrew Essey

HEAD OF TRANSACTIONS

Andrew joined Centuria Capital Group in early 2013, and has held senior positions including National Leasing Manager, Fund Manager and, most recently, Head of Transactions.

Andrew is responsible for originating and managing the Group’s property transactions and overseeing of the acquisitions team. He has transacted more than $4 billion of office and industrial real estate on behalf of Centuria.

Prior to joining Centuria, he was a Director for DTZ’s Sydney North Shore Agency, focused on leasing and sales within the North Shore industrial and office park markets. Throughout his six years with DTZ, Andrew directly transacted more than 180 deals on behalf of institutional and private investors.

Andrew holds a Bachelor of Business Administration from Radford University, Virginia, USA with a Major in marketing and a Minor in economics.

40[| ] Centuria Capital Group – Annual Report 2021

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André
Bali
HEAD OF
DEVELOPMENT
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Since 2007, André Bali has overseen all Centuria’s project and property development functions, including development and debt funds.

He is responsible for both passive and active management of Centuria and Centuria Healthcare’s listed and unlisted portfolio including capital works, planning, strategic repositioning of assets to maximise returns, development and project management, joint ventures and partnerships, and working closely with Centuria’s leasing, capital transactions and funds management teams to enhance value for Centuria’s investors.

André has more than 30 years experience in development and investment management across numerous sectors including office, health residential, industrial and retail.

Currently he oversees c.$1.6billion worth of development projects throughout Australasia across industrial, healthcare, office, dementia care residences, social and affordable housing, hotel and residential projects (as at 31 December 2021).

Prior to Centuria, André founded and operated a specialised property consulting and advisory company. His experience also includes several senior positions in a number of property development companies.

André holds an Honours Degree in Applied Science from UNSW, Masters of Commerce (Land Economics) from UWS, Grad Cert of Finance from AGSM, AAPI, MAICD and held non-executive roles on several not-for-profit organisations including Habitat for Humanity.

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Victor
Georos
HEAD OF
PORTFOLIO
& ASSET
MANAGEMENT
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Victor joined Centuria as Senior Portfolio Manager in April 2013 and was appointed Head of Portfolio and Asset Management in July 2015.

In his role he is responsible for overseeing portfolio and asset management of Centuria’s portfolio, including the development and implementation of strategies to enhance value through active asset management and development. Victor works closely with the Funds Management team and the Development team. In addition Victor manages the Centuria Property Fund’s Valuation program and is actively involved with the constant review of best practice policies and procedures.

Victor has extensive experience in asset and investment management, development and funds management, across the office, retail and industrial sectors, with a key focus on results and ability to build high performance teams across all sectors. Prior to joining Centuria Victor held senior positions with GPT Group and LendLease, including Head of Industrial & Business Parks at GPT.

Victor holds a Bachelor of Land Economy and a Graduate Diploma of Finance and Investment (FINSIA).

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Michael
Blake
HEAD OF
CENTURIA LIFE
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With more than three decades in the wealth management industry across blue-chip Australian and multinational corporations, Michael Blake joined Centuria in 2016 and is responsible for investment bond products provided by Centuria Life.

He is chiefly responsible for Centuria Life’s P&L, strategic direction, funds under management growth, product development and directly reports to the Centuria Life Limited (CLL) Board. He manages a team of five in addition to working with Centuria’s distribution team to raise the profile and investments in Centuria LifeGoals Investment Bond products.

Prior to his current position, Michael was pivotal in launching the unlisted Centuria Diversified Property Fund.

Michael joined Centuria after 12 years with a prominent international real estate investor and manager, where he secured several industry awards including Fund Manager of the Year and Direct Property and A-REIT of the Year. Prior to this, he held various National Sales Manager and State Manager roles for financial institutions across a 21year period.

He is a member of the Property Funds Association (PFA). Michael holds a Bachelor of Financial Administration from the University of New England, a Diploma of Financial Planning from the Royal Melbourne Institute of Technology (RMIT), a Master of Business Administration from Macquarie University, and is a graduate of the Australian Institute of Company Directors.

Centuria Capital Group – Annual Report 2021[| ] 41

Senior Executives

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Sara Stacey

HEAD OF MARKETING

Sara is Head of Marketing, responsible for Centuria’s full end-to-end marketing strategy, planning and execution across the Group’s business entities and channels within Australia and New Zealand, which incorporates brand positioning, real estate capital fundraising campaigns and investment bond promotions.

Since joining the Group in May 2019, Sara has been instrumental in supporting Centuria’s growth through the introduction of a new Corporate brand while integrating several merged businesses including Heathley Limited (now Centuria Healthcare), Bass Capital (now Centuria Bass Credit), Augusta Capital (now Centuria NZ) and most recently Primewest.

Sara brings more than 20 years global marketing experience to Centuria, with a strong financial markets background. Her career spans senior roles within prestigious international institutions including Pictet Asset Management, BlueBay Asset Management (now part of the Royal Bank of Canada) and State Street Global Advisors where she transferred to the Sydney office in 2015 as Head of Marketing – Australia.

Her successful career has been recognised with several marketing awards including the Financial Standard’s Marketer of the Year 2016, Advertising Campaign of the Year 2016 & 2017, Social Media Campaign of the Year 2017 and Marketing Team of the Year 2017 (finalist).

Sara studied a Chartered Institute of Marketing (CIM) accreditation from the London Metropolitan University and holds a Graphic Design Diploma (Merit) from Colchester Institute, UK.

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Bruce McCully

HEAD OF RETAIL - GENERAL MANAGER, WA

Bruce is General Manager of Western Australian following Centuria’s merger with Primewest.

In addition, he is Head of Retail and is responsible for the Group’s $2.6billion retail portfolio and expanding retail acquisitions across unlisted funds and on behalf of several institutional mandates. He oversees all operations throughout west coast Australia across development, transactions, leasing, asset management and facilities management.

Bruce joined Primewest in February 2020, bringing more than 30 years of retail property expertise to the Group. Prior to this, he was Coles Group State Property Manager across WA, SA & NT for more than 10 years. Additionally, Bruce has held senior roles with Macquarie Bank, Centro Properties and Metcash.

Bruce is a licenced Real Estate Agent and holds an MBA from the University of Western Australia, a Diploma of Business Management and Certificate of Management from the University of Western Australia and is a member of the Property Council of Australia WA.

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Mark Francis CEO - CENTURIA NEW ZEALAND

CEO of Centuria’s New Zealand division, Mark Francis, has a career spanning more than 25 years across financial and real estate markets. He founded Augusta Capital in 2001 and assumed his current position at the helm of Centuria’s New Zealand entity following the companies’ merger.

Mark is a board member of the Centuria Funds Management NZ and the Centuria NZ Industrial Fund as well as a Centuria Capital Senior Executive Committee member. He is also Managing Director of the NZX-listed Asset Plus Limited (NZX: APL).

He is responsible for overseeing a A$2.3billion real estate portfolio spanning office, industrial, healthcare, retail and tourism assets across listed and unlisted funds while managing a team of more than 40 staff across three offices.

Since merging with Centuria (July 2020), the New Zealand business increased assets under management by 35%, contributing A$24.4milion in recurring revenues to the Group. Mark was at the forefront of executing one of Australasia’s largest single-asset unlisted funds underpinned by the NZ$178m Visy Glass manufacturing facility in Penrose, Auckland (March 2021).

Prior to founding Augusta, Mark was an equity analyst with Hendry Hay MacIntosh (now Merrill Lynch in NZ) before undertaking property development roles with Force Corporation Limited and Village Roadshow Australia Pty Ltd.

Mark graduated from the University of Otago with a Bachelor of Commerce (Finance).

42[| ] Centuria Capital Group – Annual Report 2021

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Alexandra Koolman

GROUP COMMUNICATIONS MANAGER

Alexandra is Group Communications Manager, responsible for internal and external communications across Centuria’s c.$17billion listed and unlisted equity and debt funds, ESG initiatives and investment bonds.

She joined the company in April 2020, bringing extensive domestic and international corporate communications and public relations experience within commercial, residential, build-to-rent and development real estate disciplines. Alexandra brings more than 18 years experience to Centuria, having held senior positions with Australian property developers and British real estate agencies, including Colliers International.

She holds a Bachelor of Business (Public Relations) from the Queensland University of Technology (QUT).

LISTED: 825 ANN STREET, FORTITUDE VALLEY, QLD

Centuria Capital Group – Annual Report 2021[| ] 43

Centuria’s people

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INTERNATIONAL WOMEN’S DAY CENTURIA PANEL INTERNATIONAL WOMEN’S DAY CENTURIA PANEL
CENTURIA BRISBANE STAFF CENTURIA BASS CAPITAL DIRECTORS
CENTURIA NZ SENIOR TEAM
44 [| ] Centuria Capital Group – Annual Report 2021
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CENTURIA MELBOURNE OFFICE

CENTURIA DEVELOPMENT SOCIAL AND AFFORDABLE HOUSING PROJECT

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CENTURIA CHAIRMAN & JOINT CEOS - NAIDOC WEEK
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PRIMEWEST GROUP FOUNDERS
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Centuria Capital Group – Annual Report 2021[| ] 45

46[| ] Centuria Capital Group – Annual Report 2021

Directors’ Report

For the year ended 30 June 2021

The directors of Centuria Capital Limited (the ‘Company’) present their report together with the consolidated financial statements of the Company and its controlled entities (the ‘Group’) for the financial year ended 30 June 2021 and the auditor’s report thereon.

ASX listed Centuria Capital Group consists of the Company and its controlled entities including Centuria Capital Fund (‘CCF’). The shares in the Company and the units in CCF are stapled, quoted and traded on the Australian Securities Exchange (‘ASX’) as if they were a single security under the ticker code ‘CNI’.

Responsibilities

Chairman of the Centuria Capital Limited and Centuria Funds Management Limited Boards
Member of the Conflicts Committee (stepped down as Chairman on 1 May 2021)
Chairman of the Nomination and Remuneration Committee
Member of the Centuria Capital Limited and Centuria Funds Management Limited Audit, Risk Management and Compliance Committee
Chairman of the Centuria Life Limited Board

DIRECTORS AND DIRECTORS’ INTERESTS

		Directorship of
Name	Appointed	other listed entities	Resigned
Mr Garry Charny	23 Feb 2016	None
Mr Peter J. Done	28 Nov 2007	Centuria Industrial
		REIT (CIP)(i) Centuria Offce REIT
Mr John R. Slater Ms Susan Wheeldon	22 May 2013 31 Aug 2016	(COF)(ii) None None
Ms Kristie Brown	15 Feb 2021	None
Mr Nicholas Collishaw	27 Aug 2013	Centuria Industrial
		REIT (CIP)(i)
Mr John E. McBain	10 Dec 2006	Centuria Offce REIT (COF)(ii) Redcape Hotel Group (RDC)(iii) None
Mr Jason C. Huljich	28 Nov 2007	None
Mr Wee Peng Cho	15 Feb 2021	None	1 Apr 2021

(i) Director of Centuria Property Funds No. 2 Limited as responsible entity for Centuria Industrial REIT
(ii) Director of Centuria Property Funds Limited as responsible entity for Centuria Office REIT
(iii) Director of Redcape Hotel Group Management Limited as responsible entity for Redcape Hotel Trust 1 and Redcape Hotel Trust 2
Member of the Centuria Life Limited Audit Committee
Member of the Centuria Life Limited Risk and Compliance Committee
Chairman of the Centuria Healthcare Pty Limited Board
Chairman of the Over Fifties Guardian Friendly Society Limited Board
Member of the Over Fifties Guardian Friendly Society Limited Audit Committee
Member of the Over Fifties Guardian Friendly Society Limited Risk and Compliance Committee

Interests in CNI

Ordinary stapled securities: 406,753

MR PETER J. DONE, B.COMM, FCA.

Independent Non-Executive Director

Experience and expertise

Peter was appointed to the Board on 28 November 2007. Peter was a Partner at KPMG for 27 years until his retirement in June 2006.

Other directorships

None

Responsibilities

Member of the Centuria Capital Limited and Centuria Funds Management Limited Boards
Member of the Nomination and Remuneration Committee

MR GARRY S. CHARNY , BA. LL.B.

Independent Non-Executive Director and Chairman

Experience and expertise

Garry was appointed to the Board on 23 February 2016 and appointed Chairman of Centuria Capital Group on 30 March 2016. Garry is also Chairman of Centuria Life Limited and Over Fifty Guardian Friendly Society Limited.

He is Managing Director and founding principal of Wolseley Corporate, an Australian based corporate advisory and investment house which transacts both domestically and internationally.

He has significant, board-level experience in listed and unlisted companies across a diverse range of sectors including property, retail, technology and media. He formerly practised as a barrister in the fields of commercial and equity.

Other directorships

Garry is Chairman of Wolseley Corporate. He is also Chairman of Spotted Turquoise Films, an international Film and Television company based in Sydney and Los Angeles. He is Chairman of Shero Investments, a Sydney based investment company.

Chairman of the Centuria Capital Limited and Centuria Funds Management Limited Audit, Risk Management and Compliance Committee
Member of the Centuria Life Limited Board
Chairman of the Centuria Life Limited Audit Committee
Chairman of the Centuria Life Limited Risk and Compliance Committee
Member of the Centuria Life Limited Investment Committee
Member of the Centuria Property Funds Limited Board (stepped down as Chairman on 1 June 2021)
Member of the Centuria Property Funds Limited Audit, Risk Management and Compliance Committee (stepped down as Chairman on 1 June 2021)
Member of the Centuria Property Funds No. 2 Limited Board (stepped down as Chairman on 29 July 2020)
Member of the Centuria Property Funds No. 2 Limited Audit, Risk Management and Compliance Committee (stepped down as Chairman on 29 July 2020)
Member of the Over Fifties Guardian Friendly Society Limited Board
Chairman of the Over Fifties Guardian Friendly Society Limited Audit Committee
Chairman of the Over Fifties Guardian Friendly Society Limited Risk and Compliance Committee

Interests in CNI

Ordinary stapled securities: 1,506,182

Centuria Capital Group – Annual Report 2021[| ] 47

Directors’ Report

For the year ended 30 June 2021

MR JOHN R. SLATER , DIP.FS (FP), F FIN.

Independent Non-Executive Director

Experience and expertise

John was appointed to the Board on 22 May 2013 having previously been an adviser to the Centuria Life Friendly Society since 2011.

Other directorships

None

Responsibilities

Member of the Centuria Capital Limited and Centuria Funds Management Limited Boards

MS KRISTIE BROWN , B. COMM, B. LAW (HONS)

Independent Non-Executive Director

Experience and expertise

Kristie Brown is an experienced real estate investment and legal professional who joins the Centuria Board as an Independent NonExecutive Director as well as a member of the Group’s Audit, Risk and Compliance Committee (ARCC). Ms Brown is a founding partner of investment firm, Couloir Capital, and established Danube View Investments following 16 years at blue-chip law firms.

Other directorships

Director of Colouir Capital

Responsibilities

Member of the Centuria Capital Limited and Centuria Funds Management Limited Boards
Member of the Centuria Capital Limited and Centuria Funds Management Limited Audit, Risk Management and Compliance Committee

Interests in CNI

Ordinary stapled securities: Nil

Member of the Nomination and Remuneration Committee
Member of the Centuria Capital Limited and Centuria Funds Management Limited Audit, Risk Management and Compliance Committee
Member of the Centuria Life Limited Board
Chairman of the Centuria Life Limited Investment Committee
Member of the Over Fifties Guardian Friendly Society Limited Investment Committee

Interests in CNI

Ordinary stapled securities: 3,110,677

MS SUSAN WHEELDON , MBA.

Independent Non-Executive Director

Experience and expertise

Susan was appointed to the Board on 31 August 2016.

Susan is Country Manager for Australia and New Zealand at Airbnb. Previously, she served in a number of roles, including Head of Government & Performance and Head of Agency at Google, working with major national and global companies to develop and deliver growth strategies that future-proof and build clients’ businesses and brands in a constantly changing environment.

She has previous experience in retail property asset management at AMP Capital Shopping Centres, as Head of Brand & Retail, responsible for delivering alternative revenue from 38 retail assets across Australia and New Zealand with combined annual sales in excess of $5 billion.

MR NICHOLAS R. COLLISHAW, SAFIN, FAAPI, FRICS.

Non-Executive Director

Experience and expertise

Between 2005 and 2008, he was Mirvac Group’s Executive Director, Investment. Between 2008 and 2012, he was Mirvac Group’s CEO, responsible for successfully guiding the real estate development and investment company through the Global Financial Crisis and implementing sustained growth strategies.

Other directorships

Chairman of Redcape Hotel Group Management Ltd

Responsibilities

Member of the Centuria Capital Limited and Centuria Funds Management Limited Boards
Member of the Culture and ESG Committee
Member of the Centuria Property Funds Limited Board

Other directorships

None

Responsibilities

Member of the Centuria Capital Limited and Centuria Funds Management Limited Boards
Member of the Conflicts Committee
Member of the Centuria Property Funds No. 2 Limited Board
Member of the Centuria Healthcare Asset Management Limited Board

Interests in CNI

Ordinary stapled securities: 4,360,037

Chairman of the Culture and ESG Committee
Member of the Centuria Life Limited Board (resigned on 28 July 2020)

Interests in CNI

Ordinary stapled securities: Nil

48[| ] Centuria Capital Group – Annual Report 2021

MR JOHN E. MCBAIN, DIP. URBAN VALUATION

Executive Director and Joint Chief Executive Officer

Experience and expertise

Joint CEO John McBain’s 40-year real estate career in both Australasia and the UK spans the commercial and industrial markets and more latterly the healthcare and agriculture real estate sectors.

He is an executive director of Centuria Capital Limited, Centuria Life Limited, Centuria Healthcare Limited and Primewest Management Limited and a non-executive director of Centuria Bass Credit Limited and NZX listed Asset Plus Limited (NZ). He is an alternate director of Centuria Funds Management (NZ) and Augusta Industrial Fund Limited (NZ). He also serves on the Centuria Life Investment committee.

John and Jason founded Centuria Capital together and the group now oversees $17 billion of assets under management including four separate publicly listed vehicles and 300 staff throughout Sydney, Melbourne, Brisbane, and Manilla.

John is chiefly responsible for Centuria’s corporate team including corporate acquisitions and mergers. His responsibilities include corporate strategy as well as leadership of the Finance, Company Secretarial, Compliance and Governance, Corporate Investor Relations, Marketing, Communications and Centuria Life teams who report directly to him. He jointly steers the Senior Executive Committee and serves on the Sustainability and Non-Financial Risks Committees.

Since 2007, John has been instrumental in the integration of several businesses into the Centuria group, including the 360 Capital Group (2016), a majority interest in Heathley Asset Management (now Centuria Healthcare) (2019), New Zealand-based Augusta Capital Limited (2020) and Primewest Group (2021).

This corporate acquisition strategy together with a highly successful asset acquisition and funds management programme overseen by fellow CEO Jason Huljich has seen the pair oversee significant growth in both company size and shareholder returns culminating in Centuria Capital Limited entering the S&P ASX 200 Index in July 2021.

He has a property valuation qualification from The University of Auckland.

MR JASON C. HULJICH, B. COMM.

Executive Director and Joint Chief Executive Officer

Experience and expertise

Joint CEO Jason Huljich’s 25-year real estate career spans the commercial and industrial real estate sectors. He co-founded Centuria Capital, with Joint CEO, John McBain.

He is an executive director of Centuria Capital Group, Centuria Life Limited, Centuria Healthcare Limited, Centuria Healthcare Asset Management Limited, Primewest Management Limited, Centuria Capital (NZ) No. 1 Limited, Centuria Funds Management (NZ) Limited and Augusta Industrial Fund Limited. He is a non-executive director of Centuria Bass Credit Limited.

Jason shares the helm of Centuria with John, collectively overseeing more than $17 billion of assets under management and c.300 staff throughout Australia, New Zealand and the Philippines.

Since Centuria was established, Jason has been pivotal in raising over $5 billion for the listed and unlisted vehicles. He has been central to positioning Centuria as Australia’s fourth largest external manager. Centuria Capital Group (CNI) and CIP are part of the S&P/ASX 200 Index and CIP is also part of the FTSE EPRA Nareit Global Index. COF is part of the S&P/ ASX 300 Index.

Jason’s career began after graduating with a Bachelor of Commerce (Commercial Law major) from the University of Auckland. He is a Property Funds Association of Australia Past President.The PFA is the peak industry body representing the $125 billion direct property investment industry. Jason currently sits on the Property Council of Australia’s Global Investment Committee.

Other directorships

None

Other directorships

None

Responsibilities

Group Joint Chief Executive Officer

Interests in CNI

Ordinary stapled securities: 7,062,484 Performance rights granted: 2,298,002

Special responsibilities

Group Joint Chief Executive Officer Member of the Culture and ESG Committee

Interests in CNI

Ordinary stapled securities: 5,289,612 Performance rights granted: 2,165,023

Centuria Capital Group – Annual Report 2021[| ] 49

Directors’ Report

For the year ended 30 June 2021

DIRECTORS’ MEETINGS

The following table sets out the number of directors’ meetings (including meetings of committees of directors) held during the financial year and the number of meetings attended by each director (while they were a director or committee member).

Director	Board Meetings Audit, Risk, Management & Compliance Committee Meetings Nomination & Remuneration Committee Meetings Conficts Committee Meetings
	A B A B A B A B
Mr Garry S. Charny Mr Peter J. Done Mr John R. Slater Ms Susan Wheeldon Mr Nicholas R. Collishaw Mr John E. McBain Mr Jason C. Huljich Ms Kristie Brown Mr Wee Peng Cho	27 27 6 6 6 6 12 12 26 27 6 6 6 6 # # 27 27 5 6 6 6 # # 26 27 # # # # 12 12 25 27 # # # # # # 26 27 # # # # # # 26 27 # # # # # # 12 12 1 1 # # # # 3 4 # # # # # #

A = Number of meetings attended B = Number of meetings held during the time the Director held office during the year

= Not a member of committee

COMPANY SECRETARY

Anna Kovarik was appointed to the position of Company Secretary on 5 July 2018.

Anna holds a Masters of Information Technology, a BA (Hons) in Systems Management and was awarded a distinction in the Global Executive MBA program at the University of Sydney. She is qualified as a solicitor in both the United Kingdom and New South Wales and was a senior associate at Allens law practice in Sydney.

Prior to joining Centuria, Anna held the position of Group Risk Manager at Mirvac Group and was previously Head of Group Insurance for AMP and General Counsel and Company Secretary at AMP Capital Brookfield.

PRINCIPAL ACTIVITIES

The principal activities of the Group during the financial year were the marketing and management of investment products including direct interest in property funds, friendly society investment bonds, property and development finance and other liquid investments across Australasia.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Significant changes in the state of affairs of the Group during the financial year were as follows:

Contributed equity attributable to Centuria Capital Group increased to $1,405,456,000 reflecting equity raisings undertaken during the year. This included stapled securities issued as partial consideration for the takeover of Augusta Capital Limited and Primewest Group Limited (Primewest) during the year and the vesting of rights under the Executive Incentive Plan. Details of changes in contributed equity are disclosed in Note C10 to the consolidated financial statements.
In December 2020, the Group refinanced the corporate notes, reducing the fixed component of Tranche 1 from $30,708,000 to $19,447,000, reducing the variable component of Tranche 1 from $26,040,000 to $8,350,000, increasing the fixed component of Tranche 3 from $18,115,000 to $29,366,000 and increasing the variable component of Tranche 3 from $13,960,000 to $31,650,000.
In April 2021, the Group issued $198,693,000 of listed redeemable notes with a variable interest rate of 4.25% plus the bank bill rate which is due to mature on 21 April 2026.
In April 2021, the Group repaid $19,447,000 of the 7.0% fixed rate secured notes, $45,000,000 of the 6.5% fixed rate secured notes and $8,350,000 of the variable rate secured notes.
The Group acquired a 50% interest in Bass Capital Partners Pty Ltd (Centuria Bass) for $25,417,876 cash consideration. Centuria Bass is considered a joint venture and treated as an equity accounted investment commencing from 22 April 2021.
On 3 June 2021, the Group had received commitments to acquire 70.1% of Primewest securities and declared the offer as unconditional. As a result, the Group has been deemed to attain control over Primewest on 3 June 2021. The offer consisted of a cash component of $0.20 and a scrip component of 0.473 Centuria stapled securities per Primewest security. The Group had acquired 98.37% of Primewest securities at 30 June 2021, with the remaining 1.63% under compulsory acquisition. The Group has accounted for Primewest as a wholly owned subsidiary as at 30 June 2021.

50[| ] Centuria Capital Group – Annual Report 2021

OPERATING AND FINANCIAL REVIEW

The Group recorded a consolidated statutory NPAT for the year of $149,639,000 (2020: $22,087,000). Statutory NPAT has been prepared in accordance with the Corporations Act 2001 and Australian Accounting Standards, which comply with International Financial Reporting Standards.

The Group recorded an operating profit after tax of $70,211,000 (2020: $53,253,000). Operating profit after tax excludes non-operating items such as transaction costs, fair value movements and share of net profit of equity accounted investments in excess of distributions received.

The statutory NPAT includes a number of items that are not considered operating in nature, the table below provides a reconciliation from statutory profit to operating profit.

Reconciliation of statutory	2021	2020
proft to operating proft	$’000	$’000
Statutory proft after tax	149,639	22,087
Statutory earnings per security
(EPS) (cents)	24.6	4.7
Less non-operating items:
Unrealised (gain)/loss on fair value
of investments and derivatives	(79,843)	34,837
Transaction and other costs	4,503	6,208
Impairment charges in relation
to seed capital	-	550
(Proft)/loss attributable to controlled
property funds	(12,456)	1,323
Eliminations between the operating and
non-operating segment	6,681	(3,347)
Share of equity accounted net loss/
(proft) in excess of distributions received	175	(1,486)
Write-off of capitalised borrowing costs in
relation to repayment of secured notes	2,349	1,229
Tax impact of above non-operating
adjustments	(837)	(8,148)
Operating proft after tax	70,211	53,253
Operating EPS (cents)	12.0	12.0

A summary of the Group’s operating segments is provided in Note A5 of the Financial Report. The Operating NPAT for the Group comprises the result of the divisions which report to the Joint CEOs and Board of Directors for the purpose of resource allocation and assessment of performance.

Segment	Operating proft after tax $’000 Increase/ (Decrease) $’000 Increase/ (Decrease) % Highlights 2021 2020
Property Funds Management Co-Investments Developments Property and Development Finance Investment Bonds Management Corporate	44,558 36,286 8,272 23 (A) 26,066 19,166 6,900 36 (B) 3,419 1,232 2,187 178 (C) 286 - 286 - (D) 547 1,710 (1,163) (68) (E) (4,665) (5,141)
Operating proft after tax	70,211 53,253

A detailed Segment Profit and Loss as well as a detailed Segment Balance Sheet are outlined in Notes B1 and C1, respectively.

Operational highlights for the key segments were as follows:

(A) Property Funds Management

For the year ended 30 June 2021, excluding the after tax impact of performance fees, the Property Funds Management segment profit increased by $10,793,000 or 51% reflecting the growth in AUM.

For the year ended 30 June 2021, Property Funds Management operating NPAT of $44,558,000 was higher than the prior year ending 30 June 2020 by $8,272,000 primarily due to the impact of acquisitions in the first half of the financial year and full year impact of the acquisition of Augusta Capital Limited.

The increase in AUM was primarily attributable to approximately $2.0 billion in organic acquisitions with 6 assets valued at $837 million acquired in listed vehicle CIP and the remainder of the increase relating to other acquisitions in CIP, single asset funds and Healthcare properties.

(B) Co-Investments

For the year ended 30 June 2021, the Co-Investments segment operating NPAT increased by $6,900,000. This was primarily due to additional units acquired during the year in COF and CIP, as well as an increase in underwiting activity for newly established funds in New Zealand.

The operating profit after tax for the Co-Investments segment represents the distributions and returns generated from investment stakes held less applicable financing costs.

(C) Developments

For the year ended 30 June 2021, the Developments segment operating net profit after tax was $3,419,000. This segment has been introduced in the year ending 30 June 2021 due to development earnings contributing to a larger share of the Group’s earnings. The prior year segment disclosure has been restated to reflect the Development segment.

(D) Property and development finance

For the year ended 30 June 2021, the Property and development finance segment’s operating NPAT was $286,000. This segment was created from the Group’s acquisition of 50% interest in Bass Capital Partners Pty Ltd (Centuria Bass), a real estate debt fund provider, for $25,417,876 cash consideration.

Centuria Capital Group – Annual Report 2021[| ] 51

Directors’ Report

For the year ended 30 June 2021

Centuria Bass is considered a joint venture and treated as an equity accounted investment commencing from 22 April 2021. The operating results of Centuria Bass are shown in Note B1 as the Group’s proportionate share.

in future financial years has not been included in this report because disclosure of the information would be likely to result in unreasonable prejudice to the Group.

ENVIRONMENTAL REGULATION

(E) Investment Bonds Management

For the year ended 30 June 2021, the Investment Bonds Management segment’s operating NPAT decreased by $1,163,000 to $547,000 primarily due to the impact of the low interest rate environment resulting in an increase in Capital Guaranteed Fund rebates.

EARNINGS PER SECURITY (EPS)

	2021	2021	2020	2020
	Operating	Statutory	Operating	Statutory
Basic EPS (cents/security)	12.0	24.6	12.0	4.7
Diluted EPS(cents/security)	11.9	24.2	11.6	4.6

DIVIDENDS AND DISTRIBUTIONS

Dividends and distributions paid or declared by the Group during the current financial year were:

current financial year were:
		Total
	Cents per	amount	Date
	security	$’000	paid
Dividends/distributions
paid during the year
Final 2020 dividend
(100% franked)	1.80	8,690	8 Jul 2020
Final 2020
Trust distribution	3.40	16,420	8 Jul 2020
Interim 2021 dividend
(100% franked)	1.20	7,203	29 Jan 2021
Interim 2021
Trust distribution	3.30	19,811	29 Jan 2021
Dividends/distributions
declared during the year
Final 2021 dividend
(100% franked)	2.10	12,605	30 Jul 2021
Final 2021
Trust distribution	3.40	20,408	30 Jul 2021

EVENTS SUBSEQUENT TO THE REPORTING DATE

In July 2021, $34,100,000 cash consideration was received for the two final social affordable housing developments, 45 Pendlebury Road, Cardiff NSW and 357-359 Mann Street, North Gosford NSW.

Other than the above, there has not arisen in the interval between 30 June 2021 and the date hereof any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial periods.

The Group has policies and procedures to identify and appropriately address environmental obligations that might arise in respect of the Group’s operations that are subject to significant environmental laws and regulation. The Directors have determined that the Group has complied with those obligations during the financial year and that there has not been any material breach.

INDEMNIFICATION OF OFFICERS AND AUDITORS

The Company has agreed to indemnify all current and former directors and executive officers of the Company and its controlled entities against all liabilities to persons (other than the Company or a related body corporate) which arise out of the performance of their normal duties as a director or executive officer unless the liability relates to conduct involving a lack of good faith.

The Company has agreed to indemnify the directors and executive officers against all costs and expenses incurred in defending an action that falls within the scope of the indemnity and any resulting payments.

The directors have not included details of the nature of the liabilities covered or the amount of premium paid in respect of the directors’ and officers’ liability and legal expenses insurance contracts, as such disclosure is prohibited under the terms of the contracts. The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the Company or any related body corporate against a liability incurred as an officer or auditor.

NON-AUDIT SERVICES

During the financial year, KPMG, the Group’s auditor, has performed services in addition to the audit and review of the financial statements. Details of amounts paid or payable to KPMG are outlined in Note F4 to the financial statements.

The directors are satisfied that the provision of non-audit services during the year, by the auditor (or by another person or firm on the auditor’s behalf) is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001.

The directors are of the opinion that the services as disclosed in the financial statements do not compromise the external auditor’s independence, based on advice received from the Audit, Risk Management & Compliance Committee, for the following reasons:

all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in the Code of Conduct APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or decisionmaking capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards.

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 69.

LIKELY DEVELOPMENTS

The Group continues to pursue its strategy of focusing on its core operations, utilising a strengthened balance sheet to provide support to grow and develop these operations.

Further information about likely developments in the operations of the Group and the expected results of those operations

ROUNDING OF AMOUNTS

The Group is an entity of a kind referred to in ASIC Legislative Instrument 2016/191, related to the ‘rounding off’ of amounts in the Directors’ Report and financial statements. Amounts in the Directors’ Report and financial statements have been rounded off, in accordance with the instrument to the nearest thousand dollars, unless otherwise indicated.

52[| ] Centuria Capital Group – Annual Report 2021

LISTED: 1 ASHBURN ROAD, BUNDAMBA, QLD

Centuria Capital Group – Annual Report 2021[| ] 53

Directors’ Report

For the year ended 30 June 2021

REMUNERATION COMMITTEE CHAIR’S LETTER

DEAR INVESTOR,

As chair of the Nomination and Remuneration Committee, I am pleased to present the remuneration report for the year ended 30 June 2021. This report has been approved by the Board and is intended to be informative and digestible whilst complying with our statutory reporting obligations.

and Jennifer Cook to the Board of Centuria Property Funds No. 2 Limited the Responsible Entity Boards of Centuria Office REIT and Centuria Industrial REIT respectively. Professor Simon Rice, OAM, has been elevated to Chair of the Group’s Conflicts Committee and Matt Hardy to the Chair of Centuria Property Funds Limited. Finally, Susan Wheeldon has been appointed to Chair our new Culture and ESG Committee.

FY21 PERFORMANCE AND REMUNERATION OUTCOMES

Our remuneration philosophy aims to fairly reward and retain the people who we believe play a crucial role in the achievement of our long-term objectives and is a key source of our competitive advantage as a leading Australasian funds manager in the S&P/ASX200 Index. As we continue to grow and mature as a company, we have sought to substantially improve the disclosure of our remuneration structure and practices to clearly link the performance of Centuria Capital Group and to reflect our core value of pay for performance.

IMPROVEMENTS IN DISCLOSURE

Throughout FY21, we have sought feedback from our investors and various stakeholder groups and have worked to not only improve transparency of our remuneration report but to better articulate the remuneration practices we have adopted. We, as a Board, believe these remuneration practices are fit for purpose and not only align with our somewhat complex structure but also drive long-term performance for our securityholders. As such, we have included a more comprehensive overview of the overall structure of the Group and deeper rationales for the adoption of a Joint CEO structure. More details of this can be found on page 56 of the remuneration report.

EXECUTIVE REMUNERATION CHANGES

Additionally, as discussed in last year’s Notice of Meeting, we have made a number of adjustments to the performance hurdles for executives’ variable awards, making the outcome more aligned with our comparator peers, whilst continuing to align with investor’s interests. For the LongTerm Incentive (LTI) grants made in respect of the FY20-FY23 period we replaced the Assets Under Management (AUM) performance hurdle with a combination of Relative and Absolute Total Securityholder Return (TSR) hurdles assessed against AREIT peers in the S&P/ASX200. The introduction of the Relative and Absolute TSR performance hurdles to the LTI programme aligns executive’s interests with securityholder outcomes and provides a direct comparison of Centuria’s performance against their comparator group of peers. Again as foreshadowed in the Notice of Meeting in relation to the 2020 AGM, LTI grants proposed for the FY21-24 period will now vest over year’s three and four rather than in year three as was previously the case, i.e. vesting in FY24/FY25.

Further, we have amended the Short-term Incentive (STI) hurdles to ensure the awards are demonstrably not only tied to performance but also create an ongoing annual focus on imperative business and operational issues that create the type of company we are all striving towards. More details of this can be found on page 60 of the remuneration report, respectively.

NON-EXECUTIVE DIRECTOR REMUNERATION CHANGES

Effective from 1 June 2021, a new fee structure which covers the Board and Board Committee roles across Group (including CNI and other operating entities) has been adopted to improve the transparency of fees paid to directors. Further, the fee schedule has been benchmarked against AREIT peers in the S&P/ASX200 to align director remuneration with market practice as well as recognising the significant responsibilities each director has in the various Boards and Board Committees they sit across the Group. More details of the fee structure can be found on page 66 of the remuneration report.

The fees have been designed to be comparable to our peers in order to attract the highest quality talent to the Board. Expanding the breadth and depth of Board membership across the Group has been a key priority of the current Board to ensure a drive towards optimal independence and diversity in all its forms. In February 2021, Centuria appointed Kristie Brown to the Centuria Capital Limited Board. In July 2021, Centuria also appointed Nicole Green to the Board of Centuria Property Funds Limited

Despite tough market conditions in the office market due to the ongoing impact of the COVID-19 pandemic, Centuria has had successful financial year in terms of relative securityholder price (+55.3%) to the broader ASX200 industrial and real estate indices. Additionally, the Group strategies to diversify out of pure office into other asset classes and to enter M&A where it is appropriate have been instrumental in keeping our TSR healthy and growing CNI’s market capitalisation.

For FY21, Centuria’s one-year TSR was 61.8% with the three-year TSR being 130.1%. This resulted in 100% of the absolute TSR component of the Tranche 6 Long-Term Incentive (LTI) awards to vest in FY21. Furthermore, under the stewardship of the executive team, the Group has grown its AUM from $6.2 billion in FY19 to $17.4 billion at the end of FY21. This represents a compound annual growth rate in AUM of 67.5% over the three-year period. Consequently, 100% of the AUM component of the Tranche 6 LTI awards vested in FY21.

It is difficult to think of any other combination of strategies which would have produced this result and despite COVID-19’s effect on office fund generation, with the finalisation of the acquisition of the Augusta (NZ) and Primewest funds management businesses the executive team has the Group poised to enter FY22 with very healthy EPS growth metrics. Operating EPS for FY21 was 12.0 cents per security, which was comfortably within FY21 guidance range. This result, combined with our substantial year-on-year growth in AUM of 97.7% and strong continued equity flows resulted in 100% of the financial component of the FY21 Short-Term Incentive (STI) to be awarded to the executive team.

The executive team also made substantial headway on non-financial milestones across culture, risk management and sustainability, which the Board believes has contributed to the continued strong financial performance as well as positioning the Group to continue on its growth path. Consequently, 100% of the non-financial component of the FY21 STI was awarded to the executive team.

As a maturing company, we will continue to engage in an open and meaningful dialogue with our securityholders and other stakeholders surrounding our remuneration policies and their contribution to Group’s performance as well as our understanding of securityholder concerns and local and global market best practices. We hope, through our continued evolution of our remuneration practices and ongoing financial performance, that we look forward to your support at our 2021 Annual General Meeting.

Yours sincerely,

==> picture [129 x 78] intentionally omitted <==

Garry Charny

Chairman of the Board and Chairman of the Nomination & Remuneration Committee

54[| ] Centuria Capital Group – Annual Report 2021

AUDITED REMUNERATION REPORT

We are pleased to present the Remuneration Report for the period ending 30 June 2021.

This Remuneration Report has been prepared in accordance with section 300A of the Corporations Act 2001 (Cth) (Act) and the applicable Corporations Regulations 2001 (Cth) . The remuneration report provides information about the remuneration arrangements for key management personnel (KMP), which includes non-executive Directors and the Group’s most senior management for the year ended 30 June 2021.

For clarity, the STI and LTI amounts awarded to Joint CEOs and CFO were calculated on gross fixed remuneration amounts in as much as they do not allow a deduction for the wage reductions implemented by the Group in the interest of securityholders during initial COVID-19 pandemic conditions. For the period of 1 July 2020 to 30 November 2020, the Board of Directors and Joint CEOs reduced fixed remuneration/board fees by 15%.

Other staff members agreed to fee reductions in the range 5% to 12.5% over the same period. These deductions are permanent and will not be reimbursed by the Group.

The report is structured as follows:

Details of KMP covered in this report;
Remuneration oversight and key principles;
Remuneration of executive directors and senior management;
Key terms of employment contracts;
Non-executive director remuneration; and
Director and senior management equity holdings and other transactions.

DETAILS OF KMP COVERED IN THIS REPORT

The following persons had authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, including any director (whether executive or otherwise) of the Company during the full financial year.

Name	Role	Term
Non-Executive Directors
Mr Garry S. Charny	Independent Non-	Full term
	Executive Director
	and Chairman
Mr Peter J. Done	Independent Non-	Full term
	Executive Director
Mr John R. Slater	Independent Non-	Full term
	Executive Director
Ms Susan Wheeldon	Independent Non-	Full term
	Executive Director
Ms Kristie Brown	Independent Non-	Part-year (from
	Executive Director	15 Feb 2021)
Mr Nicholas R. Collishaw	Non-Executive	Full term
	Director
Executive Directors
Mr John E. McBain	Executive Director	Full term
	and Joint Chief
	Executive Offcer
Mr Jason C. Huljich	Executive Director	Full term
	and Joint Chief
	Executive Offcer
Executives
Mr Simon W. Holt	Chief Financial	Full term
	Offcer

The term ‘senior management’ is used in this remuneration report to refer to the executive directors and the Chief Financial Officer.

NOMINATION AND REMUNERATION COMMITTEE

The Board has an established Nomination & Remuneration Committee which operates under the delegated authority of the Board of Directors. A summary of the Nomination & Remuneration Committee charter is included on the Centuria Capital Group website.

The functions of the Committee in respect of remuneration include:

Making recommendations to the Board regarding the remuneration of non-executive members of Centuria’s Board, subsidiary boards and committees which shall be reviewed annually;
An annual review of the Joint CEO’s remuneration and the application of incentive programs; and
An annual review of the application of the short-term and long-term incentive schemes and policies for executives and staff.

Additionally, the function of the Committee in respect of Board, Joint CEO’s and senior executive performance include:

Evaluating the performance of the Board, including committees and individual directors;
Assessing the performance of the Joint CEO’s and senior executives against their key performance indicators; and
Ensuring other human resource management programs, including performance assessment programs are in place.

The following Non-Executive Directors of Centuria are members of the Nomination & Remuneration Committee

Mr Garry Charny (Non-Executive Committee Chair)
Mr. John Slater (Non-Executive Director)
Mr. Peter Done (Non-Executive Director)

The Committee is authorised by the Board to obtain external professional advice, and to secure the attendance of advisors with relevant experience if it considers this necessary. There were no remuneration recommendations made by external advisers during the year.

REMUNERATION POLICY AND LINK TO PERFORMANCE

Group Structure

Centuria Capital Group is an ASX-listed specialist investment manager with a 35-year track-record of delivering a range of products and services to investors, advisers and securityholders. Our business is centred around property funds management and investment bonds, with the following key areas of focus:

Centuria Property Funds which specialises in listed property funds (AREITs) and unlisted property funds including;
Listed REITS, COF and CIP in Australia;
Listed property fund Asset Plus Limited (NZ);
the Centuria Diversified Property Fund;
the Centuria Healthcare Property Fund;
the Augusta Industrial fund (NZ);
120 closed-end unlisted property funds in Australia and New Zealand;
Centuria Bass (50% interest in real estate credit supplier);
Centuria LifeGoals Investment Bonds which deliver innovative solutions to help clients meet their investment goals.

The Group encompasses a portfolio of wholesale and retail funds, a healthcare business with related wholesale and retail funds, and a New Zealand business with listed and unlisted funds. It is noted that the listed REITs also are not staffed and responsibility for these are managed by the executive team and employees of CNI. The Group structure is outlined below on page 56.

Centuria Capital Group – Annual Report 2021[| ] 55

Directors’ Report

For the year ended 30 June 2021

The combined market capitalisation of the listed headstock (Centuria Capital Group) and its two listed REITS, CIP and COF, is over approximately $5.8 billion.

Given the overall size of the Group, the complexities of the business it operates and its international scope, the Board has adopted a number of remuneration practices that reflect this. These are present in our adoption of the Joint CEO structure as well as the new Directors’ Fees Schedule, which are discussed further in the sections below of this report. These are present in our adoption of the Joint CEO structure as well as the new Directors’ Fees Schedule, which are discussed further in page 56 and 66 of this report, respectively.

==> picture [498 x 206] intentionally omitted <==

----- Start of picture text -----

Centuria Capital Fund Centuria Capital
Stapled entity with CNI Limited
and Responsible Entity ASX-listed headstock
of CFML of the Group
Management LimitedCenturia Funds Centuria Life Limited APRA License Holder Friendly Socity LimitedOver Fifty Guardian Centuria Property Funds Limited Funds No. 2 LimitedCenturia Property
Capital No. 2 Fund and Trustee of Centuria & AFSL Mutual Fund Society and other unlisted entitiesResponsible Entity of COF and other unlisted entitiesResponsible entity of CIP
Centuria No. 3 Fund
Centuria Unlisted Centuria Investment Centuria Office REIT (ASX:COF) Centuria Industrial REIT (ASX:CIP)
Funds Services Pty Ltd
ASX-listed Property Fund ASX-listed Property Fund
Centuria Institutional
Centuria Properties Centuria Canberra Investments
No. 3 Ltd No. 3 Pty Ltd
No. 3 Pty Ltd
----- End of picture text -----

Remuneration Philosophy

The Group recognises the important role people play in the achievement of its business strategy and long-term objectives and as a key source of competitive advantage. To grow and be successful across these two areas, the Group must be able to attract, motivate and retain capable individuals with exceptional talent, expertise, experience and relationships. Our Group is able to achieve this goal by following the principles of:

Delivering value for shareholders in the most efficient manner - which is reflective in the Joint CEO structure that optimises the size of the senior executive group in relation to its peers to make it leaner and more agile than our peers. Overall cost of remuneration is managed and linked to operating performance of the Group.
Ensuring competitive, at-risk rewards are provided to attract and retain the best executive talent, with a focus on retention.
Including senior staff in the Long Term Incentive equity plan to provide a sense of ownership and alignment and in FY20 and FY21 distributing securities to all non-LTI staff to encourage ownership and alignment.

The main objective in rewarding the Group’s senior management for their performances is to ensure that shareholders’ wealth is maximised through the Group’s continued growth.

Joint CEO Structure

The Joint CEO structure was established in 2019 as an important part of the Group’s long-term management succession and retention plan. In support of the Joint CEO structure the Board takes into account the following matters:

The Joint CEOs have a strong background in all aspects of the business but also have complementary skills sets, which allows them to focus on different areas in the management of the multiple complexities of the business given the Group’s overall structure. Mr Huljich has primary oversight of funds management, distribution and property services and Mr McBain has primary oversight of corporate functions (corporate strategy, M&A, finance, treasury, legal, communications and investor relations) and the Life business;
The Board have recognised the significant importance that a strong succession plan has on any business. The Joint CEOs have worked seamlessly together for over 20 years. By creating the Joint CEO role for Mr Huljich in 2019, the Board believes it has moved to ensure investors have confidence in the future direction of the Group, and that, with Joint CEOs, the business has two strong leaders, pulling together to optimise investor value in a tried and tested operative way. The Joint CEO structure has been adopted to ensure any future departure is without disruption to the Group’s operations, which will inevitably lead to superior outcomes for securityholders.

The remuneration of the Joint CEOs reflects the position they hold in the REIT industry and their experience and achievements gained from working together over a period of 25 years at Centuria. Given the complimentary skill sets of the two CEOs and their division of key responsibilities (outlined above), the Board believes the remuneration of the Joint CEOs is a benefit for investors by removing the need for expensive key resources which many other AREIT peers require, such as Chief Investment Officers or Chief Operations Officers.

Through the Joint CEO structure, the Group is able to minimise the size of the senior executive group to be leaner and nimbler than its peers, which the Board believes is a significant competitive advantage and in the long-term best interests of securityholders. As part of its benchmarking process, the Board believes the reduced executive committee size and adoption of the Joint CEO structure is a significant cost-saving practice for the Group in comparison to its peers, with the total executive cost being between 68% and 71% lower than its competitors amongst ASX AREIT peers.

The Nomination & Remuneration Committee, as well as the Board, annually review the appropriateness of the Joint CEO structure to ensure its efficiency and effectiveness by assessing the joint performance of the CEOs in delivering strong shareholder outcomes within the context of the Group’s continued growth comparatively to AREIT peers’ performance and total executive team costs.

56[| ] Centuria Capital Group – Annual Report 2021

REMUNERATION OF SENIOR MANAGEMENT

Remuneration Structure

The below table outlines the components of senior management’s remuneration and the underpinning rationale for each element of the remuneration structure. The Nomination & Remuneration Committee ensures the criteria used to assess and reward staff include financial and non-financial measures of performance.

The table below summarises the key features of executive remuneration and the objectives of each element.

Type of Remuneration	Total Executive Remuneration
	Fixed At-Risk
	Remuneration Short-term Incentive Long-term Incentive
How is it set?	Fixed remuneration is set with reference to market competitive rates in comparative ASX listed AREITs for similar positions, adjusted to account for the experience, ability and productivity of the individual employee. Senior executives participate in the Group’s STI plan which is assessed against key areas of fnancial and non-fnancial performance that are designed to create an ongoing annual focus on imperative business and operational issues that create the type of company we all strive towards. Refer tothe FY21 STI Scorecard for further details. Senior executives participate in the Group’s LTI plan which is assessed against securityholder returns over a three-year performance period. The signifcant weighting towards relative TSR in the LTI aligns executive’s interests with securityholder outcomes and provides a direct comparison of the Group’s performance against their comparator group of peers. Refer to the LTI Structure section for further details.
How is it delivered?	•Base Salary •Superannuation •Other benefits such as maintained motor vehicles •Other eligible salary sacrifice benefits Awarded in cash or shares at the Board’s discretion. Equity with performance assessed over three years (vesting in Year 3 and 4).
What is the objective?	•Attract and retain key talent •Be competitive •Drive annual financial growth targets and securityholder returns •Reward value creation over a one-year period whilst supporting the long-term strategy •Incentivise desired behaviours in line with the Group’s risk appetite •Support delivery of the business strategy and growth objectives •Incentivise long-term value creation •Drive alignment of employee and securityholder interests

Remuneration mix

Remuneration packages include a mix of fixed and variable remuneration and short and long-term performancebased incentives. The proportion of fixed and variable remuneration for senior management (excluding the Joint CEOs) is established by the Joint CEOs and the Nomination & Remuneration Committee. The proportion of fixed and variable remuneration for the Joint CEOs is established solely by the Nomination & Remuneration Committee. While the allocation may vary from period to period, the graph below details the approximate fixed and variable components for senior management.

Centuria Capital Group – Annual Report 2021[| ] 57

Directors’ Report

For the year ended 30 June 2021

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----- Start of picture text -----

POTENTIAL JOINT CEO REMUNERATION MIX POTENTIAL JOINT CEO REMUNERATION MIX POTENTIAL CFO REMUNERATION MIX POTENTIAL CFO REMUNERATION MIX
(AT TARGET OPPORTUNITIES) (AT MAXIMUM OPPORTUNITIES) (AT TARGET OPPORTUNITIES) (AT MAXIMUM OPPORTUNITIES)
33.3%
35.7% 35.8% 32.2%
41.7% 28.6% 37.7% 33.9%
3 3
25.0% 35.7% 26.4% 33.9%
FIXED STI LTI
33.3 28
----- End of picture text -----

Historical performance, shareholder wealth and remuneration FINANCIAL PERFORMANCE The Group’s overall objective is to reward executive directors and senior management based on the Group’s performance and build on shareholders’ wealth but this is subject to market conditions for the year. The graph below sets out the Group’s operating net profit after tax for the past five years. 5-year Operating Financial Performance $80,000 $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $- $’000 FY20 FY21 FY19 FY18 FY17 The table below sets out summary information about the Group’s earnings for the past five years.	5 year summary 30 June 2021 30 June 2020 30 June 2019 30 June 2018 30 June 2017
	Operating proft after tax ($'000) 70,211 53,253 45,706 45,087 15,489 Statutory proft after tax attributable to Centuria Capital Group securityholders ($'000) 143,456 21,105 50,795 54,765 17,323 Share price at start of year $1.79 $1.77 $1.40 $1.23 $1.05 Share price at end of year $2.78 $1.79 $1.77 $1.40 $1.23 Interim dividend 4.5cps 4.5cps 4.25cps 4.1cps 2.3cps Final dividend 5.5cps 5.2cps 5.0cps 4.1cps 5.2cps Special non-cash dividend - - 7.8cps - 17.27cps Statutory basic earnings per Centuria Capital Group security 24.6cps 4.7cps 14.2cps 19.8cps 11.5cps Operating basic earnings per Centuria Capital Group security 12.0cps 12.0cps 12.7cps 16.3cps 10.3cps

Historical performance, shareholder wealth and
remuneration
FINANCIAL PERFORMANCE
The Group’s overall objective is to reward executive directors and
senior management based on the Group’s performance and build on
shareholders’ wealth but this is subject to market conditions for the
year. The graph below sets out the Group’s operating net profit after
tax for the past five years.
5-year Operating Financial Performance
$80,000
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$-
$’000
FY20
FY21
FY19
FY18
FY17
The table below sets out summary information about the Group’s
earnings for the past five years.

5 year summary
30 June
2021
30 June
2020
30 June
2019
30 June
2018
30 June
2017

Operating proft
after tax ($'000)
70,211
53,253
45,706
45,087
15,489
Statutory proft after
tax attributable to
Centuria Capital
Group securityholders
($'000)
143,456
21,105
50,795
54,765
17,323
Share price at
start of year
$1.79
$1.77
$1.40
$1.23
$1.05
Share price at
end of year
$2.78
$1.79
$1.77
$1.40
$1.23
Interim dividend
4.5cps
4.5cps
4.25cps
4.1cps
2.3cps
Final dividend
5.5cps
5.2cps
5.0cps
4.1cps
5.2cps
Special non-cash
dividend
-
-
7.8cps
- 17.27cps
Statutory basic
earnings per Centuria
Capital Group security 24.6cps
4.7cps
14.2cps
19.8cps
11.5cps
Operating basic
earnings per Centuria
Capital Group security
12.0cps
12.0cps
12.7cps
16.3cps 10.3cps

The table below sets out summary information about the Group’s earnings for the past five years.

TOTAL SECURITYHOLDER RETURN (TSR)

The acquisition of the Primewest business in 2021 was a major transaction for Centuria Capital. On 16 July 2021, following this transaction, Centuria Capital joined the S&P ASX200 index ranked #154 and this ranking is expected to move to circa #130 - #140 when the forthcoming index rebalance takes into account the post-transaction free float market capitalisation.

Due to the factors set out on page 62 and subject to the qualification also outlined, the Group considers the following ASX-listed entities as its most comparable peers which forms the basis of its remuneration benchmarking exercises:

Charter Hall Group (ASX: CHC)
Goodman Group (ASX: GMG)
Stockland (ASX: SGP)
Mirvac Group (ASX: MGR)
Dexus (ASX: DXS)
GPT Group (ASX: GPT)
Scentre Group (ASX: SCG)
Vicinity Centres (ASX: VCX)

58[| ] Centuria Capital Group – Annual Report 2021

The graphs and table below highlight Centuria’s strong performance against the nominated AREIT peers, the broader S&P/ASX200 Index and the S&P 200 AREIT Index.

Total Shareholder Return - 1 year (since the start of FY21)

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Total Shareholder Return - 3 years (since the start of FY19)

==> picture [234 x 144] intentionally omitted <==

TOTAL SHAREHOLDER RETURN

Nominated Peers	1 Year 3 Years
	30 Jun 20 to 30 Jun 21 30 Jun 20 to 6 Aug 21 30 Jun 18 to 30 Jun 21 30 Jun 18 to 6 Aug 21
Centuria Capital Group Peer Peer Peer Peer Peer Peer Peer Peer Indices	61.8% 83.4% 130.1% 160.8% 64.1% 77.9% 162.0% 184.0% 44.7% 60.5% 133.4% 158.9% 48.5% 42.2% 40.9% 34.9% 39.3% 40.8% 50.2% 51.7% 29.6% 24.8% (28.4%) (31.0%) 22.0% 20.4% 26.4% 24.8% 15.0% 19.8% (30.4%) (27.5%) 24.2% 19.1% 9.4% 5.0%
S&P ASX 200 / A-REIT S&P ASX 200	33.2% 37.2% 25.1% 28.7% 27.8% 31.8% 31.6% 35.7%

Centuria believes that important factors driving this outcome include:

the selection of a lean senior management team and incentivising them appropriately;
the synergy and cohesiveness that exists between management and a diverse Board enabling long term strategies to be set and implemented seamlessly;
a recognition that the culture that exists within the group is tangible and promotes a productive, diverse, rewarding working atmosphere where employees strive to out-perform.

This special combination of highly complementary and experienced Joint CEO’s, stable and highly motivated management team and highly responsive, experienced and diverse Board members has provided consistently high levels of performance in terms of TSR and dividend flows when accurately and properly compared to its true peer set and consistent outperformance against the S&P ASX 200 index (and the S&P ASX 200 REIT index).

These performance metrics hold true over both one and three year periods and the company believes maintaining and encouraging this special combination of talent, drive and experience has will prove proven highly beneficial to securityholders over the long term.

Fixed Remuneration

Fixed remuneration consists of base remuneration (which is calculated on a total cost basis and includes any FBT charges related to employee benefits including motor vehicles), as well as employer contributions to superannuation funds.

For senior management excluding the Joint Chief Executive Officers, this is reviewed annually by the Joint Chief Executive Officers and the Nomination & Remuneration Committee. The process consists of a review of Group, business unit and individual performance as well as relevant comparative remuneration in the market. The same process is used by the Nomination & Remuneration Committee when reviewing the fixed remuneration of the Joint Chief Executive Officers.

Senior management are given the opportunity to receive their fixed remuneration in a variety of forms including cash and salary sacrifice items such as motor vehicles, motor vehicle allowances and/or additional superannuation contributions.

(i) Short-term Incentives (STI)

The objective of the STI program is to link the achievement of the Group’s non-financial and financial targets with the remuneration received by senior management accountable for meeting those targets. The potential STI available is set at a level to provide sufficient incentive for senior management to achieve operational targets and such that the cost to the Group is reasonable in the circumstances.

A major focus for FY21 was the consolidation of Centuria Capital as the fourth largest external property funds manager in Australia. Centuria’s growth strategy was executed throughout the reporting period with measurably higher total securityholder returns than six of the eight nominated peer set.

Centuria Capital Group – Annual Report 2021[| ] 59

Directors’ Report

For the year ended 30 June 2021

STI Structure

FY21 STI PLAN STRUCTURE

Performance Period	12 Months
Opportunity	Joint-CEOs 125% of total fxed remuneration at maximum.
	CFO 100% of total fxed remuneration at maximum.
How the STI is paid	STI awards may be settled in either cash and/or shares at the Board’s discretion.
Performance measures &	Financial measures (60%) •Growth in Assets Under Management (AUM)
conditions
	•Operating Earnings Per Share (EPS) Growth
	•Equity Flow Growth
	Non-fnancial measures (40%) •Staff Engagement
	•Non-Financial Risk Management
	•Environmental, Social and Governance (ESG)
How are STI targets set?	In determining STI hurdle targets, the following factors are considered by the Committee and Board:
	•Performance of peer fund managers over a range of asset classes;
	•Direct returns from asset classes in particular property, equities and fixed interest;
	•Outlook for financial markets including fixed interest returns;
	•Effect financial market views on asset values eg cap rate compression or expansion;
	•Performance of Centuria compared to other peer managers; and
	•Quality of Centuria’s financial products compared to market and how contemporary they are in this context.
How is the STI assessed?	At the Board’s absolute discretion, the Group’s Senior Management may be provided with the opportunity to
	receive an annual, performance-based incentive.
	The Nomination & Remuneration Committee assesses annually the individual scorecards of participants against
	the KPIs in determination of the annual STI outcome. The ‘STI Achieved’ section outlines the overall scorecard
	outcomes for FY21.
What happens when an executive	Joint-CEOs If employment terminates part way through a fnancial year
ceases employment?	(other than for termination for serious misconduct), the
	Joint CEOs are entitled to the STI for the full fnancial year.
	CFO If employment terminates part way through a fnancial year, the CFO forfeits any applicable STI for the relevant fnancial year.
Is there any STI deferral?	No

60[| ] Centuria Capital Group – Annual Report 2021

FY21 Performance Measures and Objectives

FY21 STI SCORECARD

FY21 STI SCORECARD
Performance Hurdle	Weighting	Target Criteria	Outcomes
FINANCIAL METRICS
Growth in AUM	30%	•Target = $10.81 billion, resulting in 100% of the	For FY21, the company’s total AUM was $17.4 billion,
		award vesting.	representing a growth of approximately 97.7% from
		•Outperformance target = $11.28 billion, resulting	the prior reporting period (FY20: $8.8 billion).
		in 125% granting of the award.	This achievement was above outperformance
			(+20.0%).
Operating EPS	15%	•Original Target = guidance	For FY21, the company’s operating EPS was
		•Outperformance target = guidance +15%cps	12.0cps.
		resulting in 125% granting of award.	This achievement was above outperformance.
Equity Flow Growth	15%	•Target = 17.5% resulting in 100% of award	Year-on-year equity fow growth was 28%.
		vesting	Equity fows relate to equity raised from public
		•Outperformance target = 20% resulting in	sources for property funds - FY21 result was
		125% granting of award.	normalised to exclude FY21 COF offce result
			($461m). Due to COVID-19 effect on commercial
			offce fund opportunity FY22 performance could not include offce fows.**
			This achievement was above outperformance.
NON-FINANCIAL METRICS
Staff Engagement***	15%	The company conducts annual company-wide	There has been signifcant ongoing work in staff
		surveys with employees.	engagement, which has recorded positive results.
		Results from these surveys are calculated	These include the following:
		into a score, with vesting occurring at these	•Regular staff engagement surveys have been
		achievement points:	conducted, which are independently assessed;
		•Score of 55% = 50% of the award	•During FY21, the executive management team
		•Score of 65%= 75% of the award	initiated the “Centuria People” online staff performance and staff engagement system; and
		•Score of 75% and over = 100% of the award	•During FY21, the executive management
			team initiated a team leadership programme
			supervised by an independent consultant
			whereby 10 future leaders join an intensive
			leadership skills programme.
			The Board assessed the outcomes of the staff
			engagement surveys in conjunction with the above
			initiatives as meeting Target, resulting in 100% of
			the award being achieved.
Non-fnancial Risk	10%	The Non Financial Risk Committee exists to	The Board noted the work of the Committee as it
Management		provide a regular conduit for important non- fnancial information to fow between management	related to a number of important non-fnancial risks eg unit pricing policies, potential confict issues,
		and the Board.	fund restructuring issues, performance reporting
		The main criteria employed to assess performance	issues, group risks, DRP issues and a large number of other relevant issues.
		were:
			The Board monitored the achievements of the
		•Regular attendance by KMP’s	Committee in raising each issue and implementing
		•Regular and accurate formal Board reporting	transparent solutions.
		•Ensuring that all relevant matters within the	The Board assessed the outcomes of the Non-
		ambit of the Committee were brought to the	Financial Risk Committee as meeting Target,
		Board’s attention in a timely manner	resulting in 100% of the award being achieved.

Centuria Capital Group – Annual Report 2021[| ] 61

Directors’ Report

For the year ended 30 June 2021

Performance Hurdle	Weighting	Target Criteria	Outcomes
ESG	15%	The ESG metric is assessed against key	Management has executed the following steps in
		achievements in the implementation of the	relation to ESG during FY21;
		company’s ESG strategy, including:	•Establishment of management ESG committee
		•Improving diversity throughout the Group; and	with members comprising relevant divisional
			executives. This committee will be central to
		•Development and roll-out of the company’s environmental and sustainability initiatives	establishing Centuria’s improving ESG outcomes.
		across the Group.	•Oversight and publication of the Company’s first
			Sustainability Report in FY21 to coincide with the
			holding of the 2021 AGM.
			•Recruitment and establishment of ESG specific
			team within the organisation including a
			new appointment - the General Manager -
			Sustainability.
			The Board assessed the outcomes of the above
			actions as meeting Target, resulting in 100% of the
			award being achieved.

*During FY21 the Board had a particular focus on AUM growth as a dedicated strategy to qualify Centuria Capital for inclusion in the S&P ASX 200 index. This goal was achieved on 16 July 2021.

** Due to COVID-19 conditions for majority of year Key Management Personnel waived their rights to 125% awards grants irrespective of qualification *** The Australian office market was impacted adversely during the majority of FY21 and in particular Australian office AREITS were not in a position to raise capital and this applied to Centuria Office REIT (COF) amongst others. The Board carefully considered the steps the executive team took to protect returns to COF securityholders and provide resilience. COF’s returns have remained stable throughout the national pandemic, COF was one of the few REIT’s which provided market FFO and distribution guidance at all times during the pandemic and in addition FY21 results were at the top end of the FFO guidance range and at distribution guidance. The Board also took careful note of the executive teams approach to and success in preparing COF for the period when the office markets recover. Recent evidence of strong market earnings guidance for FY22 together with COF’s likely inclusion in the global EPRA NAREIT index in the September 2021 rebalance provides contemporary evidence of those efforts. **** Employee engagement is measured as a score through an annual Company-wide survey conducted independently by “Leaders Aligned” who reports directly to the CNI Board.

In addition to the scorecard above, the Board took into consideration the following non-financial achievements made in FY21 in determining the final outcome of the FY21 STI awards:

For a six month period (five months included in FY21) in response to the onset of COVID-19, the KMP’s (and Board members) reduced their remuneration by agreement by 15%.
During FY21 CIP was included in the S&P ASX 200 for the first time in history and the EPRA NAREIT indices and acquired in excess of $1 billion in assets.
During FY21 Centuria increased its commitment to Sustainability and ESG outcomes with the appointment of a General Manager - Sustainability, its commitment to provide an initial Sustainability Report prior to the 2021 AGM and confirmation of Centuria’s formal support of the Task Force on Climate Related Financial Disclosures and the establishment of a Culture and ESG Board Committee amongst other initiatives.
During FY21 the acquisition of Primewest became unconditional and Centuria Capital’s market capitalisation grew to circa $2.2 billion, and noting Centuria’s inclusion in the S&P ASX 200 index as at 16 July 2021. Refer to page 59 regarding Centuria Capital Group’s index rankings.
With the addition of the Augusta and Primewest businesses, guidance for FY22 operating EPS and FY22 DPS is predicted to be plus 10.0% over the FY21 result.
The addition of the Primewest distribution network has added 900 ultra-high net worth investors to Centuria’s existing network making it the largest HNW network amongst its Australian peers. Adding the Centuria NZ network amplifies this presence.
The acquisition of a 50% interest in Centuria Bass was completed.
Integration of Augusta (NZ) completed with name change in place and execution of largest Australian retail unlisted syndicate in the last 15 years (VISY) in FY21.
Group performance achieved against COVID-19 backdrop where new office funds have been impossible to produce the post FY21 successful capital raising for $220 million Footscray office fund itself industry-leading and an important milestone for Centuria as we move through and out of COVID-19 in an office fund generation sense.

62[| ] Centuria Capital Group – Annual Report 2021

STI ACHIEVED

The table below outlines the percentage of target STI achieved (and forfeited) in relation to financial and non-financial KPIs, and the total STI awarded, for each executive in 2021.

Executive STI on Maximum Opportunity*	Financial	Non-Financial Weighting Achieved Forfeited STI Awarded
	Weighting Achieved Forfeited
John McBain (Joint CEO) $1,687,500	60% 100% 0%	40% 100% 0% $1,687,500
Jason Huljich (Joint CEO) $1,687,500	60% 100% 0%	40% 100% 0% $1,687,500
Simon Holt (CFO) $715,000	60% 100% 0%	40% 100% 0% $643,500

STI opportunities for FY21 remained at their contractual level and were not impacted by the fixed remuneration reductions implemented in response to the COVID-19 pandemic.

(ii) Long-term Incentives (LTI)

The Group has an Executive Incentive Plan (“LTI Plan”) which forms a key element of the Group’s incentive and retention strategy for senior management under which Performance Rights (“Rights”) are issued.

The primary objectives of the LTI Plan include:

focusing executives on the longer term performance of the Group to drive long term shareholder value creation;
ensure senior management remuneration outcomes are aligned with shareholder interests, in particular, the strategic goals and performance of the Group; and
ensure remuneration is competitive and aligned with general market practice by ASX listed entities.

Rights issued under the LTI Plan are issued in accordance with the thresholds approved at the Annual General Meeting (AGM).

LTI STRUCTURE

LTI STRUCTURE
LTI Plan Structure
Performance Period	3-years performance with 75% of any LTI award vesting in Year 3 with the remaining 25% vesting in Year 4
Opportunity	•Joint-CEOs •CFO •125% of total fixed remuneration at maximum •95% of total fixed remuneration at maximum
Instrument	Performance rights. The allocation of the LTI grants is on a face value basis using the volume weighted average price of the Company’s shares over the fve ASX Trading Day’s immediately preceding 1 July of the grant year (being the date of the commencement of the performance period). Each Performance Right is a right to acquire one Security in the Group (or an equivalent cash amount), subject to the achievement of the “performance hurdles” set out below.
Performance metrics	Relative Total Securityholder Return (RTSR) (75%) RTSR (compounded) when ranked to the comparator group of S&P/ASSX 200 A-REIT Accumulation Index stocks over the performance period •Exceeds the comparator group 75th percentile •More than the comparator group 50th percentile and less than 75th percentile •Equal to the comparator group 50th percentile •Less than the comparator group 50th percentile Performance Rights subject to RTSR Hurdle that vest •100% •Between 50% to 100% progressive pro-rata vesting (i.e. on a straight-line basis) •50% •0%
	Absolute Total Securityholder Return (ATSR) (25%) Annual ATSR achieved over the performance period •15% or greater •Between 10% and 15% •10% •Less than 10% Performance Rights subject to ATSR Hurdle that vest •100% •Between 25% to 100% progressive pro-rata vesting (i.e. on a straight-line basis) •25% •0%

Centuria Capital Group – Annual Report 2021[| ] 63

Directors’ Report

For the year ended 30 June 2021

LTI Plan Structure
Rationale for the	Both RTSR and ATSR measure the return Securityholders would earn if they held a notional number of
performance metric	Securities over a period of time. RTSR provides a relative measure of growth in the Group’s Security price
and conditions	in comparison to relative peers (being the S&P/ASX 200 AREIT accumulation index). ATSR provides an
	absolute measure of growth in the Group’s Security price. The ATSR target is determined with reference
	to the following factors which can impact future performance:
	•Performance of peer fund managers over a range of asset classes;
	•Direct returns from asset classes in particular property, equities and fixed interest;
	•Outlook for financial markets including fixed interest returns;
	•Effect financial market views on asset values eg cap rate compression or expansion;
	•Performance of Centuria compared to other peer managers; and
	•Quality of Centuria’s financial products compared to market and how contemporary they are in this
	context.
	By combining RTSR with an ATSR measure, executives can be rewarded for driving positive returns
	and investors have the confidence that interests are aligned with long term business growth and the
	creation of shareholder wealth. The inclusion of an ATSR metric has been designed to counter-balance
	RTSR outcomes which may vest when overall market conditions are down.
What happens when an	If a participant ceases to be employed by the Group before the end of the Performance Period, whether
executive	the Performance Rights lapse will depend on the circumstances of cessation. If a participant ceases
ceases employment?	employment due to resignation, termination for cause or termination for gross misconduct, all unvested
	Performance Rights will lapse at cessation unless the Board determines otherwise. If a participant
	ceases employment for any other reason prior to Performance Rights vesting, a pro-rata number
	of unvested Performance Rights (based on the Performance Period that has elapsed at the time of
	cessation) will remain unvested until the end of the original Performance Period and vest to the extent
	that the relevant performance hurdles have been satisfed at any time. The balance of Performance
	Rights will lapse at cessation.
Malus and Clawback	In the event of fraud, dishonesty or material misstatement of fnancial statements, the Board may make
	a determination, including lapsing unvested Performance Rights or ‘clawing back’ Securities allocated
	upon vesting, to ensure that no unfair beneft is obtained by a participant.
Dividends and voting	Rights do not carry a right to vote or to dividends or, in general, a right to participate in other corporate
rights	actions such as bonus issues.
Re-testing	Awards are tested once, at the end of the performance period of three years. There is no further
	retesting of the performance conditions
Change of Control	If a change of control event occurs, the Board has a discretion to determine whether any unvested
provisions	Performance Rights should ultimately vest, lapse or become subject to different vesting conditions.
	In making such a determination, the Board may have regard to any factors that the Board considers
	relevant, including the period elapsed, the extent to which the vesting conditions have been satisfed
	and the circumstances of the event.

LTI GRANTS

Currently, the Group operates three tranches of the LTIP as below:

Tranche	Grant Date	Performance Period
6	1 February 2019	1 July 2018 to 30 June 2021
7	18 October 2019	1 July 2019 to 30 June 2020
8	26 November 2020	1 July 2020 to 30 June 2023

64[| ] Centuria Capital Group – Annual Report 2021

The table below outlines Rights which were previously granted to senior management and testing against those conditions.

		No. of Rights	Performance	Vesting	Achievement of	No. of Rights
Trance	KMP	granted	Period	Conditions	Conditions	Vesting	Value
6	Mr John E. McBain	159,575	1 July 2018 -	AUM Growth	AUM Growth was 29.1%	159,575	$1.11
		478,724	30 June 2021	Hurdle	resulting in 100% vesting	478,724	$0.19
	Mr Jason C. Huljich	126,330				126,330	$1.11
		378,989		Absolute TSR	Absolute TSR was 27.5%,	378,989	$0.19
	Mr Simon W. Holt	57,624		Growth Hurdle	resulting in 100% vesting	57,624	$1.11
		172,872				172,872	$0.19
7	Mr John E. McBain	187,500	1 July 2019 -	FUM Growth	N/A	-	-
		562,500	30 June 2022	Hurdle		-	-
	Mr Jason C. Huljich	187,500				-	-
		562,500		Absolute TSR	N/A	-	-
	Mr Simon W. Holt	69,514		Growth Hurdle		-	-
		208,542				-	-
8	Mr John E. McBain	682,278	1 July 2020 -	Relative TSR	N/A	-	-
		227,426	30 June 2023	Growth Hurdle		-	-
	Mr Jason C. Huljich	682,278				-	-
		227,426		Absolute TSR	N/A	-	-
	Mr Simon W. Holt	274,630		Growth Hurdle		-	-
		91,543				-	-

KEY TERMS OF EMPLOYMENT CONTRACTS

Group Joint Chief Executive Officers

Mr John E. McBain, was appointed as Chief Executive Officer of the Group in April 2008. Mr Jason C. Huljich, was appointed as Joint Chief Executive Officer of the Group in June 2019. Mr John E. McBain and Mr Jason C. Huljich are employed under contract. The summary of the major terms and conditions of their employment contracts are as follows:

Fixed Compensation plus superannuation contributions;
Car parking within close proximity to the Company’s office;
Eligible to participate in the bonus program determined at the discretion of the Board;
The Group may terminate this employment contract by providing six months written notice or provide payment in lieu of the notice period plus an additional six months. Any payment in lieu of notice will be based on the total fixed compensation package; and
The Group may terminate the employment contract at any time without notice if serious misconduct has occurred. When termination with cause occurs the Joint Chief Executive Officers are only entitled to remuneration up to the date of termination.

The Nomination & Remuneration Committee ensures severance payments due to the Joint Chief Executive Officers on termination are limited to pre-established contractual arrangements which do not commit the Group to making any unjustified payments in the event of non-performance.

Other senior management (standard contracts)

All senior management are employed under contract. The Group may terminate their employment agreement by providing three months written notice or providing payment in lieu of the notice period (based on the total fixed compensation package).

NON-EXECUTIVE DIRECTOR REMUNERATION

Objective

The Board seeks to set aggregate remuneration at a level that provides the Group with the ability to attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders.

Non-executive directors receive adequate remuneration to attract and retain the requisite talent;
Reflect the complexity of the Group structure and the time commitment associated with oversight of multi-faceted operating entities within the Group; and
The structure should align the non-executive directors with investors, not providing any disincentive to take independent action.

Structure

The Constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive directors shall be determined from time to time by a general meeting. An amount not exceeding the aggregate amount determined is then divided between the directors as agreed. An aggregate maximum amount of not more than $2,000,000 per year was approved at the 2017 Annual General Meeting.

Each director receives a fee for being a director of Group companies and an additional fee is paid to the Chairman and to the Chairman of each

Centuria Capital Group – Annual Report 2021[| ] 65

Directors’ Report

For the year ended 30 June 2021

Board Committee. The payment of the additional fees to each Chairman recognises the additional time commitment and responsibility associated with the position. Non-executive directors do not receive equity as a form of payment.

As highlighted on page 55, the Centuria structure, whilst not unique, comprises multiple operating entities, both listed and unlisted. These include CNI, COF, CIP, Centuria Life, Centuria Healthcare, Centuria New Zealand, Centuria Bass Credit and Primewest. Each Board of these entities has specific requirements and obligations. In recognition of the complexity of the Group, the multiple entities and in the interests of good governance and transparency, the Group has adopted a new Directors’ fees schedule which is disclosed in the table below.

The new fee schedule covers the Board and Board Committee roles across the headstock and other operating entities which the Centuria directors sit on. The fee schedule is designed to improve transparency while recognising that each board is responsible for actively overseeing the financial position and monitoring the business and affairs of the entity on behalf of the stakeholders, to whom they are accountable.

In determining the fee schedule, the non-executive director fees were benchmarked against the same peer group of S&P/ASX200 AREIT companies used to determine levels of executive committee pay. Additionally, the complexity of the overall Group and the commitment levels required by non-executive directors was considered in setting the level of fees.

The new fee schedule, outlined below, became effective from 1 June 2021:

Director Fees’ Schedule Centuria Capital Limited

Board	Chair	$335,000
	Member	$110,000
Audit, Risk Management &
Compliance Committee	Chair	$20,000
	Member	$10,000
Conficts Committee	Chair	$50,000
	Member	$15,000
Nominination and
Remuneration Committee	Chair	-
	Member	$10,000
Culture and ESG Committee	Chair	$20,000
	Member	$10,000
Centuria Life Limited
Board	Chair	$90,000
	Member	$30,000
Audit Committee	Chair	-
	Member	$10,000
Risk & Compliance Committee	Chair	-
	Member	-
Investment Committee	Chair	$70,000
	Member	-
Centuria Property Funds Limited
Board	Chair	$110,000
	Member(i)	$30,000 / $45,000
Audit, Risk Management &
Compliance Committee	Chair	$15,000
	Member	$10,000

Centuria Property Funds No. 2 Limited

Board	Chair	$115,000
	Member(i)	$30,000 / $45,000
Audit, Risk Management &
Compliance Committee	Chair	-
	Member	$10,000
Centuria Healthcare Pty Ltd
Board	Chair	$70,000
	Member	-
Centuria Healthcare Asset Management Ltd
Board	Chair	$50,000
	Member	$40,000

Note (i): Committee members who are also Directors on the Centuria Capital Group Board are remunerated $30,000 and all other committee members are remunerated $45,000 (from 1 July 2021 this has increased to $55,000).

Related Party Transactions

In 2020, the Board established a Conflicts Committee to assist the boards of Centuria entities when they are considering matters involving conflicts of interests. This committee is overseen by an external independent chair, being Professor Simon Rice AO. One of the key oversight roles of the Conflicts Committee is monitoring related party transactions involving board members of Centuria entities. Amongst its AREIT peers in the S&P/ASX200, Centuria is the only company to have such a committee.

Following feedback from investors and other stakeholders, a review of consulting fees paid to entities related to Board members was undertaken. Traditionally, any directors who were associated with entities that received consulting fees had their independence tested by reference to ASIC guidelines on independence and through an external review.

Every independent director has had their independence confirmed through that process. Notwithstanding that confirmed independence and compliance with all appropriate guidelines, the Board has now adopted a policy that, moving forward, as a matter of general principle, third party consultancy fees should not be paid to entities that are related to independent directors.

Accordingly, whilst there was some work that needed to be completed, from 1 June 2021, no consulting fees will be paid to entities associated with CNI directors.

During the financial year, the following transactions occurred between the Group and key management personnel:

Wolseley Corporate Pty Ltd, a related party of Mr Garry S. Charny, was paid $328,707 (inclusive of GST) (2020: $556,050) for corporate advisory fees.
Tailwind Consulting Pty Ltd, a related party of Mr John R. Slater was paid a total of $211,977 (inclusive of GST) (2020: $271,558) for consultancy services.

66[| ] Centuria Capital Group – Annual Report 2021

Statutory Remuneration Table to KMP and NED

The following table discloses total remuneration of executive directors and senior management in accordance with the Corporations Act 2001:

the_Corporations Act 2001:_
Yea	r Short-term employee benefts Post employment benefts Other long-term benefts Total $ Salaries ($) Short Term Incentive ($) Super- annuation ($) Long service leave ($) Share-based payments ($)
Executive KMP
Mr John E. McBain 2021 1,243,228 1,687,500 22,398 83,748 858,689 3,895,563 2020 1,310,732 945,000 22,397 3,151 466,609 2,747,889
Mr Jason C. Huljich 2021 1,239,678 1,687,500 21,694 1,403 840,072 3,790,347 2020 1,307,092 945,000 21,003 19,703 399,961 2,692,759
Mr Simon W. Holt 2021 656,066 643,500 21,694 59,642 311,886 1,692,788 2020 686,550 436,150 21,003 - 169,260 1,312,963 Non-Executive KMP
Mr Garry S. Charny 2021 309,767 - 28,043 - - 337,810 2020 235,777 - 20,849 - - 256,626
Mr Peter J. Done 2021 190,351 - 6,997 - - 197,348 2020 196,324 - 8,977 - - 205,301
Mr John R. Slater 2021 146,045 - 13,874 - - 159,919 2020 135,409 - 12,864 - - 148,273
Ms Susan Wheeldon 2021 97,528 - 9,265 - - 106,793 2020 99,995 - 9,499 - - 109,494
Mr Nicholas R. Collishaw 2021 183,459 - 17,429 - - 200,888 Note (i) 2020 124,993 - 11,874 - 77,783 214,650
Ms Kristie Brown 2021 35,476 - 3,370 - - 38,846 Note (ii) 2020 - - - - - -
Total 2021 4,101,598 4,018,500 144,764 144,793 2,010,647 10,420,302 2020 4,096,872 2,326,150 128,466 22,854 1,113,613 7,687,955

Note (i): Mr Collishaw’s role changed from Executive Director and CEO - Listed Property Funds to Non-Executive Director effective 1 January 2018. Mr Collishaw’s share based payment amount relates to expense recognised on performance rights granted to him under Tranche 5 while he was still employed as an Executive Director. Since 1 January 2018, Nick Collishaw has received neither consulting fees or salary payments for executive duties as he ceased employment as an executive. Note (ii): Ms Kristie Brown was appointed to the Board on 15 February 2021.

Centuria Capital Group – Annual Report 2021[| ] 67

Directors’ Report

For the year ended 30 June 2021

DIRECTOR AND SENIOR MANAGEMENT EQUITY HOLDINGS AND OTHER TRANSACTIONS

Director and senior management equity holdings

Set out below are details of movements in fully paid ordinary shares held by directors and senior management as at the date of this report.

	Balance at		Balance at	Changes prior	Balance at
Name	1 July 2020	Movement	30 June 2021	to signing	signing date
Mr Garry S. Charny	369,676	37,077	406,753	–	406,753
Mr Peter J. Done	1,328,982	177,200	1,506,182	–	1,506,182
Mr John R. Slater	3,038,570	72,107	3,110,677	–	3,110,677
Ms Susan Wheeldon	-	-	-	–	-
Ms Kristie Brown	-	-	-	-	-
Mr Nicholas R. Collishaw	3,861,523	498,514	4,360,037	–	4,360,037
Mr John E. McBain	6,441,053	603,049	7,044,102	18,382	7,062,484
Mr Jason C. Huljich	3,718,114	1,571,498	5,289,612	–	5,289,612
Mr Simon W. Holt	511,036	266,853	777,889	–	777,889

This report is made in accordance with a resolution of Directors.

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Mr Garry S. Charny Director

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Mr Peter J. Done Director

Sydney 11 August 2021

68[| ] Centuria Capital Group – Annual Report 2021

Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

To the Directors of Centuria Capital Limited

I declare that, to the best of my knowledge and belief, in relation to the audit of Centuria Capital Group for the financial year ended 30 June 2021 there have been:

(i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and

(ii) no contraventions of any applicable code of professional conduct in relation to the audit.

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KPM_INI_01
PAR_SIG_01 PAR_NAM_01 PAR_POS_01 PAR_DAT_01 PAR_CIT_01
KPMG Paul Thomas
Partner
Sydney
11 August 2021
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@2021 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation.

Centuria Capital Group – Annual Report 2021[| ] 69

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Financial Report Contents

Consolidated statement of comprehensive income	73
Consolidated statement of fnancial position	74
Consolidated statement of changes in equity	75
Consolidated statement of cash fows	77
Notes to the consolidated fnancial statements	78
A About the report	78
A1 General information	78
A2 Signifcant accounting policies	78
A3 Other new Accounting Standards and Interpretations	79
A4 Use of judgements and estimates	79
A5 Segment summary	80
B Business performance	81
B1 Segment proft and loss	81
B2 Revenue	83
B3 Expenses	85
B4 Finance costs	85
B5 Taxation	86
B6 Earnings per security	88
B7 Dividends and distributions	88
C Assets and liabilities	89
C1 Segment balance sheet	89
C2 Receivables	91
C3 Financial assets	91
C4 Investment properties	94
C5 Property held for development	95
C6 Intangible assets	96
C7 Payables	96
C8 Borrowings	97
C9 Right of use asset/Lease liability	98
C10 Contributed equity	99
C11 Commitments and contingencies	99
D Cash fows	100
D1 Operating segment cash fows	100
D2 Cash and cash equivalents	100
D3 Reconciliation ofproft for theperiod to net cash fows from operatingactivities	100
E Group structure	101
E1 Interests in associates and joint ventures	101
E2 Business combination	103
E3 Interests in material subsidiaries	104
E4 Parent entitydisclosure	106
F Other	107
F1 Share-based payment arrangements	107
F2 Guarantees to Beneft Fund policyholders	108
F3 Financial instruments	108
F4 Remuneration of auditors	116
F5 Events subsequent to the reporting date	116
Directors’ declaration	117
Independent auditor’s report	118

72[| ] Centuria Capital Group – Annual Report 2021

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Consolidated statement of comprehensive income

For the year ended 30 June 2021

		2021	2020
	Notes	$’000	$’000
Revenue	B1, B2	228,932	162,373
Share of net proft of equity accounted investments	E1	3,070	8,310
Net movement in policyholder liability		5,788	34,445
Fair value movements of fnancial instruments and property		103,929	(48,280)
Expenses	B3	(111,185)	(97,723)
Cost of Sales		(44,679)	(17,320)
Finance costs	B4	(20,289)	(18,602)
Proft before tax		165,566	23,203
Income tax expense	B5	(15,927)	(1,116)
Proft after tax		149,639	22,087
PROFIT AFTER TAX IS ATTRIBUTABLE TO:
Centuria Capital Limited		23,431	20,956
Centuria Capital Fund (non-controlling interests)		120,025	149
External non-controlling interests		6,183	982
Proft after tax		149,639	22,087
Foreign currency translation reserve		(757)	(421)
Total comprehensive income for the year		148,882	21,666
TOTAL COMPREHENSIVE INCOME FOR THE YEAR IS ATTRIBUTABLE TO:
Centuria Capital Limited		22,674	20,535
Centuria Capital Fund (non-controlling interests)		120,025	149
External non-controlling interests		6,183	982
Total comprehensive income		148,882	21,666
PROFIT AFTER TAX ATTRIBUTABLE TO:
Centuria Capital Limited		23,431	20,956
Centuria Capital Fund (non-controlling interests)		120,025	149
Proft after tax attributable to Centuria Capital Group securityholders		143,456	21,105
		Cents	Cents
EARNING PER CENTURIA CAPITAL GROUP SECURITY
Basic (cents per stapled security)	B6	24.6	4.7
Diluted (cents per stapled security)	B6	24.2	4.6
EARNINGS PER CENTURIA CAPITAL LIMITED SHARE
Basic (cents per share)		4.0	4.7
Diluted (cents per share)		4.0	4.5

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

Centuria Capital Group – Annual Report 2021[| ] 73

Consolidated statement of financial position

As at 30 June 2021

		2021	2020
	Notes	$’000	$’000
Cash and cash equivalents	D2	273,351	174,458
Receivables	C2	127,197	68,729
Income tax receivable	B5(b)	977	755
Financial assets	C3	990,524	773,417
Other assets		8,679	10,795
Investment properties held for sale		-	861
Property held for development	C5	53,744	31,295
Deferred tax assets	B5(c)	42,526	39,519
Equity accounted investments	E1	55,637	32,955
Investment properties	C4	208,140	167,110
Right of use asset	C9	19,947	21,393
Intangible assets	C6	790,551	280,120
Total assets		2,571,273	1,601,407
Payables	C7	88,675	76,532
Provisions		4,077	2,201
Borrowings	C8	426,642	265,051
Provision for income tax	B5(b)	1,764	5,998
Interest rate swaps at fair value		31,205	33,388
Beneft Funds policyholder's liability		303,650	311,535
Call/Put option liability		22,690	17,167
Deferred tax liabilities	B5(c)	100,572	35,825
Lease liability	C9	21,757	22,564
Total liabilities		1,001,032	770,261
Net assets		1,570,241	831,146
EQUITY
Equity attributable to Centuria Capital Limited
Contributed equity	C10	386,634	177,149
Reserves		3,720	2,901
Retained earnings		283,058	17,074
Total equity attributable to Centuria Capital Limited		673,412	197,124
Equity attributable to Centuria Capital Fund (non-controlling interests)
Contributed equity	C10	1,018,822	545,744
Retained earnings		(183,970)	(9,771)
Total equity attributable to Centuria Capital Fund (non-controlling interests)		834,852	535,973
Total equity attributable to Centuria Capital Group securityholders		1,508,264	733,097
Equity attributable to external non-controlling interests
Contributed equity		31,781	57,230
Retained earnings		30,196	40,819
Total equity attributable to external non-controlling interests		61,977	98,049
Total equity		1,570,241	831,146

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

74[| ] Centuria Capital Group – Annual Report 2021

Consolidated statement of changes in equity

For the year ended 30 June 2021

	Centuria Capital Limited Centuria Capital Fund (non-controlling interests) External non-controlling interests Contributed equity $’000 Reserves $’000 Retained earnings $’000 Total $’000 Contributed equity $’000 Retained earnings $’000 Total $’000 Total attributable to Centuria Capital Group Security- holders $’000 Contributed equity $’000 Retained earnings $’000 Total $’000 Total equity $’000
Balance at 1 July 2020	177,149 2,901 17,074 197,124 545,744 (9,771) 535,973 733,097 57,230 40,819 98,049 831,146
Proft for the year Foreign currency translation reserve	- - 23,431 23,431 - 120,025 120,025 143,456 - 6,183 6,183 149,639 - (757) - (757) - - - (757) - - - (757)
Total comprehensive income for the year	- (757) 23,431 22,674 - 120,025 120,025 142,699 - 6,183 6,183 148,882
Acquisition of subsidiaries with Non-controlling interests - - - - - - - - 18,992 (917) 18,075 18,075 Transactions with owners in their capacity as owners - - 2,671 2,671 - 5,685 5,685 8,356 - - - 8,356 Equity settled share based payments expense 1,482 1,576 - 3,058 - - - 3,058 - - - 3,058 Dividends and distributions paid/ accrued - - (19,808) (19,808) - (40,219) (40,219) (60,027) - (3,295) (3,395) (63,322) Securities issued 209,208 - - 209,208 475,185 - 475,185 684,393 - - - 684,393 Cost of equity raising (1,205) - - (1,205) (2,107) - (2,107) (3,312) - - - (3,312) Fair value differential on acquisition (impact of transaction as part of stapled group) - - 259,690 259,690 - (259,690)(259,690) - - - - - Purchase of external non- controlling interests - - - - - - - - (42,982) (13,387) (56,369) (56,369) Deconsolidation of controlled property funds - - - - - - - - (1,459) 793 (666) (666)
Balance at 30 June 2021 386,634 3,720 283,058 673,412 1,018,822 (183,970) 834,852 1,508,264 31,781 30,196 61,977 1,570,241

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

Centuria Capital Group – Annual Report 2021[| ] 75

Consolidated statement of changes in equity

For the year ended 30 June 2021

	Centuria Capital Limited Centuria Capital Fund (non-controlling interests) External non- controlling interests Contributed equity $’000 Reserves $’000 Retained earnings $’000 Total $’000 Contributed equity $’000 Retained earnings $’000 Total $’000 Total attributable to Centuria Capital Group Security- holders $’000 Contributed equity $’000 Retained earnings $’000 Total $’000 Total equity $’000	Centuria Capital Limited Centuria Capital Fund (non-controlling interests) External non- controlling interests Contributed equity $’000 Reserves $’000 Retained earnings $’000 Total $’000 Contributed equity $’000 Retained earnings $’000 Total $’000 Total attributable to Centuria Capital Group Security- holders $’000 Contributed equity $’000 Retained earnings $’000 Total $’000 Total equity $’000
Balance at 1 July 2019	128,164 2,101 12,438 142,703 343,438 19,067 362,505 505,208 32,927 13,233 46,160 551,368
Proft for the year Foreign currency translation reserve	- - 20,956 20,956 - 149 149 21,105 - 982 982 22,087 - (421) - (421) - - - (421) - - - (421)
Total comprehensive income for the year	- (421) 20,956 20,535 - 149 149 20,684 - 982 982 21,666
Acquisition of subsidiaries with Non-controlling interests - - - - - - - - 42,982 13,386 56,368 56,368 Equity settled share based payments expense 795 1,221 - 2,016 - - - 2,016 - - - 2,016 Dividends and distributions paid/ accrued - - (16,320) (16,320) - (28,987) (28,987) (45,307) - (3,375) (3,375) (48,682) Stapled securities issued 49,845 - - 49,845 205,216 - 205,216 255,061 1,459 - 1,459 256,520 Cost of equity raising (1,655) - - (1,655) (2,910) - (2,910) (4,565) - - - (4,565)
Deconsolidation of controlled property funds - - - - - -		- - (20,138) 16,593 (3,545) (3,545)
Balance at 30 June 2020 177,149 2,901 17,074 197,124 545,744 (9,771) 535,973 733,097 57,230 40,819 98,049 831,146

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

76[| ] Centuria Capital Group – Annual Report 2021

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Consolidated statement of cash flows

For the year ended 30 June 2021

		2021	2020
	Notes	$’000	$’000
Cash fows from operating activities
Management fees received		110,355	75,476
Performance fees received		1,772	37,231
Rent received		15,333	19,261
Distributions received		38,832	35,083
Interest received		2,191	3,232
Payments to suppliers and employees		(135,469)	(92,582)
Cash received on development projects		42,723	-
Interest paid		(15,355)	(13,171)
Income taxes paid		(10,280)	(9,634)
Applications - Benefts Funds		15,611	20,383
Redemptions - Benefts Funds		(42,851)	(42,153)
Net cashprovided by operating activities	D3	22,862	33,126
Cash fows from investing activities
Proceeds from sale of related party investments		33,988	53,554
Purchase of investments in related parties		(128,519)	(111,831)
Repayment of loans by related parties		3,750	11,800
Loans to related parties		(31,216)	(11,800)
Loans repaid by other parties		6,702	-
Proceeds from sale of investment property		861	23,500
Payments in relation to investment properties		-	(21,108)
Purchase of equity accounted investments		(26,089)	(14,102)
Disposal of equity accounted investments		5,000	-
Purchase of other investments		-	(6,115)
Payments for property, plant and equipment		(3,343)	(522)
Cash balance on acquisition of subsidiaries		105,308	15,773
Purchase of subsidiaries		(104,996)	(40,852)
Collections from reverse mortgage holders		888	1,646
Purchase of property held for development		(22,621)	(1,295)
Beneft Funds net disposals of investments in fnancial assets		21,319	6,764
Return of investment to external non-controllinginterests		(356)	(4,230)
Net cash used in investing activities		(139,324)	(98,818)
Cash fows from fnancing activities
Proceeds from issues of securities to securityholders of Centuria Capital Group		133,073	205,736
Equity raising cost paid		(2,611)	(4,317)
Proceeds from borrowings		242,616	6,549
Repayment of borrowings		(98,645)	(49,887)
Capitalised borrowing costs paid		(4,877)	(1,311)
Distributions paid to securityholders of Centuria Capital Group		(52,124)	(39,377)
Proceeds from issues of securities to external non-controlling interests		1,376	1,459
Distributionspaid to external non-controllinginterests		(3,227)	(3,375)
Net cash provided by fnancing activities		215,581	115,477
Net increase in cash and cash equivalents		99,119	49,785
Cash and cash equivalents at the beginning of the fnancial year		174,458	124,673
Effects of exchange rate changes on cash and cash equivalents		(226)	-
Cash and cash equivalents at end of year		273,351	174,458

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

Centuria Capital Group – Annual Report 2021[| ] 77

Notes to the financial statements

For the year ended 30 June 2021

A About the report

A1 GENERAL INFORMATION

The shares in Centuria Capital Limited, (the ‘Company’) and the units in Centuria Capital Fund (‘CCF’) are stapled and trade together as a single stapled security (‘Stapled Security’) on the ASX as ‘Centuria Capital Group’ (the ‘Group’) under the ticker code ‘CNI’.

The Group is a for-profit entity and its principal activities are the marketing and management of investment products including property investment funds and friendly society investment bonds, as well as co-investments in property investment funds.

STATEMENT OF COMPLIANCE

The consolidated financial statements are general purpose financial statements which have been prepared in accordance with Australian Accounting Standards adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated financial statements comply with International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board (IASB).

The consolidated financial statements of the Group comprising the Company (as ‘Parent’) and its controlled entities for the year ended 30 June 2021 were authorised for issue by the Group’s Board of Directors on 11 August 2021.

BASIS OF PREPARATION

The consolidated financial statements have been prepared on the basis of historical cost, except for financial assets at fair value through profit and loss, other financial assets, investment properties and derivative financial instruments which have been measured at fair value at the end of each reporting period. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, which is the company’s functional currency, unless otherwise noted.

Assets and liabilities have been presented on the face of the statement of financial position in decreasing order of liquidity and do not distinguish between current and non-current items.

GOING CONCERN

The financial report has been prepared on a going-concern basis, which assumes continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business. The COVID-19 pandemic has created uncertainty on the global and local financial markets and may impact on the ability of funds managed by the Group to meet their obligations. The Group has completed an extensive assessment on key investments and receivables and remains confident that it will be able to continue as a going concern. Refer to Note C3.

ROUNDING OF AMOUNTS

A2 SIGNIFICANT ACCOUNTING POLICIES

The accounting policies and methods of computation in the preparation of the consolidated financial statements are consistent with those adopted in the previous financial year ended 30 June 2020 with the exception of the adoption of new accounting standards outlined below or in the relevant notes to the consolidated financial statements.

When the presentation or classification of items in the consolidated financial statements has been amended, comparative amounts are also reclassified, unless it is impractical. Accounting policies are selected and applied in a manner that ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events are reported.

These financial statements contain all significant accounting policies that summarise the recognition and measurement basis used and which are relevant to provide an understanding of the financial statements. Accounting policies that are specific to a note to the financial statements are described in the note to which they relate.

FOREIGN CURRENCY TRANSACTIONS

Transactions in foreign currencies are translated into the respective functional currencies of Group companies at the exchange rate at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are generally recognised in profit or loss.

However, foreign currency differences arising from the translation of the following items are recognised in Other Comprehensive Income (OCI):

an investment in equity securities designated as at Fair value through OCI (FVOCI) (except on impairment, in which case foreign currency differences that have been recognised in OCI are reclassified to profit or loss);
a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; and
qualifying cash flow hedges to the extent that the hedges are effective.

FOREIGN OPERATIONS

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the Australian dollar (AUD) at the exchange rate at the reporting date. The income and expenses of foreign operations are translated into AUD at the exchange rates at the date of the transactions.

Foreign currency differences arising from the translation of foreign operations are recognised in OCI and accumulated into the translation reserve, except to the extent that the translation difference is allocated to NCI.

78[| ] Centuria Capital Group – Annual Report 2021

A3 OTHER NEW ACCOUNTING STANDARDS AND INTERPRETATIONS

The AASB has issued new or amendments to standards that are first effective from 1 July 2020.

The following amended standards and interpretations that have been adopted do not have a significant impact on the Group’s consolidated financial statements.

Standards now effective:

AASB 2018-6

Clarifies the definition of a business as per AASB 3 Business Combinations and is applied prospectively to future acquisitions.

A4 USE OF JUDGEMENTS AND ESTIMATES

In preparing these consolidated financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense that are not readily apparent from other sources. The judgements, estimates and assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

Information about critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the consolidated financial statements is included in the following notes:

Note B2 Revenue - Performance fees
Note C4 Investment properties

AASB 2018-7

Clarifies the definition of material as applied across all reporting standards as per AASB 101 Presentation of Financial Statements with intention of increasing a user’s focus on the material items in a financial report.

Note C6 Intangible assets
Note F3 Financial instruments

AASB 2014-10

Clarifies the requirements for recording the sale or contribution of assets between an investor and its associate or joint venture.

Standards not yet effective:

AASB 17 INSURANCE CONTRACTS

AASB 17 Insurance Contracts establishes principles for the recognition, measurement, presentation and disclosure of insurance contracts issued. It also requires similar principles to be applied to reinsurance contracts held and investment contracts with discretionary participation features issued. The objective is to ensure that entities provide relevant information in a way that faithfully represents those contracts. This information gives a basis for users of financial statements to assess the effect that contracts within the scope of AASB 17 have on the financial position, financial performance and cash flows of the entity. The Group are currently assessing the impact of AASB 17 Insurance Contracts.

AASB 2020-3

Amendments to Australian Accounting Standards Annual Improvements 2018-2020 and Other Amendments This amendment adds to AASB 3 a requirement that, for transactions and other events within the scope of AASB 137 or IFRIC 21, an acquirer applies AASB 137 or IFRIC 21 (instead of the Conceptual Framework) to identify the liabilities it has assumed in a business combination and explicit statement that an acquirer does not recognise contingent assets acquired in a business combination.

AASB 2020-1

Amendments to Australian Accounting Standards - Classification of liabilities as current or non-current (Amendments to AASB 101) Under existing AASB 101 requirements, companies classify a liability as current when they do not have an unconditional right to defer settlement of the liability for at least twelve months after the end of the reporting period. As part of its amendments, the Board has removed the requirement for a right to be unconditional and instead, now requires that a right to defer settlement must have substance and exist at the end of the reporting period. It is expected that the changes will have minimal impact to the Group.

Centuria Capital Group – Annual Report 2021[| ] 79

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Notes to the financial statements

For the year ended 30 June 2021

A5 SEGMENT SUMMARY

As at 30 June 2021 the Group has six reportable operating segments. These reportable operating segments are the divisions which report to the Group’s Joint Chief Executive Officers and Board of Directors for the purpose of resource allocation and assessment of performance.

The reported segments have changed from those disclosed in the previous financial report as a result of the growth of the developments business. Previously development business was included within Property Funds Management however has now been broken out into its own segment

The reportable operating segments are:

Operating Segments	Description
Property Funds Management	Management of listed and unlisted property funds.
Co-Investments	Direct interest in property funds, properties held for development and other
	liquid investments
Development	Completion of structured property developments which span sectors
	ranging from Commercial Offce, Industrial and Health through to Affordable
	Housing and Residential Mixed Use. Developments is a new segment in the
	current year, the comparative information provided has been re-presented
	accordingly to conform to the current periods presentation.
Property and Development Finance	Provision of real estate secured non-bank fnance for development projects, bridge fnance and residual stock.
Investment Bonds Management	Management of the Beneft Funds of Centuria Life Limited and management of the Over Fifty Guardian Friendly Society Limited. The Beneft Funds include a range of fnancial products, including single and multi-premium
	investments.
Corporate	Overheads for supporting the Group’s operating segments and management
	of a reverse mortgage lending portfolio.
In addition, the Group also provides	disclosures in relation to a further four non-operating segments, which are:
Non-operating segments	Description
Non-operating items	Comprises transaction costs, mark-to-market movements in property and
	derivative fnancial instruments, share of equity accounted net proft in excess
	of distributions received and all other non-operating activities.
Beneft Funds	Represents the operating results and fnancial position of the Beneft Funds
	of Centuria Life Limited which are required to be consolidated in the Group’s
	fnancial statements in accordance with accounting standards.
Controlled Property Funds	Represents the operating results and fnancial position of property funds
	which are managed by the group and consolidated under accounting
	standards. The Group’s principal activities do not include direct ownership of
	these funds for the purpose of measuring control under accounting standards
	and deriving rental income. Therefore the results attributable to the controlled
	property funds are excluded from operating proft. However, the performance management of the controlled property funds is included in operating proft,
	aligned with how performance of the business is assessed by management of
	the Group.
Eliminations	Elimination of transactions between the operating segments and the
	other non-operating segments above, including transactions between the
	operating entities within the Group, the property funds controlled by the
	Group and the beneft funds.

The accounting policies of reportable segments are the same as the Group’s accounting policies. Refer below for an analysis of the Group’s segment results:

Note B1 Segment profit and loss
Note C1 Segment balance sheet
Note D1 Operating segment cash flows

80[| ] Centuria Capital Group – Annual Report 2021

B Business performance

B1 SEGMENT PROFIT AND LOSS

					Property
		Property			and	Investment			Non		Controlled
For the year ended 30 June 2021	Notes	Funds Management $’000	Co- Investments $’000	Development $’000	development fnance $’000	Bonds Management $’000	Corporate $’000	Operating proft $’000	operating items $’000	Benefts Funds $’000	Property Funds $’000	Eliminations $’000	Statutory proft $’000
Management fees		73,437	-	2,528	-	7,433	-	83,398	-	-	-	(3,879)	79,519
Property
acquisition fees		7,881	-	-	-	-	-	7,881	-	-	-	-	7,881
Property
performance fees		17,908	-	-	-	-	-	17,908	-	-	-	-	17,908
Financing Fees		420	-	-	863	-	-	1,283	(863)	-	-	-	420
Development revenue		-	-	50,271	-	-	-	50,271	-	-	-	-	50,271
Property sales fees		769	-	-	-	-	-	769	-	-	-	-	769
Interest revenue		170	830	-	-	20	2,786	3,806	-	768	-	(60)	4,514
Rental income		-	-	78	-	-	162	240	-	-	10,212	-	10,452
Recoverable
outgoings		3,977	-	-	-	-	-	3,977	-	-	3,464	-	7,441
Distribution/dividend
revenue		-	35,753	-	-	-	-	35,753	(1,469)	8,813	-	(2,371)	40,726
Premiums -
discretionary
participation features		-	-	-	-	-	-	-	-	1,441	-	-	1,441
Underwriting fees		5,090	-	-	-	-	-	5,090	-	-	-	-	5,090
Other income		-	40	12	-	552	1,736	2,340	-	73	87	-	2,500
Total Revenue	B2	109,652	36,623	52,889	863	8,005	4,684	212,716	(2,332)	11,095	13,763	(6,310)	228,932
Share of net proft
of equity accounted
investments	E1	-	-	-	-	-	-	-	3,070	-	-	-	3,070
Net movement in
policyholder liabilities		-	-	-	-	-	-	-	-	5,788	-	-	5,788
Fair value movements
of fnancial
instruments and
property		-	-	-	-	-	-	-	79,843	20,348	8,048	(4,310)	103,929
Cost of sales		-	-	(44,679)	-	-	-	(44,679)	-	-	-	-	(44,679)
Expenses	B3	(45,811)	(234)	(3,708)	(440)	(7,086)	(16,382)	(73,661)	(4,503)	(29,741)	(7,159)	3,879	(111,185)
Finance costs	B4	(1,133)	(11,168)	(6)	-	(3)	(2,578)	(14,888)	(3,262)	(3)	(2,196)	60	(20,289)
Proft/(Loss)
before tax		62,708	25,221	4,496	423	916	(14,276)	79,488	72,816	7,487	12,456	(6,681)	165,566
Income tax beneft/
(expense)	B5	(18,150)	845	(1,077)	(137)	(369)	9,611	(9,277)	837	(7,487)	-	-	(15,927)
Proft/(Loss) after tax		44,558	26,066	3,419	286	547	(4,665)	70,211	73,653	-	12,456	(6,681)	149,639
Proft/(loss) after tax
attributable to:
Centuria Capital
Limited		44,558	4,534	3,419	286	547(24,026)		29,318	(5,887)	-	-	-	23,431
Centuria Capital Fund		-	21,532	-	-	-	19,361	40,893	79,540	-	1,824	(2,232)	120,025
Proft/(loss) after
tax attributable to
Centuria Capital Group
securityholders		44,558	26,066	3,419	286	547	(4,665)	70,211	73,653	-	1,824	(2,232)	143,456
Non-controlling
interests		-	-	-	-	-	-	-	-	-	10,632	(4,449)	6,183
Proft/(loss) after tax		44,558	26,066	3,419	286	547	(4,665)	70,211	73,653	-	12,456	(6,681)	149,639

Centuria Capital Group – Annual Report 2021[| ] 81

Notes to the financial statements

For the year ended 30 June 2021

B1 SEGMENT PROFIT AND LOSS (CONTINUED)

		Property			Investment			Non		Controlled
For the year ended 30 June 2020	Notes	Funds Management $’000	Co- Investments $’000	Development $’000	Bonds Management $’000	Corporate $’000	Operating proft $’000	operating items $’000	Benefts Funds $’000	Property Funds $’000	Eliminations $’000	Statutory proft $’000
Management fees		52,302	-	1,137	9,667	-	63,106	-	-	-	(6,027)	57,079
Property
acquisition fees		6,854	-	-	-	-	6,854	-	-	-	-	6,854
Property
performance fees		21,509	-	-	-	-	21,509	-	-	-	-	21,509
Development revenue		-	-	19,075	-	-	19,075	-	-	-	-	19,075
Property sales fees		2,919	-	-	-	-	2,919	-	-	20	-	2,939
Interest revenue		259	445	-	42	2,851	3,597	-	2,353	22	(131)	5,841
Rental income		429	-	-	-	394	823	-	-	12,691	-	13,514
Recoverable outgoings		-	-	-	-	-	-	-	-	3,747	-	3,747
Distribution/dividend
revenue		-	31,785	-	-	-	31,785	(6,363)	5,188	-	(2,757)	27,853
Premiums -
discretionary
participation features		-	-	-	-	-	-	-	1,750	-	-	1,750
Other income		121	-	444	416	1,066	2,047	-	99	66	-	2,212
Total Revenue		84,393	32,230	20,656	10,125	4,311	151,715	(6,363)	9,390	16,546	(8,915)	162,373
Share of net proft
of equity accounted
investments	E1	-	-	-	-	-	-	7,849	461	-	-	8,310
Net movement in
policyholder liabilities		-	-	-	-	-	-	-	34,445	-	-	34,445
Fair value movements
of fnancial instruments
and property		-	-	-	-	-	-	(34,837)(13,383)		(6,165)	6,105	(48,280)
Expenses	B3	(30,217)	(117)	(1,537)	(7,581)	(14,696)	(54,148)	(6,758)(34,229)		(8,614)	6,026	(97,723)
Cost of sales		-	-	(17,320)	-	-	(17,320)	-	-	-	-	(17,320)
Finance costs	B4	(11)	(12,522)	-	(3)	(1,873)	(14,409)	(1,229)	(5)	(3,090)	131	(18,602)
Proft/(Loss)
before tax		54,165	19,591	1,799	2,541	(12,258)	65,838	(41,338)	(3,321)	(1,323)	3,347	23,203
Income tax beneft/
(expense)	B5	(17,879)	(425)	(567)	(831)	7,117	(12,585)	8,148	3,321	-	-	(1,116)
Proft/(Loss) after tax		36,286	19,166	1,232	1,710	(5,141)	53,253	(33,190)	-	(1,323)	3,347	22,087
Proft/(loss) after tax
attributable to:
Centuria Capital Limited		36,286	568	1,232	1,710	(15,822)	23,974	(3,018)	-	-	-	20,956
Centuria Capital Fund		-	18,598	-	-	10,681	29,279	(30,172)	-	-	1,042	149
Proft/(loss) after
tax attributable to
Centuria Capital Group
securityholders		36,286	19,166	1,232	1,710	(5,141)	53,253	(33,190)	-	-	1,042	21,105
Non-controlling
interests		-	-	-	-	-	-	-	-	(1,323)	2,305	982
Proft/(loss) after tax		36,286	19,166	1,232	1,710	(5,141)	53,253	(33,190)	-	(1,323)	3,347	22,087

82[| ] Centuria Capital Group – Annual Report 2021

B2 REVENUE

Revenue has been disaggregated in the segment profit and loss in Note B1

(A) RECOGNITION AND MEASUREMENT

Type of revenue	Description Revenue recognition policy
Management fees	The Group provides: a) fund management services to property funds in accordance with the fund constitutions. The services are provided on an ongoing basis and revenue is calculated and recognised in accordance with the relevant constitution. The fees are invoiced and paid monthly in arrears. Over-time
	b) property management services to the owners of property assets in accordance with property services agreements. The services are utilised on an ongoing basis and revenue is calculated and recognised in accordance with the specifc agreement. The fees are invoiced monthly with variable payment terms depending on the individual agreements. Over-time
	c) lease management services to the owners. The revenue is recognised when the specifc service is delivered (e.g. on lease execution) and consideration is due 30 days from invoice date. Point-in-time
	d) short-term development management services to the owners of property assets in accordance with development management agreements. Revenue is calculated in accordance with the specifc agreement and invoiced in accordance with the contract terms. Consideration is due from the customer based on the specifc terms agreed in the contract and is recognised when the Company has control of the beneft. Point-in-time
Distribution/ dividend revenue	Distribution/dividend revenue from investments is recognised when the shareholder’s right to receive payment. Point-in-time
Interest Revenue	Interest revenue is accrued on an over-time by reference to the principal outstanding using the effective interest rate. Over-time
Rental Income	Rental income from investment property is recognised in proft or loss on a straight line basis over the term of the lease. Over-time

Centuria Capital Group – Annual Report 2021[| ] 83

Notes to the financial statements

For the year ended 30 June 2021

		Revenue
		recognition
Type of revenue	Description	policy
Performance	The Group receives a performance fee for providing management services where	Over-time
fees	the property fund outperforms a set internal rate of return (IRR) benchmark at
	the time the property is sold. Consideration is due upon successful sale of the
	investment property if the performance hurdles are satisfed.
	In measuring the performance fees to be recognised each period, consideration
	is given to the facts and circumstances with respect to each investment property
	including external factors such as its current valuation, passage of time and
	outlook of the property market.
	Performance fees are only recognised when they are deemed to be highly
	probable and the amount of the performance fees will not result in a signifcant
	reversal in future periods.
	The Group’s performance fees are recognised over-time under AASB 15 Revenue
	from Contracts with Customers.
	The key assumptions made in estimating the amount of performance fee revenue
	that is highly probable include:
	>2 years from forecast fund end date:
	It is assumed that the highly probable threshold is only met when the forecast
	end date of the fund is within two years from balance date. The forecast end date
	is generally based on the relevant fund end date as expressed in the relevant PDS
	or a revised fund end date in the event that an alternative strategy is undertaken
	by the Group, in which case the unbooked portion of any forecast performance
	fees are recognised over the extended term of the fund. In instances where the
	fund term is extended beyond two years from the reporting date and the Group
	has already accrued a performance fee in prior periods, the Group will continue to
	accrue any additional fee over the extended remaining period.
	Probability thresholds for sensitivity to property valuations:
	The level of constraint applied to performance fee revenue is adjusted depending
	on remaining fund tenure. Specifcally, a discount in property values between
	10.0% to 20.0% is applied, depending on when in the two-year window the fund
	is expected to wind up. In instances where the fund term is extended beyond two
	years from the reporting date and the Group has already accrued a performance
	fee in prior periods, a discount in property values between 2.5% to 10.0% is
	applied depending on the remaining fund term as it is assumed the fund term
	extension was on the basis that fund performance can be further enhanced,
	thereby reducing the risk of valuation decrements and increasing the likelihood of
	achieving the full performance fee.
	Fair value of investment properties:
	The fair value of investment properties is based on the latest available valuation
	of the underlying property from the published fnancial statements or board
	approved valuations.
Recoverable	The Group recovers the costs associated with general building and tenancy	Over-time
outgoings	operation from lessees in accordance with specifc clauses within lease
	agreements. These are invoiced monthly based on an annual estimate. The
	consideration is due 30 days from invoice date. Should any adjustment be
	required based on actual costs incurred, this is recognised in the statement of
	fnancial performance within the same reporting period and billed annually.
Property	The Group provides property acquisition related services to property funds and	Point-in-time
acquisition	the revenue is based on a fxed percentage included in the PDS issued at the
fees	establishment of the fund. The consideration is due upon successful settlement
	of the investment property.
Property sales	The Group provides sales services to the owners of property assets in	Point-in-time
fees	accordance with property management agreements. The consideration is due
	upon successful sale of the investment property.
Development	In 2019, the Group entered into agreements to develop four social affordable	Over-time
revenue	housing dwellings in the greater Newcastle, NSW area. The Group recognises
	development revenue based on satisfaction of performance obligations on an
	over-time basis as its customers control the land on which the developments are
	being delivered.

84[| ] Centuria Capital Group – Annual Report 2021

(B) TRANSACTION PRICE ALLOCATED TO THE REMAINING PERFORMANCE OBLIGATIONS

The following table includes revenue expected to be recognised in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the reporting date.

		Unrecognised		Unrecognised
		performance		performance
	Recognised	obligations	Recognised	obligations
	in 2021	2021	in 2020	2020
	$’000	$’000	$’000	$’000
Property
performance fees*	17,908	21,388	21,509	2,334
Development
revenue	49,664	2,280	19,075	53,239
Management fees**	22,308	86,544	11,964	38,654

The underlying property funds managed by the Group have accrued total performance fees of $45,613,000 as at 30 June 2021. Based on the assumptions outlined in B2(a), the total estimated amount of performance fees available to the Group to recognise in the future is $21,388,000. ** Only relates to unlisted property funds management fees which have defined fund terms.

B3 EXPENSES

B3 EXPENSES
	2021	2020
	$’000	$’000
Employee benefts expense	49,410	33,653
Consulting and professional fees	4,077	4,964
Property outgoings and fund expenses	5,652	6,601
Transaction costs	5,220	6,125
Administration fees	1,943	2,220
Cost of sales - development	44,679	17,320
Claims - discretionary participation features	26,804	29,209
Property management fees paid	4,168	2,810
Other expenses	10,180	9,198
Depreciation Expense	3,731	2,943
	155,864	115,043

(A) TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL

(i) Transactions with directors

(C) TRANSACTIONS WITH RELATED PARTIES

Management fees are charged to related parties in accordance with the respective trust deeds and management agreements.

	2021	2020
	$	$
Management fees from Property Funds
managed by Centuria	75,021,656	52,412,451
Distributions from Property Funds
managed by Centuria	31,620,548	18,362,378
Performance fees from Property Funds
managed by Centuria	17,908,370	21,508,771
Property acquisition fees from Property
Funds managed by Centuria	7,881,250	6,854,484
Management fees from Over Fifty
Guardian Friendly Society	3,725,242	4,474,097
Fees from Debt funds managed by
Centuria	582,098	408,358
Sales fees from Property Funds managed
by Centuria	769,175	2,938,640
Interest income on loans to Property
Funds managed by Centuria	701,934	229,297
Interest income on loans to Property
Funds managed by Centuria	1,194,002	-
Distributions and interest from Debt
Funds managed by Centuria	5,089,589	-
	144,493,864	107,188,476

(i) Terms and conditions of transactions with related parties

Investments in property funds and benefit funds held by certain directors and director-related entities are made on the same terms and conditions as all other investors and policyholders. Directors and director-related entities receive the same returns on these investments as all other investors and policyholders.

For transactions with directors, refer to details included in the Audited remuneration report on page 55.

(ii) Key management personnel compensation

The aggregate compensation paid to key management personnel of the Group is set out below:

the Group is set out below:
	2021	2020
	$	$
Short-term employee benefts	8,120,098	6,423,022
Post-employment benefts	144,764	128,467
Other long-term employment benefts	144,793	22,854
Share-based payments	2,010,647	1,113,613
	10,420,302	7,687,956

Detailed information on key management personnel is included in the Audited remuneration report.

B4 FINANCE COSTS

B4 FINANCE COSTS
	2021	2020
	$’000	$’000
Operating interest charges	12,497	11,595
Bank loans in Controlled Property Funds
interest charges	2,196	3,090
Reverse mortgage facility interest
charges	2,334	2,093
Loss/(gain) on derivatives on fair value
hedges	8,080	4,667
(Gain)/loss on fnancial assets fair value
hedges	(8,080)	(4,667)
Other fnance costs	2,139	595
Finance lease interest	1,123	1,229
	20,289	18,602

The Group pays some expenses on behalf of related entities and receives a reimbursement for those payments.

Centuria Capital Group – Annual Report 2021[| ] 85

Notes to the financial statements

For the year ended 30 June 2021

RECOGNITION AND MEASUREMENT

The Group’s finance costs include:

interest expense recognised using the effective interest method; and
the net gain or loss on hedging instruments that is recognised in profit or loss.

B5 TAXATION

B5 TAXATION
	2021	2020
	$’000	$’000
Current tax expense in respect
of the current year	7,048	14,310
Adjustments to current tax
in relation to prior years	61	3,211
	7,109	17,521
Deferred tax (beneft)/expense
relating to the origination and
reversal of temporary differences	8,904	(13,687)
Adjustments to deferred tax in
relation to prior years	(86)	(2,439)
Adjustments to deferred tax in
relation to tax rate adjustments	-	(279)
Income tax expense	15,927	1,116

(A) RECONCILIATION OF INCOME TAX EXPENSE

The prima facie income tax expense on profit before income tax reconciles to the income tax expense in the consolidated financial statements as follows:

statements as follows:
	2021	2020
	$’000	$’000
Proft before tax	165,566	23,203
Less: proft not subject to income tax	(114,680)	(2,283)
	50,886	20,920
Income tax expense calculated at 30%	15,266	6,276
Add/(deduct) tax effect of amounts which
are not deductible/(assessable):
Tax offset for franked dividends	(389)	(227)
Reversal of prior year equity
accounted contribution	-	(6,000)
Non-allowable expenses - other	1,007	844
Utilisation of capital losses	-	(550)
Adjustments to current tax in relation
to prior years	(26)	773
Effects of different tax rates of
subsidiaries operating in other
jurisdictions	69	-
Income tax expense	15,927	1,116

The tax rate used in the above reconciliation is the corporate tax rate of 30% payable for Australian corporate entities on taxable profits under Australian tax law. There has been no change in the corporate tax rate when compared with the previous reporting period. Taxable income derived for New Zealand tax purposes is at the tax rate of 28%.

(B) CURRENT TAX ASSETS AND LIABILITIES

	2021	2020
	$’000	$’000
Current tax assets/(liabilities) attributable to:
Income tax payable - Australia	(996)	(3,064)
Income tax receivable - New Zealand	977	755
Income tax payable to beneft fund
policyholders	(768)	(2,934)
	(787)	(5,243)

(C) MOVEMENT OF DEFERRED TAX BALANCES

	Opening		Closing
	balance	Movement	balance
Financial year ended 30 June 2021	$’000	$’000	$’000
Deferred tax assets
Provisions	2,164	1,334	3,498
Transaction costs	3,762	625	4,387
Capital losses	25,128	(347)	24,781
Revenue tax losses	1,118	1,825	2,943
Financial derivatives	2,757	(438)	2,319
Property held for development	3,964	(22)	3,942
Right of use asset/Lease liability	103	(55)	48
Equity accounted investment	523	-	523
Other	-	85	85
	39,519	3,007	42,526
Deferred tax liabilities
Indefnite life management rights	(33,253)	(53,425)	(86,678)
Accrued performance fees	(1,498)	(4,847)	(6,345)
Accrued income	(290)	(62)	(352)
Unrealised gain/(loss)
on fnancial assets	(381)	(6,413)	(6,794)
Other	(403)	-	(403)
	(35,825)	(64,747)	(100,572)

	Opening		Closing
	balance	Movement	balance
Financial year ended 30 June 2020	$’000	$’000	$’000
Deferred tax assets
Provisions	1,560	604	2,164
Transaction costs	-	3,762	3,762
Capital losses	26,792	(1,664)	25,128
Revenue tax losses	4,021	(2,903)	1,118
Financial derivatives	-	2,757	2,757
Property held for development	-	3,964	3,964
Right of use asset/Lease liability	-	103	103
Equityaccounted investment	-	523	523
	32,373	7,146	39,519
Deferred tax liabilities
Indefnite life management rights	(27,638)	(5,615)	(33,253)
Accrued performance fees	(6,115)	4,617	(1,498)
Accrued income	(290)	-	(290)
Unrealised gain/(loss)
on fnancial assets	(1,432)	1,051	(381)
Other	(138)	(265)	(403)
Transaction costs	(4,733)	4,733	-
Financial derivatives	(2,521)	2,521	-
	(42,867)	7,042	(35,825)

86[| ] Centuria Capital Group – Annual Report 2021

RECOGNITION AND MEASUREMENT

Income tax expense represents the sum of the tax currently payable and payable on a deferred basis.

(i) Current tax

The tax currently payable is based on taxable income for the year. Taxable income differs from profit as reported in the consolidated profit or loss because of items of income or expense that are assessable or deductible in other years as well as items that are never assessable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

(ii) Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases.

Deferred tax liabilities are generally recognised for all assessable temporary differences. Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and tax offsets, to the extent that it is probable that sufficient future taxable profits will be available to utilise them.

However, deferred tax assets and liabilities are not recognised for:

assessable temporary differences that arise from the initial recognition of assets or liabilities in a transaction that is not a business combination which affects neither taxable income nor accounting profit;
assessable temporary differences relating to investments in subsidiaries, associates and joint ventures to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
assessable temporary differences arising from goodwill

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable income will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The applicable rates are 30% for deferred tax assets and liabilities arising to the Australian subsidiaries of the Company and 28% for deferred tax asset and liabilities arising to the New Zealand subsidiaries of the Company. The measurement of deferred tax assets and liabilities reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

(iii) Tax consolidation

The Company and all its wholly-owned Australian resident subsidiaries are part of a tax consolidated group under Australian taxation law. The Company is the head company of the tax consolidated group. Tax expense/benefit, deferred tax assets and deferred tax liabilities arising from temporary differences of the members of the tax consolidated group are recognised in their separate financial statements using a ‘standalone taxpayer’ approach. Under the tax funding agreement between members of the tax consolidated group, amounts are recognised as payable to or receivable by each member in relation to the tax contribution amounts paid or payable between the Company and the members of the the tax consolidated group.

The Benefit Funds are part of the tax consolidated group, and they are allocated a share of the income tax liability attributable to Centuria Life Limited equal to the income tax liability that would have arisen to the Benefit Funds had they been stand-alone entities.

Centuria Capital Fund (‘CCF’) and its sub-trusts are not part of the tax consolidated group. Under current Australian income tax legislation, trusts are not liable for income tax, provided their securityholders are presently entitled to the net (taxable) income of the trust including realised capital gains, each financial year.

Primewest Group Limited (Primewst Group) is not a wholly-owned subisidary of the Company for tax purposes at 30 June 2021 and is its own tax consolidated group at 30 June 2021. Primewest Group’s tax rate was 27.5% prior to the company’s acquisition of Primewest Group Limited. The tax rate was increased to 30% retrospectively on the date of acquisition in accordance with Australian tax legislation. Subsequent to the year-ended 30 June 2021, Primewest Group formed part of the Company’s consolidated tax group as a result of the Company acquiring the remaining interest post year-end.

Centuria Healthcare Pty Ltd (‘Centuria Healthcare’) is not a whollyowned subsidiary of the Company at 30 June 2021. Centuria Healthcare has formed its own tax consolidated group with its wholly-owned subsidiaries at 30 June 2021. Centuria Healthcare is the head company of the Centuria Healthcare tax consolidated group. Tax expense/ benefit, deferred tax assets and deferred tax liabilities arising from temporary differences of the members of the tax consolidated group are recognised in their separate financial statements using a ‘standalone taxpayer’ approach. As no tax funding agreement existed at 30 June 2021 between the members of the tax consolidated group, any amounts payable or receivable in relation to the tax contribution for each entity is recognised as a contribution of capital with the head company of the tax consolidated group.

The New Zealand tax resident subsidiaries of the Company are all stand-alone taxpayers from a New Zealand income tax perspective as they have not elected to form a consolidated group for New Zealand tax purposes.

(iv) Current and deferred tax for the period

Income taxes relating to items recognised directly in equity are recognised directly in equity and not in the statement of comprehensive income. In the case of a business combination, the tax effect is included in the accounting for the business combination.

Centuria Capital Group – Annual Report 2021[| ] 87

Notes to the financial statements

For the year ended 30 June 2021

B6 EARNINGS PER SECURITY

B6 EARNINGS PER SECURITY
	2021	2020
	Cents	Cents
Basic (cents per stapled security)	24.6	4.7
Diluted (cents per stapled security)	24.2	4.6

The earnings used in the calculation of basic and diluted earnings per security is the profit for the year attributable to Centuria Capital Group securityholders as reported in the consolidated statement of comprehensive Income.

The weighted average number of ordinary securities used in the calculation of basic and diluted earnings per security is as follows:

	2021	2020
Weighted average number of ordinary securities (basic)	584,215,946	444,644,883
Weighted average number of ordinary securities (diluted)(i)	591,683,198	460,824,844

(i) The weighted average number of ordinary securities used in the calculation of diluted earnings per security is determined as if 30 June 2021 was the end of the performance period of the grants of Rights under the LTI Plan. All Rights that would have vested if 30 June 2021 was the end of the performance period are deemed to have been issued at the start of the financial year.

B7 DIVIDENDS AND DISTRIBUTIONS

	2021 2020
	Cents per security Total $’000 Cents per security Total $’000
Dividends/distributions paid during the year Final year-end dividend (fully franked) Final year-end distribution Interim dividend (fully franked) Interim distribution Dividends/distributions declared during the year Final dividend (fully franked)(i) Final distribution(i)	1.80 8,690 0.50 1,918 3.40 16,420 4.50 17,262 1.20 7,203 1.70 7,630 3.30 19,811 2.80 12,567 2.10 12,605 1.80 8,690 3.40 20,408 3.40 16,420

(i) The Group declared a final dividend/distribution in respect of the year ended 30 June 2021 of 5.5 cents per stapled security which included a fully franked dividend of 2.1 cents per share and a trust distribution of 3.4 cents per unit. The final dividend had a record date of 25 May 2021 and was paid on 30 July 2021. The total amount paid of $33,013,000 (2020: $25,110,000) has been provided for as a liability in these financial statements.

(ii) In addition to the dividends and distributions paid to Group securityholders, the Group paid distributions of $3,295,000 (2020: $3,375,000) to external non-controlling interests and has a distribution payable of $11,500,000 to Primewest Group securityholders.

(A) FRANKING CREDITS

(A) FRANKING CREDITS
	2021	2020
	$’000	$’000
Amount of franking credits available to shareholders of the
Company for subsequent fnancial years(i)	11,297	10,427

(i) Before taking into account the impact of the final dividend paid on 30 July 2021.

Of the franking credit balance of $11,297,000 at 30 June 2021, $3,758,000 relates to the Centuria Capital Limited tax consolidated group, $3,162,000 relates to the Centuria Healthcare tax consolidated group and $4,377,000 relates to the Primewest tax consolidated group.

88[| ] Centuria Capital Group – Annual Report 2021

C Assets and liabilities

C1 SEGMENT BALANCE SHEET

					Property
		Property			and	Investment		Operating		Controlled		Statutory
As at 30 June 2021	Notes	Funds Management $’000	Co- Investments $’000	Development $’000	development fnance $’000	Bonds Management $’000	Corporate $’000	balance sheet $’000	Benefts Funds $’000	Property Funds $’000	Eliminations $’000	balance sheet $’000
ASSETS
Cash and cash
equivalents	D2	54,497	158,418	9,526	-	2,638	24,558	249,637	16,835	6,879	-	273,351
Receivables	C2	47,573	27,910	2,462	-	269	8,715	86,929	6,049	1,475	(194)	94,259
Contract Asset	C2	-	-	32,938	-	-	-	32,938	-	-	-	32,938
Income tax receivable	B5	306	-	-	-	-	671	977	-	-	-	977
Financial assets	C3	-	695,871	-	-	-	54,309	750,180	288,179	-	(47,835)	990,524
Other assets		141	-	13	-	84	8,441	8,679	-	-	-	8,679
Property held for
development	C5	-	-	53,744	-	-	-	53,744	-	-	-	53,744
Deferred tax assets	B5	28,553	-	4,152	-	-	9,821	42,526	-	-	-	42,526
Equity accounted
investments	E1	-	29,933	-	25,704	-	-	55,637	-	-	-	55,637
Investment properties	C4	-	-	-	-	-	-	-	-	208,140	-	208,140
Right of use asset	C9	-	-	-	-	-	19,947	19,947	-	-	-	19,947
Intangible assets	C6	790,551	-	-	-	-	-	790,551	-	-	-	790,551
Total assets		921,621	912,132	102,835	25,704	2,991	126,462	2,091,745	311,063	216,494	(48,029)	2,571,273
LIABILITIES
Payables	C7	5,593	29,220	3,308	-	1,230	44,541	83,892	385	4,592	(194)	88,675
Provisions		2,417	-	-	-	-	1,660	4,077	-	-	-	4,077
Borrowings	C8	-	298,440	15,955	-	-	7,006	321,401	-	106,428	(1,187)	426,642
Provision for
income tax	B5	5,658	-	-	-	-	(4,662)	996	768	-	-	1,764
Interest rate swap at
fair value		-	-	-	-	-	31,205	31,205	-	-	-	31,205
Beneft Funds policy
holders' liability		-	-	-	-	-	-	-	303,650	-	-	303,650
Call/Put option liability		-	-	-	-	-	22,690	22,690	-	-	-	22,690
Deferred tax liability	B5(c)	90,074	-	-	-	-	4,238	94,312	6,260	-	-	100,572
Lease liability	C9	-	-	-	-	-	21,757	21,757	-	-	-	21,757
Total liabilities		103,742	327,660	19,263	-	1,230	128,435	580,330	311,063	111,020	(1,381)	1,001,032
Net assets		817,879	584,472	83,572	25,704	1,761	(1,973)	1,511,415	-	105,474	(46,648)	1,570,241

Centuria Capital Group – Annual Report 2021[| ] 89

Notes to the financial statements

For the year ended 30 June 2021

C1 SEGMENT BALANCE SHEET (CONTINUED)

		Property			Investment		Operating		Controlled		Statutory
As at 30 June 2020	Notes	Funds Management $’000	Co- Investments $’000	Development $’000	Bonds Management $’000	Corporate $’000	balance sheet $’000	Benefts Funds $’000	Property Funds $’000	Eliminations $’000	balance sheet $’000
ASSETS
Cash and cash
equivalents	D2	24,514	50,707	118	6,985	67,137	149,461	22,585	2,412	-	174,458
Receivables	C2	24,651	7,744	26,537	1,780	4,818	65,530	4,192	88	(1,081)	68,729
Income tax receivable		306	-	-	-	449	755	-	-	-	755
Financial assets	C3	-	464,191	-	-	58,904	523,095	289,359	-	(39,037)	773,417
Other assets	C4	331	205	1	206	10,052	10,795	-	-	-	10,795
Investment properties		-	-	-	-	-	-	-	167,110	-	167,110
Property held for
development		-	31,295	-	-	-	31,295	-	-	-	31,295
Deferred tax assets		28,899	-	193	104	10,323	39,519	-	-	-	39,519
Equity accounted
investments	E1	-	32,955	-	-	-	32,955	-	-	-	32,955
Investment properties
held for sale		-	861	-	-	-	861	-	-	-	861
Right of use asset		-	-	-	-	21,393	21,393	-	-	-	21,393
Intangible assets	C6	280,120	-	-	-	-	280,120	-	-	-	280,120
Total assets		358,821	587,958	26,849	9,075	173,076	1,155,779	316,136	169,610	(40,118)	1,601,407
LIABILITIES
Payables	C7	1,922	20,749	2,495	2,345	43,145	70,656	2,220	4,737	(1,081)	76,532
Provisions		873	-	-	-	1,328	2,201	-	-	-	2,201
Borrowings	C8	-	167,291	-	-	13,017	180,308	-	85,920	(1,177)	265,051
Provision for
income tax		2,420	-	150	-	494	3,064	2,934	-	-	5,998
Interest rate swap at
fair value		-	-	-	-	32,752	32,752	-	636	-	33,388
Beneft Funds policy
holders' liability		-	-	-	-	-	-	311,535	-	-	311,535
Deferred tax liability	B5(c)	33,253	200	-	2	2,923	36,378	(533)	-	-	35,825
Call/Put option liability		-	-	-	-	17,167	17,167	-	-	-	17,167
Lease liability		-	-	-	-	22,564	22,564	-	-	-	22,564
Total liabilities		38,468	188,240	2,645	2,347	133,390	365,090	316,136	91,293	(2,258)	770,261
Net assets		320,353	399,718	24,204	6,728	39,686	790,689	-	78,317	(37,860)	831,146

90[| ] Centuria Capital Group – Annual Report 2021

C2 RECEIVABLES

C2 RECEIVABLES
		2021	2020
	Notes	$’000	$’000
Receivables from
related parties	C2(a)	63,252	26,098
Other receivables(i)		31,007	16,094
Contract assets - Development		32,938	26,537
		127,197	68,729

(i) Other receivables includes $16,400,000 of receivables from the sale of Vitalharvest shares.

All receivables are current except for $21,127,000 of performance fees receivable which are non-current.

The Group does not hold any collateral or other credit enhancements over these balances nor does it have a legal right of offset against any amounts owed by the Group to the counterparty.

(A) RECEIVABLES FROM RELATED PARTIES

The following amounts were owed by related parties of the Group at the end of the financial year:

the end of the financial year:
	2021	2020
	$	$
Performance fees owing from property
funds managed by Centuria	24,296,035	9,385,830
Management fees owing from property
funds managed by Centuria	13,772,263	7,294,799
Loan receivable from Centuria
Government Income Property Fund	11,248,798	-
Recoverable expenses owing from
property funds managed by Centuria	5,913,021	336,300
Distribution receivable from
Centuria Industrial REIT	3,941,846	3,182,678
Distribution receivable from
Centuria Offce REIT	3,336,852	3,484,055
Receivable from Over Fifty
Guardian Friendly Society	-	1,104,355
Sales fees owing from property
funds managed by Centuria	-	1,022,000
Distribution receivable from unlisted
property funds managed by Centuria	743,345	288,220
	63,252,160	26,098,237

RECOGNITION AND MEASUREMENT

Receivables are initially recognised at fair value and subsequently at amortised cost using the effective interest rate method, less an allowance for impairment. Due to the short-term nature of these financial rights, their carrying amounts are estimated to represent their fair values.

(i) Contract assets - development

The timing of revenue recognition, billings and cash collections results in billed accounts receivable (trade receivables) and unbilled receivables (contract assets) on the consolidated statement of financial position.

In respect of the Social Affordable Housing Developments within the Property Funds Management segment, billing occurs subsequent to revenue recognition, resulting in contract assets.

C3 FINANCIAL ASSETS

C3 FINANCIAL ASSETS
		2021	2020
	Notes	$’000	$’000
Investments in trusts, shares and
other fnancial instruments at
fair value		271,911	267,282
Investment in related party unit
trusts at fair value	C3(a)	664,304	440,529
Loans receivable(i)		-	6,702
Reverse mortgage receivables(ii)		54,309	58,904
		990,524	773,417

Financial assets are classified as non-current assets.

(i) This is an unsecured loan to a third party that accrues interest at 10% per annum. (ii) Whilst some mortgages are likely to be repaid during the next 12 months, the Group does not control the repayment date.

The loan receivable from Centuria Government Income Property Fund accrues interest at 10.00% per annum, and expires 9 June 2022.

Centuria Capital Group – Annual Report 2021[| ] 91

Notes to the financial statements

For the year ended 30 June 2021

C3 FINANCIAL ASSETS (CONTINUED)

(A) INVESTMENTS IN RELATED PARTY UNIT TRUSTS CARRIED AT FAIR VALUE THROUGH PROFIT OR LOSS

The following table details related party investments carried at fair value through profit and loss.

	2021 2020
	Fair value $ Units held Ownership % Fair value $ Units held Ownership %
Financial assets held by the Group Centuria Industrial REIT 344,998,908 92,741,642 16.81% 215,809,359 68,078,662 17.01% Centuria Offce REIT 189,290,479 80,893,367 15.72% 158,152,599 78,293,366 15.22% Augusta Industrial Fund 48,584,204 39,279,014 16.10% 17,232,050 19,000,000 10.00% Asset Plus Limited 21,915,324 72,507,288 19.99% 9,705,148 30,528,933 18.85% Centuria Healthcare Direct Medical Fund No.2 16,386,598 16,991,495 11.08% 10,305,433 11,025,391 7.48% Matrix Trust 5,892,821 5,106,431 5.00% - - 0% Pialba Place Trust 3,908,561 5,129,345 23.32% - - 0% Augusta Property Fund 3,645,664 3,850,000 10.00% - - 0% Centuria Healthcare Aged Care Property Fund No.1 2,948,651 5,513,559 9.21% 5,748,988 5,513,559 9.21% Primewest Large Format Retail Trust No. 2 2,439,720 2,430,000 6.64% - - 0% Dragon Hold Trust 1,500,000 1,500,000 10.00% - - 0% Albany Brooks Gardens Trust 422,950 275,000 1.60% - - 0% Centuria Scarborough House Fund 105,921 102,836 0.22% 97,694 102,836 0.22% Primewest 251 St Georges Terrace Trust 104,126 104,126 0.27% - - 0%
642,143,927 417,051,271
Financial assets held by the Beneft Funds Centuria Offce REIT 15,875,494 6,784,399 1.32% 18,956,484 9,384,398 1.82% Centuria Industrial REIT 5,137,580 1,381,070 0.25% 3,446,506 1,087,226 0.27% Centuria SOP Fund 1,147,200 1,000,000 3.28% 1,064,000 1,000,000 3.28%
22,160,274 23,466,990
664,304,201 440,518,261

Related party unit trusts carried at fair value through profit and loss

Related party unit trusts carried at fair value through proft and loss
	30 June 2021	30 June 2020
	$’000	$’000
Opening balance	440,529	14,571
Investment purchases	126,584	105,176
Acquisition of subsidiary	14,366	26,937
Carrying value transferred from controlled property funds	9,860	-
Disposal	(16,604)	(28,194)
Foreign currency translation	(145)	-
Fair value (loss)/gain	89,714	(108,138)
Carrying value transferred from/(to) equity accounted investments	-	378,407
Fair value gain on discontinuing equity accounted investments	-	51,770
	664,304	440,529

92[| ] Centuria Capital Group – Annual Report 2021

RECOGNITION AND MEASUREMENT

All financial assets are recognised and derecognised on trade date where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial asset within the timeframe established by the market concerned. Financial assets are initially measured at fair value plus transaction costs, except for those financial assets classified as at fair value through profit or loss (“FVTPL”), which are initially measured at fair value only.

Financial assets are classified as financial assets at FVTPL when the financial asset is either held for trading or it is designated as at fair value through profit or loss.

Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the statement of comprehensive income.

AASB 9 contains three principal classification categories for financial assets:

measured at amortised cost;
measured at fair value through other comprehensive income (FVOCI); and
measured at FVTPL.

The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows.

(i) Financial assets at amortised cost

Loans and receivables are initially recognised at fair value and subsequently at amortised cost using the effective interest rate method less any allowance under the Expected Credit Loss (“ECL”) model.

(ii) Recoverability of loans and receivables

At each reporting period, the Group assesses whether financial assets carried at amortised cost are ‘credit-impaired’. A financial asset is ‘credit-impaired’ when one or more events that has a detrimental impact on the estimated future cash flows of the financial asset have occurred.

The Group recognises loss allowances at an amount equal to lifetime ECL on trade and other receivables. Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

Lifetime ECLs result from all possible default events over the expected life of the trade receivables and are a probability-weighted estimate of credit losses. Credit losses are measured as the difference between cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive.

The Group analyses the age of outstanding receivable balances and applies historical default percentages adjusted for other current observable data as a means to estimate lifetime ECL, including forecasts of interest rates and inflation, as well as the financial stress of counterparties and their ability to operate as a going concern. Debts that are known to be uncollectable are written off when identified.

Given that COVID-19 is an ongoing situation, the Group has continued to analyse the age of outstanding receivable balances post balance sheet date and applied estimated percentages of recoverability to estimate ECL, as well as the financial stress of counterparties and their ability to operate as a going concern. Debts that are known to be uncollectible are written off when identified.

(iii) Financial assets at fair value through profit and loss

All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI or at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

A financial asset (unless it is a trade receivable without a significant financing component that is initially measured at the transaction price) is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition.

Financial assets at FVTPL are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.

Financial assets recognised at FVTPL include reverse mortgage loan receivables, reverse mortgage derivatives and investments in trusts.

Centuria Capital Group – Annual Report 2021[| ] 93

Notes to the financial statements

For the year ended 30 June 2021

C4 INVESTMENT PROPERTIES

KEY ESTIMATE AND JUDGEMENTS

(A) VALUATION TECHNIQUES AND SIGNIFICANT UNOBSERVABLE INPUTS

Property	2021 $’000	2020 $’000	Asset type	2021 Capitali- sation rate %	2021 Discount rate %	2021 Valuer
111 St George Terrace, Perth WA	159,000	155,000	Offce	6.50%	6.75%	Colliers
Foundation Place,			Large format
QLD	31,500	-	retail	6.25%	6.37%	Colliers
60 Investigator
Drive, QLD	7,250	-	Childcare	6.00%	-%	Colliers
26 Westbrook
Parade, WA	5,220	-	Childcare	6.50%	-%	Colliers
40 John rice
Avenue, SA	5,170	-	Childcare	6.50%	-%	JLL
8-10 Warneford St, Sandy Bay TAS	-	5,610Healthcare		-%	-%
120 and 122
Spencer St, South
Bunbury, WA Total fair value	- 208,140	6,500Healthcare 167,110		-%	-%

Investment properties are classified as non-current.

	2021 $’000	2020 $’000
Opening balance	167,110	177,500
Acquisition of investment properties	-	15,116
Capital improvements and
associated costs	356	4,660
Gain/(loss) on fair value	5,712	(6,141)
Change in deferred rent and lease incentives	(2,068)	(525)
Deconsolidation of controlled property funds	(12,110)	-
Acquisition of subsidiary	49,140	-
Sale of investment property	-	(23,500)
Closing balance ^	208,140	167,110

^ The carrying amount of investment properties includes components related to deferred rent, capitalised lease incentives and leasing fees amounting to $10,575,100 (30 June 2020: $12,704,534).

The investment properties recognised by the Group are properties owned by related party funds that are taken to be controlled by the Group under accounting standards. Investment properties are properties held either to earn rental income or for capital appreciation or for both. Investment properties are initially recorded at cost which includes stamp duty and other transaction costs. Subsequently, the investment properties are measured at the fair value with any change in value recognised in profit or loss. The carrying amount of investment properties includes components relating to deferred rent, lease incentives and leasing fees.

An investment property is derecognised upon disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is derecognised.

The fair value of the investment properties were determined by the directors of the Responsible Entity of the relevant fund or by an external, independent valuation company having an appropriate recognised professional qualification and recent experience in the location and category of the properties being valued. Fair value is based on market values, being the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.

The valuations were prepared by considering the following valuation methodologies:

Capitalisation approach: the annual net rental income is capitalised at an appropriate market yield to arrive at the property’s market value. Appropriate capital adjustments are then made where necessary to reflect the specific cash flow profile and the general characteristics of the property.
Discounted cash flow approach: this approach incorporates the estimation of future annual cash flows over a 10 year period by reference to expected rental growth rates, ongoing capital expenditure, terminal sale value and acquisition and disposal costs. The present value of future cash flows is then determined by the application of an appropriate discount rate to derive a net present value for the property.
Direct comparison approach: this approach identifies comparable sales on a dollar per square metre of lettable area basis and compares the equivalent rates to the property being valued to determine the property’s market value.

The valuations reflect, when appropriate, the type of tenants actually in occupation or responsible for meeting lease commitments or likely to be in occupation after letting of vacant accommodation and the market’s general perception of their credit-worthiness; the allocation of maintenance and insurance responsibilities between the lessor and lessee; and the remaining economic life of the property. It has been assumed that whenever rent reviews or lease renewals are pending with anticipated reversionary increases, all notices and, where appropriate, counter notices have been served validly and within the appropriate time.

The most significant unobservable input used in the above valuation techniques and its relationship with fair value measurement is the capitalisation rate. The higher/lower the rate, the lower/higher the fair value.

94[| ] Centuria Capital Group – Annual Report 2021

(B) FAIR VALUE MEASUREMENT

The fair value measurement of investment properties has been categorised as a Level 3 fair value as it is derived from valuation techniques that include inputs that are not based on observable market data (unobservable inputs).

	Fair value	Fair value
	measurement	measurement
	sensitivity to	sensitivity to
Signifcant	signifcant	signifcant
unobservable	increase in	decrease in
inputs	input	input	Range of inputs FY21
			$572psm to
Market rent	Increase	Decrease	$593psm
Capitalisation rate	Decrease	Increase	6.00% to 6.50%
Discount rate	Decrease	Increase	6.37% to 6.75%

A further sensitivity analysis was taken by the Group to assess the fair value of investment property values. The table below illustrates the valuation of movements in capitalisation rates and discount rate:

		Capitalisation	Capitalisation
	Fair value at	Rate impact	Rate impact
	30 June 2021	-0.25%	+0.25%
	$’000	$’000	$’000
Investment properties	208,140	8,141	(7,549)

C5 PROPERTY HELD FOR DEVELOPMENT

	30 June 2021	30 June 2020
Property	$’000	$’000
209 Kotham Road, Victoria, Australia	20,281	-
54 Cook Street, Auckland, New Zealand	20,905	19,884
17-19 Man Street, Queenstown, New
Zealand	11,263	10,116
27-29 Young St, West Gosford, Australia	1,295	1,295
	53,744	31,295

Opening balance	31,295	-
Capital expenditure	2,611	-
Foreign currency translation	(162)	-
Acquisitions	20,000	1,295
Acquisition of subsidiary balance	-	30,000
	53,744	31,295

Recognition and measurement

Properties held for development relates to land and property developments that are held for sale or development and sale in the normal course of the Group’s business. Properties held for development are carried at the lower of cost or net realisable value.

The calculation of net realisable value requires estimates and assumptions which are regularly evaluated and are based on historical experience and expectations of future events that are believed to be reasonable under the circumstances. Properties held for development are classified as non-current assets unless they are contracted to be sold within 12 months of the end of the reporting period, in which case they are classified as current assets.

Centuria Capital Group – Annual Report 2021[| ] 95

Notes to the financial statements

For the year ended 30 June 2021

C6 INTANGIBLE ASSETS

C6 INTANGIBLE ASSETS
	2021	2020
	$’000	$’000
Goodwill	481,696	167,938
Indefnite life management rights	308,855	112,182
	790,551	280,120
	2021	2020
	$’000	$’000
Opening balance	280,120	157,663
Acquired goodwill	319,216	102,403
Acquired management rights	196,799	20,054
Foreign currency translation	29	-
Purchase price accounting adjustments	(5,613)	-
	790,551	280,120

Goodwill and management rights are solely attributable to the Property Funds Management cash generating unit with recoverability determined by a value in use calculation using profit and loss projections covering a five year period, with a terminal value determined after five years.

RECOGNITION AND MEASUREMENT

(i) Indefinite life management rights

Management rights acquired in a business combination are initially measured at fair value and reflect the right to provide asset and fund management services in accordance with the management agreements.

EXPENSES

Expenses in 2022 are based on the budget for 2022 and are assumed to increase at a rate of 5.0% (2020: 5.0%) per annum for the years 2023-2026. The directors believe this is an appropriate growth rate based on past experience.

DISCOUNT RATE

Discount rates are determined to calculate the present value of future cash flows. A pre-tax rate of 9.37% (2020: 9.44%) is applied to cash flow projections. In determining the appropriate discount rate, regard has been given to relevant market data as well as Group specific inputs.

TERMINAL GROWTH RATE

Beyond 2026, a growth rate of 3.0% (2020: 3.0%), in line with long term economic growth, has been applied to determine the terminal value of the asset.

SENSITIVITY TO CHANGES IN ASSUMPTIONS

As at 30 June 2021, the estimated recoverable amount of intangibles including goodwill relating to the Property Funds Management cash-generating unit exceeded its carrying amount by $585,400,000 (2020: $322,400,000). The table below shows the key assumptions used in the value in use calculation and the amount by which each key assumption must change in isolation in order for the estimated recoverable amount to be equal to its carrying value.

	Revenue
	growth rate	Pre-tax	Expenses
	(average)	discount rate	growth rate
Assumptions used in value in use
calculation	7.50%	9.37%	5.00%
Rate required for recoverable
amount to equal carrying value	(0.92%)	13.89%	15.19%

(ii) Goodwill

Goodwill acquired in a business combination is measured at cost and subsequently measured at cost less any impairment losses. The cost represents the excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired.

(iii) Impairment

Goodwill and intangible assets that have an indefinite useful life are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows that are largely independent of the cash inflows from other assets or groups of assets (cash generating units or CGUs). Non-financial assets other than goodwill that were previously impaired are reviewed for possible reversal of the impairment at each reporting date.

KEY ESTIMATES AND JUDGEMENTS

The key assumptions used in the value in use calculations for the Property Funds Management cash-generating unit are as follows:

C7 PAYABLES

C7 PAYABLES
	2021	2020
	$’000	$’000
Sundry creditors(i)	22,550	36,498
Dividend/distribution payable(ii)	44,513	25,110
Accrued expenses	21,612	14,924
	88,675	76,532

(i) Sundry creditors are non-interest bearing liabilities and are payable on commercial terms of 7 to 60 days.

(ii) Includes the Primewest final distribution payable for the year ended 30 June 2021 of $11,500,000.

All trade and other payables are considered to be current as at 30 June 2021, due to their short-term nature.

RECOGNITION AND MEASUREMENT

Payables are recognised when the Group becomes obliged to make future payments resulting from the purchase of goods and services. Due to the short-term nature of these financial obligations, their carrying amounts are estimated to represent their fair values.

REVENUE

Revenues in 2022 are based on the Board approved budget for 2022 and are assumed to increase at a rate of 7.5% (2020: 7.5%) per annum for years 2023-2026. The directors believe this is a prudent and achievable growth rate based on past experience.

96[| ] Centuria Capital Group – Annual Report 2021

C8 BORROWINGS

C8 BORROWINGS
			2021	2020
		Notes	$’000	$’000
Secured listed redeemable notes	C8(a)		198,693	-
Floating rate secured notes	C8(b)		66,650	75,000
Fixed rate secured notes	C8(b)		29,366	93,823
Development facility	C8(c)		15,955	-
Reverse mortgage bill
facilities and notes	C8(d)		7,006	7,422
Secured facility - New Zealand	C8(e)		7,440	5,610
Secured bank loans in
Controlled Property Funds	C8(f)		106,505	85,920
Borrowing costs capitalised			(4,973)	(2,724)
			426,642	265,051

(C) DEVELOPMENT FACILITY

In 2021, the Group had drawn down amounts to fund its social affordable housing developments. Details of the amounts drawn and the maturity of each development facility are as follows:

			Facility	Draw	Borrowing
		Maturity	limit	down	costs	2021	2020
Development	Classifcation	date	$’000	$’000	$’000	$’000	$’000
45
Pendlebury
Road		7 Apr
(Cardiff)	Current	2022	10,842	7,901	-	7,901	-
357-359		7 Apr
Mann Street	Current	2022	10,258	8,054	-	8,054	-
						15,955	-

The facilities above are secured against each of the respective developments.

The terms and conditions relating to the above facilities are set out below.

(A) SECURED LISTED REDEEMABLE NOTES

On 21 April 2021, the Fund issued $198,693,000 of listed redeemable notes with a variable interest rate of 4.25% plus the bank bill rate which is due to mature on 21 April 2026. These notes are secured against assets within certain subsidiaries of the Group.

(B) SECURED NOTES

The Group has issued fixed and floating corporate notes as per below. These notes are secured against assets within certain subsidiaries of the Group.

In December 2020, the Group refinanced the corporate notes, reducing the fixed component of Tranche 1 from $30,708,000 to $19,447,000, reducing the variable component of Tranche 1 from $26,040,000 to $8,350,000, increasing the fixed component of Tranche 3 from $18,115,000 to $29,366,000 and increasing the variable component of Tranche 3 from $13,960,000 to $31,650,000.

			Coupon		2021	2020
Fixed		Classifcation	Rate	Due Date	$’000	$’000
				21 April
Tranche	1	-	7.0%	2021	-	30,708
				21 April
Tranche	2	-	6.5%	2023	-	45,000
				21 April
Tranche	3	Non-current	5.0%	2024	29,366	18,115
					29,366	93,823

(D) REVERSE MORTGAGE BILL FACILITIES AND NOTES (SECURED)

As at 30 June 2021, the Group had $7,006,000 (2020: $7,422,000) non-recourse notes on issue to ANZ Bank, secured over the remaining reverse mortgages held in Senex Warehouse Trust No.1 (a subsidiary of the Group) due to mature on 30 September 2021 and is classified as current as at 30 June 2021.

The facility limit as at 30 June 2021 is $8,200,000 (2020: $8,200,000) and is reassessed every 6 months with a view to reducing the facility in line with the reduction in the reverse mortgage book. Under the facility agreement, surplus funds (being mortgages repaid (including interest) less taxes, administration expenses and any hedge payments) are required to be applied against the facility each month.

By 30 June 2021, the Group has negotiated the refinancing of the reverse mortgage borrowings with ANZ, however the agreement could not be executed due to due to the impact of COVID-19 lockdown measures in NSW Australia. Under the extension agreement, the loan will mature on 30 September 2022 and the facility limit will reduce to $7,500,000.

$7,500,000.
	2021	2020
Facility	$’000	$’000
Amount used at reporting date	8,200	8,200
Amount unused at reporting date	(7,006)	(7,422)
	1,194	778

(E) SECURED FACILITY - NEW ZEALAND

The borrowings facilities for New Zealand are outlined as follows. These facilities are secured against assets within certain subsidiaries of the Group.

Floating Classifcation Coupon Rate Due Date 2021 $’000 2020 $’000 Tranche 1 - BBSW +4.5% 21 April 2021 - 26,040 Tranche 2 Non-current BBSW +4.25% 21 April 2023 35,000 35,000 Tranche 3 Non-current BBSW +4.50% 21 April 2024 31,650 13,960 66,650 75,000	Classifcation Maturity date Facility limit $’000 Funds available $’000 Draw down $’000 Borrowing costs $’000 Tota $’000
	30 June 2021 New Zealand Investment Facility Non- current 30 Nov 2022 11,160 3,720 7,440 - 7,440
	7,440
	30 June 2020 New Zealand Investment Facility Current 30 Jun 2021 5,610 - 5,610 - 5,610
	5,610

Centuria Capital Group – Annual Report 2021[| ] 97

Notes to the financial statements

For the year ended 30 June 2021

(F) BANK LOANS - CONTROLLED PROPERTY FUNDS (SECURED)

Each controlled property fund has debt facilities secured by first mortgage over each of the fund’s investment property and a first ranking fixed and floating charge over all assets of each of the funds. Details of the amounts drawn and the maturity of each facility are as follows:

			Facility	Funds	Draw	Borrowing
		Maturity	limit	available	down	costs	Total
Fund	Classifcation	date	$’000	$’000	$’000	$’000	$’000
30 June 2021
Centuria 111
St Georges		30 Jun
Terrace Fund	Current	2022	90,000	5,957	84,043	(148)83,895
Primewest
Property	Non-	19 Feb
Income Fund	current	2024	22,600	-	22,600	(77)22,533
						106,428
30 June 2020
Centuria 111
St Georges	Non-	30 Jun
Terrace Fund	current	2022	90,000	6,644	83,356	(193)	83,163
Nexus
Property Unit	Non-	4 Dec
Trust	current	2022	2,805	-	2,805	(48)	2,757
							85,920

RECOGNITION AND MEASUREMENT

Borrowings are initially recognised at fair value, net of transaction costs. They are subsequently measured at amortised cost using the effective interest rate method.

C9 RIGHT OF USE ASSET/LEASE LIABILITY

The Group has seven operating lease commitments outlined below:

	Original	Extension	Fixed annual
Lease	term	option	rent increase
Level 41 Chifey Square, Sydney NSW	10 years	5 years	4.0%
Level 32, 120 Collins Street,
Melbourne VIC	5 years	-	3.75%
Level 2, 348 Edward Street, Brisbane
QLD	5 years	-	3.5%
56 Clarence Street, Sydney NSW	7 years	5 years	4.0%
307 Murray Street, Perth WA	5 years	5 years	4.0%
38-35 Gaunt Street, Auckland NZ	8 years	-	2.5%
331-335 Devon Street East, New
Plymouth NZ	3 years	3 years	CPI
		2021	2020
Right of use asset		$’000	$’000
Opening balance		21,393	19,724
Additions of new leases		-	977
Depreciation on right of use asset		(2,404)	(1,961)
Acquisition of subsidiary balance		958	2,653
		19,947	21,393
		2021	2020
Lease liability		$’000	$’000
Opening balance		22,564	19,724
Additional lease liability from new lease		-	976
Cash lease payments		(2,962)	(2,018)
Finance lease interest		1,123	982
Acquisition of subsidiary balance		1,032	2,900
		21,757	22,564

98[| ] Centuria Capital Group – Annual Report 2021

C10 CONTRIBUTED EQUITY

Centuria Capital Limited	2021 2020
	No. of securities $’000 No. of securities $’000
Balance at beginning of the period Equity settled share based payments expense Stapled securities issued Cost of equity raising	509,998,482 177,149 383,557,332 128,164 1,921,149 1,482 1,529,427 795 275,883,062 209,208 124,911,723 49,845 - (1,205) - (1,655)
Balance at end of period	787,802,693 386,634 509,998,482 177,149
Centuria Capital Fund (non-controlling interests)	2021 2020
	No. of securities $’000 No. of securities $’000
Balance at beginning of the period Equity settled share based payments expense Stapled securities issued Cost of equity raising	509,998,482 545,744 383,557,332 343,438 1,921,149 - 1,529,427 - 275,883,062 475,185 124,911,723 205,216 - (2,107) - (2,910)
Balance at end of the period	787,802,693 1,018,822 509,998,482 545,744

Fully paid ordinary securities carry one vote per security and carry the right to distributions.

On 29 June 2017, the Group issued 20,098,470 options to subscribe for stapled securities. The options have an exercise price of $1.30 per stapled security and expire on 29 June 2022. Half of these options (10,049,235) were exercised on 12 December 2019 with the remaining 10,049,235 being exercised on 9 December 2020.

The Group issued 24,930,259 stapled securities in relation to the completion of the Augusta Capital Limited (now known as Centuria New Zealand) acquisition during the year-ended 30 June 2021.

The Group issued 53,336,998 stapled securities in relation to a $120,000,000 equity raising completed in October 2020. The Group issued 184,514,578 stapled securities between 8 June 2021 and 30 June 2021 in satisfaction of the scrip component of the offer consideration for the acquisition of a 98.4% interest in Primewest Group. The scrip component for the remaining 1.6% of 3,051,812 stapled securities has been included as issued as the Group has accounted for Primewest as a wholly owned subsidiary as at 30 June 2021.

C11 COMMITMENTS AND CONTINGENCIES

AUSTRALIAN GUARANTEES

The Group has provided bank guarantees of $3,349,911 for commercial leases with respect to its Sydney and Melbourne office premises. These bank guarantees are cash collateralised.

The above guarantees are issued in respect of the Group and do not constitute an additional liability to those already existing in interest bearing liabilities on the statement of financial position.

NEW ZEALAND GUARANTEES

Under the Development Agreement with Queenstown Lakes District Council (QLDC) as part of the Lakeview joint venture, the Group have provided a guarantee of the Partnership’s obligations under the Development Agreement, with a maximum capital commitment of NZ$14,000,000. The Group’s total aggregate liability under this guarantee is capped at NZ$4,250,000. Refer to Note E1 Interests in associates and joint ventures for more information.

RECOGNITION AND MEASUREMENT

Incremental costs directly attributed to the issue of ordinary shares are accounted for as a deduction from equity, net of any tax effects.

CAPITAL COMMITMENTS

At 30 June 2021 the Group has capital commitments of NZ$1,300,000. In addition, the Company has committed up to a further NZ$12,800,000 of capital over approximately the next 10 years in its joint venture partnership with Ninety Four Feet.

As part of the Man St, Queenstown property held for development in New Zealand, commitments of approximately NZD$2,700,000 have been made to the project managers of the development.

As part of the Cook St, Auckland, property held for development in New Zealand, commitments of approximately NZD$10,600,000 have been made to the project managers of the development.

CONTINGENT LIABILITIES

The directors of the Group are not aware of any contingent liabilities in relation to the Group, other than those disclosed in the financial statements, which should be brought to the attention of securityholders as at the date of completion of this report.

Centuria Capital Group – Annual Report 2021[| ] 99

Notes to the financial statements

For the year ended 30 June 2021

D Cash flows

D1 OPERATING SEGMENT CASH FLOWS[ (I)]

	2021	2020
For theyear ended 30 June 2021	$’000	$’000
Cash fows from operating activities
Management fees received	100,765	82,127
Performance fees received	1,772	37,231
Distributions received	35,021	29,938
Interest received	1,483	988
Cash received on development projects	43,866	-
Other income received	240	823
Payments to suppliers and employees	(129,500)	(82,102)
Income tax paid	(7,438)	(8,581)
Interest paid	(11,626)	(9,889)
Net cash provided by operating activities	34,583	50,535
Cash fows from investing activities
Proceeds from sale of related party investments	13,908	53,554
Purchase of investments in related parties	(128,662)	(122,688)
Repayment of loans by related parties	6,702	11,800
Loans to related parties	3,750	(11,800)
Purchase of equity accounted investments	(26,089)	(12,977)
Purchase of other investments	-	(6,115)
Payments for plant and equipment	(343)	(522)
Cash balance on acquisition of subsidiaries	97,841	15,773
Purchase of subsidiaries	(26,977)	(40,852)
Purchase of Property Held for Development	(22,621)	(1,295)
Collections from reverse mortgage holders	888	1,646
Proceeds from sale of investments	1,047	-
Purchase from sale of equity accounted investments	5,000	-
Cash contribution to related party	(78,019)	-
Net cash used in investing activities	(153,575)	(113,476)

Cash flows from financing activities

Cash fows from fnancing activities
Proceeds from issue of securities	133,073	205,736
Equity raising costs paid	(2,611)	(4,317)
Proceeds from borrowings	241,900	-
Repayment of borrowings	(98,620)	(35,771)
Costs paid to issue debt	(2,187)	(1,628)
Distributions paid	(52,124)	(39,377)
Net cash provided by fnancing activities	219,431	124,643
Net increase in operating cash and cash
equivalents	100,439	61,702
Cash and cash equivalents at the beginning
of the period	149,461	87,759
Effects of exchange rate changes on cash and
cash equivalents	(263)	-
Cash and cash equivalents at the end of the period	249,637	149,461

D2 CASH AND CASH EQUIVALENTS

Included in cash and cash equivalents is $1,828,994 (2020: $23,621,773) relating to amounts held by Senex Warehouse Trust No.1 and the Benefit Funds which is not readily available for use by the Group.

D3 RECONCILIATION OF PROFIT FOR THE PERIOD TO NET CASH FLOWS FROM OPERATING ACTIVITIES

PERIOD TO NET CASH FLOWS OPERATING ACTIVITIES	FROM
	2021	2020
	$’000	$’000
Proft for the year	149,639	22,087
Adjustments for:
Depreciation and amortisation	3,731	2,943
Non-cash development income	(11,417)	(19,075)
Share-based payment expense	3,058	2,014
Amortisation of borrowing costs	2,628	995
Non-cash performance and sales fees	(16,297)	(7,099)
Fair value movement of fnancial assets	(96,443)	42,032
Interest revenue from reverse mortgages	(2,744)	(2,631)
Interest expense reverse mortgage facility	1,522	1,126
Equity accounted proft in excess of distribution paid	(1,601)	(1,978)
Unrealised foreign exchange loss	112	-
Unrealised (gain)/loss on investment properties	(7,554)	6,260
Amortisation of lease incentives	1,881	1,665
Costs paid for debt issuance	4,877	1,311
Finance lease interest	1,210	1,229
Changes in net assets and liabilities:
(Increase)/decrease in assets:
Receivables	(6,691)	22,603
Prepayments	8,603	(349)
Deferred tax assets	(1,212)	(12,926)
Increase/(decrease) in liabilities:
Other payables	(5,939)	(8,528)
Tax provision	(5,399)	4,963
Deferred tax liability	12,484	510
Provisions	(3,701)	3,998
Policyholder liability	(7,885)	(28,024)
Net cash fows provided
by operating activities	22,862	33,126

RECOGNITION AND MEASUREMENT

For the purposes of the statement of cash flows, cash and cash equivalents includes cash on hand and in banks. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value and have a maturity of three months or less at the date of acquisition. Bank overdrafts are shown within borrowings in the statement of financial position.

(i) The operating segment cash flows support the segment note disclosures of the Group and provide details in relation to the operating segment cash flows performance of the Group. The operating segment cash flows exclude the impact of cash flows attributable to Benefit Funds and Controlled Property Funds. Refer to page 77 for the full statutory cash flow statement of the Group.

100[| ] Centuria Capital Group – Annual Report 2021

E Group Structure

E1 INTERESTS IN ASSOCIATES AND JOINT VENTURES

In February 2020, the Group increased its ownership stakes in the Centuria Diversified Property Fund to 22.7%. From that date, the Group has equity accounted its interest in that fund. The ownership stake decreased to 20.4% by 30 June 2021.

The Group’s subsidiary, Augusta Lakeview Holdings Limited (Lakeview Holdings) has signed a partnership agreement with NFF QT Development Unit Trust (NFF) to establish QT Lakeview Partnership (the Joint Venture) to develop the Lakeview site in Queenstown, New Zealand. Lakeview Holdings has a 25% interest in the Joint Venture which represents a maximum capital commitment to Lakeview Holdings of NZ$14,000,000. The Joint Venture has entered into a development agreement with the Queenstown Lakes District Council to develop a range of residential, hotels, co-working, co-living, hospitality and retail options on the 3 hectare site on a staged basis, with construction estimated to take more than 10 years and phased over 7 stages.

On 22 April 2021, the Group acquired 50% of Bass Capital Partners Pty Ltd (Centuria Bass) for $25,417,876 with the option to fully acquire the remaining 50% interest in five years. From that date, the Group has equity accounted its interest in Centuria Bass offers non-banking finance for real estate secured transactions including development projects, bridge finance and residual stock.

	% of ownership	% of ownership
	interest	interest		Carrying amount	Carrying amount
	30 June 2021	30 June 2020	Principal	30 June 2021	30 June 2020
Name of entity	%	%	activity	$’000	$’000
Centuria Diversifed Property Fund	20.40	22.68	Property investment	28,144	31,830
Centuria Bass Credit	50.00	0.00	Non-bank fnance	25,704	-
QT Lakeview Developments Limited	25.00	25.00	Property investment	1,789	1,125
Total equity accounted investments				55,637	32,955

The below table shows the movement in carrying amounts of equity accounted investments from 1 July 2020 to 30 June 2021.

	QT Lakeview	Centuria Diversifed	Centuria
Carrying amounts of equity	Developments Limited	Property Fund	Bass Credit	Total
accounted investments	$’000	$’000	$’000	$’000
Opening balance as at 1 July 2020	1,125	31,830	-	32,955
Acquisition of investments	671	-	25,418	26,089
Share of net (loss)/proft after tax	-	2,784	286	3,070
Distributions received/receivable	-	(1,470)	-	(1,470)
Disposal of investment	-	(5,000)	-	(5,000)
Foreign exchange translation	(7)	-	-	(7)
Closing balance as at 30 June 2021	1,789	28,144	25,704	55,637

The below table shows the movement in carrying amounts of equity accounted investments from 1 July 2019 to 30 June 2020.

		QT Lakeview	Centuria
Movements in carrying amounts of	Augusta Capital Limited	Developments Limited	Diversifed Property Fund	Centuria Offce REIT	Centuria Industrial REIT	Total
equity accounted investments	$’000	$’000	$’000	$’000	$’000	$’000
Opening balance as at 1 July 2019	-	-	-	203,435	183,278	386,713
Acquisition of investments	20,285	-	-	7,500	12,976	40,761
Acquisition of subsidiary that held signifcant infuence	-	1,125	-	-	-	1,125
Share of net (loss)/proft after tax	(584)	-	(502)	2,785	6,611	8,310
Distributions received/receivable	-	-	502	(3,291)	(3,057)	(5,846)
Carrying value transferred from/(to) fnancial assets	-	-	31,830	(210,429)	(199,808)	(378,407)
Fair value gain/(loss)	16,517	-	-	-	-	16,517
Gain of control of Augusta Capital Limited on
30 June 2020	(36,218)	-	-	-	-	(36,218)
Closing balance as at 30 June 2020	-	1,125	31,830	-	-	32,955

The Group equity accounted Centuria New Zealand from 12 May 2020 to 30 June 2020. On 30 June 2020, the Group consolidated Centuria New Zealand.

Centuria Capital Group – Annual Report 2021[| ] 101

Notes to the financial statements

For the year ended 30 June 2021

(A) SUMMARISED FINANCIAL INFORMATION FOR ASSOCIATES AND JOINT VENTURES

The tables below provide summarised financial information for those associates. The information disclosed reflects the amounts presented in the consolidated financial statements of the relevant associates and not the Group’s share of those amounts.

Summarised balance sheet (excluding intangibles)	QT Lakeview Developments Pty Ltd Centuria Diversifed Property Fund Centuria Bass Credit
	30 June 2021 $’000 30 June 2020 $’000 30 June 2021 $’000 30 June 2020 $’000 30 June 2021 $’000 30 June 2020 $’000
Cash and cash equivalents Other current assets	- - 11,868 18,013 19,079 - - - 2,099 11,633 598 -
Total current assets	- - 13,967 29,646 19,677 -
Other non-current assets	7,156 4,501 180,742 166,588 96,081 -
Total tangible non-current assets	7,156 4,501 180,742 166,588 96,081 -
Other current liabilities	- - 5,767 3,812 1,788 -
Total current liabilities	- - 5,767 3,812 1,788 -
Borrowings Other non-current liabilities	- - 65,150 64,988 6 - - - - 351 110,538 -
Total non-current liabilities	- - 65,150 65,339 110,538 -
Net tangible assets	7,156 4,501 123,792 127,083 3,432 -
Group share in % Group share Goodwill	25.00% 25.00% 20.44% 22.68% 50.00% - 1,789 1,125 25,303 28,822 1,716 - - - 2,841 3,008 23,988 -
Carrying amount	1,789 1,125 28,144 31,830 25,704 -
Summarised statement of comprehensive income
Revenue Interest income Net (loss)/gain on fair value of investment properties and other investments Finance costs Other expenses Other income Gain/(loss) on fair value of investments Proft/(loss) from continuing operations Proft/(loss) for the year Other comprehensive income	- - 13,912 10,919 15,618 - - - - 24 4 - - - (1,125) (10,919) - - - - (1,388) (1,233) (13) - - - (5,409) (3,699) (11,222) - - - - - 504 - - - 9,920 (351) - - - - 15,910 (5,259) 4,891 - - - 15,910 (5,259) 4,891 - - - - - - -
Total comprehensive income/(loss)	- - 15,910 (5,259) 4,891 -

102[| ] Centuria Capital Group – Annual Report 2021

E2 BUSINESS COMBINATION

(A) PRIMEWEST GROUP LIMITED ACQUISITION

On 3 June 2021, the Group declared the acquisition of Primewest Group Limited (Primewest) unconditional, obtaining acceptances for 70.1% of total Primewest securities outstanding. Primewest securityholders who accepted the offer received $0.20 in cash plus 0.473 Centuria Capital Group securities for each Primewest security.

By 30 June 2021, the Group had acquired 98.37% of Primewest securities, with the remaining 1.63% under compulsory acquisition. The Group has accounted for Primewest as a wholly owned subsidiary as at 30 June 2021. The provisional acquisition accounting is outlined below.

CONSIDERATION TRANSFERRED

The following table summarises the acquisition date fair value of each major class of consideration transferred.

	$’000
Payable(i)	55,595
Equity (Company shares issued)(ii)	120,913
Equity (Fund units issued)(ii)	240,669
Total consideration transferred	417,177

IDENTIFIABLE ASSETS ACQUIRED AND LIABILITIES ASSUMED

The assets and liabilities recognised as a result of the acquisition are as follows:

	Fair Value
	$’000
Cash and cash equivalents	105,308
Receivables	18,839
Financial assets	21,494
Other assets	310
Deferred tax assets	2,983
Investment properties	49,140
Intangible assets - indefnite life management rights	196,799
Right of use asset	958
Payables	(20,991)
Income tax payable	(1,165)
Deferred tax liability	(59,040)
Borrowings	(22,515)
Lease liability	(1,032)
Total identifable net assets acquired	291,088

(i) Payable

On 3 June 2021, the Group had not yet paid the cash component of the Offer consideration. The Payable represents the Group’s obligation to pay $0.20 cash per Primewest security to each Primewest securityholder who had accepted the Offer as at 3 June 2021.

(ii) Equity issued

The fair value of the ordinary shares issued by the Company and ordinary units issued by the Fund is based on the listed security price of CNI on 3 June 2021 of $2.75 and attributed 33.50% to Company shares and 66.50% to Fund units.

PROVISIONAL GOODWILL

Provisional goodwill arising from the acquisition has been recognised as follows:

	$’000
Consideration transferred	417,177
Non-controlling interest, based on the acquisition date
fair value(i)	193,127
Fair value of identifable net assets	(291,088)
Provisional goodwill(ii)	319,216

(i) Non-controlling interest

The non-controlling interest reflects the portion of Primewest securities that had not been acquired by the Group at the acquisition date and represents the interests that continue to be held by existing Primewest securityholders at the acquisition date fair value. This non-controlling interest had been acquired by 30 June 2021.

(ii) Provisional goodwill

The provisional goodwill is attributable mainly to Primewest’s work force and established business practices and relationships. None of the provisional goodwill recognised is expected to be deductible for tax purposes.

TRANSACTION RELATED COSTS

Transaction related costs of $4,900,000 were incurred for year in respect of the acquisition of Primewest, of which $4,400,000 were expensed in the profit and loss and $500,000 were recorded against equity.

Centuria Capital Group – Annual Report 2021[| ] 103

Notes to the financial statements

For the year ended 30 June 2021

E3 INTERESTS IN MATERIAL SUBSIDIARIES

The Group’s principal subsidiaries at 30 June 2021 are set out below. Unless otherwise stated, they have issued capital consisting solely of ordinary shares or units that are held directly by the Group, and the proportion of ownership interests held equals the voting rights held by the Group. The subsidiaries of the Group were incorporated in the following jurisdictions, Australia, New Zealand and Singapore with principal places of business corresponding with the respective geographic jurisdictions. The parent entity of the Group is Centuria Capital Limited.

Australian subsidiaries	Ownership interest % 30 June 2021 30 June 2020 0% (100% NCI) 0% (100% NCI) 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 0% 100% 100% 100% 42% 42% 100% - 100% - 100% - 48% - 100% 100% 0% 59% 100% 100% 100% 100% 63% 63% 100% 100% 100% 100% 100% 100% 100% 0% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 63% 63% 63% 63%	Australian subsidiaries	Ownership interest %
			30 June 2021 30 June 2020
Centuria Capital Fund Centuria Capital Health Fund Centuria Capital No. 2 Fund Centuria Capital No. 2 Industrial Fund Centuria Capital No. 2 Offce Fund Centuria Capital No. 3 Fund Centuria Capital No. 4 Fund Centuria Capital No. 5 Fund Centuria Capital No. 7 Fund Centuria Healthcare Property Fund Centuria Lane Cove Debt Fund Centuria 111 St Georges Terrace Fund Primewest Property Fund Primewest USA Trust Primewest 140 St Georges Terrace Fund Primewest Property Income Fund Senex Warehouse Trust No. 1 Nexus Property Unit Trust 80 Grenfell Street Pty Ltd A.C.N. 062 671 872 Pty Limited Ahnco Pty Ltd Amberlee Nominees Pty Ltd Belmont Road Development Pty Limited Belmont Road Management Pty Limited Centuria 57 Wyatt Street Pty Ltd Centuria 61-67 Wyatt St Pty Limited Centuria 80 Flinders Street Pty Limited Centuria Business Services Pty Limited Centuria Canberra No. 3 Pty Limited Centuria Developments (Cardiff) Pty Limited Centuria Developments (Mann Street) Pty Limited Centuria Developments (Mayfeld) Pty Limited Centuria Developments (Young Street) Pty Limited Centuria Developments Pty Limited Centuria Employee Share Fund Pty Ltd Centuria Finance Pty Ltd Centuria Funds Management Limited Centuria Healthcare Asset Management Limited Centuria Healthcare Asset Management Nominee 1 Pty Ltd*		Centuria Healthcare Energy Company Pty Ltd 63% 63% Centuria Healthcare Funds Distributions Limited 63% 63% Centuria Healthcare Investments Pty Ltd 63% 63% Centuria Healthcare Property Services Pty Limited 63% 63% Centuria Healthcare Pty Ltd 63% 63% Centuria Heathcare Developments Pty Ltd 63% 63% Centuria Industrial Property Services Pty Limited 100% 100% Centuria Institutional Investments No. 3 Pty Limited 100% 100% Centuria Investment Holdings No. 4 Pty Limited 100% 100% Centuria Investment Holdings Pty Limited 100% 100% Centuria Investment Management (CDPF) Pty Ltd 100% 100% Centuria Investment Management (CIP) Pty Ltd 100% - Centuria Investment Management (CMA) No. 2 Pty Limited 100% 100% Centuria Investment Management (CMA) Pty Limited 100% 100% Centuria Investment Management (Property) No. 1 Pty Ltd 100% - Centuria Investment Management (Property) No. 2 Pty Ltd 100% - Centuria Investment Management (Property) No. 3 Pty Ltd 100% - Centuria Investment Services Pty Limited 100% 100% Centuria Life Limited 100% 100% Centuria Nominees No. 3 Pty Limited 100% 100% Centuria Platform Investments Pty Limited 100% 100% Centuria Properties No. 3 Limited 100% 100% Centuria Property Funds Limited 100% 100% Centuria Property Funds No. 2 Limited 100% 100% Centuria Property Services Pty Limited 100% 100% Centuria Richlands Pty Ltd 100% - Centuria SubCo Pty Limited 100% 100% CHPF 1 Pty Ltd 100% - CHPF 2 Pty Ltd 100% - CHPF 3 Pty Ltd 100% - CHPF Cairns Pty Ltd 100% - CHPF Kallangur Pty Ltd 100% - CHPF South Bunbury Pty Ltd 100% - Crestway Nominees Pty Ltd 100% - Forrestdale Home Pty Ltd 100% - Fromnex Pty Limited 31.5% 31.5% Heathley Finance Company Pty Ltd 63% 63% Heathley Funds Management Pty Ltd 63% 63% Heathley Investor Services Pty Limited 63% 63% Heathley Nominees Pty Ltd 63% 63% Just across the river Pty Ltd 100%* -

104[| ] Centuria Capital Group – Annual Report 2021

Australian subsidiaries

Ownership interest
%

30 June
2021
30 June
2020

Mainriver Holdings Pty Ltd
More than meets the eye Pty Ltd
Over Fifty Capital Pty Ltd
Over Fifty Funds Management Pty Ltd
Over Fifty Investments Pty Ltd
Over Fifty Seniors Equity Release Pty Ltd
Primewest (1 Forrest Place) Pty Ltd
Primewest (1060 Hay Street) Pty Ltd
Primewest (15 Ogilvie Road) Pty Ltd
Primewest (307 Murray Street) Pty Ltd
Primewest (359 Scarb Beach Road) Pty Ltd
Primewest (380 Scarborough Beach Road) Pty Ltd
Primewest (380A Scarborough Beach Road) Pty Ltd
Primewest (382 Scarborough Beach Road) Pty Ltd
Primewest (384 Scarborough Beach Road) Pty Ltd
Primewest (511 Abernethy Road) Pty Ltd
Primewest (607 Bourke Street) Pty Ltd
Primewest (616 St Kilda Road) Pty Ltd
Primewest (Australia Place) Pty Ltd
Primewest (Busselton) Pty Ltd
Primewest (Cannington) Pty Ltd
Primewest (Cottesloe Central) Pty Ltd
Primewest (Erskine) Pty Ltd
Primewest (Gauge Circuit) Pty Ltd
Primewest (Hillbert Rd) Pty Ltd
Primewest (Joondalup House) Pty Ltd
Primewest (Lot 4 Davidson Street Kalgoorlie) Pty Ltd
Primewest (Melville) Pty Ltd
Primewest (Neerabup) Pty Ltd
Primewest (Northlands) Pty Ltd
Primewest (Osborne Park) Pty Ltd
Primewest (Wattleup) Pty Ltd
Primewest Agrichain Management Pty Ltd
Primewest Corporate Holdings Pty Limited
Primewest Enterprises Pty Ltd
Primewest Funds Ltd
Primewest Group Limited
Primewest Management Ltd
Primewest P/Q Pty Ltd
Primewest Real Estate Pty Ltd
Primewest USA Holdings Pty Ltd
Primwest (135 Clayton Street) Pty Limited
PWG Property Pty Ltd
Riodell Holdings Pty Ltd
Stead Road Pty Ltd
Teewana Farm Pty Ltd

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%
-
100%
-
100%
-

New Zealand Subsidiaries

Centuria Capital (NZ) Limited (formerly Centuria New
Zealand Holdings Limited)	100%	64%
Centuria Capital (NZ) No. 1 Limited (formerly Augusta
Capital Limited)	100%	64%
Centuria Capital (NZ) No. 2 Limited (formerly Augusta
Capital No. 1 Limited)	100%	64%
Centuria Funds Management (NZ) Limited (formerly
Augusta Funds Management Limited)	100%	64%
Centuria Lakeview Holdings Limited (formlerly Augusta
Lakeview Holdings Limited)	100%	64%
Centuria Property Holdco Limited (formerly Augusta
PropertyHoldco Limited)	100%	100%
Singapore subsidiaries
Centuria Capital Private Limited (Singapore)	100%	100%

The ownership percentage outlined above for these subsidiaries reflects the Group’s economic ownership. The Group holds a 50% voting right in each of these subsidiaries.

RECOGNITION AND MEASUREMENT

(i) Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

The Company is required by AASB 10 Consolidated Financial Statements to recognise the assets, liabilities, income, expenses and equity of the benefit funds of its subsidiary, Centuria Life Limited (the “Benefit Funds”). The assets and liabilities of the Benefit Funds do not impact the net profit after tax or the equity attributable to the securityholders of the Company and the securityholders of the Company have no rights over the assets and liabilities held in the Benefit Funds.

In order to reflect the assets and liabilities pertaining to the Benefit Funds being attributable to policyholders (as approved to securityholders) an equal and offsetting policyholder liability is recognised on consolidation. In addition, on consolidation of the various income and expenses attributable to the Benefit Funds an equal and opposite net change in policyholder liabilities is recorded in the statement of comprehensive income.

The Company has majority representation on the Board of the Over Fifty Guardian Friendly Society Limited (Guardian). However, as Guardian is a mutual organisation, the Company has no legal rights to Guardian’s net assets, nor does it derive any benefit from exercising its power and therefore does not control Guardian.

Centuria Capital Group – Annual Report 2021[| ] 105

Notes to the financial statements

For the year ended 30 June 2021

E4 PARENT ENTITY DISCLOSURE

As at, and throughout the current and previous financial year, the parent entity of the Group was Centuria Capital Limited.

	2021	2020
	$’000	$’000
Result of parent entity
Proft or loss for the year	28,258	22,152
Total comprehensive income for the year	28,258	22,152
Financial position of parent
entity at year end
Total assets	847,907	212,554
Total liabilities	(179,578)	(26,207)
Net assets	668,329	186,347

The parent entity presents its assets and liabilities are classified as current, except for the parent entity’s investments in subsidiaries. The assets of the parent entity mainly consist of cash, short term receivables, investments in subsidiaries and deferred tax assets. The parent entity’s investment in subsidiaries are measured at cost. The liabilities of the parent entity mainly consist of short term payables.

Total equity of the parent
entity comprising of
Share capital	386,633	177,149
Share-based incentive reserve	4,898	3,322
Retained earnings/(loss)	276,798	5,876
Total equity	668,329	186,347

(A) GUARANTEES ENTERED INTO BY THE PARENT ENTITY

The parent entity has, in the normal course of business, entered into guarantees in relation to the debts of its subsidiaries during the financial year.

(B) COMMITMENTS AND CONTINGENT LIABILITIES OF THE PARENT ENTITY

The parent entity has bank guarantees of $3,349,911 for commercial leases with respect to its Sydney and Melbourne office premises. These bank guarantees are cash collateralised.

The above guarantees are issued in respect of the parent entity and do not constitute an additional liability to those already existing in liabilities on the statement of financial position.

The directors of the Company are not aware of any other contingent liabilities in relation to the parent entity, other than those disclosed in the financial statements.

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106[| ] Centuria Capital Group – Annual Report 2021

F Other

F1 SHARE-BASED PAYMENT ARRANGEMENTS

(A) LTI PLAN DETAILS

The Company has an Executive Incentive Plan (“LTI Plan”) which forms a key element of the Company’s incentive and retention strategy for senior executives under which Performance Rights (“Rights”) are issued.

Each employee receives ordinary securities of the Group on vesting of the performance rights. No amounts are paid or payable by the recipient on receipt of the performance rights or on vesting. The performance rights carry neither rights to dividends nor voting rights prior to vesting.

It is expected that future annual grants of performance rights will be made, subject to the Board’s determination of the overall performance of the Group and market conditions. The vesting of any performance rights awarded will be subject to attainment of appropriate performance hurdles and on the basis of continuing employment with the Group.

Further details of the LTI Plan are included in the Audited remuneration report from page 55 to page 68.

	2021	2020
Performance rights outstanding
at the beginning of the year	7,090,373	5,727,134
Performance rights granted
during the year	3,861,014	2,892,669
Performance rights vested
during the year	(1,991,288)	(1,529,430)
Performance rights outstanding
at the end of the year	8,960,099	7,090,373

The performance objectives for 2,297,578 of the performance rights issued under Tranche 6 were met in full at 30 June 2021. As a result, these rights will vest on 11 August 2021.

(B) MEASUREMENT OF FAIR VALUES

The fair value of the rights was calculated using a binomial tree valuation methodology for the Rights with non-market vesting conditions and a Monte-Carlo simulation for the Rights with market vesting conditions.

The inputs used in the measurement of the fair values at grant date of the rights were as follows:

the rights were as follows:
	Tranche 6	Tranche 7	Tranche 8
	31 August	31 August	31 August
Expected vesting date	2021	2022	2023
			$2.51
Share price at the grant date	$1.32	$2.13	and $2.37
Expected life	2.6 years	2.9 years	2.8 years
Volatility	18%	18%	26%
			0.11%
Risk free interest rate	1.75%	0.76%	and 0.12%
Dividend yield	6.5%	4.5%	4.2%

The following table sets out the fair value of the rights at the respective grant date:

grant date:
Performance Condition	Tranche 6	Tranche 7	Tranche 8
Growth in FUM	$1.11	$1.87	-
			$1.29
Absolute TSR	$0.19	$0.79	and $1.10(i)
			$1.75
Relative TSR	-	-	and $1.58(ii)

(i) $1.29 for Chief Executive Officers and $1.10 for other employees.

(ii) $1.75 for Chief Executive Officers and $1.58 for other employees.

During the year, share based payment expenses were recognised of $3,058,000 (2020: $1,737,023).

RECOGNITION AND MEASUREMENT

Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest. At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates with respect to non-market vesting conditions, if any, is recognised in profit for the year such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equitysettled employee benefits reserve.

Centuria Capital Group – Annual Report 2021[| ] 107

Notes to the financial statements

For the year ended 30 June 2021

F2 GUARANTEES TO BENEFIT FUND POLICYHOLDERS

Centuria Life Limited (“CLL”) provides a guarantee to policyholders of two of its Benefit Funds, Centuria Capital Guaranteed Bond Fund and Centuria Income Accumulation Fund (collectively “Funds”) as described below.

If CLL is required under the bond rules to pay policy benefits to a policy owner as a consequence of the termination of a bond or the maturity or surrender of a policy, and CLL determines that the sums to be paid to the policy owner from the bonds shall be less than the amounts standing to the credit of the relevant accumulation account balance (or in the case of a partial surrender, the relevant proportion of the accumulation account balance), CLL guarantees to take all action within its control, including making payment from its management fund to the policy owner to ensure that the total sums received by the policy owner as a consequence of the termination, maturity or surrender equal the relevant accumulation account balance, or in the case of a partial surrender, the relevant proportion thereof.

No provision has been raised in respect of these guarantees at this time for the following reasons:

The Funds follow an investment strategy that is appropriate for the liabilities of the Funds. The Funds cannot alter their investment strategy without the approval of the members and APRA, following a report from the appointed actuary;
The Funds must meet the capital adequacy standards of APRA which results in additional reserves being held within the Funds to enable the Funds to withstand a “shock” in the market value of assets. If the Funds can withstand a shock in asset values and still meet their liabilities from their own reserves, then this further reduces the likelihood of the Funds calling on the guarantee provided; and
CLL also continues to meet the ongoing capital requirements set by APRA.

F3 FINANCIAL INSTRUMENTS

(A) MANAGEMENT OF FINANCIAL INSTRUMENTS

The Board is ultimately responsible for the Risk Management Framework of the Group.

The Group employs a cascading approach to managing risk, facilitated through delegation to specialist committees and individuals within the Group.

The Group is exposed to a variety of financial risks as a result of its activities. These risks include market risk (including interest rate risk and price risk), credit risk and liquidity risk. The Group’s risk management and investment policies, approved by the Board, seek to minimise the potential adverse effects of these risks on the Group’s financial performance. These policies may include the use of certain financial derivative instruments.

CLL has also established an Investment Committee. The Investment Committee’s function is to manage and oversee the Benefit Fund investments in accordance with the investment objectives and framework. Specifically, it has responsibility for setting and reviewing strategic asset allocations, reviewing investment performance, reviewing investment policy, monitoring and reporting on the performance of the investment risk management policy and performing risk management procedures in respect of the investments.

From time to time, the Group outsources certain parts of the investment management of the Benefit Funds to specialist investment managers including co-ordinating access to domestic and international financial markets, and managing the financial risks relating to the operations of the Group in accordance with an investment mandate set out in the Group’s constitution and the Benefit Funds’ product disclosure statements. The Benefit Funds’ investment mandates are to invest in equities and fixed interest securities via unit trusts, discount securities and may also invest in derivative instruments such as futures and options.

The Group uses interest rate swaps to manage interest rate risk and not for speculative purposes in any situation. Hedging is put in place where the Group is either seeking to minimise or eliminate cash-flow variability, i.e. converting variable rates to fixed rates, or changes in the fair values of underlying assets or liabilities, i.e. to convert fixed rates to variable rates.

Derivative financial instruments of the Benefit Funds, consolidated into the financial statements of the Group under AASB 10 Consolidated Financial Statements, are used only for hedging factual or anticipated exposures relating to investments. The use of financial derivatives in respect of Benefit Funds is governed by the Benefit Funds’ investment policies, which provide written principles on the use of financial derivatives.

(B) CAPITAL RISK MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of debt and equity capital. This overall strategy remains unchanged from the prior year.

The Group’s capital structure consists of net debt (borrowings, offset by cash and cash equivalents) and equity of the Group (comprising issued capital, reserves and retained earnings).

The Group carries on business throughout Australia and New Zealand, primarily through subsidiary companies that are established in the markets in which the Group operates. The operations of CLL are regulated by APRA and the management fund of CLL as a minimum Prescribed Capital Amount (PCA) that must be maintained at all times. It is calculated monthly and these results are reported to the Board each month. The current level of share capital of CLL meets the PCA requirements.

In addition, Centuria Property Funds Limited, Centuria Funds Management Limited, Centuria Property Fund No.2 Limited, Centuria Healthcare Asset Management Limited and Heathley Funds Distribution

108[| ] Centuria Capital Group – Annual Report 2021

Limited have AFS licences so as to operate registered property trusts. Regulations require these entities to hold a minimum net asset amount which is maintained by way of cash term deposits and listed liquid investments.

Operating cash flows are used to maintain and, where appropriate, expand the Group’s funds under management as well as to make the routine outflows of tax, dividends and repayment of maturing debt. The Group regularly reviews its anticipated funding requirements and the most appropriate form of funding (capital raising or borrowings) depending on what the funding will be used for.

The capital structure of the Benefit Funds (and management fund) consists of cash and cash equivalents, bill facilities and mortgage assets. The Benefit Funds also hold a range of financial assets for investment purposes including investments in unit trusts, equity and floating rate notes. The Investment Committee aims to ensure that there is sufficient capital for possible redemptions by policyholders of the Benefit Funds by regularly monitoring the level of liquidity in each fund.

The Benefit Funds have no restrictions or specific capital requirements on the application and redemption of units. The Benefit Funds’ overall investment strategy remains unchanged from the prior year.

(C) FAIR VALUE OF FINANCIAL INSTRUMENTS

(i) Valuation techniques and assumptions applied in determining fair value

The fair values of financial assets and financial liabilities with standard terms and conditions and traded on active liquid markets are determined with reference to quoted market prices (includes listed redeemable notes, bills of exchange, debentures and perpetual notes).

The fair values of other financial assets and financial liabilities (excluding derivative instruments) are determined in accordance with generally accepted pricing models based on discounted cash flow analysis using prices from observable current market transactions and dealer quotes for similar instruments. Discount rates are determined based on market rates applicable to the financial asset or liability.

The valuation technique used to determine the fair value of the Group’s reverse mortgage loan book is as follows:

the weighted average reverse mortgage holders’ age is 82 years;
the future cash flows calculation is related to borrowers’ mortality rates and mortality improvements. The data is sourced from mortality tables sourced from externally published data.
fixed or variable interest rates charged to borrowers are used to project future cash flows;
a redemption rate, which is based on historical loan redemption experience, applies to future cash flow forecast; and
year-end yield curve plus a credit margin is used to discount future cash flows back to 30 June 2021 to determine the fair value.

(ii) Valuation techniques and assumptions applied in determining fair value of derivatives

The fair values of derivative instruments are calculated using quoted prices. Where such prices are not available, discounted cash flow analysis is performed using the applicable yield curve for the duration of the instruments for non-optional derivatives, and option pricing models for optional derivatives.

The valuation technique used to determine the fair value of the Fixed for Life interest rate swaps is as follows:

the weighted average reverse mortgage holders’ age is 82 years;
the expected future cash flows in relation to the swaps are based on reverse mortgage borrowers’ expected life expectancy sourced from mortality tables provided by the actuary; and the difference between the fixed swap pay rates and forward rates as of 30 June 2021 is used to calculate the future cash flows in relation to the swaps; and year-end yield curve plus a credit margin is used to discount future cash flows back to 30 June 2021 to determine the fair value.

(iii) Fair value measurements recognised in the statement of financial position

The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy for financial instruments measured at fair value.

The table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

There were no transfers between Level 1, 2 and 3 in the period.

Centuria Capital Group – Annual Report 2021[| ] 109

Notes to the financial statements

For the year ended 30 June 2021

			Carrying
	Measurement	Fair value	amount	Fair value
30 June 2021	basis	hierarchy	$’000	$’000
FINANCIAL ASSETS
Cash and cash equivalents	Amortised cost	Not applicable	273,351	273,351
Receivables	Amortised cost	Not applicable	127,197	127,197
Financial assets	Fair value	Level 1	811,661	811,661
Financial assets	Fair value	Level 2	123,373	123,373
Financial assets - mortgage backed assets	Fair value	Level 3	1,181	1,181
Reverse mortgages receivables	Fair value	Level 3	54,309	54,309
			1,391,072	1,391,072
FINANCIAL LIABILITIES
Payables	Amortised cost	Not applicable	88,675	88,675
Beneft Funds policy holders' liability	Amortised cost	Not applicable	303,650	303,650
Borrowings (net of borrowing costs)	Amortised cost	Not applicable	426,642	430,576
Interest rate swaps - reverse mortgage fxed-for-life	Fair value	Level 3	31,205	31,205
Call/Put option liability	Fair value	Level 3	22,690	22,690
			872,862	876,796
			Carrying
	Measurement	Fair value	amount	Fair value
30 June 2020	basis	hierarchy	$’000	$’000
FINANCIAL ASSETS
Cash and cash equivalents	Amortised cost	Not applicable	174,458	174,458
Receivables	Amortised cost	Not applicable	68,729	68,729
Financial assets	Fair value	Level 1	639,398	639,398
Financial assets	Fair value	Level 2	73,920	73,920
Financial assets - mortgage backed assets	Fair value	Level 3	1,195	1,195
Reverse mortgages receivables	Fair value	Level 3	58,904	58,904
			1,016,604	1,016,604
FINANCIAL LIABILITIES
Payables	Amortised cost	Not applicable	76,532	76,532
Beneft Funds policy holders' liability	Amortised cost	Not applicable	311,535	311,535
Borrowings (net of borrowing costs)	Amortised cost	Not applicable	265,051	267,907
Interest rate swaps - controlled property funds	Fair value	Level 2	636	636
Interest rate swaps - reverse mortgage fxed-for-life	Fair value	Level 3	32,752	32,752
Call/Put option liability	Fair value	Level 3	17,167	17,167
			703,673	706,529

The Group determines Level 2 fair values for financial assets and liabilities without an active market based on broker quotes. Level 2 fair values for simple over-the-counter derivatives are also based on broker quotes. Those quotes are tested for reasonableness by discounting expected future cash flows using market interest rates for a similar instrument at the measurement date. Fair values reflect the credit risk of the instrument and include adjustments to take account of the credit risk of the entity and counterparty where appropriate.

110[| ] Centuria Capital Group – Annual Report 2021

(iii) Fair value measurements recognised in the statement of financial position (continued)

The Level 3 financial asset held by the Group is the fair value of the residential mortgage receivables attributable to interest rate risk. The Level 3 financial liability held by the Group is the fixed-for-life interest rate swaps. These items are designated in a fair value hedging relationship, with the fair value movements on the swaps offset by the fair value movements in the mortgage receivables. However, as the Group has only designated the fair value movements attributable to interest rate risk in the hedging relationship, any other fair value movements impact the profit and loss directly, such as credit risk movements.

(iv) Reconciliation of Level 3 fair value measurements of financial assets and liabilities

	Other
	mortgage
	backed	Reverse	Fixed-for-life	Call/Put
	assets at	mortgages	interest rate	option
	fair value	fair value	swaps	liability	Total
Year ended 30 June 2021	$’000	$’000	$’000	$’000	$’000
Balance at 1 July 2020	1,195	58,904	(32,752)	(17,167)	10,180
Loan repaid	(14)	(2,126)	720	-	(1,420)
Call/Put option liability	-	-	-	(5,523)	(5,523)
Accrued interest	-	2,965	(1,925)	-	1,040
Attributable to interest
rate and other risk	-	(5,152)	8,080	-	2,928
Attributable to
credit risk	-	(282)	(5,328)	-	(5,610)
Balance at
30 June 2021	1,181	54,309	(31,205)	(22,690)	1,595

KEY ESTIMATES AND JUDGEMENTS

The fair value of the 50-year residential mortgage loans and 50year swaps are calculated using a valuation technique based on assumptions that are not supported by prices from observable current market transactions in the same instrument and not based on available observable market data due to the illiquid nature of the instruments. A discounted cash flow model is used for analysis using the applicable yield curve out to 20 years, with the yield curve at 20 years employed as the best proxy for subsequent rates due to non-observable market data and to reflect the average remaining life expectancy of the borrowers.

Assumptions and inputs used for valuation of reverse mortgage loan receivables:

The loan interest compounding period is the expected remaining life of the borrower;
Mortality rates for males and females are based on portfolioadjusted 2013-2015 Life Tables;
The compounding interest rate is the fixed rate of loan for the period from day 1 up to the point of time when loan carrying amount equals the property value. After that point of time, the loan compounding rate will be reduced to the same as long term residential property growth rate determined by Management, on the grounds that any fixed rate exceeding the property growth rate will not be recovered after that point of time;
For 30 June 2021 valuation, the property growth rates are 3.5% for FY22, 3.5% for FY23, then reverted to a 3.5% flat rate from FY23 onwards;
Discount factors are calculated based on the market quoted long term rates on 30 June 2021;
The 1.2% flat credit risk premium, reflecting the portfolio default profile on 30 June 2021, is added to the monthly cash flow discount factors to discount future cash flows generated by the reverse mortgage loans.

Assumptions and inputs used for valuation of the 50-year interest rate swaps:

	Other
	mortgage
	backed	Reverse	Fixed-for-life	Call/Put
	assets at	mortgages	interest rate	option
	fair value	fair value	swaps	liability	Total
Year ended 30 June 2020	$’000	$’000	$’000	$’000	$’000
Balance at 1 July 2019	1,215	53,720	(28,083)	-	26,852
Loan repaid	(20)	(1,646)	465	-	(1,201)
Call/Put option liability	-	-	-	(17,167)	(17,167)
Accrued interest	-	2,871	(1,760)	-	1,111
Attributable to interest
rate and other risk	-	4,782	(4,669)	-	113
Attributable to
credit risk	-	(823)	1,295	-	472
Balance at
30 June 2020	1,195	58,904	(32,752)	(17,167)	10,180

Mortality rates for males and females based on portfolio-adjusted 2013-2015 Life Tables. The improvement factor tapers down to 1% p.a. at age 90 and then zero at age 100;
Joint life mortality is calculated based on last death for loans with joint borrowers;
45% of the residential mortgage loan portfolio consists of joint lives;
Discount factors are calculated based on the market quoted long term rates on 30 June 2021;
The 1.171% flat credit risk premium, reflecting the business default profile on 30 June 2021, is added to the monthly cash flow discount factors to discount future cash flows generated by the reverse mortgage loans.

Centuria Capital Group – Annual Report 2021[| ] 111

Notes to the financial statements

For the year ended 30 June 2021

RECOGNITION AND MEASUREMENT

The Group enters into derivative financial instruments such as interest rate swaps to manage its exposure to interest rate risk.

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting period. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event, the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

(D) CREDIT RISK

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral or other security, where appropriate, as a means of mitigating risk of financial loss from default. The credit risk on financial assets of the Group and the parent recognised in the statement of financial position is generally the carrying amount, net of allowance for impairment loss.

Concentration of risk may exist when the volume of transactions limits the number of counterparties.

(i) Credit risk of reverse mortgages

Concentration of credit risk in relation to reverse mortgage loans is minimal, as each individual reverse mortgage loan is secured by an individual residential property. The loan is required to be settled off from the proceeds of disposal of the secured property after the borrower’s death.

Individual property valuations are conducted at least every 3 years in accordance with financier’s requirements. At 30 June 2021, the highest loan to value ratio (LVR) of a loan in the reverse mortgage loan book is 117% (2020: 131%), and there are 77 out of 182 (2020: 69 out of 196) reverse mortgage loans where the LVR is higher than 50%.

(ii) Credit risk on other financial assets

Credit risk on other financial assets such as investments in floating rate notes, standard discount securities and unit trusts is managed through strategic asset allocations with creditworthy counterparties and the on-going monitoring of the credit quality of investments, including the use of credit ratings issued by well-known rating agencies. The exposure of credit risk in respect of financial assets is minimal.

(E) LIQUIDITY RISK

The Group’s approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities.

The liquidity risk is managed for the Group at a corporate level. Bank account balances across all entities, current and future commitments, and expected cash inflows are reviewed in detail when the monthly cash flow projection is prepared for management purposes and presented to the Board at its regular monthly meetings. By comparing the projected cash flows with the assets and liabilities shown in the individual and consolidated statements of financial position, which are also prepared on a monthly basis for management purposes and presented to the Board, liquidity requirements for the Group can be determined. Based on this review, if it is considered that the expected cash inflows plus liquidity on hand, may not be sufficient in the near term to meet cash outflow requirements, including repayment of borrowings, a decision can be made to carry out one or more of the following:

renegotiate the repayment terms of the borrowings;
sell assets that are held on the statement of financial position; and/or
undertake an equity raising.

This, combined with a profitable business going forward, should ensure that the Group continues to meet its commitments, including repayments of borrowings, as and when required.

The Group’s overall strategy to liquidity risk management remains unchanged from the prior year.

The following table summarises the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been prepared based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group and the parent can be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are at floating rate, the undiscounted amount is derived from interest rate curves at the end of the reporting period.

The policyholders in the Benefit Funds are able to redeem their policies at any time and the Benefit Funds are therefore exposed to the liquidity risk of meeting policyholders’ withdrawals at any time. The Investment Committee aims to ensure that there is sufficient capital for possible redemptions by policyholders of the Benefit Funds by regularly monitoring the level of liquidity in each fund.

The Group does not have any significant credit risk exposure to any single entity in other financial assets or any group of counterparties having similar characteristics.

112[| ] Centuria Capital Group – Annual Report 2021

	On	Less than	3 months
	demand	3 months	to 1 year	1-5 years	5+ years	Total
Non-derivative fnancial liabilities	$’000	$’000	$’000	$’000	$’000	$’000
2021
Borrowings	-	782	12,658	477,917	-	491,357
Payables	-	88,675	-	-	-	88,675
Call/Put option liability	-	-	-	28,141	-	28,141
Beneft Funds policyholder's liability	303,650	-	-	-	-	303,650
Finance lease liabilities	-	822	2,403	13,285	10,050	26,560
Total	303,650	90,279	15,061	519,343	10,050	938,383
2020
Borrowings	-	1,010	72,001	221,360	-	294,371
Payables	-	76,532	-	-	-	76,532
Call/Put option liability	-	-	-	24,942	-	24,942
Beneft Funds policyholder's liability	311,535	-	-	-	-	311,535
Finance lease liabilities	-	443	1,404	8,938	11,779	22,564
Total	311,535	77,985	29,603	255,240	11,779	729,944

The following table summarises the maturing profile of derivative financial liabilities. The table has been drawn up based on the undiscounted net cash flows on the derivative instruments that settle on a net basis.

		Less than	3 months
	On demand	3 months	to 1 year	1-5 years	5+ years	Total
Derivative fnancial liabilities	$’000	$’000	$’000	$’000	$’000	$’000
2021
Interest rate swaps	-	66	212	2,342	45,171	47,791
Total	-	66	212	2,342	45,171	47,791
2020
Interest rate swaps	-	51	867	1,874	49,159	51,951
Total	-	51	867	1,874	49,159	51,951

(F) MARKET RISK

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises interest rate risk and price risk. Due to the nature of assets held by the Group (excluding the Benefit Funds), there is an asset and liability management process which determines the interest rate sensitivity of the statement of financial position and the implementation of risk management practices to hedge the potential effects of interest rate changes. The Group manages the market risk associated with its Benefit Funds by outsourcing its investment management. The Investment Manager manages the financial risks relating to the operations of the Benefit Funds in accordance with an investment mandate set out in the Benefit Funds’ constitution and PDS. There has been no change to the Group’s exposure to market risks or the manner in which it manages and measures the risk.

Centuria Capital Group – Annual Report 2021[| ] 113

Notes to the financial statements

For the year ended 30 June 2021

(i) Interest rate risk management

The tables below detail the Group’s interest bearing financial assets and liabilities.

	Weighted
	average effective	Variable	Fixed
	interest rate	rate	rate	Total
	%	$’000	$’000	$’000
2021
FINANCIAL ASSETS
Cash and cash equivalents	0.13%	247,100	26,251	273,351
Other fnancial assets held by Beneft Funds	0.88%	122,219	3,825	126,044
Reverse mortgage receivables	8.71%	710	53,509	54,219
Total fnancial assets		370,029	83,585	453,614
FINANCIAL LIABILITIES
Borrowings	3.54%	(397,276)	(29,366)	(426,642)
Total fnancial liabilities		(397,276)	(29,366)	(426,642)
Net interest bearing fnancial
assets/(liabilities)		(27,247)	54,219	26,972
	Weighted
	average effective	Variable	Fixed
	interest rate	rate	rate	Total
	%	$’000	$’000	$’000
2020
FINANCIAL ASSETS
Cash and cash equivalents	0.24%	150,752	23,706	174,458
Other fnancial assets held by Beneft Funds	0.71%	79,902	81,397	161,299
Other interest bearing loans	10.00%	-	6,702	6,702
Reverse mortgage receivables	8.64%	1,181	57,723	58,904
Total fnancial assets		231,835	169,528	401,363
FINANCIAL LIABILITIES
Borrowings	4.19%	(171,228)	(93,823)	(265,051)
Total fnancial liabilities		(171,228)	(93,823)	(265,051)
Net interest bearing fnancial assets		60,607	75,705	136,312

(ii) Interest rate swap contracts

Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of changing interest rates on the fair value of fixed rate financial assets held and the cash flow exposures on the issued variable rate debt.

The following table details the notional principal amounts and remaining expiry of the Group’s outstanding interest rate swap contracts as at reporting date. These swaps are at fair value through profit and loss.

114[| ] Centuria Capital Group – Annual Report 2021

Pay fxed for foating contracts designated as effective in fair value hedge	Average contracted rate Notional principal amount Fair value
	2021 % 2020 % 2021 $'000 2020 $'000 2021 $'000 2020 $'000
Controlled property funds interest rate swaps 50 years swaps contracts	-% 1.11% - 70,000 - (636) 7.48% 7.48% 9,301 9,921 (31,205) (32,752)
	9,301 79,921 (31,205) (33,388)

(iii) Interest rate sensitivity

The sensitivity analysis below has been determined based on the parent and the Group’s exposure to interest rates at the balance date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period, in the case of financial assets and financial liabilities that have variable interest rates. A 25 basis point (0.25%) increase or decrease represents management’s assessment of the reasonably possible change in interest rate.

At reporting date, if variable interest rates had been 25 (2020: 25) basis points higher or lower and all other variables were held constant, the impact to the Group would have been as follows:

			Effect on proft after tax
	Change in variable	Change in variable	2021	2020
Consolidated	2021	2020	$’000	$’000
Interest rate risk	+0.25%	+0.25%	(496)	(181)
Interest rate risk	-0.25%	-0.25%	500	109

The methods and assumptions used to prepare the sensitivity analysis have not changed in the year. The sensitivity analysis takes into account interest-earning assets and interest-bearing liabilities attributable to the securityholders only, and does not take into account the bank bill facility margin changes.

(iv) Fair value hedges

The Group held the following instruments to hedge exposures to changes in interest rates.

	Maturity
	1-6 months 6-12 months More than one year
Interest rate swaps - as at 30 June 2021 Net exposure ($'000) Average fxed interest rate Interest rate swaps - as at 30 June 2020 Net exposure ($'000) Average fxed interest rate	- - 9,301 - - 7.48% - - 9,921 - - 7.48%

The amounts relating to items designated as hedging instruments and hedge ineffectiveness were as follows.

		Carrying amount
				Hedge ineffectiveness
	Nominal Amount	Assets	Liabilities	recognised in proft or loss
Interest rate swaps	$’000	$’000	$’000	$’000
30 June 2021	9,301	-	(31,205)	84
30 June 2020	9,921	-	(32,752)	38

Interest rate swaps are recognised as interest rate swaps at fair value line item in the statement of financial position. The line item in the profit or loss statement that includes hedge effectiveness is within finance costs.

Centuria Capital Group – Annual Report 2021[| ] 115

Notes to the financial statements

For the year ended 30 June 2021

F4 REMUNERATION OF AUDITORS

Amounts received or due and receivable by KPMG:

Amounts received or due and receivable by KPMG:
	2021	2020
	$	$
Audit and review of the fnancial report	711,048	420,565
Other services including AFSL and compliance plan audits	141,611	125,500
Non-audit services	162,500	114,266
	1,015,159	660,331

F5 EVENTS SUBSEQUENT TO THE REPORTING DATE

In July 2021, $34,100,000 cash consideration was received for the two final social affordable housing developments, 45 Pendlebury Road, Cardiff NSW and 357-359 Mann Street, North Gosford NSW.

116[| ] Centuria Capital Group – Annual Report 2021

Directors’ Declaration

For the year ended 30 June 2021

In the opinion of the Directors’ of Centuria Capital Limited:

(a) the consolidated financial statements and notes set out on pages 72 to 116 and the Remuneration Report set out on pages 54 to 68 in the Directors’ Report, 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 Group’s financial position as at 30 June 2021 and of its performance for the financial year ended on that date, and
(b) there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.

Note A1 confirms that the consolidated financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board.

The Directors have been given the declarations by the Joint Chief Executive Officers and Chief Financial Officer required by section 295A of the Corporations Act 2001.

This declaration is made in accordance with a resolution of Directors.

Mr Garry S. Charny Director

Mr Peter J. Done Director

Sydney 11 August 2021

Centuria Capital Group – Annual Report 2021[| ] 117

Independent Auditor’s Report

To the stapled security holders of Centuria Capital Group

Report on the audit of the Financial Report

Opinion

We have audited the Financial Report of Centuria Capital Limited (the Company) as the deemed parent presenting the stapled security arrangement of the Centuria Capital Group (the Stapled Group Financial Report).

In our opinion, the accompanying Financial Report is in accordance with the Corporations Act 2001 , including:

giving a true and fair view of the Stapled Group’s financial position as at 30 June 2021 and of its financial performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001 .

The Financial Report of the Stapled Group comprises:

Consolidated statement of financial position as at 30 June 2021
Consolidated statement of comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended
Notes including a summary of significant accounting policies
Directors’ Declaration.

Centuria Capital Group (the Stapled Group) consists of the Company and the entities it controlled at the yearend or from time to time during the financial year and Centuria Capital Fund and the entities it controlled at the year-end or from time to time during the financial year.

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards . We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report.

We are independent of the Stapled Group and the Company in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code.

101

118[| ] Centuria Capital Group – Annual Report 2021

Key Audit Matters

The Key Audit Matters we identified are:

Accounting for acquisitions
Recognition of performance fee income
Recoverable amount of goodwill and indefinite life intangible assets
Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Report of the current period. These matters were addressed in the context of our audit of the Financial Report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Accounting for acquisitions

Refer to Note E2 to the Financial Report

The key audit matter How the matter was addressed in our audit

During the year, the Stapled Group acquired 98.4% interest in Primewest Group Limited (‘Primewest’) with the remaining 1.6% under compulsory acquisition and subsequently settled in July 2021.

In performing our procedures, we:

Obtained an understanding of the acquisition by examining the transaction documents.
settled in July 2021. • Considered the Stapled Group’s determination of the date control was obtained. We did this
Acquisition accounting is identified as a key by evaluating the facts and circumstances of
audit matter given the significance to the the transaction and their relevance to the
financial statements and the significant Stapled Group’s assessment of control and
judgment required to assess the: impact on the date control was obtained.
Effective date of the transaction based on the evidence and determination of the date • Assessed the Stapled Group’s determination of the fair value of consideration transferred,
of control and consolidation; considering all available information including
• Fair value of consideration transferred; published prices and contractual agreements.
Fair value of acquired assets and liabilities including the value of identifiable intangible assets (e.g. management rights); and
Recognition of goodwill arising from the acquisition;

We involved valuation specialists to supplement our senior audit team members in assessing this key audit matter.

Worked with our valuation specialists to assess the Stapled Group’s determination of fair value of acquired assets and liabilities. In particular, we focused on the fair value of identifiable intangible assets (e.g. management rights).
Evaluated the recognition of goodwill against accounting standard requirements.
Assessed the appropriateness of the relevant disclosures in the Financial Report against accounting standard requirements.

102

Centuria Capital Group – Annual Report 2021[| ] 119

Recognition of performance fee income ($17.9m)

Recognition of performance fee income ($17.9m)	Recognition of performance fee income ($17.9m)

Refer to Note B2 to the Financial Report
The key audit matter	How the matter was addressed in our audit
The Stapled Group, in its capacity as a property fund manager, earns performance fees based on agreements with some of its managed property funds. Performance fees are triggered when underlying funds internal rate of return exceeds the agreed hurdle rate. Recognition of performance fee income is considered a key audit matter due to the: • Quantum of performance fee income, representing 8% of the Stapled Group’s total revenue; and • Significant judgement exercised by us in assessing the amount of performance fees recognised by the Stapled Group. The key assumptions impacting the amount of performance fees, are subject to estimation uncertainty, bias and inconsistent application. This increases the risk of inaccurate forecasts or a wider range of possible outcomes for us to consider. Increased time and effort is spent by the audit team in assessing these key assumptions. The amount of performance fees recognised are impacted by key assumptions including: • Fair value of underlying investment properties held by the funds. The valuation of investment properties contains assumptions with estimation uncertainty such as expected capitalisation rates and market rental yields. This leads to additional audit effort due to the differing assumptions based on asset classes, geographies and characteristic of individual investment properties. • Forecast fund end date. The fund end date impacts the level of returns that can be achieved over the course of the funds life and may change depending on management’s view of when maximum value can be obtained for unitholders of the fund. • Constraint. This is impacted by the Stapled Group’s expectations of how much of the performance fee is highly probable of being received in accordance with the requirements of the accounting standards.	In performing our procedures, we: • Read the Stapled Group’s agreements with managed property funds to understand the key terms related to performance fees, including hurdle rates. • Evaluated the Stapled Group’s accounting policies regarding the recognition of performance fee income against accounting standard requirements. This included assessing the Stapled Group’s policies for constraining performance fee income and valuing investment properties against accounting standard requirements. • Assessed the scope, competence and objectivity of the fund’s external experts and their internal valuers to fair value the underlying investment properties held by the funds. • Challenged specific property fair value assumptions such as capitalisation rates and market rental yields by comparing to market analysis published by industry experts, recent market transactions, inquiries with the Stapled Group, historical performance of the underlying investment properties and using our industry experience. • Assessed the Stapled Group’s determination of the forecast fund end date based on the underlying managed property fund agreements, the fair value of underlying investment properties, the Stapled Group’s fund strategy and history of extending fund term end dates. • Recalculated the Stapled Group’s performance fee recognised against hurdles in the underlying performance fee agreements with managed property funds. • Challenged the constraints applied in determining the amount of performance fees that are highly probable of bring received by the Stapled Group, based on the Stapled Group’s estimate of current and forecast property fund performance. We used our knowledge of the Stapled Group, their past performance, business, and our industry experience.
	103

120[| ] Centuria Capital Group – Annual Report 2021





Recoverable amount of goodwill and indefinite life intangible assets ($790.6m)

Refer to Note C6 to the Financial Report
The key audit matter	How the matter was addressed in our audit
A key audit matter is the Group’s annual testing of goodwill and indefinite life intangible assets for impairment, given the size of the balance (being 31% of total assets) and sensitivity of the forward -looking assumptions to small changes. We focused on the significant forward-looking assumptions the Stapled Group applied in their value in use model, including: • Forecast operating cash flows, growth rates and terminal growth rates (taking into consideration future growth in funds under management and transactional fees). The Group’s model is sensitive to small changes in these assumptions, which may reduce available headroom. This drives additional audit effort specific to their feasibility and consistency of application to the Group’s strategy. • Discount rate - this is complicated in nature and varies according to the conditions and environment the specific Cash Generating Unit (CGU) is subject to from time to time. The Group’s modelling is highly sensitive to changes in the discount rate. We involved valuation specialists to supplement our senior audit team members in assessing this key audit matter.	In performing our procedures, we: • Considered the appropriateness of the value in use method applied by the Stapled Group, to perform the annual test of goodwill and indefinite life intangible assets for impairment, against the requirements of the accounting standards. • Compared the forecast cash flows contained in the value in use model to the Board approved forecast. • Assessed the accuracy of previous Stapled Group forecasts to inform our evaluation of forecasts incorporated in the model. • Challenged the Stapled Group’s significant forecast cash flow and growth assumptions: - Challenged the Stapled Group’s significant forecast cash flows by comparing baseline cash flows to actual historic cash flows and comparing key events to the Board approved plan and strategy. - With the assistance of our valuation specialists, compared terminal growth rates to published studies of industry trends and expectations, and considered differences to the Stapled Group’s operations. We used our knowledge of the Stapled Group, their past performance, business and customers, and our industry experience. - Checked the consistency of the forecast growth rates to the Stapled Group’s stated plan and strategy and our experience regarding the feasibility of these in the economic environment in which they operate. • Worked with our valuation specialists to independently develop a discount rate range considered comparable using publicly available market data for comparable entities, adjusted by risk factors specific to the Stapled Group and the industry it operates in.
	104

Centuria Capital Group – Annual Report 2021[| ] 121

Considered the sensitivity of the model by varying key assumptions, such as forecast growth rates, terminal growth rates and discount rates, within a reasonably possible range. We did this to identify those assumptions at higher risk of bias or inconsistency in application and to focus on our further procedures.
Assessed the disclosures in the financial report using our understanding of the issue obtained from our testing and against the requirements of the accounting standards.

Other Information

Other Information is financial and non-financial information in the Stapled Group’s (Centuria Capital Group) annual reporting which is provided in addition to the Financial Report and the Auditor's Report. The Directors are responsible for the Other Information.

The Other Information we obtained prior to the date of this Auditor’s Report was the Directors’ Report, Remuneration Report, the Stock Exchange Appendix 4E and Additional stock exchange information. The About Centuria, Vision & Strategy, Australasian Real Estate Platform, Key Metrics, Key Financial Metrics, Chairman’s Report, Joint CEO Report, Expanding our Funds Management Platform, Centuria’s Dual Growth Strategy, In-house Management & COVID-19 and A Focus on Environmental, Social & Governance (ESG) are expected to be made available to us after the date of the Auditor's Report.

Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion.

In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report.

Responsibilities of the Directors for the Financial Report

The Directors are responsible for:

preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error
assessing the Stapled Group and Company’s ability to continue as a going concern and whether the use of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Stapled Group and Company or to cease operations, or have no realistic alternative but to do so.

105

122[| ] Centuria Capital Group – Annual Report 2021

Auditor’s responsibilities for the audit of the Financial Report

Our objective is:

• to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and • to issue an Auditor’s Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Financial Report. A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf. This description forms part of our Auditor’s Report.

Report on the Remuneration Report

Opinion

In our opinion, the Remuneration Report of Centuria Capital Limited for the year ended 30 June 2021, complies with Section 300A of the Corporations Act 2001 .

Directors’ responsibilities

The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001 .

Our responsibilities

We have audited the Remuneration Report included in pages 14 to 36 of the Directors’ report for the year 55 68 ended 30 June 2021.

Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards .

KPMG Paul Thomas Partner Sydney 11 August 2021

106

Centuria Capital Group – Annual Report 2021[| ] 123

Corporate Governance Statement

The corporate governance statement for CNI was last updated on 28 September 2021 and is available on the Centuria website at https://centuria.com.au/centuria-capital/corporate/sustainability/governance/.

124[| ] Centuria Capital Group – Annual Report 2021

HEALTHCARE: 32 MORROW STREET, TARINGA, QLD

Centuria Capital Group – Annual Report 2021[| ] 125

Additional ASX information

The securityholder information set out below was applicable as at 6 August 2021.

DISTRIBUTION OF SECURITIES

Analysis of numbers of securityholders by size of holding:

	Number	Number
Holding	of holders	of securities
1 - 1000	1,764	846,611
1,001 - 5,000	4,732	12,014,511
5,001 - 10,000	1,346	9,591,401
10,001 - 100,000	1,515	42,759,032
100,001 and over	208	722,660,978
	9,565	787,872,533

There were 256 holders of less than a marketable parcel of securities holding 8,149 securities.

TOP 20 SECURITYHOLDERS

The names of the twenty largest holders of securities are listed below:

TOP 20 SECURITYHOLDERS The names of the twenty largest holders of securities are listed below:
		Percentage
		of issued
	Number held	securities
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED	145,714,383	18.50
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	135,484,935	17.20
CITICORP NOMINEES PTY LIMITED	58,893,435	7.48
HWM (NZ) HOLDINGS LIMITED	50,887,204	6.46
NATIONAL NOMINEES LIMITED	33,110,048	4.20
PENTEK HOLDINGS PTY LTD	32,862,905	4.17
TOPSFIELD PTY LTD	31,958,042	4.06
CIRCLESTAR PTY LTD	28,377,402	3.60
THE TRUST COMPANY (AUSTRALIA) LIMITED	26,142,468	3.32
BNP PARIBAS NOMINEES PTY LTD	17,925,886	2.28
BNP PARIBAS NOMS PTY LTD	14,305,231	1.82
GH 2016 PTY LTD	9,536,034	1.21
BNP PARIBAS NOMS (NZ) LTD	9,163,336	1.16
MARK EDWARD FRANCIS & ROCKRIDGE TRUSTEE COMPANY LIMITED
	6,482,446	0.82
UBS NOMINEES PTY LTD	5,831,222	0.74
CITICORP NOMINEES PTY LIMITED	5,814,571	0.74
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED <NT-COMNWLTH SUPER
CORP A/C>	5,506,582	0.70
PARITAI PTY LIMITED	5,036,342	0.64
BRISPOT NOMINEES PTY LTD	4,794,770	0.61
RESOLUTE FUNDS MANAGEMENT	4,344,364	0.55
	632,171,606	80.26

SUBSTANTIAL HOLDERS

Substantial holders in the Group are set out below as at 6 August 2021.

	Number held	Percentage
The Vanguard Group, Inc.	53,421,706	7.10%
HWM (NZ) Holdings Limited	50,887,204	6.46%
BlackRock Inc.	38,658,027	6.60%
	142,966,937	20.16%

VOTING RIGHTS

All ordinary securities carry one vote per security without restriction.

126[| ] Centuria Capital Group – Annual Report 2021

Corporate directory

CONTACT US

Shareholder Enquiries 1800 182 257

HEAD OFFICE

Centuria Capital Limited Level 41, Chifley Tower,

2 Chifley Square SYDNEY NSW 2000 T. (02) 8923 8923 F. (02) 9460 2960 [email protected]

SHAREHOLDER ENQUIRIES

Boardroom Pty Limited Centuria Capital Limited, GPO Box 3993 Sydney NSW 2001

T. 1800 182 257

E. CNI.Enquiry@CenturiaInvestor. com.au

FRIENDLY SOCIETY INVESTOR ENQUIRIES

Centuria Life Limited, Level 32, 120 Collins Street Melbourne VIC 3000

T. 1300 50 50 50

[email protected]

GROUP CHIEF

RISK OFFICER AND COMPANY SECRETARY

Anna Kovarik

Level 41, Chifley Tower, 2 Chifley Square SYDNEY NSW 2000 T. (02) 8923 8923 F. (02) 9460 2960

Disclaimer

This annual report is provided for general information purposes only. It is not a prospectus, product disclosure statement, pathfinder document or any other disclosure document for the purposes of the Corporations Act and has not been, and is not required to be, lodged with the Australian Securities & Investments Commission. It should not be relied upon by the recipient in considering the merits of CNI or the acquisition of securities in CNI. Nothing in this annual report constitutes investment, legal, tax, accounting or other advice and it is not to be relied upon in substitution for the recipient’s own exercise of independent judgment with regard to the operations, financial condition and prospects of CNI. The information contained in this annual report does not constitute financial product advice. Before making an investment decision, the recipient should consider its own financial situation, objectives and needs, and conduct its own independent investigation and assessment of the contents of this annual report, including obtaining investment, legal, tax, accounting and such other advice as it considers necessary or appropriate.

This annual report has been prepared without taking account of any person’s individual investment objectives, financial situation or particular needs. It is not an invitation or offer to buy or sell, or a solicitation to invest in or refrain from investing in, securities in CNI or any other investment product. The information in this annual report has been obtained from and based on sources believed by CNI to be reliable. To the maximum extent permitted by law, CNI and the members of the Centuria Capital Group make no representation or warranty, express or implied, as to the accuracy, completeness, timeliness or reliability of the contents of this annual report. To the maximum extent permitted by law, CNI does not accept any liability (including, without limitation, any liability arising

from fault or negligence) for any loss whatsoever arising from the use of this annual report or its contents or otherwise arising in connection with it. This annual report may contain forward-looking statements, guidance, forecasts, estimates, prospects, projections or statements in relation to future matters (‘Forward Statements’). Forward Statements can generally be identified by the use of forward looking words such as “anticipate”, “estimates”, “will”, “should”, “could”, “may”, “expects”, “plans”, “forecast”, “target” or similar expressions. Forward Statements including indications, guidance or outlook on future revenues, distributions or financial position and performance or return or growth in underlying investments are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. No independent third party has reviewed the reasonableness of any such statements or assumptions.

Neither CNI nor any member of Centuria Capital Group represents or warrants that such Forward Statements will be achieved or will prove to be correct or gives any warranty, express or implied, as to the accuracy, completeness, likelihood of achievement or reasonableness of any Forward Statement contained in this annual report. Except as required by law or regulation, CNI assumes no obligation to release updates or revisions to Forward Statements to reflect any changes. The reader should note that this annual report may also contain pro-forma financial information. Distributable earnings is a financial measure which is not prescribed by Australian Accounting Standards (”AAS”) and represents the profit under AAS adjusted for specific non-cash and significant items. The Directors of CFML consider that distributable earnings reflect the core earnings of the Centuria Capital Fund. All dollar values are in Australian dollars ($ or A$) unless stated otherwise.

Centuria Capital Group – Annual Report 2021[| ] 127

CENTURIA.COM.AU

128[| ] Centuria Capital Group – Annual Report 2021

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CENTURIA CAPITAL GROUP — Annual Report 2021

64677_rns_2021-10-25_65a6d1b5-e1f9-4cbb-bbd9-00ca981e63a1.pdf

A C K N O W L E D G E M E N T O F C O U N T RY

About Centuria

CENTURIA CAPITAL (CNI) FUNDS MANAGEMENT PLATFORM

Our values and capabilities

E X E C U T I O N

SIX MAJOR REAL ESTATE ASSET CLASSES

DELIVER RECURRING REVENUES, UNLOCK PERFORMANCE FEES

GROWTH

OPPORTUNITIES

C L E A R & S I M P L E T H E M E S

Australasian real estate platform

Real estate platform expansion to $16.5B ¹ | +106% over FY21

Geographies

A $16.5bn leading Australasian real estate platform[1]

New South Wales

Victoria

ACT

Auckland

Chairman’s report

Dear Investor,

THE YEAR THROUGH COVID-19

PERFORMANCE

ESG

CULTURE, GOVERNANCE AND DIVERSITY

MANAGEMENT AND INTEGRATION

CONCLUSION

Joint CEOs letter

JASON HULJICH Joint CEO

JOHN MCBAIN

Dear Security Holder,

SOCIAL AND ENVIRONMENTAL CONSIDERATIONS

FINANCIAL RESULTS

CORPORATE INTEGRATIONS

PLATFORM EXPANSION

FY22 OUTLOOK

Key financial metrics

Expanding our funds management platform

ASSETS UNDER MANAGEMENT (AU$ billion)

GROUP AUM MOVEMENT (AU$ billion)

Proven growth through corporate initiatives

Leveraging strong capital transaction capabilities

FY21 RECORD GROSS REAL ESTATE ACQUISITIONS

98.8% Avg rent collected over entire real estate platform²

Leveraging strong active asset management capabilities

$1.9 billion development pipeline to seed funds

BALANCE SHEET PROPERTIES HELD FOR DEVELOPMENT GENERATE NO FEE INCOME. PROJECTS INCLUDE:

$2.0m $17.9m $21.4m

57%

ASSET SECTORS

$4.0bn $11.0bn in FY20 in FY21

Sustainability at Centuria

ENVIRONMENTAL

ESG REPORTING

CLIMATE ACTION

ENVIRONMENTAL DATA

CENTURIA OFFICE REIT

CENTURIA INDUSTRIAL REIT

SOCIAL MEMBER Of the Diversity Council of Australia

TENANT ENGAGEMENT[1]

SPECIALISED HEALTHCARE REAL ESTATE UNDER MANAGEMENT

GOVERNANCE

BOARD DIVERSIFICATION

CULTURE & ESG BOARD COMMITTEE ESTABLISHED[3]

FIRST MODERN SLAVERY STATEMENT DELIVERED

EMPLOYEE TRAINING

CENTURIA’S BOARD GROUP

CENTURIA CAPITAL (ASX:CNI)

ST LUCY’S SCHOOL

AUSTRALIA MEMBERSHIPS

NEW ZEALAND MEMBERSHIPS

Social and affordable housing case study

PARTNERING WITH COMPASS HOUSING (TIER 1 SERVICE PROVIDER) AND TETRIS CAPITAL

DEVELOPMENT OF 316 MAITLAND ROAD, MAYFIELD, NSW

Board of directors

Susan Wheeldon

Nicholas Collishaw

Peter Done

CENTURIA CAPITAL GROUP Annual Report 2021