GPT GROUP — Annual Report 2011

Mar 6, 2012

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GPT 2011
Annual Financial Report
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• 1 Corporate Governance

• 10 Annual Financial Report of General Property Trust

• 104 Annual Financial Report of GPT Management Holdings Limited

• 147 Supplementary Information

• 151 Directory

The cover of this Annual Financial Report is based on a fig leaf pattern, which forms the basis for the architectural design of GPT’s development at One One One Eagle Street in Brisbane, due to be completed in 2012.

Corporate Governance

1. INTRODUCTION

The GPT Group (GPT or the Group) comprises GPT Management Holdings Limited (ACN 113 510 188) (GPTMHL) and General Property Trust (Trust). GPT RE Limited (ACN 107 426 504) (GPTRE) AFSL (286511) is the Responsible Entity of the Trust. GPT’s stapled securities are listed on the Australian Securities Exchange (ASX).

The ASX Corporate Governance Council’s ‘Corporate Governance Principles and Recommendations’ (Principles), provide a

framework for good corporate governance. GPT has complied with the Principles for the 2011 year. A table summarising the Group’s compliance is provided at the end of this statement.

GPT’s website has a Corporate Governance section containing further information on GPT’s governance practices together with copies of relevant policies such as Board and Committee Charters, Code of Conduct, Continuous Disclosure Policy, Whistleblower Policy and Personal Dealing Policy.

2. GPT’S APPROACH TO CORPORATE GOVERNANCE

GPT regards good corporate governance as being of critical importance to all of GPT’s stakeholders and a fundamental component of GPT’s commitment to Securityholders. GPT’s Board strives to ensure that GPT meets high standards

of governance across its operations. This is an ongoing commitment, requiring continual review, modification and enhancement from time to time.

3. PRINCIPLE 1: LAY SOLID FOUNDATIONS FOR MANAGEMENT AND OVERSIGHT

3.1. Role and Responsibilities of the Board and Delegation to Management

As a result of the stapling of GPTRE and GPTMHL, both entities operate as a coordinated group. For example, the entities must, to the extent possible, ensure the Boards of GPTRE and GPTMHL have the same composition and that meetings are held concurrently or consecutively. References to the “Board” in this statement are references to the Board of GPTRE (as responsible entity of the Trust) and GPTMHL.

The Board is accountable to Securityholders for GPT’s performance and is responsible for the overall management and governance of GPT.

The Board is responsible for overseeing all of GPT’s businesses, including:

• setting strategic direction and ensuring it is followed;

• approving and monitoring business plans to execute strategy;

• approving major investments and commitments above $20 million;

• reviewing and ratifying systems of risk management, internal compliance and control and legal compliance and codes of conduct;

• reviewing Chief Executive Officer performance and results;

• • reviewing Director and Senior Executive compensation and benefits; and

The Board has established a formal Charter setting out its main responsibilities and functions.

A copy of the Board Charter can be obtained from GPT’s website.

All matters not specifically reserved for the Board and necessary for the day–to–day management of GPT, are delegated to management. The Board has approved delegated authority limits for management in this context. The Board has also delegated specific responsibilities to Board Committees to deal with particular matters. These Committees are discussed in more detail below.

All new Directors have formal agreements governing their employment. These agreements prescribe:

• term of appointment – subject to Securityholder approval;

• remuneration;

• expectations in relation to attendance at meetings;

• expectations and procedures in relation to other directorships;

• procedures in relation to conflicts of interest;

• insurance and indemnity arrangements;

• compliance with governance policies (including Code of Conduct, Board and Committee Charters, Personal Dealing Policy and Conflicts Management Policy);

• access to independent advice; and

• confidentiality and access to information.

• approving and monitoring financial and other reporting.

GPT Annual Financial Report 2011 1

4. PRINCIPLE 2: STRUCTURE OF THE BOARD TO ADD VALUE

4.1. Composition of the Board

The Boards of GPTRE and GPTMHL have the same Directors, comprising seven Non–Executive Directors and one Executive Director.

The Board represents a broad range of skills and experience to assist with decision making and leading GPT. Members of the Board have significant experience in various fields, including funds management, property investment, financial markets, accounting and general management. Details concerning the membership of the Board, the period of office and the experience and expertise of the Directors of the Board are set out in the Directors’ Report.

4.2. Director Independence

The Board is responsible for determining the independence of each Director. In determining each Director’s independence, the Board refers to the following criteria adapted from the Principles and set out in the Board Charter:

• the Director must be non–executive;

• the Director cannot be a substantial Securityholder of GPT;

• • the Director must not have been employed in an executive capacity with GPT within the last three years;

• the Director must not have been a principal or employee of a material professional adviser or consultant to GPT within the last three years;

• the Director must not have been a material supplier or customer to GPT;

• the Director has no material contractual relationship with GPT other than as a Director;

• the Director has not served on the Board for a period which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of GPT;

• the Director is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of GPT;

• the Director’s past performance (if applicable) in their role as a Director.

The Board recognises that the above principles are relevant in determining independence, but considers that independence is a matter of judgement having regard to all the facts and circumstances of particular relationships or circumstances.

The Board considers that of the matters set out above, the most relevant consideration for determining the independence of GPT’s Directors is that a Director be free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director’s ability to act in the best interests of GPT. This principle is also used when considering issues such as the materiality of any identified interest, business or relationship.

The Board evaluates the materiality of any interests or relationships that could be perceived as to compromise independence on a case by case basis having regard to the circumstances of each Director.

Lim Swe Guan is not considered independent as he is a nominee of GIC Real Estate.

Based on the criteria above and having taken in account the matters noted below, the Board considers all other Non– Executive Directors to be independent.

4.3. Notification of Interests and Conflicts

Directors are required to notify the Chairman of any contract, office (including other directorships) or interest which might involve a conflict of interest and a list of interests is included at the front of the Agenda for each Board meeting.

The Board has developed a Conflicts Management Policy to provide guidance in the event of a conflict of interest arising. The Conflicts Management Policy provides guidance principally in respect of conflicts arising from the existence of obligations owed by certain Directors to other corporate entities, but also in respect of conflicts arising from any material personal interests held by the Directors. In particular, where a conflict of interest may exist, Directors will not take part in discussions or vote on the matter being considered.

A copy of GPT’s Conflicts Management Policy is available on GPT’s website.

4.4. Attendance at Board Meetings by Directors

The number of Board meetings and Directors’ attendance at those meetings during the financial year is set out in the Directors’ Report.

4.5. Access to Information and Independent Advice

Each Director enters into an Access and Indemnity Deed with GPT to ensure seven years access to documents after their retirement as a Director.

The Board collectively, and each Director individually, has the right to seek independent professional advice in the performance of their duties as a Director.

4.6. Induction and Training

On commencement of employment, all Directors and employees undertake an induction program which includes information on GPT’s values, Code of Conduct, WH&S and employment practices and procedures.

General compliance training is provided to all employees and specific training is provided depending on job function (eg to meet licensing requirements, or to meet specific industry or professional body accreditation requirements). GPT has also built an in–house learning and development capability to support the maintenance and development of required employee capabilities.

Ongoing training for Directors involves education programs which are incorporated into the Board program, visits to GPT’s offices or assets and presentations on developments impacting the business.

4.7. Review of Board Performance

The Board is committed to enhancing its own and management’s effectiveness through a combined process of continuing education and performance management.

The Board considers that reviewing its performance is essential to good governance. This review process is designed to help enhance performance by providing a mechanism to raise and resolve issues and to provide recommendations to assist the Board to enhance its effectiveness.

An evaluation of the Board’s performance was undertaken in 2011. It was conducted in accordance with the principles set out in this statement.

2 GPT Annual Financial Report 2011

4.8. Review of Performance of Senior Executives

GPT has implemented a uniform performance management system to provide employees with clear financial and personal performance objectives. Components of this system include GPT or business unit financial and non financial key performance indicators as well as an assessment of performance measured against GPT’s values and culture.

These key performance indicators are initially set by the Board for the Chief Executive Officer and are then cascaded into the business.

The Nomination and Remuneration Committee conducts a performance review of the Chief Executive Officer annually and makes recommendations to the Board. In turn, the Chief Executive Officer conducts performance reviews of the Senior Executive team and reports on their performance to the Nomination and Remuneration Committee.

The performance of the Chief Executive Officer and Senior Executives during 2011 was reviewed in accordance with these principles.

Further details can be found in the remuneration report on pages 19 to 33 of the Directors’ Report

4.9. Committees of the Board

The Board has established the Audit and Risk Management Committee, Nomination and Remuneration Committee and Sustainability Committee to assist it in carrying out its responsibilities.

The Chairman of each Committee is an Independent Director with the appropriate qualifications and experience to carry out that role. Members of the Committees must all be Non– Executive Directors.

Each of the Committees has a formal Charter setting out its responsibilities and functions.

Copies of these Charters can be obtained from GPT’s website.

4.10. Nomination and Remuneration Committee

GPT’s Nomination and Remuneration Committee was established with responsibility for identifying and making recommendations to the Board regarding the appointment of Non–Executive Directors and reviewing and making recommendations to the Board regarding remuneration of Non–Executive Directors and Senior Executives.

Before making a recommendation to the Board regarding the appointment of a new Director, the Nomination and Remuneration Committee will assess the appropriate mix of skills, experience and expertise required on the Board, any future succession planning needs and diversity on the Board in accordance with GPT’s policy on the Selection and Appointment of Directors. An external professional recruitment search firm may also be employed.

Members of the Nomination and Remuneration Committee during 2011 were:

4.11. Audit and Risk Management Committee

The Board has established the Audit and Risk Management Committee to give assurance regarding the quality and reliability of financial information used by the Board and to review and report on financial statements issued by GPT.

In addition, the Audit and Risk Management Committee performs a range of advisory services to the Board, including:

• review of compliance with statutory responsibilities relating to financial disclosure;

• review of ongoing compliance with laws and regulations;

• review of ongoing compliance with the Trust’s Compliance Plan;

• overseeing the establishment and implementation of internal controls and a risk management system that incorporates a system of assurance confirming GPT’s risks are being considered and appropriate management plans are in place; and

• providing advice to the Board on whether the provision of non–audit services by the external auditor is compatible with the standards of independence required by the Corporations Act, 2001.

Members of the Audit and Risk Management Committee during 2011 were:

• Anne McDonald (Chairman)

• Eric Goodwin

• Lim Swe Guan

The Audit and Risk Management Committee meets a minimum of four times per year. The attendance record for the Audit and Risk Management Committee in 2011 is set out in the Directors’ Report.

4.12. Sustainability Committee

GPT is also committed to operating a sustainable business delivering long-term investor value. The Board has established a Sustainability Committee with an initial focus on:

• the environment as it impacts on and is impacted by GPT’s business;

• engagement of GPT’s stakeholder communities (employees, tenants, suppliers and the communities within which GPT’s assets are located); and

• legal and regulatory requirements in relation to environmental matters, socially responsible initiatives, and health and safety issues, including the health and safety of employees, tenants and visitors to the assets managed and owned by GPT and projects managed by GPT.

Members of the Sustainability Committee during 2011 were:

• Eileen Doyle (Chairman)

• Brendan Crotty

• Eric Goodwin

The Sustainability Committee meets a minimum of four times per year. The attendance record for the Sustainability Committee in 2011 is set out in the Directors’ Report.

• Gene Tilbrook (Chairman)

• Brendan Crotty

• Eileen Doyle

• Rob Ferguson

The attendance record for the Nomination and Remuneration Committee in 2011 is set out in the Directors’ Report.

A copy of GPT’s policy on the Selection and Appointment of Directors is available on GPT’s website.

GPT Annual Financial Report 2011 3

5. PRINCIPLE 3: PROMOTE ETHICAL AND RESPONSIBLE DECISION–MAKING

Funds management is a business based to a large extent upon integrity and mutual trust where the interests of all stakeholders are recognised. GPT has established a Code of Conduct to assist Directors and employees to ensure that their conduct and the conduct of GPT meets the highest ethical and professional standards.

5.1. Code of Conduct

All Directors and employees are committed to, and bound by, GPT’s Code of Conduct. The Code of Conduct does not seek to provide prescriptive rules on every ethical issue that may be faced by Directors or employees. Rather it provides a benchmark for ethical behaviour to assist GPT to maintain the trust and confidence of all of GPT’s stakeholders. The Code of Conduct also articulates the consequences for Directors and employees if they do not perform to the standards that are expected of them.

The Code of Conduct deals with:

As an equal opportunity employer, during 2011 GPT is proud to have had an employee population which is 55% female. Female representation amongst our Board of Directors was at 30%, and in the Leadership Team at 30%.

A comprehensive Gender Diversity Strategy was devised in 2011 to assist the Group in realising its objective to increase female representation in senior leadership roles to 40% by 2015. As at 31 December 2011 representation stands at 32.69% and GPT is pleased to report that this level is a slight increase from 31.25% at the end of 2010.

GPT utilises a range of inputs to inform its strategy and also assess its performance in this area such as employee opinion surveys, targeted focus groups, the monitoring of a host of employee data as well as external benchmarking.

A copy of GPT’s Diversity Policy and additional information regarding diversity can be obtained from GPT’s website.

• ethical behaviour;

• conflicts of interest;

• prohibition on insider trading;

• prohibition on making unauthorised gains;

• non–disclosure of confidential information;

• equal opportunity;

• fair dealing;

• health and safety;

• protection and use of company assets; and

• prohibition on making unauthorised public statements.

GPT also has a Whistleblower Policy which deals with reporting and investigating unethical behaviour.

All employees receive Code of Conduct training on commencement of employment with GPT and routine refresher training thereafter.

Copies of GPT’s Code of Conduct and Whistleblower Policy can be obtained from GPT’s website.

5.2. Diversity

GPT promotes an inclusive workplace where employee differences like gender, age, culture, disability and lifestyle choice are valued. The unique skills, perspectives and experience that our employees possess promotes greater creativity and innovation that better reflects and serves the needs of our diverse customer base ultimately driving improved business performance. GPT recognises that encouraging workplace diversity is not just the socially responsible course of action but is also a source of competitive advantage for the Group.

On a macro level, GPT acknowledges that females are underrepresented in senior leadership roles and as members of boards across Australia. The Group is committed to improving gender diversity throughout the business with a particular focus on what can be achieved to improve the number of females in senior leadership roles.

The GPT Group is committed to high quality recruitment and selection process for roles at all levels of the organisation which ensures candidates are selected on the basis of individual merit without patronage or favouritism. During 2011, GPT undertook a recruitment tender process whereby the presentation of a diverse range of candidates by its suppliers is actively encouraged.

5.3. Trading in Securities and Hedging

In addition to its responsibilities under the Corporations Act, the Board has established a policy for Directors and employees trading in GPT Securities. This policy provides that:

• subject to specific exemptions set out in GPT’s Personal Dealing Policy, Directors and employees are only permitted to trade in GPT Securities in the six week period beginning three days after the announcement of GPT’s half year, full year results or the provision by the Board of forecasts in an offer document released to the market;

• even during the permitted trading window, no Director or employee may deal in GPT Securities if he or she has information which, if publicly available, might have a material impact on the price of those Securities; and

• Key Management Personnel (as defined by section 9 of the Corporations Act 2001) may not enter into an arrangement (with anyone) if the arrangement would have the effect of limiting that persons’ risk exposure in respect of an element of their remuneration that has not vested or has vested but remains subject to a holding lock.

GPT’s Code of Conduct also sets out an explanation and prohibition of insider trading.

A full copy of the Personal Dealing Policy can be obtained from GPT’s website.

5.4. Political Donations

GPT’s policy is that of making no political donations.

5.5. Governance for Externally Managed Funds

GPT recognises that as the manager of an externally managed vehicle, conflicts or potential conflicts may arise from time to time between GPT and the externally managed funds.

Therefore effective and transparent governance procedures are vital to ensure that the interests of investors in the fund are being protected.

GPT has adopted the following basic principles for managing conflicts of interest that may arise:

• regular reporting in relation to conflicts;

• training of executives on their responsibilities in providing services to externally managed funds as part of a funds management business;

4 GPT Annual Financial Report 2011

• clear delineation of the matters that require investor consent in the operation of the funds; and

• fees paid to GPT by the funds are as stipulated in the documentation establishing the fund or otherwise on an “arm’s length” basis.

GPT’s funds management business currently comprises the GPT Wholesale Office Fund and the GPT Wholesale Shopping Centre Fund (Funds). GPT Funds Management Limited, a subsidiary of GPTMHL, is the Responsible Entity of these Funds. The Board of the Responsible Entity is responsible for all decisions in respect

of the Funds and, if there is a conflict between the investors’ interests and the interests of GPT, the Board of the Responsible Entity must give priority to the investors’ interests. Under the arrangements entered into between GPT and investors, it has been agreed that the Board of the Responsible Entity will be comprised of a majority of independent directors and transactions between the Funds and GPT are to be approved by the Board of the Responsible Entity (comprised only of its independent directors).

6. PRINCIPLE 4: SAFEGUARD INTEGRITY IN FINANCIAL REPORTING

6.1. Audit and Risk Management Committee

The Board has established the Audit and Risk Management Committee. The Audit and Risk Management Committee is comprised only of Non–Executive Directors, a majority of whom are independent.

At least one member of the Audit and Risk Management Committee has relevant accounting qualifications and experience and all members have a good understanding of financial reporting and risk management.

Further details of the structure and responsibilities of the Audit and Risk Management Committee are set out under Principle 2.

6.2. External Auditor

GPT’s external Auditor is PricewaterhouseCoopers (PWC). Under the Board’s guidelines for the engagement of, and dealing with, GPT’s Auditor:

• the Auditor’s appointment will be reviewed every five years and the lead audit and review partner must be rotated every five years;

• the Audit and Risk Management Committee regularly monitors the type of non–audit work undertaken by the Auditor and the fees paid for such work and provides advice to the Board on the independence of the Auditor.

The Audit and Risk Management Committee is responsible for making recommendations to the Board on the appointment, reappointment, replacement, and remuneration of external Auditors.

All fees paid to the Auditors are disclosed in GPT’s Annual Financial Report. In relation to the audit of the Annual Financial Report of GPT for the year ended 31 December 2011.

PWC has provided written confirmation to the Board that, to the best of its knowledge and belief, there have been no contraventions of:

• the auditor independence requirements of the Corporations Act 2001; and

• any applicable code of professional conduct.

  • A copy of PWC’s independence declaration is included at page 35 of the Directors’ Report.

• any major non–audit work to be undertaken by the Auditor must be approved by the Audit and Risk Management Committee; and

7. PRINCIPLE 5: MAKE TIMELY AND BALANCED DISCLOSURE

7.1. Continuous Disclosure Policy

The Board is committed to ensuring that all stakeholders are fully informed in a timely manner so that trading in GPT Securities takes place in an informed and competitive market.

GPT has a Continuous Disclosure Policy which outlines the concepts and principles of continuous disclosure, how they apply in practice, the obligations on GPT personnel to keep the market informed at all times, the procedures to be followed in the case of a disclosable event and the penalties for contravening continuous disclosure obligations. All employees receive training on GPT’s obligations to ensure disclosure of material information.

The Company Secretary is responsible for communication with the Australian Securities Exchange in relation to listing rule obligations including continuous disclosure.

A copy of the Continuous Disclosure Policy can be obtained from the GPT website.

GPT Annual Financial Report 2011 5

8. PRINCIPLE 6: RESPECT THE RIGHTS OF SHAREHOLDERS

The Board is committed to effective communication with GPT’s stakeholders on all major developments and events concerning GPT’s operations and financial results. To achieve this, GPT has designed a communications policy which outlines GPT’s procedures for disclosure of information to the market.

8.1. Communication with Stakeholders

In addition to complying with the continuous disclosure obligations required by the Australian Securities Exchange, timely and accurate information is made available to all stakeholders. Announcements are:

• released to the Australian Securities Exchange in the case of market sensitive information;

• posted to the ‘News and Media ’ section of the GPT website (additionally, interested parties can register for GPT’s ‘Alert Service’ to receive an emailed message following new announcements); and

• distributed to major media and investor contacts.

Major communication forums, such as Annual and Mid Year results briefings and the Annual General Meeting, are also webcast.

GPT maintains an extensive website which includes the following information:

• copies of Annual Reports (from 1971);

• historical information in relation to distributions including all distributions paid since 1985;

• detailed property information; and

• Board and Committee charters and policies.

Executives also meet with investors and their representatives on a regular basis to discuss GPT’s performance.

Additional information regarding Stakeholder Engagement can be obtained from GPT’s website under the section on Sustainability.

8.2. Annual General Meeting

GPT’s Annual General Meeting is held each year, typically in April/May. In addition to formal business, the meeting is an opportunity for Securityholders to be briefed on GPT’s activities and to ask questions of the Board and management.

A Notice of Meeting and accompanying Explanatory Memorandum on proposed resolutions is provided to Securityholders well in advance of any meeting of Securityholders. It is also posted on GPT’s website and lodged with the Australian Securities Exchange.

Securityholders who are not able to attend GPT’s Annual General Meeting are able to vote by proxy in accordance with the Corporations Act.

The Auditor attends the Annual General Meeting and is available to answer Securityholder questions about the conduct of the audit and the preparation and content of the Auditor’s Report.

The Annual General Meeting is webcast via GPT’s website for those Securityholders who are unable to attend in person. Additionally, the Chairman’s address is immediately announced to the Australian Securities Exchange.

9. PRINCIPLE 7: RECOGNISE AND MANAGE RISK

9.1. Risk Management Compliance Framework

Whilst GPT recognises that risk is inherent in all enterprises, GPT adopts a pro–active risk management approach directed toward realising potential opportunities whilst managing possible adverse effects. GPT also recognises that risk management is not static and systems and procedures must be able to respond to the demands of a rapidly changing market.

GPT’s approach to risk management follows the ‘International Standard on Risk Management ISO3100:2009’’. It is also guided by the Enterprise Risk Management Integrated Framework of the Committee of Sponsoring Organisations of the Treadway Commission (COSO).

The Board has adopted a Risk Management Policy outlining GPT’s objectives, strategies and resources to identify, evaluate, treat, monitor, quantify and report significant risks to the Audit and Risk Management Committee and, through the Audit and Risk Management Committee, to the Board. Management, through the Chief Executive Officer, is responsible for designing, implementing and reporting on the adequacy of GPT’s risk management and internal control system.

The objectives of GPT’s approach are to provide effective identification, assessment and management of risks that may impact on Securityholder value. Specifically:

• strategic and operational risks are reviewed at least annually by all core portfolios/businesses;

• operational risk profiles are also reviewed more frequently by portfolio risk committees; and

• executive management committees also meet regularly to deal with specific areas of risk such as WH&S and Treasury.

Underpinning this system is the recognition that while the Board retains ultimate responsibility, each level of the business is responsible for risk management, not just within GPT, but also through GPT’s associated entities, service providers and business partners.

In addition, GPT’s risk management system incorporates a system of assurance and internal audit activities to confirm that GPT’s risk management system is functioning, key risks are being considered and appropriate management plans are being implemented to minimise key risks. GPT has an internal risk management team who assist the Chief Risk Officer in undertaking these assurance and internal audit activities.

An annual work program of assurance and internal audit activities is prepared based on the results of GPT’s annual risk review. Results of assurance and internal audit reviews are reported to the Audit and Risk Management Committee and, through the Committee, to the Board.

6 GPT Annual Financial Report 2011

Reporting to the General Counsel, the Compliance Manager promotes a compliance culture across GPT, while assisting management to comply with the regulatory framework within which GPT operates. This includes monitoring compliance with the Trust’s Compliance Plan and other key compliance policies and procedures of GPT. Reports on compliance activities are provided to the Audit and Risk Management Committee and, through the Committee, to the Board.

The Audit and Risk Management Committee and, through it the Board, receive reports on GPT’s risk management practices and control systems and the effectiveness of GPT’s management of its material business risks.

9.2. Integrity in Financial Reporting, Risk Management and Internal Control

For the period ended 31 December 2011, the Board has received written assurance from the Chief Executive Officer and Chief Financial Officer that the declaration provided by them in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal compliance and control which, in all material respects, implements the policies adopted by the Board and that this system is operating effectively and efficiently in all material respects in relation to financial reporting. Since 31 December 2011 nothing has come to the attention of the Chief Executive Officer and Chief Financial Officer that would indicate any material change to these statements.

10. PRINCIPLE 8: REMUNERATE FAIRLY AND RESPONSIBLY

10.1. Nomination and Remuneration Committee

GPT’s Nomination and Remuneration Committee is responsible for:

• reviewing and making recommendations to the Board on remuneration policies (including performance management and short and long term incentive schemes) applicable to GPT employees;

• reviewing the Chief Executive Officer’s performance and remuneration annually, and reporting to and making recommendations to the Board thereon; and

• making recommendations to the Board on remuneration policies and packages applicable to Board members.

Further information concerning the Nomination and Remuneration Committee is set out above under Principle 2.

10.2. Remuneration Policy

GPT is a performance–based culture that creates opportunities for market competitive rewards to employees in line with their performance. As a result, GPT’s remuneration strategy is focused on aligning and rewarding superior employee performance. GPT’s remuneration processes are also designed to demonstrate a clear and direct link between GPT’s performance and an individual’s performance and remuneration.

The Board, with the assistance of the Nomination and Remuneration Committee, aims to create a remuneration system that:

• is transparent;

• encourages superior performance by aligning employee rewards with the interests of all stakeholders;

• attracts, motivates, retains and rewards talented and skilled directors, executives and employees; and

• rewards employees who align their conduct and performance with the core values and culture of GPT.

Non–Executive Directors receive fees which reflect their skills, responsibility and time commitment in the discharge of their duties. There is no performance link, in that fees are fixed with no short or long term incentive schemes in place. Non–Executive Directors do not receive any retirement benefits.

GPT’s philosophy and the policies and procedures that are applied to determine the nature and amount of remuneration paid to Directors and employees of GPT are set out in the Remuneration section of the Directors’ Report (pages 19 to 33).

All Senior Executives have formal agreements governing their employment. These agreements prescribe:

• job description;

• remuneration*;

• compliance with governance policies (including Code of Conduct, Personal Dealing Policy and Conflicts Management Policy);

• confidentiality; and

• notice and rights on termination*.

• Further details on these in relation to the Key Management Personnel are set out in the Remuneration section of the Directors’ Report.

• is fair and market competitive;

GPT Annual Financial Report 2011 7

REQUIREMENT/RECOMMENDATIONS	REFERENCE	COMPLY
1 Lay Solid Foundations for Management and oversight 3 Yes
1.1 Establish functions reserved to the Board and those delegated to senior executives and disclose those functions 3.1 Board Charter Directors’ Report Yes 1.2 Disclose the process for evaluating the performance of senior executives 4.7, 4.9, 10.1, 10.2 Yes 1.3 Provide information indicated in the Guide to reporting on Principle 1. 3, 3.1, 4.7,4.9, 10.1, 10.2 Board Charter Directors’ Report Yes
2 Structure the Board to add value 4 Yes
2.1 A majority of the board should be independent directors 4.1, 4.2, 4.3 Board Charter Directors’ Report Yes 2.2 Chair should be an independent director 4.1, 4.2, 4.3 Board Charter Directors’ Report Yes 2.3 Roles of the chair and chief executive officer should not be exercised by the same individual 4.1, 4.2, 4.3 Board Charter Directors’ Report Yes 2.4 The Board should establish a nomination committee 4.11, 10.1, Nomination and Remuneration Committee Charter Yes 2.5 Disclose the process for evaluating the performance of the Board, its committee and individual directors 4.7, Board Charter Yes 2.6 Provide the information indicated in the Guide to Reporting in Principle 2 4, 4.1, 4.2, 4.3, 4.5, 4.6, 4.7, 4.8, 4.11, Nomination and Remuneration Committee Charter, Directors’ Report Yes
3. Promote ethical and responsible decision-making 5 Yes
3.1 Establish a code of conduct and disclose the code or a summary of the code 5.1 Yes 3.2 Establish a policy concerning diversity and disclose the policy or a summary of that policy. The policy should include requirements for the board to establish measurable objectives for achieving gender diversity for the board to assess annually both the objectives and the progress in achieving them 5.2 Yes 3.3 Disclose in each annual report the measurable objectives for achieving gender diversity set by the board in accordance with the diversity policy and progress towards achieving them 5.2 Yes 3.4 Disclose in each annual report the proportion of women employees in the whole organisation, women in senior positions and women on the board 5.2 Yes 3.5 Provide the information indicated in the Guide to Reportingin Principle 3. 5, 5.1, 5.2 Yes
4. Safeguard integrity in financial reporting 6 Yes
4.1 Board should establish an audit committee 4.10, 4.12, 6.1 Yes 4.2 Audit committee should be structured so that: • Consists only of non-executive directors • Consists of a majority of independent directors • Is chaired by an independent chair, who is not a chair of the Board • Has at least 3 members 4.12, 6.1 Audit Committee Charter, Directors’ Report Yes 4.3 Audit committee should have a formal charter 4.10, 4.12 Yes 4.4 Provide the information indicated in the Guide to reporting on Principle 4 4.10, 4.12, 6.1, 6.2, Audit Committee Charter, Directors’ Report Yes

8 GPT Annual Financial Report 2011

REQUIREMENT/RECOMMENDATIONS	REFERENCE	COMPLY
5. Make timely and balance disclosure 7, 8 Yes
5.1 Establish written policies designed to ensure compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a senior executive level for that compliance and disclose those policies or a summary of those policies Introduction, 5.3, 7.1, Directors’ Report Yes 5.2 Provide the information indicated in the Guide to Reporting on Principle 5 Introduction, 5.3, 7, 8 Directors’ Report Yes
6. Respect the rights of shareholders 8 Yes
6.1 Design a communications policy for promoting effective communications with shareholders and encouraging their participation at general meetings and disclose that policy or a summary of that policy Introduction, 8.1, 8.2 Yes 6.2 Provide the information indicated in Guide to Reportingon Principle 6 Introduction, 8, 8.1, 8.2 Yes
7. Recognise and manage risk 9 Yes
7.1 Establish policies for the oversight and management of material business risks and disclose summary of those policies 9.1 Yes 7.2 Board should require management to design and implement the risk management and internal control system to manage the company’s material business risks and report to it on whether those risks are being managed effectively. The Board should disclose that management has reported to it as to the effectiveness of the company’s management of tis material business risks 9.1, 9.2 Yes 7.3 Board should disclose whether it has received assurances from the chief financial officer that the declaration provided in accordance with s295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to the financial reporting risks 9.2 Yes 7.4 Provide the information indicated in Guide to Reportingon Principle 7 9, 9.1, 9.2 Yes
8. Remunerate fairly and responsibly 10 Yes
8.1 Board should establish a remuneration committee 4.10, 4.11 Yes 8.2 The remuneration committee should be structured so that it: • Consists of a majority of independent directors • Is chaired by an independent chair • Has at least three members 4.11 Nomination and Remuneration Committee Charter, Directors’ Report Yes 8.3 Clearly distinguish the structure of non-executive director’s remuneration from that of executive directors and senior executives 10.2 Yes 8.3 Provide the information indicated in Guide to Reportingon Principle 8 4.10, 4.11, 10 Yes

GPT Annual Financial Report 2011

9

ANNUAL FINANCIAL REPORT OF GENERAL PROPERTY TRUST

For the year ended 31 December 2011 – THE GPT GROUP

Contents

Directors’ Report	11	28. Earnings per stapled security	98
Auditor’s Independence Declaration	35	29. Net tangible asset backing	99
Financial Report		30. Events subsequent to reporting date	99
Consolidated Statement of Comprehensive Income	36	Directors’ Declaration	100
Consolidated Statement of Financial Position	37	Independent Audit Report	101
Consolidated Statement of Changes in Equity	38
Consolidated Statement of Cash Flow	39
Notes to the Financial Report
1. Summary of significant accounting policies	40
2. Segment reporting	51
3. Distributions paid and payable	60
4. Expenses	60
5. Tax	61
6. Non-current assets held for sale, discontinued
operations and other disposals	62
7. Loans and receivables	66
8. Derivative financial instruments	66
9. Investment properties	67
10. Investments in associates and joint ventures	71
11. Property, plant & equipment	73
12. Intangible assets	74
13. Payables	75
14. Borrowings	75
15. Provisions	78
16. Contributed equity	79
17. Reserves	80
18. Accumulated losses	81
19. Parent entity financial information	81
20. Key management personnel disclosures	82
21. Share based payments	85
22. Related party transactions	86
23. Notes to the Statement of Cash Flow	88
24. Contingent assets and liabilities	89
25. Commitments	90
26. Capital and financial risk management disclosures	90
27. Auditor’s remuneration	97

The GPT Group (GPT) comprises General Property Trust (Trust) and its controlled entities and GPT Management Holdings Limited (Company) and its controlled entities.

General Property Trust is a registered scheme, registered and domiciled in Australia. GPT RE Limited is the Responsible Entity of General Property Trust. GPT Management Holdings Limited is a company limited by shares, incorporated and domiciled in Australia. GPT RE Limited is a wholly owned controlled entity of GPT Management Holdings Limited.

Through our internet site, we have ensured that our corporate reporting is timely, complete and available globally at minimum cost to the Trust. All press releases, financial reports and other information are available on our website: www.gpt.com.au.

10 GPT Annual Financial Report 2011

DIRECTORS’ REPORT

For the year ended 31 December 2011 – THE GPT GROUP

The Directors of GPT RE Limited, the Responsible Entity of General Property Trust, present their report together with the financial report of the General Property Trust (Trust) and its controlled entities (Consolidated entity) for the financial year ended 31 December 2011. The Consolidated entity together with GPT Management Holdings Limited and its controlled entities form the stapled entity, the GPT Group (GPT or the Group).

During the financial year, GPT RE Limited acted as the Responsible Entity of the Trust. GPT RE Limited is a company limited by shares, incorporated and domiciled in Australia. The registered office and principal place of business is MLC Centre, Level 51, 19 Martin Place, Sydney NSW 2000.

1. Operations and Activities

1.1 Principal Activities

The principal activities of the GPT Group remain unchanged from 31 December 2010 and are:

• investment in income producing retail, office and industrial assets;

• development of retail, office and industrial properties;

• property funds management; and

• property management.

After completing the sale of the US Senior Housing Portfolio on 29 March 2011, GPT operates almost entirely in Australia.

1.2 Review of Operations

The following provides a summary of GPT’s performance for the year ended 31 December 2011. Further information is provided in the Annual Review which is available on GPT’s website www.gpt.com.au. Hard copies are also available on request.

To provide information that reflects the Directors’ assessment of the net profit attributable to stapled securityholders calculated in accordance with Australian Accounting Standards, certain significant items that are relevant to an understanding of GPT’s result have been identified. The reconciliation of Realised Operating Income (ROI) to Net profit after tax is useful as ROI is the measure of how GPT’s profitability is assessed.

ROI is a financial measure that is based on the profit under Australian Accounting Standards adjusted for certain unrealised items, non-cash items, gains or losses on investments or other items the Directors determine to be non-recurring or capital in nature. ROI is not prescribed by any Australian Accounting Standards. The adjustments that reconcile the ROI to Net profit after tax for the year may change from time to time, depending on changes in accounting standards and/or the Directors’ assessment of items that are non-recurring or capital in nature. The ROI results are included in the Segment note (page 51) which forms part of the financial report.

The Net profit after tax for the year ended 31 December 2011 is $246.2 million (2010: $707.3 million).

The reconciliation of ROI to Net profit after tax is set out below:

non-recurring or capital in nature. The ROI results are included in the Segment note (page 51) which forms The Net profit after tax for the year ended 31 December 2011 is $246.2 million (2010: $707.3 million). The reconciliation of ROI to Net profit after tax is set out below:	part of the financial report.
	Consolidated entity 2011 $M 2010 $M
Core operations Non-core operations Financing and corporate overheads Realised Operating Income Change in fair value of assets (non-cash): Valuation increase / (decrease) Core Domestic Portfolios and Funds Management Australia Hotel / Tourism Portfolio Funds Management Europe US Seniors Housing Joint Venture Release of Foreign Currency Translation Reserve Financial Instruments mark to market value and net foreign exchange gain / (loss) Other items Net profit after tax*	569.6 530.8 31.9 57.7 (162.7) (178.5)
	438.8 410.0 84.7 102.8 (24.7) (4.4) (14.3) (9.5) - 245.9 - 4.8 (47.6) 39.6 (150.3) 5.2 (40.4) (87.1)
	246.2 707.3

*Other items include non-cash IFRS adjustments, profit / loss on sale, impairment expense of assets and relevant tax impact.

GPT Annual Financial Report 2011

11

DIRECTORS’ REPORT

For the year ended 31 December 2011 – THE GPT GROUP

1. Operations and Activities (continued)

1.2 Review of Operations (continued)

Financial results

• Realised Operating Income increased by 7.0% to $438.8 million (2010: $410.0 million)

• Profit after tax decreased by 65.2% to a profit of $246.2 million (2010: $707.3 million)

• Total assets decreased by 4.8% to $9,278.8 million (2010: $9,751.7 million)

• Total borrowings decreased by 12.6% to $2,144.1 million (2010: $2,452.5 million)

• Headline gearing (net debt basis) decreased to 22.9% (2010: 24.9%). Look through gearing (net debt basis) decreased to 24.4% (2010: 29.9%).

• ROI per ordinary stapled security increased by 8.1% to 22.4 cents (2010: 20.7 cents*)

• Distribution per ordinary stapled security increased by 9.2% to 17.8 cents (2010: 16.3 cents*)

• Net tangible assets per stapled security** decreased to $3.59 (2010: $3.60)

• Prior period comparatives are calculated on the basis of post 5 to 1 consolidation of the stapled securities.

• ** Includes the impact of potential securities assuming the conversion of the exchangeable securities at an exchange price of $3.883 (2010: $3.883).

Portfolio / operational highlights

The financial performance and total assets by portfolio are summarised below along with commentary on each portfolio’s operational performance.

Portfolio / Segment	Realised Operating Income 2011 $M Realised Operating Income 2010 $M Total Assets 2011 $M Total Assets 2010 $M
Core Retail 1.2 (a) Office 1.2 (b) Industrial 1.2 (c) Funds Management Australia 1.2 (f) Non-core Discontinued operation - US Seniors Housing 1.2 (e) Discontinued operation - Funds Management Europe Discontinued operation - Hotel / Tourism 1.2 (d) Financing and corporate overheads Corporate Total	310.1 267.3 4,918.4 4,789.1 118.7 114.8 1,938.1 1,863.6 56.6 54.4 832.5 791.9 84.2 94.3 1,021.7 1,291.5 8.6 23.7 0.2 351.9 2.3 4.4 9.0 23.0 21.0 29.6 223.9 317.1 (162.7) (178.5) 335.0 323.6
	438.8 410.0 9,278.8 9,751.7

A description of each segment along with further detail on the types of segment income and expense is set out in note 2 of the financial report.

(a) Retail Portfolio

The Retail Portfolio delivered comparable income growth of 3.6% (excluding the Homemaker assets). This was despite a relatively subdued sales environment, particularly in the second half of the year which was reflected in comparable retail sales growth of 0.3% for total centre and 1.2% for specialty stores. Income growth was underpinned by structured rental increases and a strong performance at Melbourne Central as a result of increases achieved on lease renewals.

Occupancy for the portfolio declined slightly to 99.4% but still remains high despite a number of retailers going into administration throughout the year. The high quality nature of the portfolio means that there is ongoing demand for vacated space as well as opportunities for the retail mix to be invigorated. Arrears remain low at 0.5%.

(b) Office Portfolio

The Office Portfolio continued its solid performance during the year, with comparable income growth of 4.0%. This performance was driven by GPT’s high quality property fundamentals, including structured rental increases, low expiry by area and high average occupancy throughout the year.

Occupancy for the portfolio declined slightly to 96.5% but remains well above the market average of 92.8%. The weighted average lease expiry for the portfolio is 4.7 years.

(c) Industrial & Business Park Portfolio

The Industrial Portfolio delivered comparable income growth for the year of 2.8%, driven by structured rental increases, low vacancy and limited downtime periods. The Industrial Portfolio maintained its high levels of occupancy of 98.4% and long lease expiry of 6.2 years.

12 GPT Annual Financial Report 2011

DIRECTORS’ REPORT For the year ended 31 December 2011 – THE GPT GROUP

1. Operations and Activities (continued)

1.2 Review of Operations (continued)

Portfolio / operational highlights (continued)

(d) Hotel / Tourism Portfolio

On 23 May 2011, GPT completed the sale of Ayers Rock Resort to the Indigenous Land Corporation. Total consideration for the sale was $300 million, to be received in three instalments with $81 million paid on settlement, $81 million to be received 12 months after settlement and $138 million to be received five years after settlement. Proceeds from the first instalment were used to reduce borrowings. GPT has been provided with security guaranteeing the deferred payments and will receive interest on the deferred payments at a rate of 6.5% per annum. GPT will share in 46% of the increase in capital value of Ayers Rock Resort over $300 million plus capital expenditure committed over the period with a minimum guaranteed payment to GPT of $17 million at the end of the five year period. GPT will accrue increments of the $17 million guaranteed payment over the five year period resulting in an additional 2% return per annum bringing the total return to 8.5% per annum. As part of the sale agreement, GPT will contribute $25 million towards capital expenditure.

(e) US Seniors Housing Portfolio

On 29 March 2011, GPT completed the sale of the US Seniors Housing Portfolio to Health Care REIT Inc (HCN). The US Seniors Housing Portfolio, which consisted of a 95% interest in 34 senior living communities, was sold to HCN for US $890 million with the proceeds used to reduce borrowings.

(f) Funds Management Australia

GPT Wholesale Office Fund (GWOF) has ownership interests in 14 assets with a value of $3.3 billion. GPT Wholesale Shopping Centre Fund (GWSCF) has ownership interests in 9 assets with a value of $2.2 billion.

The performance across the Funds’ assets continues to be solid, with GWOF achieving a total return of 8.8% and GWSCF a total return of 10.3% for the year. This reflects stable income growth and continuing high levels of occupancy for both portfolios.

Since late 2010, GPT has completed a $517.4 million sell down of its investments in both GWOF and GWSCF. As a result, GPT’s investments in GWOF and GWSCF have reduced to 22.9% and 20.2% respectively at 31 December 2011. Completion of this sell down enables GPT to receive a higher return on the capital it invests in the funds in future.

(g) Developments

GPT currently has five developments underway; One One One Eagle Street in Brisbane, 161 Castlereagh Street in Sydney, expansions of Highpoint Shopping Centre in Melbourne and Wollongong Central, and 5 Murray Rose Ave, Sydney Olympic Park.

GPT retains a $3.2 billion pipeline of projects underway and future development opportunities for the medium term, subject to approvals and an appropriate level of pre-commitments.

(h) Reconciliation items from Realised Operating Income to Net profit after tax

These items comprise of certain unrealised items, non-cash items, gains or losses on investments or other items the Directors determine to be non-recurring or capital in nature.

The total of the reconciliation items decreased to a loss of $192.6 million (2010: a profit of $297.3 million). This is caused by mark-to-market fair value movement of financial instruments (a loss of $147.0 million) and release of foreign currency translation reserve of $47.6m. The prior year comparative included the revaluation of the US Seniors Housing Portfolio up to the selling price ($245.9 million gain).

(i) Capital Management

Highlights

At 31 December 2011

• GPT’s percentage of net debt to total tangible assets is 22.9% (2010: 24.9%)

• GPT’s cost of debt has reduced from 7.4% in 2010 to 6.6% in 2011.

Debt facilities

At 31 December 2011, GPT had $216.4 million of liquidity available in cash and committed but undrawn debt facilities. For further details refer to note 14(d).

Gearing

The current level of gearing in the Group net of cash is 22.9% at 31 December 2011. The Group’s gearing policy, announced on 18 December 2010, aims to manage gearing within a range of 25% to 35% (based on debt to total tangible assets). The policy provides the flexibility to increase gearing beyond 30% if required, provided a reduction to 30% or below is achieved within a reasonable timeframe. This policy provides a conservative approach to gearing consistent with GPT’s business strategy and risk profile and enhances the Group’s ability to gain access to a range of funding sources through market cycles.

Credit rating

GPT has retained a Standard & Poor’s rating of A- (stable) and Moody’s rating of A3 (stable) during 2011.

GPT Annual Financial Report 2011

13

DIRECTORS’ REPORT

For the year ended 31 December 2011 – THE GPT GROUP

1. Operations and Activities (continued)

1.3 Distributions

Distributions paid/payable to stapled securityholders for the financial year ended 31 December 2011 totalled $326.4 million (2010: $302.5 million). This represented an annual distribution of 17.8 cents (2010: 16.3 cents post 5 to 1 consolidation of securities). This distribution includes 4.9 cents ($88.7 million) in respect of the quarter ended December 2011, which is expected to be paid on 16 March 2012. Further detail on quarterly distributions is set out in note 3 of the financial report.

Distribution policy

GPT will distribute the greater of 70-80% of Realised Operating Income (excluding development profits) and taxable income. For the 2011 year, GPT will distribute 80% of Realised Operating Income.

1.4 Significant Changes in State of Affairs

Significant changes in the state of the affairs of the Group during the financial year, apart from those discussed under section 1.2, were as follows:

On-market buy-back: On 11 May 2011, GPT announced an on-market buy-back of up to 5% of the Group’s ordinary securities. As at 31 December 2011, the Group has bought back 41.8 million of ordinary stapled securities for the total consideration of $126.8 million. This represents 2.3% of the total ordinary stapled securities.

1.5 Likely Developments and Expected Results of Operations

Likely developments and commentary on the expected results of operations are included in section 1.2 of this Report.

Further information on likely developments and expected results of operations have not been included in this annual financial report because the Directors believe it would be likely to result in unreasonable prejudice to GPT.

1.6 Environmental Regulation

GPT has policies and procedures in place that are designed to ensure that where operations are subject to any particular and significant environmental regulation under a law of Australia (for example property development and property management); those obligations are identified and appropriately addressed. This includes obtaining and complying with conditions of relevant authority consents and approvals and obtaining necessary licences. GPT is not aware of any breaches of any environmental regulations under the laws of the Commonwealth of Australia or of a State or Territory of Australia and has not incurred any significant liabilities under any such environmental legislation.

GPT is also subject to the reporting requirements of both the Energy Efficiency Opportunities Act 2006 (“EEO”) and the National Greenhouse and Energy Reporting Act 2007 (“NGER”).

The Energy Efficiency Opportunities Act 2006 requires GPT to assess its energy usage, including the identification, investigation and evaluation of energy saving opportunities and to report publicly on the assessments undertaken; including what action GPT intends to take as a result. As required under this act, GPT is registered with the Department of Resources, Energy and Tourism as a participant entity. GPT has collated energy data and identified energy opportunities for the 1 July 2010 to 30 June 2011 period and has disclosed the Energy Efficiency Opportunities data on the GPT website by the required date of 31 December 2011.

The National Greenhouse and Energy Reporting Act 2007 requires GPT to report its annual greenhouse gas emissions and energy use. The measurement period for GPT is 1 July 2010 to 30 June 2011. GPT has implemented systems and processes for the collection and calculation of the data required for submission of its report to the Department of Climate Change and Energy Efficiency within the legislative deadline of 31 October 2011.

More information about the GPT Group’s participation in the EEO and NGER programs is available at www.gpt.com.au.

1.7 Events Subsequent to Reporting Date

On 12 January 2012, GPT completed the settlement of La Trobe Street car park at Melbourne Central for $29.2 million.

On 17 January 2012, GPT priced $150 million fixed rate Medium Term Notes (MTNs) debt issue for a term of 7 years providing additional liquidity to fund short and medium term capital requirements. These MTNs were settled on 24 January 2012.

On 1 February 2012, GPT signed a $100 million loan facility with Commonwealth Bank of Australia with a term of 1 year expiring on 1 February 2013.

On 3 February 2012, GPT completed the settlement of the 42&44 Ocean Steamers Drive, Port Adelaide sale for $7 million.

Post 31 December 2011, GPT continued with the on-market buy-back of the Group’s ordinary stapled securities. At 17 February 2012, the GPT Group has bought back 4.3 million ordinary stapled securities for the total consideration of $13.3 million. This represents 0.2% of the total ordinary stapled securities.

On 17 February 2012, a distribution of 4.9 cents per ordinary stapled security ($88.7 million) was declared for the quarter ended 31 December 2011 (refer to note 3(a)(ii)).

Other than the above, the Directors are not aware of any matter or circumstance occurring since 31 December 2011 that has significantly or may significantly affect the operations of GPT, the results of those operations or the state of affairs of GPT in subsequent financial years.

14 GPT Annual Financial Report 2011

DIRECTORS’ REPORT For the year ended 31 December 2011 – THE GPT GROUP

2. Directors and Secretary

2.1 Directors

(i) Chairman - Non-Executive Director

Rob Ferguson

(ii) Non-Executive Directors

Brendan Crotty

Eileen Doyle

Eric Goodwin Lim Swe Guan Anne McDonald Gene Tilbrook

(iii) Executive Director

Michael Cameron

2.2 Information on Directors

Rob Ferguson – Chairman

Mr Ferguson was Managing Director and Chief Executive Officer of Bankers Trust Australia for 15 years. During his 30 year career with Bankers Trust, Mr Ferguson held a number of senior executive positions including Head of Corporate Finance and Investment Management. Mr Ferguson was also an independent non-executive director of Westfield for 10 years.

Mr Ferguson is currently the Non-Executive Chairman of IMF (Australia) Limited; Non-Executive Chairman of Primary Health Care Limited and Non-Executive Director of MoneySwitch Limited. Prior Board positions include Chairman of Vodafone Australia, Nexgen Limited and Bankers Trust Australia Ltd.

Mr Ferguson brings to the Board a wealth of knowledge and experience in finance, investment management and property as well as corporate governance.

Mr Ferguson joined the Board on 25 May 2009 and is a member of the Nomination and Remuneration Committee.

Brendan Crotty

Mr Crotty was appointed to the Board on 22 December 2009. He brings extensive property industry expertise to the Board, including 17 years as Managing Director of Australand until his retirement in 2007.

Mr Crotty is currently a director of Australand Funds Management Pty Ltd, Brickworks Limited and a privately owned major Victorian land and housing company. Mr Crotty is also Chairman of the Western Sydney Parklands Trust and RPS Australia Asia Pacific and a director of the Barangaroo Delivery Authority.

Mr Crotty holds tertiary qualifications in Surveying, Town Planning and Business Administration and is a Fellow of the Royal Institute of Chartered Surveyors, the Australian Institute of Company Directors, and the Australian Property Institute as well being a member of the Planning Institute of Australia.

Mr Crotty is a member of the Nomination and Remuneration Committee and the Sustainability Committee.

Eileen Doyle

Dr Doyle was appointed to the Board on 1 March 2010.

Dr Doyle has over two decades of diverse business experience. She has held senior executive roles and Non-Executive Director roles in a wide range of industries, including research, financial services, building and construction, steel, mining, logistics and export. Currently, Dr Doyle’s directorships include Boral Limited, Hunter Valley Research Foundation (Chairman), Bradken Limited and CSIRO.

Dr Doyle holds tertiary qualifications in mathematics, applied statistics (PhD) and business administration. She is a Fellow of the Australian Institute of Company Directors.

Dr Doyle is Chair of the Sustainability Committee and a member of the Nomination and Remuneration Committee.

GPT Annual Financial Report 2011

15

DIRECTORS’ REPORT

For the year ended 31 December 2011 – THE GPT GROUP

2. Directors and Secretary (continued)

2.2 Information on Directors (continued)

Eric Goodwin

Mr Goodwin was appointed to the Board in November 2005. He brings to the board extensive experience in design, construction and project management, general management and funds management. His experience includes funds management of the MLC Property Portfolio during the 1980s and he was the founding Fund Manager of the Australian Prime Property Fund.

Mr Goodwin is a Non-Executive Director of Eureka Funds Management Limited, Lend Lease Global Properties SICAF and AMPCI Macquarie Infrastructure Management No 2 Limited (responsible entity of Diversified Utility and Energy Trust No. 2).

Mr Goodwin joined Lend Lease in 1963 as a cadet engineer and during his 42 year career with Lend Lease held a number of senior executive and subsidiary board positions in the Australian operation, the US and he was the inaugural manager of the Group’s Asian operations.

Mr Goodwin is a member of the Audit and Risk Management Committee and a member of the Sustainability Committee.

Lim Swe Guan

Mr Lim was appointed to the Board in April 2009.

After graduating with an honours degree in Estate Management in 1979, Mr Lim was employed as Lands Officer for the Urban Redevelopment Authority of Singapore.

He left URA in 1980 to work as a securities analyst, initially for Kim Eng Securities (1980 -1982) and later for Alfa-Pacific Securities (1982 - 1983).

Mr Lim obtained an MBA from the Colgate Darden Graduate School of Business, The University of Virginia in 1985 and returned to Singapore where he worked as a property consultant with Knight Frank, Cheong Hock Chye & Bailieu. In June 1986, Mr Lim was recruited by Jones Lang Wootton in Sydney, Australia to the position of Senior Research Analyst. He was appointed Manager in October 1987 and Director in 1989. Mr Lim obtained the Chartered Financial Analyst (CFA) certification in 1991. In November 1995, Mr Lim joined SUNCORP Investments in Brisbane, Australia as Portfolio Manager, Property Funds.

Mr Lim returned to Singapore in December 1997 to join the Government of Singapore Investment Corporation, as Managing Director of GIC Real Estate until February 2011.

Mr Lim sits on the boards of Thakral Holdings Group in Australia, Sunway City Berhad in Malaysia and Global Logistic Properties in Singapore.

Mr Lim is a member of the Audit and Risk Management Committee.

Anne McDonald

Ms McDonald was appointed to the Board on 2 August 2006. Ms McDonald is currently a Non-Executive Director of listed entities, Spark Infrastructure Group and Specialty Fashion Group. She is also a Non-Executive Director of Westpac’s Life and General Insurance businesses.

Ms McDonald holds a Bachelor of Economics, is a fellow of the Institute of Chartered Accountants and a Graduate of the Australian Institute of Company Directors.

Ms McDonald is a chartered accountant and was previously a partner of Ernst & Young for 15 years specialising as a company auditor and advising multinational and Australian companies on governance, risk management and accounting issues. Previous roles include Board Member of Ernst & Young Australia and a Director of the Private Health Insurance Administration Council, St Vincent’s and Mater Health Sydney and Health Super.

Ms McDonald is Chair of the Audit and Risk Management Committee.

Gene Tilbrook

Mr Tilbrook was appointed to the Board on 11 May 2010.

He has extensive experience in corporate strategy, finance, investment and capital management. Mr Tilbrook spent the majority of his executive career at Wesfarmers Limited, including roles as Finance Director and Director of Business Development.

Mr Tilbrook is currently Non-Executive Chairman of Transpacific Industries Group Ltd; and a Non-Executive Director of Fletcher Building Ltd, NBN Co Limited and QR National Limited. He is a councillor of the Australian Institute of Company Directors (WA Division) and Curtin University and a member of the board of the UWA Perth International Arts Festival. Mr Tilbrook has previously held directorship roles in the private equity, infrastructure and property sectors.

Mr Tilbrook is Chair of the Nomination and Remuneration Committee.

16 GPT Annual Financial Report 2011

DIRECTORS’ REPORT

For the year ended 31 December 2011 – THE GPT GROUP

2. Directors and Secretary (continued)

2.2 Information on Directors (continued)

Michael Cameron

Mr Cameron joined The GPT Group as CEO and Managing Director in May 2009 and has over 30 years’ experience in finance and business.

His past experience includes 10 years with Lend Lease where he was Group Chief Accountant, then Financial Controller for MLC Limited before moving to the US in 1994 in the role of Chief Financial Officer/Director of The Yarmouth Group, Lend Lease’s US property business. On returning to Sydney in 1996 Michael was appointed to the role of Chief Financial Officer, MLC Limited before moving to the role of Chief Financial Officer, then Chief Operating Officer of the NAB Wealth Management Division following the sale of MLC.

Mr Cameron joined the Commonwealth Bank of Australia in 2002 as Deputy Chief Financial Officer, and was appointed to the role of Group Chief Financial Officer soon after in early 2003.

In 2006, Mr Cameron was appointed to the position of Group Executive of the Retail Bank Division of the Commonwealth Bank of Australia, leading a team of 20,000 staff servicing eight million customers.

Mr Cameron was Chief Financial Officer at St.George Bank Limited from mid 2007 until its sale to Westpac in December 2008.

Mr Cameron is a fellow of the Australian Institute of Chartered Accountants, a fellow of CPA Australia and a fellow of the Australian Institute of Company Directors. He is also a Director of the Great Barrier Reef Foundation.

James Coyne - Company Secretary

Mr Coyne is responsible for the legal, compliance and company secretarial activities of GPT. He was appointed as the General Counsel / Company Secretary of GPT in 2004. Previous experience includes company secretarial and legal roles in construction, infrastructure, and the real estate funds management industry (listed and unlisted).

Mr Coyne holds a Bachelor of Arts and Bachelor of Laws (Hons) from the University of Sydney.

2.3 Attendance of Directors at Meetings

The number of Board meetings, including meetings of Board Committees, held during the financial year and the number of those meetings attended by each Director is set out below:

	Board	Board	Audit and Risk Management Committee	Audit and Risk Management Committee	Nomination and Remuneration Committee	Nomination and Remuneration Committee	Sustainability Committee	Sustainability Committee
	Number of meetings attended	Number of meetings eligible to attend	Number of meetings attended	Number of meetings eligible to attend	Number of meetings attended	Number of meetings eligible to attend	Number of meetings attended	Number of meetings eligible to attend
Chairman	Rob Ferguson		Anne McDonald		Gene Tilbrook		Eileen Doyle
Rob Ferguson	9	9	-	-	5	5	-	-
Michael Cameron	9	9	-	-	-	-	-	-
Brendan Crotty	9	9	-	-	4	5	4	4
Eileen Doyle	9	9	-	-	5	5	4	4
Eric Goodwin	9	9	6	6	-	-	4	4
Lim Swe Guan	9	9	6	6	-	-	-	-
Anne McDonald	9	9	6	6	-	-	-	-
Gene Tilbrook	9	9	-	-	5	5	-	-

GPT Annual Financial Report 2011

17

DIRECTORS’ REPORT

For the year ended 31 December 2011 – THE GPT GROUP

2. Directors and Secretary (continued)

2.4 Directors’ Relevant Interests

The relevant interests of each Director in GPT stapled securities as at the date of this report are shown below:

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Number of GPT Stapled Securities
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Rob Ferguson	204,082
Michael Cameron	470,991 - Stapled Securities
	1,369,626 - Performance Rights
Brendan Crotty	30,000
Eileen Doyle	1,600
Eric Goodwin	15,584
Lim Swe Guan	Nil
Anne McDonald	9,450
Gene Tilbrook	20,000

2.5 Directors’ Directorships of Other Listed Companies

Details of all directorships of other listed entities held by each current Director in the three years immediately before 31 December 2011 and the period for which each directorship was held are set out below:

Rob Ferguson	IMF (Australia) Limited (since 2004)
	Primary Health Care Limited (since 2009)
Brendan Crotty	Brickworks Limited (since 2008)
	Trafalgar Corporate Group (from 2007 to 2009)
Eileen Doyle	One Steel Limited (from 2000 until 2010)
	Boral Limited (since 2010)
	Ross Human Directions Limited (from 2005 until 2010)
	Bradken Limited (since 2011)
Eric Goodwin	AMPCI Macquarie Infrastructure Management No. 2 Limited as Responsible Entity of the Diversified Utility and Energy
	Trust No. 2 (one of the stapled entities within the DUET Group) (since 2004)
Lim Swe Guan	Thakral Holdings Limited (since 2004)
Anne McDonald	Speciality Fashion Group Limited (since 2007)
	Spark Infrastructure Group (since 2009)
Gene Tilbrook	Transpacific Industries Limited (since 2009)
	Fletcher Buildings Limited (since 2009)
	QR National Limited (since 2010)
	Wesfarmers Limited (from 2002 to 2009)

18 GPT Annual Financial Report 2011

DIRECTORS’ REPORT

For the year ended 31 December 2011 – THE GPT GROUP

3. 2011 Remuneration Report

3.1 Remuneration in Brief

The Board is committed to clear and transparent communication of GPT’s remuneration arrangements. This section, the 2011 Remuneration in Brief, outlines the key remuneration decisions taken by GPT during the year, and shows the actual cash value of remuneration paid to GPT’s key management personnel (KMP) and the five highest paid executives. The full Remuneration Report for 2011, starting on page 21, provides more detail regarding the remuneration strategy, structures, decisions and outcomes at GPT in 2011 in accordance with statutory obligations and accounting standards.

Key remuneration drivers and actions in 2011

In 2011 the Board continued to take a conservative approach to executive remuneration. The Board actively engaged with GPT investors and stakeholders and was proactive about ensuring that there was strong alignment between GPT’s performance and executive reward outcomes. Each of these actions is outlined below and in greater detail in the Remuneration Report.

Base (Fixed) Pay

The disciplined execution of GPT’s strategy during the year which focussed on owning and actively managing quality Australian property assets generated pleasing financial results for investors in 2011. The Board maintained a prudent approach to executive remuneration, the growth of which continued to be moderate. In the review of employee base salaries in December 2010, the Board decided to:

• implement only a modest review of base pay, effective 1 January 2011, averaging 3%; and

• maintain the freeze on Non-Executive Director fees in 2011 for the 4[th] successive year.

Short Term Incentives

The Board also continued to maintain a focus on ensuring that the quantum of short term incentives (STI) received by executives was:

• market based and appropriate;

• aligned to GPT’s performance; and

• demanding of performance that was sufficiently challenging.

In line with the financial performance delivered by management in 2011, actual STI’s received by management were towards the upper end of potential.

Underlining GPT’s achievement based culture, the Board and management took the decision to reduce the level of short term incentives provided for Threshold performance (i.e. the minimum standard of performance deemed appropriate to be rewarded with an incentive payment) from 75% of the individuals’ Target short term incentive level down to 50%. This change, which will be implemented in the 2012 calendar year, has the effect of steepening the reward curve for performance below Target levels such that short term incentive rewards diminish rapidly if Targets are not delivered.

Long Term Incentives

The Board sought and received approval from GPT securityholders at the 2011 Annual General Meeting to continue the existing Performance Rights based long-term incentive (LTI) scheme. The scheme has three performance measures of GPT’s performance, each of equal weight:

• Total Shareholder Return (TSR) - TSR represents an investor’s return, calculated as the percentage difference between the initial amount invested in Stapled Securities and the final value of those Stapled Securities at the end of the relevant period, assuming distributions were reinvested, or such other method of calculation as determined by the Board.

• Adjusted Earnings per Security Growth (EPS Growth) relative to the Consumer Price Index (CPI) - This performance measure sets an EPS growth range (EPS excluding fair value adjustments) for each Performance Period calculated by reference to the CPI; and

• Total Return (TR) - Total Return is defined as the sum of the change in Net Tangible Assets excluding movements in GPT’s equity base arising from capital raisings or capital returns (NTA), plus distributions over the Performance Period, divided by the NTA at the beginning of the Performance Period.

Taking into account feedback from investors and other stakeholders, and to ensure that performance levels were sufficiently challenging for executives, the Board increased the threshold level of performance required for an LTI award in both the EPS Growth and TR measures in the 2012 LTI. These enhancements will be detailed in the Notice of Meeting for GPT’s forthcoming Annual General Meeting (AGM) in May 2012, and will be subject to securityholder approval.

The 2009 LTI covering GPT’s performance for the three calendar years of 2009-2011 concluded at the end of 2011. The threshold performance measure was not achieved and as a result all performance rights granted to executives under the plan lapsed and no LTI awards were made to executives.

GPT Annual Financial Report 2011 19

DIRECTORS’ REPORT

For the year ended 31 December 2011 – THE GPT GROUP

3. 2011 Remuneration Report (continued)

3.1 Remuneration in Brief (continued)

Key remuneration drivers and actions in 2011 (continued)

Employee Ownership

The Board believes in creating ways for employees to build an ownership stake in the business, and the benefits that this ‘culture of ownership’ brings in terms of loyalty, commitment and discretionary effort. For executives, and based on performance, this is achieved through the LTI.

Employees who are not eligible for the LTI may participate in the General Employee Security Ownership Plan (GESOP). Under GESOP individuals receive an additional benefit equivalent to 10% of their STI which is - after the deduction of income tax - invested in GPT securities to be held for a minimum of 1 year. Under the plan, 323 GPT employees received 169,504 GPT securities in 2011.

External environment

In setting and reviewing its remuneration arrangements, GPT has regard to the external environment, and is actively monitoring the tax, regulatory and governance activities impacting remuneration. In 2011, the Board sought external advice on market practice and prevailing regulatory and governance standards from Ernst & Young and Freehills. The Board did not receive any Remuneration Recommendations from Remuneration Consultants as defined under the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011.

2011 Remuneration outcomes and GPT security ownership positions for GPT’s Key Management Personnel

The disclosed remuneration of GPT’s KMP and five highest paid executives in the Remuneration Report on (page 30) is calculated in accordance with statutory obligations and accounting standards. As a result, it is based on accounting principles and includes accounting values for current and prior years’ LTI grants which have not been (and may never be) realised as they are dependent on performance measures being met.

To provide a clearer picture, GPT has chosen to include in the Remuneration in Brief the following table (Table 1) which discloses the actual Cash and Other Benefits received by GPT’s KMP and five highest paid executives during GPT’s financial year, as distinct from the accounting expense. It also includes an outline of the current and potential GPT security ownership position of executives effective 31 December 2011 that has been established during their career to date with GPT.

Table 1 - Actual Cash and Other Benefits received by GPT’s KMP and five highest paid executives

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Current GPT Future GPT
Cash & Other Benefits actually security securities subject
received by executives in 2011 ownership at to performance at
31/12/11 31/12/11
Senior Executives Position Base STI LTI [1] Other [2] Total Vested GPT Unvested GPT
----- End of picture text -----

Senior Executives	Position	Base	STI	LTI1	Other2	Total	31/12/11 Vested GPT	31/12/11 Unvested GPT
		(Fixed)					Security	Securities &
		Pay					Holding3	Performance
								Rights4
		$’000	$’000	$’000	$’000	$’000	# of securities	# of securities & rights
Michael Cameron	Managing Director and Chief Executive Officer	1,350.0	1,598.0	-	222.5	3,170.5	66,103	1,774,515
James Coyne	General Counsel / CompanySecretary	480.0	284.1	-	3.5	767.6	-	323,189
Mark Fookes	Head of Investment Management	775.0	682.0	-	4.1	1,461.1	-	518,913
Nicholas Harris	Head of Wholesale	623.0	534.6	-	3.8	1,161.4	-	419,466
Jonathan Johnstone	Head of Transactions	575.0	495.3	-	1.1	1,071.4	-	391,080
AnthonyMcNulty	Head of Development	550.0	354.7	-	2.8	907.5	-	328,019
Michael O’Brien	Chief Financial Officer	830.0	827.5	-	121.9	1,779.4	76,909	562,877
Michelle Tierney	Head of Property & Asset Management	500.0	330.2	-	3.6	833.8	-	296,635

1 The performance measures for the 2009 LTI were not satisfied at the end of the 3 year performance period on 31 December 2011, hence the performance rights granted under the scheme lapsed. As a result no GPT executive received any LTI award in 2011.

2 Other includes the value of performance rights that vested in 2011 (Michael Cameron and Michael O’Brien), Death & Total/Permanent Disablement insurance premiums, superannuation plan administration fees, executive health assessments, and other benefits.

3 Vested GPT Security Holding is the actual number of GPT securities held as a result of the individuals’ employment with GPT over the years. This excludes GPT securities that may have been granted to date but are as yet unvested due to service or performance measures and also excludes GPT securities bought privately by the individual. As a result it represents the true current ownership stake held by the executive arising from their employment with the Group. All securities listed here vested in 2011 with the exception of 38,454 of Michael O’Brien’s which vested in 2010.

4 Unvested GPT Securities and Performance Rights includes the total unvested GPT securities and performance rights received over the years that are currently on foot and excludes any GPT securities or rights that may have lapsed up to 31 December 2011. This number comprises sign on rights that are yet to vest (Michael Cameron), deferred STI into equity that is yet to vest (Michael Cameron) and grants of performance rights under the various LTI schemes that are subject to the various performance measures and are yet to vest (all executives). This highlights the current maximum number of additional GPT securities to which the individual may become entitled subject to satisfying the various applicable performance measures; as such, any securities or performance rights listed in this column should be considered “at risk”, are not guaranteed, and indeed may never vest.

20 GPT Annual Financial Report 2011

DIRECTORS’ REPORT

For the year ended 31 December 2011 – THE GPT GROUP

3. 2011 Remuneration Report (continued)

3.2 Introduction

The Board presents the Remuneration Report for GPT for the year ended 31 December 2011, which forms part of the Directors Report and has been prepared in accordance with section 300A of the Corporations Act for the Group for the year ended 31 December 2011.

This Remuneration Report outlines GPT’s remuneration philosophy and practices together with details of the specific remuneration arrangements that apply to GPT’s key management personnel (KMP) who are the individuals responsible for planning, controlling and managing the GPT Group (including the Non-Executive Directors, the CEO and other key Senior Executives), and the five highest paid executives in 2011. The data provided in the Remuneration Report was audited as required under section 308(3C) of the Corporations Act.

In 2011 the Nomination & Remuneration Committee (the Committee) comprised 4 Non-Executive Directors:

• Gene Tilbrook (Chairman)

• Brendan Crotty

• Eileen Doyle

• Rob Ferguson

The Committee provides advice and recommendations to the Board on:

• criteria for selection of Directors;

• nominations for appointment as Directors (either between AGMs or to stand for election);

• criteria for reviewing the performance of Directors individually and the GPT Board collectively;

• remuneration policies for Directors and Committee members;

• remuneration policy for senior executives;

• incentive plans for employees; and

• any other related matters regarding executives or the Board.

Further information about the role and responsibility of the Committee is set out in its Charter which is available on GPT’s website (www.gpt.com.au).

3.3 Key Issues and Changes made in 2011

Remuneration Outcomes aligned to GPT’s Performance

In 2011 GPT continued to resolutely pursue the Group’s articulated strategy of owning and actively managing quality Australian property assets. While the financial performance was pleasing, market conditions remained cautious and growth in executive pay levels moderated. Against that background the Board continued to exercise restraint with regard to executive remuneration. The main areas of activity in 2011 are outlined in the Table 2, below:

Table 2 – Main areas of activity in 2011

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Issue Who is affected? Explanation
----- End of picture text -----

Issue	Who is affected?	Explanation
Maintain restraint on executive salaries	Leadership Team and other employees	Base remuneration increases for 2011 were capped at an average 3% across the business.
Freeze on Directors’ fees	Non-Executive Directors	The overall Non-Executive Director fee pool was increased from $1,500,000 to $1,650,000 on 11 May 2011. This was done to provide room to manage Non-Executive Director transitions on and off the Board in future without exceeding the cap. At the individual level, there were no increases in fees in 2011 for Non-Executive Directors for the 4thsuccessive year.
Reduction in 2012 Threshold STI Opportunity	All employees	The Board and management took the decision to reduce the level of short term incentive provided for Threshold performance (ie the minimum standard of performance deemed appropriate to be rewarded with an incentive payment) from 75% of the individuals’ Target short term incentive level down to 50%. To be implemented in the 2012 calendar year, this has the effect of steepening the reward curve for performance below Target levels such that short term incentive rewards diminish rapidly if Targets are not delivered.
Strengthened 2012 LTI Performance Measures	Leadership Team and other executives (limited to the top 25 in total)	To more tightly align with GPT’s articulated financial performance objectives, the Board decided to increase the Threshold level of performance required for an LTI award in both the EPS and TR measures in the 2012 LTI. These adjustments will be set out in the Explanatory Memorandum to the Notice of Meeting for the AGM and subject to securityholder vote.
Continued initiative to build culture of ownership	All employees excluding the LTI participants	Under the General Employee Security Ownership Plan (GESOP) an amount equivalent to 10% of an individuals’ STI was (after the deduction of income tax) invested in GPT securities to be held for a minimum of 1 year. Under the plan, 323 GPT employees received 169,504 GPT securities in 2011.

GPT Annual Financial Report 2011 21

DIRECTORS’ REPORT

For the year ended 31 December 2011 – THE GPT GROUP

3. 2011 Remuneration Report (continued)

3.3 Key Issues and Changes made in 2011 (continued)

CEO Remuneration Structure and Contract Terms

The key terms of Mr Cameron’s remuneration arrangements and contract include the following:

Table 3 – Key terms of Michael Cameron’s Remuneration Arrangements

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Details Comments
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Details	Comments
Benchmark group for setting/reviewing remuneration	The Board benchmarks the remuneration of the CEO against: • CEOs in businesses with comparable market capitalisation; and • CEOs in comparable roles within the ASX A-REIT index.
Remuneration mix	In 2011, Mr Cameron’s remuneration mix was as follows: Base (Fixed) Pay: $1,350,000. STI: $0 to $1,687,500 based on performance and paid in cash (i.e. 0 to 125% of base pay). Further details on STI terms are set out on page 25 to 26. LTI: $0 to $2,025,000 based on performance and continued service and paid in GPT securities (ie 0 to 150% of base pay). Further details on LTI terms (including performance measures) are set out on pages 26 to 29.
Contract duration	A rolling 12 month contract.
Termination entitlements	Termination entitlements vary depending on the circumstances, however any separation payment is capped at 12 months of base (fixed) pay.

22 GPT Annual Financial Report 2011

DIRECTORS’ REPORT

For the year ended 31 December 2011 – THE GPT GROUP

3. 2011 Remuneration Report (continued)

3.4 GPT’s Remuneration Strategy

Alignment of GPT’s Remuneration Strategy and Business Strategy

The Board is conscious of the need to set a remuneration strategy that supports and drives achievement of the strategic objectives of the business. By establishing a remuneration structure that attracts, retains, motivates and rewards executives for achieving challenging targets linked to GPT’s strategy and business objectives, the Board is confident that its remuneration strategy focuses GPT employees on delivering sustainable, superior securityholder returns in line with the Group’s strategic intent.

The diagram below (Diagram 1) shows the key objectives of GPT’s remuneration policy for Executives and how these are implemented through our remuneration structures.

Diagram 1 – GPT’s Strategic Goals and the link to Remuneration Structures

• GPT’s Strategic Goals • Leading relative Total • Average EPS Growth > CPI • In the long term, deliver Total • Create and sustain Shareholder Return (TSR) plus 1% Returns > 9% per annum environments that enrich people’s lives

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• Total Remuneration Components Base (Fixed) Pay Short Term Incentive Long Term Incentive • Base level of reward • Set around market median for Target • Set at market median for Target • Set around Australian market median performance with potential to approach top performance with potential to achieve top using external benchmark data quartile for Stretch outcomes quartile for Stretch outcomes

• • Varies based on employee’s experience, • Determined by performance against a • Determined by GPT performance against skills and performance mix of Balanced Scorecard measures Financial performance measures

• • External & internal relativities considered which include Financial & Non-Financial • Tested over a 3 year performance period – measures (eg Customer, Internal process, no re-test People & Knowledge) • No value derived unless GPT meets

• • Financials include Group Earnings or exceeds challenging performance (Realised Operating Income) per Security measures and (if applicable) Portfolio (Net Return to • Delivered in equity to align long term Owner) or Property level metrics securityholder and executive interests

• • Non-Financial objectives also focus on execution of strategy, delivery of key projects and developments, culture change, sustainability, innovation, people management and development, and IT

• • Delivered in cash annually

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Align executive rewards to GPT’s performance and securityholder interests by:

Attract, retain, motivate and reward high calibre executives to deliver superior performance by:

• Providing competitive rewards • Assessing incentives against multiple financial and non-financial

• • Opportunity to achieve incentives beyond base pay based on business measures that are aligned with GPT strategy, with an performance equity component

• Opportunity to achieve incentives beyond base pay based on performance

• Putting significant components of Total Remuneration at risk

GPT Annual Financial Report 2011

23

DIRECTORS’ REPORT

For the year ended 31 December 2011 – THE GPT GROUP

3. 2011 Remuneration Report (continued)

3.4 GPT’s Remuneration Strategy (continued)

Total Remuneration Mix

As depicted in Diagram 1 above, GPT’s Executive remuneration is structured as a mixture of Base (fixed) pay and variable “at risk” short term incentive (STI) and long term incentive (LTI) components.

While the Base pay is designed to provide a predictable base level of remuneration, the STI and LTI components reward executives when certain pre-determined performance measures are met or exceeded.

The Total Remuneration mix of components for those executives with ongoing employment at the end of 2011 is set out in Table 4, below:

Table 4 – Total Remuneration Mix of Fixed and At Risk Remuneration

Senior Executives Position	Fixed Remuneration Variable or “At Risk” Remuneration1
	Base Pay STI LTI
Michael Cameron Managing Director and Chief Executive Officer	36% 36% 28%
James Coyne General Counsel / Company Secretary	50% 25% 25%
Mark Fookes Head of Investment Management	43% 35% 22%
Nicholas Harris Head of Wholesale	44% 33% 23%
Jonathan Johnstone Head of Transactions	44% 33% 23%
AnthonyMcNulty Head of Development	48% 29% 23%
Michael O’Brien Chief Financial Officer	43% 35% 22%
Michelle Tierney Head of Property & Asset Management	48% 29% 23%

1 The percentage of each component of Total Remuneration is calculated with reference to “Target” performance outcomes in both STI and LTI – for more information on performance measurement levels see the following sections on STI and LTI.

Base (Fixed) Pay

Base remuneration is reviewed annually through a process that ensures an executive’s fixed remuneration remains competitive in the market place and reflects their skills, knowledge, responsibility and general performance. This process involves market-based reviews conducted by independent experts benchmarking GPT executives against comparable peers in companies in the A-REIT and, where relevant, broader ASX 200 sectors. GPT generally aims to pay around market median base salary.

Table 5 – Base Pay

Table 5 – Base Pay
What is included in Base (Fixed) Pay?	Base pay includes cash, compulsory superannuation, and any salary sacrifice items (including Fringe Benefits Tax).
When and how is Base Pay reviewed?	Base pay is reviewed annually effective 1 January. The Committee oversees the review process to ensure that all employees are paid fairly and competitively in relation to their skills, experience, responsibilities and performance. The Committee also ensures that overall review outcomes are appropriate and affordable.
What market benchmark is applied?	The Committee commissions external benchmarking of the CEO and Leadership Team salaries annually by Ernst & Young, much of it focussed on publicly available data from annual reports. More broadly, the business relies on benchmarking relevant to the property sector including the Avdiev Property Industry Remuneration Report. For more specialist functional roles management will source multiple benchmarks from reputable recruitment agencies and other informed sources.

24 GPT Annual Financial Report 2011

DIRECTORS’ REPORT For the year ended 31 December 2011 – THE GPT GROUP

3. 2011 Remuneration Report (continued)

3.4 GPT’s Remuneration Strategy (continued)

Short Term Incentives (STI) (variable component)

GPT employees have an opportunity to receive an STI based on calendar year performance. STI levels are set as part of the process of benchmarking the Total Remuneration opportunity for each role. GPT generally aims to set STI opportunity at market median for Target performance with potential to approach top quartile for Stretch outcomes.

Table 6 – GPT’s STI Plan

Table 6 – GPT’s STI Plan
What is the STI plan?	The STI is an ‘at-risk’ incentive awarded annually in the form of cash subject to performance against agreed financial and non-financial KeyPerformance Indicators (KPIs).
Who participates in the STIplan?	All permanent GPT employees with greater than 3 months service at the end of the applicable calendar year are eligible – subject toperformance – to receive an STI.
Why does the Board consider the STI an appropriate incentive?	Having a component of the Total Remuneration at risk in the form of an STI creates the ability for the Board and management to align and focus employees on desired objectives and behaviours, co-ordinating effort in pursuit of the overall business strategy.
Are both target and stretch performance measures set?	Yes. Stretch performance measures can reward exceptional performance beyond the acceptable Target outcomes, and can motivate individuals to strive for the mutual benefit of themselves and the business.
What is the value of the STI opportunity?	The STI opportunity is expressed as a percentage of Base (fixed) pay, and varies depending on the overall Total Remuneration levels for particular roles, but the following table can be considered indicative of the possible ranges: Level Target Incentive Range Stretch Incentive Range CEO 100% 125% Executives 50-80% 62.5-100% General employees 10-30% 12.5-37.5% If a minimum or Threshold level of objective achievement is not delivered then STI would be nil. STI outcomes are capped at the Stretch level.
What are the Financial performance measures?	In 2011 the main Group Financial performance measure was Earnings (Realised Operating Income) per Ordinary Security and based on Board discretion of: Threshold: 21.2cps (ie 2% growth on the 2010 result) Target: 21.6cps (4% growth on the 2010 result) Stretch: 22.3cps (7% growth on the 2010 result) While all employees have a common Group Financial performance measure, whether there are other additional performance measures depends on the individuals’ role, as does the (indicative) mix between Financial and Non- Financial measures: Level Financial Measures Non-Financial Measures CEO 70% 30% Executives 60% 40% General employees 20% 80% Financial measures are applied at the Group,Portfolio,and Asset level.
What are the Non-financial performance measures?	Non-Financial measures include Balanced Scorecard items focussed on the Customer, Internal processes, and People & Knowledge perspectives. In addition, they may also focus on execution of strategy, delivery of key projects and developments, culture change, sustainability,innovation, people management and development,and information technology.
How is performance measured?	Financial and non-financial KPIs are determined at the start of each calendar year and set out in a formal Performance Agreement. This agreement is reviewed at the end of each calendar year for every eligible employee to determine what (if any) STI theymayreceive.
Who assesses performance against targets?	The Board assesses the performance of the CEO, who in turn assesses the performance of his direct reports among the Leadership Team.

GPT Annual Financial Report 2011

25

DIRECTORS’ REPORT

For the year ended 31 December 2011 – THE GPT GROUP

3. 2011 Remuneration Report (continued)

3.4 GPT’s Remuneration Strategy (continued)

Short-term Incentive Outcomes

In 2011 GPT achieved an Earnings (Realised Operating Income) per Ordinary Security result of 22.4 cps which exceeded the Stretch level of performance on the GPT Group Financial measure. This translated into the realisation of short term incentive compensation amounts toward the upper end of an individuals’ maximum STI potential:

Table 7 – Short Term Incentive Outcomes

		Actual STI Awarded	Actual STI Awarded as a %	% of Maximum STI Award
Senior Executives	Position	($’000)	of Maximum STI	Forfeited
Michael Cameron	Managing Director and Chief Executive Officer	$1,598.0	94.69%	5.31%
James Coyne	General Counsel / Company Secretary	$284.1	94.69%	5.31%
Mark Fookes	Head of Investment Management	$682.0	88.00%	12.00%
Nicholas Harris	Head of Wholesale	$534.6	91.53%	8.47%
Jonathon Johnstone	Head of Transactions	$495.3	91.88%	8.12%
AnthonyMcNulty	Head of Development	$354.7	86.00%	14.00%
Michael O’Brien	Chief Financial Officer	$827.5	99.69%	0.31%
Michelle Tierney	Head of Property & Asset Management	$330.2	88.06%	11.94%

Long Term Incentives (LTI) (variable component)

GPT executives who have the most ability to influence the long term commercial performance of the Group are invited by the Board to participate in an equity-based LTI scheme under which awards may vest if specified performance measures are achieved over a 3 year performance period. Combined with the Base pay and STI potential, the LTI provides a further opportunity to achieve Total Remuneration around market median for Target performance, with potential to approach top quartile for Stretch performance outcomes.

Table 8 – GPT’s LTI Plan

Table 8 – GPT’s LTI Plan
What is the purpose of the LTIplan?	The purpose of the LTI plan is to align senior executive rewards with sustained improvement in securityholder value over time.
Who participates in the LTIplan?	The CEO, his direct reports, and a small number of other senior executives with the greatest ability to impact on the long termperformance of GPT. In 2011,23 individualsparticipated.
Is there a limit on the number of LTIs issued?	Employee equity holdings under the LTI cannot exceed 5% of the total number of issued securities.
What is the value of the LTI opportunity?	The size of grants under the 2011 LTI is based on a percentage of the participants’ Base pay with the maximum (Stretch) opportunity in 2011 as follows: • for the CEO it was equivalent to 150% of base pay • for Leadership Team members it was 100% of base pay • for all otherparticipants it was equivalent to 75% of basepay
How is reward delivered under the LTI program?	Each grant consists of Performance Rights (Rights) to receive GPT securities for no cost. The number of Rights granted was determined by dividing GPT’s last quarter 2010 volume weighted average security price (VWAP) of $2.8383cps into thegrant value.
Do executives pay for the LTI instruments?	No. Rights that vest convert to GPT securities at no cost to the executive.
What rights are attached to LTIs?	Rights do not carry any voting rights or receive dividends, however GPT securities allocated on the vesting of Rights carry the same rights as anyother GPT security.
Are there restrictions on dealing with securities allocated under the LTI plan?	Yes, all GPT employees sign a policy on personal dealing (Policy) which, in addition to restrictions on insider trading, restricts dealing in GPT securities to certain trading windows. The Policy also precludes hedging or entering into any other financial derivatives in relation to unvested Rights.
What happens when an executive leaves the Company?	Broadly, unvested Rights will lapse, unless the Board in its discretion decides otherwise.
What are the performance hurdles?	See the table below.
Are Rights subject to retesting if they do not vest on initial testing?	No. There is no retesting of Rights that do not vest after being first tested for satisfaction against the performance measures at the end of the 3 year period.

26 GPT Annual Financial Report 2011

DIRECTORS’ REPORT

For the year ended 31 December 2011 – THE GPT GROUP

3. 2011 Remuneration Report (continued)

3.4 GPT’s Remuneration Strategy (continued)

Long Term Incentives (LTI) (variable component) (continued)

The performance measures and hurdles for GPT’s LTI plan, which have been approved by GPT securityholders, are summarised in table 9, below.

Table 9 – GPT LTI Plan Performance Measures & Hurdles

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

LTI LTI Performance Condition Performance Measure Hurdle Weighting Status
Performance
Measurement
Period
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LTI	LTI Performance Measurement Period	Performance Condition	Performance Measure Hurdle	Weighting	Status
2009	2009-2011	Relative TSR versus the ASX 200 Property Index (excluding GPT)	50% of rights vest at 51st percentile, up to 100% at the 75th percentile (pro rata vesting in between).	100%	Lapsed, no awards paid to executives
2010	2010-2012	Relative TSR versus the top 80% of the ASX 200 Property Index	50% of rights vest at 51st percentile, up to 100% at the 75th percentile (pro rata vesting in between).	One third each	On foot
		Earnings per security growth (EPS) vs the CPI1	50% of rights vest if EPS growth = CPI, up to 100% if EPS growth = CPI plus 1% percentile (pro rata vesting in between).
		Total Return (TR) versus the Weighted Average Cost of Capital (WACC).	0% of rights vest at 8% TR, up to 100% at 9% TR (pro-rata vesting in between).
2011	2011-2013	Relative TSR versus the top 80% of the ASX 200 Property Index	50% of rights vest at 51st percentile, up to 100% at the 75th percentile (pro rata vesting in between).	One third each	On foot
		Earnings per security growth (EPS) vs the CPI1	50% of rights vest if EPS growth = CPI, up to 100% if EPS growth = CPI plus 1% percentile (pro rata vesting in between).
		Total Return (TR) versus the Weighted Average Cost of Capital (WACC).	0% of rights vest at 8% TR, up to 100% at 9% TR (pro-rata vesting in between).

1 The EPS growth calculation for 2010 relies on a rebased 2009 EPS figure of 21.30cps versus the 2010 result of 20.74cps. The rebasing of 2009 was required to adjust the 2009 EPS result of 23.83cps (4.77 cps on a pre 5:1 consolidation basis) to take into account the dilutive effect of the capital raising. The approach is to assume the raising happened on 1 January 2009, that is, the interest saving from reducing debt starts on 1 January 2009 rather than 17 June 2009, with the adjusted earnings for the 2009 year divided by the greater number of average shares.

GPT Annual Financial Report 2011 27

DIRECTORS’ REPORT

For the year ended 31 December 2011 – THE GPT GROUP

3. 2011 Remuneration Report (continued)

3.4 GPT’s Remuneration Strategy (continued)

Long Term Incentives (LTI) (variable component) (continued)

Table 10 (below) sets out the executives’ LTI plan participation level (i.e. in terms of grant size), fair value, and the maximum recognised value in future years (see footnote 2 to table 10 for an explanation of these concepts):

Table 10 – LTI Plan Participation Levels and Fair Value

					Fair Value per		Maximum Value
		LTI	Performance		Performance		Recognised in
Senior Executives	Position	Scheme	Rights Granted	Grant Date	Right	Vesting Date1	Future Years2
Michael Cameron	Managing Director and	2009	396,617	30-Jun-09	$0.85	31-Dec-11	-
	Chief Executive Officer	2010	590,068	19-May-10	$2.06	31-Dec-12	$463,607
		2011	713,455	08-Jun-11	$2.38	31-Dec-13	$1,322,900
James Coyne	General Counsel /	2009	180,735	30-Jun-09	$1.00	31-Dec-11	-
	Company Secretary	2010	154,074	19-May-10	$2.06	31-Dec-12	$121,054
		2011	169,115	08-Jun-11	$2.38	31-Dec-13	$313,576
Mark Fookes	Head of Investment	2009	269,179	30-Jun-09	$1.00	31-Dec-11	-
	Management	2010	245,862	19-May-10	$2.06	31-Dec-12	$193,170
		2011	273,051	08-Jun-11	$2.38	31-Dec-13	$506,295
Nicholas Harris	Head of Wholesale	2009	230,725	30-Jun-09	$1.00	31-Dec-11	-
		2010	199,968	19-May-10	$2.06	31-Dec-12	$157,112
		2011	219,498	08-Jun-11	$2.38	31-Dec-13	$406,996
Jonathan Johnstone	Head of Transactions	2009	192,271	30-Jun-09	$1.00	31-Dec-11	-
		2010	188,494	19-May-10	$2.06	31-Dec-12	$148,097
		2011	202,586	08-Jun-11	$2.38	31-Dec-13	$375,638
Anthony McNulty	Head of Development	2009	152,856	30-Jun-09	$1.00	31-Dec-11	-
		2010	134,241	19-May-10	$2.06	31-Dec-12	$105,471
		2011	193,778	08-Jun-11	$2.38	31-Dec-13	$359,306
Michael O’Brien	Chief Financial Officer	2009	307,634	30-Jun-09	$1.00	31-Dec-11	-
		2010	270,448	19-May-10	$2.06	31-Dec-12	$212,487
		2011	292,429	08-Jun-11	$2.38	31-Dec-13	$542,226
Michelle Tierney	Head of Property & Asset	2009	137,714	30-Jun-09	$1.00	31-Dec-11	-
	Management	2010	120,473	19-May-10	$2.06	31-Dec-12	$94,654
		2011	176,162	08-Jun-11	$2.38	31-Dec-13	$326,642

1 Vesting date is the date that marks the end of the 3-year LTI period. At this point the performance measure will be assessed against the performance hurdle to see if any Performance Rights vest. Note that the Performance Rights granted under the 2009 LTI Scheme did not vest at 31 December 2011 as the minimum performance measure was not achieved.

2 This represents the fair value of rights as at grant date that are yet to be expensed. “Fair value” is independently determined on the grant date of each tranche of rights using Monte Carlo and Binomial tree pricing models which take into account the following factors: the expected life of the rights, the security price at grant date, expected price volatility of the underlying security, expected distribution yield and the risk free interest rate for the term of the rights. As a result, the figures derived, while accurate for the valuation requirements of the relevant accounting standards, do not bear any resemblance to the actual gross value that may or may not be realised by a participating executive. The LTI accrual numbers in the Senior Executive Remuneration Disclosures in Table 13 on page 30 represent the current (2011) year expenses whereas the maximum recognised value in future years represents the expenses which will be recognised from an accounting perspective in the future until the end of the relevant LTI plan performance period.

28 GPT Annual Financial Report 2011

DIRECTORS’ REPORT For the year ended 31 December 2011 – THE GPT GROUP

3. 2011 Remuneration Report (continued)

3.4 GPT’s Remuneration Strategy (continued)

Pre 2009 Legacy LTI Schemes

As set out in the 2010 Remuneration Report, the pre 2009 legacy LTI scheme performance period concluded on 31 December 2010 with no LTI awards made to executives. The scheme was formally wound up on 28 February 2011 during GPT’s post annual results trading window. A sale price of $3.10 per GPT security was obtained for all the holdings and the funds arising were returned to GPT in full satisfaction of the non-recourse loans provided under the scheme. Full details of the loans in place at the conclusion of the scheme were set out in the 2010 Remuneration Report. There are no further loans to GPT employees on foot as at 31 December 2011.

GPT Performance Outcomes

Table 11 (below) shows GPT’s performance against key metrics over the last 5 years. It should be noted that during FY2010 GPT undertook a five for one unit consolidation.

Table 11 – GPT’s 5 Year Performance

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2007 2008 2009 2010 2011
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Realised operating income	$m	605.1	468.8	375.8	410.0	438.8
Total securityholder return (TSR)	%	-23.4	-74.9	-14.4	2.9	10.5
Earnings (Realised Operating Income) per security (EPS)1	cents	29.4	17.7	4.8	20.7	22.4
EPS growth	%	7.0	-37.1	-74.2	-13.0	8.1
Distributions per security (DPS)1	cents	28.9	17.7	4.5	16.3	17.8
NTA (per security)1	$	3.86	1.43	0.69	3.60	3.59
Security price at end of calendar year	$	4.04	0.92	0.61	2.94	3.07

1 Unadjusted for security consolidation

GPT’s performance for securityholders was strong in 2011 with eps growth of 8.1% and total securityholder return well above both the ASX 200 and ASX 200 AREIT indices. In prior years earnings and distributions per security, as well as the company’s NTA, were impacted by significant equity raisings in 2008 and 2009 which increased the number of securities on issue.

Service Agreements

All employees have service agreements in place that set out the basic terms and conditions of employment. In 2009 the Board took steps to increase the notice periods for all Senior Executives to a minimum of 3 months. No notice provisions apply where termination occurs as a result of misconduct or serious or persistent breach of the agreement.

Remuneration arrangements for early termination of an executive’s contract for reasons outside the control of the individual or where the executive is made redundant may give rise to a severance payment at law. In the absence of any express entitlement, these payments would vary between individuals.

The Board has approved a policy with respect to severance entitlements specifically capping the maximum severance payment that would be made to twelve months base remuneration. In addition the executive may be entitled to any STI and LTI at the end of the relevant period subject to the achievement of key performance indicators that had been set.

The terms of Mr Cameron’s contract are outlined on page 22. The material terms of the service agreements for the remainder of the KMP (i.e. other than the CEO) who were employed by the Group at 31 December 2011 are set out in Table 12 (below):

Table 12 – Material terms of service agreements for the KMP and five highest paid executives

Term	Conditions
Duration	Open ended.
Termination by Executive	3 months notice. GPT may elect to make a payment in lieu of notice.
Termination by Company for cause	No notice requirement or termination benefits (other than accrued entitlements).
Termination by Company (other)	3 months notice. Severance payments may be made subject to GPT policy. Treatment of unvested STI and LTI will be at Board and management discretion under the terms of the relevant plans.
Post-employment restraints	Non-solicitation of GPT employees for 12 months post-employment.

GPT Annual Financial Report 2011 29

DIRECTORS’ REPORT

For the year ended 31 December 2011 – THE GPT GROUP

3. 2011 Remuneration Report (continued)

3.4 GPT’s Remuneration Strategy (continued)

Senior Executive Remuneration Disclosures

The following table provides a breakdown of GPT’s KMP and the five highest paid executives in accordance with statutory requirements and accounting standards. It should be noted that of the Variable or “At Risk” components, STI Bonus show actual cash payments made to executives, whereas the LTI Award Accrual and the Grant or Vesting of Performance Rights are accounting valuations and may only be payable to executives under certain performance conditions or circumstances (as per the footnotes). The Board considers that Table 1 on page 20 is a clearer indication of the actual cash and other benefits received by GPT’s KMP and five highest paid executives in 2011.

Table 13 – Senior Executive Remuneration Disclosures

Senior Executives	Fixed Pay	Variable or “At Risk”	Cash Payment on Termination Total
	Base Pay Superannuation Non- Monetary1	STI Bonus LTI Award Accrual2 Grant or Vesting of Performance Rights3, 4
M. Cameron Managing Director and Chief Executive Officer 31 December 2011 31 December 2010	$1,382,201 $1,245,889 $15,487 $14,830 $13,542 $5,445 $1,597,955 $1,415,592 $989,895 $397,045 $74,873 $74,701 - - $4,073,953 $3,153,502
J. Coyne General Counsel / Company Secretary 31 December 2011 31 December 2010	$488,781 $422,283 $15,487 $14,830 $ 3,523 $3,427 $284,081 $281,627 $ 280,703 $146,017 - - - - $ 1,072,575 $868,184
M. Fookes Head of Investment Management 31 December 2011 31 December 2010	$808,044 $786,601 $15,487 $14,830 $4,128 $2,710 $682,000 $672,287 $442,081 $225,481 - - - - $1,951,740 $1,701,909
N. Harris Head of Wholesale 31 December 2011 31 December 2010	$650,263 $617,570 $15,487 $14,830 $3,835 $3,085 $534,618 $454,968 $362,816 $188,006 - - - - $1,567,019 $1,278,459
J. Johnstone Head of Transactions 31 December 2011 31 December 2010	$590,318 $602,161 $15,487 $14,830 $1,095 $46,315 $495,264 $512,109 $329,860 $167,350 - - - - $1,432,024 $1,342,765
A. McNulty Head of Development 31 December 2011 31 December 2010	$553,592 $520,697 $15,487 $14,830 $2,761 $2,147 $354,750 $273,147 $267,177 $125,415 - - - - $1,193,767 $936,236
M. O’Brien Chief Financial Officer 31 December 2011 31 December 2010	$841,513 $850,290 $15,487 $14,830 $2,761 $3,945 $827,452 $801,264 $486,635 $252,544 $21,730 $91,670 - - $2,195,578 $2,014,543
M. Tierney Head of Property & Asset Management 31 December 2011 31 December 2010	$500,518 $519,749 $15,487 $14,830 $3,597 $1,993 $330,233 $273,969 $241,172 $112,762 - - - - $1,091,007 $923,303
Total 31 December 2011 31 December 2010	$5,815,230 $5,565,240 $123,896 $118,640 $35,242 $69,067 $5,106,353 $4,684,963 $3,400,339 $1,614,620 $96,603 $166,371 - - $14,577,663 $12,218,901

1 The amount set out under ‘Non-monetary’ may include administration fees associated with membership of the GPT Superannuation Plan, Death & Total/Permanent Disability Insurance Premiums, tax equalisation on a UK assignment (J. Johnstone in 2010 only) and termination payments.

2 The purpose of the LTI Award Accrual column is to record the amount of the fair value of performance rights under the various LTI plans expensed in the relevant financial years, and does not represent actual LTI awards made to executives.

30 GPT Annual Financial Report 2011

DIRECTORS’ REPORT

For the year ended 31 December 2011 – THE GPT GROUP

3. 2011 Remuneration Report (continued)

3.4 GPT’s Remuneration Strategy (continued)

Senior Executive Remuneration Disclosures (continued)

• 3 One off grants of Performance Rights were made in 2009 as follows:

Name	Reason for the Grant	Initial Value of the Grant	Number of Performance Rights	Vesting Condition
Michael Cameron	A sign-on package on appointment to the role of Managing Director and CEO on 1 May2009	$300,000	115,363	Service: 50% of the performance rights converted to GPT securities for nil consideration on 30 June 2011. The remaining 50% convert to GPT securities on 30 June 2012
Michael O’Brien	Recognition of 7 month’s service as Acting CEO	$200,000	76,909	Service: 50% of performance rights converted to GPT securities for nil consideration on 1 July 2010. The remaining 50% converted to GPT securities on 1 July2011
4 Additional grants of Performance Rights were made in 2010 as follows:
Name	Reason for the Grant	Initial Value of the Grant (based on fair value)	Number of Performance Rights	Vesting Condition
Michael Cameron	To address the impact of the May 2009 one for one rights issue on Mr Cameron’s sign-on grant of rights (see detailed explanation in the 2010 Remuneration Report)	$34,697	16,843	Service; 50% of performance rights converted to GPT securities for nil consideration on 30 June 2011, with the remaining 50% converting to GPT securities on 30 June 2012

3.5 Remuneration – Non-Executive Directors

Remuneration Policy

The Board determines the remuneration structure for Non-Executive Directors based on recommendations from the Nomination and Remuneration Committee. The principal features of this policy are as follows:

• Non-Executive Directors are paid one fee for participation as a Director in all GPT related companies (principally GPT RE Limited, the Responsible Entity of General Property Trust and GPT Management Holdings Limited).

• Non-Executive Director remuneration is composed of three main elements:

• Main Board fees

• Committee fees

• Superannuation contributions at the statutory Superannuation Guarantee Levy (SGL) rate.

• Differences in workloads of Non-Executive Directors arise mainly because of differing involvement in Board Committees, which is in addition to main Board work. This additional workload is remunerated via Committee fees in addition to main Board fees.

• Non-Executive Directors do not participate in any short or long term incentive arrangements.

• Non-Executive Directors are not entitled to any retirement benefits other than compulsory superannuation.

• Non-Executive Director remuneration is set by reference to comparable entities listed on the Australian Securities Exchange (based on GPT’s industry sector and market capitalisation).

• External independent advice on remuneration levels for Non-Executive Directors is sought on an annual basis. In the event that a review is conducted, the new Board and Committee fees are effective from the 1st of January in the applicable year and advised in the ensuing Remuneration Report.

GPT Annual Financial Report 2011 31

DIRECTORS’ REPORT

For the year ended 31 December 2011 – THE GPT GROUP

3. 2011 Remuneration Report (continued)

3.5 Remuneration – Non-Executive Directors (continued)

Remuneration Arrangements

As noted earlier in the Remuneration Report, the Board determined that there would be no increase in Non-Executive Director fees for 2011, continuing the freeze on Non-Executive Director fees that commenced in 2008.

The Chair is paid a main board fee which is 2.5 times the standard Board member fee to reflect the additional workload and responsibilities associated with the role. The Chairman does not receive fees for any Committees on which he serves.

Fees (including superannuation) paid to Non-Executive Directors are drawn from a remuneration pool of $1,650,000 per annum which was approved by GPT securityholders at the Annual General Meeting on 11 May 2011. As an executive director, Michael Cameron did not receive fees from this pool but was remunerated as one of GPT’s Senior Executives.

Annual Board and Board Committees fees (excluding compulsory superannuation) for the year ended 31 December 2011 are as follows:

Table 14 – Board and Board Committee Fees

Chairman1 2011 2010 Members 2011 2010	Board Audit and Risk Management Committee Sustainability Committee Nomination and Remuneration Committee
	$346,500 $34,650 $11,000 $23,100 $346,500 $34,650 $11,000 $23,100 $138,600 $17,325 $8,000 $11,550 $138,600 $17,325 $8,000 $11,550

1 ‘Chairman’ used in this sense may refer to the Chairman of the Board or the Chairman of a particular committee.

In addition to the above fees, all Non-Executive Directors receive reimbursement for reasonable travel, accommodation and other expenses incurred while undertaking GPT business.

The nature and amount of each element of remuneration paid to GPT’s Non-Executive Directors for the 2011 and 2010 calendar years is as follows on the next page.

32 GPT Annual Financial Report 2011

DIRECTORS’ REPORT

For the year ended 31 December 2011 – THE GPT GROUP

3. 2011 Remuneration Report (continued)

3.5 Remuneration – Non-Executive Directors (continued)

Remuneration Arrangements (continued)

The following table provides a breakdown of Non-Executive Director remuneration in accordance with statutory requirements and accounting standards.

Table 15 – Non-Executive Remuneration Disclosures

	Salary & Fees	Superannuation1	Non-Monetary2	Total
Director	$346,500 $276,771 $15,487 $14,494 - - $361,987 $291,265
R. Ferguson3 Chairman 31 December 2011 31 December 2010
B. Crotty 31 December 2011 31 December 2010	$158,150 $158,770 $14,442 $14,081 - - $172,592 $172,851
E. Doyle4 31 December 2011 31 December 2010	$161,150 $130,625 $14,503 $11,756 - - $175,653 $142,381
E. Goodwin 31 December 2011 31 December 2010	$163,925 $154,150 $14,753 $14,179 - - $178,678 $168,329
S. G. Lim 31 December 2011 31 December 2010	$155,925 $156,925 - - - - $155,925 $156,925
A. McDonald 31 December 2011 31 December 2010	$173,250 $173,250 $15,396 $14,830 $1,343 $1,271 $189,989 $189,351
G. Tilbrook5 31 December 2011 31 December 2010	$161,700 $100,396 $14,533 $9,036 $1,300 $1,246 $177,533 $110,678
Former Director	- $57,632 - $5,154 - - - $62,786
I. Martin6 31 December 2011 31 December 2010
K. Moss7 31 December 2011 31 December 2010	- $123,496 - $5,154 - - - $128,650
Total 31 December 2011 31 December 2010	$1,320,600 $1,332,015 $89,114 $88,684 $2,643 $2,517 $1,412,357 $1,423,216

No termination benefits were paid during the financial year.

1 Refers to compulsory superannuation only; non-compulsory superannuation salary sacrifices are included in Salary & Fees.

2 The amount set out under ‘Non-monetary’ may include administration fees associated with membership of the GPT Superannuation Plan and Death & Total/Permanent Disability Insurance Premiums.

3 R. Ferguson became Chairman on 11 May 2010.

• 4 E. Doyle was appointed to the Board on 1 March 2010.

• 5 G. Tilbrook was appointed to the Board on 11 May 2010.

• 6 I. Martin retired as a Director on 10 May 2010.

• 7 K. Moss retired from the role of Chairman of the Board on 10 May 2010.

GPT Annual Financial Report 2011 33

DIRECTORS’ REPORT

For the year ended 31 December 2011 – THE GPT GROUP

4. Other Disclosures

4.1 Indemnification and Insurance of Directors and Officers

GPT provides a Deed of Indemnity and Access (Deed) in favour of each of the Directors and Secretary of GPT and its subsidiary companies and each person who acts or has acted as a representative of GPT serving as an officer of another entity at the request of GPT. The Deed indemnifies these persons on a full indemnity basis to the extent permitted by law for losses, liabilities, costs and charges incurred as a Director or Officer of GPT, its subsidiaries or such other entities.

Subject to specified exclusions, the liabilities insured are for costs that may be incurred in defending civil or criminal proceedings that may be brought against directors and officers in their capacity as Directors and Officers of GPT, its subsidiary companies or such other entities, and other payments arising from liabilities incurred by the Directors and Officers in connection with such proceedings. GPT has agreed to indemnify the auditors out of the assets of GPT if GPT has breached the agreement under which the auditors are appointed.

During the financial year, GPT paid insurance premiums to insure the Directors and Officers of GPT and its subsidiary companies. The terms of the contract prohibit the disclosure of the premiums paid.

4.2 Proceedings on behalf of the Trust

In October 2008, Slater and Gordon announced an intention to bring a class action against GPT. At Slater & Gordon’s invitation, GPT entered into mediation discussions on a without prejudice basis in an attempt to determine whether the parties could reach agreement in relation to the dispute. Failing an agreed resolution of the matter, Slater & Gordon has now commenced proceedings on behalf of certain persons who claim that they purchased GPT securities from 27 February 2008 and held securities on 7 July 2008. The allegations surround the adequacy and timing of disclosures to the market in this period.

GPT rejects the allegations and intends to defend the claim. GPT does not expect that any payment it could be required to make would have a material adverse effect on the Group’s operational or strategic objectives, or its financial strength.

4.3 Non-Audit Services

During the year PricewaterhouseCoopers, GPT’s auditor, has performed other services in addition to their statutory duties. Details of the amounts paid to the auditor, which includes amounts paid for non-audit services and other assurance services, are set out in note 27 to the financial report.

The Directors have considered the non-audit services and other assurance services provided by the auditor during the financial year. In accordance with advice received from the Audit and Risk Management Committee, the Directors are satisfied that the provision of non-audit services by the auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons:

• the Audit & Risk Management Committee reviewed the non-audit services and other assurance services at the time of appointment to ensure that they did not impact upon the integrity and objectivity of the auditor;

• the Board’s own review conducted in conjunction with the Audit and Risk Management Committee, having regard to the Board’s policy with respect to the engagement of GPT’s auditor; and

• the fact that none of the non-audit services provided by PricewaterhouseCoopers during the financial year had the characteristics of management, decision-making, self-review, advocacy or joint sharing of risks.

4.4 Rounding of Amounts

The GPT Group is of a kind referred to in the Australian Securities & Investments Commission Class Order 98/0100. Accordingly, amounts in the Directors’ Report have been rounded to the nearest tenth of a million dollars in accordance with the Class Order, unless stated otherwise.

4.5 Auditor

PricewaterhouseCoopers continues in office in accordance with section 327 of the Corporations Act 2001.

4.6 Auditor’s Independence Declaration

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

Signed in accordance with a resolution of the Directors.

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==> picture [102 x 45] intentionally omitted <==

_____ _____ Rob Ferguson Michael Cameron Chairman Managing Director and Chief Executive Officer Sydney 17 February 2012

34 GPT Annual Financial Report 2011

AUDITOR’S INDEPENDENCE DECLARATION For the year ended 31 December 2011 – THE GPT GROUP

==> picture [502 x 742] intentionally omitted <==

GPT Annual Financial Report 2011

35

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2011 – THE GPT GROUP

Note	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
Revenue Rent from property investments Property and fund management fees Development project revenue Other income Fair value adjustments to investment properties Share of after tax profit of equity accounted investments Interest revenue - cash and short term money market securities Net foreign exchange gain Total revenue and other income Expenses Property expenses and outgoings Management and other administration costs Depreciation and amortisation expense 4(a) Finance costs 4(b) Impairment expense - loans and receivables Impairment expense - other Net loss on fair value of derivatives 4(c) Net (gain) / loss on disposal of assets Total expenses Profit before income tax expense Income tax (credit) / expense 5(a) Profit after income tax expense (Loss) / Profit from discontinued operations 2(a), 6(d) Net profit for the year Other comprehensive income Net foreign exchange translation adjustments, net of tax Total comprehensive income for the year Net profit / (loss) attributable to: - Securityholders of the Trust - Securityholders of other entities stapled to the Trust Total comprehensive income / (loss) attributable to: - Securityholders of the Trust - Securityholders of other entities stapled to the Trust Basic and diluted earnings per security attributable to ordinary securityholders of the Trust Earnings per unit (cents per unit) - profit from continuing operations 28(a) Earnings per unit (cents per unit) - (loss) / profit from discontinued operations 28(a) Earnings per unit (cents per unit) 28(a) Basic and diluted earnings per security attributable to ordinary stapled securityholders of the GPT Group Earnings per security (cents per security) - profit from continuing operations 28(b) Earnings per security (cents per security) - (loss) / profit from discontinued operations 28(b) Earnings per security (cents per security) 28(b)	573.8 520.8 34.7 38.6 9.0 8.9
	617.5 568.3
	63.1 62.3 158.1 185.3 2.0 1.8 2.5 14.8
	225.7 264.2
	843.2 832.5
	156.9 148.6 92.4 79.6 7.3 7.3 133.9 151.6 5.6 0.9 - 3.6 147.0 6.4 (2.3) 1.4
	540.8 399.4
	302.4 433.1
	(6.8) 2.6
	309.2 430.5 (63.0) 276.8
	246.2 707.3
	52.1 (90.0)
	298.3 617.3
	300.5 769.7 (54.3) (62.4) 351.8 662.4 (53.5) (45.1) 17.7 26.2 (2.8) 13.9 14.9 40.1 15.4 21.8 (3.4) 14.9 12.0 36.7

The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

36 GPT Annual Financial Report 2011

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2011 – THE GPT GROUP

Note	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
ASSETS Current Assets Cash and cash equivalents 23(b) Loans and receivables 7 Derivative assets 8 Tax receivables Prepayments Non-current assets classified as held for sale 6(c) Total Current Assets Non-Current Assets Investment properties 9 Investments in associates and joint ventures 10 Property, plant and equipment 11 Loans and receivables 7 Other assets Intangible assets 12 Derivative assets 8 Deferred tax assets 5(b) Total Non-Current Assets Total Assets LIABILITIES Current Liabilities Payables 13 Borrowings 14 Derivative liabilities 8 Current tax liabilities Provisions 15 Non-current liabilities classified as held for sale 6(c) Total Current Liabilities Non-Current Liabilities Borrowings 14 Derivative liabilities 8 Provisions 15 Deferred tax liabilities 5(c) Total Non-Current Liabilities Total Liabilities Net Assets EQUITY Equity attributable to securityholders of the Trust (parent entity) Contributed equity 16 Reserves 17 Accumulated losses 18 Total equity of GPT Trust securityholders Equity attributable to securityholders of other entities stapled to the Trust Contributed equity 16 Reserves 17 Accumulated losses 18 Total equity of other stapled securityholders Total Equity	42.0 41.1 142.7 62.0 0.2 0.2 34.9 - 5.6 6.1
	225.4 109.4 440.6 741.1
	666.0 850.5
	6,423.6 6,562.5 1,859.6 2,125.0 12.8 5.7 150.9 13.2 0.2 0.2 51.3 51.8 78.2 115.0 36.2 27.8
	8,612.8 8,901.2
	9,278.8 9,751.7
	199.2 193.4 512.6 34.3 1.0 0.4 - 2.1 16.6 15.5
	729.4 245.7 2.6 8.2
	732.0 253.9
	1,631.5 2,418.2 127.5 96.0 1.4 1.1 - 28.0
	1,760.4 2,543.3
	2,492.4 2,797.2
	6,786.4 6,954.5
	8,030.2 8,155.3 (15.2) (69.7) (625.8) (578.2)
	7,389.2 7,507.4
	323.0 324.7 41.1 35.0 (966.9) (912.6)
	(602.8) (552.9)
	6,786.4 6,954.5

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

GPT Annual Financial Report 2011

37

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2011 – THE GPT GROUP

			Total	equity	$M	6,668.4	(90.0)	(90.0)	707.3	617.3		0.7	3.0	(334.9)	6,954.5	6,954.5	52.1	52.1	246.2	298.3		(126.8)	2.6	5.9	(348.1)	6,786.4
Consolidated Entity	Attributable to the Securityholders of Attributable to the Securityholders of other entities	the General Property Trust stapled to the General Property Trust	Contributed Reserves Accumulated Total Contributed Reserves Accumulated Total	equity losses equity losses	Note $M $M $M $M $M $M $M $M	Balance at 1 January 2010 8,155.3 36.9 (1,013.0) 7,179.2 324.7 14.7 (850.2) (510.8)	Movement in foreign currency translation reserve 17 - (107.3) - (107.3) - 17.3 - 17.3	Net income / (loss) recognised directly in equity - (107.3) - (107.3) - 17.3 - 17.3	Profit / (loss) for the financial year 18 - - 769.7 769.7 - - (62.4) (62.4)	Total comprehensive income / (loss) for the financial year - (107.3) 769.7 662.4 - 17.3 (62.4) (45.1)	Transactions with Securityholders in their capacity as Securityholders:	Movement in treasury stock reserve 17 - 0.7 - 0.7 - - - -	Movement in employee incentive security scheme reserve 17 - - - - - 3.0 - 3.0	Distribution paid or payable 3 - - (334.9) (334.9) - - - -	Balance at 31 December 2010 8,155.3 (69.7) (578.2) 7,507.4 324.7 35.0 (912.6) (552.9)	Balance at 1 January 2011 8,155.3 (69.7) (578.2) 7,507.4 324.7 35.0 (912.6) (552.9)	Movement in foreign currency translation reserve 17 - 51.3 - 51.3 - 0.8 - 0.8	Net income recognised directly in equity - 51.3 - 51.3 - 0.8 - 0.8	Profit / (loss) for the financial year 18 - - 300.5 300.5 - - (54.3) (54.3)	Total comprehensive income / (loss) for the financial year - 51.3 300.5 351.8 - 0.8 (54.3) (53.5)	Transactions with Securityholders in their capacity as Securityholders:	On-market securities buy-back 16 (125.1) - - (125.1) (1.7) - - (1.7)	Movement in treasury stock reserve 17 - 3.2 - 3.2 - (0.6) - (0.6)	Movement in employee incentive security scheme reserve 17 - - - - - 5.9 - 5.9	Distribution paid or payable 3 - - (348.1) (348.1) - - - -	Balance at 31 December 2011 8,030.2 (15.2) (625.8) 7,389.2 323.0 41.1 (966.9) (602.8)

38 GPT Annual Financial Report 2011

CONSOLIDATED STATEMENT OF CASH FLOW

For the year ended 31 December 2011 – THE GPT GROUP

Note	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
Cash flows from operating activities Cash receipts in the course of operations (inclusive of GST) Cash payments in the course of operations (inclusive of GST) Distributions received from associates and joint ventures Dividend income Interest received Income taxes received / (paid) Finance costs Net cash inflows from operating activities 23(a) Cash flows from investing activities Payments for investment properties Proceeds from disposal of investment properties Payments for properties under development Payments for property, plant and equipment Proceeds from sale of property, plant & equipment Payments for intangibles Investment in joint ventures and associates Proceeds from disposal of controlled entities and associates Proceeds from disposal of assets in US Seniors Housing Portfolio (net of tax) Proceeds from disposal of other assets Loan to joint ventures and associates Loan repayment from associate Payments for cost to sell on assets held for sale Net cash inflows / (outflows) from investing activities Cash flows from financing activities Proceeds / (repayment) of bank facilities Repayments of net short and medium term notes Repayment of employee incentive scheme loans Payments on termination and restructure of derivatives Payments for the on-market buy back of securities Distributions paid to securityholders Net cash outflow from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the year Less: Cash balance classified as assets held for sale Cash and cash equivalents at the end of the year 23(b)	731.9 736.1 (319.8) (332.9) 140.2 147.5 - 0.3 12.5 10.1 (0.5) 2.4
	564.3 563.5 (151.1) (176.7)
	413.2 386.8
	(61.1) (83.7) 4.3 37.2 (135.0) (254.1) (10.0) (2.3) 81.0 13.9 (4.6) (26.8) (6.2) (141.4) 301.0 216.4 230.3 - - 20.4 (2.7) - 60.0 10.7 (9.1) (9.5)
	447.9 (219.2)
	(312.0) 502.0 - (222.5) 2.1 2.4 (78.1) (120.8) (126.8) - (348.1) (334.9)
	(862.9) (173.8)
	(1.8) (6.2) 44.8 51.0
	43.0 44.8
	(1.0) (3.7)
	42.0 41.1

The above Consolidated Statement of Cash Flow should be read in conjunction with the accompanying notes.

GPT Annual Financial Report 2011 39

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

1. Summary of significant accounting policies

The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial report is for the consolidated entity, GPT Group (GPT), consisting of General Property Trust, GPT Management Holdings Limited and their subsidiaries.

(a) Basis of preparation

This general purpose financial report has been prepared in accordance with the Trust’s Constitution, Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001.

Compliance with IFRS

The financial report complies with Australian Accounting Standards and International Financial Reporting Standards (IFRS).

New accounting standards and interpretations

AASB 9 Financial Instruments, AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 and AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) (effective for annual reporting periods beginning on or after 1 January 2013)

AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial assets and financial liabilities. The standard is not applicable until 1 January 2013 but is available for early adoption. When adopted, this could change the classification and measurement of financial assets and financial liabilities. GPT does not plan to adopt this standard early and the extent of the impact has not yet been determined.

In December 2011, the IASB delayed the application date of IFRS 9 to 1 January 2015. The AASB is expected to make an equivalent amendment to AASB 9 shortly.

AASB 2010-6 Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets (effective for annual reporting periods beginning on or after 1 July 2011)

In November 2010, the AASB made amendments to AASB 7 Financial Instruments: Disclosures which introduce additional disclosures in respect of risk exposures arising from transferred financial assets. The amendments will affect particularly entities that sell, factor, securitise, lend or otherwise transfer financial assets to other parties. They are not expected to have any significant impact on GPT’s disclosures.

AASB 10 Consolidated Financial Statements, AASB 11 Joint Arrangements, AASB 12 Disclosure of Interests in Other Entities, revised AASB 127 Separate Financial Statements and AASB 128 Investments in Associates and Joint Ventures and AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards (effective

1 January 2013)

In August 2011, the AASB issued a suite of five new and amended standards which address the accounting for joint arrangements, consolidated financial statements and associated disclosures.

AASB 10 replaces all of the guidance on control and consolidation in AASB 127 Consolidated and separate financial statements, and SIC-12 Consolidation – special purpose entities. The core principle that a consolidated entity presents a parent and its subsidiaries as if they are a single economic entity remains unchanged, as do the mechanics of consolidation. However the standard introduces a single definition of control that applies to all entities. It focuses on the need to have both power and rights or exposure to variable returns before control is present. Power is the current ability to direct the activities that significantly influence returns. Returns must vary and can be positive, negative or both. There is also new guidance on participating and protective rights and on agent/principal relationships. While GPT does not expect the new standard to have a significant impact on its composition, it has yet to perform a detailed analysis of the new guidance in the context of various investees that may or may not be controlled under the new rules.

AASB 11 introduces a principles based approach to accounting for joint arrangements. The focus is no longer on the legal structure of joint arrangements, but rather on how rights and obligations are shared by the parties to the joint arrangement. Based on the assessment of rights and obligations, a joint arrangement will be classified as either a joint operation or joint venture. Joint ventures are accounted for using the equity method, and the choice to proportionately consolidate will no longer be permitted. Parties to a joint operation will account for their share of revenues, expenses, assets and liabilities in much the same way as under the previous standard. AASB 11 also provides guidance for parties that participate in joint arrangements but do not share joint control. GPT is yet to evaluate its joint arrangements in light of the new guidance.

AASB 12 sets out the required disclosures for entities reporting under the two new standards, AASB 10 and AASB 11, and replaces the disclosure requirements currently found in AASB 128. Application of this standard by GPT will not affect any of the amounts recognised in the financial statements, but will impact the type of information disclosed in relation to GPT’s investments.

AASB 127 is renamed Separate Financial Statements and is now a standard dealing solely with separate financial statements. Application of this standard by GPT will not affect any of the amounts recognised in the financial statements.

Amendments to AASB 128 provide clarification that an entity continues to apply the equity method and does not remeasure its retained interest as part of ownership changes where a joint venture becomes an associate, and vice versa. The amendments also introduce a “partial disposal” concept. GPT is still assessing the impact of these amendments.

GPT does not expect to adopt the new standards before their operative date. They would therefore be first applied in the financial statements for the annual report ending 31 December 2013.

40 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

1. Summary of significant accounting policies (continued)

(a) Basis of preparation (continued)

AASB 13 Fair value measurement (effective 1 January 2013)

AASB 13 was released in September 2011. It explains how to measure fair value and aims to enhance fair value disclosures. The consolidated entity has yet to determine which, if any, of its current measurement techniques will have to change as a result of the new guidance. It is therefore not possible to state the impact, if any, of the new rules on any of the amounts recognised in the financial statements. However, application of the new standard will impact the type of information disclosed in the notes to the financial statements. The consolidated entity does not intend to adopt the new standard before its operative date, which means that it would be first applied in the annual reporting period ending 31 December 2013.

AASB 1053 Application of Tiers of Australian Accounting Standards and AASB 2010-2 Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements (effective 1 July 2013)

On 30 June 2010 the AASB officially introduced a revised differential reporting framework in Australia. Under this framework, a two-tier differential reporting regime applies to all entities that prepare general purpose financial reports. GPT is a disclosing entity and is not eligible to adopt the new Australian Accounting Standards - Reduced Disclosure Requirements. The two standards will have no impact on the financial report of GPT.

AASB 2011-9 Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income (effective

1 July 2012)

In September 2011, the AASB made an amendment to AASB 101 Presentation of Financial Statements which requires entities to separate items presented in other comprehensive income into two groups, based on whether they may be recycled to profit or loss in the future. This will not affect the measurement of any of the items recognised in the statement of financial position or the profit or loss in the current period. GPT intends to adopt the new standard from 1 January 2013.

AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements (effective 1 July 2013)

In July 2011 the AASB decided to remove the individual key management personnel (KMP) disclosure requirements from AASB 124 Related Party Disclosures, to achieve consistency with the international equivalent standard and remove a duplication of the requirements with the Corporations Act 2001. While this will reduce the disclosures that are currently required in the notes to the financial statements, it will not affect any of the amounts recognised in the financial statements. The amendments apply from 1 July 2013 and cannot be adopted early. The Corporations Act requirements in relation to remuneration reports will remain unchanged for now, but these requirements are currently subject to review and may also be revised in the near future. GPT intends to adopt the new standard from 1 January 2014.

Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32) and Disclosures-Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7) (effective 1 January 2014 and 1 January 2013 respectively)

In December 2011, the IASB made amendments to the application guidance in IAS 32 Financial Instruments: Presentation, to clarify some of the requirements for offsetting financial assets and financial liabilities in the balance sheet. These amendments are effective from 1 January 2014. They are unlikely to affect the accounting for any of the GPT’s current offsetting arrangements. However, the IASB has also introduced more extensive disclosure requirements into IFRS 7 which will apply from 1 January 2013. The AASB is expected to make equivalent changes to IAS 32 and AASB 7 shortly. When they become applicable, the group will have to provide a number of additional disclosures in relation to its offsetting arrangements. GPT intends to apply the new rules for the first time in the financial year commencing 1 January 2013.

Historical cost convention

This financial report has been prepared under the historical cost convention, as modified by the revaluation for financial assets and liabilities (including derivatives) at fair value through profit and loss, certain classes of property, plant and equipment and investment property.

The financial report was approved by the Board of Directors on 17 February 2012.

(b) Accounting for the GPT Group

In accordance with Australian Accounting Standards, the stapled entity reflects the Consolidated entity. Equity attributable to other stapled entities is a form of non-controlling interest in accordance with Australian Accounting Standards and in the Consolidated entity column, represents the contributed equity of GPT Management Holdings Limited (the Company).

As a result of the stapling, investors in GPT will receive payments from each component of the stapled security comprising distributions from the Trust and dividends from the Company.

GPT Annual Financial Report 2011 41

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

1. Summary of significant accounting policies (continued)

(c) Parent entity financial information

The financial information for the parent entity of GPT, General Property Trust, is disclosed in note 19 and has been prepared on the same basis as the consolidated financial report, except as set out below.

Investments in subsidiaries, associates and joint venture entities

Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial report of General Property Trust. Distributions received from associates are recognised in the parent entity’s profit or loss, rather than being deducted from the carrying amount of these investments.

(d) Principles of consolidation

(i) Controlled entities

The consolidated financial report comprises the assets and liabilities of all controlled entities and the results of all controlled entities for the financial year. The Trust and its controlled entities are collectively referred to in this financial report as GPT or the Consolidated entity.

Controlled entities are all entities (including special purpose entities) over which GPT has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether GPT controls another entity.

Controlled entities are fully consolidated from the date control commenced and de-consolidated from the date that control ceased.

The acquisition method of accounting is used to account for the acquisition of controlled entities by GPT. All inter-entity transactions, balances and unrealised gains on transactions between GPT entities have been eliminated in full. Unrealised losses are eliminated.

Non-controlling interests (previously referred to as minority interest) not held by GPT are allocated their share of net profit after income tax expense in the Statement of Comprehensive Income and are presented within equity in the Statement of Financial Position, separately from the Trust’s equity.

(ii) Associates

Associates are entities over which GPT has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for in the Consolidated Statement of Financial Position using the equity method. Under this method, GPT’s share of the associates’ post acquisition net profits after income tax expense is recognised in the Consolidated Statement of Comprehensive Income and its share of post-acquisition movements in reserves is recognised in reserves in the Consolidated Statement of Financial Position. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Distributions and dividends received from associates are recognised in the consolidated financial report as a reduction of the carrying amount of the investment. GPT’s investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition.

Where GPT’s share of losses in associates equals or exceeds its interest in the associate, including any other unsecured long term receivables, GPT does not recognise any further losses, unless it has incurred obligations or made payments on behalf of the associate.

(iii) Joint Ventures

Joint venture assets

GPT has significant co-ownership interests in a number of properties through unincorporated joint ventures. These interests are held directly and jointly as tenants in common. GPT’s proportionate share of revenues, expenses, assets and liabilities in property interests held as tenants in common are included in their respective items of the Consolidated Statement of Financial Position and Statement of Comprehensive Income.

Joint venture entities

Investments in joint venture entities are accounted for in the Consolidated Statement of Financial Position using the equity method. Under this method, GPT’s share of the joint ventures’ post-acquisition net profits after income tax expense is recognised in the Consolidated Statement of Comprehensive Income and its share of post-acquisition movements in reserves is recognised in reserves in the Consolidated Statement of Financial Position. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Distributions and dividends received from joint venture entities are recognised in the consolidated financial report as a reduction of the carrying amount of the investment.

Where controlled entities, associates or joint ventures adopt accounting policies which differ from the Parent entity, adjustments have been made so as to ensure consistency within the GPT Group.

42 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

1. Summary of significant accounting policies (continued)

(e) Foreign currency translation

(i) Functional and presentation currency

Items included in the financial report of each of the GPT entities are measured using the currency of the primary economic environment in which they operate (‘the functional currency’). The consolidated financial report is presented in Australian Dollars, which is the Trust’s functional and presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income.

(iii) Foreign operations

Non-monetary items that are measured in terms of historical cost are converted using the exchange rate as at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences of non-monetary items, such as equities held at fair value through profit or loss, are reported as part of the fair value gain or loss.

Exchange differences arising on monetary items that form part of the net investment in a foreign operation are taken against a foreign currency translation reserve on consolidation.

Where forward foreign exchange contracts are entered into to cover any anticipated excesses of revenue less expenses within foreign joint venture entities, they are converted at the ruling rates of exchange at the reporting period. The resulting foreign exchange gains and losses are taken to the Statement of Comprehensive Income.

(f) Income Tax

(i) Trusts

Under current tax legislation, Trusts are not liable for income tax, provided their securityholders are presently entitled to the taxable income of the Trust including realised capital gains each financial year.

(ii)

Company and other taxable entities

Income tax expense/benefit for the financial year is the tax payable/receivable on the current year’s taxable income based on the national income tax rate for each jurisdiction. This is adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. An exception is made for certain temporary differences arising from the initial recognition of an asset or a liability. No deferred tax asset or liability is recognised in relation to these temporary differences if they arose in a transaction, other than a business combination, that at the time of the transaction did not affect either accounting profit or taxable profit or loss.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

GPT Annual Financial Report 2011

43

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

1. Summary of significant accounting policies (continued)

(f) Income Tax (continued)

(iii) Tax consolidation – Australia

GPT Management Holdings Limited (the head entity) and its wholly owned Australian controlled entities implemented the tax consolidation legislation as of 1 January 2006. Each member in the tax consolidated group continues to account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a standalone taxpayer in its own right. On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing agreement, which in the opinion of the Directors, limits the joint and several liability of the wholly owned entities in the case of a default of the head entity, GPT Management Holdings Limited.

The Company has also entered into a tax funding agreement under which the wholly owned entities fully compensate GPT Management Holdings Limited for any current tax payable assumed and are compensated by GPT Management Holdings Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to GPT Management Holdings Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the financial report.

Assets and liabilities arising under the tax funding agreement with the tax consolidated entities are recognised as amounts receivable or payable and these amounts are due upon demand from the head entity. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments and the funding amounts are recognised as intercompany receivables or payables. Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are recognised as a contribution to (or distribution from) wholly owned tax consolidated entities.

(g) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST (or equivalent tax in overseas locations) except where the GST incurred on purchase of goods and services is not recoverable from the tax authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable. Receivables and payables are stated inclusive of the amount of GST. The net amount of GST receivable from, or payable to, the taxation authority is included with other receivables or payables in the Statement of Financial Position.

Cash flows are presented on a gross basis in the Statement of Cash Flows. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the taxation authority are presented as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

(h) Segment reporting

An operating segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different to those of other segments. Each segment is reviewed by the entity’s chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available.

Segment revenues, expenses, assets and liabilities are those that are directly attributable to a segment. Segment assets include all assets used by a segment and consist primarily of operating cash, receivables, investment properties, inventory, property, plant and equipment and intangible assets, net of related provisions. Assets used jointly by two or more different segments are allocated based on a reasonable estimate of usage. Segment liabilities consist primarily of trade creditors and accruals. Segment assets and liabilities do not include income taxes.

Operating segments are identified based on the information provided to the chief operating decision maker – being the Chief Executive Officer (CEO) and also with consideration to other factors including the existence of a Portfolio Head/Manager and the level of segment information presented to the Board of Directors.

Operating segments that meet the quantitative criteria prescribed by AASB 8 are reported separately. Information about other business activities and operating segments that are below the quantitative criteria are combined and disclosed in a separate category for “all other segments”.

44 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

1. Summary of significant accounting policies (continued)

(i) Revenue recognition

Rental revenue from operating leases is recognised on a straight line basis over the lease term. An asset is recognised to represent the portion of operating lease revenue in a reporting period relating to fixed increases in operating lease rentals in future periods. These assets are recognised as a component of investment properties. When GPT provides lease incentives to tenants, the costs of the incentives are recognised over the lease term, on a straight line basis, as a reduction of property rent revenue. Contingent rental income is recognised as revenue in the period in which it is earned.

Property and fund management fee revenue is recognised on an accruals basis, in accordance with the terms of the relevant contracts. Revenue from development projects is recognised on settlement of an unconditional contract for sale.

Revenue from dividends and distributions are recognised when they are declared. Interest income is recognised on an accruals basis using the effective interest method.

Gain or loss on disposal of assets is calculated as the difference between the carrying amount of the asset at the date of disposal and the net proceeds from disposal and is included in the Statement of Comprehensive Income in the year of disposal. Where revenue is obtained from the sale of properties or assets, it is recognised when the significant risks and rewards have transferred to the buyer. This will normally take place on exchange of unconditional contracts.

If not received at reporting date, revenue is included in the Statement of Financial Position as a receivable and carried at amortised cost.

(j) Finance costs

Finance costs include interest, amortisation of discounts or premiums relating to borrowings and amortisation of ancillary costs incurred in connection with the arrangement of borrowings. Finance costs are expensed as incurred unless they relate to a qualifying asset. A qualifying asset is an asset which generally takes more than 12 months to get ready for its intended use or sale. In these circumstances, financing costs incurred for the construction of a qualifying asset are capitalised to the cost of the asset for the period of time that is required to complete and prepare the asset for its intended use or sale. As all funds are borrowed by GPT, the capitalisation rate used to determine the amount of finance costs capitalised is the weighted average interest applicable to GPT’s outstanding borrowings during the year.

(k) Expenses

Property expenses and outgoings include rates, taxes and other property outgoings incurred in relation to investment properties where such expenses are the responsibility of GPT and are recognised on an accruals basis.

(l) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, at bank and short term money market deposits with original maturities of three months or less. Bank overdrafts are shown within borrowings in current liabilities on the Statement of Financial Position.

(m) Receivables

Trade and sundry debtors are recognised at amortised cost, which in the case of GPT, is the original invoice amount less a provision for doubtful debts. Trade debtors are due within thirty days. Collectability of trade debtors is reviewed regularly and bad debts are written off when identified. A specific provision for doubtful debts is made when there is objective evidence that GPT will not be able to collect the amounts due according to the original terms of the receivables. The amount of the impairment loss is the difference between the asset’s carrying amount and the present value of estimated future cash flows.

Other loans and receivables

Loans and receivables are recognised at amortised cost using the effective interest rate method. Under this method, fees, costs, discounts and premiums directly related to the loans and receivables are recognised in the Statement of Comprehensive Income over the expected life of the loans and receivables. All loans and receivables with maturities greater than 12 months after balance date are classified as non-current assets.

(n) Inventory

Inventory is stated at the lower of cost and net realisable value. Hotel merchandise costs are assigned on the basis of weighted average costs and net realisable value is the estimated selling price in the ordinary course of business. A provision is raised when it is believed that the costs incurred will not be recovered on the ultimate sale of the inventory.

GPT Annual Financial Report 2011 45

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

1. Summary of significant accounting policies (continued)

(o) Non-current assets classified as held for sale and discontinued operations

Non-current assets are classified as held for sale and, except for investment properties, measured at the lower of their carrying amount or fair value less costs to sell. They will be recovered principally through a sale transaction instead of use. They are not depreciated or amortised. For an asset or disposal group to be classified as held for sale, it must be available for immediate use in its present condition and its sale must be highly probable. Investment properties included as non-current assets classified as held for sale are measured at fair value as set out in note 1(p).

An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the noncurrent asset (or disposal group) is recognised at the date of derecognition.

A discontinued operation is a part of GPT’s business that:

• it has disposed or has classified as held for sale and that represents a major line of its business or geographical area of operations, or

• is part of a single co-ordinated plan to dispose of such a line of business or area of operations.

The results of discontinued operations are presented separately on the face of the Statement of Comprehensive Income and the assets and liabilities are presented separately on the face of the Statement of Financial Position.

(p) Investment property

Property, including land and buildings, held for long-term rental yields which are not occupied by a GPT entity is classified as investment property. Land held under an operating lease is classified and accounted for as investment property when the definition of investment property is met. Investment property also includes property that is being developed for future use as investment property.

Investment property is initially recorded at cost. Cost comprises the cost of acquisition, additions, refurbishments, redevelopments, finance costs and fees incurred. Land and buildings (including integral plant and equipment) that comprise investment property are not depreciated. The carrying amount of investment property also includes components relating to lease incentives and assets relating to fixed increases in operating lease rentals in future periods.

Subsequent to initial acquisition, investment property is stated at fair value with changes in fair value recorded in the Statement of Comprehensive Income.

Fair value is based on active market prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific asset. If this information is not available, the Group uses an appropriate valuation method which may include discounted cash flow projections and the capitalisation method. Discount rates and capitalisation rates are determined based upon the Trust’s industry knowledge and expertise and where possible, direct comparison to third party rates for similar assets in a comparable location. The fair value reflects, among other things, rental income from current leases and assumptions about rental income from future leases in light of current market conditions. It also reflects any cash outflows (excluding those relating to future capital expenditure) that could be expected in respect of the property.

Fair value measurement on property under development is only applied if the fair value is considered to be reliably measured. In order to evaluate whether the fair value of an investment property under development can be determined reliably, management considers the following factors, among others:

• the stage of completion

• whether the project/property is standard (typical for the market) or non-standard

• the level of reliability of cash inflows after completion

• the development risk specific to the property

• past experience with similar developments

• status of development/construction permits

• the provisions of the construction contract.

The Responsible Entity of the Trust reviews the fair value of each investment property every six months, or earlier where the Responsible Entity believes there may be a material change in the carrying value of the property and where the carrying value differs materially from the Responsible Entity’s assessment of fair value, an adjustment to the carrying value is recorded as appropriate. Independent valuations on all investment properties are carried out at least every three years on a rolling basis to ensure that the carrying amount of each investment property does not differ materially from its fair value.

Subsequent expenditure is charged to the investment property only when it is probable that future economic benefits of the expenditure will flow to GPT and the cost can be measured reliably.

Investment property for sale is classified as non-current assets held for sale in accordance with AASB 5 Non-current Assets Held for Sale and Discontinued Operations.

Some property investments are held in joint ownership arrangements (joint venture operations). The proportionate interests in the assets, liabilities, revenues and expenses of a joint venture operation have been incorporated in the financial report under the appropriate headings (refer to note 1(d)(iii)).

46 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

1. Summary of significant accounting policies (continued)

(q) Property, plant and equipment

Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to its acquisition. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to GPT and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the Statement of Comprehensive Income during the financial period in which they are incurred.

Depreciation and amortisation

Land is not depreciated. Depreciation on other assets is calculated using the straight line method to allocate their cost or revalued amounts, net of their residual values, over their expected useful lives, as follows:

• Motor Vehicles 4 – 7 years

• Office fixtures, fittings and operating equipment 5 – 15 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These are included in the Statement of Comprehensive Income. When revalued assets are sold, any amount in the asset revaluation reserve in respect of those assets is transferred to retained earnings.

(r) Leases

Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and benefits incidental to ownership. Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Net rental payments, excluding contingent payments, are recognised as an expense in the Statement of Comprehensive Income on a straight line basis over the period of the lease.

(s) Lease incentives

Incentives such as cash, rent free periods, lessee or lessor owned fit outs may be provided to lessees to enter into an operating lease. These incentives are capitalised and amortised on a straight line basis over the term of the lease as a reduction of rental revenue. The carrying amount of the lease incentives is reflected in the fair value of investment properties.

(t) Intangible assets

(i) Management rights

The management rights include asset and property development management rights of retail shopping centres. The useful life of the rights ranges between 5 years to the expected period of economic benefit. The rights are amortised over the useful life.

(ii) IT development and software

Costs incurred in developing systems and costs incurred in acquiring software and licenses that will contribute to future period financial benefits through revenue generation and/or cost reduction are capitalised to software and systems. Costs capitalised include external direct costs of materials and service and direct payroll and payroll related costs of employees’ time spent on the project. Amortisation is calculated on a straight-line basis over the period, which is the length of time over which the benefits are expected to be received, generally ranging from 3 to 10 years.

(u) Other investments

Unlisted investments are stated at the fair value of GPT’s interest in the underlying assets which approximate fair value.

(v) Impairment

All other assets, including financial assets, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Where an indicator of impairment or objective evidence exists, an estimate of the asset’s recoverable amount is made. An impairment loss is recognised in the Statement of Comprehensive Income for the amount by which the asset’s carrying amount exceeds its recoverable amount.

Recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows that are largely independent of the cash inflows from other assets.

GPT Annual Financial Report 2011 47

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

1. Summary of significant accounting policies (continued)

(w) Financial assets and liabilities

Classification of financial assets and liabilities depends on the purpose for which the assets and liabilities were acquired. GPT’s classification is set out below:

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Financial asset/liability Classification Valuation basis
Cash Fair value through profit and loss Fair value Refer to note 1(l)
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Financial asset/liability	Classification	Valuation basis
Cash	Fair value throughprofit and loss	Fair value	Refer to note 1(l)
Receivables	Loans and receivables	Amortised cost	Refer to note 1(m)
Derivative assets	Fair value throughprofit and loss	Fair value	Refer to note 1(x)
Payables	Financial liabilityat amortised cost	Amortised cost	Refer to note 1(y)
Borrowings	Financial liabilityat amortised cost	Amortised cost	Refer to note 1(aa)
Derivative liabilities	Fair value throughprofit and loss	Fair value	Refer to note 1(x)

(x) Derivatives

GPT uses derivative financial instruments to manage its exposure to fluctuations in interest rates, foreign currency rates and the volatility of financial outcomes that arise as part of normal business operations. GPT’s treasury and risk management policy sets out the policies, limits, monitoring and reporting requirements on the use of financial instruments, including derivatives, to hedge the exposures and these are discussed in detail at note 26.

Derivatives (including those embedded in other contractual arrangements) are initially recognised at fair value on the date the derivative contract is entered into and are subsequently remeasured to their fair value.

GPT is exposed to changes in interest rates and foreign exchange rates and uses interest rate swaps, forward interest rate swaps, options, and forward foreign exchange contracts to hedge these risks. Such derivative financial instruments are carried in the Statement of Financial Position at fair value and classified according to their contractual maturity. Changes in the fair value of any derivative instruments are recognised immediately in the Statement of Comprehensive Income. All derivatives are disclosed as assets when fair value is positive and disclosed as liabilities when fair value is negative.

Gains and losses on maturity or close-out of derivatives are recognised in the Statement of Comprehensive Income.

(y) Payables

Trade payables are unsecured liabilities for goods and services provided to GPT prior to the end of the financial year but which remain unpaid at reporting date. They are recognised at amortised cost, which in the case of GPT is the fair value of consideration to be paid in the future for the goods and services received.

Loans payable

Loans payable to related parties are recognised at amortised cost using the effective interest rate method. Under this method, fees, costs, discounts and premiums directly related to the loans are recognised in the Statement of Comprehensive Income over the expected life of the borrowings. Interest payable is recognised on an accruals basis. All loans payable with maturities greater than 12 months after reporting date are classified as non-current liabilities.

(z) Provisions

Provisions are recognised when GPT has a present legal, equitable or constructive obligation as a result of past transactions or events, it is more likely than not that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are not recognised for future operating losses. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. Refer to note 1(ad) for provisions for distributions.

(aa) Borrowings

Borrowings are recognised at amortised cost using the effective interest rate method or at their fair value at the time of acquisition in the case of assumed liabilities in a business combination. Under the effective interest rate method, any transaction fees, costs, discounts and premiums directly related to the borrowings are recognised in the Statement of Comprehensive Income over the expected life of the borrowings. All loans and receivables with maturities greater than twelve months after reporting date are classified as non-current liabilities. Refer to note 1(j) on finance costs.

48 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

1. Summary of significant accounting policies (continued)

(ab) Employee benefits

(i) Wages, salaries, annual leave and long service leave

Liabilities for wages and salaries (including non-monetary benefits) and annual leave are recognised in the provisions for employee benefits and measured at the amounts to be expected to be paid when the liabilities are settled. Liabilities for non-accumulated sick leave are recognised when leave is taken and measured at the rates paid or payable.

The employee benefit liability expected to be settled within 12 months from balance date is recognised in current liabilities. The non-current provision relates to entitlements, including long service leave, which are expected to be payable after twelve months from balance date and are measured as the present value of expected future payments to be made in respect of services provided by employees up to balance date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at balance date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Employee benefit on-costs are recognised and included in employee benefit liabilities and costs when the employee benefits to which they relate are recognised as liabilities.

(ii) Retirement benefit obligations

All employees of GPT are entitled to benefits on retirement, disability or death from the GPT Group Superannuation Plan. The GPT Group Superannuation Plan has a defined contribution section within its plan. The defined contribution section receives fixed contributions and GPT’s legal and constructive obligation is limited to these contributions. The employees of GPT are all members of the defined contribution section of the GPT Group Superannuation Plan.

Contributions to the defined contribution fund are recognised as an expense as they become payable. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

(iii) Profit sharing and bonus plans

GPT recognises a liability and expense for profit sharing and bonuses based on a formula that takes into consideration the profit attributable to GPT’s securityholders after certain adjustments. A provision is recognised where contractually obliged or where there is a past practice that has created a constructive obligation.

(iv) Share based payments

Security based compensation benefits are provided to employees via the schemes comprising the Employee Incentive Scheme (EIS). Refer to note 21 for further detail on EIS.

Legacy LTI Scheme

A full recourse loan based scheme which has been converted to limited recourse effective 31 December 2008 (the date of conversion). While the loan remained in place, the participant was committed only to the value of the underlying securities. The interest charge on the loans to participants was set at a level to approximate the net distributions receivable. This scheme has been wound up on 20 February 2011 at the conclusion of the final 3-year performance period.

GPT Group Stapled Security Rights Plan

Performance rights (rights) are issued to employees under the Stapled Security Rights Plan (‘the Plan’). Under the Plan, each participating employee will be granted a certain number of rights which will vest into GPT stapled securities at no cost, if all vesting conditions are satisfied.

The fair value of the rights is recognised as an employee benefit expense with a corresponding increase in the employee incentive scheme reserve in equity. Fair value is measured at grant date, recognised over the period during which the employees become unconditionally entitled to the rights and is adjusted to reflect market vesting conditions. Non-market vesting conditions are included in assumptions about the number of rights that are expected to become vested. At each reporting date, GPT revises its estimate of the number of performance rights that are expected to be exercisable and the employee benefit expense recognised each reporting period takes into account the most recent estimate. The impact of the revision to original estimates, if any, is recognised in the Statement of Comprehensive Income with a corresponding adjustment to equity.

Fair value is independently determined using Monte Carlo and Binomial tree pricing models. These models take into account the expected life of the rights, the security price at grant date, expected price volatility of the underlying security, expected distribution yield and the risk free interest rate for the term of the rights.

(ac) Contributed equity

Ordinary units and shares are classified as equity and recognised at the fair value of the consideration received by GPT. Any transaction costs arising on the issue and buy back of ordinary securities are recognised directly in equity as a reduction, net of tax, of the proceeds received.

GPT Annual Financial Report 2011 49

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

1. Summary of significant accounting policies (continued)

(ad) Distributions and dividends

Distributions and dividends are paid to GPT stapled securityholders each quarter. A provision for distribution or dividend is made for the amount of any distribution or dividend declared on or before the end of the financial year but not distributed at reporting date.

(ae) Earnings per stapled security (EPS)

Basic earnings per stapled security is calculated as net profit attributable to ordinary securityholders of GPT divided by the weighted average number of ordinary securities outstanding during the financial year, adjusted for bonus elements in ordinary securities issued during the financial year. Diluted earnings per security is calculated as net profit attributable to ordinary securityholders of GPT divided by the weighted average number of ordinary securities and dilutive potential ordinary securities, adjusted for any bonus issue. Where there is no difference between basic earnings per stapled security and diluted earnings per stapled security, the term basic and diluted earnings per stapled security is used.

(af) Critical accounting estimates and judgements

The preparation of the financial reports requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial reports. Management bases its judgements and estimates on historical experience and other various factors it believes to be reasonable under the circumstances, but which are inherently uncertain and unpredictable, the results of which form the basis of the carrying values of assets and liabilities. The resulting accounting estimates may differ from the actual results under different assumptions and conditions.

The key estimates and assumptions that have a significant risk of causing a material adjustment within the next financial year to the carrying amounts of assets and liabilities recognised in these financial reports are:

(i) Valuation of property investments

Critical judgements are made by GPT in respect of the fair values of investments in associates and joint ventures, investment properties including investment properties under development and those that are classified as assets held for sale at 31 December 2011. The fair value of these investments are reviewed regularly by management with reference to external independent property valuations, recent offers and market conditions existing at reporting date, using generally accepted market practices. The critical assumptions underlying management’s estimates of fair values are those relating to the receipt of contractual rents, expected future market rentals, maintenance requirements, discount rates that reflect current market uncertainties and current and recent property investment prices. If there is any change in these assumptions or regional, national or international economic conditions, the fair value of property investments may differ. Major assumptions used in valuation of property investments are disclosed in note 9(f).

(ii) Valuation of financial instruments

The fair value of derivative assets and liabilities are based on assumptions of future events and involve significant estimates. The basis of valuation for GPT’s derivatives are set out in note 1(x) however the fair values of derivatives reported at the end of the year may differ if there is volatility in market rates, indexes, equity prices or foreign exchange rates in future periods. The valuation techniques are discussed in detail at note 26(h) and have been developed in compliance with requirements of AASB 139 Financial Instruments: Recognition and Measurement.

(iii) Impairment of loans and receivables

Assets are assessed for impairment each reporting date by evaluating whether any impairment triggers exist. Where impairment triggers exist, management review the allocation of cash flows to those assets and estimate a fair value for the assets. Critical judgements are made by GPT in setting appropriate impairment triggers for its assets and the assumptions used when determining fair values for assets where triggers exist.

(iv) Share based payment transactions

The Group measures the cost of equity settled securities allocated to employees by reference to the fair value of the equity instruments at the date at which they are granted. For the GPT Group Stapled Security Rights Plan, the fair value of the performance share rights is determined using Monte-Carlo simulation and Binomial tree pricing models. The related assumptions are detailed in note 21. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next reporting period, but may impact, the share based payment expense and equity.

(ag) Rounding of amounts

The GPT Group is of a kind referred to in the Australian Securities & Investments Commission Class Order 98/0100. Accordingly, amounts in the financial report have been rounded to the nearest tenth of a million dollars in accordance with the Class Order, unless stated otherwise.

(ah) Other Comprehensive Income

Other comprehensive income in the Statement of Comprehensive Income reflects the remeasurements of certain assets or balances as a result of movements in price or valuation. In the case of GPT, these items will mainly include foreign exchange translation adjustments on foreign subsidiaries. Where the underlying item giving rise to the foreign currency translation adjustments is sold or realised, the foreign currency translation adjustments recognised in other comprehensive income are then recognised in earnings (or comprehensive income) in the Statement of Comprehensive Income.

50 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

2. Segment reporting

(a) Financial performance by segment

The segment information provided to the CEO for the reportable segments (discussed at note 2(e)) for the year ended 31 December 2011 is set out below.

31 December 2011

31 December 2011
	Core operations Retail Office Industrial Funds Management Australia Al Other Segments Total Core Operations $M $M $M $M $M $M	Non-Core operations Discontinued Operation - US Seniors Housing Discontinued Operation - Joint Venture Discontinued Operation - Funds Management Europe Discontinued Operation - Hotels & Tourism Total $M $M $M $M $M
Revenue Rent from investment properties Revenue from hotel operations Property and fund management fees Development project revenue Total segment revenue Other income Share of after tax profits of equity accounted investments Interest revenue - associates and other investments Total other income Total segment revenue and other income Less: Property expenses and outgoings Expenses from hotel operations Segment result before management and other administration costs, depreciation & amortisation expense, finance costs, and income tax expense Management and other administration costs Depreciation and amortisation expense Income tax (expense) / credit Finance costs Segment result for the year Fair value adjustments to investment properties Fair value and other adjustments to equity accounted investments Revaluation of Hotel Properties Depreciation and amortisation expense - management rights and hotels & tourism Impairment expense - loans and receivables Fair value movement of derivatives Net foreign exchange gain / (loss) Net gain / (loss) on disposal of assets Non-cash IFRS revenue adjustments Tax impact on reconciling items from Segment result to Net profit / (loss) for the year Others Net profit / (loss) for the year*	422.2 108.6 69.2 - - 600.0 - - - - - - 10.8 - - 23.9 - 34.7 6.8 2.2 - - - 9.0	- - - - 600.0 - - - 40.8 40.8 - - - - 34.7 - - - - 9.0
	439.8 110.8 69.2 23.9 - 643.7 9.0 46.0 - 76.4 - 131.4 - - - - - -	- - - 40.8 684.5 5.3 - 2.6 - 139.3 1.3 - 0.6 11.6 13.5
	9.0 46.0 - 76.4 - 131.4	6.6 - 3.2 11.6 152.8
	448.8 156.8 69.2 100.3 - 775.1	6.6 - 3.2 52.4 837.3
	(118.5) (26.9) (11.5) - - (156.9) - - - - - -	- - - - (156.9) - - - (34.0) (34.0)
	330.3 129.9 57.7 100.3 - 618.2	6.6 - 3.2 18.4 646.4
	(21.7) (13.8) (1.2) (11.6) (37.2) (85.5) - - - - (2.2) (2.2) 1.5 2.6 0.1 (4.5) 8.6 8.3 - - - - (131.9) (131.9)	0.7 - (0.5) - (85.3) - - - - (2.2) 1.3 - (0.4) 2.6 11.8 - - - - (131.9)
	310.1 118.7 56.6 84.2 (162.7) 406.9	8.6 - 2.3 21.0 438.8
	64.7 (0.6) (1.0) - - 63.1 1.9 (0.6) - 25.4 - 26.7 - - - - - - (1.1) - - - (4.0) (5.1) - - - - (5.6) (5.6) - - - - (147.0) (147.0) - - - - 2.5 2.5 2.5 - - - (0.2) 2.3 (15.1) (9.3) (1.8) - - (26.2) (1.2) - - - (0.3) (1.5) (2.1) - (2.2) - (2.6) (6.9)	- - - - 63.1 (3.3) - (14.3) 0.3 9.4 - - - (22.9) (22.9) - - - (2.1) (7.2) - - - - (5.6) - - - - (147.0) (5.7) - (0.1) - (3.3) (51.6) - (0.2) 0.4 (49.1) - - - - (26.2) 5.0 - - (0.3) 3.2 - - - (0.1) (7.0)
	359.7 108.2 51.6 109.6 (319.9) 309.2	(47.0) - (12.3) (3.7) 246.2

• The segment result is based on Realised Operating Income (ROI). ROI is a financial measure that is based on the profit under Australian Accounting Standards adjusted for certain unrealised items, non-cash items, gains or losses on investments or other items the Directors determine to be non-recurring or capital in nature. ROI is not prescribed by any Australian Accounting Standards. The adjustments that reconcile the Segment Result to the net profit / (loss) for the year may change from time to time, depending on changes in accounting standards and/or the Directors’ assessment of items that are non-recurring or capital in nature. A description of the material adjustments are included in note 2(b) and (c).

GPT Annual Financial Report 2011 51

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

2. Segment reporting (continued)

(a) Financial performance by segment (continued)

The segment information provided to the CEO for the reportable segments (discussed at note 2(e)) for the year ended 31 December 2010 is set out below.

31 December 2010

31 December 2010
	Core operations Retail Office Industrial Funds Management Australia Al Other Segments Total Core Operations $M $M $M $M $M $M	Non-Core operations Discontinued Operation - US Seniors Housing Discontinued Operation - Joint Venture Discontinued Operation - Funds Management Europe Discontinued Operation - Hotels & Tourism Total $M $M $M $M $M
Revenue Rent from investment properties Revenue from hotel operations Property and fund management fees Development project revenue Total segment revenue Other income Share of after tax profits of equity accounted investments Dividend from investment Interest revenue - associates and other investments Total other income Total segment revenue and other income Less: Property expenses and outgoings Expenses from hotel operations Segment result before management and other administration costs, depreciation & amortisation expense, finance costs, and income tax expense Management and other administration costs Depreciation and amortisation expense Income tax (expense) / credit Finance costs Segment result for the year Fair value adjustments to investment properties Fair value and other adjustments to equity accounted investments Revaluation of Hotel Properties Depreciation and amortisation expense - management rights and hotels & tourism Reversal of prior year impairment Impairment expense - loans and receivables Impairment expense - other Fair value movement of derivatives Net foreign exchange gain / (loss) Net gain / (loss) on disposal of assets Cost to sell for assets and liabilities held for sale Non-cash IFRS revenue adjustments Tax impact on reconciling items from Segment result to Net profit for the year Others Net profit / (loss) for the year*	372.3 101.2 66.2 - - 539.7 - - - - - - 15.8 0.1 - 22.7 - 38.6 6.1 2.8 - - - 8.9	- - - - 539.7 - - - 109.1 109.1 - - - - 38.6 - - - - 8.9
	394.2 104.1 66.2 22.7 - 587.2 8.9 43.9 - 86.8 - 139.6 - - - - - - - - - - - -	- - - 109.1 696.3 21.8 - 4.5 - 165.9 - - - 0.3 0.3 6.4 - 1.0 - 7.4
	8.9 43.9 - 86.8 - 139.6	28.2 - 5.5 0.3 173.6
	403.1 148.0 66.2 109.5 - 726.8	28.2 - 5.5 109.4 869.9
	(112.4) (25.5) (10.7) - - (148.6) - - - - - -	- - - - (148.6) - - - (85.3) (85.3)
	290.7 122.5 55.5 109.5 - 578.2	28.2 - 5.5 24.1 636.0
	(23.0) (8.7) (1.2) (11.5) (32.0) (76.4) - - - - (2.4) (2.4) (0.4) 1.0 0.1 (3.7) 5.7 2.7 - - - - (149.8) (149.8)	(3.2) - (1.1) - (80.7) - - - - (2.4) (1.3) - - 5.2 6.6 - - - 0.3 (149.5)
	267.3 114.8 54.4 94.3 (178.5) 352.3	23.7 - 4.4 29.6 410.0
	75.8 (11.8) (1.7) - - 62.3 (0.1) 19.1 - 26.7 - 45.7 - - - - - - (4.2) - - - (0.7) (4.9) - - - - - - - - - - (0.9) (0.9) - - - (1.0) (2.6) (3.6) - - - - (6.4) (6.4) - - - - 14.8 14.8 0.2 - (0.6) 0.3 (1.3) (1.4) - - - - - - (13.1) (3.4) (2.4) - - (18.9) 0.6 - - - (5.9) (5.3) - - - - (3.2) (3.2)	- - - - 62.3 245.9 - (14.2) - 277.4 - - - 5.4 5.4 - - - (5.9) (10.8) - 4.8 4.7 - 9.5 - - - - (0.9) - - - (3.9) (7.5) - - - - (6.4) - - (3.2) - 11.6 - 33.1 4.6 (1.9) 34.4 (20.1) - - (2.2) (22.3) - - - - (18.9) (27.5) (0.8) - 0.4 (33.2) - - (0.1) - (3.3)
	326.5 118.7 49.7 120.3 (184.7) 430.5	222.0 37.1 (3.8) 21.5 707.3

• The segment result is based on Realised Operating Income (ROI).

ROI is a financial measure that is based on the profit under Australian Accounting Standards adjusted for certain unrealised items, non-cash items, gains or losses on investments or other items the Directors determine to be non-recurring or capital in nature. ROI is not prescribed by any Australian Accounting Standards. The adjustments that reconcile the Segment Result to the net profit / (loss) for the year may change from time to time, depending on changes in accounting standards and/or the Directors’ assessment of items that are non-recurring or capital in nature. A description of the material adjustments are included in note 2(b) and (c).

52 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

2. Segment reporting (continued)

(b) Reconciliation of segment revenue and result to the Statement of Comprehensive Income – Continuing Operations

31 December 2011

Operations 31 December 2011
Note	Core operations All other segments Total continuing operations ROI adjustments Total Statement of Comprehensive Income $M $M $M $M $M
Revenue Rent from investment properties Property and fund management fees Development project revenue Total segment revenue Less: Non-cash IFRS adjustments 2(c)(i) Other income Share of after tax profits of investments in associates and joint ventures (excluding fair value adjustments) Fair value adjustments to investments in associates and joint ventures 2(c)(ii) Interest revenue - cash and short term money market securities 2(c)(vi) Fair value adjustments to investment properties 2(c)(iii) Net foreign exchange gain Total other income Total segment revenue and other income Less: Property expenses and outgoings Segment result before management and other administration costs, depreciation & amortisation expense, finance costs and income tax expense Management and other administration costs Other expenses Depreciation and amortisation expense (excluding intangibles) Amortisation expense - intangibles 2(c)(v) Finance costs Less: Interest revenue included in finance costs 2(c)(vi) Net loss on fair value of derivatives 2(c)(iv) Net loss on disposal of assets 2(c)(viii) Impairment expense 2(c)(vii) Income tax (expense) / credit Add: Tax impact of reconciling items from Segment result to Net profit for the year Segment result for the year Net profit / (loss) for the year from continuing operations	600.0 - 600.0 - 600.0 34.7 - 34.7 - 34.7 9.0 - 9.0 - 9.0
	643.7 - 643.7 - 643.7 - - - (26.2) (26.2)
	643.7 - 643.7 (26.2) 617.5 131.4 - 131.4 - 131.4 - - - 26.7 26.7 - - - 2.0 2.0 - - - 63.1 63.1 - - - 2.5 2.5
	131.4 - 131.4 94.3 225.7
	775.1 - 775.1 68.1 843.2
	(156.9) - (156.9) - (156.9)
	618.2 - 618.2 68.1 686.3
	(48.3) (37.2) (85.5) - (85.5) - - - (6.9) (6.9) - (2.2) (2.2) - (2.2) - - - (5.1) (5.1) - (131.9) (131.9) - (131.9) - - - (2.0) (2.0) - - - (147.0) (147.0) - - - 2.3 2.3 - - - (5.6) (5.6) (0.3) 8.6 8.3 - 8.3 - - - (1.5) (1.5)
	569.6 (162.7) 406.9
	(97.7) 309.2

GPT Annual Financial Report 2011

53

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

2. Segment reporting (continued)

(b) Reconciliation of segment revenue and result to the Statement of Comprehensive Income – Continuing Operations (continued)

31 December 2010

Operations (continued) 31 December 2010
Note	Core operations All other segments Total continuing operations ROI adjustments Total Statement of Comprehensive Income $M $M $M $M $M
Revenue Rent from investment properties Property and fund management fees Development project revenue Total segment revenue Less: Non-cash IFRS adjustments 2(c)(i) Other income Share of after tax profits of investments in associates and joint ventures (excluding fair value adjustments) Fair value adjustments to investments in associates and joint ventures 2(c)(ii) Interest revenue - cash and short term money market securities 2(c)(vi) Fair value adjustments to investment properties 2(c)(iii) Net foreign exchange gain Total other income Total segment revenue and other income Less: Property expenses and outgoings Segment result before management and other administration costs, depreciation & amortisation expense, finance costs and income tax expense Management and other administration costs Other expenses Depreciation and amortisation expense (excluding intangibles) Amortisation expense - intangibles 2(c)(v) Finance costs Less: Interest revenue included in finance costs 2(c)(vi) Net loss on fair value of derivatives 2(c)(iv) Net loss on disposal of assets 2(c)(viii) Impairment expense - loans and receivables 2(c)(vii) Impairment expense - other 2(c)(vii) Income tax (expense) / credit Add: Tax impact of reconciling items from Segment result to Net profit for year Segment result for the year Net profit for the year from continuing operations	539.7 - 539.7 - 539.7 38.6 - 38.6 - 38.6 8.9 - 8.9 - 8.9
	587.2 - 587.2 - 587.2 - - - (18.9) (18.9)
	587.2 - 587.2 (18.9) 568.3 139.6 - 139.6 - 139.6 - - - 45.7 45.7 - - - 1.8 1.8 - - - 62.3 62.3 - - - 14.8 14.8
	139.6 - 139.6 124.6 264.2
	726.8 - 726.8 105.7 832.5
	(148.6) - (148.6) - (148.6)
	578.2 - 578.2 105.7 683.9
	(44.4) (32.0) (76.4) - (76.4) - - - (3.2) (3.2) - (2.4) (2.4) - (2.4) - - - (4.9) (4.9) - (149.8) (149.8) - (149.8) - - - (1.8) (1.8) - - - (6.4) (6.4) - - - (1.4) (1.4) - - - (0.9) (0.9) - - - (3.6) (3.6) (3.0) 5.7 2.7 - 2.7 - - - (5.3) (5.3)
	530.8 (178.5) 352.3
	78.2 430.5

54 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

2. Segment reporting (continued)

(c) Description of adjustments from Segment Result (‘ROI’) to Net profit for the year

The CEO assesses the performance of the operating segments on a ROI basis. The material adjustments to the Segment Result to arrive at the net profit / (loss) shown in the financial reports are set out below:

• (i) Non-cash IFRS adjustments primarily comprise amounts for straightlining rental revenue and amortising lease incentives. These are required for Australian Accounting Standards purposes but are non-cash amounts, therefore have been excluded from ROI to better reflect revenue on a cash basis in ROI.

• (ii) Fair value and other adjustments to equity accounted investments comprise the movements in the value of the underlying assets of GPT’s investments in joint ventures and associates as required by Australian Accounting Standards. These do not reflect the cash distributions received from these investments. As such, GPT has excluded these amounts from ROI to better reflect a cash basis in ROI.

• (iii) Fair value adjustments to investment properties comprise movements in fair value of investment properties required by Australian Accounting Standards for valuation purposes and are non-cash. Therefore, GPT has excluded this amount from ROI to better reflect a cash basis in ROI.

• (iv) Fair value movement of derivatives comprise mark-to-market movements required by Australian Accounting Standards for valuation purposes and are non-cash. Therefore, GPT has excluded this amount from ROI to better reflect a cash basis in ROI.

• (v) Amortisation expense is required for Australian Accounting Standards and is a non-cash transaction. Therefore, GPT has excluded this amount from ROI to better reflect a cash basis in ROI.

• (vi) Finance costs are presented net of interest revenue from cash at bank and short term money markets in the Segment Result. This adjustment is required to reconcile to the Statement of Comprehensive Income.

• (vii) Impairment expense is required for Australian Accounting Standard and is a non-cash transaction. Therefore, GPT has excluded this amount from ROI to better reflect a cash basis in ROI.

• (viii) Net profit / (loss) on disposal is capital in nature therefore GPT has excluded this amount from ROI.

The accounting policies used by the Group in reporting segments internally are the same as those in note 1 to the financial report and in the prior years.

Revenues are derived from a large number of tenants and no single tenant or group under common control contributes more than 10% of the Group’s revenues.

GPT Annual Financial Report 2011 55

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

2. Segment reporting (continued)

(d) Reconciliation of segment assets and liabilities to the Statement of Financial Position

The amounts provided to the CEO in respect of total assets and total liabilities are:

• measured in a manner consistent with that of the financial report; and

• allocated based on the operations of the segment and physical location of the assets.

Given some of the assets and liabilities relate mainly to Corporate activities and have not been allocated to a reportable segment, a reconciliation of the reportable segments’ assets and liabilities to total assets and liabilities for the years ended 31 December 2010 and 31 December 2011 is set out below:

	Core operations Retail Office Industrial Funds Management Australia Al Other Segments Total Core Operations $M $M $M $M $M $M	Non-Core operations Discontinued Operation - US Seniors Housing Discontinued Operation - Joint Venture Discontinued Operation - Funds Management Europe Discontinued Operation - Hotels / Tourism Total $M $M $M $M $M
31 December 2011 Current Assets Current assets Total Current Assets Non-Current Assets Investment properties Equity accounted investments Property, plant and equipment Loans and receivables Intangible assets Other non-current assets Total Non-Current Assets Total Assets Other current and non-current liabilities Total Liabilities Net Assets 31 December 2010 Current Assets Current assets Total Current Assets Non-Current Assets Investment properties Equity accounted investments Property, plant and equipment Loans and receivables Intangible assets Other non-current assets Total Non-Current Assets Total Assets Other current and non-current liabilities Total Liabilities Net Assets	39.2 373.2 16.7 - 144.4 573.5	0.2 - 9.0 83.3 666.0
	39.2 373.2 16.7 - 144.4 573.5	0.2 - 9.0 83.3 666.0
	4,720.3 887.5 815.8 - - 6,423.6 147.9 677.4 - 1,021.7 12.6 1,859.6 - - - - 12.8 12.8 - - - - 10.3 10.3 11.0 - - - 40.3 51.3 - - - - 114.6 114.6	- - - - 6,423.6 - - - - 1,859.6 - - - - 12.8 - - - 140.6 150.9 - - - - 51.3 - - - - 114.6
	4,879.2 1,564.9 815.8 1,021.7 190.6 8,472.2	- - - 140.6 8,612.8
	4,918.4 1,938.1 832.5 1,021.7 335.0 9,045.7	0.2 - 9.0 223.9 9,278.8
	- - - - 2,489.8 2,489.8	0.5 - - 2.1 2,492.4
	- - - - 2,489.8 2,489.8	0.5 - - 2.1 2,492.4
	4,918.4 1,938.1 832.5 1,021.7 (2,154.8) 6,555.9	(0.3) - 9.0 221.8 6,786.4
	49.1 - - - 109.4 158.5	351.9 - 23.0 317.1 850.5
	49.1 - - - 109.4 158.5	351.9 - 23.0 317.1 850.5
	4,582.3 1,188.3 791.9 - - 6,562.5 145.6 675.3 - 1,291.5 12.6 2,125.0 - - - - 5.7 5.7 - - - - 13.2 13.2 12.1 - - - 39.7 51.8 - - - - 143.0 143.0	- - - - 6,562.5 - - - - 2,125.0 - - - - 5.7 - - - - 13.2 - - - - 51.8 - - - - 143.0
	4,740.0 1,863.6 791.9 1,291.5 214.2 8,901.2	- - - - 8,901.2
	4,789.1 1,863.6 791.9 1,291.5 323.6 9,059.7	351.9 - 23.0 317.1 9,751.7
	- - - - 2,761.5 2,761.5	27.5 - - 8.2 2,797.2
	- - - - 2,761.5 2,761.5	27.5 - - 8.2 2,797.2
	4,789.1 1,863.6 791.9 1,291.5 (2,437.9) 6,298.2	324.4 - 23.0 308.9 6,954.5

56 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

2. Segment reporting (continued)

(e) Identification of reportable segments

The Group’s operating segments as described in note 1(h) and which are based on internal reports reviewed by the Chief Executive Officer are:

==> picture [506 x 23] intentionally omitted <==

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

Segment Types of products and services which generate segment revenues
Retail Regional, sub-regional and community shopping centres, Homemaker City (bulky goods) centres,
----- End of picture text -----

Segment	Types ofproducts and services whichgenerate segment revenues
Retail	Regional, sub-regional and community shopping centres, Homemaker City (bulky goods) centres,
	retail re-developments and new retail developments as well as development and property management of retail assets.
Office	Office space with associated retail space and office developments.
Industrial	Traditional industrial and business park assets with capacity for organic growth through the development of vacant land as well as industrial re-developments.
Funds Management Australia	Asset and funds management of Australian wholesale fund vehicles, investments by the Group in GPT Wholesale ShoppingCentre Fund and GPT Wholesale Office Fund.
All Other Segments	Finance, principallyinterest costs,Groupoperatingcosts and foreign exchangegains and losses.
Discontinued Operation - US Seniors Housing	Investment in a portfolio of established seniors housing assets in the United States of America as well as an interest in the manager of these assets. GPT completed the sale of thisportfolio on 29 March 2011.
Discontinued Operation - Joint Venture	Investments in the Babcock & Brown Joint Venture in Europe, the United States of America, New Zealand and Australia. GPT has divested of the majority of its interest in the Joint Venture with all remaining interests written down to nil.
Discontinued Operation - Funds Management Europe	Equity investments in two small closed-end funds (a legacy of GPT’s ownership of GPT Halverton) managed by Internos Real Investors.
Discontinued Operation - Hotel / Tourism	Investments in nature-based resorts and hotel assets. GPT has divested all of its resorts after completing the sale of Ayers Rock Resort on 23 May2011.

(f) Share of after tax profits / (losses) from joint ventures and associates – Consolidated entity

The share of after tax profits / (losses) from those joint ventures and associates and the extent to which they have contributed to the overall net profit / (loss) of the Group in the financial year, split between continuing operations and discontinued operations, is set out below:

(1) Share of after tax profits / (losses) from joint ventures and associates – by reportable segment

	Core operations Retail Office Industrial Funds Management Australia Al Other Segments Total Core Operations $M $M $M $M $M $M	Non-Core operations Discontinued Operation - US Seniors Housing Discontinued Operation - Joint Venture Discontinued Operation - Funds Management Europe Discontinued Operation - Hotels / Tourism Total $M $M $M $M $M
31 December 2011 Revenue and other income Expenses Profit / (loss) before income tax expense Income tax expense / (credit) Share of accumulated losses not recognised Share of net profits / (losses) of joint venture and associate interests 31 December 2010 Revenue and other income Expenses Profit / (loss) before income tax expense Income tax expense / (credit) Share of accumulated losses not recognised Share of net profits / (losses) of joint venture and associate interests	14.2 58.2 - 153.1 13.8 239.3 (3.3) (12.8) - (51.3) (10.1) (77.5)	53.3 - 9.6 0.4 302.6 (51.3) (3.4) (21.3) (0.1) (153.6)
	10.9 45.4 - 101.8 3.7 161.8 - - - - - -	2.0 (3.4) (11.7) 0.3 149.0 - - - - -
	10.9 45.4 - 101.8 3.7 161.8 - - - - (3.7) (3.7)	2.0 (3.4) (11.7) 0.3 149.0 - 3.4 - - (0.3)
	10.9 45.4 - 101.8 - 158.1	2.0 - (11.7) 0.3 148.7
	12.1 74.4 - 164.0 12.6 263.1 (3.3) (11.4) - (50.5) (18.1) (83.3)	455.2 14.1 11.9 5.5 749.8 (192.0) (14.1) (21.5) (5.2) (316.1)
	8.8 63.0 - 113.5 (5.5) 179.8 - - - - (0.9) (0.9)	263.2 - (9.6) 0.3 433.7 - - - 0.3 (0.6)
	8.8 63.0 - 113.5 (4.6) 180.7 - - - - 4.6 4.6	263.2 - (9.6) - 434.3 4.4 - - - 9.0
	8.8 63.0 - 113.5 - 185.3	267.6 - (9.6) - 443.3

GPT Annual Financial Report 2011 57

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

2. Segment reporting (continued)

(f) Share of after tax profits / (losses) from joint ventures and associates – Consolidated entity (continued)

(2) Share of after tax profits / (losses) from joint ventures and associates – by geographic location

The analysis below sets out GPT’s share of after tax profit / (loss) from its associates and joint ventures by the geographic location they operate in:

	Australia Europe United States Total 31 Dec 11 31 Dec 10 31 Dec 11 31 Dec 10 31 Dec 11 31 Dec 10 31 Dec 11 31 Dec 10 $M $M $M $M $M $M $M $M
Revenue and other income Expenses Profit before income tax expense Income tax expense / (credit) Share of accumulated losses not recognised Share of net profits / (losses) of joint ventures and associate interests	239.7 268.6 9.6 11.9 53.3 469.3 302.6 749.8 (77.6) (88.5) (21.3) (21.5) (54.7) (206.1) (153.6) (316.1) 162.1 180.1 (11.7) (9.6) (1.4) 263.2 149.0 433.7 - (0.6) - - - - - (0.6) 162.1 180.7 (11.7) (9.6) (1.4) 263.2 149.0 434.3 (3.7) 4.6 - - 3.4 4.4 (0.3) 9.0 158.4 185.3 (11.7) (9.6) 2.0 267.6 148.7 443.3

(g) Share of joint venture and associates’ assets and liabilities – Consolidated entity

The underlying assets and liabilities of the joint ventures and associates shown in the Consolidated Statement of Financial Position, split between continuing operations and discontinued operations, is set out below:

(1) Share of joint venture and associates’ assets and liabilities – by reportable segment

	Core operations Retail Office Industrial Funds Management Australia Al Other Segments Total Core Operations $M $M $M $M $M $M	Non-Core operations Discontinued Operation - US Seniors Housing Discontinued Operation - Joint Venture Discontinued Operation - Funds Management Europe Discontinued Operation - Hotels / Tourism Total $M $M $M $M $M
31 December 2011 Cash and cash equivalents Property investments and loans Other assets Total Assets Other liabilities Borrowings - The GPT Group - External - Non-Current Total Liabilities Net Assets Negative Net Assets not recognised Net Assets after write back 31 December 2010 Cash and cash equivalents Property investments and loans Other assets Total Assets Other liabilities Borrowings - The GPT Group - External - Non-Current Total Liabilities Net Assets Negative Net Assets not recognised Net Assets after write back	2.4 6.9 - 4.5 1.5 15.3 148.5 685.7 - 1,201.1 49.6 2,084.9 0.3 0.5 - 6.2 9.1 16.1	5.9 - 2.6 - 23.8 - - 80.1 - 2,165.0 - - 2.9 - 19.0
	151.2 693.1 - 1,211.8 60.2 2,116.3 3.3 15.7 - 41.7 22.4 83.1 - - - - 32.9 32.9 - - - 148.4 - 148.4	5.9 - 85.6 - 2,207.8 5.7 8.2 13.2 - 110.2 - 32.3 - - 65.2 - - 72.4 - 220.8
	3.3 15.7 - 190.1 55.3 264.4	5.7 40.5 85.6 - 396.2
	147.9 677.4 - 1,021.7 4.9 1,851.9 - - - - 7.7 7.7	0.2 (40.5) - - 1,811.6 - 40.5 - - 48.2
	147.9 677.4 - 1,021.7 12.6 1,859.6	0.2 - - - 1,859.8
	1.4 0.1 - 43.8 5.3 50.6 146.0 681.5 - 1,472.9 39.5 2,339.9 0.4 2.7 - 6.8 12.5 22.4	19.7 - 2.2 1.6 74.1 836.9 - 97.8 - 3,274.6 24.3 - 1.8 3.7 52.2
	147.8 684.3 - 1,523.5 57.3 2,412.9 2.2 9.0 - 41.2 25.6 78.0 - - - - 30.3 30.3 - - - 190.8 - 190.8	880.9 - 101.8 5.3 3,400.9 41.0 4.9 12.2 0.5 136.6 60.0 32.3 - - 122.6 472.3 - 76.1 - 739.2
	2.2 9.0 - 232.0 55.9 299.1	573.3 37.2 88.3 0.5 998.4
	145.6 675.3 - 1,291.5 1.4 2,113.8 - - - - 11.2 11.2	307.6 (37.2) 13.5 4.8 2,402.5 4.4 37.2 - - 52.8
	145.6 675.3 - 1,291.5 12.6 2,125.0	312.0 - 13.5 4.8 2,455.3

58 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

2. Segment reporting (continued)

(g) Share of joint venture and associates’ assets and liabilities – Consolidated entity (continued)

(2) Share of joint ventures and associates’ assets and liabilities – by geographic location

The analysis below sets out, by geographic location, the underlying assets and liabilities of the associates and joint ventures shown in the Consolidated Statement of Financial Position. Key asset and liability categories have been individually presented for further detail.

	Australia Europe United States Total 31 Dec 11 $M 31 Dec 10 $M 31 Dec 11 $M 31 Dec 10 $M 31 Dec 11 $M 31 Dec 10 $M 31 Dec 11 $M 31 Dec 10 $M
Share of joint venture and associates’ assets and liabilities Cash and cash equivalents Property investments and loans Other assets Total Assets Other Liabilities Borrowings - The GPT Group - External - Non-Current Total Liabilities Net Assets Negative Net Assets not recognised Net Assets after write back	15.3 52.2 2.6 2.2 5.9 19.7 23.8 74.1 2,084.9 2,339.9 80.1 97.8 - 836.9 2,165.0 3,274.6 16.1 26.0 2.9 1.8 - 24.4 19.0 52.2
	2,116.3 2,418.1 85.6 101.8 5.9 881.0 2,207.8 3,400.9 83.1 78.4 13.2 12.2 13.9 46.0 110.2 136.6 32.9 30.3 - - 32.3 92.3 65.2 122.6 148.4 190.8 72.4 76.1 - 472.3 220.8 739.2
	264.4 299.5 85.6 88.3 46.2 610.6 396.2 998.4
	1,851.9 2,118.6 - 13.5 (40.3) 270.4 1,811.6 2,402.5 7.7 11.2 - - 40.5 41.6 48.2 52.8
	1,859.6 2,129.8 - 13.5 0.2 312.0 1,859.8 2,455.3

GPT Annual Financial Report 2011

59

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

3. Distributions paid and payable

	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
(a) Stapled Securityholders (i) Distributions paid Quarter ended December 2010: 4.6 cents per stapled security paid on 25 March 2011 (1.0 cent per stapled security paid on 26 March 2010 - pre 5 to 1 consolidation of stapled securities)2 Quarter ended March 2011: 4.2 cents per stapled security paid on 27 May 2011 (0.7 cent per stapled security paid on 28 May 2010 - pre 5 to 1 consolidation of stapled securities)(2) Quarter ended June 2011: 4.3 cents per stapled security paid on 23 September 2011 (4.1 cents per stapled security paid on 24 September 2010) Quarter ended September 2011: 4.4 cents per stapled security paid on 18 November 2011 (4.1 cents per stapled security paid on 26 November 2010) Total distributions paid (ii) Distributions proposed and not recognised as a liability1 Quarter ended December 2011: 4.9 cents per stapled security to be paid on 16 March 2012 (4.6 cents per stapled security paid on 25 March 2011) (b) Exchangeable securities Securityholders3 (i) Distributions paid Period from 28 November 2010 to 27 November 2011 10% per exchangeable security (ii) Distributions payable Period from 28 November 2011 to 31 December 2011 10% per exchangeable security	85.4 92.8 77.9 64.9 79.1 76.1 80.7 76.1
	323.1 309.9 88.7 85.4 25.0 25.0 2.5 2.5

1 The December quarter distribution of 4.9 cents per stapled security is expected to be paid on 16 March 2012. No provision for the distribution has been recognised in the Statement of Financial Position as at 31 December 2011 as the distribution had not been declared by that date. This distribution is based on the number of securities at 16 February 2012 and will be finalised on the record date of 29 February 2012, taking into account further on-market buy-back activity up until that date.

2 On 10 May 2010, the securityholders of GPT Group approved the consolidation of every 5 stapled securities into 1 stapled security. Refer to note 16(a) for further detail. 3 Refer to note 16(c) for further information on the Exchangeable Securities.

4. Expenses

Note	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
(a) Depreciation and amortisation expense Depreciation of hotel properties Depreciation of plant and equipment 11(a) Amortisation of intangibles 12(a) Less: Depreciation and amortisation - Discontinued operations Total depreciation and amortisation expense (b) Finance costs External entities Interest capitalised Total finance costs (c) Net loss on fair vale of derivatives Interest rate derivatives Foreign currency derivatives Total net loss on fair value of derivatives*	2.1 5.4 2.2 2.9 5.1 4.9 (2.1) (5.9)
	7.3 7.3
	147.2 180.9 (13.3) (29.3)
	133.9 151.6
	134.5 (3.0) 12.5 9.4
	147.0 6.4

*A capitalisation rate of 7.0% (2010: 7.5%) has been applied when capitalising interest on qualifying assets.

60 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

5. Tax

	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
(a) Income tax expense Current income tax expense / (credit) Deferred income tax (credit) / expense Income tax (credit) / expense in the Statement of Comprehensive Income Income tax (credit) / expense attributable to: Profit / (loss) from continuing operations (Loss) / profit from discontinued operations Aggregate income tax (credit) / expense Reconciliation of Income tax expense to prima facie tax payable: Net profit / (loss) before income tax expense Less: (profit) / loss attributed to entities not subject to tax Net loss before income tax expense Prima facie income tax credit at 30% tax rate (31 December 2010: 30%) Tax effect of amounts not deductible (taxable) in calculating income tax credit: Overhead costs Impairment expenses Withholding tax (credit) / expense Share of after tax (profits) / losses of investments in associates and joint ventures Foreign subsidiary losses not deductible for tax Adjustments in respect of current income tax of previous years Tax (credit) / expense arising on disposal of foreign assets Impairment of deferred tax assets Income tax (credit) / expense Deferred tax assets and liabilities are attributable to the following: (b) Deferred tax assets Employee benefits Overhead costs Provisions and accruals Tax losses recognised Other Net deferred tax assets Movement in temporary differences during the financial year Opening balance at beginning of the financial year (Charged) / credited to the income statement Tax losses recognised Closing balance at end of the financial year (c) Deferred tax liabilities Depreciation and amortisation Tax expenses arising on disposal of foreign assets Net deferred tax liabilities Movement in temporary differences during the financial year Opening balance at beginning of the financial year Charged to the income statement Closing balance at end of the financial year	7.4 2.0 (22.4) 24.6
	(15.0) 26.6
	(6.8) 2.6 (8.2) 24.0
	(15.0) 26.6 231.2 733.9 (293.1) (800.4)
	(61.9) (66.5)
	(18.6) (20.0) 4.1 10.0 1.7 - (0.7) 1.3 (0.8) 3.7 2.7 3.3 (7.1) - (5.0) 28.3 8.7 -
	(15.0) 26.6
	9.0 10.9 7.6 10.6 0.9 1.0 18.1 4.0 0.6 1.3
	36.2 27.8
	27.8 24.5 (5.7) 2.4 14.1 0.9
	36.2 27.8
	- 0.5 - 27.5
	- 28.0
	28.0 1.0 (28.0) 27.0
	- 28.0

GPT Annual Financial Report 2011

61

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

6. Non-current assets held for sale, discontinued operations and other disposals

(a) Details of discontinued operations

At 31 December 2011, there are four discontinued operations: Hotel / Tourism, Joint Venture, Funds Management – Europe and US Seniors Housing Portfolios.

As part of GPT’s commitment to the active ownership, management and development of high quality Australian real estate (Retail, Office and Industrial sectors), management has continued with its plans to exit from the Hotel / Tourism sector and offshore assets and further disposals have been completed in 2011. An update on the progress of these disposals post 31 December 2010 and the remaining investments for each discontinued operation as at 31 December 2011 is discussed in detail below.

(i) Hotel / Tourism

The sale contract was exchanged for the Ayers Rock Resort in October 2010 and settlement occurred on 23 May 2011 with a total consideration of $300 million and a gain on sale after tax of $0.4 million at 31 December 2011. The consideration for the sale will be received in the following instalments:

• $81 million payment received on settlement;

• $81 million payment to be received twelve months after settlement; and

• $138 million payment to be received five years after settlement.

GPT has been provided with security guaranteeing the deferred payments and will receive interest on the deferred payments at a rate of 6.5% per annum. GPT will share in 46% of the increase in capital value of Ayers Rock Resort over $300 million plus capital expenditure committed over the period with a minimum guaranteed payment to GPT of $17 million at the end of the five year period. GPT will accrue increments of the $17 million guaranteed payment over the five year period resulting in an additional 2% return per annum bringing the total return to 8.5% per annum. As part of the sale agreement, GPT will contribute $25 million towards capital expenditure.

As a result of this transaction, GPT has substantially completed its exit from the Hotel / Tourism portfolio.

(ii) Funds Management - Europe

Following regulatory consent of the legal sale of GPT Europe 2 Sarl’s 38.04% shareholding in DAF, an unconditional legal sale of the investment became effective from 6 July 2010. However, until the 38.04% shareholding in DAF is on-sold to a third party by the new owners or GPT, the risks and benefits of owning this investment still remain with GPT and do not qualify as a sale under Australian Accounting Standards. As a result, at 31 December 2011 GPT Europe 2 Sarl continues to recognise the 38.04% investment in DAF which carrying value is nil.

(iii) US Seniors Housing

On 29 March 2011, GPT completed the sale of its US Seniors Housing portfolio to Health Care REIT Inc for a total consideration of US$890 million. The accumulated reduction in the value of the portfolio because of the strengthening of the Australian dollar against the US dollar, totalling $47.6m, was taken to the Foreign Currency Translation Reserve (FCTR) while the Group owned the asset. As the holding entity, Benchmark GPT LLC, has now been liquidated, the negative currency movement, previously not recognised in the statutory profit, is now recognised in the Group’s statutory profit.

(b) Assets classified as held for sale

In addition to the residual assets and liabilities classified as held for sale in the Hotel / Tourism, Funds Management Europe and US Seniors Housing Portfolios, certain investment properties under the Retail, Office and Industrial segments are also included as assets classified as held for sale in the Statement of Financial Position as at 31 December 2011.

62 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

6. Non-current assets held for sale, discontinued operations and other disposals (continued)

(c) Details of assets and liabilities classified as held for sale

The table below sets out the assets and liabilities that continue to be owned by the Group at 31 December 2011 (discussed in (a) and (b) above). These assets and liabilities are presented as an aggregate amount on the lines ‘assets and liabilities held for sale’ in the Statement of Financial Position.

Statement of Financial Position.
Note	Consolidated entity
	Discontinued Operations Assets held for sale Total Total Hotels / Tourism Funds Management Europe US Seniors Housing 31 Dec 11 $M 31 Dec 11 $M 31 Dec 11 $M 31 Dec 11 $M 31 Dec 11 $M 31 Dec 10 $M
Assets classified as held for sale Cash and cash equavalents Loans and receivables (ii) Inventories Investment properties (i) Investments in associates and joint ventures (iii) Property, plant and equipment Other assets (iv) Total assets classified as held for sale 2(d) Liabilities classified as held for sale Trade payables and accruals Provision for employee benefits Total liabilities directly associated with assets classified as held for sale 2(d)	1.0 - - - 1.0 3.7 1.3 9.0 - - 10.3 81.0 - - - - - 3.8 - - - 429.1 429.1 49.1 - - 0.2 - 0.2 310.2 - - - - - 293.3 - - - - - -
	2.3 9.0 0.2 429.1 440.6 741.1
	2.1 - 0.5 - 2.6 6.1 - - - - - 2.1
	2.1 - 0.5 - 2.6 8.2

(i) This includes certain investment properties under Retail, Office and Industrial segments, mainly MLC Centre.

(ii) Loans and receivables mainly comprise of a loan receivable of $9.0 million from German Retail Fundco SARL.

(iii) Investments in associates and joint ventures comprise:

• the 38.04% investment in DAF held at nil carrying value. Refer to note 6(a)(ii) for further details;

• the 46% investment in Kings Canyon (Watarrka) Resort Trust held at nil carrying value as at 31 December 2011;

• the 50% investment in B&B GPT Alliance 1 LLC and B&B GPT Alliance 2 LLC with nil carrying value at 31 December 2011; and

• the 95% investment in B-VII Operations Holding Co LLC, which properties held by this entity had been sold on 29 March 2011 and it is in the process of being liquidated. This investment is held at $0.2 million as at 31 December 2011.

(iv) Other assets comprise 5.3% interest in GPT MaltaCo 1 with nil carrying value as at 31 December 2011.

GPT Annual Financial Report 2011

63

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

6. Non-current assets held for sale, discontinued operations and other disposals (continued)

(d) Details of financial performance and cash flow information relating to discontinued operations

The table below sets out the financial performance and cash flow information up to 31 December 2011 for the discontinued operations that continue to be owned by the Group at reporting date. For assets which have been divested during the year, the relevant financial performance and cash flow information up to the date of disposal have been included. These results are shown at note 2(a) within the Discontinued Operations segments.

Discontinued Operations segments.
Note	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
Revenue Share of after tax profit of investments in associates and joint ventures Expenses Income tax credit Segment result for discontinued operations Items excluded from Segment result Tax impact of reconciling items from Segment result to Net profit / (loss) for the year Net (loss) / profit after income tax of discontinued operations 2(a) Net cash inflow from operating activities Net cash inflow / (outflow) from investing activities Net increase in cash generated by discontinued operations	54.3 116.8 7.9 26.3 (33.8) (89.3) 3.5 3.9
	31.9 57.7 (99.6) 247.0 4.7 (27.9)
	(63.0) 276.8
	31.6 17.0 290.8 (3.9)
	322.4 13.1

(e) Details of Disposals

As part of GPT’s strategy to reduce its investment in the GPT managed wholesale funds to 20% over time, GPT also disposed of the following investments during the year:

following investments during the year:
	Date of Disposal		Ownership Interest	Total Consideration
	(settlement)	Principal Acitivty	Disposed	$M
Funds Management - Australia Portfolio
GPT Wholesale Office Fund	8 April to	Property	10.41%	267.8
	23 December 2011	investment
GPT Wholesale Shopping Centre Fund	8 April to	Property	1.89%	33.2
	2 May 2011	investment

64 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

6. Non-current assets held for sale, discontinued operations and other disposals (continued)

(f) Details of disposals including disposals in discontinued operations

The net profit / (loss) on sale of disposals in discontinued operations and in the general course of business during the year were:

	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
Details of disposals during the year: Cash consideration - net of transaction costs Deferred consideration Total consideration Carrying amount of net assets sold Foreign exchange loss realised on disposal (Loss) / profit on sale before income tax Income tax expense (Loss) / profit on sale after income tax The carrying amounts of assets and liabilities as at the date of disposal were: Cash and cash equivalents Loans and receivables Inventories Investment properties Equity accounted investments Property, plant and equipment Other assets Total Assets Trade payables and accruals Other liabilities Total Liabilities Net Assets	384.9 284.6 219.0 -
	603.9 284.6 (605.4) (289.8) (47.6) 39.6
	(49.1) 34.4
	- -
	(49.1) 34.4
	0.4 - 0.4 21.8 3.6 - 1.9 37.4 301.6 216.4 300.0 16.8 0.8 -
	608.7 292.4 1.4 - 1.9 2.6
	3.3 2.6
	605.4 289.8

GPT Annual Financial Report 2011

65

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

7. Loans and receivables

7. Loans and receivables
	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
Current assets Trade receivables Less: impairment of trade receivables Distributions receivable from associates Distributions receivable from joint ventures Interest receivable Deferred consideration receivables Other debtors Related party receivables1 Total current loans and receivables Non-Current assets Deferred consideration receivables Loan advanced to Lend Lease GPT (Rouse Hill) Pty Limited Total non-current loans and receivables 1 The related party receivables are on commercial terms and conditions with collection expected in 30 days. 8. Derivative financial instruments	7.9 7.1 (0.6) (0.3)
	7.3 6.8 18.6 23.3 12.6 7.2 0.5 0.2 81.0 - 12.1 10.4 10.6 14.1
	142.7 62.0
	140.6 - 10.3 13.2
	150.9 13.2
	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
Current assets Interest rate swaps Interest rate options Foreign exchange contracts Total current derivative assets Non-current assets Interest rate swaps Interest rate options Total non-current derivative assets Current liabilities Interest rate swaps Interest rate options Foreign exchange contracts Total current derivative liabilities Non-current liabilities Interest rate swaps Interest rate options Total non-current derivative liabilities	0.1 0.1 - 0.1 0.1 -
	0.2 0.2
	77.9 114.0 0.3 1.0
	78.2 115.0
	0.8 - - 0.4 0.2 -
	1.0 0.4
	26.8 50.3 100.7 45.7
	127.5 96.0

GPT does not speculatively trade in derivative financial instruments and the terms and conditions of the derivative financial instruments are similar to the terms and conditions of the underlying items being economically hedged.

Refer to note 26 for further details on GPT’s financial risk management of derivative financial instruments.

At 31 December 2011, GPT has hedges (fixed debt and swaps) in place to cover 70.6% of its total debt and the hedges have an average fixed rate of 4.38% (2010: 81.2% hedged, hedges had an average fixed rate of 5.13%).

66 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

9. Investment properties

9. Investment properties
Note	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
Retail 9(b) Office 9(c) Industrial 9(d) Properties under development 9(e) Total investment properties	4,720.3 4,582.3 740.2 1,088.3 693.0 693.0 270.1 198.9
	6,423.6 6,562.5

(a) Reconciliation

A reconciliation of the carrying amount of investment properties at the beginning and end of the financial year is as follows:

	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
Carrying amount at the beginning of the financial year Additions - operating capex Additions - interest capitalised Additions - development capex Asset acquisitions Transfers from / (to) non-current assets classified as held for sale Lease incentives Amortisation of lease incentives Disposals Fair value adjustments Leasing costs (net of amortisation) Carrying amount at the end of the financial year	6,562.5 6,023.6 39.9 16.5 13.3 29.3 124.1 261.9 - 12.9 (419.1) 172.9 29.3 40.3 (21.5) (22.9) (0.1) (37.6) 100.6 62.1 (5.4) 3.5
	6,423.6 6,562.5

(b) Retail

(b) Retail
Ownership Interest1 % Acquisition Date	Fair Value 31 Dec 11 $M Fair Value 31 Dec 10 $M Latest Independent Valuation Date Valuer
Casuarina Square, NT 100.0 Oct 1973 Charlestown Square, NSW 100.0 Dec 1977 Pacific Highway, Charlestown, NSW 100.0 Oct 2002 / Jul 2003 Dandenong Plaza, VIC 100.0 Dec 1993 / Dec 1999 Erina Fair, NSW2 33.3 Jun 1992 Highpoint Shopping Centre, VIC 16.7 Aug 2009 Homemaker City, Maribyrnong, VIC 16.7 Aug 2009 Westfield Penrith, NSW 50.0 Jun 1971 Sunshine Plaza, QLD 50.0 Dec 1992 / Sep 2004 Plaza Parade, QLD 50.0 Jun 1999 Westfield Woden, ACT 50.0 Feb 1986 Homemaker City, Aspley, QLD 100.0 Nov 2001 Homemaker City, Fortitude Valley, QLD 100.0 Dec 2001 Homemaker City, Jindalee, QLD 100.0 Nov 2001 Rouse Hill Town Centre 100.0 Dec 2005 Melbourne Central, VIC - retail portion3 100.0 May 1999 / May 2001 Total consolidated entity*	455.6 448.1 Jun 2010 Knight Frank Valuations 830.3 817.5 Dec 2010 Jones Lang LaSalle 9.9 9.9 Dec 2010 Jones Lang LaSalle 180.2 190.0 Jun 2011 CB Richard Ellis Pty Limited 252.2 251.8 Oct 2009 CB Richard Ellis Pty Limited 233.1 208.3 Sep 2011 CB Richard Ellis Pty Limited 9.1 9.2 Dec 2011 CB Richard Ellis Pty Limited 519.2 516.5 Dec 2010 CB Richard Ellis Pty Limited 326.1 312.0 Jun 2011 Knight Frank Valuations 9.3 10.0 Jun 2011 Knight Frank Valuations 321.5 320.0 Dec 2010 Knight Frank Valuations 47.7 46.5 Dec 2011 Colliers International 100.1 100.5 Dec 2011 Jones Lang LaSalle 50.0 48.4 Dec 2011 Colliers International 460.0 481.1 Dec 2009 CB Richard Ellis Pty Limited 916.0 812.5 Jun 2011 CB Richard Ellis Pty Limited 4,720.3 4,582.3

GPT Annual Financial Report 2011 67

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

9. Investment properties (continued)

(c) Office

(c) Office
Ownership Interest1 % Acquisition Date	Fair Value 31 Dec 11 $M Fair Value 31 Dec 10 $M Latest Independent Valuation Date Valuer
Australia Square, Sydney, NSW 50.0 Sep 1981 MLC Centre, Sydney, NSW4 50.0 Apr 1987 Melbourne Central, VIC - office portion3 100.0 May 1999 / May 2001 818 Bourke St, Victoria Harbour, VIC 100.0 Jun 2006 Total consolidated entity	278.8 272.8 Dec 2011 Savills Australia - 385.0 Jun 2011 Colliers International 334.0 304.9 Jun 2011 CB Richard Ellis Pty Limited 127.4 125.6 Mar 2011 Savills Australia 740.2 1,088.3

(d) Industrial

(d) Industrial
Ownership Interest1 % Acquisition Date	Fair Value 31 Dec 11 $M Fair Value 31 Dec 10 $M Latest Independent Valuation Date Valuer
2-4 Harvey Road, Kings Park, NSW 100.0 May 1999 Citi-West Industrial Estate, Altona North, VIC 100.0 Aug 1994 Quad 1, Sydney Olympic Park, NSW 100.0 Jun 2001 Quad 2, Sydney Olympic Park, NSW 100.0 Dec 2001 Quad 3, Sydney Olympic Park, NSW 100.0 Mar 2003 Quad 4, Sydney Olympic Park, NSW 100.0 Jun 2004 6 Herb Elliott, Sydney Olympic Park, NSW 100.0 Jun 2010 8 Herb Elliott, Sydney Olympic Park, NSW 100.0 Aug 2004 5 Figtree Drive, Sydney Olympic Park, NSW 100.0 Jul 2005 7 Figtree Drive, Sydney Olympic Park, NSW 100.0 Jul 2004 7 Parkview Drive, Sydney Olympic Park, NSW 100.0 May 2002 Rosehill Business Park, Camellia, NSW 100.0 May 1998 15 Berry Street, Granville, NSW 100.0 Nov 2000 19 Berry Street, Granville, NSW 100.0 Dec 2000 Erskine Park, NSW (Stage 1) 100.0 Jun 2008 Erskine Park, NSW (Stage 2) 100.0 Jun 2008 Austrak Business Park, Somerton, VIC 50.0 Oct 2003 134-140 Fairbairn Road, Sunshine West, VIC 100.0 Mar 2006 116 Holt Street, Pinkenba, QLD 100.0 Mar 2006 4 Holker Street, Silverwater, NSW 100.0 Mar 2006 372-374 Victoria Street, Wetherill Park, NSW 100.0 Jul 2006 18 - 24 Abbott Road, Seven Hills, NSW 100.0 Oct 2006 Lots 42 & 44 Ocean Steamers Drive, Port Adelaide, SA5 50.0 Jul 2006 407 Pembroke Rd, Minto NSW 50.0 Oct 2008 Total consolidated entity*	44.0 44.1 Jun 2011 Savills Australia 66.3 66.1 Mar 2009 Jones Lang LaSalle 20.4 19.7 Jun 2010 CB Richard Ellis Pty Limited 20.4 20.3 Jun 2010 CB Richard Ellis Pty Limited 21.3 21.3 Dec 2009 Jones Lang LaSalle 35.6 34.1 Dec 2009 Jones Lang LaSalle 12.1 12.0 Dec 2010 Jones Lang LaSalle 9.4 9.3 Jun 2010 CB Richard Ellis Pty Limited 18.8 18.7 Jun 2011 Colliers Pty Limited 10.5 10.0 Jun 2010 CB Richard Ellis Pty Limited 17.8 17.5 Jun 2011 Jones Lang LaSalle 67.3 66.5 Sep 2009 CB Richard Ellis Pty Limited 12.9 12.6 Sep 2009 CB Richard Ellis Pty Limited 25.7 25.7 Sep 2009 CB Richard Ellis Pty Limited 39.0 38.6 Jun 2009 Knight Frank Valuations 19.1 19.0 Sep 2010 Knight Frank Valuations 140.9 140.0 Oct 2009 Jones Lang LaSalle 13.2 13.0 Dec 2011 CB Richard Ellis 13.3 13.4 Jun 2011 Jones Lang LaSalle 30.4 30.1 Dec 2011 CB Richard Ellis 18.1 18.1 Jun 2009 Knight Frank Valuations 13.6 14.0 Dec 2011 CB Richard Ellis - 6.0 Jun 2011 Colliers International 22.9 22.9 Dec 2010 Knight Frank Valuations 693.0 693.0

68 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

9. Investment properties (continued)

(e) Properties under development

(e) Properties under development
Ownership Interest1 % Acquisition Date	Fair Value 31 Dec 11 $M Fair Value 31 Dec 10 $M Latest Independent Valuation Date Valuer
Office One One One Eagle Street, Brisbane6 33.3 Apr 1984 Industrial 17 Berry St, Granville 100.0 Sep 2009 7 Parkview Drive, Sydney Olympic Park, NSW7 100.0 May 2002 Erskine Park, NSW8 100.0 Jun 2008 407 Pembroke Rd, Minto NSW 50.0 Oct 2008 Austrak Business Park, Somerton, VIC 50.0 Oct 2003 Total consolidated entity*	147.3 100.0 Dec 2010 Jones Lang LaSalle 5.2 5.0 Sep 2010 Knight Frank Valuations 41.0 7.1 Jun 2011 Jones Lang LaSalle 53.9 64.0 Jun 2009 Knight Frank Valuations 5.2 5.2 Dec 2010 Knight Frank Valuations 17.5 17.6 Oct 2009 Jones Lang LaSalle 270.1 198.9

1 Freehold, unless otherwise marked with a * which denotes leasehold.

2 Erina Fair is 33.3% directly owned by the Trust. A further 16.7% is owned through a 50% share of Erina Property Trust, a joint venture with APPF (refer note 10(a)(i)).

3 Melbourne Central: 73.3% Retail and 26.7% Office (Dec 10: 72.7% Retail and 27.3% Office). La Trobe Street car park at Melbourne Central (Retail) has been reclassified as an asset held for sale as at 31 December 2011.

4 MLC Centre has been classified as an asset held for sale as at 31 December 2011.

5 Lots 42 & 44 Ocean Steamers Drive, Port Adelaide, SA has been classified as an asset held for sale as at 31 December 2011.

6 Currently under development. A Directors valuation of $660 million on 100% ownership (“as if complete” basis) at a capitalisation rate of 6.75% has been used to support the carrying value as at 31 December 2011 (Dec 10: external valuation on 100% ownership and “as if complete” basis was $660 million at a capitalisation rate of 6.75%).

7 This property under development is now known as 5 Murray Rose, Sydney Olympic Park, NSW.

8 Erskine Park land parcel has been classified as an asset held for sale as at 31 December 2011.

Investment properties held in associates and joint ventures are set out in note 10.

GPT Annual Financial Report 2011

69

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

9. Investment properties (continued)

(f) Key operating metrics

The key operating metrics (on the basis of weighted averages) used in the valuations of investment properties as at 31 December are set out below:

set out below:
	Consolidated entity
	31 Dec 11	31 Dec 10
Retail portfolio
Weighted Average Cap Rate (%)1	6.2%	6.2%
Total Portfolio Retail Occupancy Rate (%)1	99.4%	99.9%
Total Portfolio Specialty MAT ($psm)2	8,958	8,801
Total Portfolio Specialty Occupancy Cost (%)2	17.6%	17.7%
Office portfolio
Weighted Average Cap Rate (%)3	7.1%	7.1%
Total Portfolio Occupancy Rate (%)3	96.5%	97.8%
Weighted Average Lease Term by Area (Years)3	4.7	5.2
Industrial portfolio
Weighted Average Cap Rate (%)	8.4%	8.5%
Total Portfolio Occupancy Rate (%)	98.4%	98.4%
Weighted Average Lease Term by Income (Years)	6.2	6.5

1 Includes GPT shopping centres (excludes Homemaker City portfolio) and GPT interest in GWSCF.

2 100% of GPT & GWSCF assets, excludes homemaker centres, development impacted centres (Charlestown, Highpoint and Wollongong) and Norton Plaza.

3 Includes GPT owned assets and GPT’s interest in GWOF. Occupancy includes committed space.

(g) Operating lease receivables

The investment properties are leased to tenants under long term operating leases with rentals payable monthly. Minimum lease payments receivable under non-cancellable operating leases of investment properties are as follows:

payments receivable under non-cancellable operating leases of investment properties are as follows:
	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
Due within one year Due between one and five years Due after five years Total operating lease receivables	541.3 477.4 1,504.9 1,394.9 769.6 715.4
	2,815.8 2,587.7

70 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

10. Investments in associates and joint ventures

Note	Note	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
Investments in joint ventures 10(a)(i) Investments in associates 10(a)(ii) Total investments in associates and joint ventures (a) Details of GPT’s joint ventures and associates Name Principal Activity Ownership Interest 31 Dec 11 % 31 Dec 10 %		825.3 820.9 1,034.3 1,304.1
		1,859.6 2,125.0
		31 Dec 11 $M 31 Dec 10 $M
(i) Joint Ventures Entities incorporated in Australia 1 Farrer Place Trust1 Investment property 50.00 50.00 2 Park Street Trust1 Investment property 50.00 50.00 DPT Operator Pty Limited1 Managing property 50.00 50.00 Erina Property Trust1 Investment property 50.00 50.00 Horton Trust Investment property 50.00 50.00 Lend Lease GPT (Rouse Hill) Pty Limited1, 3 Property development 50.00 50.00 Total investment in joint ventures (ii) Associates Entities incorporated in Australia GPT Wholesale Office Fund1, 2 Property investment 22.86 33.27 GPT Wholesale Shopping Centre Fund1, 2 Property investment 20.19 21.86 Lend Lease (Twin Waters) Pty Limited1 Property development 49.00 49.00 Total investments in associates		322.2 320.6 355.1 354.6 0.1 0.1 125.7 124.5 22.2 21.1 - -
		825.3 820.9
		640.9 897.6 380.8 393.9 12.6 12.6
		1,034.3 1,304.1

1 The entity has a 30 June balance date.

2 During the period, GPT has completed a $301.0 million selldown of its investments in both GWOF ($267.8 million) and GWSCF ($33.2 million). These transactions resulted in a decrease in GPT’s investments in GWOF to 22.86% and GWSCF to 20.19%.

3 GPT has a 50% interest in Lend Lease GPT (Rouse Hill) Pty Limited, a joint venture developing residential and commercial land at the New Rouse Hill, in partnership with Landcom and the NSW Department of Planning.

(b) Share of joint ventures and associates’ assets and liabilities

Further details of the property investments, property development and investment property listed as the principal activity of associates and joint ventures in part (a) are set out below:

Investment property / portfolio, loans and other assets	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
Erina Property Trust Erina Fair, NSW Horton Trust Horton Parade and Maroochydore Superstore Plaza, QLD DPT Operator Pty Limited Property Management GPT Wholesale Shopping Centre Fund Various retail assets Total Retail 2 Park Street Trust Citigroup Centre, NSW 1 Farrer Place Trust 1 Farrer Place, NSW GPT Wholesale Office Fund Various office buildings Total Office Lend Lease GPT (Rouse Hill) Pty Ltd Residental land - Rouse Hill, NSW Total Corporate Total property investments, property management and investment properties	126.2 124.9 22.3 21.1 - - 444.0 447.8
	592.5 593.8
	363.0 360.0 322.7 321.5 757.1 1,025.1
	1,442.8 1,706.6
	36.9 26.9
	36.9 26.9
	2,072.2 2,327.3

For summary information on share of joint ventures / associates’ assets, liabilities, revenue and profit after tax, refer to note 2(f) and (g).

GPT Annual Financial Report 2011 71

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

10. Investments in associates and joint ventures (continued)

(c) Share of joint ventures and associates’ commitments

GPT’s share of its joint ventures’ and associates’ capital expenditure commitments which have been approved but not provided for at 31 December 2011, and operating lease and other commitments are set out below:

	Australia United States Total 31 Dec 11 $M 31 Dec 10 $M 31 Dec 11 $M 31 Dec 10 $M 31 Dec 11 $M 31 Dec 10 $M
Capital expenditure commitments Operating lease commitments Other commitments Total joint venture and associates' commitments	95.8 91.7 - 1.6 95.8 93.3 - - - 0.3 - 0.3 - - - 0.6 - 0.6
	95.8 91.7 - 2.5 95.8 94.2

(d) Reconciliation of the carrying amount of investments in associates and joint ventures

Reconciliations of the carrying amount of joint ventures and associates at the beginning and end of the financial year by geographic segment are set out below:

segment are set out below:
	Australia United States Total 31 Dec 11 $M 31 Dec 10 $M 31 Dec 11 $M 31 Dec 10 $M 31 Dec 11 $M 31 Dec 10 $M
Consolidated entity (i) Joint ventures Carrying amount at the beginning of the financial year Additions Share of joint ventures' net operating profit Distributions received / receivable from joint ventures Investments classified as held for sale Carrying amount at the end of the financial year (ii) Associates Carrying amount at the beginning of the financial year Acquisitions Disposals Share of associates' net operating profit Distributions received / receivable from associates Impairment on investment in associates Investments classified as held for sale Carrying amount at the end of the financial year	820.9 798.9 - 78.9 820.9 877.8 2.0 3.1 - - 2.0 3.1 56.3 71.8 - - 56.3 71.8 (53.9) (52.9) - - (53.9) (52.9) - - - (78.9) - (78.9)
	825.3 820.9 - - 825.3 820.9
	1,304.1 1,358.6 - 0.3 1,304.1 1,358.9 5.8 135.9 - - 5.8 135.9 (301.0) (216.1) - - (301.0) (216.1) 101.8 113.5 - - 101.8 113.5 (76.4) (86.8) - - (76.4) (86.8) - (1.0) - - - (1.0) - - - (0.3) - (0.3)
	1,034.3 1,304.1 - - 1,034.3 1,304.1

72 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

11. Property, plant and equipment

11. Property, plant and equipment
	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
Office fixtures, fittings & operating equipment At cost Less: accumulated depreciation and impairment Total property, plant and equipment	19.9 10.6 (7.1) (4.9)
	12.8 5.7

(a) Reconciliations

Reconciliations of the carrying amount for each class of property, plant and equipment at the beginning and end of the financial year are set out below:

are set out below:
Note	Office fixtures, fittings and operating equipment $M Total $M
Consolidated entity Year ended 31 December 2010 Carrying amount at the beginning of the financial year Additions (including capitalisations) Disposals Depreciation charge Carrying amount at the end of the financial year Year ended 31 December 2011 Carrying amount at the beginning of the financial year Additions Disposals Depreciation charge 4(a) Carrying amount at the end of the financial year	5.1 5.1 3.0 3.0 - - (2.4) (2.4)
	5.7 5.7
	5.7 5.7 9.5 9.5 (0.2) (0.2) (2.2) (2.2)
	12.8 12.8

GPT Annual Financial Report 2011

73

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

12. Intangible assets

12. Intangible assets
Note	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
Management rights At cost Less: accumulated amortisation and impairment Total management rights (b) IT development and software At cost Less: accumulated amortisation and impairment Total IT development and software (c) Total intangible assets	76.7 76.7 (65.7) (64.6)
	11.0 12.1
	48.6 44.0 (8.3) (4.3)
	40.3 39.7
	51.3 51.8

(a) Reconciliations

Reconciliations of the carrying amount of each class of intangible at the beginning and end of the financial year are set out below:

Note	Management Rights $M IT Development & Software $M Total $M
Consolidated entity Year ended 31 December 2010 Carrying amount at the beginning of the financial year Additions (including capitalisations) Disposals Impairment expense Amortisation expense 4(a) Carrying amount at the end of the financial year Year ended 31 December 2011 Carrying amount at the beginning of the financial year Additions (including capitalisations) Amortisation expense 4(a) Carrying amount at the end of the financial year	16.2 16.2 32.4 - 27.9 27.9 - (1.0) (1.0) - (2.6) (2.6) (4.1) (0.8) (4.9)
	12.1 39.7 51.8
	12.1 39.7 51.8 - 4.6 4.6 (1.1) (4.0) (5.1)
	11.0 40.3 51.3

(b) Management rights

The management rights include asset and property management rights of retail shopping centres. The useful life of the rights ranges from 5 years to the expected period of economic benefit. The rights are amortised over the useful life.

The recoverable amount of the Highpoint Management Rights is determined based on a value in use calculation using cash flow projections as at 31 December 2011 based on financial budgets approved by management covering a five-year period. The discount rate applied to these asset-specific cash flow projections is 8% and the growth rate used to extrapolate the cashflows beyond the five year period is 5%.

(c) IT development and software

Costs incurred in developing systems and costs incurred in acquiring software and licenses that will contribute to future period financial benefits through revenue generation and/or cost reduction are capitalised to software and systems. Costs capitalised include external direct costs of materials and service and direct payroll and payroll related costs of employees’ time spent on the project. Amortisation is calculated on a straight-line basis over the period, which is the length of time over which the benefits are expected to be received, generally ranging from 3 to 10 years.

74 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

13. Payables

13. Payables
	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
Trade payables and accruals Tax payable Other payables Distribution payable (Exchangeable Securities) Related party payables Interest payable Deposits payable Total payables	167.5 154.4 0.2 0.2 5.4 - 2.5 2.5 12.6 15.7 10.1 19.8 0.9 0.8
	199.2 193.4

14. Borrowings

Note	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
Current - unsecured Bank borrowings Multi option syndicated facility - Australian Dollar 14(a)(i) Bank facilities - Australian Dollar 14(a)(ii) Total current borrowings - unsecured Current - secured Bank facility - One One One Eagle Street 14(a)(v) Total current borrowings - secured Total current borrowings Non-Current - unsecured Bank borrowings Multi option syndicated facility - Australian Dollar 14(a)(i) Multi option syndicated facility - US Dollar 14(a)(i) Bank facilities - Australian Dollar 14(a)(ii) Multi option facility - Australian Dollar 14(a)(iii) Medium term notes 14(b) CPI Coupon Indexed Bond 14(c) Total non-current borrowings - unsecured Non-Current - secured Bank facility - Somerton 14(a)(iv) Bank facility - One One One Eagle Street 14(a)(v) Total non-current borrowings - secured Total non-current borrowings Total borrowings * The maturity profile of the above current and non-current borrowings is: Due within one year Due between one and five years Due after five years	362.6 - 150.0 -
	512.6 - - 34.3
	- 34.3
	512.6 34.3
	167.5 1,253.0 - 107.8 1,092.0 476.1 - 175.0 211.0 211.0 85.0 85.0
	1,555.5 2,307.9 76.0 76.0 - 34.3
	76.0 110.3
	1,631.5 2,418.2
	2,144.1 2,452.5
	512.6 34.3 1,139.7 2,123.9 491.8 294.3
	2,144.1 2,452.5

• Net of unamortised establishment costs

GPT Annual Financial Report 2011 75

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

14. Borrowings (continued)

(a) Bank facilities

Unsecured

(i) Euro multi option syndicated facility

A €2,010 million multi option syndicated facility became available to the Consolidated entity on 26 October 2007.

The facility had three maturity tranches as follows:

• Tranche A and B: €1,005 million matured 26 October 2010 and is no longer available, and

• Tranche C: €1,005 million maturing 26 October 2012. During the year, the Tranche C limit was reduced to €403 million (AUD $510.3 million).

At 31 December 2011, Tranche C is drawn to AUD $530.1 million (Dec 10: AUD $1,253.0 million and US $110.0 million (AUD $107.8 million)).

The drawn amount in AUD is greater than the restated limit by $19.8m using the 31 December 2011 balance date exchange rate. The AUD drawn amount is within the facility limit, which allows a 5% increase for currency fluctuations.

The contractual maturity of Tranche C has been split into current and non-current after overlaying forward start bank facilities with counterparties within the syndicated group.

(ii) Bank Loans

The Group has the following bank facilities:

1. $500 million bilateral facility. This facility was amended during the year to have 3 maturity tranches as follows:

2. Tranche A: AUD $200 million maturing 26 October 2015.

3. Tranche B: AUD $160 million maturing 1 April 2015.

4. Tranche C: AUD $140 million forward start with a maturity date of 1 April 2016 and is available from 26 October 2012.

5. At 31 December 2011, Tranches A and B of this facility are drawn to AUD $326 million (Dec 10: $147 million).

6. $550 million bilateral facility. At 31 December 2011, this facility is drawn to AUD $550 million (Dec 10: $175 million). The three tranches of this facility are as follows:

7. Tranches A and B: AUD $325 million have a maturity date of 26 October 2018 and were used to refinance the $175 million multi option facility and to partly refinance Tranche C of the Euro multi option syndicated facility and the short term bank facilities.

8. Tranche C: AUD $225 million has a maturity date of 15 September 2014.

9. €55 million (AUD $69.6 million) forward start facility. This facility was amended during the year to include an AUD $75 million bilateral facility. The two tranches of this facility are as follows:

10. Tranche A: €55 million (AUD $69.6 million) forward start with a maturity date of 26 October 2017 and is available from 26 October 2012 to partly refinance Tranche C of the Euro multi option syndicated facility and the short term bank facilities. This facility will restate into an AUD denominated limit on the forward start date.

11. Tranche B: AUD $75 million maturing 30 November 2016. At 31 December 2011, this facility is drawn to AUD $66 million. (Dec 10: nil)

12. $300 million bilateral facility comprising two tranches:

13. Tranche A: AUD $150 million maturing 11 November 2017. At 31 December 2011, this facility is undrawn (Dec 10: nil).

14. Tranche B: AUD $150 million forward start with a maturity date of 11 November 2017 and is available from 26 October 2012 to partly refinance Tranche C of the Euro multi option syndicated facility and the short term bank facilities.

15. In addition there is an AUD $20 million bank guarantee facility maturing on the 18 October 2012. As at 31 December 2011, bank guarantees totalling a face value of AUD$11.4 million have been issued under the facility.

16. $300 million forward start bilateral facility. This facility has a maturity date of 1 October 2015 and is available from October 2012 to partly refinance Tranche C of the Euro multi option syndicated facility and the short term bank facilities. This facility can commence earlier at the Group’s option.

17. $200 million forward start bilateral facility which gives GPT the option to exercise in October 2012 to commence the facility from 26 October 2012 to partly refinance Tranche C of the Euro multi option syndicated facility and the short term bank facilities. If GPT exercises the option to commence the loan, the maturity date is October 2016.

76 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

14. Borrowings (continued)

(a) Bank facilities (continued)

Unsecured (continued)

(ii) Bank Loans (continued)

During the year the Group has entered into the following facilities:

1. $150 million bilateral facility. At 31 December 2011, this facility is fully drawn. This facility has a maturity date of 26 October 2012.

2. $150 million bilateral facility. At 31 December 2011, this facility is fully drawn. This facility has a maturity date of 11 March 2013. A quarterly extension is available to extend the maturity date to December 2013.

The Group had the following short term bank facilities which were repaid and cancelled during the year:

1. Two AUD bilateral facilities totalling AUD $440 million with a maturity date of 31 March 2015.

2. An AUD $140 million bilateral facility with a maturity date of 31 March 2013.

(iii) Multi option facility

The Group had a $175 million multi option facility available which matured on 15 September 2011. A new bilateral facility was established which refinanced this facility on maturity (refer to (ii)(2) above) with the same lender.

Secured

(iv) Bank facilities

A floating rate bill facility was established for the GPT/Austrak Joint Venture to fund the capital expenditure requirements of the Austrak Business Park, Somerton, Victoria for $152.4 million (GPT 50% share: AUD $76.2 million). The facility matures on 31 March 2013. The facility is a non-recourse loan to GPT, secured by a mortgage over Austrak Business Park, Somerton, Victoria. As at 31 December 2011, the facility is drawn to $152.0 million (GPT 50% share: $76.0 million) (Dec 10: $152.0 million (GPT 50% share: $76.0 million)).

(v) One One One Eagle Street

$150.5 million facility was available to the Group for the purpose of funding GPT’s one third share of the construction of One One One Eagle Street, Brisbane, QLD. The facility was secured by a mortgage over the One One One Eagle Street Property. The facility matured on 30 November 2011 and the mortgage was released.

(b) Medium Term Notes (MTNs) program

At 31 December 2011, fixed rate MTNs have a principal value of AUD $200.0 million (Dec 10: AUD $200.0 million) and floating rate MTNs have principal value of AUD $12.0 million (Dec 10: $12.0 million) maturing in August 2013. GPT Group holds $1.0 million of MTNs, netted against the MTN liabilities. The net principal value at 31 December 2011 is AUD $211.0 million (Dec 10: $211.0 million).

(c) CPI coupon indexed bonds

GPT issued a CPI coupon indexed bond in December 1999 with a current coupon of 8.58% per annum (Dec 2010: 8.29%) payable quarterly in arrears and indexed by the maximum CPI since September 1999. At 31 December 2011, the principal value is AUD $85 million (Dec 10: $85 million). The CPI coupon indexed bonds mature on 10 December 2029. In December 2010, GPT entered into an interest rate derivative to swap from paying fixed rate plus CPI to paying fixed 5%. The CPI bonds still remain outstanding with the effect of the derivative being the removal of GPT’s exposure to CPI growth and lowering of the fixed interest rate.

(d) Financing Facilities

A summary of GPT’s finance facilities is below:

(d) Financing Facilities A summary of GPT’s finance facilities is below:
Note	Total facility 31 Dec 11 $M Used facility 31 Dec 11 $M Unused facility 31 Dec 11 $M
Euro multi option syndicated facility - multi currency 14(a)(i) Bank borrowings Bank loan 14(a)(ii) Bank facilities - Somerton 14(a)(iv) Medium Term Notes 14(b) CPI coupon indexed bonds 14(c) Cash and cash equivalents Total financing resources available at the end of the financial year*	510.3 530.1 (19.8) 1,435.0 1,242.0 193.0 76.2 76.0 0.2 212.0 211.0 1.0 85.0 85.0 -
	2,318.5 2,144.1 174.4
	42.0
	216.4

*Actual facility headroom under the Euro facility is €3.3m (AUD $4.1m) based on conversion using historical exchange rates on the date of the respective drawdown. The $19.8m shortfall in the table above reflects the restated headroom using the 31 December 2011 balance date exchange rate.

GPT Annual Financial Report 2011 77

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

14. Borrowings (continued)

(e) Maturity profile of financing facilities

(e) Maturity profile of financing facilities
	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
Due within one year Due between one and five years Due after five years Total financing facilities	499.1 75.2 1,180.7 2,382.8 638.7 335.3
	2,318.5 2,793.3

(f) Gearing Ratios

(i) Headline Gearing

At 31 December 2011, the percentage of debt to total tangible assets is 23.2% (Dec 10: 25.3%) and the percentage on a net debt (net of cash) basis is 22.9% (Dec 10: 24.9%).

(ii) Look through Gearing

In calculating the ‘look through’ gearing, GPT’s interest in joint ventures and associates are proportionately consolidated based on GPT’s ownership interest. At 31 December 2011, the percentage of ‘look through’ debt to total assets is 24.7% (Dec 10: 30.2%) and the percentage on a net debt (net of cash) basis is 24.4% (Dec 10: 29.9%). The ‘look through’ gearing covenant only applies to the Euro syndicated loan maturing in October 2012.

(g) Debt Covenants

GPT’s borrowings are subject to a range of covenants, according to the specific purpose and nature of the loans. Most facilities include one or more of the following covenants:

• a 50% maximum threshold limit on the percentage of GPT debt to total tangible assets (the Euro syndication loan maturing in October 2012 has a lower limit of 40% of total tangible assets)

• a minimum interest cover ratio of 2 times, being EBIT (Realised Operating Income before taxes and finance costs) divided by finance costs.

A breach of these covenants for individual facilities may trigger consequences ranging from rectifying and/or repricing to repayment of outstanding amounts. The Group performed a review of debt covenants as at 31 December 2011 and no breaches were identified.

The weighted average interest rate of borrowings as at 31 December 2011 is 5.92% (refer to note 26(f)(i)).

15. Provisions

		Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
Current provisions Employee benefits Other Total Current provisions Non Current provisions Employee benefits Total Non Current provisions	Employee benefits **$M **	8.5 7.5 8.1 8.0
		16.6 15.5
		1.4 1.1
		1.4 1.1
		Other $M Total $M
Year ended 31 December 2011 Carrying amount at the beginning of the financial year Arising during the year Utilised during the year Carrying amount at the end of the financial year Year ended 31 December 2010 Carrying amount at the beginning of the financial year Arising during the year Utilised during the year Carrying amount at the end of the financial year	8.6 5.8 (4.5)	8.0 16.6 0.5 6.3 (0.4) (4.9)
	9.9	8.1 18.0
	7.9 5.6 (4.9)	2.9 10.8 5.5 11.1 (0.4) (5.3)
	8.6	8.0 16.6

78 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

16. Contributed equity

16. Contributed equity
Note	GPT Stapled Securities Number GPT $M Other Entities Stapled to GPT $M Total $M
(i) Ordinary stapled securities 1 Jan 2010 Opening securities on issue 19 May 2010 5 to 1 consolidation of stapled securities 16(a) 31 Dec 2010 Closing securities on issue 1 Jan 2011 Opening securities on issue Jul-Dec 2011 On-market buy-back 16(b) 31 Dec 2011 Closing securities on issue (ii) Exchangeable securities 1 Jan 2010 Opening securities on issue 31 Dec 2010 Closing securities on issue 1 Jan 2011 Opening securities on issue 31 Dec 2011 Closing securities on issue 16 (c) Total Contributed Equity	9,277,584,743 7,914.7 324.7 8,239.4 (7,422,055,312) - - -
	1,855,529,431 7,914.7 324.7 8,239.4
	1,855,529,431 7,914.7 324.7 8,239.4 (41,762,323) (125.1) (1.7) (126.8)
	1,813,767,108 7,789.6 323.0 8,112.6
	2,500 240.6 - 240.6
	2,500 240.6 - 240.6
	2,500 240.6 - 240.6
	2,500 240.6 - 240.6
	8,030.2 323.0 8,353.2

(a) Consolidation of ordinary stapled securities

On 10 May 2010, the GPT securityholders approved the consolidation of every 5 stapled securities into 1 stapled security. Where the consolidation resulted in a fraction of a security being held by a securityholder, the fraction was rounded up to the nearest whole security. The consolidation took effect and was completed on 19 May 2010. The effect of the consolidation was to reduce the number of stapled securities on issue by 7,422,055,312 on 19 May 2010 to 1,855,529,431.

(b) On-market buy-back

On 11 May 2011, GPT announced an on-market buy-back of up to 5% of the Group’s ordinary securities. As at 31 December 2011, the Group has acquired 41.8 million of GPT stapled securities for the total consideration of $126.8 million.

(c) Exchangeable Securities

On 27 November 2008, 2,500 Exchangeable Securities (ES) were issued to an affiliate of GIC Real Estate Pty Limited (GIC RE) at $100,000 per exchangeable security. The ES are exchangeable into stapled securities at GIC RE’s option subject to obtaining necessary approvals at an initial exchange price of $3.883 per stapled security in accordance with the terms of the agreement. The ES offer discretionary distributions of 10% p.a and carry voting rights in GPT.

GPT Annual Financial Report 2011 79

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

17. Reserves

17. Reserves
Note	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
Foreign currency translation reserve 17(a) Treasury stock reserve 17(b) Employee incentive scheme reserve 17(c) Total reserves	14.4 (37.7) (0.6) (3.2) 12.1 6.2
	25.9 (34.7)

Reconciliation

Reconciliations of each type of reserve at the beginning and end of the financial year are set out below:

Note	Consolidated entity GPT $M Other Entities Stapled to GPT $M Total $M
(a) Foreign currency translation reserve Balance at 1 January 2010 Net foreign exchange translation adjustments Balance at 31 December 2010 Balance at 1 January 2011 Net foreign exchange translation adjustments Balance at 31 December 2011 (b) Treasury stock reserve Balance at 1 January 2010 Sale of GPT stapled securities and loan repayments 21 Impairment on stapled securities 21 Balance at 31 December 2010 Balance at 1 January 2011 Sale of GPT stapled securities and loan repayments 21 Deferred stapled security plan expense 21 Balance at 31 December 2011 (c) Employee incentive scheme reserve Balance at 1 January 2010 Employee incentive scheme expenses 21 Balance at 31 December 2010 Balance at 1 January 2011 Employee incentive scheme expenses 21 Purchase of securities 21 Balance at 31 December 2011 Total balance at 31 December 2010 Total balance at 31 December 2011	38.5 13.8 52.3 (107.3) 17.3 (90.0)
	(68.8) 31.1 (37.7)
	(68.8) 31.1 (37.7) 51.3 0.8 52.1
	(17.5) 31.9 14.4
	(3.9) - (3.9) 4.5 - 4.5 (3.8) - (3.8)
	(3.2) - (3.2)
	(3.2) - (3.2) 3.2 - 3.2 - (0.6) (0.6)
	- (0.6) (0.6)
	2.3 0.9 3.2 - 3.0 3.0
	2.3 3.9 6.2
	2.3 3.9 6.2 - 6.3 6.3 - (0.4) (0.4)
	2.3 9.8 12.1
	(69.7) 35.0 (34.7)
	(15.2) 41.1 25.9

80 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

17. Reserves (continued)

Nature and purpose of reserves

Foreign currency translation reserve

The foreign currency translation reserve is used to record exchange differences arising on translation of foreign controlled entities and associated funding of foreign controlled entities as described in note 1(e). The movement in the foreign currency reserve is recognised in the Statement of Comprehensive Income when the net investment in the foreign controlled entity is disposed.

Treasury stock reserve

The treasury stock reserve is used to record the issue and repayment of securities under the Legacy Long Term Incentive Scheme and The GPT Group Deferred Stapled Security Plan. Refer to note 21(a)(ii)(1) and (b)(ii) for further details.

Employee incentive scheme reserve

The employee incentive scheme reserve is used to recognise the notional fair value of the implied option in respect of the securities issued under the Employee Incentive Scheme – General Scheme and performance rights issued under the GPT Group Stapled Security Rights Plan (refer to Performance Rights LTI Plan in this report), as described in note 21(a)(ii)(2).

18. Accumulated losses

Note	GPT $M Other Entities Stapled to GPT $M Total $M
Consolidated entity Balance at 1 January 2010 Net profit / (loss) for the financial year less: Distributions paid to ordinary stapled securityholders 3(a) less: Distributions paid / payable to exchangeable securities securityholders 3(b) Balance at 31 December 2010 Balance at 1 January 2011 Net profit / (loss) for the financial year less: Distributions paid to ordinary stapled securityholders 3(a) less: Distributions paid / payable to exchangeable securities securityholders 3(b) Balance at 31 December 2011	(1,013.0) (850.2) (1,863.2) 769.7 (62.4) 707.3 (309.9) - (309.9) (25.0) - (25.0)
	(578.2) (912.6) (1,490.8)
	(578.2) (912.6) (1,490.8) 300.5 (54.3) 246.2 (323.1) - (323.1) (25.0) - (25.0)
	(625.8) (966.9) (1,592.7)

19. Parent entity financial information

(a) Summary financial information

The individual financial reports for the parent entity show the following aggregate amounts:

Balance Sheet

Balance Sheet
	31 Dec 11 $M 31 Dec 10 $M
ASSETS Total Current Assets Total Non-Current Assets Total Assets LIABILITIES Total Current Liabilities Total Non-Current Liabilities Total Liabilities Net Assets EQUITY Equity attributable to secutityholders of the Trust (parent entity) Contributed equity Accumulated losses Total equity of GPT Trust securityholders	470.5 41.1 8,885.5 9,750.5
	9,356.0 9,791.6
	614.5 240.1 1,984.4 2,749.9
	2,598.9 2,990.0
	6,757.1 6,801.6
	8,030.2 8,155.3 (1,273.1) (1,353.7)
	6,757.1 6,801.6

As at 31 December 2011, the Parent entity had a deficiency of current net assets of $144.0m (Dec 10: $199.0m). This position is driven by the timing of intercompany balances. The Parent has sufficient facilities to draw upon as required.

GPT Annual Financial Report 2011 81

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

19. Parent entity financial information (continued)

(a) Summary financial information (continued)

(a) Summary financial information (continued)
Profit and Loss	31 Dec 11 $M 31 Dec 10 $M
Net profit / (loss) for the year Total comprehensive income / (loss) for the year	428.6 445.1
	428.6 445.1

(b) Contractual capital commitments

As at 31 December 2011, the parent entity had capital commitments principally relating to the purchase and development of investment properties. These commitments have been approved but not recognised as liabilities as the relevant assets have not yet been received:

been received:
Due within one year Due between one and five years Due after five years Total capital expenditure commitments	68.7 97.9 41.9 17.2 - -
	110.6 115.1

20. Key management personnel disclosures

(a) Details of key management personnel

(i) Directors

The Directors of GPT Management Holdings Limited and GPT RE Limited during the financial year and up to the date of this report were:

Chairman - Non-Executive Director

Rob Ferguson

Non-Executive Directors

Brendan Crotty

Eileen Doyle

Eric Goodwin

Lim Swe Guan

Anne McDonald

Gene Tilbrook

Executive Director

Michael Cameron

(ii) Other key management personnel

In addition to the Directors, the following persons also had the greatest authority for the strategic direction and management of GPT, directly or indirectly, during the financial year:

Michael O’Brien Chief Financial Officer Nicholas Harris Head of Wholesale Mark Fookes Head of Investment Management Michelle Tierney Head of Property & Asset Management Anthony McNulty Head of Development James Coyne General Counsel and Company Secretary

82 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

20. Key management personnel disclosures (continued)

(b) Key management personnel compensation

(b) Key management personnel compensation
	Consolidated entity 31 Dec 11 $’000 31 Dec 10 $’000
Short term employee benefits Post employment benefits Long term incentive award accrual Other long term benefits Termination benefits Total key management personnel compensation	11,193.3 10,493.2 197.5 192.5 3,070.5 1,447.3 96.6 166.4 - -
	14,557.9 12,299.4

Information regarding individual Directors’ and Senior Executives’ remuneration is provided in the Remuneration Report on page 19 to 33 of the Directors’ Report.

(c) Equity instrument disclosures relating to key management personnel

(i) The number of GPT stapled securities held during the financial year by each key management personnel, including their personally-related parties, are set out below:

	Balance	Purchases /	Balance	Purchases /	Balance
	1 Jan 2010	(Sales)	31 Dec 2010	(Sales)*	31 Dec 2011
Directors
Rob Ferguson	204,082	-	204,082	-	204,082
Brendan Crotty	-	30,000	30,000	-	30,000
Eileen Doyle	-	1,600	1,600	-	1,600
Eric Goodwin	15,584	-	15,584	-	15,584
Lim Swe Guan	-	-	-	-	-
Anne McDonald	9,450	-	9,450	-	9,450
Gene Tilbrook	-	20,000	20,000	-	20,000
Michael Cameron	-	163,742	163,742	307,249	470,991
Senior Executives
Michael O'Brien	114,127	38,454	152,581	(71,172)	81,409
James Coyne	35,261	-	35,261	(35,261)	-
Mark Fookes	148,124	-	148,124	(68,124)	80,000
Nicholas Harris	1,083,169	-	1,083,169	(48,169)	1,035,000
Anthony McNulty	-	-	-	-	-
Michelle Tierney	73,029	-	73,029	(36,514)	36,515

*Represents movement of securities due to the winding up of the Legacy LTI Scheme on 28 February 2011.

GPT Annual Financial Report 2011 83

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

20. Key management personnel disclosures (continued)

(c) Equity instrument disclosures relating to key management personnel (continued)

• (ii) During the year, certain Senior Executives of The GPT Group were granted Performance Rights (refer to note 21(a)(ii)(2) for further details). The number of GPT performance rights held by the GPT Group Stapled Securities Rights Plan during the financial year by each key management personnel are set out below:

	Grant date	Vesting date Exercise price	Vesting date Exercise price	Granted	Lapsed	Balance	Vested at
			$			31 Dec 2011	31 Dec 2011
Director
Michael Cameron	29 April 2009	From 30 June 2011 to	-	528,823	(396,617)	66,103	66,103
		30 June 2012
	19 May 2010	31 December 2012	-	590,068	-	590,068	-
	8 June 2011	31 December 2013	-	713,455	-	713,455	-
Senior Executives
Michael O'Brien	30 June 2009	31 December 2011	-	307,634	(307,634)	-	-
	16 July 2009	1 July 2011	-	38,454	-	-	38,454
	19 May 2010	31 December 2012	-	270,448	-	270,448	-
	8 June 2011	31 December 2013	-	292,429	-	292,429	-
James Coyne	30 June 2009	31 December 2011	-	180,735	(180,735)	-	-
	19 May 2010	31 December 2012	-	154,074	-	154,074	-
	8 June 2011	31 December 2013	-	169,115	-	169,115	-
Mark Fookes	30 June 2009	31 December 2011	-	269,179	(269,179)	-	-
	19 May 2010	31 December 2012	-	245,862	-	245,862	-
	8 June 2011	31 December 2013	-	273,051	-	273,051	-
Nicholas Harris	30 June 2009	31 December 2011	-	230,725	(230,725)	-	-
	19 May 2010	31 December 2012	-	199,968	-	199,968	-
	8 June 2011	31 December 2013	-	219,498	-	219,498	-
Anthony McNulty	30 June 2009	31 December 2011	-	152,856	(152,856)	-	-
	19 May 2010	31 December 2012	-	134,241	-	134,241	-
	8 June 2011	31 December 2013	-	193,778	-	193,778	-
Michelle Tierney	30 June 2009	31 December 2011	-	137,714	(137,714)	-	-
	19 May 2010	31 December 2012	-	120,473	-	120,473	-
	8 June 2011	31 December 2013	-	176,162	-	176,162	-

(d) Loans to key management personnel

These loans are pursuant to the Legacy LTI Scheme which is discussed in detail at note 21(a)(ii)(1). This scheme was wound up on 20 February 2011.

Details of loans made during the financial year to each key management personnel are set out below:

Michael O'Brien James Coyne Mark Fookes Nicholas Harris Anthony McNulty Michelle Tierney	Opening balance 1 Jan 2011 $ Total accumulated interest costs capitalised as part of the loan $ Interest charged for the year $ Interest not charged for the year1 $ Loan terminated during the year $ Closing Balance 31 Dec 2011 $ Highest indebtedness during the year $
	2,664,129 300,563 - 37,188 (2,664,129) - 2,664,129 817,910 101,426 - 11,417 (817,910) - 817,910 1,595,071 194,137 - 22,265 (1,595,071) - 1,595,071 1,211,868 143,178 - 16,916 (1,211,868) - 1,211,868 1,021,699 125,651 - 14,262 (1,021,699) - 1,021,699 909,948 97,361 - 12,702 (909,948) - 909,948

1 The amounts shown for interest not charged represent the difference between the amount paid and payable for the financial year and interest that would have been charged on an arm’s length basis.

This Legacy LTI Scheme was wound up on 28 February 2011 and the residual loan balance has been repaid.

(e) Other transactions with key management personnel

There have been no transactions with key management personnel other than those transactions detailed in this note.

84 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

21. Share based payments

(a) Employee Incentive Scheme

The Employee Incentive Scheme (EIS) is a scheme under which GPT stapled securities are issued or purchased on-market on behalf of GPT employees for no cash consideration.

The EIS has two qualifying levels – the General Employee Security Ownership Plan and Long Term Incentive (LTI) Scheme.

The LTI Scheme may be divided into two broad categories:

1. Legacy LTI plans has been operable during the period 2007 to February 2011, and

2. The Performance Rights Plan approved at the 2009 AGM in May 2009, revised and approved at the 2010 AGM in May 2010.

(i) The General Employee Security Ownership Plan

The Board believes in creating ways for employees to build an ownership stake in the business. As a result, the Board introduced a basic General Employee Security Ownership Plan (GESOP) in March 2010 for individuals who do not participate in the LTI.

Under the plan individuals who participate will receive an additional benefit equivalent to 10% of their STI which is (after the deduction of income tax) invested in GPT securities to be held for a minimum of 1 year.

(ii) The Long Term Incentive (LTI) Scheme

1 Legacy LTI Scheme

As detailed in the 2008 Remuneration Report, the unprecedented dislocation in global financial markets and the A-REIT sector in particular highlighted a number of flaws in the loan based LTI scheme that had significant unintended consequences for GPT. Recognising that the scheme was no longer best practice or operating in the interests of either GPT or participants, the Board decided to convert the existing scheme loans from full recourse to the individual to limited recourse effective 31 December 2008 (the date of conversion), such that while the loan remained in place the participant was committed only to the value of the underlying securities. In addition, for 2009 onwards, the interest charge on the loans to participants was set at a level to approximate the net distributions receivables.

This Legacy LTI Scheme was wound up on 28 February 2011 and the residual loan balance has been repaid.

2 GPT Group Stapled Security Rights Plan (referred to as the Performance Rights LTI Plan)

At the 2009 Annual General Meeting GPT securityholders approved the introduction of a more contemporary Performance Rights LTI Plan. At the 2010 Annual General Meeting, the Performance Rights LTI Plan was altered with new performance conditions and was approved by the GPT securityholders.

The Performance Rights LTI Plan (‘the Plan’) covers each 3 year period. Awards under the plan to eligible participants will be in the form of Performance Rights which convert to GPT stapled securities for nil consideration if specified service / performance conditions for the applicable 3 year period are satisfied. Please refer to the Remuneration Report for detail on the service / performance conditions.

The Board determined those executives eligible to participate in the Plan and, for each participating executive, granted a number of Performance Rights calculated as a percentage of their base salary divided by GPT’s volume weighted average price (VWAP).

Under the requirements of AASB 2 Share-based Payment, the fair value of these Performance Rights will be amortised over the period starting from the grant date to the vesting date. Fair value at grant date has been independently determined using the Monte Carlo and Binomial tree pricing models that take into account the following inputs:

• (a) Performance conditions

• (b) Grant dates

• (c) Expected vesting dates

• (d) Share price at the grant date

• (e) Expected life

• (f) Dividend yield

• (g) Risk free interest rate

The fair value of these Performance Rights granted during 2011 is $2.38 per Performance right (Dec 10: $2.06 per performance right). Total share based payment expense recognised during the year ended 31 December 2011 was $6,243,233 (Dec 10: $3,217,189).

GPT Annual Financial Report 2011 85

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

21. Share based payments (continued)

(b) Other Share-based Incentive Scheme

(i) The GPT Group All Employee Stapled Security Plan (AESSP)

Implemented in March 2008, the AESSP allows eligible participants to salary sacrifice $1,000 to purchase GPT Group stapled securities on market. GPT stapled securities acquired under the AESSP must be held for a minimum of 3 years (or earlier if employment ceases) during which time they cannot be sold or otherwise dealt with.

(ii) The GPT Group Deferred Stapled Security Plan (DSSP)

Implemented in September 2008, the DSSP allows eligible participants to salary sacrifice amounts to purchase GPT Group stapled securities on market. GPT stapled securities acquired under the DSSP may be held for up to 10 years (or earlier if employment ceases) on an income tax deferred basis during which time they cannot be sold or otherwise dealt with.

The GPT stapled securities / Rights issued under all Employee Incentive Schemes to participating employees is set out below:

GPT stapled securities issued under the General Employee Security Ownership Plan GPT stapled securities issued under the Long Term Incentive Scheme GPT stapled securities issued under the The GPT Group All Employee Stapled Security Plan GPT stapled securities issued under the The GPT Group Deferred Stapled Security Plan GPT performance rights issued under GPT Group Stapled Securities Rights Plan	Number of GPT stapled securities issued during the year Total number of GPT stapled securities issued 31 Dec 11 31 Dec 10 31 Dec 11 31 Dec 10
	169,504 141,759 154,520 141,759 - - - 1,010,209 - - 2,248 5,077 241,146 163,743 407,454 166,308 Number of GPT share rights issued during the year Total number of GPT share rights issued 31 Dec 11 31 Dec 10 31 Dec 11 31 Dec 10
	4,060,829 3,818,257 7,577,189 8,375,034

22. Related party transactions

(a) Ultimate Parent

General Property Trust is the ultimate parent entity.

(b) Controlled entities, joint ventures and associates

Equity interests in joint ventures and associates are set out in note 10. Loans provided to joint ventures and associates as part of the funding of those arrangements are set out in note 7.

(c) Key management personnel

Disclosures relating to key management personnel and remuneration paid to directors of the ultimate parent entity are included in note 20.

86 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

22. Related party transactions (continued)

(d) Transactions with related parties

(d) Transactions with related parties
	Consolidated entity
	31 Dec 11	31 Dec 10
	$M	$M
Transactions with related parties other than associates and joint ventures
Expenses
Contributions to superannuation funds on behalf of employees	(4.8)	(6.1)
Transactions with associates and joint ventures
Responsible Entity fees from associates	23.9	22.7
Property management fees from associates	8.0	7.8
Development management fees from associates	6.8	4.5
Management fees from associates	3.6	3.4
Distributions received / receivable from joint ventures	363.5	53.9
Distributions received / receivable from associates	82.1	86.8
Interest revenue from associates	1.3	6.4
Payroll costs recharged to associate	4.2	4.2
Proceeds on sale of interest in associate	301.0	216.4
Other transactions
Loans advanced to joint ventures	2.7	-
Loan repayments from joint ventures	-	4.8
Loan repayments from associates	60.0	5.9
Increase in units in joint ventures	(2.0)	(3.0)
Increase in units in associates	(7.2)	(138.4)
Capital repayment from associates	3.0	-

GPT Annual Financial Report 2011

87

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

23. Notes to the Statement of Cash Flow

• (a) Reconciliation of net profit after income tax expense to net cash inflows from operating activities

	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
Net profit for the year Fair value adjustments to investment properties Share of after tax (profit) / loss of investments in associates and joint ventures Fair value adjustments to derivatives Net foreign exchange loss / (gain) Reversal of prior year impairment Impairment expense Revaluation of hotel properties Net loss / (profit) on disposal of assets Cost to sell for non-current assets held for sale Depreciation and amortisation Non-cash employee benefits - share based payments Non-cash revenue adjustments Non-cash expense adjustments Interest capitalised Impairment of trade receivables Change in operating assets and liabilities (Increase) / decrease in operating assets (Decrease) / increase in operating liabilities Net cash inflows from operating activities	246.2 707.3 (63.1) (62.3) (7.4) (296.8) 147.0 6.4 3.3 (11.6) - (9.5) 5.6 8.4 22.9 (5.4) 49.1 (34.4) - 22.3 9.4 13.2 6.5 1.7 21.4 19.3 3.2 0.8 (13.3) (29.3) 0.5 0.2 (3.1) 10.3 (15.0) 46.2
	413.2 386.8

(b) Reconciliation of cash

Reconciliation of cash at the end of the financial year (as shown in the Statement of Cashflow) to the related item in the financial report is as follows:

Cash at bank and on hand Total cash at end of the financial year	42.0 41.1
	42.0 41.1

(c) Non-cash financing and investing activities

There are no non-cash financing and investing activities for the year ended 31 December 2011.

88 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

24. Contingent assets and liabilities

Class action

In October 2008, Slater and Gordon announced an intention to bring a class action against GPT. At Slater & Gordon’s invitation, GPT entered into mediation discussions on a without prejudice basis in an attempt to determine whether the parties could reach agreement in relation to the dispute. Failing an agreed resolution of the matter, Slater & Gordon has now commenced proceedings on behalf of certain persons who claim that they purchased GPT securities from 27 February 2008 and held securities on 7 July 2008. The allegations surround the adequacy and timing of disclosures to the market in this period.

GPT rejects the allegations and intends to defend the claim. GPT does not expect that any payment it could be required to make would have a material adverse effect on the Group’s operational or strategic objectives, or its financial strength.

Sale of Ayers Rock Resort

As part of the agreement for the sale of Ayers Rock Resort, GPT has indemnified the purchaser, Indigenous Land Corporation, and its subsidiary, ILC Tourism, as follows:

• for a maximum of $20 million in respect of a breach of the Vendor’s Warranties, providing the purchaser makes a claim within 2 years from the date of completion, being 23 May 2011; and

• for a maximum of $2.5 million in respect of any breach of Environmental Law, Contamination or any other Environmental Claim relating to the condition of Ayers Rock Resort on or prior to completion, providing the purchaser notifies the vendor within 2 years from the date of completion. Included in this $2.5 million cap is a maximum of $0.6 million to cover the cost of remediation work by the purchaser in the event it is required as a result of landfill testing.

It is unlikely that any notification will be received in relation to environmental matters and it is not anticipated that a claim will be brought in relation to an alleged breach of the Vendor Warranties.

Sale of the US Senior Housing Portfolio

As part of the agreement for the sale of US Senior Housing Portfolio, GPT, through its investment in Benchmark GPT LLC and B-VII Operations Holding Co, has provided indemnification to the purchaser, Health Care REIT Inc, for a maximum of US $25 million for any breach of representation, warranties and covenants specified in the Sale Agreement and all obligations arising from any pre settlement liabilities, provided Health Care REIT Inc makes a claim by 28 March 2012.

Highpoint Shopping Centre

Highpoint Property Group has the right to put its 33.33% interest, or a part thereof (but not less than 8.33%), in Highpoint Shopping Centre and the adjacent Maribyrnong Homemaker City Centre to the GPT Wholesale Shopping Centre Fund (GWSCF). GWSCF already has a 50% interest in the property. The option, which was put in place at the time of GPT’s acquisition of an interest in the Centre in 2006, passed to GWSCF with the creation of the fund in March 2007. The option is exercisable during a 30 day window each year commencing on 1 July, although notice of the intent to put is required to be given by the Highpoint Property Group by 31 March each year. The interest would be sold to GWSCF and the sale price would be determined by an independent market valuation process. If GWSCF does not acquire the interest and another party is not nominated to acquire it, the GPT Group would be required to do so. The board of the responsible entity of GWSCF would determine whether GWSCF acquires a further interest in Highpoint Shopping Centre and the adjacent Maribyrnong Homemaker City Centre under the put option. The board of the responsible entity of GWSCF is independent from the board of the GPT Group. This put option expires in 2016. No notice of intent to exercise the put option was received by the required date for the current financial year’s exercise period.

Apart from the matters referred to above, there are no other material contingent assets or liabilities at reporting date.

GPT Annual Financial Report 2011 89

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

25. Commitments

(a) Capital expenditure commitments

At 31 December 2011, GPT has commitments principally relating to the purchase and development of investment properties which have been approved but not recognised as liabilities in the Statement of Financial Position as set out below:

have been approved but not recognised as liabilities in the Statement of Financial Position as set out below:
	Consolidated entity 31 Dec 11 $M 31 Dec 10 $M
Due within one year Due between one and five years Due after five years Total capital expenditure commitments (b) Operating lease commitments At 31 December 2011, future minimum rentals payable under non-cancellable operating leases are as follows: Due within one year Due between one and five years Due after five years Total operating lease commitments	76.2 141.1 43.5 19.2 - -
	119.7 160.3
	2.3 3.8 10.8 15.7 7.3 27.8
	20.4 47.3

GPT has entered into commercial leases on motor vehicles, office equipment and office premises.

(c) Commitments relating to associate and joint venture investments

GPT’s share of commitments relating to associate and joint venture investments has been included in note 10(c).

26. Capital and financial risk management disclosures

GPT’s Treasury Risk Management Committee (TRMC) oversees the establishment and implementation of the capital and financial risk management system including compliance with GPT treasury policy and reporting to the Audit and Risk Management Committee (ARMC) and, through the ARMC, to the GPT Board. The ARMC and the GPT Board approve GPT’s treasury policy which establishes a framework for the management of treasury risks, defines the role of GPT’s treasury and details risk management policies for cash, borrowing, liquidity, credit risk, foreign exchange, interest rate and derivative instruments. GPT’s treasury policy applies to the Trust and all controlled entities in the GPT Group.

To manage capital and financial risks GPT uses bank loans, Medium Term Notes (MTN’s) and derivative financial instruments.

(a) Capital and interest expense risk management

GPT’s objective when managing capital is to maximise the availability and minimise the cost of capital having regard to the relevant real estate market in which it is invested.

Capital and interest expense risk management is monitored in two main ways:

• Statement of Financial Position management – concerned with the capital mix of equity and debt and GPT maintaining gearing levels in line with its desired “A category” investment grade credit rating. GPT is able to increase equity in the capital mix by issuing new stapled securities, activating the DRP, adjusting the amount of distributions paid to stapled securityholders or selling assets to reduce borrowings.

• Statement of Comprehensive Income management – concerned with supporting the delivery of financial targets by protecting GPT’s exposure to interest rate volatility through the use of interest rate derivatives, which provide GPT with a known interest expense.

(i) Capital Structure, Financial Policy and Credit Rating Impact

GPT implemented revised distribution payout and gearing policies in 2010. These policies align GPT’s capital management framework with its refined business strategy, reflect a more sustainable distribution level, and ensure a prudent approach to managing the Group’s gearing through cycles.

Under the revised distribution payout policy, GPT will distribute the greater of 70-80% of realised operating income (excluding development profits), and taxable income.

GPT will manage gearing within a range of 25% to 35% (based on debt to total tangible assets). The policy includes flexibility to increase gearing beyond 30% if required, provided a reduction back to 30% or below is achieved within a reasonable timeframe.

GPT is credit rated A-/A3 with stable outlook by Standard and Poor’s and Moody’s Investor Services respectively. The ratings are important as they reflect the investment grade credit rating of GPT which allows access to global capital markets to fund its development pipeline and future acquisition investment opportunities. The stronger ratings improve both the availability of capital, in terms of amount and tenor, and reduce the cost at which it can be obtained.

90 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

26. Capital and financial risk management disclosures (continued)

(b) Financial risk management

The financial risks that result from GPT’s activities are credit risk, liquidity risk, refinancing risk and market risk (interest rate and foreign exchange). GPT manages its exposures to these key financial risks in accordance with its treasury policy and focuses on mitigating the impact of volatility in financial markets.

(c) Credit risk

Credit risk is the risk that a contracting entity will not complete its obligations under a contractual agreement, resulting in a financial loss to GPT. The GPT Consolidated entity has exposure to credit risk on all financial assets included in the Statement of Financial Position.

GPT manages this risk by:

• establishing credit limits for customers and financial institutions to ensure that GPT only trades and invests with approved counterparties to enable it to manage its exposure to individual entities;

• investing and transacting derivatives with multiple counterparties that have a minimum long term credit rating of A- (or its equivalent) from S&P, Moody’s or Fitch;

• providing loans as an investment into joint ventures, associates and third parties where it is comfortable with the underlying property exposure within that entity;

• regularly monitoring loans and receivables balances on an ongoing basis;

• regularly monitoring the performance of its associates, joint ventures and third parties on an ongoing basis; and

• obtaining collateral as security (where appropriate). Security is normally held through bank guarantees.

Receivables are reviewed regularly during the year. A provision for doubtful debts is made where collection is deemed uncertain. Part of GPT’s policy is to hold collateral as security over tenants via bank guarantees (or less frequently used collateral such as bond deposits or cash).

The maximum exposure to credit risk as at 31 December 2011 is the carrying amounts of financial assets recognised in the Statement of Financial Position of the Consolidated entity.

The table below shows the ageing analysis of loans and receivables and the financial assets that are in the Consolidated entity.

Current Receivables Impairment of receivables Non current loans and receivables Impairment Total loans and receivables	31 December 2011 Not Due 2011 $M 0-30 days 2011 $M 31-60 days 2011 $M 61-90 days 2011 $M 90+ days 2011 $M Total 2011 $M 81.0 59.0 1.2 (1.2) 4.6 144.6 Current Receivables - - - - (0.6) (0.6) Impairment of receivables 184.7 - - - - 184.7 Non current loans and receivables (24.8) - - - - (24.8) Impairment 240.9 59.0 1.2 (1.2) 4.0 303.9 Total loans and receivables	31 December 2010
		Not Due 2010 $M 0-30 days 2010 $M 31-60 days 2010 $M 61-90 days 2010 $M 90+ days 2010 $M Total 2010 $M
		- 66.8 1.3 - 2.5 70.6 - - - - (0.3) (0.3) 101.9 - - - - 101.9 (19.2) - - - - (19.2)
		82.7 66.8 1.3 - 2.2 153.0

GPT has been provided with security guaranteeing the deferred payments with respect to the Ayers Rock receivable and therefore the receivable is not considered to pose a credit risk.

The impairment includes a loan which relates to the loan to the Rouse Hill Residential joint venture and is based on the external valuation of development rights of the joint venture as at 31 December 2011.

GPT Annual Financial Report 2011

91

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

26. Capital and financial risk management disclosures (continued)

(d) Liquidity risk

Liquidity risk includes the risk that GPT, as a result of its operations:

• will not have sufficient funds to settle a transaction on the due date;

• will be forced to sell financial assets at a value which is less than what they are worth; or

• may be unable to settle or recover a financial asset at all.

Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities (refer to note 14), the ability to close out market positions, and the option to raise funds through the issue of new stapled securities.

GPT’s main liquidity risk besides meeting daily working capital requirements is its ability to refinance its current borrowings. The table below shows an analysis of the undiscounted contractual maturities of liabilities and capital expenditure commitments which forms part of GPT’s assessment of liquidity risk.

Consolidated entity

Liabilities Non-Derivatives Payables Borrowings Projected interest cost on borrowings Capital commitments Derivatives Projected interest cost on derivatives Total Liabilities Less Cash Total	31 December 2011	31 December 2010
	1 year or less Over 1 year to 2 years Over 2 years to 5 years Over 5 years Total	1 year or less Over 1 year to 2 years Over 2 years to 5 years Over 5 years Total
	$M $M $M $M $M	$M $M $M $M $M
	199.2 - - - 199.2 512.6 437.0 702.7 491.8 2,144.1 116.6 85.8 176.9 175.2 554.5 122.6 71.3 21.6 - 215.5	193.4 - - - 193.4 34.3 480.8 1,068.0 874.3 2,457.4 169.0 170.2 364.1 263.8 967.1 174.2 45.3 34.1 - 253.6
	951.0 594.1 901.2 667.0 3,113.3 22.2 35.3 64.2 47.8 169.5	570.9 696.3 1,466.2 1,138.1 3,871.5 (2.2) (5.2) (33.3) (82.0) (122.7)
	22.2 35.3 64.2 47.8 169.5	(2.2) (5.2) (33.3) (82.0) (122.7)
	973.2 629.4 965.4 714.8 3,282.8	568.7 691.1 1,432.9 1,056.1 3,748.8
	42.0 - - - 42.0	41.1 - - - 41.1
	931.2 629.4 965.4 714.8 3,240.8	527.6 691.1 1,432.9 1,056.1 3,707.7

• Projection is based on the likely outcome of contracts given the interest rates, margins, forecast exchange rates and interest rate forward curves as at 31 December 2011 and 31 December 2010 up until the contractual maturity of the contract. The projection is based on future non-discounted cash flows and does not ascribe any value to optionality on any instrument which may be included in the current market values shown in note 8.

GPT treasury policy requires debt maturity concentration risk to be minimised as follows:

• Debt expiry no greater than 20% of total forecast debt at any point in time;

• Maximum $1 billion maturing debt in forward rolling twelve month periods;

• Maximum $500 million maturing debt in any calendar quarter; and

• Minimum weighted average tenor target of four years.

As at 31 December 2011, GPT fully comply with the above treasury policy requirements.

92 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

26. Capital and financial risk management disclosures (continued)

(e) Refinancing risk

Refinancing risk is the risk that credit is unavailable or available at unfavourable interest rates and credit market conditions result in an unacceptable increase in GPT’s credit margins and interest cost. Refinancing risk arises when GPT is required to obtain debt to fund existing and new debt positions.

GPT is exposed to refinancing risks arising from the availability of finance as well as the interest rates and credit margins at which financing is available. GPT manages this risk by spreading sources and maturities of borrowings in order to minimise debt concentration risk, allow averaging of credit margins over time and reduce refinance amounts.

The GPT treasury policy further enhances refinancing risk by applying standards to all GPT borrowing facilities, in order to control GPT’s debt obligations, including the risk of cross default. The objective of the borrowing policy is to maximise GPT borrowing capacity from a variety of sources with the least amount of borrowing restrictions in terms of covenants and at the minimum cost.

As at 31 December 2011, GPT’s exposure to refinancing risk can be monitored by the spreading of its contractual maturities on borrowings in the liquidity risk table above (refer to note 26(d)).

(f) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

(i) Interest rate risk contracts – borrowings

GPT’s primary interest rate risk arises from long term borrowings. Borrowings issued at floating rates expose GPT to cash flow interest rate risk. Borrowings issued at fixed rates expose GPT to fair value interest rate risk.

GPT manages the cash flow effect of interest rate risk by entering into interest rate swap agreements that are used to convert floating interest rate borrowings to fixed interest rates. Such interest rate swaps are entered into with the objective of hedging the risk of interest rate fluctuations in respect of underlying borrowings. Under the interest rate swaps, GPT agrees with other parties to exchange, at specified intervals, the difference between fixed contract rates and floating rate interest amounts calculated by reference to the agreed notional principal amounts.

GPT had entered into interest rate swap agreements that are used to convert fixed interest rate debt to floating. Such interest rate swaps were entered into to give GPT the flexibility to utilise existing hedge positions.

Some of GPT’s interest rate swaps have embedded options, such as knock-outs, caps, collars and callable options. The options lower GPT’s cost of borrowings in exchange for some risk of the interest rate swap ceasing to be a hedge.

Interest rate swap contracts have been recorded on the Statement of Financial Position at their fair value in accordance with AASB 139 Financial Instruments: Recognition and Measurement. The requirements under Australian accounting standards in respect of documentation, designation and effectiveness requirements cannot be met in all circumstances, as a result derivatives do not qualify for hedge accounting and are recorded at fair value through the Statement of Comprehensive Income. Refer accounting policy at note 1(x).

The following table provides (in each currency) a summary of GPT’s gross interest rate risk exposure as at 31 December 2011 on interest bearing borrowings together with the net effect of interest rate risk management transactions which have been entered into to manage these exposures.

Australian Dollar Fixed rate interest-bearing borrowings Floating rate interest-bearing borrowings Average Rate (%) US Dollar Floating rate interest-bearing borrowings Average Rate (%)	Gross exposure (before the effect of derivatives) Net exposure (after the effect of derivatives)
	2011 $M 2010 $M 2011 $M 2010 $M
	284.0 284.0 1,514.0 1,994.7 1,860.1 2,065.5 630.1 354.8
	2,144.1 2,349.5 2,144.1 2,349.5
	5.92% 6.93% - 110.0 - 110.0
	- 110.0 - 110.0
	1.61%

The average rate depicted in the table above represents the balance date cost of funds for that currency. At balance date, the fair value of interest rate derivatives were an asset of $78.4 million (2010: $115.2 million) and a liability of $128.5 million (2010: $96.4 million) as disclosed in note 8. In the year ended 31 December 2011, the loss in the Statement of Comprehensive Income from the fair value of the net liability during the year is $147.0 million (2010: loss $6.4 million).

There is no foreign exchange exposure on borrowings as at 31 December 2011.

GPT Annual Financial Report 2011 93

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

26. Capital and financial risk management disclosures (continued)

(f) Interest rate risk (continued)

(ii) Interest rate risk – sensitivity analysis

Sensitivity on interest expense

The impact on unhedged interest expense of a 1% increase or decrease in market interest rates is shown below. Interest expense is sensitive to movements in market interest rates on floating rate debt (net of any derivative hedges).

Sensitivity on changes in fair value of interest rate swaps

The impact of changes in the fair value of interest rate swaps for a 1% increase or decrease in market interest rates is shown below. The sensitivity on the fair value arises from the impact that changes in market rates will have on the mark-to-market valuation of the interest rate swaps. The fair value of interest rate swaps is calculated as the present value of estimated future cash flows for each derivative, based on the forward market interest rate curve.

Gains or losses arising from changes in the fair value are reflected in the Statement of Comprehensive Income, as GPT do not apply hedge accounting, even though an economic hedge exists.

A 1% increase or decrease is used for consistency of reporting interest rate risk across the Group and represents management’s assessment of the potential change in interest rates.

	Consolidated entity 2011 (+1%)$M 2011 (-1%)$M 2010 (+1%)$M 2010 (-1%)$M
Impact on interest expense (increase) / decrease Impact on change in fair value of interest rate derivatives gain / (loss) Impact on profit / (loss) after tax	(18.6) 18.6 (21.7) 21.7 79.0 (82.7) 86.7 (91.5)
	60.4 (64.1) 65.0 (69.8)

(g) Foreign exchange risk

Foreign exchange risk refers to the risk that the value of a financial commitment, asset or liability will fluctuate due to changes in foreign currency rates. GPT’s foreign exchange risk arises primarily from:

• borrowings denominated in foreign currencies;

• firm commitments of highly probable forecast transactions for receipts and payments settled in foreign currencies or with prices dependent on foreign currencies; and

• investments in foreign assets.

(i) Foreign currency assets and liabilities

GPT manages its foreign exchange risk for its assets and liabilities denominated in foreign currency by borrowing in the same functional currency of its investment to form a natural economic hedge against any foreign currency fluctuations.

The following table shows the Australian dollar equivalents of GPT’s investments denominated in foreign currencies.

Consolidated entity

Assets Cash Interests in equity accounted investments Loans and receivables Liabilities Borrowings Payables Net assets / (liabilities)	Euros United States Dollars British Pounds 2011 A$M 2010 A$M 2011 A$M 2010 A$M 2011 A$M 2010 A$M
	0.5 1.1 0.4 0.9 0.1 0.4 - 13.5 0.2 312.0 - - 10.0 9.5 34.9 60.0 - -
	10.5 24.1 35.5 372.9 0.1 0.4 - - - 107.8 - - 1.0 0.9 - 4.7 - 0.5
	1.0 0.9 - 112.5 - 0.5
	9.5 23.2 35.5 260.4 0.1 (0.1)

As at 31 December 2011, there is no USD foreign exchange exposure as the balances are hedged by foreign exchange contracts.

(ii) Forward exchange contracts to hedge net foreign cash flows

GPT manages the foreign exchange risk of income (net of funding costs) derived from its foreign assets and investments in joint ventures and associates by entering into forward foreign exchange contracts.

94 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

26. Capital and financial risk management disclosures (continued)

(h) Fair value

GPT has adopted the classification of fair value measurements into the following hierarchy as required by AASB 7 Financial Instruments: Disclosures:

• (a) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);

• (b) 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 2); and

• (c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).

The following table presents the Consolidated entity’s assets and liabilities measured and recognised at fair value as at 31 December 2011 and 31 December 2010.

Consolidated entity

Consolidated entity
Current Derivative assets Interest rate swaps Interest rate options Foreign exchange contracts Derivative liabilities Interest rate swaps Interest rate options Foreign exchange contracts Total Current Non-Current Derivative assets Interest rate swaps Interest rate options Derivative liabilities Interest rate swaps Interest rate options Total Non-Current	Level 1 31 Dec 11 $M Level 2 31 Dec 11 $M Level 3 31 Dec 11 $M Total 31 Dec 11 $M	Level 1 31 Dec 10 $M Level 2 31 Dec 10 $M Level 3 31 Dec 10 $M Total 31 Dec 10 $M
	- 0.1 - 0.1 - - - - - 0.1 - 0.1	- 0.1 - 0.1 - - 0.1 0.1 - - - -
	- 0.2 - 0.2 - (0.8) - (0.8) - - - - - (0.2) - (0.2)	- 0.1 0.1 0.2 - - - - - - (0.4) (0.4) - - - -
	- (1.0) - (1.0)	- - (0.4) (0.4)
	- (0.8) - (0.8)	- 0.1 (0.3) (0.2)
	- 77.9 - 77.9 - - 0.3 0.3	- 114.0 - 114.0 - - 1.0 1.0
	- 77.9 0.3 78.2 - (26.8) - (26.8) - - (100.7) (100.7)	- 114.0 1.0 115.0 - (50.3) - (50.3) - - (45.7) (45.7)
	- (26.8) (100.7) (127.5)	- (50.3) (45.7) (96.0)
	- 51.1 (100.4) (49.3)	- 63.7 (44.7) 19.0

GPT holds no level 1 derivatives. Level 2 derivatives that GPT has at 31 December 2011 include Float to Float, Fixed to Float, Knock Out and Vanilla derivatives. Level 3 derivatives that GPT has at 31 December 2011 include Sold Receiver Swaption, Callable and CPI derivatives.

GPT has historically recorded mark to market on derivatives based on the counterparty valuations. This is largely based on discounted cash flow analysis using midmarket rates with inputs including the bank’s market interest rates curves, basis, CPI, volatility and may include the bank’s proprietary information and assumptions around convexity of the curves and valuation of the options. The bank valuations do not currently include any debit value or credit value adjustment which takes into account the credit risk of the respective parties.

During the year, GPT management has moved towards valuation of all its derivatives internally rather than relying on bank valuations such that a consistent approach is adopted for the same types of derivatives.

The internally generated fair value of the derivatives is determined using a generally accepted pricing model based on a discounted cash flow analysis using quoted market inputs (interest rates, basis, CPI, volatility) adjusted for specific features of the instruments and applied debit or credit value adjustments based on GPT or derivative counterparties current credit worthiness.

Credit value adjustments: these are applied to mark-to-market assets for counterparties with a rating below “AA” (given market rates are reflective of a bank with AA rating) based on that counterparty’s credit risk using the observable credit default swaps curve as a benchmark for credit risk.

Debit value adjustments: these are applied to mark-to-market liabilities based on GPT’s credit risk using GPT’s credit default swaps curve as a benchmark for credit risk.

The following table is a reconciliation of the movements in derivatives classified as Level 3 for the year ended 31 December 2011 and 31 December 2010. Amounts represented as ‘fair value movement through profit and loss – no longer held’ reflect the movement in value of the derivatives from the beginning of the financial year to the date of settlement / termination.

GPT Annual Financial Report 2011

95

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

26. Capital and financial risk management disclosures (continued)

(h) Fair value (continued)

Consolidated entity

(h) Fair value (continued) Consolidated entity
Opening balance Fair value movement through profit and loss - Still held - No longer held Purchases Terminations Transfers out of level 3 Transfers into level 3 Closing Balance as at 31 December 2011	Derivative assets 31 Dec 11 $M Derivative liabilities 31 Dec 11 $M Total 31 Dec 11 $M	Derivative assets 31 Dec 10 $M Derivative liabilities 31 Dec 10 $M Total 31 Dec 10 $M
	1.1 (46.1) (45.0) (0.7) (64.3) (65.0) (0.1) (29.1) (29.2) - - - - 38.8 38.8 - - - - - -	3.8 (68.3) (64.5) 3.0 (10.5) (7.5) - 5.7 5.7 2.1 1.6 3.7 - 2.9 2.9 (7.9) 30.5 22.6 0.1 (8.0) (7.9)
	0.3 (100.7) (100.4)	1.1 (46.1) (45.0)

Sensitivity on changes in fair value of level 3 derivatives

The fair value of derivatives classified as Level 3 are calculated using a generally accepted pricing model based on a discounted cash flow analysis using quoted market inputs such as interest rates, basis, CPI and volatility.

The impact of using reasonably possible alternative assumptions in these models, based on a 1% increase or 1% decrease in interest rates (the most significant input), while holding all other variables constant, is shown in the table below.

Consolidated entity

Consolidated entity
	2011 (+1%)$M 2011 (-1%)$M
Impact on change in fair value of Level 3 derivatives gain / (loss) Impact on profit / (loss) after tax	59.8 (63.0)
	59.8 (63.0)

96 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

27. Auditor’s remuneration

During the financial year the following amounts were paid or payable for services provided by the auditor of the Trust, PricewaterhouseCoopers, by the Consolidated entity and its related parties:

PricewaterhouseCoopers, by the Consolidated entity and its related parties:
	Consolidated entity 31 Dec 11 $’000 31 Dec 10 $’000
Audit services PricewaterhouseCoopers Australia Statutory audit and review of financial reports Affiliates of PricewaterhouseCoopers Australia including overseas firms Audit and review of financial reports and other statutory audit work Total remuneration for audit services Other assurance services PricewaterhouseCoopers Australia Regulatory and contractually required audits Total remuneration for other assurance services Total remuneration for audit and assurance services Non audit related services PricewaterhouseCoopers Australia Other Services Affiliates of PricewaterhouseCoopers Australia including overseas firms Taxation services Total remuneration for non audit related services Total auditor's remuneration	1,245.5 1,315.5 30.8 308.2
	1,276.3 1,623.7
	171.5 183.6
	171.5 183.6
	1,447.8 1,807.3
	111.5 3.8 125.4 88.3
	236.9 92.1
	1,684.7 1,899.4

GPT Annual Financial Report 2011

97

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – THE GPT GROUP

28. Earnings per stapled security

28. Earnings per stapled security
Note	Consolidated entity 31 Dec 11 Cents 31 Dec 10 Cents
(a) Attributable to ordinary securityholders of the Trust Basic and diluted earning per security - Profit from continuing operations 17.7 26.2 Basic and diluted earning per security - (Loss) / profit from discontinued operations (2.8) 13.9 Total basic and diluted earning per security attributable to ordinary securityholders of the Trust 14.9 40.1 (b) Attributable to ordinary stapled securityholders of The GPT Group Basic and diluted earning per security - Profit from continuing operations 15.4 21.8 Basic and diluted earning per security - (Loss) / profit from discontinued operations (3.4) 14.9 Total basic and diluted earning per security attributable to ordinary stapled securityholders of The GPT Group 12.0 36.7 The earnings and securities used in the calculations of basic and diluted earnings per ordinary stapled security are as follows: (c) Reconciliation of earnings used in calculating earnings per ordinary stapled security 31 Dec 11 $M 31 Dec 10 $M Net profit from continuing operations attributable to the securityholders of the Trust 351.3 511.3 Net (loss) / profit from discontinued operations attributable to the securityholders of the Trust (50.8) 258.4 300.5 769.7 Less: distribution to the holders of Exchangeable Securities (25.0) (25.0) Basic and diluted earnings of the Trust 275.5 744.7 Add: Net (loss) from continuing operations attributable to the securityholders of other stapled entities (42.1) (80.8) Add: Net (loss) / profit from discontinued operations attributable to the securityholders of other stapled entities (12.2) 18.4 Basic and diluted earnings of the Company (54.3) (62.4) Basic and diluted earnings of The Group 221.2 682.3 No. of securities millions No. of securities millions (d) Weighted average number of ordinary stapled securities 31 Dec 1131 Dec 10 Weighted average number of ordinary stapled securities used as the denominator in calculating: Basic earnings per ordinary stapled security - Trust and The Group 1,845.2 1,855.5 Adjustments for calculation of diluted earnings per security: Performance rights (weighted average basis) (e) 0.7 0.2 Weighted average number of ordinary stapled securities and potential ordinary stapled securities used as the denominator in calculating diluted earnings per ordinary stapled security 1,845.9* 1,855.7	17.7 26.2 (2.8) 13.9
	14.9 40.1
	15.4 21.8 (3.4) 14.9
	12.0 36.7
	351.3 511.3 (50.8) 258.4
	300.5 769.7 (25.0) (25.0)
	275.5 744.7 (42.1) (80.8) (12.2) 18.4
	(54.3) (62.4)
	221.2 682.3
	No. of securities millions No. of securities millions 31 Dec 1131 Dec 10
	1,845.2 1,855.5 0.7 0.2
	1,845.9 1,855.7

• These securities are not considered dilutive as the distribution per exchangeable security is higher than the basic EPS per stapled security. Refer to note 16(c) for further details on the Exchangeable Securities.

(e) Performance Rights

4,060,829 Performance Rights (Dec 10: 3,818,257 restated for the 5 to 1 consolidation of stapled securities) were granted to certain Senior Executives under the Stapled Security Rights Plan during 2011. 12,503,236 Performance Rights have been issued up until 31 December 2011. However, only 737,303 Performance Rights are considered dilutive. As such, only 737,303 performance Rights have been included in the determination of diluted earnings per security. No Performance Rights have been included in the determination of basic earnings per share.

98 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 December 2011 – THE GPT GROUP

29. Net tangible asset backing

29. Net tangible asset backing
	Consolidated entity
	31 Dec 11	31 Dec 10
	$	$
Net tangible asset backing per stapled security / unit	3.59	3.60

Net tangible asset backing per security is calculated by dividing the sum of net assets less intangible assets by the total number of potential stapled securities, assuming the conversion of the exchangeable securities at an exchange price of $3.883 (Dec 10: $3.883).

30. Events subsequent to reporting date

On 12 January 2012, GPT completed the settlement of La Trobe Street car park at Melbourne Central sale for $29.2 million.

On 17 January 2012, GPT priced $150 million fixed rate Medium Term Notes (MTNs) debt issue for a term of 7 years providing additional liquidity to fund short and medium term capital requirements. These MTNs were settled on 24 January 2012.

On 1 February 2012, GPT signed a $100 million loan facility with Commonwealth Bank of Australia with a term of 1 year expiring on 1 February 2013.

On 3 February 2012, GPT completed the settlement of the 42&44 Ocean Steamers Drive, Port Adelaide sale for $7 million.

Post 31 December 2011, GPT continued with the on-market buy-back of the Group’s ordinary stapled securities. At 17 February 2012, the GPT Group has bought back 4.3 million ordinary stapled securities for the total consideration of $13.3 million. This represents 0.2% of the total ordinary stapled securities.

On 17 February 2012, a distribution of 4.9 cents per ordinary stapled security ($88.7 million) was declared for the quarter ended 31 December 2011 (refer to note 3(a)(ii)).

Other than the above, the Directors are not aware of any matter or circumstance occurring since 31 December 2011 that has significantly or may significantly affect the operations of GPT, the results of those operations or the state of affairs of GPT in subsequent financial years.

GPT Annual Financial Report 2011

99

DIRECTORS’ DECLARATION

For the year ended 31 December 2011 – THE GPT GROUP

In the directors of the Responsible Entity’s opinion:

• (a) the financial report and notes set out on pages 36 to 99 are in accordance with the Corporations Act 2001, including:

• complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

• giving a true and fair view of the GPT Group’s financial position as at 31 December 2011 and of its performance for the financial year ended on that date; and

• (b) there are reasonable grounds to believe that the GPT Group will be able to pay its debts as and when they become due and payable.

Note 1(a) confirms that the financial report also complies with International Financial Reporting Standards as issued by the International Accounting Standards Board.

The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer as required by section 295A of the Corporations Act 2001.

This declaration is made in accordance with the resolution of the directors.

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Michael Cameron

Rob Ferguson Chairman

Managing Director and Chief Executive Officer

GPT RE Limited

Sydney 17 February 2012

100 GPT Annual Financial Report 2011

INDEPENDENT AUDIT REPORT For the year ended 31 December 2011 – THE GPT GROUP

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GPT Annual Financial Report 2011

101

INDEPENDENT AUDIT REPORT

For the year ended 31 December 2011 – THE GPT GROUP

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102 GPT Annual Financial Report 2011

INDEPENDENT AUDIT REPORT For the year ended 31 December 2011 – THE GPT GROUP

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GPT Annual Financial Report 2011

103

ANNUAL FINANCIAL REPORT

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

Contents

Directors’ Report	105
Auditor’s Independence Declaration	128
Financial Report
Consolidated Statement of Comprehensive Income	129
Consolidated Statement of Financial Position	130
Consolidated Statement of Changes in Equity	131
Consolidated Statement of Cash Flow	132
Notes to the Financial Statements
1. Basis of preparation of concise financial report	133
2. Segment reporting	133
3. Dividends paid and payable	140
4. Earnings / (loss) per share	140
5. Non-current assets held for sale and discontinued
operations	141
6. Accumulated losses	143
7. Auditor’s remuneration	143
8. Events subsequent to reporting date	143
Directors’ Declaration	144
Independent Audit Report	145

This concise financial report covers both GPT Management Holdings Limited as an individual entity and the consolidated entity consisting of GPT Management Holdings Limited and its controlled entities. The concise financial report is presented in Australian currency.

GPT Management Holdings Limited (the Company) is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is Level 51, MLC Centre, 19 Martin Place, Sydney NSW 2000.

Through our internet site, we have ensured that our corporate reporting is timely, complete and available globally at minimum cost to the Company. All press releases, financial reports and other information are available on our website: www.gpt.com.au.

104 GPT Annual Financial Report 2011

DIRECTORS’ REPORT

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

The Directors of GPT Management Holdings Limited (the Company) present their report on the consolidated entity consisting of GPT Management Holdings Limited and its controlled entities for the year ended 31 December 2011. The consolidated entity forms part of the stapled entity, the GPT Group (GPT or the Group). The Company is stapled to the GPT Trust and the Group financial statements include the results of the stapled entity as a whole.

GPT Management Holdings Limited is a company limited by shares, incorporated and domiciled in Australia. The registered office and principal place of business is MLC Centre, Level 51, 19 Martin Place, Sydney NSW 2000.

1. Operations and Activities

1.1 Principal Activities

During the year, the Company continued its strategy to simplify the business and focus on high quality Australian retail, office and industrial / business park assets.

The principal activities of GPT Management Holdings Limited remain unchanged from 31 December 2010 and are:

• management of funds holding income-producing retail, office, industrial and business park assets;

• development of properties;

• management and administration of the General Property Trust; and

• property management.

After completing the sale of the US Senior Housing Portfolio on 29 March 2011, the Company operates almost entirely in Australia.

1.2 Review of Operations

The net loss of the consolidated entity for the year ended 31 December 2011 should be read in conjunction with the financial statements of the GPT Group.

The net loss for the year ended 31 December 2011 is $49.2 million (Dec 2010: profit of $615.7 million). To provide information that reflects the Directors’ assessment of the net profit attributable to stapled securityholders calculated in accordance with Australian Accounting Standards, certain significant items that are relevant to an understanding of the consolidated entity’s result have been identified. The effect of these items is set out below:

identified. The effect of these items is set out below:
	Consolidated entity 31 Dec 11 $’000 31 Dec 10 $’000
Core operations Non-core operations Financing and corporate overheads Realised Operating Income Change in fair value of assets (non-cash): Valuation increase / (decrease) Funds Management Europe US Seniors Housing (Loss) / profit on disposal Other items1 Net profit after tax	3,752 6,125 (3,196) (22,100) (27,769) (18,333)
	(27,213) (34,308) (14,272) (14,163) 14,372 1,803 (6,089) 3,028 (16,043) 659,317
	(49,245) 615,677

1 Other items include revaluation on borrowings, impairment, amortisation and tax impact.

• Profit after tax decreased by $664.9 million to a loss of $49.2 million (Dec 2010: profit of $615.7 million)

• Realised operating income has increased by 20.7% to a loss of $27.2 million (Dec 2010: loss of $34.3 million)

• Total assets decreased by 19.3% to $176.8 million (December 2010: $219.0 million)

The increase in Realised Operating Income (ROI) compared with December 2010 is largely the result of the wind up of non-core operations resulting in increased ROI partly offset by increased overheads.

GPT Annual Financial Report 2011 105

DIRECTORS’ REPORT

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

1. Operations and Activities (continued)

1.2 Review of Operations (continued)

Financial results – operational highlights

The financial performance and total assets by portfolio are summarised below along with commentary on each portfolio’s operational performance. The segment realised operating income is reconciled to net profit / (loss) in note 2(a).

Portfolio / Segment	Realised Operating Income 2011 $’000 Realised Operating Income 2010 $’000 Total Assets 2011 $’000 Total Assets 2010 $’000
Core Funds Management - Australia 1.2(a) Property Management 1.2(b) Non-core Discontinued operation - US Senior Housing Discontinued operation - Funds Management - Europe Discontinued operation - Joint Venture Discontinued operation - Hotel / Tourism Financing and corporate overheads Corporate Total	7,913 7,742 8,839 10,221 (4,161) (1,617) 15,508 37,170 1,134 (7,764) 175 1,099 1,768 (2,290) - 13,487 - - - - (6,098) (12,046) 1,916 20,632 (27,769) (18,333) 150,411 136,431
	(27,213) (34,308) 176,849 219,040

(a) Funds Management

GPT Wholesale Office Fund (GWOF) has ownership interests in 14 assets with a value of $3.3 billion. GPT Wholesale Shopping Centre Fund (GWSCF) has ownership interests in 9 assets with a value of $2.2 billion.

The performance across the Funds’ assets continues to be solid, with GWOF achieving a total return of 8.8% and GWSCF a total return of 10.3% for the year. This reflects stable income growth and continuing high levels of occupancy for both portfolios.

(b) Property Management

The property management division made a loss of $4,634,000 (Dec 2010: profit of $24,820,000). Assets include management rights for Highpoint Shopping Centre and Norton Street Plaza.

(c) Developments

GPT currently has five developments underway; One One One Eagle Street in Brisbane, 161 Castlereagh Street in Sydney, an expansion of Highpoint Shopping Centre in Melbourne and Wollongong Central, and 5 Murray Rose Ave, Sydney Olympic Park.

GPT retains a $3.2 billion pipeline of future development opportunities for the medium term, subject to approvals and an appropriate level of pre-commitments. The consolidated entity undertakes development management of the projects.

(d) Reconciliation items from Realised Operating Income to Net profit after tax

These items comprise of certain unrealised items, non-cash items, gains or losses on investments or other items the Directors determine to be non-recurring or capital in nature.

The total of the reconciliation items decreased to a loss of $22.0 million (2010: a profit of $650.0 million). This is caused by a fair value decrement on funds management Europe assets of $14.3 million, loss on disposal of $6.1 million, amortisation and impairment expense of $10.9 million, finance costs of $4.7 million, partly offset with a fair value gain on US Senior Housing assets of $14.4 million and a gain on revaluation on borrowings of $5.1 million. Prior year comparative included revaluation on borrowings ($678.0 million gain).

(e) Capital Management

Borrowings - Loan Variation

During the prior year the terms of the Australian subsidiaries’ intercompany loans with General Property Trust (the Trust) were varied under individual Deeds of Variation. Under the Deeds of Variation, the Trust’s rights to full repayment of the intercompany loans will be limited to the surplus cash of the individual companies at their loan maturity date. This constituted a substantial modification to each of the loan terms and accordingly the loans were remeasured under the varied contractual terms and conditions. In the current year, a revaluation to the Statement of Comprehensive Income of $5,114,000 (Dec 2010: $678,035,000) for both continuing and discontinued operations has been recorded.

106 GPT Annual Financial Report 2011

DIRECTORS’ REPORT

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

1. Operations and Activities (continued)

1.3 Dividends

The Directors have not declared any dividends for the year ended 31 December 2011 (Dec 2010: nil).

1.4 Significant Changes in State of Affairs

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

• On 29 March 2011, GPT completed the sale of the US Seniors Housing Portfolio to Health Care REIT Inc (HCN). An associate of the Company, B-VII Operations Holding Co LLC, sold property, plant and equipment for US $34.3 million and the Company redeemed a 20% interest in the manager of the portfolio, Benchmark Assisted Living LLC for US $1.2 million.

• On 11 May 2011, GPT announced an on-market buy-back of up to 5% of the Group’s ordinary securities. At 31 December 2011, GPT has bought back 41.8 million ordinary stapled securities for a total consideration of $1.7 million. This represents 2.3% of total ordinary securities.

• On 23 May 2011, the Company completed the sale of the Voyages Business Platform with a gain on sale of $0.4 million.

1.5 Likely Developments and Expected Results of Operations

Likely developments and commentary on the expected results of operations are included in section 1.2 of this Report.

Further information on likely developments and expected results of operations have not been included in this annual financial report because the Directors believe it would likely result in unreasonable prejudice to the Company.

1.6 Environmental Regulation

GPT has policies and procedures in place that are designed to ensure that where operations are subject to any particular and significant environmental regulation under a law of Australia (for example property development and property management); those obligations are identified and appropriately addressed. This includes obtaining and complying with conditions of relevant authority consents and approvals and obtaining necessary licences. GPT is not aware of any breaches of any environmental regulations under the laws of the Commonwealth of Australia or of a State or Territory of Australia and has not incurred any significant liabilities under any such environmental legislation.

GPT is also subject to the reporting requirements of both the Energy Efficiency Opportunities Act 2006 (“EEO”) and the National Greenhouse and Energy Reporting Act 2007 (“NGER”).

The Energy Efficiency Opportunities Act 2006 requires GPT to assess its energy usage, including the identification, investigation and evaluation of energy saving opportunities and to report publicly on the assessments undertaken; including what action GPT intends to take as a result. As required under this act, GPT is registered with the Department of Resources, Energy and Tourism as a participant entity. GPT has collated energy data and identified energy opportunities for the 1 July 2010 to 30 June 2011 period and disclosed the Energy Efficiency Opportunities data on the GPT website by the required date of 31 December 2011.

The National Greenhouse and Energy Reporting Act 2007 requires GPT to report its annual greenhouse gas emissions and energy use. The measurement period for GPT is 1 July 2010 to 30 June 2011. GPT has implemented systems and processes for the collection and calculation of the data required for submission of its report to the Department of Climate Change and Energy Efficiency within the legislative deadline of 31 October 2011.

More information about the GPT Group’s participation in the EEO and NGER programs is available at www.gpt.com.au.

1.7 Events Subsequent to Reporting Date

The following events have occurred subsequent to 31 December 2011:

• Post 31 December 2011, GPT continued with the on-market buy-back of the Group’s ordinary securities. At 17 February 2012, the Company has bought back 4.3 million ordinary stapled securities for a total consideration of $0.1 million. This represents 0.2% of the total ordinary stapled securities.

Other than the above, the Directors are not aware of any matter or circumstance occurring since 31 December 2011 that has significantly or may significantly affect the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in subsequent financial years.

GPT Annual Financial Report 2011 107

DIRECTORS’ REPORT

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

2. Directors and Secretary

2.1 Directors

(i) Chairman - Non-Executive Director

Rob Ferguson

(ii) Non-Executive Directors

Brendan Crotty

Eileen Doyle

Eric Goodwin

Lim Swe Guan Anne McDonald Gene Tilbrook

(iii) Executive Director

Michael Cameron

2.2 Information on Directors

Rob Ferguson – Chairman

Mr Ferguson was Managing Director and Chief Executive Officer of Bankers Trust Australia for 15 years. During his 30 year career with Bankers Trust, Mr Ferguson held a number of senior executive positions including Head of Corporate Finance and Investment Management. Mr Ferguson was also an independent non-executive director of Westfield for 10 years.

Mr Ferguson is currently the Non-Executive Chairman of IMF (Australia) Limited; Non-Executive Chairman of Primary Health Care Limited and Non-Executive Director of MoneySwitch Limited. Prior Board positions include Chairman of Vodafone Australia, Nexgen Limited and Bankers Trust Australia Ltd.

Mr Ferguson brings to the Board a wealth of knowledge and experience in finance, investment management and property as well as corporate governance.

Mr Ferguson joined the Board on 25 May 2009 and is a member of the Nomination and Remuneration Committee.

Brendan Crotty

Mr Crotty was appointed to the Board on 22 December 2009. He brings extensive property industry expertise to the Board, including 17 years as Managing Director of Australand until his retirement in 2007.

Mr Crotty is currently a director of Australand Funds Management Pty Ltd, Brickworks Limited and a privately owned major Victorian land and housing company. Mr Crotty is also Chairman of the Western Sydney Parklands Trust and RPS Australia Asia Pacific and a director of the Barangaroo Delivery Authority.

Mr Crotty holds tertiary qualifications in Surveying, Town Planning and Business Administration and is a Fellow of the Royal Institute of Chartered Surveyors, the Australian Institute of Company Directors, and the Australian Property Institute as well being a member of the Planning Institute of Australia.

Mr Crotty is a member of the Nomination and Remuneration Committee and the Sustainability Committee.

Eileen Doyle

Dr Doyle was appointed to the Board on 1 March 2010.

Dr Doyle has over two decades of diverse business experience. She has held senior executive roles and Non-Executive Director roles in a wide range of industries, including research, financial services, building and construction, steel, mining, logistics and export. Currently, Dr Doyle’s directorships include Boral Limited, Hunter Valley Research Foundation (Chairman), Bradken Limited and CSIRO.

Dr Doyle holds tertiary qualifications in mathematics, applied statistics (PhD) and business administration. She is a Fellow of the Australian Institute of Company Directors.

Dr Doyle is Chair of the Sustainability Committee and a member of the Nomination and Remuneration Committee.

108 GPT Annual Financial Report 2011

DIRECTORS’ REPORT

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

2. Directors and Secretary (continued)

2.2 Information on Directors (continued)

Eric Goodwin

Mr Goodwin was appointed to the Board in November 2005. He brings to the board extensive experience in design, construction and project management, general management and funds management. His experience includes funds management of the MLC Property Portfolio during the 1980s and he was the founding Fund Manager of the Australian Prime Property Fund.

Mr Goodwin is a Non-Executive Director of Eureka Funds Management Limited, Lend Lease Global Properties SICAF and AMPCI Macquarie Infrastructure Management No 2 Limited (responsible entity of Diversified Utility and Energy Trust No. 2).

Mr Goodwin joined Lend Lease in 1963 as a cadet engineer and during his 42 year career with Lend Lease held a number of senior executive and subsidiary board positions in the Australian operation, the US and he was the inaugural manager of the Group’s Asian operations.

Mr Goodwin is a member of the Audit and Risk Management Committee and a member of the Sustainability Committee.

Lim Swe Guan

Mr Lim was appointed to the Board in April 2009.

After graduating with an honours degree in Estate Management in 1979, Mr Lim was employed as Lands Officer for the Urban Redevelopment Authority of Singapore.

He left URA in 1980 to work as a securities analyst, initially for Kim Eng Securities (1980 -1982) and later for Alfa-Pacific Securities (1982 - 1983).

Mr Lim obtained an MBA from the Colgate Darden Graduate School of Business, The University of Virginia in 1985 and returned to Singapore where he worked as a property consultant with Knight Frank, Cheong Hock Chye & Bailieu. In June 1986, Mr Lim was recruited by Jones Lang Wootton in Sydney, Australia to the position of Senior Research Analyst. He was appointed Manager in October 1987 and Director in 1989. Mr Lim obtained the Chartered Financial Analyst (CFA) certification in 1991. In November 1995, Mr Lim joined SUNCORP Investments in Brisbane, Australia as Portfolio Manager, Property Funds.

Mr Lim returned to Singapore in December 1997 to join the Government of Singapore Investment Corporation, as Managing Director of GIC Real Estate until February 2011.

Mr Lim sits on the boards of Thakral Holdings Group in Australia, Sunway City Berhad in Malaysia and Global Logistic Properties in Singapore.

Mr Lim is a member of the Audit and Risk Management Committee.

Anne McDonald

Ms McDonald was appointed to the Board on 2 August 2006. Ms McDonald is currently a Non-Executive Director of listed entities, Spark Infrastructure Group and Specialty Fashion Group. She is also a Non-Executive Director of Westpac’s Life and General Insurance businesses.

Ms McDonald holds a Bachelor of Economics, is a fellow of the Institute of Chartered Accountants and a Graduate of the Australian Institute of Company Directors.

Ms McDonald is a chartered accountant and was previously a partner of Ernst & Young for 15 years specialising as a company auditor and advising multinational and Australian companies on governance, risk management and accounting issues. Previous roles include Board Member of Ernst & Young Australia and a Director of the Private Health Insurance Administration Council, St Vincent’s and Mater Health Sydney and Health Super.

Ms McDonald is Chair of the Audit and Risk Management Committee.

Gene Tilbrook

Mr Tilbrook was appointed to the Board on 11 May 2010.

He has extensive experience in corporate strategy, finance, investment and capital management. Mr Tilbrook spent the majority of his executive career at Wesfarmers Limited, including roles as Finance Director and Director of Business Development.

Mr Tilbrook is currently Non-Executive Chairman of Transpacific Industries Group Ltd; and a Non-Executive Director of Fletcher Building Ltd, NBN Co Limited and QR National Limited. He is a councillor of the Australian Institute of Company Directors (WA Division) and Curtin University and a member of the board of the UWA Perth International Arts Festival. Mr Tilbrook has previously held directorship roles in the private equity, infrastructure and property sectors.

Mr Tilbrook is Chair of the Nomination and Remuneration Committee.

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2. Directors and Secretary (continued)

2.2 Information on Directors (continued)

Michael Cameron

Mr Cameron joined The GPT Group as CEO and Managing Director in May 2009 and has over 30 years’ experience in finance and business.

His past experience includes 10 years with Lend Lease where he was Group Chief Accountant, then Financial Controller for MLC Limited before moving to the US in 1994 in the role of Chief Financial Officer/Director of The Yarmouth Group, Lend Lease’s US property business. On returning to Sydney in 1996 Michael was appointed to the role of Chief Financial Officer, MLC Limited before moving to the role of Chief Financial Officer, then Chief Operating Officer of the NAB Wealth Management Division following the sale of MLC.

Mr Cameron joined the Commonwealth Bank of Australia in 2002 as Deputy Chief Financial Officer, and was appointed to the role of Group Chief Financial Officer soon after in early 2003.

In 2006, Mr Cameron was appointed to the position of Group Executive of the Retail Bank Division of the Commonwealth Bank of Australia, leading a team of 20,000 staff servicing eight million customers.

Mr Cameron was Chief Financial Officer at St.George Bank Limited from mid 2007 until its sale to Westpac in December 2008.

Mr Cameron is a fellow of the Australian Institute of Chartered Accountants, a fellow of CPA Australia and a fellow of the Australian Institute of Company Directors. He is also a Director of the Great Barrier Reef Foundation.

James Coyne - Company Secretary

Mr Coyne is responsible for the legal, compliance and company secretarial activities of GPT. He was appointed as the General Counsel / Company Secretary of GPT in 2004. Previous experience includes company secretarial and legal roles in construction, infrastructure, and the real estate funds management industry (listed and unlisted).

Mr Coyne holds a Bachelor of Arts and Bachelor of Laws (Hons) from the University of Sydney.

2.3 Attendance of Directors at Meetings

The number of Board meetings, including meetings of Board Committees, held during the financial year and the number of those meetings attended by each Director is set out below:

	Board	Board	Audit and Risk Management Committee	Audit and Risk Management Committee	Nomination and Remuneration Committee	Nomination and Remuneration Committee	Sustainability Committee	Sustainability Committee
	Number of meetings attended	Number of meetings eligible to attend	Number of meetings attended	Number of meetings eligible to attend	Number of meetings attended	Number of meetings eligible to attend	Number of meetings attended	Number of meetings eligible to attend
Chairman	Rob Ferguson		Anne McDonald		Gene Tilbrook		Eileen Doyle
Rob Ferguson	9	9	-	-	5	5	-	-
Michael Cameron	9	9	-	-	-	-	-	-
Brendan Crotty	9	9	-	-	4	5	4	4
Eileen Doyle	9	9	-	-	5	5	4	4
Eric Goodwin	9	9	6	6	-	-	4	4
Lim Swe Guan	9	9	6	6	-	-	-	-
Anne McDonald	9	9	6	6	-	-	-	-
Gene Tilbrook	9	9	-	-	5	5	-	-

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2. Directors and Secretary (continued)

2.4 Directors’ Relevant Interests

The relevant interests of each Director in GPT stapled securities as at the date of this report are shown below:

	Number of GPT Stapled Securities
Rob Ferguson	204,082
Michael Cameron	470,991 - Stapled Securities
	1,369,626 - Performance Rights
Brendan Crotty	30,000
Eileen Doyle	1,600
Eric Goodwin	15,584
Lim Swe Guan	Nil
Anne McDonald	9,450
Gene Tilbrook	20,000

2.5 Directors’ Directorships of Other Listed Companies

Details of all directorships of other listed entities held by each current Director in the three years immediately before 31 December 2011 and the period for which each directorship was held are set out below:

Rob Ferguson	IMF (Australia) Limited (since 2004)
	Primary Health Care Limited (since 2009)
Brendan Crotty	Brickworks Limited (since 2008)
	Trafalgar Corporate Group (from 2007 to 2009)
Eileen Doyle	One Steel Limited (from 2000 until 2010)
	Boral Limited (since 2010)
	Ross Human Directions Limited (from 2005 until 2010)
	Bradken Limited (since 2011)
Eric Goodwin	AMPCI Macquarie Infrastructure Management No. 2 Limited as Responsible Entity of the Diversified Utility and Energy
	Trust No. 2 (one of the stapled entities within the DUET Group) (since 2004)
Lim Swe Guan	Thakral Holdings Limited (since 2004)
Anne McDonald	Speciality Fashion Group Limited (since 2007)
	Spark Infrastructure Group (since 2009)
Gene Tilbrook	Transpacific Industries Limited (since 2009)
	Fletcher Buildings Limited (since 2009)
	QR National Limited (since 2010)
	Wesfarmers Limited (from 2002 to 2009)

GPT Annual Financial Report 2011

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For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

3. 2011 Remuneration Report

3.1 Remuneration in Brief

The Remuneration Report below is the report for the Group. As the Directors and Senior Executives are remunerated by the Company, the report for the Group has been included in full.

The Board is committed to clear and transparent communication of GPT’s remuneration arrangements. This section, the 2011 Remuneration in Brief, outlines the key remuneration decisions taken by GPT during the year, and shows the actual cash value of remuneration paid to GPT’s key management personnel (KMP) and the five highest paid executives. The full Remuneration Report for 2011, starting on page 114, provides more detail regarding the remuneration strategy, structures, decisions and outcomes at GPT in 2011 in accordance with statutory obligations and accounting standards.

Key remuneration drivers and actions in 2011

In 2011 the Board continued to take a conservative approach to executive remuneration. The Board actively engaged with GPT investors and stakeholders and was proactive about ensuring that there was strong alignment between GPT’s performance and executive reward outcomes. Each of these actions is outlined below and in greater detail in the Remuneration Report.

Base (Fixed) Pay

The disciplined execution of GPT’s strategy during the year which focussed on owning and actively managing quality Australian property assets generated pleasing financial results for investors in 2011. The Board maintained a prudent approach to executive remuneration, the growth of which continued to be moderate. In the review of employee base salaries in December 2010, the Board decided to:

• Implement only a modest review of base pay, effective 1 January 2011, averaging 3%; and

• Maintain the freeze on Non-Executive Director fees in 2011 for the 4[th] successive year.

Short Term Incentives

The Board also continued to maintain a focus on ensuring that the quantum of short term incentives (STI) received by executives was:

• market based and appropriate;

• aligned to GPT’s performance; and

• demanding of performance that was sufficiently challenging.

In line with the financial performance delivered by management in 2011, actual STI’s received by management were towards the upper end of potential.

Underlining GPT’s achievement based culture, the Board and management took the decision to reduce the level of short term incentives provided for Threshold performance (i.e. the minimum standard of performance deemed appropriate to be rewarded with an incentive payment) from 75% of the individuals’ Target short term incentive level down to 50%. This change, which will be implemented in the 2012 calendar year, has the effect of steepening the reward curve for performance below Target levels such that short term incentive rewards diminish rapidly if Targets are not delivered.

Long Term Incentives

The Board sought and received approval from GPT security holders at the 2011 Annual General Meeting to continue the existing Performance Rights based long-term incentive (LTI) scheme. The scheme has three performance measures of GPT’s performance, each of equal weight:

• Total Shareholder Return (TSR) - TSR represents an investor’s return, calculated as the percentage difference between the initial amount invested in Stapled Securities and the final value of those Stapled Securities at the end of the relevant period, assuming distributions were reinvested, or such other method of calculation as determined by the Board.

• Adjusted Earnings per Security Growth (EPS Growth) relative to the Consumer Price Index (CPI) - This performance measure sets an EPS growth range (EPS excluding fair value adjustments) for each Performance Period calculated by reference to the CPI; and

• Total Return (TR) - Total Return is defined as the sum of the change in Net Tangible Assets excluding movements in GPT’s equity base arising from capital raisings or capital returns (NTA), plus distributions over the Performance Period, divided by the NTA at the beginning of the Performance Period.

Taking into account feedback from investors and other stakeholders, and to ensure that performance levels were sufficiently challenging for executives, the Board increased the threshold level of performance required for an LTI award in both the EPS Growth and TR measures in the 2012 LTI. These enhancements will be detailed in the Notice of Meeting for GPT’s forthcoming Annual General Meeting (AGM) in May 2012, and will be subject to security holder approval.

The 2009 LTI covering GPT’s performance for the three calendar years of 2009-2011 concluded at the end of 2011. The threshold performance measure was not achieved and as a result all performance rights granted to executives under the plan lapsed and no LTI awards were made to executives.

112 GPT Annual Financial Report 2011

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3. 2011 Remuneration Report (continued)

3.1 Remuneration in Brief (continued)

Employee Ownership

The Board believes in creating ways for employees to build an ownership stake in the business, and the benefits that this ‘culture of ownership’ brings in terms of loyalty, commitment and discretionary effort. For executives, and based on performance, this is achieved through the LTI.

Employees who are not eligible for the LTI may participate in the General Employee Security Ownership Plan (GESOP). Under GESOP individuals receive an additional benefit equivalent to 10% of their STI which is - after the deduction of income tax - invested in GPT securities to be held for a minimum of 1 year. Under the plan, 323 GPT employees received 169,504 GPT securities in 2011.

External environment

In setting and reviewing its remuneration arrangements, GPT has regard to the external environment, and is actively monitoring the tax, regulatory and governance activities impacting remuneration. In 2011, the Board sought external advice on market practice and prevailing regulatory and governance standards from Ernst & Young and Freehills. The Board did not receive any Remuneration Recommendations from Remuneration Consultants as defined under the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011.

2011 Remuneration outcomes and GPT security ownership positions for GPT’s Key Management Personnel

The disclosed remuneration of GPT’s KMP and five highest paid executives in the Remuneration Report on (page 123) is calculated in accordance with statutory obligations and accounting standards. As a result, it is based on accounting principles and includes accounting values for current and prior years’ LTI grants which have not been (and may never be) realised as they are dependent on performance measures being met.

To provide a clearer picture, GPT has chosen to include in the Remuneration in Brief the following table (Table 1) which discloses the actual Cash and Other Benefits received by GPT’s KMP and five highest paid executives during GPT’s financial year, as distinct from the accounting expense. It also includes an outline of the current and potential GPT security ownership position of executives effective 31 December 2011 that has been established during their career to date with GPT.

Table 1 - Actual Cash and Other Benefits received by GPT’s KMP and five highest paid executives

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Current GPT Future GPT
Cash & Other Benefits actually security securities subject
received by executives in 2011 ownership at to performance at
31/12/11 31/12/11
Senior Executives Position Base STI LTI [1] Other [2] Total Vested GPT Unvested GPT
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Senior Executives	Position	Base	STI	LTI1	Other2	Total	31/12/11 Vested GPT	31/12/11 Unvested GPT
		(Fixed)					Security	Securities &
		Pay					Holding3	Performance
								Rights4
		$’000	$’000	$’000	$’000	$’000	# of securities	# of securities & rights
Michael Cameron	Managing Director and Chief Executive Officer	1,350.0	1,598.0	-	222.5	3,170.5	66,103	1,774,515
James Coyne	General Counsel / CompanySecretary	480.0	284.1	-	3.5	767.6	-	323,189
Mark Fookes	Head of Investment Management	775.0	682.0	-	4.1	1,461.1	-	518,913
Nicholas Harris	Head of Wholesale	623.0	534.6	-	3.8	1,161.4	-	419,466
Jonathan Johnstone	Head of Transactions	575.0	495.3	-	1.1	1,071.4	-	391,080
AnthonyMcNulty	Head of Development	550.0	354.7	-	2.8	907.5	-	328,019
Michael O’Brien	Chief Financial Officer	830.0	827.5	-	121.9	1,779.4	76,909	562,877
Michelle Tierney	Head of Property & Asset Management	500.0	330.2	-	3.6	833.8	-	296,635

1 The performance measures for the 2009 LTI were not satisfied at the end of the 3 year performance period on 31 December 2011, hence the performance rights granted under the scheme lapsed. As a result no GPT executive received any LTI award in 2011.

2 Other includes the value of performance rights that vested in 2011 (Michael Cameron and Michael O’Brien), Death & Total/Permanent Disablement insurance premiums, superannuation plan administration fees, executive health assessments, and other benefits.

3 Vested GPT Security Holding is the actual number of GPT securities held as a result of the individuals’ employment with GPT over the years. This excludes GPT securities that may have been granted to date but are as yet unvested due to service or performance measures and also excludes GPT securities bought privately by the individual. As a result it represents the true current ownership stake held by the executive arising from their employment with the Group. All securities listed here vested in 2011 with the exception of 38,454 of Michael O’Brien’s which vested in 2010.

4 Unvested GPT Securities and Performance Rights includes the total unvested GPT securities and performance rights received over the years that are currently on foot and excludes any GPT securities or rights that may have lapsed up to 31 December 2011. This number comprises sign on rights that are yet to vest (Michael Cameron), deferred STI into equity that is yet to vest (Michael Cameron) and grants of performance rights under the various LTI schemes that are subject to the various performance measures and are yet to vest (all executives). This highlights the current maximum number of additional GPT securities to which the individual may become entitled subject to satisfying the various applicable performance measures; as such, any securities or performance rights listed in this column should be considered “at risk”, are not guaranteed, and indeed may never vest.

GPT Annual Financial Report 2011 113

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For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

3. 2011 Remuneration Report (continued)

3.2 Introduction

The Board presents the Remuneration Report for GPT for the year ended 31 December 2011, which forms part of the Directors Report and has been prepared in accordance with section 300A of the Corporations Act for the Group for the year ended 31 December 2011.

This Remuneration Report outlines GPT’s remuneration philosophy and practices together with details of the specific remuneration arrangements that apply to GPT’s key management personnel (KMP) who are the individuals responsible for planning, controlling and managing the GPT Group (including the non-executive Directors, the CEO and other key Senior Executives), and the five highest paid executives in 2011. The data provided in the Remuneration Report was audited as required under section 308(3C) of the Corporations Act.

In 2011 the Nomination & Remuneration Committee (the Committee) comprised 4 Non-Executive Directors:

• Gene Tilbrook (Chairman)

• Brendan Crotty

• Eileen Doyle

• Rob Ferguson

The Committee provides advice and recommendations to the Board on:

• criteria for selection of Directors;

• nominations for appointment as Directors (either between AGMs or to stand for election);

• criteria for reviewing the performance of Directors individually and the GPT Board collectively;

• remuneration policies for Directors and Committee members;

• remuneration policy for senior executives;

• incentive plans for employees; and

• any other related matters regarding executives or the Board.

Further information about the role and responsibility of the Committee is set out in its Charter which is available on GPT’s website (www.gpt.com.au).

3.3 Key Issues and Changes made in 2011

Remuneration Outcomes aligned to GPT’s Performance

In 2011 GPT continued to resolutely pursue the Group’s articulated strategy of owning and actively managing quality Australian property assets. While the financial performance was pleasing, market conditions remained cautious and growth in executive pay levels moderated. Against that background the Board continued to exercise restraint with regard to executive remuneration. The main areas of activity in 2011 are outlined in the Table 2, below:

Table 2 – Main areas of activity in 2011

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Issue Who is affected? Explanation
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Issue	Who is affected?	Explanation
Maintain restraint on executive salaries	Leadership Team and other employees	Base remuneration increases for 2011 were capped at an average 3% across the business.
Freeze on Directors’ fees	Non-Executive Directors	The overall Non-Executive Director fee pool was increased from $1,500,000 to $1,650,000 on 11 May 2011. This was done to provide room to manage Non-Executive Director transitions on and off the Board in future without exceeding the cap. At the individual level, there were no increases in fees in 2011 for Non-Executive Directors for the 4thsuccessive year.
Reduction in 2012 Threshold STI Opportunity	All employees	The Board and management took the decision to reduce the level of short term incentive provided for Threshold performance (ie the minimum standard of performance deemed appropriate to be rewarded with an incentive payment) from 75% of the individuals’ Target short term incentive level down to 50%. To be implemented in the 2012 calendar year, this has the effect of steepening the reward curve for performance below Target levels such that short term incentive rewards diminish rapidly if Targets are not delivered.
Strengthened 2012 LTI Performance Measures	Leadership Team and other executives (limited to the top 25 in total)	To more tightly align with GPT’s articulated financial performance objectives, the Board decided to increase the Threshold level of performance required for an LTI award in both the EPS and TR measures in the 2012 LTI. These adjustments will be set out in the Explanatory Memorandum to the Notice of Meeting for the AGM and subject to security holder vote.
Continued initiative to build culture of ownership	All employees excluding the LTI participants	Under the General Employee Security Ownership Plan (GESOP) an amount equivalent to 10% of an individuals’ STI was (after the deduction of income tax) invested in GPT securities to be held for a minimum of 1 year. Under the plan, 323 GPT employees received 169,504 GPT securities in 2011.

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3. 2011 Remuneration Report (continued)

3.3 Key Issues and Changes made in 2011 (continued)

CEO Remuneration Structure and Contract Terms

The key terms of Mr Cameron’s remuneration arrangements and contract include the following:

Table 3 – Key terms of Michael Cameron’s Remuneration Arrangements

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Details Comments
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Details	Comments
Benchmark group for setting/reviewing remuneration	The Board benchmarks the remuneration of the CEO against: • CEOs in businesses with comparable market capitalisation; and • CEOs in comparable roles within the ASX A-REIT index.
Remuneration mix	In 2011, Mr Cameron’s remuneration mix was as follows: Base (Fixed) Pay: $1,350,000. STI: $0 to $1,687,500 based on performance and paid in cash (i.e. 0 to 125% of base pay). Further details on STI terms are set out on page 118 to 119. LTI: $0 to $2,025,000 based on performance and continued service and paid in GPT securities (ie 0 to 150% of base pay). Further details on LTI terms (including performance measures) are set out on pages 119 to 122.
Contract duration	A rolling 12 month contract.
Termination entitlements	Termination entitlements vary depending on the circumstances, however any separation payment is capped at 12 months of base (fixed) pay.

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3. 2011 Remuneration Report (continued)

3.4 GPT’s Remuneration Strategy

Alignment of GPT’s Remuneration Strategy and Business Strategy

The Board is conscious of the need to set a remuneration strategy that supports and drives achievement of the strategic objectives of the business. By establishing a remuneration structure that attracts, retains, motivates and rewards executives for achieving challenging targets linked to GPT’s strategy and business objectives, the Board is confident that its remuneration strategy focuses GPT employees on delivering sustainable, superior shareholder returns in line with the Group’s strategic intent.

The diagram below (Diagram 1) shows the key objectives of GPT’s remuneration policy for Executives and how these are implemented through our remuneration structures.

Diagram 1 – GPT’s Strategic Goals and the link to Remuneration Structures

• GPT’s Strategic Goals • Leading relative Total • Average EPS Growth > CPI • In the long term, deliver Total • Create and sustain Shareholder Return (TSR) plus 1% Returns > 9% per annum environments that enrich people’s lives

• Total Remuneration Components Base (Fixed) Pay Short Term Incentive Long Term Incentive • Base level of reward • Set around market median for Target • Set at market median for Target • Set around Australian market median performance with potential to approach top performance with potential to achieve top using external benchmark data quartile for Stretch outcomes quartile for Stretch outcomes

• • Varies based on employee’s experience, • Determined by performance against a • Determined by GPT performance against skills and performance mix of Balanced Scorecard measures Financial performance measures

• • External & internal relativities considered which include Financial & Non-Financial • Tested over a 3 year performance period – measures (eg Customer, Internal process, no re-test People & Knowledge) • No value derived unless GPT meets

• • Financials include Group Earnings or exceeds challenging performance (Realised Operating Income) per Security measures and (if applicable) Portfolio (Net Return to • Delivered in equity to align long term Owner) or Property level metrics shareholder and executive interests

• • Non-Financial objectives also focus on execution of strategy, delivery of key projects and developments, culture change, sustainability, innovation, people management and development, and IT.

  • Long Term Incentive • Set at market median for Target performance with potential to achieve top quartile for Stretch outcomes

  • Determined by GPT performance against Financial performance measures

  • • Tested over a 3 year performance period – no re-test

• Delivered in cash annually

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Attract, retain, motivate and reward high calibre executives to deliver superior performance by:

• Providing competitive rewards

• Opportunity to achieve incentives beyond base pay based on performance

Align executive rewards to GPT’s performance and security holder interests by:

• Assessing incentives against multiple financial and non-financial business measures that are aligned with GPT strategy, with an equity component

• Putting significant components of Total Remuneration at risk

116 GPT Annual Financial Report 2011

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3. 2011 Remuneration Report (continued)

3.4 GPT’s Remuneration Strategy (continued)

Total Remuneration Mix

As depicted in Diagram 1 on the previous page, GPT’s Executive remuneration is structured as a mixture of Base (fixed) pay and variable “at risk” short term incentive (STI) and long term incentive (LTI) components.

While the Base pay is designed to provide a predictable base level of remuneration, the STI and LTI components reward executives when certain pre-determined performance measures are met or exceeded.

The Total Remuneration mix of components for those executives with ongoing employment at the end of 2011 is set out in Table 4, below:

Table 4 – Total Remuneration Mix of Fixed and At Risk Remuneration

Senior Executives Position	Fixed Remuneration Variable or “At Risk” Remuneration1
	Base Pay STI LTI
Michael Cameron Managing Director and Chief Executive Officer	36% 36% 28%
James Coyne General Counsel / Company Secretary	50% 25% 25%
Mark Fookes Head of Investment Management	43% 35% 22%
Nicholas Harris Head of Wholesale	44% 33% 23%
Jonathan Johnstone Head of Transactions	44% 33% 23%
Anthony McNulty Head of Development	48% 29% 23%
Michael O’Brien Chief Financial Officer	43% 35% 22%
Michelle Tierney Head of Property & Asset Management	48% 29% 23%

1 The percentage of each component of Total Remuneration is calculated with reference to “Target” performance outcomes in both STI and LTI – for more information on performance measurement levels see the following sections on STI and LTI.

Base (Fixed) Pay

Base remuneration is reviewed annually through a process that ensures an executive’s fixed remuneration remains competitive in the market place and reflects their skills, knowledge, responsibility and general performance. This process involves market-based reviews conducted by independent experts benchmarking GPT executives against comparable peers in companies in the A-REIT and, where relevant, broader ASX 200 sectors. GPT generally aims to pay around market median base salary.

Table 5 – Base Pay

Table 5 – Base Pay
What is included in Base (Fixed) Pay?	Base pay includes cash, compulsory superannuation, and any salary sacrifice items (including Fringe Benefits Tax).
When and how is Base Pay reviewed?	Base pay is reviewed annually effective 1 January. The Committee oversees the review process to ensure that all employees are paid fairly and competitively in relation to their skills, experience, responsibilities and performance. The Committee also ensures that overall review outcomes are appropriate and affordable.
What market benchmark is applied?	The Committee commissions external benchmarking of the CEO and Leadership Team salaries annually by Ernst & Young, much of it focussed on publicly available data from annual reports. More broadly, the business relies on benchmarking relevant to the property sector including the Avdiev Property Industry Remuneration Report. For more specialist functional roles management will source multiple benchmarks from reputable recruitment agencies and other informed sources.

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3. 2011 Remuneration Report (continued)

3.4 GPT’s Remuneration Strategy (continued)

Short Term Incentives (STI) (variable component)

GPT employees have an opportunity to receive an STI based on calendar year performance. STI levels are set as part of the process of benchmarking the Total Remuneration opportunity for each role. GPT generally aims to set STI opportunity at market median for Target performance with potential to approach top quartile for Stretch outcomes.

Table 6 – GPT’s STI Plan

Table 6 – GPT’s STI Plan
What is the STI plan?	The STI is an ‘at-risk’ incentive awarded annually in the form of cash subject to performance against agreed financial and non-financial KeyPerformance Indicators (KPIs).
Who participates in the STIplan?	All permanent GPT employees with greater than 3 months service at the end of the applicable calendar year are eligible – subject toperformance – to receive an STI.
Why does the Board consider the STI an appropriate incentive?	Having a component of the Total Remuneration at risk in the form of an STI creates the ability for the Board and management to align and focus employees on desired objectives and behaviours, co-ordinating effort in pursuit of the overall business strategy.
Are both target and stretch performance measures set?	Yes. Stretch performance measures can reward exceptional performance beyond the acceptable Target outcomes, and can motivate individuals to strive for the mutual benefit of themselves and the business.
What is the value of the STI opportunity?	The STI opportunity is expressed as a percentage of Base (fixed) pay, and varies depending on the overall Total Remuneration levels for particular roles, but the following table can be considered indicative of the possible ranges: Level Target Incentive Range Stretch Incentive Range CEO 100% 125% Executives 50-80% 62.5-100% General employees 10-30% 12.5-37.5% If a minimum or Threshold level of objective achievement is not delivered then STI would be nil. STI outcomes are capped at the Stretch level.
What are the Financial performance measures?	In 2011 the main Group Financial performance measure was Earnings (Realised Operating Income) per Ordinary Security and based on Board discretion of: Threshold: 21.2cps (ie 2% growth on the 2010 result) Target: 21.6cps (4% growth on the 2010 result) Stretch: 22.3cps (7% growth on the 2010 result) While all employees have a common Group Financial performance measure, whether there are other additional performance measures depends on the individuals’ role, as does the (indicative) mix between Financial and Non- Financial measures: Level Financial Measures Non-Financial Measures CEO 70% 30% Executives 60% 40% General employees 20% 80% Financial measures are applied at the Group,Portfolio,and Asset level.
What are the Non-financial performance measures?	Non-Financial measures include Balanced Scorecard items focussed on the Customer, Internal processes, and People & Knowledge perspectives. In addition, they may also focus on execution of strategy, delivery of key projects and developments, culture change, sustainability,innovation, people management and development,and information technology.
How is performance measured?	Financial and non-financial KPIs are determined at the start of each calendar year and set out in a formal Performance Agreement. This agreement is reviewed at the end of each calendar year for every eligible employee to determine what (if any) STI theymayreceive.
Who assesses performance against targets?	The Board assesses the performance of the CEO, who in turn assesses the performance of his direct reports among the Leadership Team.

118 GPT Annual Financial Report 2011

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3. 2011 Remuneration Report (continued)

3.4 GPT’s Remuneration Strategy (continued)

Short-term incentive outcomes

In 2011 GPT achieved an Earnings (Realised Operating Income) per Ordinary Security result of 22.4 cps which exceeded the Stretch level of performance on the GPT Group Financial measure. This translated into the realisation of short term incentive compensation amounts toward the upper end of an individuals’ maximum STI potential:

Table 7 – Short Term Incentive Outcomes

		Actual STI Awarded	Actual STI Awarded as a %	% of Maximum STI Award
Senior Executives	Position	($’000)	of Maximum STI	Forfeited
Michael Cameron	Managing Director and Chief Executive Officer	$1,598.0	94.69%	5.31%
James Coyne	General Counsel / Company Secretary	$284.1	94.69%	5.31%
Mark Fookes	Head of Investment Management	$682.0	88.00%	12.00%
Nicholas Harris	Head of Wholesale	$534.6	91.53%	8.47%
Jonathon Johnstone	Head of Transactions	$495.3	91.88%	8.12%
Anthony McNulty	Head of Development	$354.7	86.00%	14.00%
Michael O’Brien	Chief Financial Officer	$827.5	99.69%	0.31%
Michelle Tierney	Head of Property & Asset Management	$330.2	88.06%	11.94%

Long Term Incentives (LTI) (variable component)

GPT executives who have the most ability to influence the long term commercial performance of the Group are invited by the Board to participate in an equity-based LTI scheme under which awards may vest if specified performance measures are achieved over a 3 year performance period. Combined with the Base pay and STI potential, the LTI provides a further opportunity to achieve Total Remuneration around market median for Target performance, with potential to approach top quartile for Stretch performance outcomes.

Table 8 – GPT’s LTI Plan

Table 8 – GPT’s LTI Plan
What is the purpose of the LTIplan?	The purpose of the LTI plan is to align senior executive rewards with sustained improvement in security holder value over time.
Who participates in the LTIplan?	The CEO, his direct reports, and a small number of other senior executives with the greatest ability to impact on the long termperformance of GPT. In 2011,23 individualsparticipated.
Is there a limit on the number of LTIs issued?	Employee equity holdings under the LTI cannot exceed 5% of the total number of issued securities.
What is the value of the LTI opportunity?	The size of grants under the 2011 LTI is based on a percentage of the participants’ Base pay with the maximum (Stretch) opportunity in 2011 as follows: • for the CEO it was equivalent to 150% of base pay • for Leadership Team members it was 100% of base pay • for all otherparticipants it was equivalent to 75% of basepay
How is reward delivered under the LTI program?	Each grant consists of Performance Rights (Rights) to receive GPT securities for no cost. The number of Rights granted was determined by dividing GPT’s last quarter 2010 volume weighted average security price (VWAP) of $2.8383cps into thegrant value.
Do executives pay for the LTI instruments?	No. Rights that vest convert to GPT securities at no cost to the executive.
What rights are attached to LTIs?	Rights do not carry any voting rights or receive dividends, however GPT securities allocated on the vesting of Rights carry the same rights as anyother GPT security.
Are there restrictions on dealing with securities allocated under the LTI plan?	Yes, all GPT employees sign a policy on personal dealing (Policy) which, in addition to restrictions on insider trading, restricts dealing in GPT securities to certain trading windows. The Policy also precludes hedging or entering into any other financial derivatives in relation to unvested Rights.
What happens when an executive leaves the Company?	Broadly, unvested Rights will lapse, unless the Board in its discretion decides otherwise.
What are the performance hurdles?	See the table on the next page.
Are Rights subject to retesting if they do not vest on initial testing?	No. There is no retesting of Rights that do not vest after being first tested for satisfaction against the performance measures at the end of the 3 year period.

GPT Annual Financial Report 2011

119

DIRECTORS’ REPORT

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

3. 2011 Remuneration Report (continued)

3.4 GPT’s Remuneration Strategy (continued)

Long Term Incentives (LTI) (variable component) (continued)

The performance measures and hurdles for GPT’s LTI plan, which have been approved by GPT security holders, are summarised in table 9, below.

Table 9 – GPT LTI Plan Performance Measures & Hurdles

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LTI LTI Performance Condition Performance Measure Hurdle Weighting Status
Performance
Measurement
Period
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LTI	LTI Performance Measurement Period	Performance Condition	Performance Measure Hurdle	Weighting	Status
2009	2009-2011	Relative TSR versus the ASX 200 Property Index (excluding GPT)	50% of rights vest at 51st percentile, up to 100% at the 75th percentile (pro rata vesting in between).	100%	Lapsed, no awards paid to executives
2010	2010-2012	Relative TSR versus the top 80% of the ASX 200 Property Index	50% of rights vest at 51st percentile, up to 100% at the 75th percentile (pro rata vesting in between).	One third each	On foot
		Earnings per security growth (EPS) vs the CPI1	50% of rights vest if EPS growth = CPI, up to 100% if EPS growth = CPI plus 1% percentile (pro rata vesting in between).
		Total Return (TR) versus the Weighted Average Cost of Capital (WACC).	0% of rights vest at 8% TR, up to 100% at 9% TR (pro-rata vesting in between).
2011	2011-2013	Relative TSR versus the top 80% of the ASX 200 Property Index	50% of rights vest at 51st percentile, up to 100% at the 75th percentile (pro rata vesting in between).	One third each	On foot
		Earnings per security growth (EPS) vs the CPI1	50% of rights vest if EPS growth = CPI, up to 100% if EPS growth = CPI plus 1% percentile (pro rata vesting in between).
		Total Return (TR) versus the Weighted Average Cost of Capital (WACC).	0% of rights vest at 8% TR, up to 100% at 9% TR (pro-rata vesting in between).

1 The EPS growth calculation for 2010 relies on a rebased 2009 EPS figure of 21.30cps versus the 2010 result of 20.74cps. The rebasing of 2009 was required to adjust the 2009 EPS result of 23.83cps (4.77 cps on a pre 5:1 consolidation basis) to take into account the dilutive effect of the capital raising. The approach is to assume the raising happened on 1 January 2009, that is, the interest saving from reducing debt starts on 1 January 2009 rather than 17 June 2009, with the adjusted earnings for the 2009 year divided by the greater number of average shares.

120 GPT Annual Financial Report 2011

DIRECTORS’ REPORT

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

3. 2011 Remuneration Report (continued)

3.4 GPT’s Remuneration Strategy (continued)

Long Term Incentives (LTI) (variable component) (continued)

Table 10 (below) sets out the executives’ LTI plan participation level (i.e. in terms of grant size), fair value, and the maximum recognised value in future years (see footnote 2 to table 10 for an explanation of these concepts):

Table 10 – LTI Plan Participation Levels and Fair Value

					Fair Value per		Maximum Value
		LTI	Performance		Performance		Recognised in
Senior Executives	Position	Scheme	Rights Granted	Grant Date	Right	Vesting Date1	Future Years2
Michael Cameron	Managing Director and	2009	396,617	30-Jun-09	$0.85	31-Dec-11	-
	Chief Executive Officer	2010	590,068	19-May-10	$2.06	31-Dec-12	$463,607
		2011	713,455	08-Jun-11	$2.38	31-Dec-13	$1,322,900
James Coyne	General Counsel /	2009	180,735	30-Jun-09	$1.00	31-Dec-11	-
	Company Secretary	2010	154,074	19-May-10	$2.06	31-Dec-12	$121,054
		2011	169,115	08-Jun-11	$2.38	31-Dec-13	$313,576
Mark Fookes	Head of Investment	2009	269,179	30-Jun-09	$1.00	31-Dec-11	-
	Management	2010	245,862	19-May-10	$2.06	31-Dec-12	$193,170
		2011	273,051	08-Jun-11	$2.38	31-Dec-13	$506,295
Nicholas Harris	Head of Wholesale	2009	230,725	30-Jun-09	$1.00	31-Dec-11	-
		2010	199,968	19-May-10	$2.06	31-Dec-12	$157,112
		2011	219,498	08-Jun-11	$2.38	31-Dec-13	$406,996
Jonathan Johnstone	Head of Transactions	2009	192,271	30-Jun-09	$1.00	31-Dec-11	-
		2010	188,494	19-May-10	$2.06	31-Dec-12	$148,097
		2011	202,586	08-Jun-11	$2.38	31-Dec-13	$375,638
Anthony McNulty	Head of Development	2009	152,856	30-Jun-09	$1.00	31-Dec-11	-
		2010	134,241	19-May-10	$2.06	31-Dec-12	$105,471
		2011	193,778	08-Jun-11	$2.38	31-Dec-13	$359,306
Michael O’Brien	Chief Financial Officer	2009	307,634	30-Jun-09	$1.00	31-Dec-11	-
		2010	270,448	19-May-10	$2.06	31-Dec-12	$212,487
		2011	292,429	08-Jun-11	$2.38	31-Dec-13	$542,226
Michelle Tierney	Head of Property & Asset	2009	137,714	30-Jun-09	$1.00	31-Dec-11	-
	Management	2010	120,473	19-May-10	$2.06	31-Dec-12	$94,654
		2011	176,162	08-Jun-11	$2.38	31-Dec-13	$326,642

• 1 Vesting date is the date that marks the end of the 3-year LTI period. At this point the performance measure will be assessed against the performance hurdle to see if any Performance Rights vest. Note that the Performance Rights granted under the 2009 LTI Scheme did not vest at 31 December 2011 as the minimum performance measure was not achieved.

2 This represents the fair value of rights as at grant date that are yet to be expensed. “Fair value” is independently determined on the grant date of each tranche of rights using Monte Carlo and Binomial tree pricing models which take into account the following factors: the expected life of the rights, the security price at grant date, expected price volatility of the underlying security, expected distribution yield and the risk free interest rate for the term of the rights. As a result, the figures derived, while accurate for the valuation requirements of the relevant accounting standards, do not bear any resemblance to the actual gross value that may or may not be realised by a participating executive. The LTI accrual numbers in the Senior Executive Remuneration Disclosures in Table 13 on page 123 represent the current (2011) year expenses whereas the maximum recognised value in future years represents the expenses which will be recognised from an accounting perspective in the future until the end of the relevant LTI plan performance period.

GPT Annual Financial Report 2011

121

DIRECTORS’ REPORT

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

3. 2011 Remuneration Report (continued)

3.4 GPT’s Remuneration Strategy (continued)

Pre 2009 Legacy LTI Schemes

As set out in the 2010 Remuneration Report, the pre 2009 legacy LTI scheme performance period concluded on 31 December 2010 with no LTI awards made to executives. The scheme was formally wound up on 28 February 2011 during GPT’s post annual results trading window. A sale price of $3.10 per GPT security was obtained for all the holdings and the funds arising were returned to GPT in full satisfaction of the non-recourse loans provided under the scheme. Full details of the loans in place at the conclusion of the scheme were set out in the 2010 Remuneration Report. There are no further loans to GPT employees on foot as at 31 December 2011.

GPT Performance Outcomes

Table 11 (below) shows GPT’s performance against key metrics over the last 5 years. It should be noted that during FY2010 GPT undertook a five for one unit consolidation.

Table 11 – GPT’s 5 Year Performance

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2007 2008 2009 2010 2011
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Realised operating income	$m	605.1	468.8	375.8	410.0	438.8
Total securityholder return (TSR)	%	-23.4	-74.9	-14.4	2.9	10.5
Earnings (Realised Operating Income) per security (EPS)1	cents	29.4	17.7	4.8	20.7	22.4
EPS growth	%	7.0	-37.1	-74.2	-13.0	8.1
Distributions per security (DPS)1	cents	28.9	17.7	4.5	16.3	17.8
NTA (per security)1	$	3.86	1.43	0.69	3.60	3.59
Security price at end of calendar year	$	4.04	0.92	0.61	2.94	3.07

1 Unadjusted for security consolidation

GPT’s performance for security holders was strong in 2011 with eps growth of 8.1% and total security holder return well above both the ASX 200 and ASX 200 AREIT indices. In prior years earnings and distributions per security, as well as the company’s NTA, were impacted by significant equity raisings in 2008 and 2009 which increased the number of securities on issue.

Service Agreements

All employees have service agreements in place that set out the basic terms and conditions of employment. In 2009 the Board took steps to increase the notice periods for all Senior Executives to a minimum of 3 months. No notice provisions apply where termination occurs as a result of misconduct or serious or persistent breach of the agreement.

Remuneration arrangements for early termination of an executive’s contract for reasons outside the control of the individual or where the executive is made redundant may give rise to a severance payment at law. In the absence of any express entitlement, these payments would vary between individuals.

The Board has approved a policy with respect to severance entitlements specifically capping the maximum severance payment that would be made to twelve months base remuneration. In addition the executive may be entitled to any STI and LTI at the end of the relevant period subject to the achievement of key performance indicators that had been set.

The terms of Mr Cameron’s contract are outlined on page 115. The material terms of the service agreements for the remainder of the KMP (i.e. other than the CEO) who were employed by the Group at 31 December 2011 are set out in Table 12 (below):

Table 12 – Material terms of service agreements for the KMP and five highest paid executives

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Term Conditions
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Term	Conditions
Duration	Open ended.
Termination by Executive	3 months notice. GPT may elect to make a payment in lieu of notice.
Termination by Company for cause	No notice requirement or termination benefits (other than accrued entitlements).
Termination by Company (other)	3 months notice. Severance payments may be made subject to GPT policy. Treatment of unvested STI and LTI will be at Board and management discretion under the terms of the relevant plans.
Post-employment restraints	Non-solicitation of GPT employees for 12 months post-employment.

122 GPT Annual Financial Report 2011

DIRECTORS’ REPORT

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

3. 2011 Remuneration Report (continued)

3.4 GPT’s Remuneration Strategy (continued)

Senior Executive Remuneration Disclosures

The following table provides a breakdown of GPT’s KMP and the five highest paid executives in accordance with statutory requirements and accounting standards. It should be noted that of the Variable or “At Risk” components, STI Bonus show actual cash payments made to executives, whereas the LTI Award Accrual and the Grant or Vesting of Performance Rights are accounting valuations and may only be payable to executives under certain performance conditions or circumstances (as per the footnotes). The Board considers that Table 1 on page 113 is a clearer indication of the actual cash and other benefits received by GPT’s KMP and five highest paid executives in 2011.

Table 13 – Senior Executive Remuneration Disclosures

Senior Executives	Fixed Pay	Variable or “At Risk”	Cash Payment on Termination Total
	Base Pay Superannuation Non- Monetary1	STI Bonus LTI Award Accrual2 Grant or Vesting of Performance Rights3, 4
M. Cameron Managing Director and Chief Executive Officer 31 December 2011 31 December 2010	$1,382,201 $1,245,889 $15,487 $14,830 $13,542 $5,445 $1,597,955 $1,415,592 $989,895 $397,045 $74,873 $74,701 - - $4,073,953 $3,153,502
J. Coyne General Counsel / Company Secretary 31 December 2011 31 December 2010	$488,781 $422,283 $15,487 $14,830 $ 3,523 $3,427 $284,081 $281,627 $ 280,703 $146,017 - - - - $ 1,072,575 $868,184
M. Fookes Head of Investment Management 31 December 2011 31 December 2010	$808,044 $786,601 $15,487 $14,830 $4,128 $2,710 $682,000 $672,287 $442,081 $225,481 - - - - $1,951,740 $1,701,909
N. Harris Head of Wholesale 31 December 2011 31 December 2010	$650,263 $617,570 $15,487 $14,830 $3,835 $3,085 $534,618 $454,968 $362,816 $188,006 - - - - $1,567,019 $1,278,459
J. Johnstone Head of Transactions 31 December 2011 31 December 2010	$590,318 $602,161 $15,487 $14,830 $1,095 $46,315 $495,264 $512,109 $329,860 $167,350 - - - - $1,432,024 $1,342,765
A. McNulty Head of Development 31 December 2011 31 December 2010	$553,592 $520,697 $15,487 $14,830 $2,761 $2,147 $354,750 $273,147 $267,177 $125,415 - - - - $1,193,767 $936,236
M. O’Brien Chief Financial Officer 31 December 2011 31 December 2010	$841,513 $850,290 $15,487 $14,830 $2,761 $3,945 $827,452 $801,264 $486,635 $252,544 $21,730 $91,670 - - $2,195,578 $2,014,543
M. Tierney Head of Property & Asset Management 31 December 2011 31 December 2010	$500,518 $519,749 $15,487 $14,830 $3,597 $1,993 $330,233 $273,969 $241,172 $112,762 - - - - $1,091,007 $923,303
Total 31 December 2011 31 December 2010	$5,815,230 $5,565,240 $123,896 $118,640 $35,242 $69,067 $5,106,353 $4,684,963 $3,400,339 $1,614,620 $96,603 $166,371 - - $14,577,663 $12,218,901

1 The amount set out under ‘Non-monetary’ may include administration fees associated with membership of the GPT Superannuation Plan, Death & Total/Permanent Disability Insurance Premiums, tax equalisation on a UK assignment (J. Johnstone in 2010 only) and termination payments.

2 The purpose of the LTI Award Accrual column is to record the amount of the fair value of performance rights under the various LTI plans expensed in the relevant financial years, and does not represent actual LTI awards made to executives.

GPT Annual Financial Report 2011

123

DIRECTORS’ REPORT

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

3. 2011 Remuneration Report (continued)

3.4 GPT’s Remuneration Strategy (continued)

Senior Executive Remuneration Disclosures (continued)

• 3 One off grants of Performance Rights were made in 2009 as follows:

Name	Reason for the Grant	Initial Value of the Grant	Number of Performance Rights	Vesting Condition
Michael Cameron	A sign on package on appointment to the role of Managing Director and CEO on 1 May2009	$300,000	115,363	Service: 50% of the performance rights converted to GPT securities for nil consideration on 30 June 2011. The remaining 50% convert to GPT securities on 30 June 2012
Michael O’Brien	Recognition of 7 month’s service as Acting CEO	$200,000	76,909	Service: 50% of performance rights converted to GPT securities for nil consideration on 1 July 2010. The remaining 50% converted to GPT securities on 1 July2011
4 Additional grants of Performance Rights were made in 2010 as follows:
Name	Reason for the Grant	Initial Value of the Grant (based on fair value)	Number of Performance Rights	Vesting Condition
Michael Cameron	To address the impact of the May 2009 one for one rights issue on Mr Cameron’s sign-on grant of rights (see detailed explanation in the 2010 Remuneration Report)	$34,697	16,843	Service; 50% of performance rights converted to GPT securities for nil consideration on 30 June 2011, with the remaining 50% converting to GPT securities on 30 June 2012

3.5 Remuneration – Non-Executive Directors

Remuneration Policy

The Board determines the remuneration structure for Non-Executive Directors based on recommendations from the Nomination and Remuneration Committee. The principal features of this policy are as follows:

• Non-Executive Directors are paid one fee for participation as a Director in all GPT related companies (principally GPT RE Limited, the Responsible Entity of General Property Trust and GPT Management Holdings Limited).

• Non-Executive Director remuneration is composed of three main elements:

• Main Board fees

• Committee fees

• Superannuation contributions at the statutory Superannuation Guarantee Levy (SGL) rate.

• Differences in workloads of Non-Executive Directors arise mainly because of differing involvement in Board Committees, which is in addition to main Board work. This additional workload is remunerated via Committee fees in addition to main Board fees.

• Non-Executive Directors do not participate in any short or long term incentive arrangements.

• Non-Executive Directors are not entitled to any retirement benefits other than compulsory superannuation.

• Non-Executive Director remuneration is set by reference to comparable entities listed on the Australian Securities Exchange (based on GPT’s industry sector and market capitalisation).

• External independent advice on remuneration levels for Non-Executive Directors is sought on an annual basis. In the event that a review is conducted, the new Board and Committee fees are effective from the 1st of January in the applicable year and advised in the ensuing Remuneration Report.

124 GPT Annual Financial Report 2011

DIRECTORS’ REPORT

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

3. 2011 Remuneration Report (continued)

3.5 Remuneration – Non-Executive Directors (continued)

Remuneration arrangements

As noted earlier in the Remuneration Report, the Board determined that there would be no increase in Non-Executive Director fees for 2011, continuing the freeze on Non-Executive Director fees that commenced in 2008.

The Chair is paid a main board fee which is 2.5 times the standard Board member fee to reflect the additional workload and responsibilities associated with the role. The Chairman does not receive fees for any Committees on which he serves.

Fees (including superannuation) paid to Non-Executive Directors are drawn from a remuneration pool of $1,650,000 per annum which was approved by GPT security holders at the Annual General Meeting on 11 May 2011. As an executive director, Michael Cameron did not receive fees from this pool but was remunerated as one of GPT’s Senior Executives.

Annual Board and Board Committees fees (excluding compulsory superannuation) for the year ended 31 December 2011 are as follows:

Table 14 – Board and Board Committee Fees

Chairman1 2011 2010 Members 2011 2010	Board Audit and Risk Management Committee Sustainability Committee Nomination and Remuneration Committee
	$346,500 $34,650 $11,000 $23,100 $346,500 $34,650 $11,000 $23,100 $138,600 $17,325 $8,000 $11,550 $138,600 $17,325 $8,000 $11,550

1 ‘Chairman’ used in this sense may refer to the Chairman of the Board or the Chairman of a particular committee.

In addition to the above fees, all Non-Executive Directors receive reimbursement for reasonable travel, accommodation and other expenses incurred while undertaking GPT business.

GPT Annual Financial Report 2011 125

DIRECTORS’ REPORT

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

3. 2011 Remuneration Report (continued)

3.5 Remuneration – Non-Executive Directors (continued)

Remuneration arrangements (continued)

The nature and amount of each element of remuneration paid to GPT’s Non-Executive Directors for the 2011 and 2010 calendar years is as follows:

The following table provides a breakdown of Non-Executive Director remuneration in accordance with statutory requirements and accounting standards.

Table 15 – Non-Executive Remuneration Disclosures

	Salary & Fees	Superannuation1	Non-Monetary2	Total
Director	$346,500 $276,771 $15,487 $14,494 - - $361,987 $291,265
R. Ferguson3 Chairman 31 December 2011 31 December 2010
B. Crotty 31 December 2011 31 December 2010	$158,150 $158,770 $14,442 $14,081 - - $172,592 $172,851
E. Doyle4 31 December 2011 31 December 2010	$161,150 $130,625 $14,503 $11,756 - - $175,653 $142,381
E. Goodwin 31 December 2011 31 December 2010	$163,925 $154,150 $14,753 $14,179 - - $178,678 $168,329
S. G. Lim 31 December 2011 31 December 2010	$155,925 $156,925 - - - - $155,925 $156,925
A. McDonald 31 December 2011 31 December 2010	$173,250 $173,250 $15,396 $14,830 $1,343 $1,271 $189,989 $189,351
G. Tilbrook5 31 December 2011 31 December 2010	$161,700 $100,396 $14,533 $9,036 $1,300 $1,246 $177,533 $110,678
Former Director	- $57,632 - $5,154 - - - $62,786
I. Martin6 31 December 2011 31 December 2010
K. Moss7 31 December 2011 31 December 2010	- $123,496 - $5,154 - - - $128,650
Total 31 December 2011 31 December 2010	$1,320,600 $1,332,015 $89,114 $88,684 $2,643 $2,517 $1,412,357 $1,423,216

No termination benefits were paid during the financial year.

1 Refers to compulsory superannuation only; non-compulsory superannuation salary sacrifices are included in Salary & Fees.

2 The amount set out under ‘Non-monetary’ may include administration fees associated with membership of the GPT Superannuation Plan and Death & Total/Permanent Disability Insurance Premiums.

3 R. Ferguson became Chairman on 11 May 2010.

4 E. Doyle was appointed to the Board on 1 March 2010.

5 G. Tilbrook was appointed to the Board on 11 May 2010.

• 6 I. Martin retired as a Director on 10 May 2010.

7 K. Moss retired from the role of Chairman of the Board on 10 May 2010.

126 GPT Annual Financial Report 2011

DIRECTORS’ REPORT

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

4. Other Disclosures

4.1 Indemnification and Insurance of Directors and Officers

GPT provides a Deed of Indemnity and Access (Deed) in favour of each of the Directors and Secretary of GPT and its subsidiary companies and each person who acts or has acted as a representative of GPT serving as an officer of another entity at the request of GPT. The Deed indemnifies these persons on a full indemnity basis to the extent permitted by law for losses, liabilities, costs and charges incurred as a Director or Officer of GPT, its subsidiaries or such other entities.

Subject to specified exclusions, the liabilities insured are for costs that may be incurred in defending civil or criminal proceedings that may be brought against directors and officers in their capacity as Directors and Officers of GPT, its subsidiary companies or such other entities, and other payments arising from liabilities incurred by the Directors and Officers in connection with such proceedings. GPT has agreed to indemnify the auditors out of the assets of GPT if GPT has breached the agreement under which the auditors are appointed.

During the financial year, GPT paid insurance premiums to insure the Directors and Officers of GPT and its subsidiary companies. The terms of the contract prohibit the disclosure of the premiums paid.

4.2 Proceedings on behalf of the Company

In October 2008, Slater and Gordon announced an intention to bring a class action against GPT. At Slater & Gordon’s invitation, GPT entered into mediation discussions on a without prejudice basis in an attempt to determine whether the parties could reach agreement in relation to the dispute. Failing an agreed resolution of the matter, Slater & Gordon has now commenced proceedings on behalf of certain persons who claim that they purchased GPT securities from 27 February 2008 and held securities on 7 July 2008. The allegations surround the adequacy and timing of disclosures to the market in this period.

GPT rejects the allegations and intends to defend the claim. GPT does not expect that any payment it could be required to make would have a material adverse effect on the Group’s operational or strategic objectives, or its financial strength.

4.3 Non-Audit Services

During the year PricewaterhouseCoopers, GPT’s auditor, has performed other services in addition to their statutory duties. Details of the amounts paid to the auditor, which includes amounts paid for non-audit services and other assurance services, are set out in note 7 to the financial statements.

The Directors have considered the non-audit services and other assurance services provided by the auditor during the financial year. In accordance with advice received from the Audit and Risk Management Committee, the Directors are satisfied that the provision of non-audit services by the auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons:

• the Audit & Risk Management Committee reviewed the non-audit services and other assurance services at the time of appointment to ensure that they did not impact upon the integrity and objectivity of the auditor;

• the Board’s own review conducted in conjunction with the Audit and Risk Management Committee, having regard to the Board’s policy with respect to the engagement of GPT’s auditor; and

• the fact that none of the non-audit services provided by PricewaterhouseCoopers during the financial year had the characteristics of management, decision-making, self-review, advocacy or joint sharing of risks.

4.4 Rounding of Amounts

The Company is of a kind referred to in the Australian Securities & Investments Commission Class Order 98/0100. Accordingly, amounts in the Directors’ Report have been rounded to the nearest thousand dollars in accordance with the Class Order, unless stated otherwise.

4.5 Auditor

PricewaterhouseCoopers continues in office in accordance with section 327 of Corporations Act 2001.

4.6 Auditor’s Independence Declaration

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

Signed in accordance with a resolution of the Directors.

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_____ _____ Rob Ferguson Michael Cameron Chairman Managing Director and Chief Executive Officer

Sydney 17 February 2012

GPT Annual Financial Report 2011

127

AUDITOR’S INDEPENDENCE DECLARATION

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

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128 GPT Annual Financial Report 2011

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

Note	Consolidated entity 31 Dec 11 $’000 31 Dec 10 $’000
Revenue Fund management fees Property management fees Development management fees Other income Mangement costs recharged Interest revenue Net foreign exchange gain Revaluation on borrowings Total revenue and other income Expenses Remuneration expenses Property rent and outgoings Repairs and maintenance Professional fees Depreciation and amortisation expense Net loss on disposal of assets Impairment expense / (reversal of prior period impairment) Finance costs Other expenses Total expenses (Loss) / profit from continuing operations before income tax expense Income tax benefit / (expense) (Loss) / profit after income tax expense for continuing operations (Loss) / profit from discontinued operations 5(d) Net (loss) / profit for the year Other comprehensive income Net foreign exchange translation adjustments, net of tax Total comprehensive (loss) / income for the year Net loss attributable to: - Members of the Company - External non-controlling interest Total comprehensive (loss) / income attributable to: - Members of the Company - External non-controlling interest Earnings per share attributable to the ordinary equity holders of the Company Basic and diluted earnings per share (cents per share) from continuing operations 4(a) Basic and diluted earnings per share (cents per share) 4(a)	70,390 63,315 20,291 24,316 20,244 18,839
	110,925 106,470
	7,308 6,609 601 814 27 622 1,844 454,075
	9,780 462,120
	120,705 568,590
	94,533 88,776 6,754 7,081 4,518 2,755 8,497 7,599 7,343 7,276 91 176 5,574 (992) 26,919 21,331 10,412 4,592
	164,641 138,594
	(43,936) 429,996
	6,865 (2,575)
	(37,071) 427,421 (12,174) 188,256
	(49,245) 615,677
	730 17,328
	(48,515) 633,005
	(46,568) 616,325 (2,677) (648) (45,838) 633,653 (2,677) (648) (1.86) 23.07 (2.52) 33.22

The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

GPT Annual Financial Report 2011 129

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

Note	Consolidated entity 31 Dec 11 $’000 31 Dec 10 $’000
ASSETS Current Assets Cash and cash equivalents Loans and receivables Prepayments Non-current assets classified as held for sale 5(c) Total Current Assets Non-Current Assets Investments in associates and joint ventures Loans and receivables Property, plant & equipment Intangible assets Deferred tax assets Other assets Total Non-Current Assets Total Assets LIABILITIES Current Liabilities Payables Provisions Current tax liabilities Non-current liabilities classified as held for sale 5(c) Total Current Liabilities Non-Current Liabilities Provisions Other liabilities Deferred tax liabilities Total Non-Current Liabilities Total Liabilities Net Assets EQUITY Contributed equity Reserves Accumulated losses 6 Total equity attributable to Company members Non-controlling interests 6 Total Equity	14,488 15,084 37,188 59,575 1,434 940
	53,110 75,599
	2,091 35,218
	55,201 110,817
	81 78 13,396 19,122 12,812 5,661 51,344 51,758 36,253 27,791 7,762 3,813
	121,648 108,223
	176,849 219,040
	49,881 47,872 14,374 12,752 - 257
	64,255 60,881
	903 9,288
	65,158 70,169
	1,358 1,104 7,962 - - 495
	9,320 1,599
	74,478 71,768
	102,371 147,272
	323,035 324,771 41,084 35,004 (266,596) (220,028)
	97,523 139,747
	4,848 7,525
	102,371 147,272

The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

130 GPT Annual Financial Report 2011

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

		Total	equity	$’000	(488,778)	17,328	17,328	615,677	633,005		3,045	147,272	147,272	730	730	(49,245)	(48,515)		(1,736)	(480)	5,830	102,371
Consolidated Entity	Attributable to non-controlling interests	Total Contributed Reserves Accumulated Total	equity losses	$’000 $’000 $’000 $’000 $’000	(496,951) 22,060 - (13,887) 8,173	17,328 - - - -	17,328 - - - -	616,325 - - (648) (648)	633,653 - - (648) (648)		3,045 - - - -	139,747 22,060 - (14,535) 7,525	139,747 22,060 - (14,535) 7,525	730 - - - -	730 - - - -	(46,568) - - (2,677) (2,677)	(45,838) - - (2,677) (2,677)		(1,736) - - - -	(480) - - - -	5,830 - - - -	97,523 22,060 - (17,212) 4,848
	Attributable to Company members	Contributed Reserves Accumulated	equity losses	$’000 $’000 $’000	Balance at 1 January 2010 324,771 14,631 (836,353)	Movement in foreign currency translation reserve - 17,328 -	Net income recognised directly in equity - 17,328 -	Profit / (loss) for the year - - 616,325	Total comprehensive income / (loss) for the year - 17,328 616,325	Transactions with Securityholders in their capacity as Securityholders:	Movement in employee incentive security scheme reserve - 3,045 -	Balance at 31 December 2010 324,771 35,004 (220,028)	Balance at 1 January 2011 324,771 35,004 (220,028)	Movement in foreign currency translation reserve - 730 -	Net income recognised directly in equity - 730 -	Loss for the year - - (46,568)	Total comprehensive income / (loss) for the year - 730 (46,568)	Transactions with Securityholders in their capacity as Securityholders:	On-market purchase of GPT stapled securities (1,736) - -	Movement in treasury stock reserve - (480) -	Movement in employee incentive security scheme reserve - 5,830 -	Balance at 31 December 2011 323,035 41,084 (266,596)

GPT Annual Financial Report 2011 131

CONSOLIDATED STATEMENT OF CASH FLOW

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

	Consolidated entity 31 Dec 11 $’000 31 Dec 10 $’000
Cash flows from operating activities Cash receipts in the course of operations (inclusive of GST) Cash payments in the course of operations (inclusive of GST) Dividends received Income tax (paid) / received Interest received Finance costs Net cash inflow from operating activities Cash flows from investing activities Payments for property, plant and equipment Payments for intangibles Proceeds from sale of controlled entities and associates Loans advanced to joint ventures and associates Repayment of joint venture and associate loans Net cash outflow from investing activities Cash flows from financing activities Repayment of employee incentive scheme loans, net of distributions Payments for buy-back of ordinary stapled securities Repayment of related party borrowings Net cash outflow from financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at the beginning of the year Less: cash balance classified as held for sale Cash and cash equivalents at the end of the year	187,367 164,563 (166,024) (140,048) 1,329 300 (1,648) 3,443 823 1,372
	21,847 29,630 (6,202) (7,062)
	15,645 22,568
	(9,372) (2,991) (4,731) (27,125) 2,089 - (2,650) - 600 -
	(14,064) (30,116)
	2,152 1,095 (1,736) - (5,262) (1,854)
	(4,846) (759)
	(3,265) (8,307) 18,795 27,102
	15,530 18,795 (1,042) (3,711)
	14,488 15,084

The above Consolidated Statement of Cash Flow should be read in conjunction with the accompanying notes.

132 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

1. Basis of preparation of concise financial report

The concise financial report has been prepared in accordance with the Corporations Act 2001 and Accounting Standard AASB 1039 Concise Financial Reports. The concise financial report and specific disclosures required by AASB 1039 have been derived from the Company’s full financial report, and is presented in Australian dollars. A full description of the accounting policies adopted by the consolidated entity is provided in the 2011 financial statements which form part of the full financial report. The concise financial report does not, and cannot be expected to, provide as full an understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report.

The consolidated entity’s accounting policies have been consistently applied to all periods presented in the concise financial report.

2. Segment reporting

(a) Financial Performance by Segment

The segment information provided to the CEO for the reportable segments (discussed at note 2(e)) for the year ended 31 December 2011 is set out below:

31 December 2011

31 December 2011
	Core operations Non-core operations Funds Management Australia Property Management All Other Segments Total Continuing Operations Discontinued Operation - US Seniors Housing Discontinued Operation - Funds Management Europe Discontinued Operation - Joint Venture Discontinued Operation - Hotel / Tourism Total $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Revenue Revenue from hotel operations Fund management fees Property management fees Development management fees Total segment revenue Other income Share of after tax profit of associates and joint ventures Management costs recharged Interest revenue Total other income Total segment revenue and other income Expenses Remuneration expenses Rental expenses attributable to hotel operations Cost of sales attributable to hotel operations Property rent and outgoings Repairs and maintenance Professional fees Depreciation and amortisation expense Finance costs Other expenses - internal recharges Other expenses Income tax (expense) / benefit Segment result for the year Fair value and other adjustments to investments in joint ventures and associates Net foreign exchange gain / loss Net profit / (loss) on disposal of assets Revaluation on borrowings Impairment reversal / (expense) Finance costs Amortisation expense - intangibles and hotels and tourism Tax impact of reconciling items from segment result to net profit / (loss) for the year Others Net profit / (loss) for the year*	- - - - - - - 40,787 40,787 24,182 - 46,208 70,390 - - - 166 70,556 - 20,268 23 20,291 - - - - 20,291 - 15,212 5,032 20,244 - - - - 20,244
	24,182 35,480 51,263 110,925 - - - 40,953 151,878
	- - - - 337 2,567 - - 2,904 - 6,101 1,207 7,308 - - - - 7,308 163 200 238 601 11 - - 211 823
	163 6,301 1,445 7,909 348 2,567 - 211 11,035
	24,345 41,781 52,708 118,834 348 2,567 - 41,164 162,913
	(3,708) (33,083) (57,742) (94,533) - - - (15,481) (110,014) - - - - - - - (13,882) (13,882) - - - - - - - (9,830) (9,830) (131) (3,410) (3,213) (6,754) - - - (5,195) (11,949) (143) (3,212) (1,163) (4,518) - - - (2,273) (6,791) (77) (903) (7,517) (8,497) - (298) - (196) (8,991) - - (2,198) (2,198) - - - - (2,198) - (1,844) (25,075) (26,919) - 4 - (2,075) (28,990) (7,622) (3,695) 10,697 (620) 786 - - (166) - (213) (1,332) (5,618) (7,163) - (155) - (781) (8,099) (4,538) 1,537 11,352 8,351 - (350) - 2,617 10,618
	7,913 (4,161) (27,769) (24,017) 1,134 1,768 - (6,098) (27,213) - - - - 14,372 (14,272) - - 100 - - 27 27 63 (36) - - 54 - - (91) (91) (6,203) (185) - 390 (6,089) - 1,844 - 1,844 - - - 3,270 5,114 - - (5,574) (5,574) - - - (116) (5,690) - - - - - - - (4,670) (4,670) - (1,123) (4,022) (5,145) - - - (23) (5,168) - (1,194) (292) (1,486) (1,304) - - (264) (3,054) - - (2,629) (2,629) - - - - (2,629)
	7,913 (4,634) (40,350) (37,071) 8,062 (12,725) - (7,511) (49,245)

• The segment result is based on Realised Operating Income (ROI). ROI is a financial measure that is based on the profit under Australian Accounting Standards adjusted for certain unrealised items, non-cash items, gains or losses on investments or other items the Directors determine to be non-recurring or capital in nature. ROI is not prescribed by any Australian Accounting Standard. The adjustments that reconcile the Segment Result to the net profit/(loss) for the year may change from time to time, depending on changes in accounting standards and/or the Directors’ assessment of items that are non-recurring or capital in nature. A description of the material adjustments are included in note 2(b) and (c).

GPT Annual Financial Report 2011 133

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

2. Segment reporting (continued)

(a) Financial Performance by Segment (continued)

The segment information provided to the CEO for the reportable segments (discussed at note 2(e)) for the year ended 31 December 2010 is below:

31 December 2010

31 December 2010
	Core operations Non-core operations Funds Management Australia Property Management All Other Segments Total Continuing Operations Discontinued Operation - US Seniors Housing Discontinued Operation - Funds Management Europe Discontinued Operation - Joint Venture Discontinued Operation - Hotel / Tourism Total $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Revenue Revenue from hotel operations Fund management fees Property management fees Development management fees Total segment revenue Other income Share of after tax (loss) / profit of associates and joint ventures Management costs recharged Interest revenue Dividend revenue Total other income Total segment revenue and other income Expenses Remuneration expenses Rental expenses attributable to hotel operations Cost of sales attributable to hotel operations Property rent and outgoings Repairs and maintenance Professional fees Depreciation and amortisation expense Finance costs Other expenses - internal recharges Other expenses Income tax (expense) / benefit Segment result for the year* Fair value and other adjustments to investments in joint ventures and associates Net foreign exchange gain / (loss) Net profit / (loss) on disposal of assets Revaluation on borrowings Impairment reversal / (expense) Finance costs Amortisation expense - intangibles and hotels and tourism Tax impact of reconciling items from segment result to net profit/(loss) for the year People costs Others Net profit / (loss) for the financial year	- - - - - - - 109,054 109,054 22,749 - 40,566 63,315 - - - 866 64,181 - 24,316 - 24,316 - - - (23) 24,293 - 13,143 5,696 18,839 - - - - 18,839
	22,749 37,459 46,262 106,470 - - - 109,897 216,367
	- - - - (4,588) 4,542 - - (46) - 4,670 1,939 6,609 - - - - 6,609 188 6 620 814 28 267 - 263 1,372 - - - - - - - 300 300
	188 4,676 2,559 7,423 (4,560) 4,809 - 563 8,235
	22,937 42,135 48,821 113,893 (4,560) 4,809 - 110,460 224,602
	(4,070) (35,762) (45,559) (85,391) - - - (40,527) (125,918) - - - - - - - (37,759) (37,759) - - - - - - - (21,193) (21,193) (173) (2,899) (4,009) (7,081) - - - (14,662) (21,743) (229) (3,579) 1,053 (2,755) - - - (6,214) (8,969) (35) (853) (6,711) (7,599) - (132) - (384) (8,115) - - (2,366) (2,366) - - - - (2,366) - (2,138) (19,193) (21,331) - (8,133) - (3,984) (33,448) (6,833) 1,151 9,328 3,646 (3,151) - - (495) - (151) 737 (6,483) (5,897) - 1,093 - (2,451) (7,255) (3,704) (409) 6,786 2,673 (53) 73 - 5,163 7,856
	7,742 (1,617) (18,333) (12,208) (7,764) (2,290) - (12,046) (34,308) - - - - 1,803 (14,163) - - (12,360) - - 622 622 (180) (633) - - (191) - - (176) (176) (125) 3,954 (125) (500) 3,028 - 29,994 424,081 454,075 - 105,203 - 118,757 678,035 - - 992 992 - 3,568 - (4,321) 239 - - - - - - - (3,078) (3,078) - (4,152) (758) (4,910) - - - (531) (5,441) - 595 (5,843) (5,248) - - - 385 (4,863) - - (3,385) (3,385) - - - 368 (3,017) - - (2,341) (2,341) (26) - - - (2,367)
	7,742 24,820 394,859 427,421 (6,292) 95,639 (125) 99,034 615,677

• The segment result is based on Realised Operating Income (ROI). ROI is a financial measure that is based on the profit under Australian Accounting Standards adjusted for certain unrealised items, non-cash items, gains or losses on investments or other items the Directors determine to be non-recurring or capital in nature. ROI is not prescribed by any Australian Accounting Standard. The adjustments that reconcile the Segment Result to the Net profit/(loss) for the year may change from time to time, depending on changes in accounting standards and/or the Directors’ assessment of items that are non-recurring or capital in nature. A description of the material adjustments are included in note 2(b) and (c).

134 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

2. Segment reporting (continued)

(b) Reconciliation of Segment Revenue and Result to the Statement of Comprehensive Income

This reconciliation relates only to revenue and expense items from continuing operations and excludes any amounts comprising the net profit/ (loss) from discontinued operations.

31 December 2011

31 December 2011
Note	Core Operations All Other Segments Total Continuing Operations ROI Adjustments Total Statement of Comprehensive Income $’000 $’000 $’000 $’000 $’000
Revenue Fund management fees Property management fees Development management fees Total segment revenue Other income Management costs recharged Interest revenue Net foreign exchange gain Revaluation on borrowings 2(c)(iii) Total other income Total segment revenue and other income Expenses Remuneration expenses Property rent and outgoings Repairs and maintenance Professional fees Depreciation and amortisation expense (excluding intangibles) Amortisation expense - intangibles 2(c)(i) Net loss on disposal of assets Finance costs Other expenses - internal recharges Other expenses Impairment expense 2(c)(ii) Income tax (expense) / benefit Add: Tax impact of reconciling items from segment result to net profit / (loss) for the year Segment result for the year Net loss for the year from continuing operations	24,182 46,208 70,390 - 70,390 20,268 23 20,291 - 20,291 15,212 5,032 20,244 - 20,244
	59,662 51,263 110,925 - 110,925
	6,101 1,207 7,308 - 7,308 363 238 601 - 601 - - - 27 27 - - - 1,844 1,844
	6,464 1,445 7,909 1,871 9,780
	66,126 52,708 118,834 1,871 120,705
	(36,791) (57,742) (94,533) - (94,533) (3,541) (3,213) (6,754) - (6,754) (3,355) (1,163) (4,518) - (4,518) (980) (7,517) (8,497) - (8,497) - (2,198) (2,198) - (2,198) - - - (5,145) (5,145) - - - (91) (91) (1,844) (25,075) (26,919) - (26,919) (11,317) 10,697 (620) - (620) (1,545) (5,618) (7,163) (2,629) (9,792) - - - (5,574) (5,574) (3,001) 11,352 8,351 - 8,351 - - - (1,486) (1,486)
	3,752 (27,769) (24,017)
	(13,054) (37,071)

GPT Annual Financial Report 2011 135

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

2. Segment reporting (continued)

(b) Reconciliation of Segment Revenue and Result to the Statement of Comprehensive Income (continued)

This reconciliation relates only to revenue and expense items from continuing operations and excludes any amounts comprising the net loss from discontinued operations.

31 December 2010

31 December 2010
Note	Core Operations All Other Segments Total Continuing Operations ROI Adjustments Total Statement of Comprehensive Income $’000 $’000 $’000 $’000 $’000
Revenue Fund management fees Property management fees Development management fees Total segment revenue Other income Management costs recharged Interest revenue Revaluation on borrowings 2(c)(iii) Net foreign exchange gain Total other income Total segment revenue and other income Expenses Remuneration expenses Property rent and outgoings Repairs and maintenance Professional fees Depreciation and amortisation expense (excluding intangibles) Amortisation expense - intangibles 2(c)(i) Net loss on disposal of assets Finance costs Other expenses - internal recharges Other expenses Reversal of prior period impairment 2(c)(ii) Income tax (expense) / benefit Add: Tax impact on reconciling items from segment result to net profit / (loss) for the year Segment result for the year Net profit for the year from continuing operations	22,749 40,566 63,315 - 63,315 24,316 - 24,316 - 24,316 13,143 5,696 18,839 - 18,839
	60,208 46,262 106,470 - 106,470
	4,670 1,939 6,609 - 6,609 194 620 814 - 814 - - - 454,075 454,075 - - - 622 622
	4,864 2,559 7,423 454,697 462,120
	65,072 48,821 113,893 454,697 568,590
	(39,832) (45,559) (85,391) (3,385) (88,776) (3,072) (4,009) (7,081) - (7,081) (3,808) 1,053 (2,755) - (2,755) (888) (6,711) (7,599) - (7,599) - (2,366) (2,366) - (2,366) - - - (4,910) (4,910) - - - (176) (176) (2,138) (19,193) (21,331) - (21,331) (5,682) 9,328 3,646 - 3,646 586 (6,483) (5,897) (2,341) (8,238) - - - 992 992 (4,113) 6,786 2,673 - 2,673 - - - (5,248) (5,248)
	6,125 (18,333) (12,208)
	439,629 427,421

136 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

2. Segment reporting (continued)

(c) Description of adjustments from the Segment result (‘ROI’) to Net profit / (loss) for the year

The CEO assesses the performance of the operating segments on a ROI basis. The material adjustments to the segment result to arrive at net profit/(loss) shown in the financial statements are set out below:

• (i) Amortisation expense is required for Australian Accounting Standards and is a non-cash transaction. The Company has therefore excluded this amount from ROI to better reflect a cash basis in ROI.

• (ii) Impairment reversal / (expense) is required for Australian Accounting Standards and is a non-cash transaction. The Company has therefore excluded this amount from ROI to better reflect a cash basis in ROI.

• (iii) Revaluation on borrowings is required for intercompany loans with General Property Trust which were modified under the Deeds of Variation in 2010 and is a non-cash item. The Company has therefore excluded this amount from ROI to better reflect a cash basis in ROI.

• (iv) Finance costs represent interest on the Voyages loan facility. The Company has therefore excluded this amount from ROI as it is capital in nature.

• (v) Fair value and other adjustments to investments in joint ventures and associates is required for Australian Accounting Standards and is a non-cash transaction. The Company has therefore excluded this amount from ROI to better reflect a cash basis in ROI.

• (vi) Others are required for Australian Accounting Standards and include one off accruals and amortisation of lease incentive which is a non-cash transaction. The Company has therefore excluded this amount from ROI to exclude one off items and better reflect a cash basis in ROI.

The accounting policies used by the Company in reporting segments internally are the same as those in note 1 to the financial statements and in the prior period.

GPT Annual Financial Report 2011

137

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

2. Segment reporting (continued)

(d) Reconciliation of Segment Assets and Liabilities to the Statements of Financial Position

The amounts provided to the CEO in respect of total assets and total liabilities are measured in a manner consistent with that of the financial report and allocated based on the operations of the segment and physical location of the assets.

The reportable segments’ assets and liabilities as at 31 December 2011 and 31 December 2010 are set out below:

31 December 2011

31 December 2011
	Core operations Funds Management Australia Property Management All Other Segments Total Continuing Operations $’000 $’000 $’000 $’000	Non-core operations Discontinued Operation - US Seniors Housing Discontinued Operation - Funds Management Europe Discontinued Operation - Joint Venture Discontinued Operation - Hotels / Tourism Total $’000 $’000 $’000 $’000 $’000
Current Assets Other current assets Assets classified as held for sale Total Current Assets Non-Current Assets Investments in associates and joint ventures Other non-current assets Total Non-Current Assets Total Assets Liabilities directly associated with assets classified as held for sale Other current and non-current liabilities Total Liabilities Net Assets 31 December 2010	8,839 4,540 39,731 53,110 - - - -	- - - - 53,110 175 - - 1,916 2,091
	8,839 4,540 39,731 53,110	175 - - 1,916 55,201
	- - 81 81 - 10,968 110,599 121,567	- - - - 81 - - - - 121,567
	- 10,968 110,680 121,648	- - - - 121,648
	8,839 15,508 150,411 174,758	175 - - 1,916 176,849
	- - - - 1,367 9,198 63,010 73,575	- - - 903 903 - - - - 73,575
	1,367 9,198 63,010 73,575	- - - 903 74,478
	7,472 6,310 87,401 101,183	175 - - 1,013 102,371
	Core operations Funds Management Australia Property Management All Other Segments Total Continuing Operations $’000 $’000 $’000 $’000	Non-core operations Discontinued Operation - US Seniors Housing Discontinued Operation - Funds Management Europe Discontinued Operation - Joint Venture Discontinued Operation - Hotels / Tourism Total $’000 $’000 $’000 $’000 $’000
Current Assets Other current assets Assets classified as held for sale Total Current Assets Non-Current Assets Investments in associates and joint ventures Other non-current assets Total Non-Current Assets Total Assets Liabilities directly associated with assets classified as held for sale Other current and non-current liabilities Total Liabilities Net Assets	10,221 25,079 40,299 75,599 - - - -	- - - - 75,599 1,099 13,487 - 20,632 35,218
	10,221 25,079 40,299 75,599	1,099 13,487 - 20,632 110,817
	- - 78 78 - 12,091 96,054 108,145	- - - - 78 - - - - 108,145
	- 12,091 96,132 108,223	- - - - 108,223
	10,221 37,170 136,431 183,822	1,099 13,487 - 20,632 219,040
	- - - - 1,782 11,792 48,906 62,480	- - - 9,288 9,288 - - - - 62,480
	1,782 11,792 48,906 62,480	- - - 9,288 71,768
	8,439 25,378 87,525 121,342	1,099 13,487 - 11,344 147,272

138 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

2. Segment reporting (continued)

(e) Identification of Reportable Segments

The Company’s operating segments based on internal reports reviewed by the CEO are:

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Segment Types of products and services which generate segment revenues
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Segment	Types of products and services whichgenerate segment revenues
Funds Management Australia	Asset and funds management of Australian wholesale fund vehicles, GPT Wholesale Shopping Centre Fund and GPT Wholesale Office Fund.
Property Management	Property management of Australian retail assets including the retail assets in the GPT Wholesale ShoppingCentre Fund.
All other segments	Costs and revenues associated with the funds management of the General Property Trust, foreign exchangegains and losses, finance costs and Companyoperatingcosts.
Discontinued operation – US Seniors Housing	Investment in the entity that operated a portfolio of established seniors housing assets in the United States of America as well as an interest in the manager of these assets. The GPT Groupcompleted the sale of thisportfolio on 29 March 2011.
Discontinued operation - Funds Management Europe	Asset and fund management in Europe through a number of small funds managed by Internos Real Investors.
Discontinued operation - Joint Venture	Investments in the Babcock & Brown Joint Venture in Europe, the United States of America, New Zealand and Australia. The Company has divested of the majority of its interest in the Joint Venture with all remaininginterests written down to nil.
Discontinued operation – Hotels / Tourism	Investments in an entity that operates nature-based resorts and hotel assets. The Company has substantially divested from this segment after completing the sale of the Voyages Business Platform on 23 May2011.

(f) Segment Revenues and Assets by geographic location

After completing the sale of the US Senior Housing Portfolio on 29 March 2011, the consolidated entity operates almost entirely in Australia. Revenues from external customers (including the General Property Trust) by geographical location along with an analysis of the location of total assets is as follows:

	Segment revenues Segment assets 31 Dec 11 $’000 31 Dec 10 $’000 31 Dec 11 $’000 31 Dec 10 $’000
Australia Europe United States of America Total	151,878 216,367 176,674 204,454 - - - 13,487 - - 175 1,099
	151,878 216,367 176,849 219,040

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Location Products and services by location
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Location	Products and services by location
Australia	Management of Australian Funds holding income-producing retail, office, industrial and business park assets. Property management and development of Australian properties, management and administration of the General Property Trust and up until the sale of the Voyages Business Platform on 23 May2011, hotel operations.
Europe	The segment consists of investments in Europe through a number of small funds managed by Internos Real Investors.
United States of America	Senior Housingupuntil the sale of the US Senior Housing portfolio on 29 March 2011.

GPT Annual Financial Report 2011 139

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

3. Dividends paid and payable

No dividends have been paid or declared for the financial year (2010: nil).

4. Earnings per share

4. Earnings per share
	Consolidated entity 31 Dec 11 31 Dec 10 Cents Cents
(a) Basic earnings per share Basic and diluted earnings per share - (loss) / profit from continuing operations Basic and diluted earnings per share - (loss) / profit from discontinued operations Total basic and diluted earnings per share	(1.86) 23.07 (0.66) 10.15
	(2.52) 33.22
	Number of shares '000 Number of shares '000
(b) Weighted average number of ordinary stapled securities Weighted average number of ordinary shares used as the denominator in calculating: Basic earnings per ordinary share Adjustments for calculation of diluted earnings per share: Performance rights (weighted average basis) Weighted average number of ordinary shares and potential ordinary shares used as the demoninator incalculating diluted earnings per ordinary share	1,845,170 1,855,529 732 244
	1,845,902 1,855,773
	31 Dec 11 $’000 31 Dec 10 $’000
(c) The profit / (loss) used in the calculation of the basic earnings per share are as follows: Profit / (loss) reconciliation - basic and diluted (Loss) / profit from continuing operations (Loss) / profit from discontinued operations Loss attributed to external non-controlling interest	(34,394) 428,069 (12,174) 188,256 (2,677) (648)
	(49,245) 615,677

(d) Performance Rights

4,060,829 Performance Rights (2010: 3,818,257) were granted to certain Senior Executives under the Stapled Security Rights Plan during 2011. Cumulatively, 12,503,236 Performance Rights have been issued up until 31 December 2011. However, only 732,074 Performance Rights are considered dilutive (2010: 243,571). As such, only 732,074 Performance Rights have been included in the determination of diluted earnings per security. No Performance Rights have been included in the determination of basic earnings per share.

140 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

5. Non-current assets held for sale and discontinued operations

(a) Details of discontinued operations

For the year ended 31 December 2011, there were four discontinued operations: Hotel / Tourism Portfolio, Joint Venture, Funds Management – Europe and US Senior Housing portfolios. These operations were classified as discontinued operations in the 2010 annual financial report.

As part of GPT’s commitment to the active ownership, management and development of high quality Australian real estate in the retail, office and industrial sectors, management has continued with its plans to exit from the Hotel / Tourism sector and offshore assets and further disposals have been completed in 2011. An update on the progress of these disposals post 31 December 2010 and the remaining investments for each discontinued operation as at 31 December 2011, are discussed in detail below.

(i) Hotel / Tourism

The sale contract was exchanged for the Voyages Business Platform in October 2010 and settlement occurred on 23 May 2011 with a gain on sale of $0.4 million at 31 December 2011.

Post this transaction, the Group has substantially completed its exit from the Hotel / Tourism portfolio with remaining balances in the consolidated entity representing miscellaneous cash, receivables and accruals to the value of $1.0 million.

(ii) Funds Management - Europe

Dutch Active Fund Propco BV (DAF)

Following regulatory consent of the legal sale of GPT Europe 2 Sarl’s 38.04% shareholding in DAF, an unconditional legal sale of the investment became effective from 6 July 2010. However, until the 38.04% shareholding in DAF is on-sold to a third party by the new owners or GPT, the risks and benefits of owning this investment still remain with GPT and does not qualify as a sale under Australian Accounting Standards. As a result, at 31 December 2011 GPT Europe 2 Sarl continues to recognise the 38.04% investment in DAF, which is nil.

(iii) US Seniors Housing

On 29 March 2011, GPT substantially completed the sale of the US Seniors Housing Portfolio to Health Care REIT Inc (HCN). An associate of the Company, B-VII Operations Holding Co LLC, sold property, plant and equipment for US $34.3 million and the Company redeemed a 20% interest in the manager of the portfolio, Benchmark Assisted Living LLC for $1.2 million with a loss on sale of $6.2 million at 31 December 2011. Remaining balances represent working capital of the investment in B-VII Operations Holding Co LLC.

(b) Assets classified as held for sale

There are no other assets held for sale other than those assets disclosed below.

(c) Details of assets and liabilities of discontinued operations

The table below sets out the assets and liabilities that continue to be owned by the consolidated entity at 31 December 2011, (discussed in note 5(a)). These assets and liabilities are presented as an aggregate amount on the lines ‘non-current assets and liabilities held for sale’ in the Statement of Financial Position.

Note	Discontinued Operations US Seniors Housing 31 Dec 11 $’000 Funds Management Europe 31 Dec 11 $’000 Hotel/ Tourism 31 Dec 11 $’000 Total 31 Dec 11 $’000 Total 31 Dec 10 $’000
Assets classified as held for sale Cash at bank and at call Loans and receivables Inventories Investments in associates and joint ventures (i) Other assets Total Assets classified as held for sale 2(d) Liabilities classified as held for sale Trade payables and accruals Other liabilities Total Liabilities classified as held for sale 2(d)	- - 1,042 1,042 3,711 - - 874 874 13,267 - - - - 3,759 175 - - 175 14,458 - - - - 23
	175 - 1,916 2,091 35,218
	- - 903 903 6,142 - - - - 3,146
	- - 903 903 9,288

(i) Investments in associated and joint ventures comprise:

• the 38.04% investment in DAF held at nil. Refer to note 5(a)(ii) for further details; and

• the 95% investment in B-VII Operations Holding Co LLC held at $0.2 million.

GPT Annual Financial Report 2011 141

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

5. Non-current assets held for sale and discontinued operations (continued)

(d) Financial performance and cashflow information relating to discontinued operations

The table below sets out the financial performance and cashflow information up to 31 December 2011 for the discontinued operations that continue to be owned by the Company at reporting date. For assets which have been divested during the period, the relevant financial performance and cashflow information up to the date of disposal have also been included. The financial performance is shown at note 2(a) within the Discontinued Operations segments.

	Consolidated entity 31 Dec 11 $’000 31 Dec 10 $’000
Revenue Expenses (Loss) / Profit before income tax Income tax credit (Loss) / Profit after income tax of discontinued operations Net cash inflow / (outflow) from operating activities Net cash inflow / (outflow) from investing activities Net cash outflow from financing activities Net decrease in cash generated by discontinued operations	47,349 334,669 (60,222) (151,981)
	(12,873) 182,688
	699 5,568
	(12,174) 188,256
	1,511 (16,258) 1,162 (2,943) (5,262) (1,885)
	(2,589) (21,086)

(e) Details of all disposals in the Statement of Comprehensive Income and Statements of Financial Position

The net profit / (loss) on sale of the discontinued operations and in the general course of business during the year were:

	Consolidated entity 31 Dec 11 $’000 31 Dec 10 $’000
Details of disposals during the year: Consideration (net of transaction costs) Total consideration Carrying amount of net assets sold Foreign exchange (loss) / gain realised on disposal (Loss) / profit on sale before income tax Income tax expense (Loss) / profit on sale after income tax The carrying amounts of assets and liabilities as at the date of disposal were: Cash at bank and at call Trade receivables Inventories Property, plant and equipment Other assets Total assets Trade payables and accruals Other liabilities Total liabilities Net assets	(3,332) 20,239
	(3,332) 20,239 (2,199) (20,791) (467) 3,580
	(5,998) 3,028
	- -
	(5,998) 3,028
	1,392 - 824 21,806 3,489 - 112 1,535 801 -
	6,618 23,341 2,043 - 2,376 2,550
	4,419 2,550
	2,199 20,791

Disposals happened throughout the year and the table above shows the carrying value of assets and liabilities as at the date of disposal.

142 GPT Annual Financial Report 2011

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

6. Accumulated losses

6. Accumulated losses
	Company $’000 Non-controlling Interest $’000 Total $’000
Consolidated entity Balance at 1 January 2010 Net profit / (loss) for the year Balance at 31 December 2010 Balance at 1 January 2011 Net loss for the year Balance at 31 December 2011	(836,353) 8,173 (828,180) 616,325 (648) 615,677
	(220,028) 7,525 (212,503)
	(220,028) 7,525 (212,503) (46,568) (2,677) (49,245)
	(266,596) 4,848 (261,748)

7. Auditor’s remuneration

During the year the following amounts were paid or payable for services provided by the auditor of the Company, PricewaterhouseCoopers, by the consolidated entity and its related parties:

	Consolidated entity 31 Dec 11 $ 31 Dec 10 $
Audit services PricewaterhouseCoopers Australia Statutory audit and review of financial reports Affiliates of PricewaterhouseCoopers Australia firm including overseas firms Statutory audit and review of financial reports Total remuneration for audit services Other assurance services PricewaterhouseCoopers Australia Regulatory and contractually required audits Total remuneration for other assurance services Total remuneration for audit and assurance services Non audit related services PricewaterhouseCoopers Australia Other services Affiliates of PricewaterhouseCoopers Australia firm including overseas firms Taxation services Total remuneration for non audit related services Total auditor's remuneration	265,000 370,000 - 308,240
	265,000 678,240
	171,469 122,500
	171,469 122,500
	436,469 800,740
	107,654 3,818 94,298 88,283
	201,952 92,101
	638,421 892,841

8. Events subsequent to reporting date

The following events have occurred subsequent to 31 December 2011:

• Post 31 December 2011, GPT continued with the on-market buy-back of the Group’s ordinary securities. At 17 February 2012, the Company has bought back 4.3 million of ordinary stapled securities for a total consideration of $0.1 million. This represents 0.2% of the total ordinary stapled securities.

Other than the above, the Directors are not aware of any matter or circumstance occurring since 31 December 2011 that has significantly or may significantly affect the operations of the consolidated entity, the results of those operations or the state of affairs of the consolidated entity in subsequent financial years.

GPT Annual Financial Report 2011 143

DIRECTORS’ DECLARATION

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

The Directors declare that in their opinion, the concise financial report of the consolidated entity for the year ended 31 December 2011 as set out on pages 129 to 143 complies with Accounting Standard AASB 1039 Concise Financial Reports.

The concise financial report is an extract from the full financial report for the year ended 31 December 2011. The financial statements and specific disclosures included in the concise financial report have been derived from the full financial report.

The concise financial report cannot be expected to provide a full understanding of the financial performance, financial position and financing and investing activities of the consolidated entity as the full financial report, which is available on request.

This declaration is made in accordance with the resolution of the Directors.

---

Rob Ferguson Chairman GPT Management Holdings Limited

Michael Cameron Managing Director and Chief Executive Officer

Sydney 17 February 2012

144 GPT Annual Financial Report 2011

INDEPENDENT AUDIT REPORT

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

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GPT Annual Financial Report 2011

145

INDEPENDENT AUDIT REPORT

For the year ended 31 December 2011 – GPT MANAGEMENT HOLDINGS LIMITED AND ITS CONTROLLED ENTITIES

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146 GPT Annual Financial Report 2011

Supplementary Information

Payments to GPT Securityholders

The table below includes payments made for the 2011 calendar year. Details of all payments made after 19 September 1985 are available from GPT’s website (at www.gpt.com.au) or from the Securityholder Service Centre on Freecall 1800 025 095.

GPT’s year end for tax purposes is 31 December, at which time the net Income of the Trust for this period is determined. As a result, the components of the Trust Distribution, against which withholding tax amounts are calculated for each quarter of the current financial year, are estimates only. The final components of each quarterly payment will be set out in the Annual Taxation Statement which is mailed to all investors in July, and will also be published on the website.

3 Months	Date Paid	Distribution	Dividend	Tax Deferred1
Ended		(centsper security)	(centsper security)	(centsper security)
31 Mar 11	27 May 11	4.2	0	4.200000
30 Jun 11	23 Sept 11	4.3	0	4.300000
30 Sep 11	18 Nov 11	4.4	0	4.400000
31 Dec 11	16 Mar 12	4.9	0	4.900000

1 The Tax Deferred component, comprising the Depreciation Allowance and distribution of pre-20 September 1985 realised and unrealised capital gain, is non-assessable for income tax. However, in determining the capital gain for CGT purposes, it will reduce the cost base or indexed cost base of units acquired after 19 September 1985. In determining a capital loss, the Tax Deferred component will reduce the cost base of units acquired after 19 September 1985.

Net Asset Backing of entities in the GPT Group

			NTA Backing per security*	General Property Trust	GPT Management Holdings
					Limited
				(unit)	(share)
30	Jun	11	$3.64	$3.64	-
31	Dec	11	$3.59	$3.59	-

• Excludes provision for June/December quarter distributions respectively.

GPT Annual Financial Report 2011 147

GPT Issue of Securities

The following table lists all issues of GPT securities since 1996. A complete list of all securities issued since GPT’s inception in 1971 can be obtained from the Group’s website (at www.gpt.com.au) or by calling the Securityholder Service Centre on Freecall 1800 025 095.

Securities

1800 025 095. Securities
Date	Description	No. of Securities	Price $	Amount $
19.01.96	Exercise of Options (1996)	2,614,035	1.89	4,930,800
19.04.96	Exercise of Options (1996)	627,294	1.93	1,209,400
27.06.96	Exercise of Options (1996-1998)	83,693,011	1.84	166,022,274
12.07.96	Exercise of Options (1996)	678,834	1.77	1,203,900
15.08.96	GEM Acquisition	312,978,299	2.25	704,201,173
03.09.96	GEM Acquisition	30,636,989	2.24	68,626,855
Various 1996	Manager’s Fee Units	3,993,662	Various	9,271,399
01.07.97	Exercise of Options (1996-1998)	76,521,770	2.01	166,053,931
27.11.97	Private Placement	60,000,000	2.50	148,875,000
03.12.97	Ayers Rock Purchase	2,850,196	2.55	7,268,000
Various 1997	Manager’s Fee Units	3,151,747	Various	7,847,684
Various 1998	Distribution Reinvestment Plan	38,874,312	Various	107,426,512
Various 1998	Manager’s Fee Units	1,763,679	Various	4,913,184
06.07.98	Exercise of Options (1996-1998)	63,808,671	2.41	166,231,132
Various 1999	Distribution Reinvestment Plan	52,208,394	Various	138,119,897
28.04.99	Manager’s Fee Units	373,816	2.78	1,039,208
21.05.99	Private Placement	88,709,678	2.48	218,762,401
Various 2000	Distribution Reinvestment Plan	61,230,010	Various	154,088,103
15.06.00	Darling Park Purchase	80,071,710	2.51	200,979,992
30.08.00	Private Placement	76,045,627	2.63	197,500,000
Various 2001	Distribution Reinvestment Plan	66,871,458	Various	175,265,269
02.01.01	Darling Park Purchase	27,600,000	2.38	65,688,000
27.03.01	Darling Park Purchase	17,660,000	2.72	47,998,114
01.01.02	Darling Park Purchase	6,100,000	2.38	14,518,000
Various 2002	Distribution Reinvestment Plan	76,561,979	Various	206,757,361
02.04.04	Private Placement	67,000,000	3.03	203,010,000
08.06.06	Security Purchase Plan	24,813,896	4.03	100,000,000
Various 2007	Distribution Reinvestment Plan	35,864,327	Various	165,527,515
23.11.07	Issue of Securities	22,219,109	4.60	102,167,909
Various 2008	Distribution Reinvestment Plan	118,119,256	Various	333,305,018
11.11.08	Issue of Securities	1,697,973,421	0.60	1,018,784,052
28.11.08	Issue of Securities	551,657,181	0.60	330,994,308
27.05.09	Issue of Securities	4,091,926,477	0.35	1,432,172,267
16.06.09	Issue of Securities	718,294,466	0.35	251,403,063
Exchangeable Securities
Date	Description	No. of Securities	Price $	Amount $
01.01.08	Opening securities on issue	-	-	-
27.11.08	Issue of exchangeable securities	2,500	240,600,000	240,600,000

148 GPT Annual Financial Report 2011

Spread of Securityholders as at 27 January 2012

Spread of Securityholders as at 27 January 2012
Holding	GPT	% of Issued Capital
	No. of Securityholders
1-1,000	20,975	45.82%
1,001-5,000	18,069	39.47%
5,001-10,000	4,031	8.81%
10,001-100,000	2,575	5.62%
100,001 and over	124	0.27%
Total number of Securityholders	45,774	100.00%

The number of security investors holding less than a marketable parcel of 162 securities ($3.08 on 27/01/2012) is 3,854 and they hold 274,461 securities.

Substantial Holders in GPT as at 27 January 2012

ubstantial Holders in GPT as at 27 January 2012
Securityholder	Number of Securities
Government of Singapore Investment Corporation Pte Ltd and its associates	205,875,282*
Uni Super	154,208,158
The Vanguard Group, Inc	112,368,480
Blackrock	98,949,289
State Street Corporation	88,600,537

• Includes 64,383,209 votes that would be exercisable by a holder of the total number of Units which would be required to be issued to the Exchangeable Securityholder if the Exchangeable Securities held by that Securityholder had been exchanged on the record date of the relevant meeting. The total number of votes is based on an initial aggregate principal amount of exchangeable securities which is $250,000,000 to be exchanged at the “Exchange Price” in effect at the relevant “Exchange Date” which at 31 December 2010 was $0.3883.

GPT Annual Financial Report 2011

149

20 Largest GPT Securityholders as at 27 January 2012

20 Largest GPT Securityholders as at 27 January 2012
Securityholder	Number of Securities	Percentage of total issued
		Securities
HSBC Custody Nominees (Australia) Limited	644,966,686	35.64%
National Nominees Limited	442,690,681	24.47%
JP Morgan Nominees Australia Limited	280,413,819	15.50%
Citicorp Nominees Pty Limited	106,263,896	5.87%
Citicorp Nominees Pty Limited	55,424,883	3.06%
AMP Life Limited	24,519,648	1.36%
JP Morgan Nominees Australia Limited	17,036,004	0.94%
Cogent Nominees Pty Limited	8,362,736	0.46%
Bond Street Custodians Limited	7,735,037	0.43%
Cogent Nominees Pty Limited	5,443,963	0.30%
RBC Dexia Investor Services Australia Nominees Pty Ltd	4,375,791	0.24%
Neasham Holdings Pty Ltd	4,000,399	0.22%
Invia Custodian Pty Limited	3,749,746	0.21%
Queensland Investment Corporation	3,623,572	0.20%
Suncorp Custodian Services Pty Limited	3,456,586	0.19%
RBC Dexia Investor Services Australia Nominees Pty Limited	3,362,639	0.19%
RBC Dexia Investor Services Australianominees Pty Limited	3,223,000	0.18%
Bond Street Custodians Limited	2,944,940	0.16%
Questor Financial Services Limited	2,744,545	0.15%
RBC Dexia Investor Services Australia Nominees Pty Limited	2,531,843	0.14%
Total	1,626,870,414	89.91%
Total Securities	1,809,449,764	100.00%

Voting

Securityholders in the GPT Group are entitled to 1 vote for each dollar of the value of the total securities they hold in the Group.

150 GPT Annual Financial Report 2011

Directory

The GPT Group comprising

GPT Management Holdings Limited ACN 113 510 188 and

GPT RE Limited ACN 107 426 504 AFSL 286511 As Responsible Entity for General Property Trust ARSN 090 110 357

Registered Office Level 51 MLC Centre 19 Martin Place Sydney NSW 2000

Directors (as at February 2012) Michael Cameron Brendan Crotty Eileen Doyle Rob Ferguson Eric Goodwin Lim Swe Guan Anne McDonald Gene Tilbrook Secretary James Coyne Audit and Risk Management Committee (as at February 2012) Anne McDonald Eric Goodwin Lim Swe Guan Nomination and Remuneration Committee (as at February 2012) Gene Tilbrook Brendan Crotty Eileen Doyle Rob Ferguson Sustainability Committee (as at February 2012) Eileen Doyle Brendan Crotty Eric Goodwin

Auditors

PricewaterhouseCoopers 201 Sussex Street Sydney NSW 2000

Lawyers

Allens Arthur Robinson Level 28, Deutsche Bank Place Cnr Hunter & Phillip Streets Sydney NSW 2000 Principal Registry Link Market Services Limited Level 12 680 George Street Sydney NSW 2000

Mail to:

GPT Security Registrar Locked Bag A14 Sydney South NSW 1235 Stock Exchange Quotation GPT is listed on Australian Securities Exchange under ASX Listing Code GPT

For further information, contact GPT’s Securityholder Service Centre or visit GPT’s website at: www.gpt.com.au

• To arrange changes of address, or changes in registration of securities, please call GPT’s Securityholder Service Centre on 1800 025 095.

• Please quote your Securityholder Reference Number (SRN)/Holder Identification Number (HIN) in all correspondence. The SRN/HIN is found at the top right hand corner of your holding statement.

• All Securityholders must sign any written enquiries or amendments to holdings.

• Written notification is required for changes of name or address, email is not accepted.

GPT Annual Financial Report 2011 151

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