GPT GROUP — Regulatory Filings 2013

Aug 11, 2013

GPT Management Holdings Limited ABN: 67 113 510 188

Interim Financial Report 30 June 2013

This interim 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 interim financial report is presented in Australian currency.

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual financial report for the year ended 31 December 2012 and any public announcements made by GPT Management Holdings Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

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.

CONTENTS

	Directors' Report	3
	Auditor's Independence Declaration	6
	Consolidated Statement of Comprehensive Income	7
	Consolidated Statement of Financial Position	8
	Consolidated Statement of Changes in Equity	9
	Consolidated Statement of Cash Flow	10
	Notes to the Financial Statements
1.	Summary of significant accounting policies	11
2.	Segment reporting	13
3.	Dividends paid and payable	13
4.	Earnings/(loss) per share	13
5.	Property, plant and equipment	14
6.	Intangibles	14
7.	Borrowings	14
8.	Contributed equity	15
9.	Notes to the Consolidated Statement of Cash Flow	15
10.	Contingent assets and liabilities	16
11.	Commitments	16
12.	Net tangible asset backing	16
13.	Events subsequent to the reporting date	16
	Directors' Declaration	17
	Independent Auditor's Review Report	18

DIRECTORS' REPORT

For the half year ended 30 June 2013

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 half year ended 30 June 2013. The consolidated entity forms part of the stapled entity, the GPT Group (GPT or the Group). The Company is stapled to the General Property Trust and the GPT 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 Level 51, MLC Centre, 19 Martin Place, Sydney NSW 2000.

Directors

The Directors of GPT Management Holdings Limited at any time during or since the end of the half year are:

(i) Chairman - Non-Executive Director

Rob Ferguson

(ii) Non-Executive Directors

Brendan Crotty Eileen Doyle Eric Goodwin Anne McDonald Gene Tilbrook

(iii) Executive Director

Michael Cameron

Principal Activities

During the half year, the Company continued its strategy to simplify the business and focus on high quality Australian retail, office and logistics & business park assets.

The principal activities of GPT Management Holdings Limited remain unchanged from 31 December 2012 and are:

• management of funds holding income-producing retail, office and logistics & business park assets;
• development of properties;
• management and administration of the General Property Trust; and
• property management.

The GPT Group

The shares of GPT Management Holdings Limited are quoted on the Australian Securities Exchange under the stapled entity code 'GPT' and comprise one unit in General Property Trust (Trust) and one share in GPT Management Holdings Limited. The unit and share are stapled together and cannot be traded separately. The Trust and the Company are entities that form the GPT Group. Each entity forming part of the Group continues as a separate legal entity in its own right under the Corporations Act 2001 and is therefore required to comply with the reporting and disclosure requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board.

DIRECTORS' REPORT

For the half year ended 30 June 2013

Review of operations

The net profit of the consolidated entity for the half year ended 30 June 2013 should be read in conjunction with the interim financial report of the GPT Group.

The net profit for the half year ended 30 June 2013 is \$13.6 million (Jun 2012: loss of \$3.9 million).

	Consolidated entity
	30 Jun 13	30 Jun 12
	\$'000	\$'000
Revenue	51,740	58,866
Other income	26,393	6,128
Expenses	(59,598)	(71,444)
Profit / (loss) from continuing operations before income tax expense	18,535	(6,450)
Income tax (expense) / benefit	(1,611)	2,473
Profit / (loss) after income tax expense for continuing operations	16,924	(3,977)
(Loss) / profit from discontinued operations	(3,348)	38
Net profit / (loss) for the half year	13,576	(3,939)

Profit after tax increased by \$17.5 million to a profit of \$13.6 million (Jun 2012: loss of \$3.9 million).

Total assets decreased by 0.2% to \$159.8 million (Dec 2012: \$160.1 million).

The increase in profit after tax compared with June 2012 is largely the result of an increase in revaluation on borrowings and delivery of lower overall expenses via ongoing expense discipline.

Dividends

The Directors have not declared any dividends for the half year ended 30 June 2013 (Jun 2012: nil).

Significant changes in the state of affairs

Significant changes in the state of affairs of the Company during the half year under review were as follows:

On 1 May 2013, the GPT Group internalised the property management function of the MLC building. Prior to May 2013, the property management function of this asset, jointly owned with QIC, had been outsourced to Jones Lang LaSalle (JLL).

In June 2013, the Board of GPT Funds Management Limited as the Trustee of the GPT Wholesale Office Fund approved the proposal to internalise the property management function of certain assets held by GWOF. The property management function of these assets had been previously outsourced to JLL.

The internalisation was undertaken to reinforce GPT's core business strategy to own and actively manage quality Australian property assets, as well as delivering great customer experiences and performance outcomes.

• On 8 May 2013, the GPT Group announced that a settlement has been reached in relation to the class action with Slater & Gordon.
• On 10 May 2013, the GPT Group announced the extension of the on-market buy-back for an additional 12 months until May 2014. During the six months ended 30 June 2013, GPT has acquired 25.2 million GPT stapled securities for a total consideration of \$93.9 million of which the Company's share is \$0.7m.
• On 17 May 2013, the GPT Group completed the divestment of the 38.04% interest in Dutch Active Fund (DAF) for nil consideration.
• On 28 June 2013, the Company invested \$2,000 into the Chullora Joint Venture which is an SPV jointly owned by the Company (50% interest) and Commercial and Industrial Properties Pty Ltd (50% interest). The SPV was set up to purchase the land at 14-18 Worth Street, Chullora for subdivision, development and sale.

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 2012 to 30 June 2013 period to ensure that the Energy Efficiency Opportunities data is made available in a public report on the GPT website by the required date of 31 December 2013.

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 2012 to 30 June 2013. 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 2013.

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

Auditor's Independence Declaration

As lead auditor for the review of GPT Management Holdings Limited for the half-year ended 30 June 2013, I declare that to the best of my knowledge and belief, there have been:

• a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and
• b) no contraventions of any applicable code of professional conduct in relation to the review

This declaration is in respect of GPT Management Holdings Limited and the entities it controlled during the period.

Matthew Lunn Sydney Partner 9 August 2013 PricewaterhouseCoopers

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the half year ended 30 June 2013

		Consolidated entity
		30 Jun 13	30 Jun 12
	Note	\$'000	\$'000
Revenue
Fund management fees		29,045	34,373
Property management fees		15,448	14,394
Development management fees		7,247	10,099
		51,740	58,866
Other income
Interest revenue		336	259
Revaluation on borrowings		26,057	5,869
		26,393	6,128
Total revenue and other income		78,133	64,994
Expenses
Remuneration expenses		38,647	45,842
Property rent and outgoings		2,309	1,898
Repairs and maintenance		1,510	2,717
Professional fees		790	2,174
Depreciation and amortisation expense		3,654	3,289
Finance costs		9,205	11,571
Other expenses		3,483	3,953
Total expenses		59,598	71,444
Profit / (loss) from continuing operations before income tax expense		18,535	(6,450)
Income tax (expense) / benefit		(1,611)	2,473
Profit / (loss) after income tax expense for continuing operations		16,924	(3,977)
(Loss) / profit from discontinued operations		(3,348)	38
Net profit / (loss) for the half year		13,576	(3,939)
Other comprehensive income
Items that may be reclassified to profit and loss
Net foreign exchange translation adjustments		200	(16)
Total comprehensive income / (loss) for the half year		13,776	(3,955)
Net profit / (loss) attributable to:
- Members of the Company		13,576	(3,939)
- Non-controlling interest		-	-
Total comprehensive income / (loss) attributable to:
- Members of the Company		13,776	(3,955)
- Non-controlling interest		-	-
Earnings per share attributable to the ordinary equity holders of the Company
Basic and diluted earnings / (loss) per share (cents per share) from continuing operations	4(a)	0.96	(0.22)
Basic and diluted loss per share (cents per share) from discontinued operations	4(a)	(0.19)	-
Basic and diluted earnings / (loss) per share (cents per share) - Total	4(a)	0.77	(0.22)

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

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

as at 30 June 2013

30 Jun 13 31 Dec 12 Note \$'000 \$'000 ASSETS Current Assets Cash and cash equivalents 25,040 19,990 Loans and receivables 23,668 26,841 Prepayments - 722 48,708 47,553 Assets classified as held for sale 102 102 Total Current Assets 48,810 47,655 Non-Current Assets Investments in associates and joint ventures 83 82 Loans and receivables 13,396 13,445 Property, plant & equipment 5 11,589 10,742 Intangible assets 6 50,898 49,914 Deferred tax assets 29,114 31,908 Other assets 5,942 6,354 Total Non-Current Assets 111,022 112,445 Total Assets 159,832 160,100 LIABILITIES Current Liabilities Payables 26,304 37,556 Provisions 12,958 12,392 Total Current Liabilities 39,262 49,948 Non-Current Liabilities Provisions 1,472 1,339 Other liabilities 7,352 7,584 Total Non-Current Liabilities 8,824 8,923 Total Liabilities 48,086 58,871 Net Assets 111,746 101,229 EQUITY Contributed equity 8 321,137 321,812 Reserves 47,375 49,759 Accumulated losses (261,614) (275,190) Total equity attributable to Company members 106,898 96,381 Non-controlling interests 4,848 4,848 Total Equity 111,746 101,229		Consolidated entity

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

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the half year ended 30 June 2013

	Consolidated entity
			Attributable to Company members			Attributable to non-controlling interests
	Contributed equity	Reserves	Accumulated losses	Total	Contributed equity	Reserves	Accumulated losses	Total	Total equity
	\$'000	\$'000	\$'000	\$'000	\$'000	\$'000	\$'000	\$'000	\$'000
Balance at 1 January 2012	323,035	41,084	(266,596)	97,523	22,060	-	(17,212)	4,848	102,371
Movement in foreign currency translation reserve	-	(16)	-	(16)	-	-	-	-	(16)
Net loss recognised directly in equity	-	(16)	-	(16)	-	-	-	-	(16)
Loss for the half year	-	-	(3,939)	(3,939)	-	-	-	-	(3,939)
Total comprehensive loss for the half year	-	(16)	(3,939)	(3,955)	-	-	-	-	(3,955)
Transactions with Securityholders in their capacity as Securityholders:
On-market purchase of GPT stapled securities	(1,223)	-	-	(1,223)	-	-	-	-	(1,223)
Movement in treasury stock reserve	-	145	-	145	-	-	-	-	145
Movement in employee incentive security scheme reserve	-	3,389	-	3,389	-	-	-	-	3,389
Balance at 30 June 2012	321,812	44,602	(270,535)	95,879	22,060	-	(17,212)	4,848	100,727
Balance at 1 January 2013	321,812	49,759	(275,190)	96,381	22,060	-	(17,212)	4,848	101,229
Movement in foreign currency translation reserve	-	200	-	200	-	-	-	-	200
Net profit recognised directly in equity	-	200	-	200	-	-	-	-	200
Profit for the half year	-	-	13,576	13,576	-	-	-	-	13,576
Total comprehensive income for the half year	-	200	13,576	13,776	-	-	-	-	13,776
Transactions with Securityholders in their capacity as Securityholders:
On-market purchase of GPT stapled securities	(707)	-	-	(707)	-	-	-	-	(707)
Securities issued	32			32					32
Movement in treasury stock reserve	-	100	-	100	-	-	-	-	100
Movement in employee incentive security scheme reserve	-	(2,684)	-	(2,684)	-	-	-	-	(2,684)
Balance at 30 June 2013	321,137	47,375	(261,614)	106,898	22,060	-	(17,212)	4,848	111,746

The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF CASH FLOW

for the half year ended 30 June 2013

		Consolidated entity
		30 Jun 13	30 Jun 12
	Note	\$'000	\$'000
Cash flows from operating activities
Cash receipts in the course of operations (inclusive of GST)		65,998	66,013
Cash payments in the course of operations (inclusive of GST)		(57,171)	(63,261)
Dividends received		324	980
Income tax paid		-	(14)
Interest received		241	280
Net cash inflow from operating activities	9(a)	9,392	3,998
Cash flows from investing activities
Payments for property, plant and equipment		(703)	(151)
Payments for intangibles		(2,729)	(673)
Payments for costs to sell on assets held for sale		(203)	-
Net cash outflow from investing activities		(3,635)	(824)
Cash flows from financing activities
Purchase of securities for the employee incentive scheme		-	(216)
Payments for buy-back of ordinary stapled securities		(707)	(1,262)
Net cash outflow from financing activities		(707)	(1,478)
Net increase in cash and cash equivalents		5,050	1,696
Cash and cash equivalents at the beginning of the half year		19,990	15,530
		25,040	17,226
Less: cash balance classified as held for sale		-	(1,241)
Cash and cash equivalents at the end of the half year	9(b)	25,040	15,985

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

NOTES TO THE FINANCIAL STATEMENTS

for the half year ended 30 June 2013

1. Summary of significant accounting policies

(a) Basis of preparation

This general purpose financial report for the interim half year reporting period ended 30 June 2013 has been prepared in accordance with GPT Management Holdings Limited's Constitution, Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual financial report for the year ended 31 December 2012 and any public announcements made by GPT Management Holdings Limited during the interim period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

The interim financial report complies with Australian Accounting Standards.

The interim financial report was approved by the Board of Directors on 9 August 2013.

(b) Significant accounting policies

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period with the exception of new and amended standards and interpretations mandatory for 2013 which have been applied as required. No significant changes are expected to the consolidated entity's financial performance, financial position or accounting principles as a result of the application of the new and amended standards, mandatory for annual reporting periods beginning on or after 1 January 2013.

Where applicable, certain comparative figures are restated in order to comply with the current period presentation of the financial report.

(c) New accounting standards and interpretations

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.

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) and 2012-6 Mandatory Effective Date of AASB 9 and Transition Disclosures (effective for annual reporting periods beginning on or after 1 January 2015)

AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial assets and financial liabilities. The standard is not applicable until 1 January 2015 but is available for early adoption. When adopted, this could change the classification and measurement of financial assets and financial liabilities. The consolidated entity may adopt this standard early and does not expect a significant impact from its early application.

(d) Critical accounting estimates and judgements

The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts in the financial statements. Management bases its judgments 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 result 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 period to the carrying amounts of assets and liabilities recognised in these interim financial statements are:

(i) 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 assess the expected cash flows of those assets discounted using the original effective interest rates. Critical judgements are made by the Company in setting appropriate impairment triggers for its assets and the assumptions used when determining fair values for assets where triggers exist.

(ii) Impairment of intangibles

The consolidated entity assesses impairment of intangible assets at each reporting date by evaluating conditions specific to the consolidated entity and to the particular intangible asset that may lead to impairment.

(iii) Share based payment transactions

The Company 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 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.

NOTES TO THE FINANCIAL STATEMENTS

for the half year ended 30 June 2013

1. Summary of significant accounting policies (continued)

(d) Critical accounting estimates and judgements (continued)

(iv) Recoverability of deferred tax assets

Deferred tax assets are recognised for deductible temporary differences and unused tax losses as management considers that it is probable that future taxable profits will be available to utilise those temporary differences and unused tax losses. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits which may lead to impairment of the deferred tax asset.

(e) Principles of Consolidation

As a result of implementation of AASB 10, 11, 12 the consolidated entity has adopted new 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 period. GPT Management Holdings Limited and its controlled entities are collectively referred to in this interim financial report as the consolidated entity.

Subsidiaries are all entities (including structured entities) over which the consolidated entity has control. The consolidated entity controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the consolidated entity. They are deconsolidated from the date that control ceases.

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

Non-controlling interests (previously referred to as minority interest) not held by the consolidated entity 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 Company's equity.

(ii) Associates

Associates are entities over which the consolidated entity 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, the consolidated entity'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. The consolidated entity's investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition.

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

(iii) Joint arrangements

Investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations each investor has, rather than the legal structure of the joint arrangement. The consolidated entity has assessed the nature of its joint arrangements and determined it has joint venture entities only.

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

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

NOTES TO THE FINANCIAL STATEMENTS

for the half year ended 30 June 2013

2. Segment reporting

(a) Financial Performance by Segment

The Chief Operating Decision Maker has been identified as the Chief Executive Officer (CEO) of the consolidated entity who is responsible for the strategic decision making within the consolidated entity. In the prior year, the Group changed its management reporting to focus on reporting performance at a Group level. Therefore Management of the consolidated entity has determined that the consolidated entity now operates in a single segment based on the information provided to the CEO of the consolidated entity. Refer to the GPT Group consolidated interim financial report for more detailed segment analysis at the Group level.

The amounts provided to the CEO in respect of financial performance are measured in a manner consistent with that of the interim financial report. Refer to the consolidated statement of comprehensive income for the segment financial performance and the consolidated statement of financial position for the total assets and liabilities.

3. Dividends paid and payable

No dividends have been paid or declared for the half year (June 2012: nil).

4. Earnings / (loss) per share

	Consolidated entity
	30 Jun 13	30 Jun 12
	Cents	Cents
(a) Basic and diluted earnings per share
Basic and diluted earnings per share - profit / (loss) from continuing operations	0.96	(0.22)
Basic and diluted earnings per share - (loss) from discontinued operations	(0.19)	-
Total basic and diluted earnings per share	0.77	(0.22)
	Number of	Number of
(b) Weighted average number of ordinary stapled securities	shares	shares
	'000s	'000s
Weighted average number of ordinary shares used as the denominator in calculating:
Basic earnings per ordinary share	1,766,374	1,794,579
Adjustments for calculation of diluted earnings per share:
Performance rights (weighted average basis)	1,392	1,447
Weighted average number of ordinary shares and potential ordinary shares used as the demoninator in
calculating diluted earnings per ordinary share	1,767,766	1,796,026
(c) The profit / (loss) used in the calculation of the basic and diluted earnings per share are as follows:
	30 Jun 13	30 Jun 12
Profit / (loss) reconciliation - basic and diluted	\$'000	\$'000
Profit / (loss) from continuing operations	16,924	(3,977)
(Loss) / profit from discontinued operations	(3,348)	38
	13,576	(3,939)

(d) Information concerning the classification of securities Performance Rights

4,021,529 Performance Rights (Jun 2012: 4,101,033) were granted to certain Senior Executives under the Stapled Security Rights Plan during 2013. Cumulatively, 11,696,162 Performance Rights have been issued up until 30 June 2013. However, only 1,392,134 Performance Rights are considered dilutive (Jun 2012: 1,446,643). As such, only 1,392,134 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.

NOTES TO THE FINANCIAL STATEMENTS

for the half year ended 30 June 2013

5. Property, plant and equipment

	Consolidated entity
	30 Jun 13	31 Dec 12
	\$'000	\$'000
Computers
At cost	9,943	9,932
less: accumulated depreciation and impairment	(7,513)	(6,819)
Total computers	2,430	3,113
Office, fixtures and fittings
At cost	12,020	10,141
less: accumulated depreciation and impairment	(2,861)	(2,512)
Total office, fixtures and fittings	9,159	7,629
Total property, plant and equipment	11,589	10,742
6. Intangibles

		Consolidated entity
	30 Jun 13	31 Dec 12
	\$'000	\$'000
Management rights
At cost	54,838	54,809
less: accumulated amortisation and impairment	(43,731)	(43,550)
Total management rights	11,107	11,259
IT development and software
At cost	55,043	51,477
less: accumulated amortisation and impairment	(15,252)	(12,822)
Total IT development and software	39,791	38,655
Total intangible assets	50,898	49,914

Management rights

The management rights include asset and property management rights of retail shopping centres. The rights are amortised over the useful life, which range from 3 years to indefinite.

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.

7. Borrowings

Related party borrowings – non-current

The following non-current, unsecured borrowings were provided by GPT Trust and its subsidiaries and drawn as at 30 June 2013:

• a loan facility to GPT Management Holdings Limited of AUD \$550,000,000 was drawn to \$358,394,580 (Dec 2012: \$334,476,632). This facility expires on 31 December 2015.
• a loan facility to GPT Property Management Ltd of AUD \$50,000,000 was drawn to \$34,006,243 (Dec 2012: \$33,375,494). This facility expires on 31 December 2015.
• a loan facility to GPT International Pty Limited of AUD \$120,000,000 was drawn to \$100,183,491 (Dec 2012: \$98,678,136). This facility expires on 12 June 2017.
• a loan facility to Voyages Hotels & Resorts of AUD \$70,000,000 was drawn to \$70,000,000 (Dec 2012: \$70,000,000). This facility expires on 24 December 2019.

Under Australian Accounting Standards, these loans have been revalued to nil (Jun 2012: \$nil) based on a forecast cash flow for amounts payable. As a result a revaluation adjustment of \$26.06 million for both continuing and discontinued operations has been recorded (Jun 2012: \$8.04 million).

NOTES TO THE FINANCIAL STATEMENTS

for the half year ended 30 June 2013

8. Contributed equity

			Shares
		Note	Number	\$'000
Ordinary stapled securities
1 January 2012	Opening securities on issue		1,813,767,108	323,035
1 January 2012 to 31 December 2012	On-market buy-back	(a)	(46,982,033)	(1,223)
31 December 2012	Closing securities on issue		1,766,785,075	321,812
1 January 2013	Opening securities on issue		1,766,785,075	321,812
18 February 2013	Securities issued	(b)	1,946,654	32
1 January 2013 to 30 June 2013	On-market buy-back	(a)	(25,202,180)	(707)
30 June 2013	Closing securities on issue		1,743,529,549	321,137

a) On-market buy-back

On 26 April 2012, GPT announced the extension of the existing on market buy-back for an additional 12 months from 11 May 2012 and increased the maximum number of securities that can be bought back from 5% to 10% of ordinary securities. On 10 May 2013, GPT announced the extension of the on-market buy-back for an additional 12 months until May 2014. During the 6 months ended 30 June 2013, the Group has bought back 25.2 million ordinary stapled securities for a total consideration of \$93.9 million of which the Company's share is \$0.7m.

(b) Securities issued

On 18 February 2013, GPT issued 1,946,654 securities under the 2010 Performance Rights Long Term Incentive Plan.

9. Notes to the Consolidated Statement of Cash Flow

	Consolidated entity
	30 Jun 13	30 Jun 12
	\$'000	\$'000
(a) Reconciliation of profit / (loss) after income tax expense to net cash inflow from operating activities
Net profit / (loss) for the half year	13,576	(3,939)
Share of after tax profit of equity accounted investments	-	(310)
Interest received	(104)	-
Net foreign currency exchange losses	8	4
Employee incentive security scheme expenses	1,619	3,751
Depreciation and amortisation expense	3,654	3,289
Intercompany finance costs	10,963	13,690
Lease incentive amortisation	180	246
Revaluation on borrowings	(26,057)	(8,044)
Change in operating assets and liabilities:
Decrease in receivables	14,663	8,675
Decrease in payables	(11,904)	(11,221)
Decrease / (increase) in deferred tax asset	2,794	(2,143)
Net cash inflow from operating activities	9,392	3,998

(b) Reconciliation of cash

	Consolidated entity
	30 Jun 13	30 Jun 12
	\$'000	\$'000
Cash at bank	25,040	15,985
Total cash and cash equivalents at the end of the half year	25,040	15,985

NOTES TO THE FINANCIAL STATEMENTS

for the half year ended 30 June 2013

10. Contingent assets and liabilities

There are no material contingent assets or liabilities at reporting date.

11. Commitments

(a) Capital expenditure commitments

At 30 June 2013, commitments principally relating to the purchase of property, plant and equipment and which have been approved but not recognised as liabilities in the statement of financial position, are as follows:

		Consolidated entity
	30 Jun 13	31 Dec 12
	\$'000	\$'000
Due within one year	-	49
Due between one and five years	-	-
Over five years	-	-
Total capital expenditure commitments	-	49

(b) Operating lease commitments

At 30 June 2013, future minimum rentals payable under non-cancellable operating leases are as follows:

		Consolidated entity
	30 Jun 13	31 Dec 12
	\$'000	\$'000
Due within one year	3,812	3,749
Due between one and five years	15,681	15,613
Over five years	9,233	11,251
Total operating lease commitments	28,726	30,613

The Company has entered into commercial leases on office equipment and office premises.

12. Net tangible asset backing

		Consolidated entity
	30 Jun 13	31 Dec 12
	\$	\$
Net tangible asset backing per security	0.03	0.03

Net tangible asset backing per share is calculated by dividing the sum of net assets less intangible assets by the total number of securities on issue as set out in note 8.

13. Events subsequent to the reporting date

The following events have occurred subsequent to 30 June 2013:

Post 30 June 2013 and prior to 9 August 2013, the Group has bought back 0.7 million ordinary stapled securities for a total consideration of \$2.5 million.

Other than the above, the Directors are not aware of any matter or circumstance occurring since 30 June 2013 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.

Independent auditor's review report to the members of GPT Management Holdings Limited

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of GPT Management Holdings Limited (the company), which comprises the consolidated statement of financial position as at 30 June 2013, the consolidated statement of comprehensive income, consolidated statement of changes in equity and the consolidated statement of cash flows for the half-year ended on that date, selected explanatory notes and the directors' declaration for the company and its controlled entities (the consolidated entity). The consolidated entity comprises both the company and the entities it controlled during that half-year.

Directors' responsibility for the half-year financial report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity's financial position as at 30 June 2013 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of GPT Management Holdings Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our review was not designed to provide assurance on internal controls.

PricewaterhouseCoopers, ABN 52 780 433 757 Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171 DX 77 Sydney, Australia T: +61 2 8266 0000, F: +61 2 8266 9999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of GPT Management Holdings Limited is not in accordance with the Corporations Act 2001 including:

• (a) giving a true and fair view of the consolidated entity's financial position as at 30 June 2013 and of its performance for the half-year ended on that date; and
• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

Matters relating to the electronic presentation of the reviewed financial report

This review report relates to the financial report of the company for the half-year ended 30 June 2013 included on the GPT Group's web site. The company's directors are responsible for the integrity of the GPT Group's web site. We have not been engaged to report on the integrity of this web site. The review report refers only to the statements named above. It does not provide an opinion on any other information which may have been hyperlinked to/from these statements. If users of this report are concerned with the inherent risks arising from electronic data communications they are advised to refer to the hard copy of the reviewed financial report to confirm the information included in the reviewed financial report presented on this web site.

PricewaterhouseCoopers

Matthew Lunn Sydney Partner 9 August 2013