INGENIA COMMUNITIES GROUP — Interim / Quarterly Report 2018

Feb 19, 2018

Appendix 4D Half-Year Report Half-Year ended 31 December 2017

APPENDIX 4D

Half-Year Financial Report

Half-Year ended 31 December 2017

Name of Entity: Ingenia Communities Holdings Limited (“INA”), a stapled entity comprising Ingenia Communities Holdings Limited ACN 154 444 925, Ingenia Communities Fund ARSN 107 459 576, and Ingenia Communities Management Trust ARSN 122 928 410.

	Current period: Previous corresponding period:	1 July 2017 – 31 December 2017 1 July 2016 – 31 December 2016

Results for announcement to the market

Results for announcement to the market
	31 Dec 2017	31 Dec 2016	Change
	$'000	$'000	%
Revenues	76,882	65,427	18%
Profit from ordinary activities after tax attributable to members	17,119	7,647	124%
Net profit for the period attributable to members	17,119	7,647	124%
Underlying profit	14,634	10,647	37%
Distributions - current period (cents): FY17 Final Distribution (paid) 1H18 Interim Distribution (declared)	5.1 5.1
Distributions - previous period (cents): FY16 Final Distribution (paid) 1H17 Interim Distribution (paid)		5.1 5.1
Record date for determining entitlement to the interim distribution	5pm, 26 February 2018
The Dividend and Distribution Reinvestment Plan is operational for this distribution
	31 Dec 2017	30 Jun 2017	Change
Net tangible asset value per security	$2.53	$2.50	1.2%

Appendix 4D Half-Year Report Half-Year ended 31 December 2017

Results for announcement to the market

The half-year financial report does not include all of the information required for a full-year financial report and should be read in conjunction with the Group’s annual financial report for the year ended 30 June 2017 and any ASX announcements issued during the period.

Details of entities over which control has been gained or lost during the period:

Control gained: None Control lost: None

Details of any associates and joint venture entities required to be disclosed: None

Audit status

This report is based on the consolidated 31 December 2017 Half Year Financial Report of Ingenia Communities, which has been reviewed by Ernst & Young. The Auditor’s Independence Declaration provided by Ernst & Young is included in the 31 December 2017 Half Year Financial Report.

Other significant information and commentary on results

See attached ASX announcement and materials referred to below.

Additional Appendix 4D disclosure requirements can be found in the Directors’ Report and the 31 December 2017 Half Year Financial Report.

For all other information required by Appendix 4D, including a results commentary, please refer to the following documents:

• Directors’ Report

• Reviewed Half Year Financial Report

• Results presentation and media release

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Leanne Ralph Company Secretary 20 February 2018

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INGENIA COMMUNITIES HOLDINGS LIMITED A.C.N 154 444 925 HALF–YEAR FINANCIAL REPORT 31 DECEMBER 2017

w w w .ingeniacom m unities.com .au Registered O ffice:Level9,115PittStreetSydney N SW 2000

Half–Year FinancialR eport IngeniaC om m unitiesHoldingsLim ited Forthe sixm onthsended 31D ecem ber2017

C ontents D irectors'Report...................................................................................................................................................................................................1 A uditorsIndependence D eclaration ..........................................................................................................................................................7 C onsolidated statem entofcom prehensive incom e..........................................................................................................................8 C onsolidated balance sheet...........................................................................................................................................................................9 C onsolidated cashflow statem ent.............................................................................................................................................................10 C onsolidated statem entofchangesin equity.....................................................................................................................................11 1.Sum m ary ofsignificantaccounting policies...............................................................................................................................12 2.A ccounting estim atesand judgem ents.......................................................................................................................................13 3.Segm entinform ation .............................................................................................................................................................................14 4.E arningspersecurity.............................................................................................................................................................................16 5.Revenue ........................................................................................................................................................................................................16 6.N etfinance expense...............................................................................................................................................................................17 7.Inventories...................................................................................................................................................................................................17 8.A ssetsand liabilitiesheld forsale ...................................................................................................................................................17 9.Investm entproperties...........................................................................................................................................................................18 10.Trade and otherpayables................................................................................................................................................................22 11.B orrow ings.................................................................................................................................................................................................22 12.Retirem entvillage residentloans..................................................................................................................................................23 13.Issued securities.....................................................................................................................................................................................23 14.C om m itm ents..........................................................................................................................................................................................23 15.Subsequentevents...............................................................................................................................................................................24 D irectors’declaration......................................................................................................................................................................................25 IndependentA uditor’sReport....................................................................................................................................................................26

D irectors’R eport

IngeniaC om m unitiesHoldingsLim ited Forthe sixm onthsended 31D ecem ber2017

The D irectors of IngeniaC om m unities Holdings Lim ited (“IC H” or the “C ompany”) present their report together w ith the C om pany’s financialreport for the six m onths ended 31 D ecem ber 2017 (the “current period”) and the Independent A uditor’s Report thereon.The C om pany’s financialreport com prises the consolidated financialreportofthe C om pany anditscontrolledentities,includingIngeniaC om m unitiesFund (“IC F”orthe “Fund”)and IngeniaC om m unitiesM anagem entTrust(“IC M T”)(collectively,the “Trusts”).

The shares ofthe C om pany are “stapled”w ith the units ofthe Trusts and trade on the A ustralian Securities E xchange (“A SX”)asone security (A SX C ode:IN A ).IngeniaC om m unitiesRE Lim ited(“IC RE ”or“Responsible E ntity”),aw holly ow ned subsidiary ofthe C om pany,isthe responsible entity ofthe Trusts.In thisreport,the C om pany and the Trustsare referred to collectively asthe G roup.

In accordance w ith A ccounting Standard A A SB 3 B usiness C om binations ,the stapling ofthe C om pany and the Trusts is regarded as a business combination.The C om pany has been identified as the parent for preparing consolidated financialreports.

DIRECTORS

The D irectorsofthe C om pany atany tim e during orsince the end ofthe currentperiod w ere:

Non - Executive Directors (NEDs)

Jim Hazel(C hairm an) RobertM orrison (D eputy C hairm an) A m andaHeyw orth Valerie Lyons A ndrew M cE voy (appointed 1D ecem ber2017) Philip C lark A M (resigned 4 D ecember2017)

Executive Director

Sim on O w en (M anaging D irectorand C hiefE xecutive O fficer(M D and C E O ))

OPERATING AND FINANCIAL REVIEW

Ingenia Communities Overview

The G roup is an active ow ner,m anager and developer ofadiversified portfolio ofretirem ent lifestyle and holiday com m unitiesacrossA ustralia.Itsrealestate assetsat31D ecem ber2017w ere valuedat$734.0 m illion (netoffinance leasesand residentloans),com prising 33 lifestyle and holiday com m unities(IngeniaLifestyle and Holidays),31rentalcom m unities(IngeniaG ardens)and tw o Settlersassets(IngeniaSettlers).The G roup isin the A SX 300 w ith amarketcapitalisation ofapproxim ately $572.1m illion at31D ecem ber2017.

The G roup’s vision is to create A ustralia’s best lifestyle com m unities offering affordable perm anent and tourism rental accom m odation w ith a focus on the seniors dem ographic.The B oard is com m itted to deliveringE PS grow th to securityholdersw hile providingasupportive com m unity environm entto perm anent residentsand holidaym akers.

Our Values

A t Ingeniaw e build com m unity using afoundation ofintegrity and respect,creating aplace w here people have asense ofconnection and belonging.W e strive forcontinuousimprovem entin ourresident,guestand visitor service,to ensure that they receive the best possible support,attention and experience every day. W hetherit’stim e to play,stay,restorrenew ,w e deliverfreedom ofchoice w ith arange oflifestyle andholiday options.

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D irectors’R eport

IngeniaC om m unitiesHoldingsLim ited Forthe sixm onthsended 31D ecem ber2017

Strategy

The G roup’s strategy is to further develop Lifestyle com m unities and enhance the operationalperform ance ofitsassetbase to grow revenue stream sand m anage costeffectively.

Increasing sales velocity and profit m argin on new hom e sales,repositioning and upgrading existing com m unitiesandtargetingsectoradjacenciesandinnovationsare key grow th prioritiesofthe G roup.In 2018 the G roup istargeting the settlem entofover260 new hom es.U sing adisciplinedinvestm entfram ew ork,the G roup plans to continue its focus on m etropolitan and coastallocations through targeted acquisitions and divestm ents.

The key im m ediate businessprioritiesofthe G roup are:

• D eliverdevelopm entprojectson tim e and w ithin budget;

• A chieve atleast260 new hom e settlem entsin the 2018 financialyear;

• C ontinue to focus on m etropolitan and coastal locations through portfolio rem ixing and developm ent;

• Im prove perform ance ofexisting assets through repositioning and by driving revenue grow th and leveraging the G roup’soperating and salesplatform ;

• E xpand developm entm arginsthrough innovative hom e designsand building efficiencies.

Financial Results

The 6 m onths to 31D ecember 2017 has delivered astatutory profit of$17.1m illion,w hich is up 124% on the prior year.U nderlying Profit from continuing operations w as $ 14.6 m illion w hich represents an increase of $4.0 m illion (37%)on the prioryear.

The G roup developed and sold 90 turnkey hom es(1H17:82 hom es)and grew rentalincom e from perm anent, annualand tourism clientsto $30.7 m illion (1H17:$19.7 m illion).

The underlying result is underpinned by asignificantly higher E B IT contribution from the IngeniaLifestyle and Holidays segm ent up 53% from the prior year.The statutory result is further im pacted by an uplift in valuationsofinvestm entproperty.

O perating cash flow for the year w as $11.3 m illion,up 7% from the prior year,reflecting grow th in recurring rentalincom e and new lifestyle hom e settlem entsgrow ing by 10% to 90.

Further investm ent in lifestyle com m unities continued during the half-year,w ith a continued focus on progressing the G roup’sdevelopm entpipeline and the com pletion ofthree strategicacquisitions.The G roup settled on the acquisition of Sheldon C aravan Park (E ight M ile Plains,B risbane),G lenw ood (Plantations) (N SW M id N orth C oast)and land directly adjacentto Latitude O ne (N SW M id N orth C oast).

Key Metrics

• U nderlying profitof$14.6 m illion,up 37% on the prioryear.

• Statutory profitof$17.1m illion,up $9.5m illion on the prioryear.

• B asicearningspershare of8.3 cpsw hich issignificantly higherthan the prioryear(1H17:4.3 cps).

• O perating cash flow sof$11.3 m illion compared w ith $10.5m illion in the prioryear.

• Interim distribution of5.1cps,in line w ith the prioryear.

• N etassetvalue $2.53 persecurity com pared w ith $2.50 at30 June 2017.

• Fairvalue upliftacrossthe investm entproperty portfolio of$4.5m illion,(excluding$2.6 m illion w ritedow n relating to capitalised acquisition costson new investm ents)

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Directors’ Report

Ingenia Communities Holdings Limited For the six months ended 31 December 2017

Group results summary

Underlying profit for the financial year has been calculated as follows:

roup results summary nderlying profit for the financial year has been calculated as follows:
EBIT Net finance expense Tax (expense)/benefit associated with underlying profit Underlying profit1 Net loss on disposal of investment properties Net gain on change in fair value Reclassification of gain on newly constructed Settlers units Tax benefit/(expense) Statutory profit	31 Dec 2017 31 Dec 2016 $’000 $’000 19,260 13,692 (3,305) (3,362) (1,321) 317
	14,634 10,647 - (8,309) 1,865 8,077 - (633) 620 (2,135)
	17,119 7,647

1 Underlying Profit is a non-IFRS measure designed to present, in the opinion of the Directors, the results from the on-going operating activities in a way that appropriately reflects underlying performance. Underlying Profit excludes items such as unrealised fair value gains/ (losses) and adjustments arising from the effect of revaluing assets/liabilities (such as derivatives and investment properties). These items are required to be included in statutory profit in accordance with Australian Accounting Standards.

Segment performance and priorities

Ingenia Lifestyle Development

The earnings contribution from development has continued to grow with development now underway at 12 communities and new turnkey settlement volumes up 10% from the prior year, with 90 new turnkey settlements in the current period.

This result reflects increased awareness and interest in the market and Ingenia’s investment in a sales and development platform for new homes.

Performance
	31 Dec 2017	31 Dec 2016	Change %
New home settlements (#)	90	82	10%
Gross development profit ($m)	10.5	8.8	19%
EBIT contribution ($m)	4.2	3.9	8%
Margin (%)	16.5	15.8	4%

Strategic priorities

The key strategic priorities for this segment include delivering the current development projects on time and within budget, continuing the sales and settlement momentum achieved during the current half-year and securing further development approvals for new homes within our existing communities. The Group will continue to deliver its greenfield developments and continue expansion within the lifestyle market.

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IngeniaC om m unitiesHoldingsLim ited Forthe sixm onthsended 31D ecem ber2017

D irectors’R eport

Ingenia Lifestyle and Holidays Operations

IngeniaLifestyle and Holidays com prises of 33 lifestyle com m unities that offer an affordable com m unity experience forseniorsandtourism guests.C ontinuingto grow rentalincom e andleveragingscale efficiencies w asafocusofthe G roup during the currentperiod.

Tourism andannualrentalincom e grow th hasbeen positively im pactedby the acquisitionsofC airnsC oconut and B onny Hillsin the second halfof2017 financialyear.

E B IT grew to $13.2 m illion in the currentperiod,up 76% on the prioryear,w ith improved E B IT m arginsbeing achieved.

The G roup com pleted the acquisition ofSheldon C aravan Park (E ight M ile Plains),G lenw ood (Plantations) and land adjacentto Latitude O ne,furthergrow ing the num berand scale oflifestyle com m unities.

The carrying value ofthe Lifestyle and Holidays O perations segm ent assets at 31D ecem ber 2017 is $457.3 m illion.

Perform ance

erform ance
	31 Dec 2017	31 Dec 2016	Change %
Perm anentrentalincom e ($m )	10.6	7.1	49%
A nnualsrentalincom e ($m )	2.4	2.0	20%
Tourism rentalincom e ($m )	17.7	10.6	67%
Service station sales($m )	3.5	3.6	(3%)
E B IT contribution ($m )	13.2	7.5	76%
M argin (%)	36.4	30.3	20%

Strategicpriorities

The strategicpriorities for the IngeniaLifestyle and Holidays segm ents include integrating and optim ising new ly acquired com m unities,grow ing rentalreturns and leveraging scale efficiencies.W e w illcontinue to focuson leveraging ourdatabase and building ourbrand position w ithin the tourism m arket.

Ingenia Gardens

IngeniaG ardenscom prisesof1,628 individualunitsavailable forrentacross31com m unitieslocatedalongthe eastern seaboard and W estern A ustralia.These com m unities generated $12.7 m illion in gross rentalincome during the currentperiod.

IngeniaG ardenscontinuesto deliveraconsistentstream ofrecurringcash incom e forthe G roup w ith grow ing rentalincom e and im proved m arginsw hen com pared to the priorcorresponding period.

A sat31D ecem ber2017,IngeniaG ardensclosed atan occupancy of91.0% (31D ecem ber2016:91.4%).

Perform ance

erform ance
	31 Dec 2017	31 Dec 2016	Change %
O ccupancy (%)	91.0	91.4	-%
Rentalincom e ($m )	12.7	12.3	3%
C atering incom e ($m )	1.6	1.6	-%
E B IT contribution ($m )	6.1	5.8	5%
M argin (%)	41.8	41.1	2%

StrategicPriorities

The key strategicprioritiesofthissegm entoverthe com ing yearisto increase rentsabove C PIasunitsturn over, ensuring residents are actively engaged and m aintaining affordability w hilst further seeking opportunitiesto leverage scale.

Capital Management

The G roup adoptsaprudentand considered approach to capitalm anagem ent.A s at31D ecem ber2017,the currentloan to assetvalue ratio (LVR)is35.1%,w ithin the G roup’stargetLVR of30-40% and w ellbelow the financialcovenantof50%.The G roup hasan undraw n debtcapacity of$68.6 m illion.

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D irectors’R eport

IngeniaC om m unitiesHoldingsLim ited Forthe sixm onthsended 31D ecem ber2017

Financial Position

The follow ing table providesasum m ary ofthe G roup’sfinancialposition asat31D ecem ber2017:

C ash and cash equivalents Inventories Investm entproperties D eferred taxasset A ssetsheld forsale O therassets Total assets B orrow ings Retirem entvillage residentloans Liabilitiesheld forsale O therliabilities Total liabilities Net assets /equity	31 Dec 2017 30 Jun 2017 Change $’000 $’000 % 7,084 9,645 (27%) 25,668 21,597 19% 733,996 693,473 6% 6,763 7,464 (9%) 30,382 - N M 17,484 15,977 9%
	821,377 748,156 10% 235,855 170,830 38% 12,415 27,201 (54%) 14,130 - N M 34,379 34,393 -%
	296,779 232,424 28%
	524,598 515,732 2%

The increase in investm entproperty hasbeen driven by capitalspend on developm entprojectsand the acquisition ofIngeniaPlantations(W oolgoolga)and IngeniaE ightM ilesPlains(Sheldon).

A ssetsand liabilitiesheld forsale relate to the sale ofthree assetsw hich w ere contracted forsale at31 D ecem ber2017.

Cash flow

O perating cash flow Investing cash flow Financing cash flow Net change in cash and cash equivalents	31 Dec 2017 31 Dec 2016 Change $’000 $’000 % 11,256 10,543 7% (70,105) (47,097) (49%) 56,288 29,743 89%
	(2,561) (6,811) 62%

Investing cash flow s are up on prior year driven by increased spend on developm ent projects,particularly Latitude O ne,C ham bersPines,Lara,The G range,Lake C onjolaandB ethania.The G roup also incurredcapital spend on 38 new cabins and 19 buybacks w hich are available for rent across its Lifestyle and Holidays portfolio.

Distributions

O n 22 A ugust 2017,the D irectors declared afinaldistribution for 2017 of5.1cps,am ounting to $10.5m illion w hich w as paid on 13 Septem ber 2017.The distribution w as 26.5% tax deferred and the distribution reinvestm entplan w asin place.

Outlook

The G roup is w ellpositioned to continue grow ing its Lifestyle and Holidays business w ith asignificant developm entpipeline in place.O ngoing grow th in sales and settlem ents volum es is expected in the second halfof2018 as Latitude O ne,C onjolaLakeside and The G range projects are released,w ith strong contracts and depositsin place.

The G roup w ill continue to grow incom e from its Lifestyle and Holidays portfolio,underpinning the developm ent pipeline w ith steady recurrent cash flow s.A continuing focus rem ains on opportunities for revenue grow th orcostm inim isation to grow recurring yieldsacrossthe portfolios. The G roup w illcontinue to regularly assess the perform ance ofits existing assets and w here appropriate recycle capitalinto otheropportunitiesdelivering superiorreturns.

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IngeniaC om m unitiesHoldingsLim ited Forthe sixm onthsended 31D ecem ber2017

D irectors’R eport

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

C hanges in the state ofaffairs during the current period are set out in the various reports in this half-year financialreport.Referto N ote 9 forinvestm entpropertiesacquired ordisposed ofduring the yearand N ote 13 forissued securities.

SUBSEQUENT EVENTS

Interim distribution

O n 20 February 2018,the D irectors ofthe G roup resolved to declare an interim distribution of5.1cps (1H17: 5.1cps)am ounting to $10.6 m illion to be paid on 14 M arch 2018.The distribution is21.3% taxdeferred and the distribution reinvestm entplan w illbe in operation forthisdistribution.

Sale ofnon-core assets

O n 21D ecem ber 2017,the G roup announced the sale ofthree non-core subscale assets.These divestm ents are consistent w ith the G roup’s focus on divesting non-core assets in order to redeploy capitalinto higher grow th lifestyle developm entprojectsincluded;

• The disposalofSettlers M eadow Springs (M andurah,W A ).This sale (inclusive ofthe G roupsliability forresidentloans)w as com pleted on 31January 2018,w here the G roup received gross proceeds of $4.5m illion.

• The disposalofIngeniaLifestyle Lake M acquarie (M orisset,N SW ).This sale (inclusive ofinventory) w ascom pleted on 2 February 2018,w here the G roup received grossproceedsof$7.1m illion.

AUDITORS INDEPENDENCE DECLARATION

A copy ofthe auditor’s independence declaration as required under section 307cofthe C orporations A ct 2001issetouton page 7.

GROUP INDEMNITIES

The G roup haspurchasedvariousinsurance policiesto coverarange orrisks(subjectto specifiedexclusions) for D irectors,officers and em ployees of the G roup serving in their respective capacities.K ey insurance policiesinclude:directorsand officersinsurance;professionalindem nity insurance;and m anagem entliability insurance.

INDEMNIFICATION OF AUDITORS

To the extentperm itted by law ,the C om pany hasagreed to indem nify itsauditors,E rnst& Young A ustralia, aspartofthe term sofitsauditengagem entagreem entagainstclaim sby third partiesarising from the audit (for an unspecified am ount).N o paym ent has been made to indem nify E rnst & Young during or since the period.

ROUNDING OF AMOUNTS

IngeniaC om m unitiesG roup isan entity ofthe kindreferredto in A SIC Instrum ent2016/191,andin accordance w ith thatC lassO rder,am ountsin the financialreportand D irector’sreporthave been rounded to the nearest thousand dollars,unlessotherw ise stated.

Signed in accordance w ith aresolution ofthe D irectors.

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Jim Hazel C hairm an Sydney 20 February 2018

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Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001

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Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au

Auditor’s Independence Declaration to the Directors of Ingenia Communities Holdings Limited

As lead auditor for the review of Ingenia Communities Holdings Limited and its controlled entities for the half-year ended 31 December 2017, I declare 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 Ingenia Communities Holdings Limited and the entities it controlled during the financial period.

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Ernst & Young

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Megan Wilson Partner Sydney 20 February 2018

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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

C onsolidated Statem ent ofC om prehensive Incom e IngeniaC om m unitiesHoldingsLim ited Forthe sixm onthsended 31D ecem ber2017

Note RentalIncom e 5(a) M anufactured hom e sales Service station revenue O therrevenue 5(b) Revenue Property expenses C ostofm anufactured homessold E m ployee expenses A dm inistrative expenses O perational,m arketing and selling expenses Service Station expenses D epreciation and am ortisation expense Operating profit before interest and tax N etfinance expense 6 Operating profit before tax N etgain/(loss)on change in fairvalue of Investm entproperties O ther N et(loss)on disposalofinvestm entproperties Profit before tax Incom e taxexpense Profit after tax O thercom prehensive incom e,netoftax Total comprehensive income for the period Profit/(loss)attributable to securityholdersof: IngeniaC om m unitiesHoldingsLim ited IngeniaC om m unitiesFund IngeniaC om m unitiesM anagem entTrust Totalcomprehensive incom e attributable to securityholdersof: IngeniaC om m unitiesHoldingsLim ited IngeniaC om m unitiesFund IngeniaC om m unitiesM anagem entTrust B asicearningspersecurity 4(a) D iluted earningspersecurity 4(a) B asicearningspersecurity attributable to parent 4(b) D iluted earningspersecurity attributable to parent 4(b)	31 Dec 2017 31 Dec 2016 $’000 $’000 43,652 32,378 25,096 24,732 3,536 3,607 4,598 4,710
	76,882 65,427 (13,887) (11,610) (14,569) (16,083) (18,973) (15,319) (3,426) (3,167) (3,238) (2,805) (2,985) (3,019) (544) (365)
	19,260 13,059 (3,305) (3,362)
	15,955 9,697 1,895 7,881 (30) 196 - (8,309)
	17,820 9,465 (701) (1,818)
	17,119 7,647 - -
	17,119 7,647
	(127) (909) 15,189 (11,184) 2,057 19,740
	17,119 7,647
	(127) (909) 15,189 (11,184) 2,057 19,740
	17,119 7,647
	Cents Cents 8.3 4.3 8.2 4.3 (0.1) (0.5) (0.1) (0.5)

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C onsolidated B alance Sheet

IngeniaC om m unitiesHoldingsLim ited A sat31D ecem ber2017

Note Current assets C ash and cash equivalents Trade and otherreceivables Inventories 7 Incom e taxreceivable A ssetsheld forsale 8(a) Total current assets Non-current assets Trade and otherreceivables Investm entproperties 9 Plantand equipm ent O therfinancialassets Intangibles D eferred taxasset Total non-current assets Total assets Current liabilities Trade and otherpayables 10 B orrow ings 11 E m ployee liabilities Retirem entvillage residentloans 12 Liabilitiesheld forsale 8(b) Total current liabilities Non-current liabilities B orrow ings 11 O therfinancialliabilities E m ployee liabilities D erivativesand otherfinancialinstrum ents O therpayables 10 Total non-current liabilities Total Liabilities Net assets Equity Issued securities 13 Reserves A ccum ulated losses Total equity N etassetvalue persecurity ($) A ttributable to securityholdersof: IngeniaC om m unitiesHoldingsLim ited IngeniaC om m unitiesFund IngeniaC om m unitiesM anagem entTrust	31 Dec 2017 30 Jun 2017 $’000 $’000 7,084 9,645 6,728 5,901 25,668 21,597 38 38 30,382 -
	69,900 37,181 3,264 3,002 733,996 693,473 3,334 2,752 2,263 2,263 1,857 2,021 6,763 7,464
	751,477 710,975
	821,377 748,156
	26,587 25,983 486 493 1,650 1,480 12,415 27,201 14,130 -
	55,268 55,157 235,369 170,337 5,250 6,136 521 344 204 282 167 168
	241,511 177,267
	296,779 232,424
	524,598 515,732
	812,071 809,836 841 1,074 (288,314) (295,178)
	524,598 515,732
	2.53 2.50 10,444 10,494 448,255 441,671 65,899 63,567
	524,598 515,732

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C onsolidated C ash Flow Statem ent

IngeniaC om m unitiesHoldingsLim ited Forthe sixm onthsended 31D ecem ber2017

Note Operating activities Rentaland otherproperty incom e Property and otherexpenses Proceedsfrom residentloans 12(b) Repaym entofresidentloans 12(b) Proceedsfrom sale ofm anufactured hom es Purchase ofm anufactured hom es Proceedsfrom sale ofservice station inventory Purchase ofservice station inventory Interestreceived B orrow ing costspaid Incom e taxreceived Net Cash flows from operating activities Investing activities Purchase and additionsofplantand equipm ent Purchase and additionsofintangible assets Paym entsforinvestm entproperties A dditionsto investm entproperties Proceedsfrom sale ofinvestm entproperties Net Cash flows from investing activities Financing activities Proceedsfrom issue ofstapled securities Paym entsforsecurity issue costs Finance lease paym ents D istributionsto securityholders Paym entsfordebtissue costs Proceedsfrom borrow ings Repaym entofborrow ings Net Cash flows from financing activities N et(decrease)in cash and cash equivalents C ash and cash equivalentsatthe beginning ofthe period E ffectsofexchange rate fluctuation on cash held Cash and cash equivalents at the end of the period	31 Dec 2017 31 Dec 2016 $’000 $’000 52,834 39,239 (43,908) (31,249) 387 2,706 (777) (1,289) 28,155 24,964 (22,060) (21,447) 3,890 3,607 (3,415) (3,273) 39 12 (3,889) (2,865) - 138
	11,256 10,543 (1,015) (609) (43) (212) (36,622) (75,121) (32,676) (12,087) 251 40,932
	(70,105) (47,097) - 8,461 - (398) (321) (321) (8,291) (5,583) - (262) 69,900 64,846 (5,000) (37,000)
	56,288 29,743 (2,561) (6,811) 9,645 15,057 - 33
	7,084 8,279

Page |10

C onsolidated Statem ent ofC hanges in E quity IngeniaC om m unitiesHoldingsLim ited Forthe sixm onthsended 31D ecem ber2017

Carrying amount 1 Jul 2017 N etprofit/(loss) Total comprehensive income Transactionsw ith securityholders in theircapacity assecurityholders: Issue ofsecurities Share based paym enttransactions Paym entofdistributionsto securityholders Carrying amount 31 Dec 2017 Carrying amount 1 Jul 2016 N etprofit/(loss) Total comprehensive income Transactionsw ith securityholdersin theircapacity assecurityholders: Issue ofsecurities Share based paym enttransactions Paym entofdistributionsto securityholders Carrying amount 31 Dec 2016		Attributable to securityholders	Attributable to securityholders	Attributable to securityholders
		Ingenia Communities Holdings Limited Note Issued capital Reserves Retained Earnings Total ICF & ICMT Total Equity $’000 $’000 $’000 $’000 $’000 $’000 11,131 1,074 (1,711) 10,494 505,241 515,735 - - (127) (127) 17,246 17,119 - - (127) (127) 17,246 17,119 13(a) 43 - - 43 2,192 2,235 - (233) 267 34 - 34 - - - - (10,525) (10,525) 11,174 841 (1,571) 10,444 514,154 524,598 Attributable to securityholders
		Note 13(a)
			- - (127) (127) 17,246 17,119
			43 - - 43 2,192 2,235 - (233) 267 34 - 34 - - - - (10,525) (10,525)
			11,174 841 (1,571) 10,444 514,154 524,598
			Attributable to securityholders
			Ingenia Communities Holdings Limited Issued capital Reserves Retained Earnings Total ICF & ICMT Total Equity $’000 $’000 $’000 $’000 $’000 $’000 10,205 1,810 (1,265) 10,750 410,851 421,601 - - (906) (906) 8,556 7,650 - - (906) (906) 8,556 7,650 142 - - 142 12,682 12,824 - (1,060) - (1,060) - (1,060) - - - - (8,967) (8,967) 10,347 750 (2,171) 8,926 423,122 432,048
		Note
				- - (906) (906) 8,556 7,650
				142 - - 142 12,682 12,824 - (1,060) - (1,060) - (1,060) - - - - (8,967) (8,967)
				10,347 750 (2,171) 8,926 423,122 432,048

Page |11

N otes to the FinancialStatem ents

IngeniaC om m unitiesHoldingsLim ited Forthe sixm onthsended 31D ecem ber2017

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) The G roup

The financialreport ofIngeniaC om m unities Holdings Lim ited (the “C om pany”) com prises the consolidated financialreportofthe C om pany and itscontrolled entities,including IngeniaC omm unitiesFund (“IC F”orthe “Fund”)and IngeniaC om m unities M anagem entTrust(“IC M T”)(collectively,the “Trusts”).The shares ofthe C om pany are “stapled”w ith the units ofthe Trusts and trade on the A ustralian SecuritiesE xchange (“A SX”) effectively as one security.IngeniaC om m unities RE Lim ited (“IC RE ”),aw holly ow ned subsidiary of the C om pany,is the Responsible E ntity ofthe Trusts.In this report,the C om pany and the Trusts are referred to collectively asthe G roup.

The constitutions ofthe C om pany and the Trusts require that,for as long as they rem ain jointly quoted on the A SX,the num ber of shares in the C om pany and of units in each trust shallrem ain equaland those securityholdersin the C om pany and unitholdersin each trustshallbe identical.

The stapling structure w illcease to operate on the firstto occurof:

• the C om pany or either of the Trusts resolving by special resolution in accordance w ith its constitution to term inate the stapling provisions;or

• the com m encem entofthe w inding up ofthe C om pany oreitherofthe Trusts.

The financialreport as at and for the six m onths ended 31D ecem ber 2017 w as authorised for issue by the D irectorson 20 February 2018.

(b) B asis ofPreparation

The half-year financialreport is ageneralpurpose financialreport,w hich has been prepared in accordance w ith A A SB 134 Interim FinancialReporting and the C orporationsA ct2001.

The half-year financialreport does not include allofthe inform ation required for afull-year financialreport and should be read in conjunction w ith the G roup’s annualfinancialreportfor the year ended 30 June 2017 and any A SX announcem entsissued during the period.

The financialreport complies w ith A ustralian A ccounting Standards as issued by the A ustralian A ccounting Standards B oard and InternationalFinancialReporting Standards (IFRS) as issued by the International A ccounting StandardsB oard.

A s perm itted by Instrum ent 2015/838,issued by the A ustralian Securities and Investm ents C om m ission,the financialstatem ents and accom panying notes ofthe G roup have been presented in the attached com bined financialreport.

The financialreport is presented in A ustralian dollars and allvalues are rounded to the nearest thousand dollars($’000)unlessotherw ise stated.

W here appropriate comparative am ountshave been restatedto ensure consistency ofdisclosure throughout the financialreport.

The accounting policies and m ethods ofcom putation adopted in the preparation ofthe half-year financial reportare consistentw ith those adopted and disclosed in the G roup’s2017 annualreportw ith the exception of new am ended standards and interpretations w hich have been applied as required.W here necessary corresponding figureshave been adjusted to confirm w ith changesin presentation in the currentperiod.

(c) A doption ofnew and revised accounting standards

N o new orrevised standardsand interpretationsw ere issued by the A ustralian A ccounting StandardsB oard thatare relevantto the G roup during the period.

(d) A ssets held for sale

C om ponents ofthe entity are classified as held for sale iftheir carrying value w illbe recovered principally through asale transaction ratherthan through continuing use.

They are m easured at the low er oftheir carrying am ount and fair value less costs to sell,except for assets such asinvestm entproperty,w hich are carried atfairvalue.

The liabilitiesofan assetclassified asheld forsale are presented separately from otherliabilitieson the face ofthe balance sheet.

D etailsofassetsand liabilitiesheld forsale are given atN ote 8.

Page |12

IngeniaC om m unitiesHoldingsLim ited Forthe sixm onthsended 31D ecem ber2017

N otes to the FinancialStatem ents

2. ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of financialstatem ents requires the use of certain criticalaccounting estim ates.It also requiresthe G roup to exercise itsjudgem entin the processofapplying the G roup’saccounting policies.The areas involving ahigherdegree ofjudgem entor complexity,or areas w here assum ptions and estim ates are significantto the financialstatem entsare disclosed below .

E stim atesandjudgem entsare continually evaluatedandare basedon historicalexperience andotherfactors, including expectationsoffuture eventsthatare believed to be reasonable underthe circum stances.

(a) C riticalaccounting estim ates and assum ptions

The G roup m ake estim ates and assum ptions concerning the future.The resulting accounting estim ates,by definition,w illseldom equalthe related actualresults.The estim atesand assum ptionsthathave asignificant risk ofcausing am aterialadjustm entto the carrying am ountsofassetsand liabilitiesw ithin the nextfinancial yearare discussed below .

i. Valuation ofinvestm ent property

The G roup has investm ent properties w ith acom bined carrying am ount of$733,996,000 (30 June 2017: $693,473,000)(referN ote 9),and com bined retirem entvillage residentloans of$12,415,000 (30 June 2017: $27,201,000) (refer N ote 12) w hich together represent the estim ated fair value of the G roup’s property business.

These carrying am ounts reflect certain assum ptions about expected future rentals,rent-free periods, operating costs and appropriate discount and capitalisation rates.The valuation assum ption for properties to be developed reflect assum ptions around sales prices for new hom es,sales rates,new rentaltariffs, estim ates of capital expenditure,discount rates and projected property grow th rates.The valuation assum ptions for deferred m anagem ent fee villages reflect assum ptions relating to average length ofstay, unit m arket values,estim ates of capitalexpenditure,contract term s w ith residents,discount rates and projected property grow th rates.

In form ing these assum ptions,the G roup considered inform ation about current and recent sales activity, current m arket rents,and discount and capitalisation rates,for properties sim ilar to those ow ned by the G roup,asw ellasindependentvaluationsofthe G roup’sproperty.

ii. Valuation ofinventories

The G roup has inventory in the form ofm anufactured hom es and service station fueland supplies,w hich it carries at the low er ofcost or net realisable value.E stim ates ofnet realisable value are based on the m ost reliable evidence available atthe tim e the estim atesare m ade,ofthe am ountthe inventoriesare expectedto realise and the estim ate ofcosts to com plete.K ey assum ptions require the use ofm anagem ent judgem ent, and are continually review ed.

iii. Valuation ofretirem ent village resident loans

The fairvalue ofthe retirementvillage residentloansiscalculatedby reference to the initialloan am ountplus the resident’s share ofany capitalgains in accordance w ith their contracts less any deferred m anagem ent fee incom e accrued to date by the G roup as operator.The key assum ption for calculating the capitalgain and deferred m anagem ent fee incom e com ponents is the value of the dw elling being occupied by the resident.Thisvalue isdeterm ined by reference to the valuation ofinvestm entproperty asreferred to above.

iv. C alculation ofdeferred m anagem ent fee (“D M F”)

D eferred m anagem entfeesare recognised by the G roup overthe estim ated period oftim e the property w ill be leased by the residentand the accrued D M Fisrealised upon exitofthe resident.D M Fisbased on various inputs including the initialprice ofthe property,estim ated length ofstay ofthe resident,various contract term sand projected price ofproperty attim e ofre-leasing.

(b) C riticaljudgem ents in applying the entity’s accounting policies

There w ere no judgem ents,apartfrom those involvingestim ations,thatm anagem enthasm ade in the process ofapplying the entity’s accounting policies that had asignificant effect on the am ounts recognised in the financialreport.

Page |13

N otes to the FinancialStatem ents IngeniaC om m unitiesHoldingsLim ited Forthe sixm onthsended 31D ecem ber2017

3. SEGMENT INFORMATION

(a) D escription ofsegm ents

The G roup investspredom inantly in rentalpropertieslocated in A ustraliaw ith fourreportable segm ents:

• IngeniaLifestyle andHolidaysO perations–lifestyle com m unitiescom prisingperm anentandtourism accom m odation;

• IngeniaLifestyle D evelopment–com prising the developm entand sale ofm anufactured hom es;

• IngeniaG ardens–rentalcom m unities;and

• IngeniaSettlers–deferred m anagem entfee com m unities.

The G roup hasidentifieditsoperating segm entsbasedon the internalreportsthatare review ed andusedby the chiefoperating decision m aker in assessing perform ance and determ ining the allocation ofresources. O therpartsofthe G roup are neitheran operating segm entnorpartofan operating segm ent.A ssetsthatdo notbelong to an operating segm entare described below as“C orporate and O ther”.

The results ofthe G roup are affected by the seasonality ofLifestyle and Holiday com m unities.O ccupancy rates oftourism cabins are typically higherin the period D ecem berthrough to M arch each yeardue to their geographiclocation and sum m erholiday m onthsincreasing dem and forholiday bookings.

	Lifestyle &
	Holidays	Lifestyle	Ingenia	Ingenia	Corporate
(b) 31 December 2017	Operations	Development	Gardens	Settlers	& Other	Total
	$’000	$’000	$’000	$’000	$’000	$’000
Segment Revenue
E xternalsegm entrevenue	36,373	25,104	14,489	868	48	76,882
Total revenue	36,373	25,104	14,489	868	48	76,882
Segment underlying profit
E xternalsegm entrevenue	36,373	25,104	14,489	868	48	76,882
Property expenses	(9,106)	(240)	(4,139)	(253)	(149)	(13,887)
C ostofm anufactured homessold	-	(14,569)	-	-	-	(14,569)
E m ployee expenses	(8,351)	(4,129)	(3,578)	(268)	(2,647)	(18,973)
A dm inistrative expenses	(1,397)	(279)	(258)	(51)	(1,441)	(3,426)
O perational,m arketing and selling expenses	(1,101)	(1,579)	(410)	(39)	(109)	(3,238)
Service Station expenses	(2,985)	-	-	-	-	(2,985)
D epreciation and am ortisation expense	(199)	(154)	(54)	(10)	(127)	(544)
Earnings before interest and tax	13,234	4,154	6,050	247	(4,425)	19,260
Incom e taxexpense	-	-	-	-	(1,321)	(1,321)
N etfinance expense	-	-	-	-	(3,305)	(3,305)
Underlying profit	13,234	4,154	6,050	247	(9,051)	14,634
N etgain/(loss)on change in fair
value of
Investm entproperties	(1,103)	3,732	888	(1,620)	(2)	1,895
O ther	-	-	-	17	(47)	(30)
N et(loss)on disposalof	-	-	-	-	-	-
investm entproperties
Incom e taxbenefit	-	-	-	-	620	620
Profit after tax	12,131	7,886	6,938	(1,356)	(8,480)	17,119
Segment Assets	457,297	160,334	145,823	36,471	21,452	821,377

Page |14

N otes to the FinancialStatem ents

IngeniaC om m unitiesHoldingsLim ited Forthe sixm onthsended 31D ecem ber2017

3. SEGMENT INFORMATION (CONTINUED)

	Lifestyle &
	Holidays	Lifestyle	Ingenia	Ingenia	Corporate
(c) 31 December 2016	Operations	Development	Gardens	Settlers	& Other	Total
	$’000	$’000	$’000	$’000	$’000	$’000
Segment Revenue
E xternalsegm entrevenue	24,615	24,850	14,080	2,495	20	66,060
Reclassification ofgain on new ly constructed villages	-	-	-	(633)	-	(633)
Total revenue	24,615	24,850	14,080	1,862	20	65,427
Segment underlying profit
E xternalsegm entrevenue	24,615	24,850	14,080	2,495	20	66,060
Property expenses	(6,524)	(205)	(4,031)	(529)	(321)	(11,610)
C ostofm anufactured homessold	-	(16,083)	-	-	-	(16,083)
E m ployee expenses	(5,830)	(3,348)	(3,461)	(465)	(2,215)	(15,319)
A dm inistrative expenses	(916)	(316)	(270)	(78)	(1,587)	(3,167)
O perational,m arketing and selling expenses	(747)	(858)	(464)	(183)	(553)	(2,805)
Service Station expenses	(3,019)	-	-	-	-	(3,019)
D epreciation and am ortisation expense	(111)	(120)	(62)	(15)	(57)	(365)
Earnings before interest and tax	7,468	3,920	5,792	1,225	(4,713)	13,692
Incom e taxbenefit	-	-	-	-	317	317
N etfinance expense	-	-	-	-	(3,362)	(3,362)
Underlying profit	7,468	3,920	5,792	1,225	(7,758)	10,647
N etgain/(loss)on change in fair
value of
Investm entproperties	3,633	-	4,311	(63)	-	7,881
O ther			-	83	113	196
Reclassification ofgain on new ly constructed villages	-	-	-	(633)	-	(633)
N et(loss)on disposalof investm entproperties	(812)	-	-	(7,497)	-	(8,309)
Incom e taxexpense	-	-	-	-	(2,135)	(2,135)
Profit after tax	10,289	3,920	10,103	(6,885)	(9,780)	7,647
Segment Assets	284,652	134,309	142,185	38,406	23,854	623,406

Page |15

Notes to the Financial Statements

Ingenia Communities Holdings Limited For the six months ended 31 December 2017

4. EARNINGS PER SECURITY

(a) Per security Profit attributable to securityholders ($’000) Weighted average number of securities outstanding (thousands) Issued securities (thousands) Dilutive securities (thousands) Long-term incentives Short-term incentives Weighted average number of issued and dilutive potential securities outstanding (thousands) Basic earnings per security (cents) Dilutive earnings per security (cents) (b) Per security attributable to parent Loss attributable to securityholders ($’000) Weighted average number of securities outstanding (thousands) Issued securities (thousands) Dilutive securities (thousands) Long-term incentives Short-term incentives Weighted average number of issued and dilutive potential securities outstanding (thousands) Basic earnings per security (cents) Dilutive earnings per security (cents) 5. REVENUE (a) Rental income Residential rental income – Ingenia Gardens Residential rental income – Settlers Residential rental income – Lifestyle and Holidays Annuals rental income – Lifestyle and Holidays Short-term rental income – Lifestyle and Holidays Commercial rental income – Lifestyle and Holidays Total rental income (b) Other revenue Catering income Accrued deferred management fee Utility recoveries Ancillary lifestyle park income Commissions and administrative fees Government incentives Sundry income Total other revenue	31 Dec 2017 31 Dec 2016 17,119 7,647 206,906 176,211 544 405 94 99
	207,544 176,715
	8.3 4.3 8.2 4.3 31 Dec 2017 31 Dec 2016 (127) (909) 206,906 176,211 544 405 94 99
	207,544 176,715
	(0.1) (0.5) (0.1) (0.5) 31 Dec 2017 31 Dec 2016 $’000 $’000 12,720 12,335 69 164 10,608 7,072 2,378 2,023 17,656 10,556 221 228
	43,652 32,378
	31 Dec 2017 31 Dec 2016 $’000 $’000 1,604 1,608 466 1,565 840 572 872 413 234 167 89 65 493 320
	4,598 4,710

Page | 16

N otes to the FinancialStatem ents

IngeniaC om m unitiesHoldingsLim ited

Forthe sixm onthsended 31D ecem ber2017

6. NET FINANCE EXPENSE

6. NET FINANCE EXPENSE
Interestincom e D ebtfacility interestpaid orpayable D eferred consideration intereston acquisitions Finance lease interestpaid orpayable (1)	31 Dec 2017 31 Dec 2016 $’000 $’000 39 12 (3,164) (3,080) - (110) (180) (184)
	(3,305) (3,362)

(1)Finance leasesrelate to certain investm entpropertiesand are long term in nature.

Interest costs of$1,390,000 have been capitalised into investm ent properties associated w ith developm ent assets(31D ecem ber2016:$43,800)

7. INVENTORIES

7. INVENTORIES
M anufactured hom es C om pleted U nderconstruction Service station fueland supplies Total inventories	31 Dec 2017 30 Jun 2017 $’000 $’000 13,668 15,247 11,720 6,190 280 160
	25,668 21,597

The m anufactured hom e balance includes:

• 80 new com pleted hom es(30 Jun 2017:86)

• 11refurbished/renovated/annualscom pleted hom es(30 Jun 2017:9)

• M anufactured hom es underconstruction includes149 partially com pleted hom esatdifferentstages ofdevelopm ent (30 Jun 2017:56).It also includes dem olition,site preparation costs and buybacks on future developm entsites.

8. ASSETS AND LIABILITIES HELD FOR SALE

(a) Summary of carrying values

The follow ing are the carrying valuesofassetsheld forsale:

		31 Dec 2017	30 Jun 2017
	Note	$’000	$’000
Investm entpropertiesheld forsale
M eadow Springs,M andurah,W A (1)		18,632	-
Lake M acquarie (Lifestyle),M orisset,N SW (1)		7,020	-
C hain Valley B ay,C hain Valley B ay,N SW		4,730	-
Total assets for sale	9(b)	30,382	-

(1)M eadow Springsand Lake M acquarie w ere sold in January 2018 and February 2018 respectively (N ote 15).

(b) Summary of carrying amounts – loans

The follow ing isasum m ary ofthe carrying am ountsofthe loansassociated w ith investm entpropertiesheld forsale:

Note N etresidentloans–M eadow Springs,M andurah,W A 12	31 Dec 2017 30 Jun 2017 $’000 $’000 14,130 -

Page |17

N otes to the FinancialStatem ents IngeniaC om m unitiesHoldingsLim ited Forthe sixm onthsended 31D ecem ber2017

9. INVESTMENT PROPERTIES

(a) Summary of carrying amounts

a) Summary of carrying amounts
C om pleted properties Propertiesunderdevelopm ent Total carrying amount b) Movements in carrying amounts Note Carrying amount at the beginning of the period A cquisitions E xpenditure C apitalised N etchange in fairvalue Investm entProperty ResidentLoans Transferto assetsheld forsale 8(a) D isposals C arrying value N etlosson disposalofinvestm entproperty Carrying amount at the end of the period(1)	31 Dec 2017 30 Jun 2017 $’000 $’000 599,049 580,601 134,947 112,872
	733,996 693,473
	31 Dec 2017 30 Jun 2017 $’000 $’000 693,473 710,746 37,202 174,883 32,059 28,562 2,551 12,372 (656) - (30,382) - (251) (224,652) - (8,438)
	733,996 693,473

(b) Movements in carrying amounts

(1) N ote that in the reconciliation above,the m ovem ents for 31D ecem ber 2017 are for a6 m onth period,w hilst com parative 30 June 2017 m ovem ent is for a12 m onth period.

(c) Reconciliation of Fair value

c) Reconciliation of Fair value
C arrying am ountat1Jul2017 A cquisitions E xpenditure C apitalised N etchange in fairvalue Investm entProperty Residentloans Transferto assetsheld forsale D isposals Carrying amount at 31 Dec 2017	Ingenia Gardens Lifestyle and Holidays Ingenia Settlers Total $’000 $’000 $’000 $’000 141,290 514,843 37,340 693,473 - 37,202 - 37,202 1,062 30,964 33 32,059 888 2,706 (1,043) 2,551 - (63) (593) (656) - (11,750) (18,632) (30,382) - (251) - (251)
	143,240 573,651 17,105 733,996

(d) Individual carrying amounts

d) Individual carrying amounts
Completed properties IngeniaSettlers C essnock,C essnock,N SW G ladstone,South G ladstone,Q LD M eadow Springs,M andurah,W A (5)	Carrying amount 31 Dec 2017 30 Jun 2017 $’000 $’000 6,570 6,756 10,535 11,018 - 19,566
	17,105 37,340

Page |18

N otes to the FinancialStatem ents

IngeniaC om m unitiesHoldingsLim ited Forthe sixm onthsended 31D ecem ber2017

9. INVESTMENT PROPERTIES (CONTINUED)

Completed properties IngeniaG ardens B rooklyn,B rookfield,VIC C arey Park,B unbury,W A E lphinw ood,Launceston,TA S Horsham ,Horsham ,VIC Jefferis,B undaberg N orth,Q LD O xley,PortM acquarie,N SW Tow nsend,StA lbansPark,VIC Yakam ia,Yakam ia,W A C hatsbury,G oulburn,N SW C larem ont,C larem ont,TA S C oburns,B rookfield,VIC D evonport,D evonport,TA S Hertford,Sebastopol,VIC Seascape,E rskine,W A Seville G rove,Seville G rove,W A StA lbansPark,StA lbansPark,VIC Taloum bi,C offsHarbour,N SW W heelers,D ubbo,N SW Taree,Taree,N SW G rovedale,G rovedale,VIC G lenorchy,G lenorchy,TA S M arsden,M arsden,Q LD Sw an View ,Sw an View ,W A D ubbo,D ubbo,N SW O cean G rove,M andurah,W A PeelRiver,Tam w orth,N SW Sovereign,B allarat,VIC W agga,W aggaW agga,N SW B athurst,B athurst,N SW Launceston,Launceston,TA S W arrnam bool,W arrnam bool,VIC

Carrying amount 31 Dec 2017 30 Jun 2017 $’000 $’000 4,830 4,690 4,500 4,400 4,160 4,100 3,880 3,700 4,350 4,550 4,950 4,760 5,050 4,850 4,520 4,500 4,560 4,420 4,350 4,260 4,670 4,500 2,100 2,160 3,700 3,840 4,300 4,980 4,000 3,660 5,700 5,680 5,400 5,150 5,170 5,050 4,000 3,940 5,500 5,400 4,400 4,280 10,010 9,560 7,700 7,610 5,650 5,170 3,890 3,870 5,230 5,270 2,550 2,540 3,500 3,950 4,320 4,100 3,120 3,350 3,180 3,000

143,240 141,290

Page |19

N otes to the FinancialStatem ents

IngeniaC om m unitiesHoldingsLim ited Forthe sixm onthsended 31D ecem ber2017

9. INVESTMENT PROPERTIES (CONTINUED)

Completed properties IngeniaLifestyle and H olidays The G range,M orisset,N SW E ttalong B each,E ttalong B each,N SW (1) A lbury,Lavington,N SW N epean River,E m uPlains,N SW M udgee Valley,M udgee,N SW M udgee,M udgee,N SW K ingscliff,K ingscliff,N SW Lake M acquarie (Lifestyle),M orisset,N SW (5) C hain Valley B ay,C hain Valley B ay,N SW (5) O ne M ile B each,O ne M ile,N SW (1) HunterValley,C essnock,N SW Sun C ountry,M ulw ala,N SW Stoney C reek,M arsden Park,N SW Rouse Hill,Rouse Hill,N SW (2) W hite A lbatross,N am buccaHeads,N SW N oosa,Tew antin,Q LD C ham bersPines,C ham bersFlat,Q LD Lake M acquarie,M annering Park,N SW Sydney Hills,D ural,N SW B ethania,B ethania,Q LD C onjolaLakeside,Lake C onjola,N SW SoldiersPoint,PortStephens,N SW Lara,Lara,VIC South W estRocks,South W estRocksN SW (1) B roulee,B roulee,N SW (1) O cean Lake,O cean Lake,N SW A vinaVan Village,Vineyard,N SW Hervey B ay,Hervey B ay,Q LD B lueysB each,B lueysB each,N SW C airnsC oconut,W oree,Q LD B onny Hills,B onny Hills,N SW D urack G ardens,D urack,Q LD (3) E ightM ile Plains,Q LD (3) Total completed properties	Carrying amount 31 Dec 2017 30 Jun 2017 $’000 $’000 13,816 13,718 7,084 5,968 3,384 3,132 12,701 13,867 2,811 2,934 4,825 4,587 13,000 12,524 - 6,778 - 2,435 15,521 14,809 8,070 7,868 7,425 7,384 20,300 18,529 10,300 10,300 29,128 28,443 17,955 16,800 21,177 19,200 8,154 8,020 15,818 15,200 6,359 5,401 28,951 27,500 13,993 13,027 8,293 4,582 7,738 7,016 6,674 6,463 9,147 8,900 21,000 17,480 9,964 9,667 6,285 4,480 51,500 50,038 12,000 11,987 22,952 22,934 22,379 -
	438,704 401,971
	599,049 580,601

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N otes to the FinancialStatem ents IngeniaC om m unitiesHoldingsLim ited Forthe sixm onthsended 31D ecem ber2017

9. INVESTMENT PROPERTIES (CONTINUED)

Properties under development IngeniaLifestyle and H olidays The G range,M orisset,N SW A lbury,Lavington,N SW M udgee Valley,M udgee,N SW M udgee,M udgee,N SW C hain Valley B ay,C hain Valley B ay,N SW HunterValley,C essnock,N SW Sun C ountry,M ulw ala,N SW Stoney C reek,M arsden Park,N SW Rouse Hill,Rouse Hill,N SW (2) C ham bersPines,C ham bersFlat,Q LD Sydney Hills,D ural,N SW B ethania,B ethania,Q LD C onjolaLakeside,Lake C onjola,N SW Lara,Lara,VIC South W estRocks,N SW (1) A vinaVan Village,Vineyard,N SW Latitude O ne,PortStephens,N SW (4) B lueysB each,B lueysB each,N SW C airnsC oconut,W oree,Q LD B onny Hills,B onny Hills,N SW D urack G ardens,D urack,Q LD (3) E ightM ile Plains,Q LD (3) Plantations,W oolgoolga,N SW (3)

Carrying amount 31 Dec 2017 30 Jun 2017 $’000 $’000 7,097 1,967 3,840 3,682 700 700 2,000 2,203 - 2,678 3,586 3,395 1,905 1,904 2,304 2,560 8,368 8,224 15,477 9,590 - 160 13,874 15,084 7,160 5,000 12,732 13,702 2,142 2,616 12,831 17,745 23,694 13,805 1,315 3,020 1,258 1,258 1,513 1,513 2,450 2,066 2,695 - 8,006 -

134,947 112,872

(1)Includesaland com ponentthatisleased from the C row n orlocalm unicipalities and are recognised asinvestm entproperty w ith an associated finance lease.

(2)Rouse Hillhasbeen valued on ahighestand bestuse basisasam edium density residentialdevelopm ent.

(3)Held atpurchase price plusany subsequentand supportable capitalexpenditure in accordance w ith accounting policy.

(4)The carrying value forLatitude O ne represents100% ofthe property value.A profitshare arrangem entisin place w ith athird-party liability w hich is carried at fairvalue and classified asanon-currentfinancialliability.

(5)C lassified asassetsheld forsale at31D ecem ber2017.

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N otes to the FinancialStatem ents

IngeniaC om m unitiesHoldingsLim ited Forthe sixm onthsended 31D ecem ber2017

10. TRADE AND OTHER PAYABLES

Current Trade payablesand accruals D eposits O therunearned incom e Non-current O ther 11. BORROWINGS Current Finance leases Non-current B ank debt Prepaid borrow ing costs Finance leases	31 Dec 2017 30 Jun 2017 $’000 $’000 18,299 20,071 7,034 4,562 1,254 1,350
	26,587 25,983
	167 168
	31 Dec 2017 30 Jun 2017 $’000 $’000 486 493
	231,364 166,464 (1,471) (1,735) 5,476 5,608
	235,369 170,337

(a) Bank debt

The total$300 m illion in debtfacilities(2016:$200 m illion)isprovided by three A ustralian banks.The facility m aturity datesare:

• 12 February 2020 ($124.6 m illion);and

• 12 February 2022 ($175.4 m illion)

A sat31D ecem ber2017,the facilitieshave been draw n to $231.4 m illion (30 June 2017:$166.5m illion).The carrying value ofinvestm entproperty netofresidentliabilitiesatreporting date forthe G roup’sA ustralian propertiespledged assecurity is$679.8 m illion (30 June 2017:$602.9 m illion).

(b) Bank guarantees

The G roup hasthe ability to utilise itsbank facilitiesto provide bank guarantees,w hich at31D ecember2017 w ere $11.1m illion (30 June 2017:$10.8 m illion).

(c) Finance leases

• The G roup hasentered into finance leasesforthe follow ing Lifestyle and Holidaysinvestm entproperties:

• G osford C ity C ouncilforthe land and facilitiesofE ttalong B each

• C row n leasesforthe land ofO ne M ile B each

• C row n lease forthe land ofB ig 4 B roulee B each

• C row n lease forthe land ofSouth W estRocks

The leasesare long-term in nature and range betw een 9 yearsto perpetuity.

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N otes to the FinancialStatem ents

IngeniaC om m unitiesHoldingsLim ited Forthe sixm onthsended 31D ecem ber2017

12. RETIREMENT VILLAGE RESIDENT LOANS

12. RETIREMENT VILLAGE RESIDENT LOANS	12. RETIREMENT VILLAGE RESIDENT LOANS
Note (a) Summary of carrying amounts G rossresidentloans A ccrued deferred m anagem entfee N etresidentloans (b) Movements in carrying amounts C arrying am ountatbeginning ofperiod A ccrued deferred m anagem entfee incom e D eferred m anagem entfee cash collected Proceedsfrom residentloans Repaym entofresidentloans Transferto liabilitiesheld forsale 8(b) D isposalofvillages O ther 13. ISSUED SECURITIES (a) Carrying values A tbeginning ofperiod Issued during the year: D istribution reinvestm entplan Perform ance quantum rights Institutionalplacem entand rightsissue Security purchase plan Short-term incentive plan Institutionalplacem entand rightsissue costs A tend ofperiod The closing balance isattributable to the securityholdersof: IngeniaC om m unitiesHolding Lim ited IngeniaC om m unitiesFund IngeniaC om m unitiesM anagem entTrust (b) Number of issued securities A tbeginning ofperiod Issued during the period: Perform ance quantum rights D istribution reinvestm entplan Security purchase plan Institutionalplacem entand rightsissue Short-term incentive plan A tend ofperiod		31 Dec 2017 30 Jun 2017 $’000 $’000 15,648 30,155 (3,233) (2,954)
		12,415 27,201
		27,201 207,483 (466) (1,825) 205 465 387 3,411 (777) (2,191) (14,130) - - (180,283) (5) 141
		12,415 27,201
		31 Dec 2017 30 Jun 2017 $’000 $’000 809,836 723,383 2,235 5,517 - 1,158 - 74,045 - 8,162 - 238 - (2,667)
		812,071 809,836
		11,174 11,131 757,486 755,570 43,411 43,135
		812,071 809,836
		31 Dec 2017 30 Jun 2017 $’000 $’000 206,382 172,155 - 599 886 2,049 - 3,023 - 28,479 - 77
		207,268 206,382

(c) Term of securities

A llsecuritiesare fully paid and rank equally w ith each otherforallpurposes.E ach security entitles the holderto one vote,in person orby proxy,atam eeting ofsecurityholders.

14. COMMITMENTS

There w ere com m itm entsforcapitalexpenditure on investm entpropertiesand inventoriescontracted but notprovided foratreporting date of$2,519,733 (30 June 2017:$805,725).

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N otes to the FinancialStatem ents

IngeniaC om m unitiesHoldingsLim ited Forthe sixm onthsended 31D ecem ber2017

15. SUBSEQUENT EVENTS

Interim distribution

O n 20 February 2018,the D irectors ofthe G roup resolved to declare an interim distribution of5.1cps (1H17: 5.1cps)am ounting to $10.6 m illion to be paid on 14 M arch 2018.The distribution is21.3% taxdeferred and the distribution reinvestm entplan w illbe in operation forthisdistribution.

Sale ofnon-core assets

O n 21D ecem ber 2017,the G roup announced the sale ofthree non-core subscale assets.These divestm ents are consistent w ith the G roup’s focus on divesting non-core assets in order to redeploy capitalinto higher grow th lifestyle developm entprojectsincluded;

• The disposalofSettlers M eadow Springs (M andurah,W A ).This sale (inclusive ofthe G roupsliability forresidentloans)w as com pleted on 31January 2018,w here the G roup received gross proceeds of $4.5m illion.

• The disposalofIngeniaLifestyle Lake M acquarie (M orisset,N SW ).This sale (inclusive ofinventory) w ascom pleted on 2 February 2018,w here the G roup received grossproceedsof$7.1m illion.

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D irectors’D eclaration

IngeniaC om m unitiesHoldingsLim ited Forthe sixm onthsended 31D ecem ber2017

In accordance w ith aresolution ofthe D irectorsofIngeniaC om m unitiesHoldingsLim ited,Istate that:

• In the opinion ofthe D irectors:

• (a) the financialstatem entsand notesofIngeniaC om m unitiesHoldingsLim ited forthe half-year ended 31D ecember2017 are in accordance w ith the C orporationsA ct2001including: (i) giving atrue and fairview ofthe G roup’sfinancialposition asat31D ecem ber2017 and of itsperform ance forthe half-yearended on thatdate;and

  • (ii) com plying w ith A ccounting Standardsand C orporationsRegulations2001;and

• (b) there are reasonable groundsto believe thatIngeniaC om m unitiesHoldingsLim ited w illbe able to pay itsdebtsasand w hen they becom e due and payable.

O n behalfofthe board

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Jim Hazel C hairm an 20 February 2018

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Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001

Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au

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Independent Auditor's Review Report to the unitholders of Ingenia Communities Holdings Limited

Report on the Half-Year Financial Report

Conclusion

We have reviewed the accompanying half-year financial report of Ingenia Communities Holdings Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 31 December 2017, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated cash flow statement for the half year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration.

Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the half-year financial report of the Group is not in accordance with the Corporations Act 2001 , including:

• a) giving a true and fair view of the consolidated financial position of the Group as at 31 December 2017 and of its consolidated financial 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 .

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 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, anything has come to our attention that causes us to believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Group’s consolidated financial position as at 31 December 2017 and its consolidated financial 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 the Group, 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.

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

1

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Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We have given to the directors of the Responsible Entity a written Auditor’s Independence Declaration, a copy of which is included in the Directors’ Report.

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Ernst & Young

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Megan Wilson Partner Sydney 20 February 2018

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

2

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INGENIA COMMUNITIES FUND AND

INGENIA COMMUNITIES MANAGEMENT TRUST HALF–YEAR FINANCIAL REPORT 31 DECEMBER 2017

w w w .ingeniacom m unities.com .au Registered O ffice:Level9,115PittStreetSydney N SW 2000

Half–Year FinancialR eport

IngeniaC om m unitiesFund and IngeniaC om m unitiesM anagem entTrust Forthe sixm onthsended 31D ecem ber2017

C ontents

D irectors'report.......................................................................................................................................................................................................1 A uditor’sindependence declaration............................................................................................................................................................4 C onsolidated statem entofcom prehensive incom e............................................................................................................................5 C onsolidated balance sheet.............................................................................................................................................................................6 C onsolidated cashflow statem ent..................................................................................................................................................................7 C onsolidated statem entofchangesin equity........................................................................................................................................8 1.Sum m ary ofsignificantaccounting policies...................................................................................................................................9 2.A ccounting estim atesand judgem ents..........................................................................................................................................10 3.Segm entinform ation.................................................................................................................................................................................11 4.E arningsperunit.........................................................................................................................................................................................15 5.Inventories......................................................................................................................................................................................................15 6.A ssetsand liabilitiesheld forsale......................................................................................................................................................15 7.Investm entproperties..............................................................................................................................................................................16 8.Trade and otherpayables......................................................................................................................................................................16 9.B orrow ings.....................................................................................................................................................................................................17 10.Retirem entvillage residentloans.....................................................................................................................................................17 11.Issued units....................................................................................................................................................................................................18 12.C om m itm ents..............................................................................................................................................................................................18 13.Subsequentevents...................................................................................................................................................................................18 D irectors’declaration..........................................................................................................................................................................................19 IndependentA uditor’sReport.....................................................................................................................................................................20

IngeniaC om m unitiesFund and IngeniaC om m unitiesM anagem entTrust Forthe sixm onthsended 31D ecem ber2017

D irectors’R eport

IngeniaC om m unitiesFund(IC Forthe Fund)(A RSN 107459 576)andIngeniaC om m unitiesM anagem entTrust (IC M T)(A RSN 122 928 410)(togetherthe Trusts)are A ustralian registered schem es.IngeniaC om m unitiesRE Lim ited (A C N 154 464 990;A ustralian FinancialServices Licence number 415862),the Responsible E ntity of the Trusts,isincorporated and dom iciled in A ustralia.

The parent com pany of Ingenia C om m unities RE Lim ited (IC RE or the Responsible E ntity) is Ingenia C om m unities Holdings Lim ited (the C om pany).The shares ofthe C om pany are “stapled”w ith the units ofthe Trustsandtrade on the A ustralian SecuritiesE xchange (“A SX”)asone security (A SX C ode:IN A ).The C om pany and the Trustsalong w ith theirsubsidiariesare collectively referred to asthe G roup in thisreport.

The D irectors’Report is acom bined D irectors’Report that covers the Trusts for the half year ended 31 D ecem ber2017 (the “currentperiod”).

DIRECTORS

The D irectorsofthe Responsible E ntity atany tim e during orsince the end ofthe currentperiod w ere:

Non - Executive Directors (NEDs)

Jim Hazel(C hairm an) RobertM orrison (D eputy C hairm an) A m andaHeyw orth Valerie Lyons A ndrew M cE voy (appointed 1D ecem ber2017) Philip C lark A M (resigned 4 D ecember2017)

Executive Directors

Sim on O w en (M anaging D irectorand C hiefE xecutive O fficer(M D and C E O ))

OPERATING AND FINANCIAL REVIEW

ICF and ICMT Overview

IC F and IC M T are tw o of the entities form ing part of IngeniaC om m unities G roup,w hich is atriple staple structure traded on the A SX.

The G roup is an active ow ner,m anager and developer ofadiversified portfolio ofretirem ent lifestyle and holiday com m unitiesacrossA ustralia.Itsrealestate assetsat31D ecem ber2017 w ere valued at$734.0 m illion (net offinance leases and resident loans),being 33 lifestyle and holiday com m unities (IngeniaLifestyle and Holidays),31rentalcom m unities (IngeniaG ardens)and tw o Settlers assets (IngeniaSettlers).The G roup is in the A SX 300 w ith am arketcapitalisation ofapproximately $572.1m illion at31D ecem ber2017.

The G roup’svision isto create A ustralia’sbestlifestyle com m unitiesofferingaffordable perm anentandtourism rentalaccom m odation w ith a focus on the seniors dem ographic.The B oard is com m itted to delivering continued earnings and security price grow th to securityholders w hile providing asupportive com m unity environm entto perm anentresidentsand holidaym akers.

Our Values

A t Ingeniaw e build com m unity using afoundation ofintegrity and respect,creating aplace w here people have asense ofconnection and belonging.W e strive for continuous improvem ent in our resident,guest and visitor service,to ensure that they receive the best possible support,attention and experience every day. W hetherit’stim e to play,stay,restorrenew ,w e deliverfreedom ofchoice w ith arange oflifestyle andholiday options.

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D irectors’R eport

IngeniaC om m unitiesFund and IngeniaC om m unitiesM anagem entTrust Forthe sixm onthsended 31D ecem ber2017

Strategy

The strategiesofIC Fand IC M T are aligned w ith the G roup’sstrategy to furtherdevelop Lifestyle com m unities and enhance the operationalperform ance of its asset base to grow revenue stream s and m anage cost effectively.

Increasing sales velocity and profit m argin on new hom e sales,repositioning and upgrading existing com m unitiesand targetingsectoradjacenciesand innovationsare key grow th prioritiesofthe Trusts.In FY18, the Trustsare targetingthe settlem entofover260 new hom es.U singadisciplinedinvestm entfram ew ork,the Trusts plan to continue their focus on m etropolitan and coastallocations through targeted acquisitions and divestm ents.

The key im m ediate businessprioritiesofthe Trustsare:

• D eliverdevelopm entprojectson tim e and w ithin budget;

• A chieve atleast260 new hom e settlem entsin FY18;

• C ontinue to focuson m etropolitan andcoastallocationsthrough portfolio rem ixing anddevelopm ent;

• Im prove perform ance ofexisting assets through repositioning and by driving revenue grow th and leveraging the G roup’soperating and salesplatform ;

• E xpand developm entm arginsthrough innovative hom e designsand building efficiencies.

Financial Results

The financialresults for IngeniaC om m unities G roup are disclosed in the results of IngeniaC om m unities Holdings Lim ited (IC H),w hich doesnotform partofthese accounts,butis relevantasIC H isstapled w ith IC F and IC M T.

The six m onths to 31D ecem ber 2017 has delivered astatutory profit of$17.1m illion,w hich is up 124% on the prioryear.U nderlyingProfitfrom continuingoperationsw as$14.6 m illion w hich representsan increase of$4.0 m illion (37%)on the prioryear.

The G roup developed and sold 90 turnkey hom es (1H17:82 hom es)and grew rentalincom e from perm anent, annualand tourism clientsto $30.7 m illion (up from $19.7 m illion in 1H17).

The underlying resultisunderpinned by asignificantly higherE B IT contribution from the IngeniaLifestyle and Holidayssegm entup 53% from the prioryear.The statutory resultisfurtherim pactedby an upliftin valuations ofinvestm entproperty.

Further investm ent in lifestyle com m unities continued during the half-year,w ith a continued focus on progressing the G roup’s developm entpipeline and the com pletion ofthree strategicacquisitions.The G roup settledon the acquisition ofSheldon C aravan Park (E ightM ile Plains,B risbane),G lenw ood(Plantations)(N SW M id N orth C oast)and land directly adjacentto Latitude O ne (N SW M id N orth C oast).

Key metrics

• N etProfitforthe currentperiod forIC F$15.2 m illion (1H17:$11.2m loss).

• N etProfitforthe currentperiod forIC M T of$2.1m illion (1H17:$19.7 m profit).

• Interim distribution of5.1centsperunitby IC F,nilfrom IC M T.

Capital Management

The Trusts adopt aprudent and considered approach to capitalm anagem ent.A s at 31D ecem ber 2017,the current loan to asset value ratio (LVR) is 35.1%,w ithin the G roup’s target LVR of30-40% and w ellbelow the financialcovenantof50%.The G roup hasan undraw n debtcapacity of$68.6 m illion.

Distributions

O n 22 A ugust2017,the D irectors ofIC RE as responsible entity forIC Fdeclared afinaldistribution for2017 of 5.1cps,am ounting to $10.5m illion w hich w as paid on 13 Septem ber 2017.The distribution w as 26.5% tax deferred and the distribution reinvestm entplan w asin place.

Page |2

D irectors’R eport

IngeniaC om m unitiesFund and IngeniaC om m unitiesM anagem entTrust Forthe sixm onthsended 31D ecem ber2017

Outlook

The Trusts are w ellpositioned to continue grow ing its Lifestyle and Holidays business w ith asignificant developm ent pipeline in place.O ngoing grow th in sales and settlem ents volum es is expected in the second halfof2018 asnew projectsw ith strong depositsand contractsin place.

The Trusts w ill continue to grow incom e from its Lifestyle and Holidays portfolio,underpinning the developm ent pipeline w ith steady recurrent cash flow s.A continuing focus rem ains on opportunities for revenue grow th orcostm inim isation to grow recurring yieldsacrossthe portfolios.

The Trusts w illcontinue to regularly assess the perform ance of its existing assets and w here appropriate recycle capitalinto otheropportunitiesdelivering superiorreturns.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

C hanges in the state ofaffairs during the current period are set out in the various reports in this half-year financialreport.Referto N ote 7 forinvestm entpropertiesacquired ordisposed ofduring the yearand N ote 11 forissued units.

SUBSEQUENT EVENTS

Interim distribution

O n 20 February 2018,the D irectors ofIngeniaC om m unities RE Lim ited (“IC RE ”)as responsible entity forIC F resolved to declare an interim distribution of5.1cps (1H17:5.1cps)am ounting to $10.6 m illion to be paid on 14 M arch 2018.The distribution is 21.3% tax deferred and the distribution reinvestm ent plan w illbe in operation forthisdistribution.

Sale ofnon-core assets

O n 21D ecember2017,the Trustsannouncedthe sale ofthree non-core subscale assets.These divestm entsare consistentw ith the G roup’sfocuson divesting non-core assetsin orderto redeploy capitalinto highergrow th lifestyle developm entprojectsincluded;

• The disposalofSettlers M eadow Springs (M andurah,W A ).This sale (inclusive ofthe G roups liability for resident loans) w as com pleted on 31January 2018,w here the G roup received gross proceeds of $4.5m illion.

• The disposalof IngeniaLifestyle Lake M acquarie (M orisset,N SW ).This sale (inclusive ofinventory) w ascom pleted on 2 February 2018,w here the G roup received grossproceedsof$7.1m illion.

AUDITOR’S INDEPENDENCE DECLARATION

A copy ofthe auditor’sindependence declaration asrequiredundersection 307cofthe C orporationsA ct2001 issetouton page 4.

GROUP INDEMNITIES

The Trustshave purchasedvariousinsurance policiesto coverarange orrisks(subjectto specifiedexclusions) forD irectors,officersandem ployeesofthe G roup servingin theirrespective capacities.K ey insurance policies include:directorsandofficersinsurance;professionalindem nity insurance;andm anagem entliability insurance.

INDEMNIFICATION OF AUDITORS

To the extentperm itted by law ,the Trusts have agreed to indem nify its auditors,E rnst & Young A ustralia,as partofthe term sofitsauditengagem entagreem entagainstclaim sby third partiesarising from the audit(for an unspecified am ount).N o paym enthasbeen m ade to indem nify E rnst& Young during orsince the period.

ROUNDING OF AMOUNTS

The Trusts are ofthe kind referred to in A SIC Instrument 2016/191,and in accordance w ith that C lass O rder, am ountsin the financialreportandD irector’sreporthave been roundedto the nearestthousanddollars,unless otherw ise stated.

Signed in accordance w ith aresolution ofthe D irectorsofthe Responsible E ntity.

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Jim Hazel C hairm an Sydney 20 February 2018

Page |3

Ernst & Young Tel: +61 2 9248 5555 200 George Street Fax: +61 2 9248 5959 Sydney NSW 2000 Australia ey.com/au GPO Box 2646 Sydney NSW 2001

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Auditor’s Independence Declaration to the Directors of Ingenia Communities RE Limited as Responsible Entity for Ingenia Communities Fund and Ingenia Communities Management Trust

As lead auditor for the review of Ingenia Communities Fund and its controlled entities and Ingenia Communities Management Trust and its controlled entities for the half-year ended 31 December 2017, I declare to the best of my knowledge and belief, there have been:

• a) no contraventions of the auditor independence requirements of the Corporations Act 2001 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 Ingenia Communities Fund and the entities it controlled and Ingenia Communities Management Trust and the entities it controlled during the financial period.

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Ernst & Young

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Megan Wilson Partner Sydney 20 February 2018

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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

C onsolidated Statem ent ofC om prehensive Incom e

IngeniaC om m unitiesFund and IngeniaC om m unitiesM anagem entTrust Forthe sixm onthsended 31D ecem ber2017

Note RentalIncom e M anufactured hom e sales Service station revenue O therrevenue Revenue Property expenses C ostofm anufactured homessold E m ployee expenses A dm inistrative expenses O perational,m arketing and selling expenses Service Station expenses Responsible entity fee and expenses D epreciation and am ortisation expense Operating profit before interest and tax N etfinance incom e/(expense) Operating profit before tax N etgain/(loss)on change in fairvalue of Investm entproperties O ther N et(loss)on disposalofinvestm entproperties Profit/(loss) before tax Incom e taxexpense Profit/(loss) after tax O thercom prehensive incom e,netoftax Total comprehensive income/(loss) for the period Profit/(loss)attributable to unitholdersof: IngeniaC om m unitiesFund IngeniaC om m unitiesM anagem entTrust Totalcomprehensive incom e/(loss)attributable to unitholdersof: IngeniaC om m unitiesFund IngeniaC om m unitiesM anagem entTrust B asicearningsperunit 4 D iluted earningsperunit 4	Ingenia Communities Fund Ingenia Communities Management Trust 31 Dec 2017 31 Dec 2016 31 Dec 2017 31 Dec 2016 $’000 $’000 $’000 $’000 4,551 4,551 43,652 32,378 - - 25,096 24,732 - - 3,536 3,607 - - 4,598 4,710
	4,551 4,551 76,882 65,427 (469) (502) (18,679) (16,418) - - (14,569) (16,083) - - (16,326) (13,012) (138) (139) (2,114) (1,750) - - (3,155) (2,707) - - (2,985) (3,019) (1,622) (1,297) (1,533) (1,482) (13) (12) (416) (307)
	2,309 2,601 17,105 10,649 8,941 6,831 (12,284) (9,801)
	11,250 9,432 4,821 848 3,975 6,788 (2,078) 1,093 (36) 152 6 85 - (27,556) - 19,701
	15,189 (11,184) 2,749 21,727 - - (692) (1,987)
	15,189 (11,184) 2,057 19,740 - - - -
	15,189 (11,184) 2,057 19,740
	15,189 (11,184) - - 2,057 19,740
	15,189 (11,184) 2,057 19,740
	15,189 (11,184) - - - - 2,057 19,740
	15,189 (11,184) 2,057 19,740
	Cents Cents Cents Cents 7.3 (6.3) 1.0 11.2 7.3 (6.3) 1.0 11.2

Page |5

C onsolidated B alance Sheet

IngeniaC om m unitiesFund and IngeniaC om m unitiesM anagem entTrust A sat31D ecem ber2017

Note Current assets C ash and cash equivalents Trade and otherreceivables Inventories 5 Incom e taxreceivable A ssetsheld forsale 6(a) Total current assets Non-current assets Trade and otherreceivables Receivable from related party Investm entproperties 7 Plantand equipm ent O therfinancialassets Intangibles D eferred taxasset Total non-current assets Total assets Current liabilities Trade and otherpayables 8 B orrow ings 9 Retirem entvillage residentloans 10 E m ployee liabilities Liabilitiesheld forsale 6(b) Total current liabilities Non-current liabilities O therpayables 8 Payable to related party B orrow ings 9 O therfinancialliabilities E m ployee liabilities D erivativesand otherfinancialinstrum ents Total non-current liabilities Total Liabilities Net assets Equity Issued units 11 (A ccum ulated losses)/Retained earnings Unitholders interest N on-controlling interest Total equity A ttributable to unitholdersof: IngeniaC om m unitiesFund IngeniaC om m unitiesM anagem entTrust	Ingenia Communities Fund 31 Dec 2017 30 Jun 2017 $’000 $’000 1,421 991 780 719 - - 19 19 - -	Ingenia Communities Management Trust 31 Dec 2017 30 Jun 2017 $’000 $’000 5,437 8,547 6,660 5,708 25,668 21,597 19 19 30,382 -
	2,220 1,729 10,082 10,129 505,444 441,244 161,852 154,556 70 73 773 773 - - - -	68,166 35,871 458 458 - - 572,144 538,917 2,645 1,991 1,490 1,490 1,847 2,022 3,362 5,233
	678,221 606,775	581,946 550,111
	680,441 608,504	650,112 585,982
	2,089 1,822 - - - - - - - -	23,895 23,474 486 493 12,415 27,201 1,650 1,480 14,130 -
	2,089 1,822 - - - - 229,893 164,729 - - - - 204 282	52,576 52,648 167 167 512,618 449,907 13,781 13,913 5,250 6,136 521 344 - -
	230,097 165,011	532,337 470,467
	232,186 166,833	584,913 523,115
	448,255 441,671	65,199 62,867
	757,486 755,571 (309,231) (313,900)	43,411 43,136 22,488 20,431
	448,255 441,671	65,899 63,567
	- -	(700) (700)
	448,255 441,671	65,199 62,867
	448,255 441,671 - -	(700) (700) 65,899 63,567
	448,255 441,671	65,199 62,867

Page |6

C onsolidated C ash Flow Statem ent

IngeniaC om m unitiesFund and IngeniaC om m unitiesM anagem entTrust Forthe sixm onthsended 31D ecem ber2017

Note Operating activities Rentaland otherproperty incom e Property and otherexpenses Proceedsfrom residentloans 10 Repaym entofresidentloans 10 Proceedsfrom sale ofm anufactured hom es Purchase ofm anufactured hom es Proceedsfrom sale ofservice station inventory Purchase ofservice station inventory Interestreceived B orrow ing costspaid Incom e taxreceived Net Cash flows from operating activities Investing activities Purchase and additionsofplantand equipm ent Purchase and additionsofintangible assets Paym entsforinvestm entproperties A dditionsto investm entproperties Proceedsfrom sale ofinvestm entproperties Net Cash flows from investing activities Financing activities Proceedsfrom issue ofstapled securities Paym entsforunitissue costs Finance lease paym ents D istributionsto unitholders Paym entsfordebtissue costs (Paym entsto)/proceedsfrom related party borrow ings Proceedsfrom borrow ings Repaym entofborrow ings Net Cash flows from financing activities N et(decrease)in cash and cash equivalents C ash and cash equivalentsatbeginning ofperiod E ffectsofexchange rate fluctuation on cash held Cash and cash equivalents at end of the period

Ingenia Communities Fund Ingenia Communities Management Trust 31 Dec 2017 31 Dec 2016 31 Dec 2017 31 Dec 2016 $’000 $’000 $’000 $’000 - - 52,838 39,229 (412) (452) (43,832) (29,177) - - 387 2,706 - - (777) (1,289) - - 28,155 24,964 - - (22,060) (21,447) - - 3,890 3,607 - - (3,415) (3,273) 12 9 12 1 (3,833) (2,710) - (149) - - - 138 (4,233) (3,153) 15,198 15,310 (11) - (955) (576) - - (32) (131) - - (36,622) (75,121) (3,653) (1,428) (29,023) (10,659) - - 251 41,303 (3,664) (1,428) (66,381) (45,184) - 7,921 - 445 - (397) - - - - (321) (321) (8,291) (5,583) - - - (204) - - (48,282) (30,194) 48,394 27,964 69,900 64,846 - - (5,000) (37,000) - - 8,327 (611) 48,073 28,088 430 (5,192) (3,110) (1,786) 991 8,329 8,547 6,621 - 23 - 9 1,421 3,160 5,437 4,844

Page |7

C onsolidated Statem ent ofC hanges in E quity

IngeniaC om m unitiesFund and IngeniaC om m unitiesM anagem entTrust Forthe sixm onthsended 31D ecem ber2017

Carrying amount 1 Jul 2017 N etprofit/(loss) Total comprehensive income Transactionsw ith unitholdersin theircapacity asunitholders: Issue ofsecurities Paym entofdistributionsto unitholders Carrying amount 31 Dec 2017 Carrying amount 1 Jul 2016 N etprofit/(loss) Total comprehensive income Transactionsw ith unitholdersin theircapacity asunitholders: Issue ofsecurities Paym entofdistributionsto unitholders Carrying amount 31 Dec 2016 Carrying amount 1 Jul 2017 N etprofit/(loss) Total comprehensive income Transactionsw ith unitholdersin theircapacity asunitholders: Issue ofsecurities Carrying amount 31 Dec 2017 Carrying amount 1 Jul 2016 N etprofit/(loss) Total comprehensive income Transactionsw ith unitholdersin theircapacity asunitholders: Issue ofsecurities Carrying amount 31 Dec 2016		Attributable to unitholders	Attributable to unitholders
		Ingenia Communities Fund
	Note 11	Issued capital Retained Earnings $’000 $’000 755,571 (313,895) - 15,189	Total Non- controlling interest $’000 $’000 441,676 - 15,189 -	Total Equity $’000 441,676 15,189
		- 15,189	15,189 -	15,189
		1,915 - - (10,525)	1,915 - (10,525) -	1,915 (10,525)
		757,486 (309,231)	448,255 -	448,255
		679,161 (293,168) - (11,184)	385,993 - (11,184) -	385,993 (11,184)
		- (11,184)	(11,184) -	(11,184)
		12,014 - - (8,967)	12,014 - (8,967) -	12,014 (8,967)
		691,175 (313,319)	377,856 -	377,856
		Attributable to unitholders
		Ingenia Communities Management Trust
	Note 11	Issued capital Retained Earnings $’000 $’000 43,134 20,431 - 2,057	Total Non- controlling interest $’000 $’000 63,565 (700) 2,057 -	Total Equity $’000 62,865 2,057
		- 2,057	2,057 -	2,057
		277 -	277 -	277
		43,411 22,488	65,899 (700)	65,199
		34,019 (9,161) - 19,740	24,858 (700) 19,740 -	24,158 19,740
		- 19,740	19,740 -	19,740
		668 -	668 -	668
		34,687 10,579	45,266 (700)	44,566

Page |8

N otes to the FinancialStatem ents

IngeniaC om m unitiesFund and IngeniaC om m unitiesM anagem entTrust Forthe sixm onthsended 31D ecem ber2017

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) The Trusts

IngeniaC om m unities Fund (“IC F”orthe “Fund”)(A RSN 107 459 576)and IngeniaC om m unities M anagem ent Trust (“IC M T”) (A RSN 122 928 410) (together “the Trusts”) are A ustralian registered schem es.Ingenia C om m unities RE Lim ited (A C N 154 464 990;A ustralian FinancialServices Licence number 415862),the Responsible E ntity ofthe Trusts,isincorporated and dom iciled in A ustralia.

The parent com pany of Ingenia C om m unities RE Lim ited is Ingenia C om m unities Holdings Lim ited (the “C om pany”).The sharesofthe C om pany are “stapled”w ith the unitsofthe Trustsand trade on the A ustralian SecuritiesE xchange (“A SX”)effectively asone security.In thisreport,the C om pany andthe Trustsare referred to collectively asthe G roup.

The stapling structure w illcease to operate on the firstto occurof:

• the C om pany or either of the Trusts resolving by special resolution in accordance w ith its constitution to term inate the stapling provisions;or

• the com m encem entofthe w inding up ofthe C om pany oreitherofthe Trusts.

The financialreport as at and for the six m onths ended 31D ecem ber 2017 w as authorised for issue by the D irectorson 20 February 2018.

(b) B asis ofPreparation

The half-year financialreport is ageneralpurpose financialreport,w hich has been prepared in accordance w ith A A SB 134 Interim FinancialReporting and the C orporationsA ct2001.

The half-yearfinancialreportdoesnotinclude allofthe inform ation requiredforafull-yearfinancialreportand shouldbe readin conjunction w ith both the IngeniaC om m unitiesFundandIngeniaC om m unitiesM anagem ent Trustannualreportsforthe yearended 30 June 2017 and any A SX announcem entsissued during the period.

The financialreport com plies w ith A ustralian A ccounting Standards as issued by the A ustralian A ccounting Standards B oard and International Financial Reporting Standards (IFRS) as issued by the International A ccounting StandardsB oard.

A s perm itted by Instrum ent 2015/838,issued by the A ustralian Securities and Investm ents C om m ission,this financialreportisacombined financialreportthatpresentsthe financialstatem entsand accompanying notes ofboth IC Fand IC M T.

The financialreportispresentedin A ustralian dollarsandallvaluesare roundedto the nearestthousanddollars ($’000)unlessotherw ise stated.

W here appropriate com parative am ounts have been restated to ensure consistency ofdisclosure throughout the financialreport.The 31D ecem ber2016 com parative inform ation forthe Trustshasbeen adjustedto realign the recognition ofhistoricaltransactionsw ithin the individualstapledentities.Thishasresultedin the follow ing:

• For IC F,areduction in equity as at 30 June 2016 of$6,187,000 and adecrease in net profit for 31 D ecem ber2016 of$6,187,000.

• ForIC M T,areduction in equity asat30 June 2016 of$700,000.

• These adjustm ents are internalrealignm ents only and do notim pactthe reported consolidated results ofthe stapled G roup.

The accounting policies and m ethods ofcom putation adopted in the preparation ofthe half-year financial reportare consistentw ith those adopted and disclosed in the Trusts’2017 annualreportw ith the exception of new am ended standards and interpretations w hich have been applied as required.W here necessary corresponding figureshave been adjusted to confirm w ith changesin presentation in the currentperiod.

(c) A doption ofnew and revised accounting standards

N o new or revised standards and interpretations w ere issued by the A ustralian A ccounting Standards B oard thatare relevantto the Trustsduring the period.

(d) A ssets held for sale

C om ponents ofthe entity are classified as held for sale iftheir carrying value w illbe recovered principally through asale transaction ratherthan through continuing use.

Page |9

IngeniaC om m unitiesFund and IngeniaC om m unitiesM anagem entTrust Forthe sixm onthsended 31D ecem ber2017

N otes to the FinancialStatem ents

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(d) A ssets held for sale (continued)

They are m easuredatthe low eroftheircarryingam ountandfairvalue lesscoststo sell,exceptforassetssuch asinvestm entproperty,w hich are carried atfairvalue.

The liabilitiesofan assetclassified asheld forsale are presented separately from otherliabilitieson the face ofthe balance sheet.

D etailsofassetsand liabilitiesheld forsale are given atN ote 6.

2. ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation offinancialstatem entsrequiresthe use ofcertain criticalaccountingestim ates.Italso requires the Truststo exercise judgem entin the processofapplyingthe Trustsaccountingpolicies.The areasinvolving ahigherdegree ofjudgementorcom plexity,orareasw here assum ptions and estim ates are significantto the financialstatem entsare disclosed below .

E stim atesand judgem entsare continually evaluated and are based on historicalexperience and otherfactors, including expectationsoffuture eventsthatare believed to be reasonable underthe circum stances.

(a) C riticalaccounting estim ates and assum ptions

The Trusts m ake estim ates and assum ptions concerning the future.The resulting accounting estim ates,by definition,w illseldom equalthe related actualresults.The estim ates and assum ptions that have asignificant risk ofcausing am aterialadjustm entto the carrying am ounts ofassets and liabilities w ithin the nextfinancial yearare discussed below .

i. Valuation ofinvestm ent property

The Trusts have investm ent properties w ith acombined carrying am ount of$733,996,000 (30 June 2017: $693,473,000) (refer N ote 7),and com bined retirem ent village resident loans of$12,415,000 (30 June 2017: $27,201,000)(referN ote 10)w hich togetherrepresentthe estim atedfairvalue ofthe Trust’sproperty business.

These carryingam ountsreflectcertain assum ptionsaboutexpectedfuture rentals,rent-free periods,operating costs and appropriate discount and capitalisation rates.The valuation assum ption for properties to be developed reflectassum ptions around salesprices fornew hom es,sales rates,new rentaltariffs,estim ates of capitalexpenditure,discount rates and projected property grow th rates.The valuation assum ptions for deferred m anagem ent fee villages reflect assum ptions relating to average length ofstay,unit m arket values, estim atesofcapitalexpenditure,contractterm sw ith residents,discountratesand projectedproperty grow th rates.

In form ing these assum ptions,the Trusts considered inform ation about current and recent sales activity, currentm arketrents,anddiscountandcapitalisation rates,forpropertiessim ilarto those ow nedby the Trusts, asw ellasindependentvaluationsofthe Trusts’property.

ii. Valuation ofinventories

The Trusts have inventory in the form ofm anufactured hom es and service station fueland supplies,w hich it carries at the low er ofcost or net realisable value.E stim ates ofnet realisable value are based on the m ost reliable evidence available atthe tim e the estim ates are m ade,ofthe am ountthe inventoriesare expected to realise and the estim ate ofcosts to com plete.K ey assum ptions require the use ofm anagem ent judgem ent, and are continually review ed.

iii. Valuation ofretirem ent village resident loans

The fairvalue ofthe retirem entvillage residentloansis calculated by reference to the initialloan am ountplus the resident’sshare ofany capitalgainsin accordance w ith theircontractslessany deferred m anagem entfee incom e accruedto date by IC M Tasoperator.The key assum ption forcalculatingthe capitalgain anddeferred m anagem ent fee incom e com ponents is the value ofthe dw elling being occupied by the resident.This value isdeterm ined by reference to the valuation ofinvestm entproperty asreferred to above.

iv. C alculation ofdeferred m anagem ent fee (“D M F”)

D eferred m anagem ent fees are recognised by the Trusts over the estim ated period oftim e the property w ill be leased by the residentand the accrued D M Fis realised upon exitofthe resident.D M Fis based on various inputsincludingthe initialprice ofthe property,estim atedlength ofstay ofthe resident,variouscontractterms and projected price ofproperty attim e ofre-leasing.

Page |10

N otes to the FinancialStatem ents

IngeniaC om m unitiesFund and IngeniaC om m unitiesM anagem entTrust Forthe sixm onthsended 31D ecem ber2017

2. ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)

(b) C riticaljudgem ents in applying the entity’s accounting policies

There w ere no judgem ents,apartfrom those involvingestim ations,thatm anagem enthasm ade in the process ofapplying the entity’s accounting policies that had asignificant effect on the am ounts recognised in the financialreport.

3. SEGMENT INFORMATION

(a) D escription ofsegm ents

The Trustsinvestpredom inantly in rentalpropertieslocated in A ustraliaw ith fourreportable segm ents:

• IngeniaLifestyle and Holidays O perations –lifestyle com m unities com prising perm anent and tourism accom m odation;

• IngeniaLifestyle D evelopment–com prising the developm entand sale ofm anufactured hom es;

• IngeniaG ardens–rentalcom m unities;and

• IngeniaSettlers–deferred m anagem entfee com m unities.

The Trustshave identified theiroperating segm entsbased on the internalreportsthatare review ed and used by the chiefoperating decision m aker in assessing perform ance and determ ining the allocation ofresources. O therparts ofthe Trusts are neither an operating segm ent norpart ofan operating segm ent.A ssets thatdo notbelong to an operating segm entare described below as“C orporate /O ther”.

The resultsofthe Trustsare affectedby the seasonality ofLifestyle andHoliday com m unities.O ccupancy rates of tourism cabins are typically higher in the period D ecem ber through to M arch each year due to their geographiclocation and sum m erholiday m onthsincreasing dem and forholiday bookings.

Page |11

Notes to the Financial Statements

Ingenia Communities Fund and Ingenia Communities Management Trust For the six months ended 31 December 2017

3. SEGMENT INFORMATION (CONTINUED)

(b) ICF - 31 December 2017 Segment Revenue External segment revenue Total revenue Segment underlying profit External segment revenue Property expenses Administrative expenses Responsible entity fees Depreciation expense Earnings before interest and tax Net finance income /(expense) Underlying profit Net gain/(loss) on change in fair value of Investment properties Other Profit after tax Segment Assets (c) ICF - 31 December 2016 Segment Revenue External segment revenue Total revenue Segment underlying profit External segment revenue Property expenses Administrative expenses Responsible entity fees Depreciation expense Earnings before interest and tax Net finance income Underlying profit Net gain/(loss) on change in fair value of Investment properties Other Net (loss) on disposal of investment properties Profit after tax Segment Assets	L&H Operations Ingenia Gardens Ingenia Settlers Corporate & Other Total $’000 $’000 $’000 $’000 $’000 192 4,359 - - 4,551 192 4,359 - - 4,551 192 4,359 - - 4,551 - - - (469) (469) - - - (138) (138) - - - (1,622) (1,622) - - - (13) (13) 192 4,359 - (2,242) 2,309 - - 377 8,564 8,941 192 4,359 377 6,322 11,250 3,087 888 - - 3,975 - - - (36) (36) 3,279 5,247 377 6,286 15,189 16,482 143,239 10,445 510,275 680,441 L&H Operations Ingenia Gardens Ingenia Settlers Corporate & Other Total $’000 $’000 $’000 $’000 $’000 192 4,359 - - 4,551
	192 4,359 - - 4,551
	192 4,359 - - 4,551 - - - (502) (502) - - - (139) (139) - - - (1,297) (1,297) - - - (12) (12)
	192 4,359 - (1,950) 2,601
	- - 988 5,843 6,831
	192 4,359 988 3,893 9,432
	2,477 4,311 - - 6,788 - - - 152 152 - - (27,556) - (27,556)
	2,669 8,670 (26,568) 4,045 (11,184)
	10,465 139,519 10,460 344,314 504,758

Page | 12

Notes to the Financial Statements

Ingenia Communities Fund and Ingenia Communities Management Trust For the six months ended 31 December 2017

3. SEGMENT INFORMATION (CONTINUED)

(d) ICMT - 31 December 2017 Segment Revenue External segment revenue Total revenue Segment underlying profit External segment revenue Property expenses Cost of manufactured homes sold Employee expenses Administrative expenses Operational, marketing and selling expenses Service Station expenses Responsible entity fees Depreciation and amortisation expense Earnings before interest and tax Income tax expense Net finance expense Underlying profit Net gain/(loss) on change in fair value of Investment properties Other Income tax expense Profit after tax Segment Assets	L&H Operations L&H Development Ingenia Gardens $’000 $’000 $’000 36,373 25,104 14,489	Ingenia Settlers Corporate & Other Total $’000 $’000 $’000 868 48 76,882
	36,373 25,104 14,489	868 48 76,882
	36,373 25,104 14,489 (9,106) (240) (4,139) - (14,569) - (8,351) (4,129) (3,578) (1,397) (279) (254) (1,101) (1,579) (410) (2,985) - - - - - (199) (153) (54)	868 48 76,882 (253) (4,941) (18,679) - - (14,569) (268) - (16,326) (51) (133) (2,114) (39) (26) (3,155) - - (2,985) - (1,533) (1,533) (10) - (416)
	13,234 4,155 6,054	247 (6,585) 17,105
	- - - - - -	- (1,311) (1,311) - (12,284) (12,284)
	13,234 4,155 6,054	247 (20,180) 3,510
	(1,103) 644 - - - - - - -	(1,619) - (2,078) 17 (11) 6 - 619 619
	12,131 4,799 6,054	(1,355) (19,572) 2,057
	444,415 160,334 4,122	34,379 6,862 650,112

Page | 13

Notes to the Financial Statements

Ingenia Communities Fund and Ingenia Communities Management Trust For the six months ended 31 December 2017

3. SEGMENT INFORMATION (CONTINUED)

(e) ICMT - 31 December 2016 Segment Revenue External segment revenue Reclassification of gain on newly constructed villages Total revenue Segment underlying profit External segment revenue Property expenses Cost of manufactured homes sold Employee expenses Administrative expenses Operational, marketing and selling expenses Service Station expenses Responsible entity fees Depreciation and amortisation expense Earnings before interest and tax Income tax expense Net finance expense Underlying profit Net gain/(loss) on change in fair value of Investment properties Other Reclassification of gain on newly constructed villages Net (loss) on disposal of investment properties Income tax expense Profit after tax Segment Assets	L&H Operations L&H Development Ingenia Gardens $’000 $’000 $’000 24,615 24,850 14,080 - - -	Ingenia Settlers Corporate & Other Total $’000 $’000 $’000 2,495 20 66,060 (633) - (633)
	24,615 24,850 14,080	1,862 20 65,427
	24,615 24,850 14,080 (6,524) (205) (8,385) - (16,083) - (5,830) (3,348) (3,461) (916) (316) (270) (747) (858) (464) (3,019) - - - - - (110) (120) (62)	2,495 20 66,060 (529) (775) (16,418) - - (16,083) (465) 92 (13,012) (78) (170) (1,750) (183) (455) (2,707) - - (3,019) - (1,482) (1,482) (15) - (307)
	7,469 3,920 1,438	1,225 (2,770) 11,282
	- - - - - -	- 148 148 - (9,801) (9,801)
	7,469 3,920 1,438	1,225 (12,423) 1,629
	1,156 - - - - - - - - (812) - - - - -	(63) - 1,093 85 - 85 (633) - (633) 20,513 - 19,701 - (2,135) (2,135)
	7,813 3,920 1,438	21,127 (14,558) 19,740
	277,077 134,309 4,660	37,263 7,577 460,886

Page | 14

N otes to the FinancialStatem ents

IngeniaC om m unitiesFund and IngeniaC om m unitiesM anagem entTrust Forthe sixm onthsended 31D ecem ber2017

4. EARNINGS PER UNIT

4. EARNINGS PER UNIT
Profit/(loss)attributable to unitholders($’000) W eighted average num berofunitsoutstanding (thousands) Issued units(thousands) D ilutive units(thousands) Long-term incentives Short-term incentives W eighted average num berofissued and dilutive potentialunitsoutstanding (thousands) Basic earnings per unit (cents) Dilutive earnings per unit (cents) 5. INVENTORIES M anufactured hom es C om pleted U nderconstruction Service station fueland supplies Total inventories	Ingenia Communities Fund Ingenia Communities Management Trust 31 Dec 2017 31 Dec 2016 31 Dec 2017 31 Dec 2016 $’000 $’000 $’000 $’000 15,189 (11,184) 2,057 19,740 206,906 176,211 206,906 176,211 544 405 544 405 94 99 94 99 207,544 176,715 207,544 176,715 7.3 (6.3) 1.0 11.2 7.3 (6.3) 1.0 11.2 Ingenia Communities Fund Ingenia Communities Management Trust 31 Dec 2017 30 Jun 2017 31 Dec 2017 30 Jun 2017 $’000 $’000 $’000 $’000 - - 13,668 15,247 - - 11,720 6,190 - - 280 160
	- - 25,668 21,597

The m anufactured hom e balance includes:

• 80 new com pleted hom es(30 Jun 2017:86)

• 11refurbished/renovated/annualscom pleted hom es(30 Jun 2017:9)

• M anufactured hom es under construction includes partially com pleted hom es at different stages of developm ent.Italso includesdem olition,site preparation costsand buybackson future developm ent sites.

6. ASSETS AND LIABILITIES HELD FOR SALE

(a) Summary of carrying values

The follow ing are the carrying valuesofassetsheld forsale:

Note Investm entpropertiesheld forsale: M eadow Springs,M andurah,W A (1) Lake M acquarie (Lifestyle),M orisset,N SW (1) C hain Valley B ay,C hain Valley B ay,N SW Total assets held for sale 7(b)	Ingenia Communities Fund Ingenia Communities Management Trust 31 Dec 2017 30 Jun 2017 31 Dec 2017 30 Jun 2017 $’000 $’000 $’000 $’000 - - 18,632 - - - 7,020 - - - 4,730 -
	- - 30,382 -

(1)M eadow Springsand Lake M acquarie w ere sold in January 2018 and February 2018 respectively (N ote 13).

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N otes to the FinancialStatem ents

IngeniaC om m unitiesFund and IngeniaC om m unitiesM anagem entTrust Forthe sixm onthsended 31D ecem ber2017

6. ASSETS AND LIABILITIES HELD FOR SALE (CONTINUED)

(b) Summary of carrying amounts – loans

The follow ing is asum m ary ofthe carrying am ounts ofthe loans associated w ith investm ent properties held forsale:

forsale:	forsale:
Note N etresidentloans–M eadow Springs, M andurah,W A 10(b) 7. INVESTMENT PROPERTIES (a) Summary of carrying amounts C om pleted properties Propertiesunderdevelopm ent Total carrying amount (b) Movements in carrying amounts Carrying amount at beginning of period A cquisitions E xpenditure capitalised N ettransferfrom /(to)inventory Transferofcrossstaple lease N etchange in fairvalue Investm entproperty Residentloans Transferto assetsheld forsale D isposals C arrying value N etlosson disposalofinvestm entproperty Carrying amount at the end of the period(1)		Ingenia Communities Fund Ingenia Communities Management Trust 31 Dec 2017 30 Jun 2017 31 Dec 2017 30 Jun 2017 $’000 $’000 $’000 $’000 - - 14,130 -
		Ingenia Communities Fund Ingenia Communities Management Trust 31 Dec 2017 30 Jun 2017 31 Dec 2017 30 Jun 2017 $’000 $’000 $’000 $’000 157,055 154,556 450,360 428,815 4,797 - 121,784 110,102 161,852 154,556 572,144 538,917 Ingenia Communities Fund Ingenia Communities Management Trust 31 Dec 2017 30 Jun 2017 31 Dec 2017 30 Jun 2017 $’000 $’000 $’000 $’000 154,556 162,795 538,917 547,950 - - 37,202 174,883 3,321 3,627 28,738 24,935 - 9,690 - (9,690) 3,975 6,000 (1,424) 6,373 - - (656) - - - (30,382) - - - (251) (224,652) - (27,556) - 19,118 161,852 154,556 572,144 538,917

(1)N ote thatin the reconciliation above,the m ovem entsfor31D ecem ber2017are fora6 m onth period,w hilstcom parative 30 June 2017m ovem entisfora12 m onth period.

8. TRADE AND OTHER PAYABLES

. TRADE AND OTHER PAYABLES
Current Trade payablesand accruals D eposits O therunearned incom e Non-current O ther	Ingenia Communities Fund Ingenia Communities Management Trust 31 Dec 2017 30 Jun 2017 31 Dec 2017 30 Jun 2017 $’000 $’000 $’000 $’000 2,089 1,822 15,607 17,562 - - 7,034 4,562 - - 1,254 1,350
	2,089 1,822 23,895 23,474
	- - 167 167

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IngeniaC om m unitiesFund and IngeniaC om m unitiesM anagem entTrust Forthe sixm onthsended 31D ecem ber2017

N otes to the FinancialStatem ents

9. BORROWINGS

. BORROWINGS
Current Finance leases Non-current B ank debt Prepaid borrow ing costs Finance leases	Ingenia Communities Fund Ingenia Communities Management Trust 31 Dec 2017 30 Jun 2017 31 Dec 2017 30 Jun 2017 $’000 $’000 $’000 $’000 - - 486 493
	231,364 166,464 - - (1,471) (1,735) - - - - 13,781 13,913
	229,893 164,729 13,781 13,913

(a) Bank debt

The total$300 m illion in debtfacilities(2016:$200 m illion)isprovided by three A ustralian banks.The facility m aturity datesare:

• 12 February 2020 ($124.6 m illion);and

• 12 February 2022 ($175.4 m illion)

A sat31D ecem ber2017,the facilitieshave been draw n to $231.4 m illion (30 June 2017:$166.5m illion).The carrying value ofinvestm entproperty netofresidentliabilitiesatreporting date forthe G roup’sA ustralian propertiespledged assecurity is$679.8 m illion (30 June 2017:$602.9 m illion).

(b) Bank guarantees

The G roup hasthe ability to utilise itsbank facilitiesto provide bank guarantees,w hich at31D ecember2017 w ere $11.1m illion (30 June 2017:$10.8 m illion).

(c) Finance leases

The G roup hasentered into finance leasesforthe follow ing Lifestyle and Holidaysinvestm entproperties:

• G osford C ity C ouncilforthe land and facilitiesofE ttalong B each

• C row n leasesforthe land ofO ne M ile B each

• C row n lease forthe land ofB ig 4 B roulee B each

• C row n lease forthe land ofSouth W estRocks

The leasesare long-term in nature and range betw een 9 yearsto perpetuity.

10. RETIREMENT VILLAGE RESIDENT LOANS

(a) Summary of carrying amounts G rossresidentloans A ccrued deferred m anagem entfee N etresidentloans (b) Movements in carrying amounts C arrying am ountatbeginning ofperiod A ccrued deferred m anagem entfee incom e D eferred m anagem entfee cash collected Proceedsfrom residentloans Repaym entofresidentloans Transferto liabilitiesheld forsale D isposalofvillages O ther	Ingenia Communities Fund Ingenia Communities Management Trust 31 Dec 2017 30 Jun 2017 31 Dec 2017 30 Jun 2017 $’000 $’000 $’000 $’000 - - 15,648 30,155 - - (3,233) (2,954)
	- - 12,415 27,201
	- - 27,201 207,483 - - (466) (1,825) - - 205 465 - - 387 3,411 - - (777) (2,191) - - (14,130) - - - - (180,283) - - (5) 141
	- - 12,415 27,201

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N otes to the FinancialStatem ents

IngeniaC om m unitiesFund and IngeniaC om m unitiesM anagem entTrust Forthe sixm onthsended 31D ecem ber2017

11. ISSUED UNITS

11. ISSUED UNITS
(a) Carrying values At beginning of period Issued during the year: D istribution reinvestm entplan Perform ance quantum rights Institutionalplacem entand rightsissue Security purchase plan Short-term incentive plan Institutionalplacem entand rightsissue costs At end of period The closing balance isattributable to the unitholdersof: IngeniaC om m unitiesFund IngeniaC om m unitiesM anagem entTrust (b) Number of issued units At beginning of period Issued during the period: Perform ance quantum rights D istribution reinvestm entplan Security purchase plan Institutionalplacem entand rightsissue Short-term incentive plan At end of period	Ingenia Communities Fund 31 Dec 2017 30 Jun 2017 $’000 $’000 755,571 679,161 1,915 5,027 - 1,087 - 64,766 - 7,641 - 225 - (2,336)	Ingenia Communities Management Trust 31 Dec 2017 30 Jun 2017 $’000 $’000 43,134 34,019 277 429 - 58 - 8,492 - 430 - 10 - (302)
	757,486 755,571	43,411 43,136
	757,486 755,571 - -	- - 43,411 43,136
	757,486 755,571	43,411 43,136
	Ingenia Communities Fund 31 Dec 2017 30 Jun 2017 $’000 $’000 206,382 172,155 - 599 886 2,049 - 3,023 - 28,479 - 77	Ingenia Communities Management Trust 31 Dec 2017 30 Jun 2017 $’000 $’000 206,382 172,155 - 599 886 2,049 - 3,023 - 28,479 - 77
	207,268 206,382	207,268 206,382

(c) Term of units

A llunitsare fully paid and rank equally w ith each otherforallpurposes.E ach unitentitlesthe holderto one vote,in person orby proxy,atam eeting ofunitholders.

12. COMMITMENTS

IC Fhascom m itm entsforcapitalexpenditure on investm entpropertiesand inventoriescontracted butnot provided foratreporting date of$2,519,733 (30 June 2017:$805,725).

13. SUBSEQUENT EVENTS

Interim distribution

O n 20 February 2018,the D irectors ofIngeniaC om m unities RE Lim ited (“IC RE ”)as responsible entity forIC F resolved to declare an interim distribution of5.1cps (1H17:5.1cps)am ounting to $10.6 m illion to be paid on 14 M arch 2018.The distribution is 21.3% tax deferred and the distribution reinvestm ent plan w illbe in operation forthisdistribution.

Sale ofnon-core assets

O n 21D ecember2017,the Trustsannouncedthe sale ofthree non-core subscale assets.These divestm entsare consistentw ith the G roup’sfocuson divesting non-core assetsin orderto redeploy capitalinto highergrow th lifestyle developm entprojectsincluded;

• The disposalofSettlers M eadow Springs (M andurah,W A ).This sale (inclusive ofthe G roups liability for resident loans) w as com pleted on 31January 2018,w here the G roup received gross proceeds of $4.5m illion.

• The disposalof IngeniaLifestyle Lake M acquarie (M orisset,N SW ).This sale (inclusive ofinventory) w ascom pleted on 2 February 2018,w here the G roup received grossproceedsof$7.1m illion.

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D irectors’D eclaration

IngeniaC om m unitiesFund and IngeniaC om m unitiesM anagem entTrust Forthe sixm onthsended 31D ecem ber2017

In accordance w ith aresolution ofthe D irectorsofIngeniaC om m unitiesRE Lim ited,Istate that:

• In the opinion ofthe D irectors:

• (a) the financialstatem entsand notesofIngeniaC om m unitiesFund and IngeniaC om m unities M anagem entTrustforthe half-yearended 31D ecem ber2017 are in accordance w ith the C orporationsA ct2001including:

  • (i) giving atrue and fairview ofeach Trusts’financialposition asat31D ecem ber2017 and of theirperform ance forthe half-yearended on thatdate;and

  • (ii) com plying w ith A ccounting Standardsand C orporationsRegulations2001;and

• (b) there are reasonable groundsto believe thatIngeniaC om m unitiesFund and IngeniaC om m unities M anagem entTrustw illbe able to pay theirdebtsasand w hen they becom e due and payable.

O n behalfofthe board

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Jim Hazel C hairm an 20 February 2018

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Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001

Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au

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Independent Auditor's Review Report to the unitholders of Ingenia Communities Fund and Ingenia Communities Management Trust (“the Trusts”)

Report on the Half-Year Financial Report

Conclusion

We have reviewed the accompanying half-year financial reports which have been prepared in accordance with ASIC Corporations (Stapled Group Reports) Instrument 2015/838 and comprise:

• the consolidated balance sheet as at 31 December 2017, the consolidated statement of comprehensive income, the statement of changes in unitholders’ interest and the consolidated statement of cash flow for the half-year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of Ingenia Communities Fund, comprising Ingenia Communities Fund and the entities it controlled at half-year end or from time to time during the half-year.

• the consolidated balance sheet as at 31 December 2017, the consolidated statement of comprehensive income, the statement of changes in unitholders’ interest and the consolidated statement of cash flow for the half-year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of Ingenia Communities Management Trust, comprising Ingenia Communities Management Trust and the entities it controlled at half-year end or from time to time during the half-year.

Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the half-year financial reports of the Trusts are not in accordance with the Corporations Act 2001 , including:

• a) giving a true and fair view of each consolidated entity’s financial position as at 31 December 2017 and of its financial 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 .

Directors’ Responsibility for the Half-Year Financial Report

The directors of the Ingenia Communities RE Limited as Responsible Entity of the Trusts are responsible for the preparation of the half-year financial reports that give a true and fair view in accordance with Australian Accounting Standards 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 reports that are 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 reports 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, anything has come to our attention that causes us to believe that the half-year financial reports are not in accordance with the Corporations Act 2001 including: giving a true and fair view of each consolidated entity’s financial position as at 31 December 2017 and its financial performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

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As the auditor of the Trusts and the entities they controlled during the half-year, 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.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 . We have given to the directors of the Responsible Entity a written Auditor’s Independence Declaration, a copy of which is included in the Directors’ Report.

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Ernst & Young

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Megan Wilson Partner Sydney 20 February 2018

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

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