MUSTERA PROPERTY GROUP LIMITED — Annual Report 2021

Aug 30, 2021

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ACN 142 375 522

ASX Appendix 4E Preliminary Final Report

For the year ended 30 June 2021 (incorporating information pursuant to ASX Listing Rule 4.3A)

Appendix 4E Preliminary Final Report to the Australian Securities Exchange Mustera Property Group Ltd and Controlled Entities – ABN 13 142 375 522 Year ended 30 June 2021

The following information is provided to the ASX under listing rule 4.3A. The Appendix 4E should be read in conjunction with the annual financial report of Mustera Property Group Ltd for the year ended 30 June 2021.

1. Details of the reporting period and the previous corresponding period.

Reporting Period	Year ended 30 June 2021
Previous Corresponding Reporting Period	Year ended 30 June 2020

2. Results for announcement to the market

2.1 The amount and percentage change up or down from the previous corresponding period of revenue from ordinary activities.

$ Revenue from Ordinary Activities - currentperiod	$'000	5,409
$ Revenue from Ordinary Activities -previousperiod	$'000	2,646
$ change in Revenue from Ordinary Activities	$'000	2,763
% change fromprevious corresponding reporting period	% UP	104%

2.2 The amount and percentage change up or down from the previous corresponding period of profit (loss) from ordinary activities after tax attributable to members.

$ Profit(loss) from ordinary activities after tax - currentperiod	$'000	(2,491)
$ Profit(loss) from ordinary activities after tax -previousperiod	$'000	(1,066)
$ change inprofit(loss) from ordinary activities after tax	$'000	(1,425)
% change fromprevious corresponding reporting period	% UP	134%

2.3 The amount and percentage change up or down from the previous corresponding period of net profit (loss) for the period attributable to members.

$ Netprofit(loss) attributable to members - currentperiod	$'000	(2,415)
$ Netprofit(loss) attributable to members -previousperiod	$'000	(1,040)
$ change in netprofit(loss) attributable to members	$'000	(1,375)
% change fromprevious corresponding reporting period	% UP	132

2.4 The amount per security and franked amount per security of final and interim dividends or a statement that it is not proposed to pay dividends.

It is not proposed to pay dividends.

2.5 The record date for determining entitlements to the dividends (if any).

Not applicable.

2.6 A brief explanation of any of the figures in 2.1 to 2.4 necessary to enable the figures to be understood.

Please refer to the review of operations in section 14.

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Appendix 4E Preliminary Final Report to the Australian Securities Exchange Mustera Property Group Ltd and Controlled Entities – ABN 13 142 375 522 Year ended 30 June 2021

3. A statement of comprehensive income together with notes to the statement, prepared in compliance with AASB 101 ‘Presentation of Financial Statements’ or the equivalent foreign accounting standard.

Revenue Cost of sales Gross Profit Other income Property expenses and outgoings Property development costs Employee benefits expenses Administration and overhead costs Amortisation and depreciation Other Income and Expenses Finance income Finance costs (Increase)/Decrease in net assets attributable to unitholders Net Finance Costs Profit/(loss) before income tax Income tax benefit/(expense) Net profit/(loss) for the year Other comprehensive income Items that will not be reclassified to profit or loss Items that may be reclassified subsequently to profit or loss Other comprehensive income for the year, net of tax Total comprehensive income/(loss) for the year attributable to the ordinary equity holders of the Company Total comprehensive income for the period is attributable to: Ordinary equity holders of the parent Non-controlling interest Earnings/(loss) per share (cents) Basic earnings/(loss) per share for the financial year (cents) Diluted earnings/(loss) per share for the financial year (cents)	2021 $ 2020 $ 5,352,010 2,601,741 (2,897,355) -
	2,454,655 2,601,741
	57,439 43,885 (1,106,953) (1,266,276) (1,063,091) (87,710) (974,818) (363,599) (667,559) (607,647) (113,845) (2,740)
	(3,926,266) (2,284,087)
	633 126,913 (555,031) (904,502) (491,453) (626,269)
	(1,045,851) (1,403,858)
	(2,460,023) (1,086,204) (30,638) 20,268
	(2,490,661) (1,065,936)
	- - - -
	- -
	(2,490,661) (1,065,936)
	(2,414,686) (1,040,107) (75,975) (25,829)
	(2,490,661) (1,065,936)
	(2.23) (1.07) N/A N/A

*Diluted loss per share is not shown as all potential ordinary shares on issue would decrease the loss per share and are thus not considered dilutive.

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Appendix 4E Preliminary Final Report to the Australian Securities Exchange Mustera Property Group Ltd and Controlled Entities – ABN 13 142 375 522 Year ended 30 June 2021

4. A statement of financial position together with notes to the statement. The statement of financial position may be condensed but must report as line items each significant class of asset, liability, and equity element with appropriate sub-totals.

CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Other current assets Total Current Assets NON-CURRENT ASSETS Trade and other receivables Inventories Investment property Deferred tax assets Property, plant & equipment Right of use assets Total Non-Current Assets TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Income tax payable Employee benefits Lease liability Borrowings Net assets attributable to property fund unitholders Total Current Liabilities NON-CURRENT LIABILITIES Other payables Lease liability Employee benefits Borrowings Total Non-Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity Other reserves Accumulated losses Non-controlling interest TOTAL EQUITY	2021 $ 2020 $ 421,449 281,321 387,135 211,264 1,189,419 1,486,774 49,220 15,197
	2,047,223 1,994,556
	2,500 2,500 22,253,488 24,133,525 17,425,091 17,359,827 157,723 188,362 123,947 19,343 24,624 -
	39,987,373 41,703,557
	42,034,596 43,698,113
	1,435,190 952,573 6,524 108,471 14,425 17,066 19,988 - 11,655,000 15,358,183 5,441,692 7,017,669
	18,572,819 23,453,962
	2,500 2,500 5,125 - 31,886 - 9,900,000 8,531,000
	9,939,511 8,533,500
	28,512,330 31,987,462
	13,522,266 11,710,651
	16,131,071 11,980,795 687,494 308,019 (3,475,753) (1,061,067) 179,454 482,904
	13,522,266 **11,710,651 **

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Appendix 4E Preliminary Final Report to the Australian Securities Exchange Mustera Property Group Ltd and Controlled Entities – ABN 13 142 375 522 Year ended 30 June 2021

5. A statement of cash flows together with notes to the statement. The statement of cash flows may be condensed but must report as line items each significant form of cash flow and comply with the disclosure requirements of AASB 107 “Statement of Cash Flows’, or for foreign entities, the equivalent foreign accounting standard.

Cash flows from operating activities Receipts in the course of operations Receipts from repayment of vendor finance loan Other receipts Payments in the course of operations Payments for property held for development Interest received Interest paid Income tax refund/(paid) Net cash inflow/(outflow) from operating activities Cash flows from investing activities Payments for property, plant and equipment Payments for leasehold improvements Payments for purchase of units in the Fund Payments for purchase of units in the Fund Proceeds from sale of units in the Fund Payments for transactions with non controlling interests Net cash (outflow)/ inflow from investing activities Cash flows from financing activities Distributions – property fund Proceeds from borrowings Repayment of borrowings Cash allocated to term deposits Payment of lease liabilities Proceeds from share issue Net cash inflow/(outflow) from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at 1 July 2020 Cash and cash equivalents at 30 June 2021	2021 $ 2020 $ 5,331,161 2,682,539 - 3,410,300 58,176 43,148 (3,113,316) (2,930,904) (719,963) (305,802) 213 126,913 (295,924) (734,904) (101,947) (325,181)
	1,161,658 1,966,109
	(204,929) (5,055) (65,264) - - (250,000) (2,900,000) - 1,250,000 - (425,000) -
	(2,345,193) (255,055)
	(417,430) (655,143) 5,458,805 3,275,000 (7,792,988) (4,909,433) (60,000) (83,746) (15,000) - 4,150,276 -
	1,323,663 (2,373,322)
	140,128 (662,268) 281,321 943,589
	421,449 281,321

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Appendix 4E Preliminary Final Report to the Australian Securities Exchange Mustera Property Group Ltd and Controlled Entities – ABN 13 142 375 522 Year ended 30 June 2021

6. A statement of retained earnings, or a statement of changes in equity, showing movements.

Balance at 1 July 2019 Loss for the year Total comprehensive loss for the year Balance at 30 June 2020	Contributed Equity $ 11,980,795 - - 11,980,795	Other Reserves $ 308,019 - - 308,019	Other Reserves $ 308,019 - - 308,019	Accumulated Losses $ (20,961) (1,040,107) (1,040,107) (1,061,067)	Accumulated Losses $ (20,961) (1,040,107) (1,040,107) (1,061,067)	Total $ 12,267,853 (1,040,107) (1,040,107) (11,227,747)	Non- controlling interests $ 508,733 (25,829) (25,829) 482,904	Total Equity $ 12,776,586 (1,065,936)
								(1,065,936)
								11,710,651
Balance at 1 July 2020	11,980,795	308,019		(1,061,067)		(11,227,747)	482,904	11,710,651
Loss for the year	-	-		(2,414,686)		(2,414,686)	(75,975)	(2,490,661)
Total comprehensive loss for the year	-	-		(2,414,686)		(2,414,686)	(75,975)	(2,490,661)
Transactions with equity holders in their capacity as equity holders:
Shares issued, net of costs	4,150,276	-		-		4,150,276	-	4,150,276
Performance rights issue	-	577,000		-		577,000	-	577,000
Transactions with non controlling interests	-	(197,525)		-		(197,525)	(227,475)	(425,000)
Balance at 30 June 2021	16,131,071	687,494		(3,475,753)		13,342,812	179,454	13,522,266

7. Details of individual and total dividends or distributions and dividend or distribution payments. The details must include the date on which each dividend or distribution is payable and (if known) the amount per security of foreign source dividend or distribution.

Nil.

8. Details of any dividend or distribution reinvestment plans in operation and the last date for the receipt of an election notice for participation in any dividend or distribution reinvestment plan.

Nil.

9. Net tangible assets per security with the comparative figure for the previous corresponding period.

Net tangible assetsper security	Cents	11.6 cents
Previous corresponding period	Cents	11.8 cents

10. Details of entities over which control has been gained or lost during the period, including the following.

10.1 Name of the entity.

The Company has not gained or lost control of any entity during the year.

10.2 The date of the gain or loss of control.

Not Applicable.

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Appendix 4E Preliminary Final Report to the Australian Securities Exchange Mustera Property Group Ltd and Controlled Entities – ABN 13 142 375 522 Year ended 30 June 2021

10.3 Where material to an understanding of the report - the contribution of such entities to the reporting entity’s profit from ordinary activities during the period and the profit or loss of such entities during the whole of the previous corresponding period.

Not applicable.

11. Details of associates and joint venture entities including the following.

11.1 Name of the associate or joint venture entity.

Nil.

11.2 Details of the reporting entity’s percentage holding in each of these entities.

Not applicable.

11.3 Where material to an understanding of the report – aggregate share of profits (losses) of these entities, details of contributions to net profit for each of these entities, and with comparative figures for each of these disclosures for the previous corresponding period.

Not applicable.

12. Any other significant information needed by an investor to make an informed assessment of the entity’s financial performance and financial position.

Not applicable.

13. For foreign entities, which set of accounting standards is used in compiling the report (e.g. International Financial Reporting Standards).

Not applicable.

14. A commentary on the results for the period. The commentary must be sufficient for the user to be able to compare the information presented with equivalent information for previous periods. The commentary must include any significant information needed by an investor to make an informed assessment of the entity’s activities and results, which would include but not be limited to discussion of the following.

REVIEW OF OPERATIONS

The Group recorded a loss of $2,490,661 for the financial year (2020: loss of $1,065,936).

Mustera continued with its core business during the year including the development of residential apartments and funds management. Revenue of $5.35m was recorded during the year received from rental income, fund management fees and the sale of inventory. No new projects reached completion during the year.

During the year, the Company progressed with its flagship project, Forbes Residences in Applecross. The Company commenced with its marketing campaign in Q4 2020 and at 30 June 2021 had 32 apartments under contract including two penthouse apartments. Strong interest levels have been from owner occupiers downsizing locally who recognise the boutique nature of the project as well as the green and sustainable initiatives driven though its international design practices.

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Appendix 4E Preliminary Final Report to the Australian Securities Exchange Mustera Property Group Ltd and Controlled Entities – ABN 13 142 375 522 Year ended 30 June 2021

After a competitive tender process, the Company appointed PACT Construction Pty Ltd to build its flagship project. They have a proven track record of delivering high quality projects and has successfully built numerous residential projects in Perth. The appointment of a builder is a major milestone for the Project and the Company are pleased to have a builder with the local expertise and proven track record on board. Construction is commencing in September 2021.

The Company also divested its Belmont property being considered a non-core asset in June 2021.

Mustera continued to focus on progressing its portfolio of development assets and delivering rental revenue and management fees through its investments during the year.

Further details of the Group’s operating activities during the year are outlined below.

COMPLETED PROJECTS

Victoria Quarter, Lot 803 Foundry Road, Midland WA – One apartment was sold during the year and the remaining four apartments are currently under contract and will settle in September 2021.

FUTURE PROJECTS

10 Forbes Road, Applecross WA - Development Approval was issued in April 2020 for 57 apartments, food and beverage and commercial office space over 13 floors.

32 apartments are sold and under contract at 30 June 2021.

In May 2021 the Company appointed PACT Construction Pty Ltd as the contractor to construct the Forbes project. Construction is due to commence in September 2021 with an estimated completion in Q2 2023. The Company continues to market the apartments for sale.

75 Haig Park Circle, East Perth WA - The property comprises a 2,233m[2] site and is situated near the corner of Plain and Royal Street, 1.5 km from the Perth Central Business District. Improvements include an open air at-grade car park with fifty car bays. The property is currently leased for public parking.

The City of Perth has adopted design guidelines to introduce development standards for the property. The scheme amendment was approved by the Minister in May 2021.

Consistent with the Group’s strategy, rental income is being generated from the leased property whilst development planning and approvals are being undertaken.

15 McCabe Street, North Fremantle WA – The property, with direct ocean and river views, comprises office improvements of approximately 2,000m[2] over two levels, on a 2,398m[2] site.

The Group has continued to progress with the preliminary design and planning for the development in anticipation of applying for planning approval in late 2021.

Consistent with the Group’s strategy, rental income is being generated from the leased property whilst

development planning is being undertaken.

Grace Quarter, Lot 801 Helena Street, Midland WA – The 2,390m[2] site is located on the corner of Helena Street and Yelverton Drive and forms a part of the Midland Railway Workshops precinct.

The Group continues to assess the market conditions in anticipation of reinstating the expired development approval. In addition, the Company is also looking at alternative development options for the property.

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Appendix 4E Preliminary Final Report to the Australian Securities Exchange Mustera Property Group Ltd and Controlled Entities – ABN 13 142 375 522 Year ended 30 June 2021

14.1 The earnings per security and the nature of any dilution aspects.

EARNINGS PER SHARE Loss after income tax attributable to ordinary shareholders Weighted average number of ordinary shares used in calculating basic earnings per share Adjustments for calculation of diluted earnings per share: Options over ordinary shares Weighted average number of ordinary shares used in calculating diluted earnings per share Basic earnings per share Diluted earnings per share	2021 $ 2020 $ (2,414,686) (1,040,107)
	Number Number 111,532,525 99,399,020
	- -
	111,532,525 99,399,020
	Cents Cents (2.17) (1.04) N/A N/A

14.2 Returns to shareholders including distributions and buy backs.

Nil.

14.3 Significant features of operating performance.

REVENUE Rental income and recoverable outgoings Sale of inventory	2021 $ 2020 $ 2,439,607 2,601,741 2,912,403 -
	5,352,010 2,601,741

14.4 The results of segments that are significant to an understanding of the business as a whole.

SEGMENT INFORMATION

Identification of reportable operating segments

The consolidated entity has identified two reportable segments, being property investment and property development. The identification of reportable segments is based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers ('CODM')) in assessing performance and in determining the allocation of resources.

Accounting policies

The accounting policies adopted for internal reporting to the CODM are consistent with those adopted in the financial statements.

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Appendix 4E Preliminary Final Report to the Australian Securities Exchange Mustera Property Group Ltd and Controlled Entities – ABN 13 142 375 522 Year ended 30 June 2021

Segment information

30 June 2021 Property Investment $ Property Development $ Other1 $ Segment revenue and other income 1,591,320 3,761,323 57,439 Interest expenses 175,079 289,372 90,579 Segment result 718,351 (2,082,814) (1,049,223) Segment assets 17,359,827 22,405,209 2,269,560 Segment liabilities 15,341,692 11,908,676 1,261,963 30 June 2020 Segment revenue and other income 1,672,203 929,538 43,885 Interest expenses 275,760 422,455 206,287 Segment result 713,235 (1,097,537) (665,805) Segment assets 17,359,827 24,158,916 2,179,370 Segment liabilities 16,917,669 14,139,890 931,903	Group $ 5,410,082
	555,030
	(2,414,686)
	42,034,596
	28,512,331
	2,645,626
	904,502
	(1,040,107)
	43,698,113
	31,987,462

Note:

1. This column includes head office and group services which are not allocated to any reportable segment.

14.5 A discussion of trends in performance.

Please refer to section 14.

14.6 Any other factors which have affected the results in the period or which are likely to affect results in the future, including where the effect could not be quantified.

Not applicable.

15. A statement as to whether the report is based on accounts which have been audited or subject to review, are in the process of being audited or reviewed, or have not yet been audited or reviewed.

This report is based on accounts that are in the process of being audited.

16. If the accounts have not yet been audited and are likely to contain an independent audit report that is subject to a modified opinion, emphasis of matter or other matter paragraph, a description of the modified opinion, emphasis of matter or other matter paragraph.

Not applicable.

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Appendix 4E Preliminary Final Report to the Australian Securities Exchange Mustera Property Group Ltd and Controlled Entities – ABN 13 142 375 522 Year ended 30 June 2021

17. If the accounts have been audited and contain an independent audit report that is subject to a modified opinion, emphasis of matter or other matter paragraph, a description of the modified opinion, emphasis of matter or other matter paragraph.

Not applicable.

Dated at Perth, Western Australia this 31[st] day of August 2021.

Authorised for release by the Board of Directors.

Nicholas Zborowski

Executive Director

Mustera Property Group Ltd

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