Annual Report 2011 Success Through Experience

Peet Limited Peet Limited " Peet is committed to growth and prosperity for our shareholders, syndicate investors and the residents of our quality masterplanned communities".

Peet Values	2
Business Overview	5
Performance at a Glance	6
Chairman's Review	8
Managing Director and
Chief Executive Offi cer's Review	10
Operational Review	14
Corporate Calendar	21
Corporate Governance Statement	22

Board of Directors	30
Directors' Report	32
Auditor's Independence Declaration	52
Financial Report	53
Directors' Declaration	124
Independent Audit Report to the Members	125
Shareholder Information	127
Corporate Directory	129

Peet Values

Integrity

We act with high integrity through open, honest and professional conduct.

Respect

We treat our team, customers and the environment with respect, dignity and equality.

Teamwork

We recognise the strength of working together and encourage the development of our people and the sharing of knowledge.

Adaptability

We embrace change and foster creativity, initiative, innovation and embrace progressive thinking.

Accountability

We respect the responsibility invested in us and have ownership and the freedom to act to deliver constant improvements.

Customer service

We strive to deliver a high standard of prompt, effi cient and courteous service to our customers, both internal and external.

1/ Cardinia Lakes, VIC
2/ Burns Beach Estate, WA
3/ Vantage, QLD
4/ The Village at Wellard, WA

1/ Greenwood Grove, QLD 2/ Kingsford at Point Cook, VIC
3/ The Rise, VIC
4/ Lakelands Private Estate, WA

Business Overview

Peet Limited is focused on acquiring, developing and marketing land under a funds management model.

We are committed to growth and prosperity for our shareholders, syndicate investors and the residents of our quality, masterplanned communities across Australia.

With a sound governance framework and quality infrastructure, a breadth of business skills and project management systems and procedures, Peet effectively and effi ciently manages a land bank of more than 50,600 lots in various growth corridors around the country.

The Group employs around 150 people in offi ces in Perth, Melbourne and Brisbane. It has specialist inhouse expertise in a range of relevant disciplines and also draws on the specialist expertise of the very best consultants as required for each residential land development project it brings to life.

The results are masterplanned residential estates that set new standards in industry best practice, earn coveted industry awards and deliver quality communities for tens of thousands of Australians.

In the 2011 fi nancial year, Peet has delivered on its stated strategy to grow its Funds Management business including the expansion of its wholesale platform, fi rmly positioning itself for growth in the medium to long-term.

Performance at a Glance

Group revenue up 6% to $188.7 million
Operating EBITDA up 7% to $81.2 million 1
Operating net profi t after tax of $44.0 million1 , up 3%
Operating EPS of 14.6c1 , up 2%
Statutory profi t of $22.1 million, down 47% due to write-downs of inventories and development costs
Full year dividend of 8.5 cents per share
NTA of $1.372 per share, up 10% due to portfolio net valuation gain
Gearing of 33.5%3 , down from 36.0%
2,209 lots sold for a gross value of $474.8 million
1,125 lots under contract as at 30 June 2011 for a gross value of $288.6 million
Continued growth of wholesale funds management platform during the year with Future Fund and MTAA Super partnerships

1/ Quattro: The New Queens Park, WA

Pre write-downs
Net assets adjusted for market value of inventory
(Total interest bearing liabilities (including deferred payment obligations) less cash) / (Total assets adjusted for market value of inventory less cash, less intangible assets)

1/ Lakelands Private Estate, WA 2/ Shorehaven at Alkimos, WA 3/ Warner Lakes, QLD
4/ Skye Valley, VIC

Chairman's Review

On behalf of the Peet Limited Board, I am pleased to present the Peet 2011 Annual Report.

Results

Our focus, as always, has been on achieving the best possible results for shareholders by delivering quality, masterplanned residential communities that are well-located and appeal to a wide range of homebuyers.

The Group has recorded an operating net profi t after tax of $44.0 million4 which represents an increase of 3% over the previous corresponding period.

This is a sound result in what have been challenging market conditions, particularly in the second half of the year. Peet's results were underpinned by the performance of the Funds Management business and its ability to maintain operating margins, despite deteriorating conditions.

The success of the past year is also measured by the strategic positioning of the Group for future growth – the expansion of the Funds Management business and the establishment and development of key partnerships including a very signifi cant mandate with the Future Fund.

The statutory net profi t after tax reduced 47% to $22.1 million due to the writedown of inventories and development costs relating, predominantly, to longer dated assets in the Company's Queensland portfolio.

At the conclusion of the 2011 fi nancial year, the Directors are pleased to have declared a fi nal fully franked dividend for the year of 4.5 cents per share, bringing the total dividend to 8.5 cents per share, fully franked. Once again, the Dividend Reinvestment Plan which provides shareholders with an opportunity to acquire shares in the Company remains activated.

Board and executive

Peet investors and stakeholders can have every confi dence in their Board and Peet's executive team. They have an unwavering commitment to achieving outstanding results across the business and take responsibility for a dedicated group of employees at Peet Limited, as well as expert consultant teams who are appointed for each individual project.

Managing Director and CEO, Brendan Gore and his executive team continue to deliver on the Company's strategic vision, provide strong leadership and encourage innovation and excellence across the business.

The Board has full confi dence in how Peet has been positioned to build on the achievements of the past year over the next period, and the Board looks forward to providing the appropriate strategic direction.

1/ Burns Beach Estate, WA 2/ Kingsford, VIC

I thank my Board colleagues – Graeme Sinclair, Stephen Higgs, Brendan Gore and Anthony Lennon for their hard work, dedication and wisdom over the past year and we thank Peet's Group Company Secretary, Dom Scafetta, for his consistent support and commitment.

I make a special expression of gratitude to Warwick Hemsley who retired from the Peet Limited Board in March 2011. Mr Hemsley served 26 years on the Board of Peet Limited, including 17 years as Managing Director and Chief Executive Offi cer.

He was the Managing Director and Chief Executive Offi cer of Peet when it listed in 2004 and continued as a nonexecutive director after his retirement from the Company in 2007. We thank Mr Hemsley for his very signifi cant contribution to the growth of Peet Limited over more than a quarter of a century.

Outlook

As I write this report, Australian households are responding to the negative sentiment around European economies and concern about the United States' debt ceiling issue and general economic malaise with caution. Despite Australia's own sound banking and fi nancial systems, good employment rates, and bourgeoning resources sector, consumer and business confi dence has weakened, with obvious fl ow-on effects to the residential property sector. These factors have also weighed heavily on Peet's share price.

Nonetheless, there are positive signs for the Australian property market in the longer-term, and for Peet in particular. Peet's portfolio is strategically balanced between Western Australia and Queensland where Australia's resources sector is focussed, and Victoria where our land bank is well located within the urban corridors earmarked to accommodate the forecast population growth.

It is clear that the conditions in the year ahead will present signifi cant challenges, but I remain confi dent in the Group's capacity to meet those challenges and optimise the opportunities that might arise during such times.

Tony Lennon Chairman 30 September 2011

Managing Director and Chief Executive Offi cer's Review

Peet Limited's results for the 2011 fi nancial year demonstrate the effectiveness of our well-stated business strategy – expanding the Group's position in the Australian residential property market through the growth of our funds management platform, strategic partnerships and disciplined capital management.

The changing and challenging market conditions that developed during the latter half of FY11 have intensifi ed in the fi rst quarter of the new fi nancial year. However, Peet has a strong track record of successfully managing through varying economic cycles and, during the past year, we have developed our core strengths and are well positioned to meet the challenges of FY12 and maintain our long-term growth strategy.

Peet continues to be an industry leader in the delivery of high-quality residential communities across Australia. Sales and settlement volumes were lower than expected in FY11, with consumer confi dence falling signifi cantly in the second half of the year, however, this was offset by growth in prices and margins in key business areas and markets. Operating profi t was up 3% to $44.0 million5 and we continued our geographic expansion into Queensland and Western Australia with signifi cant acquisitions and development management appointments that position the Group well for future growth.

Our achievements and acquisitions over the past year underpin our ongoing commitment to our customers – addressing the critical issue of affordability and creating masterplanned communities with a focus on genuine sustainability.

During the year we continued to deliver on our Funds Management strategy, developing our platform comprising retail syndicates and wholesale funds and partnerships, with a focus on large-scale projects in Australia's key markets.

As part of its medium to long-term growth strategy, during the year, Peet added another 17,300 lots with an on-completion value of $2.7 billion to its Funds Management business. This included the Flagstone acquisition in South East Queensland and other new projects in Perth's northern and southern coastal corridors.

The major acquisition of a 50% interest in MTAA Super's 1,244-hectare Flagstone West landholding is located next to it's Flagstone East project which has existing services and infrastructure, and a community of around 3,500 residents. Peet will project manage the Flagstone West project and the delivery of the 300 lots remaining in Flagstone East.

The Flagstone West project involves the delivery of an estimated 10,000 residential lots focused on the affordable market segment over the next 25 years, and a 200-hectare town centre for Greater Flagstone with provision for retail centres, neighbourhood activity centres, schools, healthcare, retirement housing, childcare and other community facilities.

With the addition of the Flagstone projects, Peet's land bank increased to more than 50,600 lots with an estimated on-completion value of $9.1 billion (in today's dollars). Almost 70% of the land bank, or $6.3 billion, is held within the Group's Funds Management and Joint Venture businesses.

In late June 2011, we announced a wholesale residential land partnership between Peet Limited and the Future Fund.

The purpose of the partnership is to create new residential communities in Australia's key growth corridors over the medium to long-term. We look forward to working with the Future Fund in acquiring broadacre residential land in areas of projected population growth around the country, and set about developing them into quality residential communities focused principally on the affordable market segment.

1/ Shorehaven at Alkimos, WA

The wholesale funds management growth strategy was identifi ed three years ago as one means of securing signifi cant future earnings while delivering quality results to our institutional partners and their investors and the Company's shareholders, and addressing the critical issues of land supply and affordability across Australia.

These key strategic achievements were highlights in a year impacted by challenging economic conditions, globally and locally.

The Group achieved net operating profi t in the 2011 fi nancial year of $44.0 million6 , representing an increase of 3%. It recorded a 7% increase in EBITDA, taking it to $81.2 million6 for the year and the Group's EBITDA margin remained steady at 43%6 . Revenue increased by 6% to $188.7 million.

Peet's Victorian operations were a key contributor, accounting for 78% of the Group's EBITDA for the year, and the Funds Management business performed very strongly, recording a 21% increase in EBITDA over the previous fi nancial year.

More than 2,200 residential lots were sold during the year (down 14%) for a gross value of $474.8 million. Almost 2,200 lots were settled (down 7%) for a gross value of $485.8 million.

There were 1,125 contracts on hand at 30 June 2011 (down 11%) with a gross value of $288.6 million (down 1%).

The statutory net profi t for the period was $22.1 million, down 47%. This included write-downs in the carrying value of inventories and development costs of $31.3 million (before tax) for the year.

Overall, the 2011 independent bank mortgage valuations of Companyowned land holdings increased to $586 million, resulting in a 10% increase in NTA to $1.377 per share. This NTA does not include the value attributed to the Company's Funds Management business.

The write-downs, however, related predominantly to longer-dated assets in our Queensland portfolio where the impact of natural disasters and deteriorating consumer and business confi dence has been well-documented. The write-downs have no impact on the production pipeline over the next fi ve years and the newly acquired Flagstone West property was not affected by the write-downs.

In line with Peet's stated capital management strategy, we also commenced a process to divest a number of non-core assets during the year. Proceeds received will be used to fund Peet's current development pipeline, reduce debt or pursue other capital management initiatives.

Steps were also taken towards the winding up of the Peet Income Property Fund which has had a focus on investment in the commercial and industrial sectors.

In June 2011, Peet also announced three capital management initiatives which underpin our growth strategy, providing working capital for the strategic expansion of the land bank and investment in several new projects in the year ahead.

Peet continued to comply with all of its debt covenants during the year and we remain committed to maintaining a strong balance sheet.

1/ Warner Lakes, QLD 2/ Carramar Village at Carramar Golf Course Estate, WA

The 2011 fi nancial year was focused on preparing for and investing in Peet's future - balancing the land portfolio, implementing our clearly-stated capital management strategy and positioning the operating business for growth in the medium to long-term with new larger scale managed and Companyowned projects in Western Australia, Queensland and Victoria.

As well as signifi cant developments in our institutional partnerships, Peet also established new relationships and nurtured existing partnerships with some of Australia's leading builders right across the country, and with the community.

Peet's partnerships with investors, government, builders and communities, will continue to be an important part of our success and particularly as we meet the challenges of the 2012 fi nancial year.

We expect that the Australian residential market will continue to be impacted by weak consumer sentiment across the country as householders react to the deterioration in major global economies, rising living costs, speculation over interest rates and ongoing uncertainty and speculative debate over the impact of federal government policy.

However, while the housing market continued to soften during the second half of the 2011 fi nancial year and through the fi rst quarter of FY12, indicators show the trend is cyclical rather than structural and the longterm outlook remains more positive. Household savings are high, dwelling approvals are below the long-term average and population growth is above average – all positive signs for the property market in the longer-term.

Furthermore, while Australian Bureau of Statistics fi gures showed a marginal increase in the number of unemployed in Australia in August 2011 (up 0.1% to 5.3%), the overall rate remains relatively low, and there remains a shortage of skilled labour, particularly in Western Australia and Queensland.

Housing affordability is a critical challenge right across Australia and will remain so in the short to medium term, due to a structural supply/demand imbalance. Peet will play its role in addressing this challenge and meeting market demand for affordable homesites, with its large and fl exible land bank, by expanding its product mix and offering a range of lot sizes in a variety of locations across the country.

In the year ahead, Peet remains focussed on delivering the right projects in the right markets under a capital effi cient model.

Strategic priorities for the Group continue to include:

a clear focus on the businesses of residential land development and funds management;
working with wholesale partners to acquire large-scale greenfi eld developments;
the continued national expansion of the retail syndication and wholesale funds management platform;
a focus on our customers, quality product and community to drive Peet's competitive advantage;
prudent capital management; and
a commitment to being environmentally responsible across its operations.

The Group has a large, geographically balanced land bank and will continue to meet the demands of the market in terms of product, price and service, with a particular focus on the affordable segment.

1/ Quarters, VIC

We will continue to benefi t from the experience and strategic guidance of Peet Limited's Chairman, Tony Lennon and the Board - and, on behalf of the entire Peet team, I thank them for their ongoing support and commitment.

I would also like to thank our shareholders, institutional and joint venture partners, and our retail syndicate investors who can remain confi dent that everyone at Peet is focussed on delivering the best possible results, yearin, year-out.

As we move towards the end of the fi rst quarter of FY12, there are signifi cant market challenges with a number of sectors, including the residential property sector, experiencing more diffi cult conditions.

In the short-term, there are some obvious challenges which require the Group to maintain a sharp focus on its capital management.

Global growth has softened with ongoing concern about European and American debt. At home, household and business confi dence has fallen and employment growth has slowed compared with 2010.

Nonetheless, there are more positive signs in the longer-term and Peet is well positioned to consider opportunities as they arise. The Australian economy continues to benefi t from economic growth in Asia and the high level of commodity prices is contributing to strength in the resources sector which augurs well for Peet in the longer-term, with a large proportion of our land bank in Australia's resource states of Western Australia and Queensland.

As the year progresses we will be closely monitoring the Australian household behaviour response to a range of global and local factors, ensuring that we continue to meet the market – and particularly the affordable market segment – with a wide range of residential product in our key markets of Western Australia, Victoria and Queensland.

We remain confi dent in the fundamental drivers of the Australian economy and in our strategy to deliver business growth in the medium to long-term.

Brendan Gore Managing Director and Chief Executive Offi cer 30 September 2011

Operational Review

Peet's Victorian operations were a key driver, performing particularly well in challenging market conditions.

Group Performance

Peet offers quality residential homesites targeted at the affordable segment of the market in the growth corridors of Perth, Melbourne and South East Queensland.

The Group's sound performance in challenging market conditions across the country in the 2011 fi nancial year was underpinned by the performance of its Funds Management business and its ability to maintain operating margins.

Sales concluded during the year at a number of mature projects and signifi cant investment commenced in new medium to long-term projects including a number of large-scale, Company-owned assets.

While deteriorating consumer confi dence impacted the number of sales and settlements achieved during the year, margins held fi rm and there was a 13% increase in the average price of residential lots settled.

As at 30 June 2011, there were 1,125 contracts on hand, down 11%, with a gross value of $288.6 million – down just 1% in value compared with the same time last year. The decrease in the number of contracts on hand was due primarily to delays in planning approvals on two large Victorian projects, both of which were in production at the start of FY12.

Project portfolio

Peet has successfully re-balanced its land bank with a focus on the longerterm growth states of Western Australia and Queensland, positioning itself for growth in the medium to long-term with new, larger-scale projects in those states and others in Melbourne's key growth corridors.

During the year, Peet acquired a 50% interest in the 1,244 hectare Flagstone West landholding from MTAA Super, which will include the development of a major Town Centre, and will also manage the remaining 300 lots in Flagstone East on behalf of MTAA Super.

The announcement of a partnership between Peet Limited and the Future Fund late in the fi nancial year also gives Peet a mandate to acquire and develop new residential communities in Australia's key growth corridors over the medium to long-term.

As at 30 June 2011, Peet's owned and managed land bank was the equivalent of more than 50,600 lots with an on-completion value (in today's dollars) of $9.1 billion.

More than 35,900 lots with an estimated on-completion value of more than $6.3 billion – or around 70% of the total land bank – form the syndicated or managed pipeline. This refl ects the successful implementation of a key plank of Peet's stated growth strategy – the expansion of its Funds Management business.

" More than 35,900 lots with an estimated on-completion value of more than $6.3 billion – or around 70% of the total land bank – form the syndicated or managed pipeline."

1/ Flagstone, QLD 2/ Quarters, VIC

Highlights

Group revenue of $188.7 million
Average selling price of residential lots settled up 13%
Operating EBITDA of $81.2 million, up 7%8
Operating EBITDA margin of 43%8
More than 2,200 owned and managed lots sold down 14%
Almost 2,200 owned and managed lots settled down 7% with a gross value of $485.8 million
1,125 contracts on hand as at 30 June 2011 with a gross value of $288.6 million value down 1%
Total land bank of more than 50,600 lots with an on-completion value of $9.1 billion

Carrying value of inventories

Overall in FY11, the independent bank mortgage valuations of Companyowned projects showed an increase to $586 million, resulting in a 10% increase in NTA to $1.379 per share. This NTA does not include the value attributed to the Company's Funds Management business.

However, Peet recorded write-downs in the carrying value of inventories and development costs of $31.3 million (before tax) for the year. These related predominately to longer-dated assets in Peet's Queensland portfolio, where the market has declined due to the widespread economic impact of natural disasters and deteriorating business and consumer confi dence.

The carrying value of inventories adjustment has no impact on the production pipeline over the next fi ve years. The newly acquired Flagstone West value was not written down.

Capital management

Peet made signifi cant achievements and delivered on its capital management strategy during the year with the introduction of a new lender and key capital management initiatives including the issuing of $50 million in convertible notes, a fully underwritten share purchase plan of $20 million and the extension of the Group's $300 million syndicated debt facility.

The success of the Group's capital management strategy creates a strong and secure capital environment for growth in the medium to long-term.

It included, during this period, the start of a process to divest a number of non-core assets with the proceeds to be redeployed into Peet's current development pipeline, debt reduction or the pursuit of other capital management initiatives.

At the end of the 2011 fi nancial year Peet had:

a weighted average debt maturity profi le of 3.3 years10;
Group interest cover of 3.7 times; and
Gearing of 33.5%11.

The weighted average cost of debt for the year ended 30 June 2011 was 8.6%10 (including margins). At year end, 91%10 of the Group's interest bearing debt ($217 million10 net of cash) was hedged, with a weighted average hedge maturity of 3.5 years10.

Peet continued to comply with all of its debt covenants during the year.

8. Pre write-downs

9. Net assets adjusted for market value of inventory

10. Excludes assets and liabilities associated with assets and liabilities classifi ed as held for sale

11. (Total interest bearing liabilities (including deferred payment obligations) less cash) / (Total assets adjusted for market value of inventory less cash, less intangible assets)

1/ Artist's Impression, Aston, VIC 2/ Avon Ridge, WA

Highlights

Revenue of $120.6 million from the settlement of 598 lots
Operating EBITDA of $40.1 million12
Operating EBITDA margin of 33%12
423 lots sold for a gross value of $88.3 million
178 contracts on hand for a gross value of $40.7 million

Company-owned Projects

The Group sold more than 420 Company-owned residential lots for a total gross sales value of $88.3 million. This represented a 29% decrease in the number of lots but only a 1.8% decrease in the value of lots sold compared with the previous corresponding period.

A total of almost 600 lots were settled during the year, contributing to an increase in revenue to $120.6 million.

At 30 June 2011, there were 178 contracts on hand with a total gross value of $40.7 million. This was almost half the number of the previous corresponding period, largely due to the delay in planning approvals of key major projects. Those projects were in production at the start of the 2012 fi nancial year.

Peet's Company-owned projects totalled the equivalent of more than 14,700 lots at year end, with an on-completion value of just over $2.8 billion.

1/ Cardinia Lakes, VIC

Highlights

EBITDA up 21% to $30.7 million
Revenue up 26% to $46.4 million
More than 1,620 lots sold for a gross value of $352.5 million
More than 1,460 lots settled for a gross value of $331.1 million
More than 850 contracts on hand as at 30 June 2011 with a gross value of $226.8 million
164 sales and 137 settlements from two joint venture projects

Funds Management

Peet manages and markets residential land developments on behalf of its land syndicates and under joint venture or project management arrangements.

The Group has delivered on its stated business strategy – in particular the growth and increased signifi cance of its Funds Management portfolio. Peet added another 17,300 lots with an on-completion value of $2.7 billion to its Funds Management business during the year. This included a major acquisition at Flagstone in South East Queensland and others in Perth's northern and southern corridors.

The major acquisition of a 50% interest in MTAA Super's 1,244-hectare Flagstone West landholding is situated next to MTAA Super's Flagstone East project for which Peet also takes responsibility for the delivery of the remaining 300 lots.

The Flagstone West project in South East Queensland is being undertaken in partnership with MTAA Super. It involves the delivery of an estimated 10,000 residential lots focussed on the affordable market segment over the next 25 years, and a 200-hectare town centre for Greater Flagstone with provision for retail centres, neighbourhood activity centres, schools, healthcare, retirement housing, childcare and other community facilities.

In February 2011, the Western Australian Government also announced that Peet would manage and market its large, proposed coastal community at Golden Bay, south of Perth.

The new 160-hectare Golden Bay residential community will be a 2,200 dwelling coastal development with Stage 1 land sales expected to commence in the fi rst half of the 2012 fi nancial year.

At 30 June 2011, sales had concluded or were nearing conclusion at a number of syndicated projects, including Brimbank Gardens, The Rise and Tarneit Gardens in Victoria, while new projects including Quarters in Melbourne's south-east were launched.

At year end, the Group's managed lots made up 69% of the total land bank portfolio, and had an estimated on-completion value of $6.3 billion.

A new partnership with the Future Fund provides a mandate to further build the managed portfolio and grow the Group's wholesale funds platform.

Peet has also identifi ed a retail syndicate pipeline and will continue to monitor interest from its retail investor base to determine the timing of a new retail syndicate launch.

Managed projects at Alkimos and Yanchep in Western Australia and at Flagstone and Caboolture in Queensland are among key projects underpinning Peet's performance in the 2012 fi nancial year and beyond.

The Company currently has two joint venture projects with the Western Australian Government.

There were 164 sales at Quattro: The New Queens Park and The Village at Wellard during the year. A total of 137 lots were settled during the year and there were 95 contracts on hand as at 30 June 2011 with a total value of $21.1 million.

In February 2011, close to 1,000 people turned out to mark the opening of The Village at Wellard's new builders' Display Village and, in April 2011, all but fi ve of 33 homesites released by ballot were snapped up in a single morning.

Sustainability

Peet Limited is committed to sustainability and environmental excellence and applies sustainability principles in its development projects and business practices, as well as leading and supporting industry programs and initiatives.

Our priorities in the design, construction and ongoing community capacity building of our larger projects include protecting and celebrating the natural environment, ensuring safety in construction and ongoing occupation, encouraging social well-being and providing for economic opportunity.

Peet also addresses the critical issue of housing affordability by providing a range of lot sizes at different locations to suit a variety of lifestyles and budgets – and with innovative incentives and partnerships to assist homebuyers entering the property market.

During the year:

Avon Ridge at Brigadoon in Western Australia earned UDIA EnviroDevelopment accreditation in the categories of "Water" and "Ecosystems". It recognises Peet's strong focus on environmentallysensitive design, and in particular the effort it has put into water-saving measures, conservation and protecting native plants and animals in the new community. Last year, Shorehaven at Alkimos was the fi rst in Western Australia to receive accreditation in the "Water" category.
A major lakes precinct was offi cially opened at Cardinia Lakes in Victoria completing the transformation of an old quarry area. The eastern lake parklands features a timber amphitheatre, kilometres of walking and bike tracks, exercise stations and two lookouts. The western lake parklands also feature walking and bike tracks. As well as the sustainability outcomes, the works have helped establish an area of premium product within the community.
The million dollar revegetation program at Four Mile Creek at Warner Lakes in Queensland continued, as did restoration work at Cooroy Creek at Greenwood Grove on the Queensland central coast. Planning was also underway for the establishment of wetlands at Riverbank in Caboolture and further environmental work at Vantage in Gladstone.
A bund was designed, in collaboration with Melbourne Water, to protect the Greenvale Reservoir – an important water source for Melbourne adjoining Peet's Greenvale Lakes community. The bund will also provide opportunities for the development of walking and cycling paths around the reservoir.
Construction commenced on the new Community Centre at The Village at Wellard in Western Australia. The Centre will include a range of multi-purpose activity centre uses.
Peet undertook a range of environmental awareness and education initiatives for residents at many of its estates and their wider communities, ranging from the provision of information and tips on how to live more sustainably, through to the organising and sponsorship of community events including National Tree Day.
There were numerous events at Peet communities during the year, bringing together residents and members of the wider community to celebrate important milestones and encourage a sense of community. Among the events were display village openings, festive celebrations and family fun days.

1/ Greenvale Reservoir, VIC 2/ National Tree Day at Warner Lakes, QLD

" The Infl atable rescue boat will be a valuable tool for us as we patrol the beaches, keeping locals and tourists safe during the peak summer season and throughout the year."

Dene Herbert, Shellharbour Surf Life Saving.

Community

Peet Limited is proud to have been part of the Australian community for more than 115 years. Building community capacity and supporting local groups and organisations is an important part of our work around Australia.

From February 2011, Peet has been pleased to support the Perth 2011 ISAF Sailing World Championships – an Olympic qualifying event expected to attract more than 1,400 athletes and offi cials from 80 nations in December 2011.

For the fi fth year, Peet was proud to support the work of Anglicare WA through the 2011 Peet Op Shop Ball for Anglicare. The project has so far raised more than $740,000 and delivered "A suitcase of hope" to many hundreds of children.

By contributing to not for profi t organisations in areas of the arts, social welfare groups and sport, Peet supports a wide range of groups which, in turn, help thousands of Australians in need every year.

In 2011, Peet communities were proud to sponsor more than 40 organisations and initiatives including the arts sector, community development initiatives, sporting groups and environmental programs.

In Victoria, Peet Limited also sponsored the UDIA Young Professional of the Year Award for the fi fth year and the Victorian Planning & Environmental Law Association Young Professional Awards, supporting the development of young professionals in the industry.

In Western Australia, Peet provided support to the UDIA (WA) and a regional conference hosted by the Planning Institute of Australia.

Awards

Peet Limited has been proud to earn a number a coveted industry awards for excellence in planning, design, environmental management and the development of vibrant, sustainable communities. In the past two years it added to its list of awards:

Urban Development Institute of Australia (VIC) Awards for Excellence-Judges' Award Innisfail, VIC

Town of Kwinana, Looking Forward Award The Village at Wellard, WA

Parks and Leisure Australia (National) Awards for Excellence, Inclusive and Connected Communities The Village at Wellard, WA

Parks and Leisure Australia (WA) Awards for Excellence, Inclusive and Connected Communities The Village at Wellard, WA

Urban Development Institute of Australia (QLD) Women In Development Excellence Awards (Industry Support Services category)

Sandra MacKinley, QLD

Australian Marketing Institute (WA) Award New Product Launch

Launch of Shorehaven at Alkimos, WA

1/ Innisfail, VIC 2/ The Village at Wellard, WA

Corporate Calendar

23 September 2011

Record date for fi nal dividend for the year ended 30 June 2011.

30 September 2011

Annual report for the year ended 30 June 2011 lodged with ASX.

14 October 2011

Annual report dispatched to all shareholders.

18 October 2011

Payment date for fi nal dividend for the year ended 30 June 2011.

15 November 2011

Annual General Meeting at the Parmelia Hilton Perth Hotel, Mill Street, Perth at 10.00am (AWST).

February 2012

Release of results for the half year ending 31 December 2011.

Outlined below are the main corporate governance policies and practices in place during the fi nancial year ended 30 June 2011. Unless otherwise stated, these are consistent with the ASX Corporate Governance Council's principles and recommendations and copies of relevant charters and policies are available at www.peet.com.au.

Board of Directors

Role of the Board

The Board of Directors is responsible for the corporate governance structures and practices of the Peet Group. Under the Board charter, the Board's responsibilities include:

setting strategic direction of the Peet Group and monitoring management's performance within that framework;
ensuring there are adequate resources available to meet the Peet Group's objectives;
appointing and removing the Managing Director and Chief Executive Offi cer and overseeing succession plans for the senior executive team;
approving and monitoring fi nancial reporting and capital management;
approving and monitoring the progress of business objectives;
ensuring that any necessary statutory licences (for example, Australian Financial Services Licence) are held and compliance measures are maintained to ensure compliance with the law and licence(s);
ensuring that adequate risk management procedures are in place;
ensuring that the Peet Group has appropriate corporate governance structures in place, including standards of ethical behaviour and a culture of corporate and social responsibility; and
ensuring that the Board is and remains appropriately skilled to meet the changing needs of the Company.

Composition of the Board

Under the Constitution, the minimum number of directors is three. The maximum number of directors is to be fi xed by the directors, but may not be more than 14, unless the Company in general meeting resolves otherwise.

Following the resignation of Mr Warwick Hemsley as a Non-executive Director on 30 March 2011, the Board currently comprises of three non-executive directors (including two independent directors) and two executive directors.

Board Members

Details of the members of the Board, their experience, expertise, qualifi cations and independent status are set out in the Board of Directors section of this report.

The ASX Corporate Governance Council's principles recommend that Boards consist of a majority of independent non-executive directors; however, while the Peet Board does not meet this recommendation, it does consist of a majority of non-executive directors, one of whom is Chairman.

While the overall composition of the Board does not currently meet ASX guidelines on independence, the Directors believe that the current composition has the necessary skills and motivation to ensure that the Company continues to perform strongly.

The Directors are continuing their search for a new independent non-executive director. This will bring the number of independent non-executive directors to three, bringing the composition of the Board closer to ASX guidelines.

Mr Tony Lennon who is (indirectly) the largest shareholder in the Company and the Non-executive Chairman, is not independent but the Board strongly believes that due to the wealth of experience in Peet's business sector and knowledge of the Peet Group business that he brings to the Board, he is the most suitable person to occupy the position of Chairman.

Mr Warwick Hemsley held a nonexecutive position on the Board until his resignation on 30 March 2011. Mr Hemsley is a substantial shareholder in the Company and was Managing Director of the Company up to his retirement from that role in August 2007. He was not considered independent.

Mr Stephen Higgs is deemed to be independent under the principles set out on page 23.

Mr Graeme Sinclair is deemed to be independent under the principles set out on page 23.

Board Diversity

The Board recognises the benefi ts that arise from employee and board diversity and has adopted a Diversity Policy which is available on the Company's website.

The Diversity Policy provides that the Board will seek to develop measurable objectives for the Company to achieve greater gender diversity at board, executive and at a whole of company level.

The Board is required to assess the objectives annually as part of their performance assessment process, and will disclose its progress against these objectives and the proportion of women employees in the whole organisation, at board and various management levels, in the 2012 Annual Report.

Directors' independence

The Board of Peet defi nes an independent director as a non-executive director and:

is not a substantial (as defi ned by Corporations Act) shareholder of the Company or an offi cer of a substantial shareholder who has a fi nancial interest in the substantial shareholder;
within the last three years has not been employed in an executive capacity by the Company or another group member, or been a director after ceasing to hold any such employment;
within the last three years has not been a principal of a material professional adviser or a material consultant to the Company or another group member, or an employee materially associated with the service provider;
is not a material supplier or customer of the Company or other group member, or an offi cer of a material supplier or customer who has a fi nancial interest in the material supplier or customer;
has no material contractual relationship with the Company or another group member other than as a director of the Company or a other group member;
has not served on the Board for a period which could, or could reasonably be perceived to, materially interfere with the director's ability to act in the best interests of the Company; and
is free from any interest and any business or other relationship that could, or could reasonably be perceived to, materially interfere with the director's ability to act in the best interests of the Company.

Materiality for these purposes is determined on both quantitative and qualitative bases. An amount of more than 5% of annual turnover of the Company or Group or 5% of the individual director's net worth is considered material for these purposes. In addition, a transaction of any amount or a relationship is deemed material if knowledge of it may impact the shareholders' understanding of the director's performance.

Term of Offi ce

Apart from the Managing Director, all directors are appointed for a term (maximum of three years) retiring in rotation.

Chairman and Managing Director

The roles of Chairman and Managing Director are strictly separated.

The Chairman is responsible for:

leading the Board in its duties to the Peet Group;
ensuring there are processes and procedures in place to evaluate the performance of the Board, its committees and individual directors;
facilitating effective discussions at Board meetings; and
ensuring effective communication with shareholders.

The Managing Director is responsible for:

strategy and policy direction of the operations of the Peet Group;
the effi cient and effective operation of the Peet Group;
ensuring the Board is provided with accurate and clear information in a timely manner to promote effective decision-making; and
ensuring all material matters affecting the Peet Group are brought to the Board's attention.

Independent Professional Advice

In fulfi lling their duties, each director may obtain independent professional advice at the Company's expense, subject to prior approval of the Chairman, whose approval will not be unreasonably withheld.

Performance Assessment

The Board undergoes periodic formal assessments as and when considered appropriate, and informal self assessment on an ongoing basis.

The formal assessment process generally involves the appointment of an independent, third party consultant to facilitate the process and typically includes the requirement for each director to complete a questionnaire and to be interviewed by the third party consultant. Matters assessed may include the role, composition, procedures, practices and behaviour of the Board, its committees and their members.

This is then generally followed by a facilitated workshop at which the directors discuss the fi ndings (in aggregate) from the questionnaires and interviews and agree on a program of actions.

The fi nal part of the process generally involves individual feedback sessions facilitated by the independent third party consultant.

The Board continuously assesses its performance on an informal basis.

Board Committees

The following committees serve the Board:

Remuneration Committee

The Remuneration Committee meets as frequently as required and during the year held three (3) meetings. The Committee operates in accordance with its charter which is available on the Company's website. Its primary function is to make recommendations to the Board on:

executive remuneration and incentive policies;
the remuneration packages of senior management;
recruitment, retention and termination policies for senior management;
incentive schemes;
superannuation arrangements;
senior management succession plans; and
the remuneration framework for directors, including non-executive directors.

The Remuneration Committee currently consists of two independent directors and the Non-executive Chairman.

The chairperson of the Remuneration Committee is the person appointed by the Board.

The members of the committee during the year were:

Mr SF Higgs (Chairman) Independent Non-executive Director
Mr GW Sinclair Independent Non-executive Director
Mr AW Lennon Non-executive Chairman

Details of these directors' attendance at Remuneration Committee meetings are set out at item 12 in the Directors' Report.

Details of key management personnel remuneration is set out at item 14 in the Directors' Report.

As at the 30 June 2011, the Company's key management personnel comprised the Executive Team, whose members report directly to the Managing Director and Chief Executive Offi cer, and the Directors.

The process for evaluating the performance of the Executive Team members (not including the Managing Director and Chief Executive Offi cer) generally involves an analysis of:

a summary of the executives' highlights for the previous 12 months;
an assessment against the Company's values and behaviours, which is considered a mandatory aspect of the day-to-day performance and an integral part of the Company's culture;
an assessment against personal objectives and key performance indicators; and
an assessment of personal skills and attributes.

This performance evaluation is undertaken by the Managing Director and Chief Executive Offi cer.

A performance evaluation for each member of the Executive Team occurred during the past year in relation to the year ended 30 June 2010 and the process in respect of the year ended 30 June 2011 is currently in progress.

The Managing Director and Chief Executive Offi cer had his performance assessed by the Remuneration Committee and the Board based, primarily, on various Group fi nancial and non-fi nancial performance criteria.

Audit and Risk Management Committee

The purpose of the Audit and Risk Management Committee is to review and monitor the fi nancial affairs of the Company and to ensure there are adequate policies in place in relation to risk management, compliance and internal control systems.

The committee's primary responsibilities include the following:

review the integrity of the Peet Group's fi nancial and external reporting;
review and assess the external auditors' activities, scope and independence;
review the management processes for the identifi cation of signifi cant business risks and exposures and review and assess the adequacy of management information and internal control structures; and
provide assurance that the Peet Group is adequately managing risk relating to corporate governance and is maintaining appropriate controls against confl icts of interest and fraud.

Under its charter, the Audit and Risk Management Committee consists of a minimum of three directors with a majority of independent directors. The Board selects the chairperson of the Audit and Risk Management Committee. The current committee consists of two independent non-executive directors and the Non-executive Chairman.

At the discretion of the Committee, the external auditor and other members of the Board and management are invited to Audit and Risk Management Committee meetings as and when considered appropriate.

The Audit and Risk Management Committee will consider any matters relating to the fi nancial affairs of Peet and any other matter referred to it by the Board.

The Audit and Risk Management Committee charter requires the committee to meet at least three (3) times a year. The Committee held four (4) meetings during the year and all the other directors were invited to these meetings, along with the Chief Financial Offi cer and/or the Group Financial Controller.

The external auditors were invited to attend two (2) of the four (4) meetings.

The members of the committee during the year were:

Mr GW Sinclair (Chairman) Independent Non-executive Director
Mr SF Higgs Independent Non-executive Director
Mr AW Lennon Non-executive Chairman

Details of these directors' attendance at Audit and Risk Management Committee meetings are set out at item 12 in the Directors' Report.

The Group Company Secretary acts as secretary to the Committee and attends its meetings.

Compliance Committee

The Compliance Committee is responsible for monitoring and reviewing the effectiveness of the various Compliance Plans and functions governing the various Managed Investment Schemes for which Peet acts as Responsible Entity and Custodian.

The members of the Compliance Committee during the year were:

• Mr D Rundle (external member) - was a practising accountant for over 40 years, including 11 years in public practice. In more recent times has been involved in property development, including being a member of the unit-holders advisory committee of managed investment schemes managed by Peet.

Mr A Hicks (external member) former partner of the fi rm currently known as RSM Bird Cameron. Mr Hicks spent his entire working life in public practice and is a Fellow of both CPA Australia and Institute of Chartered Accountants of Australia.
Mr W Hemsley (former Non-executive Director) – resigned on 30 March 2011 from the Board of Peet Limited and the Compliance Committee.
Mr Domenico Scafetta (Group Company Secretary) – was appointed as a temporary member following Mr Hemsley's resignation.

Peet's Compliance Offi cer acts as secretary to the Committee and attends its meetings.

The Compliance Plans of the Managed Investment Schemes have been lodged with the Australian Securities and Investments Commission (ASIC) and are subject to ongoing review.

The Committee meets at least four times a year and is required to report breaches of the Corporations Act 2001, the Parent Entity's Australian Financial Services Licence and the various Managed Investment Schemes' Constitutions and Compliance Plans to the Board, which is then required to report to ASIC any signifi cant breach of obligations.

Nomination Committee

No nomination committee currently exists.

Any changes to directorships will continue to be considered by the Remuneration Committee and the full Board subject to any applicable laws.

When a new director is to be appointed the Board, together with the Remuneration Committee, will review the range of skills, experience and expertise on the Board, identify its needs and prepare a short-list of candidates with appropriate skills and experience. Where necessary, advice will be sought from independent search consultants.

The Board will then appoint the most suitable candidate who must stand for election at the next annual general meeting of the Company. The Board's nomination of existing directors for reappointment is not automatic and is contingent on their past performance, contribution to the Company and the current and future needs of the Board and the Company.

Risk Management

The Board recognises the importance of managing the risks associated with Peet's business operations and has adopted a formal Risk Management Plan in keeping with its Risk Management Policy Statement, a copy of which is available on the Corporate Governance section of the Company's website (www.peet.com.au).

Management is responsible for the design and implementation of the risk management framework and internal control systems to manage the Company's material business risks and to report to the Board on whether those risks are being managed effectively. Individual business units are responsible for integrating the risk management framework within their business processes and systems.

The Audit and Risk Management Committee assists the Board in its risk management oversight function, receives reports from management on the Company's material business risks and monitors the effectiveness of risk management and internal control policies.

While the identifi cation, monitoring and reporting of risks occurs continually, management reviews the Risk Management Plan periodically to ensure its ongoing relevance.

The Risk Management Plan represents a component of the overall internal controls of Peet to assist in risk management. Other internal controls include:

establishing a company-wide code of conduct;
the adoption of written policies and procedures;
the delegation of authority across the various levels of the Company;
establishment of reporting systems to monitor compliance;
appointment of a compliance offi cer; and
a network disaster recovery plan.

During the year, the Audit and Risk Management Committee and the Board received periodic reports on management's ongoing monitoring of, and action plans for, material business risks.

External Auditors

The Company and Audit and Risk Management Committee policy is to appoint external auditors who demonstrate quality and independence. The performance of the external auditor is reviewed periodically and applications for tender of external audit services are requested as deemed appropriate, taking into consideration assessment of performance, existing value and tender costs.

PricewaterhouseCoopers were appointed as the external auditors of the Company in 1998. It is PricewaterhouseCoopers' policy to rotate audit engagement partners on listed companies at least every fi ve years. The current lead audit partner, David J Smith, was fi rst appointed for the 2008 fi nancial year's audit.

An analysis of fees paid to the external auditors, including a breakdown of fees for non-audit services, is provided in item 16 of the Directors' Report and in note 27 to the fi nancial report.

The external auditor is requested to attend the Annual General Meeting and be available to answer shareholders' questions about the conduct of the audit and the preparation and content of the audit report.

Corporate Reporting

The following certifi cations required by the Corporations Act have been made to the Board:

• that the Company's fi nancial reports are complete and present a true and fair view, in all material respects, of the fi nancial condition and operational results of the Company and Group and are in accordance with relevant accounting standards; and

• that the above statement is founded on a sound system of risk management and internal compliance and control and which implements the policies adopted by the Board and that the Company's risk management and internal compliance and control system is operating effi ciently and effectively in all material respects.

Promotion of Ethical and Responsible Decision Making

Code of conduct

The Board believes that the success of the Peet Group has been, and will continue to be, enhanced by a strong ethical culture within the organisation. As the Peet Group grows, the need to ensure that ethical standards remain has led the Board to embrace policies to ensure that all directors, executives and employees act with the utmost integrity and objectivity in their dealings with all people that they come in contact with during their employment with the Peet Group.

The Company has documented the requirements to ensure that all legal and other compliance obligations to legitimate stakeholders are fully met. The various charters and policies are periodically reviewed and updated as necessary to ensure they refl ect the highest standards of behaviour and professionalism and the practices necessary to maintain confi dence in the Company's integrity.

Share trading guidelines

Employees

Employees, other than directors or senior management, may buy or sell Peet shares on the ASX in the period of 60 days commencing immediately following:

the announcement of half-yearly results;
the announcement of annual results; or
the holding of the Annual General Meeting

except where an employee is in possession of price sensitive information or where the Company is in possession of price sensitive information and has, during the 'window' set out above, notifi ed the employee that they may not buy or sell shares during all or part of any such period.

Employees, other than directors or senior management, may also buy or sell Peet's shares during the period that Peet has a current prospectus or other form of disclosure document on issue pursuant to which persons may subscribe for shares.

During other periods

Outside of the 'window' period, all employees, other than directors or senior management, must receive clearance for any proposed dealing in Peet's shares on the ASX by informing and receiving approval from the Managing Director prior to undertaking a transaction.

Directors and senior management

Unless there are unusual circumstances, as determined by the Board, approval will not be given to enable directors and senior management to trade in Peet's shares outside the 'windows' discussed above.

Additionally, before directors and senior management can deal in Peet's shares during the windows previously mentioned, they must follow these procedures:

a director of Peet (including the Managing Director) must notify the Chairman and Group Company Secretary prior to undertaking a transaction;
the Chairman must notify the Board or the next most senior director, prior to undertaking a transaction; and
senior management must notify the Managing Director and Group Company Secretary prior to undertaking a transaction.

ASX Listing Rule 3.19A requires a listed company to advise ASX of a change in a notifi able interest of a director no more than fi ve business days after the change occurs. A director of Peet is required to complete a standard memorandum and pass it on to the Group Company Secretary when they either buy or sell securities in Peet. The standard memorandum includes confi rmation as to whether or not the trade occurred outside the specifi ed 'windows' where prior clearance was required, whether that clearance was granted, the date that clearance was granted, and for what period.

Members of Senior Management are required to complete a standard memorandum if they seek approval to trade in Peet's securities outside the approved trading windows.

Short-term dealing

Employees may not deal in Peet's securities on a 'short-swing' basis, except in circumstances of special hardship, with the Managing Director's approval. That is, employees may not buy and then sell securities within a three month period. In addition, employees may not enter into any other shortterm dealings (for example, forward contracts) except with the approval of the Managing Director.

Hedging of unvested securities

The Company's Guidelines for Dealing in Securities prohibit the entering into of schemes by directors and employees to protect the value of unvested entitlements under any equity-based remuneration scheme.

Continuous disclosure policies and shareholder communication

The Company places a high priority on communication with shareholders and is aware of the obligations it has under the Corporations Act 2001 and the ASX Listing Rules, to keep the market fully informed of information which is not generally available and which may have a material effect on the price or value of the Company's securities.

The Company has adopted policies, which establish procedures to ensure that directors and management are aware of and fulfi l their obligations in relation to the timely disclosure of material price sensitive information.

The Group Company Secretary has been nominated as the person responsible for communications with the Australian Securities Exchange (ASX). This role includes responsibility for ensuring compliance with the continuous disclosure requirements in the ASX Listing Rules and overseeing and co-ordinating information disclosure to the ASX.

Information is communicated to shareholders as follows:

The Annual and Half-yearly Financial Reports are lodged with the ASX, with the Annual Report made available for distribution to shareholders;
Announcements of annual and interim results, broker/analyst presentations and other price sensitive information are made to the ASX; and
Addresses made by the Chairman and Managing Director to the Annual General Meeting (AGM).

Shareholders are entitled to attend the AGM and receive a notice of such meeting together with an explanatory memorandum of proposed resolutions (as appropriate). If shareholders cannot attend the AGM they are entitled to lodge a proxy in accordance with the Corporations Act 2001 and Peet's Constitution.

A transcript of the addresses made by the Chairman and the Managing Director to the AGM is released to the ASX prior to the commencement of the AGM.

Additionally, all ASX announcements and other media releases are accessible via the Company's website.

Board of Directors

Tony Lennon FAICD Non-executive Chairman

Tony Lennon has been a Director of Peet for 26 years and was Executive Chairman before the Company was listed on the Australian Securities Exchange in 2004. He brings more than 40 years' property experience to the position of Chairman of the Board.

A qualifi ed valuer, Mr Lennon acquired a controlling interest in, and assumed the position of Managing Director of, Peet Limited in 1985. Today, he continues to maintain a signifi cant and active interest in the Company.

Mr Lennon is a Fellow of the Australian Institute of Company Directors and an Associate of the Australian Property Institute. A former President of the Real Estate Institute of Western Australia, he has also served as a Councillor of the national body, the Real Estate Institute of Australia.

His industry service has included State Government appointed roles as Chairman of both the Perth Inner City Living Taskforce and the Residential Densities Review Taskforce. He was also a Member of the Commercial Tribunal (Commercial Tenancies).

Mr Lennon is a former President of Western Australia's Shire of Peppermint Grove and Deputy Chairman of the National Board of the Australia Day Council. He is also a former Chairman of the Curtin Aged Persons Foundation and a founding Director of the Wearne and the Riversea Hostels for the Aged, both of which are locally initiated and managed community facilities.

Brendan Gore BComm, FCPA, FCIS, FAICD Managing Director and Chief Executive Offi cer

Brendan Gore has held senior corporate, commercial and operational roles for more than 19 years and brings to the positions of Managing Director and Chief Executive Offi cer wide-ranging expertise in the business, resources and property sectors.

Mr Gore is a qualifi ed accountant and Fellow of the Australian Institute of Company Directors, CPA Australia and the Chartered Secretaries Australia.

Before joining Peet, Mr Gore held the dual role of Chief Financial Offi cer and Company Secretary of Mermaid Marine Australia Limited - now Australia's largest marine-based services provider to the offshore oil and gas industry.

He began with Peet as Chief Financial Offi cer and played a key role in expanding the company's scope of activities and growing its core residential development and land syndication businesses.

In January 2007, he was appointed inaugural Chief Operating Offi cer, taking on responsibility for developing Peet's integrated operational strategy and managing the day-to-day safety and performance of its business divisions.

Assuming the position of Managing Director and Chief Executive Offi cer later that same year, Mr Gore maintains Peet's ongoing commitment to a longterm, strategic and disciplined approach to growth and expansion.

Stephen Higgs BEc (Syd) Independent Non-executive Director

Stephen Higgs joined the Board of Peet Limited in June 2004.

Mr Higgs has held a series of board roles with high-profi le Australian companies, including UBS Investment Bank, with which he worked for 20 years to cement a leadership position in the private equity market.

He is also Chairman of the Juvenile Diabetes Research Foundation Australia, a role he has undertaken since 2002.

Mr Higgs' commitment to the community has extended to include positions working as a Councillor at St Andrew's College at Sydney University and Trustee of Redkite (formerly the Malcolm Sargent Cancer Fund for Children in Australia).

Graeme Sinclair

BComm, CA, ACIS, FAICD Independent Non-executive Director

A qualifi ed Chartered Accountant with more than 35 years accumulated experience in investment and wealth management services, Graeme Sinclair joined the Peet Limited Board in June 2004.

Mr Sinclair gained his accounting qualifi cations with an international accounting fi rm in 1971, before transferring to the fi rm's London offi ce.

Two years later he returned to Australia and joined the Myer Family Group, an actively-managed long-term investment group. The Myer Family Group holds Australian and international equity portfolios, as well as private equity and property investments.

After becoming the Group's Chief Executive Offi cer and Managing Director of the Myer Family Company Pty Ltd, Mr Sinclair served in those roles for 13 years before retiring from those positions in mid 2009.

Mr Sinclair is also a Non-executive Director of Mirrabooka Investments Limited, a listed investment company specialising in investing in small and medium-sized companies.

Mr Sinclair has a number of philanthropic activities, including being a Trustee of the William Buckland Foundation, one of Australia's largest philanthropic foundations, and a Director of Habitat for Humanity Australia (Victoria) Inc, having previously served as Secretary of both The Myer Foundation and the Sidney Myer Fund.

Anthony Lennon

BA, Grad Dip Bus Admin, MAICD Executive Director / National Business Development Director

Anthony Lennon joined Peet in 1991 and became a Director in 1996.

He moved to Victoria over a decade ago to establish Peet's operations in Australia's eastern states and has overseen signifi cant expansion since that time.

Before joining the Company, Mr Lennon worked in the United Kingdom, where he completed his post-graduate Diploma in Business Administration while on a Graduate Management Training Scheme with major international construction and development company, John Laing PLC. His time with this global company saw him gain valuable experience in property planning, marketing, feasibility analysis and project management.

Mr Lennon's responsibilities since joining Peet have included project management, broadacre acquisitions, marketing and fi nancing and a six-year stint as Chairman of one of WA's largest conveyancing businesses.

Currently Peet Limited's National Business Development Director, he has previously held the positions of Director of Marketing and Director of Eastern States Operations, responsible for projects in Victoria, Queensland and New South Wales.

He is a board member of the Urban Development Institute of Australia (Victoria).

Directors' Report

Your Directors present their report on the Consolidated Entity consisting of Peet Limited ('the Parent Entity' or 'the Company') and the entities it controlled at the end of, or during, the fi nancial year ended 30 June 2011 ('Peet Group').

1 Directors

The following persons were Directors of the Company during part or the whole of the fi nancial year and up to the date of this report:

Non-executive Chairman AW Lennon

Executive Directors BD Gore AJ Lennon

Non-executive Directors SF Higgs GW Sinclair WD Hemsley (resigned 30 March 2011)

2 Principal Activities

The principal activities of the Consolidated Entity during the course of the fi nancial year were land development, funds management and land syndication. There was no signifi cant change in the nature of the activities during the year.

3 Review of Operations and Consolidated Results

GROUP FINANCIAL SUMMARY		CONSOLIDATED
	2011	2010
	$'000	$'000
Revenue	188,725	178,022
Expenses	(109,173)	(103,718)
	79,552	74,304
Write-down in the carrying value of inventories and development costs	(31,251)	(989)
EBIT	48,301	73,315
Finance costs (includes interest and fi nance costs expensed through cost of sales)	(15,550)	(11,981)
Profi t before income tax	32,751	61,334
Income tax expense	(10,545)	(19,223)
Profi t after tax for the year	22,206	42,111
Profi t is attributable to:
Owners of Peet Limited	22,147	42,111
Non-controlling interests	59	-
	22,206	42,111

A review of operations for the fi nancial year and the results of those operations are set out in the Operational Review.

4 Earnings Per Share

		CONSOLIDATED
	2011	2010
	CENTS	CENTS
Basic earnings per share	7.3	14.1
Diluted earnings per share	6.8	13.9

Basic earnings per share is calculated after income tax expense based on the weighted average number of shares on issue for the year to 30 June 2011.

5 Signifi cant Changes in the State of Affairs

There were no signifi cant changes in the state of affairs of the Group during the fi nancial year, other than those changes identifi ed in the fi nancial statements for the year ended 30 June 2011.

6 Matters Subsequent to the End of the Financial Year

On 25 July 2011 Peet No 130 Pty Limited (a wholly owned subsidiary of Peet Limited) paid an outstanding commitment due of $43,500,000 in relation to the Flagstone West property. Refer to note 29 for further details.

No other matters or circumstances have arisen since the end of the fi nancial year, which have signifi cantly affected or may signifi cantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in subsequent fi nancial years.

7 Likely Developments and Expected Results of Operations

No further information as to the likely developments in the operations of the Consolidated Entity and the expected results of those operations in subsequent fi nancial years has been included in this report because, in the opinion of the Directors, it would prejudice the interests of the Consolidated Entity.

8 Dividends

Dividends paid or declared by the Company to members since the end of the previous fi nancial year were:

	CENTS PERSHARE	TOTALAMOUNT$'000	DATE OF PAYMENT	FRANKED /UNFRANKED
Declared and paid during the year
Interim 2011 ordinary	4.00	12,118	20 April 2011	Franked
Final 2010 ordinary	4.50	13,531	15 October 2010	Franked
	8.50	25,649
Declared after year end
Final 2011 ordinary	4.50	14,312	18 October 2011	Franked

Dividends declared or paid during the year were fully franked at the tax rate of 30%.

The fi nancial effect of the dividend declared subsequent to the reporting date has not been brought to account in the fi nancial statements for the year ended 30 June 2011 and will be recognised in the following fi nancial period.

The amount of dividends payable subsequent to year end is based on the 318 million ordinary shares on issue at the record date.

9 Environmental Regulation

The Consolidated Entity is subject to environmental regulation by way of the Environment Protection and Biodiversity Conservation Act 1999 in respect of its land subdivision activities nationally; the Environmental Protection Act 1986 (as amended) and the Contaminated Sites Act 2003 in respect of its Western Australian land subdivision activities, the Environmental Protection Act 1970 (as amended) in respect of its Victorian subdivision activities, the Environmental Protection Act 1994 (including Regulations 1998) and the Sustainable Planning Act 2009 in respect to its Queensland land subdivision activities and the Environmental Planning and Assessment Act 1979 in respect of its New South Wales subdivision activities.

The Peet Group is not aware of any breaches of environmental regulations in respect of its activities.

Greenhouse gas and energy data reporting requirements

The Consolidated Entity is also subject to the reporting requirements of the National Greenhouse and Energy Reporting Act 2007, which requires the Group to report its annual greenhouse gas (GHG) emissions and energy use if it emits greenhouse gases, produces energy, or consumes energy at or above specifi ed GHG emission thresholds per fi nancial year starting 1 July 2008.

The Group is not required to register and report to the Department of Climate Change as the Group's GHG emissions or energy consumption are below the reporting thresholds for the 2010 and 2011 reporting periods.

10 Information on Directors and Group Company Secretary

Please refer to the Board of Directors section of this report for information on Directors.

Group Company Secretary

The Group Company Secretary is Mr Dom Scafetta, who was appointed to the position on 19 January 2005. He is a qualifi ed Chartered Accountant and joined the Company in 1998. He is responsible for the corporate compliance and secretarial responsibilities of the Peet Group and all property syndicates. Prior to his appointment to the Company, he worked with accounting fi rm Coopers & Lybrand (now PricewaterhouseCoopers).

11 Interests in the Shares, Options and Performance Rights of the Company

DIRECTOR	INTEREST INORDINARY SHARES	INTEREST INOPTIONS &PERFORMANCERIGHTS	INTEREST INORDINARY SHARES	INTEREST INOPTIONS &PERFORMANCERIGHTS
	At 30 June 2011	At 30 June 2011	At the date of this report	At the date of this report
AW Lennon	81,153,656	-	81,580,965	-
SF Higgs	400,000	-	400,000	-
GW Sinclair	79,000	-	79,000	-
BD Gore	-	4,315,166	-	4,315,166
AJ Lennon	976,799	665,343	976,799	665,343
WD Hemsley1	-	-	-	-

WD Hemsley resigned 30 March 2011, accordingly his shareholding is no longer required to be reported.

12 Directors' Meetings

The number of meetings of Directors (including meetings of committees of Directors) held during the year and the number of meetings attended by each Director were as follows:

				AUDIT & RISK MANAGEMENT
DIRECTOR		BOARD OF DIRECTORS		COMMITTEE		REMUNERATION COMMITTEE
	Held	Attended	Held	Attended	Held	Attended
AW Lennon	13	13	4	4	3	3
BD Gore	13	13	-	-	-	-
SF Higgs	13	13	4	4	3	3
GW Sinclair	13	13	4	4	3	3
AJ Lennon	13	13	-	-	-	-
WD Hemsley1	8	7	-	-	-	-

Resigned 30 March 2011.

13 Retirement, Election and Continuation in Offi ce of Directors

Directors are elected at the Annual General Meeting (AGM) of the Company. Retirement will occur on a rotational basis so that one third of the Directors, but not less than two, shall retire at each AGM. The Directors may also appoint a Director to fi ll a casual vacancy on the Board or in addition to the existing Directors, who will then hold offi ce until the next AGM. No Director who is not the Managing Director, may hold offi ce without re-election beyond the third AGM following the meeting at which the Director was last elected or re-elected.

At this year's AGM both AJ Lennon and SF Higgs will retire by rotation and offer themselves for re-election. The balance of your Board of Directors recommends their re-election.

14 Remuneration Report

The remuneration report is set out under the following main headings:

Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional information

The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001.

Principles used to determine the nature and amount of remuneration

The objective of the Company's executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with achievement of strategic objectives and creation of value for shareholders. The Board ensures that executive reward satisfi es the following key criteria for good reward governance practices:

competitiveness and reasonableness;
acceptability to shareholders;
performance linkage/alignment to executive compensation; and
capital management.

In consultation with external remuneration consultants, the Company has structured an executive remuneration framework that is market competitive and complementary to the reward strategy of the organisation through the following features:

Alignment to shareholders' interests:

has earnings as a core component of plan design;
focuses the executive on key fi nancial and non-fi nancial drivers of value; and
attracts and retains high-calibre executives.

Alignment to program participants' interests:

rewards capability and experience;
provides a clear structure for earning rewards; and
provides recognition for contribution.

The framework provides a mix of fi xed and variable pay, and a blend of short (STI) and long-term incentives (LTI). As employees are promoted to executive and senior management roles within the Company, the balance of this mix shifts to a higher proportion of 'at risk' rewards.

Principles used to determine the nature and amount of remuneration (continued)

Non-executive Directors' fees

Fees and payments to Non-executive Directors refl ect the demands which are made on, and the responsibilities of, the Directors. Non-executive Directors' fees and payments are reviewed annually by the Board. The Board considers, as appropriate, the advice of independent remuneration consultants to ensure Non-executive Directors' fees and payments are appropriate and in line with the market. The Chairman's fees are determined independently to the fees of Non-executive Directors based on comparative roles in the external market. The Chairman is not present at any discussions relating to determination of his own remuneration. Non-executive Directors do not receive share options. Subject to the rules of the relevant shareplan, Non-executive Directors may opt each year to receive a percentage of their remuneration in Peet Limited shares, which would be acquired on market. Shareholders approved this arrangement in June 2004.

The current base remuneration was last set with effect from 1 July 2006. The Chairman's and Non-executive Directors' remuneration is inclusive of committee fees and for their membership on any subsidiary Boards. Non-executive Directors' fees, including the Chairman's, are determined within an aggregate Directors' fee pool limit, which is periodically recommended for approval by shareholders. The maximum currently stands at $600,000.

The Non-executive Directors do not receive any form of retirement allowance.

Executive Directors' pay

The Executive Directors' pay and reward framework has four components:

base pay and benefi ts;
short-term performance incentives;
long-term incentives through participation in the Peet Limited Employee Share Option Plan (ESOP) and the Peet Limited Performance Rights Plan (PRP); and
other remuneration such as superannuation.

The combination of these comprises the Executive Directors' total remuneration.

Base pay

Executive Directors' base pay is structured as a total employment cost package which may be delivered as a mix of cash and prescribed non-fi nancial benefi ts.

Executive Directors are offered a competitive base pay that comprises the fi xed component of pay and rewards. As and when considered appropriate, external remuneration consultants provide analysis and advice to ensure base pay is set to refl ect the market for a comparable role. Base pay for Executive Directors is reviewed annually to ensure the Directors' pay is competitive with the market.

Short-term Incentives (STI)

Each Executive Director has a target STI opportunity depending on the accountabilities of the role and impact on the Group's performance. Generally, the maximum target bonus opportunity is 100% of total base salary for the Managing Director and Chief Executive Offi cer and is 30% of total base salary for the National Business Development Director. However, the Board of Directors has the discretion to pay over and above these amounts.

Each year, the Remuneration Committee considers the appropriate targets and key performance indicators (KPIs) to link the STI plan and the level of payout if targets are met. This may include setting any maximum payout under the STI plan, and minimum levels of performance to trigger payment of STI.

For the years ended 30 June 2011 and 2010, the KPIs linked to STI plans were based on Group, individual business and personal objectives. The KPIs required performance in achieving specifi c earnings and operational targets, taking into account prevailing market conditions.

Principles used to determine the nature and amount of remuneration (continued)

Other key management personnel remuneration

The other key management personnel pay and reward framework has the same four components as the Executive Directors' pay and reward framework:

base pay and benefi ts;
short-term performance incentives;
long-term incentives through participation in the Peet Limited Employee Share Option Plan (ESOP) and the Peet Limited Performance Rights Plan (PRP); and
other remuneration such as superannuation.

The combination of these comprises the other key management personnels' total remuneration.

Base pay

The base pay for other key management personnel is structured as a total employment cost package which may be delivered as a mix of cash and prescribed non-fi nancial benefi ts.

Other key management personnel are offered a competitive base pay that comprises the fi xed component of pay and rewards. External remuneration consultants provide analysis and advice to ensure base pay is set to refl ect the market for a comparable role. Base pay for key management personnel is reviewed annually to ensure that their pay is competitive with the market. Key management personnel pay is also reviewed on promotion.

Short-term Incentives (STI)

The Managing Director and Chief Executive Offi cer, together with the Remuneration Committee and the Board consider the appropriate targets and KPIs to link the STI plan and the level of payout if targets are met.

Additionally bonuses may be awarded to other key management personnel at the discretion of the Remuneration Committee in acknowledgement of exceptional performance.

Details of remuneration

Details of the remuneration of each Director and the other key management personnel of the Group, as defi ned in AASB 124 Related Party Disclosures, are set out in the tables following.

Other key management personnel

The key management personnel of the Company and the Group include the Executive Directors and the following executives who have authority and responsibility for planning, directing and controlling the activities of the Group. This also includes the fi ve highest paid executives of the Group as required to be disclosed under the Corporations Act 2001.

Name	Position
BD Gore	Managing Director and Chief Executive Offi cer
AJ Lennon	National Business Development Director
D Cooper	Chief Operating Offi cer
P Dumas	Head of Funds Management
D Scafetta	Group Company Secretary
M Pisano	Chief Financial Offi cer (resigned 23 December 2010)
M Dolin	Chief Financial Offi cer (appointed 6 July 2011)

Details of remuneration (continued)

The remuneration of the Directors and other key management personnel, set out on page 40 of this report, is calculated in accordance with statutory obligations and Accounting Standards, and is theoretical due to the complex way equity-based incentive pay is calculated for accounting purposes. To provide more meaningful information to the shareholders, the table below sets out clearly and concisely the cash and other benefi ts actually received during the year ended, or receivable as at, 30 June 2011 by the Directors and other key management personnel of the Group.

	Notes		Cash salaryand fees1$	Bonus2$	Other3$	Superannuation$	Total$
Directors
AW Lennon		2011	165,000	-	-	14,850	179,850
		2010	165,000	-	-	14,850	179,850
SF Higgs		2011	75,000	-	-	6,750	81,750
		2010	75,000	-	-	6,750	81,750
GW Sinclair		2011	75,000	-	-	6,750	81,750
		2010	75,000	-	-	6,750	81,750
BD Gore	4	2011	834,801	725,000	6,181	15,199	1,581,181
	4	2010	670,539	907,500	-	14,461	1,592,500
AJ Lennon	4	2011	360,226	57,750	13,000	26,774	457,750
	4	2010	355,211	57,750	13,000	31,789	457,750
WD Hemsley	5	2011	56,250	-	-	5,063	61,313
		2010	75,000	-	-	6,750	81,750
Total		2011	1,566,277	782,750	19,181	75,386	2,443,594
		2010	1,415,750	965,250	13,000	81,350	2,475,350
Other key management personnel
D Cooper	4	2011	401,687	178,000	47,440	15,199	642,326
	4	2010	377,943	196,900	-	14,461	589,304
P Dumas	4	2011	385,000	195,000	-	25,000	605,000
	4	2010	302,752	165,000	-	27,248	495,000
D Scafetta	4	2011	224,801	60,000	-	15,199	300,000
		2010	185,539	60,000	-	14,461	260,000
M Pisano	6	2011	193,194	-	-	8,184	201,378
	4	2010	285,539	77,700	-	14,461	377,700
Total		2011	1,204,682	433,000	47,440	63,582	1,748,704
		2010	1,151,773	499,600	-	70,631	1,722,004

Cash salary and fees includes accrued annual leave liability paid out on retirement or resignation.
All cash bonuses are earned in the fi nancial year to which they relate and are paid during the following fi nancial year.
Other includes motor vehicle costs, car-parking and other benefi ts and are inclusive of related fringe benefi ts tax. 4. Denotes one of the fi ve highest paid executives of the Group, as required to be disclosed under the Corporations Act 2001.
Resigned 30 March 2011.
Resigned 23 December 2010.

Details of remuneration (continued)

				SHORT-TERM BENEFITS		POSTEMPLOYMENTBENEFITS		LONG-TERM BENEFITS
	Notes		Cash salaryand fees1$	Bonus2$	Other3$	Superannuation$	Shares /options4,6$	Longserviceleave$	Terminationbenefi ts$	Total$
Directors
AW Lennon		2011	165,000	-	-	14,850	-	-	-	179,850
		2010	165,000	-	-	14,850	-	-	-	179,850
SF Higgs		2011	75,000	-	-	6,750	-	-	-	81,750
		2010	75,000	-	-	6,750	-	-	-	81,750
GW Sinclair		2011	75,000	-	-	6,750	-	-	-	81,750
		2010	75,000	-	-	6,750	-	-	-	81,750
BD Gore	5	2011	834,801	725,000	6,181	15,199	388,819	-	-	1,970,000
	5	2010	670,539	907,500	-	14,461	582,644	-	-	2,175,144
AJ Lennon	5	2011	360,226	57,750	13,000	26,774	36,020	-	-	493,770
	5	2010	355,211	57,750	13,000	31,789	(7,768)	-	-	449,982
WD Hemsley	7	2011	56,250	-	-	5,063	-	-	-	61,313
		2010	75,000	-	-	6,750	-	-	-	81,750
Total		2011	1,566,277	782,750	19,181	75,386	424,839	-	-	2,868,433
		2010	1,415,750	965,250	13,000	81,350	574,876	-	-	3,050,226
Other key management personnel
D Cooper	5	2011	401,687	178,000	47,440	15,199	105,378	-	-	747,704
	5	2010	377,943	196,900	-	14,461	(6,491)	-	-	582,813
P Dumas	5	2011	385,000	195,000	-	25,000	102,160	-	-	707,160
	5	2010	302,752	165,000	-	27,248	(5,403)	-	-	489,597
D Scafetta	5	2011	224,801	60,000	-	15,199	50,180	-	-	350,180
		2010	185,539	60,000	-	14,461	(3,256)	-	-	256,744
M Pisano	8	2011	193,194	-	-	8,184	(250)	-	-	201,128
	5	2010	285,539	77,700	-	14,461	(4,877)	-	-	372,823
Total		2011	1,204,682	433,000	47,440	63,582	257,468	-	-	2,006,172
		2010	1,151,773	499,600	-	70,631	(20,027)	-	-	1,701,977

Cash salary and fees includes accrued annual leave liability paid out on retirement or resignation.
All cash bonuses are earned in the fi nancial year to which they relate and are paid during the following fi nancial year.
Other includes motor vehicle costs, car-parking and other benefi ts and are inclusive of related fringe benefi ts tax.
Options and performance rights granted include the employee share option plan and performance rights plan as disclosed in note 38 to the fi nancial statements. The value placed on options and performance rights in the table above is based on the valuation at the date of grant using a Black-Scholes model (options) or Binomial Model (performance rights), pro-rated over the period from grant date to vesting date.
Denotes one of the fi ve highest paid executives of the Group, as required to be disclosed under the Corporations Act 2001. 6. Remuneration in the form of options and/or performance rights includes negative amounts as a result of changes made to vesting probability assumptions and as a result of options and/or performance rights forfeited during the year.
Resigned 30 March 2011.
Resigned 23 December 2010.

Details of remuneration (continued)

The relative proportions of remuneration that are linked to performance and those that are fi xed are as follows:

		FIXED
		REMUNERATION	AT RISK-STI			AT RISK-LTI
	2011	2010	2011	2010	2011	20101
Directors
AW Lennon	100%	100%	-	-	-	-
SF Higgs	100%	100%	-	-	-	-
GW Sinclair	100%	100%	-	-	-	-
BD Gore	43%	31%	37%	42%	20%	27%
AJ Lennon	81%	89%	12%	13%	7%	(2%)
WD Hemsley2	100%	100%	-	-	-	-
Other key management personnel
D Cooper	62%	67%	24%	34%	14%	(1%)
P Dumas	58%	67%	28%	34%	14%	(1%)
D Scafetta	69%	78%	17%	23%	14%	(1%)
M Pisano3	100%	80%	-	21%	-	(1%)

Since the LTI are provided exclusively by way of options and/or performance rights, the percentages disclosed also refl ect the value of remuneration consisting of options and/or performance rights based on the value of options and/or performance rights expensed during the year. Negative amounts indicate expenses reversed during the year as a result of changes made to vesting probability assumptions.
Resigned 30 March 2011. 3. Resigned 23 December 2010.

Peet Limited | Annual Report 2011 41

Service agreements

On appointment to the Board, all Non-executive Directors enter into a service agreement with the Company in the form of a letter of appointment. The letter summarises the Board policies and terms, including compensation, relevant to the offi ce of director.

Remuneration and other terms of employment for the Managing Director and Chief Executive Offi cer, Executive Director, Chief Financial Offi cer and other key management personnel are formalised in service agreements. Each of these agreements provide for the provision of performance related cash bonuses and participation, when eligible, in the Peet Limited Employee Share Option Plan and the Peet Limited Performance Rights Plan. The major provisions of the agreements are set out below.

All contracts with executives may be terminated early by either party with 3 to 6 months notice, subject to termination payments as detailed below.

NAME	TERMS OF AGREEMENT	BASE SALARY INCLUDINGSUPERANNUATION1	TERMINATION BENEFIT2
BD Gore	4 years commenced 6 August 20073	$850,000	6 months base salary inclusiveof superannuation
AJ Lennon	On-going commenced 20 July 2010	$400,000	6 months base salary inclusiveof superannuation
D Cooper	On-going commenced 4 February 2008	$420,000	3 months base salary inclusiveof superannuation
P Dumas	On-going commenced 4 February 2008	$410,000	3 months base salary inclusiveof superannuation
D Scafetta	On-going commenced 10 June 1998	$240,000	3 months base salary inclusiveof superannuation

Base salaries quoted are for the year ended 30 June 2011; they are reviewed annually by the remuneration committee.
Termination benefi ts are payable on early termination by Peet Limited giving notice in writing. Payment may be made in lieu of notice, other

than for gross misconduct. 3. Since year end, BD Gore's original service agreement which commenced 6 August 2007 came to an end and he renewed his contractual arrangement.

BD Gore, Managing Director and Chief Executive Offi cer

On 5 August 2011 BD Gore renewed his contractual arrangements with the Company. There is no fi xed termination date and the agreement is terminable on six months notice by either party.

Under the agreement the components of his remuneration comprise fi xed annual remuneration, STI and LTI. A summary of the key contractual terms and remuneration-related arrangements were disclosed to the market on 5 August 2011. A copy of the announcement can be obtained from the Company's website.

Share-based compensation

Options over shares in Peet Limited are granted under the Peet Limited Employee Share Option Plan (ESOP), which was approved by the Board and shareholders during the 2004 fi nancial year and the Peet Limited Performance Rights Plan (PRP), which was approved by shareholders at the 2008 AGM. Employees of any Peet Group Company (including Executive Directors) will be eligible to participate in the ESOP and/or PRP at the discretion of the Board.

Invitations to apply for options and/or performance rights

Eligible employees, at the discretion of the Board, may be invited to apply for options and/or performance rights on terms and conditions to be determined by the Board including as to:

the method of calculation of the exercise price of each option;
the number of options and/or performance rights being offered and the maximum number of shares over which each option and/or performance right is granted;
the period or periods during which any of the options and/or performance rights may be exercised;
the dates and times when the options and/or performance rights lapse;
the date and time by which the application for options and/or performance rights must be received by Peet; and
any applicable conditions which must be satisfi ed or circumstances which must exist before the options and/or performance rights may be exercised.

Eligible employees may apply for part of the options and/or performance rights offered to them, but only in specifi ed multiples.

Consideration

Unless the Board determines otherwise, no payment will be required for a grant of options and/or performance rights under the ESOP and/or PRP.

Exercise conditions

Generally, as a pre-condition to exercise, any exercise conditions in respect of an option and/or performance right must be satisfi ed. However, the Board has the discretion to enable an option and/or performance right holder to exercise options and/or performance rights where the exercise conditions have not been met, including, for example, where a court orders a meeting to be held in relation to a proposed compromise or arrangement in respect of the Company, or a resolution is passed or an order is made for winding up the Company.

Options granted under the ESOP and performance rights granted under the PRP carry no dividend or voting rights.

Lapse of options and/or performance rights

Unexercised options and/or performance rights will lapse upon the earlier to occur of a variety of events specifi ed in the rules of the ESOP and PRP, including, on the date or in circumstances specifi ed by the Board in the invitation, failure to meet the options' or performance rights' exercise conditions in the prescribed period or on a specifi ed anniversary date of grant of the options or performance rights, as determined by the Board.

Share options and performance rights granted to Executive Directors 6 August 2007

On 6 August 2007, 1,200,000 options were granted to BD Gore under the Company's ESOP and approved by the shareholders at the 2007 AGM. The options are convertible to ordinary shares on a 1:1 basis at an exercise price of $4.10 per share after the fourth anniversary of the grant date.

The exercise condition in respect of options granted to BD Gore on 6 August 2007 is that he remains employed as Managing Director for a period of four years. While the service period requirement has been met, the options have not been exercised.

Share-based compensation (continued)

Share options and performance rights granted to Executive Directors (continued)

18 December 2008

On 18 December 2008, and following shareholder approval, 1,300,000 options and 120,000 performance rights were granted to BD Gore and 400,000 options and 35,000 performance rights were granted to AJ Lennon under the Company's ESOP and PRP, respectively.

The terms and conditions of the options and performance rights can be summarised as follows:

SECURITY	VESTING TERM	EXPIRY TERM	EXERCISE PRICE	VESTING CONDITIONS
Option	4 years	6 years	$2.50	EPS growth (refer below)
Performance right	4 years	6 years	$0.00	EPS growth (refer below)

The options and performance rights are convertible to ordinary shares on a 1:1 basis. The vesting condition is based on earnings per share (EPS), with a target level expressed as an average per annum growth over the four-year vesting period, with the base year being 30 June 2008. The EPS hurdle operates as follows:

PERFORMANCE LEVEL	AVERAGE FOUR-YEAR EPS GROWTH	PROPORTION OF OPTIONS AND PERFORMANCERIGHTS THAT MAY BE ELIGIBLE TO VEST
Less than the threshold	Peet's average 4-year EPS growth is lessthan 5% per annum	0%
Threshold	Peet's average 4-year EPS growth is5% per annum	50%
Threshold - maximum	Peet's average 4-year EPS growth isbetween 5% to 8% per annum	Pro-rata between 50% and 100%
Maximum	Peet's average 4-year EPS growth is above8% per annum	100%

11 February 2010

On 11 February 2010, and following shareholder approval, 869,121 performance rights were granted to BD Gore under the Company's PRP.

The terms and conditions of the performance rights can be summarised as follows:

SECURITY	VESTING TERM	EXPIRY TERM	EXERCISE PRICE	VESTING CONDITIONS
Performance right	3 years	5 years	$0.00	NOPAT growth (refer below)
				FUM growth (refer below)

The performance rights are convertible to ordinary shares on a 1:1 basis. The vesting conditions are based on Net Operating Profi t after Tax (Net Profi t after Tax before write-down in the carrying value of inventories) (NOPAT) growth and Funds under Management (FUM) growth. The vesting of 50% of the performance rights granted will be subject to the NOPAT growth condition, while the remaining 50% of the performance rights will be subject to the FUM growth condition.

NOPAT growth will be measured as the average increase in NOPAT over the three-year vesting period, with the base year being 30 June 2009. The NOPAT hurdle operates as follows:

PERFORMANCE LEVEL	THREE-YEAR NOPAT GROWTH TARGET	PROPORTION OF PERFORMANCE RIGHTSTHAT MAY BE ELIGIBLE TO VEST
Less than the target	Peet's average 3-year NOPAT growth is lessthan 8% per annum	0%
Target	Peet's average 3-year NOPAT growth is8% per annum	25%
Target - maximum	Peet's average 3-year NOPAT growth isbetween 8% to 12% per annum	Pro-rata between 25% and 100%
Maximum	Peet's average 3-year NOPAT growth isabove 12% per annum	100%

Share-based compensation (continued)

Share options and performance rights granted to Executive Directors (continued)

11 February 2010 (continued)

FUM growth will be measured as the cumulative value of properties:

acquired by Peet on balance sheet and subsequently sold into a Peet syndicate; or
funded by way of a Peet syndicate; or
for which Peet has been appointed development manager during the performance period.

The aggregate of the FUM growth during the performance period is then compared to the FUM growth target set by the Board.

Of the half of the performance rights to be issued subject to FUM growth, the proportion to vest will be as follows:

PERFORMANCE LEVEL	AGGREGATE FUM GROWTH TARGETDURING PERFORMANCE PERIOD	PROPORTION OF PERFORMANCE RIGHTS THATMAY BE ELIGIBLE TO VEST
Less than the target	Less than $60 million	0%
Target	$60 million	50%
Target - maximum	$60 million to $100 million	Pro-rata between 50% and 100%
Maximum	Greater than $100 million	100%

24 December 2010

On 24 December 2010, and following shareholder approval, 826,045 performance rights were granted to BD Gore and 112,245 performance rights were granted to AJ Lennon under the Company's PRP.

The terms and conditions of the performance rights can be summarised as follows:

SECURITY	VESTING TERM	EXPIRY TERM	EXERCISE PRICE	VESTING CONDITIONS
Performance right	3 years	5 years	$0.00	Relative ROE (refer below)
				FUM growth (refer below)

The performance rights are convertible to ordinary shares on a 1:1 basis. The vesting conditions are based on relative Return on Equity (ROE) and FUM growth. The vesting of 50% of the performance rights granted will be subject to the relative ROE condition, while the remaining 50% of the performance rights will be subject to the FUM growth condition.

Relative ROE will be measured as the average net profi t after tax (NPAT) over the three-year vesting period compared to the S&P/ASX 200 Industrials, with the base year being 30 June 2010. The ROE hurdle operates as follows:

ROE RESULT	PERFORMANCE RIGHTS VESTING
Below 50th percentile	0% vesting
Equal to 50th percentile	50% vesting
Between 50th and 70th percentile	Pro-rata between 50% and 100%
Greater than 70th percentile	100% vesting

The Board has the discretion to amend the calculation of ROE to take account of capital raisings, approved by the Board for the long-term benefi t of the Company, but which have short-term implications on the calculation of ROE. While shareholder approval was obtained on the basis of ROE calculated using NPAT, Directors will propose a resolution at the 2011 AGM to amend the calculation of ROE on the basis of NOPAT.

FUM growth will be measured as the cumulative value of properties:

acquired by Peet on balance sheet and subsequently sold into a Peet syndicate; or
funded by way of a Peet syndicate; or
for which Peet has been appointed a joint venture partner; or
for which Peet has been appointed development manager during the performance period.

Share-based compensation (continued)

Share options and performance rights granted to Executive Directors (continued)

24 December 2010 (continued)

The aggregate of the FUM growth during the performance period is then compared to the FUM growth target set by the Board.

Of the half of the performance rights to be issued subject to FUM growth, the proportion to vest will be as follows:

PERFORMANCE LEVEL	AGGREGATE FUM GROWTH TARGETDURING PERFORMANCE PERIOD	PROPORTION OF PERFORMANCE RIGHTS THAT MAYBE ELIGIBLE TO VEST
Less than the target	Less than $60 million	0%
Target	$60 million	50%
Target - maximum	$60 million to $100 million	Pro-rata between 50% and 100%
Maximum	Greater than $100 million	100%

In addition to the 112,245 performance rights granted to AJ Lennon on 24 December 2010, 118,098 performance rights were also granted to AJ Lennon in respect of FY10. These performance rights were approved by the Company's shareholders at the 2010 AGM and have the same vesting conditions as those granted on 11 February 2010.

Share options and performance rights granted to employees

The ESOP and PRP are designed to provide long-term incentives for executives to deliver long-term shareholder returns. Under the plans, participants are granted options and/or performance rights which only vest if the employees are still employed by the Group at the end of the vesting period and any performance hurdles set have been met. Participation in the plans is at the Board's discretion and no individual has a contractual right to participate in the plans or to receive any guaranteed benefi ts.

During the fi nancial year, there were 600,583 performance rights granted to other key management personnel under the Company's PRP other than those granted to BD Gore and to AJ Lennon. These performance rights have the same vesting conditions as those FY11 performance rights granted to BD Gore and AJ Lennon on 24 December 2010.

Shares under option and performance rights

Unissued ordinary shares of the Company under option and performance rights amounted to 7,533,740 at the date of this report. The details of the options and performance rights are as follows:

NO. OF OPTIONS& PERFORMANCERIGHTS	EXERCISE PRICE	VALUE PER OPTION& PERFORMANCERIGHT ATGRANT DATE	GRANT DATE	VESTING &/OREXERCISE DATE	EXPIRY DATE
Options
1,200,000	$4.10	$1.12	30 Nov 2007	30 Nov 2011	N/A
2,630,000	$2.50	$0.07	18 Dec 2008	18 Dec 2012	18 Dec 2014
3,830,000
Performance rights
240,000	$0.00	$1.08	18 Dec 2008	18 Dec 2012	18 Dec 2014
869,121	$0.00	$2.08	11 Feb 2010	11 Feb 2013	11 Feb 2015
697,852	$0.00	$1.86	28 Jun 2010	28 Jun 2013	28 Jun 2015
1,056,388	$0.00	$1.581	24 Dec 2010	24 Dec 2013	24 Dec 2015
840,379	$0.00	$1.75	24 Dec 2010	24 Dec 2013	24 Dec 2015
3,703,740
7,533,740

Under AASB 2 Share-based payment the issue of a share-based payment award to a Director requires shareholder approval and the value at grant date is taken as the date at which that approval is granted. Accordingly the value of these performance rights is based on 16 November 2010, being the date of Peet Limited's 2010 AGM.

Share-based compensation (continued)

Option and performance rights holdings

The number of options and performance rights over unissued ordinary shares in the Company held during the fi nancial year by each Director and each of the other key management personnel of the Consolidated Entity, including their personally-related entities, are set out below. When exercisable, each option and performance right is convertible into one ordinary share of Peet Limited. Further information on the options and performance rights is set out in note 38 to the fi nancial statements.

		BALANCE ATTHE START OFTHE YEAR	GRANTEDDURING THEYEAR	EXERCISEDDURING THEYEAR	LAPSEDDURING THEYEAR	BALANCE ATEND OF THEYEAR	VESTED ANDEXERCISABLEAT THE ENDOF THE YEAR
Directors
AW Lennon	2011	-	-	-	-	-	-
	2010	-	-	-	-	-	-
SF Higgs	2011	-	-	-	-	-	-
	2010	-	-	-	-	-	-
GW Sinclair	2011	-	-	-	-	-	-
	2010	-	-	-	-	-	-
BD Gore	2011	3,659,121	826,045	-	(170,000)	4,315,166	-
	2010	2,790,000	869,121	-	-	3,659,121	170,000
AJ Lennon	2011	435,000	230,343	-	-	665,343	-
	2010	435,000	-	-	-	435,000	-
WD Hemsley1	2011	-	-	-	-	-	-
	2010	-	-	-	-	-	-
Other key management personnel
D Cooper	2011	692,669	244,898	-	-	937,567	-
	2010	435,000	257,669	-	-	692,669	-
P Dumas	2011	608,466	239,067	-	-	847,533	-
	2010	360,000	248,466	-	-	608,466	-
D Scafetta	2011	342,699	116,618	-	-	459,317	-
	2010	220,000	122,699	-	-	342,699	-
M Pisano2	2011	447,699	-	-	(447,699)	-	-
	2010	325,000	122,699	-	-	447,699	-

Resigned 30 March 2011.
Resigned 23 December 2010.

During the fi nancial year, nil options (2010: nil) were exercised by Directors or other key management personnel.

Additional information

Performance of Peet Limited

The overall level of executive compensation takes into account the performance of the Group over the past year. Comparison to the previous fi ve years performance is tabulated below:

YEAR		2006	2007	2008	2009	2010	2011
Net profi t after tax (NPAT)	$'000	36,834	45,518	47,912	12,019	42,111	22,147
NPAT Growth	Growth%	N/A	23.6%	5.3%	(74.9%)	250.4%	(47.4%)
Net operating profi t after tax (NOPAT)	$'000	36,972	45,732	49,267	31,177	42,803	44,023
NOPAT Growth	Growth%	N/A	23.7%	7.7%	(36.7%)	37.3%	2.8%
Basic EPS	cents per share	18.4	21.4	21.6	5.1	14.1	7.3
Basic EPS Growth	Growth%	N/A	16.3%	0.9%	(76.4%)	176.5%	(48.2%)
Operating EPS	cents per share	18.5	21.5	22.2	13.2	14.3	14.6
Operating EPS Growth	Growth%	N/A	16.2%	3.3%	(40.5%)	8.3%	2.1%
Dividends paid	cents per share	17.0	19.5	19.75	7.0	8.5	8.5
Dividend paid Growth	Growth%	N/A	14.7%	1.3%	(64.6%)	21.4%	0.0%

Additional information (continued)

Details of remuneration: cash bonuses, options and performance rights

For each cash bonus, grant of options and/or performance rights included in the tables within the remuneration report, the percentage of the available bonus or grant that was paid, or that vested in the fi nancial year, and the percentage that was forfeited because the person did not meet the service and performance criteria, is set out below. Generally no part of the bonuses forfeited is payable in future years. Subject to the rules of the ESOP and PRP, no options or performance rights will vest if the conditions are not satisfi ed, hence the minimum value of the option and performance rights yet to vest is nil. The maximum value of the options and performance rights yet to vest has been determined as the amount of the grant date fair value of the options and performance rights that is yet to be expensed.

		CASH BONUS			OPTIONS & PERFORMANCE RIGHTS
	PAID/PAYABLE%	FORFEITED/DEFERRED%	FINANCIALYEARGRANTED	VESTED%	FORFEITED%	FINANCIALYEARS INWHICHOPTIONSMAY VEST	MAXIMUMTOTAL VALUEOF GRANTYET TO VEST$
Directors
AW Lennon	-	-	-	-	-	-	-
SF Higgs	-	-	-	-	-	-	-
GW Sinclair	-	-	-	-	-	-	-
BD Gore	85%	15%	2011	-	-	2014	1,142,077
			2010	-	-	2013	1,440,251
			2009	-	-	2013	233,708
			2008	-	-	2012	35,213
			2006	-	100%	-	-
AJ Lennon	50%	50%	2011	-	-	2014	327,761
			2009	-	-	2013	-
WD Hemsley1	-	-	-	-	-	-	-
Other key management personnel
D Cooper	85%	15%	2011	-	-	2014	381,554
			2010	-	-	2013	418,407
			2009	-	-	2013	65,065
P Dumas	95%	5%	2011	-	-	2014	372,469
			2010	-	-	2013	403,463
			2009	-	-	2013	54,895
D Scafetta	100%	-	2011	-	-	2014	181,692
			2010	-	-	2013	199,241
			2009	-	-	2013	35,237
M Pisano2	-	-	2010	-	100%	2013	-
			2009	-	100%	2013	-

Resigned 30 March 2011.
Resigned 23 December 2010.

Additional information (continued)

Details of remuneration: cash bonuses, options and performance rights (continued)

Further details relating to options and/or performance rights, either granted, exercised or lapsed during the year, are set out below. The amounts below are calculated in accordance with accounting standards and do not represent what was actually received by way of cash or shares in the Company. Neither the Executive Directors nor the other key management personnel exercised any options or performance rights over shares in the Company or received any shares in the Company during the year.

	REMUNERATIONCONSISTING OF OPTIONS& PERFORMANCE RIGHTS1	VALUE ATGRANT DATE2$	VALUE ATEXERCISE DATE3$	VALUE ATLAPSE DATE4$
Executive Directors
BD Gore	20%	1,305,151	-	72,283
AJ Lennon	7%	363,942	-	-
Other key management personnel
D Cooper	14%	428,572	-	-
P Dumas	14%	418,367	-	-
D Scafetta	14%	204,082	-	-
M Pisano5	-	-	-	275,618

The percentage of the value of remuneration consisting of options and performance rights, based on the value of options and performance rights expensed during the current year.
The value at grant date calculated in accordance with AASB 2 Share-based payment of options and/or performance rights granted during the year as part of remuneration.
The value at exercise date of options and/or performance rights that were granted as part of remuneration and were exercised during the year, being the intrinsic value of the options and/or performance rights at that date.
The value at lapse date of options and/or performance rights that were granted as part of remuneration and that lapsed during the year.
Resigned 23 December 2010.

Loans to Directors and other key management personnel

There were no loans made to any Directors or any of the other key management personnel of the Group, or their personally-related entities, during the fi nancial year.

15 Insurance of Offi cers and Auditors

During the fi nancial year, the Company paid a premium in respect of Directors' and Offi cers' liability that indemnifi es Directors and Offi cers of the Company. The liabilities insured are costs and expenses that may be incurred in defending civil or criminal proceedings that may be brought against the Directors and Offi cers in their capacity as such. The Directors have not included more specifi c details of the nature of the liabilities covered or the amount of the premium paid in respect of Directors' and Offi cers' liability, as such disclosure is prohibited under the terms of the contract.

The Company has not during, or since the beginning of the fi nancial year, in respect of any person who is or has been an auditor of the Company, paid, or agreed to pay, a premium in respect of a contract, that insures against any liability, including liability for costs or expenses to defend legal proceedings.

16 Non-Audit Services

The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor's expertise and experience with the Company and/or the Consolidated Entity are considered important.

Details of the amounts paid or payable to the auditor (PricewaterhouseCoopers) for audit and non-audit services provided during the year are set out below and in note 27 to the fi nancial statements.

The Board of Directors has considered the position and, in accordance with the advice received from the Audit and Risk Management Committee, is satisfi ed that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfi ed that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

all non-audit services have been reviewed by the Audit and Risk Management Committee to ensure they do not impact the impartiality and objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants.

During the year the following fees were paid or payable for services provided by the auditor of the Consolidated Entity, its related practices and non-related audit fi rms:

		CONSOLIDATED
	2011	2010
	$	$
Audit services
Audit and review of fi nancial reports and other audit work under the Corporations Act 2001
PricewaterhouseCoopers Australian fi rm	234,210	218,730
Non-PricewaterhouseCoopers audit fi rms	14,111	-
Total remuneration for audit services	248,321	218,730
Other assurance services
PricewaterhouseCoopers Australian fi rm	112,073	79,038
Non-PricewaterhouseCoopers audit fi rms	56,240	37,116
Total remuneration for other assurance services	168,313	116,154
Total remuneration for audit and other assurance services	416,634	334,884
Taxation services
Tax compliance services, including review of Company income tax returns
PricewaterhouseCoopers Australian fi rm	72,000	70,549
Non-PricewaterhouseCoopers tax fi rms	3,050	18,193
Total remuneration for other taxation services	75,050	88,742

17 Auditor

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

18 Auditor's Independence Declaration

A copy of the auditor's independence declaration, as required under section 307C of the Corporation Act 2001, is set out on page 52.

19 Rounding of Amounts

The Company is of a kind referred to in Class Order 98/0100, issued by the Australian Securities and Investments Commission, relating to the ''rounding off'' of amounts in the fi nancial statements. Amounts in the fi nancial statements have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, the nearest dollar.

Signed for and on behalf of the Board in accordance with a resolution of the Board of Directors.

Brendan Gore Managing Director and Chief Executive Offi cer Perth, Western Australia

30 September 2011

Financial Report

Income statements	54
Statements of comprehensive income	55
Statements of fi nancial position	56
Statements of changes in equity	57
Statements of cash fl ows	59
Notes to fi nancial statements	60
Directors' declaration	124
Independent auditor's report to the members	125
Shareholders information	127
Corporate directory	129

This fi nancial report covers both the separate fi nancial statements of Peet Limited as an individual entity and the consolidated fi nancial statements for the Consolidated Entity consisting of Peet Limited and its subsidiaries. The fi nancial report is presented in Australian currency.

Peet Limited is a Company limited by shares, incorporated and domiciled in Australia. Its registered offi ce and principal place of business is: Level 7, 200 St Georges Terrace Perth WA 6000.

The fi nancial report was authorised for issue by the Directors on 30 September 2011. The Directors have the power to amend and reissue the fi nancial report. Through the use of the internet, we have ensured that our corporate reporting is timely and complete. All press releases, fi nancial reports and other information are accessible via our website: www.peet.com.au

A description of the nature of the Consolidated Entity's operations and its principal activities is included in the Operational Review on pages 14 to 20, which is not part of the fi nancial report.

Income Statements

	NOTES	2011$'000	CONSOLIDATED2010$'000	2011$'000	PARENT ENTITY2010$'000
Revenue	5	188,725	178,022	41,816	92,200
Other income	7(a)	-	-	4,974	5,096
Cost of inventories	6	(74,737)	(73,519)	(41)	(342)
Employee benefi ts expense		(18,384)	(16,604)	(17,454)	(16,074)
Depreciation and amortisation	6	(1,625)	(1,466)	(792)	(671)
Project management, selling and otheroperating costs		(11,795)	(10,095)	(3,559)	(3,349)
Offi ce costs		(4,346)	(3,793)	(3,570)	(3,115)
Other expenses		(6,781)	(5,868)	(5,299)	(4,801)
Write-down in carrying value of inventories anddevelopment costs	6	(31,251)	(989)	(468)	(989)
Finance costs	6	(5,282)	(4,347)	(195)	896
Share of net loss of associates accounted forusing the equity method	34(b)	(1,773)	(7)	-	-
Profi t before income tax		32,751	61,334	15,412	68,851
Income tax expense	7	(10,545)	(19,223)	(2,833)	(3,253)
Profi t for the year		22,206	42,111	12,579	65,598
Attributable to :
Owners of Peet Limited		22,147	42,111	12,579	65,598
Non-controlling interests		59	-	-	-
		22,206	42,111	12,579	65,598
Earnings per share for profi t attributable to the ordinary equity holders of the Parent Entity:
Basic earnings per share (cents)	37(a)	7.3	14.1

The above income statements should be read in conjunction with the accompanying notes.

Diluted earnings per share (cents) 37(a) 6.8 13.9

Statements of Comprehensive Income

			CONSOLIDATED		PARENT ENTITY
	NOTES	2011$'000	2010$'000	2011$'000	2010$'000
Profi t for the year		22,206	42,111	12,579	65,598
Other comprehensive income
Changes in the fair value of cash fl ow hedges		1,083	(1,565)	233	(1,565)
Share of other comprehensive income ofassociates	25	(58)	-	-	-
Income tax relating to components of othercomprehensive income		(307)	470	(70)	470
Other comprehensive income for the year,net of tax		718	(1,095)	163	(1,095)
Total comprehensive income for the year		22,924	41,016	12,742	64,503
Total comprehensive income for the yearis attributable to:
Owners of Peet Limited		22,927	41,016	12,742	64,503
Non-controlling interests		(3)	-	-	-
		22,924	41,016	12,742	64,503

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

Statements of Financial Position

			CONSOLIDATED		PARENT ENTITY
	NOTES	2011$'000	2010$'000	2011$'000	2010$'000
Current assets
Cash and cash equivalents	8	57,201	41,074	16,961	21,017
Receivables	9	67,752	51,220	53,046	44,531
Inventories	10	120,444	64,833	-	2
Derivative fi nancial instruments	11	263	-	-	-
Assets classifi ed as held for sale	12	69,509	-	-	-
Total current assets		315,169	157,127	70,007	65,550
Non-current assets
Receivables	9	14,578	13,077	7,089	7,281
Inventories	10	300,979	353,559	9,828	6,931
Investments accounted for using the equity
method	13	36,124	32,640	-	-
Available for sale fi nancial assets	14	462	257	462	257
Derivative fi nancial instruments	11	851	1,208	-	1,208
Investments in subsidiaries and associatesProperty, plant and equipment	1617	-10,575	-8,012	224,6773,525	164,2483,259
Intangible assets	18	876	-	876	-
Total non-current assets		364,445	408,753	246,457	183,184
Total assets		679,614	565,880	316,464	248,734
Current liabilities
Payables	19	30,371	25,048	6,528	5,545
Land vendor liabilities	20	20,573	42,240	-	-
Borrowings	21	1,080	1,043	1,080	1,043
Current tax liabilities		3,171	1,110	3,171	1,110
Provisions	22	1,969	2,640	330	349
Liabilities directly associated with assetsclassifi ed as held for sale	12	29,439	-	-	-
Total current liabilities		86,603	72,081	11,109	8,047
Non-current liabilities
Payables	19	-	-	2	2
Land vendor liabilities	20	25,793	18,024	-	-
Borrowings	21	273,096	218,790	54,456	6,307
Deferred tax liabilities	23	22,132	23,983	6,542	5,125
Provisions	22	153	90	149	83
Total non-current liabilities		321,174	260,887	61,149	11,517
Total liabilities		407,777	332,968	72,258	19,564
Net assets		271,837	232,912	244,206	229,170
Equity
Contributed equity	24	201,291	176,025	201,291	176,025
Reserves	25	5,020	1,367	4,207	1,367
Retained profi ts	25	52,018	55,520	38,708	51,778
Capital and reserves attributable to owners of
Peet Limited		258,329	232,912	244,206	229,170
Non-controlling interests		13,508	-	-	-
Total equity		271,837	232,912	244,206	229,170

The above statements of fi nancial position should be read in conjunction with the accompanying notes.

Statements of Changes in Equity

				CONSOLIDATED
	NOTES	CONTRIBUTEDEQUITY$'000	RESERVES$'000	RETAINEDPROFITS$'000	TOTAL$'000	NONCONTROLLINGINTERESTS$'000	TOTAL$'000
Balance at 1 July 2009		163,354	2,160	37,149	202,663	-	202,663
Profi t for the year		-	-	42,111	42,111	-	42,111
Other comprehensive income		-	(1,095)	-	(1,095)	-	(1,095)
Total comprehensive incomefor the year		-	(1,095)	42,111	41,016	-	41,016
Transactions with owners in their capacity as owners:
Contributions of equity, net oftransaction costs and tax		12,117	-	-	12,117	-	12,117
Dividends provided for or paid	26(a)	-	-	(23,740)	(23,740)	-	(23,740)
Exercise of employee shareoptions	24(a)	48	-	-	48	-	48
Transfer of exercised options	24(a), 25	506	(506)	-	-	-	-
Employee share benefi texpense	25	-	808	-	808	-	808
		12,671	302	(23,740)	(10,767)	-	(10,767)
Balance at 30 June 2010		176,025	1,367	55,520	232,912	-	232,912

				CONSOLIDATED
		CONTRIBUTED		RETAINED		NONCONTROLLING
	NOTES	EQUITY$'000	RESERVES$'000	PROFITS$'000	TOTAL$'000	INTERESTS$'000	TOTAL$'000
Balance at 1 July 2010		176,025	1,367	55,520	232,912	-	232,912
Profi t for the year		-	-	22,147	22,147	59	22,206
Other comprehensive income		-	780	-	780	(62)	718
Total comprehensive incomefor the year		-	780	22,147	22,927	(3)	22,924
Transactions with owners in their capacity as owners:
Contributions of equity, net oftransaction costs and tax		25,266	-	-	25,266	-	25,266
Value of conversion rightson convertible notes, net oftransaction costs and tax	25	-	1,934	-	1,934	-	1,934
Non-controlling interests onpart disposal of subsidiary	12(c)	-	349	-	349	13,511	13,860
Transactions with noncontrolling parties		-	(153)	-	(153)	-	(153)
Dividends provided for or paid	26(a)	-	-	(25,649)	(25,649)	-	(25,649)
Employee share benefi texpense	25	-	743	-	743	-	743
		25,266	2,873	(25,649)	2,490	13,511	16,001
Balance at 30 June 2011		201,291	5,020	52,018	258,329	13,508	271,837

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

Statements of Changes in Equity

				PARENT
	NOTES	CONTRIBUTEDEQUITY$'000	RESERVES$'000	RETAINEDPROFITS$'000	TOTAL$'000	NONCONTROLLINGINTERESTS$'000	TOTAL$'000
Balance at 1 July 2009		163,354	2,160	9,920	175,434	-	175,434
Profi t for the year		-	-	65,598	65,598	-	65,598
Other comprehensive income		-	(1,095)	-	(1,095)	-	(1,095)
Total comprehensive incomefor the year		-	(1,095)	65,598	64,503	-	64,503
Transactions with owners in their capacity as owners:
Contributions of equity, net oftransaction costs and tax		12,117	-	-	12,117	-	12,117
Dividends provided for or paid	26(a)	-	-	(23,740)	(23,740)	-	(23,740)
Exercise of employee shareoptions	24(a)	48	-	-	48	-	48
Transfer of exercised options	24(a), 25	506	(506)	-	-	-	-
Employee share benefi t
expense	25	-	808	-	808	-	808
		12,671	302	(23,740)	(10,767)	-	(10,767)
Balance at 30 June 2010		176,025	1,367	51,778	229,170	-	229,170

				PARENT
						NON
	NOTES	CONTRIBUTEDEQUITY	RESERVES	RETAINEDPROFITS	TOTAL	CONTROLLINGINTERESTS	TOTAL
		$'000	$'000	$'000	$'000	$'000	$'000
Balance at 1 July 2010		176,025	1,367	51,778	229,170	-	229,170
Profi t for the year		-	-	12,579	12,579	-	12,579
Other comprehensive income		-	163	-	163	-	163
Total comprehensive income
for the year		-	163	12,579	12,742	-	12,742
Transactions with owners in their capacity as owners:
Contributions of equity, net oftransaction costs and tax		25,266	-	-	25,266	-	25,266
Value of conversion rightson convertible notes, net of
transaction costs and tax	25	-	1,934	-	1,934	-	1,934
Dividends provided for or paid	26(a)	-	-	(25,649)	(25,649)	-	(25,649)
Employee share benefi t
expense	25	-	743	-	743	-	743
		25,266	2,677	(25,649)	2,294	-	2,294
Balance at 30 June 2011		201,291	4,207	38,708	244,206	-	244,206

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

Statements of Cash Flows

			CONSOLIDATED		PARENT ENTITY
	NOTES	2011$'000	2010$'000	2011$'000	2010$'000
Cash fl ows from operating activities
Receipts from customers (inclusive of goods andservices tax)		197,139	178,247	38,159	43,532
Payments to suppliers and employees (inclusive of
goods and services tax)		(126,910)(98,588)	(86,152)	(35,356)-	(30,113)
Payments for purchase of landInterest and other fi nance costs paid		(22,317)	(32,230)(22,324)	(907)	-(2,664)
Reimbursements of interest and other fi nancecosts from subsidiaries		-	-	1,929	5,438
Income tax paid		(11,503)	(4,962)	(11,503)	(4,962)
Reimbursements received from tax consolidatedentities		-	-	15,002	16,837
Net cash (outfl ow)/infl ow from operating
activities	33(b)	(62,179)	32,579	7,324	28,068
Cash fl ows from investing activities
Payments for property, plant and equipment		(4,184)	(2,015)	(1,053)	(903)
Proceeds from sale of property, plant and
equipment		-	12	-	-
Payments for intangibles		(881)	-	(881)	-
Payments for investments in associates and jointlycontrolled entities		(5,336)	(16)	(30)	(16)
Payments for investments in available for sale
fi nancial assetsLoans to related entities		(205)(31,927)	-(17,271)	(205)(128,315)	-(191,373)
Repayments of loans by related entities		21,712	56	74,600	79,458
Dividends received		235	167	235	50,697
Interest received		4,469	3,656	2,104	1,983
Net cash outfl ow from investing activities		(16,117)	(15,411)	(53,545)	(60,154)
Cash fl ows from fi nancing activities
Dividends paid to the Company's shareholders		(19,911)	(16,467)	(19,911)	(16,467)
Proceeds from exercise of employee share options		-	48	-	48
Repayments of borrowings		(38,068)	(168,491)	(1,043)	(26,151)
Proceeds from borrowings		76,346	80,719	-	-
Proceeds from capital returns		38	42	38	42
Proceeds from issue of equity securities		15,808	5,000	15,808	5,000
Transaction costs of share issue		(892)	(61)	(674)	(61)
Proceeds from issue of convertible notes (net ofdebt raising costs)		47,947	-	47,947	-
Transactions with non-controlling interests		13,860	-	-	-
Net cash infl ow/(outfl ow) from fi nancingactivities		95,128	(99,210)	42,165	(37,589)
Net increase/(decrease) in cash and cashequivalents		16,832	(82,042)	(4,056)	(69,675)
Cash and cash equivalents at the beginning of thefi nancial year		41,074	123,116	21,017	90,692
Cash and cash equivalents at the end of thefi nancial year	33(a)	57,906	41,074	16,961	21,017
Financing arrangements	21(c)

The above statements of cash fl ows should be read in conjunction with the accompanying notes.

Notes to Financial Statements

1 Summary of Signifi cant Accounting Policies

The principal accounting policies adopted in the preparation of the fi nancial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The fi nancial statements include separate fi nancial statements for Peet Limited as an individual entity and the Consolidated Entity consisting of Peet Limited and its subsidiaries.

(a) Basis of preparation

These general purpose fi nancial statements have been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act 2001.

Compliance with IFRS

The fi nancial statements of the Peet Limited Group also comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

New and amended standards adopted by the Group

The following new standards and amendments to standards are mandatory for the fi rst time for the fi nancial year beginning 1 July 2010:

AASB 2009-5 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project;
AASB 2009-8 Amendments to Australian Accounting Standards Group Cash-settled Share-based Payment Transactions;
AASB 2009-10 Amendments to Australian Accounting Standards Classifi cation of Rights Issues;
AASB Interpretation 19 Extinguishing Financial Liabilities with Equity Instruments and AASB 2009-13 Amendments to Australian Accounting Standards arising from Interpretation 19; and
AASB 2010-3 Amendments to Australian Accounting Standards arising from the Annual Improvements Project.

The adoption of these standards did not have any impact on the current period or any prior period and is not likely to affect future periods.

Historical cost convention

These fi nancial statements have been prepared under the historical cost convention, except for derivative instruments and available for sale fi nancial assets which have been measured at fair value.

Critical accounting estimates

The preparation of fi nancial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are signifi cant to the fi nancial statements are disclosed in note 3.

Comparatives

The comparative revenues and expenses in the income statement, assets and liabilities in the statement of fi nancial position and cash fl ow movements in the statement of cash fl ows have been reclassifi ed where appropriate to enhance comparability and understanding of the fi nancial statements. There is no impact on the profi t and net asset position of the Group in the prior year.

The accounting policies adopted are consistent with those of the previous fi nancial year.

(b) Principles of consolidation

(i) Subsidiaries

The consolidated fi nancial statements incorporate the assets and liabilities of Peet Limited ('Parent Entity') as at 30 June 2011 and the results of all subsidiaries for the year then ended. Peet Limited and its subsidiaries together are referred to in these fi nancial statements as the Group or the Consolidated Entity.

(b) Principles of consolidation (continued)

(i) Subsidiaries (continued)

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

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The acquisition method of accounting is used to account for business combinations by the Group (refer to note 1(f)).

Intercompany transactions, balances and unrealised gains on transactions between Group entities are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

Investments in subsidiaries are accounted for at cost in the individual fi nancial statements of Peet Limited. Such investments include both investments in shares issued by the subsidiary and other Parent Entity interests that in substance form part of the Parent Entity's investment in the subsidiary. These include investments in the form of interest-free loans which have no fi xed repayment terms and which have been provided to subsidiaries as an additional source of long-term capital.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income statement, statement of comprehensive income, statement of changes in equity and statement of fi nancial position respectively.

(ii) Associates

Associates are all entities over which the Group has signifi cant infl uence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. In the case of land syndicates, signifi cant infl uence can exist with a lower shareholding by virtue of the Group's position as syndicate manager. Investments in associates are accounted for using the equity method of accounting, after initially being recognised at cost.

The Group's share of its associates' post-acquisition profi ts or losses are recognised in the income statement, and its share of post-acquisition other comprehensive income is recognised in other comprehensive income. The cumulative postacquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from associates are recognised as a reduction in the carrying amount of the investment.

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

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

(iii) Joint ventures

Jointly controlled operations

In respect of its interests in jointly controlled operations the Group recognises in its fi nancial statements the assets that it controls and the liabilities that it incurs. The expenses that it incurs and its share of the income that it earns from the sale of goods or services by the joint venture are also recognised.

(b) Principles of consolidation (continued)

(iii) Joint ventures (continued)

Jointly controlled entities

The interest in jointly controlled entities is accounted for using the equity method after initially being recognised at cost. Under the equity method, the share of the profi ts or losses of the jointly controlled entities is recognised in the profi t or loss, and the share of post-acquisition movements in reserves is recognised in other comprehensive income. Details relating to jointly controlled entities are set out in note 34.

Profi ts or losses on transactions establishing the jointly controlled entities and transactions with the jointly controlled entities are eliminated to the extent of the Group's ownership interest until such time as they are realised by the jointly controlled entities on consumption or sale. A loss on the transaction is recognised immediately if the loss provides evidence of a reduction in the net realisable value of current assets, or an impairment loss.

(iv) Changes in ownership interests

The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to refl ect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate reserve within equity attributable to owners of Peet Limited.

When the Group ceases to have control, joint control or signifi cant infl uence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profi t or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, jointly controlled entity or fi nancial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassifi ed to profi t or loss.

If the ownership interest in a jointly-controlled entity or an associate is reduced but joint control or signifi cant infl uence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassifi ed to profi t or loss where appropriate.

(c) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identifi ed as the executive management group.

(d) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, allowances, and duties and taxes paid. The following specifi c recognition criteria must also be met before revenue is recognised:

Sale of land

Revenue and profi ts from the sale of blocks from completed stages of land subdivision are recognised on settlement of the sale. This represents the point when risks and rewards have passed to the buyer.

Project management, marketing and selling management fees

Project management, marketing and selling management fees are recognised where there is a signed contract as this is the point at which revenue has been earned.

Manager's performance fees

Manager's performance fee revenue is recognised at the end of each reporting period and is based on a profi tability measurement in accordance with the relevant Management Agreement.

(d) Revenue recognition (continued)

Other trading activities

Revenue from other trading activities is recognised when the service required under the contract has been performed.

Interest income

Interest revenue is brought to account when earned, taking into account the effective yield on the fi nancial asset.

Dividend income

Dividends are recognised as revenue when the right to receive payment is established.

(e) Income tax

The income tax expense or revenue for the period is the tax payable on the current period's taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the fi nancial statements, and to unused tax losses.

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

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profi t or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Tax consolidation legislation

Peet Limited and its wholly owned Australian controlled entities have implemented the tax consolidation legislation as of 1 July 2003.

The head entity, Peet Limited, and the controlled entities in the tax consolidated group continue to account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a stand alone taxpayer in its own right.

In addition to its own current and deferred tax amounts, Peet Limited also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the tax consolidated group.

Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from or payable to other entities in the Group. Details about the tax funding agreement are disclosed in note 7.

Any difference between the amount assumed and amounts receivable or payable under the tax funding agreement are recognised as a contribution to (or distribution from) the wholly owned entity.

(f) Business combinations

The acquisition method of accounting is used to account for all business combinations, including business combinations involving entities or businesses under common control, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any asset or liability resulting from a contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary.

Acquisition-related costs are expensed as incurred. Identifi able assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest's proportionate share of the acquiree's net identifi able assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquire and the acquisitiondate fair value of any previous equity interest in the acquiree over the fair value of the group's share of the net identifi able assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifi able assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the difference is recognised directly in profi t or loss as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity's incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent fi nancier under comparable terms and conditions.

Contingent consideration is classifi ed either as equity or a fi nancial liability. Amounts classifi ed as a fi nancial liability are subsequently remeasured to fair value with changes in fair value recognised in profi t or loss.

(g) Impairment of assets

Intangible assets that have an indefi nite life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired.

Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifi able cash infl ows which are largely independent of the cash infl ows from other assets or groups of assets (cash generating units). Non-fi nancial assets that suffered impairment are reviewed for possible reversal of the impairment at each reporting period.

(h) Cash and cash equivalents

For the purpose of presentation in the statement of cash fl ows, cash and cash equivalents includes cash on hand, deposits held at call with fi nancial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignifi cant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the statement of fi nancial position.

(i) Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Trade receivables are generally due for settlement within 30 - 60 days. They are presented as current assets unless collection is not expected for more than 12 months after the reporting date. Other receivables are recognised on an accrual basis as the services to which they relate are performed.

Collectability of trade receivables is reviewed on an ongoing basis. Receivables which are known to be uncollectible are written off. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. Signifi cant fi nancial diffi culties of the debtor, probability that the debtor will enter bankruptcy or fi nancial reorganisation, and default or delinquency in payments (more than 60 days overdue) are considered indicators that the trade receivable may be impaired. The amount of the impairment provision is the difference between the asset's carrying amount and the present value of estimated future cash fl ows, discounted at the effective interest rate. Cash fl ows relating to short-term receivables are not discounted if the effect of discounting is immaterial.

(i) Trade receivables (continued)

The amount of the provision is recognised in the income statement within other expenses. When a trade receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the provision for impairment of trade receivables. Subsequent recoveries of amounts previously written off are credited against other expenses in the income statement.

(j) Inventories

Land held for development and resale is stated at the lower of cost and net realisable value. Cost includes the cost of acquisition, development and borrowing costs during development. When development is completed borrowing costs and other holding charges are expensed as incurred.

Borrowing costs included in the cost of land held for resale are those costs that would have been avoided if the expenditure on the acquisition and development of the land had not been made. Borrowing costs incurred while active development is interrupted for extended periods are recognised as expenses.

Land purchased for residential subdivision is classifi ed as non-current. They are reclassifi ed as current when lots within the subdivision are expected to be sold within 12 months.

(k) Current assets classifi ed as held for sale

Current assets (or disposal groups) are classifi ed as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefi ts, fi nancial assets and investment property that are carried at fair value and contractual rights under insurance contracts, which are specifi cally exempt from this requirement.

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

Current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classifi ed as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classifi ed as held for sale continue to be recognised.

Current assets classifi ed as held for sale and the assets of a disposal group classifi ed as held for sale are presented separately from the other assets in the balance sheet. The liabilities of a disposal group classifi ed as held for sale are presented separately from other liabilities in the balance sheet.

(l) Investments and other fi nancial assets

Classifi cation

The Group classifi es its investments in the following categories: loans and receivables, and available for sale fi nancial assets. The classifi cation depends on the purpose for which the investments were acquired. Management determines the classifi cation of its investments at initial recognition and re-evaluates this designation at the end of each reporting date.

(i) Loans and receivables

Loans and receivables are non-derivative fi nancial assets with fi xed or determinable payments that are not quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the balance date which are classifi ed as non-current assets. Loans and receivables are included in receivables in the statement of fi nancial position.

(ii) Available for sale fi nancial assets

Available for sale fi nancial assets, comprising principally marketable equity securities, are non-derivatives that are either designated in this category or not classifi ed in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the balance date.

(l) Investments in subsidiaries and associates (continued)

Recognition and derecognition

Regular way purchases and sales of investments are recognised on trade-date – the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs for all fi nancial assets not carried at fair value through profi t or loss. Financial assets carried at fair value through profi t or loss are initially recognised at fair value and transaction costs are expensed in the income statement. Financial assets are derecognised when the rights to receive cash fl ows from the fi nancial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership.

When securities classifi ed as available for sale are sold or impaired, the accumulated fair value adjustments recognised in other comprehensive income are reclassifi ed to the income statement as gains and losses from investment securities.

Measurement

At initial recognition, the Group measures a fi nancial asset at its fair value plus, in the case of a fi nancial asset not at fair value through profi t or loss, transaction costs that are directly attributable to the acquisition of the fi nancial asset. Transaction costs of fi nancial assets carried at fair value through profi t or loss are expensed in profi t or loss.

Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method.

Available for sale fi nancial assets and fi nancial assets at fair value through profi t and loss are subsequently carried at fair value. Gains or losses arising from changes in the fair value of the 'fi nancial assets at fair value through profi t or loss' category are presented in the income statement within other income or other expenses in the period in which they arise. Dividend income from fi nancial assets at fair value through profi t and loss is recognised in the income statement as part of revenue from continuing operations when the Group's right to receive payments is established.

Fair value

Details on how the fair value of fi nancial instruments is determined are disclosed in note 1(p).

Impairment

The Group assesses at each balance date whether there is objective evidence that a fi nancial asset or group of fi nancial assets is impaired. In the case of equity securities classifi ed as available for sale, a signifi cant or prolonged decline in the fair value of a security below its cost is considered in determining whether the security is impaired. If any such evidence exists for available for sale fi nancial assets, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that fi nancial asset previously recognised in profi t and loss - is removed from equity and recognised in the income statement. Impairment losses recognised in the income statement on equity instruments classifi ed as available for sale are not reversed through the income statement.

(m) Derivatives

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as hedges of the cash fl ows of recognised assets and liabilities and highly probable forecast transactions (cash fl ow hedges).

The Group documents at the inception of the hedging transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash fl ows of hedged items.

The fair value of the derivative fi nancial instruments used for hedging purposes is disclosed in note 11. Movements in the hedging reserve in shareholders' equity are shown in note 25. The full fair value of a hedging derivative is classifi ed as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months. It is classifi ed as a current asset or liability when the remaining maturity of the hedged item is less than 12 months.

(m) Derivatives (continued)

Cash fl ow hedge

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash fl ow hedges is recognised in other comprehensive income and accumulated reserves in equity. The gain or loss relating to the ineffective portion is recognised immediately in the income statement within fi nance costs.

Amounts accumulated in equity are recycled in the income statement in the periods when the hedged item affects profi t or loss (for instance when the forecast sale that is hedged takes place). However when the forecast transaction that is hedged results in a recognition of a non-fi nancial asset (for example inventory) or a non-fi nancial liability, the gains or losses previously deferred in equity are transferred from equity and included in the measurement of the initial cost or carrying amount of the asset or liability.

When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in the income statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassifi ed to the income statement.

Derivatives that do not qualify for hedge accounting

Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognised immediately in the income statement in the period in which they occur.

(n) Property, plant and equipment

Property, plant and equipment are shown at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Depreciation on property, plant and equipment is calculated using the straight line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives, as follows:

Plant and equipment 1 to 5 years
Property 40 years

The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date.

An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount (note 1(g)).

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the income statement.

Properties under construction

Property under construction is carried at cost and is not depreciated until the asset is available and ready for use.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefi ts associated with the item will fl ow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the income statement during the fi nancial period in which they are incurred.

(o) Intangible assets - Management rights

The management rights acquired by the Company are initially carried at cost. Amortisation is calculated based on the timing of projected cash fl ows of the management rights over their estimated useful lives.

(p) Fair value estimation

The fair value of fi nancial assets and fi nancial liabilities must be estimated for recognition and measurement or for disclosure purposes.

The fair value of fi nancial instruments traded in active markets (such as publicly traded derivatives and trading and available for sale securities) is based on quoted market prices at the balance date. The quoted market price used for fi nancial assets held by the Group is the current bid price; the appropriate quoted market price for fi nancial liabilities is the current ask price.

The fair value of fi nancial instruments that are not traded in an active market (for example, unlisted securities) is determined using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance date. Quoted market prices or dealer quotes for similar instruments are used for long-term debt instruments held. Other techniques, such as estimated discounted cash fl ows, are used to determine fair value for the remaining fi nancial instruments. The fair value of interest rate swaps is calculated as the present value of the estimated future cash fl ows.

The carrying amount less impairment provision of trade receivables and payables are assumed to approximate their fair values. The fair value of fi nancial liabilities for disclosure purposes is estimated by discounting the future contractual cash fl ows at the current market interest rate that is available to the Group for similar fi nancial instruments.

(q) Trade and other payables

These amounts represent liabilities for goods and services provided to the Group prior to the end of the fi nancial year which are unpaid. These amounts are unsecured and usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.

(r) Land vendor liabilities

Where the Group or Parent Entity enters into unconditional contracts with land vendors to purchase properties for future development that contain deferred payment terms, these borrowings are disclosed at their present value. The unwinding of the discount applied to the acquisition price is included in fi nance costs.

(s) Borrowings and borrowing costs

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the income statement over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent, there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment and amortised over the period of the facility to which it relates.

Borrowings are classifi ed as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period.

The fair value of the liability portion of a convertible bond is determined using a market interest rate for an equivalent non-convertible bond. This amount is recorded as a liability on an amortised cost basis until extinguished on conversion or maturity of the bonds. The remainder of the proceeds is allocated to the conversion option. This is recognised and included in reserves, net of income tax effects.

Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed in the period they are incurred. The capitalisation rate used to determine the amount of fi nance costs to be capitalised is the weighted average interest rate applicable to the Group's outstanding borrowings during the year.

(t) Provisions

Provisions for legal and other claims are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outfl ow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses. Refer to note 1(u) for provisions for rebates.

Where there are a number of similar obligations, the likelihood that an outfl ow will be required at settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outfl ow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the balance date. The discount rate used to determine the present value refl ects current market assessments of the time, value of money and the risks specifi c to the liability. The increase in the provision due to the passage of time is recognised as interest expense.

(u) Rebates

The Company may be required under the terms of certain sale contracts to provide rebates for expenditures undertaken by land holders in respect of Peet developments. These expenditures relate to landscaping and fencing and are generally payable where the land purchaser completes the construction of their dwelling within a specifi ed period of time. This period is generally twelve to eighteen months from the date of settlement. A liability is recorded at settlement and a related adjustment to revenue is recorded upon the expiration of the time limit if the rebate has not been paid.

(v) Employee benefi ts

(i) Short-term obligations

Liabilities for wages and salaries, including non-monetary benefi ts, annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in other payables in respect of employees' services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled.

(ii) Other long-term employee benefi t obligations

The liability for long service leave is recognised in the provision for employee benefi ts and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the discounted cash fl ow method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outfl ows.

(iii) Share-based payments

Share-based compensation benefi ts are provided to employees via the Employee Share Option Plan, Performance Rights Plan and Deferred Employee Share Plan. Information relating to these plans is set out in note 38.

The fair value of options granted under the Employee Share Option Plan and Performance Rights Plan are recognised as an employee benefi t expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the options and/or performance rights.

The fair value at grant date is independently determined using a Black Scholes option pricing model and the value of a performance right at grant date is determined using a Binomial pricing model. The model takes into account the exercise price, the term of the option and/or performance right, the vesting and performance criteria, the impact of dilution, the non-tradeable nature of the option or performance right, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option and/or performance rights.

(v) Employee benefi ts (continued)

(iii) Share-based payments (continued)

The fair value of the options and/or performance rights granted is adjusted to refl ect market vesting conditions, but excludes the impact of any non-market vesting conditions (for example, profi tability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to become exercisable. At each balance date, the entity revises its estimate of the number of options and/or performance rights that are expected to become exercisable. The employee benefi t expense recognised each period takes into account the most recent estimate. The impact of the revision to the original estimates, if any, is recognised in the income statement with a corresponding adjustment to equity.

Upon the exercise of options and/or performance rights, the balance of the share based payments reserve relating to those options and/or performance rights is transferred to share capital and the proceeds received, net of any directly attributable transaction costs.

(iv) Profi t sharing and bonus plans

The Group recognises a liability and an expense for bonuses and profi t sharing based on a formula that takes into consideration the profi t attributable to the Company's shareholders after certain adjustments. The Group recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

(v) Termination benefi ts

Termination benefi ts are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefi ts. The Group recognises termination benefi ts when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefi ts as a result of an offer made to encourage voluntary redundancy. Benefi ts falling due more than 12 months after balance date are discounted to present value.

(vi) Retirement benefi t obligations

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

(w) Contributed equity

Ordinary shares are classifi ed as equity. Incremental costs directly attributable to the issue of new shares or options and/or performance rights are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares, options and/or performance rights for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.

If the entity reacquires its own equity instruments, e.g. as the result of a share buy back, those instruments are deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the profi t or loss and the consideration paid including any directly attributable incremental costs (net of income taxes) is recognised directly in equity.

(x) Dividends

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period, but not distributed at the end of the reporting period.

(y) Earnings per share

(i) Basic earnings per share

Basic earnings per share is determined by dividing the profi t attributable to owners of the Parent Entity, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the fi nancial year.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the fi gures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other fi nancing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

(z) Goods and services tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the statement of fi nancial position.

Cash fl ows are presented on a gross basis. The GST components of cash fl ows arising from investing or fi nancing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash fl ows.

(aa) Rounding of amounts

The Company is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, relating to the 'rounding off' of amounts in the fi nancial statements. Amounts in the fi nancial statements have been rounded off in accordance with that Class Order to the nearest thousand dollars, or in certain cases, the nearest dollar.

(ab) New accounting standards and interpretations

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2011 reporting periods. The Group's assessment of the impact of these new standards and interpretations is set out below.

• AASB 2010-3 Amendments to Australian Accounting Standards arising from the Annual Improvements Project and AASB 2010-4 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project (effective for annual periods beginning on or after January 2011)

In June 2010, the AASB made a number of amendments to Australian Accounting Standards as a result of the IASB's annual improvements project. The Group will apply the amendments from 1 July 2011. The Group does not expect that any adjustments will be necessary as the result of applying the revised rules.

• IFRS 10 Consolidated Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of Interests in Other Entities and revised IAS 27 Separate Financial Statements and IAS 28 Investments in Associates and Joint Ventures (effective 1 January 2013)

In May 2011, the IASB issued a suite of fi ve new and amended standards which address the accounting for joint arrangements, consolidated fi nancial statements and associated disclosures. The AASB is expected to issue equivalent Australian standards shortly.

IFRS 10 replaces all of the guidance on control and consolidation in IAS 27 Consolidated and Separate Financial Statements, and SIC-12 Consolidation – Special Purpose Entities. The core principle that a consolidated entity presents a parent and its subsidiaries as if they are a single economic entity remains unchanged, as do the mechanics of consolidation. However the standard introduces a single defi nition of control that applies to all entities. It focuses on the need to have both power and rights or exposure to variable returns before control is present. Power is the current ability to direct the activities that signifi cantly infl uence returns. Returns must vary and can be positive, negative or both. There is also new guidance on participating and protective rights and on agent/principal relationships. While the Group does not expect the new standard to have a signifi cant impact on its composition, it has yet to perform a detailed analysis of the new guidance in the context of its various investees that may or may not be controlled under the new rules.

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

(ab) New accounting standards and interpretations (continued)

IFRS 12 sets out the required disclosures for entities reporting under the two new standards, IFRS 10 and IFRS 11, and replaces the disclosure requirements currently found in IAS 28. Application of this standard by the Group will not affect any of the amounts recognised in the fi nancial statements, but will impact the type of information disclosed in relation to the Group's investments.

IAS 27 is renamed Separate Financial Statements and is now a standard dealing solely with separate fi nancial statements. Application of this standard by the Group and Parent Entity will not affect any of the amounts recognised in the fi nancial statements, but may impact the type of information disclosed in relation to the parent's investments in the separate Parent Entity fi nancial statements.

Amendments to IAS 28 provide clarifi cation that an entity continues to apply the equity method and does not remeasure its retained interest as part of ownership changes where a joint venture becomes an associate, and vice versa. The amendments also introduce a "partial disposal" concept. The Group is still assessing the impact of these amendments.

The Group does not expect to adopt the new standards before their operative date. They would therefore be fi rst applied in the fi nancial statements for the annual reporting period ending 30 June 2014.

• IFRS 13 Fair Value Measurement (effective 1 January 2013)

IFRS 13 was released in May 2011. The AASB is expected to issue an equivalent Australian standard shortly. IFRS 13 explains how to measure fair value and aims to enhance fair value disclosures. The Group has yet to determine which, if any, of its current measurement techniques will have to change as a result of the new guidance. It is therefore not possible to state the impact, if any, of the new rules on any of the amounts recognised in the fi nancial statements. However, application of the new standard will impact the type of information disclosed in the notes to the fi nancial statements. The Group does not intend to adopt the new standard before its operative date, which means that it would be fi rst applied in the annual reporting period ending 30 June 2014.

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

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

There are no other standards that are not yet effective and that are expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

2 Financial Risk Management

The Group's activities expose it to a variety of fi nancial risks; credit risk, price risk, liquidity risk and cash fl ow interest rate risk. The Group's overall risk management program focuses on the unpredictability of fi nancial markets and seeks to minimise potential adverse effects on the fi nancial performance of the Group. The Group uses derivative fi nancial instruments such as interest rate swaps to hedge certain risk exposures. Derivatives are exclusively used for hedging purposes, ie not as trading or other speculative instruments.

Financial risk management is carried out by the accounting and fi nance department under policies approved by the Board of Directors and the Audit and Risk Management Committee. The department identifi es, evaluates and mitigates fi nancial risks in close co-operation with the Group's operating units. The Board and Audit and Risk Management Committee provide written principles for overall risk management, as well as written policies covering specifi c areas, such as mitigating interest rate and credit risks, use of derivative fi nancial instruments and investing excess liquidity.

(a) Credit risk

Credit risk arises from the fi nancial assets of the Group and the Parent Entity, which comprise cash and cash equivalents, trade and other receivables and derivative fi nancial instruments.

Credit risk further arises in relation to fi nancial guarantees given to parties as set out in note 28. Such guarantees are subject to Board approval.

The Group manages this risk by:

transacting with credit worthy counterparties that have an appropriate credit history;
utilising ISDA agreements with derivative counterparties in order to limit exposure to credit risk through the netting of amounts receivable from and amounts payable to individual counterparties;
providing loans as an investment into joint ventures and associates where it is comfortable with the underlying property exposure within that entity;
performing ongoing checks to ensure that settlement terms detailed in individual contracts are adhered to;
regularly monitoring the performance of its associates, joint ventures and third parties; and
obtaining collateral as security (where appropriate).

The maximum exposure to credit risk as at 30 June 2011 is the carrying amount of the fi nancial assets as summarised in the table below:

			CONSOLIDATED		PARENT ENTITY
	NOTES	2011$'000	2010$'000	2011$'000	2010$'000
Financial assets:
Cash and cash equivalents	8,12	57,906	41,074	16,961	21,017
Receivables (excluding prepayments)	9,12	81,929	62,709	59,784	51,087
Derivative fi nancial instruments	11	1,114	1,208	-	1,208
Total maximum credit exposure		140,949	104,991	76,745	73,312

Cash

The cash component of fi nancial assets is considered to have low credit risk as the counterparties are banks with high credit-ratings assigned by international credit-rating agencies. The National Australia Bank (NAB) and ANZ are the only concentration of credit risk for the Group and the Parent Entity.

(a) Credit risk (continued)

Receivables

The credit risk arising on trade and other receivables is monitored on an ongoing basis with the results that the exposure to bad debts for the Group or the Parent Entity is not signifi cant. There are no signifi cant fi nancial assets that have had renegotiated terms that would otherwise have been past due or impaired.

The ageing analysis of trade receivables as at 30 June 2011 for the Group and the Parent Entity is as follows:

		CONSOLIDATED		PARENT ENTITY
	2011	2010	2011	2010
	$'000	$'000	$'000	$'000
Ageing analysis for trade receivables:
0 - 30 days	6,817	1,097	6,565	3,548
31 – 60 days1	153	42	10	42
61 – 90 days1	56	37	10	36
91 – 120 days1	13	865	26	26
121 – 150 days1	-	1	-	-
151 – 180 days1	7	1	18	-
181+ days1	882	12,2282	3,287	40
Total trade receivables	7,928	14,271	9,916	3,692
% of trade receivables with related parties (note 31)	36%	91%	57%	97%

1: Past Due Not Impaired (PDNI).

2: Includes $12m receivable from Peet Point Cook Kingsford Syndicate in relation to the settlement of land made on terms. The $12m was received in November 2010 as per the contract of sale.

Based on the credit history of these classes, it is expected that these amounts will be received. The Group and the Parent Entity do not hold any collateral in relation to these receivables. There is no signifi cant concentration of credit risk with respect to receivables as the Group and the Parent Entity have a large number of balances with related parties and the remaining with other parties that have a good credit history with the Group and the Parent Entity.

Derivative fi nancial instruments

The Group and the Parent Entity limit their exposure to credit risk associated with future payments from interest rate swaps by contracting with reputable major fi nancial institutions subject to regulation in Australia.

(b) Price risk

The Group and the Parent Entity are exposed to equity securities price risk. This arises from investments held by the Group and classifi ed on the statement of fi nancial position as available for sale fi nancial assets.

The Group and the Parent Entity hold units in the Peet Income Property Fund (note 14). Peet Limited is the responsible entity for Peet Income Property Fund. The price risk for the unlisted securities is immaterial in terms of the possible impact on profi t or loss or total equity. It has therefore not been included in the sensitivity analysis.

(c) Liquidity risk

Liquidity risk includes the risk that the Group and the Parent Entity, as a result of their operations:

will not have suffi cient funds to settle a transaction on that date;
will be forced to sell fi nancial assets at a value which is less than what they are worth; or
may be unable to settle or recover a fi nancial asset at all.

Prudent liquidity risk management implies maintaining suffi cient cash, the availability of funding through an adequate amount of committed credit facilities (note 21(c)) to meet obligations when due, and the ability to close-out market positions. Due to the dynamic nature of the underlying business, the Group aims at maintaining fl exibility in funding by keeping committed credit lines available, and regularly updating and reviewing its cash fl ow forecasts to assist in managing its liquidity.

Financing arrangements

Included in note 21(c) is a listing of unused borrowing facilities that the Group has at its disposal to further reduce liquidity risk.

Maturities of fi nancial liabilities

The table below analyses the Group's and the Parent Entity's fi nancial liabilities and derivative fi nancial instruments into relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash fl ows, except for interest rate swaps where the cash fl ows have been estimated using forward interest rates applicable at the reporting date.

			CONSOLIDATED
	Within1 year$'000	Between1 and 2years$'000	Between2 and 5years$'000	Over5 years$'000	Totalcontractualcash fl ows$'000	Carryingamount ofliabilities$'000
At 30 June 2011
Non-derivatives
Non-interest bearing	30,630	-	-	-	30,630	30,630
Fixed rate	26,462	13,691	73,424	20,364	133,941	95,037
Variable rate	21,916	49,419	244,965	-	316,300	254,421
Total non-derivatives	79,008	63,110	318,389	20,364	480,871	380,088
Derivatives
Net settled (interest rate swaps)	-	-	264	-	264	264
At 30 June 2010
Non-derivatives
Non-interest bearing	25,048	-	-	-	25,048	25,048
Fixed rate	45,283	3,480	14,295	11,489	74,547	64,997
Variable rate	20,250	14,983	213,846	-	249,079	215,100
Total non-derivatives	90,581	18,463	228,141	11,489	348,674	305,145
Derivatives
Net settled (interest rate swaps)	-	-	-	-	-	-

(c) Liquidity risk (continued)

Maturities of fi nancial liabilities (continued)

			PARENT ENTITY
	Within1 year$'000	Between1 and 2years$'000	Between2 and 5years$'000	Over5 years$'000	Totalcontractualcash fl ows$'000	Carryingamount ofliabilities$'000
At 30 June 2011
Non-derivatives
Non-interest bearing	6,530	-	-	-	6,530	6,530
Fixed rate	5,830	5,591	66,019	-	77,440	48,671
Variable rate	531	531	7,396	-	8,458	6,865
Total non-derivatives	12,891	6,122	73,415	-	92,428	62,066
At 30 June 2010
Non-derivatives
Non-interest bearing	5,547	-	-	-	5,547	5,547
Fixed rate	1,043	1,080	2,176	434	4,733	4,733
Variable rate	161	161	2,658	-	2,980	2,617
Total non-derivatives	6,751	1,241	4,834	434	13,260	12,897
Derivatives
Net settled (interest rate swaps)	-	-	-	-	-	-

(d) Cash fl ow and fair value interest rate risk

The Group's main interest rate risks arise from cash and long-term borrowings.

Borrowings issued at variable rates expose the Group to cash fl ow interest rate risk. Borrowings issued at fi xed rates expose the Group to fair value interest rate risk.

The Group manages its cash fl ow interest rate risk by using fl oating-to-fi xed interest rate swaps. Such interest rate swaps have the economic effect of converting borrowings from fl oating rates to fi xed rates. Generally, the Group raises long-term borrowings at fl oating rates and swaps them into fi xed rates that are lower than those available if the Group borrowed at fi xed rates directly. Under the interest rate swaps, the Group agrees with other parties to exchange, at specifi ed intervals (mainly monthly), the difference between fi xed contract rates and fl oating rate interest amounts calculated by reference to the agreed notional principal amounts.

The Group's fi xed rate borrowings and receivables are carried at amortised cost. They are therefore not subject to interest rate risk as defi ned in AASB 7.

(d) Cash fl ow and fair value interest rate risk (continued)

As at the end of the reporting period, the Group had the following cash, variable rate borrowings and interest rate swap contracts outstanding:

		CONSOLIDATED
	NOTES	Floatinginterest rate$'000	Weightedaverageinterest rate%
At 30 June 2011
Cash and cash equivalents	8,12	57,906	4.61
Borrowings (excluding convertible notes)	21	(225,505)	8.63
Interest rate swaps (notional principal amounts)	11	200,000	8.00
Borrowings (classifi ed as liabilities held for sale)	12	(28,916)	8.49
Interest rate swaps (notional principal amount)	12	15,000	8.06
Total net cash fl ow exposure		18,485
At 30 June 2010
Cash and cash equivalents	8	26,558	4.31
Borrowings	21	(215,100)	7.13
Interest rate swaps (notional principal amounts)	11	200,000	7.20
Total net cash fl ow exposure		11,458
		PARENT ENTITY
	NOTES	Floatinginterest rate$'000	Weightedaverageinterest rate%
At 30 June 2011
Cash and cash equivalents	8	16,961	4.17
Borrowings (excluding convertible notes)	21	(6,865)	7.73
Total net cash fl ow exposure		10,096
At 30 June 2010
Cash and cash equivalents	8	6,501	4.06
Borrowings	21	(2,617)	6.16
Interest rate swaps (notional principal amounts)	11	200,000	7.20
Total net cash fl ow exposure		203,884

(d) Cash fl ow and fair value interest rate risk (continued)

Interest rate sensitivity

The sensitivity analysis below has been determined based on the exposure to interest rates in existence at balance date, and the stipulated change taking place at the beginning of the fi nancial year and held constant throughout the reporting period. A 50 basis point increase or decrease used in the interest rate sensitivity analysis was determined based on the Group's relationship with fi nancial institutions, the level of debt that was renewed and forecasters' economic expectations and represents management's assessment of the possible change in interest rates.

The potential impact of a change in interest rates by +/-50 basis points on profi t and equity has been tabulated below:

			CONSOLIDATED
		-50 BASIS POINTS		+50 BASIS POINTS
	Carrying	Post tax		Post tax
	amount$'000	profi t/(loss)$'000	Equity$'000	profi t/(loss)$'000	Equity$'000
As at 30 June 2011
Financial assets
Cash and cash equivalents (fl oating)	57,906	(203)	(203)	203	203
Interest rate swaps	1,114	-	(4)	-	4
Financial liabilities
Borrowings (fl oating)	(39,421)	138	138	(138)	(138)
Interest rate swap	(264)	-	1	-	(1)
Total (decrease)/ increase		(65)	(68)	65	68
As at 30 June 2010
Financial assets
Cash and cash equivalents (fl oating)	26,558	(93)	(93)	93	93
Interest rate swaps	1,208	-	(4)	-	4
Financial liabilities
Borrowings (fl oating)	(15,100)	53	53	(53)	(53)
Total (decrease)/ increase		(40)	(44)	40	44

			PARENT ENTITY
		-50 BASIS POINTS		+50 BASIS POINTS
	Carrying	Post tax		Post tax
	amount$'000	profi t/(loss)$'000	Equity$'000	profi t/(loss)$'000	Equity$'000
As at 30 June 2011
Financial assets
Cash and cash equivalents (fl oating)	16,961	(59)	(59)	59	59
Financial liabilities
Borrowings (fl oating)	(6,865)	24	24	(24)	(24)
Total (decrease)/increase		(35)	(35)	35	35
As at 30 June 2010
Financial assets
Cash and cash equivalents	6,501	(23)	(23)	23	23
Interest rate swaps	1,208	-	(4)	-	4
Total (decrease)/increase		(23)	(27)	23	27

(e) Fair value measurements

The fair value of fi nancial assets and fi nancial liabilities must be estimated for recognition and measurement or for disclosure purposes. AASB 7 Financial Instruments: Disclosures requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (level 2); and
inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).

The following tables present the Group's and the Parent Entity's assets and liabilities measured and recognised at fair value at 30 June 2011 and 30 June 2010.

		CONSOLIDATED
	Level 2$000	Level 3$000	Total$000
As at 30 June 2011
Assets
Derivative fi nancial instruments	1,114	-	1,114
Available for sale fi nancial assets	-	462	462
Total assets	1,114	462	1,576
Liabilities
Derivative fi nancial instruments	264	-	264
Total liabilities	264	-	264
As at 30 June 2010
Assets
Derivative fi nancial instruments	1,208	-	1,208
Available for sale fi nancial assets	-	257	257
Total assets	1,208	257	1,465
Liabilities
Derivative fi nancial instruments	-	-	-
Total liabilities	-	-	-
		PARENT ENTITY
	Level 2	Level 3	Total
	$000	$000	$000
As at 30 June 2011
Assets
Available for sale fi nancial assets	-	462	462
Total assets	-	462	462
As at 30 June 2010
Assets
Derivative fi nancial instruments	1,208	-	1,208
Available for sale fi nancial assets	-	257	257
Total assets	1,208	257	1,465

The change in level 2 instruments relates to fair value adjustments recognised in the statements of other comprehensive income. The increase in level 3 fi nancial assets resulted from the Group acquiring additional units in the unlisted trust Peet Income Property Fund.

(e) Fair value measurements (continued)

For fi nancial instruments not quoted in active markets, the Company uses valuation techniques such as present value techniques, comparison to similar instruments for which market observable prices exist and other relevant models used by market participants. These valuation techniques use both observable market inputs. These instruments are included in level 2.

The fair value of available for sale assets (included in level 3) have been estimated using valuation techniques based on assumptions, which are not supported by observable market prices or rates.

3 Critical Accounting Estimates And Judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by defi nition, seldom equal the related actual results. The material estimates and assumptions in these fi nancial statements include:

Estimate of sales fall-over rates on project management, marketing and selling management fees.

An analysis of sales fall-overs is performed on a monthly basis for all business segments by location, and updated at each reporting date to determine the appropriateness of the accruals of sales fall-overs recognised in the value of project, marketing and selling management fees in accrued income.

Inventories

The Group is required to carry inventory at lower of cost or net realisable value. The net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. Estimates of net realisable value are based on the most reliable evidence available at the time the estimates are made, of the amount the inventories are expected to realise and the estimate of costs to complete. These estimates take into consideration fl uctuations of price or costs directly related to events occurring after the end of the period to the extent that such events confi rm conditions existing at the end of the period. The key assumptions require the use of management judgement and are reviewed annually. The basis of the valuation for land owned by the Group is set out in note 10. The Group has expensed $31,251,000 (2010: $989,000) in relation to inventory that was carried in excess of the net realisable value and development costs.

4 Segment Information

Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identifi ed as the executive management group.

The executive management group assesses the performance of the operating segments based on multiple measures including EBITDA, EBIT and profi t after tax.

The executive management group considers the business to have the following three reportable business segments:

Funds management/land syndication

External equity capital raisings are undertaken to fund the acquisition of land across Australia. The Consolidated Entity derives fees from underwriting and capital raising coordination services, as well as asset identifi cation fees from this activity. Ongoing project related fees are then derived by the Consolidated Entity for the duration of a particular project.

Company-owned projects

Purchase and development of various parcels of land in Australia, primarily for residential purposes. However, certain land holdings will also produce non-residential blocks of land.

Joint ventures

Joint ventures are formed with government, statutory authorities and private landowners. The joint venture partner will normally contribute the land and the Consolidated Entity funds the development costs. The Company is typically entitled to ongoing fees for management of the development project and also a share of the profi ts.

For internal reporting purposes management consider both 'The Village at Wellard' and 'Quattro – The New Queens Park' projects to be joint ventures. Quattro, however, is not considered a joint venture for statutory reporting purposes.

The Consolidated Entity operates primarily in Australia.

Inter-segment transfers

Segment revenue, expenses and results include transfers between segments. Such transfers are based on an arm's length basis and are eliminated on consolidation.

mation (continued)ment InforSeg
	LAND SYNDICATIONMANAGEMENT/FUNDS		COMPANY OWNEDPROJECTS			JOINT VENTURES	ELIMINATIONS ANDINTER-SEGMENTUNALLOCATED			CONSOLIDATED
	2011$'000	2010$'000	2011$'000	2010$'000	2011$'000	2010$'000	2011$'000	2010$'000	2011$'000	2010$'000
Revenue
Sales to external customers	46,158	36,540	118,290	116,235	17,036	19,967	-	-	181,484	172,742
Total sales revenue	46,158	36,540	118,290	116,235	17,036	19,967	-	-	181,484	172,742
Other income	235	167	2,272	1,454	-	-	-	-	2,507	1,621
Interest	-	-	-	-	-	-	4,734	3,659	4,734	3,659
Total segment revenue	46,393	36,707	120,562	117,689	17,036	19,967	4,734	3,659	188,725	178,022
Result before write-down in carrying value
of inventories and development costs,
fi nance costs expensed through cost of salesdepreciation, fi nancing cost, interest and
and income tax expense	30,710	25,448	40,108	41,090	5,625	5,573	4,734	3,659	81,177	75,770
Write-down in carrying value of inventories and
development costs	-	-	(31,251)	(989)	-	-	-	-	(31,251)	(989)
EBITDA (i)	30,710	25,448	8,857	40,101	5,625	5,573	4,734	3,659	49,926	74,781
Depreciation and amortisation	(347)	(240)	(1,007)	(964)	(271)	(262)	-	-	(1,625)	(1,466)
EBIT (ii)	30,363	25,208	7,850	39,137	5,354	5,311	4,734	3,659	48,301	73,315
Financing costs (includes interest and fi nance costs expensed through cost of sales)									(15,550)	(11,981)
Profi t before income tax expense									32,751	61,334
Income tax expense									(10,545)	(19,223)
Profi t for the year									22,206	42,111

(i) EBITDA: Earnings Before Interest (including interest and fi nance costs expensed through cost of sales), Tax, Depreciation and Amortisation (ii) EBIT: Earnings Before Interest (including interest and fi nance costs expensed through cost of sales) and Tax

5 Revenue

		CONSOLIDATED		PARENT ENTITY
	2011	2010	2011	2010
	$'000	$'000	$'000	$'000
Revenue from sale of land	118,290	116,235	38	875
Project management and performance fees	43,994	35,325	34,781	34,956
Revenue from Joint Venture operations	16,442	18,833	1,032	1,279
Revenue from other trading activities
- Syndicate administration fees	1,155	1,170	1,183	1,170
- Syndicate underwriting and capital raising fees	1,603	1,179	2,153	1,179
	181,484	172,742	39,187	39,459
Other revenue
- Dividends	235	167	235	50,697
- Interest	4,734	3,659	2,369	1,986
- Other	2,272	1,454	25	58
	7,241	5,280	2,629	52,741
	188,725	178,022	41,816	92,200

6 Expenses

Profi t before income tax includes the following specifi c expenses:

		CONSOLIDATED		PARENT ENTITY
	2011$'000	2010$'000	2011$'000	2010$'000
Cost of inventories
Cost of inventories	64,469	65,885	41	230
Capitalised interest and fi nance charges	10,268	7,634	-	112
	74,737	73,519	41	342
Depreciation and amortisation
Property, plant and equipment	1,620	1,466	787	671
Intangible assets	5	-	5	-
	1,625	1,466	792	671
Finance costs
Interest and fi nance charges paid/payable1	23,757	19,921	550	(495)
Cash fl ow hedges – transfer from equity	1,441	3,298	1,441	3,298
Cash fl ow hedges – transfer from equity on-charged tosubsidiaries	-	-	(1,422)	(3,257)
Interest on convertible notes	211	-	211	-
Interest on convertible notes on-charged to subsidiaries	-	-	(204)	-
Amount capitalised to inventory	(20,127)	(18,872)	(381)	(442)
	5,282	4,347	195	(896)

Interest and fi nance charges paid/payable at 30 June 2010 include the reversal of accruals from the previous period.

Discount on land vendor payments
Change in present value of land vendor payments	3,622	5,597	-	-
Capitalisation of change in present value of land
vendor payments	(3,622)	(5,597)	-	-
	-	-	-	-
Rental expense – relating to operating leasesincluded in offi ce costs
Minimum lease payments	1,227	1,011	1,227	1,011
Write-down in carrying value of inventories anddevelopment costs
Write-down of inventory to net realisable value	30,783	-	-	-
Write-off of development expenditure	468	989	468	989
	31,251	989	468	989
Other charges against assets
Bad debts - trade receivables	-	6	3	6
Write-down of investment in associates	-	11	-	11

7 Income Tax

			CONSOLIDATED		PARENT ENTITY
	NOTES	2011	2010	2011	2010
		$'000	$'000	$'000	$'000
Income tax expense
Current tax		13,723	14,627	2,142	3,688
Deferred tax		(3,176)	3,989	1,176	494
Adjustments for current tax of prior periods		(159)	(257)	(29)	316
Adjustments for deferred tax of prior periods		157	864	(456)	(1,245)
		10,545	19,223	2,833	3,253
Deferred income tax expense included inincome tax expense comprises:
(Increase)/decrease in deferred tax assets	15	(9,286)	947	184	219
Increase/(decrease) in deferred tax liabilities	23	6,267	3,906	536	(970)
		(3,019)	4,853	720	(751)
Numerical reconciliation of income taxexpense to prima facie tax payable
Profi t before income tax expense		32,751	61,334	15,412	68,851
Tax at Australian tax rate of 30% (2010: 30%)		9,825	18,400	4,624	20,655
Tax effect of amounts which are not deductible(taxable) in calculating taxable income
Entertainment		28	14	25	14
Share of net loss of associates		532	1	-	-
Fines & penalties		3	-	2	-
Employee benefi ts		229	251	229	251
Tax consolidation distribution		-	-	(1,492)	(1,529)
Intercompany distribution		-	-	-	(15,159)
Dividend franking		28	19	28	19
Franking rebate		(98)	(69)	(98)	(69)
(Over)/under provision in prior years		(2)	607	(485)	(929)
		10,545	19,223	2,833	3,253

Peet Limited and its wholly owned Australian controlled entities have implemented the tax consolidation legislation as of 1 July 2003. The accounting policy in relation to this legislation is set out in note 1(e).

On adoption of the tax consolidation legislation, the entities in the tax consolidated group entered into a tax sharing agreement which, in the opinion of the Directors, limits the joint and several liability of the wholly owned entities in the case of a default by the head entity, Peet Limited.

The entities have also entered into a tax funding agreement under which the wholly owned entities fully compensate Peet Limited for any current tax payable assumed and are not compensated by Peet Limited for any unused tax losses or unused tax credits that are transferred to the Parent Entity under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the wholly owned entities' fi nancial statements.

The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each fi nancial year. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments. The funding amounts are recognised as current inter-company receivables or payables (note 31(e)).

(a) Other income related to tax consolidation legislation

Peet Limited has recognised a tax consolidation distribution from wholly owned tax consolidated entities of $4,974,000 (2010: $5,096,000). The distribution arose as the result of a transfer of tax losses to the head entity for no compensation and is classifi ed as other income.

8 Current Assets – Cash and Cash Equivalents

		CONSOLIDATED		PARENT ENTITY
	2011	2010	2011	2010
	$'000	$'000	$'000	$'000
Cash at bank and on hand	57,201	26,558	16,961	6,501
Term deposits	-	14,516	-	14,516
	57,201	41,074	16,961	21,017

Credit risk and interest rate risk

The Group's and the Parent Entity's exposure to credit risk and interest rate risk is discussed in note 2.

9 Receivables (Current and Non-Current)

			CONSOLIDATED		PARENT ENTITY
	NOTES	2011$'000	2010$'000	2011$'000	2010$'000
Current
Trade receivables - note (a)		7,928	14,271	9,916	3,692
Accrued income - note (b)		29,675	21,267	24,620	21,331
Tax related amounts receivable from whollyowned entities	31(e)	-	-	8,941	7,519
Prepayments		429	1,588	351	725
Other debtors - note (c)		1,634	1,480	263	230
Amounts receivable from associates	31(e)	28,086	12,614	8,955	11,034
		67,752	51,220	53,046	44,531
Non-current
Deferred facilities fee - note (e)		2,900	1,300	-	-
Other debtors		22	22	-	-
Amounts receivable from associates	31(e)	11,656	11,755	7,089	7,281
		14,578	13,077	7,089	7,281
Total receivables		82,330	64,297	60,135	51,812

(a) Impaired trade receivables

Trade receivables are non-interest bearing and generally have 30-60 day terms. There were no impaired trade receivables and hence no provision for impaired trade receivables at the end of the year for either the Group or the Parent Entity (2010: $nil).

(b) Accrued income

These amounts represent project management and performance fees from associates.

(c) Other debtors

These receivables are related to sundry debtors, bonds recoverable and GST recoverable. Amounts relating to other debtors are expected to be received within a year.

(d) Fair value and credit risk

Due to the short-term nature of these receivables, their carrying amount is assumed to approximate their fair value. The maximum exposure to credit risk is the fair value of receivables. The fair value of securities held for certain trade receivables is insignifi cant as is the fair value of any collateral sold or pledged. Refer to note 2 for more information on the risk management policy of the Group and the credit quality of the entity's trade receivables.

(e) Deferred facilities fee

Homes in the Lattitude Lakelands retirement village are sold to approved applicants on condition that every purchaser enters into an "Estate Lifestyle Agreement" with Secure Living Pty Limited, a wholly owned subsidiary of Peet Limited. The agreement includes a requirement to pay deferred facilities fees on departure by the resident, which is based on 3% of the market value of the unit (at the time of sale and departure) for each year of occupation up to a maximum of 24%.

As at 30 June 2011, the deferred facilities fee is accrued based on the independent valuation of the properties.

10 Inventories (Current and Non-Current)

		CONSOLIDATED		PARENT ENTITY
	2011	2010	2011	2010
	$'000	$'000	$'000	$'000
Current
Cost of acquisition	55,527	20,725	-	-
Capitalised development costs	46,618	34,940	-	2
Capitalised fi nance costs	18,299	9,168	-	-
	120,444	64,833	-	2
Non-current
Cost of acquisition	204,437	264,795	5,157	3,639
Capitalised development costs	59,157	49,924	3,178	2,180
Capitalised fi nance costs	37,385	38,840	1,493	1,112
	300,979	353,559	9,828	6,931
Total carrying amount of inventories	421,423	418,392	9,828	6,933

Write-down in carrying value of inventories and development costs

Write-down of inventories to net realisable value and development expenditure recognised as an expense during the year ended 30 June 2011 amounted to $31,251,000 (2010: $989,000) for the Group (note 6).

Valuations

The valuations of land owned by the Consolidated Entity for the year ended 30 June 2011 is $586,033,000 (2010: $558,779,000) exclusive of GST. The valuations were determined by independent valuers using the direct comparison approach or the discounted cash fl ow analysis method.

In addition to the inventories noted above, the Group also has inventories of $68,493,000 (2010: $nil) classifi ed as held for sale (note 12).

11 Derivative Financial Instruments (Current and Non-Current)

		CONSOLIDATED		PARENT ENTITY
	2011	2010	2011	2010
	$'000	$'000	$'000	$'000
Current
Interest rate swap contracts – cash fl ow hedges	263	-	-	-
Non-current
Interest rate swap contracts – cash fl ow hedges	851	1,208	-	1,208
Total derivative fi nancial instruments	1,114	1,208	-	1,208

The Group is party to derivative fi nancial instruments in the normal course of business in order to hedge exposure to fl uctuations in interest rates in accordance with the Group's fi nancial risk management policies (note 2).

Interest rate swap contracts – cash fl ow hedges

Bank loans of the Group currently bear a weighted average variable interest rate before hedges of 4.83% (2010: 3.93%). It is the Group's policy to protect part of the loans from exposure to increasing interest rates. Accordingly, the Group has entered into interest rate swap contracts under which it is obliged to receive interest at variable rates and to pay interest at fi xed rates.

Swaps currently cover approximately 89% (2010: 93%) of the variable loan principal outstanding and are timed to expire as each loan repayment falls due. The fi xed interest rate swaps range between 4.10% and 5.08% (2010: 4.10% and 5.05%) and the variable rates are between 4.65% and 5.08% (2010: 3.15% and 4.76%).

The contracts require settlement of net interest receivable or payable monthly. The settlement dates coincide with the dates on which interest is payable on the underlying debt. The contracts are settled on a net basis.

At 30 June 2011, the notional principal amounts and periods of expiry of the interest rate swap contracts were as follows:

		CONSOLIDATED		PARENT ENTITY
	2011$'000	2010$'000	2011$'000	2010$'000
0 – 1 years	50,000	-	-
1 – 2 years	-	50,000	-	50,000
2 – 3 years	75,000	-	-	-
3 – 4 years	-	75,000	-	75,000
4 + years	75,000	75,000	-	75,000
	200,000	200,000	-	200,000

The gain or loss from remeasuring the hedging instruments at fair value is recognised in other comprehensive income and deferred in equity in the hedge reserve, to the extent that the hedge is effective. It is reclassifi ed into profi t or loss when the hedged interest expense is recognised. The ineffective portion is recognised in the income statement immediately. There was no ineffectiveness in the current or prior year.

In relation to the other loans (note 21), $1,441,000 was recycled from the hedge reserve to fi nance costs in the current year (2010: $3,298,000).

In addition to the interest rate swap contracts noted above, the Group also has a further interest rate swap contract classifi ed as held for sale (note 12).

Credit risk and interest rate risk

Information about the Group's and the Parent Entity's exposure to credit risk and interest rate risk is provided in note 2.

12 Current Assets and Liabilities – Classifi ed as Held For Sale

		CONSOLIDATED		PARENT ENTITY
	2011	2010	2011	2010
	$'000	$'000	$'000	$'000
(a) Assets classifi ed as held for sale
Cash at bank and on hand	705	-	-	-
Fixed assets	1	-	-	-
GST recoverable	28	-	-	-
Inventories	68,493	-	-	-
Net deferred tax assets	282	-	-	-
	69,509	-	-	-
(b) Liabilities directly associated with assetsclassifi ed as held for sale
Payables	259	-	-	-
Bank borrowings	28,916	-	-	-
Interest rate swap contract - cash fl ow hedge	264	-	-	-
	29,439	-	-	-

Interest rate swap contracts - cash fl ow hedges

Bank loans included in liabilities classifi ed as held for sale currently bear a weighted average variable interest rate before hedges of 4.86% (2010: nil). It is the Company's policy to protect part of the loans from exposure to interest rate fl uctuations. Accordingly, the Company has entered into an interest rate swap contract under which it is obliged to receive interest at a variable rate and to pay interest at a fi xed rate.

The swap currently in place covers approximately 52% (2010: nil) of the loan principal outstanding and is timed to expire as each loan repayment falls due. The fi xed interest rate is 5.69% (2010: nil) and the variable rates are between 4.84% and 4.88% (2010: nil).

The contract requires settlement of net interest receivable or payable monthly. The settlement date coincides with the date on which interest is payable on the underlying debt. The contract is settled on a net basis.

At 30 June 2011, the notional principal amount was $15,000,000 (2010: $nil) and is due to expire on 10 January 2014.

(c) Transactions with non-controlling interests

In December 2010, Peet No 113 Pty Ltd (a wholly owned subsidiary of Peet Limited) sold 33.5% of its investment in Peet Yanchep Land Syndicate for $13,803,000. In February 2011, Peet No 113 Pty sold a further 1% of its investment in Peet Yanchep Land Syndicate for $57,000. The difference between the book value of the assets disposed and the proceeds received have been recognised in the non-controlling interest reserve.

The assets and liabilities of Peet Yanchep Land Syndicate have been classifi ed as held for sale as the Directors of Peet Limited are currently in discussions with interested parties with regard to further reducing the number of units held by Peet No 113 Pty Ltd. It is the Directors' intention to sell down to a non-controlling interest within the next 12 months.

			PARENT ENTITY
2011$'000	2010$'000	2011$'000	2010$'000
13,511	-	-	-
(13,860)	-	-	-
			-
	(349)	CONSOLIDATED-	-

13 Non-Current Assets – Investments Accounted for Using the Equity Method

		CONSOLIDATED		PARENT ENTITY
	2011	2010	2011	2010
	$'000	$'000	$'000	$'000
Peet Yanchep Pty Ltd	700	-	-	-
Peet Caboolture Syndicate Limited	1,244	1,343	-	-
Peet Tri State Syndicate Limited	3,910	5,268	-	-
Peet Flagstone City Pty Ltd	4,606	-	-	-
Peet Alkimos Pty Limited	24,348	24,647	-	-
Other	1,316	1,382	-	-
	36,124	32,640	-	-

Investments in associates and jointly controlled entities are accounted for in the consolidated fi nancial statements using the equity method of accounting and are carried at cost by the entity holding the investment (note 34).

14 Non-Current Assets – Available For Sale Financial Assets

	CONSOLIDATED			PARENT ENTITY
	2011	2010	2011	2010
	$'000	$'000	$'000	$'000
Peet Income Property Fund	462	257	462	257

The fair value has been estimated using valuation techniques based on assumptions, which are outlined in note 1(p), that are not supported by observable market prices or rates.

Included in available for sale investments in both the Group and the Parent Entity are units in the unlisted trust Peet Income Property Fund at a fair value of $462,000 (2010: $257,000). The Parent Entity owns 370,139 units (2010: 196,977 units) of the issued capital of Peet Income Property Fund. Peet Limited is the Responsible Entity for Peet Income Property Fund.

Information about the Group's and the Parent Entity's exposure to price risk is provided in note 2(b).

15 Non-Current Assets - Deferred Tax Assets

			CONSOLIDATED		PARENT ENTITY
	NOTES	2011	2010	2011	2010
		$'000	$'000	$'000	$'000
The balance comprises temporary differences attributable to:
Accrued expenses and provisions		1,136	1,070	1,132	1,045
Staff provisions		416	330	402	319
Inventory		10,115	525	-	-
Capital raising costs		521	657	521	657
		12,188	2,582	2,055	2,021
Other
Rebates provision		157	411	1	16
Convertible notes		40	-	40	-
Assets classifi ed as held for sale		282	-	-	-
Other		-	1	-	1
		479	412	41	17
Total deferred tax assets		12,667	2,994	2,096	2,038
Set off against deferred tax liabilities pursuant
to set off provisions	23	(12,385)	(2,994)	(2,096)	(2,038)
Set off against classifi ed as held for sale		(282)	-	-	-
Net deferred tax assets		-	-	-	-
Deferred tax assets to be recovered within
12 months		1,834	1,533	1,534	1,365
Deferred tax assets to be recovered after
more than 12 months		10,833	1,461	562	673
		12,667	2,994	2,096	2,038

			CONSOLIDATED
MOVEMENTS	Accrued Expensesand Provisions$'000	StaffProvisions$'000	Inventory$'000	CapitalRaising Costs$'000	Other$'000	Total$'000
At 1 July 2009	688	272	385	1,050	1,479	3,874
Credited/(charged)
- to profi t or loss	382	58	140	(460)	(1,067)	(947)
- directly to equity	-	-	-	67	-	67
At 30 June 2010	1,070	330	525	657	412	2,994
Credited/(charged)
- to profi t or loss	66	86	9,590	(338)	(118)	9,286
- to other comprehensive income	-	-	-	-	(79)	(79)
- directly to equity	-	-	-	202	264	466
At 30 June 2011	1,136	416	10,115	521	479	12,667

			PARENT
MOVEMENTS	Accrued Expensesand Provisions$'000	StaffProvisions$'000	Inventory$'000	CapitalRaising Costs$'000	Other$'000	Total$'000
At 1 July 2009	478	272	253	1,050	137	2,190
Credited/(charged)
- to profi t or loss	567	47	(253)	(460)	(120)	(219)
- directly to equity	-	-	-	67	-	67
At 30 June 2010	1,045	319	-	657	17	2,038
Credited/(charged)
- to profi t or loss	87	83	-	(338)	(16)	(184)
- to other comprehensive income	-	-	-	-	-	-
- directly to equity	-	-	-	202	40	242
At 30 June 2011	1,132	402	-	521	41	2,096

16 Non-Current Assets – Investments in Subsidiaries and Associates

			CONSOLIDATED		PARENT ENTITY
	NOTES	2011$'000	2010$'000	2011$'000	2010$'000
Investments in associates	34	-	-	35,296	35,304
Investments in subsidiaries	31(e), 35	-	-	189,381	128,944
		-	-	224,677	164,248

17 Non-Current Assets – Property, Plant and Equipment

		CONSOLIDATED		PARENT ENTITY
	2011	2010	2011	2010
	$'000	$'000	$'000	$'000
Cost	16,210	12,027	6,749	5,696
Accumulated depreciation	(5,635)	(4,015)	(3,224)	(2,437)
	10,575	8,012	3,525	3,259
Movement in property, plant and equipment:
Property, plant and equipment:
Cost	11,354	6,355	5,696	4,793
Accumulated depreciation	(4,015)	(2,646)	(2,437)	(1,766)
Carrying amount at 1 July	7,339	3,709	3,259	3,027
Additions	2,026	1,797	1,053	903
Transfer in from 'property under construction'	-	3,311	-	-
Disposals	-	(12)	-	-
Depreciation	(1,620)	(1,466)	(787)	(671)
Carrying amount at 30 June	7,745	7,339	3,525	3,259
Movement in property under construction:
Property under construction:
Cost	673	3,766	-	-
Carrying amount at 1 July	673	3,766	-	-
Additions	2,157	218	-	-
Transfer to 'property, plant and equipment '	-	(3,311)	-	-
Carrying amount at 30 June	2,830	673	-	-
Total carrying amount at 30 June	10,575	8,012	3,525	3,259

Refer to note 21(b) for information on non-current assets pledged as security by the Parent Entity and its controlled entities.

18 Non-Current Assets – Intangible Assets

		CONSOLIDATED		PARENT ENTITY
	2011	2010	2011	2010
	$'000	$'000	$'000	$'000
Cost	881	-	881	-
Accumulated amortisation	(5)	-	(5)	-
	876	-	876	-
Movement in intangible assets:
Management rights:
Carrying amount at 1 July	-	-	-	-
Additions	881	-	881	-
Amortisation charge	(5)	-	(5)	-
Carrying amount at 30 June	876	-	876	-

Amortisation of $5,000 (2010: $nil) is included in depreciation and amortisation expense in profi t or loss.

19 Payables (Current and Non-Current)

		CONSOLIDATED		PARENT ENTITY
	2011	2010	2011	2010
	$'000	$'000	$'000	$'000
Current
Trade payables	2,967	4,190	570	436
Unearned income	11,218	10,572	-	-
GST payable	4,141	1,837	487	358
Accruals	3,623	1,800	727	190
Other payables	8,422	6,649	4,744	4,561
	30,371	25,048	6,528	5,545
Non-current
Owing to controlled entities – note (a)	-	-	2	2
	-	-	2	2
Total payables	30,371	25,048	6,530	5,547

(a) Terms and conditions on amounts owing to controlled entities are set out in note 31(e).

20 Land Vendor Liabilities (Current and Non-Current)

		CONSOLIDATED		PARENT ENTITY
	2011	2010	2011	2010
	$'000	$'000	$'000	$'000
Current
Instalment for purchase of development property	20,631	44,240	-	-
Future interest component of deferred payment	(58)	(2,000)	-	-
	20,573	42,240	-	-
Non-current
Instalment for purchase of development property	35,870	25,574	-	-
Future interest component of deferred payment	(10,077)	(7,550)	-	-
	25,793	18,024	-	-
Total land vendor liabilities	46,366	60,264	-	-

The deferred payment terms for land vendor liabilities are disclosed in accordance with note 1(r). Generally, the land vendor holds the title over the property until settlement has occurred.

21 Borrowings (Current and Non-Current)

		CONSOLIDATED		PARENT ENTITY
	2011	2010	2011	2010
	$'000	$'000	$'000	$'000
Current
Other loans – fi xed	1,080	1,043	1,080	1,043
	1,080	1,043	1,080	1,043
Non-current
Bank loans – secured	225,505	215,100	-	-
Intercompany debt from Peet Treasury Pty Ltd	-	-	6,865	2,617
Other loans – fi xed	2,610	3,690	2,610	3,690
Convertible notes - unsecured	44,981	-	44,981	-
	273,096	218,790	54,456	6,307
Total borrowings	274,176	219,833	55,536	7,350

Other loans

On 30 April 2009, Peet Limited entered into an agreement with the National Australia Bank for the payment of $5,900,000 for the close out of three interest rate swap contracts with a total notional value of $100,000,000.

In addition to the borrowings in the table above, the Group also has borrowings of $28,916,000 (2010: $nil) classifi ed as held for sale (note 12).

(a) Convertible Notes

The Parent Entity issued 500,000 convertible notes for $50 million on 16 June 2011. The notes are convertible into ordinary shares of the Parent Entity, at the option of the holder, or repayable on 16 June 2016. The conversion rate is 44.44 shares for each note held, which is based on a fi xed conversion price of $2.25 (subject to adjustment for certain dilutionary and other capital transactions). The convertible notes are presented in the balance sheet as follows:

	CONSOLIDATED				PARENT ENTITY
	NOTES	2011	2010	2011	2010
		$'000	$'000	$'000	$'000
Face value of notes issue		50,000	-	50,000	-
Transaction cost of notes issue		(2,285)	-	(2,285)	-
Other equity securities (net of transaction
costs) – value of conversion rights	25	(2,763)	-	(2,763)	-
		44,952	-	44,952	-

Interest expense1	6	211	-	211	-
Interest paid/payable		(182)	-	(182)	-
		29	-	29
Non-current liability		44,981	-	44,981	-

Interest expense is calculated by applying the effective interest rate of 12.3% to the liability component.

21 Borrowings (Current and Non-Current) (continued)

(b) Assets pledged as security

The carrying amounts of assets pledged as security for secured current and non-current bank loans are:

			CONSOLIDATED		PARENT ENTITY
	NOTES	2011	2010	2011	2010
		$'000	$'000	$'000	$'000
Current assets
First Mortgage
Inventories	10, 20	99,871	22,593	-	2
Assets classifi ed as held for sale	12	68,493	-	-	-
		168,364	22,593	-	2
Floating Charge
Cash and cash equivalents	8	57,201	41,074	16,961	21,017
Receivables	9	67,752	51,220	53,046	44,531
Assets classifi ed as held for sale	12	733	-	-	-
		125,686	92,294	70,007	65,548
Total current assets pledged as security		294,050	114,887	70,007	65,550
Non-current assets
First Mortgage
Inventories	10, 20	275,186	335,535	9,828	6,931
Floating Charge
Receivables	9	14,578	13,077	7,089	7,281
Available for sale fi nancial assets	14	462	257	462	257
Investments in subsidiaries and associates	16	-	-	224,677	164,248
Property, plant and equipment	17	10,575	8,012	3,525	3,259
		25,615	21,346	235,753	175,045
Total non-current assets pledged as security		300,801	356,881	245,581	181,976
Total assets pledged as security		594,851	471,768	315,588	247,526

The terms and conditions relating to the fi nancial assets are as follows:

Cash and cash equivalents are pledged against the bank overdraft on an ongoing fl oating basis for the terms of the bank overdraft's maturity.

Receivables, available for sale fi nancial assets and investments in subsidiaries and associates are pledged against secured bank loans to the extent that they are not already covered by valuations on inventories (land assets) and plant and equipment on a fl oating basis for the terms of the various secured loans.

21 Borrowings (Current and Non-Current) (continued)

(c) Financing arrangements

A summary of the Group's fi nancing facilities are below:

		CONSOLIDATED
	2011	2010
	$'000	$'000
Total facilities
Bank loan facilities	308,083	291,823
Bank guarantees	32,607	25,910
Credit cards	75	75
	340,765	317,808

Used at balance date
Bank loan facilities	258,111	219,833
Bank guarantees	17,655	18,130
Credit cards	17	20
	275,783	237,983
Unused at balance date
Bank loan facilities	51,972	71,990
Bank guarantees	12,952	7,780
Credit cards	58	55
	64,982	79,825

Parent Entity facilities are not disclosed as the Parent Entity does not transact with fi nancial institutions in its own right, but rather Peet Treasury Pty Limited, a wholly owned subsidiary of Peet Limited, manages the Group's treasury function.

The terms and conditions of the Consolidated Entity's borrowing facilities are as follows:

TYPE OF FACILITY	LIMIT$'000	MATURITY DATE
Revolving Multi-Option Facility	250,000	30 Jun 2014
Bank Guarantee Facility	25,000	30 Jun 2014
Revolving Multi-Option Facility – Joint Venture	19,393	30 Jun 2014
Bank Guarantee Facility – Joint Venture	607	30 Jun 2014
Bank Guarantee Facility	5,000	30 Jun 2014
Business credit card facility	75	30 Jun 2014
Fixed Interest Loan	3,690	29 Apr 2016
Cash Facility	35,000	1 Dec 2012
Bank Guarantee Facility	2,000	1 Dec 2012

(d) Interest rate risk and liquidity risk

Details regarding liquidity and interest rate risk are disclosed in note 2(c) and 2(d).

(e) Fair value

Details of the fair value of the borrowings are disclosed in note 2(e).

22 Provisions (Current and Non-Current)

		CONSOLIDATED		PARENT ENTITY
	2011	2010	2011	2010
	$'000	$'000	$'000	$'000
Current
Rebates – note (a)	1,628	2,340	3	54
Employee entitlements - long service leave - note (b)	341	300	327	295
	1,969	2,640	330	349

Non-current
Employee entitlements - long service leave - note (b)	153	90	149	83
Total provisions	2,122	2,730	479	432

Movements in the provision for rebates during the fi nancial year are set out below:

		CONSOLIDATED		PARENT ENTITY
	2011$'000	2010$'000	2011$'000	2010$'000
Carrying amount at 1 July	2,340	5,179	54	448
Charged/(credited) to the income statement
- Additional provision recognised	1,537	2,627	-	-
- Paid during the year	(1,861)	(2,864)	-	(115)
- Expired during the year	(388)	(2,602)	(51)	(279)
Carrying amount at 30 June	1,628	2,340	3	54

(a) Rebates

Once the Group and the Parent Entity sells lots, purchasers may become entitled to a rebate for fencing and landscaping. In general, the Group expects that rebates will be claimed within 12 to 18 months of the purchased lots settling.

(b) Long service leave

Refer to note 1(v)(ii) for the relevant accounting policy and a discussion of the signifi cant estimates and assumptions applied in the measurement of this provision.

23 Non-Current Liabilities – Deferred Tax Liabilities

			CONSOLIDATED		PARENT ENTITY
	NOTES	2011	2010	2011	2010
		$'000	$'000	$'000	$'000
The balance comprises temporary differences attributable to:
Borrowing and interest costs		18,780	16,707	429	306
Accrued income		14,502	9,838	7,280	6,399
Cash fl ow hedges		334	362	-	362
Convertible notes		810	-	810	-
Depreciation		91	70	119	96
Total deferred tax liabilities		34,517	26,977	8,638	7,163
Set-off against deferred tax assets pursuant
to set-off provisions	15	(12,385)	(2,994)	(2,096)	(2,038)
Net deferred tax liabilities		22,132	23,983	6,542	5,125
Deferred tax liabilities to be settled within
12 months		14,502	9,838	7,280	6,399
Deferred tax liabilities to be settled after more
than 12 months		20,015	17,139	1,358	764
		34,517	26,977	8,638	7,163

			CONSOLIDATED
MOVEMENTS	Borrowing andInterest Costs$'000	AccruedIncome$'000	Cash FlowHedges$'000	ConvertibleNotes$'000	Other$'000	Total$'000
At 1 July 2009	13,729	7,168	1,821	-	823	23,541
Charged/(credited)
- to profi t or loss	2,978	2,670	(989)	-	(753)	3,906
- to other comprehensive income	-	-	(470)	-	-	(470)
- directly to equity	-	-	-	-	-	-
At 30 June 2010	16,707	9,838	362	-	70	26,977
Charged/(credited)
- to profi t or loss	2,073	4,664	(432)	(59)	21	6,267
- to other comprehensive income	-	-	387	-	-	387
- directly to equity	-	-	17	869	-	886
At 30 June 2011	18,780	14,502	334	810	91	34,517

			PARENT
MOVEMENTS	Borrowing andInterest Costs$'000	AccruedIncome$'000	Cash FlowHedges$'000	ConvertibleNotes$'000	Other$'000	Total$'000
At 1 July 2009	234	6,339	1,821	-	209	8,603
Charged/(credited)
- to profi t or loss	72	60	(989)	-	(113)	(970)
- to other comprehensive income	-	-	(470)	-	-	(470)
- directly to equity	-	-	-	-	-	-
At 30 June 2010	306	6,399	362	-	96	7,163
Charged/(credited)
- to profi t or loss	123	881	(432)	(59)	23	536
- to other comprehensive income	-	-	70	-	-	70
- directly to equity	-	-	-	869	-	869
At 30 June 2011	429	7,280	-	810	119	8,638

24 Contributed Equity

		(a) Share capital
--	--	-------------------

			CONSOLIDATED AND PARENT ENTITY
	2011	2010	2011	2010
	SHARES	SHARES	$'000	$'000
Paid up capital
Ordinary shares – fully paid	318,038,544	300,681,486	201,291	176,025

Movements in ordinary share capital

1 July 2009Opening balance294,087,378163,3541 July 2009Transfer of exercised options (prior periods)-49828 July 2009Exercise of optionsc40,0004828 July 2009Transfer of exercised options-831 October 2009Dividend Reinvestment Pland5,237,0709,27016 April 2010Dividend Reinvestment Pland1,317,0383,003Less: Transaction costs arising on share issuee(223)Deferred tax credit recognised directly in equity(note 15)6730 June 2010Balance300,681,486176,02518 October 2010Dividend Reinvestment Pland2,284,3184,15720 April 2011Dividend Reinvestment Pland888,4401,58130 June 2011Institutional Share Purchase Planf11,210,99215,80830 June 2011Retail Share Purchase Planf2,973,3084,192Less: Transaction costs arising on share issuee(674)Deferred tax credit recognised directly in equity(note 15)20230 June 2011Balance318,038,544201,291	DATE	DETAILS	NUMBEROF SHARES	$'000

(b) Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Parent Entity in proportion to the number of and amounts paid on the shares held.

On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share held is entitled to one vote.

(c) Options

Information relating to the Peet Limited Employee Share Option Plan, including details of the options issued, exercised and lapsed during the fi nancial year and options outstanding at the end of the fi nancial year, is set out in note 38.

(d) Dividend Reinvestment Plan (DRP)

The Company's DRP provided shareholders with an opportunity to acquire additional shares in the Company during the year.

24 Contributed Equity (continued)

(e) Transaction costs

The transaction costs represent the costs of issuing the shares under the Share Purchase Plan.

(f) Share Purchase Plan

On 1 June 2011, the Company announced a $20 million fully underwritten share purchase plan (SPP). The SPP allowed existing eligible Peet Limited shareholders to acquire up to a maximum of $15,000 worth of fully paid ordinary shares in Peet Limited.

(g) Capital risk management

The Group's and the Parent Entity's objectives when managing capital are to safeguard their ability to continue as a going concern, so that it can continue to provide returns to shareholders and benefi ts for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The Group and the Parent Entity monitor capital on the basis of the gearing ratio. This ratio is calculated as total interest bearing liabilities (including deferred payment obligations) less cash divided by total assets adjusted for market value net of cash and cash equivalents less intangible assets. At 30 June 2011, the gearing ratio was 33.5% (2010: 36.0%).

25 Reserves and Retained Profi ts

		CONSOLIDATED		PARENT ENTITY
	2011	2010	2011	2010
	$'000	$'000	$'000	$'000
Reserves
Cash fl ow hedges reserve	526	(254)	(91)	(254)
Share-based payments reserve	2,364	1,621	2,364	1,621
Convertible notes reserve	1,934	-	1,934	-
Non-controlling interest reserve	196	-	-	-
	5,020	1,367	4,207	1,367
Movements
Cash fl ow hedges reserve
Balance 1 July	(254)	841	(254)	841
Revaluation – gross	(269)	(4,863)	(1,208)	(4,863)
Transfer to profi t and loss	1,441	3,298	1,441	3,298
Associates - cash fl ow hedges reserve	(58)	-	-	-
Deferred tax	(334)	470	(70)	470
Balance 30 June	526	(254)	(91)	(254)
Share-based payments reserve
Balance 1 July	1,621	1,319	1,621	1,319
Option expense	743	808	743	808
Transfer of exercised options	-	(506)	-	(506)
Balance 30 June	2,364	1,621	2,364	1,621
Convertible notes reserve
Balance 1 July	-	-	-	-
Revaluation – gross	2,895	-	2,895	-
Transaction cost of issue	(132)	-	(132)	-
Deferred tax	(829)	-	(829)	-
Balance 30 June	1,934	-	1,934	-
Non-controlling interest reserve
Balance 1 July	-	-	-	-
Gain on disposal of ownership in Peet subsidiary	349	-	-	-
Transaction cost of share issue of subsidiary	(218)	-	-	-
Deferred tax	65	-	-	-
Balance 30 June	196	-	-	-

Cash fl ow hedges reserve

The cash fl ow hedging reserve is used to record gains or losses on a hedging instrument in a cash fl ow hedge that is recognised directly in equity, as described in note 1(m). Amounts are recognised in profi t and loss when the associated hedged transaction affects profi t and loss.

Share-based payments reserve

The share-based payments reserve is used to recognise the fair value of options granted.

25 Reserves and Retained Profi ts (continued)

Convertible notes reserve

The convertible notes reserve is used to recognise the value of the conversion rights relating to the 9.5% convertible notes, details of which are shown in note 21(a).

Non-controlling interest reserve

This reserve is used to record the differences described in note 1(b)(iv) which may arise as a result of transactions with non-controlling interests that do not result in a loss of control.

			CONSOLIDATED		PARENT ENTITY
	NOTES	2011$'000	2010$'000	2011$'000	2010$'000
Retained profi ts
Retained profi ts at the beginning of thefi nancial year		55,520	37,149	51,778	9,920
Profi t for the year		22,147	42,111	12,579	65,598
Dividends provided for or paid	26	(25,649)	(23,740)	(25,649)	(23,740)
Retained profi ts at the end of the fi nancial year		52,018	55,520	38,708	51,778

26 Dividends

(a) Dividends paid

		TOTAL
	CENTS	AMOUNT	DATE OF	FRANKED/
	PER SHARE	$'000	PAYMENT	UNFRANKED
2011
Interim 2011 ordinary	4.00	12,118	20 April 2011	Franked
Final 2010 ordinary	4.50	13,531	15 October 2010	Franked
Total amount	8.50	25,649

2010
Interim 2010 ordinary	4.00	11,975	16 April 2010	Franked
Final 2009 ordinary	4.00	11,765	8 October 2009	Franked
Total amount	8.00	23,740

Franked dividends declared or paid during the year were fully franked at the tax rate of 30%.

(b) Dividends not recognised at year end

After the balance date the following dividends were proposed by the Directors.

4.50	14,312	18 October 2011	Franked
PER SHARE	$'000	PAYMENT	UNFRANKED
CENTS	TOTALAMOUNT	DATE OF	FRANKED/

The fi nancial effect of the dividend declared subsequent to reporting date has not been brought to account in the fi nancial statements for the year ended 30 June 2011 and will be recognised in subsequent fi nancial reports. The declaration and subsequent payment of this dividend have no income tax consequences.

26 Dividends (continued)

(c) Dividend Reinvestment Plan (DRP)

The Company's DRP which provides shareholders with an opportunity to acquire shares in the Company remains in place. This provides shareholders with the choice of reinvesting some or all of their dividends in shares (at a discount) rather than receiving those dividends in cash.

(d) Dividend franking account

		PARENT ENTITY
	2011	2010
	$'000	$'000
The amount of franking credits available for the subsequent fi nancial year are:
(a) Franking account balance as at the end of the fi nancial year at 30% (2010: 30%)	3,043	2,451
(b) Franking credits that will arise from the payment of income tax payable	3,171	1,110
	6,214	3,561

The ability to utilise the franking credits is dependent upon there being suffi cient available profi ts to declare dividends. The impact on the dividend franking account of the dividend proposed subsequent to year end but not recognised as a liability is to reduce it by $6,134,000 (2010: $5,799,000). In accordance with the tax consolidation legislation, the Company as the head entity in the tax consolidated group has assumed all franking credits from all entities within the tax consolidated group.

27 Remuneration of Auditors

		CONSOLIDATED		PARENT ENTITY
	2011	2010	2011	2010
	$	$	$	$
Audit services
Audit and review of fi nancial reports and other audit workunder the Corporations Act 2001
PricewaterhouseCoopers Australian fi rm	234,210	218,730	234,210	218,730
Non-PricewaterhouseCoopers audit fi rms	14,111	-	-	-
Total remuneration for audit services	248,321	218,730	234,210	218,730
Other assurance services
PricewaterhouseCoopers Australian fi rm	112,073	79,038	112,073	79,038
Non-PricewaterhouseCoopers audit fi rms	56,240	37,116	51,290	37,116
Total remuneration for other assurance services	168,313	116,154	163,363	116,154
Total remuneration for audit and other assurance services	416,634	334,884	397,573	334,884
Taxation services
Tax compliance services including review of Company incometax returns
PricewaterhouseCoopers Australian fi rm	72,000	70,549	72,000	65,500
Non-PricewaterhouseCoopers tax fi rms	3,050	18,193	-	18,193
Total remuneration for taxation services	75,050	88,742	72,000	83,693

28 Contingencies

Contingent liabilities

Details of the estimated maximum amounts of contingent liabilities (for which no amounts are recognised in the fi nancial statements) are as follows:

		CONSOLIDATED		PARENT ENTITY
	2011$'000	2010$'000	2011$'000	2010$'000
Underwriting obligations outstanding	13,947	11,197	13,947	11,197
Bank guarantees outstanding	17,655	18,130	4,446	4,706
	31,602	29,327	18,393	15,903

The Directors are not aware of any circumstances or information, which would lead them to believe that these contingent liabilities will eventuate and consequently no provisions are included in the accounts in respect of these matters.

Contingent assets

The Directors are not aware of any circumstances or information pertaining to the existence or possible existence of any contingent assets.

29 Commitments

Operating Leases

Commitments in relation to operating lease expenditure contracted for at balance sheet date but not provided for in the fi nancial statements:

		CONSOLIDATED		PARENT ENTITY
	2011$'000	2010$'000	2011$'000	2010$'000
Payable:
- Not later than one year	1,969	1,565	1,969	1,565
- Later than one year but not later than fi ve years	4,031	4,666	4,031	4,666
- Later than fi ve years	-	-	-	-
	6,000	6,231	6,000	6,231

The Consolidated Entity leases premises at Levels 7 and 8, 200 St George's Terrace (2010: Level 7, 200 St George's Terrace), Perth; Level 3, 492 St Kilda Road, Melbourne and Level 2, 167 Eagle Street, Brisbane under non-cancellable operating leases with commitments expiring from between one to fi ve years. Leases generally provide the Consolidated Entity with a right of renewal at which time all terms are renegotiated.

Other commitments

As at 30 June 2011 the Group had commitments of $43,500,000 being the balance of funds for the subscription of shares due from Peet No 130 Pty Limited (wholly owned subsidiary of Peet Limited) to Peet Flagstone City Pty Limited of $42,750,000 plus $750,000 due from Peet No 130 Pty Limited to MTAA Flagstone in accordance with the terms of the Development and Marketing agreement for the Flagstone West property.

30 Key Management Personnel Disclosures

(a) Directors

The following persons were Directors of the Company during the fi nancial year:

Non-executive Chairman

AW Lennon

Non-executive Directors

SF Higgs GW Sinclair WD Hemsley (resigned 30 March 2011)

Executive Directors

BD Gore AJ Lennon

(b) Other key management personnel

The following persons also had authority and responsibility for planning and controlling the activities of the Group, directly or indirectly, during the fi nancial year:

Name	Position
D Cooper	Chief Operating Offi cer
P Dumas	Head of Funds Management
D Scafetta	Group Company Secretary
M Pisano	Chief Financial Offi cer (resigned 23 December 2010)

M Dolin was appointed to the position of Chief Financial Offi cer on 6 July 2011.

(c) Directors and other key management personnel compensation

		CONSOLIDATED		PARENT ENTITY
	2011$	2010$	2011$	2010$
Short-term employee benefi ts	4,053,330	4,045,373	4,053,330	4,045,373
Post employment benefi ts	138,968	151,981	138,968	151,981
Share-based payments	682,307	554,849	682,307	554,849
	4,874,605	4,752,203	4,874,605	4,752,203

Detailed remuneration disclosures are provided in note 14 within the Directors' Report.

30 Key Management Personnel Disclosures (continued)

(d) Equity instrument disclosures relating to Directors and other key management personnel

Option and performance rights provided as remuneration

Details of options and performance rights provided as remuneration, together with terms and conditions of the options and performance rights, can be found in the remuneration report on pages 43 to 47.

Option and performance rights holdings

The number of options and performance rights over unissued ordinary shares in the Company held during the fi nancial year by each Director of the Company and each of the other key management personnel of the Group, including their personally related entities, are set out below:

		Balance atthe start ofthe year	Grantedduring theyear	Exercisedduring theyear	Lapsedduring theyear	Balance atthe end ofthe year	Vested andexercisableat the end ofthe year
Directors
AW Lennon	2011	-	-	-	-	-	-
	2010	-	-	-	-	-	-
SF Higgs	2011	-	-	-	-	-	-
	2010	-	-	-	-	-	-
GW Sinclair	2011	-	-	-	-	-	-
	2010	-	-	-	-	-	-
BD Gore	2011	3,659,121	826,045	-	(170,000)	4,315,166	-
	2010	2,790,000	869,121	-	-	3,659,121	170,000
AJ Lennon	2011	435,000	230,343	-	-	665,343	-
	2010	435,000	-	-	-	435,000	-
WD Hemsley1	2011	-	-	-	-	-	-
	2010	-	-	-	-	-	-
Other key management personnel
D Cooper	2011	692,669	244,898	-	-	937,567	-
	2010	435,000	257,669	-	-	692,669	-
P Dumas	2011	608,466	239,067	-	-	847,533	-
	2010	360,000	248,466	-	-	608,466	-
D Scafetta	2011	342,699	116,618	-	-	459,317	-
	2010	220,000	122,699	-	-	342,699	-
M Pisano2	2011	447,699	-	-	(447,699)	-	-
	2010	325,000	122,699	-	-	447,699	-

Resigned 30 March 2011.
Resigned 23 December 2010.

During the fi nancial year nil options (2010: nil) were exercised by Directors or other key management personnel.

30 Key Management Personnel Disclosures (continued)

(d) Equity instrument disclosures relating to Directors and other key management personnel (continued)

Share holdings

The number of shares in the Company held during the fi nancial year by each Director of the Company and each of the other key management personnel of the Group, including their personally related entities, are set out below:

		Balance at the startof the year	Received during theyear on the exerciseof options	Other changesduring the year	Balance at theend of the year
Directors
AW Lennon1	2011	80,141,446	-	1,012,210	81,153,656
	2010	78,548,323	-	1,593,123	80,141,446
SF Higgs	2011	400,000	-	-	400,000
	2010	800,000	-	(400,000)	400,000
GW Sinclair	2011	79,000	-	-	79,000
	2010	79,000	-	-	79,000
BD Gore	2011	-	-	-	-
	2010	-	-	-	-
AJ Lennon1	2011	934,420	-	42,379	976,799
	2010	829,393	-	105,027	934,420
WD Hemsley2	2011	20,663,600	-	(20,663,600)	-
	2010	20,663,600	-	-	20,663,600

Other Key Management Personnel

D Cooper	2011	4,000	-	-	4,000
	2010	4,000	-	-	4,000
P Dumas	2011	-	-	-	-
	2010	-	-	-	-
D Scafetta	2011	284,000	-	-	284,000
	2010	284,000	-	-	284,000
M Pisano3	2011	-	-	-	-
	2010	-	-	-	-

AW Lennon and AJ Lennon are benefi ciaries of the Gwenton Trust, which is a discretionary family trust. AW Lennon holds 15,188 shares in his own name, and 37,495 shares as a joint trustee for the Trofi e Superfund. The remaining 81,100,973 shares are held in the name of Scorpio Nominees Pty Ltd as trustee for the Gwenton Trust. AW Lennon is a Director and shareholder of Scorpio Nominees Pty Ltd.
WD Hemsley resigned 30 March 2011, accordingly his shareholding is no longer required to be reported.
Resigned 23 December 2010.

31 Related Parties

(a) Parent Entity

Peet Limited is the ultimate Australian Parent Entity.

(b) Controlled entities

Interests in signifi cant controlled entities are set out in note 35. Interests held in associates and jointly controlled entities are set out in note 34.

(c) Key management personnel

Details relating to the key management personnel, including remuneration paid, are included in note 30.

(d) Transactions with related parties

Transactions with subsidiaries

Transactions between the Company and other entities in the wholly owned Group consisted of loans advanced and distributions received from subsidiaries. There are no interest charges or fi xed terms for the repayment of loans advanced by the Company.

During the year ended 30 June 2011 the Company derived the following revenue and fees from its subsidiaries:

		CONSOLIDATED		PARENT ENTITY
	2011	2010	2011	2010
	$	$	$	$
Dividend revenue	-	-	-	50,530,154

Tax consolidation regime

The Company has recognised $15,002,239 (2010: $16,837,496) in respect to its subsidiaries' contributions towards the Group's tax obligations as set out in the tax sharing and funding agreement.

The Company has recognised a tax consolidation distribution from wholly owned tax consolidated entities for the year ended 30 June 2011 of $4,974,134 (2010: $5,095,765). The tax consolidation distribution arose as a result of a transfer of tax losses to the Parent Entity for no compensation and is included as other income of the Parent Entity.

31 Related Parties (continued)

(d) Transactions with related parties (continued)

Transactions with associates and jointly controlled entities

During the year ended 30 June 2011, the Company derived the following revenue and fees from associates and jointly controlled entities:

		CONSOLIDATED		PARENT ENTITY
	2011	2010	2011	2010
	$	$	$	$
Revenue from sale of land	6,700,000	32,050,000	-	-
Project management and performance fees	43,399,675	34,190,047	35,812,977	33,833,921
Syndicate underwriting and capital raising fees	1,603,005	1,179,212	2,153,005	1,179,212
Syndicate administration fees	1,155,426	1,169,875	1,182,926	1,169,875
Dividends	235,037	167,268	235,037	167,268
Interest	2,808,771	733,287	1,754,377	728,931
	55,901,914	69,489,689	41,138,322	37,079,207

(e) Outstanding balances

Aggregate amounts of advances receivable from and payable to subsidiaries at balance date are as follows:

			PARENT ENTITY
	NOTES	2011	2010
		$	$
Payable to subsidiaries
Non-current	19	1,767	1,767
Receivable from subsidiaries
Current
Tax funding agreement	9	8,941,135	7,518,643
Trade and sundry debtors		2,872,208	2,579,077
		11,813,343	10,097,720
Non-current
Loans to subsidiaries - note (i)	16	189,381,018	128,943,977
Total receivable from subsidiaries		201,194,361	139,041,697

(i) The amounts owing are unsecured, interest free and repayable on demand however it is not anticipated that these amounts will be requested for repayment within the next twelve months. The purpose of the advances to the various entities is to allow the purchase and potential development of broad acre land and is considered a part of the project management services performed by the parent for its subsidiaries.

31 Related Parties (continued)

(e) Outstanding balances (continued)

		PARENT ENTITY
	2011	2010
	$	$
Movements in loans to subsidiaries
Beginning of the year	128,943,977	31,621,935
Loans advanced	116,257,355	174,106,428
Loan repayments received	(60,068,402)	(79,402,027)
Notional debt allocation	4,248,088	2,617,641
End of year	189,381,018	128,943,977

Aggregate amounts receivable from associates and jointly controlled entities at balance date are as follows:

		CONSOLIDATED			PARENT ENTITY
	NOTES	2011	2010	2011	2010
		$	$	$	$
Current
Trade and other receivables		31,240,774	22,169,464	29,636,294	22,343,603
Loans to associates and jointly
controlled entities	9	28,086,124	12,613,841	8,955,118	11,033,841
		59,326,898	34,783,305	38,591,412	33,377,444

Non-current
Loans to associates and jointly
controlled entities	9	11,656,141	11,755,337	7,089,430	7,280,981
Total amount owing by associates and
jointly controlled entities		70,983,039	46,538,642	45,680,842	40,658,425
Movements in loans to associates and jointly controlled entities
Beginning of the year		24,369,178	690,412	18,314,822	690,412
Loans advanced to associates and
jointly controlled entities		31,926,950	17,271,287	12,058,589	17,266,931
Loan repayments from associates and
jointly controlled entities		(21,711,799)	(56,412)	(14,531,799)	(56,412)
Vendor fi nance		4,955,000	6,050,000	-	-
Other		202,936	413,891	202,936	413,891
End of year		39,742,265	24,369,178	16,044,548	18,314,822

Outstanding balances

Trade and other receivables include amounts owing by associates and jointly controlled entities in respect of project management fees, performance fees and accrued commission receivable on sales. Unless otherwise agreed outstanding balances at year end are unsecured, interest free and repayable on demand. There have been no guarantees provided or received for any related party receivable.

31 Related Parties (continued)

(e) Outstanding balances (continued)

The Group has agreed to provide certain associates of the Group with short-term working capital loan facilities on commercial terms. Details of these loans are as follows:

	LOAN
ASSOCIATE	FACILITY LIMIT	INTEREST RATE	EXPIRY DATE
		4% above BBSY
Peet Tri State Syndicate Limited	$13,000,000	per annum	2 April 2012
		4% above BBSY
Peet Beachton Syndicate Limited	$13,000,000	per annum	2 October 2012
		4% above BBSY
Peet Bayonet Head Syndicate Limited	$700,000	per annum	2 October 2012
		4% above BBSY
Peet Forrestdale Syndicate Limited	$1,500,000	per annum	2 October 2012

During the year the Group provided fi nancial support of $2,204,000 (2010: $nil) to Peet & Co Casey Land Syndicate Limited. As at date of signing this report documentation in regards to the funds provided has yet to be fi nalised.

During the year the Group provided a bank guarantee facility to Peet Alkimos Pty Limited, an associate of the Group. The facility is for $5,000,000 and is due to expire in December 2012. A procurement fee equal to 6% per annum on the face value of all bank guarantees issued is payable by Peet Alkimos Pty Limited on the expiry of the agreement.

In July 2010 the Group provided to Peet Alkimos Pty Limited a second Subordinated Loan for the amount of $2,161,000. The loan is on commercial terms at an interest rate of 14% per annum and is due to expire in October 2012. The Subordinated Loan was used to partially repay Peet Alkimos Pty Limited's bank facility. The fi rst Subordinated Loan (made in October 2009 for the amount of $2,130,000) remains in place at an interest rate of 10% per annum, and is due to expire October 2012.

The Group has provided a loan of $5,522,000 (2010: $5,522,000) to Peet Caboolture Syndicate Limited. This loan represents Peet's 20% towards repaying the syndicate's $27,610,000 debt facility, with the other shareholder also contributing funds. The loan is interest free (2010: interest free) with no fi xed expiry date.

The Group has also provided an additional loan of $100,000 (2010: $nil) to Peet Caboolture Syndicate Limited. This loan represents Peet's 20% proportional contribution towards project costs, with the other shareholder also contributing funds. The loan is on commercial terms at an interest rate of 4% above BBSY with no fi xed expiry date.

The Group provided a Guarantee and Indemnity to National Australia Bank in order for Peet Caboolture Syndicate Limited to receive an $11,000,000 bank guarantee facility from National Australia Bank. The facility enabled the syndicate to receive funding for the construction of an entry bridge into the project. Peet Limited is liable for 20% of any call made under the guarantee and indemnity, with the other shareholders liable for the remaining 80%.

Allowance for impairment loss on trade receivables

For the year ended 30 June 2011, the Group has not made any allowance for impairment losses relating to amounts owed by related parties as the payment history has been excellent (2010: $nil). An impairment assessment is undertaken each fi nancial year by examining the fi nancial position of the related party and the market in which the related party operates to determine whether there is objective evidence that a related party receivable is impaired. When such objective evidence exists, the Group recognises an allowance for impairment loss.

32 Matters Subsequent to the End of the Financial Year

On 25th July 2011 Peet No 130 Pty Limited (a wholly owned subsidiary of Peet Limited) paid an outstanding commitment due of $43,500,000. Refer to note 29 for further details.

33 Cash Flow Information

(a) Reconciliation of cash and cash equivalents

		CONSOLIDATED		PARENT ENTITY
	2011	2010	2011	2010
	$'000	$'000	$'000	$'000
Cash at bank and on hand	57,201	26,558	16,961	6,501
Term deposit	-	14,516	-	14,516
	57,201	41,074	16,961	21,017

Cash and cash equivalents as at the end of the fi nancial year as shown in the statement of cash fl ows is reconciled to the related items in the statement of fi nancial position as follows:

		CONSOLIDATED		PARENT ENTITY
	2011$'000	2010$'000	2011$'000	2010$'000
Balances as above	57,201	41,074	16,961	21,017
Asset classifi ed as held for sale - cash at bank	705	-	-	-
Balances per statement of cash fl ows	57,906	41,074	16,961	21,017

33 Cash Flow Information (continued)

(b) Reconciliation of profi t after income tax to net cash infl ow from operating activities

		CONSOLIDATED		PARENT ENTITY
	2011$'000	2010$'000	2011$'000	2010$'000
Profi t for the year	22,206	42,111	12,579	65,598
Add non-cash items:
Depreciation	1,620	1,466	787	671
Amortisation of intangible assets	5	-	5	-
Write-down of investments	-	11	-	11
Write-down of inventories and development costs	31,251	989	468	989
Employee share-based payments	743	808	743	808
Equity accounting for investments in associates	1,773	7	-	-
Amortisation of closed out hedges	1,441	3,298	1,441	3,298
Convertible notes – effective Interest	211	-	211	-
Deduct other items:
Dividend income classifi ed as cash fl ows from investing	(235)	(167)	(235)	(50,697)
Interest received classifi ed as cash fl ows from investing	(4,469)	(3,656)	(2,104)	(1,983)
Change in operating assets and liabilities during thefi nancial year:
Increase in assets classifi ed as held for sale	(68,521)	-	-	-
(Increase)/decrease in receivables	(3,626)	(14,367)	(6,605)	907
(Increase)/decrease in inventories	(34,282)	11,298	(3,363)	(900)
Increase in tax liabilities	2,061	9,408	2,061	9,408
(Decrease)/increase in payables	(8,989)	(20,724)	569	1,032
(Decrease)/increase in provisions	(608)	(2,756)	47	(323)
(Decrease)/increase in deferred tax liabilities	(3,019)	4,853	720	(751)
Increase in liabilities directly associated with assets
classifi ed as held for sale	259	-	-	-
Net cash (outfl ow)/infl ow from operating activities	(62,179)	32,579	7,324	28,068

34 Investments in Associates and Jointly Controlled Entities

	OWNERSHIP INTEREST			CONSOLIDATED		PARENT ENTITY
NAME OF ASSOCIATE OR JOINTLYCONTROLLED ENTITY	2011%	2010%	2011$'000	2010$'000	2011$'000	2010$'000
Peet & Co Casey Land Syndicate Limited	0.54	0.54	12	18	10	10
Peet Alkimos Pty Limited	13.62	13.62	24,348	24,647	25,260	25,260
Peet Baldivis Syndicate Limited
(in liquidation)1	0.39	0.39	1	2	1	2
Peet Bayonet Head Syndicate Limited	0.56	0.56	-	2	6	6
Peet Beachton Syndicate Limited	0.31	0.31	1	19	46	46
Peet Botanic Village Syndicate Limited	0.69	0.69	116	117	125	125
Peet Byford Syndicate Limited	0.15	0.15	12	12	13	13
Peet Caboolture Syndicate Limited	20.00	20.00	1,244	1,343	1,600	1,600
Peet Cardinia Lakes Syndicate Limited	0.21	0.21	40	38	42	42
Peet Cranbourne Syndicate Limited	1.56	1.56	277	289	311	311
Peet Cranbourne Central Syndicate Limited	0.05	0.05	9	9	10	10
Peet Flagstone City Pty Limited2	50.00	-	4,606	-	-	-
Peet Forrestdale Syndicate Limited	0.70	0.70	16	14	23	23
Peet Mandurah Syndicate Limited	1.25	1.25	191	197	80	80
Peet Mundijong Syndicate Limited	0.22	0.22	51	50	52	52
Peet Oakford Land Syndicate Limited	0.37	0.37	6	6	7	7
Peet Point Cook Kingsford Syndicate	0.22	0.15	50	15	42	16
Peet Tarneit Gardens Syndicate Limited	1.29	1.29	142	141	91	91
Peet Tarneit Rise Syndicate Limited	0.33	0.33	29	54	22	50
Peet Tri State Syndicate Limited	24.43	24.43	3,910	5,268	7,270	7,270
Peet Warner Lakes Syndicate Limited	1.56	1.56	340	371	270	270
Peet Windsor Park Syndicate Limited	0.07	0.07	9	14	1	6
Peet Yanchep Pty Limited2	50.00	-	700	-	-	-
Other			14	14	14	14
			36,124	32,640	35,296	35,304

This syndicate's land development project came to a successful end and was placed in a members' voluntary liquidation.
These are jointly controlled entities accounted for using the equity method.

The Group has signifi cant infl uence over the property syndicates due to its key role as development manager.

(a) Movements in carrying amounts of investments in associates and jointly controlled entities

		CONSOLIDATED		PARENT ENTITY
	2011$'000	2010$'000	2011$'000	2010$'000
Carrying amount at the beginning of thefi nancial year	32,640	32,684	35,304	35,341
Acquisitions	5,336	5	30	5
Disposals/capital returns	(38)	(42)	(38)	(42)
Share of loss after income tax (b)	(1,773)	(7)	-	-
Share of associate's reserves	(41)	-	-	-
Carrying amount at the end of the fi nancial year	36,124	32,640	35,296	35,304

34 Investments in Associates and Jointly Controlled Entities (continued)

(b) Share of associates and jointly controlled entities loss

		CONSOLIDATED
	2011	2010
	$'000	$'000
Share of associates and jointly controlled entities loss (c)	(1,773)	(7)

(c) Summarised fi nancial information of associates and jointly controlled entities

		AS AT 30 JUNE 2011 GROUP'S SHARE OF:
NAME OF ASSOCIATE OR JOINTLY CONTROLLED ENTITY	Assets	Liabilities	Revenues	Profi t/(Loss)
	$'000	$'000	$'000	$'000
Peet & Co Casey Land Syndicate Limited	44	32	-	(6)
Peet Alkimos Pty Limited	56,879	32,531	6,585	(260)
Peet Baldivis Syndicate Limited (in liquidation)1	3	2	1	-
Peet Bayonet Head Syndicate Limited	28	28	5	(5)
Peet Beachton Syndicate Limited	71	70	1	(16)
Peet Botanic Village Syndicate Limited	185	69	-	(1)
Peet Byford Syndicate Limited	14	2	-	-
Peet Caboolture Syndicate Limited	7,888	6,644	2	(98)
Peet Cardinia Lakes Syndicate Limited	59	19	28	1
Peet Cranbourne Syndicate Limited	647	370	-	(12)
Peet Cranbourne Central Syndicate Limited	19	10	-	-
Peet Flagstone City Pty Limited2	47,356	42,750	1	1
Peet Forrestdale Syndicate Limited	92	76	-	1
Peet Mandurah Syndicate Limited	398	207	147	(5)
Peet Mundijong Syndicate Limited	51	-	8	1
Peet Oakford Land Syndicate Limited	19	13	-	-
Peet Point Cook Kingsford Syndicate	73	23	53	11
Peet Tarneit Gardens Syndicate Limited	185	43	138	1
Peet Tarneit Rise Syndicate Limited	40	11	71	3
Peet Tri State Syndicate Limited	13,548	9,638	358	(1,359)
Peet Warner Lakes Syndicate Limited	588	248	621	(30)
Peet Windsor Park Syndicate Limited	22	13	36	-
Peet Yanchep Pty Limited2	12,700	12,000	-	-
	140,909	104,799	8,055	(1,773)

This syndicate's land development project came to a successful end and was placed in a members' voluntary liquidation.
These are jointly controlled entities accounted for using the equity method.

34 Investments in Associates and Jointly Controlled Entities (continued)

		AS AT 30 JUNE 2010 GROUP'S SHARE OF:
NAME OF ASSOCIATE OR JOINTLY CONTROLLED ENTITY	Assets	Liabilities	Revenues	Profi t/(Loss)
	$'000	$'000	$'000	$'000
Peet & Co Casey Land Syndicate Limited	28	11	-	1
Peet Alkimos Pty Limited	54,067	29,420	6	(365)
Peet Bayonet Head Syndicate Limited	31	28	-	-
Peet Baldivis Syndicate Limited (in liquidation)1	4	2	7	(7)
Peet Beachton Syndicate Limited	66	47	18	(49)
Peet Botanic Village Syndicate Limited	177	60	-	-
Peet Byford Syndicate Limited	13	1	-	-
Peet Caboolture Syndicate Limited	7,270	5,927	4	(24)
Peet Cardinia Lakes Syndicate Limited	53	15	28	(2)
Peet Cranbourne Syndicate Limited	524	235	-	(7)
Peet Cranbourne Central Syndicate Limited	17	8	-	-
Peet Forrestdale Syndicate Limited	77	63	-	(2)
Peet Mandurah Syndicate Limited	356	159	329	71
Peet Mundijong Syndicate Limited	51	2	-	-
Peet Oakford Land Syndicate Limited	17	11	-	-
Peet Point Cook Kingsford Syndicate	49	34	-	(2)
Peet Tarneit Gardens Syndicate Limited	225	84	379	17
Peet Tarneit Rise Syndicate Limited	63	9	47	(7)
Peet Tri State Syndicate Limited	14,583	9,315	3,209	412
Peet Warner Lakes Syndicate Limited	643	238	492	(46)
Peet Windsor Park Syndicate Limited	22	8	23	3
	78,336	45,677	4,542	(7)

(c) Summarised fi nancial information of associates and jointly controlled entities (continued)

This syndicate's land development project came to a successful end and was placed in a members' voluntary liquidation.

35 Subsidiaries

Signifi cant investments in subsidiaries

The consolidated fi nancial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in note 1(b):

			HOLDING
NAME OF SUBSIDIARY	Place ofIncorporation	Class ofShare	2011	2010
			%	%
At Cost
Peet Innisfail Pty Limited	WA	Ordinary	100	100
Peet Craigieburn Pty Limited	WA	Ordinary	100	100
Peet Greenvale No 2 Pty Limited	WA	Ordinary	100	100
Peet Southern JV Pty Limited	WA	Ordinary	100	100
Peet Brigadoon Pty Limited	WA	Ordinary	100	100
Peet Ashton Heights Pty Limited	WA	Ordinary	100	100
Peet Queens Park JV Pty Limited	WA	Ordinary	100	100
Peet Baldivis Heights Pty Limited	WA	Ordinary	100	100
Secure Living Pty Limited	WA	Ordinary	100	100
Peet Skye Pty Limited	WA	Ordinary	100	100
Peet No 108 Pty Limited	WA	Ordinary	100	100
Peet No 112 Pty Limited	WA	Ordinary	100	100
Peet No 113 Pty Limited	WA	Ordinary	100	100
Peet Treasury Pty	WA	Ordinary	100	100
Peet Estates (VIC) Pty Ltd	WA	Ordinary	100	100
Peet Development Management Pty Limited	WA	Ordinary	100	100
Peet Estates (QLD) Pty Ltd	WA	Ordinary	100	100
Peet No 130 Pty Limited	WA	Ordinary	100	100
Peet Estates (WA) Pty Ltd	WA	Ordinary	100	100
Peet Yanchep Land Syndicate	WA	Trust Unit	66.4	100

36 Interests in Jointly Controlled Operations

(a) Details of aggregate share of assets and liabilities of jointly controlled operations:

		CONSOLIDATED
	2011	2010
	$'000	$'000
The Village at Wellard
Total assets	31,794	29,228
Total liabilities	(22,063)	(23,717)
Net assets	9,731	5,511

(b) Details of aggregate share of revenue, expenses and results of jointly controlled operations:

		CONSOLIDATED
	2011	2010
	$'000	$'000
The Village at Wellard
Revenue	15,514	17,599
Expenses	(9,487)	(13,154)
Profi t before income tax	6,027	4,445

37 Earnings Per Share

(a) Earnings per share

		CONSOLIDATED
	2011	2010
	CENTS	CENTS
Basic earnings per share	7.3	14.1
Diluted earnings per share	6.8	13.9

(b) Reconciliation of earnings used in calculating earnings per share

		CONSOLIDATED
	2011$'000	2010$'000
Basic earnings per share
Profi t attributable to the ordinary equity holders of the Company used incalculating basic earnings per share	22,147	42,111
Diluted earnings per share
Profi t attributable to the ordinary equity holders of the Company used incalculating basic earnings per share	22,147	42,111
Add: interest savings on convertible notes	148	-
Profi t attributable to the ordinary equity holders of the Company used incalculating diluted earnings per share	22,295	42,111

(c) Weighted average number of shares used in the denominator

	CONSOLIDATED
2011	2010
SHARES	SHARES
Weighted average number of ordinary shares used as the denominator
in calculating of basic earnings per share302,404,570	298,928,054
Adjustments for calculation of diluted earnings per share:
3,830,000Options	4,530,000
Convertible notes22,222,222	-
Weighted average number of ordinary shares and potential ordinary shares
used as the denominator in calculating diluted earnings per share328,456,792	303,458,054

38 Share-Based Payments

(a) Employee Share Option Plan (ESOP) and Performance Rights Plan (PRP)

The establishment of the Peet Limited ESOP was approved by the Board and shareholders during the 2004 fi nancial year and the Peet Limited PRP was approved by shareholders at the 2008 AGM. Employees of any Peet Group Company (including Executive Directors) will be eligible to participate in the ESOP and/or PRP at the discretion of the Board.

Invitations to apply for options and/or performance rights

Eligible employees, at the discretion of the Board, may be invited to apply for options and/or performance rights on terms and conditions to be determined by the Board including as to:

the method of calculation of the exercise price of each option;
the number of options and/or performance rights being offered and the maximum number of shares over which each option and/or performance rights is granted;
the period or periods during which any of the options and/or performance rights may be exercised;
the dates and times when the options and/or performance rights lapse;
the date and time by which the application for options and/or performance rights must be received by Peet; and
any applicable conditions which must be satisfi ed or circumstances which must exist before the options and/or performance rights may be exercised.

Eligible employees may apply for part of the options and/or performance rights offered to them, but only in specifi ed multiples.

Consideration

Unless the Board determines otherwise, no payment will be required for a grant of options and/or performance rights under the ESOP and/or PRP.

Exercise conditions

Options granted under the ESOP and performance rights under the PRP carry no dividend or voting rights.

Lapse of options and performance rights

Unexercised options and/or performance rights will lapse upon the earlier to occur of a variety of events specifi ed in the rules of the ESOP and PRP, including, on the date or in circumstances specifi ed by the Board in the invitation, failure to meet the options' or performance rights' exercise conditions in the prescribed period or on the expiry date of options and/or performance rights, as determined by the Board.

38 Share-Based Payments (continued)

(a) Employee Share Option Plan (ESOP) and Performance Rights Plan (PRP) (continued)

Set out below are summaries of options and performance rights granted under the plans:

			BALANCE			LAPSED/
			AT START	GRANTED	EXERCISED	FORFEITED	BALANCE AT	EXERCISABLE
			OF THE	DURING	DURING	DURING	END OF	AT END OF
GRANTDATE	EXPIRYDATE	EXERCISEPRICE	YEARNo.	THE YEARNo.	THE YEARNo.	THE YEARNo.	THE YEARNo.	THE YEARNo.
Consolidated and Parent Entity – 2011
Options
17 Aug 05	17 Aug 10	$1.71	20,000	-	-	(20,000)	-	-
1 Sep 05	1 Sep 10	$2.04	210,000	-	-	(210,000)	-	-
8 Feb 06	8 Feb 11	$2.81	100,000	-	-	(100,000)	-	-
2 May 06	2 May 11	$3.09	20,000	-	-	(20,000)	-	-
24 May 06	24 May 11	$3.42	50,000	-	-	(50,000)	-	-
30 Nov 07	30 Nov 13	$4.10	1,200,000	-	-	-	1,200,000	-
18 Dec 08	18 Dec 14	$2.50	2,930,000	-	-	(300,000)	2,630,000	-
			4,530,000	-	-	(700,000)	3,830,000	-
Performance rights
18 Dec 08	18 Dec 14	$0.00	265,000	-	-	(25,000)	240,000	-
11 Feb 10	11 Feb 15	$0.00	869,121	-	-	-	869,121	-
28 Jun 10	28 Jun 15	$0.00	820,551	-	-	(122,699)	697,852	-
24 Dec 10	24 Dec 15	$0.00	-	1,896,767	-	-	1,896,767	-
			1,954,672	1,896,767	-	(147,699)	3,703,740	-
Total			6,484,672	1,896,767	-	(847,699)	7,533,740	-
Weighted average exercise price			$2.04	$0.00	-	$2.04	$1.53	-

38 Share-Based Payments (continued)

GRANTDATE	EXPIRYDATE	EXERCISEPRICE	BALANCEAT STARTOF THEYEARNo.	GRANTEDDURINGTHE YEARNo.	EXERCISEDDURINGTHE YEARNo.	LAPSED/FORFEITEDDURINGTHE YEARNo.	BALANCE ATEND OFTHE YEARNo.	EXERCISABLEAT END OFTHE YEARNo.
	Consolidated and Parent Entity – 2010
Options
28 July 04	28 July 09	$1.20	84,000	-	(40,000)	(44,000)	-	-
17 Aug 05	17 Aug 10	$1.71	20,000	-	-	-	20,000	20,000
1 Sep 05	1 Sep 10	$2.04	230,000	-	-	(20,000)	210,000	210,000
8 Feb 06	8 Feb 11	$2.81	100,000	-	-	-	100,000	100,000
2 May 06	2 May 11	$3.09	20,000	-	-	-	20,000	20,000
24 May 06	24 May 11	$3.42	50,000	-	-	-	50,000	50,000
30 Nov 07	30 Nov 13	$4.10	1,200,000	-	-	-	1,200,000	-
18 Dec 08	18 Dec 14	$2.50	2,930,000	-	-		2,930,000	-
			4,634,000	-	(40,000)	(64,000)	4,530,000	400,000
Performance rights
18 Dec 08	18 Dec 14	$0.00	265,000	-	-	-	265,000	-
11 Feb 10	11 Feb 15	$0.00	-	869,121	-	-	869,121	-
28 Jun 10	28 Jun 15	$0.00	-	820,551	-	-	820,551	-
			265,000	1,689,672	-	-	1,954,672	-
Total			4,899,000	1,689,672	(40,000)	(64,000)	6,484,672	400,000
	Weighted average exercise price		$2.73	$0.00	$1.20	$1.46	$2.04	$2.44

(a) Employee Share Option Plan (ESOP) and Performance Rights Plan (PRP) (continued)

Options and performance rights lapsed/forfeited during the 2011 fi nancial year amounted to 847,699 (2010: 64,000).

During the fi nancial year, nil options (2010: 40,000) were exercised by Directors or other key management personnel.

The weighted average remaining contractual life of share options and performance rights outstanding at 30 June 2011 was 3.62 years (2010: 4.11 years).

38 Share-Based Payments (continued)

(a) Employee Share Option Plan (ESOP) and Performance Rights Plan (PRP) (continued)

Fair value of options and performance rights granted

The fair value of an option at grant date is determined using a Black-Scholes option pricing model and the value of a performance right at grant date is determined using a Binomial pricing model. The models take into account the exercise price, the term of the option and/or performance right, the vesting and performance criteria, the impact of dilution, the non-tradeable nature of the option or performance right, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option and/or performance right.

The inputs for assessing the fair value of the options granted under the ESOP and performance rights under the PRP were:

				EXPECTEDPRICE
GRANTDATE	EXERCISEPRICE	EXPIRY DATE	SHARE PRICEAT GRANT DATE	VOLATILITY OFSHARES	RISK FREEINTEREST RATE	ASSESSEDFAIR VALUE
Options
17 Aug 05	$1.71	17 Aug 10	$1.71	30%	5.08%	$0.23
1 Sep 05	$2.04	1 Sep 10	$2.04	30%	4.99%	$0.22
8 Feb 06	$2.81	8 Feb 11	$2.81	30%	5.25%	$0.57
2 May 06	$3.09	2 May 11	$3.09	30%	5.69%	$0.68
24 May 06	$3.42	24 May 11	$3.42	30%	5.64%	$0.78
30 Nov 07	$4.10	30 Nov 13	$3.90	30%	6.46%	$1.12
18 Dec 08	$2.50	18 Dec 14	$1.49	28%	3.15%	$0.07
Performance rights
18 Dec 08	$0.00	18 Dec 14	$1.49	32%	3.41%	$1.08
11 Feb 10	$0.00	11 Feb 15	$2.10	41%	4.91%	$2.08
28 Jun 10	$0.00	28 Jun 15	$2.08	41%	4.53%	$1.86
24 Dec 101	$0.00	24 Dec 15	$1.82	40%	5.57%	$1.58
24 Dec 10	$0.00	24 Dec 15	$1.98	41%	5.59%	$1.75

Under AASB 2 Share-based payment the issue of a share-based payment award to a Director requires shareholder approval and the value at grant date is taken as the date at which that approval is granted. Accordingly the value of these performance rights is based on 16 November 2010, being the date of Peet Limited's AGM.

The expected price volatility is based on the historic volatility (based on the remaining life of the options and/or performance rights), adjusted for any expected changes to future volatility due to publicly available information.

(b) Expenses arising from share-based payment transactions

Total expenses arising from share-based payment transactions recognised during the year as part of employee benefi t expense were as follows:

		CONSOLIDATED		PARENT ENTITY
	2011$'000	2010$'000	2011$'000	2010$'000
Options and Performance Rights issued under theESOP and PRP, respectively	743	808	743	808

Directors' Declaration

In the Directors' opinion:

(a) the fi nancial statements and notes set out on pages 54 to 123 are in accordance with the Corporations Act 2001, including:
- (i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
- (ii) giving a true and fair view of the Company's and Consolidated Entity's fi nancial position as at 30 June 2011 and of their performance for the fi nancial year ended on that date; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable, and note 1(a) confi rms that the fi nancial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board.

The Directors have been given the declarations by the Chief Executive Offi cer and Chief Financial Offi cer required by section 295A of the Corporations Act 2001.

This declaration is made in accordance with a resolution of the Directors.

Brendan Gore Managing Director and Chief Executive Offi cer Perth, Western Australia

30 September 2011

Shareholder Information

The information following is extracted from Peet Limited's share register as at 27 September 2011.

Distribution of equity securities

Analysis of numbers of equity security holders by size of holding

	NUMBER OFSHAREHOLDERS	% OF ISSUEDSHARES
1 – 1,000	271	0.04
1,001 – 5,000	1,100	1.08
5,001 – 10,000	778	1.85
10,001 – 100,000	993	7.56
100,001 and over	87	89.47
	3,229	100.00

There were 128 holders of less than a marketable parcel of ordinary shares.

Equity security holders

The names of the twenty largest holders of quoted equity securities are listed below:

	NUMBER OFSHARES HELD	% OF ISSUEDSHARES
NAME
Scorpio Nominees Pty Ltd	81,111,611	25.50
JP Morgan Nominees Australia Limited	24,881,570	7.82
Mr IMC Palmer & Mrs HC Palmer	23,307,352	7.33
Mr WD Hemsley	20,605,000	6.48
National Nominees Limited	20,487,271	6.44
RBC Dexia Investor Services Australia Nominees Pty Ltd	14,745,208	4.64
Citicorp Nominees Pty Ltd	14,416,912	4.53
MF Custodians Ltd	12,955,962	4.07
HSBC Custody Nominees (Australia) Limited	11,886,152	3.74
Australian Foundation Investment Company Limited	11,183,748	3.52
UBS Nominees Pty Ltd	7,870,594	2.47
Argo Investments Limited	6,234,679	1.96
Citicorp Nominees Pty Limited	3,530,513	1.11
Cogent Nominees Pty Limited	3,100,963	0.98
Amcil Ltd	2,266,667	0.71
Mirrabooka Investments Ltd	2,000,000	0.63
RBC Dexia Investor Services Australia Nominees Pty Limited	1,993,278	0.63
Djerriwarrh Investments Limited	1,696,000	0.53
UBS Wealth Management Australia Nominees Pty Ltd	1,624,917	0.51
Mr LJ Peet	1,510,638	0.47
	267,409,035	84.07

Substantial shareholders

NAME	NUMBER OFSHARES HELD	% OF ISSUEDSHARES
Scorpio Nominees Pty Ltd	81,111,611	25.50
Perpetual Investments Ltd	27,032,362	8.50
Mr IMC Palmer & Mrs HC Palmer	23,612,616	7.42
Mr WD Hemsley	20,663,000	6.50
Commonwealth Bank Group	16,142,062	5.08
	168,561,651	53.0

Based on share register analysis as at 14 September 2011.

Voting rights

The voting rights attaching to each class of equity securities are as set out below:

Ordinary shares

On a show of hands every member present at the meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

Securities Exchange Listing

Peet Limited shares are listed on the Australian Securities Exchange Limited (ASX). The Company's ASX code is PPC.

Website address

www.peet.com.au

The Parent Entity website offers the following features:

Investor relations page with the latest Company announcements;
News service providing up to date information on the Company's activities and projects; and
Access to annual and half year reports.

Corporate Directory

PEET LIMITED

A.B.N 56 008 665 834 Website Address - www.peet.com.au

Directors

Tony Lennon, Non- executive Chairman Brendan Gore BComm, FCPA, FCIS, FAICD, Managing Director and Chief Executive Offi cer Stephen Higgs BEc (Syd), Non-executive Director Graeme Sinclair BComm, CA, ACIS, FAICD, Non-executive Director Anthony Lennon BA, Grad Dip Bus Admin, National Business Development Director

Group Company Secretary Dom Scafetta, B.Comm, CA

Registered Offi ce and Principal Place of Business 7th Floor, 200 St George's Terrace Perth, Western Australia 6000 Tel. (08) 9420 1111

Share Register

Computershare Investor Services Pty Limited Level 2, 45 St George's Terrace Perth, Western Australia 6000

Auditor

PricewaterhouseCoopers QV1, 250 St George's Terrace Perth, Western Australia 6000

Peet Limited ACN 008 665 834 Level 7, 200 St Georges Terrace Perth WA 6000 Telephone (08) 9420 1111 | Facsimile (08) 9481 4712 www.peet.com.au

AI assistant

PEET LIMITED — Annual Report 2011

65600_rns_2011-09-29_245a171b-af42-4ead-b6a6-14a7c865148d.pdf

Annual Report 2011 Success Through Experience

Contents

Peet Values

Integrity

Respect

Teamwork

Adaptability

Accountability

Customer service

Business Overview

Performance at a Glance

Chairman's Review

Results

Board and executive

Outlook

Managing Director and Chief Executive Offi cer's Review

Operational Review

Group Performance

Project portfolio

Highlights

Carrying value of inventories

Capital management

Highlights

Company-owned Projects

Highlights

Funds Management

Sustainability

" The Infl atable rescue boat will be a valuable tool for us as we patrol the beaches, keeping locals and tourists safe during the peak summer season and throughout the year."

Community

Awards

Corporate Calendar

23 September 2011

30 September 2011

14 October 2011

18 October 2011

15 November 2011

February 2012

Board of Directors

Role of the Board

Composition of the Board

Board Members

Board Diversity

Directors' independence

Term of Offi ce

Chairman and Managing Director

Independent Professional Advice

Performance Assessment

Board Committees

Remuneration Committee

Audit and Risk Management Committee

Compliance Committee

Nomination Committee

Risk Management

External Auditors

Corporate Reporting

Promotion of Ethical and Responsible Decision Making

Code of conduct

Share trading guidelines

Employees

During other periods

Directors and senior management

Short-term dealing

Hedging of unvested securities

Continuous disclosure policies and shareholder communication

Board of Directors

Graeme Sinclair

Anthony Lennon

Directors' Report

1 Directors

2 Principal Activities

3 Review of Operations and Consolidated Results

4 Earnings Per Share

5 Signifi cant Changes in the State of Affairs

6 Matters Subsequent to the End of the Financial Year

7 Likely Developments and Expected Results of Operations

8 Dividends

9 Environmental Regulation

PEET LIMITED Annual Report 2011