ANNUAL REPORT 2021

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CONTENTS
About Peet	2
What we do	3
How we do it	4
FY21 Performance at a Glance	6
Business Model	8
Our Strategy	9
National Reach	10
Chairman’s Review	12
Managing Director and CEO’s Review	14
Operational and Financial Review
Fund Management Projects	18
Joint Ventures	20
Development Projects	22
Living Sustainably. Environment Social and Innovation	24
Corporate Calendar FY22	28
Financials	30

PEET LIMITED | ANNUAL REPORT 2021

Peet is one of Australia’s leading residential real estate developers, creating places to live for thousands of Australians each year.

PEET About

Peet is one of Australia’s leading residential real estate developers, creating places to live for thousands of Australians every year. Listed on the Australian Securities Exchange (ASX) since 2004, Peet develops masterplanned communities, medium density housing and low-rise apartments in the major growth corridors in every mainland state in Australia.

Established in 1895 by founder James Thomas Peet with a vision for Australians to build or buy their own home, Peet has enabled thousands of Australians achieve their ownership dreams.

With strong roots in Western Australia and a presence that now reaches across the country, Peet has played a key role in shaping and enhancing the urbanisation of cities by creating desirable communities with a strong commitment to affordability.

WHAT WE DO

Peet acquires, develops and markets residential land in Australia. Currently, Peet manages a broad property portfolio of almost 45,000 lots with a gross development value of approximately $13.6 billion across 52 projects, making Peet Australia’s largest ‘pure play’ residential property developer.

For over 125 years, Peet has continuously evolved its business with a focus on providing choice for Australians. Historically, the company has been a residential land developer, replenishing its land bank in a disciplined manner, including using its unique and capital-lite funds management platform. Bolstered by its deep knowledge of the industry, Peet broadened its geographic scope resulting in a portfolio with national reach and a product mix of land, medium density townhouses and low-rise apartments, in response to the changing lifestyles sought by Australians. Peet’s range of product type appeals across buyer segments whilst maintaining a core focus on first homebuyers.

Peet prides itself on not only creating housing allotments, but communities. Investing in infrastructure is key – from amenities such as parks, shopping centres and schools to installation works of public art, Peet develops communities that offer residents a safe, secure and convenient lifestyle and great places to live.

Peet harnesses its deep experience and knowledge of Australia’s real estate markets to create long-term shareholder value by effectively managing the development and sale of land, townhouses and apartments across the country’s cycles.

The Peet team comprises committed and engaged individuals who work with specialist consultants to deliver projects ranging from boutique townhouses to substantial urban renewal and master-planned communities.

Peet’s brand ethos is Life Your Way . This means we have a commitment to creating places that enable Australians to buy a new home in a new community that suits their lifestyle and needs. Our financial results section provides an overview of our performance during the 2021 financial year (FY21).

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ANNUAL REPORT 2021 | PEET LIMITED 3

HOW WE DO IT Our values

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Image: Googong, NSW
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Integrity

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

Teamwork

WE recognise the strength of working together, encourage the development of people and the sharing of knowledge.

Accountability

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

Adaptability

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

Respect

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

Customer service

WE strive to deliver a high standard of prompt, efficient and courteous service to our customers, both internal and external.

ANNUAL REPORT 2021 | PEET LIMITED

FY21 PERFORMANCE at a glance

Financial

Operating and Statutory Profit[1] $28.5 After Tax million

89%

EBITDA[2 ] (Before restructuring and $ 58.1 divestment related provisions in FY20) million

57%

OPERATING EARNINGS OF 5.9 CENTS PER SHARE

90%

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DIVIDEND OF 3.5 CENTS PER SHARE FULLY FRANKED

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BOOK NTA[3] PER SHARE $1.13

GEARING[4] OF 24.8%

1 Operating profit is a non-IFRS measure that is determined to present the ongoing activities of the Group in a way that reflects its operating performance. Operating profit excludes unrealised fair value gains/(losses) arising from the effect of revaluing assets and liabilities and adjustments for realised/(unrealised) transactions outside the core ongoing business activities. In FY20, a restructuring and divestment-related provision of $45.2 million after tax was excluded in calculating the operating profit.
2 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in associates and joint ventures. 3 NTA before application of AASB16 Leases.
4 Calculated as (Total interest-bearing liabilities (including land vendor liabilities) less cash) / (Total assets less cash, less intangible assets).

Operational

3,142 LOTS SOLD[5] 2,980 35% LOTS SETTLED[5] INCREASE ON FY20 66%

87 [%] of land bank expected to be in development by FY24

APPROX 2 TOWNHOUSE SITES FIVE NEW PROJECTS 1,000 CONTRACTS ON HAND1,948[5] +1 COMMENCED SALES/ PIPELINE OF 9% LOW-RISE APARTMENT DEVELOPMENT TOWNHOUSES/LOW INCREASE RISE APARTMENTS SITE ACQUIRED ON 30 JUNE 2020

Future proofing

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Land bank of 44,957 lots[5]

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Land Bank 52 projects of $13.6 nationally billion gross development value

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Range of affordable product appealing to all buyer segments

5 Includes equivalent lots.

BUSINESS Model

A unique funding model is one of Peet’s key differentiators. It funds development through a combination of Company-owned Development projects, Funds Management projects and Joint Ventures, resulting in a capital efficient business model. Peet pioneered retail land syndication in Australia and its Funds Management and Joint Ventures businesses manage more than 33,000[6] lots across 25 projects, providing opportunities for investors ranging from mums and dads to institutional and wholesale investors to participate in land development projects.

Peet’s Funds Management and Joint Ventures contributed approximately 69% of the Group’s EBITDA[7,8 ] in FY21.

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OWNED
11,540 lots
$2.9bn GDV WHOLESALE
INSTITUTIONAL
21,715 lots
$6.4bn GDV
JOINT
VENTURES
5,871 lots
$2.9bn GDV RETAIL
5,831 lots
$1.4bn GDV
MEDIUM DENSITY
FU
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6 Includes equivalent lots.
7 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in associates and joint ventures.
8 Before inter-segment transfers and other unallocated items.

8 PEET LIMITED | ANNUAL REPORT 2021

Our STRATEGY

Peet’s strategy is to target the delivery of residential communities around Australia by leveraging its land bank, working in partnership with wholesale, institutional and retail investors, and continuing to meet market demand for a mix of products in growth corridors of major Australian cities. We also take a strategic approach to land acquisition, and our geographically diversified portfolio means we are well positioned to leverage different property cycles.

INVEST PEET’S STRATEGY ENHANCE FOCUSES ON FOUR KEY EXPAND PILLARS MAINTAIN

Invest in high quality land in strategic locations across the country

Enhance, plan and create communities and homes targeting the low to middle market segment

Expand product offering and geographic presence to appeal to a wider variety of customers Maintain strong capital management

ANNUAL REPORT 2021 | PEET LIMITED

WA PROJECTS: 21

VIC PROJECTS: 10

QLD PROJECTS: 12

ACT QLD PROJECTS: 1 PROJECTS: 12 SA NSW PROJECTS: 6 PROJECTS: 2

44,957 LOTS[9]

Peet manages a broad property portfolio, encompassing almost 45,000 lots across 52 projects

Diversified land bank strategically located in growth corridors of major cities in every mainland state of Australia

Range of affordable product type appealing to all buyer segments with a core focus on first home buyers

ANNUAL REPORT 2021 | PEET LIMITED

Chairman’s REVIEW

Dear Shareholders,

I am pleased to present Peet’s Annual Report for the year ended 30 June 2021.

Peet has a long and proud history of creating thriving communities for Australians for over 125 years. Despite continued challenges presented by the COVID-19 pandemic, the Group has remained committed to executing our strategy, positioning the business for future growth and creating value for our shareholders.

Peet manages a broad property portfolio, and with a diversified product offering and geographic footprint, the Group is well positioned to leverage our land bank and benefit from improving market conditions and strong demand for affordable housing.

Our financial results for FY21 include an operating[10] and statutory profit[11] after tax of $28.5 million. The profit for FY21 is at the upper end of the earnings guidance announced to the market in July 2021 of an earnings range of $27.5 million to $29.0 million. The improved profit compared to FY20 is due to both higher sales and settlements volumes across the Group’s three business segments and most states that we operate in. This has been supported by continuing favourable market conditions, government stimulus and improving consumer confidence.

During FY21, Peet extended its on-market share buy-back of up to 5% of its issued ordinary shares for a further 12 months to 30 August 2022. We also refinanced $100 million of five-year fixed rate bonds via the issue of $75 million, five and a quarter year floating unlisted notes and a $25 million increase in our senior bank debt facilities, resulting in an increase in the weighted average debt maturity and a reduction in the weighted average cost of borrowing.

STRATEGY

We are focused on positioning the Group for future growth through a prudent approach to project delivery and identifying strategic opportunities to leverage existing assets supplemented by selective acquisitions.

Key elements of the Group’s strategy for the year ahead and beyond include:

continuing to leverage its large-scale national portfolio to further improve returns by:
º accelerating production to meet current demand and increasing operating cash flows;
º continuing to focus on improving project returns and operating margins through efficient master planning, affordable product development, cost reduction initiatives and efficient allocation of capital; and
º continuing to balance the portfolio between land and built form projects, increasing the weighting to east coast markets and remaining focused on the right product in the right markets;
continuing to assess capital recycling opportunities by:
º assessing further divestment opportunities to maximise market cycles to unlock value where appropriate;
º continuing to develop Funds Management/Joint Venture initiatives with existing and new capital partners; and
º evaluating “super lot” opportunities within the portfolio; and
considering selective acquisitions to restock the pipeline when appropriate.

10 Operating profit is a non-IFRS measure that is determined to present the ongoing activities of the Group in a way that reflects its operating performance. Operating profit excludes unrealised fair value gains / (losses) arising from the effect of revaluing assets and liabilities and adjustments for realised / unrealised transactions outside the core ongoing business activities. 11 Statutory profit / (loss) after tax means net profit / (loss) measured in accordance with Australian Accounting Standards, attributable to the owners of Peet Limited.

12 PEET LIMITED | ANNUAL REPORT 2021

DIVIDENDS

Subsequent to year end, the Directors declared a final dividend for FY21 of 2.5 cent per share, fully franked. This brings the total dividend for FY21 to 3.5 cents per share and compares to the FY20 dividend of 1.5 cents per share, fully franked.

Once again, I would like to thank my fellow Board members for their contributions during the year. I would also like to thank our Managing Director and CEO Brendan Gore and the entire Peet team for their continued commitment and energy throughout another year of disruption and uncertainty.

The final FY21 dividend is to be paid on Monday, 11 October 2021, with a record date of Friday, 17 September 2021. The Directors have resolved to keep the Company’s Dividend Reinvestment Plan deactivated.

On behalf of Peet, I would also like to extend our appreciation to our shareholders and other stakeholders for their support and we look forward to sharing our progress with you in FY22.

CONCLUSION

The Group continues to monitor, assess and manage the ongoing impacts of COVID-19 including government-imposed lockdowns and restrictions. Protecting and supporting our staff and customers remains our highest priority, as we mitigate risks to our operations by remaining agile and focused on project delivery.

Tony Lennon Chairman

With continuing residential sales momentum, a significant development pipeline and a strengthening balance sheet, the Group is positioned well for future growth.

During FY22, the team will be focused on the delivery of a significant number of land lots and townhouses, along with the commencement of up to six new projects.

“ With continuing residential sales momentum, a significant development pipeline and a strengthening balance sheet, the Group is positioned well for future growth.”

ANNUAL REPORT 2021 | PEET LIMITED 13

Managing Director and CEO’s REVIEW

Dear Shareholders,

The Group’s strategy has positioned us well to capitalise on a strengthening residential market buoyed by low interest rates, improving employment outlook and supportive lending conditions. Our diversified and balanced portfolio allows us to maximise increased demand and opportunities for price growth; and our balance sheet continues to strengthen supporting the targeting of future growth.

The continued impact of COVID-19 border closures and lockdowns has presented operational challenges, however the market has remained resilient, and we’ve seen positive sales momentum leading into FY22.

Enquiry levels remained strong throughout FY21 despite the roll-off of the HomeBuilder stimulus. Enquiry at our projects across Queensland, Western Australia and Australian Capital Territory/New South Wales have continued to grow in the first quarter of FY22, with enquiry in Victoria remaining solid despite extended COVID-19 lockdown restrictions.

Strong customer demand for quality, affordable product continues, with key indicators signifying positive momentum moving into FY22.

COVID-19 RESPONSES

Our first priority is the safety and wellbeing of our team, with particular focus on our Victorian employees, who have demonstrated enormous character and resilience through extended lockdowns.

FY21 PERFORMANCE

The Peet Group achieved an operating[12] and statutory profit[13] after tax of $28.5 million for FY21, representing increases of 89% and 195%, respectively on FY20.

Higher sales and settlement volumes contributed to improved profit compared to FY20, driven by strong conversion of sales from the HomeBuilder stimulus and strengthening market conditions.

The Group achieved 3,142 sales[14] with a gross value of $858.8 million, representing an increase of 35% on the number of sales in FY20. Sales in 2H21 continued the positive momentum experienced during 1H21 and have continued to improve during the first quarter of FY22.

The Group achieved 2,980 settlements[14] for the full year across its Funds Management, Development and Joint Venture projects, representing an increase of 66% compared with FY20.

The Group derived EBITDA[15] of $58.1 million during FY21, compared to $37.0 million (before restructuring and divestment-related provisions) in FY20, with an EBITDA[15] margin of 25%, compared to the margin achieved in FY20 of 19%. This improved margin is attributable to revenue increases from higher sales and settlements accompanied by price growth across the portfolio and a continued focus on cost management.

At 30 June 2021, there were 1,948 contracts on hand[14] , with a gross value of $546.6 million, compared with 1,786 contracts on hand[14] with a gross value of $427.7 million at 30 June 2020. This represents an increase of 9% in contracts on hand and a 28% increase in contract value, providing a positive momentum into FY22.

12 Operating profit is a non-IFRS measure that is determined to present the ongoing activities of the Group in a way that reflects its operating performance. Operating profit excludes unrealised fair value gains / (losses) arising from the effect of revaluing assets and liabilities and adjustments for realised / unrealised transactions outside the core ongoing business activities. 13 Statutory profit / (loss) after tax means net profit / (loss) measured in accordance with Australian Accounting Standards, attributable to the owners of Peet Limited. 14 Includes equivalent lots.

15 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in associates and joint ventures.

14 PEET LIMITED | ANNUAL REPORT 2021

DELIVERY AGAINST STRATEGY

The Group’s portfolio is well positioned for positive growth, value creation and to capitalise on an improving market to continue to deliver against our strategic pillars.

Invest in high quality land in strategic locations across the country.

Maintain strong capital management.

The Group continues to apply a prudent focus on capital management and its gearing[16] as at 30 June 2021 was 24.8% (30 June 2020: 28.8%) and within its target range of 20% to 30%.

We continued to build our geographically diverse portfolio, with two townhouse sites and one low-rise apartment site acquired during FY21.

At 30 June 2021, the Group had net interest-bearing debt (including Peet Bonds) of $203.9 million, compared with $235.3 million at 30 June 2020.

Enhance, plan and create communities and homes targeting the lower to middle market segment.

Five new projects commenced development/sales during FY21, with a further six projects to be launched in FY22.

Peet enters FY22 with cash and debt facility headroom of $175.1 million as at 30 June 2021 and a weighted average debt maturity of over three years. It has the capacity to accelerate delivery of product to meet the material increase in demand following the introduction of Government stimulus.

We remain focused on driving operating leverage with circa 70% of the land bank in development.

Gearing[16] during FY22 is expected to be at the upper end of the 20% to 30% target range due to the significant level of construction activity anticipated to be undertaken.

Expand our product offering and geographic presence to appeal a wider variety of customers.

We extended our market reach by continuing to broaden our offerings to townhouses and low-rise apartments.

We have a pipeline of approximately 1,000 townhouses and apartments.

“ Our first priority is the safety and wellbeing of our team, with particular focus on our Victorian employees, who have demonstrated enormous character and resilience through extended lockdowns.”

16 Calculated as (Total interest-bearing liabilities (including land vendor liabilities) less cash) / (Total assets less cash, less intangible assets).

ANNUAL REPORT 2021 | PEET LIMITED 15

OUTLOOK

Residential markets are expected to remain positive over the medium term supported by low interest rates, accommodative credit conditions and an improving employment outlook.

Particular focus in the short-term will be on risks associated with COVID-19, including:

prolonged government lock downs negatively impacting the general economy, consumer confidence, supply chains and halting the current positive market momentum;
rising development and labour costs due to border restrictions/closures; and
the potential for development programs to be extended.

Subject to the above risks, FY22 is expected to be a year focused on the delivery of a significant number of land lots and townhouses sold during FY21 along with the commencement of up to six new projects.

The Group is well-positioned to target growth on FY21 earnings, subject to market conditions and the timing of settlements.

I would like to thank Chairman Tony Lennon and our board for their support and contribution. Thank you also to the management team and staff for their continued commitment and dedication which has contributed to the FY21 results.

As always, thank you to our loyal shareholders and other stakeholders who continue to support Peet. I look forward to updating you on our progress during the year.

Brendan Gore

Managing Director and Chief Executive Officer

16 PEET LIMITED | ANNUAL REPORT 2021

“Sales in 2H21 continued the positive momentum experienced during 1H21 and have continued to improve during the first quarter of FY22.”

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Image: Newhaven Tarneit, VIC
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ANNUAL REPORT 2021 | PEET LIMITED 17

OPERATIONAL AND FINANCIAL REVIEW

FUNDS MANAGEMENT[projects]

The Peet group manages a number of projects on behalf of land syndicates using funds raised from a combination of wholesale, institutional and retail investors. It also manages projects under project management and co-investment arrangements. This provides Peet a capital efficient profit source which is difficult to replicate while also providing long term earnings visibility.

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Comprised
61% 19
OF GROUP’S
LAND BANK
42% OF
17, 18
EBITDA
21
20 GDV
27,546 lots
$7.8 billion
17 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in associates and joint ventures.
18 Before inter-segment transfers and other unallocated items.
19 By number of lots.
20 Includes equivalent lots.
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21 Gross Development Value.

18 PEET LIMITED | ANNUAL REPORT 2021

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FY21 FY20
1,613 1,412
Gross value of Gross value of
$406.0 million $310.0 million
FY21 FY20
1,732 924
Gross value of Gross value of
$394.4 million $217.9 million
FY21 FY20
1,054 1,173
Gross value of Gross value of
$252.8 million $241.2 million
FY21 FY20
$29.2 $13.0
million million
FY21 FY20
69% 53%
22 Includes equivalent lots.
23 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in associates.
22
LOTS
SOLD
22
LOTS SETTLED
22
ON HAND
CONTRACTS
23
EBITDA
EBITDA 23
MARGIN
Flagstone, QLD
Image:
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ANNUAL REPORT 2021 | PEET LIMITED 19

OPERATIONAL AND FINANCIAL REVIEW

JOINT[ventures]

The Peet Group has a number of high-profile joint venture projects, which are generally entered into with Governments, statutory authorities, private land owners or partner developers.

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Comprised
13% 26
OF GROUP’S
LAND BANK
27% OF
24, 25
EBITDA
28
27 GDV
5,871 lots
$2.9 billion
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24 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in associates and joint ventures.

25 Before inter-segment transfers and other unallocated items.
26 By number of lots.
27 Includes equivalent lots.
28 Gross Development Value.

20 PEET LIMITED | ANNUAL REPORT 2021

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FY21 FY20
998 479
Gross value of Gross value of
$286.6 million $100.5 million
FY21 FY20
764 436
Gross value of Gross value of
$216.3 million $103.0 million
FY21 FY20
638 404
Gross value of Gross value of
$198.4 million $128.1 million
FY21 FY20
$18.3 $8.8
million million
FY21 FY20
35% 22%
29 Includes equivalent lots.
30 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in joint ventures. Also before divestment and related provisions in FY20.
ANNUAL REPORT 2021 | PEET LIMITED 21
29
LOTS
SOLD
29
LOTS SETTLED
29
ON HAND
CONTRACTS
30
EBITDA
EBITDA 30
MARGIN
Image: Folio 195 Apartments, WA
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OPERATIONAL AND FINANCIAL REVIEW

DEVELOPMENT[projects]

Peet’s Development projects are 100% owned by Peet and held on its balance sheet. 100% of returns are collected upon development, sale and settlement of these projects, generating solid margins.

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Comprised 33
26%
OF GROUP’S
LAND BANK
31% OF
31, 32
EBITDA
35
34 GDV
11,540 lots
$2.9 billion
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31 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in associates and joint ventures.

32 Before inter-segment transfers and other unallocated items.

33 By number of lots.

34 Includes equivalent lots.

35 Gross Development Value.

22 PEET LIMITED | ANNUAL REPORT 2021

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FY21 FY20
531 432
Gross value of Gross value of
$166.2 million $118.2 million
FY21 FY20
484 434
Gross value of Gross value of
$129.2 million $115.8 million
FY21 FY20
256 209
Gross value of Gross value of
$95.4 million $58.4 million
FY21 FY20
$21.8 $23.5
million million
FY21 FY20
16% 18%
36 Includes equivalent lots.
37 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in joint ventures. Also before divestment and related provisions in FY20.
36
LOTS
SOLD
36
LOTS SETTLED
36
ON HAND
CONTRACTS
37
EBITDA
EBITDA 37
MARGIN
Tonsley Village, SA
Image:
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ANNUAL REPORT 2021 | PEET LIMITED

LIVING Sustainably

ENVIRONMENT, SOCIAL & INNOVATION

Peet creates communities that become a permanent part of Australia’s urban fabric for decades to come.

With this in mind, Peet focuses on planning, designing and developing communities that leverage innovation to minimise the impact on the environment, while creating opportunities for communities and residents to thrive.

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SMART
LIGHTING AT
GOOGONG
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The township of Googong in NSW is set to become a showcase for technology-based urban living with a comprehensive Smart City infrastructure program that reduces everyday community service costs, including waste management, utility consumption and the maintenance of amenities. Googong is one of the first towns in Australia to have smart technology built in at scale and from the ground up; and in 2021 released the Googong Smart Cities Blueprint to support other planners, developers and councils.

The latest addition to the roll-out of the town’s Smart Cities infrastructure is 5G ready ‘smart’ LED light poles. The poles are installed offgrid and are powered by free renewable solar energy - meaning no carbon emissions and no energy costs. Trench-free installation is also cost effective and allows for flexible positioning, while remote operation monitoring, reportable data

collection and fault detection provides enhanced facilities management. The lights are currently programmed to run at 100% capacity from dusk to 11pm, and then dim down to 30% from 11pm to dawn. Motion detectors allow individual lights to power up to 100% for a few minutes as pedestrians pass through the area.While the ‘smart’ poles are already delivering increased safety, efficiency, productivity and services, they also have the capability to be fitted with additional network infrastructure for free public Wi-Fi, digital wayfinding and surveillance cameras.

Googong was recognised at the 2021 MAV Technology Awards for Excellence with a Highly Commended in the category of Strategy and Planning Achievement of the Year for its Smart Cities Blueprint.

Googong is a joint venture with Mirvac.

24 PEET LIMITED | ANNUAL REPORT 2021

JOURNEY TOWARDS RECONCILIATION

We are pleased to have commenced the process to develop our Reflect Reconciliation Action Plan, which aims to make a positive contribution towards reconciliation in our community. Peet has a history of successfully working with the Traditional Owners of the land in which we create our communities. We are committed to understanding, listening and learning to further enhance those relationships and identify opportunities to support and celebrate First Nations peoples and culture.

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FLAGSTONE
SPORTS FIELD
SUPPORTING
THE NEXT
GENERATION
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The next generation of Queensland rugby league stars will be honing their skills and talent with the launch of the Flagstone Tigers and new team clubhouse at Flagstone Sports Field. The new clubhouse features showers, toilets, a kiosk and meeting rooms.

A Queensland Government grant, together with Peet Flagstone City Pty Limited’s in-kind site works made the delivery of the clubhouse a reality for the community.

The establishment of the Flagstone Tigers club contributes to building the community spirit and these new facilities are an important piece of foundation infrastructure for the club.

The Flagstone Tigers have begun with Under 6s to Under 9s in 2021. Next year, they will expand to older age groups, and the Brisbane Easts Tigers Rugby League Club are also working closely with the local schools to implement junior development programs.

Peet has a proud history of building sustainable communities through significant infrastructure such as this and through our community grants program which supports community clubs and initiatives at a grass roots level.

ANNUAL REPORT 2021 | PEET LIMITED 25

COMPLETION OF 6.2-HECTARE LIGHTSVIEW WETLANDS

Lightsview’s substantial master-planned park, featuring a full system of wetlands, central lake and connecting walking trails in addition to a drawcard adventure playground, is now complete.

The wetlands and the central lake all contribute to creating sustainable water bodies in the urban area for the benefit of the community. A constructed wetland system supports a healthy ecosystem that is able to filter and process the contaminants carried in stormwater to cleanse the water before being released. The wetlands filter and process pollutants, they support a wide range of plants and animals adding to the urban biodiversity of the area.

Eucalypts, native water plants and South Australian flora provide beautiful greenery throughout, with over 150 trees and 20,000 plants and aquatics planted. Mellow sandstone sourced from the Adelaide hills, has been used for attractive statement borders and edging.

All is designed specifically to support recreation activities in and around the wetlands with walking paths, boardwalks, stepping stones, a playground and active play spaces for residents to enjoy.

Lightsview is an award-winning project in joint venture with Renewal SA.

AUSTRALIA’S FIRST 9-STAR NatHERS ACCREDITED DISPLAY HOME AT BRABHAM

In an Australian first at Brabham Estate, Peet is building a 9.2 star rated green home, accredited by the Nationwide House Energy Rating Scheme (NatHERS) which measures a home’s energy efficiency. As a demonstration of Peet’s commitment to innovate, the home located within the first Brabham Display Village, will showcase the advantages of ‘green’ homes through good design, quality building and integration of multiple technologies.

The home, built by Green Homes Australia, will provide an opportunity to educate purchasers on the positive impact and long-term benefits of sustainable design, supported by an integrated and interpretative signage strategy throughout the display and landscape garden to draw attention to the sustainable initiatives and design.

The key sustainable features of the home include lightweight timber frame, solar orientation and ventilation features, smart home features such as electric vehicle charging and integrated home energy management systems as well as an integrated sustainable landscape design including a 14m[2] roof garden, smart irrigation systems and the planting of drought tolerant species.

A 12-month monitoring and evaluation program will be implemented to test and benchmark equivalent dwelling construction. The home is due to open in the Display Village in the New Year.

Brabham Estate is located in Perth’s north east and developed in partnership with Development WA.

26 PEET LIMITED | ANNUAL REPORT 2021

Peet has a proud history of supporting the community through partnerships and grants that bring residents together, encourage healthy and active lifestyles and create sustainable communities that thrive for years to come.

ANNUAL REPORT 2021 | PEET LIMITED 27

Corporate CALENDAR FY22

5 JULY 2021

Interest payment date for Peet Bond holders (PPCHB)

26 AUGUST 2021

Release of results for the year ended 30 June 2021

17 SEPTEMBER 2021

Record date for FY21 final dividend of $0.025 per share

30 SEPTEMBER 2021

Interest payment date for unlisted notes issued in 2021

5 OCTOBER 2021

Interest payment date for Peet Bond holders (PPCHB)

11 OCTOBER 2021

Payment date for FY21 final dividend of $0.025 per share

14 OCTOBER 2021

Annual Report and Notice of 2021 AGM dispatched to shareholders

16 NOVEMBER 2021

2021 Annual General Meeting

7 DECEMBER 2021

Interest payment date for unlisted notes issued in 2019

31 DECEMBER 2021

Interest payment date for unlisted notes issued in 2021

5 JANUARY 2022

Interest payment date for Peet Bond holders (PPCHB)

FEBRUARY 2022

Release of results for the half-year ending 31 December 2021

31 MARCH 2022

Interest payment date for unlisted notes issued in 2021

5 APRIL 2022

Interest payment date for Peet Bond holders (PPCHB)

7 JUNE 2022

Interest payment date for unlisted notes issued in 2019

30 JUNE 2022

Interest payment date for unlisted notes issued in 2021

28 PEET LIMITED | ANNUAL REPORT 2021

ANNUAL REPORT 2021 | PEET LIMITED 29

Financials 2021

Directors’ Report ............................................................................................................................................................... 31 Auditor’s Independence Declaration ................................................................................................................................. 59 Corporate Governance Statement .................................................................................................................................... 60 Financial Report ................................................................................................................................................................ 61 Directors’ Declaration ...................................................................................................................................................... 102 Independent Auditor’s Report to the Members of Peet Limited .................................................................................... 103 Securityholder Information ..............................................................................................................................................110 Corporate Directory ..........................................................................................................................................................113

30 PEET LIMITED | ANNUAL REPORT 2021

Directors’ Report

Year ended 30 June 2021

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 financial year ended 30 June 2021 (‘the Group’).

1. DIRECTORS

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

TONY LENNON

FAICD

NON-EXECUTIVE CHAIRMAN

Tony Lennon has extensive general commercial experience and particularly in the property industry.

Mr Lennon is a Fellow of the Australian Institute of Company Directors and an Associate of the Australian Property Institute.

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. He is a World Fellow Member of The Duke of Edinburgh’s International Award.

BRENDAN GORE

BComm, FCPA, FCIS, FGIA, FAICD

MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER

Brendan Gore has been Managing Director and Chief Executive Officer (“CEO”) of Peet Limited since 2007 – successfully leading the company’s strategy through its land bank expansion, diversification of its product offering and developing key new partnerships with Government and major institutions.

Mr Gore’s appointment to the position of Managing Director and CEO followed experience in two other key executive roles within the Company. He began with Peet as Chief Financial Officer and played a key role in expanding the Company’s scope of activities and growing its core residential development and land syndication businesses.

Mr Gore’s period in senior executive roles at Peet Limited was preceded by more than two decades’ experience in a range of senior corporate, commercial and operational positions where he gained extensive experience in large scale operations, strategy development and implementation, as well as expertise in debt and equity markets.

He developed a reputation as a strong leader, with operational responsibilities across local and State Government relations, environmental and sustainability management and occupational health and safety.

Mr Gore is a qualified accountant and a Fellow of CPA Australia. He is also a Fellow of the Australian Institute of Company Directors and a Fellow of the Governance Institute of Australia.

ANNUAL REPORT 2021 | PEET LIMITED 31

Year ended 30 June 2021

Directors’ Report

1. DIRECTORS continued

ANTHONY LENNON

BA, Grad Dip Bus Admin, MAICD

NON-EXECUTIVE DIRECTOR

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

He moved to Victoria to establish Peet’s operations in Australia’s eastern states and oversaw significant expansion.

Before joining the Company, Mr Lennon worked in the United Kingdom, where he completed his post-graduate qualification whilst working for 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 during his career with Peet included project management, broadacre acquisitions, marketing and financing and a six-year term as Chairman of one of WA’s largest conveyancing businesses.

Until his transition from Executive to Non-executive Director on 27 August 2012, Mr Lennon was Peet Limited’s National Business Development Director.

In 2019 he became a director of Habitat for Humanity (Vic). Part of a worldwide organisation, it is a registered charity which assists low income families into affordable home ownership and out of the rental market by providing no interest mortgages.

TREVOR ALLEN

BComm (Hons), CA, FF, FAICD

INDEPENDENT NON-EXECUTIVE DIRECTOR

Trevor Allen joined Peet in April 2012, with almost four decades of experience in the corporate and financial sectors, primarily as a corporate and financial advisor to Australian and international public and privately-owned companies.

Mr Allen is a Non-executive Director of Eclipx Group Limited, where he chairs its Audit and Risk Management Committee and is a member of its Remuneration Committee. He is also a non-executive director of TopCo Investments Pte Ltd, a Singapore company which is the holding company of Real Pet Food Company Limited, where he chairs its Risk and Sustainability Committee and is the Deputy Chair of its Finance and Audit Committee.

During the last three years, Mr Allen was a director of Freedom Foods Group Limited, retiring from that position in January 2021.

Prior to Mr Allen’s non-executive roles, he held senior executive positions including Executive Director Corporate Finance at SBC Warburg (now part of UBS), at Baring Brothers and as a Corporate Finance Partner at KPMG. At the time of his retirement from KPMG in 2011 he was the lead partner in its National Mergers and Acquisitions group.

32 PEET LIMITED | ANNUAL REPORT 2021

VICKI KRAUSE

BJuris LLB W.Aust, GAICD

INDEPENDENT NON-EXECUTIVE DIRECTOR

Vicki Krause was appointed to the Board of Peet Limited in April 2014.

An experienced commercial lawyer, Ms Krause had a 25 year career as a senior corporate executive with the Wesfarmers Group, including seven years as its Chief Legal Counsel.

She supported successful outcomes in numerous significant acquisitions (including listed companies, trade sales and a privatisation) and divestments.

As Chief Legal Counsel and a member of the Wesfarmers Executive Committee, Ms Krause led a large legal team and was responsible for the provision of legal advice and strategic planning in relation to the management of legal risk in the Wesfarmers Group with key outputs including the evaluation and completion of major business projects and major supply arrangements.

Ms Krause has completed the PMD Management Course at Harvard Business School.

She is a former director of Western Power.

ROBERT MCKINNON

FCPA, FCIS, FGIA, MAICD

LEAD INDEPENDENT NON-EXECUTIVE DIRECTOR

Appointed as Non-executive Director in May 2014, Bob McKinnon has 40 years’ experience in finance and general management positions in the light manufacturing and industrial sectors in Australia, New Zealand, and Canada.

He is the former Managing Director of Austal Ships and Fleetwood Corporation Limited and spent 28 years with Capral Aluminium (formerly Alcan Australia) in various financial and senior executive positions.

Mr McKinnon is a Director of DGL Group Limited; the former Non-executive Chairman of M8 Sustainable Limited; and, was previously a Non-executive Director of Bankwest, Brierty Limited, Programmed Maintenance Services Limited and Tox Free Solutions Limited.

2. PRINCIPAL ACTIVITIES

The Group acquires, develops and markets residential land, predominantly under a capital-efficient funds management model.

Peet was founded in Western Australia in 1895 and has expanded over the years to become Australia’s largest pure-play residential developer. Peet has been listed on the ASX since 2004 and is focused on creating high-quality masterplanned residential communities for homebuyers across Australia, and achieving the best possible results for its shareholders, investors and partners who include State and Federal Government agencies and major Australian institutions.

As at 30 June 2021, the Group employed 195 people in offices throughout Australia and managed and marketed a land bank of more than 44,900 lots in the growth corridors of major mainland Australian cities.

ANNUAL REPORT 2021 | PEET LIMITED 33

Year ended 30 June 2021

Directors’ Report

3. REVIEW OF OPERATIONS AND CONSOLIDATED RESULTS

OPERATING AND FINANCIAL REVIEW

KEY RESULTS[1]

Operating profit[2] and statutory profit[3] after tax of $28.5 million
Earnings per share of 5.9 cents per share
FY21 dividends of 3.5 cents per share, fully franked
Revenue[4] of $234.3 million, with 2,980 lots settled
EBITDA[5] of $58.1 million
1,948 contracts on hand[6] as at 30 June 2021
Gearing[7] of 24.8%

FINANCIAL COMMENTARY

The Peet Group achieved an operating profit[2] and statutory profit[3] after tax of $28.5 million for the year ended 30 June 2021 (“FY21”), which represent increases of 89% and 195%, respectively on FY20. The profit for FY21 is at the upper end of the earnings guidance announced to the market in July 2021 of an earnings range of $27.5 million to $29.0 million.

The improved profit is on the back of both higher sales and settlements volumes across the Group’s three business segments and across most states that it operates in, supported by continuing favourable market conditions, government stimulus and consumer confidence during FY21.

The Group derived EBITDA[5] of $58.1 million during FY21, compared to $37.0 million (before divestment and related provisions) in FY20, with an EBITDA[5] margin of 25%, compared to the margin achieved in FY20 of 19%. This margin increase is attributable to revenue increases from increased sales and settlements accompanied by price growth across the portfolio and a continued focus on cost management.

The performance has resulted in an operating and statutory earnings per share of 5.9 cents for FY21, compared to operating earnings per share of 3.1 cents and statutory loss per share of 6.2 cents in FY20.

The Group’s focus on prudent capital management allowed it to proactively implement capital management initiatives in response to COVID-19. This focus has continued, allowing it to release, develop and construct its products in response to the increased demand from customers around the country.

The Group enters FY22 in a strong capital position, with gearing[7] at 30 June 2021 of 24.8% (30 June 2020: 28.8%), which is within the Company’s target range of 20% to 30%.

COVID-19 responses

While business practices normalised across the majority of the country in the first half of FY21, Melbourne continued to be subject to significant disruption resulting from COVID-19-related lock downs. While sales and settlements from our Victorian portfolio remained solid and market conditions resilient, the Group continued to prioritise the safety and wellbeing of its Victorian employees, who have demonstrated enormous character and resilience.

1 Comparative period is 30 June 2020, unless stated otherwise. The non-IFRS measures have not been audited.

2 Operating profit is a non-IFRS measure that is determined to present the ongoing activities of the Group in a way that reflects its operating performance. Operating profit excludes unrealised fair value gains/ (losses) arising from the effect of revaluing assets and liabilities and adjustments for realised/unrealised transactions outside the core ongoing business activities.

3 Statutory profit/(loss) after tax means net profit/(loss) measured in accordance with Australian Accounting Standards, attributable to the owners of Peet Limited.

4 Includes statutory revenue of $220.3 million (FY20: $188.2 million) and share of net profits from associates and joint ventures of $14.0 million (FY20: $8.1 million).

5 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in associates and joint ventures.

6 Includes equivalent lots.

7 Calculated as (Total interest-bearing liabilities (including land vendor liabilities) less cash)/(Total assets less cash, less intangible assets).

34 PEET LIMITED | ANNUAL REPORT 2021

OPERATIONAL COMMENTARY

The Group achieved 3,142 sales[8] (with a gross value of $858.8 million) for the full year across its Funds Management, Development and Joint Venture projects, representing an increase of 35% on the number of sales achieved in FY20.

Sales in 2H21 continued the improving momentum experienced during 1H21 and have continued to improve during the first quarter to date of FY22.

The Group achieved 2,980 settlements[8] for the full year across its Funds Management, Development and Joint Venture projects, representing an increase of 66% compared with FY20.

At 30 June 2021, there were 1,948 contracts on hand[8] , with a gross value of $546.6 million, compared with 1,786 contracts on hand[8] with a gross value of $427.7 million at 30 June in 2020. This represents an increase of 9% in contracts on hand[8] and a 28% increase in contract value, providing a positive momentum into FY22.

Funds management projects

Key highlights

1,613 lots sold[8] for a gross value of $406.0 million, compared with 1,412 lots sold[8] ($310.0 million) in FY20.
1,732 lots settled[8] for a gross value of $394.4 million, compared with 924 lots settled[8] ($217.9 million) in FY20.
1,054 contracts on hand[8] as at 30 June 2021 with a total value of $252.8 million, compared with 1,173 contracts on hand[8] ($241.2 million) as at 30 June 2020.
EBITDA[9] of $29.2 million compared with $13.0 million in FY20.
EBITDA[9] margin increased to 69% from 53% in FY20.

The 14% increase in sales and the 87% increase in settlements contributed to EBITDA[9] increasing 125%.

As at 30 June 2021, approximately 61% of the Group’s land bank comprised Funds Management projects. This business provides Peet with a capital-lite earnings base which contributed approximately 42% of the Group’s EBITDA[9,10] for FY21.

Development projects

Key highlights

531 lots sold[8] for a gross value of $166.2 million, compared with 432 lots sold[8] ($118.2 million) in FY20.
484 lots settled[8] for a gross value of $129.2 million, compared with 434 lots settled[8] ($115.8 million) in FY20.
256 contracts on hand[8] as at 30 June 2021 with a total value of $95.4 million, compared with 209 contracts on hand[8] ($58.4 million) as at 30 June 2020.
EBITDA[9] of $21.8 million compared with $23.5 million[11] in FY20.
EBITDA[9] margin of 16% compared with 18%[11] in FY20.

The reduction in the EBITDA[9] margin can be partly attributed to the first phase of the Craigieburn, Aston (Vic) project substantially completing settlements in FY20. However, the commencement of settlements from the Group’s townhouse projects partially offset this decrease. Increased investment in the Group’s townhouse business is expected to show EBITDA[9] improvement over the next 12 to 24 months.

As at 30 June 2021 approximately 26% of the Group’s land bank comprised Development projects.

8 Includes equivalent lots.

9 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in associates and joint ventures.

10 Before inter-segment transfers and other unallocated items.

11 Before divestment and related provisions in FY20.

ANNUAL REPORT 2021 | PEET LIMITED 35

Directors’ Report Year ended 30 June 2021

3. REVIEW OF OPERATIONS AND CONSOLIDATED RESULTS continued

Joint Ventures

Key highlights

998 lots sold[12] for a gross value of $286.6 million, compared with 479 lots sold[12] ($100.5 million) in FY20.
764 lots settled[12] for a gross value of $216.3 million, compared with 436 lots settled[12] ($103.0 million) in FY20.
638 contracts on hand[12] as at 30 June 2021 with a total value of $198.4 million, compared with 404 contracts on hand[12] ($128.1 million) as at 30 June 2020.
EBITDA[13] of $18.3 million compared with $8.8 million[14] in FY20.
EBITDA[13] margin of 35% compared with 22%[14] in FY20.

Sales increased 108% during the year on the back of strong sales from the Googong (NSW), Lightsview (SA) and Edens Crossing (Qld) projects.

Settlements were 75% higher in FY21, compared to FY20, resulting in the EBITDA[13,14] contribution increasing 108%.

As at 30 June 2021 approximately 13% of the Group’s land bank comprised Joint Venture projects, with major projects located in Qld, NSW, WA and SA.

Land portfolio metrics

Land portfolio metrics
	FY21	FY20	Change
Lot sales12	3,142	2,323	35%
Lot settlements12	2,980	1,794	66%
Contracts on hand12as at 30 June
– Number	1,948	1,786	9%
– Value	$546.6 million	$427.7 million	28%

CAPITAL MANAGEMENT

The Group continues to apply a prudent focus on capital management and its gearing[15] as at 30 June 2021 was 24.8% (30 June 2020: $28.8%) and within its target range of 20% to 30%.

At 30 June 2021, the Group had net interest-bearing debt[16] (including Peet Bonds) of $203.9 million, compared with $235.3 million at 30 June 2020.

Gearing[15] during FY22 is expected to be at the upper end of the 20% to 30% target range due to the significant level of construction activity and anticipated to be undertaken.

12 Includes equivalent lots

13 EBITDA is a non-IFRS measure that includes effects of non-cash movements in investments in associates and joint ventures.

14 Before divestment and related provisions in FY20.

15 Calculated as (Total interest-bearing liabilities (including land vendor liabilities) less cash)/(Total assets less cash, less intangible assets).

16 Including net debt of syndicates consolidated under AASB10.

36 PEET LIMITED | ANNUAL REPORT 2021

During FY21, Peet Limited:

extended its on-market share buy-back of up to 5% of its issued ordinary shares. As at 30 June 2021, the Company had acquired 6.7 million of its ordinary shares, representing approximately 27% of the total shares to be acquired, and subsequent to year end announced that the on-market buy-back has been extended for a further 12 months; and
refinanced $100 million of five-year fixed rate bonds (ASX:PPCHA) via the issue of $75 million, five and quarter years floating unlisted notes and a $25 million increase in its senior bank debt facilities, resulting in an increase in the weighted average debt maturity and a reduction in the weighted average cost of borrowing.

DIVIDENDS

Subsequent to year end, the Directors declared a final dividend for FY21 of 2.5 cent per share, fully franked. This brings the total dividend for FY21 to 3.5 cents per share. This compares to the FY20 dividend of 1.5 cents per share, fully franked. The final FY21 dividend is to be paid on Monday, 11 October 2021, with a record date of Friday, 17 September 2021.

The Directors have resolved to keep the Company’s Dividend Reinvestment Plan deactivated.

GROUP STRATEGY

Key elements of the Group’s strategy for the year ahead and beyond include:

continuing to leverage its large-scale national portfolio to further improve returns by:
accelerating production to meet current demand and increasing operating cash flows;
continuing to focus on improving project returns and operating margins through efficient master planning, affordable product development, cost reduction initiatives and efficient allocation of capital; and
continuing to balance the portfolio between land and built form projects, increasing the weighting to east coast markets and remaining focussed on the right product in the right markets;
continuing to assess capital recycling opportunities by:
assessing further divestment opportunities to maximise market cycles to unlock value where appropriate;
continuing to develop Funds Management/Joint Venture initiatives with existing and new capital partners; and
evaluating “super lot” opportunities within the portfolio; and
considering selective acquisitions to restock the pipeline when appropriate.

RISKS

The Group’s operating and financial performance is influenced by a number of risks impacting the property sector. These include bank lending conditions, general economic conditions, government policy influencing a range of matters including population growth (immigration policy), household income and consumer confidence, the employment market and land development conditions and requirements, including in relation to infrastructure, environmental and climatechange management.

In respect to climate change, the Group’s focus continues to be on understanding and mitigating climate change risks on development approvals processes, reputational matters and reporting obligations.

Global and domestic economic factors which may influence capital markets and the movement of interest rates are also risks faced by the Group.

At an individual project level, residential property developments also face a number of risks related to the price and availability of capital, the timeliness of approvals, delays in construction, and the level of competition in the market. The Group has a long history of managing these risks at an individual project and portfolio level.

ANNUAL REPORT 2021 | PEET LIMITED 37

Year ended 30 June 2021

Directors’ Report

3. REVIEW OF OPERATIONS AND CONSOLIDATED RESULTS continued

The Group’s financial risk management policies are set out in note 17 to the Financial Report.

Particular focus in the short-term will be on risks associated with COVID-19, including:

prolonged government lock downs negatively impacting the general economy, consumer confidence, supply chains and halting the current positive market momentum;
rising development and labour costs due to border restrictions/closures; and
the potential for development programs to be extended.

The property market is cyclical and, while the Group is impacted by fluctuations in the market, it has also proved its capacity to manage through various cycles over a very significant period of time. This continues to include managing risks associated with changing consumer preferences for products – size, location, product typology (house and land, low-rise apartments and medium density townhouses).

OUTLOOK

Continuing residential sales momentum, a significant development pipeline and a strengthening balance sheet, positions the Group well for future growth.

Residential markets are expected to remain positive over the medium term supported by low interest rates, accommodative credit conditions and an improving employment outlook.

The Group is well-positioned to target growth on FY21 earnings, subject to market conditions and the timing of settlements.

4. EARNINGS PER SHARE

4. EARNINGS PER SHARE
	2021	2020
	Cents	Cents
Basic and diluted earnings/(loss) per share	5.9	(6.19)

Basic earnings per share is calculated after income tax expense based on the weighted average number of shares on issue for the year ended 30 June 2021. The weighted average number of shares on issue used to calculate earnings per share is discussed at note 7 to the Financial Report.

5. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There were no significant changes in the state of affairs of the Group during the year.

6. MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

Other than the final FY21 dividend (details of which are included below), no matters or circumstances have arisen since the end of the financial year, which have significantly affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in subsequent financial years.

38 PEET LIMITED | ANNUAL REPORT 2021

7. DIVIDENDS

In August 2020, the Directors declared a final dividend of 1.0 cents per share, fully franked, in respect of the year ended 30 June 2020. The dividend of $4.8 million was paid on Thursday, 19 November 2020.

In February 2021, the Directors declared an interim dividend of 1.0 cents per share, fully franked, in respect to the year then ending 30 June 2021. The dividend of $4.8 million was paid on Thursday, 8 April 2021.

The Directors have resolved to keep the Company’s Dividend Reinvestment Plan deactivated.

8. ENVIRONMENTAL REGULATION

The Group is subject to environmental regulation by way of the Environment Protection and Biodiversity Conservation Act 1999 in respect of its land subdivision activities nationally, as well as other environmental regulations under both Commonwealth and State legislation.

The Group is not aware of any breaches of environmental regulations in respect of its activities. However, from time to time, statutory authorities make enquiries, issue notices requiring documents and/or material to be provided, and undertake investigations or audits to confirm compliance with relevant regulations.

GREENHOUSE GAS AND ENERGY DATA REPORTING REQUIREMENTS

The Group may be subject to the reporting requirements of the National Greenhouse and Energy Reporting Act 2007 . This requires the Group to report its annual greenhouse gas (GHG) emissions and energy use if it has operational control of facilities (sites) that emit greenhouse gases, produce energy, or consume energy at or above the specified GHG emission and energy thresholds per financial year.

The Group is not required to register and report to the Clean Energy Regulator as the Group does not have operational control for each of its projects, which is the responsibility of the relevant contractor undertaking the works, and the remainder of the Group’s activities fall below the reporting thresholds for the FY21 reporting period.

9. 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

Dom Scafetta is a Chartered Accountant who has worked with Peet Limited since 1998.

Mr Scafetta began his career with major accounting firm Coopers & Lybrand (now PricewaterhouseCoopers) after completing a commerce degree in 1993. He held a senior role with the organisation in its Business Services division and advised a range of clients on accounting, taxation and general business matters.

After four years at Coopers & Lybrand, Mr Scafetta joined Peet as Company Accountant and Company Secretary, which also required him to act as Company Secretary for the Company’s various syndicates and subsidiaries. Prior to Peet being listed on the Australian Securities Exchange, Mr Scafetta was appointed Chief Financial Officer and served in that role until February 2005, when he was appointed as Company Secretary of Peet Limited.

ANNUAL REPORT 2021 | PEET LIMITED 39

Year ended 30 June 2021

Directors’ Report

10. 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:

Director	Board of Directors Audit & Risk Management Committee Remuneration Committee Nomination Committee
	Entitled to Attend Attended Entitled to Attend Attended Entitled to Attend Attended Entitled to Attend Attended
A W Lennon B D Gore A J Lennon T J Allen V Krause R J McKinnon	21 21 – – – – 2 2 21 21 – – – – 2 2 21 21 8 8 3 3 2 2 21 20 8 8 3 3 2 2 21 21 – – 3 3 2 2 21 21 8 8 3 3 2 2

On some occasions, Board and Committee meetings may have been called or rescheduled on short notice which meant that some Directors may not have been able to attend.

11. RETIREMENT, ELECTION AND CONTINUATION IN OFFICE 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 fill a casual vacancy on the Board or in addition to the existing Directors, who will then hold office until the next AGM. No Director who is not the Managing Director, may hold office 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 Mr T J Allen and Mr R J McKinnon will retire by rotation and offer themselves for re-election. Your Board of Directors recommend the re-election of Mr T J Allen and Mr R J McKinnon.

12. REMUNERATION

Dear Shareholder,

Peet is pleased to present its Remuneration Report for the year ended 30 June 2021. This report sets out remuneration information for Non-executive Directors (“NEDs”), the Managing Director and Chief Executive Officer (“MD”) and other key management personnel (“KMP”). It focuses on the remuneration decisions made by the Board and the pay outcomes that resulted.

To ensure Peet delivers on its growth strategy it must have the right people to lead the Group over the long-term and a competitive remuneration framework that encourages our Leadership Team to continue to make decisions with a view to creating long-term value for shareholders and all stakeholders.

In considering remuneration outcomes, the Board’s Remuneration Committee:

(a) balances Peet’s financial performance with the development and implementation of strategies for the long-term benefit of the Group; and
(b) takes into account the underlying scale of Peet’s operations which are not fully identifiable from a pure focus on the Group’s statutory accounts.

Peet achieved an operating net profit after tax and a statutory profit after tax of $28.5 million for the 2021 financial year, compared to an operating profit after tax of $15.1 million and a statutory loss after tax of $30.1 million in the previous year.

40 PEET LIMITED | ANNUAL REPORT 2021

While the statutory financial statements show total revenue of $234.3 million and earnings before interest, tax, depreciation and amortisation (“EBITDA”) of $58.1 million for the 2021 financial year, Peet management remains responsible for a greater scale of business.

In addition to its own land development projects, Peet is also responsible for the management of a significant portfolio of land development projects held within its Funds Management and Joint Arrangements businesses. These Funds Management and Joint Arrangement businesses generated revenues of $587.1 million and EBITDA of $122.0 million.

Accordingly, the scale of business from which Peet derives its revenues and earnings, which drive its capacity to pay dividends to shareholders, is extensive.

Key remuneration outcomes during the year ended 30 June 2021 included:

The MD’s base pay for the year ended 30 June 2021 was the same as for the previous year.
There were no increases in the base pay of the other KMP, including NEDs, during the year ended 30 June 2021.
During the year, long-term incentive performance conditions were tested as at 30 June 2020 in respect to the performance over the three years ended on that date resulting in the partial vesting of performance rights. The exercise of any vested performance rights was met by way of ordinary shares acquired on market during the 2021 financial year.
Short-term incentives will be paid to KMP in respect of the year ended 30 June 2021, following a positive assessment of the individual KMP’s performance against a balanced scorecard, which includes consideration of Group financial and strategic targets. The MD was entitled to 100% of his short-term incentive entitlement, however the Remuneration Committee and the Board, in agreement with the MD, applied discretion to reduce the MD’s entitlement to 80%.
In response to COVID-19:
all members of the Leadership Team, as well as other members of senior management, took a voluntary 20% reduction of fixed salaries for the last two months of FY20, which extended to 31 July 2020; and
all NEDs took a voluntary 20% reduction of Directors’ fees for the last two months of FY20, which extended to 31 July 2020.

Peet also takes the opportunity to confirm that the MD’s base pay for the year ending 30 June 2022 will be the same as 2021, notwithstanding his contractual entitlement to an adjustment of at least CPI. The MD’s base pay was last amended with effect from 1 July 2014. Additionally, the FY21 base pays of all other KMP, including NEDs, will remain the same as their FY21 base pays.

We encourage our shareholders to use the cash value of remuneration realised table on page 13 to assess the remuneration outcomes for KMP in the year ended 30 June 2021 and the alignment of these outcomes with the Group’s performance.

The key difference between the cash value of remuneration realised and the statutory remuneration is the value included in the statutory remuneration table for potential future outcomes under the long-term incentive. A value is required to be included in the statutory remuneration table to account for long-term incentives that may or may not vest in the future, while the value for long-term incentives included in the cash value of remuneration realised table represents the value of shares actually received by KMP following the vesting and exercise of performance rights.

The Board is satisfied that these remuneration outcomes for the year ended 30 June 2021 are appropriately performance-based while at the same time recognising the strategic needs of the Group, and we commend this report to you.

Robert McKinnon

Chairman, Remuneration Committee

ANNUAL REPORT 2021 | PEET LIMITED 41

Directors’ Report Year ended 30 June 2021

13. REMUNERATION REPORT (AUDITED)

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

A. SERVICE AGREEMENTS
B. PRINCIPLES USED TO DETERMINE THE NATURE AND AMOUNT OF REMUNERATION
C. DETAILS OF REMUNERATION
D. SHARE-BASED COMPENSATION

E. ADDITIONAL INFORMATION

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

The key management personnel of the Group (“KMP”) include the Non-executive Directors (“NEDs”) of the Group, and the following executives (the “Executives”) who have authority and responsibility for planning, directing and controlling the activities of the Group.

Name	Position
B D Gore	Managing Director and Chief Executive Offcer
B C Fullarton	Chief Financial Offcer
D Scafetta	Group Company Secretary
P J Dumas	Chief Investment Offcer

A. SERVICE AGREEMENTS

Remuneration and other terms of employment for the Executives 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/or 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 pay including Superannuation1	Termination Beneft2,3
B D Gore	On-going renewed 5 August 2011	$937,300	Refer below4
B C Fullarton	On-going commenced 21 October 2013	$440,000	3 months base pay inclusive of superannuation
D Scafetta	On-going commenced 10 June 1998	$350,000	3 months base pay inclusive of superannuation
P J Dumas	On-going commenced 4 February 2008	$485,000	3 months base pay inclusive of superannuation

Base pays, inclusive of superannuation, for the year ended 30 June 2021. Base pays are reviewed annually by the Remuneration Committee.
Termination benefits 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.
Termination benefits referred to in the above table are in addition to any statutory entitlements payable (e.g. accrued annual leave and long service leave).
On 5 August 2011 B D Gore renewed his contractual arrangements with the Company. Under the agreement the components of his remuneration comprise fixed annual remuneration, short-term incentives and long-term incentives. There is no fixed termination date and the agreement is terminable on six months notice by either party. The Company may, at its option, make a payment in lieu of part or all of the notice period and certain conditions exist in relation to payment of long-term and short-term incentives upon termination. A summary of the key contractual terms and remuneration-related arrangements was disclosed to the market on 5 August 2011 with certain parts approved by shareholders at the 2011 AGM.

42 PEET LIMITED | ANNUAL REPORT 2021

B. 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 for the long-term benefit of the Company and shareholders. The Board ensures that executive reward satisfies 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 in prior financial years, the Company has structured, and continues to evolve, an executive remuneration framework that is market competitive and complementary to our reward strategy through the following features.

ALIGNMENT TO SHAREHOLDERS’ INTERESTS

has a relevant measurement of financial performance as a core component of plan design;
rewards implementation of strategy;
focuses the Executive on other key financial and non-financial drivers of long-term value; and
attracts and retains high-calibre executives.

For the purpose of assessing Executives’ eligibility to short-term incentives, the Remuneration Committee and Board have traditionally agreed to the use of a balanced scorecard. This methodology has continued to be used for the 2021 financial year, and comprised a combination of financial and non-financial key performance indicators.

During the 2018 financial year, the Remuneration Committee recommended to the Board, and it agreed, to assess financial performance for the purposes of long-term incentive awards against earnings per share (EPS) growth, together with funds under management growth. These performance measures have been used for each year thereafter and will continue to be used for the 2022 financial year.

The Remuneration Committee and the Board will continue to assess the applicability of all short-term and long-term related key performance indicators as they are applied in assessing performance for remuneration purposes.

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 fixed and variable pay, and a blend of short and long-term incentives. 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.

ANNUAL REPORT 2021 | PEET LIMITED 43

Year ended 30 June 2021

Directors’ Report

13. REMUNERATION REPORT (AUDITED) continued

NEDS’ FEES (INCLUDING THE CHAIRMAN’S FEES)

Fees and payments to NEDs reflect the demands which are made on, and the responsibilities of, the NEDs. NEDs’ fees and payments are reviewed periodically by the Remuneration Committee and the Board. The Remuneration Committee considers, as appropriate, the advice of independent remuneration consultants to ensure NEDs’ fees and payments are appropriate and in line with the market. NEDs do not receive share options or performance rights.

The NEDs’ remuneration is inclusive of committee fees and fees for their membership on any subsidiary Boards. The fees payable to NEDs and the Chairman of the Remuneration Committee and the Chairman of the Audit and Risk Management Committee were last amended with effect from 1 July 2018 (after last being amended with effect from 1 July 2014). NEDs may also be entitled to fees where they represent Peet on the Board of Syndicates.

NEDs’ fees are determined within an aggregate Directors’ fee pool limit, which is periodically recommended for approval by shareholders. Shareholders approved a resolution at the 2012 AGM to increase the aggregate NEDs’ fees pool to $900,000.

The NEDs do not receive any form of retirement allowance.

NEDs’ fees for the 2022 financial year will be the same as the 2021 financial year.

EXECUTIVE PAY

The Company’s pay and reward framework for Executives has the following components:

base pay and benefits;
short-term performance incentives; and
long-term performance incentives.

The combination of these comprises the total remuneration for the individual concerned.

Base pay and benefits

The base pay for Executives is structured as a total employment cost package, which may be delivered as a mix of cash and prescribed non-financial benefits and includes superannuation.

Executives are offered a competitive base pay that comprises the fixed component of pay and rewards. As and when considered appropriate, external remuneration consultants provide analysis and advice to ensure base pay is set to reflect the market for a comparable role. Base pay is reviewed annually to ensure it remains competitive with the market. There were no changes to the quantum of total base pay for Executives during the 2021 financial year.

44 PEET LIMITED | ANNUAL REPORT 2021

Short-term performance incentives (“STI”)

Executives have a target STI opportunity depending on the accountabilities of their specific role and impact on the Group’s performance. The maximum target bonus opportunity for the Executives for the years ended 30 June 2021 and 2020 ranged between 50% and 100% of the relevant Executive’s base pay. However, the Board of Directors has the discretion to either pay over and above or less than these amounts.

Each year, the Remuneration Committee considers the appropriate targets and key performance indicators (“KPIs”) to link to the STI plan and the level of payout if targets are met for the Managing Director and Chief Executive Officer (“MD”). This may include setting any maximum payout under the STI plan and minimum levels of performance to trigger payment of STI. The MD will then generally set the STI KPIs to apply to the other Executives.

KPIs for the MD are set by reference to the following criteria based:

financial;
strategy;
stakeholder engagement;
people and processes improvements; and
health, safety and environment.

For the year ended 30 June 2021, the MD was assessed as follows against the KPIs:

Category	Weighting (%)	Achieved (%)
Financial	70.0%	84.0%
Strategic	10.0%	10.0%
Stakeholder	7.5%	5.0%
People, processes and culture	7.5%	5.0%
Health, safety and environment	5.0%	5.0%
	100.0%	109.0%
Less:
– Amount over 100.0%		(9.0%)
– Discretionary adjustment by Board		(20.0%)
Final assessment		80.0%

For the year ended 30 June 2020, the MD’s KPIs linked to the STI plan were based on similar criteria.

For the year ended 30 June 2021, the KPIs for Executives were determined by the MD, based on the above criteria. The Executives were assessed to have been eligible for up to 100% of their maximum STI entitlement. However, the Board applied its discretion to reduce the Executives’ eligibility to between 70% and 90% of their FY21 STI entitlements.

For the year ended 30 June 2020, the Executives’ KPI’ linked to the STI plan were based on similar criteria.

Long-term incentives (“LTI”)

Traditionally, the Company has provided its Executives with LTI through participation in the Peet Limited Employee Share Option Plan (“PESOP”) and/or the Peet Limited Performance Rights Plan (“PPRP”).

Executives have a target LTI opportunity depending on the accountabilities of their specific role and impact on the Group’s performance. The maximum target opportunity for the Executives for the years ended 30 June 2021 and 2020 ranged between 50% and 100% of the relevant Executive’s base pay.

Each year, the Remuneration Committee considers the appropriate targets and KPIs to link to the LTI plan and the level of payout if targets are met for the Executives. This may include setting any maximum payout under the LTI plan and minimum levels of performance to trigger payment of LTI. Further details of the Company’s LTI structures are included in the section titled ‘Share-based compensation’.

ANNUAL REPORT 2021 | PEET LIMITED 45

Directors’ Report Year ended 30 June 2021

13. REMUNERATION REPORT (AUDITED) continued

C. DETAILS OF REMUNERATION

Details of the statutory and cash value of remuneration of each member of the KMP of the Group are set out in the tables following.

The statutory disclosures required by the Corporations Act 2001 (Cth), as amended and its regulations are set out in the table on page 47. The company believes that the additional information provided in table below is useful to investors. The table below sets out the total cash value of remuneration realised for the KMP and provides shareholders with details of the “take-home” pay received/receivable during the year. These earnings include cash salary and fees, bonus, superannuation, non-cash benefits received/receivable during the year and the value of shares issued to, or acquired on behalf of, KMP following the vesting of Performance Rights (“PRs”) during the financial year. The table does not include the accounting value of share-based payments consisting of PRs granted in the current and prior years required for statutory purposes. This is because those share-based payments are dependent on the achievement of performance hurdles and so may or may not be realised.

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Cash salary Value of PRs
and fees [1] Bonus [2] exercised [3] Other [4] Superannuation Total
$ $ $ $ $ $
Directors
A W Lennon 2021 227,993 – – – 21,659 249,652
2020 224,129 – – – 21,292 245,421
T J Allen 2021 140,781 – – – 13,374 154,155
2020 138,395 – – – 13,148 151,543
V Krause 2021 91,390 – – – 8,682 100,072
2020 89,841 – – – 8,535 98,376
R J McKinnon 2021 113,841 – – – 10,815 124,656
2020 111,911 – – – 10,632 122,543
A J Lennon 2021 151,390 – – – 8,682 160,072
2020 147,841 – – – 8,535 156,376
B D Gore 2021 899,984 749,840 – 10,000 21,694 1,681,518
2020 885,054 – – 10,000 21,003 916,057
Total 2021 1,625,379 749,840 – 10,000 84,906 2,470,125
2020 1,597,171 – – 10,000 83,145 1,690,316
Other key management personnel
P J Dumas 2021 451,917 203,700 – – 25,000 680,617
2020 443,833 – – – 25,000 468,833
D Scafetta 2021 322,473 157,500 – – 21,694 501,667
2020 317,331 – 226,705 – 21,003 565,039
B C Fullarton 2021 407,667 198,000 – – 25,000 630,667
2020 400,333 – – – 25,000 425,333
Total 2021 1,182,057 559,200 – – 71,694 1,812,951
2020 1,161,497 – 226,705 – 71,003 1,459,205
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Cash salary (including accrued annual leave) and fees, as well as fees paid to Directors for their directorship on Syndicate Boards.
All cash bonuses are earned in the financial year to which they relate and are paid during the following financial year.
Amount paid by the Company in order to settle the PRs exercised during years ended 30 June 2020 and 2021. The Company purchased ordinary shares in the Company on-market on behalf of KMP.
Other includes termination benefits, long service payments, motor vehicle costs, car-parking and other benefits.

46 PEET LIMITED | ANNUAL REPORT 2021

The table below is calculated in accordance with statutory obligations and Australian Accounting Standards. The amounts in the “Share-based payments” column relate to the component of the fair value of awards from the current year and prior years made under the various incentive plans attributable to the year measured in accordance with AASB 2 Share-based Payments .

	Short-term benefts Post-employment benefts Share-based payments
	Cash salary and fees1 $ Bonus2 $ Other3 $ Superannuation $ Shares/ Options/ Performance Rights4 $ Termination benefts $ Total $
Directors
A W Lennon 2021 2020	227,993 – – 21,659 – – 249,652
	224,129 – – 21,292 – – 245,421
T J Allen 2021 2020	140,781 – – 13,374 – – 154,155
	138,395 – – 13,148 – – 151,543
V Krause 2021 2020	91,390 – – 8,682 – – 100,072
	89,841 – – 8,535 – – 98,376
R J McKinnon 2021 2020	113,841 – – 10,815 – – 124,656
	111,911 – – 10,632 – – 122,543
A J Lennon 2021 2020	151,390 – – 8,682 – – 160,072
	147,841 – – 8,535 – – 156,376
B D Gore 2021 2020	899,984 749,840 10,000 21,694 638,955 – 2,320,473
	885,054 – 10,000 21,003 518,760 – 1,434,817
Total 2021 2020	1,625,379 749,840 10,000 84,906 638,955 – 3,109,080
	1,597,171 – 10,000 83,145 518,760 – 2,209,076
Other key management personnel
P J Dumas 2021 451,917 203,700 – 25,000 198,374 – 878,991 2020 443,833 – – 25,000 160,006 – 628,839
D Scafetta 2021 322,473 157,500 – 21,694 119,297 – 620,964 2020 317,331 – – 21,003 96,224 – 434,558
B C Fullarton 2021 407,667 198,000 – 25,000 149,973 – 780,640 2020 400,333 – – 25,000 120,967 – 546,300
Total 2021 1,182,057 559,200 – 71,694 467,644 – 2,280,595 2020 1,161,497 – – 71,003 377,197 – 1,609,697

Cash salary (including accrued annual leave) and fees include fees paid to Directors for their directorship on Syndicate Boards.
All cash bonuses are earned in the financial year to which they relate and are paid during the following financial year.
Other includes motor vehicle costs, car-parking and other benefits.
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, pro-rated over the period from grant date to vesting date. These do not represent the value of equity benefits that vested in favour of KMP during the year.

ANNUAL REPORT 2021 | PEET LIMITED 47

Year ended 30 June 2021

Directors’ Report

13. REMUNERATION REPORT (AUDITED) continued

The relative proportions of remuneration that are linked to performance and those that are fixed based on the table are as follows:

	Fixed remuneration At risk STI At risk LTI
	2021 2020 2021 2020 20211 20201
Directors
A W Lennon T J Allen V Krause R J McKinnon A J Lennon B D Gore	100% 100% – – – – 100% 100% – – – – 100% 100% – – – – 100% 100% – – – – 100% 100% – – – – 40% 64% 32% 0% 28% 36%
Other key management personnel
P J Dumas 54% 75% 23% 0% 23% 25% D Scafetta 56% 78% 25% 0% 19% 22% B C Fullarton 56% 78% 25% 0% 19% 22%

Since LTI are provided exclusively by way of options and/or PRs, the percentages disclosed also reflect the value of remuneration consisting of options and/or PRs based on the value of options and/or PRs expensed during the year.

D. SHARE-BASED COMPENSATION

Options over shares in Peet Limited are granted under the PESOP, which was approved by the Board and shareholders during the 2004 financial year. PRs over shares in Peet Limited are granted under the PPRP, which was approved by shareholders at the 2008 AGM. Changes have been made since to allow for changes in taxation of PRs. Employees of any Group Company (including an Executive Director) will be eligible to participate in the PESOP and/or PPRP at the discretion of the Board.

Any additional persons to whom ASX Listing Rule 10.14 applies and who became entitled to participate in a grant of PRs under the PPRP after the approval of Resolution 4 considered at the 2020 AGM and who was not named in the Notice of AGM will not participate until approval is obtained under ASX Listing Rule 10.14.

The PESOP and PPRP are designed to provide long-term incentives for Executives to deliver long-term shareholder returns. Under the plans, participants are granted options and/or PRs, which only vest if the employees are still employed by the Group at the end of the vesting period, subject to the Board’s discretion, and any set performance hurdles have been met.

48 PEET LIMITED | ANNUAL REPORT 2021

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 PRs 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 PRs being offered and the maximum number of shares over which each option and/or PR is granted;
the period or periods during which any of the options and/or PRs may be exercised;
the dates and times when the options and/or PRs lapse;
the dates and times by which the application for options and/or PRs must be received by Peet; and
any applicable conditions which must be satisfied or circumstances which must exist before the options and/or PRs may be exercised.

Eligible employees may apply for part of the options and/or PRs offered to them, but only in specified multiples.

CONSIDERATION

Unless the Board determines otherwise, no payment will be required for a grant of options and/or PRs under the PESOP and/or PPRP.

EXERCISE CONDITIONS

Generally, as a pre-condition to exercise, any exercise conditions in respect of an option and/or PR must be satisfied. However, the Board has the discretion to enable an option and/or PR holder to exercise options and/or PRs 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 PESOP and PRs granted under the PPRP carry no dividend or voting rights.

LAPSE OF OPTIONS AND/OR PRS

Unexercised options and/or PRs will lapse upon the earlier to occur of a variety of events specified in the rules of the PESOP and PPRP including, on the date or in circumstances specified by the Board in the invitation, failure to meet the options’ or PRs’ exercise conditions in the prescribed period or on a specified anniversary date of grant of the options or PRs, as determined by the Board.

ANNUAL REPORT 2021 | PEET LIMITED 49

Directors’ Report

Year ended 30 June 2021

13. REMUNERATION REPORT (AUDITED) continued

The table below summarises the status of the Company’s options and performance rights granted to Executives:

Executives Date of Grant Performance/ Service Period Expiry Exercise Value per option/PR at Grant Date Vesting conditions Balance as at 1 July 2020 Granted Exercised Lapsed/ forfeited Balance at date of report Vested and Exercisable at date of report Notes	Options	B D Gore 30 Nov 2007 Up to 30 Nov 2011 N/A $4.10 $1.12 Time based 1,200,000 – – – 1,200,000 1,200,000 2	Performance Rights	B D Gore 23 Nov 2016 3 yrs ended 30 Jun 2019 23 Nov 2031 $0.00 $0.801 FUM Growth ROCE 1,065,114 – – – 1,065,114 1,065,114 29 Nov 2017 3 yrs ended 30 Jun 2020 29 Nov 2032 $0.00 $1.331 FUM Growth EPS Growth 874,347 – – (524,608) 349,739 349,739 3 4 21 Nov 2018 3 yrs ended 30 Jun 2021 21 Nov 2033 $0.00 $0.941 FUM Growth EPS Growth 870,288 – – (348,116) 522,172 522,172 3 4 20 Nov 2019 3 yrs ended 30 Jun 2022 20 Nov 2034 $0.00 $1.041 FUM Growth EPS Growth 897,797 – – – 897,797 – 3 4 19 Nov 2020 3 yrs ended 30 Jun 2023 19 Nov 2035 $0.00 $0.941 FUM Growth EPS Growth – 1,244,754 – – 1,244,754 – 3 4	Other Executives 21 Dec 2015 3 yrs ended 30 Jun 2018 21 Dec 2030 $0.00 $0.96 FUM Growth ROCE 269,103 – – – 269,103 269,103 21 Dec 2016 3 yrs ended 30 Jun 2019 21 Dec 2031 $0.00 $0.85 FUM Growth ROCE 580,682 – – – 580,682 580,682 5 Dec 2017 3 yrs ended 30 Jun 2020 5 Dec 2032 $0.00 $1.30 FUM Growth EPS Growth 639,925 – – (383,955) 255,970 255,970 3 4 21 Nov 2018 3 yrs ended 30 Jun 2021 21 Nov 2033 $0.00 $0.94 FUM Growth EPS Growth 636,954 – – (254,782) 382,172 382,172 3 4 20 Nov 2019 3 yrs ended 30 Jun 2022 20 Nov 2034 $0.00 $1.04 FUM Growth EPS Growth 657,089 – – – 657,089 – 3 4 19 Nov 2020 3 yrs ended 30 Jun 2023 19 Nov 2035 $0.00 $0.94 FUM Growth EPS Growth – 911,023 – – 911,023 – 3 4	6,491,299 2,155,777 – (1,511,461) 7,135,615 3,424,952	Total 7,691,299 2,155,777 – (1,511,461) 8,335,615 4,624,952

50 PEET LIMITED | ANNUAL REPORT 2021

NOTE 1

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 PRs is based on 23 November 2016, 29 November 2017, 21 November 2018, 20 November 2019 and 19 November 2020, being the dates of Peet Limited’s, 2016, 2017, 2018, 2019 and 2020 AGMs, respectively.

NOTE 2

These options are convertible to ordinary shares on a 1:1 basis at the exercise price after the fourth anniversary of the grant date.

The exercise condition in respect of these options is that Mr Gore remains employed as Managing Director for a period of four years. Although the service period requirement has been met, the options have not been exercised.

NOTE 3

These PRs are convertible to ordinary shares on a 1:1 basis, with 40% subject to the Funds Under Management (FUM) growth vesting condition measured over a three-year period from 1 July 2017 to 30 June 2020 (“FY18 Performance Period”), 1 July 2018 to 30 June 2021 (“FY19 Performance Period”) and 1 July 2019 to 30 June 2022 (“FY20 Performance Period”), respectively.

The PRs granted in respect to the three-year period from 1 July 2020 to 30 June 2023 (“FY21 Performance Period”) are convertible to ordinary shares on a 1:1 basis, with 25% subject to the FUM growth vesting condition.

FUM growth is measured as the total of the following during the performance period:

the purchase price (ex GST) of land acquired by a Peet syndicate or Joint Venture; or
the market value (ex GST) of land for which Peet has been appointed development manager at the time of its appointment; or
the selling price (ex GST) of land sold by Peet, a Syndicate, a Joint Venture or Peet-managed project to a third party and Peet is appointed the development manager (and where applicable, to manage the leasing) of a commercial, industrial, retail or residential built-form project on that property; or
in all other property funds management-related transactions, as determined by the Board of Directors.

The aggregate of the FUM growth during the relevant performance period is reduced by the equity interest retained by the Group and is then compared to the rolling three-year FUM growth target set by the Board for the relevant performance period.

For the FY18, FY19 and FY20 Performance Periods, the proportion of PRs to vest subject to FUM growth will be as follows:

	Aggregate FUM growth target	Proportion of performance rights
Performance level	during performance period	that may be eligible to vest
Less than the target	Less than $60 million	0%
Target	$60 million	50%
Target – medium	$60 million to $100 million	Pro-rata between 50% and 70%
Medium – maximum	$100 million to $150 million	Pro-rata between 70% and 100%
Maximum	Greater than $150 million	100%

ANNUAL REPORT 2021 | PEET LIMITED 51

Year ended 30 June 2021

Directors’ Report

13. REMUNERATION REPORT (AUDITED) continued

For the FY21 Performance Period, the proportion of PRs to vest subject to FUM growth will be as follows:

	Aggregate FUM growth target	Proportion of performance rights
Performance level	during performance period	that may be eligible to vest
Less than the target	Less than $40 million	0%
Target	$40 million	50%
Target – medium	$40 million to $60 million	Pro-rata between 50% and 70%
Medium – maximum	$60 million to $75 million	Pro-rata between 70% and 100%
Maximum	Greater than $75 million	100%

The Group achieved FUM growth of $153.2 million for the FY18 Performance Period. Accordingly, the performance condition was fully met and on 25 August 2020 the Directors resolved that 100% of these FY18 PRs vested.

The Group achieved FUM growth of $64.8 million for the FY19 Performance Period. Accordingly, the performance condition was partially met and on 24 August 2021 the Directors resolved that 52.5% of these FY19 PRs vested.

The FY20 and FY21 PRs remain unvested.

NOTE 4

These PRs are convertible to ordinary shares on a 1:1 basis, with 60% subject to the EPS growth vesting condition, measured over a three-year period from 1 July 2017 to 30 June 2020 (“FY18 Performance Period”), 1 July 2018 to 30 June 2021 (“FY19 Performance Period”) and 1 July 2019 to 30 June 2022 (“FY20 Performance Period”), respectively.

The PRs granted in respect to the three-year period from 1 July 2020 to 30 June 2023 (“FY21 Performance Period”) are convertible to ordinary shares on a 1:1 basis, with 75% subject to the EPS growth vesting condition.

The EPS growth vesting condition will be measured as the average growth in operating EPS over the relevant Performance Period, with the EPS derived for the previous financial year as the base year.

The earnings component of EPS is calculated as net profit measured in accordance with Australian Accounting Standards, excluding write-downs of inventories and development costs and increases in the carrying value of inventories during the relevant financial year, and is subject to other adjustments at the Board’s discretion.

EPS growth is then compared to the Board’s internal target EPS growth for the relevant performance period.

Of the PRs subject to EPS growth, the proportion to vest will be as follows:

Performance level	Proportion of performance rights that may be eligible to vest
Less than 80% of the EPS growth target	0%
80% of the EPS growth target	50%
80% to 100% of the EPS growth target	Pro-rata between 50% and 80%
100% to 120% of the EPS growth target	Pro-rata between 80% and 100%
Greater than 120% of the EPS growth target	100%

52 PEET LIMITED | ANNUAL REPORT 2021

The Group achieved EPS growth of less than 80% of the target of 5% for the FY18 Performance Period. Accordingly, no EPS growth-related FY18 PRs vested.

The Group achieved EPS growth of 6.25% for the FY19 Performance Period, compared to the EPS growth target of 5% for that period. While the performance condition was fully met, and in accordance with the PPRP, the holders of FY19 PRs consented to a request by the Remuneration Committee to reduce the number of EPS growth-related FY19 PRs vesting and on 24 August 2021 the Directors resolved that 65% of these FY19 PRs vested.

The FY20 and FY21 PRs remain unvested.

OPTION AND PERFORMANCE RIGHTS HOLDINGS

The number of options and PRs over unissued ordinary shares in the Company held during the financial year by the KMP of the Group, including their personally-related entities, is set out below. When exercisable, each option and PR is convertible into one ordinary share of Peet Limited.

				Lapsed/		Vested and
	Balance at	Granted	Exercised	forfeited	Balance	exercisable
	the start	during	during	during the	at end of	at the end
	of the year	the year	the year	year1	the year	of the year
Directors
A W Lennon	–	–	–	–	–	–
T J Allen	–	–	–	–	–	–
V Krause	–	–	–	–	–	–
R J McKinnon	–	–	–	–	–	–
A J Lennon	–	–	–	–	–	–
B D Gore	4,907,546	1,244,754	–	(524,608)	5,627,692	2,614,853
Other key management personnel
P J Dumas	1,420,171	386,454	–	(162,873)	1,643,752	708,367
D Scafetta	493,359	232,404	–	(97,948)	627,815	65,298
B C Fullarton	870,223	292,165	–	(123,134)	1,039,254	332,090

Includes performance rights for which performance conditions were not met for the performance period.

During the year ended 30 June 2021, 605,709 PRs (2020: 1,844,660) had vested and NIL (2020: 198,864) were exercised by KMP at $ Nil exercise price. In order to settle the PRs exercised during year ended 30 June 2021, the Company purchased ordinary shares in the Company on-market on behalf of KMP.

On 19 November 2020, 1,244,754 FY21 PRs were granted to the Managing Director and Chief Executive Officer, B D Gore. The grant was approved by shareholders under ASX Listing Rule 10.14.

Since 30 June 2021, 1,258,318 PRs (includes PRs exercisable by non KMP) vested and are exercisable at the date of this report. No other options and PRs have been issued. Refer note 25 of the financial report for the total options and PRs outstanding.

ANNUAL REPORT 2021 | PEET LIMITED 53

Directors’ Report Year ended 30 June 2021

13. REMUNERATION REPORT (AUDITED) continued

E. ADDITIONAL INFORMATION

PERFORMANCE OF PEET LIMITED

The overall level of executive compensation takes into account the performance of the Group. STI is generally based on an assessment of performance over a 12-month period, while LTI is generally assessed over a three-year period. The high-level performance of the Group over the last five years is compared below:

		2017	2018	2019	2020	2021
Net proft/(loss) after tax (NPAT)	$’000	44,792	49,112	47,549	(30,056)	28,500
NPAT growth	Growth%	5.2%	9.6%	(3.2%)	(163.2%)	194.8%
Net operating proft after tax (NOPAT)	$’000	44,792	49,112	47,549	15,060	28,500
NOPAT growth	Growth%	5.2%	9.6%	(3.2%)	(68.3%)	89.2%
Basic EPS	cents per share	9.14	10.02	9.79	(6.19)	5.90
Basic EPS growth	Growth%	5.1%	9.6%	(2.3%)	(163.2%)	195.3%
Operating EPS	cents per share	9.14	10.02	9.79	3.10	5.90
Operating EPS growth	Growth%	5.1%	9.6%	(2.3%)	(68.3%)	90.3%
Dividends paid/payable	cents per share	4.75	5.00	5.00	1.50	3.50
Share price 30 June	$	1.20	1.32	1.12	0.97	1.20
Share price growth	Growth%	27.7%	10%	(15.1%)	(13.4%)	23.7%

DETAILS OF REMUNERATION: CASH BONUSES, OPTIONS AND PRS

For each cash bonus, grant of options and/or PRs included in the tables within the remuneration report, the percentage of the available bonus or grant that was paid, or that vested 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 PESOP and PPRP no options or PRs will vest if the conditions are not satisfied, subject to the discretion of the Board, hence the minimum value of the option and PRs yet to vest is nil. The maximum value of the options and PRs yet to vest has been determined as the amount of the grant date fair value of the options and PRs that is yet to be expensed.

	Cash Bonus	Options & Performance Rights
	Paid/ payable % Forfeited/ deferred %	Financial year Granted Vested1 % Forfeited1,2 % Financial years in which options/PRs may vest Maximum total Value of grant yet to expense $
Directors
A W Lennon T J Allen V Krause R J McKinnon A J Lennon B D Gore	– – – – – – – – – – 80% 20%	– – – – – – – – – – – – – – – – – – – – – – – – – 2021 – – 2023 951,656 2020 – – 2022 562,209 2019 – – 2021 327,228 2018 40% 60% 2020 696,680

54 PEET LIMITED | ANNUAL REPORT 2021

	Cash Bonus	Options & Performance Rights
	Paid/ payable % Forfeited/ deferred %	Financial year Granted Vested1 % Forfeited1,2 % Financial years in which options/PRs may vest Maximum total Value of grant yet to expense $
Other key management personnel
P J Dumas 70% 30% D Scafetta 90% 10% B C Fullarton 90% 10%		2021 – – 2023 295,457 2020 – – 2022 174,547 2019 – – 2021 101,593 2018 40% 60% 2020 211,572 2021 – – 2023 177,681 2020 – – 2022 104,969 2019 – – 2021 61,096 2018 40% 60% 2020 127,234 2021 – – 2023 223,370 2020 – – 2022 131,960 2019 – – 2021 76,806 2018 40% 60% 2020 159,952

Includes performance rights for which performance conditions were met for the performance period and confirmed by the Directors after balance date.
Includes performance rights for which performance conditions were not met for the performance period.

Further details relating to options and/or PRs, either granted, exercised or lapsed during the year, are set out below. The amounts below are calculated in accordance with Australian Accounting Standards. Please refer to previous pages of the Remuneration Report for commentary on vesting conditions met during the performance period ended 30 June 2021.

	Remuneration	Value of options &	Value of options &
	consisting of options &	performance rights	performance rights
	performance rights1	granted2	exercised3
Directors
B D Gore	28%	1,170,069	–
Other key management personnel
P J Dumas	23%	363,267	–
D Scafetta	19%	218,460	–
B C Fullarton	19%	274,635	–

The percentage of the value of remuneration consisting of options and PRs, based on the value of options and PRs expensed during the current year.
The value at grant date calculated in accordance with AASB 2 Share-based payments of options and/or PRs granted during the year as part of remuneration.
The value at exercise date of options and/or PRs that were granted as part of remuneration and were exercised during the year, being the intrinsic value of the options and/or PRs at that date.

LOANS TO DIRECTORS AND OTHER KEY MANAGEMENT PERSONNEL

There were no loans made to KMP, or their personally-related entities, during the financial year.

ANNUAL REPORT 2021 | PEET LIMITED 55

Year ended 30 June 2021

Directors’ Report

13. REMUNERATION REPORT (AUDITED) continued

VOTING AND COMMENTS MADE AT THE COMPANY’S 2020 ANNUAL GENERAL MEETING

The instructions given to validly appointed proxies in respect of the resolution pertaining to the Company’s 2020 Remuneration Report were as follows:

For	Against	Proxy’s discretion	Abstain
301,374,934	6,710,809	17,573,357	177,825
92.54%	2.06%	5.4%

The motion was carried as an ordinary resolution on show of hands.

INTERESTS IN THE SHARES AND BONDS OF THE COMPANY

	Shares	Bonds
	Balance at the start of the year Received during the year on exercise of PRs Other changes during the year Balance at the end of the year	Balance at the start of the year Other changes during the year Balance at the end of the year
Directors
A W Lennon T J Allen V Krause R J McKinnon B D Gore A J Lennon	97,314,685 – – 97,314,685 92,054 – – 92,054 – – – – 50,000 – – 50,000 5,306,679 – – 5,306,679 1,331,344 – – 1,331,344	4,875 (3,000) 1,875 500 1,000 1,500 1,000 (1,000) – 500 (500) – – – – 500 (500) –
Other key management personnel
P J Dumas 1,087,882 – – 1,087,882 D Scafetta 1,020,000 – – 1,020,000 B C Fullarton 603,850 – – 603,850		– – – – – – – – –

Since 30 June 2021, 1,258,318 PRs (includes PRs exercisable by Non KMP) were vested and are exercisable at the date of this report. No other options and PRs have been issued.

END OF REMUNERATION REPORT (AUDITED)

56 PEET LIMITED | ANNUAL REPORT 2021

14. INDEMNITY OF OFFICERS AND AUDITORS

During the financial year, the Company paid a premium in respect of a Directors’ and Officers’ insurance policy that insures Directors and Officers 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 Officers in their capacity as such. The Directors have not included more specific details of the nature of the liabilities covered or the amount of the premium paid in respect of Directors’ and Officers’ liability, as such disclosure is prohibited under the terms of the contract.

To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). The indemnity does not apply to any loss in respect of any matters which are finally determined to have resulted from the auditors’ negligent, wrongful or willful acts or omissions. No payment has been made to indemnify the auditors during or since the financial year.

15. 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 Group are considered important.

The Board of Directors has considered the position and, in accordance with the advice received from the Audit and Risk Management Committee, is satisfied 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 satisfied that the provision of non-audit services by the auditor 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.

The fees that were paid or payable for services provided by the auditors of the Group, its related practices and nonrelated audit firms is set out in note 22 of the Financial Report.

ANNUAL REPORT 2021 | PEET LIMITED 57

Year ended 30 June 2021

Directors’ Report

16. 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 59.

On 19 February 2019, the Board granted approval under section 324DAA of the Corporations Act 2001 for Mr Geoff Lotter to continue as lead auditor, to play a significant role in the audit of the company for two additional successive financial years, being the financial year ending 30 June 2020 and 30 June 2021. The approval was granted in accordance with a recommendation from the Audit and Risk Management Committee which was satisfied the approval:

is consistent with maintaining the quality of the audit provided to the company; and
would not give rise to a conflict of interest situation (as defined in section 324CD of the Corporations Act 2001 ).

Reasons supporting this decision include:

the benefits associated with the continued retention of knowledge regarding key audit matters and significant judgements, in light of the changes in residential property markets and bank lending policies;
the Audit and Risk Management Committee has been satisfied with the quality of Ernst & Young and Mr Lotter’s work as auditor; and
the Audit and Risk Management Committee is satisfied with the introduction of a new engagement quality review partner on the completion of the 30 June 2019 audit.

The company maintains, and will continue to maintain, robust auditor independence policies and controls to ensure the independence of the auditor is maintained. A copy of the Board resolution granting approval was lodged with ASIC in accordance with section 324DAC of the Corporations Act 2001 .

17. ROUNDING OF AMOUNTS

The Company is of a kind referred to in ASIC Corporations Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to the “rounding off” of amounts in the Director’s Report. Amounts in the Director’s Report have been rounded off in accordance with that legislative instrument 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.

==> picture [152 x 49] intentionally omitted <==

Brendan Gore Managing Director and Chief Executive Officer Perth, Western Australia 25 August 2021

58 PEET LIMITED | ANNUAL REPORT 2021

Auditor’s Independence Declaration

==> picture [455 x 645] intentionally omitted <==

ANNUAL REPORT 2021 | PEET LIMITED 59

Corporate Governance Statement

Year ended 30 June 2021

A copy of the Group’s corporate governance policies and practices in place during the financial year ended 30 June 2021 is available at the following link:

- https://www.peet.com.au/ /media/peet/documents/corporate/corporate/corporate governance/2021

Unless otherwise stated, these are consistent with the 3rd edition of the ASX Corporate Governance Council’s Principles and Recommendations (released March 2014).

60 PEET LIMITED | ANNUAL REPORT 2021

Financial Report

Consolidated Statement of Profit or Loss and Other Comprehensive Income ................................................................ 62 Consolidated Balance Sheet ............................................................................................................................................. 63 Consolidated Statement of Changes in Equity .................................................................................................................64 Consolidated Statement of Cash Flows ............................................................................................................................ 65 Notes to the Consolidated Financial Statements .............................................................................................................. 66

This financial report covers the consolidated financial statements for the Group consisting of Peet Limited and its subsidiaries. The financial report is presented in Australian currency. Peet Limited is a for profit company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is Level 7, 200 St Georges Terrace, Perth WA 6000. The financial report was authorised for issue by the Directors on 25 August 2021. The Directors have the power to amend and reissue the financial report. Through the use of the internet, we have ensured that our corporate reporting is timely and complete. All press releases, financial reports and other information are accessible via our website; www.peet.com.au

ANNUAL REPORT 2021 | PEET LIMITED

Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the year ended 30 June 2021

For the year ended 30 June 2021
		2021	2020
	Notes	$’000	$’000
Revenue	5	220,267	188,282
Expenses	6	(188,720)	(230,253)
Finance costs (net of capitalised borrowing costs)	6	(5,342)	(7,428)
Share of net proft of associates and joint ventures	10	14,033	8,060
Proft/(loss) before income tax		40,238	(41,339)
Income tax (expense)/beneft	8	(12,153)	10,648
Proft/(loss) after income tax		28,085	(30,691)
Attributable to:
Owners of Peet Limited		28,500	(30,056)
Non-controlling interests		(415)	(635)
		28,085	(30,691)
Other comprehensive income
Items that may be reclassifed to proft or loss:
Gain on cash fow hedges		–	2,636
Income tax relating to components of other comprehensive income		–	(794)
Other comprehensive income for the year, net of tax		–	1,842
Total comprehensive income for the year		28,085	(28,849)
Attributable to:
Owners of Peet Limited		28,500	(28,214)
Non-controlling interests		(415)	(635)
		28,085	(28,849)
Earnings/(loss) per share – attributable to the ordinary equity holders of the Company
	Notes	Cents	Cents
Basic and diluted earnings/(loss) per share	7	5.90	(6.19)

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

62 PEET LIMITED | ANNUAL REPORT 2021

Consolidated Balance Sheet

As at 30 June 2021

		2021	2020
	Notes	$’000	$’000
Current assets
Cash and cash equivalents		64,125	46,838
Receivables	11	25,925	36,943
Contract assets	12	11,528	8,536
Inventories	9	114,898	87,087
Total current assets		216,476	179,404
Non-current assets
Receivables	11	52,809	69,575
Contract assets	12	3,726	4,336
Inventories	9	375,027	391,372
Investments accounted for using the equity method	10	232,622	232,061
Property, plant and equipment		3,096	4,157
Right-of-use assets		3,848	5,188
Intangible assets	2(e)	2,194	2,589
Total non-current assets		673,322	709,278
Total assets		889,798	888,682
Current liabilities
Payables	13	34,549	33,444
Land vendor liabilities	14	–	6,350
Borrowings	17(c)	3,555	118,275
Lease liabilities	17(d)	1,797	1,607
Derivative fnancial instruments	17	1,529	–
Current tax liabilities		6,371	687
Provisions	15	12,730	14,628
Total current liabilities		60,531	174,991
Non-current liabilities
Borrowings	17	264,430	163,879
Lease liabilities	17(c)	3,723	5,520
Derivative fnancial instruments	17(d)	–	4,407
Deferred tax liabilities	8	15,286	14,563
Provisions	15	13,233	12,254
Total non-current liabilities		296,672	200,623
Total liabilities		357,203	375,614
Net assets		532,595	513,068
Equity
Contributed equity	18	378,916	378,916
Reserves	18	(1,449)	(2,557)
Retained profts		138,814	119,980
Capital and reserves attributable to owners of Peet Limited		516,281	496,339
Non-controlling interest		16,314	16,729
Total equity		532,595	513,068

The above consolidated balance sheet should be read in conjunction with the accompanying notes.

ANNUAL REPORT 2021 | PEET LIMITED 63

Consolidated Statement of Changes in Equity

For the year ended 30 June 2021

Notes Contributed equity $’000 Reserves $’000 Retained profts $’000 Total $’000	Non- controlling interest $’000 Total equity $’000
Balance at 1 July 2019 378,916 (5,051) 168,722 542,587	17,364 559,951
Loss for the year – – (30,056) (30,056) Other comprehensive income – 1,842 – 1,842	(635) (30,691) – 1,842
Total comprehensive income for the year – 1,842 (30,056) (28,214)	(635) (28,849)
Vesting of performance rights 18 – (647) – (647) Share-based payments 18,25 – 1,299 – 1,299 Dividends paid 19 – – (16,916) (16,916)	– (647) – 1,299 – (16,916)
Balance at 30 June 2020 378,916 (2,557) 121,750 498,109	16,729 514,838
Balance at 1 July 2020 – as previously reported 378,916 (2,557) 121,750 498,109	16,729 514,838
Effect of changing accounting policy 2(e) – – (1,770) (1,770)	– (1,770)
Balance at 1 July 2020 – restated 378,916 (2,557) 119,980 496,339	16,729 513,068
Proft for the year – – 28,500 28,500 Other comprehensive income – – – –	(415) 28,085 – –
Total comprehensive income for the year – – 28,500 28,500	(415) 28,085
Vesting of performance rights 18 – (492) – (492) Share-based payments 18,25 – 1,600 – 1,600 Dividends paid 19 – – (9,666) (9,666)	– (492) – 1,600 – (9,666)
Balance at 30 June 2021 378,916 (1,449) 138,814 516,281	16,314 532,595

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

64 PEET LIMITED | ANNUAL REPORT 2021

Consolidated Statement of Cash Flows

For the year ended 30 June 2021

		2021	2020
	Notes	$’000	$’000
Cash fows from operating activities
Receipts from customers (inclusive of GST)		228,219	191,596
Payments to suppliers and employees (inclusive of GST)		(149,578)	(167,002)
Payments for purchase of land held for sale		(47,403)	(11,340)
Interest and other fnance costs paid		(22,592)	(21,839)
Distributions and dividends received from associates and joint ventures		11,210	7,962
Interest received		321	39
Income tax paid		(5,746)	(7,266)
Net cash infow/(outfow) from operating activities	20	14,431	(7,850)
Cash fows from investing activities
(Payments)/proceeds for property, plant and equipment		(200)	42
Proceeds from capital returns from associates and joint ventures		2,262	1,705
Loans to associates and joint ventures		(5,452)	(9,180)
Repayment of loans by associates and joint ventures		32,849	11,016
Net cash infow from investing activities		29,459	3,583
Cash fows from fnancing activities
Dividends paid		(9,666)	(16,916)
Repayment of borrowings		(44,250)	(26,275)
Proceeds from borrowings		55,000	62,120
Proceeds from issue of Peet notes (net of transaction costs)		73,920	–
Repayment of Peet bonds		(100,000)	–
Payment of principal portion of lease liabilities		(1,607)	(1,430)
Net cash (outfow)/infow from fnancing activities		(26,603)	17,499
Net increase in cash and cash equivalents		17,287	13,232
Cash and cash equivalents at the beginning of the year		46,838	33,606
Cash and cash equivalents at the end of the year		64,125	46,838

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

ANNUAL REPORT 2021 | PEET LIMITED 65

Notes to the Consolidated Financial Statements

For the year ended 30 June 2021

BASIS OF REPORTING 1. Reporting entity .......................................................................................................................................................... 67 2. Basis of preparation .................................................................................................................................................... 67 3. How to read the annual report .................................................................................................................................... 70 PERFORMANCE FOR THE YEAR 4. Segment information .................................................................................................................................................. 70 5. Revenue ...................................................................................................................................................................... 73 6. Expenses .................................................................................................................................................................... 74 7. Earnings/(loss) per share ............................................................................................................................................ 75 8. Taxes ........................................................................................................................................................................... 75 OPERATING ASSETS AND LIABILITIES 9. Inventories .................................................................................................................................................................. 79 10. Investments accounted for using the equity method ................................................................................................ 79 11. Receivables ................................................................................................................................................................. 82 12. Contract assets ........................................................................................................................................................... 82 13. Payables ...................................................................................................................................................................... 83 14. Land vendor liabilities ................................................................................................................................................. 83 15. Provisions ................................................................................................................................................................... 83 16. Interests in joint operations ........................................................................................................................................84 CAPITAL MANAGEMENT 17. Borrowings, lease liabilities and derivative financial instruments .............................................................................. 85 18. Contributed equity and reserves ................................................................................................................................ 90 19. Dividends .................................................................................................................................................................... 91 20. Reconciliation of profit/(loss) after income tax to net cash outflow from operating activities .................................. 91 21. Fair value measurement ............................................................................................................................................. 92 OTHER NOTES 22. Remuneration of auditors ........................................................................................................................................... 93 23. Contingencies and commitments .............................................................................................................................. 93 24. Parent entity financial information and subsidiaries ................................................................................................... 93 25. Share-based payments ...............................................................................................................................................96 26. Matters subsequent to the end of the financial year ................................................................................................. 98 27. Other accounting policies ........................................................................................................................................... 98

66 PEET LIMITED | ANNUAL REPORT 2021

BASIS OF REPORTING

This section of the financial report sets out the basis of preparation of the consolidated financial statements. Where an accounting policy is specific to one note, the policy is described in the note to which it relates.

1. REPORTING ENTITY

This financial report covers the consolidated financial statements for the Consolidated Entity consisting of Peet Limited and its subsidiaries (Group). The Financial Report is presented in the Australian currency. Peet Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is; Level 7, 200 St Georges Terrace, Perth WA 6000. The nature of the operations and principal activities of the Group are described in the Directors’ Report. Peet Limited is a for-profit entity.

2. BASIS OF PREPARATION

The Financial Report is a general purpose financial report which:

has been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001 ;
complies with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB);
has been prepared under the historical cost convention, except for derivative financial instruments and financial assets which have been measured at fair value;
provides comparative information in respect of the previous period; and

A. PRINCIPLES OF CONSOLIDATION

The consolidated financial statements comprise the financial statements of the Group and the entities it controlled at the end of, or during the year ended 30 June 2021. The Group controls an investee if and only if the Group has:

power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);
exposure, or rights, to variable returns from its involvement with the investee; and
the ability to use its power over the investee to affect its returns.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

is rounded off to the nearest thousand dollars or in certain cases to the nearest dollar in accordance with ASIC Corporations Instrument 2016/191.

ANNUAL REPORT 2021 | PEET LIMITED 67

Notes to the Consolidated Financial Statements For the year ended 30 June 2021

2. BASIS OF PREPARATION continued

B. ASSOCIATES

Associates are all entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. In the case of syndicates, significant influence can exist with a lower shareholding by virtue of the Group’s position as project manager. Investments in associates are accounted for using the equity method of accounting.

The Group’s share of its associates’ post-acquisition profits or losses are recognised in the consolidated statement of profit or loss, and its share of post-acquisition other comprehensive income is recognised in other comprehensive income. The cumulative post-acquisition 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.

C. INVESTMENTS IN JOINT ARRANGEMENTS

Joint arrangements are arrangements of which two or more parties have joint control. Joint control is the contractual agreed sharing of control which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control. Joint arrangements are classified as either a joint operation or joint venture , based on the rights and obligations arising from the contractual obligations between the parties to the arrangement.

To the extent the joint arrangement provides the Group with rights to the individual assets and obligations arising from the joint arrangement, the arrangement is classified as a joint operation and as such, the Group recognises its:

assets, including its share of any assets held jointly;
liabilities, including its share of any liabilities incurred jointly;
share of revenue from the sale of the output by the joint operation; and
expenses, including its share of any expenses incurred jointly.

To the extent the joint arrangement provides the Group with rights to the net assets of the arrangement, the investment is classified as a joint venture and accounted for using the equity method. Under the equity method, the cost of the investment is adjusted by the post-acquisition changes in the Group’s share of the net assets of the venture.

68 PEET LIMITED | ANNUAL REPORT 2021

D. CHANGES IN OWNERSHIP INTERESTS

The Group treats transactions with non-controlling interests that do not result in a gain or 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 reflect 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.

E. CHANGES IN ACCOUNTING POLICIES

The accounting policies adopted in the preparation of the financial report are consistent with those followed in the preparation of the Group’s annual financial statements for the year ended 30 June 2020, except for changes arising from the adoption of new and amended accounting standards and interpretations effective as at 1 July 2020.

In April 2021, the IFRS Interpretations Committee (IFRIC) published an agenda decision for configuration and customisation costs incurred relating to a Software as a Service (SaaS) arrangement. The Group has changed its accounting policy in relation to configuration and customisation costs incurred in implementing SaaS arrangements. The nature and effect of the changes as a result of changing this policy is described below.

Several other amendments and interpretations apply for the first time on 1 July 2020, but do not have a material impact on the Group. The Group has not early adopted any standard, interpretation or amendment that has been issued but is not yet effective.

ACCOUNTING POLICY – SOFTWARE-AS-A-SERVICE (SAAS) ARRANGEMENTS

SaaS arrangements are arrangements in which the Group does not currently control the underlying software used in the arrangement. Where costs incurred to configure or customise SaaS arrangements result in the creation of a resource which is identifiable, and where the company has the power to obtain the future economic benefits flowing from the underlying resource and to restrict the access of others to those benefits, such costs are recognised as a separate intangible software asset and amortised over the useful life of the software on a straight-line basis. The amortisation is reviewed at least at the end of each reporting period and any changes are treated as changes in accounting estimates. Where costs incurred to configure or customise do not result in the recognition of an intangible software asset, then those costs that provide the Group with a distinct service (in addition to the SaaS access) are now recognised as expenses when the supplier provides the services. Previously some costs had been capitalised and amortised over its useful life.

Impact of change in accounting policy

The change in policy has been retrospectively applied and comparative financial information in the balance sheet has been restated. The net impact being a write-off of $1.8 million against the comparative period’s opening retained earnings. The impact on the current period and the prior period profit/(loss) is insignificant.

ANNUAL REPORT 2021 | PEET LIMITED 69

Notes to the Consolidated Financial Statements

For the year ended 30 June 2021

3. HOW TO READ THE FINANCIAL REPORT

The notes to the financial statements are set out in four specific sections:

Performance for the year
Operating assets and liabilities
Capital management
Other notes

Where an accounting policy is specific to one note, the policy is described in the note to which it relates.

Key estimates are described in the following notes:

Note 5 – constraints on project management & selling fees and estimates on percentage completion
Note 8 – deferred tax assets
Note 9 – net realisable value
Note 11 – ECL allowance
Note 21 – fair value estimation

Financial risks and its management are detailed in the respective notes it pertains to. The Group’s activities expose it to financial risks including (note 17):

liquidity risk
credit risk; and
interest rate risk.

Related party transactions are disclosed within the notes they relate to. Transactions which occur between the Group and significant controlled entities are classified as related party transactions. Significant controlled entities are interests held in associates and joint ventures, which are set out in note 10. Details relating to the key management personnel, including remuneration paid, are set out in note 6.

PERFORMANCE FOR THE YEAR

This section focuses on the results and performance of the Group.

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, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the executive management group.

The executive management group assesses the performance of the operating segments based on multiple measures including earnings before interest (including interest and finance charges amortised through cost of sales), tax, depreciation and amortisation (“EBITDA”), earnings before interest (including interest and finance charges amortised through cost of sales) and tax (“EBIT”) and profit after tax.

The share of profits from associates and joint ventures is included as segment revenue as it is treated as revenue for internal reporting purposes.

The Group operates only in Australia.

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

FUNDS MANAGEMENT

Peet enters into asset and funds management agreements with external capital providers. Peet and/or the external capital provider commit equity funds towards the acquisition of land and this is generally supplemented with debt funds either at the time of acquisition or during the development phase of a project.

The Group derives fees from underwriting, capital raising and asset identification services. Ongoing project related fees (mainly project management and selling fees as well as performance fees) are then derived by the Group for the duration of a particular project.

70 PEET LIMITED | ANNUAL REPORT 2021

COMPANY-OWNED PROJECTS

The Group acquires parcels of land in Australia, primarily for residential development purposes. Certain land holdings will also produce non-residential blocks of land.

JOINT ARRANGEMENTS

Joint arrangements are entered into with government, statutory authorities and private landowners. The form of these arrangements can vary from project to project but generally involves Peet undertaking the development of land on behalf of the landowner or in conjunction with the co-owner. The Group is typically entitled to ongoing fees for management of the development project and also a share of the profits.

INTER-SEGMENT TRANSFERS AND OTHER UNALLOCATED

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

Certain property syndicates are consolidated where the Group is considered to have control. These entities however, continue to be managed and reported to the executive management group as part of the funds management business segment. Adjustments are included in “Inter-segment transfers and other unallocated” to reconcile reportable business segment information to the Group’s consolidated statement of profit or loss.

ANNUAL REPORT 2021 | PEET LIMITED 71

For the year ended 30 June 2021

Notes to the Consolidated Financial Statements

4. SEGMENT INFORMATION continued

Consolidated	2021 $’000 2020 $’000	213,338 184,751 6,929 3,531 14,033 8,060	234,300 196,342	(10,944) (8,950) 58,056 36,972 – (61,027)	58,056 (24,055) (2,996) (3,370)	55,060 (27,425)
Inter-segment transfers and other unallocated	2021 $’000 2020 $’000	3,586 2,436 – – 822 1,286	4,408 3,722	(10,994) (8,950) (11,245) (8,384) – (2,500)	(11,245) (10,884) (2,484) (2,853)	(13,729) (13,737)
Joint arrangements	2021 $’000 2020 $’000	44,248 34,287 534 297 7,855 4,834	52,637 39,418	18,298 8,825 – (2,700)	18,298 6,125 (163) (92)	18,135 6,033
Company-owned projects	2021 $’000 2020 $’000	129,839 125,566 4,867 2,907 – –	134,706 128,473	21,810 23,518 – (55,827)	21,810 (32,309) (299) (400)	21,511 (32,709)
Funds management 2021 $’000 2020 $’000		Revenue by segment Sales to external parties 35,665 22,462 Other revenue 1,528 327 Share of net proft of associates and JVs 5,356 1,940	Total 42,549 24,729	Corporate overheads EBITDA (before divestment and related provisions) 29,193 13,013 Divestment and related provisions – –	EBITDA1 29,193 13,013 Depreciation and amortisation (50) (25)	Segment result (EBIT2) 29,143 12,988

72 PEET LIMITED | ANNUAL REPORT 2021

5. REVENUE

5. REVENUE
	2021	2020
	$’000	$’000
Revenue from contracts with
customers
– Sales of land and built form	162,490	151,506
– Project management and	50,848	33,245
selling services
Other income	6,929	3,531
	220,267	188,282

RECOGNITION AND MEASUREMENT

The main streams of revenue recognised by the Group relate to the sale of land and built form, and the provision of management and selling services. Revenue from contracts with customers is recognised when or as the Group transfers control of the goods and services to a customer at an amount that reflects the consideration to which the Group is expected to be entitled in exchange for those goods and services. Revenue is recognised when or as each performance obligation is satisfied at the amount of the transaction price allocated to that performance obligation. If the consideration in the contract includes a variable amount, the Group estimates the amount of the consideration to which it is entitled in exchange for transferring the goods and services to the customer. The variable consideration is estimated at contract inception and constrained until it is highly probable that a significant revenue reversal of the amount of the cumulative revenue recognised will not occur when the associated uncertainty with the variable consideration is subsequently resolved. When a performance obligation is satisfied by transferring a promised good or service to the customer before the customer pays consideration or before payment is due, the Group presents the revenue as a contract asset, unless the Group’s rights to the amount of consideration are unconditional, in which case the Group recognises a receivable.

SALE OF LAND AND BUILT FORM

Revenue from the sale of land and built form is recognised on settlement of the sale. This represents the point when control (title) has passed to the customer.

PROJECT MANAGEMENT

Project management represents a single performance obligation that is satisfied over time for the oversight and management of the development. The consideration receivable under the contract allocated to project management is variable and is measured using an expected value approach subject to a constraint. The transaction price is based on the relative standalone selling price. Revenue is recognised using an output method based on development milestones reached. Payment is received on settlement.

SELLING SERVICES

This service represents a performance obligation to facilitate the sale of an individual lot which is satisfied over the short period of time relating to the procedural steps of finalising the sale of the property to a purchaser. The consideration receivable under the contract allocated to selling services is considered to be variable consideration and is measured on a portfolio basis using an expected value approach subject to a constraint. The transaction price is based on the relative standalone selling price of the service. Payment is received on settlement.

The Group recognises contract fulfilment costs as an asset only if the costs relate directly to a contract, the costs generate or enhance resources of the Group that will be used to satisfy future performance obligations and the costs are expected to be recovered. If not capitalised, contract fulfilment costs are expensed as incurred.

ANNUAL REPORT 2021 | PEET LIMITED 73

Notes to the Consolidated Financial Statements

For the year ended 30 June 2021

5. REVENUE continued

6. EXPENSES

KEY ESTIMATES

Constraints on project management & selling fees

An analysis of sales fall over rates and minimum selling prices is performed for all business segments by location. This analysis, on a portfolio basis, is used to determine an appropriate constraint for revenue recognised against project management and selling fees.

Percentage completion

An analysis of development milestones is performed to determine an appropriate percentage of completion for completed lots.

Revenue from related parties included above:

	2021	2020
	$’000	$’000
Revenue from related parties ¹
Associates
Project management and selling services	32,498	19,843
Syndicate administration services	1,429	1,441
Joint arrangements
Project management and selling services	4,967	3,815
	38,894	25,099

Refer to note 3 for information on related party transactions.

	2021	2020
	$’000	$’000
Proft/(Loss) before income tax includes the following specifc
expenses: Land and development costs Amortised interest and fnance expense	121,770 9,480	94,707 6,486
Total land and development cost	131,250	101,193
Divestment and related provisions1	–	61,027
Depreciation2
– Right-of-use assets	1,341	1,341
– Property, plant and equipment	849	933
Amortisation	806	1,096
Total depreciation and amortisation	2,996	3,370
Employee benefts expense3	25,482	30,865
Project management, selling and other	15,909	16,551
operating costs
Other expenses	13,083	17,247
Total other expenses	54,474	64,663
Total expenses	188,720	230,253
Finance costs
Interest and fnance charges
– Bank borrowings	5,418	5,951
– Lease liabilities	432	534
Hedging losses reclassifed to proft or loss	–	2,424
Interest on corporate bonds	15,700	16,219
Amount capitalised	(16,208)	(17,700)
	5,342	7,428

This amount includes provisions of write-downs to a number of divesting projects (refer to note 9 for the inventory component) and provisions of related costs.
Refer to note 27 (b), (c) and (d) for accounting policies.
Refer to note 27 (e) for accounting policies.

74 PEET LIMITED | ANNUAL REPORT 2021

8. TAXES

Related party expenses

A. INCOME TAX EXPENSE

2021 $’000 2020 $’000 KMP remuneration1 Short-term employee benefts 4,126 2,769 Post-employment benefts 157 154 Share-based payments 1,107 896 5,390 3,819 1. Refer to note 3 for information about related party transactions. LAND AND DEVELOPMENT COSTS Land and development costs represent the portion of the land and development costs associated with the lots sold during the year (cost of sales). BORROWING COSTS 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 fnance costs to be capitalised is the weighted average interest rate applicable to the ’	A. INCOME TAX EXPENSE 2021 $’000 2020 $’000
	Major components of tax expense Current income tax expense Current tax 10,031 2,996 Adjustments for prior periods 1,399 (3,958)
	11,430 (962) Deferred income tax expense Deferred tax 2,135 (13,717) Adjustments for prior periods (1,412) 4,031
	723 (9,686)
	12,153 (10,648)
	2021 $’000 2020 $’000
	Deferred income tax expense included in income tax expense comprises: Increase in deferred tax assets (1,262) (2,313) Increase/(Decrease) in deferred tax liabilities 1,985 (7,373)
	723 (9,686)

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 finance costs to be capitalised is the weighted average interest rate applicable to the Group’s outstanding borrowings during the year (refer note 17).

7. EARNINGS/(LOSS) PER SHARE

	2021	2020
Proft/(loss) attributable to the	28,500	(30,056)
ordinary equity holders of the Company ($’000)
Weighted average number of	483,300,489	483,300,489
ordinary shares used as the
denominator in calculating basic
earnings per share
Basic and diluted earnings/(loss) per share (cents)	5.90	(6.19)

There are 1,200,000 options excluded from the calculation of diluted earnings per share as they are anti-dilutive. They could potentially dilute basic earnings per share in the future.

	2021 $’000	2020 $’000
Tax reconciliation
Proft/(Loss) before income tax	40,238	(41,339)
Tax at Australian tax rate of 30%	12,071	(12,402)
Tax effect of amounts which are not
assessable or deductible:
Share of net proft of associates	116	452
Employee benefts	332	195
Franking credits	(1,492)	(384)
Deferred tax assets not recognised	371	1,237
Sundry items	768	181
Over provision in prior periods	(13)	73
	12,153	(10,648)

Refer note 25 for the number of Performance Rights (PRs) outstanding at 30 June 2021. These PRs are contingently issuable shares and accordingly not included in diluted earnings per share.

ANNUAL REPORT 2021 | PEET LIMITED 75

Notes to the Consolidated Financial Statements For the year ended 30 June 2021

8. TAXES continued

A. INCOME TAX EXPENSE continued

RECOGNITION AND MEASUREMENT

Current taxes

The income tax expense for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate, 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 financial statements. 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.

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 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 and deferred tax is recognised in profit 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.

Deferred taxes

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 by the end of the reporting period. 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 arise in a transaction other than a business combination that at the time of the transaction did not affect either accounting profit or taxable profit or loss.

KEY ESTIMATES

Deferred tax assets

The Group has recognised deferred tax assets relating to carried forward tax losses to the extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority against which the unused tax losses can be utilised. However, utilisation of the tax losses also depends on the ability of the entity, to satisfy certain tests at the time the losses are recouped.

76 PEET LIMITED | ANNUAL REPORT 2021

B. DEFERRED TAX ASSETS

					Property,
					plant and
		Cash fow			equipment (including
	Inventory	hedges	Receivables	Tax losses	leases)	Other	Total
	$’000	$’000	$’000	$’000	$’000	$’000	$’000
At 1 July 2019	3,922	1,659	9,338	517	1,963	2,614	20,013
Credited/(charged):
– to proft or loss	(195)	457	2,732	546	1,085	(2,312)	2,313
– to other comprehensive	–	(794)	–	–	–	–	(794)
income
Total deferred tax assets	3,727	1,322	12,070	1,063	3,048	302	21,532
Set off against deferred tax							(21,532)
liabilities pursuant to set off
provisions
At 30 June 2020							–
At 1 July 2020	3,727	1,322	12,070	1,063	3,048	302	21,532
Effect of changing accounting	–	–	–	–	758	–	758
policy
Balance at 1 July 2020	3,727	1,322	12,070	1,063	3,806	302	22,290
(restated)
Credited/(charged):
– to proft or loss	189	(863)	1,461	346	189	(60)	1,262
Total deferred tax assets	3,916	459	13,531	1,409	3,995	242	23,552
Set off against deferred tax							(23,552)
liabilities pursuant to set off
provisions
At 30 June 2021							–

ANNUAL REPORT 2021 | PEET LIMITED 77

For the year ended 30 June 2021

Notes to the Consolidated Financial Statements

8. TAXES continued

C. DEFERRED TAX LIABILITIES

	Finance	Accrued		Share of joint
	charges	income	Inventory	arrangements	Other	Total
Movements	$’000	$’000	$’000	$’000	$’000	$’000
At 1 July 2019	21,923	2,541	14,818	4,789	155	44,226
Charged/(credited):
– to proft or loss	3,902	1,648	(13,355)	432	–	(7,373)
Total deferred tax liabilities	25,825	4,189	1,463	5,221	155	36,853
Set off against deferred tax liabilities						(22,290)
pursuant to set off provisions
At 30 June 2020						14,563
At 1 July 2020	25,825	4,189	1,463	5,221	155	36,853
Charged/(credited):
– to proft or loss	2,289	405	1,048	(1,757)	–	1,985
Total deferred tax liabilities	28,114	4,594	2,511	3,464	155	38,838
Set off against deferred tax liabilities						(23,552)
pursuant to set off provisions
At 30 June 2021						15,286

78 PEET LIMITED | ANNUAL REPORT 2021

OPERATING ASSETS AND LIABILITIES

This section shows the assets used to generate the Group’s trading performance and the liabilities incurred as a result. Liabilities relating to the Group’s financing activities are addressed in the capital management section.

9. INVENTORIES

9. INVENTORIES
	2021	2020
	$’000	$’000
Cost of acquisition	309,269	287,301
Capitalised development costs	144,306	159,250
Capitalised fnance costs	87,947	88,375
Total inventory at cost	541,522	534,926
Provision for write-downs	(51,597)	(56,467)
to net realisable value1
Total inventory	489,925	478,459
Current	114,898	87,087
Non-current	375,027	391,372
Total inventory	489,925	478,459

The write-downs are from several non-core projects that are to be divested. The estimated net realisable values used to calculate the write-down provisions are based on the latest valuations and management’s assessment of the market for each project.

RECOGNITION AND MEASUREMENT

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.

Land is initially classified as non-current. It is subsequently reclassified to current if the development/subdivided lots are expected to be sold within the next 12 months.

KEY ESTIMATES

Net realisable value

The Group is required to carry inventory at lower of cost and net realisable value. 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. The key assumptions require the use of management judgement and are reviewed annually.

In June 2021, IFRIC published an agenda decision in relation to the accounting treatment when determining net realisable value (NRV) of inventories, in particular what costs are necessary to sell inventories under IAS 2 Inventories. Based on the analysis performed, the Group expects an immaterial impact from the adoption of the IFRIC agenda decision.

10. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in associates and joint ventures are accounted for using the equity method of accounting.

A. MOVEMENTS IN CARRYING AMOUNTS OF INVESTMENTS IN ASSOCIATES AND JOINT VENTURES

JOINT VENTURES
Carrying amount at 1 July Dividends	2021 $’000 232,061 (11,210)	2020 $’000 233,668 (7,962)
Capital returns	(2,262)	(1,705)
Share of proft after income tax	14,033	8,060
Carrying amount at 30 June	232,622	232,061

ANNUAL REPORT 2021 | PEET LIMITED 79

Notes to the Consolidated Financial Statements For the year ended 30 June 2021

10. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD continued

The Group assesses, at each balance date, the carrying value of investments in associates and joint ventures to ensure the assets are not impaired.

B. INVESTMENTS IN ASSOCIATES AND JOINT VENTURES (JVS) INCLUDING SUMMARISED FINANCIAL INFORMATION

	Ownership	Current assets	Non-current assets	Current liabilities	Non-current liabilities	Net assets	Carrying value of interest in associate or joint venture	Revenue	Net proft/(loss) after tax	Share of proft/(loss)
As at 30 June 2021	%	$’000	$’000	$’000	$’000	$’000	$’000	$’000	$’000	$’000
Associates
Peet Alkimos Pty Limited, WA	33	8,065	390,154	112,227	35,759	250,233	69,125	34,493	(4,028)	(1,344)
Peet Caboolture Syndicate Limited, QLD	20	8,191	35,274	1,819	20,717	20,929	6,023	31,112	3,014	603
Peet Werribee Land Syndicate, VIC	17	2,175	27,006	3,520	8,002	17,659	3,030	24,758	3,586	615
Joint Ventures*
Peet Flagstone City Pty Limited, QLD	50	4,225	181,174	54,454	5,317	125,628	62,814	30,451	4,963	2,482
Googong Township Unit Trust, NSW	50	6,029	153,700	4,756	33,000	121,973	60,987	54,024	13,896	6,948
Peet Golden Bay Pty Limited, WA	50	3,397	21,202	990	–	23,609	11,804	11,373	900	450
Peet Mt Barker Pty Limited, SA	50	1,740	21,506	4,419	526	18,301	9,150	17,426	1,815	908
Peet No.1895 Pty Limited, VIC	50	2,759	90,256	21,767	54,181	17,067	8,584	32,892	2,152	1,078
Peet Brabham Pty Ltd, WA	50	10,943	39,873	49,468	1,068	280	140	5,402	942	471
Other associates and JVs							965			1,822
Total							232,622			14,033

As at 30 June 2020
Associates
Peet Alkimos Pty Limited, WA	33	7,587	405,389	123,857	34,675	254,444	70,479	9,359	(3,633)	(1,212)
Peet Caboolture Syndicate Limited, QLD	20	3,331	43,344	631	16,820	29,224	5,845	15,432	1,154	231
Peet Werribee Land Syndicate, VIC	17	7,701	32,620	1,879	5,385	33,057	5,672	19,144	3,081	529
Joint Ventures*
Peet Flagstone City Pty Limited, QLD	50	3,771	177,828	56,862	4,063	120,674	60,337	19,358	907	454
Googong Township Unit Trust, NSW	50	35,638	128,554	2,618	45,000	116,573	58,287	43,533	9,684	4,842
Peet Golden Bay Pty Limited, WA	50	1,014	23,789	687	–	24,116	12,058	6,647	173	86
Peet Mt Barker Pty Limited, SA	50	2,299	23,213	1,572	3,336	20,604	10,302	11,930	360	180
Peet No.1895 Pty Limited, VIC	50	2,166	99,173	2,343	84,080	14,916	7,473	24,627	2,755	1,380
Peet Brabham Pty Ltd, WA	50	7,805	37,546	419	45,840	(908)	(454)	(291)	(440)	(220)
Other associates and JVs							2,062			1,790
Total							232,061			8,060

Refer to note 10(c) for further breakdown of financial information of joint ventures

80 PEET LIMITED | ANNUAL REPORT 2021

The associates and joint ventures finance their operations through unitholder/shareholder contributions and also through external banking facilities. The Group also provides a loan facility to some of these entities which is disclosed in note 11. For Peet Alkimos Pty Ltd, the Group has agreed to defer payment of project management and selling fees to a future date. The Group has no further contractual obligations to provide ongoing financial support.

C. ADDITIONAL SUMMARISED INFORMATION IN RELATION TO AMOUNTS INCLUDED IN ASSETS, LIABILITIES AND PROFIT/(LOSS) OF JOINT VENTURES

		Current	Non-current		Income tax
	Cash and cash equivalents	fnancial liabilities1	fnancial liabilities1	Interest expense	expense/ (beneft)
As at 30 June 2021	$’000	$’000	$’000	$’000	$’000
Peet Flagstone City Pty Limited	3,625	–	48,757	–	2,128
Googong Township Unit Trust	5,525	–	33,000	–	8
Peet Golden Bay Pty Limited	4,450	–	–	–	386
Peet Mt Barker Pty Limited	1,614	–	–	–	778
Peet No. 1895 Pty Limited	2,597	–	67,328	–	922
Peet Brabham Pty Limited	407	–	49,431	26	157
As at 30 June 2020
Peet Flagstone City Pty Limited	3,475	53,557	–	–	398
Googong Township Unit Trust	9,589	–	45,000	–	(16)
Peet Golden Bay Pty Limited	1,647	–	–	–	72
Peet Mt Barker Pty Limited	2,191	–	3,000	–	102
Peet No. 1895 Pty Limited	2,014	–	77,867	–	1,181
Peet Brabham Pty Limited	475	–	45,150	–	–

Excluding trade and other payables and provisions

ANNUAL REPORT 2021 | PEET LIMITED 81

Notes to the Consolidated Financial Statements

For the year ended 30 June 2021

11. RECEIVABLES

Related party balances with associates and joint ventures included above:

2021 $’000 2020 $’000 Current Trade receivables at amortised cost1 7,728 8,224 Other receivables at amortised cost1 1,276 1,182 Loans to associates and joint ventures2 – At amortised cost 12,708 7,774 – ECL allowance (3,143) (73) – At fair value2 7,356 19,836 25,925 36,943 Non-current Loans to associates and joint ventures2 – At amortised cost 17,157 26,848 – ECL allowance (91) (2,692) – At fair value2 30,313 40,060 Other receivables 5,430 5,359 52,809 69,575 Total receivables 78,734 106,518	2021 $’000 2020 $’000
	Current
	Trade receivables 3,021 2,048 Loans to associates and joint ventures – Amortised cost (net of ECL allowance) 9,565 7,701 – Fair value 7,356 19,836 Non-current
	Loans to associates and joint ventures – Amortised cost (net of ECL allowance) 17,066 24,156 – Fair value 30,313 40,060 Other receivables 5,430 5,359
	Total 72,751 99,160
	Movements in loans to associates and joint ventures:
	2021 $’000 2020 $’000
	Carrying amount at 1 July 91,753 97,316 Loans advanced 5,452 9,180 Loan repayments (32,849) (11,016) Other (56) (3,727)
	Carrying amount at 30 June 64,300 91,753

	2021	2020
	$’000	$’000
Carrying amount at 1 July	91,753	97,316
Loans advanced	5,452	9,180
Loan repayments	(32,849)	(11,016)
Other	(56)	(3,727)
Carrying amount at 30 June	64,300	91,753

Trade and other receivables are non-interest bearing and generally have 30-60 day terms. There were no past due or impaired trade receivables at the end of the year (2020: $Nil).
The Group has entered into financing arrangements (including loans and equity contributions in cash) with certain associates and JVs of the Group on commercial terms. The loans provided to associates and JVs are unsecured with interest rates based on Bank Bill Swap Bid Rate (BBSY) plus a margin up to 5%.

Refer note 27(a) for accounting policy on financial assets and note 21 for fair value disclosures.

12. CONTRACT ASSETS

KEY ESTIMATES

ECL allowance

ECL allowance is determined on a probability of default on a loan by loan basis.

	2021	2020
	$’000	$’000
Current
Accrued income1	11,528	8,536
Non-current
Deferred management fees2	3,726	4,336
Total contract assets	15,254	12,872

These amounts represent project management and performance fees from associates and other managed entities. They are recognised for the earned consideration that is conditional under AASB 15. Refer note 5 for revenue related accounting policies.
The deferred management fees are receivable from residents in the Lattitude Lakelands retirement village, who entered into an agreement to pay the fee upon their departure. The fee is based on 3% of the resale price of the unit for each year of occupation (up to 24%).

82 PEET LIMITED | ANNUAL REPORT 2021

13. PAYABLES

13. PAYABLES
	2021	2020
	$’000	$’000
Current
Trade payables and accruals	29,726	27,424
Advance from joint operators	4,823	6,020
Total payables	34,549	33,444

RECOGNITION AND MEASUREMENT

These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial 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.

In some joint arrangement contracts, costs are reimbursed as incurred during development. As revenue is only recognised on settlements, reimbursements received are recognised as advance from joint operators until settlement.

Refer note 21 for fair value disclosures.

The below table analyses the maturity of the Group’s land vendor liability obligation:

	2021	2020
	$’000	$’000
0 – 1 years	–	6,350
Total contractual cash fows	–	6,350
Carrying amount of liabilities	–	6,350

15. PROVISIONS

	2021 $’000	2020 $’000
Current
Rebates	2,455	2,524
Employee entitlements	3,295	3,183
Provision for development costs	6,980	8,921
to complete
	12,730	14,628
Non-current
Employee entitlements	158	216
Provision for development costs to	13,075	12,038
complete
	13,233	12,254
Total provisions	25,963	26,882

Movements in provisions during the financial year are set out below:

14. LAND VENDOR LIABILITIES

	2021	2020
	$’000	$’000
Current
Instalments for purchase of development property	–	6,350
Total land vendor liabilities	–	6,350

	2021	2020
	$’000	$’000
Carrying amount at 1 July	26,882	33,232
– Additional provision recognised	4,488	4,612
– Paid during year	(3,431)	(3,852)
– Expired during the year	(1,976)	(7,110)
Carrying amount at 30 June	25,963	26,882

RECOGNITION AND MEASUREMENT

Where the Group enters into unconditional contracts with land vendors to purchase properties for future development that contain deferred payment terms, these borrowings are initially measured at fair value and subsequently carried at amortised cost. The unwinding of the discount applied to the acquisition price is included in finance costs. Generally, the land vendor holds the title over the property until settlement has occurred.

Refer note 21 for fair value disclosures.

ANNUAL REPORT 2021 | PEET LIMITED 83

Notes to the Consolidated Financial Statements For the year ended 30 June 2021

15. PROVISIONS continued

RECOGNITION AND MEASUREMENT

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

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

REBATES

The Group may be required under the terms of certain sale contracts to provide rebates for expenditures undertaken by land holders in respect of developments. These expenditures relate to landscaping and fencing and are generally payable where the land purchaser completes the construction of their dwelling within a specified period of time. This period is generally 12 to 18 months from the date of settlement. A liability is recorded for rebates at settlement and is measured at the amount of consideration receivable under the sales contract for which the Group does not expect to be entitled. The provision is updated at the end of each reporting period for changes in circumstances.

EMPLOYEE ENTITLEMENTS

The liability for long service leave and annual leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the balance date. Consideration is given to expected future wage and salary levels, experience of the employee, departures and periods of service. Expected future payments are discounted using market yields at the reporting date on high quality corporate bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

Liabilities for wages and salaries, including non-monetary benefits and accumulating sick leave expected to be settled within 12 months of the balance date are measured at the amounts expected to be paid when the liabilities are settled.

DEVELOPMENT COSTS TO COMPLETE

Provisions for development costs not yet incurred for lots settled are recognised at each reporting date based on the estimated costs to complete.

16. INTERESTS IN JOINT OPERATIONS

Details of aggregate share of assets, liabilities, revenue, expenses and results of joint operations

Group’s share of:

	Total	Total
	assets	liabilities	Revenue	Expenses
	$’000	$’000	$’000	$’000
As at 30 June 2021
The Village at	7,966	3,526	5,341	3,613
Wellard, WA
Lightsview Joint Venture, SA	4,197	2,126	9,360	7,742
Redbank Plains Joint Venture, QLD	22,391	4,675	10,748	9,374
As at 30 June 2020
The Village at Wellard, WA	12,532	3,128	7,708	5,756
Lightsview Joint Venture, SA	9,134	5,181	6,567	5,674
The Heights	9,882	6,482	2,270	1,827
Durack, NT Redbank Plains	25,023	6,180	7,952	6,455
Joint Venture, QLD

84 PEET LIMITED | ANNUAL REPORT 2021

CAPITAL MANAGEMENT

This section outlines how the Group manages its capital and related financing costs.

For the purpose of the Group’s capital management, capital includes:

issued capital;
debt facilities; and
other equity reserves attributable to the equity holders of the parent.

17. BORROWINGS, LEASE LIABILITIES AND DERIVATIVE FINANCIAL INSTRUMENTS

NET DEBT

	2021	2020
	$’000	$’000
Borrowings – Current	3,555	118,275
Borrowings – Non-current	264,430	163,879
Total borrowings*	267,985	282,154
Cash and cash equivalents Net debt	(64,125) 203,860	(46,838) 235,316

Excludes vendor financing. Refer note 14 for vendor financing on deferred payment terms.

The Group’s objectives when managing capital are to:

safeguard its ability to continue as a going concern;
continue to provide returns to shareholders and benefits for other stakeholders;
maintain an efficient capital structure to reduce the cost of capital; and
ensure all covenants are complied with.

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 monitors 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. The market value is based on the latest independent mortgage valuations, adjusted for settlements, development costs and titled stock between the date of valuation and 30 June 2021. At 30 June 2021, the bank covenant gearing ratio was 25.7% (2020: 29.7%).

RECOGNITION AND MEASUREMENT

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 Statement Of Profit Or Loss Over The Period Of The Borrowings Using The Effective Interest Method.

For The Purpose Of Presentation In The Statement Of Cash Flows, Cash And Cash Equivalents Includes Cash On Hand, Deposits Held At Call With Financial 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 Insignificant Risk Of Changes In Value, And Bank Overdrafts.

Refer Note 21 For Fair Value Disclosures.

ANNUAL REPORT 2021 | PEET LIMITED 85

Notes to the Consolidated Financial Statements For the year ended 30 June 2021

17. BORROWINGS, LEASE LIABILITIES AND DERIVATIVE FINANCIAL INSTRUMENTS continued

DEBT FACILITIES

The following provides details of the loans and borrowings utilised as at 30 June 2021:

			Effective
	Facility amount	Utilised amount1	interest rate
	$’000	$’000	%
Bank loans – note a	202,000	70,330	5.5
			Effective
	Face value	Carrying amount2	interest rate
	$’000	$’000	%
Peet bonds and notes –
note b
Series 2, Tranche 1	50,000	49,726	5.1
Peet notes 2019	75,000	73,996	7.2
Peet notes 2021	75,000	73,933	5.2
	200,000	197,655

Excludes bank guarantees. Refer note 23 for bank guarantees information.
Net of transaction and finance costs.

A. BANK LOANS

The bank facilities are secured by a first registered fixed and floating charge over the assets and undertakings of the Group with a carrying amount of $655 million (2020: $655 million). Under these facilities the Group is required to meet bank covenants relating to interest cover, gearing ratio, real property ratio and minimum shareholders’ equity. All bank covenants have been waived during the reporting period up to 30 June 2021. All bank covenants are compliant as at 30 June 2021.

In May 2021, the Group’s main bank facility of $150 million was increased to $175 million and extended to 1 October 2024. The table below analyses the maturity of the Group’s bank loans based on the remaining period at reporting date to the contractual maturity date:

	2021	2020
	$’000	$’000
0 – 1 years	7,433	21,583
1 – 2 years	20,171	8,150
2 – 5 years	54,018	35,577
Total contractual cash fows	81,622	65,310
Carrying amount of liabilities	70,330	59,341

B. PEET BONDS AND NOTES

Peet bonds Series 1, Tranche 1

On 7 June 2016, Peet issued 1,000,000 Peet bonds with a face value of $100 per bond with a maturity date of 7 June 2021. These bonds are unsecured and interest-bearing at a fixed rate of interest of 7.5%. On 7 June 2021, Peet repaid the bonds.

Peet bonds Series 2, Tranche 1

On 5 July 2017, Peet issued 500,000 Bonds at a face value of $100 per bond with a maturity date of 5 October 2022. These bonds are unsecured and carry a floating interest rate of BBSW+ 4.65% margin.

Peet Notes 2019

On 4 April 2019, Peet issued 75,000 notes to eligible professional and sophisticated investors at a face value of $1,000 per bond with a maturity date of 7 June 2024. These bonds are unsecured and carry a fixed interest rate of 6.75%.

Peet Notes 2021

On 4 June 2021, Peet issued 75,000 notes to eligible professional and sophisticated investors at a face value of $1,000 per bond with a maturity date of 30 September 2026. These bonds are unsecured and carry a floating interest rate of BBSW+4.85% margin.

The bonds and notes are presented in the balance sheet as follows:

	2021	2020
	$’000	$’000
Face value of bonds and notes issued	200,000	225,000
Transaction costs Cumulative interest expense	(3,499) 196,501 24,392	(4,669) 220,331 48,519
Cumulative coupon payable	(23,238)	(46,037)
	1,154	2,482
Total bonds and notes liability	197,655	222,813

The bonds and notes are repayable as follows:

	2021	2020
	$’000	$’000
0 – 1 years	11,069	115,019
1 – 2 years	59,349	7,807
2 – 5 years	166,682	135,549
Total contractual cash fows	237,100	258,375
Carrying amount of liabilities	197,655	222,813

86 PEET LIMITED | ANNUAL REPORT 2021

C. LEASE LIABILITIES

D. DERIVATIVE FINANCIAL INSTRUMENTS

2021 $’000 2020 $’000 Current Offce space leases 1,797 1,607 Non-current Offce space leases 3,723 5,520 Total lease liabilities 5,520 7,127	2021 $’000 2020 $’000
	Current
	Interest rate swap contracts 1,529 – Non-current
	Interest rate swap contracts – 4,407
	Total derivative fnancial instruments 1,529 4,407

During the year, total cash outflow for these leases is $2.0 million (2020: $2.0 million).

The below table analyses the maturity of the Group’s interest rate swaps on a net settled basis:

The below table analyses the maturity of the Group’s lease liabilities based on the remaining period at reporting date to the contractual maturity date:

	2021	2020
	$’000	$’000
0 – 1 years	1,529	–
1 – 2 years Total contractual cash fows	– 1,529	4,407 4,407
Carrying amount of liabilities	1,529	4,407

	2021 $’000 2020 $’000
	0 – 1 years 1,529 – 1 – 2 years – 4,407
2021 $’000 2020 $’000 0 – 1 years 2,115 2,039 1 – 2 years 2,149 2,115 2 – 5 years 1,850 3,898 > 5 years – 101 Total contractual cash fows 6,114 8,153 Carrying amount of liabilities 5,520 7,127
	Total contractual cash fows 1,529 4,407
	Carrying amount of liabilities 1,529 4,407
	E. CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES Borrowings $’000 Lease liabilities $’000 Derivative fnancial instruments $’000
	1 July 2020 282,154 7,127 4,407 Cash fows (15,330) (1,607) – Changes in fair value – – (2,878) Others 1,161 – –
	30 June 2021 267,985 5,520 1,529

ANNUAL REPORT 2021 | PEET LIMITED 87

Notes to the Consolidated Financial Statements For the year ended 30 June 2021

17. BORROWINGS, LEASE LIABILITIES AND DERIVATIVE FINANCIAL INSTRUMENTS continued

INTEREST RATE SWAP CONTRACTS

RECOGNITION AND MEASUREMENT

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently measured at 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 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 how it will assess hedge effectiveness (including the analysis of sources of hedge ineffectiveness). Hedge accounting is only applied where there is an economic relationship between the hedged item and hedging instrument.

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 reclassified into profit or loss when the hedged interest expense is recognised. The ineffective portion is recognised in the statement of profit or loss immediately.

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 statement of profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassified to the statement of profit or loss.

The Group’s policy is 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 fixed rates. In FY20, the Group has determined the interest rate swap contracts no longer meet the Group’s risk management objective. As a result, the Group has discontinued hedge accounting.

During the year, the fixed interest rate on the interest rate swap contracts was 3.11% (2020: 3.11%). The variable base rates are between 0.01% and 0.09% (2020: 0.09% and 1.22%).

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 notional principal amounts and periods of expiry of the interest rate swap contracts were as follows:

				2021 $’000	2020 $’000
0	–	1	years	100,000	–
1	–	2	years	–	100,000
				100,000	100,000

The full fair value of interest rate swap is classified as a non-current asset or liability when the remaining maturity is more than 12 months, otherwise current.

LIQUIDITY RISK

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

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

Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities 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 flexibility in funding by keeping committed credit lines available, and regularly updating and reviewing its cash flow forecasts to assist in managing its liquidity. The maturity analysis of the Group’s derivative and non-derivative financial instruments can be located in their respective notes.

The Group has unused borrowing facilities which can further reduce liquidity risk (refer to note 17 for analysis of maturities on borrowing facilities).

88 PEET LIMITED | ANNUAL REPORT 2021

CREDIT RISK

The cash component of financial assets is considered to have low credit risk as the counterparties are banks with high credit ratings assigned by international creditrating agencies. An expected credit loss provision of $3.2 million (2020: $2.8 million) has been recognised for loans measured at amortised cost of $29.9 million (2020: $34.6 million) (refer to note 11 and 27).

INTEREST RATE RISK

The Group’s main interest rate risk arises from cash, loans to associates and joint ventures measured at fair value and long-term borrowings.

Borrowings issued at variable rates expose the Group to cash flow interest rate risk.

The Group manages its interest rate risk by both variable and fixed rate debt instruments.

The Group’s fixed rate borrowings and certain loans to associates and joint ventures are carried at amortised cost. They are therefore not subject to interest rate risk.

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 financial 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 level of debt that was renewed and forecasters’ economic expectations and represents management’s assessment of the possible change in interest rates.

At 30 June 2021, the Group had the following mix of financial assets and liabilities exposed to variable interest rates:

	2021	2020
	$’000	$’000
Financial assets
Cash and cash equivalents (foating)	64,125	46,838
Loans to associates and joint ventures measured at fair value	37,669	59,896
Financial liabilities
Borrowings (foating, unhedged)	(20,330)	(24,341)
Interest rate swap	(1,529)	(4,407)

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

	Post-tax profts Increase/ (decrease) Equity Increase/ (decrease)
	2021 $’000 2020 $’000 2021 $’000 2020 $’000
– 50 basis points + 50 basis points	(283) (282) (283) (282) 283 282 283 282

ANNUAL REPORT 2021 | PEET LIMITED 89

Notes to the Consolidated Financial Statements For the year ended 30 June 2021

18. CONTRIBUTED EQUITY AND RESERVES

A. MOVEMENTS IN ORDINARY SHARE CAPITAL

		Number
Date	Details	of shares	$’000
30 June 2019	Closing balance	483,300,489	378,916
	Movement for the year
30 June 2020	Closing balance	483,300,489	378,916
	Movement for the year	–	–
30 June 2021	Closing balance	483,300,489	378,916

THE NATURE OF THE GROUP’S CONTRIBUTED EQUITY

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares of 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. 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.

B. RESERVES

B. RESERVES
Cash fow hedge reserve1 $’000 Share-based payments reserve2 $’000 Non- controlling interest reserve3 $’000	Total $’000
At 1 July 2019 (1,842) 12,238 (15,447) Cash fow hedges (gross) 2,636 – – Deferred tax (794) – – Share based payment – 1,299 – Buyback on vesting of performance rights4 – (647) –	(5,051) 2,636 (794) 1,299 (647)
At 30 June 2020 – 12,890 (15,447)	(2,557)
At 1 July 2020 – 12,890 (15,447) Share based payment – 1,600 – Buyback on vesting of performance rights5 – (492) –	(2,557) 1,600 (492)
At 30 June 2021 – 13,998 (15,447)	(1,449)

The cash flow hedge reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that is recognised directly in equity. Amounts are recognised in profit or loss when the associated hedged transaction affects profit or loss.
The share-based payments reserve is used to recognise the fair value of options and performance rights granted.
The non-controlling interest reserve is used to record the differences described in note 2(d) which may arise as a result of transactions with non-controlling interests that do not result in a loss of control.
In September 2019, the Company purchased 572,160 shares to settle the vesting of FY17 Performance Rights.
During the year, the Company purchased 456,174 shares to settle the vesting of FY17 and FY18 Performance Rights.

90 PEET LIMITED | ANNUAL REPORT 2021

19. DIVIDENDS

19. DIVIDENDS
	2021	2020
	$’000	$’000
Declared and paid during the period
Prior year fully franked dividend 1.0 cent, paid on 19 November 2020 (2020: 3.0 cents)	4,833	14,499
Fully franked interim dividend for 2021: 1.0 cent (2020: 0.5 cent)	4,833	2,417
	9,666	16,916
Dividend not recognised at year end
Final dividend 2.5 cents per share to be paid on 11 October 2021 (2020: 1.0 cents per share)	12,083	4,833
Franking credit balance
Franking account balance as at the end of the fnancial year at 30% (2020: 30%)	58,514	55,418
Franking credits that will arise from the payment of income tax	6,371	687
Impact on the franking account of dividends proposed before the fnancial report was issued but not	(5,178)	(2,071)
recognised as a distribution to equity holders during the period
	59,707	54,034

20. RECONCILIATION OF PROFIT/(LOSS) AFTER INCOME TAX TO NET CASH OUTFLOW FROM OPERATING ACTIVITIES

OPERATING ACTIVITIES
	2021	2020
	$’000	$’000
Proft/(loss) after income tax	28,085	(30,691)
Add/(deduct) non cash items:
Depreciation	2,190	2,274
Amortisation of intangible assets	806	1,096
Employee share-based payments	1,108	652
Equity accounting for investments in associates and joint ventures	(14,033)	(8,060)
Interest received	(2,639)	1,820
Peet bonds and notes effective interest rate adjustment	922	814
Add other items:
Distributions and dividends from associates and joint ventures	11,210	7,962
Change in operating assets and liabilities during the fnancial year
(Increase)/decrease in receivables	(1,996)	4,014
(Increase)/decrease in inventories	(11,466)	40,210
Increase/(decrease) in tax liabilities	5,684	(8,228)
Decrease in payables	(5,244)	(3,677)
Decrease in provisions	(919)	(6,350)
Increase/(decrease) in deferred tax liabilities	723	(9,686)
Net cash infow/(outfow) from operating activities	14,431	(7,850)

ANNUAL REPORT 2021 | PEET LIMITED 91

Notes to the Consolidated Financial Statements For the year ended 30 June 2021

21. FAIR VALUE MEASUREMENT

VALUATION OF FINANCIAL INSTRUMENTS

For financial assets and liabilities, the Group uses the following fair value measurement hierarchy:

Level 1: the fair value is calculated using quoted prices in active markets for identical assets and liabilities.

At 30 June 2021, the carrying value and the fair value of Peet bonds and notes are $197.7 million (30 June 2020: $222.8 million) and $202.9 million ($220.7 million), respectively.

KEY ESTIMATES

Fair value estimation

Level 2: the fair value is determined using inputs other than quoted prices included in level 1 that are observable for the asset or liability either directly (as prices) or indirectly (derived from prices).
Level 3: the fair value is based on inputs for the asset or liability that are not based on observable market data.

FINANCIAL INSTRUMENTS MEASURED AT FAIR VALUE

Certain loans to associates and joint ventures carried at fair value through profit or loss. The fair values of these financial assets have been estimated using discounted cashflows with significant unobservable inputs at each reporting date (level 3 of the fair value hierarchy).

At 30 June 2021, the fair value of these loans to associates and joint ventures is $37.7 million (30 June 2020: $59.9 million).

The Group measures its derivative financial liabilities at fair value at each reporting date. These derivatives are measured using significant observable inputs (level 2 of the fair value hierarchy). The fair value at 30 June 2021 is $1.5 million (30 June 2020: $4.4 million).

There have been no transfers between levels during the period.

OTHER FINANCIAL INSTRUMENTS – FAIR VALUE DISCLOSURES

Except for the Peet bonds and notes, the carrying value of financial liabilities is considered to approximate fair values.

The quoted market value (on ASX) as at 30 June 2021 of a Peet bond Series 2, Tranche 1 is $100.04 per bond (Level 1) (30 June 2020: $94.1).

The fair value of financial 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 financial assets held by the Group is the current bid price; the appropriate quoted market price for financial liabilities is the current ask price. Fair value of the Peet bonds is based on price quotations at the reporting date.

The fair value of financial instruments that are not traded in an active market 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.

Interest rate swaps are valued using valuation techniques, which employs the use of market observable inputs such as forward pricing and swap models.
Receivables/borrowings are evaluated by the Group based on parameters such as interest rates and individual creditworthiness of the counter party. Based on this evaluation, allowances are taken into account for the expected losses of these receivables.

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

The fair value as at 30 June 2021 of Peet Notes 2019 is $1,021.6 per note (30 June 2020: $975.0), and of Peet Notes 2021 is $1,016.8 per note. These notes are measured using significant observable inputs (level 2 of the fair value hierarchy).

92 PEET LIMITED | ANNUAL REPORT 2021

OTHER NOTES

22. REMUNERATION OF AUDITORS

	2021	2020
	$	$
Fees to Ernst & Young (Australia)
Fees for auditing the statutory fnancial	338,065	351,900
report of the parent covering the group and auditing the statutory fnancial reports of any controlled entities
Fees for assurance services that are
required by legislation to be provided
by the auditor
– Compliance Plan & AFSL audits	7,500	7,000
Fees for other assurance and agreed- upon-procedures services under other	56,350	63,050
legislation or contractual arrangements
Fees for other services
– Tax compliance	168,792	179,086
– Tax advice	69,030	87,150
Total Fees to Ernst & Young	639,737	688,186
(Australia)

23. CONTINGENCIES AND COMMITMENTS

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

Bank guarantees outstanding	2021 $’000 21,905	2020 $’000 21,684
Insurance bonds outstanding	14,539	13,604
	36,444	35,288

24. PARENT ENTITY FINANCIAL INFORMATION AND SUBSIDIARIES

A. PARENT ENTITY FINANCIAL INFORMATION

SUMMARY FINANCIAL INFORMATION

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

	2021	2020
	$’000	$’000
Balance sheet
Current assets	63,565	69,254
Total assets	574,610	638,152
Current liabilities	20,414	13,600
Total liabilities	125,345	160,178
Shareholders’ equity
Issued capital	378,917	378,917
Reserves
Share-based payments reserve	13,998	12,890
Retained profts	56,350	86,167
Total equity	449,265	477,974
(Loss)/proft for the year	(20,151)	69,407
Total comprehensive income	(20,151)	69,407

GUARANTEES ENTERED INTO BY THE

PARENT ENTITY

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

	2021	2020
	$’000	$’000
Bank guarantees outstanding	689	586

All contingent liabilities are expected to mature within 1 year.

At 30 June 2021, the Group had commitments of $0.5 million (2020: $29.4 million) to purchase lots from associates and joint ventures, at arms-length, to be on-sold to third party buyers through the Group’s Peet Complete program.

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.

ANNUAL REPORT 2021 | PEET LIMITED 93

Notes to the Consolidated Financial Statements For the year ended 30 June 2021

24. PARENT ENTITY FINANCIAL INFORMATION AND SUBSIDIARIES continued

B. SUBSIDIARIES

SIGNIFICANT INVESTMENTS IN SUBSIDIARIES

The consolidated financial statements incorporate the assets, liabilities and results of the following significant subsidiaries in accordance with the accounting policy described in note 2(a):

Name of Subsidiary

Holding

2021
%
2020
%

CIC Australia Pty Limited1
Peet Craigieburn Pty Limited2
Peet Greenvale No. 2 Pty Limited2
Peet Cranbourne (51A Craig Rd) Pty Limited2
Peet No. 88 Pty Limited2
Peet Southern JV Pty Limited2
Peet Brigadoon Pty Limited2
Secure Living Pty Limited2
Peet No. 108 Pty Limited2
Peet No. 112 Pty Limited2
Peet Treasury Pty Limited2
Peet Estates (VIC) Pty Limited2
Peet Development Management Pty Limited2
Peet Estates (QLD) Pty Limited2
Peet Estates (WA) Pty Limited2
Peet Estates (SA) Pty Limited1
Peet Funds Management Limited2
Peet R B Plains Pty Limited2
Peet No. 73 Pty Limited2
Lakelands Retail Centre Development
Pty Limited2
Peet Mt. Pleasant Pty Limited2
Peet No. 127 Pty Limited2
Lightsview Apartments Pty Limited1
Peet Tonsley Pty Limited2
JTP Homes Pty Limited2
Peet Tonsley Apartments Pty Limited2
Peet Keysborough Pty Limited2
Peet Jumping Creek Pty Limited2
Peet 2018 No.2 Pty Limited2
Peet Yanchep Land Syndicate2

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66.4
66.4

MATERIAL PARTLY-OWNED SUBSIDIARIES

Financial information of subsidiaries that have material noncontrolling interests is provided below. This information is based on amounts before inter-company eliminations.

	Peet Yanchep Land Syndicate
	2021 $’000 2020 $’000
Current assets Non-current assets Current liabilities Non-current liabilities Non-controlling interest Revenue Loss after tax Loss attributable to non-controlling interest	2,879 3,861 81,673 80,049 2,704 20,310 31,727 12,241 16,841 17,258 4,101 2,819 (1,238) (1,889) 415 635

Summarised cash flow information:

	Peet Yanchep Land Syndicate
	2021 $’000 2020 $’000
Operating Financing	(153) (998) 200 871
Net infow/(outfow)	47 (127)

Peet has provided $2.4 million loan to Peet Yanchep Land Syndicate as at 30 June 2021 (30 June 2020: $0.2 million) and no loans to other partly-owned subsidiaries. Peet granted a guarantee of $6.0 million to Peet Yanchep Land Syndicate as at 30 June 2021 (30 June 2020: $4.9 million). The Group has no further contractual obligations to provide ongoing financial support.

Incorporated in ACT.
Incorporated in WA.

94 PEET LIMITED | ANNUAL REPORT 2021

DEED OF CROSS GUARANTEE

Peet Limited and certain wholly-owned subsidiaries are parties to a deed of cross guarantee under which each company guarantees the debts of the other. By entering into the deed, the wholly-owned entities have been relieved from the requirements to prepare a financial report and directors’ report under ASIC Corporations (Whollyowned Companies) Instrument 2016/785 issued by the Australian Securities and Investments Commission.

The companies represent a ‘closed group’ for the purposes of the Class Order.

	2021	2020
	$’000	$’000
Consolidated statement of proft or loss
Revenue	216,632	183,785
Expenses	(183,845)	(224,921)
Finance costs	(5,342)	(7,428)
Share of net proft of associates	13,211	6,774
accounted for using the equity method
Proft/(loss) before income tax	40,656	(41,790)
Income tax (expense)/beneft	(12,154)	11,667
Proft/(loss) for the year	28,502	(30,123)
Other comprehensive income
Items that may be reclassifed to proft or loss:
Changes in the fair value of cash fow hedges Income tax relating to components of other comprehensive income	– –	2,636 (794)
Other comprehensive income for the	–	1,842
year, net of tax
Total comprehensive income/(loss)	28,502	(28,281)
for the year
Summary of movement in consolidated retained profts
Retained profts at the beginning of the fnancial year Effect of changing accounting policy	119,305 –	168,114 (1,770)
Proft/(loss) for the year Dividends paid Retained profts at the end of the fnancial year	28,502 (9,666) 138,141	(30,123) (16,916) 119,305

CONSOLIDATED BALANCE SHEET

Set out below is a consolidated balance sheet at 30 June 2021 of the closed group consisting of Peet Limited and certain wholly owned subsidiaries.

	2021 $’000	2020 $’000
Current assets
Cash and cash equivalents	63,958	46,719
Receivables	37,379	23,335
Inventories	114,898	87,087
Total current assets	216,235	157,141
Non-current assets
Receivables	59,800	101,649
Inventories	290,701	302,472
Investments accounted for using the	265,904	266,175
equity method
Right-of-use assets	3,848	5,188
Property, plant and equipment	3,092	4,151
Intangible assets	2,193	2,587
Total non-current assets	625,538	682,222
Total assets	841,773	839,363
Current liabilities
Payables	33,492	41,286
Land vendor liabilities	–	6,350
Borrowings	3,555	105,066
Lease liabilities	1,797	1,607
Derivative fnancial instruments	1,529	–
Current tax liabilities	6,371	687
Provisions	12,437	5,550
Total current liabilities	59,181	160,546
Non-current liabilities
Borrowings	3,723	158,313
Lease liabilities	247,655	5,520
Derivative fnancial instruments	–	4,407
Deferred tax liabilities	15,314	14,563
Provisions	158	216
Total non-current liabilities	266,850	183,019
Total liabilities	326,031	343,565
Net assets	515,742	495,798
Equity
Contributed equity	378,916	378,916
Reserves	(1,315)	(2,423)
Retained profts	138,141	119,305
Total equity	515,742	495,798

ANNUAL REPORT 2021 | PEET LIMITED 95

Notes to the Consolidated Financial Statements For the year ended 30 June 2021

25. SHARE-BASED PAYMENTS

PEET EMPLOYEE SHARE OPTION PLAN (PESOP) AND PEET PERFORMANCE RIGHTS PLAN (PPRP)

The establishment of the PESOP was approved by the Board and shareholders during the 2004 financial year and the Peet Limited PPRP was approved by shareholders at the 2008 AGM. Employees of any Group Company (including Executive Directors) will be eligible to participate in the PESOP and/or PPRP 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;
any applicable conditions which must be satisfied or circumstances which must exist before the options and/ or performance rights may be exercised.

CONSIDERATION

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

VESTING AND EXERCISE CONDITIONS

Under the plans, options and/or PRs only vest if the employees are still employed by the Group at the end of the vesting period, subject to the Board’s discretion, and any set performance hurdles have been met.

Generally, as a pre-condition to exercise, any exercise conditions in respect of an option and/or performance right must be satisfied. 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 PESOP and performance rights under the PPRP 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 specified in the rules of the PESOP and PPRP including, on the date or in circumstances specified 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.

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

96 PEET LIMITED | ANNUAL REPORT 2021

FAIR VALUE OF OPTIONS AND PERFORMANCE RIGHTS GRANTED

The fair value of an option and PRs 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 performance rights issued during the year under the PPRP were:

			Share price at	Risk free	Assessed
Grant Date	Exercise Price	Expiry date	grant date	interest rate	fair value
19 Nov 20	$0.00	19 Nov 35	$1.06	0.27%	$0.94

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.

Total expenses arising from share-based payment transactions recognised during the year as part of employee benefits expense is $1,600,218 (2020: $1,298,700).

Set out below are summaries of options and performance rights granted under the plans:

								Lapsed/
					Granted		Exercised	forfeited
		Exercise	Assessed	Balance at	during the		during the	during the	Balance at	Exercisable
Grant date	Expiry date	Price $	fair value $	1 July		year	year	year	30 June	at 30 June
30 June 2021
Options
30 Nov 07	N/A	$4.10	$1.12	1,200,000		–	–	–	1,200,000	1,200,000
Performance	rights
21 Dec 15	21 Dec 30	–	$0.957	269,103		–	–	–	269,103	269,103
23 Nov 16	23 Nov 31	–	$0.801	1,065,114		–	–	–	1,065,114	1,065,114
21 Dec 16	21 Dec 31	–	$0.849	808,392		–	(227,710)	–	580,682	580,682
29 Nov 17	29 Nov 32	–	$1.328	874,347		–	–	(524,608)	349,739	349,739
5 Dec 17	5 Dec 32	–	$1.299	1,232,635		–	(228,464)	(739,581)	264,590	264,590
21 Nov 18	21 Nov 33	–	$0.940	2,097,201		–	–	–	2,097,201	–
21 Nov 19	21 Nov 34	–	$1.044	2,333,607		–	–	(80,460)	2,253,147	–
19 Nov 20	19 Nov 35	–	$0.940	–	3,243,407		–	–	3,243,407	–
				8,680,399	3,243,407		(456,174)	(1,344,649)	10,122,983	2,529,228
				9,880,399	3,243,407		(456,174)	(1,344,649)	11,322,983	3,729,228

ANNUAL REPORT 2021 | PEET LIMITED 97

Notes to the Consolidated Financial Statements For the year ended 30 June 2021

25. SHARE-BASED PAYMENTS continued

FAIR VALUE OF OPTIONS AND PERFORMANCE RIGHTS GRANTED continued

30 June 2020

30 June 2020
Options
30 Nov 07	N/A	$4.10	$1.12	1,200,000	–	–	–	1,200,000	1,200,000
Performance rights
21 Dec 15	21 Dec 30	–	$0.957	269,103	–	–	–	269,103	269,103
23 Nov 16	23 Nov 31	–	$0.801	1,065,114	–	–	–	1,065,114	1,065,114
21 Dec 16	21 Dec 31	–	$0.849	1,380,552	–	(572,160)	–	808,392	808,392
29 Nov 17	29 Nov 32	–	$1.328	874,347	–	–	–	874,347	–
5 Dec 17	5 Dec 32	–	$1.299	1,232,635	–	–	–	1,232,635	–
21 Nov 18	21 Nov 33	–	$0.940	2,097,201	–	–	–	2,097,201	–
21 Nov 19	21 Nov 34	–	$1.044	–	2,333,607	–	–	2,333,607	–
				6,918,952	2,333,607	(572,160)	–	8,680,399	2,142,609
Total				8,118,952	2,333,607	(572,160)	–	9,880,399	3,342,609

26. MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR

The Directors have declared a final fully franked dividend of 2.5 cents per share in respect to the year ended 30 June 2021. The dividend is to be paid on Monday, 11 October 2021, with a record date of Friday, 17 September 2021. No provision has been made for this dividend in the financial report as the dividend was not declared or determined by the directors on or before the end of the financial year.

27. OTHER ACCOUNTING POLICIES

A. FINANCIAL ASSETS

INITIAL RECOGNITION AND MEASUREMENT

Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through other comprehensive income (OCI), and fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial asset’s contractual cash flow characteristics and the Group’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determined under AASB 15.

In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.

The Group’s business model for managing financial assets refers to how it manages its financial assets in order to generate cash flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial assets, or both.

98 PEET LIMITED | ANNUAL REPORT 2021

SUBSEQUENT MEASUREMENT

For purposes of subsequent measurement, financial assets are classified in four categories:

Financial assets at amortised cost (debt instruments)
Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt instruments)
Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)
Financial assets at fair value through profit or loss

Financial assets at amortised cost (debt instruments)

This category is the most relevant to the Group. The Group measures financial assets at amortised cost if both of the following conditions are met:

The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows; and
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding

Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired.

The Group’s financial assets at amortised cost includes trade receivables, and loans to associates and JVs included under Receivables.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss include financial assets held for trading, financial assets designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Derivatives, including separated embedded derivatives, are also classified as held for trading unless they are designated as effective hedging instruments. Financial assets with cash flows that are not solely payments of principal and interest are classified and measured at fair value through profit or loss, irrespective of the business model. Notwithstanding the criteria for debt instruments to be classified at amortised cost or at fair value through OCI, as described above, debt instruments may be designated at fair value through

profit or loss on initial recognition if doing so eliminates, or significantly reduces, an accounting mismatch.

Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value with net changes in fair value recognised in the statement of profit or loss.

This category includes loans to associates and joint ventures and derivative instruments.

IMPAIRMENT

The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash flows will include cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.

ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs. Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment.

The Group considers a financial asset in default when internal or external information indicates that the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by the Group. A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.

ANNUAL REPORT 2021 | PEET LIMITED 99

Notes to the Consolidated Financial Statements For the year ended 30 June 2021

27. OTHER ACCOUNTING POLICIES continued

B. LEASES

For leases with a lease term greater than 12 months that are not considered low value leases (see below), right-ofuse assets and associated lease liabilities are recognised at the commencement of the lease.

Right-of-use assets are measured at cost initially and then depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are subject to impairment.

The lease liability is initially measured at net present value of future lease payments using the Group’s incremental borrowing rate. The lease payments include fixed payments less any lease incentives receivable and variable lease payments that depend on an index or a rate. The lease payments are allocated between repayment of lease liability and interest expense (charged to profit or loss over the lease period). In addition, the carrying amount of lease liabilities is remeasured if there is a modification or a change in the lease term.

For short-term leases and leases of low-value assets, lease payments are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 month or less. Low-value assets are generally small items of office equipment.

C. INTANGIBLE ASSETS

Intangible assets primarily consist of software and are shown at historical costs less depreciation.

Depreciation on intangible assets is calculated using the straight-line method over their estimated useful lives as below.

• Software – 5 years

Where costs incurred to configure or customise Softwareas-a Service (SaaS) arrangements result in the creation of a resource which is identifiable, and where the company has the power to obtain the future economic benefits flowing from the underlying resource and to restrict the access of others to those benefits, such costs are recognised as a separate intangible software asset and amortised over the useful life of the software on a straight-line basis. The amortisation is reviewed at least at the end of each reporting period and any changes are treated as changes in accounting estimates. Where costs incurred to configure or customise do not result in the recognition of an intangible software asset, then those costs that provide the Group with a distinct service (in addition to the SaaS access) are now recognised as expenses when the supplier provides the services.

D. 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, net of their residual values, over their estimated useful lives, as follows:

Fixtures and fittings – 3 to 10 years
Leasehold improvements – 10 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. Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in the statement of profit or loss.

100 PEET LIMITED | ANNUAL REPORT 2021

E. TERMINATION BENEFITS

Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits 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 benefits because of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after balance date are discounted to present value.

F. 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 balance sheet.

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

G. GOVERNMENT GRANTS

Government grants are recognised where there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs are expensed.

H. PARENT ENTITY FINANCIAL INFORMATION

TAX CONSOLIDATION LEGISLATION

Peet Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation as of 1 July 2003. Peet Limited is the head entity of the tax consolidated group. Members of the group are taxed as a single entity and the deferred tax assets and liabilities of the entities are set-off in the consolidated financial statements.

The entities in the tax consolidated group entered into a tax sharing agreement which limits the joint and several liability of the wholly-owned entities in the case of a default by the head entity, Peet Limited. At the balance sheet date the possibilities of default were remote.

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.

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.

INVESTMENTS IN SUBSIDIARIES

Investments in subsidiaries are accounted for at cost in the separate financial 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 fixed repayment terms and which have been provided to subsidiaries as an additional source of long-term capital.

I. NEW ACCOUNTING STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE

There are no new and amended accounting 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.

AMENDMENTS TO IAS 1: CLASSIFICATION OF LIABILITIES AS CURRENT OR NON-CURRENT

In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as current or non-current. The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and must be applied retrospectively. The Group is currently assessing the impact the amendments will have on current practice. However, the Group does not expect a material impact based on current arrangements.

ANNUAL REPORT 2021 | PEET LIMITED 101

Directors’ Declaration

Year ended 30 June 2021

In the Directors’ opinion:

a. the financial statements and notes set out on pages 67 to 101 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 Consolidated Entity’s financial position as at 30 June 2021 and of its performance for the financial 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
c. at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group identified in note 24 will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee described in note 24.

Note 2 discloses that the financial statements and notes also comply with International Financial Reporting Standards.

The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section 295A of the Corporations Act 2001.

This declaration is made in accordance with a resolution of the Directors.

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Brendan Gore

Managing Director and Chief Executive Officer Perth, Western Australia 25 August 2021

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Independent Auditor’s Report

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ANNUAL REPORT 2021 | PEET LIMITED 109

Securityholder Information

DISTRIBUTION OF ORDINARY SHARES AND PEET BONDS

As at 14 September 2021 there were 2,143 current holders of ordinary shares and 565 current holders of Series 2, Tranche 1 Peet Bonds (“PPCHB Bonds”). These holdings were distributed in the following categories:

	No of	% of Issued	No of PPCHB	% of Issued
Size of Holding	Shareholders	Shares	Bondholders	PPCHB Bonds
1 – 1,000	545	0.03	506	32.46
1,001 – 5,000	584	0.37	49	21.59
5,001 – 10,000	345	0.55	5	7.12
10,001 – 100,000	597	3.51	4	10.22
100,001 and over	72	95.54	1	28.61
	2,143	100.00	565	100.00

There were 390 shareholdings of less than a marketable parcel of $500 (435 shares).

There were nil holdings of PPCHB Bonds of less than a marketable parcel of $500 (five PPCHB Bonds).

SECURITYHOLDERS

The names of the 20 largest holders of ordinary shares as at 14 September 2021 are listed below:

	Number of	% of
Name	Shares Held	Shares Held
Scorpio Nominees Pty Ltd	86,582,433	17.91
Citicorp Nominees Pty Limited	68,372,688	14.16
J P Morgan Nominees Australia Pty Limited	58,715,944	12.15
HSBC Custody Nominees (Australia) Limited	42,536,964	8.80
CS Third Nominees Pty Limited	29,100,298	6.02
HSBC Custody Nominees (Australia) Limited – A/C 2	25,114,628	5.20
National Nominees Limited	19,782,981	4.09
Argo Investments Limited	18,152,705	3.76
Mr Warwick Donald Hemsley	17,459,881	3.61
Ian Murray Charles Palmer & Helen Christina Palmer	12,707,352	2.63
UBS Nominees Pty Ltd	8,886,215	1.84
Golden Years Holdings Pty Ltd	8,656,230	1.79
Merrill Lynch (Australia) Nominees Pty Limited	7,808,362	1.62
Mirrabooka Investments Limited	6,100,000	1.26
BNP Paribas Noms Pty Ltd	5,981,378	1.24
Zero Nominees Pty Ltd	5,630,000	1.16
Mr Brendan David Gore	5,303,817	1.10
Netwealth Investments Limited	5,136,867	1.06
Brispot Nominees Pty Ltd	4,451,781	0.92
CS Fourth Nominees Pty Limited	3,927,828	0.81
Total for 20 largest shareholders	440,408,352	91.13
Total other shareholders	42,892,137	8.87
Total ordinary shares on issue	483,300,489	100.00

110 PEET LIMITED | ANNUAL REPORT 2021

The names of the 22 largest holders of PPCHB Bonds as at 14 September 2021 are listed below:

	Number of
	PPCHB	% of PPCHB
Name	Bonds Held	Bonds Held
HSBC Custody Nominees (Australia) Limited	143,065	28.60
National Nominees Limited	16,284	3.26
Grizzly Holdings Pty Limited	12,600	2.52
Keppoch Pty Limited	12,000	2.40
J P Morgan Nominees Australia Pty Limited	10,234	2.05
Finot Pty Limited	8,000	1.60
BNP Paribas Nominees Pty Ltd Hub24 Custodial Serv Ltd	7,539	1.51
Mr Joseph Compagnone & Mrs Cheryl Robyn Compagnone	7,050	1.41
BT Portfolio Services Limited	7,000	1.40
Roni H Pty Ltd	6,000	1.20
Invia Custodian Pty Limited	4,690	0.94
Mr Joseph Compagnone & Mrs Cheryl Robyn Compagnone	4,262	0.85
Netwealth Investments Limited	4,023	0.80
Hamilton Industries (Victoria) Pty Limited	4,000	0.80
Trancape Pty Ltd	4,000	0.80
Trendmead Pty Ltd	3,500	0.70
A Cameron Holdings Pty Limited	3,125	0.63
Bentleigh Nominees Pty Ltd	3,000	0.60
Invia Custodian Pty Limited	3,000	0.60
Mr Thomas Kiss & Mrs Amanda Aizenstros	3,000	0.60
Mr Archibald John McKirdy	3,000	0.60
Mr Jian Wang	3,000	0.60
Total for 20 largest PPCHB Bondholders	272,372	54.47
Total other PPCHB Bondholders	227,628	45.53
Total PPCHB Bonds on issue	500,000	100.00

SUBSTANTIAL SHAREHOLDERS

As disclosed in substantial holding notices lodged with ASX (as applicable) as at 14 September 2021:

	Date of Last Notice	Number of	% of Issued
Name	Received	Shares Held	Shares Held1
Scorpio Nominees Pty Ltd and its associates	13 November 2018	99,156,523	20.50
Allan Gray Australia Pty Ltd and its related bodies corporate	14 August 2020	88,722,096	18.36
L1 Capital Pty Ltd	31 March 2020	67,316,177	13.93

Percentage of issued shares held as at the date notice provided.

ANNUAL REPORT 2021 | PEET LIMITED 111

Securityholder Information

VOTING RIGHTS OF ORDINARY SHARES

The constitution provides for votes to be cast:

on a show of hands, one vote for each shareholder; and
on a poll, one vote for each fully paid ordinary share.

VOTING RIGHTS OF PEET BONDS

Bondholders have certain rights to vote at meetings of bondholders but are not entitled to vote at general meetings, unless provided for by the ASX Listing Rules or the Corporations Act.

SECURITIES EXCHANGE LISTINGS

Peet Limited’s ordinary shares are listed on the Australian Securities Exchange (“ASX”). The Company’s ASX code is PPC.

Peet Limited’s Series 2, Tranche 1 Peet Bonds are listed on the ASX, with the code being PPCHB.

OPTIONS AND PERFORMANCE RIGHTS

As at 14 September 2021, Peet Limited had 1,200,000 options on issue, held by one key management person, as disclosed elsewhere in the Annual Report.

As at 14 September 2021, Peet Limited had 8,921,506 performance rights on issue, held by a total of eight key management personnel and other senior managers.

These options and performance rights, which are not listed, were issued under the PESOP and PPRP, respectively.

PEET NOTES

As at as at 14 September 2021, Peet Limited had 75,000 unsecured and unsubordinated, 6.75% fixed-rate notes on issue, with a maturity date of 7 June 2024 and 75,000 unsecured and unsubordinated floating rate notes on issue, with a maturity date of 30 September 2026. Noteholders are not entitled to vote at general meetings, however, are entitled to vote on certain matters that affect their rights under the notes’ Trust Deed. The notes were issued to professional and sophisticated investors and are not listed.

WEBSITE ADDRESS

www.peet.com.au

The Peet Limited 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.

112 PEET LIMITED | ANNUAL REPORT 2021

Corporate Directory

PEET LIMITED

A.B.N. 56 008 665 834

Website Address – www.peet.com.au

DIRECTORS

Tony Lennon, FAICD, Non-executive Chairman

Brendan Gore, BComm, FCPA, FCIS, FGIA, FAICD, Managing Director and Chief Executive Officer

Anthony Lennon, BA, Grad Dip Bus Admin, MAICD, Non-executive Director

Trevor Allen, BComm (Hons), CA, FF, FAICD, Independent Director

Vicki Krause, BJuris LLB W.Aust, GAICD, Independent Director

Robert McKinnon, FCPA, FCIS, FGIA, MAICD, Lead Independent Director

GROUP COMPANY SECRETARY

Dom Scafetta, BComm, CA

REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS

7th Floor, 200 St Georges Terrace Perth, Western Australia 6000 Tel. (08) 9420 1111

SHARE REGISTER

Computershare Investor Services Pty Limited Level 11, 172 St Georges Terrace Perth, Western Australia 6000 Tel: (08) 9323 2000

AUDITOR

Ernst & Young Ernst & Young Building 11 Mounts Bay Road Perth, Western Australia 6000

ANNUAL REPORT 2021 | PEET LIMITED 113

Notes

114 PEET LIMITED | ANNUAL REPORT 2021

ANNUAL REPORT 2021 | PEET LIMITED 115

Peet Limited

ACN 008 665 834 Level 7, 200 St Georges Terrace Perth WA 6000 Telephone +61 8 9420 1111[| ] Facsimile +61 8 9481 4712 www.peet.com.au

Perth | Melbourne | Brisbane | Canberra | Adelaide

AI assistant

PEET LIMITED — Annual Report 2021

65600_rns_2021-10-13_f22716d9-8474-4059-af66-ae20b43cab6d.pdf

ANNUAL REPORT 2021

Peet is one of Australia’s leading residential real estate developers, creating places to live for thousands of Australians each year.

PEET About

WHAT WE DO

HOW WE DO IT Our values

Integrity

Teamwork

Accountability

Adaptability

Respect

Customer service

FY21 PERFORMANCE at a glance

Financial

Operational

Future proofing

BUSINESS Model

Our STRATEGY

Chairman’s REVIEW

STRATEGY

DIVIDENDS

CONCLUSION

Managing Director and CEO’s REVIEW

Dear Shareholders,

COVID-19 RESPONSES

FY21 PERFORMANCE

DELIVERY AGAINST STRATEGY

Invest in high quality land in strategic locations across the country.

Maintain strong capital management.

Enhance, plan and create communities and homes targeting the lower to middle market segment.

Expand our product offering and geographic presence to appeal a wider variety of customers.

OUTLOOK

Brendan Gore

OPERATIONAL AND FINANCIAL REVIEW

FUNDS MANAGEMENT[projects]

OPERATIONAL AND FINANCIAL REVIEW

JOINT[ventures]

OPERATIONAL AND FINANCIAL REVIEW

DEVELOPMENT[projects]

LIVING Sustainably

ENVIRONMENT, SOCIAL & INNOVATION

JOURNEY TOWARDS RECONCILIATION

Corporate CALENDAR FY22

5 JULY 2021

26 AUGUST 2021

17 SEPTEMBER 2021

30 SEPTEMBER 2021

5 OCTOBER 2021

11 OCTOBER 2021

14 OCTOBER 2021

16 NOVEMBER 2021

7 DECEMBER 2021

31 DECEMBER 2021

5 JANUARY 2022

FEBRUARY 2022

31 MARCH 2022

5 APRIL 2022

7 JUNE 2022

30 JUNE 2022

Financials 2021

Contents

Directors’ Report

Year ended 30 June 2021

1. DIRECTORS

TONY LENNON

FAICD

NON-EXECUTIVE CHAIRMAN

BRENDAN GORE

BComm, FCPA, FCIS, FGIA, FAICD

MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER

Directors’ Report

1. DIRECTORS continued

ANTHONY LENNON

BA, Grad Dip Bus Admin, MAICD

NON-EXECUTIVE DIRECTOR

TREVOR ALLEN

BComm (Hons), CA, FF, FAICD

INDEPENDENT NON-EXECUTIVE DIRECTOR

PEET LIMITED Annual Report 2021