Interim Report 2018

INTERIM REPORT 2018
Bright
from the
start

Welcome to Oceania
Healthcare’s interim
report for the six months
ended 30 November 2017
Contents
02 Oceania at a glance
05 Highlights
06 Chair and CEO's Report
14 Financial Statements
19 Notes to the Interim Financial Statements
46 Independent Review Report
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~2,750
STAFF
~2,450
AGED CARE RESIDENTS
EXISTING FACILITIES WITH
MATURE OPERATIONS
26
Locations with development land bank
Locations with no development land bank
EXISTING FACILITIES WITH
BROWNFIELD DEVELOPMENTS
(CURRENT AND PLANNED)
22
3
UNDEVELOPED SITES
TOTAL SITES
51
As at 30 November 2017
Oceania site locations
Oceania Healthcare is a leading
provider of healthcare services
in New Zealand being the third
largest in residential aged care
and sixth largest in retirement
village. Our properties are
located in prime metropolitan
areas across New Zealand and
we provide a full continuum of
care offering to our residents.
We have a strong platform for
growth given our substantial
brownfield land bank, with proven
expertise and experience in
managing construction projects.
We have sufficient land to build
1,782 new residences (1,393 net
of decommissions) with 1,057
of these already consented.
1

We pride ourselves in being a
recognised industry leader in the
provision of clinical care to our
residents. For the third year in a
row we were awarded the Overall
Excellence in Care award by the
NZ Aged Care Association and
also won the Best Food in Aged
Care award at the national Senior
Lifestyle Cuisine competition.
Oceania at a glance
1
Excluding St Heliers and land adjacent to Eden.
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Highlights
Your Board of Directors is pleased to report our
first half year result for the 12 months to 31 May 2018.
Total Operating Revenue
$92.1
m
for the first six months to 30 November 2017
+3.3% higher than the corresponding period last year.
Net Profit after Tax
$42.5
m
for the first six months to 30 November 2017
+93.2% higher than the corresponding period last year.
Pro forma Underlying EBITDA
$25.3
m
¹
+8.6% higher than the corresponding period last year.
Total Assets
$1.0
bn
+19.1 % higher than the corresponding period last year. This increase in the
value of our properties reflects work in progress at our development sites
and an uplift in the valuation of our existing properties.
1
This is a non-GAAP measure.
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Financial Review
Oceania Healthcare reported net profit
after tax of $42.5m for the 6 month
period to 30 November 2017, 93.2%
higher than the prior corresponding
period last year.
Pro forma underlying EBITDA
1
increased
by 8.6% to $25.3m over this time, driven
by fees from ORA contracts (DMF) and
realised development margins.
Total assets increased by $160.5m to
$1.0bn due to significant development
capital expenditure, acquisitions and
revaluations.
Total operating revenue was up 3.3%
to $92.1m driven by increased care
revenues of $79.9m.
Occupancy at care facilities that are
not impacted by our redevelopment
activity held at 89.0% compared with
91.7% in the corresponding period
last year. This is significantly higher
than the national average of 86.9%
2
.
Care revenue represented 86.8% of
total operating revenue.
Operating expenses were up 5.1% driven
by the Equal Pay settlement that became
effective in July 2017.
With net debt of $118.1m, as at 30
November 2017, our gearing remains
conservative with net debt to net debt
plus equity of 18.7%.
Operating Review
We have embarked on an extensive
programme of capital works as a key
strategy to support our core purpose
which is to provide high quality aged
care services and retirement facilities
throughout New Zealand. We consider
our development projects as not just
bricks and mortar, but an opportunity to
continually improve our design and core
care services for our residents.
CHAIR AND CEO’S REPORT
It was especially pleasing in September
to be recognised by our industry peers
as the leading provider of aged care in
New Zealand with Oceania winning the
supreme award for Overall Excellence in
Care by the NZ Aged Care Association
for the third year in a row.
Care
There are strong underlying demographic
trends in the aged care sector, however
we operate in a competitive market. In
order to maintain our industry leading
reputation, we need to ensure that we
are innovative and constantly focused
on improving our customer experiences.
A core component of our aged care
delivery is the provision of nutritious
food and quality dining experiences for
our residents. In July this year we won
the Best Food in Aged Care award at
the national Senior Lifestyle Cuisine
competition against other top aged care
facilities around the country for the third
year in a row.
Our new clinical information system
is on track for implementation in 2018.
This system will significantly enhance
the way we organise the delivery of
care services to our residents whilst
also streamlining our compliance
requirements. The rollout of this system
is made possible by our investment last
year in wireless connectivity across all
our sites.

After a successful trial at our Lady Allum
site in Milford, we are rolling out the
Oceania “I Love Music” programme
across all our sites. This programme is an
innovative way to connect residents with
the meaningful tunes of their younger
years by providing them with an iPod
loaded with their own unique music
playlist. We are seeing amazing results in
the health and happiness of our residents
with this programme.
Aged care is a highly regulated industry
and all of our facilities require certification
by the Ministry of Health to ensure they
meet the required operational standards.
We are pleased to report that 25% of
our care sites have now achieved the
maximum certification period possible
of four years with the remainder of our
sites holding a three year certification.
Chair and
Chief Executive Officer’s
Report
1
This is a non-GAAP measure.
2
For the quarter ended Sept 17 – Source: NZACA
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Development Progress
Our comprehensive programme of
capital works continues to progress on
time and on budget. All construction
works that were forecast to be
completed this financial year have either
already been completed or are well on
track to be completed by the end of
January 2018.
The construction of the apartments in
Stage 3 at Meadowbank, Auckland will
be practically completed in January.
This stage consists of 62 independent
living apartments with a vast new village
community centre, as well as 30 new
luxury care suites. The first residents
will move in during February 2018.
A further 25 new villas have been
completed at Elmwood, Auckland on
neighbouring land that we purchased
two years ago, and residents began
moving into their new villas in November.
Construction of another phase of 10 new
villas at our Stoke Village, Nelson was
completed in December 2017 with the
first residents expected to occupy their
villas in January.
Construction is also progressing
according to programme for those
projects that are expected to complete
in the 2019 financial year.
The construction of 81 new care suites at
Melrose, Tauranga is progressing well
with completion scheduled for
CHAIR AND CEO’S REPORTCHAIR AND CEO’S REPORT
September 2018. The design of the
next phase at Melrose, consisting of
72 independent living apartments with
full community facilities, has been
completed and the project is now in
the building consent phase.
The basement level and ground works
of our Auckland waterfront site in
Browns Bay, The Sands (formerly
Maureen Plowman), is now complete.
This unrivalled location will feature
64 independent living apartments and
44 luxury care suites.
The fourth stage at Meadowbank, the
construction of a further 49 apartments
and 32 luxury care suites, commenced
in September and is expected to be
complete in May 2019.
The construction of a further four villas
at Wharerangi, Taupo was commenced
in early October to complement the
villa development that was completed
in May 2016, and all four villas already
have presale applications on them.
This popular site very near the lakefront
in Taupo will have a 47 bed care facility
and 22 retirement village units once
completed.
The construction of 90 new care suites
at Trevellyn, Hamilton has commenced
in January 2018 as stage 1 of the
redevelopment of this 2.4ha site
overlooking the river and less than 2 km
from town.
Meadowbank Village, Auckland
Elmwood Village, Auckland
09
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Resource consent was issued in August
2017 for our Windermere site in Papanui,
Christchurch. This consent is for the
construction of a boutique development
of 68 independent living apartments and
60 luxury care suites.
Resource consent applications were also
lodged for the construction of new villas
at Gracelands and an extended care
facility and apartments at Eversley, both
in Hastings.
As part of our aged care growth
strategy to enhance the number of
beds that can be sold under occupation
rights agreements, we have converted
CHAIR AND CEO’S REPORTCHAIR AND CEO’S REPORT
44 rooms and units into care suites since
June 2017 and will convert further rooms
and studios at Elmwood, Heretaunga,
Atawhai and St Johns Wood over the
remainder of the 2018 financial year.
We have also commenced all
remediation work identified in the Cove
Kinloch report commissioned before our
IPO and will complete these before the
end of the financial year.
Acquisition
In August we purchased 2,668m
2
of land
adjacent to our existing Mt Eden facility.
Our intention is to add to our existing
luxury care suite and independent
apartment offering of 67 suites and
40 apartments in this highly sought
after location.
We have also entered into an
unconditional agreement to acquire
8,945m
2
of vacant land in Waimarie St,
St Heliers, Auckland which has wide
views over Auckland's harbour.
Our People
In July we implemented the new pay
structure for healthcare assistants
announced by the Government as part
of the equal pay settlement which
recognises the incredible contribution
our people make to caring for the elderly.
The increase in wage cost is in line with
our forecast for 2018.
As part of our ongoing commitment
to building the competencies of our
people, our new Step Up learning and
development programme for Leaders
has had a number of facility managers
complete the course so far this year.
Caring for the safety of our teams is just
as important as caring for our residents.
Our new moving and handling training
programme continues to be a focus
along with our injury management
processes.
Interim Dividend
The Board has declared an interim
dividend of $12.7m, or 2.1 cents per share
(not imputed), to be paid on 20 February
2018. The record date for entitlement is
13 February 2018.
The Sands, Auckland
Yours sincerely
Elizabeth Coutts
Chair, Oceania Healthcare Limited
Earl Gasparich
Chief Executive Officer
Melrose Village, Tauranga
11
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Directors’ Report
30 November 2017
The Board has pleasure in presenting the interim report of Oceania Healthcare
Limited and its subsidiaries, incorporating the consolidated interim financial
statements and the independent review report, for the six months ended
30 November 2017.
The Board of Directors of the Company authorised these consolidated interim
financial statements for issue on 25 January 2018.
The consolidated interim financial statements are unaudited.
For and on behalf of the Board
Elizabeth Coutts
Chairman
Hugh William FitzSimons
Director

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Consolidated Balance Sheet
As at 30 November 2017
$’000 Notes
Unaudited
30 Nov 2017
Audited
31 May 2017
Unaudited
30 Nov 2016
1
Assets
Cash and cash equivalents6,24810,8612,127
Trade and other receivables15,13411,30211,656
Property, plant and equipment
3.3
279,154267,972244,544
Investment property
3.1
681,261611,016562,944
Intangible assets17,33517,05317,329
Total assets999,132918,204838,600
Liabilities
Trade and other payables27,71927,48023,576
Derivative financial instruments420283-
Deferred management fee
3.2
18,84519,53418,890
Refundable occupation right agreements
3.2
290,781282,904266,695
Borrowings
4.3
123,81095,242275,764
Deferred tax liabilities
5.1
26,65324,80829,709
Total liabilities488,228450,251614,634
Net assets510,904467,953223,966
Equity
Contributed equity
4.1
579,498579,498372,633
Retained deficit(153,366)(195,966)(218,947)
Reserves84,77284,42170,280
Total equity510,904467,953223,966
The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.
1
The 30 November 2016 deferred tax liabilities have been restated. Refer to note 5.1(iv) for details.
Consolidated Statement of Comprehensive Income
For the six months ended 30 November 2017
$’000 Notes
Unaudited
Six months
30 Nov 2017
Unaudited
Six months
30 Nov 2016
1
Operating revenue90,20787,771
Change in fair value of investment property
3.1
34,14732,646
Other income 1,916 1,455
Total income126,270121,872
Employee benefits54,476 51,446
Depreciation and amortisation4,0623,774
Finance costs1,44810,074
Impairment of property, plant and equipment
3.3
(1,118)3,179
Other expenses22,99122,471
Total expenses81,85990,944
Profit before income tax44,41130,928
Income tax expense
5.1
1,890 8,956
Profit for the period 42,52121,972
Other comprehensive income
Items that will not be subsequently reclassified
to profit and loss
Gain on revaluation for the period net of tax
3.3
370 1,881
Items that may be subsequently reclassified
to profit and loss
Movement in interest rate swap net of tax(19)-
Other comprehensive income for the period net of tax
3511,881
Total comprehensive income for the period attributable to
shareholders of the parent42,87223,853

Basic earnings per share (cents per share)
4.2
7.06.5
Diluted earnings per share (cents per share)
4.2
7.06.5
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the
accompanying notes.
1
The 30 November 2016 income tax expense and, as a result, earnings per share have been restated.
Refer to note 5.1(iv) for details.

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Consolidated Cash Flow Statement
For the six months ended 30 November 2017
$’000
Unaudited
Six months
30 Nov 2017
Unaudited
Six months
30 Nov 2016
Cash flows from operating activities
Receipts from residents for membership fees, village and care fees 78,52181,519
Payments to suppliers and employees(76,070)(74,650)
Receipts from new occupation right agreements34,41131,345
Payments for outgoing occupation right agreements(18,550) (16,685)
Interest received72 62
Interest paid(1,325) (8,801)
Net cash inflow from operating activities17,05912,790
Cash flows from investing activities
Proceeds from sale of property, plant and equipment and
investment property165-
Payments for property, plant and equipment and intangible assets(14,278) (8,698)
Payments for investment property and investment property
under development(34,645) (21,026)
Net cash inflow from investing activities(48,758) (29,724)
Cash flows from financing activities
Proceeds from borrowings44,81231,644
Repayment of borrowings(17,726) (16,687)
Net cash inflow from financing activities27,08614,957
Net decrease in cash and cash equivalents(4,613) (1,977)
Cash and cash equivalents at the beginning of the period10,861 4,104
Cash and cash equivalents at end of period6,2482,127
The above Consolidated Cash Flow Statement should be read in conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity
For the six months ended 30 November 2017
$’000 Notes
Contributed
equity
Retained
deficit
Asset
revaluation
reserve
Interest
rate swap
reserve
Total
equity
Balance at 1 June 2016 (audited)372,633(240,988)68,399-200,044
Profit for the period
1
-21,972--21,972
Other comprehensive income
Revaluation of assets net of tax
3.3- -1,881-1,881
Total comprehensive income- 21,9721,881-23,853
Transactions with owners
Employee share scheme
4.1
-69--69
Total transactions with owners-69- -69
Balance as at 30 November
2016 (unaudited) 372,633(218,947)70,280-223,966
Balance at 1 June 2017 (audited)579,498(195,966)84,603(182)467,953
Profit for the period - 42,521 - -42,521
Other comprehensive income
Revaluation of interest rate swaps
net of tax---(19)(19)
Revaluation of assets net of tax
3.3 - -370-370
Total comprehensive income - 42,521370(19)42,872
Transactions with owners
Employee share scheme
4.1-79--79
Total transactions with owners-79 - -79

Balance as at 30 November
2017 (unaudited)579,498(153,366)84,973(201)510,904
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying
notes.
1
The 30 November 2016 profit for the period has been restated. Refer to note 5.1(iv) for details.

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Notes to the Interim Financial Statements
For the six months ended 30 November 2017
1. General Information
1 General Information Page
1.1 Basis of Preparation 20
1.2 Accounting Policies 22

2 Operating Performance
2.1 Operating Segments 23

3 Property Assets
3.1 Investment Property 28
3.2 Refundable Occupation Right Agreements 34
3.3 Property, Plant and Equipment 35

4 Shareholders‘ Equity and Funding
4.1 Shareholder Equity and Reserves 37
4.2 Earnings Per Share 39
4.3 Borrowings 40

5 Other Disclosures
5.1 Income Tax 41
5.2 Contingencies and Commitments 45
5.3 Events After Balance Date 45
Consolidated Cash Flow Statement (Continued)
For the six months ended 30 November 2017
Reconciliation of profit after income tax to net cash inflow from operating activities
$’000 Notes
Unaudited
Six months
30 Nov 2017
Unaudited
Six months
30 Nov 2016
Profit after income tax for the period42,52121,972
Non cash items
Deferred management fee accrued but not settled(9,554)(8,166)
Depreciation and amortisation4,062 3,774
Impairment of goodwill - 303
Net gain on disposal of property, plant and equipment- (3)
Fair value adjustment to investment property
3.1
(34,147)(32,646)
(Reversal of Impairment) / impairment of property, plant
and equipment
3.3(1,118)3,179
Bad and doubtful debt (benefit) (152) (14)
Interest charged but not paid112 1,308
Residents share of resale gains511 666
Movement in deferred tax
5.11,8908,956
Other non cash items 196 (567)
(38,200)(23,210)
Cash items
Receipts from new occupation right agreements34,41131,345
Payments for outgoing occupation right agreements(18,550)(16,685)
15,86114,660
Increase in operating assets and liabilities
(Increase) / decrease in trade and other receivables(3,969)524
Increase / (decrease) in trade and other payables846 (1,156)
Net cash inflow from operating activities17,05912,790
The above Consolidated Cash Flow Statement should be read in conjunction with the accompanying notes.

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Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
1.1. Basis of Preparation (Continued)
The consolidated interim financial statements do not include all the notes of
the type normally included in the consolidated annual financial statements.
Accordingly, these consolidated interim financial statements are to be read in
conjunction with the consolidated annual financial statements for the year
ended 31 May 2017, prepared in accordance with New Zealand Equivalents to
International Financial Reporting Standards (‘NZ IFRS’).
The consolidated interim financial statements for the six months ended
30 November 2017 and comparatives for the six months ended 30 November
2016 are unaudited. The consolidated financial statements for the year ended
31 May 2017 were audited and form the basis for the comparative figures for
that period in these statements. They are presented in New Zealand dollars
which is the Group‘s presentational currency.
Where a change has been made to the presentation of the consolidated
financial statements to that used in prior periods, comparative figures have
been restated accordingly. A change in presentation has been made to the
income tax note to separately disclose the reconciliation of current tax and
deferred tax to provide clearer disclosure to the reader. Refer to note 5.1.
Where necessary, certain comparative information has been restated to
reflect the tax impact of a reclassification of certain depreciable property
assets. Refer to note 5.1(iv) for details.
The consolidated financial statements have been prepared in accordance
with the going concern basis of accounting, which assumes that the Group
will be able to realise its assets and discharge its liabilities in the normal
course of business as they come due into the foreseeable future.
(iii) Key estimates and judgements
The preparation of financial statements in conformity with IAS 34 and NZ IAS 34
requires the use of certain critical accounting estimates. It also requires
management to exercise their judgement in the process of applying the
Group‘s accounting policies.
The Group makes estimates and assumptions concerning the future. The
resulting accounting estimates will, by definition, seldom equal the related
actual results. Estimates and judgements are continually evaluated and are
based on historical experience and other factors, including expectations of
future events that are believed to be reasonable under the circumstances.
1. General Information
1.1. Basis of Preparation
(i) Entities reporting
The interim financial statements of the ‘Consolidated’ or ‘Group’ entity are
for the economic entity comprising Oceania Healthcare Limited and its
subsidiaries, together ‘the Group’. Refer to the 31 May 2017 annual report
for details of the Group structure.
The consolidated interim financial statements incorporate the assets and
liabilities of all subsidiaries of Oceania Healthcare Limited as at 30 November
2017 and the results of all subsidiaries for the six months then ended.
The Group owns and operates various rest homes and retirement villages
around New Zealand. The Group’s registered office is Affinity House,
2 Hargreaves Street, St Mary‘s Bay, Auckland 1011, New Zealand.
The consolidated entity is designated as a profit oriented entity for financial
reporting purposes.
(ii) Statutory base
Oceania Healthcare Limited is a limited liability company which is domiciled
and incorporated in New Zealand. It is registered under the Companies Act
1993 and is a FMC Reporting Entity in terms of Part 7 of the Financial Markets
Conduct Act 2013. The Company is also listed on the NZX Main Board (‘NZX’)
and the Australian Securities Exchange (‘ASX’) as a foreign exempt listing.
The Group financial statements have been prepared in accordance with the
requirements of the NZX and ASX listing rules, and Part 7 of the Financial
Markets Conduct Act 2013.
The Group interim financial statements have been prepared in accordance
with New Zealand Generally Accepted Accounting Practice (‘NZ GAAP’). They
comply with New Zealand Equivalent to International Accounting Standard 34
(‘NZ IAS 34’) and International Accounting Standard 34 Interim Financial
Reporting (‘IAS 34’).
The accounting policies that materially affect the measurement of the
Statement of Comprehensive Income, Balance Sheet and the Cash Flow
Statement have been applied on a basis consistent with those used in the
audited financial statements for the year ended 31 May 2017.
Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017

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Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
2. Operating Performance
2.1. Operating Segments
The Group‘s chief operating decision-maker is the Board of Directors.
The operating segments have been determined based on the information
reviewed by the Board of Directors for the purposes of allocating resources
and assessing performance. The assets and liabilities of the Group are reported
to the chief operating decision-maker in total and are not allocated by
operating segment.
The Group comprises two segments, care operations and village operations,
and operates in New Zealand. There have been no changes to the segments
from those disclosed in the 31 May 2017 financial statements.
Information regarding the operations of each reportable segment is included
below. Amongst other criteria, performance is measured based on segmental
underlying earnings before interest, tax, depreciation and amortisation
(‘EBITDA’); being the most relevant measure in evaluating the performance of
segments relative to other entities that operate within the aged care and
retirement village industries.
Additional segmental reporting information
Capital expenditure: Refer to notes 3.1 and 3.3 for details on capital
expenditure. Chattels, freehold land and buildings, including related property
held for development, classified as property, plant and equipment principally
relate to care operations. Investment property assets principally relate to village
operations. Capital expenditure on intangibles and other property, plant and
equipment are unallocated to these segments.
Goodwill: Goodwill is allocated to Care Cash Generating Units.
Underlying Profit: Underlying Profit is a non-GAAP measure used by the Group
to monitor financial performance and determine dividend distributions.
Underlying measures require a methodology and a number of estimations
to be approved by Directors in their preparation. Both the methodology and
the estimations may differ among companies in the retirement village sector
that report underlying financial measures. Underlying profit is a measure of
financial performance and does not represent business cash flow generated
during the period.
1.1. Basis of Preparation (Continued)
The areas involving a higher degree of judgement or complexity, or areas
where assumptions and estimates are significant to the financial statements
are disclosed in the following notes:
– Fair value of investment property and investment property under
development (note 3.1)
– Classification of accommodation with a care or service offering
(notes 3.1 and 3.3)
– Fair value of freehold land and buildings (note 3.3)
– Revenue recognition of deferred management fee (refer 31 May 2017
annual report note 3.2)
– Recognition of deferred tax (note 5.1).
1.2. Accounting Policies
(i) New and amended standards adopted by the Group
There are no new standards or amendments to existing standards effective
for the financial period ended 30 November 2017.
(ii) Measurement of fair value
The Group classifies its fair value measurement using the fair value hierarchy
that reflects the significance of the inputs used in making the measurements.
The fair value hierarchy has the following levels.
Level 1: Quoted prices (unadjusted) in active markets for the identical assets
or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
Level 3: Inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
The carrying amount of all financial assets and liabilities is considered to
approximate to their fair value.
Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017

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Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
2.1. Operating Segments (Continued)
– An apportionment of land value based on the gross floor area of the ORA
units and care suites developed. The value for Brownfield
2
development land
is the estimated fair value of land at the time a change of use occurred
3
(from
operating as a care facility or retirement village to a development site), as
assessed by an external independent valuer. Greenfield
4
development land
is valued at historical cost; and
– Capitalised interest costs to the date of project completion apportioned
using the gross floor area of ORA units and care suites developed.
Development costs do not include:
– Construction, land (apportioned on a gross floor area basis) and interest
costs associated with common areas and amenities or any operational or
administrative areas.
The Directors‘ estimate of development margin for conversions is calculated
based on the difference between the ORA licence payment received on the
settlement of sales of newly converted ORA units and care suites and the
associated conversion costs. Conversion costs comprise:
– In the case of conversion of care beds to care suites, the actual
refurbishment costs incurred; and
– In the case of conversions of rental units to ORA units, the actual
refurbishment costs incurred and the fair value of the rental unit prior
to conversion.
2
Brownfield land refers to land previously utilised by, or part of, an operational aged care facility or retirement
village.
3
The timing of a change of use is a Directors‘ estimate. It is based on a range of factors including evidence of
steps taken to secure a resource consent and/or building consent for a particular development or stage of a
development and the decommissioning of existing operations (either through the buy-back of existing village
ORA units or decommissioning of an existing care facility). Note the cost of buybacks is not included in the
development cost as an independent fair value of the land on an unencumbered basis is used as the value
ascribed to the development land.
4
Greenfield land refers to land not previously utilised by, or as part of, an operational aged care facility or
retirement village. Greenfield land is typically bare (undeveloped) land at the time of purchase.
Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
2.1. Operating Segments (Continued)
Oceania calculates Underlying Profit by making the following adjustments
to Net Profit after Tax:
– Removing the change in fair value of investment properties and any
impairment or reversal of impairment of property, plant and equipment;
– Removing any impairment of goodwill;
– Removing any loss on disposal of chattels from the decommissioning of
development sites;
– Adding back the Directors‘ estimate of realised gains on occupation right
agreement (‘ORA’) units and care suites
1
;
– Adding back the Directors‘ estimate of realised development margin on the
cash settlement of the first sale of new ORA units or care suites following the
development, or conversion of an existing care bed to a care suite or
conversion of a rental unit to an ORA unit; and
– Adding back the deferred taxation component of taxation expense so that
only current tax expense is reflected.
Resale gain
The Directors‘ estimate of realised gains on resales of ORA units and care suites
is calculated as the net cash flow received by the Group on the cash settlement
of the resale of pre-existing ORAs (i.e. the difference between the ORA licence
payment received from the incoming resident and the ORA licence payment
previously received from the outgoing resident).
Development margin
The Directors‘ estimate of realised development margin is calculated as the
cash received on settlement of the first sale of new ORA units and care suites
less the development costs associated with developing the ORA units and
care suites. The development costs include:
– Construction costs directly attributable to the relevant project, including
any required infrastructure (e.g. roading) and amenities related to the units
(e.g. landscaping) as well as any demolition and site preparation costs
associated with the project. The costs are apportioned between the ORA
units and care suites, in aggregate, using estimates provided by the project
quantity surveyor. The construction costs for the individual ORA units or care
suites sold are determined on a prorated basis using gross floor areas of the
ORA units and care suites;
1
Units and care suites sold under an Occupation Right Agreement.

1
The 30 November 2016 income tax expense has been restated. Refer to note 5.1(iv) for details.
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Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
2.1. Operating Segments (Continued)
$’000
Care
Operations
Village
OperationsOtherTotal
Six months ended 30 November 2016
unaudited
Operating revenue77,76210,009 - 87,771
Other income3674575691,393
Revaluation of investment property - 32,646 - 32,646
Total income78,12943,112569121,810
Operating expenses(59,843)(5,749)(8,139)(73,731)
Impairment of goodwill (186)- - (186)
Impairment of property, plant and
equipment
(3,179)
- - (3,179)
Segment EBITDA14,92137,363(7,570)44,714
Interest income-65662
Finance costs - - (10,074)(10,074)
Depreciation and amortisation (3,489) - (285)(3,774)
Profit before income tax11,43237,369(17,873)30,928
Taxation benefit / (expense)
1
77(9,961)928(8,956)
Profit for the period attributable
to shareholders11,50927,408(16,945)21,972
Adjusted for underlying profit items
Add / (Less): Change in fair value of
investment property and impairment of
property, plant
and equipment3,179(32,646)-(29,467)
Add: Impairment of goodwill186--186
Add: Realised gain on resale-6,429-6,429
Add: Realised development margin-944-944
Underlying net profit before tax14,8742,135(16,945)64
Add: Deferred tax (benefit) / expense
1
(77)9,961(928)8,956
Underlying net profit after tax14,79712,096(17,873)9,020
Less: Interest income-(6)(56)(62)
Add: Finance costs--10,07410,074
Add: Depreciation and amortisation3,489-2853,774
Underlying EBITDA18,28612,090(7,570)22,806
Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
2.1. Operating Segments (Continued)
$’000
Care
Operations
Village
OperationsOtherTotal
Six months ended 30 November 2017
unaudited
Operating revenue79,26010,947-90,207
Other income6715895841,844
Revaluation of investment property-34,147-34,147
Total income79,93145,683584126,198
Operating expenses(63,523)(5,957)(7,987)(77,467)
Reversal of impairment of property, plant
and equipment1,118--1,118
Impairment of goodwill----
Segment EBITDA17,52639,726(7,403)49,849
Interest income296172
Finance costs - - (1,448)(1,448)
Depreciation and amortisation(3,796) - (266)(4,062)
Profit before income tax13,73239,735(9,056)44,411
Taxation (expense) / benefit(1,553)1,104(1,441)(1,890)
Profit for the period attributable
to shareholders12,17940,839(10,497)42,521
Adjusted for underlying profit items
Less: Change in fair value of investment
property and reversal of impairment of
property, plant and equipment(1,118)(34,147)-(35,265)
Add: Impairment of goodwill----
Add: Loss on disposal of chattels at
decommissioned sites----
Add: Realised gain on resale-6,664-6,664
Add: Realised development margin-4,078-4,078
Underlying net profit before tax11,06117,434(10,497)17,998
Add: Deferred tax expense / (benefit)1,553(1,104)1,4411,890
Underlying net profit after tax12,61416,330(9,056)19,888
Less: Interest income(2)(9)(61)(72)
Add: Finance costs--1,4481,448
Add: Depreciation and amortisation3,796-2664,062
Underlying EBITDA16,40816,321(7,403)25,326

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Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
3.1. Investment Property (Continued)
Investment property includes both freehold land and buildings and land and
buildings under development, comprising independent units, certain care
suites, serviced apartments and common facilities, provided for use by
residents under the terms of an ORA. Investment property is held for long-term
yields and is not occupied by the Group.
Completed investment property
The fair value of completed investment property is based on an industry
accepted valuation model applied to the expected future cash flows to derive
a net present value.
As required by NZ IAS 40 ‘Investment Property’, the fair value as determined
by the independent valuer is adjusted for assets and liabilities already
recognised in the Balance Sheet which are also reflected in the discounted
cash flow model.
CBRE Limited performed a ‘roll forward’ of the valuation of completed
investment property that was completed at 31 May 2017 for the period from
1 June 2017 to 31 October 2017 for all sites. This involved the Group confirming
the movements in the sales, resales and repurchases of ORA‘s during the
period, an assessment by the valuer of the general market conditions and the
impact of the changes, where appropriate, in the completed value of
investment properties. The ‘roll forward’ provides an assessment by the valuer
of the financial impact of the changes for the five month period since the most
recent full valuation as at 31 May 2017. CBRE Limited, independent registered
valuers and associates of the New Zealand Institute of Valuers, will perform a
full valuation for the year ended 31 May 2018.
The CBRE Limited valuation is reviewed by management for accuracy of inputs
and reasonableness of assumptions.
The CBRE Limited valuation has been adjusted by management for the impact
of any sales, resales and repurchase of ORA‘s between 1 November 2017 and
30 November 2017 to arrive at the fair value of completed investment
properties at 30 November 2017.
Based on information available the Directors do not expect a material valuation
movement in investment property under development in the interim period
and so no external valuation has been sought with relation to the 30 November
2017 balance date except as it relates to the Meadowbank facility where land
relating to the practically completed development has been valued and
transferred to completed investment property.
Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
3. Property Assets
3.1. Investment Property
$’000 Notes
Unaudited
30 Nov 2017
Audited
31 May 2017
Unaudited
30 Nov 2016
Investment property under
development at fair value
Opening balance79,48648,311 48,311
Transfer from property, plant and
equipment
3.3
37612,944 13,949
Capitalised expenditure32,72029,13112,301
Capitalised interest1,1342308
Disposals(57)--
Transfer within investment property(57,723) (14,915) (14,915)
Change in fair value during the period-3,7854,369
Closing balance55,93679,48664,023
Completed investment property at fair
value
Opening balance531,530447,560447,560
Transfer within investment property57,723 14,915 14,915
Transfer to property, plant and
equipment
3.3
- (2,981) -
Capitalised expenditure1,92518,4298,105
Capitalised interest-23265
Disposals-(1)(1)
Change in fair value during the period34,14753,37628,277
Closing balance625,325531,530498,921
Total investment property681,261611,016562,944
Change in Fair Value Recognised in the Statement of Comprehensive Income
$’000
Unaudited
30 Nov 2017
Unaudited
30 Nov 2016
Increase in fair value of investment property70,24567,073
Less: Transfers during the period(376) (13,949)
Less: Capitalised expenditure including capitalised interest(35,779)(20,479)
Plus: Disposals571
Change in fair value recognised in Statement of
Comprehensive Income34,14732,646

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Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
3.1. Investment Property (Continued)
Property specific assumptions
Seismic and weather tightness assessments
The CBRE Limited valuation, and accordingly the fair value of investment
property, incorporates the findings of independent seismic strength
engineering assessments conducted by MSC Consulting Group Ltd (‘MSC’),
based on visual inspections and by applying the guidelines recommended
by the New Zealand Society for Earthquake Engineering. The CBRE Limited
valuation also incorporates the estimated costs to address weather tightness at
certain sites. These estimated costs are based on management budgets which
utilise building condition reports completed by CoveKinloch New Zealand
Limited in February 2017. Based on further investigation and updated project
budgets these estimated costs have been reduced by $1.13m since 31 May 2017
in arriving at the 30 November 2017 valuation.
Key accounting estimates and judgements
Introduction
All investment properties have been determined to be Level 3 in the fair value
hierarchy as the fair value is determined using inputs that are unobservable.
Classification of accommodation with a care or service offering
Where services are provided to residents who occupy accommodation under
an ORA it is the Group‘s policy to look at how consequential, or significant,
these are in the context of the overall revenue/income derived from the
accommodation in ascertaining whether the accommodation is land and
buildings (referred to as property, plant and equipment) or investment
property. Whether the level of service provided is significant is an area
of judgement.
It is the Group‘s policy to review sites that provide accommodation that is
subject to an ORA and also incorporates a provision to receive services on
a case by case basis, where this type of accommodation is significant in the
context of the site‘s overall capacity.
Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
3.1. Investment Property (Continued)
Investment property under development
Investment property under development as at 30 November 2016 was valued
by CBRE Limited as a material movement from the 31 May 2016 value was
expected at that time.
The Group has applied the following methodology in relation to the measurement
of investment property under development as at 30 November 2017:
Practical completion not achieved
Where the development still requires substantial work such that practical
completion is not going to be achieved, and a reliable estimate of fair value
cannot be made, at or close to balance date, the fair value recognised is the fair
value of the development land as determined by CBRE Limited at 31 May 2017
plus the cost of any work in progress, an amount of $53.0m as at 30 November
2017 (31 May 2017: $32.2m, 30 November 2016: $15.3m), in relation to these
development sites. Any developments completed in the period have been
transferred to investment property.
Where an individual development is of both investment property and freehold
buildings in nature, the fair value of land is apportioned between investment
property under development and freehold land and buildings under
development, by applying the estimated gross floor area for these respective
areas of the development based on information obtained from external
Quantity Surveyors at the planning and design stages. Any work in progress
is allocated in line with the budgeted cost to build.
Practical completion achieved
Where a development is practically completed, or likely to be completed at,
or close to, balance date the investment property is transferred to completed
investment property and measured at its completed fair value as determined by
CBRE Limited with an adjustment made for any estimated costs, in accordance
with the project budget, to be incurred to complete the development.

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Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
3.1. Investment Property (Continued)
Other relevant information
The valuation of investment property is adjusted for cashflows relating to
refundable occupation licence payments, residents‘ share of resale gains and
management fee receivable recognised separately on the Balance Sheet and
also reflected in the valuation model.
A reconciliation between the valuation and the amount recognised on the
Balance Sheet as investment property is as follows:
$’000
Unaudited
30 Nov 2017
Audited
31 May 2017
Unaudited
30 Nov 2016
Completed investment property
Valuation339,639252,706 234,377
Plus: Refundable occupation licence payments326,617315,425298,783
Plus: Residents‘ share of resale gains9,5069,7708,790
Less: Management fee receivable(50,188)(46,150) (42,781)
Less: Resident obligations for units not included
in valuation (249)(221) (248)
625,325531,530 498,921
Investment property under development
Fair value of investment property under
development55,93679,486 64,023
55,93679,486 64,023
Total investment property at fair value681,261611,016562,944
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Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
3.1. Investment Property (Continued)
The Group applies the following principles when ascertaining the appropriate
accounting treatment to be applied:
Scenario Consideration of Significance of Cashflows Classification
Additional Services are
optional (whether or not
the unit is certified for
Aged Related Residential
Care (‘ARRC’)).
Qualitatively the business model is the
provision of retirement accommodation.
Investment
property
Services are compulsory
but an insignificant portion
of total revenue from
the unit.
Quantitatively insignificant (a guideline of
under 20% of total revenue is adopted) and
qualitatively the business model is the provision
of retirement accommodation.
Investment
property
Services are compulsory
and a significant portion of
the total revenue derived
from the unit.
Quantitatively significant. Qualitatively the
business model is the provision of care.
Property,
plant and
equipment
Full ARRC funded care
is compulsory for that
unit/bed.
Qualitatively the business model is the
provision of care. Quantitative assessment
not relevant as price of accommodation (and
therefore deferred management fee) does not
change overall purpose of the accommodation.
Property,
plant and
equipment
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Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
3.3. Property, Plant and Equipment
$’000
Freehold
Land
Freehold
Buildings
Freehold Land
and Buildings
Under
Development
Chattels and
Leasehold
ImprovementsTotal
At 30 Nov 2016 (unaudited)
Cost- - - 44,00344,003
Valuation69,765141,33918,393- 229,497
Accumulated depreciation
- - - (28,956)(28,956)
Net book amount
69,765 141,33918,39315,047244,544
At 31 May 2017 (audited)
Cost - - - 46,750 46,750
Valuation72,045153,46827,806 - 253,319
Accumulated depreciation
- - - (32,097)(32,097)
Net book amount
72,045153,46827,80614,653267,972
At 30 Nov 2017 (unaudited)
Cost---44,36644,366
Valuation73,245167,61824,078-264,941
Accumulated depreciation---(30,153)(30,153)
Net book amount73,245167,61824,07814,213279,154
Key accounting estimates and judgements
All land and buildings have been determined to be Level 3 in the fair value
hierarchy as the fair value is determined using inputs that are unobservable.
Valuation process and key inputs
The Group‘s land and buildings and land and buildings under development
were revalued on 31 May 2017 by independent registered valuers CBRE
Limited. CBRE Limited are appropriately qualified with experience of valuing
residential aged care and retirement village properties in New Zealand.
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Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
3.2. Refundable Occupation Right Agreements
$’000
Unaudited
30 Nov 2017
Audited
31 May 2017
Unaudited
30 Nov 2016
Village
Refundable occupation licence payments 326,617315,425 298,783
Residents share of resale gains9,5069,770 8,790
Less: Management fee receivable (per contract)(68,412)(64,856) (61,155)
267,711260,339246,418
Care Suites
Refundable occupation licence payments29,39028,285 24,475
Accommodation rebate610575 491
Less: Management fee receivable (per contract)(6,930)(6,295) (4,689)
23,07022,56520,277
Total refundable occupation right agreements290,781282,904266,695
The management fee receivable is recognised in accordance with the terms of
the resident‘s occupation right agreement.
Reconciliation of management fees recognised under IFRS and
per ORA terms
$’000
Unaudited
30 Nov 2017
Audited
31 May 2017
Unaudited
30 Nov 2016
Village
Management fee receivable (per contract)68,41264,85661,155
Deferred management fee(18,224)(18,706)(18,374)
Management fee receivable (per IFRS)50,18846,15042,781
Care Suites
Management fee receivable (per contract)6,9306,2954,689
Deferred management fee(621)(828)(516)
Management fee receivable (per IFRS)6,3095,4674,173
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Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
3.3. Property, Plant and Equipment (Continued)
The CBRE Limited valuation at 31 May 2017 incorporated the estimated costs to
address weather tightness at certain sites based on building condition reports
completed by CoveKinloch New Zealand Limited in February 2017. Based on
further investigation and updated project budgets the 31 May 2017 valuation
has been adjusted by management for the reduction in the estimated costs of
$1.68m since 31 May 2017 in arriving at the 30 November 2017 valuation.
Finance leases
The Group leases various equipment and motor vehicles under finance
lease agreements. The lease terms are between 3 and 6 years and have
a net book value as at 30 November 2017 of $5.8m (31 May 2017: $7.3m,
30 November 2016: $6.1m).
4. Shareholders’ Equity and Funding
4.1. Shareholder Equity and Reserves
Shares
Unaudited
30 Nov 2017
Audited
31 May 2017
Unaudited
30 Nov 2016
Share capital
Authorised, issued and fully paid up capital610,254,535610,254,535 340,213,420
Total contributed equity610,254,535610,254,535 340,213,420
Movements
Opening balance of ordinary shares issued610,254,535340,213,420 340,213,420
Subscription for shares (Oceania
Healthcare Holdings Limited)-13,712,002-
Subscription for shares (IPO)-253,164,557-
Shares issued for long term incentive plan-3,164,556-
Closing balance of ordinary shares issued610,254,535610,254,535 340,213,420
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Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
3.3. Property, Plant and Equipment (Continued)
The valuation comprises land, improvements, chattels and goodwill. The fair
value of land and buildings is determined by CBRE Limited based on the level
of rent able to be generated from the maintainable net cash flow of the facility
subject to average efficient management. Where a decrease in land and
buildings has been recognised below original cost this has been recognised
directly to the Statement of Comprehensive Income. The 31 May 2017
CBRE Limited valuation included $59.1m (31 May 2016: $51.6m) of goodwill.
An additional $2.0m has arisen as at 31 October 2017 on valuation of the
Meadowbank care suites. There is $17.0m (31 May 2016: $17.3m) of goodwill
recognised on acquisition included in these financial statements as an
intangible asset.
When the Group undertakes development of a new site the classification
between freehold land buildings and investment property is reviewed. For
sites with a care facility, including those with care suites, these properties are
classified as freehold land and buildings. For sites with a retirement village the
properties are classified as investment property. Refer to note ‎3.1 for further
information, including the principles applied by the Group in determining
the appropriate apportionment between freehold land, buildings and
investment property.
The Group‘s policy is to revalue all freehold land and buildings, including land
and buildings under development annually. If the Directors expect a material
valuation movement in the interim period a valuation is also sought at this time.
Based on information available the Directors do not expect a material valuation
movement in the interim period and so no external valuation has been sought
with relation to the 30 November 2017 balance date except as it relates to
the construction of new care suite units at the substantially completed
Meadowbank facility.
The fair value of freehold land and buildings, including land and buildings
under development was determined by CBRE Limited at 31 May 2017. This has
been adjusted for the cost of any additions or work in progress incurred, less
any disposals and depreciation recognised since 1 June 2017 to arrive at the
fair value of land and buildings and land and buildings under development at
30 November 2017. Chattels and leasehold improvements are carried at cost
less depreciation.
Freehold development land as at 30 November 2016 was valued by CBRE
Limited as a material movement from the 31 May 2016 value was expected at
that time.
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Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
4.1. Shareholder Equity and Reserves (Continued)
Asset revaluation reserve
The asset revaluation reserve is used to record the revaluation of freehold land
and buildings and land and buildings under development.
Interest rate swap reserve
The interest rate swap reserve is used to record gains or losses on instruments
used as cash flow hedges. The amounts are recognised in the Statement of
Comprehensive Income when the hedged transaction affects profit and loss.
4.2. Earnings per Share
Earnings per share
Basic
Basic earnings per share is calculated by dividing the profit after tax of the
Group by the weighted average number of ordinary shares outstanding
during the year.
$’000
Unaudited
30 Nov 2017
Unaudited
30 Nov 2016
Profit after tax ($’000)42,52121,972
1
Weighted average number of ordinary shares outstanding ('000s)604,359337,483
Basic earnings per share (cents per share)7.06.5
Diluted
Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares outstanding to assume conversion of all dilutive
potential ordinary shares. As at 30 Nov 2017 there were 1,820,515 shares with
a dilutive effect (31 May 2017: 910,257, 30 November 2016: nil).
$’000
Unaudited
30 Nov 2017
Unaudited
30 Nov 2016
Profit after tax ($’000)42,52121,972
1
Diluted weighted average number of ordinary shares
outstanding (
’000s)605,047337,483
Basic earnings per share (cents per share)7.06.5
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1
The 30 November 2016 profit for the period has been restated. Refer to note 5.1(iv) for details.
The impact on both basic and diluted EPS was a decrease of 0.1 cents per share.
Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
4.1. Shareholder Equity and Reserves (Continued)
$’000
Unaudited
30 Nov 2017
Audited
31 May 2017
Unaudited
30 Nov 2016
Share capital
Authorised, issued and fully paid up capital579,498579,498372,633
Total contributed equity579,498579,498372,633
Movements
Opening balance of ordinary shares issued579,498372,633372,633
Subscription for shares (Oceania
Healthcare Holdings Limited)-14,398-
Subscription for shares (IPO)-200,000-
Capitalised costs on IPO-(7,533)-
Closing balance of ordinary shares issued579,498579,498372,633
Ordinary shares are classified as equity. Incremental costs directly attributable
to the issue of new shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
All ordinary shares are authorised and rank equally with one vote attached to
each fully paid ordinary share. The shares have no par value.
Recognition and measurement
None of the above issued shares are held by the Company or its subsidiaries
with the exception of shares issued to OCA Employees Trustee Limited, a
subsidiary, on behalf of Oceania employees in relation to a Long Term Incentive
Plan (‘LTIP’).
A total of 5,895,329 shares issued to OCA Employees Trustee Limited and
certain members of the Senior Management Team in respect of the LTIP are
classified as Treasury Shares as the Company has a beneficial interest in the
shares until the vesting conditions are met.
Dividends
On 25 January 2018 an interim dividend of 2.1 cents per share (not imputed)
was declared and will be paid on 20 February 2018 (31 May 2017: nil). The
record date for entitlement is 13 February 2018.
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5. Other Disclosures
5.1. Income Tax
$’000
Unaudited
30 Nov 2017
Unaudited
30 Nov 2016
Income tax expense
Current tax--
Deferred tax1,8908,956
1,8908,956
Taxation expense is calculated as follows:
Profit before income tax44,41130,928
Tax at the New Zealand tax rate of 28% 12,4358,660
Adjusted by the tax effect of:
Non-deductible impairment of goodwill
-52
Non-deductible expenditure88375
Capitalised interest deductible for tax(259)(24)
Non assessable revaluation of investment property(9,561)(9,141)
Taxable depreciation(1,862)(1,825)
Accounting depreciation1,0841,026
Non-assessable revaluation of fixed asset(313)890
Adjustment for timing difference of provisions(92)(183)
Other-(74)
Prior period adjustments-3
Losses (utilised) / recognised(1,520)241
Current tax expense
--
Impact of change to held for use for investment property-10,362
1
Impact of movements in investment property(1,098)(315)
Impact of movements in property, plant and equipment 1,311124
Other adjustments157204
Prior period adjustments-(600)
Losses utilised / (recognised)1,520(819)
Deferred tax expense1,8908,956
Income tax expense1,8908,956
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Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
1
The 30 November 2016 balances in respect of the tax effect of investment property and property, plant and
equipment have been restated. Refer to note 5.1(iv).
4.3. Borrowings
$’000
Unaudited
30 Nov 2017
Unaudited
30 Nov 2016
Secured
Bank loans118,55589,430
Capitalised loan costs(519)(627)
Finance leases5,7746,439
Total borrowings123,81095,242
Financing Arrangements
At 30 November 2017, the Group held committed bank facilities with drawings
as follows:
Nov-17May-17
$’000CommittedDrawnCommittedDrawn
General Corporate Facility60,00019,96560,00020,965
Development Facility175,00098,590175,000 68,465
Total235,000118,555235,00089,430
The Group’s revolving Development Facility is utilised to cover costs associated
with current development projects. The revolving General Corporate Facility
represents corporate debt supported by the cash flows of the business as well
as development land for projects not currently funded by the Development
Facility.
Interest on the General Corporate Facility is typically payable quarterly.
Interest on the Development Facility is capitalised and repaid together with
principal using the ORA licence proceeds received upon settlement of initial
sales of newly developed units and care suites. Line fees are payable quarterly
on the committed General Corporate Facility and the Committed Development
Facility.
Finance Lease
Finance lease liabilities relate to the lease of various equipment and motor
vehicles and are effectively secured as the rights to the leased asset revert to
the lessor in the event of default.
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Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017

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5.1. Income Tax (Continued)
Recognition and measurement
No income tax was paid or payable during the period.
Key accounting judgements
(i) Deferred tax on investment property
Deferred tax on investment property is assessed on the basis that the asset
value will be realised through use (‘Held for Use’).
An initial recognition exemption has been applied to newly developed village
sites in accordance with NZ IAS 12.
The Group’s ORA comprises two gross cash flows (being an ORA deposit upon
entering the unit and the refund of this deposit upon exit). In determining the
tax base of investment property, the Group considered whether taxable cash
flows are received at the end of the ORA period (i.e. upon refund of the ORA
deposit by way of set off on exit by a resident) or at the beginning of the ORA
period (i.e. at time of the receipt of the ORA deposit). The Group has carefully
evaluated all the available information and considers it appropriate to recognise
and measure the tax base and associated deferred tax based on the taxable
cash flows being receivable at the end of the ORA period as this best
represents the Group’s contractual entitlement.
Contractually, management fees are received upon refund of the ORA deposit
by way of set off on exit of a unit by a resident.
Should the taxable cash flows of investment property be treated as received
at the beginning of the ORA period an additional deferred tax liability of
$3.7m would be recognised on the Balance Sheet. An additional current
year tax expense of $3.7m and a corresponding reduction in net profit
after tax of $3.7m would also be recognised (31 May 2017: $3.1m,
30 November 2016: $3.2m).
Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
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5.1. Income Tax (Continued)
Movement in the deferred tax balance
$’000
Balance

1 June 2017
Recognised
in Income
Statement
Recognised
in Other
Comprehensive
Income
Balance

30 Nov 2017
(unaudited)
Investment property(12,179)1,098-(11,081)
Property, plant and equipment(19,126)(1,311)(72)(20,509)
Provisions and other assets / liabilities4,158(157)1174,118
Tax losses2,339(1,520)-819
Deferred tax liabilities(24,808)(1,890)45(26,653)
$’000
Balance

1 June 2016
Recognised
in Income
Statement
Recognised
in Other
Comprehensive
Income
Balance

31 May 2017
(audited)
Investment property(2,083)(10,096)-(12,179)
Property, plant and equipment(21,357)3,409(1,178)(19,126)
Provisions and other assets / liabilities2,2641,894-4,158
Tax losses -2,268712,339
Deferred tax liabilities(21,176)(2,525)(1,107)(24,808)
$’000
Balance

1 June 2016
Recognised
in Income
Statement
Recognised
in Other
Comprehensive
Income
Balance

30 Nov 2016
(unaudited)
1
Investment property(2,083)(10,047)
1
-(12,130)
Property, plant and equipment(21,357)428423(20,506)
Provisions and other assets / liabilities2,264(156)-2,108
Tax losses -819-819
Deferred tax liabilities(21,176)(8,956)423(29,709)
Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
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1
The 30 November 2016 balances in respect of the tax effect of investment property and property, plant and
equipment have been restated. Refer to note 5.1(iv).

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5.2. Contingencies and Commitments
As at 30 November 2017 the Group had no contingent liabilities or assets
(31 May 2017: nil, 30 November 2016: nil).
At 30 November 2017 the Group has a number of commitments to develop
and construct certain facilities totalling $103.0m (31 May 2017: $41.6m,
30 November 2016: $46.7m).
5.3 Events after Balance Date
On 15 December 2017 the Group entered into an unconditional agreement
to acquire 8,945m
2
of vacant land located at 14-22, 28 and 30 Waimarie Street,
St Heliers, Auckland.
On 25 January 2018 an interim dividend of 2.1 cents per share (not imputed)
was declared and will be paid on 20 February 2018. The record date for
entitlement is 13 February 2018.
There have been no other significant events after Balance Date.
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5.1. Income Tax (Continued)
(ii) Recognition of tax losses
The Group had not recognised any tax losses since the year ended 31 May
2014 in the Balance Sheet as, in prior reporting periods, the Directors
considered it would not be probable that the Group would utilise the tax losses
prior to any change of shareholding continuity. Relevant disclosures were made
in the respective financial statements.
After completing the IPO in May 2017 and following consideration of the
Group‘s capital structure and profitability forecasts, the Directors consider it
appropriate to recognise a portion of the Group‘s available tax losses to the
extent that these are expected to be utilised before any breach of shareholding
continuity, from a change in shareholding or other means of restructure, in
accordance with NZ IAS 12.
(iii) Recognition of Deferred Management Fee
The interpretation of NZ tax laws in relation to deferred management fees
involves significant judgements and uncertainty. Deferred management fees
are currently recognised for tax purposes consistent with the revenue
recognition policy as provided in the 31 May 2017 annual financial statements.
Consequently no deferred tax is recognised.
(iv) Update of 30 November 2016 comparatives
As disclosed in the Annual Report for the year ended 31 May 2017 in estimating
the income tax expense and deferred tax liability in the interim period to
30 November 2016, certain assets were classified incorrectly as depreciable
for tax purposes. As a result the deferred tax liability as at 30 November 2016
and, consequently, the income tax expense for the interim period ended
30 November 2016 were understated by $4.1m. The comparatives presented in
these interim financial statements have been corrected. There was no impact
on the cash flows or the underlying profit presented in the interim period to
30 November 2016.
The presentation of the November 2016 comparatives have also been updated
to align with the presentation adopted for November 2017.
Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017
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Notes to the Financial Statements (Continued)
For the six months ended 30 November 2017

Independent Review Report
To the shareholders of Oceania Healthcare Limited
Report on the interim financial statements
We have reviewed the accompanying interim financial statements of Oceania
Healthcare Limited (the Company) including its subsidiaries (together, the Group) on
pages 14 to 45, which comprise the consolidated balance sheet as at 30 November
2017, and the consolidated statement of comprehensive income, the consolidated
statement of changes in equity and the consolidated cash flow statement for the
period ended on that date, and selected explanatory notes.
Directors’ responsibility for the interim financial statements
The Directors are responsible on behalf of the Company for the preparation and
presentation of these interim financial statements in accordance with International
Accounting Standard 34 Interim Financial Reporting (IAS 34) and New Zealand
Equivalent to International Accounting Standard 34 Interim Financial Reporting (NZ
IAS 34) and for such internal controls as the Directors determine are necessary to
enable the preparation of interim financial statements that are free from material
misstatement, whether due to fraud or error.
Our responsibility
Our responsibility is to express a conclusion on the accompanying interim financial
statements based on our review. We conducted our review in accordance with the
New Zealand Standard on Review Engagements 2410 Review of Financial Statements
Performed by the Independent Auditor of the Entity (NZ SRE 2410). NZ SRE 2410
requires us to conclude whether anything has come to our attention that causes us to
believe that the interim financial statements, taken as a whole, are not prepared in all
material respects, in accordance with IAS 34 and NZ IAS 34. As the auditor of the
Company, NZ SRE 2410 requires that we comply with the ethical requirements
relevant to the audit of the annual financial statements.
A review of interim financial statements in accordance with NZ SRE 2410 is a limited
assurance engagement. The auditor performs procedures, primarily consisting of
making enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. The procedures
performed in a review are substantially less than those performed in an audit
conducted in accordance with International Standards on Auditing (New Zealand)
and International Standards on Auditing. Accordingly, we do not express an audit
opinion on these interim financial statements.
We are independent of the Group. Other than in our capacity as the auditor, we have
no relationship with, or interests in, the Group.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that
these interim financial statements of the Group are not prepared, in all material
respects, in accordance with IAS 34 and NZ IAS 34.
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our review
work has been undertaken so that we might state to the Company’s shareholders
those matters which we are required to state to them in our review report and for no
other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the shareholders, as a body, for our review
procedures, for this report, or for the conclusion we have formed.
For and on behalf of:
Chartered Accountants Auckland
25 January 2018
Independent Review Report (Continued)
To the shareholders of Oceania Healthcare Limited
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