Annual Report FY2018

ANNUAL REPORT 2018
Care & attention

Contents
02 Highlights & results
05 Letter from the Chair
06 Chief Executive Officer’s Report
11 Planning & execution
19 Experience & design
21 New & improved
23 Connected & involved
24 Board of Directors
26 Consolidated Financial Statements
33 Notes to the Consolidated Financial Statements
80 Independent Auditor's Report
87 Corporate Governance Statement
Today & tomorrow
Our focus and expertise in
care, along with the attention
we give to developing superior
services and facilities, is
delivering outstanding results.
01

Highlights & results
The $34.0m represents pro forma underlying net profit after tax which is a non GAAP
measure. It includes certain pro forma adjustments to the $13.4m figure presented in the
audited financial statements; including the change in capital structure after the Initial Public
Offering. These pro forma adjustments are in addition to the underlying adjustments outlined
in section 2.1 of the enclosed financial statements. Please refer to the Product Disclosure
Statement dated 31 March 2017 for the pro forma adjustments made to the audited financial
statements. No pro forma underlying net profit after tax was calculated for FY2016 in the
Product Disclosure Statement.
REPORTED NET PROFIT AFTER TAX
$
7 7.0M
+45.0%
Ahead of IPO forecast of $53.1m
+71.5%
Ahead of 2017 reported net profit after tax of $44.9m
TOTAL ASSETS
$
1.15B
UNDERLYING NET PROFIT AFTER TAX
$
52.1M
Financial
FY16FY17FY18 (F)FY18FY17FY18 (F)FY18
48.7
44.9
53.1
77.0
34.0
51.4
52.1
FY16FY17FY18 (F)FY18
0.8
0.9
1.0
1.1
Reported NPAT
$NZm
Pro forma Underlying EBITDA
$NZm
Total Assets
$NZb
FY16FY17FY18 (F)FY18FY17FY18 (F)FY18
48.7
44.9
53.1
77.0
34.0
51.4
52.1
FY16FY17FY18 (F)FY18
0.8
0.9
1.0
1.1
Reported NPAT
$NZm
Pro forma Underlying EBITDA
$NZm
Total Assets
$NZb
FY16FY17FY18 (F)FY18FY17FY18 (F)FY18
48.7
44.9
53.1
77.0
34.0
51.4
52.1
FY16FY17FY18 (F)FY18
0.8
0.9
1.0
1.1
Reported NPAT
$NZm
Pro forma Underlying EBITDA
$NZm
Total Assets
$NZb
FY16FY17FY18 (F)FY18FY17FY18 (F)FY18
48.7
44.9
53.1
77.0
34.0
51.4
52.1
FY16FY17FY18 (F)FY18
0.8
0.9
1.0
1.1
Reported NPAT
$NZm
Pro forma Underlying EBITDA
$NZm
Total Assets
$NZb
FY16FY17FY18 (F)FY18FY17FY18 (F)FY18
48.7
44.9
53.1
77.0
34.0
51.4
52.1
FY16FY17FY18 (F)FY18
0.8
0.9
1.0
1.1
Reported NPAT
$NZm
Pro forma Underlying EBITDA
$NZm
Total Assets
$NZb
FY16FY17FY18 (F)FY18FY17FY18 (F)FY18
48.7
44.9
53.1
77.0
34.0
51.4
52.1
FY16FY17FY18 (F)FY18
0.8
0.9
1.0
1.1
Reported NPAT
$NZm
Pro forma Underlying EBITDA
$NZm
Total Assets
$NZb
+1.3%
Ahead of IPO forecast of $51.4m
+53.1%
Ahead of 2017 underlying net profit after tax of $34.0m
+11.3%
Ahead of IPO forecast of $1.03b
+24.9%
Ahead of 2017 total assets of $918.2m
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2,8801 ,1 0 2
COMPLETED
Including 62 apartments
& 30 care suites at
Meadowbank (Auckland)
in February 2018.
SECURED
Resource consents at Lady
Allum in Auckland (137
apartments, 142 care suites),
Gracelands in Hastings (50
villas), Windermere in
Christchurch (68 apartments,
60 care suites).
ACQUIRED
Increase in development
pipeline of ~300 units and
care suites from land
acquired at Waimarie Street
(Auckland), land adjacent to
Eden Village (Auckland),
land adjacent to Elmwood
Village (Auckland).
UNDER
CONSTRUCTION
451 units and care suites
under construction at
Meadowbank and The
Sands (Auckland), The
BayView (Tauranga),
Trevellyn (Hamilton) and
Green Gables (Nelson).
+3.3%

Ahead of IPO forecast of 271
+37.9%

Ahead of 2017 total sales
UNIT SALES
NEW
UNITS
73
UNITS AND
CARE SUITES
131
RESALE
UNITS
101
UNITS AND
CARE SUITES
457
UNITS AND
CARE SUITES
451
UNITS AND
CARE SUITES
~
300
NEW CARE
SUITES
27
RESALE CARE
SUITES
79
TOTAL
SALES
280
CARE BEDSUNITS
Operational
Developments
03

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LETTER FROM THE CHAIR –––––––
In our second annual report since Oceania Healthcare
became a listed company, I am pleased to report
that your company has completed a successful year
exceeding forecast profit and made great progress with
the execution of our strategy to create long-term value.
In this ever-growing aged care sector, our strategy is to
be a leading provider of aged care rooms and suites
while also developing our portfolio of retirement village
units. This year we have completed construction of
92 units and care suites at Meadowbank, 25 villas at
Elmwood, Auckland, and 10 villas at Stoke, Nelson with
all these projects being delivered on time and on budget.
Construction of 81 care suites at The BayView (previously
Melrose, Tauranga) is on track for completion in October
this year, and progress is steady at The Sands (Auckland),
Trevellyn (Hamilton) and Green Gables (Nelson). These
development projects will deliver a significant boost to
our care suite offering.
With the acquisition this year of four properties in
Auckland and the advancement of plans at our other
premium Auckland sites, we announced in May 2018,
our total development pipeline has increased 34% since
our Initial Public Offering from 1,674 to over 2,100 units
and care suites. We will be enhancing our build rate from
200 units and care suites as declared at the time of the
IPO, to 300 units and care suites in the medium term.
Financial results
Net Profit after Tax increased by 71.5% to $77.0 million
compared with $44.9 million for the prior financial year
and exceeded IPO forecast by 45.0%.
Underlying Net Profit after Tax also increased by 53.1%
to $52.1 million compared with $34.0 million for the prior
financial year and also exceeded IPO forecast.
We have substantially increased our total assets due to
our significant capital development program, greenfield
acquisitions and revaluations with total assets valued at
$1,147.2 million as at 31 May 2018.
Our net debt was $150.8 million as at 31 May 2018 and
our gearing ratio remains prudent with net debt to net
debt plus equity of 22%.
We increased and extended our debt facilities in July
2018 to provide us with sufficient headroom and
flexibility to execute our development pipeline as and
when directors consider we are ready to proceed.
Directors have declared a final dividend of 2.6 cents
per share, taking full year dividends (non imputed) to
4.7 cents per share which represents 55 % of underlying
Net Profit after Tax.
Our people
We welcomed two new Directors this year, Sally Evans
and Greg Tomlinson, to broaden the skillset of our Board
and further assist us to create long term sustainable value
for our shareholders.
Once again we asked a great deal of our people this
year and they certainly delivered. I would like to thank
my fellow Directors, our Chief Executive, and the
management team and staff for their contribution to
the Company.
The Board and management of Oceania are focused on
building quality products and delivering exceptional
services that exceed the expectations of our residents.
We remain determined to provide a consistent and
reliable return on your investment and thank you for
putting your trust in us.
Yours sincerely,
Elizabeth Coutts
Chair, Oceania Healthcare Limited
0505

CHIEF EXECUTIVE OFFICER’S REPORT –––––––
Improvement & performance
It has been an exhilarating year at
Oceania Healthcare and we are
thrilled to have outperformed our
financial forecasts provided to
investors at the time of our IPO.
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Most importantly, we have proven our capability to
design, build, sell and operate premium aged care and
retirement village facilities that deliver industry-leading
returns. In particular, we are demonstrating our point of
difference through the weighting of our portfolio in care
and higher returns generated from our care suite product.
We know that the journey has really just begun, and with
the current brownfields pipeline of approximately seven
years of development ahead of us at an increased build
rate of 250-300 care suites and retirement village units
(61% of which already have resource consents in place),
we have a very tangible, profitable and high growth
future ahead.
There were many highlights over the year and I would like
to share just a few of them with you to show how much
has been going on at Oceania Healthcare.
Developments
At the time of our IPO we said that we would complete
97 retirement village units and 30 care suites in the
year to 31 May 2018 and we did that with Meadowbank
Stage 3, and the Elmwood villas in Auckland as well as
the Stoke villa development in Nelson, delivered on time
and on budget – an outstanding achievement given the
tight construction sector. Our ability to deliver these
projects according to forecast is testimony to the highly
skilled and experienced internal development team at
Oceania, which has 153 years construction and project
management experience between them. We believe our
model of “total ownership” of the development provides
the right balance between managing costs and mitigating
risk given the current market conditions. Mark Stockton,
our General Manager of Property, explains this concept
later on in this report.
It is also pleasing to receive the excellent feedback from
both residents, their families and investors as they visit
Meadowbank and recognise the significant emphasis on
design and construction quality of this Village, which is
notably higher than other surrounding offerings. Oceania
will be a brownfield developer for much of the medium-
term future, and our designs reflect the local communities
in which we operate. While we are increasingly
standardising our layouts and internal configurations to
extract construction efficiencies, our designs are certainly
not “cookie-cutter”, as evidenced by the quite stunning
look of The Sands which is well advanced on the
foreshore of Browns Bay on the North Shore of Auckland.
In addition to the completion of Meadowbank Stage 3,
and Elmwood and Stoke villa developments during the
year, our development team commenced construction of
Stage 1 at The BayView in Tauranga (formerly Melrose),
Trevellyn in Hamilton and Green Gables in Nelson. These
substantial new aged care buildings are being
constructed adjacent to existing (operating) facilities.
Stage 4 at Meadowbank also commenced comprising a
further 49 premium retirement village apartments and 34
care suites. With these four projects now well underway
and The Sands progressing well, we have 451 units and
care suites under construction with 272 of these expected
to be completed within the next financial year. This is a
significant increase to the IPO forecast.
We announced in early May 2018 that our total
development pipeline had increased by 34% since the
IPO (from 1,674 to over 2,100 units and care suites)
because of new land acquisitions in Auckland over the
past year and advancing plans to redevelop our other
premium Auckland sites. The acquisition of Waimarie
We have delivered you 54% growth in underlying earnings, distributing
dividends of 4.7 cents per share at a yield of 4.2%* and driven substantial
improvements in the business over the past year.
*
Dividend yield of 4.2% based on a share price of $1.12 as at 13 July 2018.
0707

Street was a highlight as this site is located in the suburb
of St Heliers in Eastern Auckland, with panoramic views
of the Waitemata Harbour and the city skyline. We have
subsequently secured ownership of several neighbouring
properties which has increased the total site size from
8,945m
2
to 13,464m
2
, and our plan to develop a premium,
integrated aged care and retirement village development
on this site is progressing well.
As well as proving our internal capability to deliver new
developments, we already have resource consents in
place for 1,303 units and care suites (61%) of our total
2,129 pipeline. This substantially de-risks future build
volume and enables us to effectively arrange resources
and stage projects to manage development debt.
Resource consents were obtained across three facilities
comprising 457 units and care suites over the year and
the team are working on consent applications for a
further five sites in the balance of the pipeline.
Care
Aged care is our core competency; our roots are steeped
in this business and we are market leaders in the delivery
of excellent clinical care. We have a comparatively higher
mix of hospital level care beds in our portfolio compared
to other operators and are continuously innovating in
both service delivery and product offering. This was
proven once again during the past year with Oceania
Healthcare winning the Overall Excellence in Aged Care
Award at the New Zealand Aged Care Association
Conference for the third year in the row. Our “I love
Music” programme, delivering personalised music
playlists to residents according to their individual
preferences, was judged the most innovative in our
category. The resident testimonies from this programme
are both moving and heart-warming and you can watch
some of these on our website.
Care suites are at the core of our growth strategy in
aged care, with these premium, certified beds capable
of delivering both rest home and hospital level care to
our residents. This enables residents to remain in the
same room throughout all care levels, with care being
subsidised if the resident’s assets are below the
Government threshold. This full-service capability
sets care suites apart from serviced apartments in the
sector, which are generally independent living units only
capable of delivering low level care services and many
are non-certified.
As we recycle our capital by selling care suites under
occupation right agreements, we realise a deferred
management fee at the end of the tenure whilst also
generating aged care earnings during the tenure by
delivering care services into the room. This innovative
product provides the returns required to justify an
investment in aged care and meet the significant increase
in demand that will be coming as the population ages.
This wave of new generation residents is growing and they
are demanding so much more than traditional rest homes
have provided. Oceania Healthcare’s aged care growth
strategy will deliver the superior product and services
demanded by these customers. In addition to the
premium rooms and common areas at our new
Meadowbank care centre that opened in February, we
began rolling out our new service delivery model.
Residents are experiencing never seen before choices–
food to order by our executive chef, Chris Eickhoff, a guest
services coordinator and a concierge services team. This is
just the beginning of the transformation of our aged care
business as we build over 800 new care suites over
approximately seven years in Auckland (The Sands,
Meadowbank, Lady Allum, Waimarie Street, and Elmwood),
Tauranga (The BayView), Hamilton (Trevellyn), Nelson
(Green Gables), and Christchurch (Windermere) and many
other sites making up the current development pipeline.
We undertook a thorough review of our aged care
portfolio during the past year and assessed the
opportunity to enhance returns at each facility. We are
proud to be a substantial nationwide provider of aged
care services and deliver care in metropolitan locations as
well as in the regions. Having a diversified national
spread of sites has considerable benefits both in terms of
scale of operations and diversifying geographical risk.
As well as new aged care redevelopments across the
brownfields pipeline, our aged care portfolio review
identified an opportunity to strategically reposition
several sites by reconfiguring internal layouts to bring the
product up to a superior standard and then selling these
rooms as care suites, recovering our capital invested in
the process. These sites are operating in locations with
strong market fundamentals and future growth prospects,
and by undertaking the refurbishments we improve
earnings through both higher occupancy and deferred
management fees accrued following the sale of the ORA.
We have proven the success of this process at several
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sites throughout the country over the past five years with
approximately 70% of our current care suites being
conversions from older room configurations.
Upon completion of our current brownfield development
pipeline and site upgrades, approximately 62% of our
aged care offering will be in premium rooms (sold as care
suites or with a premium accommodation charge), with
the balance operated as standard rooms under the
traditional Government-funding model.
The portfolio review also identified a small number
of facilities that were not suitable for upgrade or
redevelopment, and hence do not fit within our future
aged care plans. These sites are currently in the process
of being divested.
Delivering our new aged care redevelopments and
repositioning the portfolio demonstrates a clear growth
strategy in aged care, and as we embark on further
executing this plan over the coming year we will be able
to generate greater returns from this core competency.
Our people
We are a large employer across multiple locations, and
we are determined that we not lose sight of the personal
significance of the work that we do with our residents on
a 24~7 basis. As I meet with our staff they tell me “I was
born to do this job”, “our work is incredibly special, you
need to have a heart for it”, and “this is far more than
a job, it’s a calling”. With this level of commitment and
sheer passion for doing a good job, I know our staff will
continue to deliver great service to our residents.
Our healthcare assistants received a well-deserved wage
increase last year through the Government’s Equal Pay
settlement and a significant shift took place in the
workforce as numbers of staff at the highest level of
qualification for this category of workers increased
dramatically. We are providing career pathways to a
higher number of staff than ever before with upskilling
happening both through industry qualifications and our
own Oceania learning and development programmes.
We have also invested significantly in leadership training
for our facility managers, clinical leaders and we will be
rolling out a similar programme for other emerging
leaders in the Company. I am a strong believer that when
our staff are led well, they become more aligned to our
vision and values, work together better in teams and
enjoy greater results.
We also enhanced our health and safety training and
support programmes across the country last year and in
doing so halved our injury rates. Our staff know that we
place a strong emphasis on safety and it is very pleasing
to have achieved such significant strides forward.
Outlook
It is extremely satisfying to have delivered on our
forecasts and be well on our way to executing our growth
strategy. Our team is focused on delivering consistent
year on year growth as we build, sell and operate great
new facilities across the country. We currently have
approximately seven years of development ahead of us
on our brownfields pipeline, which represents a very
tangible growth pathway, and a proven team to deliver
results.
We are innovative and know our residents well. Our new
care model will be transformational and our product
world-class. I am excited for our future and look forward
to continuing to produce outstanding results across all
facets of our business next year.
Yours sincerely
Earl Gasparich
Chief Executive Officer
09

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Planning & execution
With five sites currently under
construction, 61% of our brownfields
sites currently consented and the
recent acquisition of four new sites,
we are well on track to bring our
care and expertise to over
5,400 residents.
11

Locations
Oceania site locations
At a glance ––––––
~2,750
STAFF
~3,500
RESIDENTS
26
EXISTING FACILITIES WITH
MATURE OPERATIONS
22
EXISTING FACILITIES WITH
BROWNFIELD DEVELOPMENTS
(CURRENT AND PLANNED)
3
UNDEVELOPED SITES
51
TOTAL SITES
AS AT 31 MAY 2018
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Land acquisitions
View Road
Mt Eden, Auckland
Village Expansion
Waimarie Street
St Heliers Bay, Auckland
New Development
Hill Road
The Gardens, Auckland
Village Expansion
13

At a glance ––––––
STATUS
STAGE 3 COMPLETED FEBRUARY 2018
STAGE 4 UNDER CONSTRUCTION
Meadowbank
Meadowbank, Auckland
Stage 3

Stage 4
30
CARE SUITES
34
CARE SUITES
62
APARTMENTS
62
APARTMENTS
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The Sands
Browns Bay, Auckland
STATUS
UNDER CONSTRUCTION
44
CARE SUITES
64
APARTMENTS
15

STATUS
STAGE 1 UNDER CONSTRUCTION
STATUS
STAGE 1 UNDER CONSTRUCTION
The BayView
Tauranga
81
CARE SUITES
90
CARE SUITES
Trevellyn
Hamilton
At a glance ––––––
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STATUS
UNDER CONSTRUCTION
61
CARE SUITES
Green Gables
Nelson
28
APARTMENTS
17

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“The development team
spends considerable effort
refining the design to
ensure previous experience
and customer preferences
are incorporated.”
MARK STOCKTON, OCEANIA’S GENERAL MANAGER OF PROPERTY EXPLAINS HOW OUR
DEVELOPMENTS ARE MANAGED FROM CONCEPTION THROUGH TO DELIVERY.–––––––
Our development approach is to take full ownership
from conception through to after sales support.
We have a multi disciplinary in-house development
team who provide expert project management oversight
of our developments.
During the initial feasibility assessment of a new or
brownfield site, the development team work alongside
both the sales and operations teams to identify the
market opportunity and to determine the ideal mix of
retirement village accommodation and care services
required to meet customer demand.
Once financial feasibility of the proposed development
is determined and our Board have approved the
opportunity, our in-house development team commences
the resource consent application process, with advice and
support from external consultants as required. We have
an excellent track record of obtaining consents for
brownfield sites close to residential areas because of our
total ownership of the consenting process.
Once resource consent has been obtained, the
development team spend considerable effort refining
the design with multiple stakeholders to ensure previous
experience and the latest customer preferences are
incorporated into the design. Input is sought from the
sales and operations teams, in addition to existing
residents, prospective residents and building contractors.
This ensures that we “build it right first time”.
The procurement of a building contractor is a key
milestone and we are careful to select a main contractor
who we are confident will build a quality product, on
time. Naturally cost is an important consideration,
especially in the current construction market, but a key
driver is also the contractor’s ability to always deliver on
their commitment to us.
Once we have received final contractor pricing and
quantity surveyor reports, our Board undertakes a rigorous
assessment process before approving all projects.
Once the project is ready to go to site, the development
team closely manage the contractor which includes their
appointment and the administration of the contract. By
controlling the contract and the specification we fully
“own” each project. Again, we have a strong record of
finishing projects on time and within budget with a
significant amount of attention to all the detail, no matter
how small.
Once the in-house development team is happy that a
project is fully complete, snag free and of the highest
quality, we work alongside the sales and operations team
to ensure the incoming resident is completely happy with
the finishes of their unit.
Experience & design
19

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LIZ BURRETT, DAUGHTER OF MEADOWBANK CARE RESIDENT, RIE, EXPLAINS HOW OCEANIA’S UNIQUE
APPROACH TO CARE HAS MADE ALL THE DIFFERENCE TO HER MUM’S QUALITY OF LIFE.–––––––
“Mum loved her apartment at Meadowbank Village and
the warm community feel of the place, but as time went
on she needed more and more help,” explains daughter
Liz Burrett. “The staff in the village were so good and
organised in-home help for her, but eventually she
needed full-time support.”
In February Rie moved into a luxury care suite at
Meadowbank Village where she receives rest home level
care. Her care suite has all the mod cons and is like a
smaller version of her apartment with its own lounge,
kitchenette and bedroom. “It’s such a relief to know that
Mum is getting the care she needs,” says Liz, “and if she
ever needs hospital level care, she can get it in her care
suite. She never has to worry about moving again.”
Liz says the move into Meadowbank care has made all
the difference. “She’s so well looked after and she can
still entertain in her suite or pop down to the cafe to
meet her friends from the village.” Rie’s family and
friends often catch up with her over a meal in the dining
room. Close friend and former work colleague, Ian, jokes
that the meals are so good, he plans his visits around
lunch time!
Most importantly, Rie now has the support she needs to
keep doing the things she loves. “Mum is a music lover,”
says Liz. “Listening to her music really sparks her up.”
Soon after she moved in, the Concierge Services team
introduced Rie to Oceania’s “I Love Music”, a
programme that provides her with a personalised music
playlist loaded on an mp3 player so she can listen to her
favourite music anytime she wants.
More recently her Leisure Coordinator, May Ann,
organised tickets, transport and assistance for Rie and her
friends to watch the RNZ Navy Band perform, and then
there’s the fortnightly outings to the Celebration Choir at
the Auckland University campus. “Rie loves singing along
with the other people in audience,” says May Ann.
Rie and her family couldn’t be happier with the attentive
and personalised care she receives. “It’s a good place to
live” says Rie. “I’ve been very lucky.”
New & improved
“ Oceania's unique
approach to care is
making a real
difference to the lives
of its residents.”
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RESIDENTS WANT TO STAY CONNECTED TO THE COMMUNITY THEY KNOW AND LOVE AND
AS SHOWN HERE MANY AREN’T AFRAID TO GET OUT AND TRY SOMETHING NEW!–––––––
“ Each week the residents’
self-confidence grew and
the sense of freedom
and control that cycling
gave them was clear.”
Connected & involved
Helping our residents stay connected to their community
is an important part of what we do at Oceania. Our staff
recently spotted an opportunity to be involved with the
Avantidrome “Wheels in Motion” community sessions in
Cambridge.
Weekly visits to the Avantidrome became a highlight for
a group of rest home residents who ranged in age from
80 to 99 years. With the support and encouragement of
our staff and the biking instructor, all took to riding their
specially designed trikes with enthusiasm and some
impressive dexterity.
This was more than just an opportunity to get some
exercise. Cycling as a group and with other members of
the community was a wonderful way to meet new people
and bond over a shared experience. Each week the
residents’ self-confidence grew and the sense of freedom
and control that cycling gave them was clear.
Graeme, who has dementia, was a bit hesitant at the
start, but with some gentle encouragement from his carer
he pedalled as though he’d been doing it for years.
“Graeme has led a very full life,” says his wife Kate.
“He’s lost so much of himself to Alzheimers but he’s still
able to get enjoyment out of each day. I can’t tell you
how much that means to us as a family.”
23

Board of Directors ––––––
Oceania has an experienced Board with a diverse range of skills, including
industry and business knowledge, property development, financial
management and corporate governance experience. With the introduction
of two new Directors, the Board now comprises an independent Chair, three
independent non-executive Directors and three non-executive Directors.
Elizabeth Coutts
Chair and Independent Director
ONZM, BMS, FCA
Patrick McCawe
Non-Executive Director
BCA (Hons), MBA, CA
Alan Isaac
Independent Director
CNZM, BCA, FCCA, FICS
Kerry Prendergast
Independent Director
CNZM, MBA (VUW), NZRN, NZM
Hugh FitzSimons
Non-Executive Director
BEc LLB (Hons) (Syd)
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Welcoming
two new
Directors
Greg Tomlinson
Non-Executive Director
AME
Greg Tomlinson has been a Director of
Oceania since 23 March 2018. Greg is a
Christchurch domiciled businessman and
investor with experience in a variety of
New Zealand industries. One of the
original pioneers of the aquaculture
industry in Marlborough, he has also
established construction and aged care
businesses.
Greg established Qualcare before it was
sold into the Oceania Group in early
2008 and he was a Director of Oceania
Healthcare from 2008 until 2016. Greg
holds directorships on the boards of
a number of New Zealand based
companies and is currently a director of
Heartland Bank Limited.
Sally Evans
Independent Director
BHSc, MSc, FAICD, GAIST
Sally Evans has been a Director of
Oceania since 23 March 2018. Sally has
over 30 years’ experience in the private,
government and social enterprise sectors
in Australia, New Zealand, the United
Kingdom and Hong Kong.
Sally currently chairs the social enterprise
LifeCircle and is a Non-Executive
Director of ASX-listed Gateway Lifestyle
Operations Limited.
She has previously held directorships on
the boards of Opal Specialist Aged Care
and Blue Cross Aged Care, was an
inaugural member of the Australian
Federal Government’s Aged Care
Financing Authority and held executive
roles as Healthcare Director at the FTSE
Compass Group plc and Head of Aged
Care at AMP Capital.
Sally is the chair of the Remuneration
Committee and is a member of the
Clinical and Health and Safety Committee.
25

Directors’ Report 27
Consolidated Statement of Comprehensive Income 28
Consolidated Balance Sheet 29
Consolidated Statement of Changes in Equity 30
Consolidated Cash Flow Statement 31
Notes to the Consolidated Financial Statements 33
Independent Auditor's Report 80
Corporate Governance Statement 87
Consolidated
Financial
Statements
For the year ended 31 May 2018
Oceania Healthcare
|
Annual Report 2018
26

The Board has pleasure in presenting the audited
consolidated financial statements of Oceania Healthcare
Limited ("the Company") and its subsidiaries, incorporating
the consolidated financial statements and the independent
auditor’s report, for the year ended 31 May 2018.
The Board of Directors of the Company authorised these
consolidated financial statements for issue on 26 July 2018.
For and on behalf of the Board
Elizabeth Coutts Hugh William FitzSimons
Chairman Director
Directors’ Report
31 May 2018
27
Oceania Healthcare
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Annual Report 2018

28
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Annual Report 2018
Consolidated Statement of Comprehensive Income
For the year ended 31 May 2018
$’000 NotesMay 2018May 2017
Operating revenue
2.2
180,047 171,883
Change in fair value of investment property
3.1
68,32057,161
Other income
2.3
3,995 2,963
Total income252,362232,007
Employee benefits113,306 103,274
Depreciation and amortisation8,8357,911
Finance costs2,94420,146
(Reversal of impairment) / impairment of property, plant and equipment
3.3
(1,142)4,328
Other expenses52,54348,941
Total expenses
2.4
176,486184,600
Profit before income tax75,87647,407
Income tax benefit / (expense)
5.1
1,096(2,525)
Profit for the year 76,97244,882
Other comprehensive income
Items that will not be subsequently reclassified to profit and loss
Gain on revaluation for the year, net of tax
3.3
4,67616,204
Items that may be subsequently reclassified to profit and loss
Movement in interest rate swaps, net of tax
5.6
79(182)
Other comprehensive income for the year, net of tax4,75516,022
Total comprehensive income for the year attributable to shareholders
of the parent81,72760,904
Basic earnings per share (cents per share)
4.2
12.712.4
Diluted earnings per share (cents per share)
4.2
12.712.4
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

29
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Annual Report 2018
Consolidated Balance Sheet
As at 31 May 2018
$’000 NotesMay 2018May 2017
Assets
Cash and cash equivalents18,28810,861
Trade and other receivables
5.3
32,69311,302
Assets held for sale
3.3
19,653-
Property, plant and equipment
3.3
303,561267,972
Investment property
3.1
755,561611,016
Intangible assets
5.2
17,39817,053
Total assets1,147,154918,204
Liabilities
Trade and other payables
5.4
37,59227,480
Derivative financial instruments
5.6
283283
Deferred management fee
3.2
21,92319,534
Refundable occupation right agreements
3.2
358,213282,904
Borrowings
4.4
168,71195,242
Deferred tax liabilities
5.1
23,33524,808
Total liabilities610,057450,251
Net assets537,097467,953
Equity
Contributed equity
4.1
579,498579,498
Retained deficit(127,899)(195,966)
Reserves85,49884,421
Total equity537,097467,953
The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.

30
Oceania Healthcare
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Annual Report 2018
Consolidated Statement of Changes in Equity
For the year ended 31 May 2018
$’000 Notes
Contributed
Equity
Retained
Deficit
Asset
Revaluation
Reserve
Interest Rate
Swap Reserve
Total
Equity
Balance at 31 May 2016372,633(240,988)68,399-200,044
Profit for the year - 44,882 - -44,882
Other comprehensive income
Revaluation of interest rate swaps
5.6
---(182)(182)
Revaluation of assets net of tax
3.3
- -16,204-16,204
Total comprehensive income - 44,88216,204(182)60,904
Transactions with owners
Share capital issued
4.1
214,398- - -214,398
Costs capitalised to equity
4.1
(7,533)---(7,533)
Employee share scheme
4.3
-140--140
Total transactions with owners206,865140 - -207,005
Balance as at 31 May 2017579,498(195,966)84,603(182)467,953
Profit for the year - 76,972 - -76,972
Other comprehensive income
Revaluation of interest rate swaps
net of tax
5.6---7979
Revaluation of assets net of tax
3.3
- -4,676-4,676
Total comprehensive income - 76,9724,6767981,727
Transfer of revaluation reserve for assets
held for sale
3.3-3,678(3,678)--
Transactions with owners
Dividends paid-(12,732)--(12,732)
Employee share scheme
4.3
-149--149
Total transactions with owners-(12,583) - -(12,583)
Balance as at 31 May 2018579,498(127,899)85,601(103)537,097
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.

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The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Consolidated Cash Flow Statement
For the year ended 31 May 2018
$’000 May 2018May 2017
Cash flows from operating activities
Receipts from residents for membership fees, village and care fees 161,786159,289
Payments to suppliers and employees(155,229)(141,062)
Receipts from new occupation right agreements113,51768,763
Payments for outgoing occupation right agreements(35,421)(30,894)
Interest received165133
Interest paid(2,588)(17,306)
Net cash inflow from operating activities82,23038,923
Cash flows from investing activities
Proceeds from sale of property, plant and equipment and investment property1707
Payments for property, plant and equipment and intangible assets(33,389)(33,503)
Payments for investment property and investment property under development
(98,172)(47,560)
Net cash outflow from investing activities(131,391)(81,056)
Cash flows from financing activities
Proceeds from borrowings119,788144,994
Repayment of borrowings(50,468)(285,424)
Transaction costs-(10,680)
Dividends paid(12,732)-
Proceeds from share issue-200,000
Net cash inflow from financing activities56,58848,890
Net increase in cash and cash equivalents
7,4276,757
Cash and cash equivalents at the beginning of the year10,8614,104
Cash and cash equivalents at end of year18,28810,861
The above Consolidated Cash Flow Statement should be read in conjunction with the accompanying notes.

32
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Consolidated Cash Flow Statement (Continued)
For the year ended 31 May 2018
The above Consolidated Cash Flow Statement should be read in conjunction with the accompanying notes.
Reconciliation of profit after income tax to net cash inflow from operating activities
$’000 NotesMay 2018May 2017
Profit after income tax for the year76,97244,882
Non cash items
Deferred management fee accrued but not settled
2.2
(18,748)(16,330)
Depreciation and amortisation
2.4
8,8357,911
Impairment of goodwill
2.4
-478
Net loss on disposal of property, plant and equipment13563
Fair value adjustment to investment property
3.1
(68,320)(57,161)
(Reversal of impairment) / impairment of property, plant and equipment
3.3
(1,142)4,328
Bad and doubtful debt (benefit) / expense
2.4
(156)125
Interest charged but not paid3562,840
Fair value movement on residents’ share of resale gains
2.3
(26)2,207
Fair value gain on derivatives
5.6
-(4)
Movement in deferred tax
5.1
(1,096)2,525
Other non cash items 127330
(80,157)(52,188)
Cash items
Receipts from new occupation right agreements113,51768,763
Payments for outgoing occupation right agreements(35,421)(30,894)
Transaction costs expensed and held in financing activities-3,147
78,09641,016
Increase in operating assets and liabilities
(Increase) / decrease in trade and other receivables(3,222)718
Increase in trade and other payables10,5414,495
Net cash inflow from operating activities82,23038,923

Notes to the
Consolidated
Financial
Statements
For the year ended 31 May 2018
1. General Information 34
1.1 Basis of Preparation 34
1.2 Accounting Policies 35
2. Operating Performance 36
2.1 Operating Segments 36
2.2 Operating Revenue 41
2.3 Other Income 41
2.4 Expenses 42
3. Property Assets 44
3.1 Investment Property 44
3.2 Refundable Occupation Right Agreements 48
3.3 Property, Plant and Equipment 50
4. Shareholders’ Equity and Funding 56
4.1 Shareholder Equity and Reserves 56
4.2 Earnings Per Share 57
4.3 Employee Share Based Payments 57
4.4 Borrowings 59
5. Other Disclosures 61
5.1 Income Tax 61
5.2 Intangible Assets 65
5.3 Trade and Other Receivables 66
5.4 Trade and Other Payables 67
5.5 Related Party Transactions 68
5.6 Financial Risk Management 69
5.7 New Accounting Standards 72
5.8 Contingencies and Commitments 74
5.9 Events After Balance Date 75
5.10 Comparison to Prospective Financial Statements 76
33
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Annual Report 2018

34
Oceania Healthcare
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Annual Report 2018
1. General Information
1.1. Basis of Preparation
(i) Entities Reporting
The consolidated financial statements of the "Group" entity are for the economic entity comprising Oceania
Healthcare Limited (the "Company") and its subsidiaries, together "the Group". Refer to note 5.5 for details
of Group structure.
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of
Oceania Healthcare Limited as at 31 May 2018 and the results of all subsidiaries for the year 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.
(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 consolidated 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 and the Companies Act 1993.
The consolidated financial statements have been prepared in accordance with New Zealand Generally
Accepted Accounting Practice ("NZ GAAP"). They comply with New Zealand equivalents to International
Financial Reporting Standards ("NZ IFRS"), International Financial Reporting Standards ("IFRS") and other
applicable New Zealand Financial Reporting Standards, as appropriate for for-profit entities. The Group is
a Tier 1 for profit entity in accordance with XRB A1.
The Consolidated Balance Sheet has been prepared using a liquidity format.
(iii) Measurement Basis
These consolidated financial statements have been prepared under the historical cost convention,
as modified by the revaluation of certain assets and liabilities, including investment properties, property,
plant and equipment and interest rate swaps.
(iv) Going Concern Assumption
These consolidated financial statements have been prepared on a going concern basis.
(v) Key Estimates and Judgements
The preparation of consolidated financial statements in conformity with NZ IFRS 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.
Notes to the Consolidated Financial Statements
For the year ended 31 May 2018

35
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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 consolidated 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 fees (note 3.2)
– Costs associated with the long term incentive plans (note 4.3)
– Recognition of deferred tax (note 5.1)
1.2. Accounting Policies
Accounting policies that summarise the measurement basis used and which are relevant to
understanding the consolidated financial statements are provided throughout the notes to these
consolidated financial statements.
Other relevant policies are provided as follows:
(i) Principles of Consolidation
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect
those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are deconsolidated from the date that control ceases.
Intercompany transactions and balances between Group companies are eliminated. Accounting policies of
subsidiaries are consistent with the policies adopted by the Group.
(ii) Functional and Presentation Currency
These consolidated financial statements are presented in New Zealand Dollars which is the Company’s
functional and the Group’s presentation currency. The consolidated financial statements are presented in
round thousands.
(iii) Goods and Services Tax ("GST")
The Consolidated Statement of Comprehensive Income and Consolidated Cash Flow Statement have been
prepared so that all components are stated exclusive of GST. All items in the Consolidated Balance Sheet are
stated net of GST, with the exception of receivables and payables, which include GST invoiced.
(iv) Comparative Information
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.
(v) 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.

36
Oceania Healthcare
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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.
Reporting Segment Description
Care Operations Includes all revenue and facility-level expenses associated with the provision of care and
related services to Oceania’s aged care and retirement village residents, including the
deferred management fee ("DMF") and operating expenses associated with care suites.
The Group derives care fee revenue in respect of eligible Government subsidised aged
care residents as well as private contributions from residents. Aged care subsidies
received from the Ministry of Health, included in rest home, hospital and dementia fee
revenue, amounted to $101.0m (2017: $96.9m).
Village Operations Includes the DMF on the Group’s retirement village units, weekly service fees,
retirement village operating expenses, and, in respect of underlying measures, the
realised gains on resales and the development margins from the sale of both units and
care suites.
Other Includes Support Office and corporate expenses and operating lease costs relating to
the Group’s three leasehold sites. In addition, income and expenditure relating to the
Wesley Training Institute is recognised in this segment.
There is a degree of integration between the care and village operations. This includes the provision of
services such as meals and care packages by care operations to village residents.
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.
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018

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Annual Report 2018
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018
2.1. Operating Segments (Continued)
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. Refer to note 5.2 for further details.
Underlying Profit: Underlying profit is a non-GAAP measure used by the Group to monitor financial
performance and determine dividend distributions. Underlying profit 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.
Oceania calculates underlying profit by making the following adjustments to reported Net Profit After Tax:
– Removing the change in fair value of investment properties (including right to use investment property
assets) 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;
– Removing any DMF income and rental expenditure in relation to right to use investment property assets;
– Adding back the Directors’ estimate of realised gains on resale of occupation right agreement ("ORA")
units and care suites
1
;
– Adding back the Directors’ estimate of realised development margin on 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 (i.e. the difference between
the incoming resident’s ORA licence payment and the ORA licence payment previously received from the
outgoing resident) is calculated as the net cash flow received, and receivable, at the point that the ORA
contract becomes unconditional and has either "cooled off" or where the resident is in occupation at
balance date.
In the 2017 financial year there were resale gains of $1.4m that related to units and care suites that had
cooled off or were in occupation but had not completed cash settlement. In the 2017 financial year only
resale gains for ORAs for which settlement in cash had occurred were recognised. In 2018, following a
review of the Group’s revenue recognition criteria, ORA contracts that are unconditional and have either
cooled off or were occupied have been included as this more accurately reflects the transfer of legal and
economic benefits associated with these transactions.
1
Units and care suites sold under an occupation right agreement.

38
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Annual Report 2018
2.1. Operating Segments (Continued)
Development Margin
The Directors’ estimate of realised development margin is calculated as the cash received, and
receivable, in relation to the first sale of new ORA units and care suites, at the point that the ORA contract
becomes unconditional and has either "cooled off" or where the resident is in occupation at balance date,
less the development costs associated with developing the ORA units and care suites. In the 2017 financial
year there was realised development margin of $0.9m that related to units and care suites that had cooled off
or were in occupation but had not completed cash settlement. In the 2017 financial year only realised
development margin for ORAs for which settlement in cash had occurred were recognised. In 2018, following
a review of the Group’s revenue recognition criteria, ORA contracts that are unconditional and have either
cooled off or were occupied have been included as this more accurately reflects the transfer of legal and
economic benefits associated with these transactions.
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 pro rated basis using gross
floor areas of the ORA units and care suites;
– 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, and receivable, in relation to sales of newly converted ORA
units and care suites, at the point that the ORA contract becomes unconditional and either "cooled off"
or where the resident is in occupation at balance date, 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.
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018
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.

39
Oceania Healthcare
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Annual Report 2018
$’000
Care
Operations
Village
OperationsOtherTotal
2018
Operating revenue158,49121,556-180,047
Other income1,1041,5611,1653,830
Revaluation of investment property-68,320-68,320
Total income 159,595 91,437 1,165252,197
Operating expenses(130,658)(19,095)(16,096)(165,849)
Impairment of goodwill----
Reversal of impairment of property, plant
and equipment1,142--1,142
Segment EBITDA 30,079 72,342 (14,931)87,490
Interest income-21144165
Finance costs--(2,944)(2,944)
Depreciation and amortisation(8,307)-(528)(8,835)
Profit before income tax 21,772 72,363 (18,259)75,876
Taxation benefit / (expense)1,2501,982(2,136)1,096
Profit for the year attributable to shareholders23,02274,345 (20,395)76,972
Adjusted for underlying profit items
(Less): Change in fair value of investment property
1
and
reversal of impairment of property, plant and equipment(1,142)(68,320)-(69,462)
Add: Impairment of goodwill----
Less: DMF in relation to right to use asset-(123)-(123)
Add: Rental expenses in relation to right to use asset-7,790-7,790
Add: Loss on disposal of chattels at
decommissioned sites----
Add: Realised gain on resale-16,930-16,930
Add: Realised development margin-21,052-21,052
Underlying net profit before tax21,88051,674(20,395)53,159
(Less) / add: Deferred tax(1,250)(1,982)2,136(1,096)
Underlying net profit after tax20,63049,692(18,259)52,063
Less: Interest income-(21)(144)(165)
Add: Finance costs--2,9442,944
Add: Depreciation and amortisation8,307-5288,835
Underlying EBITDA28,93749,671(14,931)63,677
1
Includes change in fair value of right to use asset.

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Annual Report 2018
2.1. Operating Segments (Continued)
$’000
Care
Operations
Village
OperationsOtherTotal
2017
Operating revenue152,12719,756-171,883
Other income6688951,2672,830
Revaluation of investment property-57,161-57,161
Total income152,79577,8121,267231,874
Operating expenses(121,384)(11,709)(18,644)(151,737)
Impairment of goodwill(478)--(478)
Impairment of property, plant and equipment(4,328)--(4,328)
Segment EBITDA26,60566,103(17,377)75,331
Interest income-11122133
Finance costs - - (20,146)(20,146)
Depreciation and amortisation(7,362) - (549)(7,911)
Profit before income tax19,24366,114(37,950)47,407
Taxation expense--(2,525)(2,525)
Profit for the year attributable to shareholders19,24366,114(40,475)44,882
Adjusted for underlying profit items
Add / (less): Change in fair value of investment property
and impairment of property, plant and equipment4,328(57,161)-(52,833)
Add: Impairment of goodwill478--478
Add: Loss on disposal of chattels at
decommissioned sites495--495
Add: Realised gain on resale-12,653-12,653
Add: Realised development margin-5,222-5,222
Underlying net profit before tax24,54426,828(40,475)10,897
Add: Deferred tax--2,5252,525
Underlying net profit after tax24,54426,828(37,950)13,422
Less: Interest income-(11)(122)(133)
Add: Finance costs--20,14620,146
Add: Depreciation and amortisation7,362-5497,911
Underlying EBITDA31,90626,817(17,377)41,346
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018

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2.2. Operating Revenue
Accounting Policy
Revenue is recognised to the extent that it is probable that future economic benefits will flow to the Group
and the amount can be measured reliably.
Deferred Management Fees
Deferred management fees are payable by residents of the Group's units, apartments and care suites under
the terms of their ORA or unit title rights.
Management fees are typically payable up to a maximum percentage of a resident’s occupation licence or
unit title rights deposit for the right to share in the use and enjoyment of common facilities.
The timing of the recognition of deferred management fees is a critical accounting estimate and judgement.
The deferred management fee is recognised on a straight-line basis over the greater of the term specified in
a resident’s ORA or the average expected occupancy for the relevant accommodation. This has been
assessed as 7 years for units, 5 years for apartments and 3 years for care suites from the date of occupation.
Estimates applied for deferred management fee tenure are reviewed periodically. Where a change in
estimate is required, it is the Group’s policy to recognise the aggregate impact of this change in the period
in which the change in estimate occurs.
Deferred management fees are recognised with respect to the leased site as per note 3.1.
Rest Home and Hospital Service Fees
Rest home and hospital service fees are recognised in the accounting period in which the services are
rendered. Where applicable these are recognised net of any associated rebates to residents.
Village Service Fees
Village service fees are charged to residents to recover village operating costs. These fees are recognised
as revenue when the associated services are provided to residents.
Rental Income
Rental income is recognised on an accruals basis in accordance with the substance of the relevant agreements.
$’000 May 2018May 2017
Deferred management fees18,62516,330
Deferred management fees – leased site123-
Rest home, hospital, dementia fees 154,865149,092
Village service fees5,3415,260
Rental income1,0931,201
180,047171,883
2.3. Other Income
Interest Income
Interest income is recognised on an accruals basis using the effective interest method.
Other Income
Other income includes income derived from additional services provided to residents such as meals
and laundry.
$’000 May 2018May 2017
Interest income165133
Net gain on disposal of property, plant and equipment95-
Change in fair value of interest rate swaps-4
Movement of residents’ share of resale gains26-
Training income1,1931,158
Other income2,5161,668
3,9952,963

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2.4. Expenses
Accounting Policy
All operating expenses are recognised on an accrual basis.
$’000 NotesMay 2018May 2017
Profit before income tax includes the following expenses:
Employee benefits
Wages and salaries
1
112,951102,733
Termination benefits206401
Share based payment expense
4.3
149140
113,306103,274
Depreciation and amortisation
Depreciation of property, plant and equipment
3.3
8,6947,706
Amortisation of software
5.2
141205
8,8357,911
Finance costs
Interest on senior debt facilities 3,49013,135
Payments on interest rate swaps1,673243
Agency, commitment and line fees4111,514
Capitalised interest(3,341)(517)
Interest on shareholder loans-990
Amortisation of bank fees2141,491
Interest on other loans-2,853
Interest on finance lease497437
2,94420,146
(Reversal of impairment) / impairment of property, plant
and equipment
3.3(1,142)4,328
Auditor’s remuneration
Audit and review of consolidated financial statements428346
Other assurance services
Trustee reporting and compliance with debt covenants1413
Other services
Taxation compliance services-125
Transaction costs
2
4.1
-525
Total fees paid to auditor4421,009
Transaction costs paid to auditor capitalised
2
4.1
-(193)
Fees to auditor expensed442816
1
Wages and salaries include staff related costs such as staff training, uniforms and recruitment.
2
Transaction costs paid to auditors in the year to 31 May 2017 relate to due diligence work in relation to the initial public offering of
Oceania Healthcare Limited. Refer to note 4.1.
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018

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$’000 NotesMay 2018May 2017
Transaction costs
4.1
-4,042
Impairment of goodwill
5.2
-478
Repairs and maintenance of property, plant and equipment2,9662,846
Repairs and maintenance of investment property933712
Loss on disposal of property, plant and equipment-563
Donations63
Bad and doubtful debts (release) / expense
5.3
(156)125
Rental expense relating to operating leases1,2661,339
Rental expense relating to leased investment property
3.1
7,790-
Resident consumables15,39415,230
Residents’ share of resale gains-2,207
Insurance 1,7101,212
Legal and professional services2,3431,238
Other expenses (no items of individual significance)19,84918,130
52,54348,941
Total expenses176,486184,600

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3. Property Assets
3.1. Investment Property
Accounting Policy
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 and is held at fair value.
The fair value of investment property, including the right to use asset under a lease (Everil Orr), is determined
by a qualified independent external valuer using a discounted cash flow model. 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 Consolidated Balance Sheet which are also reflected in the discounted
cash flow model. The movement in the carrying value of investment property, net of additions, transfers and
disposals is recognised as a fair value movement in the Consolidated Statement of Comprehensive Income.
Fair value measurement on property under development is only applied if the fair value is considered to be
reliably measurable. Where the fair value of a property under development can be determined, it is carried
at fair value. Where the fair value of investment property under development cannot be reliably determined,
the value is considered to be the fair value of the land plus the cost of work undertaken.
$’000 NotesMay 2018May 2017
Investment property under development at fair value
Opening balance79,48648,311
Transfer (to) / from property, plant and equipment
3.3
(2,801)12,944
Capitalised expenditure83,25929,131
Capitalised interest and line fees1,070230
Transfer within investment property(56,970) (14,915)
Disposals(57)-
Change in fair value during the year4,2173,785
Closing balance108,20479,486
Completed investment property at fair value
Opening balance531,530447,560
Transfer within investment property56,970 14,915
Transfer to property, plant and equipment
3.3
(18,686) (2,981)
Transfer to held for sale(2,338)-
Capitalised expenditure14,13218,429
Capitalised interest and line fees1,646232
Disposals-(1)
Change in fair value during the year64,10353,376
Closing balance647,357531,530
Total investment property755,561611,016
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018

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Change in Fair Value Recognised in the Consolidated Statement of Comprehensive Income
$’000 May 2018May 2017
Increase in fair value of investment property144,545115,145
Add / (less): Transfers during the year23,825(9,964)
Less: Capitalised expenditure including capitalised interest(100,107)(48,021)
Plus: Disposals571
Change in fair value recognised in Consolidated Statement of
Comprehensive Income68,32057,161
Valuation Process and Key Inputs
Completed Investment Property
The fair value of completed investment property is calculated every six months by CBRE Limited.
CBRE Limited is an independent registered valuer and associate of the New Zealand Institute of Valuers and
is appropriately qualified with experience of valuing retirement village properties in New Zealand. 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. The valuation calculates the expected cash flows for
a projected sequence of sales based on recycle profiling using a Monte Carlo simulation and a stabilised
occupancy term for residents. The analysis includes significant unobservable inputs used to determine the
fair value, as disclosed below.
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 Consolidated Balance Sheet which are also
reflected in the discounted cash flow model.
The CBRE Limited valuation is reviewed by management for accuracy of inputs and reasonableness
of assumptions.
The Group's interest in all investment property was valued on 30 April 2018 by CBRE Limited (2017:
31 May 2017 by CBRE Limited), at a total of $332.1m (2017: $252.7m).
The CBRE Limited valuation has been adjusted by management for the impact of any sale, resale and
repurchase of ORAs between 1 May 2018 and 31 May 2018 to arrive at the fair value of completed
investment properties at 31 May 2018. The CBRE Limited valuation has been adjusted downward by
management by $20.0m to reflect, amongst other things, the sale of unsold stock during the month of
May 2018 to arrive at a 31 May 2018 valuation (2017: nil adjustment). This is a change from prior periods
where the independent valuation was undertaken as at 31 May.
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
Consolidated Balance Sheet and also reflected in the valuation model. Refer below for a reconciliation.
Investment Property under Development
All land classified as under development was valued on 30 April 2018 by CBRE Limited (2017: 31 May 2017 by
CBRE Limited). Management does not envisage a material movement in the land value between 30 April
2018 and 31 May 2018 and therefore no adjustment has been made to this value. Any costs incurred to 31
May 2018 on the developments are included in arriving at the 31 May 2018 fair value.
The Group has applied the following methodology in relation to the measurement of investment property
under development:
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 per CBRE Limited valuation plus the cost of any work
in progress. An amount of $31.1m as at 31 May 2018 (2017: $32.2m) has been recognised in relation to these
development sites.
Where an individual development is of both investment property and freehold buildings in nature, the fair
value of land and work in progress 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 the project quantity surveyors at
the planning and design stages.

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3.1. Investment Property (Continued)
Practical completion achieved
Where a development is practically completed, or likely to be completed at, or close to, balance date the
investment property is 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, and is then transferred to completed investment property.
Property Specific Assumptions
Seismic and Weather Tightness Assessments
The CBRE Limited valuation, and accordingly the fair value of investment property, incorporates an allowance
in relation to remediation to properties where seismic strength testing has been carried out in prior years.
The May 2017 valuation incorporated the estimated costs to address weather tightness at certain sites based
on estimates provided in building condition reports completed by CoveKinloch New Zealand Limited in
February 2017. Based on further investigation and updated project budgets the estimated remediation costs
have reduced by $1.1m since 31 May 2017. Further, remediation costs totalling $1.1m (2017: $0.6m) have been
incurred in the 2018 financial year. The forecast cost, as at 31 May 2018, to complete the remediation is $0.2m.
Land Acquisitions
Acquisitions of land are recognised as investment property under development at the point that the sale
and purchase agreement is unconditional and risks, rewards and control have effectively passed to the
Group. As at 31 May 2018, $10.7m (2017: nil) has been recognised with respect to three parcels of land which
the Group has under agreement that were unconditional as at 31 May 2018. Deposits of $3.7m have been
paid as at 31 May 2018 and a payable of $7.0m with respect to these parcels of land has been included in
trade and other payables (see note 5.4). Per note 5.9, the final payment was made in relation to these
properties in June and July 2018.
Lease of Investment Property
The Group leases one site, Everil Orr, which meets the definition of investment property. The facility
comprises both apartments and common facilities provided for use by residents under the terms of an ORA.
Payments to the lessor under this lease are made as ORAs are sold. Subsequent cash flows upon the sale and
resale of the units are shared between the lessor and the Group.
Due to the variability of these payments both the right to use asset and the corresponding lease liability were
initially recognised at nil value. Rental payments are recognised as a rental expense through the
Consolidated Statement of Comprehensive Income as incurred (note 2.4). The right to use asset is held at fair
value in accordance with NZ IAS 40 Investment Property and has been valued by CBRE Limited at 30 April
2018. The valuation has been adjusted by management for the impact of any sale of ORAs between 1 May
2018 and 31 May 2018 to arrive at the fair value as at 31 May 2018 and any changes in fair value are taken to
the Consolidated Statement of Comprehensive Income.
The carrying value of the right to use asset as at 31 May 2018 in respect of this leased site is $7.7m (2017: nil)
and is included as completed investment property above.
Key Accounting Estimates and Judgements
Introduction
All investment properties have been determined to be Level 3 (2017: 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 freehold 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, at each reporting date, 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 Consolidated Financial Statements (Continued)
For the year ended 31 May 2018

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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
Sensitivity
The significant unobservable inputs used in the fair value measurement of the Group's portfolio of
investment property are the discount rate and property price growth rate. The following assumptions have
been used to determine fair value:
Significant InputDescription2018
2017
Discount rateThe pre-tax discount rate14.0% – 22.0%
(median: 15.0%)
14.0% – 22.0%
(median: 15.0%)
Property price growth rateAnticipated annual property price growth over
the cash flow period 0-4 years
0.0% – 3.0%0.0% – 3.0%
Property price growth rateAnticipated annual property price growth over
the cash flow period 5+ years
2.5% – 3.5%2.5% – 3.5%
Stabilised Occupancy
Period
3.1yrs – 8.4yrs
(median: 7.2yrs)
3.1yrs – 8.4yrs
(median: 7.2yrs)
Completed Investment Property Sensitivity

$’000
Adopted ValueDiscount Rate
+0.5%
Discount Rate
–0.5%
Property Growth
Rate +50 bp
Property Growth
Rate –50 bp
2018
Valuation312,109
Difference $’000(11,105)11,88815,605(14,981)
Difference %(3.6%)3.8%5.0%(4.8%)

$’000
Adopted ValueDiscount Rate
+0.5%
Discount Rate
–0.5%
Property Growth
Rate +50 bp
Property Growth
Rate –50 bp
2017
Valuation252,706
Difference $’000(8,720)9,28811,877(13,393)
Difference %(3.5%)3.7%4.7%(5.3%)
The stabilised occupancy period is a key driver of the CBRE Limited valuation. A significant increase/
(decrease) in the occupancy period would result in a significantly lower/(higher) fair value measurement.
Current ingoing price, for subsequent resales of ORAs, is a key driver of the CBRE Limited valuation.
A significant increase/(decrease) in the ingoing price would result in a significantly higher/(lower) fair
value measurement.

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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
Consolidated Balance Sheet and also reflected in the valuation model.
A reconciliation between the valuation and the amount recognised on the Consolidated Balance Sheet as
investment property is as follows:
$’000 May 2018May 2017
Completed investment property
Valuation312,109252,706
Plus: Refundable occupation licence payments383,323315,425
Plus: Resident’s share of resale gains7,5629,770
Less: Management fee receivable(52,665)(46,150)
Less: Resident obligations for units not included in valuation (2,972)(221)
647,357531,530
Investment property under development
Valuation108,20479,486
108,20479,486
Total investment property at fair value755,561611,016
Where an incoming resident has an unconditional ORA in respect of a retirement village unit and the
corresponding outgoing resident for that same accommodation has not yet been refunded, the CBRE Limited
valuation is adjusted for the incoming resident balances only. An adjustment of $3.0m (2017: $0.2m) is included
in the above reconciliation to reflect this.
Assets Held for Sale
Investment property assets are classified as held for sale when their carrying amount is to be recovered
principally through a sale transaction and a sale is considered highly probable. They are stated at their fair
value. Refer note 3.3.
3.2. Refundable Occupation Right Agreements
Accounting Policy
A new resident is charged a refundable occupation licence payment in consideration for the right to occupy
one of the Group's units, apartments or care suites. The occupation licence payment becomes payable at
such time as the ORA is unconditional and has either "cooled off" or where the resident is in occupation at
balance date. On termination of the ORA the licence payment is repaid to the exiting resident. The Group
has a legal right to set-off any amounts owing to the Group by a resident against that resident's licence
payment. Such amounts include deferred management fees, recovery of village operating costs and recovery
of outstanding obligations to the village.
An amount equal to a capped percentage of the licence payment is charged by the Group as a management
fee for the right to use and enjoy the common areas of the village. The deferred management fee is payable
by the resident on termination of the ORA.
The management fee receivable is recognised in accordance with the terms of the resident’s ORA.
The deferred management fee represents the difference between the management fees receivable under
the ORA and the portion of the management fee accrued which is recognised on a straight-line basis over
the greater of the term specified in a resident's ORA or the average expected occupancy for the relevant
accommodation i.e. 7 years for units, 5 years for apartments and 3 years for care suites (2017: 7 years,
5 years, 3 years).
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018

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The management fee recognised in the Consolidated Statement of Comprehensive Income represents
income earned in line with the average expected occupancy.
Included in the obligation to residents is an estimate of the amount expected to be paid to those residents
whose occupation licence or unit title right allows them to participate in the resale gain of the unit or
apartment they occupy.
As the refundable occupation licence payment is repayable to the resident upon termination (subject to a
new ORA being issued to an incoming resident), the fair value is equal to the face value, being the amount
that can be demanded.
$’000 May 2018May 2017
Village
Refundable occupation licence payments383,323315,425
Residents’ share of resale gains7,5629,770
Less: Management fee receivable (per contract)(72,269)(64,856)
318,616260,339
Care Suites
Refundable occupation licence payments47,73428,285
Accommodation rebate825575
Less: Management fee receivable (per contract)(10,763)(6,295)
37,79622,565
Held for Sale
Refundable occupation licence payments2,108-
Residents’ share of resale gains20-
Less: Management fee receivable (per contract)(327)-
1,801-
Total refundable occupation right agreements358,213282,904
Reconciliation of Management Fees recognised under NZ IFRS and per ORA
$’000 May 2018May 2017
Village
Management fee receivable (per contract)(72,269)(64,856)
Deferred management fee19,60418,706
Management fee receivable (per NZ IFRS)(52,665)(46,150)
Care Suites
Management fee receivable (per contract)(10,763)(6,295)
Deferred management fee2,222828
Management fee receivable (per NZ IFRS)(8,541)(5,467)
Held for Sale
Management fee receivable (per contract)(327)-
Deferred management fee97-
Management fee receivable (per NZ IFRS)(230)-

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3.2. Refundable Occupation Right Agreements (Continued)
Expected Maturity
Although the occupation licence payments are refundable to the residents on vacating the unit / apartment /
care suite or on termination of the licence to occupy / unit title right (subject to new licences or unit title
rights being issued), average occupancy is estimated to be 7 years for units, 5 years for apartments and 3
years for care suites based on observed tenure at the Group’s villages. It is therefore not expected that the
full obligation to residents will fall due within one year.
Based on past experience the expected maturity of the net obligation to residents is as follows:
$’000 May 2018May 2017
Within 12 months34,03026,876
Beyond 12 months from Balance Sheet date324,183256,028
Total refundable occupation right agreements358,213282,904
3.3. Property, Plant and Equipment
Accounting Policy
Property, plant and equipment comprises owner-occupied freehold land and buildings and plant and
equipment operated by the Group for the provision of care services, certain care suites and land and
buildings under development.
Following initial recognition at cost, completed owner occupied freehold land and buildings and land and
buildings under development are carried at fair value. Independent valuations are performed with sufficient
regularity (i.e. every two years) to ensure that the carrying amount does not differ materially from the assets
fair value at the balance date. Any depreciation at the date of valuation is eliminated against the gross
carrying value of the asset, and the net amount is restated to the revalued amount of the asset. In periods
where no valuation is carried out, the asset is carried at its revalued amount plus any additions, less any
impairment and less any depreciation incurred since the date of the last valuation.
All other plant and equipment is stated at historical cost less depreciation and impairment. Historical cost
includes expenditure that is directly attributable to the acquisition of the items.
A property under construction is classified as land and buildings within property, plant and equipment where
the completed development will be classified as such and as investment property where the completed
development will be classified as an investment property. Fair value measurement on property under
construction is only applied if the fair value is reliably measurable. Where the fair value of property under
construction cannot be reliably determined the value is the fair value of the land plus the cost of work
undertaken. Property under construction classified as land and buildings under development is revalued
annually and is not depreciated.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the
Group and the cost of the item can be measured reliably. All other repairs and maintenance are expensed to
the Consolidated Statement of Comprehensive Income during the financial year in which they are incurred.
Increases in the carrying amount arising on revaluation of land and buildings are credited to asset revaluation
reserves in shareholder’s equity; increases that offset previous decreases taken through the Consolidated
Statement of Comprehensive Income are recognised in the Consolidated Statement of Comprehensive
Income. Decreases that offset previous increases of the same asset are charged against the asset revaluation
reserve directly in equity; all other decreases are charged to the Consolidated Statement of Comprehensive
Income. When revalued assets are sold, or held for sale, the amounts included in reserves are transferred to
retained earnings.
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018

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Land is not depreciated. Depreciation on other assets is calculated using the straight line method to allocate
their cost, net of their residual values, over their estimated useful lives, as follows:
CategoryUseful Life Range
Weighted Average
Depreciation Rate
Freehold buildings10 - 50 years3%
Chattels and leasehold improvements2 - 50 years20%
Motor vehicles5 years22%
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance date.
No depreciation is charged in the year of sale for all assets other than buildings in which case depreciation
is charged to earlier of the date of classification to held for sale or the date of sale.
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 the net disposal proceeds with the carrying
amount of the asset. These are included in the Consolidated Statement of Comprehensive Income.

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3.3. Property, Plant and Equipment (Continued)

$’000
Freehold
Land
Freehold
Buildings
Freehold
Land and
Buildings under
Development
Chattels and
Leasehold
ImprovementTotal
At 31 May 2016
Cost - - - 45,072 45,072
Valuation 69,090 143,243 26,862 - 239,195
Accumulated depreciation - - - (31,128)(31,128)
Net book amount 69,090 143,243 26,862 13,944 253,139
Year ended 31 May 2017
Opening net book amount 69,090 143,24326,86213,944253,139
Additions3607,3647,8414,39719,962
Capitalised interest and line fees--56-56
Disposals - --(570)(570)
Depreciation-(4,588)-(3,118)(7,706)
Transfer from / (to) investment
property-2,081(12,044)-(9,963)
Reclassification within property,
plant and equipment-113(113)--
Net revaluation surplus2,5955,2555,204-13,054
Closing net book amount72,045153,46827,80614,653267,972
At 31 May 2017
Cost - - - 46,75046,750
Valuation72,045153,46827,806 - 253,319
Accumulated depreciation - - - (32,097)(32,097)
Net book amount72,045153,46827,80614,653267,972
Year ended 31 May 2018
Opening net book amount72,045153,46827,80614,653 267,972
Additions-6,53123,659 3,794 33,984
Capitalised interest and line fees-375251 - 626
Disposals-(12)- (6) (18)
Depreciation-(5,375)- (3,319)(8,694)
Transfer to assets held for sale(5,860)(10,710)- (745)(17,315)
Transfer (to) / from investment
property(350)18,8502,987 - 21,487
Reclassification within property,
plant and equipment1,61210,475(12,087)- -
Net revaluation surplus (323)4,095 1,747 - 5,519
Closing net book amount 67,124 177,697 44,363 14,377 303,561
At 31 May 2018
Cost - - - 46,526 46,526
Valuation 67,124 177,697 44,363 - 289,184
Accumulated depreciation - - - (32,149)(32,149)
Net book amount 67,124 177,697 44,363 14,377 303,561
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018

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Key Accounting Estimates and Judgements
All land and buildings have been determined to be Level 3 (2017: Level 3) in the fair value hierarchy as the fair
value is determined using inputs that are unobservable.
Valuation Process and Key Inputs
Land and Buildings
Land and buildings are held at fair value. Independent valuation reports are obtained every two years, unless
there is sustained market evidence of a significant change in fair value. Based on information available, the
Directors have determined that there has been no material valuation movement in the period from 31 May 2017
to 31 May 2018 with respect to freehold land and buildings with the exception of the newly completed care
suites at the Meadowbank facility. No external valuation has been sought in relation to the 31 May 2018
balance date except as it relates to the construction of care suites at Meadowbank. CBRE Limited have
valued the care suites at the Meadowbank facility as at 30 April 2018. This valuation has been adjusted by
management for the impact of sales of ORAs between 1 May 2018 and 31 May 2018 to arrive at the fair value
of the completed Meadowbank facility.
An independent valuation in respect of freehold land and buildings was undertaken in May 2017 by
independent registered valuers CBRE Limited. CBRE Limited are appropriately qualified valuers with
experience of valuing residential aged care and retirement village property in New Zealand. The 31 May 2017
valuation of the Group's care facilities was apportioned to land, improvements, chattels and goodwill. The fair
value of land and buildings as determined by CBRE Limited is based on the level of rent able to be generated
from the maintainable net cash flow of the facility subject to average efficient management. The fair value of
the Group's land and buildings is based on these apportionments. However chattels are carried at historic cost
less depreciation and goodwill is not recorded in the consolidated financial statements. The 31 May 2017
CBRE Limited valuation included $59.1m of goodwill. An additional $2.5m has arisen as at 30 April 2018 on
valuation of the newly completed Meadowbank care suites that were transferred from land and buildings
under development. This goodwill is not recognised in the consolidated financial statements. There is $16.8m
(2017: $16.8m) of goodwill recognised on acquisition included in these consolidated financial statements as an
intangible asset.
In arriving at fair value of freehold land and buildings as at 31 May 2018, the 31 May 2017 carrying amounts have
been adjusted for the cost of any additions or work in progress incurred, less any disposals and depreciation
recognised since 1 June 2017. An adjustment for reversal of previous impairment has been made as below.
The CBRE Limited valuation, and accordingly the fair value of freehold buildings, incorporates an allowance
in relation to remediation to properties where seismic strength testing has been carried out in prior years.
The CBRE Limited valuation as 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. Following further investigation and updated project budgets the 31 May 2017 valuation has
been adjusted by management for the reduction in the estimated costs of $1.7m since 31 May 2017 in
arriving at the 31 May 2018 valuation. Further remediation costs totalling $2.8m (2017: $1.0m) have been
incurred in the 2018 financial year. The forecast cost, as at 31 May 2018, to complete the remediation is $0.6m.
Where a decrease in land and buildings is recognised below original cost, this is recognised directly within
the Consolidated Statement of Comprehensive Income. Total net revaluation gains of $5.5m have been
recognised in the current year in respect of land and buildings (2017: $13.0m gain). In the current year, a
reversal of impairment of $1.1m (2017: impairment $4.3m) has been recognised in the Consolidated
Statement of Comprehensive Income. The remaining gain of $4.4m (2017: $17.3m gain) has been recognised
in the revaluation reserve together with deferred tax of $0.3m (2017: $1.2m decrease). Refer to note 5.1 for
the tax effects of revaluation.
Land and Buildings Under Development
When the Group undertakes development of a new site, the classification between freehold land and
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 land under development was revalued on 30 April 2018 (2017: 31 May 2017) by independent
registered valuers CBRE Limited. CBRE Limited are appropriately qualified valuers with experience of valuing
residential aged care and retirement village properties in New Zealand. This has been adjusted for any costs
incurred to 31 May 2018 on the developments in arriving at the 31 May 2018 fair value.

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3.3. Property, Plant and Equipment (Continued)
Critical Judgements and Estimates in Applying Accounting Policies
(i) Classification of Care Suites
An area of significant judgement is determining the classification of those properties which are operated
as care suites. Refer note 3.1 for further information.
(ii) Valuation of Freehold Land and Buildings
No external valuation has been obtained in respect of freehold land and buildings as at 31 May 2018.
The valuation approach for the freehold land and buildings as at 31 May 2017 was an income capitalisation
approach and/or discounted cash flow analysis supplemented by the direct comparison approach.
The valuation is determined by the capitalisation of net cash flow profit/earnings before interest, tax,
depreciation, amortisation and rent ("EBITDAR") under the assumption a positive cash flow will be generated
into perpetuity. Capitalisation rates used for the 31 May 2017 valuation range from 10.0% to 18.5% with
a median value of 13.5%. The valuation was apportioned between land, buildings, chattels / plant and
equipment and goodwill to determine the fair value of the assets.
The significant unobservable input used in the fair value measurement of the Group's portfolio of land and
buildings is the capitalisation rate applied to earnings. A significant decrease/(increase) in the capitalisation
rate would result in significantly higher/(lower) fair value measurement.
Sensitivity

$’000
Adopted ValueCapitalisation Rate
+50 bp
Capitalisation Rate
–50 bp
31 May 2018
Freehold land and buildings
(excluding property under development)
Valuation 244,821
Difference $(13,465)14,689
Difference %(5.5%)6.0%

$’000
Adopted ValueCapitalisation Rate
+50 bp
Capitalisation Rate
–50 bp
31 May 2017
Freehold land and buildings
(excluding property under development)
Valuation 225,513
Difference $(12,403)13,531
Difference %(5.5%)6.0%
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018

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Assets Held for Sale
Assets are classified as held for sale when their carrying amount is to be recovered principally through a sale
transaction and a sale is considered highly probable. They are stated at the lower of carrying amount and fair
value less costs to sell, except for investment property assets held for sale which are carried at fair value.
As at 31 May 2018, five facilities met the definition of held for sale. These facilities and their respective land,
buildings, investment property and plant and equipment have been reclassified for reporting purposes and
are held on the Consolidated Balance Sheet at current valuation which is the lower of their fair value less
costs to sell and their carrying amount. The revaluation reserve totalling $3.7m in respect of the properties
held for sale has been reclassified to retained earnings on reclassification of the properties.
$’000 May 2018May 2017
Opening balance --
Reclassification from investment properties 2,338 -
Reclassification from property, plant and equipment 17,315 -
Closing Balance 19,653 -
A conditional sale and purchase agreement in respect of these five sites was entered into on 5 July 2018.
Refer to note 5.9 for further details.
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 31 May 2018 of $6.6m (2017: $7.3m).
Carrying Value of Assets
The carrying amount at which both land and buildings would have been carried had the assets been
measured under historical cost is as follows:
$’000
Freehold
Land
Freehold
Buildings
Freehold Land and
Buildings under
DevelopmentTotal
Carrying amount
Historical cost 201839,843152,6054,231196,679
Carrying amount
Historical cost 201743,931150,9745,919 200,824

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4. Shareholders’ Equity and Funding
4.1. Shareholder Equity and Reserves
Accounting Policy
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.
May 2018
Shares
May 2017
Shares
May 2018
$’000
May 2017
$’000
Share capital
Authorised, issued and fully paid up capital610,254,535 610,254,535 579,498 579,498
Total contributed equity610,254,535 610,254,535 579,498 579,498
Movements
Opening balance of ordinary shares issued610,254,535340,213,420579,498372,633
Subscription for shares (Oceania Healthcare
Holdings Limited)-13,712,002-14,398
Subscription for shares (IPO)-253,164,557-200,000
Capitalised costs on IPO---(7,533)
Shares issued for long term incentive plan-3,164,556- -
Closing balance of ordinary shares issued610,254,535610,254,535579,498579,498
On 27 January 2017, 13,712,002 ordinary shares were issued to Oceania Healthcare Holdings Limited
("OHHL"), at $1.05 per share. This was to settle a loan from OHHL to Oceania Healthcare Limited of $13.4m,
and its associated accrued interest, entered into by Oceania Healthcare Limited on 30 June 2016.
On 5 May 2017, Oceania Healthcare Limited issued 253,164,557 ordinary shares at $0.79 each by way of
an Initial Public Offering ("IPO").
The Company incurred transaction costs of $11.9m, of which $10.7m was paid in the financial year to 31 May
2017, in relation to the IPO. Of this, $7.5m related to the issue of new shares and was netted against new
equity with the remaining balance expensed through the Consolidated Statement of Comprehensive Income.
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").
The shares issued for the LTIP are classified as Treasury Shares as the Company has a beneficial interest in
the shares until the vesting conditions are met. Refer note 4.3.
Dividends
On 26 July 2018, a full year dividend of 2.6 cents per share (not imputed) was declared and will be paid on
20 August 2018. The record date for entitlement is 13 August 2018 (31 May 2017: nil).
On 25 January 2018 an interim dividend of 2.1 cents per share (not imputed) was declared and subsequently
paid on 20 February 2018.
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018

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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 Consolidated Statement of Comprehensive Income when the hedged
transaction affects profit and loss. Refer note 5.6.
4.2. 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.
May 2018May 2017
Profit after tax ($’000)76,97244,882
Weighted average number of ordinary shares outstanding (’000s)604,359360,868
Basic earnings per share (cents per share)12.712.4
Diluted
Diluted Earnings per share is calculated by adjusting the weighted average number of ordinary shares
outstanding to assume conversion of all dilutive potential ordinary shares. As at 31 May 2018 there were
2,730,772 shares with a dilutive effect (2017: 910,257).
May 2018May 2017
Profit after tax ($’000)76,97244,882
Diluted weighted average number of ordinary shares outstanding (’000s)605,411360,890
Diluted earnings per share (cents per share)12.712.4
4.3. Employee Share Based Payments
(a) Long Term Incentive Plan
The Company operates two LTIPs for certain members of the Senior Management Team ("the Participants").
The vesting of shares depends upon the satisfaction of performance hurdles.
The Group has provided interest free limited recourse loans to fund the acquisition of shares by the
Participants. In substance the arrangement has been determined as an employee share option. The shares
are treated as treasury stock when issued due to the features of the scheme.
Combined, the two schemes consist of 5,895,329 fully allocated shares, which represents 0.97% of the total
shares on issue. Of these 3,164,556 are held by OCA Employees Trustee Limited on behalf of the Participants
with the balance held directly by employees.
The 2,730,772 shares in the 2015 share plan were all fully vested as at 31 May 2018.
The 3,164,556 shares in the 2017 share plan vest on the business day after the consolidated financial
statements for the 31 May 2020 financial year are released. The vesting criteria is a non-market earnings per
share based performance hurdle being the achievement of a minimum Compound Annual Growth Rate of
35.0% per annum in Underlying Earnings per Share over the three year period until 31 May 2020.

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4.3. Employee Share Based Payments (Continued)
The Participants are required to be employed by the Group at the vesting dates for the shares to vest.
A valuation of the schemes as at the grant dates has been performed by a qualified independent party using a
combination of the Black Scholes and Binomial Option Pricing models. The weighted average fair value of
each option within the 2015 plan was determined at $0.089 at grant date and $0.143 for the 2017 plan. The
expense is spread over the expected vesting period of the options and is recognised within retained earnings.
During the year to 31 May 2018, the remaining 1,820,515 shares (or 66.66%) of the 2015 plan have vested
(2017: 910,257 shares vested) and are held directly by employees, a portion of which are subject to escrow
requirements. These shares were originally issued at $0.52 per share during the 2016 financial year.
A reconciliation of the share rights on issue is provided below.
May 2018
Shares
May 2017
Shares
Opening balance4,985,0712,730,772
Granted during the year-3,164,556
Vested during the year(1,820,515)(910,257)
Forfeited during the year--
Closing balance3,164,5564,985,071
(b) Key Estimates and Assumptions
The key inputs used in the determination of the fair value of the equity instruments by the binomial option
pricing are as follows:
2015 Share Plan2017 Share Plan
Grant date15 August 20155 May 2017
Volatility20%30%
Risk free rate2.64%2.45%
Loan repayment date31 May 201915 August 2020
Issue / exercise price$0.52$0.79
Expected volatility was determined by assessing the historical volatility of comparable companies in
New Zealand and Australia.
As at 31 May 2018, it has been assumed that Participants will remain employed with the Group and that
the earnings based performance hurdles will be met. Dividend assumptions are based on forecast dividend
payments over the vesting period. Any dividend payments during the vesting period are applied to the
outstanding balance of the loan.
The combined cost for the year is $0.1m (2017: $0.1m) giving a total cost to date of $0.3m (2017: $0.2m).
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018

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4.4. Borrowings
Accounting Policy
Borrowings are initially recognised at fair value, including 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 Consolidated Statement of Comprehensive Income over
the period of the borrowings using the effective interest method.
Specific borrowing costs directly attributable to the acquisition, construction or production of qualifying
assets, which are assets that necessarily take a substantial period of time to get ready for their intended use
or sale, are added to the cost of those assets, until such a time as the assets are substantially ready for their
intended use. Other borrowing costs are recognised in the Consolidated Statement of Comprehensive
Income in the period in which they are incurred.
$’000May 2018May 2017
Secured
Bank loans 163,283 89,430
Other loans - -
Capitalised loan costs(413)(627)
Finance leases5,8416,439
Total borrowings 168,711 95,242
Current 2,064 2,201
Non current 167,060 93,668
Total borrowings excluding capitalised loan costs 169,124 95,869
Recognition and Measurement
(i) Bank Loans
Under the Group’s senior debt facilities prior to the IPO, interest on loans and advances was charged using
the BKBM Bill rate plus a margin. Interest is now charged using the BKBM Bill rate plus a margin and line fees.
Interest rates applicable in the year to 31 May 2018 ranged from 2.99% to 3.94% (2017: 3.61% to 5.97%).
Contemporaneous with the IPO, the Group’s existing bank debt was refinanced. At this time new financing
arrangements were entered into with a maturity date of 5 May 2020.
Debt Financing
On 6 July 2018 an agreement was entered into with the banking syndicate to increase total debt facility limits
from $235m to $350m as follows:
(i) General Corporate Facility limit increased to $135m (formerly $60m); and
(ii) Development Facility limit increased to $215m (formerly $175m).
In addition to the above, the maturity of borrowings was extended to 31 July 2023.

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4.4. Borrowings (Continued)
Financing Arrangements
At 31 May 2018, the Group held committed bank facilities with drawings as follows:
May 2018May 2017
$’000CommittedDrawnCommittedDrawn
General Corporate Facility75,00062,15760,00020,965
Development Facility160,000101,126175,00068,465
Total235,000163,283235,00089,430
The Group’s revolving Development Facility is utilised to cover costs associated with current development
projects. The revolving General Corporate Facility is used for general corporate purposes 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.
The financial covenants in the Group's senior debt facilities, with which the Group must comply include:
a) Interest Cover Ratio – the ratio of Adjusted EBITDA to Net Interest Charges is not less than 2.0x; and
b) Loan to Value Ratio – the ratio of total bank debt shall not exceed 50% of the total property value
of all Group’s properties (including the "as-complete" valuations for projects funded under the
Development Facility).
The covenants are tested half yearly. All covenants have been complied with during the year.
Assets Pledged as Security
The bank loans of the Group are secured by mortgages over the Group’s care facility freehold land and
buildings and rank second behind the Statutory Supervisors where the land and buildings are classified as
investment property and investment property under development. There was no material change to security
arrangements as a result of the refinance.
(ii) 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.
Minimum Future Lease Payments
$’000May 2018May 2017
Not later than 1 year 2,426 2,201
Later than 1 year and not later than 5 years 4,172 5,084
Minimum lease payments 6,598 7,285
Less: Future finance charges(757)(846)
Present value of minimum lease payments 5,841 6,439
Included in the financial statements as:
Finance leases – current portion 2,064 1,813
Finance leases – non current portion 3,777 4,626
Due to the variable payments with respect to the rental of the investment property site per note 3.1 no
liability is included in the finance lease balance above in respect of this right to use asset. The total required
lease payment in respect of Stage One is $25.5m. To date an amount of $7.8m (note 2.4) has been paid.
The remaining $17.7m balance outstanding has been disclosed as a commitment per note 5.8.
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018

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(iii) Net Debt Reconciliation
Cash and cash equivalents include cash at hand. The following provides an analysis of net debt and the
movements in net debt for the year.
$’000May 2018
Cash and cash equivalents18,288
Borrowings – repayable within one year(2,064)
Borrowings – repayable after one year(167,060)
(150,836)
Cash and liquid investments18,288
Gross debt – fixed interest rates(105,841)
Gross debt – floating interest rates(63,283)
(150,836)
Liabilities from Financing Activities
$’000 Cash
Finance
Leases Due
Within
1 year
Finance
Leases Due
After
1 year
Borrowings
Due Within
1 year
Borrowings
Due After
1 yearTotal
Net debt as at 31 May 2017
10,861 (1,813)(4,626)- (89,430)(85,008)
Cash flows7,4271,933--(71,253)(61,893)
Acquisitions – finance leases-(217)(992)--(1,209)
Other non-cash movements-(1,967) 1,841 -(2,600)(2,726)
Net debt as at 31 May 201818,288(2,064)(3,777)
-
(163,283)(150,836)
5. Other Disclosures
5.1. Income Tax

Accounting Policy
The tax expense or benefit for the year comprises current and deferred tax. Tax is recognised in the
calculation of profit for the year in the Consolidated Statement of Comprehensive Income, except to
the extent that it relates to items recognised in Other Comprehensive Income. In this case the tax is also
recognised in Other Comprehensive Income.
The current income tax charge is calculated on the basis of the tax laws enacted at the year end.
The Directors periodically evaluate positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation.
Deferred income tax is recognised, using the liability method, on temporary differences arising between the
tax base of assets and liabilities and their carrying amounts in the consolidated financial statements.
However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability
in a transaction other than a business combination that at the time of the transaction affects neither
accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have
been enacted or substantially enacted by the Balance Sheet date and are expected to apply when the
related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will
be available against which the temporary differences can be utilised.

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5.1. Income Tax (Continued)
$’000May 2018May 2017
Income tax (benefit) / expense
Current tax--
Deferred tax(1,096)2,525
(1,096)2,525
Taxation expense is calculated as follows:
Profit before income tax75,87647,407
Tax at the New Zealand tax rate of 28% 21,24513,274
Adjusted by the tax effect of:
Non-deductible impairment of goodwill-134
Non-deductible expenditure1021,425
Capitalised interest deductible for tax(936)(145)
Non-assessable revaluation of investment property(19,129)(16,005)
Taxable depreciation(3,397)(3,645)
Accounting depreciation2,4472,312
Non-assessable (reversal of impairment) / impairment of of fixed asset(320)1,212
Adjustment for timing difference of provisions607186
Other-(70)
Losses (utilised) / recognised(619)1,322
Current tax expense--
Impact of change to held for use for investment property-9,844
Impact of movements in investment property(2,602)419
Impact of movements in property, plant and equipment 296(3,547)
Other adjustments(577)(1,851)
Prior period adjustments112(631)
Losses utilised or derecognised / (recognised)1,675(1,709)
Deferred tax expense(1,096)2,525
Income tax (benefit) / expense(1,096)2,525
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018

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Movement in the Deferred Tax Balance
$’000
Balance
1 June 2017
Recognised
in Consolidated
Statement of
Comprehensive
Income
Recognised
in Other
Comprehensive
Income
Balance
31 May 2018
Investment property(12,179)2,555-(9,624)
Property, plant and equipment(19,126)358298(18,470)
Provisions and other assets / liabilities4,158522794,759
Tax losses2,339(2,339)--
Deferred tax liabilities(24,808)1,096377(23,335)
$’000
Balance
1 June 2016
Recognised
in Consolidated
Statement of
Comprehensive
Income
Recognised
in Other
Comprehensive
Income
Balance
31 May 2017
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)
Recognition and Measurement
No income tax was paid or payable during the period (2017: nil).
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 ORAs 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.
In calculating deferred tax under the Held for Use methodology, the Group has made significant judgements
to determine taxable temporary differences. The carrying value of the Group’s investment property is
determined on a discounted cash flow basis and includes cash flows that are both taxable and non-taxable in
the future. The Group has recognised deferred tax on the cash flows with a future tax consequence being
DMF as provided by CBRE Limited, to the extent that it arises from depreciable components (i.e. buildings)
of the investment property. The Group uses the council rateable valuations to estimate the apportionment of
cash flows arising from the depreciable (i.e. buildings) and non-depreciable components (i.e. land).
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 Consolidated 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 (2017: $3.1m).

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5.1. Income Tax (Continued)
(ii) Recognition of Tax Losses
Up until 31 May 2015 the Company and its subsidiaries were members of a tax consolidated group together
with the Company’s parent company, OHHL. The issuance of shares to the executive members participating
in the long term incentive scheme in November 2015 triggered the Company and its subsidiaries’ exit from
the tax consolidated group as the Company, and its subsidiaries, no longer met the tax consolidated group
eligibility criteria of being in a wholly-owned group. The impact of this is that all tax losses incurred by the
Company and its subsidiaries until 31 May 2015 remain within the tax consolidated group (of which OHHL is
the sole member).
After completing the IPO in May 2017 and following consideration of the Group’s capital structure and
profitability forecasts, the Directors considered it appropriate to recognise a portion of the Group’s available
tax losses to the extent that these were 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. As the shares
held by OHHL are escrowed to the date of the market announcement of the 2018 financial year result, $2.3m
(tax effect) of tax losses were recognised as at 31 May 2017 based on the Group’s forecast taxable profit until
31 May 2018.
The Group entered into a tax loss offset agreement with its parent company, OHHL, to offset the taxable
income generated by Oceania Village Company Limited ("OVCL"), a subsidiary of the Company, for the year
ended 31 May 2017 for $28.7m. Following the loss offset of the OVCL taxable income with OHHL losses, and
losses generated in the May 2018 year, the Group will have $64.6m (31 May 2017: $42.5m) of available tax
losses at 31 May 2018.
As the timeframe for any breach of shareholder continuity beyond the aforementioned escrow period is
uncertain no tax losses have been recognised as at 31 May 2018.
(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 Group’s revenue recognition policy. Consequently no deferred tax is recognised (refer note 2.2).
The Inland Revenue is currently disputing the tax treatment adopted by the Group in relation to deferred
management fees and a Notice of Proposed Adjustment in respect of the 2016 income year was received
on 13 March 2018.
The Group believes the tax treatment adopted is correct and is defending its position. Should the Inland
Revenue be successful in its claim in relation to the 2016 income year this would initially result in the
recognition of a tax liability of approximately $5.4m which would be fully met by the application of losses.
A corresponding recognition of an equal and opposite deferred tax asset of approximately $5.4m would
also be recognised at this time.
The dispute is currently limited to the 2016 income year however if the Commissioner is successful and
requires application to the 31 May 2017 and 31 May 2018 periods, a corresponding deferred tax asset
of $6.1m would be recognised. Further, $21.9m of the $64.6m of available tax losses would be utilised.
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018

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5.2. Intangible Assets
Accounting Policy
Goodwill
Goodwill represents the excess of cost of an acquisition over the fair value of the Group's share of the net
identifiable assets of the acquired subsidiary or business at the date of acquisition. Goodwill is not amortised.
Instead, goodwill is reviewed for indicators of impairment at 30 November and tested for impairment at 31 May,
and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity or cash
generating unit ("CGU") include the carrying amount of goodwill relating to the entity or CGU sold. Goodwill
is allocated to CGUs and these CGUs are grouped where appropriate for the purpose of impairment testing.
The allocation is made to those CGUs or groups of CGUs that are expected to benefit from the business
combination in which the goodwill arose.
Computer Software
Costs associated with maintaining computer software programmes are recognised as an expense as
incurred. Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire
and bring to use the specified software. These costs are amortised on a straight line basis over their
estimated useful lives (2.5 years).
$’000Goodwill Software Total
Year ended 31 May 2017
Opening net book amount17,29532717,622
Additions - 114114
Amortisation and impairment charge(478)(205)(683)
Closing net book amount16,81723617,053
As at 31 May 2017
At cost216,2033,194219,397
Accumulated amortisation and impairment(199,386)(2,958)(202,344)
Net book amount16,81723617,053
Year ended 31 May 2018
Opening net book amount 16,817 236 17,053
Additions - 486 486
Amortisation and impairment charge - (141) (141)
Closing net book amount 16,817 581 17,398
As at 31 May 2018
At cost 216,203 3,680 219,883
Accumulated amortisation and impairment (199,386) (3,099) (202,485)
Net book amount 16,817 581 17,398

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5.2. Intangible Assets (Continued)
Impairment Test for Goodwill
The carrying value of goodwill has been assessed on a site by site basis taking into account the site's results
as a whole for both the care and village CGUs.
The carrying amount of goodwill at each site is not significant in comparison to the total amount of goodwill.
All goodwill is allocated to the care CGUs.
Key Judgements in Applying the Accounting Policies
Care CGUs Recoverable Amount
The recoverable amount of the individual care sites has been determined based on an external valuation of
fair value less costs to sell by CBRE Limited as an external valuer. The fair value less costs to sell is considered
level 3 in the fair value hierarchy. This has been used for comparison to current carrying value.
The assumptions used in determining the fair value for care facilities are disclosed in note 3.3.
Reasonable possible movements in the capitalisation rates have been considered to have no material impact
on the carrying value of goodwill.
5.3. Trade and Other Receivables
Accounting Policy
Trade receivables are amounts due from residents and various government agencies in the ordinary course
of business. Trade receivables are recognised initially at fair value plus transaction costs and subsequently
measured at amortised cost, less a provision for impairment.
Occupation licence payment receivables are recognised at the point in time that an ORA becomes
unconditional and has either "cooled off" or where the resident is in occupation, and the resident has not yet
made all of the contractual licence payment to the Group.
$’000May 2018May 2017
Net trade and other receivables
Trade receivables 11,678 10,281
Less: Provision for impairment (403)(669)
11,2759,612
Occupation licence payment receivable 19,658 883
Prepayments 1,760 807
Trade and other receivables32,69311,302
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018

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Movement in the provision for impairment of trade receivables is as follows:
$’000May 2018May 2017
Opening provision for doubtful debts 669 649
Balances recovered(459)(352)
Increase in provision276 537
Bad debts written off(83)(165)
Closing provision for doubtful debts403 669
$’000May 2018May 2017
Past due and impaired receivables
Impaired receivables (by resident departure date)
0 to 3 months299 467
over 3 months104 202
403 669
Past due but not impaired receivables (by resident departure date)
1 to 3 months590765
Over 3 months646678
1,2361,443
Recognition, Measurement and Critical Judgements in Applying Accounting Policies
Collectability of trade receivables is reviewed on an on-going basis. Debts which are known to be
uncollectible are written off to the Consolidated Statement of Comprehensive Income within other
expenses. A provision for doubtful receivables is established where there is objective evidence that the
Group will not be able to collect all amounts due according to the original terms of the receivables. In making
this judgement, significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy
or financial reorganisation and default or delinquency in payments are considered indicators that the trade
receivable is impaired. The amount of the provision is the difference between the asset’s carrying amount
and the present value of estimated future cash flows, discounted at the effective interest rate.
When a trade receivable is uncollectable it is written off against the provision for trade receivables.
Subsequent recoveries of amounts previously written off are credited against other expenses in the
Consolidated Statement of Comprehensive Income.
There is no significant concentration of credit risk as trade receivables relate to individual residents and
government agencies.
5.4. Trade and Other Payables
Accounting Policy
Trade and other payables represent liabilities for goods and services provided to the Group prior to the
end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days
of recognition.
Trade payables are recognised initially at fair value less transaction costs and subsequently measured at
amortised cost using the effective interest method.
Sundry payables include $0.1m (2017: $0.1m) relating to cash held on behalf of residents and $7.0m in
relation to the purchase of land (2017: nil) per note 3.1.
Settlement payments in respect of unconditional land purchases were made post 31 May 2018 per notes
3.1 and 5.9.

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5.4. Trade and Other Payables (Continued)
Wages and Salaries, Annual Leave and Long Service Leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave are recognised in other
payables in respect of employees' services up to the reporting date and are measured at the amounts
expected to be paid when the liabilities are settled.
The liability for employee entitlements is carried at the present value of the estimated future cash flow.
The liability for long service 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 reporting date. Consideration is given to expected future wage and salary levels, experience of
employee departures and periods of service.
$’000May 2018May 2017
Trade payables 3,770 3,518
Sundry payables and accruals 12,079 11,272
Payables in respect of unconditional land purchases7,156-
Accrued interest on external borrowings and derivatives 41 35
Employee entitlements 14,546 12,655
Trade and other payables 37,592 27,480
5.5. Related Party Transactions
Parent and Subsidiary Entities
The Group‘s parent entity is Oceania Healthcare Holdings Limited, owning 57.21% of the Group, and its
ultimate owners are The Trust Company Limited (interest 98.8%) and Ngakuta Trust Company Limited
(interest 1.2%). The below entities are subsidiaries of Oceania Healthcare Limited.
Name of EntityPrincipal Activities20182017Class of Shares
Oceania Group (NZ) Limited Support office functions100%100%Ordinary
Oceania Care Company LimitedOperation of aged care facilities100%100%Ordinary
Oceania Village Company
Limited
Ownership and operation of
retirement villages100%100%Ordinary
OCA Employees Trustee LimitedHold LTIP shares on behalf of
employees100%100%Ordinary
All subsidiaries are incorporated in New Zealand and have a balance date of 31 May. There are no significant
restrictions on subsidiaries.
Key Management Personnel Compensation
Key management personnel are all executives with the authority for the strategic direction and management
of the Group.
$’000May 2018May 2017
Directors’ remuneration and expenses 622 370
Salaries and other short term employee benefits 2,022 3,282
Dividends 71 -
Termination benefits - -
2,715 3,652
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018

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Transactions with Related Parties
The following transactions occurred with related parties:
$’000 NotesMay 2018May 2017
Transactions with shareholders
Shares issued to Oceania Healthcare Holdings Limited
4.1
- 14,398
During the comparative period the Directors of Oceania Healthcare Limited implemented the 2017 share plan
(refer note 4.3).
There are no outstanding balances with related parties (2017: nil).
5.6. Financial Risk Management
The Group's activities expose it to a variety of financial risks: market risks (including cash flow interest rate
risk), credit risk and liquidity risk. The Group's overall risk management programme focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial
performance of the Group. The Group uses derivative financial instruments such as interest rate swap
contracts to hedge certain interest rate risk exposures. Derivatives are exclusively used for hedging
purposes, i.e. not as trading or other speculative instruments. The Group uses different methods to measure
different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest
rates to determine market risk and aging analysis for credit risk.
Risk management is carried out centrally by management under policies approved by the Board of
Directors. The Board provides written principles for overall risk management, as well as policies covering
specific areas, such as interest rate risk, credit risk, use of derivative financial instruments and non-derivative
financial instruments.
(a) Market Risk
Market risk is the risk that changes in market prices such as interest rates will affect the Group’s income.
The objective of market risk management is to manage and control market risk exposures within acceptable
parameters, while optimising the return on risk.
(b) Cash Flow Interest Rate Risk
The Group has no significant interest-bearing assets, as such the Group's income is substantially independent
of changes in market interest rates.
The Group's interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose
the Group to cash flow interest rate risk. The cash flow and interest rate risks are monitored by the Board on
a monthly basis. The Board monitors the existing interest rate profile with reference to the Group’s Treasury
Policy and the Group’s underlying interest rate exposure. Management present interest rate hedging analysis
and strategies to the Board for consideration and seek Board approval prior to entering into any interest
rate swaps.

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5.6. Financial Risk Management (Continued)
The following table shows the sensitivity of the Group’s Profit / (Loss) and equity to a movement in interest
rates of +/-1%. This assumes all other variables remain constant.
+1%–1%
$’000Profit / (Loss) Equity Profit / (Loss) Equity
2018
Interest expense(189)(189)189189
Change in fair value of interest rate swaps42 941 (43)(952)
2017
Interest expense(520)(520)520520
Change in fair value of interest rate swaps91,966(35)(1,388)
Interest Rate Swaps
The Group’s exposure to interest rate risk is managed by seeking to obtain the most competitive rate of
interest at all times. It is the Group's policy to manage the cash flow interest rate risk through the use of
interest rate swaps to reduce the impact of changes in interest rates on its floating rate long term debt.
The objective of the interest rate swaps is to protect the Group from the short to medium term impact to
cash flows which arises out of variability in floating interest rates.
Interest rate swaps are initially recognised at fair value on the date a contract is entered into and are
subsequently measured at fair value on each reporting date. The fair values of the interest rate swaps are
determined based on cash flows discounted to present value using current market interest rates.
When interest rate swaps meet the criteria for cash flow hedge accounting, the effective portion of the gain
or loss on the hedging instrument is recognised in Other Comprehensive Income, while the ineffective
portion is recognised in other expenses in the Consolidated Statement of Comprehensive Income. Amounts
taken to reserves are transferred out of reserves and included in the measurement of the hedged transaction
when the forecast transaction occurs. When interest rate swaps do not meet the criteria for cash flow hedge
accounting, all movements in fair value of the hedging instruments are recognised in the Consolidated
Statement of Comprehensive Income.
Under the interest rate swap agreements, the Group has a right to receive interest at variable rates and an
obligation to pay interest at fixed rates. At 31 May 2018, the Group had interest rate swap agreements in
place with a total notional principal amount of $100.0m (2017: $100.0m). Of the interest rate swaps in place,
at 31 May 2018, $100.0m (2017: $100.0m) are being used to cover approximately 61% (2017: 111%) of the loan
principal outstanding. These agreements effectively change the Group’s interest exposure on the principal
covered by the interest rate swaps from a floating rate to fixed rate. Bank loans of the Group currently bear
an average fixed interest rate (including margin and line fees) of 4.1% (2017: 4.1%). The fair value of these
agreements at 31 May 2018 is $0.3m liability. The agreements cover notional amounts for a term of 12 months.
The notional principal amounts and the period of expiry of the interest rate swap contracts are as follows:
Average Contracted
Fixed Interest Rate
Notional Principal
Amount
May 2018
%
May 2017
%
May 2018
$’000
May 2017
$’000
Less than 1 year4.104.10 100,000100,000
Between 1 and 2 years-4.10 -100,000
Between 2 and 3 years-- --
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018

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(c) Credit Risk
Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks
and financial institutions, as well as credit exposure from trade and other receivables.
In the normal course of business, the Group has no significant concentrations of credit risk. The Group
requires settlement of the ORA before allowing occupation of its villas or apartments. Therefore, the Group
does not face significant credit risk. The values attached to each financial asset in the Consolidated Balance
Sheet represent the maximum credit risk. Except as disclosed in the consolidated financial statements, no
collateral is held with respect to any financial assets. The Group enters into financial instruments with various
counterparties in accordance with established limits as to credit rating and dollar limits and does not require
collateral or other security to support the financial instruments.
Concentrations
Cash and cash equivalents of the Group are deposited with one of the major trading banks.
Non-performance of obligations by the bank is not expected due to the credit rating of the counter party
considered. The Standard and Poors credit rating of the counter party as at 31 May 2018 is AA- (2017: AA-).
The Group’s receivables represent distinct trading relationships with each of the residents. There are no
concentrations of credit risk with residents. The only large receivables relate to the residential care subsidies
which are received in aggregate via the various District Health Boards and Work and Income New Zealand.
Neither of these entities has demonstrated, or is considered, a credit risk.
(d) Liquidity Risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the
availability of funding through an adequate amount of committed credit facilities and the ability to close-out
market positions. Due to the dynamic nature of the underlying businesses, the Directors aim at maintaining
flexibility in funding by keeping committed credit lines available.
Cash flow forecasting is regularly performed by management. Management monitors rolling forecasts of the
Group's liquidity requirements to ensure it has sufficient cash to meet operational needs, while maintaining
headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach
borrowing limits or covenants on any of its borrowing facilities. Such forecasting takes into consideration
the Group's debt financing plans and covenant compliance.
The table below shows the maturity analysis of the Group's contractual undiscounted cash flows.
$’000
Less than
1 Year
Between
1 and 2 Years
Between
2 and 5 Years
Over
5 Years
2018
Trade and other payables 23,005 - - -
Borrowings 8,969 171,678 2,353 -
Interest rate swaps 315 - - -
Refundable occupation right agreements 358,213 - - -
2017
Trade and other payables14,790 - - -
Borrowings 6,2736,04596,133-
Interest rate swaps159159--
Refundable occupation right agreements282,904 - - -
The refundable occupation right agreements are repayable to the resident on vacation of the unit, apartment,
care suite or on the termination of the occupation right agreement and subsequent resale of the unit,
apartment or care suite. The expected maturity of the refundable occupation right agreements is shown in
note 3.2.
(e) Capital Risk Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital. The consolidated financial statements are prepared on a going
concern basis.

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5.7. New Accounting Standards
(a) New and amended standards adopted by the Group
In the current year, the Group adopted all mandatory new and amended standards and interpretations.
(b) Standards, amendments and interpretations to existing standards that are not yet effective
and have not been early adopted by the Group
The following relevant standards have not been early adopted by the Group but are to be adopted from
1 June 2018 and 1 June 2019 as appropriate which are the Group’s mandatory adoption dates.
NZ IFRS 9, Financial Instruments (NZ IFRS 9) (effective for the Group from 1 June 2018)
NZ IFRS 9 addresses the classification, measurement and recognition of financial assets and financial
liabilities, the impairment of financial assets and hedge accounting. The Group’s initial assessment did not
highlight any significant impacts on the consolidated financial statements.
In summary:
(i) Classification and measurement – The standard requires financial assets to be classified into two
measurement categories: those measured as at fair value and those measured at amortised cost.
The determination is made at initial recognition. The classification depends on the entity's business
model for managing its financial instruments and the contractual cash flow characteristics of the
instrument. For financial liabilities, the standard retains most of the NZ IAS 39 Financial Instruments:
Recognition and Measurement (NZ IAS 39) requirements. Trade receivables are amounts due from
residents and various government agencies held to collect contractual cash flows in the ordinary
course of business. These balances shall continue to be held at amortised cost less a provision for
impairment.
(ii) Impairment – The standard introduces the expected credit loss model for impairment of
financial assets which replaces the incurred loss model used in NZ IAS 39. Application of the
NZ IFRS 9 impairment model is expected to have minimal impact given the Group’s credit risk
management policies.
(iii) Hedge accounting – The standard amends the rules on hedge accounting to align the accounting
treatment with the risk management practices of the reporting entity. Existing hedge relationships
would appear to qualify as continuing hedge relationships on adoption of the new standard.
NZ IFRS 9 will require several new disclosures with respect to hedge accounting, credit risk and expected
credit losses. The Group is currently working through the disclosure requirements which shall be required for
the 30 November 2018 and 31 May 2019 consolidated financial statements onwards.
NZ IFRS 15, Revenue from contracts with customers (NZ IFRS 15) (effective for the Group from
1 June 2018)
NZ IFRS 15 addresses recognition of revenue from contracts with customers. It replaces the current revenue
recognition guidance in NZ IAS 18 Revenue and NZ IAS 11 Construction Contracts and is applicable to all
entities with revenue.
The standard is based on the principle that revenue is recognised when control of a good and service
transfers to a customer and establishes principles for reporting the nature, amount, timing and uncertainty of
revenue and cash flows arising from an entity’s contracts with customers and requires application of a 5-step
process to:
a) Identify the contract with the customer;
b) Identify performance obligations;
c) Determine transaction price;
d) Allocate the transaction price to the performance obligations based on standalone selling prices;
and
e) Recognise revenue when performance obligations are satisfied.
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018

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The Group has reviewed the impact of NZ IFRS 15 and note the following in relation to the main
revenue streams:
(i) Deferred management fees – A contract is in place with all village residents by means of an ORA.
The resident receives the benefit as they occupy the accommodation with a right to share in the use
and enjoyment of common facilities. The deferred management fee is recognised on a straight-line
basis over the greater of the term specified in a resident’s ORA or the average expected occupancy
for the relevant accommodation.
(ii) Rest home, hospital and dementia fees – A contract is in place with all care residents by means of an
admission agreement. The resident receives the benefit as the daily care is administered and each
resident incurs an agreed upon contracted daily care fee. Rest home, hospital and dementia service
fees are recognised in the accounting period in which the services are rendered and are specifically
linked to the day the service is delivered.
(iii) Village service fees – Village service fees are charged to residents to recover village operating costs.
A contract is in place with all village residents by means of an ORA. The resident receives the benefit
as they occupy the accommodation and have a contracted agreed weekly fee. Village service fees
are recognised in the accounting period in which the services are rendered and are specifically
linked to the service delivered.
(iv) Rental income – Contracts are in place with all rental residents in the form of rental agreements
which detail the relevant weekly / monthly rental fee. The resident receives the benefit as they
occupy the accommodation.
The Group’s initial assessment of NZ IFRS 15 is that the Group will continue to recognise management fees
on a straight-line basis and each of care fees, village service fees and rental income in line with the date that
the service is rendered. The above represent the main revenue streams of the Group. It is noted that the
level of disclosure in relation to revenue will increase because of the adoption of NZ IFRS 15. The Group is
currently working through the disclosure requirements which shall be required for the 30 November 2018
and 31 May 2019 consolidated financial statements onwards.
NZ IFRS 16, Leases (effective for the Group from 1 June 2019)
NZ IFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases.
The objective of the standard is to ensure that lessees and lessors provide relevant information in a manner
that faithfully represents those transactions.
The standard requires a lessee to recognise a lease liability on the balance sheet reflecting the future lease
payments and a right-of-use asset for all lease contracts except those which are of low value or short term.
This standard will affect primarily the accounting of the Group’s operating leases. As at 31 May 2018 the
Group had non-cancellable operating lease commitments of $14.6m (refer note 5.8). Many of the Group’s
leases relate to leases of low value assets however the Group currently leases three care facility sites and the
impact of recognising these properties on balance sheet will be material to the Group.
The Group is currently reviewing the impact of NZ IFRS 16. To date, work has focused on the identification
and understanding of the provisions of the standard which will most impact the Group, establishing the
population of lease contracts which will extend beyond 1 June 2019, discount rate determination and the
review of system requirements. A lease management system has been selected and the Group is currently
in the process of loading lease information.
Some of the operating leases currently held expire prior to the implementation of the standard. As such
the Group has not finalised its quantification of the effect of the new standard, however the following impacts
are expected:
a) The straight-line operating lease expense will be replaced with a depreciation charge for the right
of use assets and interest expense on lease liabilities;
b) The repayment of the principal portion of all lease liabilities will be classified as financing activities;
and
c) The Consolidated Balance Sheet will be impacted by the recognition of right to use assets and
corresponding lease liabilities.
The adoption of NZ IFRS 16 will have no cash effect to the Group and the change is for financial reporting
purposes only. NZ IFRS 16 is expected to be the most significant of the new standards in terms of impact to
the Group and therefore the Group has chosen to not early adopt the standard to allow further time to fully
understand the impact and determine which transition approach to apply.

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5.8. Contingencies and Commitments
(a) Contingencies
As at 31 May 2018, the Group had no contingent liabilities or assets (2017: nil).
(b) Capital Commitments
At 31 May 2018, the Group has a number of commitments to develop and construct certain facilities totalling
$104.6m (2017: $41.6m) of which $104.1m (2017: $39.5m) relates to development sites.
At 31 May 2018, the Group is committed to acquiring a number of small parcels of land totalling $14.3m.
(c) Lease Commitments
Finance Leases
Leases where the Group has substantially all the risk and rewards of ownership are classified as finance
leases. Finance leases are capitalised at the lease’s commencement at the lower of the fair value of the leased
property and the present value of the minimum lease payments. See note 4.4.
Lease of Investment Property
On 28 October 2015, subsidiaries of the Group entered into an agreement with a third party to develop
Everil Orr, an existing leasehold care site. The site will continue to operate as a leasehold care site and the
Group will also perform village operations. Stage one of the village development was completed in February
2018 and a right to use asset recorded. See note 3.1 for further details. A commitment of $17.7m in relation to
Stage One of the development in the form of future lease payments exists.
Operating Leases
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are
classified as operating leases. Payments made under operating leases (net of any incentives received from
the lessor) are charged to the Consolidated Statement of Comprehensive Income on a straight-line basis over
the period of the lease.
Commitments in relation to operating leases are payable as follows:
$’000May 2018May 2017
Within one year1,5931,535
Later than one year but not later than five years4,6773,809
Later than five years8,3398,577
14,60913,921
The above mainly relates to land and buildings leased for the purpose of operating healthcare facilities for
the elderly. The leases vary from 5 year to 30 year terms. Lease rentals are subject to annual increases based
on Consumer Price Index ("CPI") movements.
(d) Repairs and Maintenance
There are no significant unrecognised contractual obligations entered into for future repairs and maintenance
at balance date.
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018

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5.9. Events After Balance Date
Land Purchases
In June and July 2018, full and final settlement totalling $7.0m was made in respect of three parcels of land
which were subject to unconditional agreements as at 31 May 2018 as per note 3.1.
During June 2018 unconditional agreements were entered into for the purchase of a further five parcels of
land adjacent to three existing facilities totalling $14.3m. Final settlements are forecast to take place between
July and October 2018.
Held for Sale Assets
A conditional Sale and Purchase Agreement was entered into with a third party in July 2018 in respect
of the sale of the five facilities which were held for sale as at 31 May 2018 as per note 3.3.
Debt Financing
On 6 July 2018 an agreement was entered into with the banking syndicate to increase total debt facility limits
from $235m to $350m as follows:
(i) General Corporate Facility limit increased to $135m (formerly $60m); and
(ii) Development Facility limit increased to $215m (formerly $175m).
In addition to the above, the maturity of borrowings was extended to 31 July 2023.
Dividends
On 26 July 2018 a full year dividend of 2.6 cents per share (not imputed) was declared and will be paid on
20 August 2018. The record date for entitlement is 13 August 2018.
There have been no other significant events after balance date.

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5.10. Comparison to Prospective Consolidated Financial Statements
Consolidated Statement of Comprehensive Income
$’000
Actual
May 2018
Prospective
May 2018
Operating revenue180,047175,318
Change in fair value of investment property68,32040,419
Other income3,995-
Total income252,362215,737
Employee benefits113,306103,260
Depreciation and amortisation8,8358,689
Finance costs2,9442,140
(Reversal of impairment) / impairment of property, plant and equipment(1,142)-
Other expenses52,54343,590
Total expenses176,486157,679
Profit before income tax75,87658,058
Income tax benefit / (expense)1,096(4,965)
Profit for the year76,97253,093
Other comprehensive income4,755(433)
Total comprehensive income for the period81,72752,660
Commentary
Income was $36.6m ahead of the IPO forecast for the year ended 31 May 2018 due to a larger increase in the
fair value of investment property ("IP") than forecast ($28.0m). This was due to higher ingoing prices achieved
than forecast. Operating revenue (including other income) of $184.0m was $8.7m higher than forecast (for
presentation purposes other income was aggregated with operating revenue for the IPO forecasts).
The IPO forecast assumed a net nil impact on profit from the settlement of the "equal pay" negotiations as
both the timing and quantum of the impact on income and expenses was uncertain. As the settlement took
effect from 1 July 2017, the actual income in 2018 reflects a full year of the increase in income associated with
the settlement.
Expenses were $18.8m above the IPO forecast due to the increase in Healthcare Assistant wages from the
"equal pay settlement" and the rental expense associated with the right to use IP (reflected in other
expenses).
As outlined above the effects of the "equal pay settlement" were not explicitly included in the forecast
expenses in the IPO forecast.
Tax expense was $6.1m below the IPO forecast due to reductions in the deferred tax liabilities relating
to both IP and property, plant and equipment ("PPE"). This was forecast to increase in the IPO forecast.
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018

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Consolidated Balance Sheet
$’000
Actual
May 2018
Prospective
May 2018
Assets
Cash and cash equivalents18,2883,764
Trade and other receivables32,69311,840
Assets held for sale19,653-
Property, plant and equipment303,561 234,360
Investment property755,561 763,139
Intangible assets17,398 17,128
Total assets1,147,154 1,030,231
Liabilities
Trade and other payables37,592 23,936
Derivative financial instruments283-
Deferred management fee21,923-
Refundable occupation right agreements358,213373,720
Borrowings168,711 130,849
Deferred tax liability23,335 28,564
Total liabilities610,057 557,069
Net assets537,097473,162
Equity
Contributed equity579,498 587,030
Retained deficit(127,899) (182,499)
Reserves85,498 68,631
Total equity537,097 473,162
Commentary
Cash was $14.5m above the IPO forecast due to the timing of the repayment of the development debt facility
from sales of new units and care suites (being the 20th of the following month) rather than contemporaneously,
as modelled in the IPO forecast. Trade and other receivables was $21.0m above the IPO forecast as sales
receipts for new ORAs were also modelled to occur on the ORAs becoming unconditional in the IPO forecast.
The impact of this was $17.2m.
For the purposes of the modelling of the fair value of PPE and IP for the IPO forecast, all PPE under
development was aggregated with IP under development. Consequently the variation to the IPO forecast for
the PPE and IP balances is most appropriately considered collectively i.e. $1,059.1m (actual) compared to
$997.5m (forecast). As outlined above the variance principally relates to the acquisition of new land and the
revaluation of IP. The IPO forecast did not envisage any assets held for sale.
Actual trade payables as at 31 May 2018 were higher than the IPO forecast as the actual balance includes the
residual amounts required to settle land purchases that were not factored into the IPO forecast.
The IPO forecast also aggregated the deferred management fee and refundable occupation right
agreements consistent with the presentation of the 31 May 2016 consolidated financial statements. On a
consolidated basis the actual balance as at 31 May 2018 of $380.1m is in line with that forecast of $373.7m.
Borrowings of $168.7m was higher than the IPO forecast ($130.8m) principally due to the acquisitions of new
land made during the 2018 financial year that were not contemplated in the IPO forecast.

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5.10. Comparison to Prospective Financial Statements (Continued)
Consolidated Statement of Changes in Equity
$’000
Contributed
Equity
Retained
DeficitReserve
Total
Equity
Assets
Balance at 31 May 2017 579,498 (195,966) 84,421 467,953
Profit for the year-76,972-76,972
Other comprehensive income
Revaluation of interest rate swaps-7979
Revaluation of assets net of tax - -4,6764,676
Transfer of revaluation reserve for assets
held for sale-3,678(3,678)-
- 80,6501,07781,727
Dividends paid - (12,732) - (12,732)
Employee share scheme-149-149
-(12,583)-(12,583)
Balance at 31 May 2018579,498 (127,899)85,498537,097
Prospective Forecast
Balance at 31 May 2017 579,894 (215,711) 69,064 433,247
Profit for the year - 53,093 (433) 52,660
Other comprehensive income
Revaluation of interest rate swaps----
Revaluation of assets net of tax----
- 53,093 (433) 52,660
Dividends paid-(12,745)-(12,745)
-(12,745)-(12,745)
Balance at 31 May 2018 579,894 (175,363) 68,631 473,162
Commentary
Equity was $63.9m above the IPO forecast (2017: $34.7m above the IPO forecast) due to the higher Net Profit
After Tax achieved in both 2018 and 2017 and revaluation of PPE in 2017.
Notes to the Consolidated Financial Statements (Continued)
For the year ended 31 May 2018

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Consolidated Cash Flow Statement
$’000
Actual
May 2018
Prospective
May 2018
Cash flows from operating activities
Receipts from residents for membership fees, village and care fees 161,786 156,758
Payments to suppliers and employees(155,229) (146,181)
Receipts from new occupation right agreements 113,517 120,669
Payments for outgoing occupation right agreements(35,421) (32,634)
Interest received16546
Interest paid(2,588)(6,096)
Net cash inflow from operating activities82,23092,562
Cash flows from investing activities
Proceeds from sale of property, plant and equipment and investment property170-
Payments for property, plant and equipment and intangible assets(33,389)-
Payments for investment property and investment property under development(98,172)(107,552)
Net cash outflow from investing activities(131,391)(107,552)
Cash flows from financing activities
Proceeds from borrowings119,78892,319
Repayment of borrowings(50,468) (65,177)
Transaction costs--
Dividend paid(12,732)(12,745)
Proceeds from share issue--
Net cash inflow from financing activities56,58814,397
Net increase in cash and cash equivalents 7,427 (593)
Cash and cash equivalents at beginning of the period 10,861 4,357
Cash and cash equivalents at end of the period 18,288 3,764
Commentary
Operating cashflow was below the IPO forecast due to higher payments to suppliers and lower net receipts
from ORAs. Interest paid was lower as development related interest was modelled as "cash-paid" in the IPO
forecast whereas in practice this is capitalised to the projects and repaid on sale of the units and beds.
As outlined above payments for PPE and IP were estimated in aggregate for the purposes of the IPO
forecast. The combined variance of $23.8m in net cash flow from investing activities is due to the effect
of the aforementioned land acquisitions and a variance in development capital expenditure which
was modelled on a "straight line" basis for the IPO forecast with expenditure apportioned equally
over the construction period.
The net cash flow from financing activities differs from the IPO forecast due to the land acquisitions made
and the variance in the actual timing of the repayment of development debt compared to the way this was
modelled for the IPO forecast.

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Independent Auditor's Report
To the shareholders of Oceania Healthcare Limited
PricewaterhouseCoopers, 188 Quay Street, Private Bag 92162, Auckland 1142, New Zealand
T: +64 9 355 8000, F: +64 9 355 8001, pwc.co.nz
Independent auditor’s report
To the shareholders of Oceania Healthcare Limited
The consolidated financial statements comprise:
•the consolidated balance sheet as at 31 May 2018;
•the consolidated statement of comprehensive income for the year then ended;
•the consolidated statement of changes in equity for the year then ended;
•the consolidated cash flow statement for the year then ended; and
•the notes to the consolidated financial statements, which include significant accounting policies.

Our opinion
In our opinion, the consolidated financial statements of Oceania Healthcare Limited (the Company),
including its subsidiaries (the Group), present fairly, in all material respects, the financial position of
the Group as at 31 May 2018, its financial performance and its cash flows for the year then ended in
accordance with New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS)
and International Financial Reporting Standards (IFRS).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
NZ) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
further described in the Auditor’s responsibilities for the audit of the consolidated financial
statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1 (Revised)
Code of Ethics for Assurance Practitioners (PES 1) issued by the New Zealand Auditing and Assurance
Standards Board and the International Ethics Standards Board for Accountants’ Code of Ethics for
Professional Accountants (IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements.
Our firm carries out other assurance services for the Group in the areas of trustee reporting and
compliance with debt covenants. The provision of these other services has not impaired our
independence as auditor of the Group.

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Our audit approach
Overview
An audit is designed to obtain reasonable assurance whether the consolidated
financial statements are free from material misstatement.
Overall Group materiality: $1.8 million, which represents approximately 1% of
operating revenue.
We chose operating revenue as the benchmark because, in our view, it is a key
financial metric used in assessing the performance of the Group and is not as
volatile as other profit or loss measures.
We have determined that there are three key audit matters:
•Valuation of investment property
•Valuation of freehold land and buildings
•Deferred tax on investment property
Materiality
The scope of our audit was influenced by our application of materiality.
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the consolidated financial statements as a whole as set out
above. These, together with qualitative considerations, helped us to determine the scope of our audit,
the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both
individually and in aggregate on the consolidated financial statements as a whole.
Audit scope
We designed our audit by assessing the risks of material misstatement in the consolidated financial
statements and our application of materiality. As in all of our audits, we also addressed the risk of
management override of internal controls including among other matters, consideration of whether
there was evidence of bias that represented a risk of material misstatement due to fraud.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an
opinion on the consolidated financial statements as a whole, taking into account the structure of the
Group, the accounting processes and controls, and the industry in which the Group operates.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the consolidated financial statements of the current year. These matters were addressed in
the context of our audit of the consolidated financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on these matters.

Independent Auditor’s Report (Continued)
To the shareholders of Oceania Healthcare Limited
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Key audit matter How our audit addressed the key audit matter
Valuation of investment property
As disclosed in note 3.1 of the consolidated
financial statements, the Group’s
investment property portfolio at $756
million represents the largest asset as at
31 May 2018.
The fair value of investment property is
calculated every six months by CBRE
Limited (the Valuer), an independent
registered valuer.
Investment property is recorded in the
consolidated financial statements at the
value determined by the Valuer as at
30 April 2018, adjusted by management
for the impact of any sale, resale and
repurchase of Occupation Right
Agreements (ORA) between the date
of the valuation and 31 May 2018.
For each investment property, assumptions
and estimates are made in respect of:
•discount rate;
•property price growth rate; and
•stabilised occupancy periods.
The valuation is also adjusted for
refundable occupation licence payments,
residents’ share of resale gains and
management fees receivable which are
recognised separately on the consolidated
balance sheet and also reflected in the
Valuer’s cash flow model.
The valuation of the Group’s property
portfolio is inherently subjective. The
existence of significant estimation
uncertainty, coupled with the fact that
only a small percentage difference in
assumptions on individual properties,
when aggregated, could result in material
differences, is why we have given specific
audit focus and attention to this area.
Our audit procedures included the following:
External valuations
We read the valuation report and discussed the report
with the Valuer. We assessed the valuation approach
for the right to use and investment property assets
(together referred to as investment property or
properties in this section) with reference to the relevant
accounting standards.
From our discussions with management and the
Valuer, and from our review of the valuation report,
assumptions (including the discount rate, property
price growth rate and stabilised occupancy periods)
were made to reflect each property’s individual
characteristics, it s overall quality, geographic location
and desirability as a whole.
On a sample basis, we tested whether property specific
information supplied to the Valuer by the Group
reflected the underlying property records held by
the Group.
Assumptions and estimates
Our work over the assumptions focused on the largest
properties in the portfolio and those properties where
the assumptions (including the discount rate, property
price growth rate and stabilised occupancy periods) used
and/or year-on-year fair value movement suggested a
possible outlier compared to the rest of the portfolio
and the market data for the sector.
We engaged our in-house valuation expert to challenge
the work performed by the Valuer and assess the
reasonableness of the assumptions used based on his
knowledge gained from reviewing valuations
of similar
properties, known transactions and available market
data.
Valuation estimates
Because of the subjectivity involved in determining
valuations for individual properties and the existence of
alternative assumptions and valuation methods, there is
a range of values which can be considered reasonable
when evaluating the independent property valuations
used by the Group. If we identify an error in a property
valuation or determine that the valuation is outside of a
reasonable range, we evaluate the error or difference to
determine if there is a material misstatement i n the
consolidated financial statements.

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Key audit matter How our audit addressed the key audit matter
Valuation adjustments
We tested, on a sample basis, the transactions
representing the adjustments made to the valuations as
at 30 April 2018 as determined by the Valuer for the
impact of sales, resales and repurchases of ORAs
between the date of the valuation and 31 May 2018.
We checked that the adjustments to the valuation for
refundable occupation licence payments, residents share
of resale gains and management fees receivable
reconciled to the corresponding amounts recognised
separately on the consolidated balance sheet. We also
considered whether there were any events subsequent
to the date of the Valuer’s report which may have
caused the valuations of investment properties to be
materially different to those determined by the Valuer.

Independent Auditor’s Report (Continued)
To the shareholders of Oceania Healthcare Limited
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Key audit matter How our audit addressed the key audit matter
Valuation of freehold land and
buildings
As disclosed in note 3.3 of the consolidated
financial statements, the Group’s freehold
land and buildings were valued at $245
million as at 31 May 2018.
The valuations of individual properties are
carried out by an independent registered
valuer, CBRE Limited (the Valuer), every
two years unless there is sustained market
evidence of a significant change in fair
value. An independent valuation was
conducted by CBRE Limited at 31 May
2017 and the Directors have determined
that there has been no material valuation
movement in the period to 31 May 2018
with respect to freehold land and buildings,
with the exception of the newly completed
care suites at the Meadowbank facility.
Apart from the newly completed care suites
at the Meadowbank facility, no external
valuation has been sought in relation to the
31 May 2018 balance date.
In arriving at fair value of freehold land
and buildings as at 31 May 2018, the 31
May 2017 carrying amounts have been
adjusted for the cost of any additions or
work in progress incurred, less any
disposals and depreciation recognised
since 1 June 2017.
Due to the significant judgement exercised
by the Directors in determining that the
carrying values of freehold land and
buildings do not differ materially from
their fair values as at 31 May 2017 and that
no independent valuation was required in
the current year apart from the newly
completed care suites at the Meadowbank
facility, we have given specific audit focus
and attention to this area.
Our audit procedures focused on the appropriateness of
the Directors’ assessment that the carrying values of
freehold land and buildings as at 31 May 2018 were
materially consistent with their fair values.
We evaluated, together with our in-house valuation
expert, the analysis prepared by management in
supporting their assessment of whether there have been
any significant changes to the assumptions used in the
last external valuation as 31 May 2017 that would lead to
the carrying values of freehold land and buildings as at
31 May 2018 being materially different to their fair
values.
We tested, on a sample basis, the validity of additions to
freehold land and buildings and the reasonableness of
depreciation charged since the date of the last external
valuation. Apart from the movement caused by
additions and depreciation, we reviewed management’s
assessment of the relevant assumptions, supporting that
the carrying values of freehold land and buildings
materially represented their fair value as at 31 May
2018.
For freehold land and buildings comprising the newly
completed care suites at the Meadowbank facility, the
Valuer has carried out a valuation in the current year.
We considered management’s assessment that there
were no changes in the assumptions that would cause
the value as
at 31 May 2018 to materially differ from the
30 April 2018 adopted value as determined by the
Valuer. Our audit procedures and conclusions in relation
to the current year valuations performed by the Valuer
are set out in the preceding key audit matter.

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PwC
6
Key audit matter How our audit addressed the key audit matter
Deferred tax on investment property
As disclosed in note 5.1 of the consolidated
financial statements, the Group assesses
deferred tax on investment property on the
basis that the asset value will be realised
through use (‘Held for Use’).
In applying the Held for Use methodology,
the Group makes three key assumptions
which involve significant judgement:
1.Determining the amount of taxabl
e
cash flows;
2.Timing of taxable cash flows, being at
the end of the Occupation Right
Agreement (ORA) period; and
3.Apportionment of investment property
between land and buildings.
Due to the significant judgement exercised
by the Group in making and applying these
assumptions to determine the deferred tax
on investment property, we have given
specific audit focus and attention to this
area.
Assumptions
With respect to the assumptions used in the
calculation of deferred tax, we engaged our in-house
tax specialist and valuation expert to challenge the
work performed and assess the reasonableness of the
assumptions based on their knowledge of the tax
legislation and other accepted approaches in the
industry.
1. Determining the amount of taxable cash
flows
We agreed the amount of taxable cash flows of
investment property from the Valuer’s report, which is
based on materially the same assumptions and
estimates used in the valuation of investment propert
y
described above.
2. Timing of taxable cash flows
We tested a sample of ORAs to confirm that the
Deferred Management Fees (DMF) are contractually
earned at the end of the ORA period.
3. Apportionment of investment property
For a sample of properties, we agreed the council
rateable valuations to the council website and
recalculated the apportionment between land and
buildings.
Information other than the consolidated financial statements and auditor’s report
The Directors are responsible for the annual report. Our opinion on the consolidated financial
statements does not cover the other information included in the annual report and we do not, express
any form of assurance conclusion on the other information.
In connection with our audit of the consolidated financial statements, our responsibility is to read the
other information and, in doing so, consider whether the other information is materially inconsistent
with the consolidated financial statements or our knowledge obtained in the audit, or otherwise
appears to be materially misstated. If, based on the work we have performed on the other information
that we obtained prior to the date of this auditor’s report, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report
in this regard.

Independent Auditor's Report (Continued)
To the shareholders of Oceania Healthcare Limited
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Responsibilities of the Directors for the consolidated financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the consolidated financial statements in accordance with NZ IFRS and IFRS, and for such internal
control as the Directors determine is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Directors are responsible for assessing the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the Directors either intend to liquidate
the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements, as a whole, are free from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs NZ and ISAs will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the consolidated financial statements is
located at the External Reporting Board’s website at:
https://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-responsibilities/audit-
report-1/
This description forms part of our auditor’s report.
Who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been
undertaken so that we might state those matters which we are required to state to them in an auditor’s
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 Company and the Company’s shareholders, as a body, for our
audit work, for this report or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Leopino Foliaki.
For and on behalf of:
Chartered Accountants
26 July 2018
Auckland

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Corporate Governance
Oceania is committed to maintaining the highest standards of governance by implementing best practice structures
and policies. This Corporate Governance Statement sets out the corporate governance policies, practices and
processes adopted or followed by Oceania (including the guiding principles, authority, responsibilities, membership
and operation of the Board of Directors of Oceania) as at 31 May 2018, and has been approved by the Board.
The best practice principles (and underlying recommendations) which Oceania has had regard to in determining
its governance approach are the principles set out in the NZX Corporate Governance Code 2017 ("NZX Code").
The Board’s view is that Oceania’s corporate governance policies, practices and processes generally follow the
recommendations set by the NZX Code. This Corporate Governance Statement includes disclosure of the extent
to which Oceania has followed each of the recommendations in the NZX Code (or, if applicable, an explanation of
why a recommendation was not followed and any alternative practices followed in lieu of the recommendation).
Oceania also supports the ASX Corporate Governance Council’s Corporate Governance Principles and
Recommendations.
Further information about Oceania’s corporate governance framework (including Oceania’s constitution,
the Board and Board committee charters, and codes and policies referred to in this section) is available to view
at www.oceaniahealthcare.co.nz/investor-centre/governance.
Principle 1 – Code of Ethical Behaviour
Directors should set high standards of ethical behaviour, model this behaviour and hold management
accountable for these standards being followed throughout the organisation.
Code of Values and Conduct and Related Policies
Recommendation 1.1: The Board should document minimum standards of ethical behaviour to which the issuer’s
Directors and employees are expected to adhere (a code of ethics) and comply with the other requirements of
Recommendation 1.1 of the NZX Code.
Oceania expects its Directors, senior managers and employees to maintain the highest standards of honesty,
integrity and ethical conduct in day to day behaviour and decision making. The Board has adopted a Code of Values
and Conduct, a Whistleblowing Policy, a Confidentiality Policy, and a Trading in Company Securities Policy, all of
which are available on Oceania’s website.
The Code of Values and Conduct applies to all Directors, employees, contractors and consultants and outlines
Oceania’s expectations about behaviour (including the specific expectations prescribed in the NZX Code), as well
as the procedure for any breach of the Code. Every new Director, employee, contractor and consultant is required to
read and understand the Code of Values and Conduct as part of the induction process and acknowledge that they
have done so.
Trading in Company Securities Policy
Recommendation 1.2: An issuer should have a financial product dealing policy which applies to employees
and Directors.
The Trading in Company Securities Policy sets out Oceania’s requirements for all Directors and employees in relation
to trading Oceania’s shares. The policy incorporates all trading restraints. Directors and senior managers are
restricted from trading in shares during "black out" periods around the balance date and the half year balance date,
and proposed transactions by Directors or senior managers at any other time require approval. The policy also
provides that no Directors or employees can trade shares if they are in possession of price sensitive information
that is not publicly available.
Corporate Governance Statement

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Principle 2 – Board Composition and Performance
To ensure an effective Board, there should be a balance of independence, skills, knowledge, experience
and perspectives.
The Board is comprised of seven Directors with a mix of qualifications, skills and experience appropriate to Oceania’s
business. The Chair of the Board is elected by the Board each year. The Board schedules a minimum of nine
meetings each year.
Board Charter
Recommendation 2.1: The Board of an issuer should operate under a written charter which sets out the roles and
responsibilities of the Board. The Board charter should clearly distinguish and disclose the respective roles and
responsibilities of the Board and management.
The Board has adopted a formal Board Charter which sets out the respective role, responsibilities, composition and
structure of the Board and senior management, and this is available on Oceania’s website. The Board is responsible
for the strategic direction of Oceania and for supervising the management of the business for the benefit of its
shareholders. Responsibility for the day to day management of Oceania has been delegated to the Chief Executive
Officer and the Senior Management Team. The General Counsel & Company Secretary provides company secretarial
services to the Board. The General Counsel & Company Secretary is accountable to the Board through the Chair.
Nomination and Appointment of Directors
Recommendation 2.2 and 2.3: Every issuer should have a procedure for the nomination and appointment of
Directors to the Board. An issuer should enter into written agreements with each newly appointed Director establishing
the terms of their appointment.
The Board is responsible for succession planning. The procedure for the nomination and appointment of Directors is
included in the Board Charter. When considering the appointment of a new Director, the Board will consider the skills
of the existing Board and any gaps and the Board will undertake appropriate checks as to the candidate’s character
and experience. Where Oceania determines that a person is an appropriate candidate, shareholders are notified of
that and are provided with all material information in Oceania’s possession that is relevant to their decision on
whether or not to elect or re-elect a Director. All new Directors enter into a written agreement with Oceania setting
out the terms of their appointment.
Directors
The Board currently comprises seven Directors. All of the Directors are non-executive Directors. The Board has
considered which of its Directors are deemed to be independent for the purposes of the NZX Listing Rules and
has determined that, as at 31 May 2018, four Directors are independent Directors, including the Chair and the Chair
of the Audit Committee. As at the date of this Annual Report, the Directors are:
Elizabeth Coutts
Chair, Independent DirectorAppointed in November 2014
Alan Isaac
Independent DirectorAppointed in October 2015
Kerry Prendergast
Independent DirectorAppointed in December 2016
Sally Evans
Independent DirectorAppointed in March 2018
Patrick McCawe
Non-Executive DirectorAppointed in February 2017
Hugh FitzSimons
Non-Executive DirectorAppointed in October 2012
Gregory Tomlinson
Non-Executive DirectorAppointed in March 2018
Director Particulars
Recommendation 2.4: Every issuer should disclose information about each Director in its Annual Report
or on its website, including a profile of experience, length of service, independence and ownership interests.
A biography of each Director is available on Oceania’s website in accordance with this recommendation.
Corporate Governance Statement (Continued)

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Directors’ Interests in Shares
Directors disclosed the following relevant interests in shares as at 31 May 2018:
DirectorNumber of shares in which a relevant interest is held
Elizabeth Coutts
450,000 shares
Alan Isaac
110,000 shares
Kerry Prendergast
25,000 shares
Patrick McCawe
250,000 shares
349,175,418 shares held by Oceania Healthcare Holdings Limited
1
Hugh FitzSimons
250,000 shares
349,175,418 shares held by Oceania Healthcare Holdings Limited
1
Gregory Tomlinson
3,504,260 shares
Note:
1
Oceania Healthcare Holdings Limited ("OHHL") is the majority shareholder of Oceania. OHHL is majority (98.83%) owned indirectly
by three institutional funds that are managed by specialist management companies within the Macquarie Infrastructure and
Real Assets division of Macquarie Group Limited. The fund investments are held through various sub trusts. The Trust Company Limited,
as custodian, holds OHHL shares on behalf of the sub trusts. As Directors of OHHL, each of Patrick McCawe and Hugh FitzSimons
have the power to control the exercise of the rights attaching to the shares held by OHHL, and the power to control the acquisition
or disposition of such shares.
Diversity
Recommendation 2.5: An issuer should have a written Diversity Policy which includes requirements for the Board
or a relevant committee of the Board to set measurable objectives for achieving diversity (which, at a minimum,
should address gender diversity) and to assess annually both the objectives and the entity’s progress in achieving
them. The issuer should disclose the policy or a summary of it.
Oceania has a Diversity Policy which aims to ensure that Oceania has a focus on diversity throughout the
organisation. This recognises that a diverse work force (including at Board and management levels) contributes
to business growth and performance, helping to drive an inclusive, high performance environment.
The Diversity Policy establishes the following measurable objectives for achieving diversity:
- Facilitating and promoting equal employment opportunities at all levels including assessment of diversity of skills,
experience, values, culture and gender wherever possible from the available candidates.
- Promoting a merit based environment in which employees have the opportunity to develop and perform to their
full potential in alignment with Oceania’s commitment to the ongoing training and wellbeing of its employees.
- Ensuring employees are treated fairly, evaluated objectively and promoted on the basis of their performance.
The Diversity Policy also sets out requirements for the Board to assess its progress in achieving the objectives and
the objectives themselves. The Diversity Policy is available on Oceania’s website.
The Board considers that the Diversity Policy has been successfully implemented across the business with an
excellent balance of gender and ethnicity at Director and officer levels. As at 31 May 2018 (and 31 May 2017 for the
prior comparative period), the gender breakdown of the Directors, officers (as that term is defined in the NZX Listing
Rules) and employees is as follows:
31 May 201831 May 2017
Gender
MaleFemaleMaleFemale
Directors
4332
Officers
6646
Employees
34923903402370
Oceania is developing further internal systems and processes to allow regular and efficient monitoring of
policy objectives.

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Director Training
Recommendation 2.6: Directors should undertake appropriate training to remain current on how to best perform
their duties as Directors of an issuer.
The Board ensures that there is appropriate training for all Directors enabling them to remain current on how to best
discharge their responsibilities and keep abreast of changes and trends in economic, political, social, financial and
legal climates and governance practices. The Board also ensures that new Directors are appropriately introduced to
management and the business, that all Directors are acquainted with relevant industry knowledge and receive copies
of appropriate company documents to enable them to perform their role.
Evaluation of Performance of Directors
Recommendation 2.7: The Board should have a procedure to regularly assess Director, Board and committee
performance.
The Chair of the Board leads an annual performance review and evaluation of the Board as a whole, and of the Board
committees, against the Board Charter including seeking Directors’ views relating to Board and Board committee
process, efficiency and effectiveness, for discussion by the full Board. The Chair of the Board also engages with
individual Directors to evaluate and discuss performance and professional development.
Separation of Board Chair and CEO
Recommendation 2.8: The Chair and the CEO should be different people.
The Board Charter requires the Board Chair to be an independent Director, and not be the same person as the Chief
Executive Officer or the Chair of the Audit Committee.
Principle 3 – Board Committees
The Board should use committees where this will enhance its effectiveness in key areas, while still retaining
Board responsibility.
Overview of Board Committees
The Board has three standing committees to assist in the execution of the Board’s duties, being the Audit Committee,
the Remuneration Committee and the Clinical and Health and Safety Committee.
Recommendation 3.5: All committees should operate under written charters. An issuer should identify the members
of each of its committees, and periodically report member attendance.
Each committee operates under a charter which is available on Oceania’s website. Committee members are
appointed from members of the Board and membership is reviewed on an annual basis. Any recommendations
made by committees are submitted to the full Board as recommendations for Board decision.
Attendance at Board and Committee Meetings for the Year Ended 31 May 2018
Board
AuditRemuneration
Clinical and
Health and Safety

EligibleAttendedEligibleAttendedEligibleAttendedEligibleAttended
Elizabeth Coutts
1010663333
Alan Isaac
10106633
Kerry Prendergast
10
933
Sally Evans
1100
Patrick McCawe
108
Hugh FitzSimons
1010653333
Gregory Tomlinson
11
Outside of the scheduled Board and committee meetings described above, the Board or a committee held an
additional nine formal meetings in person or by way of conference calls during the year.
Corporate Governance Statement (Continued)