Financial Results for the Year Ended 31 December 2020

Summerset Group Holdings Limited
Level 27 Majestic Centre, 100 Willis St, Wellington
PO Box 5187, Wellington 6140
Phone: 04 894 7320 | Fax: 04 894 7319
Website: www.summerset.co.nz

NZX & ASX RELEASE

23 FEBRUARY 2021


SUMMERSET POSTS $98.3M FULL YEAR UNDERLYING PROFIT


Retirement village operator Summerset Group Holdings Limited today announced a full year
underlying profit for the year ending 31 December 2020 of NZ$98.3 million, down 7% on FY19.

Net (IFRS) profit after tax, which includes the impact of unrealised movements in the fair value of
investment property, was up 32% on FY19 at NZ$230.8 million.

Summerset Chief Executive Julian Cook said it had been a strong year for Summerset despite
the COVID-19 pandemic.

“Summerset has maintained strong profitability and resilience throughout 2020.”

Mr Cook said underlying profit was down on the previous year due to expenditure on measures
to keep residents safe from COVID-19 plus increases in employee wages.

“Despite the COVID-19 pandemic and lockdown, we have performed well. This is testament to
New Zealand’s effective public health response, the Summerset team, our handling of the
pandemic, and the underlying strength of Summerset’s business,” he said.

In 2020, Summerset opened next-generation main buildings in Christchurch and Hamilton and
new retirement villages in Tauranga (Papamoa Beach), Napier (Te Awa) and New Plymouth
(Bell Block).

It completed 356 units built across nine sites despite the closure of construction sites due to the
COVID-19 lockdown.

Summerset now has 32 villages completed or in development and continues to have the largest
land bank in the sector. The number of residents increased from just over 5,500 at the end of
2019 to over 6,200 as at 31 December 2020.

Summerset’s care business continued its strong performance over 2020 with occupancy at 96%
in established care centres. Resident satisfaction was also steady at industry-leading levels of
97% for care residents and 95% for retirement village residents.
 Underlying profit for FY20 of NZ$98.3 million, down 7% on FY19
 Net profit after tax of NZ$230.8 million, up 32% on FY19
 Total assets of NZ$3.9 billion, up 17% on FY19
 785 total sales of occupation rights, up 20% on FY19
 356 new units delivered, up from 354 for FY19
 Land bank total of 5,129 retirement units and 863 care units across NZ and Australia
 Gearing ratio of 32.6%, down from 33.3% at FY19
 Final dividend of NZ 7.0 cents per share

Summerset continued to build on its commitment to sustainability. It is now in its third year as a
certified Toitū carbonzero organisation and set a new science-based carbon reduction target in
2020.

Looking ahead, Mr Cook said Summerset expected to open main buildings in its Richmond
(Nelson) and Avonhead (Christchurch) retirement villages in 2021. The 9,000m
2
main buildings
include extensive village amenities such as a swimming pool, gym and movie theatre, a care
centre and memory care centre, and serviced apartments.

A 32% increase in net profit after tax was driven by an investment property revaluation uplift of
NZ$221.1 million on Summerset’s retirement village assets for the year. The investment property
valuation as at 31 December 2020 has rebounded strongly since the previous valuation as at 30
June 2020 when the residential property market was forecast to fall by up to 10% as a result of
the COVID-19 pandemic.

The board has declared an unimputed final dividend of NZ7.0 cents per share. The record date
will be Tuesday 9 March 2021 and the payment date will be Monday 22 March 2021. This brings
the total dividend payment for 2020 to NZ13.0 cents per share. The dividend reinvestment plan
will apply to the dividend, with a discount of 2% applicable to those shareholders participating in
the plan.

ENDS

For investor relations enquiries: For media enquiries:
Scott Scoullar Jenny Bridgen
Deputy CEO and CFO Communications Manager
scott.scoullar@summerset.co.nz jenny.bridgen@summerset.co.nz
029 894 7317 021 408 215

ABOUT SUMMERSET

 Summerset is one of the leading operators and developers of retirement villages in New
Zealand, with 32 villages completed or in development across the country. In addition,
Summerset has eight sites for development in Half Moon Bay (Auckland), Milldale
(Auckland), Parnell (Auckland), Prebbleton (Canterbury), Rangiora (Canterbury),
Waikanae (Kapiti Coast), Blenheim (Marlborough), and Cambridge (Waikato), plus two
sites in Victoria, Australia. This brings the total number of properties to 42.

 It provides a range of living options and care services to more than 6,200 residents.

 The Summerset Group has villages in Aotea, Avonhead, Bell Block, Casebrook,
Dunedin, Ellerslie, Hamilton, Hastings, Havelock North, Hobsonville, Karaka, Katikati,
Kenepuru, Levin, Lower Hutt, Manukau, Napier, Nelson, New Plymouth, Palmerston
North, Papamoa Beach, Paraparaumu, Richmond, Rototuna, St Johns, Taupo, Te Awa,
Trentham, Wanganui, Warkworth, Whangarei and Wigram.

---

A nnual
Report
2020

Artist’s impression of Cranbourne North, Melbourne

Summerset is one of New Zealand’s
leading and fastest growing
retirement village operators.
Our business spans development, design and construction,
through to running retirement villages and care centres.
We aim to develop our villages on both sides of the Tasman
responsibly and help create a more sustainable future for all.

OUR RESIDENTS
Bringing the best of life to
our residents every day —
resulting in high levels of
resident satisfaction
OUR PEOPLE
People are the heart of
Summerset. Our values are:
Strong enough to care
One team
Strive to be the best
OUR ENVIRONMENT
Everyday we focus on:
Minimising waste
Increasing energy efficiency
Being more sustainable
0 2

OUR RESIDENTS
Bringing the best of life to
our residents every day —
resulting in high levels of
resident satisfaction
OUR PEOPLE
People are the heart of
Summerset. Our values are:
Strong enough to care
One team
Strive to be the best
OUR ENVIRONMENT
Everyday we focus on:
Minimising waste
Increasing energy efficiency
Being more sustainable
Contents
Chair and CEO's Report06
Highlights12
Who we are and what we deliver
12
2020 highlights
14
Portfolio growth
16
Our people and community18
Our villages24
Our commitment to sustainability30
Our performance34
Financial statements40
Governance
79
Board of Directors
90
Executive leadership team
92
Remuneration
94
Disclosures
103
Directory
110
Company information
113
0 3

Strategy
This Annual Report of Summerset
Group Holdings Limited
(Summerset) is prepared in
accordance with New Zealand
equivalents to International
Financial Reporting Standards
(NZ IFRS), the NZX Listing Rules
and Corporate Governance Code,
the Companies Act 1993 and
aligned with the International
Integrated Reporting Council’s
(IIRC) International Integrated
Reporting Framework.
This Annual Report covers all
business operations for the year
ended 31 December 2020. We have
started to align our reporting to the
International Integrated Reporting
Framework to improve the way
we communicate and improve
transparency, we will continue to
build on this approach over the
coming years.
‘Bringing the best of life’ to our
residents is at the core of what
we do. The strategic pillars that
underpin this are Growth, Our
People and Our Customers.
Themes of wellness, innovation,
and sustainability run through our
work. This includes the wellbeing of
our people, being innovative in our
approach to ideas and technology,
and being more sustainable.
ABOUT THIS REPORT
Summerset Heritage Park, Ellerslie
0 4

Our strategy
Bringing the best of life
Our strategic goals are underpinned by our desire
to bring increased wellbeing to our customers
and sta, by harnessing the power of innovation
and weaving sustainability into our work
Growth
We look for expansion
opportunities and
returns for our
shareholders
Our people
We want to create a great
place to work, where
our people can thrive
Our customers
We continually improve
and enhance our
oering to resident
s
InnovationSustainabilityWellbeing
0 5

Chair and CEO's
r
eport
Rob Campbell
Chair
Julian Cook
Chief Executive Officer
Welcome to Summerset’s annual
report for the 1
2 months ended
31 December 2020. This report
covers an unprecedented year in
which the COVID-19 pandemic had
a major impact on our business,
as it did throughout the world.
Our priority has been keeping our
residents and staff safe, and we
currently maintain our record of no
COVID-19 cases at Summerset.
This year we take our first
step toward integrated reporting.
This provides a fuller picture of
Summerset’s entire business, with
financial and sustainability elements
in one report.
Business performance
Reported underlying profit for the
full year is $
98.3 million, a decrease
of 7% on 2019. Our IFRS net profit
after tax is $230.8 million, up 32%
on 2019. Overall, the value of
investment property is $3.6 billion,
up 17% on 2019.
The financial performance of the
business for 2020 has been pleasing.
This is despite the impact of the
COVID-19 lockdown. During this
period prospects were unable to visit
our villages or sell their properties
and we have spent an additional
$9.2 million to date on COVID-19
related costs including preventative
measures to keep residents and
staff safe.
Our COVID-1
9 response
2020 was dominated by COVID-19
but we are pleased and grateful not
to have had any cases among staff
or residents to date. We activated
our pandemic plan in early March,
and moved quickly to protect our
residents and support them through
the subsequent lockdowns.
A range of protections were put in
place to keep our residents and staff
safe. The measures we took included
mandatory temperature checks and
face masks for staff, security on
village gates to screen visitors, a
negative COVID-19 test prior to
admission for new care residents,
and additional cleaning protocols. At
the outset of the crisis we also took
on extra staff in our care centres and
villages to provide additional care
for residents.
We stepped up physically distanced
activities in the villages to
provide connection and comfort
for residents, operated a grocery
delivery service for residents, and
set up an online wellness centre
to keep residents entertained. We
also provided iPads so residents
could video-call families and
friends during the higher alert
levels. The response from both
residents and their families on our
handling of the pandemic has been
overwhelmingly positive. We would
like to thank our dedicated staff
for their professionalism, resilience
and hard work throughout the
lockdown periods.
Annual Report 2020
0 6

$98.3
m
Underlying profit
In April 2020, we received
$8.6 million from the Government’s
initial wage subsidy scheme. This
was
a period of great uncertainty for
the business.
At that time, sales of occupation
rights — a major source of
revenue — had ceased. We also
introduced several cost-saving
measures, including moving more
than 230 corporate staff to a four-
day week. The Executive Team and
Board of Directors also took a 20%
pay cut for the same 10-week period.
We repaid the wage subsidy in full
in December 2020 as trading for the
business has been strong over the
second half of 2020.
August’s lockdown in Auckland
was a reminder that COVID-19 will
continue to impact our residents and
staff for the foreseeable future.
Villages and care
Village life has been affected
by the COVID-1
9 pandemic and
we look forward to the rollout
of the COVID-19 immunisation
programme, due this year.
We have been pleased to see
heightened enquiries and sales
from the third quarter of 2020
onwards. Performance in our care
business continued to track well,
with occupancy for the year at 96%
in our developed villages, versus
90% for the aged care sector overall.
Protections were put
in place to keep our
residents and staff safe
during lockdowns
2020 in review
Adapting to COVID-1
9
Summerset worked hard to ensure that
its residents and staff were kept safe
throughout 2020. We are pleased that
we have had no cases of COVID-19 in
our villages to date.
Expanding into Australia
Our first village in the Melbourne suburb
of Cranbourne North is expected to
receive development approval shortly.
Summerset also holds eight hectares
in Torquay on the Bellarine Peninsula
in Victoria.
Chair Rob Campbell retires
Rob Campbell announced his
retirement from the Board in December
2
020, ending a decade as Chair.
Mr Campbell oversaw Summerset’s
listing on the NZX in 2011, and under
his leadership Summerset has grown
to become one of the NZX’s top
20 companies.
The Board thanks Mr Campbell for
his outstanding leadership which
covered a wide range of initiatives
and achievements, including the
introduction of memory care centres
for people living with dementia, an
improved staff offering, becoming
New Zealand’s first carbonzero
TM
retirement operator, and more
recently, Summerset’s expansion
across the Tasman.
His depth of experience and genuine
passion for the people at Summerset
will be missed.
The Board commenced the search for a
new Board member in December 2020
and once this search is complete, will
appoint a director as the new Chair.
C H A I R A N D C E O ' S R E P O R T
0 7

Growth and development
Despite the closure of our
construction sites during the first
COVID-1
9 lockdown, we completed
next-generation main buildings at
our Casebrook and Rototuna villages
in 2020.
These new buildings reflect the
evolution of our village centre
designs. They include our new state-
of-the-art memory care centre for
people living with dementia, as
well as serviced apartments and a
care centre.
Earthworks have progressed well
at our St Johns site in Auckland
and construction work will start
there in 2021. Building also starts in
2021 at our Lower Hutt site, where
final resource consent was granted
in November. We also lodged
resource consent for our villages in
Prebbleton and Rangiora. Our land
bank continues to expand, with the
acquisition of our ninth property in
Auckland in October 2020.
Our latest land acquisition in
Auckland is in Half Moon Bay. It
will be our first retirement village in
East Auckland.
We completed
next-generation
main buildings at
our Casebrook and
Rototuna villages
Our people
We were pleased to see our staff
engagement results increase in
2
020, which at the time of survey
completion were at or above the
Australia/New Zealand and global
benchmarks of companies using the
same engagement tool.
We started 2020 with a plan to
prioritise pay and training for our
teams. In January we increased the
pay for care staff to equal the top
pay rates in the sector and increased
weekend allowances for care staff
in April.
We introduced an online
learning system and new training
programmes in 2
020, enhancing
our onboarding and professional
development programmes.
We also invested in our
clinical leaders through the
implementation of a leadership
development programme.
Summerset was accredited with
tertiary status in the Accident
Compensation Corporation (ACC)’s
Accredited Employers Programme
for the third year running. During
2020, we launched three-year
strategies for health and safety,
learning and development, and
diversity and inclusion. These
strategies cover all parts of the
business, with tailored plans created
to meet the varying requirements of
individual business groups.
Sustainability
We have continued to make positive
progress on our carbon reduction
targets this year. Notably, we have
set a new science-aligned carbon
reduction target that commits us to
a 6
2% reduction in carbon emissions
per square metre of building area by
2032 (from 2017 levels).
The Board has oversight of climate-
related risks and opportunities
through our current reporting
framework. The forthcoming Task
Force for Climate-related Financial
Disclosures (TCFD) requirements will
add further disclosure in this area
and Summerset is well placed to
meet these.
Looking ahead
Despite COVID-1
9, we have gained
good ground since the end of New
Zealand’s nationwide lockdown in
May 2020. Our third and fourth
quarter sales were at record highs
and our business continues to
perform well.
We are optimistic about growth in
2021 and beyond. Our expansion
into Australia will take a major
step forward with the launch
of our first retirement village in
Victoria in late 2021/early 2022,
and we anticipate an increased
build rate across our New Zealand
sites. We will make further
progress toward sustainability
across Summerset, particularly in
design and construction.
We hold the largest land bank of
units in New Zealand’s retirement
village sector, providing a strong
outlook for our construction and
sales teams. This provides us
with a good spread of sites
across the country, allowing us
to change tempo depending on
market conditions.
Thank you to everyone who has
worked so hard throughout 2020. A
special thank you to our Summerset
staff, as well as their families and
support networks, for helping to
keep all our residents safe this year.
Rob Campbell
Chair
Julian Cook
Chief Executive Officer
Annual Report 2020
0 8

Delivering value
Buy land in desirable
places where people
want to retire
Build high quality,
modern villages
Hire skilled sta
and help them thrive
Look after our
residents and provide
excellent care
Create sustainable
value for stakeholders
Bringing
the best
of life






























































































































































O
N
E

T
E
A
M































































































































































S
T
R
O
N
G

E
N
O
U
G
H

T
O

C
A
R
E




































S
T
R
I
V
E

T
O

B
E

T
H
E

B
E
S
T
C H A I R A N D C E O ' S R E P O R T
0 9

A decade
at the top
Farewell from Julian Cook
It
has been a privilege for me to lead
this company and to be part of an
organisation and industry that has
changed so many people’s lives for
the better.
I am retiring as Chief Executive
on 29 March after 10 years at
Summerset, seven of them as Chief
Executive. Summerset has grown
both in terms of size and maturity
over the last decade, and now is the
right time to hand it over for the next
phase of growth in New Zealand
and Australia.
I am enormously proud of what we
deliver to residents, staff and our
communities. Summerset started
out over 23 years ago as a small
family business founded by John
and Rose O’Sullivan. Their goal was
to create a retirement village that
was good enough for their nana.
This philosophy guides us still and
we always ask ourselves, 'Is it good
enough for Mum?'
In 2014, my first year as Chief
Executive, we had 20 villages, 3,000
residents and 700 staff.
We now have 32 retirement villages
and another 10 in the pipeline. We
will open our first retirement village
in Australia in late 2021/early 2022,
and have another piece of land in
Victoria for a second village. We are
now the second largest retirement
village operator in New Zealand, with
over 6,200 residents and more than
1,800 staff.
We have grown sustainably over the
years, and despite 2020’s COVID-19
pandemic and lockdown, we are in
a strong position to continue into
the future.
Annual Report 2020
1 0

I am enormously proud
of what we deliver to
residents, staff and
our communities
Looking back, there are many
highlights, three in particular will stay
with
me. The first of these is the 2011
stock exchange listing. This gave us
the capital to accelerate our growth.
The introduction of comprehensive
staff benefits, including health
insurance and the all staff share
scheme, was another step toward
rewarding our staff for their hard
work and loyalty. More recently,
starting up Summerset’s Australian
arm has given us the chance to use
all we have learnt in New Zealand to
build a brand-new offering for
Australian retirees.
In 2011, I knew Summerset had great
potential for growth, but most
importantly, I saw that there was
scope to improve our offering to
residents and staff.
My regular visits to our villages
assure me we are bringing the best
of life to our residents. I see a lot of
joy and companionship in our
villages, with people taking up new
hobbies, sharing old ones with new
friends, and creating a unique and
vibrant community.
Over time, we have gradually refined
and enhanced the homes, facilities
and activities we offer our residents.
New Zealand has a growing
population of older people, and it
makes me proud to see the lifestyle
and comfort we provide those who
choose to live in our villages.
I leave the company knowing we
have fulfilled the potential I saw 10
years ago. I have loved my time at
Summerset, and I will greatly miss all
its people.
Julian
Introducing
Scott Scoullar
I have had the pleasure
of being Summerset’s Chief
Financial Officer for almost seven
years now and the Deputy
Chief Executive for three years.
During this time, I have worked
alongside Julian and our Board
developing and implementing
Summerset’s strategy.
It’s a great honour as well as
a great opportunity to lead
one of New Zealand’s largest
retirement providers into its
next phase of development.

The possibilities as we embark on
our growth strategy into Australia
are exciting, and many of our
new sites in New Zealand are
truly ground-breaking.

At Summerset we are fortunate
to play such an important part in
people’s lives.
Our residents look to us to provide
a home and living environment
that is fulfilling, and they trust us
every day to look after them. The
way I think about it, every resident
living in our villages could be our
mum, dad, nana or poppa – and
therefore we will continue to make
their lives as special as we can.
I’m looking forward to starting
as Chief Executive and meeting
as many residents and staff as
possible.
I’d like to thank Julian for
everything he has achieved over
the last 10 years.
Thank you to all our residents who
have chosen to live with us, to
our staff and to our shareholders.
I look forward to working with you
all over the coming years.
Scott
C H A I R A N D C E O ' S R E P O R T
1 1

Who we are and
what w
e deliver
Our people
6,200+
Residents

1,800+
Staff
members
95%
Village
resident satisfaction
Our care
97%
Care
resident satisfaction
972
57 care units
1
and
9
15 care beds in portfolio
1,042
863 care units
1
and
1
79 care beds in land bank
Our performace
$230.8m
Net profit after tax
FY1
9 $175.3m
$98.3m
Underlying profit
FY1
9 $106.2m
$266.8m
Operating cash flow
FY1
9 $237.9m
1Care units include care suites and memory care apartments
Annual Report 2020
1 2

Our portfolio
4,442
Units
in portfolio
$3.9b
Total assets
FY1
9 $3.3b

5,992
Land bank
of units
32
Villages completed or
under development
↵
↵
↵
↵
↵
↵
↵
↵
↵
785
Sales of
occupation rights
10
Greenfield sites
↵
↵
↵
↵
↵
↵
↵
↵
Summerset Rototuna, Hamilton
H I G H L I G H T S
1 3

2020 highlights
January
Construction sites fully
back up and running after
COVID-19 lockdown
May
Earthworks start
at St Johns site in Auckland
February
$20,000 raised by staff and
residents for Australian bush
fire victims
March
Our next-generation main
building at Casebrook,
Christchurch, opened
Start of COVID-19 lockdown
April
Dementia friendly
accreditation awarded
New Plymouth’s Bell Block
village launched
June
Annual Report 2020
1 4

September
First residents moved into our
new Papamoa Beach (Tauranga)
and Te Awa (Napier) villages
$150 million bond issue offered
October
Summerset enters NZ Aged
Care Association Awards,
winning staff training award
Half Moon Bay site
purchased in Auckland
July
Connect speaker series
restarts with our first
virtual event hosted by
Peta Mathias
August
University of Otago student
Riria Mohi-Dewhirst became the
first recipient of Summerset’s
new Waitaha Te Houhou
health scholarship
Lower Hutt resource
consent received
Resource consent notified for
proposed retirement village
in Parnell
November
December
Melbourne’s Cranbourne
North tenders ready
to issue to builders
H I G H L I G H T S
1 5

Portfolio growth
23 years of consistent growth and delivery
1
Total units in portfolio
129129
219219
407407
470470
528528
652652
732732
795795
921921
983983
1,1091,109
1,2721,272
1,3521,352
1,4861,486
1,6461,646
1,8551,855
2,1162,116
2,4192,419
2,8282,828
3,2783,278
3,7323,732
4,0864,086
4,4424,442
1291292192194074074704705285286526527327327957959219219839831,1091,1091,2721,2721,3641,3641,4861,4861,6461,6461,8551,8552,1162,1162,4192,4192,8282,8283,2783,2783,7323,7324,0864,086129129
9090
188188
63
58
124124
8080
63
126126
6262
126126
163163
8080
122122
160160
209209
261261
303303
409409
450450
454454
354354
356356
Existing stock
New units delivered
'97'98'99'00'01'02'03'04'05'06'07'08'09'10'11*'12'13'14'15'16'17'18'19'20
0
500
1,000
1,5
00
2,000
2,500
3,000
3,500
4,000
4,500
1 Units include all units to be sold under occupation right agreement
Annual Report 2020
1 6

23 years of consistent growth and delivery
1
Total units in portfolio
129129
21921
9
407407
470470
528528
652652
732732
795795
921921
983983
1,1091,109
1,2721,272
1,3521,352
1,4861,486
1,6461,646
1,8551,855
2,1162,116
2,4192,419
2,8282,828
3,2783,278
3,7323,732
4,0864,086
4,4424,442
1291292192194074074704705285286526527327327957959219219839831,1091,1091,2721,2721,3641,3641,4861,4861,6461,6461,8551,8552,1162,1162,4192,4192,8282,8283,2783,2783,7323,7324,0864,086129129
9090
188188
6363
5858
124124
8080
6363
126126
6262
126126
163163
8080
122122
160160
209209
261261
303303
409409
450450
454454
354354
356356
Existing stock
New units delivered
'97'98'99'00'01'02'03'04'05'06'07'08'09'10'11*'12'13'14'15'16'17'18'19'20
0
500
1,000
1,5
00
2,000
2,500
3,000
3,500
4,000
4,500
1 Units include all units to be sold under occupation right agreement
* 2011 existing stock included 12 units acquired as part of the Nelson site purchase
H I G H L I G H T S
1 7

Our people and
communit y
Summerset’s annual satisfaction survey shows continued
high satisfaction levels, with independent living residents
at 95% and care centre residents at 97%.
Annual Report 2020
1 8

Our Summerset community is made
up of more than 6,2
00 residents in
over 4,400 units and over 900 care
beds. We employ over 1,800 staff
across 32 retirement villages.
COVID-19
Due to the global pandemic,
2020 was difficult and challenging.
However, New Zealand's effective
public health response, and the
plans and procedures we put in
place, resulted in zero COVID-19
cases among our residents and staff
to date.
We engaged our pandemic plan
as soon as news of the virus
emerged and pulled together our
Crisis Response Team.
As events escalated, we worked
quickly to safeguard our residents
and staff through an evolving range
of measures, working with other
members of the aged care sector
at the forefront of the response.
During the nationwide COVID-1
9
lockdown period we:
•Procured more than $750,000
of additional personal
protective equipment
•Required staff and approved
visitors to undergo temperature
checks and wear face masks
•Provided security at all village
gates to screen visitors
•Increased our cleaning regimes,
particularly in high-touch areas
•Established a safe food delivery
service direct to our residents’
front doors
•Provided regular updates via
a new email newsletter
for residents and their families
•Provided care packages and
arranged physically distanced
events for residents
•Developed an online wellness
centre promoting physical and
mental wellbeing for residents.
Throughout 2
020, our staff have
worked hard to support residents
and their families to stay connected
despite travel restrictions.

7,000
care calls made
to prospective
residents
16,600
visitors to the
Wellness Centre,
our online entertainment
and education hub
10 days
to implement a
new nationwide
home grocery
delivery service
Over
2,000
third-party grocery
orders processed
and delivered
51,000
meals
delivered to
care centre
residents in
their rooms
41,000
meals
delivered to
village residents
131
residents tested
for COVID19
– all test results
negative
76
sta on paid
leave pending
a COVID19 test
– all test results
negative
13
resident and next
of kin newsletters
sent in irst 12 weeks
of lockdown

Extra
42
nurses
employed during
lockdown to maintain
care levels
Extra
80
care sta
employed during
lockdown to maintain
care levels
Extra
39
village sta
employed during
lockdown to maintain
care levels
O U R P E O P L E A N D C O M M U N I T Y
1 9

Resident wellbeing
During 2020 we continued the
rollout of our signature fitness
programme for residents. Designed
specifically for over-7
0s by an
experienced personal training
company, the programme has been
accredited as a falls-prevention class
by the Ministry of Health and ACC.
The new programme includes
mental and physical exercises to
improve and maintain coordination,
balance and cognitive health. To
ensure the effective delivery of the
programme, each class is run by a
fitness instructor. The programme is
now available in seven villages and
we will roll it out to a similar number
in 2021.
Although we had to postpone our
popular Connect speaker series
during the COVID-19 lockdowns,
we organised virtual events for our
residents. These included a wine-
tasting experience with Villa Maria
and a food-focused talk by chef and
author Peta Mathias.
We reintroduced face-to-face
events in July 2020, with Connect
talks from Olympic boardsailor
Barbara Kendall and comedians
Ginette McDonald and Pinky Agnew.
We also held a second series of
‘Understanding dementia’ talks in
conjunction with Dementia New
Zealand from September 2
020. We
plan to continue hosting virtual
events alongside our village-based
events into the future.
Resident wellbeing is
at the centre of what
we do and Summerset
continues to plan for
a variety of virtual and
village based events
Dementia-friendly accreditation
In April 2020 we achieved
dementia-friendly accreditation
from Alzheimers New Zealand. This
means we are nationally recognised
as a safe, accepting and supportive
place for people with dementia.
Alzheimers New Zealand’s Chief
Executive, Catherine Hall, said, “the
Committee was impressed with the
work Summerset has initiated to
challenge stigma and create kinder,
more accepting communities for
people living with dementia,
and the wide range of
creative dementia friendly initiatives
observed during the audit.”
To achieve this, we carried
out intensive work across our
villages, from training each staff
member, to creatively meeting the
individual needs of residents living
with dementia.
More than 1
95 corporate staff
have also completed an online
training module to increase their
understanding of dementia.
Summerset has a three-year
partnership with Dementia New
Zealand and has been working
alongside the organisation to
provide public talks at our villages to
reduce stigma around the disease.
Summerset has been
recognised as a safe
and accepting place
for people living
with dementia
Summerset by the Park, Manukau
Annual Report 2020
2 0

People are the heart of Summerset
In 2
020 we prioritised the training
and development of our staff, and
this will continue into 2021 and
beyond. We introduced a new online
learning system that provides staff
with easy access to user-friendly
training modules.
Online training enables a consistent
learning experience for all our staff,
wherever they work. Our first online
training programme was a six-
module self-paced learning
programme for our sales team.
We also launched our Care Centre
Manager and Clinical Nurse Lead
leadership development
programmes to build capability in
these key frontline roles. They began
with a series of face-to-face
workshops and will continue to roll
out over the next two to three years.
Online learning was invaluable
during the nationwide lockdown,
when we recruited more than 120
nurses and caregivers during the
first six weeks. It allowed us to induct
new staff into our processes,
procedures, and health and safety
protocols before they had even set
foot on Summerset premises.
Our recruitment campaign for extra
staff included contacting over 80
companies that were making
redundancies due to COVID-19.
Online training enables
a consistent learning
experience for staff and
was invaluable during
the lockdown period
Employee attrition
%
34%34%
29%29%
27%27%
28%28%
20%20%
20162017201820192020
0
10
2
0
30
40
Employee retention
%
74%74%
79%79%
82%82%
201820192020
0
30
6
0
90
Workplace injury rates
1
Frequency rate
3.683.68
2.522.52
2.152.15
2.732.73
4.254.25
8.418.41
5.625.62
4.614.61
5.055.05
6.226.22
Lost time injury frequency rate
Recordable injury frequency rate
20162017201820192020
0
2.5
5
7.5
10
1 The prior year (LTIFR) lost time injury frequency rate numbers have been updated due to Summerset changing
to the benchmark methodology used by the Business Leaders' Health and Safety Forum.
O U R P E O P L E A N D C O M M U N I T Y
2 1

60%6
50%
4
Sta engagement

2015
53%
2020
7.8
2017
67%
Previous survey providerPeakon
2019
7.7
2018
40%
2
70%
8
2019
67%
69%
%Peakon
1. Peakon was provided the 2019 raw data to ensure year on year consistency — noting dierent scoring scales (67% = 7.7).
Attracting and retaining staff
Staff retention and turnover
improved significantly over 2
020,
with turnover now below the
industry average. This was partly due
to the border closures and greater
economic uncertainty brought
about by COVID-19. However, it
was also the result of ongoing
improvements in our employee
offering and culture.
During the year we changed our
survey provider for measuring
staff engagement. We now use
the Peakon survey, whose much-
improved technology assisted us in
achieving 86% staff participation.
Our overall staff engagement score
increased from 7.7 to 7.8 out of
10 in 2020, putting us at or above
the top quartile of companies using
Peakon globally.
Diversity and inclusion
During 2020 we also progressed our
diversity and inclusion strategy. The
specialist consultancy, Diversitas,
thoroughly examined our policies
and processes through a diversity
and inclusion lens, and interviewed
staff across the organisation. As
a result of the review, we have
now identified opportunities for
continued improvement and a
three-year plan has been developed
with work starting in early 2021.
Continuing improvement in health
and safety
We were pleased to be reaccredited
with tertiary status in ACC’s
Accredited Employers Programme
in 2
020, which we have held since
June 2017. The annual renewal audit
provides an important snapshot of
safety and injury management in
our workplace. We are committed to
the core values of this programme,
creating safe work environments for
our people and ensuring that we
continue to be leaders in health
and safety.
7.8
Staff engagement score
(out of 10)
2020 highlights
•Strategy updated and three-
year plan developed for
implementation in 2
021
•Increased visibility and training of
senior leaders
•Improved risk reporting across
the organisation
•Safety in design implemented
and matured
•Improved incident reporting,
data and analysis
•Improved third-party
contractor management
•SiteWise pre-qualification
programme well embedded
•Improved onboarding
processes.
Annual Report 2020
2 2

Strong wave
of gr
owth
The New Zealand population aged 75 and over is forecast to more than triple in the next 50 years.
NZ population 75+
%
NZ population 75+ (left-hand axis)% population 75+ (right-hand axis)
2002
2007
2012
2016
2020
2023
2028
2033
2038
2043
2048
2053
2058
2063
2068
2073
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
0
3
6
9
12
15
18
Per annum New Zealand population growth 75+
NZ population 75+ per annum growth
1997-2002
2002-2007
2007-2012
2012-2016
2016-2020
2020-2023
2023-2028
2028-2033
2033-2038
2038-2043
2043-2048
2048-2053
2053-2058
2058-2063
2063-2068
2068-2073
0
5,000
10,000
15,000
20,000
25,000
30,000
Source: Statistics New Zealand – National Population Projections
O U R P E O P L E A N D C O M M U N I T Y
2 3

Our
villages
Summerset continues to grow its portfolio of
high-quality retirement villages with amenities
and facilities designed for Kiwi and Australian retirees.
Summerset at Monterey Park, Hobsonville
Annual Report 2020
2 4

Summerset has 32 villages in
operation or in development across
New Zealand, and a further eight
sites in New Zealand held for future
development. In 2
020 we purchased
2.8 hectares of land in Auckland in
Half Moon Bay.
Our land bank for future
development is the largest in the
New Zealand retirement sector,
allowing us to double our current
resident population. We have
retirement villages in the main
urban centres, including Auckland,
New Zealand’s most populous
city, with five villages and four
more in the pipeline. We also
have villages in major provincial
cities, including Nelson and New
Plymouth, and popular retirement
destinations such as Tauranga and
the Kapiti Coast.
2020 successes
In 2
020 we started earthworks at two
sites and our first residents moved
into three newly opened villages.
We also completed construction on
two next-generation main buildings,
at Casebrook in March and Rototuna
in November.
Our main buildings form the heart
of our villages, providing a vibrant
community hub for residents, staff,
families and friends.
At 9,000m
2
, our new main buildings
are almost double the size of those in
our earlier villages.

Village highlights
New residents
We were pleased to welcome our
first residents to our new villages at
Papamoa Beach (Tauranga),
Te Awa (Napier) and Bell Block
(New Plymouth). We now have two
villages in the Bay of Plenty, four in the
Hawke's Bay and two in Taranaki.

New earthworks
We started earthworks on two sites
in 2
020, at St Johns and Whangarei.
Members of Ngāti Hau, a hapū
of Ngāpuhi in the area of the
new Whangarei village site, gathered
for a morning blessing, alongside
contractors, local kaumātua Mike
Kake and Dave Coyne, and Group
Construction Manager Jason Rahui.

New technology
We imported New Zealand’s first
Tovertafel — an interactive lightshow
providing stimulation for people
with cognitive impairments. The new
technology is from the Netherlands for
use in
our newer memory care centres.
O U R V I L L A G E S
2 5

Memory care centres
Summerset is a New Zealand leader
in next-generation memory care.
Since the 2
017 opening of our award-
winning memory care centre in
Levin, we have refined the design
and features for our newest centres
in Casebrook and Rototuna.
Our in-house design and operations
teams have used research from
international dementia design
specialists to create apartment-
style living for residents with
dementia. The modern design
offers clear wayfinding, dementia-
friendly signage, large communal
areas and a secure outdoor
courtyard for freedom of movement
and independence.
Priorities for 2021
In 2021 we will complete our
Ellerslie village by finishing the last
independent apartment building. In
addition, we will deliver our first
units as part of the Hobsonville
village extension.
We expect to see good progress
in 2021 at our St Johns site. Bulk
earthworks will finish in March
2021, and construction will start on
the 8,500m
2
basement which will
contain carparking for residents.
We also received final resource
consent from the Environment
Court for our Boulcott site in
Lower Hutt in November 2020.
Construction has started on the
village, which will ultimately be home
to more than 300 residents.
Regional main buildings will be
delivered in both our Richmond and
Avonhead villages in 2
021. These
will provide further well-appointed
amenities for our residents.
6
Building
resource consents
lodged
RESOURCE CONSENTS
SITE

DETAILSPROGRESS
PrebbletonResource consent lodged Q3 2020In progress

RangioraPlan change approved.
Resource consent lodged Q4 2
020

In progress

Blenheim

Resource consent lodged Q4 2020

In progress

Cambridge Resource consent lodged Q4 2020 In progress

Waikanae

Resource consent lodged Q4 2020

In progress
Lower Hutt

Environment Court
decision granted
Resource consent received Q4 2020

Parnell

Resource consent lodged Q3 2020

Public notification closed
Hearing expected Q2 2
021

Annual Report 2020
2 6

Expanding the model
into Australia
It is important that we have a strong
local base as we expand into
Australia. We are gradually
developing our Australian team and
appointed the heads of the design,
sales and operations teams for
Victoria in 2
020.
Two of these roles were filled by
existing Summerset staff, who will
move to Melbourne early in 2021. We
are looking forward to providing the
Australian market with our
continuum of care offering and
the backing of a trusted brand
with 23 years’ experience in
retirement living.
Providing a home for life
in Australia
Summerset will offer a full
continuum of care in Australia.
This sets us apart from many
competitors in Australia, where it is
common
for independent living and
care to operate separately and
across different locations.
We will be building Cranbourne
North in carefully planned stages.
We expect to deliver approximately
40 villas in the first stage of the
development, from late 2021/
early 2022.
Planning for our specialist care
centre and care services at
Cranbourne North is already well
under way. The care centre will
offer a unique household model,
with no more than 18 residents
in a household.
Each resident will have a private
room and access to shared lounge
and dining areas. This will provide
them with the comfort, intimacy and
closeness of a family unit, and will
allow our care staff to focus on each
individual resident.
Half Moon Bay
In October 2
020 we announced the purchase of a 2.8-hectare site in
Half Moon Bay.
Once consented, it will be our ninth village in Auckland and our very
first in East Auckland.
It will include independent living and serviced apartments, care suites
and a memory care centre. It is near the Half Moon Bay Marina with ferry
services to the CBD and Waiheke Island.
Upper floors will have west-facing views across Half Moon Bay, towards
the city and out to the Waitakeres.
The number of people in the 75+ age group in East Auckland is forecast
to increase by over 5
0% in the next eight years.

O U R V I L L A G E S
2 7

Completed villages
In development
Proposed villages
Dunedin
Casebrook
Paraparaumu
Levin
Palmerston North
Wanganui
New Plymouth
Richmond
Nelson
Lower Hutt
Papamoa Beach
Havelock North
Hastings
Te Awa
Napier
Taupo
Katikati
Manukau
Warkworth
Milldale
Hobsonville
Ellerslie
Karaka
Parnell
Hamilton
Rototuna
Aotea
Kenepuru
Wigram
Avonhead
Bell Block
Waikanae
St Johns
Trentham
Whangarei
Cambridge
Rangiora
Prebbleton
Blenheim
Torquay
Cranbourne North
MELBOURNE
Half Moon Bay
Our
villages
Annual Report 2020
2 8

* New site purchased
Our land bank
New Zealand land bank
DesignConsentingConstructionVillage openFinal stages
Hobsonville, Auckland
Ellerslie, Auckland
Rototuna, Hamilton
Casebrook, Christchurch
Avonhead, Christchurch
Richmond, Tasman
Kenepuru, Wellington
Te Awa, Napier
Papamoa Beach, Tauranga
Bell Block, New Plymouth
St Johns, Auckland
Whangarei, Northland
Lower Hutt, Wellington
Rangiora, Canterbury
Parnell, Auckland
Waikanae, Kapiti
Cambridge, Waikato
Blenheim, Marlborough
Prebbleton, Canterbury
Milldale, Auckland
Half Moon Bay, Auckland*
Australian land bank
Cranbourne North, Melbourne
Torquay, Victoria
O U R V I L L A G E S
2 9

Our commitment
to sustainability
Summerset was certified as New Zealand’s
first carbonzero
TM
retirement village operator in 2018,
and we have continued to build on our commitment
to sustainability each year.
Annual Report 2020
3 0

In 2020, Summerset committed to
a science-aligned carbon reduction
target, that commits us to a 62%
reduction per square metre of
building area by 2032 (from 2017
levels). We are the only New Zealand
retirement village operator to have
done this. Summerset is also working
closely with its supply chains to
reduce carbon emissions. We have
also expanded our emissions
reduction programme into our
villages and started preparing for
innovation in future village builds.
Summerset has a large construction
business, giving us scope to reduce
our carbon emissions and future-
proof our villages against climate-
related risks. We can reduce
emissions by adopting new
technologies in our building designs,
using greener building materials and
creating landscapes that are more
water efficient.
As part of its goal of reaching net
zero carbon emissions by 2050, the
Government is expected to
introduce regulation on the Building
for Climate Change Programme in
2021. Summerset has made a
submission on this as part of the
consultation process.
Summerset has
expanded its emissions
reduction programme
across its villages
Emissions reduction programme
Summerset is Toitū carbonzero
TM
certified. We have been measuring,
managing and reporting on our
carbon footprint since 2017. From
2018, our carbon emissions have
been independently audited by
Toitū Envirocare to the ISO14064-1
standard. We are on track to meet
our target of a 5% reduction in all
operational emissions intensity by
the end of 2022.
Our internal tracking shows we
have reduced our carbon emissions
intensity by 31% since 2017.
Given our significant property
development activities, we calculate
our total gross carbon emissions
per square metre of build. This has
decreased by 22% since 2017.
Decrease in absolute
carbon emissions
Summerset’s total emissions in 2020
were 6,414 tCO
2
e, which is 1% lower
than the previous year’s total of
6,466 tCO
2
e and 8% higher than
the base year total of 5,939 tCO
2
e.
Energy use accounts for 80% of our
carbon emissions.
Absolute emissions progress
tCO
2
e
5,9395,939
6,6716,671
6,4666,466
6,4146,414
2017
(Base year)
201820192020
0
800
1,600
2,400
3,200
4,000
4,800
5,600
6,400
7,200
O U R C O M M I T M E N T T O S U S T A I N A B I L I T Y
3 1

Progress in 2020
In 2
020 we monitored
our performance across two
environmental, social and
governance (ESG) indices. We
achieved an AA rating from Morgan
Stanley and submitted a non-scored
survey to the Carbon Disclosure
Project (CDP) for the first time.
In addition, Summerset joined New
Zealand’s main body for sustainable
building knowledge in August.
The New Zealand Green Building
Council membership will provide
our staff with access to technical
knowledge on best environmental
building practices.
Along with over 100 of New
Zealand’s leading companies, we
are a signatory to the Climate
Leaders Coalition and have set a
science-aligned carbon reduction
target for our business in 2021.
This demonstrates our commitment
to the Paris Agreement on global
climate change.
Summerset's five areas of focus as
part of our emissions management
reduction are
energy, waste, travel,
paper and fertilisers.
ENERGY
Reducing electricity and
gas usage
We fine-tuned, maintained and
upgraded equipment throughout
2
020 to ensure energy efficiency.
This included upgrading the gas
boiler at our Manukau village
and continuing our LED upgrade
programme. In addition, we joined
the New Zealand Green Building
Council to ensure optimal energy
performance for new builds.
Emissions intensity – CO
2
e tonnes per $ million revenue
tCO
2
e
5454
4949
4242
3737
2017
(Base year)
2
01820192020
0
15
30
45
60
2020 key impact areas by tCO
2
e
Energy 8
0%
Travel 9%
Waste 1
1%
Paper 0.3%
Fertiliser 0.1%
Annual Report 2020
3 2

WASTE
Minimising our waste to landfill
Reducing the amount of waste
we send to landfill is an ongoing
focus
for our offices, operations and
construction activities. In operations
we achieved a 35% diversion
from landfill, and in construction
the figure was 30%.The Ellerslie
construction site achieved a 75%
avoidance. As a result of this focus
on recycling, our facilities now send
25% less waste to landfill per resident
compared to our 2017 base year.
TRAVEL
Being more efficient in the way
we travel
Travel emissions are calculated for
car hire and air travel. Compared to
2
019 we achieved a 50% decrease
in emissions from domestic, short-
haul and international flights in 2020.
This was due to COVID-19 travel
restrictions and the increased use of
communications technology.
PAPER
Reducing our paper consumption
Our paper use went up due to the
increase in printed communications
during the COVID-1
9 lockdowns.
However, invoices are now sent via
email to 51% of residents, up from
17% at the beginning of 2020.
FERTILISERS
Selecting environmentally
friendly fertilisers
Fertilisers are a small but visible part
of our emissions profile. We continue
to reduce our fertiliser emissions by
working with our landscaping teams,
gardeners and suppliers to ensure
we use products that have a low
carbon footprint.
Governance
Roles and responsibilities
BoardOversees climate-related issues and responsibility for
sustainability. Reviews and approves direction and
monitors progress against targets

CEOAssesses and manages climate-related risks and
opportunities. Reports programme performance and
progress at Board meetings

Sustainability
Forum
Includes senior managers from across the business.
Shapes and monitors our sustainability strategy

Key functional
workstreams
Covers operational impact areas related to the new
build environment

Green TeamImplements specific actions and initiatives identified in the
emissions reduction plan

Further details on our climate-related targets,
measurements and results
Summerset is aware of work under way on making climate-related financial
disclosures mandatory for listed companies by 2
023. Climate-related risks
are currently managed through our risk management framework and across
our governance and reporting processes.

•Governance – for a statement on the Board’s oversight of climate-related
risks and opportunities see our governance section on page 79
•Strategy – details of our overall business strategy is on page 5 and our plan
is to better understand climate-related material risks and opportunities for
Summerset in the future
•Risk management – see our risk management framework presented on
pages 86 to 88
•Metrics and targets – carbon performance metrics can be found
above; operational performance metrics are on pages 18 to 27, financial
performance metrics are on pages 34 to 38
O U R C O M M I T M E N T T O S U S T A I N A B I L I T Y
3 3

Our
performance
Summerset has maintained strong profitability and
balance sheet resilience throughout 2020 and is well
positioned for future sustained growth.
Summerset Heritage Park, Ellerslie
Annual Report 2020
3 4

Financial performance overview
Underlying profit for the year
ended 31 December 2
020
decreased by 7% on the prior
year to $98.3 million (2019:
$106.2 million), driven principally
by significant additional operational
costs associated with COVID-19
to ensure our residents remained
safe, increased investment in care,
employee wages and penal rates,
and cost drag from opening new
villages and main buildings.
Our sales of new and existing units
were strong, with increased volumes
for both. We also saw increased
sale prices on our resale units,
reflecting the strong residential
property market. The margin on new
units reduced due to changes in
the mix of units sold, with more
needs-based products and more
regional sales.
Revenue for the year grew 12% to
$172.4 million (2019: $153.9 million),
reflecting the opening of three new
villages and two main buildings,
and strong financial performance
across village operations. Our care
occupancy rates in established
villages remained high despite a
small reduction following the two
COVID-19 lockdowns.
Underlying profit is a non-GAAP
measure. A detailed explanation is
included in Note 2 to the Financial
Statements (see page 49). In
general terms, underlying profit
removes the fair value movement of
investment property and reinstates
the realised gains associated with
our resales and the development
margin associated with our new
sales. Underlying profit is used to
determine the dividend pay-out
to shareholders.
COVID-19 impact
COVID-19 had a significant impact
on 2
020 underlying profit. Increased
operational costs of over $9 million
were predominantly from additional
staff resources, pandemic kits and
personal protective equipment.
This included additional care and
housekeeping staff, a $
2 per hour
wage increase during level four
lockdown, security at our sites, and
extra sick leave as a precaution for
staff either because of their health or
that of their close contacts.
The costs outlined above are some
of the direct costs related to our
response, but we also incurred a
number of indirect costs. These
include the cost of paying the
construction staff during lockdown
while they were unable to be on
site and significant investment in
marketing and sales post lockdown
to support our sales teams to
ensure our sales were successful.
There were also no sales during the
national lockdown.
In May we received $0.7 million as
part of the Government’s support
to aged care providers for the
additional costs incurred. We note
that this is considerably less than our
actual costs to date. We qualified
for the COVID-19 wage subsidy as
revenue fell by more than 30% in
April, when retirement unit sales fell
to zero, and received $8.6 million.
However, we repaid this in full once
it became clear the business was in
a stable financial position and the
outlook was positive.
Sales were significantly better
than expected once the country
came out of lockdown, with the
third and fourth quarters bringing
record sales and the business
continuing to perform well. While
we have not yet experienced the
economic downturn predicted by
many economists, we are wary
that COVID-19 will be with us for
some time. We will continue to
plan and prepare to ensure we are
well positioned to deal with any
future outbreaks.
Underlying profit has
seen a compound
annual growth rate of
32% since the company
was listed on the NZX
in 2
011
Long-term growth
A key component of underlying
profit is the realised development
margin on new sales which was
$
48.2 million in 2020 (2019:
$61.0 million). The development
margin was 19.6%, down from
27.9% in the previous year. The
decrease was due to increased
construction costs across our main
centres, an increase in needs-
based products and fewer Auckland
settlements. The long-term returns
remain strong on needs-based
products. Summerset’s medium-
term expectation of development
margins is in the 20–25% range.
This will continue to be an area
of significant focus for the Board
and management.
Good margins reflect the
advantage of having strong
in-house capabilities for each
stage of village development,
including land purchase,
planning, consenting, design and
construction management. We
can achieve cost advantages
through scale and standardisation
of development programmes, while
also being able to adapt each project
to local needs and preferences.
Summerset continues to maintain
the largest land bank for a retirement
village operator in New Zealand, and
acquired a new site at Half Moon Bay
in Auckland during 2020. This brings
our total land bank of units to 5,992.
O U R P E R F O R M A N C E
3 5

Summary of sales and
developments
New Zealand’s residential property
market is continuing to hold strong
despite early predictions from
market analysts that the global
pandemic could result in significant
decreases in house prices
nationwide. Prices continued to rise
across most regions, partly fuelled
by low interest rates and strong
buyer demand.
Summerset had a record sales year,
with 7
85 unit sales of occupation
rights (2019: 652), 404 of them new
unit sales and 381 resales. Average
gross proceeds per new sale
settlement of $607,000 were down
from $665,000 in 2019 due to the
change in mix of unit type and region
of sales. Realised resale gain
increased by 25% to $46.1 million in
2020. Average gross proceeds per
resale settlement were $464,000,
up 4% from 2019. This reflects the
growth in the residential property
market in some regions, as well as
the length of time taken between
sale of units.
Key development milestones
included the opening of three new
villages: Papamoa Beach (Tauranga),
Te Awa (Napier) and Bell Block (New
Plymouth). For developing villages
still under construction, new unit
sales were strong at Casebrook
(Christchurch), Rototuna (Hamilton)
and Avonhead (Christchurch).
In addition, our Australian sites
acquired to date illustrate
Summerset's commitment to
diversifying into an attractive
overseas growth market.
Underlying profit
$m
37.837.856.656.681.781.798.698.6106.2106.298.398.3
FY15FY16FY17FY18FY19FY20
0
4
0
80
120
Land bank over time (units)
1
2,4142,414
2,6
092,609
2,8412,841
3,9103,910
5,3805,380
5,9925,992
1,8811,8812,4142,4142,6092,6092,8412,8413,9103,9105,3805,380
533533
195195
232232
1,0691,069
1,4701,470
612612
Existing land bank
Net land bank growth
FY15FY16FY17FY18FY19FY20
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
1 Units include all units to be sold under occupation right agreement
Annual Report 2020
3 6

Net profit after tax
Summerset recorded a net profit
after tax of $
230.8 million for the year
ended 31 December 2020, up from
$175.3 million in 2019.
This increase is largely due to the
fair value movement on investment
property (2020: $221.1 million; 2019:
$165.3 million).
Fair value movement in 2020 of
$221.1 million reflects the delivery
of 356 units in the financial
year, the completion of two main
buildings, strong sales rates across
our villages reducing our vacant
stock levels and changes to the
key assumptions applied by the
valuer. Assumption changes in the
period were predominately to short
term growth rates and recycle
frequencies, reflecting the tailwinds
seen in the residential property
market across the second half
of 2020.
Business growth and expenses
Summerset derives its revenue from
selling units (deferred management
fees) and providing village and care
services. The company’s revenue
increased as a result of higher
volumes, reflective of the scale and
growth of our operations.
Deferred management fees on
Summerset’s investment property
were $
60.8 million in 2020
(2019: $52.5 million). The growth
reflects the increase in the
number, occupancy and value of
Summerset’s portfolio of units.
Expense breakdown
Employee expenses
Employee
expenses 5
7%
Property-related
expenses 10%
Repairs and
maintenance
expenses 4%
Depreciation,
amortisation
and impairments 7%
Other operating
expenses 2
2%
Revenue breakdown
Revenue breakdown
Deferred
management fees 35%
Care fees and
village services 65%
Dividend cents per share
1.41.41.91.92.62.63.93.96.06.06.46.46.06.02.52.53.33.3
2.12.1
3.43.4
5.15.1
7.17.1
7.27.2
7.77.7
7.07.0
Interim
Final
FY12FY13FY14FY15FY16FY17FY18FY19FY20
0
4
8
1
2
16
O U R P E R F O R M A N C E
3 7

96%
Occupancy in our mature
care centres

At 31 December 2
020, Summerset’s
total unit portfolio reached 4,442
(2019: 4,086) and at year end there
were only 179 new sales units and 73
resale units available for sale.
The final apartment building in
Summerset’s Ellerslie village is due
for delivery in early 2021, and
comprises a further 74 apartments.
Strong progress has also been made
on two main buildings in Avonhead
and Richmond, both due to open
in 2021.
Occupancy in our mature care
centres was 96% which is above the
industry average of 90%.
Total expenses increased in 2020
by 22% to $158.3 million (2019:
$130.2 million), largely due to
COVID-19 costs and cost drag
of new care centres and villages
opening in line with Summerset's
ongoing business growth. We also
invested in our employee offering
and culture to ensure we remain
a top employer, we had increased
uncontrollable expenditure items
such as rates and power, and
spent more on additional sales and
marketing expenses.
Operating activities
Summerset’s net cash from
operating activities was
$
266.8 million for the year, up 12%
from 2019 (2019: $237.9 million).
This was principally driven by
gross receipts from new occupation
right agreement sales, amounting
to $237.0 million, up from
$209.4 million in 2019.
Summerset is a growth company
and reinvests operating cash flows
back into the business to finance
future growth. In 2020 Summerset
invested $318.8 million, primarily
in new and existing retirement
villages and care centres (2019:
$327.4 million).
Investment activities are principally
the purchase of land and the
development and refurbishment of
new and existing retirement villages
and care centres.
Assets rose to $3.9 billion
Total assets rose 17% to $3.9 billion
at 31 December 2
020 (2019:
$3.3 billion), mainly due to growth
in the size and value of Summerset’s
investment property, which reached
$3.6 billion (2019: $3.1 billion).
At balance date, Summerset also
had other property, plant and
equipment valued at $181.1 million
(2019: $154.0 million), most of
this being care centres (these
are operated to provide services
and are therefore not included as
investment property).
An increased embedded value of
$883.6 million (2019: $752.7 million)
demonstrates future cash that can
be generated when units are resold.
Interest-bearing debt of
$
687.1 million was 18% of total assets
at year end (2019: $587.1 million).
Summerset raised $150.0 million
from a new retail bond in September
2020 which brings the year end debt
at face value to $297.6 million of
bank borrowings and $375.0 million
of retail bonds.
Summerset also has residents' loans
of $1.5 billion (2019: $1.3 billion).
This in the form of licences paid
by residents under occupation right
agreements, these are repayable
when residents vacate units and
the associated occupation rights
are resold.
Consistent strong
growth performance
Summerset continued to pay
dividends to shareholders during
COVID-1
9 despite unprecedented
circumstances. We will pay a final
dividend of 7.0 cents per share (cps)
on 22 March 2021, making a full pay-
out for the 2020 year of 13.0 cps
(2019: 14.1 cps).
Board policy remains for shareholder
distributions in the range of 30–50%
of each year’s underlying profit. The
2020 distribution of $29.7 million
represents 30% of underlying profit
($98.3 million), which is consistent
with the last five years.
Summerset continues to
offer shareholders a dividend
reinvestment option, including a 2%
discount to market share price.
Annual Report 2020
3 8

Five year
summar
y
Key operational and financial statistics for the
five year period up to and including FY2
0 are
as follows:
Results highlights - operational
UnitFY20FY19FY18FY17FY16
FY19 to
FY2
0 %
Change
New sales of occupation rightsNo.40432933938241423%
Resales of occupation rightsNo.38132330130024418%
Total sales of occupation rightsNo.78565264068265820%
Development margin%19.6%27.9%33.2%27.3%22.2%-30%
New units deliveredNo.3563544544504091%
Units in portfolioNo.4,4424,0863,7323,2782,8289%
Care beds in portfolioNo.9158588588067487%
Results highlights - financial
UnitFY20FY19FY18FY17FY16
FY19 to
FY2
0 %
Change
Net operating cash flow
$m
266.8237.9217.8207.7192.612%
Total assets
$m
3,893.23,337.92,766.42,232.81,706.817%
Net assets
$m
1,354.81,131.9978.8785.8545.620%
Underlying profit
$m
98.3106.298.681.756.6-7%
Profit before income tax (IFRS)
$m
221.7173.6216.2240.2145.628%
Profit for the period (IFRS)
$m
230.8175.3214.5239.9145.532%
Dividend per share
cents
13.014.113.211.07.7-8%
Basic earnings per share
cents
102.378.697.1109.866.930%
O U R P E R F O R M A N C E
3 9

Financial
statements
Annual Report 2020
4 0

Income Statement
For the year ended 31 December 2020
20202019
NOTE$000$000
Care fees and village services4111,619101,259
Deferred management fees460,75252,470
Interest received451217
Total revenue172,422153,946
Fair value movement of investment property11221,142165,252
Total income393,564319,198
Operating expenses5(146,805)(122,399)
Depreciation and amortisation expense9, 10(8,097)(7,833)
Impairment of property, plant and equipment9(3,431)-
Total expenses
(158,333)
(130,232)
Operating profit before financing costs235,231188,966
Net finance costs6(13,496)(15,405)
Profit before income tax221,735173,561
Income tax credit79,0411,701
Profit for the period230,776175,262
Basic earnings per share (cents)20102.3078.59
Diluted earnings per share (cents)20101.2377.52
The accompanying notes form part of these financial statements.
4 1

Statement of Comprehensive Income
For the year ended 31 December 2020
20202019
NOTE$000$000
Profit for the period230,776175,262
Fair value loss on interest rate swaps14(7,075)
(7,015)
Tax on items of other comprehensive income71,981
1,964
(Loss)/gain on translation of foreign currency operations(491)266
Other comprehensive income that will be reclassified subsequently to
profit or loss for the period net of tax
(5,585)(4,785)
Net revaluation of property, plant and equipment912,712-
Tax on items of other comprehensive income
7(3,145)
-
Other comprehensive income which will not be reclassified
subsequently to profit or loss for the period net of tax
9,567-
Total comprehensive income for the period
234,758
170,477
The accompanying notes form part of these financial statements.
Annual Report 2020
4 2

Statement of Changes in Equity
For the year ended 31 December 2020
SHARE
CAPITAL
$000
HEDGING
RESERVE
$000
REVALUATION
RESERVE
$000
RETAINED
EARNINGS
$000
FOREIGN
CURRENCY
TRANSLATION
RESERVE
$000
TOTAL
EQUITY
$000
As at 1 January 2019269,467(10,122)24,941694,5085978,799
Adjustment on adoption
of IFRS 16
---(1,413)-(1,413)
Adjusted balance at
1 January 2
019
269,467(10,122)24,941693,0955977,386
Profit for the period---175,262-175,262
Other comprehensive
income for the period
-(5,051)--266(4,785)
Total comprehensive
income for the period
-(5,051)-175,262266170,477
Dividends paid---(30,586)-(30,586)
Shares issued13,351----13,351
Employee share plan
option cost
1,256----1,256
As at 31 December 2019284,074(15,173)24,941837,7712711,131,884
As at 1 January 2020284,074(15,173)24,941837,7712711,131,884
Profit for the period---230,776-230,776
Other comprehensive
income for the period
-(5,094)9,567-(491)3,982
Total comprehensive
income for the period
-(5,094)9,567230,776(491)234,758
Dividends paid---(31,222)-(31,222)
Shares issued16,395----16,395
Employee share plan
option cost
3,030----3,030
As at 31 December 2020303,499(20,267)34,5081,037,325(220)1,354,845
The accompanying notes form part of these financial statements.
4 3

Statement of Financial Position
As at 31 December 2020
20202019
NOTE$000$000
Assets
Cash and cash equivalents15,81721,462
Trade and other receivables833,39536,662
Interest rate swaps1418,41212,617
Property, plant and equipment9181,098154,004
Intangible assets105,7096,123
Investment property113,638,7603,107,014
Total assets3,893,1913,337,882
Liabilities
Trade and other payables12158,610134,680
Employee benefits1315,43811,434
Revenue received in advance4114,73791,142
Interest rate swaps1428,15021,075
Residents’ loans151,520,2981,327,607
Interest-bearing loans and borrowings17687,099597,081
Lease liability1611,18410,460
Deferred tax liability72,83012,519
Total liabilities2,538,3462,205,998
Net assets1,354,8451,131,884
Equity
Share capital19303,499284,074
Reserves1914,02110,039
Retained earnings1,037,325837,771
Total equity attributable to shareholders1,354,8451,131,884
The accompanying notes form part of these financial statements.
On behalf of the Board
Rob Campbell
Director and Chair of
the Board
James Ogden
Director and Chair of the
Audit Committee
Authorised for issue on 22 February 2021
Annual Report 2020
4 4

Statement of Cash Flows
For the year ended 31 December 2020
20202019
$000$000
Cash flows from operating activities
Receipts from residents for care fees and village services110,719101,116
Interest received51217
Payments to suppliers and employees(142,205)(116,811)
Receipts for residents’ loans - new occupation right agreements237,000209,364
Net receipts for residents' loans - resales of occupation right agreements61,28244,010
Net cash flow from operating activities266,847237,896
Cash flows to investing activities
Sale of investment property1,154-
Payments for investment property:
- land(44,386)(57,344)
- construction of villages(229,205)(232,768)
- refurbishment of villages(8,244)(7,201)
Payments for property, plant and equipment:
- construction of care centres(16,651)(15,413)
- refurbishment of care centres(1,107)(146)
- other(7,760)(3,172)
Payments for intangible assets(668)(567)
Capitalised interest paid(11,910)(10,800)
Net cash flow to investing activities(318,777)(327,410)
Cash flows from financing activities
Net (repayments of)/proceeds from bank borrowings(71,542)135,636
Proceeds from issue of retail bonds150,000-
Proceeds from issue of shares4,2012,215
Interest paid on borrowings(15,436)(13,549)
Payments in relation to lease liabilities(1,549)(1,264)
Dividends paid(19,389)(19,544)
Net cash flow from financing activities46,285103,494
Net (decrease)/increase in cash and cash equivalents(5,645)13,980
Cash and cash equivalents at beginning of period21,4627,482
Cash and cash equivalents at end of period15,81721,462
The accompanying notes form part of these financial statements.
4 5

Reconciliation of Operating Results and Operating Cash Flows
For the year ended 31 December 2020
20202019
$000$000
Profit for the period230,776175,262
Adjustments for:
Depreciation and amortisation expense8,0977,833
Impairment on property, plant and equipment3,431-
Fair value movement of investment property(221,142)(165,252)
Net finance costs paid13,49615,405
Income tax credit(9,041)(1,701)
Deferred management fee amortisation(60,752)(52,470)
Employee share plan option cost1,5761,256
Other non-cash items90271
(264,245)(194,658)
Movements in working capital
Decrease/(increase) in trade and other receivables1,632(10,724)
Increase in employee benefits4,0041,980
Increase in trade and other payables903624
Increase in residents’ loans net of non-cash amortisation293,777265,412
300,316257,292
Net cash flow from operating activities266,847237,896
The accompanying notes form part of these financial statements.
Annual Report 2020
4 6

Notes to the
financial
s
tatements
For the year ended 31 December 2020
1. Summary of accounting policies
Reporting entity
The consolidated financial statements presented for the year ended 31 December 2
020 are for Summerset Group Holdings Limited
(the "Company") and its subsidiaries (collectively referred to as the "Group"). The Group develops, owns and operates integrated
retirement villages in New Zealand, including independent living, care centres with rest home and hospital-level care and memory
care centres. The Group also owns land for development of retirement villages in Australia.
Summerset Group Holdings Limited is registered in New Zealand under the Companies Act 1993 and is a FMC Reporting Entity for
the purposes of the Financial Markets Conduct Act 2013. The reporting entity is listed on the New Zealand Stock Exchange (NZX),
being the Company’s primary exchange, and is listed on the Australian Securities Exchange (ASX) as a foreign exempt listing.
Basis of preparation
These consolidated financial statements have been prepared in accordance with generally accepted accounting practice in New
Zealand (NZ GAAP), except for Note 2: Non-GAAP underlying profit, which is presented in addition to NZ GAAP compliant information.
NZ GAAP in this instance refers to New Zealand equivalents to International Financial Reporting Standards (NZ IFRS) as appropriate
for profit-oriented entities. These financial statements also comply with International Financial Reporting Standards.
These financial statements are expressed in New Zealand dollars, which is the Company’s and New Zealand subsidiaries' functional
currency. The functional currency of the Company's Australian subsidiaries is Australian dollars. All financial information has been
rounded to the nearest thousand, unless otherwise stated.
All amounts are shown exclusive of goods and services tax (GST), except for trade receivables and trade payables, and except where
the amount of GST incurred is not recoverable. When this occurs, GST is recognised as part of the cost of the asset or as an expense
as applicable.
The measurement basis adopted in the preparation of these financial statements is historical cost, with the exception of the items
noted below.
•Interest rate swaps – Note 14
•Investment property – Note 11
•Land and buildings – Note 9
•Retail bonds – Note 17
Basis of consolidation
Subsidiaries are fully consolidated at the date on which the Group obtains control, and continue to be consolidated until the date
when
such control ceases. The financial statements are prepared for the same reporting period as the Company, using consistent
accounting policies. All intra-group transactions and balances arising within the Group are eliminated in full.
All subsidiary companies are 100% owned and incorporated in New Zealand or Australia with a balance date of 31 December.
4 7

The New Zealand subsidiaries are:
Summer Land Developments Limited
Summerset Care Limited
Summerset Holdings Limited
Summerset LTI Trustee Limited
Summerset Management Group Limited
Summerset Properties Limited
Summerset Retention Trustee Limited
Summerset Villages (Aotea) Limited
Summerset Villages (Avonhead) Limited
Summerset Villages (Bell Block) Limited
Summerset Villages (Blenheim) Limited
Summerset Villages (Cambridge) Limited
Summerset Villages (Casebrook) Limited
Summerset Villages (Dunedin) Limited
Summerset Villages (Ellerslie) Limited
Summerset Villages (Half Moon Bay) Limited
Summerset Villages (Hamilton) Limited
Summerset Villages (Hastings) Limited
Summerset Villages (Havelock North) Limited
Summerset Villages (Hobsonville) Limited
Summerset Villages (Karaka) Limited
Summerset Villages (Katikati) Limited
Summerset Villages (Kenepuru) Limited
Summerset Villages (Levin) Limited
Summerset Villages (Lower Hutt) Limited
Summerset Villages (Manukau) Limited
Summerset Villages (Milldale) Limited
Summerset Villages (Napier) Limited
Summerset Villages (Nelson) Limited
Summerset Villages (New Plymouth) Limited
Summerset Villages (Number 42) Limited
Summerset Villages (Number 43) Limited
Summerset Villages (Number 4
4) Limited
Summerset Villages (Number 45) Limited
Summerset Villages (Palmerston North) Limited
Summerset Villages (Papamoa) Limited
Summerset Villages (Paraparaumu) Limited
Summerset Villages (Parnell) Limited
Summerset Villages (Prebbleton) Limited
Summerset Villages (Rangiora) Limited
Summerset Villages (Richmond) Limited
Summerset Villages (Rototuna) Limited
Summerset Villages (St Johns) Limited
Summerset Villages (Taupo) Limited
Summerset Villages (Te Awa) Limited
Summerset Villages (Trentham) Limited
Summerset Villages (Waikanae) Limited
Summerset Villages (Wanganui) Limited
Summerset Villages (Warkworth) Limited
Summerset Villages (Whangarei) Limited
Summerset Villages (Wigram) Limited
Welhom Developments Limited
The Australian subsidiaries are:
Summerset Care (Australia) Pty Limited
Summerset Holdings (Australia) Pty Limited
Summerset Management Group (Australia) Pty Limited
Summerset Villages (Cranbourne North) Pty Limited
Summerset Villages (Number 2) Pty Limited
Summerset Villages (Number 3) Pty Limited
Summerset Villages (Number 4) Pty Limited
Summerset Villages (Number 5) Pty Limited
Summerset Villages (Number 6) Pty Limited
Welhom Developments (Australia) Pty Limited
Accounting policies
Accounting policies that summarise the measurement basis used and that are relevant to the understanding of the financial
statements are provided throughout the accompanying notes.
The accounting policies adopted have been applied consistently throughout the periods presented in these financial statements.
The Group adopted all mandatory new and amended NZ IFRS Standards and Interpretations. and there has been no material impact
on the Group's financial statements.
There are no new standards, amendments or interpretations that have been issued and are not yet effective, that are expected to
have a significant impact on the Group.
Critical accounting estimates and judgements
In preparing the financial
statements, management has made estimates and assumptions about the future that affect the reported
amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during
the period. Actual results may differ from those estimates.
Estimates and assumptions are regularly evaluated and are based on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances. The principal areas of judgement in preparing these
financial statements are described in the following notes:
•Deferred management fees – Note 4
•Deferred taxation – Note 7
•Interest rate swaps – Note 14
Annual Report 2020
Notes to the financial statements (continued)
4 8

•Leases – Note 1
6
•Revenue in advance – Note 4
•Valuation of investment property – Note 11
•Valuation of land and buildings – Note 9
•Valuation of retail bonds – Note 17
Comparative information
No comparatives have been restated in the current year.
2. Non-GAAP underlying profit
20202019
Ref$000$000
Profit for the period230,776175,262
Less fair value movement of investment propertya)(221,142)(165,252)
Add impairment of assetsb)3,431-
Add realised gain on resalesc)46,07236,901
Add realised development margind)48,20860,973
Less deferred tax credite)(9,041)(1,701)
Underlying profit98,304106,182
Underlying profit is a non-GAAP measure and differs from NZ IFRS profit for the period. Underlying profit does not have a standardised
meaning prescribed by GAAP and therefore may not be comparable to similar financial information presented by other entities.
The Directors have provided an underlying profit measure in addition to IFRS profit to assist readers in determining the realised
and unrealised components of fair value movement of investment property, impairment and tax expense in the Group’s income
statement. The measure is used internally in conjunction with other measures to monitor performance and make investment
decisions. Underlying profit is a measure that the Group uses consistently across reporting periods. Underlying profit is used to
determine the dividend pay-out to shareholders.
This statement presented is for the Group, prepared in accordance with the Basis of preparation: underlying profit described below.
Basis of preparation: underlying profit
Underlying profit is determined by taking profit for the period determined under NZ IFRS, adjusted for the impact of the following:
a)Less fair value movement of investment property: reversal of investment property valuation changes recorded in NZ IFRS
profit for the period, which comprise both realised and non-realised valuation movements. This is reversed and replaced with
realised
development margin and realised resale gains during the period, effectively removing the unrealised component of
the fair value movement of investment property.
b)Add impairment of assets: remove the impact of non-cash care centre valuation changes recorded in NZ IFRS profit for the
period. Care centres are valued at least every three years (last valued as at 31 December 2020), with fair value gains flowing
through to the revaluation reserve unless the gain offsets a previous impairment to fair value that was recorded in NZ IFRS profit
for the period. Where there is any impairment of a care centre, or reversal of a previous impairment that impacts NZ IFRS profit
for the period, this is eliminated for the purposes of determining underlying profit.
c)Add realised gain on resales: add the realised gains across all resales of occupation rights during the period. The realised
gain for each resale is determined to be the difference between the licence price for the previous occupation right for a
retirement unit and the occupation right resold for that same retirement unit during the period. Realised resale gains are a
measure of the cash generated from increases in selling prices of occupation rights to incoming residents, less cash amounts
repaid to vacated residents for the repayment of the price of their refundable occupation right purchased in an earlier
period, with the recognition point being the cash settlement. Realised resale gains exclude deferred management fees and
refurbishment costs.
d)Add realised development margin: add realised development margin across all new sales of occupation rights during the
period, with the recognition point being the cash settlement. Realised development margin is the margin earned on the first
time sale of an occupation right following the development of a retirement unit. The margin for each new sale is determined
to be the licence price for the occupation right, less the cost of developing that retirement unit.
4 9

Components of the cost of developing units include directly attributable construction costs and a proportionate share of the
following costs:
•Infrastructure costs
•Land cost on the basis of the purchase price of the land
•Interest during the build period
•Head office costs directly related to the construction of units
All costs above include non-recoverable GST.
Development
margin excludes the costs of developing common areas within the retirement village (including a share of the
proportionate costs listed above). This is because these areas are assets that support the sale of occupation rights for not just
the new sale but for all subsequent resales. It also excludes the costs of developing care centres, which are treated as property,
plant and equipment for accounting purposes.
Where costs are apportioned across more than one asset, the apportionment methodology is determined by considering the
nature of the cost.
e)Add/(less) deferred tax expense/(credit): reversal of the impact of deferred taxation.
Underlying profit does not include any adjustments for abnormal items or fair value movements on financial instruments that
are included in NZ IFRS profit for the period.
3. Segment reporting
The Group operates in one industry, being the provision of integrated retirement villages. The services provided across all of the
Group’s villages are similar, as are the type of customer and the regulatory environment. The chief operating decision makers, the
Chief Executive Officer and the Board of Directors, review the operating results of the Group as a whole on a regular basis. On
this basis,
the Group has one reportable segment, and the Group results are the same as the results of the reportable segment. All
resource allocation decisions across the Group are made to optimise the consolidated Group’s result.
The Group continues to proceed with its expansion into Australia. Two Australian sites were purchased in 2019. It is intended that
these sites will be developed into retirement villages. To date the expenditure incurred and assets acquired in Australia have been
immaterial to the Group and so are not reported as a separate operating segment as at 31 December 2020.
The Ministry of Health is a significant customer of the Group, as the Group derives care fee revenue in respect of eligible government
subsidised aged care residents. Fees earned from the Ministry of Health for the year ended 31 December 2020 amounted to
$36.2 million (2019: $32.2 million). No other customers individually contribute a significant proportion of the Group revenue. All
revenue is earned in New Zealand.
4. Revenue
Care fees and village services income are recognised over the period in which the service is rendered.
Deferred management fees, which entitle residents to accommodation and the use of the community facilities within the village,
are recognised over the period of service, being the greater of the expected period of tenure or the contractual right to revenue.
The expected periods of tenure, being based on historical Group averages, are estimated to be seven to eight years for villas,
five years for apartments, three years for serviced apartments and memory care apartments and two years for care suites. Where
the deferred management fees over the contractual period exceed the amortisation of the deferred management fee based on
estimated tenure, the amount is recorded as a liability (revenue in advance). At balance date, the majority of the revenue in advance
balance is non-current. Deferred management fees are recognised on a gross basis in the receipts for residents’ loans section of the
statement of cash flows.
Interest income is recognised in the income statement as it accrues, using the effective interest method.
Annual Report 2020
Notes to the financial statements (continued)
5 0

5. Operating expenses
20202019
$000$000
Employee expenses90,69172,921
Property-related expenses16,18713,589
Repairs and maintenance expenses5,8245,185
Other operating expenses34,10330,703
Total operating expenses146,805122,399
Other operating expenses include:
20202019
$000$000
Remuneration paid to auditors:
- Audit and other assurance related services review of
financial statements
205194
Donations3458
Rent
1
158217
1 Outgoings and short term and low value amounts exempt under NZ IFRS 16 - Leases.
Employee expenses include post-employment benefits (KiwiSaver/Superannuation) of $2.3 million (2019: $2.0 million).
During the year the Group received a $8.6 million one-off Government wage subsidy in relation to COVID-19. The subsidy related
to a 12-week period between March and June 2020. Although the Group was entitled to receive the wage subsidy, the Directors
subsequently determined that it was appropriate to return the subsidy back to the Government and the full $8.6 million was repaid
on 23 December 2020. This resulted in a net nil impact to other operating expenses for the year ended 31 December 2020.
The Group also received an additional $0.7 million of funding as part of the Government's package to support residential aged care
providers to keep COVID-19 at bay. This funding has been recorded as a deduction to other operating expenses.
Included in the above operating expenses is $9.2 million of additional costs incurred as a result of COVID-19.
6. Net finance costs
20202019
$000$000
Interest on bank loans, retail bonds and related fees22,15622,664
Interest on interest rate swaps3,1932,623
Interest on lease liability466442
Capitalised finance costs(12,323)(10,481)
Fair value movement of interest rate swaps through profit or loss(5,795)(7,991)
Fair value movement of retail bonds designated as fair value through profit
or loss
5,7828,082
Other1766
Net finance costs13,49615,405
Interest expense comprises interest payable on borrowings and is calculated using the effective interest rate method.
5 1

Borrowing costs are capitalised for property, plant and equipment (Note 9), and investment property (Note 11), if they are directly
attributable to the construction or production of a qualifying asset. Capitalisation of borrowing costs commences when the activities
to prepare the asset commence and expenditure and borrowing costs are incurred. Capitalisation of borrowing costs continues until
the assets are substantially ready for their intended use.
Borrowing costs of $1
2.3 million (2019: $10.5 million) have been capitalised during the period of construction in the current year. The
weighted average capitalisation rate on funds borrowed representing the borrowing costs of the loans used to finance projects is
3.15% per annum (2019: 3.87% per annum).
Two of the Group's retail bonds are designated in a fair value hedging relationship. Details of fair value hedging are included in Note 14.
7. Income tax
Tax expense comprises current and deferred tax, calculated using the tax rate enacted or substantively enacted at balance date and
any adjustment to tax payable in respect of prior years. Tax expense is recognised in the income statement, except when it relates to
items
recognised directly in the statement of comprehensive income, in which case the tax expense is recognised in the statement
of comprehensive income.
Deferred tax expense is recognised in respect of temporary differences between the carrying amounts of assets and liabilities in
the financial statements and the amounts used for taxation purposes. A deferred tax asset is recognised only to the extent that it is
probable it will be utilised. Temporary differences for the initial recognition of assets or liabilities that affect neither accounting nor
taxable profit, unless they arise from business combination, are not provided for.
Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Group
intends to settle its current tax assets and liabilities on a net basis.
(a) Income tax recognised in the income statement
20202019
$000$000
Tax expense comprises:
Deferred tax relating to the origination and reversal of temporary differences(9,041)(1,701)
Total tax credit reported in income statement(9,041)(1,701)
The prima facie income tax expense on pre-tax accounting profit from operations reconciles to the income tax expense in the
financial statements as follows:
20202019
$000%$000%
Profit before income tax221,735173,561
Income tax using the corporate tax rate62,08628.0%48,59728.0%
Capitalised interest(3,450)(1.6%)(2,935)(1.7%)
Other non-deductible expenses2080.1%3990.2%
Non-assessable investment property revaluations(62,501)(28.2%)(46,271)(26.7%)
Reinstatement of tax depreciation on non-
residential buildings
(6,008)(2.7%)-0.0%
Other1800.1%(1,681)(1.0%)
Prior period adjustments4440.2%1900.1%
Total income tax credit(9,041)(4.1%)(1,701)(1.0%)
Total Group tax losses available amounted to $
250.5 million (2019: $184.0 million). There are no unrecognised tax losses for the Group
at 31 December 2020 (2019: nil).
Annual Report 2020
Notes to the financial statements (continued)
5 2

(b) Amounts charged or credited to other comprehensive income
20202019
$000$000
Tax expense comprises:
Net gain on revaluation of land and buildings3,145-
Fair value movement of interest rate swaps(1,981)(1,964)
Total tax expense/(credit) reported in statement of comprehensive income
1,164(1,964)
(c) Amounts charged or credited directly to equity
20202019
$000$000
Tax expense comprises:
Deferred tax relating to employee share option plans(1,812)-
Total tax credit reported directly in equity(1,812)-
(d) Imputation credit account
There were no imputation credits received or paid during the year and the balance at 31 December 2020 is nil (2019: nil).
(e) Deferred tax
Movement in the deferred tax balance comprises:
BALANCE
1 JAN 2
020
$000
RECOGNISED
IN INCOME
$000
RECOGNISED
DIRECTLY IN
EQUITY
$000
RECOGNISED
IN OCI*
$000
BALANCE
3
1 DEC 2020
$000
Property, plant and equipment17,607(6,581)-3,14514,171
Investment property29,1886,043--35,231
Revenue in advance23,47911,680--35,159
Interest rate swaps(5,901)--(1,981)(7,882)
Income tax losses not yet utilised(51,631)(18,678)--(70,309)
Other items(223)(1,505)(1,812)-(3,540)
Net deferred tax liability12,519(9,041)(1,812)1,1642,830
BALANCE
1 JAN 2
019
$000
RECOGNISED
IN INCOME
$000
RECOGNISED
IN OCI*
$000
BALANCE
3
1 DEC 2019
$000
Property, plant and equipment17,062545-17,607
Investment property24,1115,077-29,188
Revenue in advance11,65011,829-23,479
Interest rate swaps(3,937)-(1,964)(5,901)
Income tax losses not yet utilised(31,802)(19,829)-(51,631)
Other items(900)677-(223)
Net deferred tax liability16,184(1,701)(1,964)12,519
* Other comprehensive income
5 3

(f) Income tax legislation amendments during the period
During the period, the Income Tax Act 2
007 in New Zealand was amended to restore tax depreciation deductions for non-residential
buildings. This amendment resulted in a $6.0 million credit to tax expense during the period and a corresponding reduction in the
deferred tax liability related to property, plant and equipment.
8. Trade and other receivables
Trade and other receivables are stated at amortised cost less impairment losses. Trade receivables are not significant on an individual
basis and are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate, less
an
allowance for impairment. The allowance for doubtful debts is made up of expected credit losses based on assessment of trade
receivables debt at the individual level for impairment, plus an additional allowance on the remaining balance for potential credit
losses not yet identified. The expected credit losses allowance requirement on the remaining balance has been set at 2%.
20202019
$000$000
Trade receivables
3,3572,912
Allowance for doubtful debts
(237)(169)
Net trade receivables
3,1202,743
Prepayments
12,2158,331
Accrued income
1,092923
Sundry debtors
16,96824,665
Total trade and other receivables33,39536,662
9. Property, plant and equipment
Property, plant and equipment includes care centres, both complete and under development, and corporate assets held.
All property, plant and equipment is initially recorded at cost. Cost includes expenditure that is directly attributable to the acquisition
of the asset. The cost of self-constructed care centres includes directly attributable construction costs and other costs necessary to
bring the care centres to working condition for their intended use. These other costs include professional fees and consents, interest
during
the build period and head office costs directly related to the construction of the care centres. Where costs are apportioned
across more than one asset, the apportionment methodology is determined by considering the nature of the cost.
Subsequent to initial recognition, completed care centres are carried at a revalued amount, which is the fair value at the date of the
revaluation less any subsequent accumulated depreciation on care centres and accumulated impairment losses, if any, since the
assets were last revalued. Other corporate assets are subsequently measured at cost less accumulated depreciation and impairment
losses, if any. Where an item of plant and equipment is disposed of, the gain or loss recognised in the income statement is calculated
as the difference between the net sales price and the carrying amount of the asset.
Fair value is determined by reference to market-based evidence, which is the amount for which the assets could be exchanged
between a knowledgeable willing buyer and a knowledgeable willing seller in an arm’s length transaction as at the valuation date.
Any revaluation surplus is recognised in other comprehensive income unless it reverses a revaluation decrease of the same asset
previously recognised in the income statement. Any revaluation deficit is recognised in the income statement unless it directly offsets
a previous surplus in the same asset in other comprehensive income. Any accumulated depreciation at revaluation date is eliminated
against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset. Upon disposal,
any revaluation reserve relating to the particular asset being sold is transferred to retained earnings. Independent valuations are
performed with sufficient regularity to ensure that the carrying amount does not differ materially from the asset’s fair value at the
balance sheet date.
Note 6 provides details on capitalised borrowing costs.
Depreciation is charged to the income statement on a straight-line (SL) basis over the estimated useful life of each item of property,
plant and equipment, with the exception of land, which is not depreciated. Depreciation methods, useful lives and residual values
are reassessed at each reporting date.
Major depreciation rates are as follows:
•Buildings (
2% to 13% SL)•Furniture and fittings (7% to 20% SL)
•Motor vehicles (10% SL)•Plant and equipment (2% to 50% SL)
Annual Report 2020
Notes to the financial statements (continued)
5 4

Also included in the buildings category is building fit-out.
Right of use assets are depreciated on a SL basis over the term of their lease. Refer to Note 1
6.
LAND AND
BUILDINGS
$000
MOTOR
VEHICLES
$000
PLANT AND
EQUIPMENT
$000
FURNITURE
AND
FITTINGS
$000
RIGHT OF USE
ASSETS
$000
TOTAL
$000
Cost
Balance at 1 January 2019123,1041,54512,6037,303-144,555
Additions15,3943542,8662029,20328,019
Disposals-(66)---(66)
Balance at
3
1 December 2019
138,4981,83315,4697,5059,203172,508
Additions17,5116176,3261,2851,80627,545
Transfer(2,885)----(2,885)
Impairment through profit
or loss
(3,634)----(3,634)
Net revaluations through
other comprehensive income
5,882----5,882
Balance at
3
1 December 2020
155,3722,45021,7958,79011,009199,416
Accumulated depreciation
Balance at 1 January 20192,3078575,6612,984-11,809
Depreciation charge for
the year
2,3571612,1891,1449106,761
Disposals-(66)---(66)
Balance at
3
1 December 2019
4,6649527,8504,12891018,504
Depreciation charge for
the year
2,5371862,0781,0701,1447,015
Transfer(168)----(168)
Impairment through profit
or loss
(203)----(203)
Net revaluations through
other comprehensive income
(6,830)----(6,830)
Balance at
3
1 December 2020
-1,1389,9285,1982,05418,318
Carrying amounts
As at 31 December 2019133,8348817,6193,3778,293154,004
As at 31 December 2020155,3721,31211,8673,5928,955181,098
Buildings include $16.9 million of care centres under development carried at cost at 31 December 2020 (2019: $20.4 million). Right
of use assets relate to the Group's leased office premises and car park spaces; refer to Note 1
6 for further information.
5 5

Transfer
As
at 31 December 2020, a number of care rooms have been decommissioned as they are to be converted to serviced apartments
and accordingly have been transferred from property, plant and equipment to investment property. The care rooms were transferred
to investment property at their fair value which totalled $2.5 million. An impairment loss of $0.2 million was recognised on transfer
via the revaluation reserve.
Revaluations
An independent valuation to determine the fair value of all completed care centres that are classified as land and buildings was
carried out as at 31 December 2020 by CBRE Limited ("CBRE NZ"), an independent registered valuer. Valuations are carried out every
three years unless there are indicators of a significant change in fair value. CBRE NZ determines the fair value of all care centre
assets using an earnings-based multiple approach and the amount apportioned to goodwill of $18.9 million is not recognised (2017:
$16.8 million). Significant assumptions used in the most recent valuation include market value per care bed of between $71,300 and
$231,600, and individual unit earning capitalisation rate of between 11.0% and 13.5%.
As the fair value of land and buildings is determined using inputs that are unobservable, the Group has categorised property, plant
and equipment as Level 3 under the fair value hierarchy in accordance with NZ IFRS 13 – Fair Value Measurement.
Sensitivity analysis to significant changes in unobservable inputs within Level 3 of the hierarchy
The significant unobservable inputs used in the fair value measurement categorised within Level 3 of the fair value hierarchy of
the entity’s portfolios of land and buildings are the capitalisation rates applied to individual unit earnings and the market value
per care bed. A significant decrease (increase) in the capitalisation rate would result in a significantly higher (lower) fair value
measurement, and a significant increase (decrease) in the market value per care bed would result in a significantly higher (lower) fair
value measurement.
Cost model
If land and buildings were measured using the cost model, the carrying amounts would be as follows:
20202019
LAND AND
BUILDINGS
$000
LAND AND
BUILDINGS
$000
Cost126,225111,599
Accumulated depreciation and impairment losses(18,971)(16,602)
Net carrying amount107,25494,997
Security
At 31 December 2020, all care centres held by retirement villages registered under the Retirement Villages Act 2003 are subject to
a registered first mortgage in favour of the Statutory Supervisor.
Annual Report 2020
Notes to the financial statements (continued)
5 6

10. Intangible assets
Intangible
assets acquired by the Group are measured at cost less accumulated amortisation and accumulated impairment losses.
Amortisation is recognised in the income statement on a SL basis over the estimated useful lives of intangible assets from the date
that they are available for use. The intangible assets are software and the amortisation rates at 31 December 2020 are between 10-20%
SL basis.
TOTAL
$000
Cost
Balance at 1 January 20199,804
Additions567
As at 31 December 201910,371
Additions668
As at 31 December 202011,039
Accumulated amortisation
Balance at 1 January 20193,176
Amortisation charge for the year1,072
As at 31 December 20194,248
Amortisation charge for the year1,082
As at 31 December 20205,330
Carrying amounts
As at 31 December 20196,123
As at 31 December 20205,709
5 7

11. Investment property
Investment
property is held to earn current and future rental income (deferred management fees). It comprises land and buildings,
and associated equipment and furnishings, relating to retirement villages and common facilities in the retirement village. Investment
property includes buildings under development, excluding care centres under development, which are included in property, plant
and equipment. Initial recognition of investment property is at cost and it is subsequently measured at fair value, with any change
in fair value recognised in the income statement.
The cost of retirement villages includes directly attributable construction costs and other costs necessary to bring the retirement
villages to working condition for their intended use. These other costs include professional fees and consents, interest during the
build period and head office costs directly related to the construction of the retirement villages. Where costs are apportioned across
more than one asset, the apportionment methodology is determined by considering the nature of the cost.
Land acquired with the intention of constructing investment property on it is classified as investment property from the date
of acquisition.
Rental income from investment property, being deferred management fees, is accounted for as described in Note 4.
Depreciation is not charged on investment property.
Note 6 provides details on capitalised borrowing costs.
20202019
$000$000
Balance at beginning of period3,107,0142,585,049
Additions309,024356,713
Disposals(920)-
Transfer from property, plant and equipment2,500-
Fair value movement221,142165,252
Total investment property3,638,7603,107,014
20202019
$000$000
Development land measured at fair value
1
335,694305,148
Retirement villages measured at fair value2,973,0402,580,855
Retirement villages under development measured at cost330,026221,011
Total investment property3,638,7603,107,014
1 Included in development land are pieces of land that were acquired close to balance date and as such were excluded from the valuation of investment property. These pieces
of land have been accounted for at cost, which has been determined to be fair value due to the proximity of the transaction to balance date. At 31 December 2020 the land
at cost was $9.9 million (2019: $74.9 million).
20202019
$000$000
Manager's net interest2,003,7251,688,265
Plus: revenue received in advance114,73791,142
Plus: liability for residents' loans1,520,2981,327,607
Total investment property3,638,7603,107,014
The Group is unable to reliably determine the fair value of non-land retirement villages under development at 31 December 2
020 and
therefore these are carried at cost. This equates to $330.0 million of investment property (2019: $221.0 million).
Annual Report 2020
Notes to the financial statements (continued)
5 8

The fair value of investment property as at 31 December 2020 was determined by independent registered valuers CBRE Limited
("CBRE NZ") and Jones Lang LaSalle Limited ("JLL") for villages including land in New Zealand and CBRE Valuations Pty Limited
("CBRE AU") for
land in Australia. The fair value of the Group’s investment property is determined on a semi-annual basis, based on
market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing
buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably,
prudently and without compulsion.
As required by NZ IAS 40 - Investment Property, the fair value as determined by the independent registered valuer is adjusted for
assets and liabilities already recognised on the balance sheet which are also reflected in the cash flow analysis.
To assess the fair value of the Group's interest in each New Zealand village, CBRE NZ and JLL have undertaken a cash flow analysis
to derive a net present value. The Group's development land has been valued by CBRE NZ using the direct comparison approach.
Each valuer continues to review market conditions in relation to the COVID-19 global pandemic. Since 30 June 2020 the level
of uncertainty and unknown impact has decreased with markets becoming more used to operating under COVID-19 conditions.
Because of this, the valuers have reversed their COVID-19 specific adjustments relating to near term growth rates and recycle
frequencies when determining value at 31 December 2020.
The valuers' view is that the longer-term economic impact as a result of COVID-19 on the New Zealand aged care sector still remains
largely unknown with comparable transactions and market evidence since the outbreak limited. Therefore they advise that a higher
degree of caution should be exercised when relying upon the valuation.
Significant assumptions used by CBRE NZ and JLL in relation to the New Zealand investment property include a discount rate of
between 13.5% and 16.5% (2019: 13.5% to 16.5%), and a long-term nominal house price inflation rate (growth rate) of between 0% and
3.5% (2019: 0% to 3.5%). Other assumptions used include the average entry age of residents of between 72 years and 90 years (2019:
72 years and 91 years), and the stabilised departing occupancy periods of units of between 3.7 years and 9.0 years (2019: 3.6 years
and 8.8 years).
Two sites under development in Australia have been valued separately by CBRE AU. The Cranbourne North land was valued under
the same methodology as development land in New Zealand. The Torquay land was valued under a modified direct comparison
approach which takes into account the gross realisation of the proposed units 'as if complete'.
As the fair value of investment property is determined using inputs that are unobservable, the Group has categorised investment
property as Level 3 under the fair value hierarchy in accordance with NZ IFRS 13 –
Fair Value Measurement.
Sensitivity analysis to significant changes in unobservable inputs within Level 3 of the hierarchy
To assess the market value of the Group's interest in a retirement village, CBRE and JLL have undertaken a cash flow analysis to
derive a net present value. As the fair value of investment property is determined using inputs that are significant and unobservable,
the Group has categorised investment property as Level 3 under the fair value hierarchy in accordance with NZ IFRS 13 - Fair
Value Measurement.
The sensitivities of the significant assumptions are shown in the table below:
Adopted
value
1
Discount rate
+5
0 bp
Discount rate
-5
0 bp
Growth rates
+5
0bp
Growth rates
-5
0bp
31 December 2020
Valuation ($000)1,142,825
Difference ($000)(40,635)43,39553,550(70,865)
Difference (%)
(3.6%)3.8%4.7%(6.2%)
31 December 2019
Valuation ($000)963,530
Difference ($000)(34,320)36,61057,812(52,994)
Difference (%)
(3.6%)3.8%6.0%(5.5%)
1 Completed units excluding unsold stock.
5 9

Other key components in determining the fair value of investment property are the average entry age of residents and the average
occupancy of units. A significant decrease (increase) in the occupancy period of units would result in a significantly higher (lower) fair
value
measurement, and a significant increase (decrease) in the average entry age of residents would result in a significantly higher
(lower) fair value measurement.
Operating expenses
Direct operating expenses arising from investment property during the period amounted to $41.1 million (2019: $34.3 million).
Security
At 31 December 2020, all investment property relating to registered retirement villages under the Retirement Villages Act 2003 are
subject to a registered first mortgage in favour of the Statutory Supervisor to secure the Group’s obligations to the occupation right
agreement holders.
12. Trade and other payables
Trade and other payables are carried at amortised cost. Due to their short-term nature they are not discounted.
20202019
$000$000
Trade payables3,6872,071
Accruals - development of retirement units and care centres118,185114,735
Accruals - other14,27513,480
Short-term advance15,750-
Sundry payables6,7134,394
Total trade and other payables158,610134,680
13. Employee benefits
A provision is made for benefits
accruing to employees in respect of wages, salaries, annual leave and short-term incentives when
it is probable that settlement will be required and the amount can be estimated reliably.
20202019
$000$000
Leave liabilities8,2845,755
Other employee benefits7,1545,679
Total employee benefits15,43811,434
14. Interest rate swaps
The Group uses interest rate swaps to manage its risk associated with interest rate fluctuations. 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.
Cash flow hedges
The Group has entered into interest rate swaps to manage its interest rate risk in relation to its floating rate debt. These interest
rate swaps qualify for cash flow hedge accounting. 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 the income statement. 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 instrument are recognised in the income statement.
Annual Report 2020
Notes to the financial statements (continued)
6 0

Under the interest rate swap agreements that qualify for cash flow hedge accounting, the Group has a right to receive interest at
variable
rates and to pay interest at fixed rates. At 31 December 2020, the Group had interest rate swap agreements in place with a
total notional principal amount of $337.0 million (2019: $377.0 million). Of the swaps in place, at 31 December 2020 $312.0 million
(2019: $292.0 million) are being used to cover approximately 45% (2019: 49%) of the floating rate debt 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 rates, which range between 1.22% and 3.87% (2019: 1.22% and 4.43%).
The fair value of these agreements at 31 December 2020 is a $28.2 million liability, comprised of $29.2 million of swap liabilities and
$1.0 million of swap assets (2019: liability of $21.1 million, comprised of $22.6 million of swap liabilities and $1.5 million of swap assets).
Of this, a liability of $274,000 is estimated to be current (2019: $515,000). The agreements cover notional amounts for terms of up
to eight years.
The notional principal amounts and the period of expiry of the cash flow hedge interest rate swap contracts are as follows:
20202019
$000$000
Less than 1 year25,00040,000
Between 1 and 2 years70,00025,000
Between 2 and 3 years-70,000
Between 3 and 4 years105,00045,000
Between 4 and 5 years-60,000
Between 5 and 6 years77,00025,000
Between 6 and 7 years50,00052,000
Between 7 and 8 years10,00050,000
Between 8 and 9 years-10,000
Total337,000377,000
Current312,000292,000
Forward starting25,00085,000
Total337,000377,000
Fair value hedges
The Group has entered into interest rate swaps to manage its interest rate risk in relation to its fixed
rate debt arising from the retail
bonds. The hedge is for the future fair value movements in the retail bonds as a result of market interest rate movements. The Group
has designated $225.0 million of its retail bonds in fair value hedge relationships.
Both the hedging instrument (interest rate swap) and the hedged risk are recognised at fair value. The change in the fair value of both
items offset in the statement of comprehensive income to the extent the hedging relationship is effective. The increase in fair value
of the interest rate swaps of $5.8 million (2019: $8.0 million) has been recognised in finance costs and has been offset with a similar
fair value loss on the retail bonds to leave an ineffective amount in finance costs of $13,000 (2019: $92,000).
Under the interest rate swap agreements that qualify for fair value hedge accounting, the Group has a right to receive interest at
fixed rates and to pay interest at floating rates. At 31 December 2020, the Group had interest rate swap agreements in place with
a total notional principal amount of $225.0 million (2019: $225.0 million). Of the interest rate swaps in place, at 31 December 2020
$225.0 million (2019: $225.0 million) are being used to cover 60% (2019: 100%) of the fixed interest rate retail bonds outstanding.
6 1

The notional principal amounts and the period of expiry of the fair value hedge interest rate swap contracts are as follows:
20202019
$000$000
Between 3 and 4 years100,000100,000
Between 4 and 5 years--
Between 5 and 6 years125,000125,000
Total225,000225,000
Current225,000225,000
Total225,000225,000
15. Residents' loans
Residents’ loans are amounts payable under occupation right agreements. An occupation right agreement confers a right of
occupancy to a villa, apartment, serviced apartment, care suite or memory care apartment. The consideration received on the grant
of an occupation right agreement is allocated to the resident’s loan in full. These loans are non-interest-bearing and are payable when
both an occupation right agreement is terminated and there has been settlement of a new occupation right agreement for the same
retirement unit and the proceeds from the new settlement have been received by the Group. Residents’ loans are initially recognised
at fair value and subsequently measured at amortised cost.
The Group holds a contractual right to set-off the deferred management fee receivable on termination of an agreement against the
resident’s loan to be repaid. Residents’ loans are therefore recognised net of the deferred management fee receivable on the balance
sheet. Deferred management fees are payable by residents in consideration for the supply of accommodation and the right to share
in the use of community facilities. Deferred management fees are paid in arrears, with the amount payable calculated as a percentage
of the resident’s loan amount as per the resident’s occupation right agreement. Deferred management fee receivable is calculated
and recorded based on the current tenure of the resident and the contractual right to deferred management fee earned at balance
date. Refer to Note 4 for further detail on recognition of deferred management fee revenue.
20202019
$000$000
Balance at beginning of period1,599,8541,355,535
Net receipts for residents' loans - resales of occupation right agreements27,83026,294
Receipts for residents' loans - new occupation right agreements245,052218,025
Total gross residents’ loans1,872,7361,599,854
Deferred management fees and other receivables(352,438)(272,247)
Total residents’ loans1,520,2981,327,607
Note 18 provides a split between current and non-current residents’ loans.
16. Leases
The leases to which NZ IFRS 16 applies are the leases of office premises and car parks occupied by the Group in New Zealand and
Australia. In respect of these leases, a right of use asset is disclosed along with a corresponding lease liability. The right of use assets
are depreciated on a SL basis, while the lease liability is measured at the present value of the lease payments that are not yet paid,
discounted using the Group's incremental borrowing rate.
The
Group has elected not to recognise right of use assets and lease liabilities for short-term leases of office spaces, car parks and
information technology equipment that have a lease term of 12 months or less, or as a transitional expedient, have less than 12 months
left on the lease term as at the date of application of NZ IFRS 16. The Group recognises the lease payments associated with these
leases as incurred as a rental expense over the lease term.
Annual Report 2020
Notes to the financial statements (continued)
6 2