Cromwell Property Group (ASX:CMW) Annual Report 2023

Wednesday 27 September 2023

ASX Market Announcements Office

Exchange Centre

20 Bridge Street

SYDNEY NSW 2000

To whom it may concern

Cromwell Property Group (ASX:CMW)

Annual Report 2023

I attach a copy of Cromwell Property Group’s Annual Report 2023.

Yours faithfully

CROMWELL PROPERTY GROUP

MICHAEL FOSTER

COMPANY SECRETARY AND SENIOR LEGAL COUNSEL

Authorised for lodgement by Michael Foster (Company Secretary and Senior Legal Counsel) and

Michael Wilde (Chief Financial Officer).

For investor relations:

Libby Langtry

Cromwell Property Group

+61 2 8278 3690

libby.langtry@cromwell.com.au

For retail securityholders:

Cromwell’s Investor Services Team

1300 268 078

+61 7 3225 7777

invest@cromwell.com.au

For media:

Brendan Altadonna

GRACosway

+61 409 919 891

baltadonna@gracosway.com.au

ABOUT CROMWELL PROPERTY GROUP

Cromwell Property Group (ASX:CMW) is a real estate investor and fund manager with operations on

three continents and a global investor base. Cromwell is included in the S&P/ASX200. As at 30 June

2023, Cromwell had a market capitalisation of $1.4 billion, an Australian investment portfolio valued at

$2.6 billion and total assets under management of $11.5 billion across Australia, New Zealand and

Europe.

Annual

Report

2023

18 Directors’ Report

65 Auditor’s Independence Declaration

67 Consolidated Statements of Profit or Loss

68 Consolidated Statements of

Other Comprehensive Income

69 Consolidated Balance Sheets

70 Consolidated Statements of

Changes in Equity

72 Consolidated Statements of

Cash Flows

73 Notes to theFinancial Statements

137 Directors’ Declaration

138 Independent Auditor’s Report

142 Corporate Governance Statement

164 Securityholder Information

P. 4

Strategic highlights

P. 5

Performance summary

P. 6

Operational summary

P. 8

Chair’s Report

P. 10

CEO’s Report

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT

Cromwell Property Group

Cromwell Property Group (Cromwell) is a real estate

investor and fund manager with operations on three

continents and a global investor base. As at 30 June 2023,

Cromwell had a market capitalisation of $1.4 billion, an

Australian investment portfolio valued at $2.6 billion and

total assets under management of $11.5 billion across

Australia, New Zealand and Europe.

Cromwell is included in the S&P/ASX 200 and the FTSE

EPRA/NAREIT Global Real Estate Index.

Securityholder enquiries

All enquiries and correspondence regarding your security-

holding should be directed to Cromwell’s Investor Services

Team on 1300 268 078 (within Australia) or +61 7 3225 7777

(outside Australia).

This document is issued by

Cromwell Property Group

consisting of

Cromwell Corporation Limited ABN 44 001 056 980 and

Cromwell Diversified Property Trust

ARSN 102 982 598 ABN 30 074 537 051

the responsible entity of which is

Cromwell Property Securities Limited

AFSL 238052 ABN 11 079 147 809

Level 19, 200 Mary Street, Brisbane QLD 4000

Phone: +61 7 3225 7777

Fax: +61 7 3225 7788

Web: www.cromwellpropertygroup.com

Email: invest@cromwell.com.au

Cromwell Property Group

acknowledges and pays respects to

past, present, and future Traditional

Custodians and Elders of Australia.

We respect the cultural, spiritual, and

educational practices of Aboriginal

and Torres Strait Islander peoples.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 3

Third Space, 400 George Street, Brisbane, Australia

505.8 million

of non-core assets sold

since December 2021.

1.1 billion

Proposed transaction between Cromwell Direct

Property Fund and the Australian Unity

Diversified Property Fund.

319 million

Reduction in debt in FY23

due to non-core sales.

5.5 billion

Funds managed in Europe as mandates

deployed through asset acquisitions.

Sale process of Cromwell Polish Retail Fund

continues with party currently in

exclusive due diligence.

New joint venture partner purchased 50% of

Cromwell Italy Urban Logistics Fund (CIULF),

Cromwell to continue to manage.

3rd in energy performance

in NABERS Sustainable Portfolios Index 2023

for Cromwell Direct Property Fund.

4th in energy performance

in NABERS Sustainable Portfolios Index 2023

for energy performance for Cromwell’s

Investment Portfolio.

Sustainable financing framework developed,

and first green loan established in Australia.

FY23 Strategic highlights

EXECUTING ON STRATEGIC OBJECTIVES TO SIMPLIFY THE BUSINESS AND POSITION FOR GROWTH

ESG Improvements

Continued sale of non-core assets Growth in fund management

Third Space, 400 George Street, Brisbane, Australia

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT

STATUTORY LOSS

443.8 million

(equivalent to loss 16.95 cps)

UNDERLYING

OPERATING PROFIT

158.6 million

(equivalent to 6.06 cps)

AFFO

114.5million

(equivalent to 4.37 cps)

DISTRIBUTIONS

5.5cps

(payout ratio on operating earnings

of 90.8% and 125.8% of AFFO)

FY23 Performance summary

EARNINGS AND DISTRIBUTIONS

Overview Financial Position

NTA PER UNIT

0.84

(FY22 $1.04)

LIQUIDITY

289 million

GEARING

42.6%

40.9% proforma gearing following

sale of Penrith and CIULF

LOOK THROUGH GEARING

47.6%

46.5% proforma gearing following

sale of Penrith and CIULF

WEIGHTED AVERAGE

DEBT MATURITY

2.7 years

INTEREST RATE

HEDGING

70%/

1.7years

(1) Cash and cash equivalents plus available undrawn commitments.

(2) Calculated as (Total borrowings less cash) / (Total tangible assets less cash). Total tangible

assets excludes Right to Use assets recorded in accordance with AASB16 Leases.

(3) As at 1 July 2023 to include new interest rate derivatives.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 5

Haagse Poort, The Hague, The Netherlands

PORTFOLIO VALUE

2.6 billion

($248.1 million decline from

FY22 on a like-for-like basis)

WACR

5.7%

WALE

5.3years

PORTFOLIO

OCCUPANCY BY NLA

94.6%

NOI GROWTH

(LIKEFORLIKE)

3.9%

FY23

Operational

summary

Investment Portfolio

(1) Australian Portfolio, includes 50% ownership of 475 Victoria Ave, Chatswood and excludes 2 Station Street, Penrith.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT

Sognevej 25, Copenhagen, Denmark

545 Queen Street, Brisbane, Australia

TOTAL THIRDPARTY AUM

8.0 billion

(FY22 $7.8 billion)

EUROPEAN MANDATE DEPLOYMENT

€

560 million GAV

EUROPE AUM

5.5 billion

(FY22 $5.1 billion)

TENANTCUSTOMERS

2,100+

AUSTRALIA/ NEW ZEALAND AUM

2.5 billion

(FY22 $2.7 billion)

PROPERTIES

217

Fund and Asset Management

(1) Includes deployment of €109.8 million completed after balance date and €75 million due to complete in October 2023.

WALE

5.3years

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT

Dear fellow Securityholder,

It has been a difficult 12 months for the economy,

businesses, and families with inflation persisting, supply

chain disruptions lingering, and interest rates at an

11-year high. The resulting market uncertainty has had

far-reaching consequences, and the commercial property

sector has been no exception. Real estate has experienced

capitalisation rate expansion and declines in valuations,

with further challenges expected in the year ahead.

Despite the tough operational environment, Cromwell has

made progress on a number of key strategic initiatives

that were outlined in our FY22 report. This is reflective

of Cromwell’s long-standing ability to adapt and manage

complex market conditions.

PROGRESSING STRATEGIC INITIATIVES

During the financial year, Cromwell continued to

simplify the business, going back to key core fund and

property management practices. We continue to focus

on protecting balance sheet strength through prudent

capital management – maintaining good relationships

with our diverse set of lenders – which shields us from

single region economic impacts. Hedging has increased

to 70%, with a new $60 million collar commencing in

March 2023, as well as two new caps for $206.0 million

starting in July 2023. The team also remains committed

to active asset management, which has been Cromwell’s

strong suit for many years. The incremental upgrades,

refurbishments, and additions identified through strong

tenant relationships and market intel are what continue

to set us aside from our peers – this is reflected in our

positive leasing and rental reversion metrics for the year.

We have progressed our programme to sell non-core

assets on and offshore, with $505 million in assets sales

having been completed since December 2021. We have

also looked to grow our funds management platform

through the proposed $1.1 billion transaction with the

Australian Unity Diversified Property Fund.

The ongoing simplification of the Group has laid

the foundations from which to grow the business.

Management is well-positioned to identify value accretive

opportunities to recycle capital, launch new products,

and build on partnerships to grow the funds management

platform. This will lead to long-term returns to

securityholders.

DELIVERING FOR OUR PEOPLE

Our ability to unleash the immense potential of our people,

remains our greatest asset. In 2022, we committed to

delivering a number of cultural improvements and are

pleased with the progress we have made to date, namely,

the creation of a unified vision; the launch of our new

values which were developed in consultation with our

people; better work-life balance through our improved

agile working framework; improved benefits such as

better leave entitlements; benchmarked remuneration

and maintaining pay parity; and opportunities for growth

and development through our new talent framework, all

of which resulted in an improved Employee Engagement

Score.

We are proud to have promoted or expanded the

responsibilities of 31 people across the Australian

business this year, almost 20% of our local workforce.

Cromwell continues to invest in strong leadership, as it is

foundational to our future success and has the greatest

impact on the engagement of our people. In May, we held

our second annual Leadership Summit in Brisbane. The

summit focused on providing our leaders with the tools to

foster talent and promote individual growth, and to lead

their teams in an ever-changing environment.

Chair’s Report

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT8

EMBRACING DIVERSITY, EQUITY AND INCLUSION

At Cromwell, we firmly believe that organisational diversity,

where the composition of the workforce reflects that of the

local population, brings the diversity of thought needed

for innovation, effective decision making, great customer

service and ultimately outstanding performance. We also

believe that in order to harness that diversity, we need

inclusion, where all employees are able to be themselves

at work, and equity, where everyone is treated fairly.

This year, Cromwell became a member of Diversity

Council Australia – the independent not-for-profit peak

body leading diversity and inclusion in the workplace. We

continue to collaborate with key voices on diversity and

inclusion, both those within and outside our organisation,

ensuring we are championing the principles of diversity,

equity, and inclusion in the workplace.

Cromwell is also a proud member of the Property Council

of Australia’s Champions of Change Coalition, a globally

recognised strategy for advancing gender equality and

building respectful, inclusive workplaces. In December,

we participated in the 16 days of Activism Against Gender-

based Violence and we launched our Respect @ Cromwell

framework – part of our ongoing strategic commitment

to make the prevention, and early intervention, of sexual

harassment a leadership priority.

Building on our achieved FY22 diversification objective

of 40:40:20, we achieved a female representation of 37%

at Board level, 45% at senior executive level and 50% at

employee level in Australian business.

CONTRIBUTING TO OUR COMMUNITIES

Over the past year, we have been able to make significant

contributions to more than a dozen charitable not-for-

profit organisations and causes. These philanthropic

activities are driven largely by our people, who share an

innate enthusiasm for helping to improve the communities

in which the Group operates.

We are particularly proud of the team banding together

to nominate The Daniela Dwyer Foundation, headed

by Cromwell’s own Kevin Dwyer, as part of our annual

Christmas Giving Programme. After losing their daughter

Daniela to Glioblastoma (GBM) brain tumours in 2021,

Kevin’s family have started the Daniela Dwyer Foundation

to help change the current approach to diagnoses and

make early intervention easier to achieve. Overseas,

our Italian team collected 150 kg of plastic and litter

from Giardino Marcello Candia, a green space local to

Nervesa21, our sustainable office redevelopment, in

Milan, improving the space for the community and

showcasing our commitment to investing in the local

areas where we operate.

PROGRESSING SUSTAINABLE OUTCOMES

In December 2022, Cromwell announced one of the United

Kingdom’s leading sustainability experts, Lara Young, as

our Head of Environmental, Social, and Governance (ESG).

Lara was named Young Person of the Year by the

Construction Leadership Council (CLC) and Energy and

Carbon Leader of the Year at the 2021 edie Awards – the

United Kingdom’s industry leading sustainability awards

– and she is currently the Chair of the Carbon Champion

Review Panel, which is convened by the Institution of Civil

Engineers (ICE).

Lara’s appointment to the position has helped steer

Cromwell’s ESG strategy in a way that will positively impact

the business, its tenants and investors, and the planet.

In a significant milestone for the business, Cromwell

transitioned to its first ever green loan in July, as part of

our new Sustainable Finance Framework – developed in

consultation with the Commonwealth Bank of Australia

and French-based multinational financial services

company Societe Generale.

The inaugural transaction under the new Sustainable

Finance Framework involved transitioning the existing

$130 million bilateral loan with Commonwealth Bank

of Australia – on the Cromwell Riverpark Trust – to a

green loan certified by the Climate Bonds Initiative. The

debt facility for the Cromwell Riverpark Trust has been

extended for a further two years, with all other terms

remaining the same.

More sustainability initiatives will be outlined in the ESG

report, released later this year.

On behalf of the Cromwell Board, I would like to thank all

securityholders for their support during the year. I extend

gratitude to my fellow Directors and the leadership team

for your dedication, and to all our people for their efforts,

as together we continue our journey towards a capital light

fund manager.

Dr Gary Weiss AM

Chair

Cromwell Property Group

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 9

FY23 Results Overview

Group investment and leasing activity remains

robust, with valuation headwinds detracting from

overall performance.

On Thursday 31 August 2023, Cromwell reported a

statutory loss of $443.8 million for the 2023 financial

year driven by $491.6 million in unrealised fair value

adjustments to investment properties. FY23 operating

profit of $158.6 million, equivalent to 6.06 cents per

security, was down 21.1% on last year, and distributions

were 5.5 cents per security, representing a payout ratio

of 90.8%.

Rising interest rates impacted interest costs over the

past financial year, which were up $23.8 million, equating

to a 43.8% increase on the prior financial year, while

borrowings decreased by $319.0 million, down 14.7% on

last year, due to progress made on our debt repayment

goal through asset sales.

Fund and asset management in Australia achieved

earnings of $28.8 million, down 24.0% on the prior

financial year due to no transaction fees being received in

2023. In contrast, earnings from our European business

were up 5.9% to $12.5 million due to higher

performance fees.

The Cromwell Polish Retail Fund received higher rents

over the period, although this was more than offset by

the increasing service charge costs in a high inflationary

environment.

In Australia, our Investment Portfolio headline

performance was down 6.7%. Excluding asset sales, the

portfolio delivered like-for-like Net Operating Income

growth of 3.9%. Corporate costs were down 10.2%, mainly

due to lower insurance costs over the year.

We recognise the impact recent property revaluations

have had on our NTA, which fell from $1.04 to 84 cents.

The total value of the Australian Investment Portfolio fell

by 9.1%, driven by cap rate expansion. This decrease was

consistent with other falls seen in the market.

Polish Portfolio

The total value of the Cromwell Polish Retail Fund portfolio

fell by 21%. This portfolio consists of six wholly owned

retail assets and a 50% joint venture of an Ursynów asset.

The portfolio of six wholly owned assets is currently in

exclusive due diligence.

CEO’s Report

FY23 FY22 Change

Statutory (loss) / profit ($m) (443.8) 263.2 (268.7%)

Statutory (loss) / profit (cps) (16.95) 10.05 (268.7%)

Operating profit ($m) 158.6 201.0 (21.1%)

Operating profit (cps) 6.06 7.68 (21.1%)

Distributions ($m) 144.0 170.3 (15.4%)

Distributions (cps) 5.5 6.5 (15.4%)

Payout ratio 90.8% 84.7% 7.2%

FY22 Operating profit

Net property income

Disposals

Co-investments

Funds Management

Net financing

Corporate Costs & Tax

FY23 Operating profit

7.68

0.24

-0.68

-0.37

-0.32

-0.82

0.33

6.06

Operating profit (cents per unit)

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT10

While external valuations had these six assets valued

at a higher number, the Cromwell Board has adopted a

carrying amount that is reflective of the indicative offer

from the party in exclusive due diligence. The offer was

for the entire six assets, along with a strong commitment

from the purchaser for the bid price, and there are

substantial strategic benefits to exiting the portfolio. While

completion of this transaction is not certain, adopting

the offer price as the carrying amount best reflects the

application of the relevant accounting standards.

Capital Management

Capital management remains a priority – assets sales and

retirement of debt will ensure we can bring our gearing

in range and shore up the balance sheet for an uncertain

operating environment over the next year.

60%

FY20 HY21 FY21 HY22 FY22 HY23 FY23 Proforma 1 Proforma 2

Group net debt $ Headline gearing Look-through gearing

Target Gearing Range

$200

$400

$600

$800

1,000

1,200

1,400

1,600

1,800

$2,000

Debt reduction activities ongoing, despite valuation headwinds

Gearing at 42.6%, currently sits outside our target range

of 30-40%, attributed to negative valuation impacts, felt

globally. However, significant progress has been made to

debt repayment, decreasing our net debt from $1.88 billion

at June 2022, to $1.74 billion at June 2023 as we focus on

prudent debt management.

Further assets sales are slated for the 2024 financial year,

with assets in due diligence of more than $560 million, of

which proceeds will be applied to debt repayment in the

first instance.

This includes the sale of 2 Station Street, Penrith, and

the 50% sale of the Cromwell Italy Urban Logistics Fund

portfolio, both occurring after 30 June 2023. Following

these transactions we estimate gearing to be 40.9% and,

upon the exit of Cromwell Polish Retail Fund at the current

carrying amount, further debt reductions would bring

gearing to well within our target range.

Simplification of debt continued through 2023 with the

closing out of the Euro denominated convertible bond. We

have a diversified lender profile, which will set us up well

in the current climate, with a good split of exposure to

Australian, Asian, and European lenders.

Near-term debt expiry in 2024 is attributed to the

Cromwell Polish Retail Fund asset level debt and we are

in advanced stages of renegotiation with three European

lenders.

We maintain a comfortable buffer to covenants, noting that

we negotiated the relaxation of Euro revolver ICR covenant

down to two times to reflect the higher level of the Euribor

three-month rate.

Cromwell is hedged to 70%, including new caps

commencing July 2023. This level is appropriate given

the potential future assets sales.

Our current average cost of debt is 3.9% including

derivatives, up from June 2022 and in line with current

global markets.

FY22 NTA

$1.20

$1.00

$0.80

$0.60

$0.40

$0.20

Revaluations Europe

Revaluations Australia

Asset sales

Net debt

Other

FY23

$1.04

-$0.08

-$0.12

-$0.09

$0.09

$0.03

-$0.03

$0.84

Increase Decrease Total

NTA

Proforma 1 reflects the debt reduction upon the sale of Penrith and CIULF.

Proforma 2 reflects the impact of Proforma 1 and debt reduction upon the sale of CPRF and other assets in due diligence.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 11

Fund and Asset Management

Platform growth continues across both retail and

institutional markets globally

We have worked hard across our funds management

platform, both onshore and offshore, to bring new

opportunities to life over the 2023 financial year.

Our assets under management of $8 billon represents

$2.5 billion in Australia and $5.5 billion in Europe, with

geographic split globally looking very healthy across top

markets of Australia, Benelux, Italy, New Zealand, and

France.

Europe

In Europe, we continue to deploy capital from non-

discretionary mandates, having invested €560 million

of just over €2 billion committed. These mandates vary

across sectors and regions, with key focus on the Nordics,

Germany, The Netherlands, and Italy.

€105 million in refurbishment and development projects

are ongoing, with €80 million to start in coming months.

We have also announced Value Partners as a new joint

venture partner, with the Hong Kong based asset manager

having invested 50% into the Cromwell Italy Urban

Logistics Fund, based on a portfolio asset value of €55.8

million - an approximate 9.4% increase on Cromwell’s

initial purchase price.

Australia

In Australia, the unlisted funds management platform

continues to receive inflows, and our flagship fund,

Cromwell Direct Property Fund, has announced a

proposed transaction with the Australian Unity Diversified

Property Fund to bring the two funds together under

Cromwell management.

The transaction will create a $1.1 billion fund, which will

benefit from more diverse geographic and sector exposure,

strong weighted average lease expiry and occupancy

metrics as well as operational economies of scale. A

vote will go to Australian Unity Diversified Property Fund

unitholders and, if approved, implementation will occur

towards the end of 2023 calendar year.

Leasing remains active in Cromwell Direct Property

Fund, although no fees from transactions were booked

during the financial year and we are managing increased

redemptions carefully, in line with the fund’s policy.

We announced our first green loan certified by the Climate

Bonds initiative in Australia, transitioning an existing

$130 million bilateral loan for Cromwell Riverpark Trust

during the financial year. Under the newly developed group

Sustainable Finance Framework, we will further optimise

the Group’s borrowing practices and move closer to

decarbonisation goals.

Italy

13%

Benelux

19%

Nordics

CEE

Germany

France

11%

Australia

21%

New Zealand

11%

Phoenix

Wholesale

Oyster

Retail Direct

$2.5bn

$8.0bn

$5.5bn

13%

11%

34%

42%

29%

71%

CEREIT

Institutional

mandates

Third party assets under management Regional fund management by product split

AUM% by country Australia/New Zealand

Europe

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT12

Co-Investments

Our strategic co-investment in Cromwell Direct Property

Fund remains valued at $16.5 million, with a distribution

of $1.0 million, representing a yield of 6.05% over the

financial year.

Similarly, we hold a 28% share in Cromwell European

REIT (CEREIT), listed on the Singapore exchange, which is

valued at $589.7 million. We received distributions through

the financial year of $41.1 million and remain a committed

long-term investor in this fund.

CEREIT continues to re-weight the portfolio toward

logistics in Europe, having sold office assets of €131

million, and buying logistics assets of €15.8 million.

CEREIT’s performance remains robust, with net property

income of €68.5 million, up 3.9% for the half year to

June 2023 on a like-for-like basis, compared to the prior

corresponding period. The debt profile remains strong,

with approximately €500 million current headroom to the

Monetary Authority of Singapore’s mandated covenant

limits.

The Cromwell Italy Urban Logistics Fund performed well

over the financial year, 100% leased to DHL in northern

Italy. Cromwell’s operating profit for the financial year was

$3.5 million. The new joint venture with Value Partners

commenced in July 2023, who took a 50% stake in the

portfolio based on a portfolio asset value of €55.8 million.

Australian Investment Portfolio

Investment portfolio leasing is mitigating cap

rate expansion

We have continued the simplification of the Australian

Investment Portfolio, with $86.4 million of non-core

asset sales through the 2023 financial year, the proceeds

of which have been prioritised to repay debt. A further

$45.3 million of sales are under contract and to complete

in early FY24. Since the programme commenced in

December 2021, we have sold just under $300 million

of Australian non-core assets at or above book value in

aggregate.

Valuations in the portfolio are down 9.1% to $2.6 billion,

these declines have been mitigated by the sale of lower

quality assets, such as 200 Mary Street in Brisbane; TGA

Complex in Symonston; the Village Cinema in Geelong;

and the Regent Cinema Centre in Albury last financial year,

as well as assets in non-core markets, such as 84 Crown

Street in Wollongong and 117 Bull Street in Newcastle this

financial year.

The weighted average capitalisation rate of the portfolio

has increased over the year from 5.2% to 5.7%, which has

been mitigated by leasing.

While valuation movements have been largely driven by

increases in global interest rates and capitalisation rates,

valuations have also been supported by tenant demand in

the office market sector – in which we remain invested.

Regional fund management by product split

Australian Investment portfolio

PORTFOLIO VALUE

2.6billion

($248.1 million decline from FY22 on a like-for-like basis)

NEW OR

RENEGOTIATED LEASES

IN FY23

18,500sqm

RENTAL REVERSION ON

NEW LEASES SIGNED DURING

FY23 (WEIGHTED BY AREA)

8.4%

WACR

5.7%

PORTFOLIO

OCCUPANCY BY NLA

94.6%

WALE

5.3years

NOI GROWTH

(LIKEFORLIKE)

3.9%

(1) Australian Portfolio, includes 50% ownership of 475 Victoria Ave,

Chatswood and excludes 2 Station Street, Penrith.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 13

Prudent investment in sustainability initiatives and asset

repositioning has supported a strong leasing outcome,

with approximately 18,500 square metres of space leased

over the financial year and 8.4% rental reversion on new

leases signed during the year. Like-for-like Net Operating

Income, taking account of assets that have been sold, is

also up a respectable 3.9%.

Active leasing has seen portfolio occupancy remain

stable at 94.6% NLA on a like-for-like basis, and the

portfolio WALE is 5.3 years at financial year end. The

portfolio maintains a strong weighting of 46% by income

to government tenants, and a further 19% to Qantas. This

provides Cromwell with high income security at a time of

falling market valuations.

Vacancy and near-term expiry are weighted towards

markets demonstrating rental growth, and is concentrated

in single floors and suites, where demand has been

stronger.

A consistent theme this reporting season has been the

relative strength in the A-Grade office market, particularly

in Sydney. While larger occupiers have been contracting in

response to the normalisation of hybrid working, smaller

employers have been maintaining or increasing their

footprint and upgrading the sustainability and quality of

their premises as an employee attraction and retention

tool.

Supply of A-Grade space has also been more moderate

than in Premium Grade – Sydney CBD A-Grade total stock

only increased by 0.3% over the year to June, whereas

Premium stock increased by 4.7%. The combination of

muted supply and supportive tenant demand has seen

the National A-Grade vacancy rate fall over the year from

15.6% to 14.1%.

In Sydney, we have some vacancy at 207 Kent Street and in

475 Victoria Avenue in Chatswood. 207 Kent Street has had

strong demand and continues to see good enquiry, with

tenants relocating to the building from elsewhere in the

CBD, but also from suburbs like Rhodes and North Sydney.

Kent Street is a great example of our A-Grade market

strength – it’s affordable for a wide range of tenants, has

good floor plate sizes with a central core which subdivides

well, and it has excellent in-house and nearby amenity and

transport links.

475 Victoria Avenue is about to complete a significant

repositioning, including façade, end-of-trip facilities,

ground plane and lobby refresh, and we are already seeing

this translate into leasing outcomes.

Looking forward, capital expenditure will continue to be

prudently applied, with a focus on ESG initiatives such as

the full electrification of the McKell Building in Sydney,

de-commissioning of the co-gen plant at HQ North in

Brisbane, and installation of solar plants where rooftop

space allows.

Our commitment to improving the sustainability of our

portfolio includes a cognisance of the embodied carbon

in our assets and the emissions involved in dealing

with waste streams, and we are advancing practical

decarbonisation plans for all our assets. This will also

have the benefit of bringing us closer to our tenants as we

work to reduce whole of building emissions.

27%

48%

13%

12%

QLD

NSW

ACT

VIC

46%

36%

18%

Government

Authority

Listed Company

/Subsidiary

Private Compan

Diversification by state (value) Diversification by occupier (income)

10%

12%

14%

16%

18%

Premium A Grade B Grade C&D Grade

Vacancy %

Jun-22

Jun-23

20y Av

National CBD Vacancy Rate

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT14

Outlook

Cromwell’s long-term strategic objectives remain

unchanged. Debt reduction remains key, as we continue

our goal to bring gearing within our target range, a goal

which we believe is achievable upon the completion of

remaining asset sales in FY24.

We will position our fund management platform for growth

with well-considered deployment of capital through

partnerships and acquisitions where it makes sense to do

so, using prudent capital-recycling opportunities as they

become available.

Our commitment to becoming a capital light fund manager

remains, although the pace of this transition will be

hampered by current market conditions.

Lastly, and very importantly, we remain committed to

Group ESG improvements, with our commitment to a

decarbonisation strategy released during the financial year.

Specifically, we are targeting net zero where Cromwell has

operational control for 2035 and entire portfolio scope 1, 2

and 3 emissions net zero for 2045.

Moving into the 2024 financial year, we will focus on the

execution of a proposed transaction with the Australian

Unity Diversified Property Fund, and continue to develop

products for our mandate investors in Europe and local

retail investors.

Our investment portfolio assets continue to perform well,

with active leasing and value driven through upgrades

and repositioning – this will remain a key focus for the

Australian team during a more difficult operating climate.

Cromwell will continue its current practice of not providing

annual guidance. Given the uncertainty around the

progress of asset sales and need to protect balance sheet

liquidity, the Board will adopt a conservative distribution

policy throughout the year unless circumstances change.

A distribution of 0.83 cents per security is expected to be

paid for the September 2023 quarter.

I would like to thank my fellow Board members for their

support over the last 12 months and also acknowledge

Cromwell’s employees for their dedication and hard work.

Yours sincerely,

Jonathan Callaghan

CEO

Cromwell Property Group

100 Creek Street,

Brisbane, Australia

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT

DIRECTORY

Board of Directors:

Gary Weiss AM

Eng Peng Ooi

Robert Blain

Jonathan Callaghan

Tanya Cox

Joseph Gersh AM

Lisa Scenna

Jialei Tang

Secretary:

Michael Foster

Share Registry:

Link Market Services Limited

Level 21, 10 Eagle Street

Brisbane QLD 4000

Registered Office:

Level 19, 200 Mary Street

Brisbane QLD 4000

Tel: +61 7 3225 7777

Web: www.cromwellpropertygroup.com

Listing:

Cromwell Property Group

is listed on the

Australian Securities Exchange

(ASX:CMW)

Auditor:

Deloitte Touche Tohmatsu

Level 23, Riverside Centre

123 Eagle Street

Brisbane QLD 4000

All ASX and media releases as well as company news can be found on our website www.cromwellpropertygroup.com

P. 18

Director’s Report

P. 65

Auditor’s Independence

Declaration

P. 66

Financial Statements

P.67 Consolidated Statements of

Profit or Loss

P.68

Consolidated Statements of

Other Comprehensive Income

P.69

Consolidated Balance Sheets

P.70 Consolidated Statements of

Changes in Equity

P.72

Consolidated Statements of

Cash Flows

P. 73

Notes to the Financial

Statements

P.74 About this Report

P.78

Results

P.92 Operating Assets

P.102 Finance and Capital Structure

P.118

Group Structure

P.124 Other items

P. 137

Director’s Declaration

P. 138

Independent

Auditor’s Report

P. 142

Corporate Governance

Statement

P. 164

Securityholder Information

Contents

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT16

Cromwell Property Group

Annual Financial Report

30 June 2023

Cromwell Corporation Limited

ABN 44 001 056 980

Level 19, 200 Mary Street

Brisbane QLD 4000

Cromwell Diversified Property Trust

ARSN 102 982 598

Responsible entity:

Cromwell Property Securities Limited

ABN 11 079 147 809 AFSL 238052

Level 19, 200 Mary Street

Brisbane QLD 4000

Financials

Consisting of the combined consolidated Financial Reports of

Cromwell Corporation Limited (ABN 44 001 056 980) and

Cromwell Diversified Property Trust (ARSN 102 982 598)

Directors’ Report

The Directors of Cromwell Corporation Limited and Cromwell Property Securities Limited as responsible entity for the

Cromwell Diversified Property Trust (collectively referred to as “the Directors”) present their report together with the

consolidated financial statements for the year ended 30 June 2023 for both:

• the Cromwell Property Group (“Cromwell”) consisting of Cromwell Corporation Limited (“the Company”) and its

controlled entities and the Cromwell Diversified Property Trust (“the CDPT”) and its controlled entities; and

• the CDPT and its controlled entities (“the Trust”).

The shares of the Company and units of the CDPT are combined and issued as stapled securities in Cromwell. The shares

of the Company and units of CDPT cannot be traded separately and can only be traded as stapled securities.

In order to comply with the provisions of the

Corporations Act 2001

(Cth), the Directors Report follows.

Principal activities

The principal activities of Cromwell and the Trust, which did not change significantly through the year, are summarised below:

Fund and asset management Fund management represents activities in relation to the establishment and management of

external funds for institutional and retail investors. Asset management includes property and

facility management, leasing and project management and development related activities.

These activities are carried out by Cromwell itself and by associates and contributes related

fee revenues or the relevant share of profit of each investee to consolidated results.

Co-investments

This activity includes Cromwell’s investments in assets warehoused while being repositioned

for deployment into the fund and asset management business and assets it may not fully

own or over which it cannot exercise unilateral control. This includes interests in investment

property portfolios in Poland (CPRF) and Italy (CIULF), the Cromwell European Real Estate

Investment Trust (CEREIT), and other investment vehicles. This activity contributes net rental

income and the relevant share of profit of each investee to consolidated results.

Investment portfolio This involves the ownership of investment properties located in Australia. These properties

are held for long term investment purposes and primarily contribute net rental income and

associated cash flows to results.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT18

Key results and metrics

(1)

2023 2022 2021 2020

Financial performance

Total assets under management ($B)

11.5 12.0 11.9 11.5

Total revenue and other income for the year ($M)

377.5 568.6 595.0 494.7

Statutory (loss)/profit for the year ($M)

(443.8) 263.2 308.2 177.6

Statutory (loss)/profit per stapled security for the year (basic) (cents)

(16.95) 10.05 11.78 6.83

Results from operations:

Funds and asset management ($M)

41.3 49.7 44.6 78.1

Co-investments ($M)

77.2 86.8 75.0 48.3

Investment portfolio ($M)

161.2 172.8 174.5 202.6

Unallocated items ($M)

(121.1) (108.3) (101.9) (107.8)

Operating profit for the year ($M)

158.6 201.0 192.2 221.2

Operating profit per stapled security for the year (cents)

6.06 7.68 7.35 8.50

Dividends / distributions for the year ($M)

144.0 170.3 183.1 195.5

Dividends / distributions per stapled security for the year (cents)

5.50 6.50 7.00 7.50

Financial position

Total assets ($M)

4,215.7 5,054.2 5,008.9 4,984.5

Net assets ($M)

2,212.2 2,710.4 2,665.3 2,583.4

Net tangible assets ($M)

(2)

2,211.2 2,721.2 2,656.7 2,573.4

Net debt ($M)

(3)

1,735.4 1,879.5 2,021.2 1,975.9

Gearing (%)

(4)

42.6% 39.6% 41.8% 41.6%

Look-through gearing (%)

47.6% 44.8% 46.2% 47.5%

Stapled securities issued (M)

2,618.9 2,618.9 2,617.5 2,612.9

NTA per stapled security

$0.84 $1.04 $1.02 $0.99

(1) Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year.

(2) Net assets less deferred tax assets, intangible assets, leased assets and leased liabilities, and deferred tax liabilities.

(3) Borrowings less cash and cash equivalents and restricted cash.

(4) Net debt divided by total tangible assets less cash and cash equivalents.

Financial performance

STATUTORY (LOSS) / PROFIT

Cromwell recorded a statutory loss after tax of $443.8 million for the year ended 30 June 2023 (2022: statutory profit

$263.2 million). The Trust recorded a statutory loss after tax of $438.7 million for the year ended 30 June 2023 (2022:

statutory profit of $274.9 million).

OPERATING PROFIT

Statutory loss or profit includes a number of items which are non-cash in nature or occur infrequently and/or relate

to realised or unrealised changes in the values of assets and liabilities and in the opinion of the Directors should be

adjusted for in order to allow securityholders to gain a better understanding of Cromwell’s operating profit. Operating

profit is considered by the Directors to reflect the underlying earnings of Cromwell. It is a key metric taken into account in

determining distributions. Operating profit is not a measure which is calculated in accordance with International Financial

Reporting Standards (“IFRS”) and has not been reviewed by Cromwell’s auditor. There has been no significant change to

the methodology of the calculation of operating profit since Cromwell stapled in 2007 other than the inclusion of items,

such as foreign currency, which are associated with the ongoing growth of the business.

Cromwell recorded an operating profit of $158.6 million for the year ended 30 June 2023 compared with $201.0 million for

the previous year.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 19

A reconciliation of operating profit, as assessed by the Directors, to statutory (loss) / profit after tax is as follows:

Cromwell

2023 2022

$M $M

Operating profit 158.6 201.0

Reconciliation to (loss) / profit after tax

Gain on sale of investment properties 2.0 11.8

Fair value net (losses) / gains - Investment properties (491.6) 54.0

Fair value net (losses) / gains - Derivative financial instruments (4.7) 55.4

Fair value net losses – investments at fair value through profit or loss (4.9) (1.7)

Lease cost and incentive amortisation and rent straight-lining (20.2) (23.1)

Relating to equity accounted investments

(1)

(63.1) (15.9)

Net exchange (loss) / gain on foreign currency borrowings (14.0) 28.0

Tax benefit / (expense) relating to non-operating items 15.1 (16.5)

Other non-cash expenses or non-recurring items

(2)

(21.0) (29.8)

(Loss)/Profit after tax (443.8) 263.2

(1) Comprises fair value adjustments included in share of profit of equity accounted entities.

(2) These expenses include but are not limited to:

• Amortisation of loan transaction costs.

• Amortisation of intangible assets and depreciation of property, plant and equipment.

• Other transaction costs.

Operating profit per security for the year was 6.06 cents (2022: 7.68 cents). This represents a decrease of approximately

21.1% over the prior year. Operating profit is analysed within each segment in the following section.

ANALYSIS OF SEGMENT PERFORMANCE

The contribution to operating profit of each of the 3 segments of Cromwell and the reconciliation to total operating profit is

set out in the upcoming sections.

Fund and Asset Management

Financial highlights in relation to fund and asset management include:

Total Australia Europe Joint ventures

2023 2022 2023 2022 2023 2022 2023 2022

Fee and other revenues ($M) 96.4 95.5 22.7 34.2 73.7 61.2 - -

Development income ($M) 21.3 18.5 - - 2.1 2.3 19.2 16.2

Share of operating profit ($M) 1.5 11.7 - - 1.2 7.7 0.3 4.0

Expenses attributable ($M) 77.9 76.0 13.4 16.5 64.5 59.5 - -

Operating profit ($M) 41.3 49.7 9.3 17.7 12.5 11.8 19.5 20.2

Assets under management ($B) 11.5 12.0 4.1 4.5 6.2 5.9 1.2 1.6

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT20

AUSTRALIA

Retail fund management

A breakdown of retail fund management results is below:

2023 2022

$M $M

Recurring fee income 9.8 9.0

Transactional fee income - 5.4

Performance fee income - 5.2

Total fee and other revenue 9.8 19.6

Costs attributable 4.1 6.2

Operating profit 5.7 13.4

Retail funds management profit decreased from $13.4 million in the prior year to $5.7 million for the year. Cromwell earned

no transactional or performance fee income in the current year. This was driven by the increase in official interest rates,

a reduction in investment property asset values and the price dislocation between the listed and unlisted property funds.

The flow on impact has been an overall reduction in net capital inflows into Cromwell’s funds which are currently open for

investment. The Cromwell Direct Property Fund, Cromwell’s main open fund, received net capital inflows for the current year

of $15.6 million versus net capital inflows of $88.6 million for the prior year. As a result of all these economic conditions and

Cromwell’s continued focus on careful asset selection, the fund made no property acquisitions during the year.

Total assets under management at 30 June 2023 was $1.4 billion (June 2022: $1.5 billion).

Cromwell remains committed to investing in increasing the scale and diversification of its retail funds management

business, which it believes is highly complementary to its property and facilities management activities.

Wholesale fund management

A breakdown of wholesale fund management results is below:

2023 2022

$M $M

Recurring fee income 0.7 1.0

Development income - -

Total fee and other revenue 0.7 1.0

Operating profit 0.7 1.0

During the year wholesale funds management activities related to the management of the Northpoint tower and the project

at 475 Victoria Avenue, Chatswood NSW. Operating profit fell to $0.7 million (2022: $1.0 million) following Cromwell no

longer undertaking any management activities at the Northpoint tower as of the end of December 2022.

Property management

A breakdown of property management results is below:

2023 2022

$M $M

Recurring fee income 12.2 13.5

Costs attributable 9.3 10.3

Operating profit 2.9 3.2

Property management profit decreased to $2.9 million (2022: $3.2 million) as a result of a decrease in leasing commissions

received along with a decrease in employee benefits expense.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 21

The business generated an operating profit of $11.3 million (2022: $4.1 million) for the year. This was the result of a

combination of higher recurring fee income and higher performance fee income.

At 30 June 2023 the European fund management business had €3.9 billion ($6.2 billion) assets under management

(2022: €3.9 billion ($5.9 billion)). The business has three major non-discretionary mandates with a combined potential

investment capacity of €1.9 billion. Details are outlined below.

Nordics mandate

• Investment capacity of €300 million

• Investing in logistics and light industrial assets across Sweden, Denmark and Finland

• 5 acquisitions (incorporating 8 assets) were completed in the year totalling €49.5 million

• Remaining investment capacity of €232.5 million

German mandate

• Investment capacity of €625 million

• Investing in logistics assets across Germany

• Mandate signed in December 2022 with a portfolio of 6 assets for just over €90.5 million acquired in Hamburg

• Remaining investment capacity of €534.5 million

Pan-European mandate

• Investment capacity of €1.0 billion

• Investing in logistics assets across Europe with a focus on the United Kingdom, Netherlands, Germany, France

and Italy

• Assets acquired in the current year include one asset in the United Kingdom for €50.2 million and one €90 million

asset in the Netherlands

• A further United Kingdom portfolio of assets was acquired in July 2023 for €109.8 million with further acquisitions of

€75 million signed and due to complete in October 2023

• Remaining investment capacity (inclusive of post balance date acquisitions completed and due to complete) of

€607.5 million

CEREIT continued to reposition its portfolio during the year and was a net seller of assets, disposing of €131.8 million and

acquiring €15.8 million.

EUROPE

A breakdown of European fund management results is below:

2023 2022

$M $M

Fee and revenue

Recurring fee income 59.6 53.9

Development income 2.1 2.3

Performance fee income 10.5 2.0

Transactional fee income 3.6 5.4

Total fee and other revenue 75.8 63.6

Costs attributable

Employee benefits expense:

Performance fee-related 2.3 1.2

Other 47.7 45.8

Other operational costs 14.5 12.5

Total costs attributable 64.5 59.5

Operating profit 11.3 4.1

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT22

JOINT VENTURES

LDK

In October 2022, Cromwell sold its 50% interest in LDK to Anglican Community Services for $20.0 million versus a carrying

amount of $12.0 million. The gain on disposal of Cromwell’s 50% interest reflected the future development profit from

stage two of the site at Tuggeranong and has been included in operating profit for the year.

The development loans provided to LDK remained in place until repayment March 2023 and continued to attract interest

up until that date.

During the year Cromwell and the Trust recorded $11.5 million (2022: $16.2 million) finance income in respect of

development-related loans made to LDK. The loans were utilised by LDK to construct the village at Greenway and acquire

the Landings retirement village.

Phoenix – Australia

Phoenix Portfolios Pty Ltd experienced a similar decrease in activity during the year as the rest of Cromwell’s Australian

funds management platform.

Cromwell recognised a share of operating profit of $0.4 million for the year (2022: $1.0 million).

Oyster – New Zealand

Oyster Property Group’s assets under management decreased to NZD$1.9 billion at year end (2022: NZD$2.1 billion).

Cromwell recognised a share of operating loss of $0.1 million for the year (2022: share of profit of $3.0 million).

Co-investments

Financial highlights in relation to Co-investments include:

Total CPRF CIULF CEREIT

Other

investments

2023 2022 2023 2022 2023 2022 2023 2022 2023 2022

Rental income

and recoverable

outgoings ($M)

79.3 73.7 74.5 69.1 4.8 4.6 - - - -

Share of operating

profit ($M)

43.1 45.4 3.4 3.5 - - 39.7 41.9 - -

Distribution income ($M) 2.7 7.0 - - - - - - 2.7 7.0

Operating profit ($M) 77.2 86.8 31.3 34.5 3.5 3.4 39.7 41.9 2.7 7.0

Net fair value (losses) /

gains ($M)

(219.5) (3.5) (212.6) (11.8) (6.9) 8.3 - - - -

Occupancy rate (%) 93.9 91.7 92.7 90.6 100.0 100.0 - - - -

WALE (years) 4.2 4.7 3.5 4.1 7.8 8.8 - - - -

Ownership share (%) - - 100.0% 100.0% 100.0% 100.0% 27.8% 27.8% - -

Investment value ($M) 1,261.4 1,434.5 559.6 720.1 91.5 91.1 589.7 600.0 20.6 23.3

CPRF

The 100% owned Cromwell Polish Retail Fund (CPRF) portfolio consists of six retail centre assets of varying sizes as well

as a seventh shopping centre asset held jointly with Unibail Rodamco Westfield (URW). The assets are located throughout

Poland.

The performance of the retail assets has continued its post-pandemic recovery despite a difficult economic environment

with inflation remaining high at 11.5% although down from its peak of 17% and 11 consecutive rises of domestic interest

rates in Poland, both negatively affecting retail spending. The footfall for the assets improved by 2% compared with

the 2022 financial year but still remains 5.7% below pre-pandemic levels. Turnover in the centres increased by 11.6%

compared with the prior year and is now 38.3% above pre-pandemic levels. Janki, the portfolio’s largest asset in Warsaw,

performed particularly well with an increase in footfall of 8.3% and an increase in turnover of 17.1% compared with the

prior year.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 23

The war in neighbouring Ukraine is impacting the portfolio mainly through significantly higher electricity and gas costs

along with the sanctioning of a Russian owned tenant that was present in five of the centres (including the joint venture

asset) which ceased trading following the sanctions.

The negative impact of higher costs as a result of elevated inflation in general and higher electricity and gas costs in

particular was partly offset by the fact that the vast majority of the portfolio’s leases are linked to CPI increasing at 1

January each year. The average rent increase for shopping centre tenants at 1 January 2023 was 10.1% and 8.3% for

anchor hypermarket tenants. The 7,579 sqm of lettable area that was previously occupied by the Russian owned tenant

sanctioned in April 2022 has now all been leased again, except for the space at the Ursynów joint venture asset, at an

average lease term of 6.3 years at similar rent levels. Notwithstanding these positive outcomes, overall net operating

income from the portfolio decreased by 7.9% compared with 2022 financial year, largely driven by cost increases.

During the year a total of 6,714 sqm was renewed and 5,313 sqm was re-let, including 1,001 sqm of previously vacant

space. Overall occupancy has increased to 92.7% (2022: 90.6%) with a weighted average lease expiry (WALE) of 3.5 years

(2022: 4.1 years).

In August 2022, following delays resulting from COVID-19 and Russia’s invasion of Ukraine, and pursuant to Cromwell’s

strategic objectives to become a capital light fund manager and in order to repatriate capital to Australia to reduce

Cromwell’s gearing, the decision was made to formally market the wholly owned assets (the Poland Retail Portfolio).

An extensive on-market sale process has been undertaken over the past 11 months resulting in Cromwell receiving a

number of non-binding indicative offers on the Poland Retail Portfolio, as well as various combinations of offers for the

underlying assets. In late June 2023, while the highest offer was below the level of the latest independent valuations,

it was determined that given the extent of the process that had been conducted in conjunction with the substantial

strategic benefits to exiting the Poland Retail Portfolio, the exclusive right to carry out due diligence would be granted

to an independent third party. The non-binding offer received was in relation to the acquisition of the 6 wholly owned

investment properties comprising the Poland Retail Portfolio (excluding the jointly held asset) with the indicative price

of $508.1 million, representing a 21.9% reduction compared with the 30 June 2023 independent external valuations. The

independent valuers determined the valuation of the individual properties, for independent valuation purposes, at a total

of $650.9 million. As a result of the strategic decision, and having considered the relevant requirements of the Accounting

Standards in determining market value for accounting purposes, the Board has adopted the non-binding offer price as the

carrying amount for accounting purposes at 30 June 2023, rather than the value determined by the independent external

valuations.

CIULF

The Cromwell Italy Urban Logistics Fund (CIULF) portfolio contains seven logistics assets in Italy. The portfolio is fully let

to and occupied by one tenant, global logistics company DHL with a WALE of 7.8 years (2022: 8.8 years). As announced,

in July 2023, subsequent to balance date, Cromwell successfully entered into a joint venture with Value Partners to share

ownership of the assets. The assets and liabilities (including all borrowings) of the fund are carried as held for sale at 30

June 2023. The investment properties were held at $91.5 million (2022: $91.1 million) which reflects their value based on

the sale of the 50% stake to Value Partners.

CEREIT

Cromwell continues to manage and sponsor CEREIT, a SGX-listed real estate investment trust. At 30 June 2023 Cromwell

owned 27.8% of CEREIT (2022: 27.8%), while CEREIT itself had 112 properties with a fair value of €2.3 billion (2022: 116

properties with a fair value of €2.6 billion) located across Europe. CEREIT’s property and tenant portfolios have been

relatively unimpacted by COVID-19. Occupancy has remained steady at 95.4% (2022: 95.4%) and the COVID-19 pandemic

has had a minimal impact on tenant collections. External valuations as at 30 June 2023 were conducted for 111 properties

representing approximately 99% of CEREIT’s portfolio by value resulting in net fair value losses of €56.1 million (June

2022: external valuations were conducted for 113 properties representing approximately 97% of CEREIT’s portfolio by value

resulting in net fair value gains of €11.2 million).

During the year Cromwell recognised its share of operating profit of $39.7 million (June 2022: $41.9 million) and received

$41.1 million in distributions (June 2022: $34.5 million).

This investment had been primarily financed utilising the issue of Euro-denominated convertible bonds, applicable finance

costs for the year being $0.4 million (June 2022: $8.8 million) following the final repayment of the bond early in 2023.

OTHER INVESTMENTS

Cromwell currently has co-investments in Australian and European real estate investment mandates which are accounted

for as investments at fair value through profit or loss. Cromwell receives distributions from these co-investments which

also support the funds management business.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT24

Net operating income from the investment portfolio decreased by 6.3% compared prior year largely because of the

disposal of non-core investment properties both during the 2023 and 2022 financial years. On a like-for-like basis, net

operating income increased by 3.9% with weighted average rent increases as a result of annual rent increases or rent

reviews of 8.4%.

Leasing highlights for the period include:

• 3,543 sqm leased at Cromwell’s Sydney CBD asset 207 Kent Street, including 1,244 sqm to Australia Post, 1,031 sqm to

Judo Bank and 1,031 sqm to Hewlett Packard as well as renewal of 1,022 sqm leased to Betchoice Corporation;

• 3,117 sqm at Cromwell’s Brisbane CBD asset 400 George Street, including 2,273 sqm to the Queensland government

as well as renewal of 1,458 sqm with Microsoft;

• 1,348 sqm at 243 Northbourne Avenue in the ACT, including 413 sqm to Animal Health Australia; and

• Lease renewals of 432 sqm with Lendlease and 798 sqm with Bureau of Meteorology at 700 Collins Street, Melbourne.

The value of the properties in Cromwell’s investment portfolio decreased on a like-for-like basis by $248.1 million or

8.8% as a result of an expansion of capitalisation rates, on a weighted average basis, by 56 basis points from 5.16% to

5.72%. All states in which Cromwell’s investment properties are located were equally affected by the general expansion of

capitalisation rates that reflect the demand for higher returns by investors following the recent rise in interest rates.

Major individual valuation movements included decreases in fair value of 400 George St in QLD by $62.0 million (11.4%),

700 Collins St in Victoria by $52.9 million (15.0%), 203 Coward St in NSW by $40.0 million (7.1%) all due to an expansion in

capitalisation rates of between 50 and 62.5 basis points.

Investment portfolio

Cromwell continues to be dedicated to driving the performance of the property portfolio through leasing and asset

management initiatives while also remaining focused on its strategy to simplify the Group structure by disposing of non-

core assets and moving the Group to be a capital light real estate fund manager. Following the disposal of four non-core

investment properties for total proceeds of $167.5 million during the second half of the prior financial year, Cromwell further

disposed of two non-core investment properties at 84 Crown Street, Wollongong, NSW for $53.0 million and 117 Bull Street,

Newcastle, NSW for $33.4 million. Subsequent to the end of the financial year Cromwell signed a contract for the sale of a

further non-core asset, 2-6 Station Street, Penrith, NSW for $45.3 million. All proceeds were used to repay debt.

Investment portfolio performance and key metrics

Portfolio performance

2023 2022

$M $M

Rental income and recoverable outgoings

(1)

202.3 215.2

Property expenses

(2)

(39.5) (41.4)

Net operating income 162.8 173.8

Investment property revaluation (loss) / gain (272.1) 57.5

(1) Rental income and recoverable outgoings excluding lease incentive amortisation and rent straight-lining.

(2) Property expenses excluding lease cost amortisation.

Key metrics 2023 2022

Investment portfolio value ($M) 2,584.1 2,973.7

Weighted average capitalisation rate (%) 5.7 5.2

Total lettable area (sqm) 256,637 279,966

Occupancy (%) 94.6 95.6

Weighted average lease expiry (years) 5.3 5.9

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 25

Capital management

As at 30 June 2023 Cromwell’s gearing was at 42.6% compared with the 30 June 2022 gearing level of 39.6%. The increase

followed the fair value decrease of investment properties in Cromwell’s Australian investment portfolio by 8.8% and in

Cromwell’s CPRF co-investment portfolio by 24.1%. Gearing levels currently sit slightly outside Cromwell’s stated target

range of 30% - 40% through the cycle. Cromwell currently has the investment property located at 2-6 Station Street,

Penrith, NSW contracted for sale and has a buyer for the CPRF assets in exclusive due diligence.

While total borrowings decreased during the year by $319 million (14.7%), interest expense in relation to borrowings for

the year increased to $77.2 million (2022: $53.2 million). The increase in interest expense is due to the significant and

sharp rise in interest rates set by the various central banks with the biggest impact being from the rapid increase in the

EURIBOR rate. The average interest rate for the current year increased to 3.90% compared with 2.31% for the prior year.

The net fair value loss in relation to derivative financial instruments of $4.7 million (2022: gain of $55.4 million) primarily

arose as a result of the revaluation of interest rate swap and cap contracts, which resulted in the recognition of a net loss

of $4.7 million for the year (2022: net gain of $50.2 million) in respect of these instruments. The remaining part of the fair

value movement in the prior year for derivative financial instruments related to the conversion feature in the convertible

bond. The convertible bond was repaid in September 2022. Cromwell has hedged future interest rates through various

types of interest rate derivatives (predominately interest rate caps) with 70% of borrowings at year end hedged (including

forward start derivatives) or fixed to minimise the risk of changes in interest rates in the future (2022: 51%). During the

year Cromwell entered into $369 million of new interest rate hedges via three forward starting interest rate caps, each

with a notional amount of $103 million and one interest rate collar with a notional amount of $60 million. The premium

paid was $5.0 million. Two of the three $103 million interest rate caps commence in July 2023 and mature in July 2025.

The remaining $103 million interest rate cap commenced in December 2022 and matures in July 2024. The interest rate

collar commenced in March 2023 and matures in March 2025. Weighted average hedge term at 30 June 2023 was 1.7

years (2022: 2.1 years).

DEBT

Cromwell’s debt platform is underpinned by its bilateral facilities secured against selected assets of Cromwell’s Australian

investment portfolio. The facilities continue to have headroom to cover further falls in property valuations should they

arise or any further increases in variable interest rates.

Cromwell continues to fund its co-investments in CPRF and CIULF via a Euro revolving credit facility. The facility continues

to have headroom to cover further falls in asset values should they arise or any further increases in variable interest rates.

All other loan facilities are asset level financing with no reference to group level gearing.

Other debt highlights during the year include:

• Complete repayment of $205.0 million Euro denominated convertible bonds;

• Extension of $200 million of debt within Cromwell’s bilateral facilities for a further three years from June 2024

to June 2027;

• Extension of €215.0 million ($338.2 million) of Cromwell’s Euro denominated revolving facility by one year to

September 2024;

• Relaxation of the Euro denominated revolving facilities ICR covenant to reflect the higher level of the EURIBOR 3 month

rate plus a reduction of the facility limit from €215 million to €175 million; and

• Refinance of the €66m Janki loan (one of the Polish asset facilities) for a further two years.

Part of the asset level debt which finances the CPRF portfolio (totalling €83m) matures in January 2024. Cromwell is

currently in advanced stages of renegotiating this facility with a consortium of 3 European banks.

These extensions of debt facilities evidence the continued confidence of debt providers in Cromwell’s business and the

quality of Cromwell’s investment property portfolio.

LIQUIDITY

As at 30 June 2023 Cromwell had $113.9 million of cash (2022: $286.0 million) and undrawn bank facilities totalling $173.6

million (2022: $360.9 million).

EQUITY

No additional stapled securities were issued during the year. Securities required to meet the exercise of employee

performance rights are now acquired on market.

Net tangible assets (NTA) per security has decreased during the year from $1.04 to $0.84, primarily as a result of an

overall decrease in property valuations.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT26

Strategy

Cromwell remains committed to its long-term stability and growth objectives:

• Ongoing growth of fund management platforms through the launch of new products in retail markets, as well as

partnerships and mandates;

• Continued focus on resilience and strength of the Investment Portfolio through active management and leasing

initiatives;

• Reducing gearing to within target range;

• Measured approach to capital recycling as opportunities present;

• Long term commitment to ESG with the implementation of scope 1-3 emissions inventory and modelling reduction

pathways; and

• Transition to a capital light fund management model remains a priority, when capital markets are more conducive.

Outlook

Cromwell faces an economic environment of high floating interest rates, challenging property markets, subdued

transactional volumes in fund management markets and the need to reduce gearing to within its target range.

This has meant a continuation of the prudent approach to distribution payments.

A distribution of 0.83 cents per security is expected to be paid for the September 2023 quarter.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 27

Risks

Cromwell has an enterprise-wide risk management framework which provides a comprehensive approach to identifying,

assessing and managing risk aligned with AS/NZS ISO 31000:2018. The framework ensures appropriate oversight of risk

and includes policies and processes reflecting an integrated risk management approach and recognises that everyone at

Cromwell has a role to play in effectively managing risk.

Cromwell actively identifies and manages the risks that may impact its operations, strategy and outlook, and considers

megatrends and external insights to respond to emerging areas of risk. The Board is ultimately accountable for risk

management and is supported in its ongoing oversight by separate committees to review and assess key risks and

ensure they are managed appropriately. The Investment Committee is responsible for overseeing and reviewing all

major transactions including investment in and divestment of assets. The Audit and Risk Committee is responsible for

overseeing and reviewing the effectiveness of Cromwell’s risk management framework in responding to the various

exposures to risk Cromwell has in the course of its business. Effective 1 July 2022, the Audit and Risk Committee was

reconstituted as an Audit Committee and as an Environmental-Social-Governance (ESG) and Risk Committee.

Cromwell’s key risks and the core controls and mitigants to assist in managing them are described below:

Key Risk Description Mitigation

Performance

• Delivering distributions that

meet market guidance and

expectations

• Ensuring that investments and

developments perform in line

with expectations

• Retaining and growing AUM

• Board approved strategy continuously reviewed with

processes to monitor and manage performance to ensure

maximisation of security value and best operational

structures

• Investment governance framework ensuring structured

investment and divestment approval processes

• Investment Committee and management regular review

of performance of investments and developments against

targets

• Transition of European investments to long term, secure,

reliable revenue streams

Capital management

• Ensuring continuous access

to debt and equity markets

to support Cromwell’s

sustainable growth

• Board approved gearing range through the cycle reduced to

30% - 40% and regularly monitored

• Prudent capital management informed by cash flow

forecasting and sensitivity analysis. Regular reviews of

available liquidity matched to capital requirements and

monthly Board reporting

• Long dated debt expiry profile

• Diversification of debt funding sources

• Spreading of debt maturities

People and culture

• Ensuring Cromwell has access

to and can retain key talent

• Maintaining Cromwell’s strong,

adaptive and open culture

• Investment in our staff with focused learning and

development plans

• Promotion of group wide values and conduct standards

• Fostering an inclusive workplace culture, supported by

policies and forums, including the Diversity and Inclusion

Working Group to promote equity and fairness

• Succession planning and leadership development for senior

staff

• Fostering the development of key talent

• Competitive remuneration and benefits

• Effective performance management and review

• Staff engagement and feedback mechanisms

• Various staff wellbeing initiatives

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT28

Key Risk Description Mitigation

Health, Safety

and Wellbeing

• Ensuring the health, safety

and wellbeing of Cromwell’s

staff, contractors, visitors and

occupants.

• Preventing death or serious

injury at any Cromwell owned

or controlled property or in the

course of employment with

Cromwell

• Education, awareness and training programs to make our

Directors, Officers and Staff aware of health, safety and

wellbeing (HSW) and promote a positive safety culture across

our business

• Formal HSW policies and programs in place and reviewed

regularly at Cromwell owned properties and operational

locations

• Wellbeing Program promotes pursuing healthy lifestyles and

self-care to staff and provides practical tools and advice

• Employee Assistance Program makes a wide network of

health professionals available to staff to discuss any issues

in confidence

• Code of Conduct establishes required standards of behaviour

across the Group, with complementary Whistleblower

protection, Grievance resolution and escalation mechanisms

to promote a safe environment

• Group wide Supplier Code of Conduct and Procurement

Policy extends Cromwell’s corporate expectations to our

suppliers and service providers

Sustainability and

Environment, Social

and Governance

• Delivering sustainable

outcomes for investors and

other stakeholders

• Understanding, responding to

and managing the impacts of

changing environmental and

social conditions that could

affect our people, assets and

business operations

• Sustainability Framework outlining goals and accountabilities

for relevant focus areas, i.e. environment, economic, social

and governance

• Participation in benchmarking and assessment activities

to measure our progress year on year and inform future

ambitions

• Comprehensive reporting including Sustainability Report,

TCFD disclosures and Modern Slavery Statements

• risks and potential impacts of ESG matters, including

climate, managed within our enterprise risk management

framework

• active engagement with our stakeholders and communities

to contribute to society positively and relevantly

Technology and data

security

• Ensure that information

management systems are

resilient and able to meet

business needs

• Ensure availability and integrity

of critical IT infrastructure &

applications

• Ensure Cromwell remains

compliant with data protection

requirements, and provides

measures to protect against

cyber-attack

• Maintaining suitable policies, guidelines and procedures

to support secure business operations and standards for

information management and privacy

• Executing regular cyber-security evaluations, training,

testing, and vulnerability mitigation activities

• Maintaining ISO 27001 certification for critical technology

services

• Maintaining and testing suitable business continuity plans

and procedures

• Providing robust vendor selection and assessment

methodology with ongoing performance due diligence

Leasing

• Ensuring that assets are

leased in accordance with

asset management plans and

forecasts

• Maintain a portfolio of

high quality commercially

attractive property assets that

respond to tenant demand and

market expectations ensuring

consistent, predictable

occupancy and income returns

• Defensive portfolio with long WALE

• Large and diversified tenant base

• Experienced leasing team

• Active asset management with focus on repositioning,

refurbishing and re-leasing properties to enhance returns

• Strategic asset management plans to ensure optimisation

of asset use and assist return expectations over the asset’s

lifecycle

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 29

Key Risk Description Mitigation

Governance and

compliance

• Ensuring continuous

compliance with regulatory

requirements

• Meeting stakeholder and

investor expectations

• Training programs addressing key compliance requirements

in place across the business

• Board approved Policies and key frameworks that facilitate

good governance and drive appropriate accountability and

oversight

• Board approved Tax Risk Management Policy ensures

ongoing REIT status

• Board oversight of compliance objectives and obligations

under compliance plans and regulation

• Appropriate assurance activities for areas of potential

compliance and governance risk

• Cromwell’s Culture and Values expectations clearly

articulated to all staff and interlinked with performance

reviews and incentives

Climate-related ﬁnancial disclosure

Cromwell acknowledges the impacts of climate change in Cromwell’s upstream and downstream value chain, as well as

on the environment, business and society at large. Cromwell supports the decarbonisation of the industry, and the goals

of the 2015 Paris Agreement to global warming well below 2°C above pre-industrial levels, with efforts to limit global

temperature increase to 1.5°C above pre-industrial levels.

Cromwell’s ESG vision is to elevate real estate investment, empower its people and deliver a resilient future for its

investors, tenants, communities, and planet. Ambitious net zero emissions targets were set as part of Cromwell’s new

ESG Strategy in 2022. These include:

• 100% renewable electricity by 2030;

• Net zero emission from assets under operational control by 2035;

• Net zero Scope 1, 2 and 3 emissions, including tenants’ emissions and embodied carbon, by 2045.

The TCFD recommendations provide a consistent reporting framework to enable financiers, investors, insurers and

other stakeholders to understand an organisation’s material climate related risks and the financial implications and

the approach undertaken to manage them. Cromwell strives to better understand and disclose the potential risks

and opportunities arising from climate change and a transition to a low-carbon economy and continues to improve

its alignment with the Task Force on Climate-related Financial Disclosure (TCFD) recommendations and all future

International Sustainability Standards Board (ISSB) requirements.

GOVERNANCE

Cromwell has formalised its governance structure and mechanisms relating to climate risk, with the Cromwell Group

Board and its ESG & Risk Committee (ERC) overseeing Cromwell’s climate-related strategy, activities and ambition. The

ERC is responsible for monitoring the effectiveness of the Group’s ESG and Net Zero Strategies, and advising the Board

on the progress and the actions undertaken on TCFD and net zero workstreams, as well as broader ESG and corporate

risk management. Both the Board and ERC meet quarterly at a minimum to receive reports, updates and presentations on

risks and sustainability measures across the business including reports on climate change activities and impacts.

The Board and ERC delegate responsibility of management of climate risks, opportunities and impacts through the

Executive Committee, the Investment Committee, the EU ESG Steering Committee and regional ESG teams. In FY23, the

EU ESG Steering Committee conducted deep dives on environmental data integration and management through the ESG

data software system (Deepki) rollout, and on ESG and climate-related training across the EU business. The Executive

Committee and key management personnel are incentivised to successfully implement the ESG Strategy and achieve

Cromwell’s climate-related targets. Further climate-related responsibilities that extend throughout the organisation are

shown in the table below.

Cromwell’s climate-related governance structure is shown on the following page.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT30

Board Audit Committee

The Board Audit Committee assists the Board in

providing objective review and non-executive oversight of

the Group’s financial reporting, application of accounting

policies, legal and regulatory compliance and internal

control framework. Where relevant the Committee

incorporates ESG risks and impacts within it’s remit

Cromwell Risk Appetite Statement (RAS)

Cromwell’s RAS outlines its willingness to accept and

manage risks, such as climate change, in pursuit of

Cromwell’s strategic objectives while maintaining an

acceptable level of risk.

Enterprise Risk Management Framework

Describes the structure and approach that Cromwell

takes to identify, assess, monitor and mitigate risks, such

as climate risks, as well as integrate risk management

into decision-making processes.

Board ESG & Risk Committee

The Board ESG & Risk Committee (ERC) supports the

Board in ensuring objective, non-executive oversight of the

development and implementation of the Group’s ESG, risk

management and health, safety and wellness objectives.

Board Nomination and Remuneration Committee

The Board Nomination and Remuneration Committee assists

the Board in ensuring Cromwell has and observes coherent

remuneration policies and practices to attract, retain and

motivate senior executives and directors who will create

value for securityholders. Where relevant the Committee

incorporates ESG risks and impoacts within it’s remit

Group ESG Policy

Reflects Cromwell’s approach and commitments to

responding to ESG issues, impacts, risks and opportunities.

Group Net Zero Strategy

Cromwell’s ambitious action

plan to achieving net zero

Scope 1, 2 and 3 emissions.

Executive Committee

Responsible for overseeing the group-wide

implementation of the ESG Strategy and Net Zero

Strategy.

Investment Committee (IC)

Responsible for evaluating Cromwell’s

investment opportunities. ESG and climate

considerations are evaluated by the IC during

due diligence procedures.

EU ESG Steering Committee

Responsible for overseeing the implementation

fo the ESG Strategy across Cromwell’s

European portfolios.

Group ESG Strategy

Approved by the Board in December 2022, the Group ESG

Strategy sets out Cromwell’s vision, commitments, focus

areas and targets in relation to ESG.

Cromwell Group Board

Responsible for providing strategic direction on Cromwell's climate change goals, activities and practices, overseeing Cromwell's

climate risks and opportunities, and ensuring the integration of climate considerations into corporate decision-making and

disclosure.

Cromwell’s climate-related governance structure

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 31

Department Responsibility

ESG The ESG teams are responsible for conveying advice to the EMT, ERC and Board, delivering

on the ESG Strategy and the Net Zero Strategy, reporting on progress against targets and

preparing annual corporate ESG and climate disclosures, such as the ESG Report, CDP, DJSI,

GRESB, Climate Active and SFDR responses and TCFD Statements. The Group Head of ESG is a

member of the Group EMT and a permanent voting member of the EU Investment Committee.

Investment Management Product development and Fund management teams are responsible for integrating climate

change consideration and impacts into the product strategies they develop and subsequently

manage.

Transactions teams, led respectively by the Chief Investment Officer in Australia and Head

of Investment Management across Europe, are responsible for preparing briefing papers

including detailed technical, financial and legal reviews on proposed acquisitions and

divestments. The Investment Committee or the Board (where applicable) has oversight and

approval of asset acquisitions and disposals, including consideration of climate change risk

throughout the due diligence process.

Legal, Company Secretarial,

Risk and Compliance

Cromwell’s Legal, Company Secretary, Risk and Compliance teams all have responsibility for

maintaining Cromwell’s oversight on emerging risks and regulation. Risk and Compliance

teams are responsible for developing and maintaining the Group Risk Appetite Statement,

Enterprise Risk Management (ERM) Framework and ERM Policy, which includes a process for

identifying, owning, managing and tracking risks, including the strategic risk, “ESG integration”

which considers the impact of climate change and weather phenomena.

Property & Facilities

Management

Facilities managers across all regions are responsible for maintaining active Building

Continuity Plans and conducting regular reviews of climate adaptability and stranding risk.

Facility managers support the ongoing management of energy, emissions, water and waste

data capture and reporting.

Property Operations &

Asset management

Property Operations and Asset management teams ensure that activities with Cromwell’s

properties, suppliers and tenants remain in line with the ESG Strategy. This includes achieving

the ESG Strategy and decarbonisation approach at the individual property level and reporting

on progress internally, and supporting engagement with tenants and suppliers in ESG,

decarbonisation and climate-related activities and contracting.

Finance Cromwell’s Finance team oversees the development of Cromwell’s climate-related financial

disclosures. The Treasury function leads Cromwell’s green financing initiatives which support

Cromwell in attaining and maintaining high energy and climate performance of its assets.

Marketing Marketing teams support the ESG teams in communicating Cromwell’s decarbonisation

progress and broader ESG activities to Cromwell’s internal and external stakeholders.

People and Culture P&C are engaged in supporting management and leadership at Cromwell in developing and

achieving Objective and Key Results (OKRs) related to climate change and ESG and aligning

Executive incentives to the achievement of Cromwell’s ESG Strategy and climate objectives.

They also stay actively involved in discussions on intersections between diversity, equity,

inclusion and reconciliation with climate change.

Research and Investment

strategy

Research teams are engaged in supporting management and leadership at Cromwell by

integrating climate change considerations and impacts into the Group’s researching strategy

and function. They also stay actively involved in discussions on intersections between research,

investment, and climate change.

Development Development teams ensure that development activities remain in line with the Group ESG

Strategy. They also stay actively involved in cross discipline discussions on construction,

engineering and climate change.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT32

STRATEGY

During FY23, Cromwell embarked on the process of reviewing, refreshing and formalising its ESG Strategy to guide its

future actions and ensure that its metrics and targets, including emissions and other climate related metrics reflect

Cromwell’s ambition. Cromwell has a Climate Change Position Policy to support internal assessment, reporting and

management of identified risks. Where Cromwell maintains operational control of property assets, strategies are in place

to create and deliver opportunities to embrace sustainable development solutions for capital works, investment in new

plant and equipment and the adoption of renewable energy solutions and technologies. Strategic asset plans include

detailed asset-level ESG activities to support the achievement of the ESG Strategy.

In FY23, Cromwell developed its Net Zero Strategy. As a real estate investor and fund manager that focuses on the

acquisition and uplift of existing buildings, Cromwell is fully committed to reducing its carbon footprint and address all

scope including embodied carbon emissions despite the fact these are largely limited to maintenance and refurbishment

activities. Cromwell has set ambitious net zero targets as part of its Net Zero Strategy, which encompasses Scope 1, 2

and 3 emissions, including its tenants’ emissions and embodied carbon. Alongside comprehensive Scope 1-3 emissions

baselines, Marginal Abatement Cost Curves were modelled for both of Cromwell’s Australian and European regions, to

support decision-making through the identification and analysis of different emissions reduction activities according to

cost and quantity of emissions abatement. Alongside prioritisation by cost and feasibility, initiatives to reduce emissions are

assessed based on the carbon management hierarchy of avoid, reduce, substitute, sequester and offset.

In collaboration with Deepki, the Carbon Risk Real Estate Monitor (CRREM) tool is used for both CEREIT and CPRF

portfolios to support “stranding” risk considerations in line with a 1.5°C warming scenario and enhance Cromwell’s

climate-related strategic decision-making processes in Europe. By leveraging the investment projection capabilities of

Deepki and CRREM, the data-driven approach helps Cromwell anticipate and navigate potential risks associated with

stranded assets.

As a property fund manager, Cromwell considers that the greatest material risks posed from climate change are likely to

be from:

• Physical risks from severe weather events directly impacting and damaging assets owned, managed and developed; and

• Indirect impacts, such as increasing operational costs from rising insurance premiums, energy costs, carbon charges

and taxes, legislation and operational costs resulting from increased temperature extremities and wear and tear to

operating plant and equipment.

In FY24, Cromwell plans to reassess its climate-related risks, opportunities and impacts by conducting a comprehensive

scenario analysis. Appropriate scenarios and time horizons will be selected at group level to further strengthen and align

its climate risk management approach. While climate scenario analysis has been previously conducted by Cromwell in

FY20, Cromwell acknowledges the significant advancements in climate change accountability, commitments, policy, and

decarbonisation approaches over the three intervening years. Therefore, Cromwell recognises the importance of regularly

performing climate scenario analysis to further integrate it into decision-making and proactively address and effectively

manage its climate-related risks.

Energy audits play a crucial role in Cromwell’s strategy to reduce energy consumption and optimise operational

performance. These are conducted across all regions where Cromwell operates, and the outcomes of these audits drive

key actions to minimise energy usage. The findings directly inform the capital expenditure planning process. Technical

Building Assessments were conducted across all Australian properties in 2019 and assessed Cromwell’s assets’ climate

resilience and climate adaptation strategy. Additionally, NABERS gap analyses are conducted annually across all Australian

properties to identify pathways for improving energy and water performance.

Overall, Cromwell’s strategy focuses on proactive risk management, efficient resource utilisation, and embracing

opportunities associated with the transition to a low-carbon and net zero economy. By aligning its operations with these

strategic objectives, Cromwell aims to drive sustainable value creation and enhance its resilience in the face of climate-

related challenges.

RISK MANAGEMENT

Cromwell maintains a comprehensive enterprise risk management system and defines its process for identifying,

assessing and managing risks in its Enterprise Risk Management (ERM) Framework and ERM Policy. In adopting this

approach to climate-related risks, Cromwell’s objective has been to assess the impact of climate risks within enterprise

risk considerations and identify how Cromwell’s sustainability and climate risk management approach serves as a

mitigating factor and control for organisational risk. ESG integration features as a strategic risk in the group Risk Appetite

Statement, with Climate Change and Weather being a sub-risk. The Cromwell ERM Framework also describes the

processes for analysis and review of compliance with and changes to legislation, regulation, strategy or policies, including

those related to climate change. For example, Cromwell’s Board ESG & Risk Committee regularly discusses compliance

with EU climate disclosure regulations such as SFDR and alignment with the EU Taxonomy, as well as global disclosure

megatrends affecting all regions that Cromwell operates in.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 33

Risk reviews of the ERM Framework and Risk Appetite Statement are undertaken with each risk owner by the Head of

Risk and Compliance (AU) and the Head of Risk (EU) respectively, and these reviews are included in reports to the ESG

and Risk Committee. For Cromwell’s European assets, the EU ESG Committee documents minutes of its meetings and/

or quarterly risk reports. Environmental data management platform, Deepki, is used for monitoring transition risks of

Cromwell’s European assets through the Carbon Risk Real Estate Monitor (CRREM) risk assessment tool. Additionally, the

environmental compliance status of CEREIT assets is planned to be monitored in real-time by Nova Ambiente in FY24.

Cromwell’s transactions and investment team is enhancing its ESG due diligence procedure and further developing

its process to assess physical climate risks and stranding risks when acquiring new properties. When managing and

operating its properties, Cromwell’s property team conducts climate-related risk management procedures.

Both the Australian and EU property services teams have established protocols for end-of-life management of buildings,

covering aspects such as fire safety, air conditioning, HVAC systems, and electrical systems. Building Continuity Plans

are regularly updated, addressing contingencies for climate-related physical impacts such as bushfires, floods and

power outages, and provide clear identification of teams and management responses. For maintaining assets, across all

regions, a building condition report is conducted annually, along with a Repair & Maintenance (R&M) report that includes

associated costs. Regular meetings with property managers are held to address R&M and capital expenditure needs.

Cromwell undertook energy audits for all Australian properties across 2020 and 2021 and will have undertaken energy

audits for 57% of European properties by the end of financial year 2023. The results of these energy audits directly feed

into annual capex planning aligned with Cromwell’s broader ESG Strategy and Net Zero Strategy, thereby enhancing the

energy efficiency of Cromwell’s assets, optimising operational performance and mitigating medium to long-term climate-

related risks. For example, capital works plans and forecast expenditure spanning multiple years are prepared for each

property asset. The capital expenditure plan is prepared at acquisition and updated throughout the asset lifecycle to

address the replacement of ageing plant, equipment and building fabric.

METRICS AND TARGETS

Cromwell recognises that the greatest opportunity to reducing emissions is within its property assets and value

chains. Cromwell manages property assets in Australia and Europe. Cromwell discloses ESG and emissions reduction

performance of its property assets, and report progress against targets in an annual ESG Report and Data Pack, as well

as in its annual CDP response. The ESG Data Pack includes environmental metrics such as Scope 1, 2 and 3 emissions,

energy consumption, renewable energy procurement, water and waste, as well as key data points relating to Cromwell’s

individual building attributes, such as Net Lettable Area, NABERS Energy, NABERS Water, BREEAM, LEED and Green Star

ratings where available.

Cromwell’s emissions data is not limited to where Cromwell has operational control. In the development of Cromwell’s

Group Net Zero Strategy, a new comprehensive FY22 baseline was set covering Scope 1, 2 and all relevant Scope 3

emissions sources, adjusting against the previous 2007 emissions baseline. It also extends to all relevant categories of

Scope 3 emissions including emissions estimates for investments, downstream leased assets, purchased goods and

services, capital goods including embodied emissions, fuel and energy-related activities, waste generated in operations

and business travel, with aims to improve the data quality and reduce the need for estimations year on year. Transparency

and reporting continue to be expanded and improved through active engagement with tenants, key suppliers and contracts

for data sharing and uplifting the coverage of Cromwell’s metering and data platforms, Envizi and Deepki.

Cromwell is certified Climate Active Carbon Neutral for its Australian corporate operations. By maintaining this

certification, Cromwell ensures accuracy and accountability in its operational emissions reduction activities and emissions

calculation methodologies.

Setting targets enables Cromwell to adopt a systematic and disciplined approach toward improving efficiency and reducing

emissions. Long-term net zero and climate change-related targets have been set to achieve net zero emissions both

within and beyond Cromwell’s operational control. These are listed below:

• Net zero operational control Scope 1 and 2 emissions by 2035;

• Net zero Scope 1, 2 and 3 emissions by 2045 including tenants’ emissions and embodied carbon;

• 80% renewable electricity by 2025 and 100% by 2030 across all portfolios;

• 75% of waste diverted from landfill by 2030, 100% by 2040;

• 60% recycling rate by 2040;

• Align Cromwell’s Net Zero targets to the Science Based Targets Initiative Net Zero Standard;

• Achieve minimum weighted average NABERS Energy rating of 5.5 stars in Australia and minimum EPC C certification;

across all European buildings;

• Achieve minimum target of 5 star Green Star in Australia, “Very Good” BREEAM and LEED Gold ratings across all new

construction and refurbishments; and

• 4.5 star weighted average NABERS Water rating across the Australian portfolio by 2030.

Cromwell is excited to continue sharing updates on its progress and learnings toward achieving its net zero targets.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT34

LOOKING FORWARD

Cromwell’s roadmap for deepening its alignment with the TCFD recommendations is shown below and takes into

account the varying maturity and approach to ESG across the jurisdictions that we operate in. It is expected that the ISSB

standards will be implemented in Australia from the year ending 30 June 2025 and this plan will evolve as requirements

are clarified and Cromwell progresses its strategy for the listed group and the application of different requirements in

different jurisdictions.

Thematic

Area Activity FY23 FY24 FY25 FY26

Governance

Align with internal stakeholders on level of climate ambition

Undertake Board and management capacity building activities

Clarify and document internal structure for climate-related accountabilities,

information flows at all levels

Consider establishment of incentive mechanisms related to climate targets

and metrics

Strategy

Identify scenarios, time horizons, relevant sectors and geographies and

develop climate risk management framework

Undertake climate scenario analysis

Develop Climate Change Risk and Opportunity Register reflecting aggregated

risk data and exposure to climate risks and opportunities

Develop Net Zero Strategy to identify, prioritise and align emissions reduction

activities

Undertake physical asset deep-dive and development of climate risk

mitigation plans for all physical assets

Enhance investment due diligence and monitoring processes to include

climate risk

Undertake deep-dive analysis on extreme weather events, including modelling

Continue use of scenario analysis in strategic decision making

Undertake scenario modelling to link risk exposure to financial impact

Risk

management

Integrate climate risk into the corporate risk register

Document risk owners, control owners and actions in the

corporate risk register

Integrate climate risk management into existing enterprise risk management

framework, systems and tools

Treat and manage key risks

Set internal audit procedure for climate-related information and processes

Set process for emerging climate risk and regulatory monitoring

Develop internal climate risk dictionary

Metrics and

targets

Extend calculation, monitoring and disclosure of emissions to all funds under

management

Calculate and monitor Scope 3 emissions

Identify metrics for key risks

Establish targets for key risks and align to ESG Strategy

Establish near and long-term targets aligned to the Science-Based Targets

Initiative

Monitor performance against key risk targets and metrics

Obtain third party verification over disclosures on Scope 1, 2 and 3 emissions

and calculation methodologies

Key

Complete

Ongoing Future Activity

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 35

Directors

The Directors of Cromwell Corporation Limited and Cromwell Property Securities Limited as responsible entity of the

CDPT (“responsible entity”) during the year and up to the date of this report are:

Dr Gary Weiss AM

Non-executive Chair

LLB (Hons), LLM, JSD, 70

Listed Company Directorships (held within the last three years):

Chair – Ardent Leisure Group Limited (2017 – current)

Executive Director – Ariadne Australia Limited (1989 – current)

Chair – Estia Health Limited (2016 – current)

Non-executive Director – Hearts and Minds Investments Limited (2018 – current)

Non-executive Director – Thorney Opportunities Ltd (2013 – current)

Chair – Ridley Corporation Limited (2010 – 2020)

Non-executive Director – The Straits Trading Company Limited (2014 – 2020)

Skills and Experience

Dr Weiss has substantial board and board committee experience at both listed and non-

listed entities. Dr Weiss is currently Chair of Ardent Leisure Group Limited and Estia

Health Limited, an Executive Director of Ariadne Australia Limited and a Non-executive

Director of Hearts and Minds Investments Limited, Thorney Opportunities Limited, the

Victor Chang Cardiac Research Institute and The Centre for Independent Studies. Dr Weiss

is also a Commissioner of the Australian Rugby League Commission.

Dr Weiss served as Chair of Ridley Corporation Limited, Clearview Wealth Limited and

Coats Group plc. Dr Weiss is a former Non-executive Director of The Straits Trading

Company Limited, a former Executive Director of Industrial Equity Limited, Whitlam,

Turnbull & Co and Guinness Peat Group plc, and has served on the boards of numerous

other companies, including Westfield Group, Premier Investments Limited and Tower

Australia Limited. Dr Weiss has been involved in overseeing large businesses with

operations in many regions including Asia Pacific, Europe, China, India and the United

States and is familiar with investments across a wide range of industries and sectors,

including real estate.

In 2019, Dr Weiss was awarded the Member (AM) in the General Division of the Order of

Australia for significant services to business and the community.

Dr Weiss holds an LLB (Hons) and LLM from the Victoria University of Wellington and a

Doctor of the Science of Law (JSD) from Cornell University. He was admitted as a Barrister

and Solicitor of the Supreme Court of New Zealand, a Barrister and Solicitor of the

Supreme Court of Victoria and as a Solicitor of the Supreme Court of New South Wales.

Director since:

18 September 2020

Chair since:

17 March 2021

Last elected:

16 November 2022

Board Committee

membership:

Member of the

Audit Committee

Member of the ESG

and Risk Committee

Member of the

Investment Committee

Member of the Nomination and

Remuneration Committee

Independent:

Based in:

Australia

Stapled Securities held:

150,000 stapled securities

(Change of Director’s Interest

Notice - 17 June 2022)

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT36

Mr Eng Peng Ooi

Non-executive Deputy Chair and Senior Independent Director

BCom, Member of the

Certified Practising Accountants of Australia, Member of the Singapore Institute of Directors, 67

Listed Company Directorships (held within the last three years):

Non-executive Director – Manager of Cromwell European REIT (2021 – current)

Deputy Chair – Manager of ESR-LOGOS REIT (formerly known as ESR-REIT)

(2021 – 1 July 2022)

Chair – Manager of ESR-LOGOS REIT (formerly known as ESR-REIT) (2017 – 2021)

Non-executive Director – Manager of ESR-LOGOS REIT (formerly known as ESR-REIT)

(2012 – 1 July 2022)

Non-executive Director – Perennial Real Estate Holdings Limited (2015 – 2020)

Skills and Experience

Mr Ooi has more than 35 years of real estate experience, including in property investment,

development, project management, fund investment and management and capital

partnerships in Australia and across Asia. Mr Ooi joined Lendlease in 1981, working in

various finance roles in Sydney, before taking on the role of Chief Financial Officer, Asia

in the late 1990s. Later, Mr Ooi returned to Sydney with Lendlease and fulfilled the roles

of Chief Financial Officer of Lendlease Development (2000 – 2002), Global Chief Financial

Officer of Lendlease Investment Management (2002 – 2003) and Asia Pacific Chief

Financial Officer, Lendlease Communities (2003 – 2005).

From 2006 to 2010, Mr Ooi was the Asia Chief Executive Officer, Lendlease Investment

Management and Retail, based in Singapore. Mr Ooi subsequently established the

development business and retail funds, and successfully developed capital partnerships,

forming strong relationships across Asia. In 2010, Mr Ooi was appointed Asia Chief

Executive Officer for Lendlease. Since retiring from his executive career in late 2011,

Mr Ooi has gained board and board committee experience at both listed and non-listed

entities across Asia Pacific. Mr Ooi is a Non-executive Director of Cromwell EREIT

Management Pte. Ltd., the manager of SGX-listed Cromwell European REIT. Since 2016,

Mr Ooi has been a Non-executive Director of Savant Global Capital Pty Limited, a specialist

investment management and real estate advisory platform.

Mr Ooi served as a Non-executive Director of ESR-LOGOS Funds Management (S) Limited

(formerly known as ESR Funds Management (S) Limited), the manager of SGX-listed ESR-

LOGOS REIT (formerly known as ESR-REIT), from 2012 until 1 July 2022. Mr Ooi served

as Chair from 2017 to 30 June 2021 and, after almost nine years as independent Non-

executive Director, was redesignated as Deputy Chair and non-independent Non-executive

Director effective 1 July 2021. Mr Ooi was a Member (and the former Chair) of ESR-

LOGOS REIT (formerly known as ESR-REIT)’s Nominating and Remuneration Committee,

a Member of its Audit, Risk Management and Compliance Committee and the Chair of

its Executive Committee. In addition, Mr Ooi was previously a Non-executive Director

of formerly-SGX-listed Perennial Real Estate Holdings Limited (2015 – 2020), Frasers

Property Australia (2014 – 2018) and Perennial China Retail Trust Management Pte. Ltd.

(2012 – 2014).

Mr Ooi holds a Bachelor of Commerce from the University of New South Wales and is

a Member of the Certified Practising Accountants of Australia and a Member of the

Singapore Institute of Directors.

Director since:

8 March 2021

Deputy Chair and Senior

Independent Director since:

17 March 2021

Last elected:

17 November 2021

Board Committee

membership:

Chair of the Audit Committee

Chair of the Independent

Board Committee

Member of the ESG

and Risk Committee

Independent:

Yes

Based in:

Australia

Stapled securities held:

195,208 stapled securities

(Change of Director’s Interest

Notice - 10 June 2022)

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 37

Mr Robert Blain

Non-executive Director

FAPI, FRICS, 68

Skills and Experience

Mr Blain has more than 40 years of real estate experience, including in property and asset

management, strategic development, cross border activity and capital markets in Australia

and across Asia.

After pursuing rural infrastructure interests, Mr Blain commenced his corporate career

in Sydney in the late 1970s, obtaining a real estate licence and working for several years

with LJ Hooker. He joined the Colliers Jardine Group as Sales Director before being

appointed as Regional Service Director, Capital Markets APAC. From 1995 to 1998, Mr

Blain held the position of Regional Investment Director based in Singapore and, in 1999,

was appointed Australia Director. Mr Blain’s last role at the Colliers Jardine Group was as

Chief Executive, New South Wales.

In 2002, Mr Blain joined CBRE as Managing Director, CBRE Hong Kong and China, based

in Hong Kong. In 2003, he was appointed Chief Executive Officer, CBRE Asia and, in 2005,

became Chair and Chief Executive Officer, CBRE Asia Pacific. Mr Blain was responsible

for CBRE’s activities across Asia Pacific and was a member of the Global Operating

Committee, based in the United States, driving CBRE’s global business strategy.

In 2014, Mr Blain transitioned to the role of Executive Chair, CBRE Asia Pacific and

focussed on CBRE’s major clients and building strong relationships across the region.

In 2019, Mr Blain retired from his Executive Chair and Global Operating Committee roles

at CBRE and returned to Australia. In December 2022, Mr Blain was appointed Chair of

LAWD.

Mr Blain is a Fellow of the Australian Property Institute and Fellow of the Royal Institute of

Chartered Surveyors.

Mr Jonathan Callaghan

Managing Director and Chief Executive Oﬃcer

BSc (Hons), LLB (Hons), MAppFin, 52

Skills and Experience

Mr Callaghan joined Cromwell as Chief Executive Officer in October 2021. Prior to this,

he was at Investa Property Group where he started as General Counsel and Company

Secretary in 2006 before being appointed Joint Managing Director and Finance Director in

2013 and Chief Executive Officer in 2016.

His career at Investa included overseeing management of the Investa Commercial

Property Fund, which at the time of his departure was the top performing core office fund

over two, three, five and seven-year time horizons. During his tenure, Investa was widely

regarded as an industry leader and was recognised in the Australian Financial Review

BOSS Best Places to Work list for 2021 in property. Earlier in his career, Mr Callaghan

spent time at law firms Gilbert & Tobin and Corrs Chambers Westgarth.

Mr Callaghan holds a Master of Applied Finance from Macquarie University and a

Bachelor of Science (Hons) and Bachelor of Laws (Hons) from the University of Sydney. Mr

Callaghan is a Member of the Property Champions of Change Coalition.

Director since:

8 March 2021

Last elected:

17 November 2021

Board Committee

membership:

Chair of the

Investment Committee

Member of the Independent

Board Committee

Member of the Nomination and

Remuneration Committee

Independent:

Yes

Based in:

Australia

Stapled securities held:

Nil (Initial Director’s

Interest - 8 March 2021)

Director since:

7 October 2021

Board Committee

membership:

Not applicable

Independent:

Based in:

Australia

Stapled securities held:

420,776 stapled securities

(change of Director’s Interest

Notice - 7 October 2022)

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT38

Ms Tanya Cox

Non-executive Director

MBA, Grad Dip Applied Corporate Governance, FAICD, FGIA, 62

Listed Company Directorships (held within the last three years):

Non-executive Director – OtherLevels Holdings Limited (2015 – 2020)

Skills and Experience

Ms Cox has over 15 years of board experience and extensive executive experience in

sustainability, property, finance and funds management. Ms Cox began her career at

the Bank of New Zealand and over an 11 year period succeeded to the role of General

Manager of Finance, Operations and IT. Ms Cox led similar functions at the managed fund

custodian Ausmaq Limited, before joining Rothschild & Co Australia Limited as Director

and Chief Operating Officer for the Australian operations. During her tenure at Rothschild

& Co Australia Limited, Ms Cox was a member of several executive committees, including

Chair of the Risk Committee and a member of the Executive and Investment Committees.

In 2003, Ms Cox joined Dexus as Chief Operating Officer and Company Secretary, with

her responsibilities expanding in 2012 to include the role of Executive General Manager

– Property Services. During her tenure at Dexus, Ms Cox was a member of the Executive

Committee and the Investment Committee, and her responsibilities included oversight

of all operational aspects of the business including corporate responsibility and

sustainability, marketing and communications, information technology, operational risk

management, corporate governance and company secretarial practices.

Since retiring from her executive career in 2014, Ms Cox has gained board experience

at listed companies including BuildingIQ, Inc and OtherLevels Holdings Ltd. Ms Cox is

the current Chair of Cromwell Funds Management Limited, the Australian Sustainable

Built Environment Council, Fender Katsalidis (Aust) Pty Ltd and Equiem Holdings Ltd

and is a Director of Niche Environment and Heritage Pty Ltd and Campus Living Funds

Management Pty Ltd. Ms Cox was former Chair of the World Green Building Council and

Green Building Council of Australia, a former Member of the NSW Climate Change Council

and a former Director of Low Carbon Australia.

Ms Cox holds a Master of Business Administration from the Australian Graduate School

of Management at University of New South Wales and a Graduate Diploma in Applied

Corporate Governance from the Governance Institute of Australia. Ms Cox is a Fellow

of the Australian Institute of Company Directors, the Governance Institute of Australia

(formerly known as the Institute of Chartered Secretaries & Administrators) and is a

Member of Chief Executive Women. Ms Cox is based in Australia.

Director since:

21 October 2019

Last elected:

17 November 2021

Board Committee

membership:

Chair of the Nomination and

Remuneration Committee

Member of the Audit Committee

Member of the Independent

Board Committee

Member of the ESG and Risk

Committee

Independent:

Yes

Based in:

Australia

Stapled securities held:

210,000 stapled securities

(Change of Director’s Interest

Notice - 14 June 2022)

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 39

Mr Joseph Gersh AM

Non-executive Director

BCom, LLB (Hons), 67

Skills and Experience

Mr Gersh is currently Executive Chairman of Gersh Investment Partners Ltd and a

Director of the Sydney Institute in an honorary capacity. Mr Gersh is a former government

appointed Non-executive Director of the Australian Broadcasting Corporation (ABC) and

was the Chair of the ABC’s People and Sustainability Committee.

Mr Gersh was formerly the inaugural Chairman of the Australian Reinsurance Pool

Corporation, foundation Director of the Reserve Bank of Australia’s Payments System

Board and Director of the Federal Airports Corporation. Mr Gersh is a former senior

partner and Chairman of the Management Committee of law firm, Arnold Bloch Leibler.

One of his principal areas of expertise is major property development and, in particular,

the construction of hotels, shopping centres, land subdivisions, apartments and office

towers.

Mr Gersh previously served as Deputy Chairman of the Australia Council for the Arts, as

Chairman of Artbank (which is part of the Australian Government Office for the Arts) and

as Chairman of the National Institute of Circus Arts. In 2006, Mr Gersh was awarded the

Member (AM) in the General Division of the Order of Australia for significant services to

business, government, the arts and the community.

Mr Gersh holds a Bachelor of Commerce and Bachelor of Laws (Hons) from the University

of Melbourne.

Director since:

18 September 2020

Last elected:

16 November 2022

Board Committee

membership:

Member of the

Investment Committee

Member of the Independent

Board Committee

Independent:

Yes

Based in:

Australia

Stapled securities held:

140,000 stapled securities

(Change of Director’s Interest

Notice - 14 June 2022)

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT40

Ms Lisa Scenna

Non-executive Director

B.Comm, Fellow of Chartered Accountants Australia

and New Zealand, MAICD, 55

Listed Company Directorships (held within the last three years):

Non-executive Director – Gore Street Energy Storage Fund plc (2023 – current)

Non-executive Director – Harworth Group plc (2020 – current)

Senior Independent Director – Genuit Group plc (2023 – current)

Non-executive Director – Genuit Group plc (2019 – 2023)

Skills and Experience

Ms Scenna has over 25 years of executive experience in property and asset management

and funds/investment management in both the United Kingdom and Australia. Ms Scenna

joined Westfield Group in 1994 and progressed to the role of Head of Investor Relations.

Ms Scenna moved to Stockland Group as General Manager – Finance and Business

Development and rose through the group to the role of UK Joint Managing Director in

2007. In this role, Ms Scenna was responsible for establishing Stockland Group in the

UK, had full responsibility for the regional operations and was involved in a number of

acquisitions and integrations.

In 2009, Ms Scenna left Stockland Group to stay in the UK and accepted the role of Group

Head of Explore at Laing O’Rourke, the country’s largest privately-owned construction

solutions provider. For just under three years, Ms Scenna led the Explore Investments and

Explore Living businesses across Europe, Canada, the Middle East and Australasia. In this

role, Ms Scenna led the infrastructure investing activities globally and worked with clients

and investors to build Laing O’Rourke’s direct infrastructure portfolio held in co-ownership

with a number of institutional investors across the UK, Australia and Canada.

In 2013, Ms Scenna joined UK construction and regeneration company, Morgan Sindall

Group plc, as the Managing Director of their Investments business. During her tenure, Ms

Scenna was a Director of the Morgan Sindall Investments Board. Through her extensive

executive experience in the UK, Ms Scenna has developed strong connections with local

authorities, developers and investors and has a deep understanding of the drivers for

competitors.

Ms Scenna is a Senior Independent Director of AMP Capital Funds Management Limited

and Chair of its Audit, Risk and Compliance Committee. Ms Scenna is an Independent

Director of AMP Investment Services Pty Limited and Chair of its Audit, Risk and

Compliance Committee.

Ms Scenna is a Senior Independent Director of Genuit Group plc and Chair of its

Remuneration Committee, and a Member of its Audit Committee and Nomination

Committee. Ms Scenna is a Non-executive Director of Harworth Group plc and is a

Member of its Audit Committee and Remuneration Committee. Genuit Group plc, Gore

Street Energy Storage Fund plc and Harworth Group plc are listed on the London Stock

Exchange.

Ms Scenna is the former Deputy Chair of the Private Infrastructure Development Group’s

Supervisory Board and has played a leadership role in charitable organisations.

Ms Scenna holds a Bachelor of Commerce from the University of New South Wales and

is a Fellow of Chartered Accountants Australia and New Zealand and a Member of the

Australian Institute of Company Directors.

Director since:

21 October 2019

Last elected:

16 November 2022

Board Committee

membership:

Chair of the ESG and Risk

Committee

Member of the Audit Committee

Member of the Independent

Board Committee

Member of the Nomination and

Remuneration Committee

Independent:

Yes

Based in:

United Kingdom

Stapled securities held:

150,000 stapled securities

(Change of Director’s Interest

Notice - 31 October 2022)

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 41

Ms Jialei Tang

Non-executive Director

BFA Architectural Design, BA in Liberal Arts, 28

Skills and Experience

Ms Tang has investment, executive and board experience in diverse industries comprising

finance, real estate, hospitality, pharmaceuticals, and technology. Her work spans Asia-

Pacific, European and North American markets.

In the real estate sector, Ms Tang specializes in the evaluation, acquisition, planning, and

development of properties encompassing hospitality, port terminals, premium offices

high density residential complexes, and REITs. She is the Director of investment offices

Haiyi Holdings Pte Ltd and Asia Marvel Holdings Ltd, where her projects include the UBS

Singapore headquarters, a 1468-unit residential complex, a port terminal in Southern

China, and a logistics portfolio acquisition. She is also Chief Executive Officer of Silver City

Properties, LLC, a residential property investment and management company in New York.

Ms Tang joined the board as an alternate director of TauRx Pharmaceuticals Ltd in

2019. She also handles the communication and strategic planning for her family office’s

philanthropy including support for education, sports, the Olympic movement, refugee relief

and healthcare.

Ms Tang holds a Master in Urban Planning from Harvard University, and a Bachelor of

Fine Arts in Architectural Design and Bachelor of Arts in Liberal Arts (Epistemology and

Language) from The New School. She is a Graduate of the Australian Institute of Company

Directors.

Mr Michael Foster

Company Secretary and Senior Legal Counsel

LLB (Hons), B.Bus, Grad Dip Applied Corporate Governance

Skills and Experience

Mr Foster has more than 14 years of corporate and financial services experience, having

worked as an inhouse legal practitioner for several ASX listed Australian financial services

licensees.

Mr Foster’s experience includes the areas of company secretariat and corporate

governance, having been appointed as Company Secretary for Cromwell Funds

Management Limited in 2021.

Mr Foster has private practice experience in Australia and the United Kingdom with a

focus on real estate transactions.

Mr Foster holds a Bachelor of Laws (Hons), a Bachelor of Business and a Graduate

Diploma in Applied Corporate Governance.

Director since:

9 July 2021

Last elected:

17 November 2021

Board Committee

membership:

Member of the

Investment Committee

Independent:

Based in:

Singapore and the United States

Stapled securities held:

123,346,692 stapled securities

(Initial Director’s Interest

Notice - 9 July 2021)

Appointed since:

6 April 2023

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT42

DIRECTORS’ MEETINGS

The following table sets out the number of Directors’ meetings (including committees of the Board of Directors) held

during the financial year and the number for meetings attended by each director (where a director or member of

committee).

Directors Notes

Board of

Directors

Audit

Committee

Investment

Committee

ESG and Risk

Committee

Nomination and

Remuneration

Committee

Meetings

attended

Meetings

eligible

to attend

Meetings

attended

Meetings

eligible

to attend

Meetings

attended

Meetings

eligible

to attend

Meetings

attended

Meetings

eligible

to attend

Meetings

attended

Meetings

eligible

to attend

G Weiss Elected 18

September

2020

11 11 4 4 2 2 5 5 5 5

EP Ooi Appointed 8

March 2021

11 11 4 4 - - 5 5 - -

R Blain Appointed 8

March 2021

10 11 - - 2 2 - - 5 5

J Callaghan Appointed 7

October 2021

11 11 - - - - - - - -

T Cox Appointed 21

October 2019

11 11 4 4 - - 5 5 5 5

J Gersh Elected 18

September

2020

11 11 - - 2 2 - - - -

L Scenna Appointed 21

October 2019

11 11 4 4 - - 5 5

5 5

J Tang Appointed 9

July 2021

10 11 - - 1 2 - - - -

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 43

Letter from the Chair

On behalf of the Board, I am pleased to present the Remuneration Report for the financial year

ended 30 June 2023.

PERFORMANCE AND REMUNERATION OUTCOMES

As detailed in my letter last year, Cromwell’s transition to Fund Manager will span multiple

financial years and 2023 saw continued progression towards that goal through the sale of non-

core assets.

Significant progress has been made in the internal cultural shift which is core to the achievement

of the strategy. Cromwell’s new corporate values were defined early in the financial year, through

an extensive consultative exercise with the global business to ensure the values resonated with

our people as well as our purpose. Cromwell’s new values are Accountable, Progressive

and Collaborative.

Cromwell has made significant progress towards its 40:40:20 gender diversity targets. At the executive level, the group has

achieved 38.5% female representation, increasing from 30% in FY22. The Australian Executive Committee has achieved

the target with 44.4% female representation and overall the target has been achieved at 4 of 5 management levels in the

Australian business. Over the last 2 years Cromwell has significantly reduced its gender pay gap, but there is still work to

be done here, which the CEO and board are committed to continuously progressing. Board and committee composition

also maintains its 40:40:20 representation.

The KMP STI Plan had a financial gateway of 90% of the Operating Earnings budget and this hurdle was met. The CEO and

CFO earned 50% of their potential incentive award, in line with performance against KPIs.

As disclosed in the FY22 Remuneration report, the KMP LTI Plan hurdles were amended effective 1 July 2022, resulting in

only two hurdles for FY23, being Relative Total Securityholder Return (Relative TSR) and Return on Invested Capital (ROIC).

The Relative TSR hurdle remains unchanged from previous years, weighted at 50%. The ROIC hurdle has been set at the

10-year bond rate, on the day of grant, plus 300 basis points. Both hurdles are tested at the end of the three-year period

and will remain unchanged in 2024.

The Board has considered the impact of a falling security price on the volume of LTI allocations and has decided not to

adjust the allocations. Similarly, the Board does not adjust LTI allocations in a rising market or exercise discretion over

vesting outcomes when a falling security price impacts vesting.

FY24 APPROACH TO REMUNERATION

KMP Remuneration will remain unchanged in FY24. As noted above, the Committee amended the KMP LTI Plan hurdles

in 2022, from three equally weighted targets to two. In June 2023, the Committee considered the base salaries of both

executive and non-executive KMP and determined that no increase would be awarded.

NONEXECUTIVE DIRECTOR REMUNERATION

During FY23 the structure of the Board Committees was reviewed. Cognisant of increased investor focus on

Environmental, Social and Governance (ESG) issues and the materiality of those issues to real estate investment trusts,

a combined ESG and Risk Committee was established, to ensure all matters under these areas receive appropriate

attention. The previous Audit and Risk committee was converted to an Audit Committee.

Yours sincerely,

Ms Tanya Cox

Chair, Nomination and Remuneration Committee

Ms Tanya Cox

Chair, Nomination

and Remuneration

Committee

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT44

Remuneration Report

Table of contents

The remuneration report is presented for the financial year ending 30 June 2023. The report forms part of the Directors’

Report and has been prepared and audited in accordance with the requirements of the

Corporations Act 2001

(Cth). This

report is where we explain how performance has been linked to reward outcomes that forge a clear alignment between

Cromwell staff and securityholders.

P. 46

1. Remuneration

Overview

1.1 Key Management

Personnel 46

P. 47

2. Remuneration Strategy

and Governance

2.1 Cromwell’s

Remuneration Strategy 47

2.2 Remuneration Mix 48

2.3 Remuneration

Time Horizon 48

2.4. How variable remuneration

is structured 49

2.5 Employment Contract

Terms & Conditions 51

2.6 Remuneration Governance 51

P. 52

3. Cromwell Performance

and Remuneration

Outcomes

3.1 Cromwell’s five-year

performance summary 52

3.2 STI Scorecard 54

3.3 Executive KMP STI

Outcomes 55

3.4 Executive KMP LTI

Performance 55

3.5 Executive Actual

Remuneration 57

3.6 Executive Statutory

Remuneration 57

P. 58

4. Non-executive Director

Remuneration

4.1 Board remuneration

structure 58

4.2 Total remuneration for

Non-executive Directors 58

4.3 Non-executive Directors’

security holding requirement 58

4.4 Non-executive Directors’

remuneration table 59

P. 60

5. Additional Disclosures

5.1 At risk cash awards and

performance rights vesting

and forfeiture in 2023 60

5.2 Equity based compensation

for the CEO and other KMP 61

5.3 Security holdings 62

5.4 Loans To Key

Management Personnel 62

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 45

1. Remuneration overview

1.1 KEY MANAGEMENT PERSONNEL

In this report, Key Management Personnel (KMP) are those with the authority and responsibility for planning, directing

and controlling the activities of the Group, either directly or indirectly.

Name Position / Title Term Current security holding

Current Non-executive Directors

Gary Weiss AM Non-executive Director

Non-executive Chair

Full year 150,000

Eng Peng Ooi Non-executive Director (independent)

Non-executive Deputy Chair (independent)

Full year 195,208

Robert Blain Non-executive Director (independent) Full year -

Tanya Cox Non-executive Director (independent) Full year 210,000

Joseph Gersh AM Non-executive Director (independent) Full year 140,000

Lisa Scenna Non-executive Director (independent) Full year 150,000

Jialei Tang Non-executive Director Full year 123,346,692

Executive Director

Jonathan Callaghan Chief Executive Officer

Managing Director

Full year

420,776

Other Executive KMP

Michael Wilde Chief Financial Officer Full year 1,250,832

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT46

2. Remuneration strategy and governance

2.1 CROMWELL’S REMUNERATION STRATEGY

Our Purpose

To be a trusted global Real Estate Fund Manager known for our transparency, authenticity and creativity.

Our Strategic Objectives

Simplify the

business

Grow Funds under

Management

Grow Capital

Relationships

Focus on People

and Platform

Our Values

Our Remuneration Principles

Encourage

behaviours

consistent with

our values

Attract proven

high performers

Motivate achievement

of strategic objectives

Create

securityholder

alignment

Retain proven

high performers

KMP Remuneration Structure

Fixed

Fixed Remuneration

STI

Short-Term Incentive

LTI

Long-Term Incentive

Benchmarked to market, Fixed

Remuneration is used as a tool to

attract executives with the skills and

experience required to execute the

strategy.

Base salary, superannuation and

non-financial benefits

STI drives achievement of short-

term strategic objectives.

50% paid in cash

50% paid in securities and

deferred for one year.

Designed to improve retention and

create securityholder alignment.

At the end of three years:

100% vests in staple securities

50% is released immediately

50% is deferred in holding lock for

a further 12 months.

Reviewed annually against comparable organisations

Minimum Securityholding Requirement

(1)

The CEO is required to hold a minimum of 100% of gross Fixed Remuneration in Cromwell stapled securities within 4

years of commencement. Upon the CEO obtaining the Required Securityholding, the Required Securityholding is fixed at

the required value (Fixed Shares). Notwithstanding any decrease in the actual value of the Fixed Shares, no additional

shares are required to be acquired.

Other executive KMP are required to hold a minimum of 50% of Fixed Remuneration (within 4 years of 1 July 2019 or

becoming KMP). Securities in STI and LTI holding lock are included in KMP total holdings.

(1) The Board has approved that securities held in a family trust will count towards minimum shareholding.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 47

2.2 REMUNERATION MIX

The following diagram illustrates the remuneration mix at maximum potential for Key Management Personnel.

Fixed Remuneration Short term Long term

Variable remuneration

Current KMP

CEO 37% 31.5% 31.5%

CFO 50% 25% 25%

2.3 REMUNERATION TIME HORIZON

The following diagram provides an illustration of how 2024 financial year remuneration will be delivered.

Fixed remuneration

Base salary, superannuation

and other non-financial

benefits

STI – cash component

STI – deferred component

LTI – vested component

LTI – deferred component

2023 2024 2025 2026

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT48

2.4 HOW VARIABLE REMUNERATION IS STRUCTURED

Short-Term Incentive (STI)

Purpose To drive the achievement of short-term strategic objectives.

Value % of Fixed Remuneration Target

Current KMP

CEO 85%

CFO 50%

Performance Measures All KMP STI’s are subject to the following gateways:

1. Achieving 90% of earnings guidance or Board approved budgeted earnings where no

guidance is provided; and

2. Scoring a minimum of Meeting Expectations against Cromwell’s values-based

Behavioural Competencies.

3. Zero safety incidents causing death or major harm.

If any of the gateways are not met, no STI is payable.

Individual STI outcomes are determined based on group performance against a mix of financial

and non-financial measures. More information can be found on the KMP STI Performance

Measures in the STI Scorecard.

Financial Measures Non-financial Measures

Current KMP

CEO 80% 20%

CFO 70% 30%

Reason for

performance measures

The Board considers that a mix of financial and non-financial measures are appropriate

and that they are aligned with Cromwell’s strategy and values. Performance measures are

reviewed annually, and the Board has discretion to review and amend the measures during

the performance period where significant unforeseen events have occurred which are outside

the control of management, or where formulaic application is likely to produce a material and

perverse outcome.

Calculation of awards Value of awards are calculated as follows:

Fixed Remuneration x Target STI opportunity % x Achievement Score against

Performance Measures

Delivery of awards 50% of the STI awarded is delivered in cash and 50% is delivered in securities and deferred for

a further 12 months*. All securities are purchased on market.

In the event the recipient ceases to be employed:

• before the STI award date, the recipient is ineligible to receive an award

• after the STI award date, securities in holding lock remain in holding lock until the release

date provided the employee is deemed to be a good leaver

Clawback Malus and Clawback clauses allow deferred securities to be clawed back where a recipient has

acted fraudulently, dishonestly or where there has been a material misstatement or omission

in Cromwell’s financial statements leading to receipt of an unfair benefit. This may also occur

where an executive KMP fails to meet cultural related expectations including acting ethically

and responsibly.

Change of Control In the event of a change of control, any STI award deferred in securities will be released.

*In his second year of employment, the CEO will receive 30% cash, 20% non-deferred Cromwell Securities, and 50% as deferred Cromwell Securities.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 49

KMP Long Term Incentive (LTI)

Purpose To create securityholder alignment and encourage retention.

Value % of Fixed Remuneration Target Allocation method

Current KMP

CEO 85% Face value

CFO 50% Face value

Performance

Measures

For each measure, 25% vests at the lower bound with straight line vesting to 100% at the

maximum threshold.

50% Return on Invested Capital (ROIC)

Tested at the end of 3-year performance period.

ROIC = (Dividend + increase in NTA)/opening NTA.

Lower bound is 300bps about the 10-year bond rate (set at 6.7% on 1 July 2022) and

the upper bound is 400bps above the 10-year bond rate (set at 7.7% on 1 July 2022).

Equity Issues that significantly impact NTA will be considered, as well as significant

write downs in intangible assets.

50% Relative TSR

Tested at the end of 3-year performance period.

Measured against the S&P/ASX300 A-REIT Accumulation Index on a percentile basis

with 50th percentile lower bound and 75th percentile upper bound.

Below Median – 0% vesting.

Reason for

performance

measures

ROIC is a measure of profitability above the average cost of debt.

Relative TSR is an effective measure of securityholder value creation compared to peers without

adjusting for market driven impacts.

Calculation of

awards

The number of performance rights granted is calculated under the Face Value Methodology, based

on the VWAP of Cromwell’s security price for the 10 days immediately succeeding the annual results

announcement.

Delivery of

awards

At the end of the 3-year performance period, 100% of the award vests, with 50% released and 50%

deferred in holding lock for a further 12 months. All securities are purchased on market.

In the event the recipient ceases to be employed:

• before the vesting date, all rights to securities are forfeit.

• after the vesting date, securities in holding lock remain in holding lock until the release date

provided the employee is deemed to be a good leaver.

Clawback Malus and Clawback clauses allow unvested and deferred securities to be clawed back where a

recipient has acted fraudulently, dishonestly or where there has been a material misstatement or

omission in Cromwell’s financial statements leading to receipt of an unfair benefit. This may also

occur where an executive KMP fails to meet cultural related expectations including acting ethically

and responsibly.

Change of Control In the case of a change of control, performance rights will be tested and will pro rata vest in line with

achievement against performance measures.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT50

2.5 EMPLOYMENT CONTRACT TERMS & CONDITIONS

All executive KMP are employed on Employment Contracts that detail the components of remuneration paid and frequency

of review but do not describe how remuneration levels are modified from year to year. The contracts do not provide for a

fixed term however they can be terminated on specified notice (with the exception of gross misconduct when they can be

terminated without notice).

Termination by Company Termination by Executive KMP

CEO and other

Executive KMP

Notice Period

6 months, with the option of payment

in lieu (lump sum)

Impact on incentives

If an executive KMP is determined to be a good

leaver deferred securities remain on foot. If an

executive KMP is determined to be a bad leaver

all deferred securities are forfeit.

Notice Period

6 months

Impact on incentives

If an executive KMP is determined to be a

good leaver unvested performance rights

and deferred securities remain on foot. If an

executive KMP is determined to be a bad leaver,

unvested and deferred securities are forfeit.

2.6 REMUNERATION GOVERNANCE

The Board has appointed a Nomination and Remuneration Committee (“Committee”) responsible for reviewing,

monitoring and making recommendations in relation to the appointment, performance and remuneration of the KMP.

Board

The Board is responsible for setting the executive remuneration strategy, monitoring KMP

performance and approving the executive Key Performance Indicators

Nomination and Remuneration Committee

The Committee is the main governing body for KMP appointment and remuneration.

The Committee is responsible for implementation of the Remuneration Principles.

Full charter available at:

https://www.cromwellpropertygroup.com/__data/assets/pdf_file/0028/16579/CG_

Nomination-and-Remuneration-Committee-Charter_approved-June-2020.pdf

Management

Provides recommendations on reward strategy design and implementation to the Committee.

From time to time Management may seek remuneration advice.

External advisors

Provide expert

independent information

on remuneration for

KMP.

Remuneration consultants are appointed from time to time to provide independent information and advice.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 51

8.2

8.5

7.4

7.7

6.1

‘19 ‘20 ‘21 ‘22 ‘23

11.9

11.6

11.9

12.0

11.5

‘19 ‘20 ‘21 ‘22 ‘23

10.0

9.8

8.4

8.8

7.0

‘19 ‘20 ‘21 ‘22 ‘23

8.4

4.9

10.1

8.8

13.7

‘19 ‘20 ‘21 ‘22

‘23

3. Cromwell performance and remuneration outcomes

3.1 CROMWELL’S FIVEYEAR PERFORMANCE SUMMARY

The remuneration outcomes of executive KMP vary with short-term and long-term performance outcomes. The graphs

and tables below show executive KMP remuneration outcomes and Cromwell’s core financial performance measures over

the past five years.

Total return of Cromwell securities

The chart below illustrates Cromwell’s performance against the S&P/ASX300 A-REIT Accumulation Index since 2009.

Cromwell’s Five-Year Performance Summary

Short-Term Measures Long-Term Measures

STI and LTI Outcomes 2019 2020 2021 2022 2023

STI (average % of target) 91% 71% 0% 71% 50%

LTI (% of maximum) 82% 38% 32% 27% 0%

LTI excludes backward looking LTI scheme

EPS

Cents

AUM

$Bn

Total Return

ROCE

Jun-2023

Cromwell Performance -v- S&P/ASX 300 A-REIT Total Return Index

600.00

500.00

400.00

Jun-2009

Jun-2011

Jun-2013

Jun-2015

Jun-2017

Jun-2019

Jun-2021

Jun-2010

Jun-2012

Jun-2014

Jun-2016

Jun-2018

Jun-2020

Jun-2022

300.00

200.00

100.00

0.00

Cromwell Property Group S&P/ASX 300 A-REIT Total Return Index

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT52

1 year 3 year 5 year 10 year 15 year

CMW Total Return (22.4%) (8.6%) (6.6%) 2.0% 6.6%

S&P / ASX 300 A-REIT Accum. Index 7.5% 8.5% 3.9% 8.0% 5.3%

CMW Excess Performance (29.9%) (17.1%) (10.5%) (6.0%) 1.3%

Total Securityholder Returns (Annualised)

Cromwell’s Total Securityholder Return (TSR) over the last 1, 3, 5, 10 and 15 years relative to benchmark indices is

shown below.

Over the course of any short-term period, the total securityholder return of Cromwell will vary against the index. Over the

medium term, the overall performance of Cromwell should be demonstrated in sustained operating earnings and growth

in total securityholder returns. The LTI hurdles implemented for all KMP will reward the achievement of medium-term

returns.

As a result of the three-year performance of Cromwell, the TSR LTI Hurdle for the period from 1 July 2020 to 30 June 2023

paid out 0%. The final payout ratio for LTI’s running from 1 July 2020 to 30 June 2023 was 14% which reflects the long-

term performance of Cromwell over that time.

15.0%

5.0%

-5.0%

-15.0%

-25.0%

10.0%

0.0%

-10.0%

-20.0%

-30.0%

-35.0%

-22.4%

7.5%

8.5%

-8.6%

-17.1%

-6.6%

-6.0%

-10.5%

3.9%

2.0%

8.0%

6.6%

5.3%

1.3%

-29.9%

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 53

Objective Key Results Commentary Rating

KMP

Responsible

GATEWAYS

Achieve a minimum of 90% of Operating

Earnings budget

The board approved target operating

earnings for FY23 was set at 5.44cps

and the associated earnings gateway

was 4.94 cps.

Gateway

achieved

All

Achieve a minimum score of “Meets

Expectations” against Cromwell

behavioural and values-based

expectations

Gateway

achieved

All

Achieve zero safety incidents causing

death or major harm

There were zero incidents causing

death or major harm in Cromwell’s

operations.

Gateway

achieved

All

FINANCIAL PERFORMANCE

Financial Operating Earnings per

Security of 5.44cps

The Group achieved an Operating

Earnings per Security of 6.06cps

Achieved All

Progress on Board

Endorsed strategic

initiatives to the

Board’s satisfaction

As determined by the board There are multiple strategic initiatives

underway that will span multiple

financial years.

Partially

achieved

All

Growth in Funds

under Management

(FUM)

Achieve growth of funds under

management by $220m

AUM decreased Not

achieved

CEO

Expense

Management

All cost centres within expense budgets. 91.2% of cost centres were within

expense budgets. Australian business

expenses were 15.3% below budget and

European business expenses were 7.5%

below budget.

Achieved CFO

NON-FINANCIAL PERFORMANCE

Operational Achieve FY23 Gender Diversity Targets Measured the Gender Pay Gap and set

target for improvement, improved gap

by 2% globally and 1% in Australia.

40:40:20 gender diversity target at each

leadership level: achieved target at non-

executive director, Team Leader and

Emerging Leader Level globally and the

Executive, Senior Leader, Team Leader

and Emerging Leader Level in Australia.

Not

achieved

Not

achieved

All

Operational efficiencies Major projects pertaining to structure

and efficiency were completed.

Achieved CFO

ESG Execute Strategy and achieve ESG targets 74% of ESG targets met Not

achieved

All

Leadership “Executive Leadership” engagement

score improved from 56% to 70%

Executive leadership engagement

factor score at 61%

Not

achieved

All

“People Leadership” factor score for

CEO direct reports at 70%

People leadership score of 74% Achieved CEO

People Leadership factor score for CFO

direct reports at 80%

People leadership score of 82% Achieved CFO

Culture Engagement score improved to 70% Global Engagement score at 63% Not

achieved

All

New values embedded Values Embedded Achieved CEO

3.2 STI SCORECARD

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT54

3.3 EXECUTIVE KMP STI OUTCOMES

Behavioural

Gateway

Target STI

(as % of FR)

STI Awarded

STI Forfeit

Current KMP

CEO

Jonathan Callaghan

Met 85% $425,000 $425,000

CFO

Michael Wilde

Met 50% $212,500 $212,500

3.4 EXECUTIVE KMP LTI PERFORMANCE

There is currently one LTI plan in operation for executive KMP, a “forward looking” LTI Plan, introduced on 1 July 2019.

The following Performance Rights have been granted under this Plan:

No of performance

rights granted Allocation date Financial years tested Expiry date

J Callaghan 1,083,078 1-Jul-22 2023 - 2025 30-Sep-25

706,563 1-Jul-21 2022 - 2024 30-Sep-24

Total 1,789,641

M Wilde 541,539 1-Jul-22 2023 - 2025 30-Sep-25

679,601 1-Jul-21 2022 - 2024 30-Sep-24

857,008 1-Jul-20 2021 - 2023 30-Sep-23

Total 2,078,148

Performance Rights granted under the above Plan will be tested, at the vesting date, against the following performance

hurdles and the resulting number of Performance Rights will vest. Upon vesting, an equivalent number of Stapled

Securities will be issued to the holder, 50% of which will remain in holding lock for a further 12 months.

Plan

Performance

period start date

Performance

period end date Vesting conditions

2023 KMP LTI Plan 1 July 2022 30 June 2025 • 50% Return on Invested Capital (ROIC) (6.7% - 7.7%)

• 50% Relative TSR (50th – 75th percentile)

2022 KMP LTI Plan 1 July 2021 30 June 2024

• 33.3% Total Return (8.5% - 11.5%)

• 33.3% ROCE (8.5% - 11.5%)

• 33.3% Relative TSR (50th – 75th percentile)

2021 KMP LTI Plan 1 July 2020 30 June 2023

• 33.3% Total Return (8.5% - 11.5%)

• 33.3% ROCE (8.5% - 11.5%)

• 33.3% Relative TSR (50th – 75th percentile)

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 55

The targets set for the 2023, 2022 and 2021 plans and performance against each target is as follows:

The targets set for the 2023 plan are not scheduled to be tested until 30 June 2025.

The “backward looking” LTI Plan was discontinued for executive KMP on 30 June 2019. The following Performance Rights

have been allocated and vested during 2023 under this plan. This was the final LTI allocation to KMP under this plan.

Performance Rights granted under the above Plan were tested on the allocation date, against specific performance

hurdles and the resulting number of Performance Rights were granted. The Performance Rights generally vest three

years after grant date provided the below ongoing conditions are met during the vesting period:

• continuing employment; and

• achievement of a minimum score of “Solid Performance” against individual KPIs, assessed annually during the

three-year period.

2023 2022 2021

Total Return

Target range 8.5%-11.5% 8.5%-11.5% 8.5%-11.5%

Achieved (13.7%) 8.8% 10.1%

Vesting percentage 0.0% 32.5% 64.9%

Return on Contributed Equity (ROCE)

Target range 8.5%-11.5% 8.5%-11.5% 8.5%-11.5%

Achieved 7.0% 8.8% 8.4%

Vesting percentage 0.0% 32.7% 0.0%

Relative Total Shareholder Return

Target range 50th percentile to 75th percentile of S&P/ASX300 A-REIT Index

Achieved Below median Below median N/A

Vesting percentage

0.0%

0.0% N/A

No of performance

rights granted

Exercise

Price

Allocation

date

Expiry

date

M Wilde 172,518 $0.00 30-Jun-19 1-Oct-22 Vested during FY23

Total 172,518

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT56

3.5 EXECUTIVE ACTUAL REMUNERATION

3.6 EXECUTIVE STATUTORY REMUNERATION

The table below outlines the cash remuneration and at-risk cash awards received as well as the value of equity-based

compensation expensed during the year in accordance with applicable statutory accounting rules.

(1) Includes any change in accruals for annual leave.

(2) Mr Callaghan commenced as CEO on 5 October 2021. In his first and second year of employment, Mr Callaghan will receive 40% of the value of his at-risk cash

bonus in the form of Cromwell securities.

(3) Mr Wilde was Acing CEO until 4 October 2021 and CFO from 5 October 2021 onwards.

(4) Mr Hinton ceased being a KMP on 5 October 2021.

Short-term

Post-

employment

Security based

payments

Salary and

fees

Non-

monetary

benefits

At-risk

cash bonus

Super-

annuation

Deferred

STI

award

LTI

scheme Total

$ $ $ $ $ $ $

J Callaghan 2023 966,394 8,387 235,875 25,292 - - 1,235,948

M Wilde 2023 813,358 10,855 159,375 25,292 - 142,737 1,151,617

Total

remuneration

2023 1,779,752 19,242 395,250 50,584 - 142,737 2,387,565

Short-term Post-employment

Long-

term

Security based

payments

Salary

(1)

Non-

monetary

benefits

At-risk

cash bonus

Diminishing

deferred

payment

Super-

annuation

Termination

benefits

Long

service

leave

Deferred

STI

award

LTI

scheme Total

$ $ $ $ $ $ $ $ $ $

Executive KMP

J Callaghan

(2)

2023 985,500 8,387 212,500 - 25,292 - 16,376 212,500 167,324 1,627,879

2022 735,306 9,000 235,875 - 17,676 - 11,996 235,875 106,580 1,352,308

M Wilde

(3)

2023 844,641 10,855 106,250 - 25,292 - 13,509 106,250 60,839 1,167,636

2022 920,555 12,180 159,375 - 23,568 - (53,506) 159,375 283,042 1,504,589

B Hinton

(4)

2022 110,906 - 19,013 62,832 5,892 - 2,670 19,012 35,656 255,981

Total

remuneration

2023 1,830,141 19,242 318,750 - 50,584 - 29,885 318,750 228,163 2,795,515

2022 1,766,767 21,180 414,263 62,832 47,136 - (38,840) 414,262 425,278 3,112,878

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 57

4. Non-executive Director remuneration

4.1 BOARD REMUNERATION STRUCTURE

The Board determines remuneration of Non-executive Directors within the maximum amount approved by securityholders

from time to time. This maximum currently stands at $1,500,000 per annum in total for fees to be divided among the Non-

executive Directors in such a proportion and manner as they agree.

4.2 TOTAL REMUNERATION FOR NONEXECUTIVE DIRECTORS

Non-executive Directors are paid a Fixed Remuneration, comprising base and committee fees or salary and

superannuation (as applicable). Non-executive Directors do not receive bonus payments or participate in stapled security-

based compensation plans and are not provided with retirement benefits other than statutory superannuation.

2023

2022

Chair

(1)

292,500 292,500

Non-executive Director 133,000 133,000

Audit and Risk Committee – Chair

(2)

- 32,000

Audit and Risk Committee – Member

(2)

- 16,000

Audit Committee – Chair

(2)

30,000 -

Audit Committee – Member

(2)

15,000 -

ESG and Risk Committee – Chair

(2)

30,000 -

ESG and Risk Committee - Member

(2)

15,000 -

Investment Committee – Chair 17,000 17,000

Investment Committee – Member 8,500 8,500

Nomination and Remuneration Committee – Chair 30,000 30,000

Nomination and Remuneration Committee – Member 15,000 15,000

(1) The Board Chair fee is an all-inclusive board chair fee and includes all committee responsibilities.

(2) From 1 July 2022 the Audit and Risk Committee has been converted to an Audit Committee and an ESG and Risk Committee.

Fees for subsidiary boards

Mr Ooi is Non-executive Director (appointed 15 September 2021) of Cromwell EREIT Management Pte Ltd (CEM), a 100%

owned subsidiary of the Company, domiciled in Singapore. Mr Ooi is also the Chair of the Sustainability Committee for

CEM (appointed Chair on 1 January 2022). The annual fees for being a Non-executive Director of CEM is SGD$80,000

and the annual fee for Sustainability Committee Chair is SGD$40,000. During 2023, Mr Ooi earned AUD$130,763 (2022:

AUD$83,108) from CEM.

Ms Cox is Chair of the Board of Cromwell Funds Management Ltd (CFML), a 100% owned subsidiary of the Company.

The annual fee for the Chair of the Board of CFML is $55,000 (inclusive of superannuation). During 2023, Ms Cox earned

$49,774 (2022: $77,838 from CFML which included an amount relating to the prior financial year).

4.3 NONEXECUTIVE DIRECTORS’ SECURITY HOLDING REQUIREMENT

Non-executive Directors are required to have a minimum holding of Cromwell Property Group stapled securities

equivalent to the Non-executive Director annual fee within three years of their start date. Non-executive Directors are

bound by Cromwell’s Securities Trading Policy, which is available on Cromwell’s website. No additional remuneration is

provided to Non-executive Directors to purchase these stapled securities.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT58

Director fees

Subsidiary

board fees

Non-

monetary

benefits

Post-

employment

benefits

(superannuation)

Total

Non-executive directors:

G Weiss 2023 286,230 - - 6,863 293,093

2022 288,043 - - 11,784 299,827

E P Ooi 2023 161,131 130,763 - 16,919 308,813

2022 156,068 83,108 - 15,607 254,783

R Blain 2023 149,321 - - 15,679 165,000

2022 154,478 - - 15,448 169,926

T Cox 2023 174,709 49,774 - 23,570 248,053

2022 167,531 73,462 - 21,273 262,266

J Gersh 2023 128,054 - - 13,446 141,500

2022 137,969 - - 13,797 151,766

L Scenna 2023 193,111 - - - 193,111

2022 170,613 - - - 170,613

J Tang

(1)

2023 141,500 - - - 141,500

2022 138,081 - - - 138,081

Total Remuneration

2023 1,234,056 180,537 - 76,477 1,491,070

2022 1,212,783 156,570 - 77,909 1,447,262

(1) Ms Tang was appointed on 9 July 2021.

4.4 NONEXECUTIVE DIRECTORS’ REMUNERATION TABLE

The table below outlines the cash remuneration and benefits received by each Non-executive Director during the year in

accordance with applicable statutory accounting rules.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 59

5. Additional disclosures

5.1 AT RISK CASH AWARDS AND PERFORMANCE RIGHTS VESTING AND FORFEITURE IN 2023

For each at risk cash award and grant of performance rights options (equity-based compensation) included in the tables

above, the percentage of the available at-risk cash bonus paid, or equity-based compensation that vested, during the year

and the percentage that was forfeited because the person did not meet the service and performance criteria is set out

below.

The performance rights are subject to vesting conditions as outlined above. No performance rights will vest if the

conditions are not satisfied, hence the minimum value of performance rights yet to vest is $nil. The maximum value of the

performance rights yet to vest has been determined as the amount of the grant date fair value of the performance rights

that is yet to be expensed at balance date. References to options in the table below relate to performance rights.

At-risk cash bonus

Cash bonus paid

Cash bonus forfeited

J Callaghan 50 50

M Wilde 50 50

Equity based compensation

Years

options

granted

Options vested in

2023

Options forfeited

in 2023

Years

options

may vest

Maximum value

of grant to vest

J Callaghan 2022 - - 2025 82,693

2023 - - 2026 290,710

M Wilde 2020 14% 86% 2023 -

2021 - - 2024 200

2022 - - 2025 79,537

2023 - - 2026 145,355

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT60

5.2 EQUITY BASED COMPENSATION FOR THE CEO AND OTHER KMP

Details of the PRP are set out in sections 2.4 and 3.4 of the remuneration report.

All Executive Directors and employees of Cromwell are considered for participation in the PRP subject to a minimum

period of service and level of remuneration, which may be waived by the Committee. Grants to Executive Directors are

subject to securityholder approval.

Consideration for granting performance rights, grant periods, vesting and exercise dates, exercise periods and exercise

prices are determined by the Board or Committee in each case. Performance rights carry no voting rights. When

exercised, each performance right is convertible into one stapled security.

The terms and conditions of each grant of performance rights under the PRP affecting remuneration for Key Management

Personnel in the current or future reporting periods are included in the table below:

Details of changes during the 2023 financial year in performance rights on issue to Key Management Personnel under the

PRP are set out below.

Grant date Expiry date Exercise price

No of performance

rights granted

Assessed value per

right at grant date

4-Oct-19 1-Oct-22 - 172,518 106.3¢

27-Mar-20 30-Sep-22 - 236,809 63.0¢

27-Mar-20 30-Sep-22 - 118,405 30.2¢

23-Dec-20 30-Sep-23 - 571,338 69.5¢

23-Dec-20 30-Sep-23 - 285,670 34.5¢

11-Nov-21 30-Sep-24 - 924,109 65.3¢

11-Nov-21 30-Sep-24 - 462,055 34.5¢

7-Oct-22 30-Sep-25 - 812,309 51.6¢

7-Oct-22 30-Sep-25 - 812,309 28.8¢

Opening

balance Granted Exercised Forfeited Lapsed

Closing

balance

J Callaghan 706,563 1,083,078

(1)

- - - 1,789,641

M Wilde 2,064,341 541,539

(2)

(246,116)

(3)

(281,616) - 2,078,148

2,770,904 1,624,617 (246,116) (281,616) - 3,867,788

(1) The fair value at grant date was $435,668.

(2) The fair value at grant date was $217,834.

(3) The fair value at grant date was $229,667. The face value at exercise date was $167,984. Exercise price was $nil.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 61

5.3 SECURITY HOLDINGS

The number of Cromwell stapled securities held during the 2023 financial year by key management personnel of

Cromwell, including their personally related parties are as follows:

Balance at 1 July

Performance

rights

exercised

Received

as STI

Received as

deferred STI

Net purchases

(sales)

Balance at

30 June

Non-executive

directors:

G Weiss 150,000 - - - - 150,000

E P Ooi 195,208 - - - - 195,208

R Blain - - - - - -

T Cox 210,000 - - - - 210,000

J Gersh 140,000 - - - - 140,000

L Scenna 125,000 - - - 25,000 150,000

J Tang 123,346,692 - - - - 123,346,692

Executive KMP:

J Callaghan - - 120,222 300,554 - 420,776

M Wilde 1,010,956 246,116 - 203,077 (209,317) 1,250,832

125,177,856 246,116 120,222 503,631 (209,317) 125,863,508

5.4 LOANS TO KEY MANAGEMENT PERSONNEL

Cromwell has provided no loans to any key management personnel.

End of Remuneration Report.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT62

Signiﬁcant changes in the state of aﬀairs

Changes in the state of affairs of Cromwell during the financial year are set out within the financial report. There were no

significant changes in the state of affairs of Cromwell during the financial year other than as disclosed in this report and

the accompanying financial report.

Subsequent events

Other than as disclosed in note 27, no matter or circumstance has arisen since 30 June 2023 that has significantly affected

or may significantly affect:

• Cromwell’s operations in future financial years; or

• the results of those operations in future financial years; or

• Cromwell’s state of affairs in future financial years.

Environmental regulation

The Directors are not aware of any particular and significant environmental regulation under a law of the Commonwealth,

State or Territory relevant to Cromwell.

Trust disclosures

ISSUED UNITS

Units issued in the Trust during the year are set out in note 15 in the accompanying financial report. There were

2,618,866,699 (2022: 2,618,866,699) issued units in the Trust at balance date.

VALUE OF SCHEME ASSETS

The total carrying value of the Trust’s assets as at year end was $4,071.1 million (2022: $4,911.2 million). Net assets

attributable to unitholders of the Trust were $2,118.8 million (2022: $2,615.4 million) equating to $0.81 per unit (2022:

$0.98 per unit).

The Trust’s assets are valued in accordance with policies stated in notes to the financial statements.

ALTERNATIVE INVESTMENT FUND MANAGERS DIRECTIVE (AIFMD) REMUNERATION DISCLOSURE

The senior management and staff of Cromwell whose actions have a material impact on the risk profile of the Trust are

considered to be the key management personnel identified in the Remuneration Report which is included in this

Directors’ Report.

The amount of the aggregate remuneration paid by Cromwell to those key management personnel in respect of the

financial year ending 30 June 2023 was $4,286,585 (2022: $6,246,328). This amount is comprised of fixed remuneration of

$3,739,672 and variable remuneration of $546,913 (2022: $5,695,314 and $551,014 respectively).

This remuneration disclosure is being made to satisfy Cromwell Property Securities Limited’s obligations under AIFMD.

References to “remuneration”, “staff” and “senior management” should be construed accordingly.

Indemnifying oﬃcers or auditor

Subject to the following, no indemnity or insurance premium was paid during the financial year for a person who is or has

been an officer of Cromwell. The constitution of the Company provides that to the extent permitted by law, a person who is

or has been an officer of the Company is indemnified against certain liabilities and costs incurred by them in their capacity

as an officer of the Company.

Further, the Company has entered into a Deed of access, insurance and indemnity with each of the Directors and the

Company Secretary. Under the deed, the Company agrees to, amongst other things:

• indemnify the officer to the extent permitted by law against certain liabilities and legal costs incurred by the officer as

an officer of the Company and its subsidiaries;

• maintain and pay the premium on an insurance policy in respect of the officer; and

• provide the officer with access to board papers and other documents provided or available to the officer as an officer of

the Company and its subsidiaries.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 63

Cromwell has paid premiums for directors’ and officers’ liability insurance with respect to the Directors, Company

Secretary and senior management as permitted under the Corporations Act 2001 (Cth). The terms of the policy prohibit

disclosure of the nature of the liabilities covered and the premiums payable under the policy. No indemnities have been

given or insurance premiums paid, during or since the end of the financial year, for any person who is or has been an

auditor of the Company or any of its controlled entities.

Rounding of amounts

Cromwell is an entity of the kind referred to in

ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument

2016/191

and in accordance with that instrument amounts in the Directors’ report have been rounded off to the nearest

one hundred thousand dollars, or in certain cases to the nearest dollar, unless otherwise indicated.

Auditor

Deloitte Touche Tohmatsu continues in office in accordance with section 327B of the

Corporations Act 2001

(Cth).

The Company may decide to employ Deloitte Touche Tohmatsu on assignments additional to their statutory duties where

the auditor’s expertise and experience with the Company and/or the Cromwell are important.

The Directors have considered the position and, in accordance with advice received from the Audit & Risk Committee, are

satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors

imposed by the

Corporations Act 2001

(Cth). The Directors are satisfied that the provision of non-audit services by the

auditor, as set out below, did not compromise the auditor independence requirements of the

Corporations Act 2001

(Cth)

as none of the services undermine the general principles relating to auditor independence as set out in APES 110

Code

of Ethics for Professional Accountants

and all non-audit services have been reviewed by the Audit and Risk Committee

to ensure they do not impact the impartiality and objectivity of the auditor. Effective 1 July 2022, the Audit and Risk

Committee was reconstituted as an Audit Committee and as an ESG and Risk Committee.

Details of the amounts paid or payable to the auditor and its related parties for non-audit services provided to Cromwell

are set out below:

2023

2022

Non-audit services

Due diligence services 19,650 452,765

Other reporting services 8,797 45,940

International consulting services 5,420 17,567

Tax compliance services – Australia 8,380 17,015

Total remuneration for non-audit services 42,247 533,287

During the year, Deloitte, as auditor, received remuneration for audit and other services relating to other entities for

which Cromwell EREIT Management Pte. Ltd and Cromwell Investment Services Limited, both controlled entities, act as

responsible entity. The remuneration was disclosed in the relevant entity’s financial reports and totalled $1,553,900 (2022:

$1,255,100).

Auditor’s independence declaration

A copy of the auditor’s independence declaration as required under section 307C of the

Corporations Act 2001

(Cth)

accompanies this report.

The Directors’ Report, including the Remuneration Report, is signed in accordance with a resolution of the Directors,

pursuant to 298(2) of the

Corporations Act 2001

(Cth).

Dr Gary Weiss AM

Chair

30 August 2023

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT64

Cromwell Property Group | Annual Financial Report | Page 47 of 115

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Asia Pacific Limited and the Deloitte Network.

Deloitte Touche Tohmatsu

ABN 74 490 121 060

Riverside Centre

123 Eagle Street

Brisbane QLD 4000

GPO Box 1463

Brisbane QLD 4001 Australia

DX: 10307SSE

Tel: +61 (0) 7 3308 7000

Fax: +61 (0) 2 9322 7001

www.deloitte.com.au

30 August 2023

Board of Directors

Cromwell Corporation Limited and

Cromwell Property Securities Limited

(as responsible entity for Cromwell Diversified Property Trust)

Level 19, 200 Mary Street

Brisbane QLD 4000

Dear Directors

Auditor’s Independence Declaration

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration

of independence to the Board of Directors of Cromwell Corporation Limited and Cromwell Property Securities

Limited as responsible entity for Cromwell Diversified Property Trust.

As lead audit partner for the audit of the financial report of Cromwell Property Group (the stapled entity which

comprises Cromwell Corporation Limited, Cromwell Diversified Property Trust and the entities they controlled at

the end of the year or from time to time during the year) and Cromwell Diversified Property Trust for the year

ended 30 June 2023, I declare that to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

(ii) any applicable code of professional conduct in relation to the audit.

Yours faithfully

DELOITTE TOUCHE TOHMATSU

David Rodgers

Partner

Chartered Accountants

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 65

Financial Statements

Table of contents

P. 67

Consolidated Statements

of Profit or Loss

P. 68

Consolidated Statements of

Other Comprehensive Income

P. 69

Consolidated

Balance Sheets

P. 70

Consolidated Statements of

Changes in Equity

P. 72

Consolidated Statements

of Cash Flows

P. 73

Notes to the

Financial Statements

P.74 About this Report

P.78

Results

P.92 Operating Assets

P.102 Finance and Capital Structure

P.118 Group Structure

P.124 Other items

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT66

Cromwell Trust

Notes 2023 2022 2023 2022

Revenue 5(a) 367.8 377.4 274.6 283.2

Other income

Fair value net gains from:

Investment properties 8(f) - 54.0 - 54.0

Derivative financial instruments - - 55.4 - 55.4

Share of profit of equity accounted investments 9(f) - 41.3 - 38.8

Net foreign currency gains - 26.4 - 24.1

Gain on sale of investment properties 2.0 11.8 2.0 11.8

Gain on sale of interest in joint venture held for sale 7.7 - - -

Other income - 2.3 1.0 -

Total revenue and other income 377.5 568.6 277.6 467.3

Expenses

Property expenses and outgoings 72.3 64.8 80.6 74.3

Fund management costs 8.2 7.6 - -

Employee benefits expense 6(a) 82.6 80.7 - -

Administrative and other expenses 6(b) 43.2 49.3 27.9 28.6

Finance costs 6(c) 85.9 72.8 85.5 72.4

Fair value net losses from:

Investment properties 8(f) 491.6 - 491.6 -

Derivative financial instruments 4.7 - 4.7 -

Investments at fair value through profit and loss 4.9 1.7 3.3 -

Share of losses of equity accounted investments 9(f) 18.5 - 19.0 -

Impairment of equity accounted investments 9(f) 1.9 1.4 1.9 1.4

Net foreign currency losses 13.3 - 8.8 -

Other transaction costs 3.5 3.0 2.0 2.8

Total expenses 830.6 281.3 725.3 179.5

(Loss) / profit before income tax (453.1) 287.3

(447.7) 287.8

Income tax (benefit) / expense 7(c) (9.3) 24.1 (9.0) 12.9

(Loss) / profit after tax (443.8) 263.2 (438.7) 274.9

(Loss) / profit after tax is attributable to securityholders:

Attributable to the Company (5.1) (10.5) - -

Attributable to the Trust (438.7) 273.7 (438.7) 273.7

Attributable to non-controlling interests - - - 1.2

(Loss) / profit after tax (443.8) 263.2 (438.7) 274.9

Earnings per security

Basic earnings per stapled security (cents) 3(b) (16.95¢) 10.05¢ (16.76¢) 10.45¢

Diluted earnings per stapled security (cents) 3(b) (16.90¢) 10.02¢ (16.71¢) 10.42¢

The above Consolidated Statements of Profit or Loss should be read in conjunction with the accompanying notes.

Consolidated Statements of Proﬁt or Loss

FOR THE YEAR ENDED 30 JUNE 2023

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 67

Consolidated Statements of Other Comprehensive Income

FOR THE YEAR ENDED 30 JUNE 2023

Cromwell Trust

Notes

2023

2022

2023

2022

(Loss) / profit after tax (443.8) 263.2 (438.7) 274.9

Other comprehensive income / (loss)

Items that may be reclassified to profit or loss

Exchange differences on translation of foreign operations 89.4 (45.2) 86.1 (44.7)

Transfer of FVOCI reserve to profit or loss - (2.3) - -

Income tax relating to these items - - - -

Other comprehensive income / (loss), net of tax 89.4 (47.5) 86.1 (44.7)

Total other comprehensive (loss) / income (354.4) 215.7 (352.6) 230.2

Total other comprehensive (loss) / income is

attributable to securityholders:

Attributable to the Company (1.8) (13.3) - -

Attributable to the Trust (352.6) 229.0 (352.6) 229.0

Attributable to non-controlling interests - - - 1.2

Total other comprehensive (loss) / income (354.4) 215.7 (352.6) 230.2

The above Consolidated Statements of Other Comprehensive Income should be read in conjunction with the accompanying notes.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT68

Cromwell Trust

Notes

2023

2022

2023

2022

Current assets

Cash and cash equivalents 113.9 286.0 58.3 212.8

Receivables 13(b) 41.3 38.2 14.7 16.9

Derivative financial instruments 12(a) 28.0 13.3 28.0 13.3

Current tax assets 0.6 2.4 0.1 -

Other current assets 7.0 7.0 2.3 2.3

190.8 346.9 103.4 245.3

Assets held for sale 20(a) 138.4 160.4 138.4 105.7

Total current assets 329.2 507.3 241.8 351.0

Non-current assets

Investment properties 8(e) 3,098.2 3,740.0 3,098.2 3,740.0

Equity accounted investments 9(a) 662.2 670.7 632.1 641.5

Investments at fair value through profit or loss 10(a) 20.6 23.3 17.7 20.4

Inventories 8(d) 16.5 15.3 - -

Derivative financial instruments 12(a) 28.5 42.6 28.5 42.6

Receivables 13(b) 38.3 28.5 51.1 114.9

Property, plant and equipment 20.2 25.2 - -

Intangible assets 0.3 0.5 - -

Deferred tax assets 7(d) 1.7 0.8 1.7 0.8

Total non-current assets 3,886.5 4,546.9 3,829.3 4,560.2

Total assets 4,215.7 5,054.2 4,071.1 4,911.2

Current liabilities

Trade and other payables 13(c) 69.8 73.3 42.1 53.3

Unearned income 17.3 16.3 16.1 15.1

Dividends / distributions payable

4(a) 36.0 42.6 36.0 42.6

Interest bearing liabilities 11(a) 142.8 211.7 138.0 206.2

Provisions 5.2 4.7 - -

Current tax liabilities 0.5 2.3 0.2 1.8

271.6 350.9 232.4 319.0

Liabilities directly related to assets held for sale 20(a) 49.4 - 49.4 -

Total current liabilities 321.0 350.9 281.8 319.0

Non-current liabilities

Interest bearing liabilities 11(a) 1,681.3 1,980.0 1,669.8 1,964.7

Provisions 0.5 0.7 - -

Deferred tax liabilities 7(d) 0.7 12.2 0.7 12.1

Total non-current liabilities 1,682.5 1,992.9 1,670.5 1,976.8

Total liabilities 2,003.5 2,343.8 1,952.3 2,295.8

Net assets 2,212.2 2,710.4 2,118.8 2,615.4

Equity attributable to securityholders

Contributed equity 15(b) 2,280.1 2,280.1 2,072.8 2,072.8

Reserves 16(a) 58.1 (31.5) 29.5 (56.6)

Retained earnings (126.0) 461.8 16.5 599.2

Total equity attributable to securityholders 2,212.2 2,710.4 2,118.8 2,615.4

Comprising

Total equity attributable to the Company

19(b) 93.4 95.0 - -

Total equity attributable to the CDPT

19(c) 2,118.8 2,615.4 2,118.8 2,615.4

Total equity attributable to securityholders 2,212.2 2,710.4 2,118.8 2,615.4

The above Consolidated Balance Sheets should be read in conjunction with the accompanying notes.

Consolidated Balance Sheets

FOR THE YEAR ENDED 30 JUNE 2023

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 69

Consolidated Statements of Changes in Equity

FOR THE YEAR ENDED 30 JUNE 2023

Attributable to Equity Holders of Cromwell

Contributed

equity

Reserves

Retained

earnings

Total

$MCromwell Notes

Balance at 1 July 2021 2,279.8 16.6 368.9 2,665.3

Profit for the year - - 263.2 263.2

Other comprehensive loss - (47.5) - (47.5)

Total comprehensive income - (47.5) 263.2 215.7

Transactions with equity holders in their

capacity as equity holders:

Contributions of equity, net of equity issue costs 15(b) 0.3 - - 0.3

Dividends / distributions paid / payable 4(a) - - (170.3) (170.3)

Acquisition of treasury securities 16(a) - (0.5) - (0.5)

Employee performance rights 16(a) - (0.1) - (0.1)

Total transactions with equity holders 0.3 (0.6) (170.3) (170.6)

Balance as at 30 June 2022 2,280.1 (31.5) 461.8 2,710.4

Loss for the year - - (443.8) (443.8)

Other comprehensive income - 89.4 - 89.4

Total comprehensive loss - 89.4 (443.8) (354.4)

Transactions with equity holders in their

capacity as equity holders:

Dividends / distributions paid / payable 4(a) - - (144.0) (144.0)

Acquisition of treasury securities 16(a) - (1.6) - (1.6)

Issue of treasury securities 16(a) - 0.9 - 0.9

Contributions of exercise price for options settled with

treasury securities

16(a) - 0.4 - 0.4

Employee performance rights 16(a) - 0.5 - 0.5

Total transactions with equity holders - 0.2 (144.0) (143.8)

Balance as at 30 June 2023 2,280.1 58.1 (126.0) 2,212.2

The above Consolidated Statements of Changes in Equity should be read in conjunction with accompanying notes.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT70

Consolidated Statements of Changes in Equity

FOR THE YEAR ENDED 30 JUNE 2023

Attributable to Equity Holders of CDPT

Contributed

equity

Reserves

Retained

earnings

Total

Non-

controlling

interests

Total

$MTrust Notes

Balance at 1 July 2021 2,072.5 (11.9) 495.8 2,556.4 7.7 2,564.1

Profit for the year - - 273.7 273.7 1.2 274.9

Other comprehensive loss - (44.7) - (44.7) - (44.7)

Total comprehensive income - (44.7) 273.7 229.0 1.2 230.2

Transactions with equity holders

in their capacity as equity holders:

Contributions of equity,

net of equity issue costs

15(b) 0.3 - - 0.3 - 0.3

Distributions paid / payable 4(a) - - (170.3) (170.3) (0.3) (170.6)

Disposal of non-controlling interest - - - - (8.6) (8.6)

Total transactions with equity

holders

0.3 - (170.3) (170.0) (8.9) (178.9)

Balance as at 30 June 2022 2,072.8 (56.6) 599.2 2,615.4 - 2,615.4

Loss for the year - - (438.7) (438.7) - (438.7)

Other comprehensive income - 86.1 - 86.1 - 86.1

Total comprehensive loss - 86.1 (438.7) (352.6) - (352.6)

Transactions with equity holders in

their capacity as equity holders:

Distributions paid / payable 4(a) - - (144.0) (144.0) - (144.0)

Total transactions with equity holders - - (144.0) (144.0) - (144.0)

Balance as at 30 June 2023 2,072.8 29.5 16.5

2,118.8 - 2,118.8

The above Consolidated Statements of Changes in Equity should be read in conjunction with accompanying notes.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 71

Consolidated Statements of Cash Flows

FOR THE YEAR ENDED 30 JUNE 2023

Cromwell Trust

Notes

2023

2022

2023

2022

Cash flows from operating activities

Receipts in the course of operations 387.8 395.4 292.8 297.3

Payments in the course of operations (220.6) (224.0) (125.1) (117.5)

Distributions received 46.6 51.3 41.6 34.6

Interest received 20.0 9.7 18.1 6.5

Finance costs paid (81.3) (54.3) (81.3) (54.3)

Income tax paid (3.3) (2.9) (5.3) (0.5)

Net cash provided by operating activities 22(b) 149.2 175.2 140.8 166.1

Cash flows from investing activities

Proceeds from sale of investment properties 88.4 162.0 88.4 162.0

Payments for investment properties (38.6) (20.9) (38.6) (20.9)

Payments for equity accounted investments (3.8) - (3.8) -

Proceeds from sale of equity accounted investments 19.7 0.3 - -

Proceeds from sale of investments at fair value through profit or loss - 4.1 - -

Payments for investments at fair value through profit or loss (1.8) (20.6) (0.5) (20.0)

Receipt of capital return distributions from investments at

fair value through profit or loss

- 0.4 - -

Payments for intangible assets (0.1) (0.2) - -

Payments for property, plant and equipment (1.2) (0.6) - -

Proceeds from vendor finance loan - 27.0 - 27.0

Repayment of loans from related entities 147.9 24.4 178.0 26.1

Loans to related entities (9.7) (46.2) (3.8) (50.6)

Payments for other transaction costs (3.9) (3.0) (2.2) (2.8)

Net cash provided by investing activities 196.9 126.7 217.5 120.8

Cash flows from financing activities

Proceeds from interest bearing liabilities 167.7 474.0 167.7 474.0

Repayment of interest bearing liabilities (523.2) (447.2) (523.2)

(447.2)

Payments for lease liabilities (6.4) (4.5) (0.4) (0.3)

Payment of loan transaction costs (2.7) (2.2) (2.7) (2.2)

Payments for settlement of derivative financial instruments (5.0) (0.3) (5.0) (0.3)

Proceeds from issue of stapled securities - 0.3 - 0.3

Payments for units redeemed by NCI - - - (8.6)

Payments for treasury securities (1.6) (0.5) - -

Proceeds from contribution of exercise price on options 0.4 - - -

Payment of dividends / distributions (150.6) (170.2) (150.6) (170.2)

Net cash used in financing activities (521.4) (150.6) (514.2) (154.5)

Net (decrease) / increase in cash and cash equivalents (175.3) 151.3 (155.9) 132.4

Cash and cash equivalents at 1 July 286.0 142.3 212.8 83.7

Effects of exchange rate changes on cash and cash equivalents 4.7 (7.6) 2.9 (3.3)

Less cash included in assets held for sale 20(a) (1.5) - (1.5) -

Cash and cash equivalents at 30 June 113.9 286.0 58.3 212.8

The above Consolidated Statements of Cash Flows should be read in conjunction with the accompanying notes.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT72

Notes to the Financial Statements

FOR THE YEAR ENDED 30 JUNE 2023

P. 74

About this report

1. Basis of preparation 74

P. 78

Results

2. Operating segment

information 78

3. Earnings per security 83

4. Distributions 84

5. Revenue 84

6. Employee benefits,

administrative, finance

and other expenses 87

7. Income tax 89

P. 92

Operating Assets

8. Investment properties 92

9. Equity accounted

investments 97

10. Investments at fair

value through profit or loss 101

P. 102

Finance and Capital Structure

11. Interest bearing liabilities 102

12. Derivative financial

instruments 105

13. Other financial assets

and financial liabilities 107

14. Financial risk management 108

15. Contributed equity 115

16. Reserves 116

P. 118

Group Structure

17. Parent entity disclosures 118

18. Controlled entities 119

19. Equity attributable to

the Company and CDPT 122

P. 124

Other Items

20. Assets held for sale and

liabilities directly related to

assets held for sale 124

21. Leased assets and

related leases 125

22. Cash flow information 128

23. Security based payments 131

24. Related parties 132

25. Auditors’ remuneration 135

26. Unrecognised items 135

27. Subsequent events 136

Table of contents

Cromwell’s annual financial report has been prepared in a format designed to provide users of the financial report with

a clearer understanding of relevant balances and transactions that drive Cromwell’s financial performance and financial

position free of immaterial and superfluous information. Plain English is used in commentary or explanatory sections

of the notes to the financial statements to also improve readability of the financial report. Additionally, amounts in the

consolidated financial statements have been rounded to the nearest one hundred thousand dollars, unless otherwise

indicated, in accordance with

ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191

The notes have been organised into the following six sections for reduced complexity and ease of navigation:

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 73

About this report

This section of the annual financial report provides an overview of the basis upon which the financial statements of

Cromwell and the Trust have been prepared. Accounting policies relating to balances and transactions for which

specific note disclosure is presented in this financial report are contained in the relevant note. Accounting policies

for other balances and transactions are also contained in this section.

1. Basis of preparation

Shares of Cromwell Corporation Limited (“Company”) and units of Cromwell Diversified Property Trust (“CDPT”) are

stapled to one another forming the Cromwell Property Group and are quoted as a single stapled security on the ASX under

the code CMW. Australian Accounting Standards require an acquirer to be identified and an in-substance acquisition to be

recognised. In relation to the stapling of the Company and CDPT, the Company is identified as having acquired control over

the assets of CDPT.

As permitted by

ASIC Corporations (Stapled Group Reports) Instrument 2015/838

the consolidated financial statements

and accompanying notes of the Cromwell Property Group (“Cromwell”), consisting of the Company and its controlled

entities and CDPT and its controlled entities are presented jointly with the consolidated financial statements and

accompanying notes of the CDPT and its controlled entities (“Trust”). In the consolidated financial statements of Cromwell

equity attributable to the Trust is presented as a non-controlling interest.

Cromwell and the Trust are for-profit entities for the purpose of preparing the financial statements.

This financial report has been prepared on a going concern basis. Cromwell’s current assets exceed current liabilities

by $8.2 million at 30 June 2023 (30 June 2022: $156.4 million). The Trust’s current liabilities exceed current assets by

$40.0 million at 30 June 2023 (30 June 2022: current assets exceeded current liabilities by $32.0 million). In addition, at

30 June 2023, Cromwell and the Trust had a total of $173.6 million of undrawn and available bank debt facilities (2022:

$360.9 million) and $113.9 million and $58.3 million of cash (2022: $286.0 million and $212.8 million).

STATEMENT OF COMPLIANCE

The consolidated financial statements of Cromwell and the Trust are general purpose financial statements which have

been prepared in accordance with Australian Accounting Standards (including Australian Accounting Interpretations)

adopted by the Australian Accounting Standards Board (AASB) and the

Corporations Act 2001

(Cth).

The financial statements also comply with International Financial Reporting Standards (IFRS) and Interpretations as

adopted by the International Accounting Standards Board (IASB).

HISTORICAL COST CONVENTION

The financial report is prepared on the historical cost basis except for the following:

• investment properties are measured at fair value;

• derivative financial instruments are measured at fair value;

• investments at fair value through profit or loss are measured at fair value; and,

• receivables at fair value through profit or loss are measured at fair value.

ROUNDING OF AMOUNTS

In accordance with

ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191

amounts in these

consolidated financial statements have been rounded off to the nearest one hundred thousand dollars, unless otherwise

indicated.

PRESENTATIONAL CHANGES AND COMPARATIVES

Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT74

A) BASIS OF CONSOLIDATION

Stapling

The stapling of the Company and CDPT was approved at separate meetings of the respective shareholders and unitholders

on 6 December 2006. Following approval of the stapling, shares in the Company and units in the Trust were stapled to one

another and are quoted as a single security on the Australian Securities Exchange.

Australian Accounting Standards require an acquirer to be identified and an in-substance acquisition to be recognised.

In relation to the stapling of the Company and CDPT, the Company is identified as having acquired control over the assets

of CDPT.

The Trust’s contributed equity and retained earnings/accumulated losses are shown as a non-controlling interest. Even

though the interests of the equity holders of the identified acquiree (the Trust) are treated as non-controlling interests the

equity holders of the acquiree are also equity holders in the acquirer (the Company) by virtue of the stapling arrangement.

Subsidiaries

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries at year end and the results

of all subsidiaries for the year then ended. Subsidiaries are entities controlled by Cromwell. Control exists when Cromwell

is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those

returns through its power to direct the activities of the entity. The financial statements of subsidiaries are included in the

consolidated financial statements from the date that control commences until the date that control ceases.

The acquisition method of accounting is used to account for the business combinations by Cromwell. Inter-entity

transactions, balances and unrealised gains on transactions between Cromwell entities are eliminated. Unrealised losses

are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting

policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by Cromwell.

Any non-controlling interests in the results and equity of subsidiaries are shown separately in the Statement of Profit or

Loss / Statement of Other Comprehensive Income and the Balance Sheet respectively.

Investments in subsidiaries are accounted for at cost in the individual financial statements of the Company and CDPT.

A list of subsidiaries is included in the notes.

B) FOREIGN CURRENCY TRANSLATION

Functional and presentation currency

Items included in the financial statements of each of Cromwell’s entities are measured using the currency of the primary

economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are

presented in Australian dollars, which is the Company’s and the Trust’s functional and presentation currency.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the

dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and

from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are

recognised in the Consolidated Statement of Profit or Loss, except when they are attributable to part of the net investment

in a foreign operation.

Foreign exchange gains and losses that relate to borrowings are presented in the Statement of Profit or Loss, within

finance costs. All other foreign exchange gains and losses are presented in the Statement of Profit or Loss on a net basis.

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the

date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported

as part of the fair value gain or loss.

Foreign operations

Subsidiaries, joint arrangements and associates that have functional currencies different from the presentation currency

translate their Statement of Other Comprehensive Income items using the average exchange rate for the year. Assets

and liabilities are translated using exchange rates prevailing at balance date. Exchange variations resulting from the

retranslation at closing rate of the net investment in foreign operations, together with their differences between their

Statement of Other Comprehensive Income items translated at average rates and closing rates, are recognised in the

foreign currency translation reserve.

For the purpose of foreign currency translation, the net investment in a foreign operation is determined inclusive of foreign

currency intercompany balances. The balance of the foreign currency translation reserve relating to a foreign operation

that is disposed of, or partially disposed of, is recognised in the Statement of Profit or Loss at the time of disposal.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 75

The following material spot and average rates were used:

Spot rate Average rate

2023 2022 2023 2022

Euro 0.61 0.66 0.64 0.64

Polish Złoty 2.71 3.09 3.01 2.94

C) IMPAIRMENT OF ASSETS

At each reporting date, and whenever events or changes in circumstances occur, Cromwell assesses whether there is any

indication that any relevant asset may be impaired. Where an indicator of impairment exists, Cromwell makes a formal

estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount, the asset is

considered impaired and an impairment loss is recognised for the amount by which the asset’s carrying amount exceeds

its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately

identifiable cash inflows which are largely independent of the cash inflows from other assets or groups of assets (cash

generating units). Assets other than goodwill that have been previously impaired are reviewed for possible reversal of the

impairment at each reporting date.

D) INVENTORIES

Inventories relate to land and property developments that are held for sale in the normal course of business. Inventories

are carried at the lower of cost or net realisable value. Net realisable value is the estimated selling price in the normal

course of business, less the estimated costs of completion and selling expenses.

E) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment relate to equipment used in the day-to-day operations of Cromwell as well as right-to-use

assets for property, plant and equipment held under operating leases.

Owned property, plant and equipment is initially recognised at cost and subsequently carried at cost less accumulated

depreciation and impairment losses. Owned property, plant and equipment is depreciated on a straight-line basis over the

period of the useful life of the asset.

Right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made

at or before commencement, less any lease incentives received and any initial direct costs. Right-of-use assets are

subsequently measured as cost less accumulated depreciation and impairments losses. For further information in

relation to leased assets see note 21.

F) GOODS AND SERVICES TAX

Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except:

• Where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of

acquisition of an asset or as part of an item of expense, or

• For receivables and payables which are recognised inclusive of GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or trade

and other payables. Cash flows are included in the Statement of Cashflows on a gross basis.

The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to,

the taxation authority is classified within cash flows from operating activities.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT76

G) CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of financial statements requires management to make judgements, estimates and assumptions that

affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.

Estimates and underlying assumptions are reviewed on an ongoing basis and are based on historical or professional

experience and other factors such as expectations about future events. Revisions to accounting estimates are recognised

in the period in which the estimate is revised and in any future periods affected.

The areas that involved a higher degree of judgement or complexity and may need material adjustment if estimates and

assumptions made in preparation of these financial statements are incorrect are:

Area of estimation Note

Revenue 5

Fair value of investment property 8

Equity accounted investments 9

Other financial assets and financial liabilities 13

Fair value of financial instruments 14

Assets held for sale and liabilities directly related to assets held for sale 20

H) NEW ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED BY CROMWELL AND THE TRUST

Cromwell and the Trust have adopted all applicable new Australian accounting standards and interpretations. There are

no new relevant accounting standards and interpretations that have been adopted in the current financial year.

There are currently no relevant accounting standards and interpretations that have been issued or amended but are not

yet effective and have not been adopted Cromwell or the Trust.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 77

Results

This section of the annual financial report provides further information on Cromwell’s and the Trust’s financial

performance, including the performance of each of Cromwell’s three segments, the earnings per security

calculation, details of distributions as well as information about Cromwell’s revenue, expense and income tax items.

2. Operating segment information

A) OVERVIEW

Operating segments are distinct business activities from which Cromwell may earn revenues and incur expenses.

Cromwell reports the results of its operating segments on a regular basis to its Chief Executive Officer (CEO), the group’s

chief operating decision maker (CODM), in order to assess the performance of each of Cromwell’s operating segments and

allocate resources to them.

Operating segments below are reported in a manner consistent with the internal reporting provided to the CEO. These are

explained below.

Operating segments: Business activity:

Funds and asset

management:

Funds management represents activities in relation to the establishment and management of

external funds for institutional and retail investors. Asset management includes property and

facility management, leasing and project management and development related activities. These

activities are carried out by Cromwell itself and by associates (including the LDK Seniors living

joint venture and others) and contribute related fee revenues or the relevant share of profit of each

investee to the consolidated results.

Co-investments: This activity includes Cromwell’s investments in assets warehoused whilst being repositioned for

deployment into the fund and asset management business and assets it may not fully own or over

which it cannot exercise unilateral control. This includes interests in investment property portfolios

in Poland (CPRF) and Italy (CIULF), the Cromwell European Real Estate Investment Trust (CEREIT),

and other investment vehicles. This activity contributes net rental income and the relevant share of

profit of each investee to the consolidated results.

Investment portfolio: This involves the ownership of investment properties located in Australia. These properties are held

for long term investment purposes and primarily contribute net rental income and associated cash

flows to results.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT78

B) SEGMENT RESULTS

The table below shows the segment results as presented to the CEO in his capacity as CODM. Commentary on the

segment results is included in the Directors’ Report.

2023

Funds

and asset

management

Co-investments

Investment

portfolio

Cromwell

Segment revenue

Rental income and recoverable outgoings - 79.3 202.3 281.6

Operating profit of equity accounted investments 1.5 43.1 - 44.6

Development income

(1)

21.3 - - 21.3

Fund and asset management fees 96.4 - - 96.4

Distributions - 2.7 - 2.7

Total segment revenue 119.2 125.1 202.3 446.6

Segment expenses

Property expenses - 40.5 39.5 80.0

Fund and asset management direct costs 67.9 4.4 - 72.3

Other expenses 10.0 3.0 1.6 14.6

Total segment expenses 77.9 47.9 41.1 166.9

Segment EBIT 41.3 77.2 161.2 279.7

Unallocated items

Net finance costs (73.1)

Corporate costs

(2)

(42.3)

Income tax expense (5.7)

Segment profit 158.6

2022

Funds and asset

management

Co-investments

Investment

portfolio

Cromwell

Segment revenue

Rental income and recoverable outgoings - 73.7 215.2 288.9

Operating profit of equity accounted investments 11.7 45.4 - 57.1

Development income

(1)

18.5 - - 18.5

Fund and asset management fees 95.5 - - 95.5

Distributions - 7.0 - 7.0

Total segment revenue 125.7 126.1 215.2 467.0

Segment expenses

Property expenses - 31.7 41.4 73.1

Fund and asset management direct costs 65.7 4.3 - 70.0

Other expenses 10.3 3.3 1.0 14.6

Total segment expenses 76.0 39.3 42.4 157.7

Segment EBIT 49.7 86.8 172.8 309.3

Unallocated items

Net finance costs (51.6)

Corporate costs

(2)

(47.1)

Income tax expense (9.6)

Segment profit 201.0

(1) Includes finance income attributable to development loans and fee revenue.

(2) Includes non-segment specific corporate costs pertaining to Group level functions.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 79

C) RECONCILIATION OF SEGMENT PROFIT TO (LOSS) / PROFIT AFTER TAX

Cromwell

2023

2022

Segment profit 158.6 201.0

Reconciliation to (loss) / profit after tax

Gain on sale of investment properties 2.0 11.8

Fair value (losses) / gains from investment properties (491.6) 54.0

Fair value (losses) / gains from derivative financial instruments (4.7) 55.4

Fair value losses from investments at fair value through profit or loss (4.9) (1.7)

Lease cost and incentive amortisation and rent straight-lining (20.2) (23.1)

Relating to equity accounted investments

(1)

(63.1) (15.9)

Net exchange (losses) / gain on foreign currency borrowings (14.0) 28.0

Tax benefit / (expense) relating to non-operating items 15.1 (16.5)

Other non-cash expenses or non-recurring items

(2)

(21.0) (29.8)

(Loss) / profit after tax (443.8) 263.2

(1) Comprises fair value adjustments included in share of profit of equity accounted entities.

(2) These expenses include but are not limited to:

• Amortisation of loan transaction costs.

• Amortisation of intangible assets and depreciation of property, plant and equipment.

• Other transaction costs.

D) RECONCILIATION OF TOTAL SEGMENT REVENUE TO TOTAL REVENUE

Total segment revenue reconciles to total revenue as shown in the Consolidated Statement of Profit or Loss as follows:

2023

2022

Total segment revenue 446.6 467.0

Reconciliation to total revenue:

Inter-segmental management fee revenue (12.5) (13.2)

Straight-line lease income 7.4 6.0

Lease incentive amortisation (25.5) (26.9)

Operating profit from equity accounted investments (44.6) (57.1)

Gain on sale of equity accounted investments

(1)

(7.7) -

Finance income 4.1 1.6

Total revenue 367.8 377.4

(1) The gain on sale of the LDK joint venture equity interest is presented to the Chief Operating Decision Maker as development income. This is consistent with CMW’s

overall view of the LDK project which has been internally shown and reported as a development project. For this financial report, the gain in all other places where

it is presented has been classified and disclosed in accordance with the requirements of IFRS.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT80

E) SEGMENT ASSETS AND LIABILITIES

2023

Funds

and asset

management

Co-investments

Investment

portfolio

Cromwell

Segment assets 153.3 1,343.2 2,719.2 4,215.7

Segment liabilities 53.1 601.4 1,349.0 2,003.5

Segment net assets 100.2 741.8 1,370.2 2,212.2

Other segment information

Equity accounted investments 21.0 641.2 - 662.2

Acquisition / (disposal) of non-current segment assets

(1)

Investments in associates 0.9 3.8 - 4.7

Investments at fair value through profit or loss - 1.8 - 1.8

Intangible assets 0.1 - - 0.1

(1) For additions to investment property, forming part of the Investment portfolio segment, refer to note 8.

2022

Funds

and asset

management

Co-investments

Investment

portfolio

Cromwell

Segment assets 335.2 1,520.7 3,198.3 5,054.2

Segment liabilities 48.8 834.2 1,460.8 2,343.8

Segment net assets 286.4 686.5 1,737.5 2,710.4

Other segment information

Equity accounted investments 19.9 650.8 - 670.7

Acquisition / (disposal) of non-current segment assets

(1)

Investments in associates (6.6) (1.1) - (7.7)

Investments at fair value through profit or loss - 16.4 - 16.4

Intangible assets 0.1 - - 0.1

(1) For additions to investment property, forming part of the Investment portfolio segment, refer to note 8.

F) OTHER SEGMENT INFORMATION

Geographic information

Cromwell has operations in four distinct geographical markets. These are Australia through the Cromwell Property Group

and the Australian funds it manages, United Kingdom and Europe through its European business (including the property

portfolio in Poland), Asia through its investment in the Singapore-listed CEREIT and New Zealand through its Oyster

Property Funds Limited joint venture.

Non-current assets for the purpose of the disclosure below include investment property, equity accounted investments

and investments at fair value through profit or loss.

Revenue from external customers Non-current operating assets

2023

2022

2023

2022

Geographic location

Australia 252.6 278.8 2,655.5 3,064.2

United Kingdom and Europe 147.1 135.7 625.5 866.1

Asia 47.8 49.6 590.1 600.5

New Zealand (0.9) 2.9 15.4 16.1

Total 446.6 467.0 3,886.5 4,546.9

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 81

Major customers

Major customers of Cromwell that account for more than 10% of Cromwell’s segmental revenue are listed below.

All of these customers form part of the Investment portfolio segment.

2023

2022

Major customer

Commonwealth of Australia 42.7 48.1

Qantas Airways Limited 35.4 34.0

New South Wales State Government 22.3 29.2

Total income from major customers 100.4 111.3

G) ACCOUNTING POLICY

Segment allocation

Segment revenues, expenses, assets and liabilities are those that are directly attributable to a segment and the

relevant portion that can be allocated to the segment on a reasonable basis. While most of these assets can be

directly attributable to individual segments, the carrying amounts of certain assets used jointly by segments are

allocated based on reasonable estimates of usage.

Property expenses and outgoings which include rates, taxes and other property outgoings and other expenses are

recognised on an accruals basis.

EBIT

Earnings Before Interest, Tax, (EBIT) is a measure of financial performance and is used as an alternative to operating

profit or statutory profit.

Segment profit

Segment profit, internally referred to as operating profit, is based on income and expenses excluding adjustments

for unrealised fair value adjustments and write downs, gains or losses on all sale of investment properties and

certain other non-cash income and expense items.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT82

3. Earnings per security

A) OVERVIEW

Earnings per security (EPS) is a measure that makes it easier for users of Cromwell’s financial report to compare

Cromwell’s performance between different reporting periods. Accounting standards require the disclosure of basic EPS

and diluted EPS. Basic EPS information provides a measure of interests of each ordinary issued security of the parent

entity in the performance of the entity over the reporting period. Diluted EPS information provides the same information

but takes into account the effect of all dilutive potential ordinary securities outstanding during the period, such as

Cromwell’s performance rights.

B) EARNINGS PER STAPLED SECURITY / TRUST UNIT

Cromwell Company Trust

2023 2022 2023 2022 2023 2022

Basic earnings per security (cents) (16.95) 10.05 (0.19) (0.40) (16.76) 10.45

Diluted earnings per security (cents) (16.90) 10.02 (0.19) (0.40) (16.71) 10.42

Earnings used to calculate basic and diluted

earnings per security:

(Loss) / profit for the year attributable to

securityholders ($M)

(443.8) 263.2 (5.1) (10.5) (438.7) 273.7

Weighted average number of securities used

in calculating basic and diluted earnings per

security:

Weighted average number of securities used in

calculating basic earnings per security (millions)

2,618.9 2,618.3 2,618.9 2,618.3 2,618.9 2,618.3

Effect of performance rights on issue (millions) 7.6 9.4 7.6 9.4 7.6 9.4

Weighted average number of securities used

in calculating diluted earnings per security

(millions)

2,626.5 2,627.7 2,626.5 2,627.7 2,626.5 2,627.7

C) INFORMATION IN RELATION TO THE CLASSIFICATION OF SECURITIES

Performance rights

Performance rights granted under Cromwell’s Performance Rights Plan are considered to be potential ordinary stapled

securities and have been included in the determination of diluted earnings per stapled security to the extent to which they

are dilutive. The performance rights have not been included in the determination of basic earnings per stapled security.

Convertible bonds

The remaining convertible bonds were repaid in full in September 2022 and have no impact on the 30 June 2023 diluted

earnings per share calculation. Historically, the convertible bonds have not been included in diluted earnings per share

calculation as the conversion feature was considered to make them anti-dilutive.

D) ACCOUNTING POLICY

Basic earnings per security

Basic earnings per security is calculated by dividing profit attributable to security holders of the Company / Trust /

Cromwell, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of

ordinary securities outstanding during the financial year, adjusted for bonus elements in ordinary securities issued

during the year.

Diluted earnings per security

Diluted earnings per security adjusts the figures used in the determination of basic earnings per security to take

into account the after income tax effect of interest and other financing costs associated with potentially ordinary

securities and the weighted average number of securities assumed to have been issued for no consideration in

relation to dilutive potential ordinary securities.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 83

4. Distributions

A) OVERVIEW

Cromwell’s objective is to generate sustainable returns for our securityholders, including stable annual distributions.

When determining distribution rates Cromwell’s board considers a number of factors, including forecast earnings,

anticipated capital and lease incentive expenditure requirements over the next three to five years and expected economic

conditions.

Distributions paid / payable by Cromwell and the Trust during the year were as follows:

2023 2022

2023

cents

2022

cents

2023

2022

18 November 2022 19 November 2021 1.3750¢ 1.6250¢ 36.0 42.5

17 February 2023 18 February 2022 1.3750¢ 1.6250¢ 36.0 42.6

19 May 2023 20 May 2022 1.3750¢ 1.6250¢ 36.0 42.6

18 August 2023 19 August 2022 1.3750¢ 1.6250¢ 36.0 42.6

Total 5.5000¢ 6.5000¢ 144.0 170.3

There were no dividends paid or payable by the Company in respect of the 2023 and 2022 financial years. All of Cromwell’s

and the Trust’s distributions are unfranked.

B) FRANKING CREDITS

Currently, Cromwell’s distributions are paid from the Trust. Franking credits are only available for future dividends

paid by the Company as well as the subsidiary companies of the Trust. The Company’s franking account balance as at

30 June 2023 is $14,418,100 (2022: $14,572,800). The Trust’s subsidiary companies’ aggregated franking account balance

as at 30 June 2023 is $867,400 (2022: $728,400).

5. Revenue

A) OVERVIEW

Cromwell derives revenue from its three main business activities / operating segments (described in note 2). These

revenue sources and the revenue items relating to them are as follows:

Funds and asset

management:

Funds management represents activities in relation to the establishment and management of

external funds for institutional and retail investors. Asset management includes property and

facility management, leasing and project management and development related activities. These

activities are carried out by Cromwell itself and by associates (including the LDK Seniors living

joint venture and others) and contribute related fee revenues or the relevant share of profit of each

investee to the consolidated results.

Co-investments: This activity includes Cromwell’s investments in assets warehoused whilst being repositioned for

deployment into the fund and asset management business and assets it may not fully own or over

which it cannot exercise unilateral control. This includes interests in investment property portfolios

in Poland (CPRF) and Italy (CIULF), the Cromwell European Real Estate Investment Trust (CEREIT),

and other investment vehicles. This activity contributes net rental income and the relevant share of

profit of each investee to the consolidated results.

Investment portfolio: This involves the ownership of investment properties located in Australia. These properties are held

for long term investment purposes and primarily contribute net rental income and associated cash

flows to results.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT84

The table below presents information about revenue items recognised from contracts with customers and other sources:

Cromwell Trust

2023

2022

2023

2022

Rental income – lease components 210.2 218.5 209.8 219.5

Recoverable outgoings – non-lease components 53.2 49.4 51.6 48.0

Rental income and recoverable outgoings 263.4 267.9 261.4 267.5

Other revenue from contracts with customers:

Fund and asset management fees 86.0 84.6 - -

Total revenue 349.4 352.5 261.4 267.5

Other revenue items recognised:

Interest 15.6 17.8 12.0 14.9

Distributions 2.7 7.0 1.0 0.8

Other revenue 0.1 0.1 0.2 -

Total other revenue 18.4 24.9 13.2 15.7

Total revenue 367.8 377.4 274.6 283.2

B) DISAGGREGATION OF REVENUE FROM CONTRACTS WITH CUSTOMERS

The table below presents information about the disaggregation of revenue items from Cromwell’s contracts with relevant

customers:

Cromwell Trust

2023

2022

2023

2022

Rental income and recoverable outgoings – non-lease

components:

Recoverable outgoings

(1)

30.5 31.3 30.5 31.4

Cost recoveries

(2)

22.7 18.1 21.1 16.6

Total rental income and recoverable outgoings –

non-lease components

53.2 49.4 51.6 48.0

Fund and asset management fees:

Fund and asset management fees

(1)

55.1 51.6 - -

Performance fees

(2)

10.5 6.7 - -

Asset acquisition and sale fees

(2)

3.6 11.3 - -

Project management fees

(1)

6.2 2.1 - -

Leasing fees

(2)

6.0 8.2 - -

Property management fees

(1)

4.6 4.7 - -

Total fund and asset management fees 86.0 84.6 - -

Total revenue from contracts with customers 139.2 134.0 51.6 48.0

Timing of recognition of revenue items

Recognised over time 96.4 89.7 30.5 31.4

Recognised at point in time 42.8 44.3 21.1 16.6

Total revenue from contracts with customers 139.2 134.0 51.6 48.0

(1) Revenue recognised over time.

(2) Revenue recognised at point in time.

C) ACCOUNTING POLICIES

Rental income and recoverable outgoings

Rental income and recoverable outgoings comprises rental income from tenants under operating leases of investment

properties and amounts charged to tenants for property outgoings such rates, levies, utilities, cleaning etc.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 85

Rental income is recognised on a straight-line basis over the lease term. Lease incentives granted are considered an

integral part of the total rental income and are recognised as a reduction in rental income over the term of the lease,

on a straight-line basis. Amounts charged for outgoings to tenants are expense recoveries and is recognised upon

incurring the expense.

Fund and asset management fees

Revenue from management services is measured based on the consideration specified in the contract with the

customer and recognised when control over the service is transferred to the customer. Fee income derived from

investment management and property services is recognised progressively as the services are provided.

Asset acquisition and disposal, project management and leasing fees are recognised upon completion of the service

when the customer derives the benefit from the service.

Performance fee income is recognised progressively as the services are provided but only when the revenue can

be reliably measured, and it becomes highly probably that there will be no significant reversal of revenue in future.

Performance fees are generally dependent on certain performance obligation specified in the contract with the

customer in respect of the management of the customer’s assets or the outcome of transactions on behalf of

customers.

Development sales and fees

Development sales comprises income from the disposal of property inventories. Revenue is recognised at the point

in time that control of the asset has been transferred to the customer, generally upon legal settlement date.

Development management fees are derived from the provision of development management services. Revenue is

recognised over time as the service is performed.

Unearned income

Payments from tenants and customers in relation to future periods, which are not due and payable are recognised

as unearned income in the Balance Sheet.

Interest revenue

Interest revenue is recognised as it accrues using the effective interest method. Interest revenue is predominately

earned from financial assets including cash and loan receivables.

Distributions

Revenue from distributions is earned from investments and is recognised when the right to receipt is established.

D) CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Performance fees

Cromwell exercises judgement in estimating the amount of variable consideration it will be entitled to under the

relevant contract and constrains the amount of revenue recognised to the amount that is considered highly probable

will not result in a significant reversal. Variable consideration is assessed at each reporting period to account for any

changes in circumstances.

Impact of COVID-19

Australia – rental income and related collections were relatively unimpacted by COVID-19 due to the tenant

population being heavily skewed towards government and other tenants in markets not materially impacted by the

pandemic.

Poland – Poland was not subject to lockdowns during the year. However, as a result of lockdowns during the prior

year, during which rent and service charges were invoiced but collections slowed, Cromwell and the Trust have

chosen to recognise an expected credit loss provision at 30 June 2023 of €1.1 million ($1.8 million) at balance date

(June 2022: €1.2 million, $1.8 million).

Italy – due to the nature of the cornerstone tenant and the geographical location of the properties no COVID-19-

related support has been requested nor granted and none is expected for the foreseeable future.

For further information in relation to the treatment of expected credit losses in relation to receivables see notes 13

and 14.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT86

6. Employee beneﬁts, administrative, ﬁnance and other expenses

This note provides further details about Cromwell’s other operating business expenses, including Cromwell’s employee

benefits expenses and its components as well as items included in administrative and other expenses and finance costs.

A) EMPLOYEE BENEFITS EXPENSE

Cromwell Trust

2023

2022

2023

2022

Salaries and wages, including bonuses and on-costs 70.0 66.2 - -

Directors fees 2.1 2.0 - -

Contributions to defined contribution superannuation

plans

4.3 4.1 - -

Security-based payments 0.5 - - -

Restructure costs 3.1 5.0 - -

Other employee benefits expense 2.6 3.4 - -

Total employee benefits expense 82.6 80.7 - -

B) ADMINISTRATIVE AND OTHER EXPENSES

Cromwell Trust

2023

2022

2023

2022

Audit, taxation and other professional fees 6.6 7.3 4.0 3.4

Administrative and overhead costs 26.9 35.6 0.6 2.8

Fund administration costs - - 23.0 22.2

Amortisation and depreciation 7.5 6.0 0.3 0.2

Other 2.2 0.4 - -

Total administrative and other expenses 43.2 49.3 27.9 28.6

C) FINANCE COSTS

Cromwell Trust

2023

2022

2023

2022

Interest on borrowings 78.2 54.4 78.2 54.4

Interest on lease liabilities 0.7 0.7 0.3 0.3

Amortisation of loan transaction costs 6.9 17.9 6.9 17.9

Net exchange losses/(gains) relating to finance costs 0.1 (0.2) 0.1 (0.2)

Total finance costs 85.9 72.8 85.5 72.4

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 87

D) ACCOUNTING POLICIES

Salaries, wages and other short-term employee benefits obligations

Salaries, wages, including non-monetary benefits, and annual leave where there is no unconditional right to defer

settlement in respect of employee’s services up to the end of the reporting period and are measured at the amounts

expected to be paid when the liabilities are settled.

Bonuses

A liability is recognised for bonuses where contractually obliged or where there is a past practice that has created a

constructive obligation.

Superannuation

Contributions are made to defined contribution superannuation funds and expensed as they become payable.

Other long-term employee benefits obligations

The liabilities for long service leave and annual leave are not expected to be settled wholly within 12 months after

the end of the period in which the employees render the related service. They are recognised in the provision

for employee benefits and measured as the present value of expected future payments to be made in respect of

services provided by employees up to the end of the reporting period. Consideration is given to expected future

wage and salary levels, experience of employee departures and periods of service. Expected future payments are

discounted using relevant discount rates at the end of the reporting period that match, as closely as possible, the

estimated future cash outflows. Re-measurements as a result of experience adjustments and changes in actuarial

assumptions are recognised in profit or loss.

Security-based payments

Security-based compensation benefits are provided to employees via Cromwell’s Performance Rights Plan (PRP).

Further information about the PRP is set out in note 23.

The fair value of options and performance rights granted is recognised as an employee benefit expense with a

corresponding increase in equity. The fair value is measured at grant date and recognised over the period during

which the employees become unconditionally entitled to the options or performance rights. The fair value at grant

date is determined using a pricing model that takes into account the exercise price, the term, the security price at

grant date and expected price volatility of the underlying security, the expected distribution yield and the risk free

interest rate for the term.

The fair value of the options or performance rights granted is adjusted to reflect the probability of market vesting

conditions being met, but excludes the impact of any non market vesting conditions (for example, profitability and

sales growth targets). Non market vesting conditions are included in assumptions about the number of options or

performance rights that are expected to become exercisable. At each balance date, Cromwell revises its estimate

of the number of options or performance rights that are expected to become exercisable. The employee benefit

expense recognised each period takes into account the most recent estimate. The impact of the revision to original

estimates, if any, is recognised in profit or loss with a corresponding adjustment to equity.

Finance costs

Information about Cromwell’s exposure to interest rate changes is provided in note 14(e).

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT88

7. Income tax

A) OVERVIEW

Income tax expense comprises current and deferred tax expense. Current tax expense is the income tax payable on

expected taxable income for the financial year and adjustments to tax payable in respect of previous financial years.

Deferred tax expense is the result of different income and expense recognition principles between accounting standards

and tax laws and represents the future tax consequences of recovering or settling the carrying amount of an asset or

liability. Deferred tax liabilities are recognised for all taxable temporary differences whereas deferred tax assets are

recognised for all deductible temporary differences and unused tax losses.

Taxation of the Trust

Under current Australian income tax legislation, the Trust and its sub-Trusts are not liable for income tax on their taxable

income (including assessable realised capital gains) provided that the unitholders are presently entitled to the income

of the Trust. However, the Trust also controls a number of corporate entities that are subject to income tax. Income tax

shown for the Trust represents taxation of those corporate entities.

B) INCOME TAX EXPENSE

Cromwell Trust

2023

2022

2023

2022

Current tax expense 4.5 3.6 4.3 2.4

Deferred tax (benefit) / expense (11.4) 20.9 (11.1) 10.7

Adjustment in relation to prior periods – current tax (0.4) 0.4 - (0.1)

Adjustment in relation to prior periods – deferred tax (2.0) (0.8) (2.2) (0.1)

Income tax (benefit) / expense (9.3) 24.1 (9.0) 12.9

Deferred tax expense / (benefit)

Decrease / (increase) in deferred tax assets (0.7) 8.5 (0.8) (0.8)

Increase / (decrease) in deferred tax liabilities (12.7) 11.6 (12.5) 11.4

Total deferred tax (benefit) / expense (13.4) 20.1 (13.3) 10.6

C) RECONCILIATION BETWEEN INCOME TAX (BENEFIT) / EXPENSE AND (LOSS) / PROFIT BEFORE INCOME TAX

Cromwell Trust

2023

2022

2023

2022

(Loss) / profit before income tax (453.1) 287.3 (447.7) 287.8

Tax at Australian tax rate of 30% (2022: 30%) (135.9) 86.2 (134.3) 86.3

Tax effect of amounts which are not deductible / (taxable)

in calculating taxable income:

Trust income 67.4 (67.5) 67.4 (67.4)

Fair value movements not deductible / (not assessable) (10.3) 4.1 (10.6) 4.3

Net non-deductible expenses / (net non-assessable

income)

0.4 (2.4) (1.5) (0.7)

Movement in tax losses and capital losses derecognised

/ (recognised)

5.8 1.8 7.8 (3.0)

Movement in deferred tax assets derecognised /

(recognised)

7.5 3.4 6.9 (4.0)

Movement in initial recognition exemption 33.0 - 33.0 -

Adjustment in relation to prior periods (2.4) (0.4) (2.2) (0.2)

Difference in overseas tax rates 25.2 (1.1) 24.5 (2.4)

Income tax (benefit) / expense (9.3) 24.1 (9.0) 12.9

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 89

D) DEFERRED TAX

Cromwell Trust

(i) Deferred tax assets

2023

2022

2023

2022

Deferred tax assets are attributable to:

Interests in managed investment schemes - (3.6) - -

Investment properties 1.6 (0.3) 1.6 (0.3)

Employee benefits - 0.1 - -

Transaction costs and sundry items 0.4 0.3 0.4 0.3

Unrealised foreign currency (gains) / losses (0.5) 0.3 (0.5) 0.3

Tax losses recognised 0.2 4.0 0.2 0.5

Total deferred tax assets 1.7 0.8 1.7 0.8

Movements:

Balance at 1 July 0.8 8.4 0.8 -

(Charged) / credited to profit or loss 0.9 (9.2) 0.8 0.8

Credited to comprehensive income - 0.9 - -

Adjustment in relation to prior periods (0.2) 0.7 - -

Other movements 0.2 - 0.1 -

Balance at 30 June 1.7 0.8 1.7 0.8

Cromwell Trust

(ii) Unrecognised deferred tax assets

2023

2022

2023

2022

Deferred tax assets have not been recognised in respect

of the following items:

Employee benefits 2.5 2.3 - -

Investments in subsidiaries 69.3 - 68.8 -

Unrealised foreign exchange losses 3.4 2.7 - 0.1

Derivatives - 0.3 - 0.3

Tax losses 82.6 76.0 34.3 28.2

Other items 2.1 4.2 0.2 1.2

Total deferred tax assets not recognised 159.9 85.5 103.3 29.8

Cromwell Trust

(iii) Tax losses by year of expiration

2023

2022

2023

2022

The gross amount of tax losses carried forward

that have not been recognised by their expiration date

is as follows:

Not later than one year 0.2 0.7 0.2 0.7

Later than one year and not later than three years 27.8 16.2 27.8 16.2

Later than three years and not later than six years 25.9 14.8 25.9 14.8

Later than six years and not later than seventeen years 30.8 28.1 30.8 28.1

Unlimited 237.4 232.8 65.8 61.0

Gross amount of tax losses not recognised 322.1 292.6 150.5 120.8

Tax effect of total losses not recognised 82.6 76.0 34.3 28.2

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT90

Cromwell Trust

(iv) Deferred tax liabilities

2023

2022

2023

2022

Deferred tax liabilities are attributable to:

Interests in managed investment schemes 0.5 12.2 0.1 12.0

Interests in other investments 0.8 0.6 0.8 0.5

Investment properties - 3.4 - 3.4

Tax losses recognised (0.1) (0.3) - (0.3)

Transactions costs and other items (0.5) (3.7) (0.2) (3.5)

Total deferred tax liabilities 0.7 12.2 0.7 12.1

Movements:

Balance at 1 July 12.2 0.6 12.1 0.6

(Credited) / charged to profit or loss (10.5) 11.7 (10.3) 11.5

Adjustment in relation to prior periods (2.2) (0.1) (2.2) (0.1)

Other movements 1.2 - 1.1 0.1

Balance at 30 June 0.7 12.2 0.7 12.1

E) ACCOUNTING POLICY

Income tax

Cromwell’s income tax expense for the period is the tax payable on the current period’s taxable income adjusted by

changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets

and liabilities and their carrying amounts in the financial statements, and to unused tax losses.

Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when

the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively

enacted. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary

differences to measure the deferred tax asset or liability.

Deferred tax is not recognised for the recognition of goodwill on business combinations and for temporary

differences between the carrying amount and tax bases of investments in controlled entities where the parent entity

is able to control the timing of the reversal of the temporary differences and it is probable that the differences will

not reverse in the foreseeable future.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable

that future taxable amounts will be available to utilise those temporary differences and losses. Current and deferred

tax balances attributable to amounts recognised in other comprehensive income or directly in equity are also

recognised in other comprehensive income or directly in equity.

Tax consolidation

The Company and its wholly-owned entities (this excludes the Trust and its controlled entities and foreign entities

controlled by the Company) have formed a tax-consolidated group and are taxed as a single entity. The head entity

within the tax-consolidated group is Cromwell Corporation Limited. The head entity, in conjunction with other

members of the tax-consolidated group, has entered into a tax funding arrangement, which sets out the funding

obligations of members of the tax-consolidated group in respect of tax amounts. The head entity, in conjunction with

other members of the tax-consolidated group, has also entered into a tax sharing agreement.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 91

Operating Assets

This section of the annual financial report provides further information on Cromwell’s and the Trust’s operating

assets. These are assets that individually contribute to Cromwell’s revenue and include investment properties, equity

accounted investments and investments at fair value through profit or loss.

8. Investment properties

A) OVERVIEW

Investment properties are land, buildings or both held solely for the purpose of earning rental income and / or for capital

appreciation. This note provides a detailed overview of Cromwell’s investment property portfolio, including details of

movements during the financial year.

B) MOVEMENTS IN INVESTMENT PROPERTIES

A reconciliation of the carrying amounts of investment properties at the beginning and the end of the financial year is set

out below.

Cromwell Trust

2023

2022

2023

2022

Balance at 1 July 3,740.0 3,863.5 3,740.0 3,863.5

Acquisitions - - - -

Capital works:

Construction costs - 0.2 - 0.2

Property improvements 10.9 13.9 10.9 13.9

Lifecycle 12.1 6.0 12.1 6.0

Disposals (32.8) (132.3) (32.8) (142.3)

Reclassified to:

Held for sale

(1)

(189.8) (19.0) (189.8) (19.0)

Inventory - (10.0) - -

Straight-line lease income 7.4 6.0 7.4 6.0

Lease costs and incentive costs 14.1 17.4 14.1 17.4

Amortisation

(2)

(27.9) (29.3) (27.9) (29.3)

Net (loss) / gain from fair value adjustments (491.6) 54.0 (491.6) 54.0

Foreign exchange differences 55.8 (30.4) 55.8 (30.4)

Balance at 30 June 3,098.2 3,740.0 3,098.2 3,740.0

(1) 84 Crown Street, Wollongong, NSW was reclassified as held for sale at 31 December 2022 and was subsequently sold in February 2023 for $53.0 million.

(2) Pertains to the amortisation of lease costs, lease incentive costs and right-of-use assets.

C) INVESTMENT PROPERTIES SOLD / RECLASSIFIED AS HELD FOR SALE

During the current financial year the Trust entered into the following investment property related transactions:

• 84 Crown Street, Wollongong, NSW was reclassified as held for sale at 31 December 2022 and was subsequently sold

in February 2023 for $53.0 million;

• 117 Bull Street, Newcastle, NSW was sold in April 2023 for $33.4 million;

• The Italian portfolio of 7 investment properties was transferred to held for sale (refer to note 20) on 30 June 2023 for

$91.5 million (€55.8 million) as part of Cromwell divesting 50% of the Cromwell Italy Urban Logistics Fund (CIULF) and

entering into a partnership with Value Partners; and

• 2-6 Station Street, Penrith NSW was reclassified to held for sale (refer to note 20) at 30 June 2023, as subsequent to

year end a sale agreement was signed for $45.3 million (net of estimated sale costs).

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT92

During the 2022 financial year the Trust disposed of the following properties: Village Cinema, Geelong, VIC for

$19.0 million (net of required capital expenditure); 200 Mary Street, QLD for $108.5 million; Regent Cinema, Albury,

NSW for $18.5 million; and the TGA Complex, ACT for $21.5 million.

D) INVESTMENT PROPERTIES RECLASSIFIED AS INVENTORY

During the prior financial year Cromwell reclassified the investment property at 19 National Circuit, Barton, ACT as an

inventory asset. This is due to its intended redevelopment for future sale. To facilitate this ownership, the asset was

transferred from the Trust to the Cromwell Development Trust (a subsidiary of Cromwell Corporation Limited) for a

contract price of $10.0 million. Costs totalling $6.5 million (2022: $5.3 million) were incurred from the date the asset

was classified as Inventory to 30 June 2023, with the Inventory carrying amount totalling $16.5 million at 30 June 2023

(30 June 2022: $15.3 million).

E) DETAILS OF CROMWELL’S INVESTMENT PROPERTY PORTFOLIO

Independent

valuation

Carrying amount

Ownership Title

Asset

class Date

Amount

2023

2022

Australia

400 George Street, Brisbane QLD 100% Freehold Office Jun-23 480.0 480.0 542.0

HQ North, Fortitude Valley QLD 100% Freehold Office Jun-23 217.5 217.5 241.0

203 Coward Street, Mascot NSW 100% Freehold Office Jun-23 520.0 520.0 560.0

2-24 Rawson Place, Sydney NSW 100% Freehold Office Jun-23 292.0 292.0 320.0

207 Kent Street, Sydney NSW 100% Freehold Office Jun-23 289.0 289.0 317.0

475 Victoria Avenue, Chatswood NSW 50% Freehold Office Jun-23 134.0 134.0 135.5

2-6 Station Street, Penrith NSW

(1)

100% Freehold Office N/A - - 57.5

84 Crown Street, Wollongong NSW 100% Freehold Office N/A - - 51.0

117 Bull Street, Newcastle NSW 100% Freehold Office N/A - - 33.0

243 Northbourne Avenue, Lyneham

ACT

100% Leasehold Office Jun-23 33.8 33.8 35.7

Soward Way, Greenway ACT 100% Leasehold Office Jun-23 300.2 300.2 319.7

Tuggeranong Office Park,

Tuggeranong ACT

(2)

100% Leasehold Land May-19 7.5 17.5 8.3

700 Collins Street, Melbourne VIC 100% Freehold Office Jun-23 300.1 300.1 353.0

Total Australian Portfolio 2,574.1 2,584.1 2,973.7

Poland Portfolio

(3)

Jun-23 650.9 508.1 669.3

Italy Portfolio

(4)

N/A - - 91.1

Total – investment property portfolio 3,225.0 3,092.2 3,734.1

Add: Right-of-use assets – Polish leasehold properties - 6.0 5.9

Total – investment properties 3,225.0 3,098.2 3,740.0

(1) 2-6 Station Street, Penrith NSW has been reclassified as held for sale at 30 June 2023, refer to note 20 for further details.

(2) Tuggeranong Office Park. Tuggeranong ACT has been revalued at 30 June 2023 based on a Director’s valuation.

(3) Refer to note 8(f) below for details on the Poland Portfolio.

(4) The Italian investment properties have been reclassified as held for sale at 30 June 2023, refer to note 20 for further details.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 93

F) CRITICAL ACCOUNTING ESTIMATES  REVALUATION OF INVESTMENT PROPERTY PORTFOLIO

Cromwell’s investment properties, with an aggregate carrying amount of $3,098.2 million (2022: $3,740.0 million)

represent a significant balance on Cromwell’s and the Trust’s Balance Sheets. Investment properties are measured

at fair value (for accounting purposes) using valuation methods that utilise inputs based upon estimates.

All property valuations, except for the Polish Portfolio in 2023, utilise valuation models based on discounted cash

flow (“DCF”) models or income capitalisation models (or a combination of both) supported by recent market sales

evidence. See note 8(g) below for further information in relation to the valuation of investment properties which

utilise valuation models to derive fair value.

Poland Retail Portfolio Strategic review and carrying amount as at 30 June 2023

In August 2022, following delays resulting from COVID-19 and Russia’s invasion of Ukraine, and pursuant to

Cromwell’s strategic objectives to become a capital light fund manager and in order to repatriate capital to Australia

to reduce Cromwell’s gearing, the decision was made to formally market the wholly owned assets (the Poland

Retail Portfolio). An extensive on-market sale process has been undertaken over the past 11 months resulting in

Cromwell receiving a number of non-binding indicative offers on the Poland Retail Portfolio, as well as various

combinations of offers for the underlying assets. In late June 2023, while the highest offer was below the level of

the latest independent valuations, it was determined that given the extent of the process that had been conducted in

conjunction with the substantial strategic benefits to exiting the Poland Retail Portfolio, the exclusive right to carry

out due diligence would be granted to an independent third party. The non-binding offer received was in relation to

the acquisition of the 6 wholly owned investment properties comprising the Poland Retail Portfolio (excluding the

jointly held asset) with the indicative price of $508.1 million, representing a 21.9% reduction compared with the

30 June 2023 independent external valuations. The independent valuers determined the valuation of the individual

properties, for independent valuation purposes, at a total of $650.9 million. As a result of the strategic decision,

and having considered the relevant requirements of the Accounting Standards in determining market value for

accounting purposes, the Board has adopted the non-binding offer price as the carrying amount for accounting

purposes at 30 June 2023, rather than the value determined by the independent external valuations.

Australian portfolio

At balance date the adopted valuations for 9 of Cromwell’s Australian investment properties are based on

independent external valuations representing 99.3% of the value of the portfolio. The balance of the portfolio is

subject to internal valuations having regard to previous external valuations, comparable sales evidence, indicative

offers, or, in the case of investment properties held for sale, with reference to the relevant sale price. Cromwell’s

valuation policy requires all properties (other than land only) to be valued by an independent professionally qualified

valuer with a recognised relevant professional qualification at least once every two years.

Impact of COVID-19 and other global economic impacts on property valuations

For the year ended 30 June 2023 Cromwell’s approach to property valuations was substantially consistent with prior

years, being in accordance with the established Valuations policy, but with an added emphasis in relation to the impact of

COVID-19 and other global economic impacts (such as global geopolitical instability and tightened monetary policy) upon

inputs relevant to the valuation model for each property.

It should be noted that external valuers have specified in their reports that their valuations at 30 June 2023 were

performed in an unusual market context, notably the absence of transactions initiated after the outbreak of the COVID-19

pandemic and difficulties associated with estimating the outlook for changes in the investment property market given

the nature of the recent health crisis and other global economic impacts, and they were working within the context of

valuation uncertainty.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT94

The table below shows the year end revaluation (losses) / gains for each portfolio.

Cromwell

2023

2022

Australia (272.1) 57.5

Poland (212.6) (11.8)

Italy (6.9) 8.3

Total revaluation (loss) / gain (491.6) 54.0

G) FAIR VALUE MEASUREMENT

As noted below in Cromwell’s accounting policy, investment properties are measured at fair value. The fair value of

Cromwell’s investment properties is determined using property valuation models that rely on the use of inputs that are not

based on readily observable market data. Such valuation methods for determining fair value are called level 3 fair value

measurements. These valuation methods and inputs are described in more detail below.

Valuation methodologies

Income capitalisation

method

This method involves assessing the total net market income receivable from the property

and capitalising this perpetually, using an appropriate, market derived capitalisation rate,

to derive a capital value, with allowances for capital expenditure reversions such as lease

incentives and required capital works payable in the near future and overs / unders when

comparing market rent with passing rent.

DCF method Under the DCF method, a property’s fair value is estimated using assumptions regarding

the benefits and liabilities of ownership over the asset’s life including an exit terminal

value. The DCF method involves the projection of expected cash flows from a real

property asset over a period of time (generally five years) discounted to present value

using an appropriate discount rate. An exit terminal value is added to the present value

of the property cash flows using an appropriate terminal yield, to derive the value of the

property.

Both methods require the determination of net market rent for a particular property, being the income capitalised or used

to determine the present value of cash flows from the properties.

Unobservable inputs

Annual net property income Annual net property income is the contracted amount for which the property space is leased. In

the net property income, the property owner recovers outgoings from the tenant.

Capitalisation rate The rate at which net market income is capitalised to determine the value of the property. The

rate is determined with regard to market evidence (and the prior external valuation for internal

valuations).

Discount rate The rate of return used to convert a monetary sum, payable or receivable in the future, into

present value. It reflects the opportunity cost of capital, that is, the rate of return the capital

can earn if put to other uses having similar risk. The rate is determined with regard to market

evidence (and the prior external valuation for internal valuations).

Terminal yield The capitalisation rate used to estimate the residual value of the cash flows associated with

the investment property at the end of the expected holding period.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 95

Changes in these unobservable inputs have the following impact on the valuation of the properties:

Inputs

Impact of increase in

input on fair value

Impact of decrease in

input on fair value

Annual net property income Increase Decrease

Capitalisation rate Decrease Increase

Discount rate Decrease Increase

Terminal yield Decrease Increase

Range and weighted average of unobservable inputs used in the valuation methods to determine the fair value of

Cromwell’s investment properties in the current and prior year are as follows:

Annual net

property income

($M)

Capitalisation rate

(%)

Discount rate

(%)

Terminal yield

(%)

Range

Weighted

average Range

Weighted

average Range

Weighted

average Range

Weighted

average

2023

Australia

(1)

3.0 – 29.8 21.5 5.1 - 7.5 5.7 6.0 – 7.8 6.3 5.6 – 7.8 6.1

Poland

(2)

N/A N/A N/A N/A N/A N/A N/A N/A

Italy

(3)

N/A N/A N/A N/A N/A N/A N/A N/A

Portfolio 3.0 – 29.8 21.5 5.1 – 7.5 5.7 6.0 – 7.8 6.3 5.6 – 7.8 6.1

2022

Australia

(1)

1.9 – 32.4 20.7 4.6 – 6.8 5.2 5.3 – 7.5 5.9 5.0 – 7.3 5.6

Poland 1.7 – 22.5 15.1 N/A N/A 7.8 – 9.7 8.5 6.4 – 8.0 7.0

Italy

(4)

0.1 – 1.2 0.8 N/A N/A 5.2 – 5.8 5.3 4.3 – 5.0 4.5

Portfolio 0.1 – 32.4 19.2 4.6 – 6.8 5.2 5.2 – 9.7 6.4 4.3 – 8.0 5.8

(1) DCF models / income capitalisation models (and unobservable inputs therein) are not applied in certain cases (e.g. H.F.S. assets, vacant assets, etc) where this is

not considered an appropriate method of valuation for the particular asset.

(2) The Polish portfolio of investment properties have been valued using a non-binding offer price instead of independent external valuations for the year ended 30

June 2023. Refer to note 8(f) for further details.

(3) The Italian portfolio of investment properties are classified as held for sale at 30 June 2023 with their value determined by reference to the CIULF unit sale

agreement.

(4) No equivalent metric in Italian valuation methodologies utilised.

Sensitivity analysis

Significant judgement is required when assessing the fair value of investment property, especially in the current global

economic environment. Owing to this significant judgement, a sensitivity analysis is included below. The sensitivity analysis

shows the impact on the carrying values of directly held investment properties of an increase or decrease of 0.50% on the

capitalisation rate, discount rate and terminal yields as at 30 June 2023.

Cromwell

2023

0.50% (0.50%)

Australian portfolio

(235.7) 261.2

Polish portfolio

(1)

- -

Italian portfolio

(2)

- -

Total

(235.7) 261.2

(1) The Polish portfolio of investment properties have been valued using a non-binding offer price instead of independent external valuations that utilise capitalisa-

tion rates, discount rates and terminal yields for the year ended 30 June 2023.

(2) The Italian portfolio of investment properties are not considered in the sensitivity analysis at 30 June 2023 as these properties will form part of an equity account-

ed investment from the settlement of the unit sale agreement in July 2023.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT96

h) Non-cancellable operating lease receivable from investment property tenants

The table below reflects the gross property income, excluding recoverable outgoings and lease incentives, based on

existing lease agreements. It assumes, that leases will not be extended by tenants beyond the current lease period, even if

the lease contains options for lease extensions by tenants.

Cromwell Trust

2023

2022

2023

2022

Within one year 216.2 213.9 216.2 213.9

Later than one year but not later than five years 620.4 705.7 620.4 705.7

Later than five years 358.1 486.0 358.1 486.0

Total non-cancellable operating lease receivable from

investment property tenants

1,194.7 1,405.6 1,194.7 1,405.6

I) ACCOUNTING POLICY

Investment properties

Investment properties are initially measured at cost including transaction costs and subsequently measured at fair

value, with any change therein recognised in profit or loss.

Fair value is based upon active market prices, given the assets’ highest and best use, adjusted if necessary, for any

difference in the nature, location or condition of the relevant asset. If this information is not available, Cromwell

uses alternative valuation methods such as discounted cash flow projections and / or the capitalised earnings

approach. The highest and best use of an investment property refers to the use of the investment property by market

participants that would maximise the value of that investment property.

The carrying value of the investment property includes components relating to lease incentives and other items

relating to the maintenance of, or increases in, lease rentals in future periods.

Investment properties under construction are classified as investment property and carried at fair value. Finance

costs incurred on investment properties under construction are included in the construction costs.

Lease incentives

Lessees may be offered incentives as an inducement to enter into non-cancellable operating leases. These

incentives may take various forms including up-front cash payments, rent free periods, rental abatements over the

period or a contribution to certain lessee costs such as fit out costs or relocation costs. They are recognised as an

asset in the Balance Sheet as a component of the carrying amount of investment property and amortised over the

lease period as a reduction of rental income.

Initial direct leasing costs

Initial direct leasing costs incurred by Cromwell in negotiating and arranging operating leases are recognised as an

asset in the Balance Sheet as a component of the carrying amount of investment property and are amortised as an

expense on a straight-line basis over the lease term.

9. Equity accounted investments

A) OVERVIEW

This note provides an overview and detailed financial information of Cromwell’s and the Trust’s investments that are

accounted for using the equity method of accounting. These include joint arrangements where Cromwell or the Trust

have joint control over an investee together with one or more joint venture partners (these can take the form of either joint

arrangements or joint ventures depending upon the contractual rights and obligations of each party) and investments

in associates, which are entities over which Cromwell is presumed to have significant influence but not control or joint

control by virtue of holding 20% or more of the associates’ issued capital and voting rights, but less than 50%.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 97

Cromwell’s and the Trust’s equity accounted investments are as follows:

Cromwell Trust

2023 2022 2023 2022

% $M % $M % $M % $M

Equity accounted investments

CEREIT 27.8 589.7 27.8 600.0 27.4 580.6 27.4 590.7

Ursynów 50.0 51.5 50.0 50.8 50.0 51.5 50.0 50.8

Others 21.0 19.9 - -

Equity accounted investments 662.2 670.7 632.1 641.5

B) DETAILS OF ASSOCIATE

Cromwell European Real Estate Investment Trust

Cromwell and the Trust have an investment in CEREIT with a carrying amount of $589.7 million (2022: $600.0 million) and

$580.6 million (2022: $590.7 million) respectively. CEREIT is a real estate investment trust (REIT) listed on the mainboard

of the Singapore Exchange (SGX) managed by Cromwell through its 100% owned subsidiary Cromwell EREIT Management

Pte. Ltd. (the “Manager”). CEREIT invests in commercial property, mainly office and urban logistics, in western and central

Europe with a current portfolio of 112 properties located in 10 European countries with an aggregate portfolio value of

€2.3 billion ($3.8 billion). The Manager of CEREIT has its own majority independent board of directors acting solely in

the interest of all CEREIT unitholders. As such, Cromwell and the Trust does not control CEREIT, however has significant

influence by virtue of their unitholdings.

C) DETAILS OF JOINT VENTURES

Ursynów

Cromwell and the Trust have an investment in Ursynów with a carrying amount of $51.5 million (2022: $50.8 million).

Ursynów forms part of the Cromwell Polish Retail Fund (CPRF). Ursynów is a Polish company limited by shares that owns

a single retail asset in Warsaw, Poland. Cromwell and the Trust hold 50% of the voting rights of the company. The other

50% is held by joint venture partner, Unibail Rodamco Westfield (URW). The company is governed by a supervisory board

that decides on all relevant activities of the company. Both investors have equal participation rights in the supervisory

board and all decisions require unanimous consent establishing joint control.

During the current period Cromwell and the Trust invested a further €2.4 million ($3.8 million) into the joint venture

which was disproportionate to Cromwell and the Trust’s joint venture partner as a result of a pre-existing arrangement.

The disproportionate contribution by Cromwell and the Trust has resulted in the recognition of an impairment to the

investment of €1.2 million ($1.9 million) due to Cromwell and the Trust’s ownership percentage remaining unchanged

at 50%.

During the prior financial year Cromwell and its joint venture partner contributed loans of $26.8 million (€17.0 million)

each, which the joint venture used to repay an external debt facility. This balance receivable from Ursynów at 30 June 2023

was $30.5 million (€18.6 million).

Other joint ventures and associates

Other equity accounted investments include Cromwell’s investment in Oyster Property Funds Limited (Oyster) (50%

interest, 2022: 50%), a New Zealand based fund and property manager which is jointly owned with six other shareholders,

and Phoenix portfolio’s (45% interest, 2022: 45%), an Australian based equity fund manager. An investment in VAC Car

Park Co. Pty Ltd (CARVAC) (50% interest, 2022: 50%), an Australian based company which operates the car park in

Cromwell’s Victoria Avenue Chatswood investment property.

In Europe, Cromwell has investments in Stirling Development Agency Limited (SDA) (50% interest, 2022: 50%) a UK based

property developer and Redhouse Holdings Limited (Redhouse) (50% interest, 2022: 50%) a UK based property developer.

The Dasos Cromwell RE Management Company Sarl (Dasos) (nil interest, 2022: 50%) a Luxembourg based property

investment manager was dissolved during the period.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT98

D) ACCOUNTING POLICY

Interests in associates and joint venture entities are accounted for in Cromwell’s financial statements using the

equity method. Cromwell’s share of its associates and joint ventures’ post-acquisition profits or losses is recognised

in profit or loss and its share of post-acquisition movements in reserves is recognised in reserves. The cumulative

post-acquisition movements are adjusted against the carrying amount of the investment. Dividends or distributions

receivable from associates and joint ventures are recognised in Cromwell’s financial statements as a reduction of

the carrying amount of the investment.

When Cromwell’s share of losses in an associate or joint venture equals or exceeds its investment in the joint

venture, including any other relevant unsecured receivables, Cromwell does not recognise further losses, unless

it has incurred obligations or made payments on behalf of the associate or joint venture. Unrealised gains on

transactions between Cromwell its associates and joint ventures are eliminated to the extent of Cromwell’s

investment in the associate or joint venture. Unrealised losses are also eliminated unless the transaction provides

evidence of an impairment of the asset transferred.

E) CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

The preparation of financial statements requires management to make judgements and assumptions that affect

the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The

judgements and assumptions regarding the investments in Cromwell European Real Estate Investment Trust

(CEREIT) and Ursynów are detailed below.

Cromwell European Real Estate Investment Trust

Cromwell and the Trust are considered to be able to exert significant influence, but not control, over the entity. This

determination is pursuant to the assessment of control/significant influence and the consideration of key factors

regarding the management of CEREIT as governed by Cromwell’s Capital Markets Service Licence (as issued by the

Monetary Authority of Singapore (MAS)) and the composition of the Board.

Cromwell’s investment in CEREIT was assessed for indicators of impairment as at 30 June 2023. The CEREIT unit

price (€1.56) on the Singapore Exchange (SGX) was 32.2% below the carrying value per unit, and the fair value of the

investment using the quoted market price on the SGX per unit would be $399.7 million, which is $190.0 million below

the carrying value. Given this position has been significant and prolonged, Cromwell has considered whether the

value of the investment is impaired and assessed whether the recoverable amount (being the higher of value in use

or fair value less costs of disposal) exceeds the carrying amount of the investment.

Cromwell’s assessment of the value of the investment in CEREIT has been based on the fair value less costs of

disposal methodology. The fair value of CEREIT has been measured by considering the value of the investment that

Cromwell holds in CEREIT in its entirety which reflects the premium that an external buyer of CEREIT (as a whole)

would pay for the significant influence that Cromwell has due to the combination of the scale of the holding and

acting as manager of the vehicle. In addition, as at 30 June 2023, the balance sheet of CEREIT contains no goodwill

or other intangible assets, and 111 of 112 investment properties were independently revalued at 30 June 2023.

Based on Cromwell’s assessment of the fair value of CEREIT as at 30 June 2023 no impairment is required.

Ursynów

Cromwell and the Trust can only exercise joint control over the relevant decisions but not control, over the entity.

This determination is pursuant to the assessment of control and the consideration of key factors regarding the

management of Ursynów, the composition of the Board and other relevant agreements and joint control over

relevant decisions.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 99

F) SUMMARISED FINANCIAL INFORMATION FOR JOINT VENTURES AND EQUITY ACCOUNTED INVESTMENTS OWNED BY CROMWELL

As at 30 June 2023

As at 30 June 2022

CEREIT

(1)

Ursynów

(2)

Other Total CEREIT

(1)

Ursynów

(2)

LDK

(3)

Other Total

Summarised Balance Sheets:

Cash and cash equivalents 230.3 10.3 6.3 246.9 80.1 6.3 - 11.5 97.9

Other current assets 187.2 0.4 13.2 200.8 27.8 0.9 - 7.4 36.1

Total current assets 417.5 10.7 19.5 447.7 107.9 7.2 - 18.9 134.0

Investment properties 3,769.9 163.6 - 3,933.5 3,897.7 158.9 - - 4,056.6

Other non-current assets 47.1 0.5 26.0 73.6 21.3 0.6 - 26.8 48.7

Total non-current assets 3,817.0 164.1 26.0 4,007.1 3,919.0 159.5 - 26.8 4,105.3

Total assets 4,234.5 174.8 45.5 4,454.8 4,026.9 166.7 - 45.7 4,239.3

Financial liabilities 77.8 - 12.8 90.6 99.8 - - 6.3 106.1

Other current liabilities 66.9 3.7 0.4 71.0 50.3 3.9 - 0.1 54.3

Total current liabilities 144.7 3.7 13.2 161.6 150.1 3.9 - 6.4 160.4

Financial liabilities 1,865.6 62.0 - 1,927.6 1,616.0 51.6 - 5.6 1,673.2

Other non-current liabilities 102.4 6.1 2.6 111.1

101.8 9.7 - 2.9 114.4

Total non-current liabilities 1,968.0 68.1 2.6 2,038.7 1,717.8 61.3 - 8.5 1,787.6

Total liabilities 2,112.7 71.8 15.8 2,200.3 1,867.9 65.2 - 14.9 1,948.0

Net assets 2,121.8 103.0 29.7 2,254.5 2,159.0 101.5 - 30.8 2,291.3

Carrying amount of investment:

Cromwell’s share of equity (%) 27.8 50.0 - - 27.8 50.0 - - -

Cromwell’s share of net assets 589.7 51.5 14.4 655.6 600.0 50.8 - 13.3 664.1

Goodwill - - 6.6 6.6 - - - 6.6 6.6

Carrying amount 589.7 51.5 21.0 662.2 600.0 50.8 - 19.9 670.7

Movement in carrying amounts:

Opening balance at 1 July 600.0 50.8 19.9 670.7 620.7 51.5 21.4 18.9 712.5

Investment – net of loans from investees - 3.8 1.1 4.9 0.1 - - - 0.1

Disposals - - (0.2) (0.2) (1.2) - - (6.6) (7.8)

Share of (loss) / profit (14.1) (5.2) 0.8 (18.5) 38.0 1.4 (9.4) 11.3 41.3

Less: dividends / distributions received (41.1) - (2.7) (43.8) (34.5) - - (3.7) (38.2)

Impairment - (1.9) - (1.9) (1.4) -

- - (1.4)

Reclassified as held for sale - - - - - - (12.0) - (12.0)

Foreign exchange difference 44.9 4.0 2.1 51.0 (21.7) (2.1) - - (23.8)

Carrying amount at 30 June 589.7 51.5 21.0 662.2 600.0 50.8 - 19.9 670.7

Summarised statements of comprehensive income:

Revenue 352.1 13.1 19.3 384.5 338.4 12.8 35.6 40.6 427.4

Expenses (393.7) (22.9) (18.3) (434.9) (197.4) (10.0) (45.0) (19.0) (271.4)

Total comprehensive (loss) / profit (41.6) (9.8) 1.0 (50.4) 141.0 2.8 (9.4) 21.6 156.0

Share of (loss) / profit (14.1) (5.2) 0.8 (18.5) 38.0 1.4 (9.4) 11.3 41.3

(1) At year end Cromwell owned 27.8% of CEREIT, the Trust owned 27.4% (2022: 27.8% and 27.4% respectively).

(2) At year end Cromwell and the Trust owned 50.0% of Ursynów (2022: 50.0%).

(3) Cromwell had rights to a disproportionate share of LDK’s profits (currently 100%) until a certain internal rate of return (IRR) threshold is achieved in respect of its capital invested. As of 30 June 2022, Cromwell’s investment was reclassified as held for

sale and subsequently sold in October 2022. Refer to note 20.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT100

10. Investments at fair value through proﬁt or loss

A) OVERVIEW

This note provides an overview and detailed financial information of Cromwell’s investments that are classified as financial

assets at fair value through profit or loss. Below is information about Cromwell’s investments in unlisted property and

share related trusts whereby Cromwell holds less than 20% of the issued capital in the investee. Such investments are

classified as investments at fair value through profit or loss which are carried at fair value in the Balance Sheet with

adjustments to the fair value recorded in profit or loss and include co-investments in European wholesale funds managed

by Cromwell and any other relevant financial assets.

Cromwell Trust

2023

2022

2023

2022

Investment in Cromwell unlisted fund 17.7 20.4 17.7 20.4

Investment in wholesale funds 2.9 2.9 - -

Total investments at fair value through profit or loss 20.6 23.3 17.7 20.4

B) ACCOUNTING POLICY

Investments at fair value through profit or loss are financial assets held for trading which are acquired principally for

the purpose of selling in the short term with the intention of making a profit. Financial assets at fair value through

profit or loss also include financial assets which upon initial recognition are designated as such. These include

financial assets that are not held for trading purposes and which may be sold. These are investments in exchange

traded equity instruments and unlisted trusts.

At initial recognition, Cromwell measures a financial asset at its fair value. Transaction costs of financial assets

carried at fair value through profit or loss are expensed in the Statement of Profit or Loss.

Subsequent to initial recognition, Cromwell continues to measure all equity investments at fair value. The fair

values of quoted investments are based on current bid prices. If the market for a financial asset is not active (e.g.

for unlisted securities), Cromwell establishes fair value by using valuation techniques. These include reference

to the fair values of recent arm’s length transactions, involving the same instruments or other instruments that

are substantially the same, discounted cash flow analysis and pricing models to reflect the issuer’s specific

circumstances.

Changes in the fair value of equity investments at fair value through profit or loss are recognised in the Statement of

Profit or Loss as applicable.

For methods used to measure the fair value measurement of Cromwell’s and the Trust’s investments at fair value

through profit or loss refer to note 14.

F) SUMMARISED FINANCIAL INFORMATION FOR JOINT VENTURES AND EQUITY ACCOUNTED INVESTMENTS OWNED BY CROMWELL

As at 30 June 2023

As at 30 June 2022

CEREIT

(1)

Ursynów

(2)

Other Total CEREIT

(1)

Ursynów

(2)

LDK

(3)

Other Total

Summarised Balance Sheets:

Cash and cash equivalents 230.3 10.3 6.3 246.9 80.1 6.3 - 11.5 97.9

Other current assets 187.2 0.4 13.2 200.8 27.8 0.9 - 7.4 36.1

Total current assets 417.5 10.7 19.5 447.7 107.9 7.2 - 18.9 134.0

Investment properties 3,769.9 163.6 - 3,933.5 3,897.7 158.9 - - 4,056.6

Other non-current assets 47.1 0.5 26.0 73.6 21.3 0.6 - 26.8 48.7

Total non-current assets 3,817.0 164.1 26.0 4,007.1 3,919.0 159.5 - 26.8 4,105.3

Total assets 4,234.5 174.8 45.5 4,454.8 4,026.9 166.7 - 45.7 4,239.3

Financial liabilities 77.8 - 12.8 90.6 99.8 - - 6.3 106.1

Other current liabilities 66.9 3.7 0.4 71.0 50.3 3.9 - 0.1 54.3

Total current liabilities 144.7 3.7 13.2 161.6 150.1 3.9 - 6.4 160.4

Financial liabilities 1,865.6 62.0 - 1,927.6 1,616.0 51.6 - 5.6 1,673.2

Other non-current liabilities 102.4 6.1 2.6 111.1

101.8 9.7 - 2.9 114.4

Total non-current liabilities 1,968.0 68.1 2.6 2,038.7 1,717.8 61.3 - 8.5 1,787.6

Total liabilities 2,112.7 71.8 15.8 2,200.3 1,867.9 65.2 - 14.9 1,948.0

Net assets 2,121.8 103.0 29.7 2,254.5 2,159.0 101.5 - 30.8 2,291.3

Carrying amount of investment:

Cromwell’s share of equity (%) 27.8 50.0 - - 27.8 50.0 - - -

Cromwell’s share of net assets 589.7 51.5 14.4 655.6 600.0 50.8 - 13.3 664.1

Goodwill - - 6.6 6.6 - - - 6.6 6.6

Carrying amount 589.7 51.5 21.0 662.2 600.0 50.8 - 19.9 670.7

Movement in carrying amounts:

Opening balance at 1 July 600.0 50.8 19.9 670.7 620.7 51.5 21.4 18.9 712.5

Investment – net of loans from investees - 3.8 1.1 4.9 0.1 - - - 0.1

Disposals - - (0.2) (0.2) (1.2) - - (6.6) (7.8)

Share of (loss) / profit (14.1) (5.2) 0.8 (18.5) 38.0 1.4 (9.4) 11.3 41.3

Less: dividends / distributions received (41.1) - (2.7) (43.8) (34.5) - - (3.7) (38.2)

Impairment - (1.9) - (1.9) (1.4) -

- - (1.4)

Reclassified as held for sale - - - - - - (12.0) - (12.0)

Foreign exchange difference 44.9 4.0 2.1 51.0 (21.7) (2.1) - - (23.8)

Carrying amount at 30 June 589.7 51.5 21.0 662.2 600.0 50.8 - 19.9 670.7

Summarised statements of comprehensive income:

Revenue 352.1 13.1 19.3 384.5 338.4 12.8 35.6 40.6 427.4

Expenses (393.7) (22.9) (18.3) (434.9) (197.4) (10.0) (45.0) (19.0) (271.4)

Total comprehensive (loss) / profit (41.6) (9.8) 1.0 (50.4) 141.0 2.8 (9.4) 21.6 156.0

Share of (loss) / profit (14.1) (5.2) 0.8 (18.5) 38.0 1.4 (9.4) 11.3 41.3

(1) At year end Cromwell owned 27.8% of CEREIT, the Trust owned 27.4% (2022: 27.8% and 27.4% respectively).

(2) At year end Cromwell and the Trust owned 50.0% of Ursynów (2022: 50.0%).

sale and subsequently sold in October 2022. Refer to note 20.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 101

Finance and Capital Structure

This section of the annual financial report provides further information on Cromwell’s and the Trust’s capital

that comprises debt and stapled securityholders’ equity and reserves. The Board of Directors is responsible for

Cromwell’s capital management strategy. Capital management is an integral part of Cromwell’s risk management

framework and seeks to safeguard Cromwell’s ability to continue as a going concern while maximising

securityholder value through optimising the level and use of capital resources and the mix of debt and equity

funding.

This section outlines the financial risks that Cromwell and the Trust are exposed to and how these risks are

managed as part of Cromwell’s capital management.

11. Interest bearing liabilities

A) OVERVIEW

Cromwell and the Trust borrow funds from financial institutions and investors (the latter in the form of convertible bonds)

to partly fund the acquisition of income producing assets. A significant proportion of these borrowings are generally fixed

either directly or through the use of interest rate swaps/options/caps and have a fixed term. This note provides information

about Cromwell’s debt facilities, including maturity dates, security provided and facility limits.

Cromwell Trust

2023 2022 2023 2022

Limit

Drawn

Limit

Drawn

Limit

Drawn

Limit

Drawn

Current

Unsecured

Convertible bond - - 205.0 205.0 - - 205.0 205.0

Lease liabilities - 5.2 - 5.9 - 0.4 - 0.4

Secured

Polish Euro facilities 137.6 137.6 - - 137.6 137.6 - -

Italian Euro facilities - - 0.8 0.8 - - 0.8 0.8

Total current 137.6 142.8 205.8 211.7 137.6 138.0 205.8 206.2

Non-current

Unsecured

Euro / GBP facility 286.8 286.8 341.9 283.4 286.8 286.8 341.9 283.4

Lease liabilities - 17.1 - 20.3 - 5.6 - 5.0

Secured

Bilateral loan facilities

(1)

1,560.0 1,188.5 1,560.0 1,293.5 1,560.0 1,188.5 1,560.0 1,293.5

Development loan facility –

AUD

(2)

95.9 87.0 113.1 77.2 95.9 87.0 113.1 77.2

Polish Euro facilities 108.1 108.1 270.7 270.7 108.1 108.1 270.7 270.7

Italian Euro facilities

(3)

- - 45.3 45.3 - - 45.3 45.3

Unamortised transaction

costs

(6.2) - (10.4) - (6.2) - (10.4)

Total non-current 2,050.8 1,681.3 2,331.0 1,980.0 2,050.8 1,669.8 2,331.0 1,964.7

Total interest bearing

liabilities

2,188.4 1,824.1 2,536.8 2,191.7 2,188.4 1,807.8 2,536.8 2,170.9

(1) Under the financial undertakings of the Bilateral loan facilities $168.4 million is currently available to be drawn upon.

(2) Under the Development loan facility $5.2 million is currently available to be drawn upon.

(3) Italian Euro facilities have been reclassified as held for sale at 30 June 2023 upon Cromwell entering into an agreement with Value Partners to divest 50% of the

units in CIULF, refer to note 20 for further information.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT102

B) MATURITY PROFILE

At balance date, the notional principal amounts and period of expiry of all of Cromwell’s and the Trust’s interest bearing

liabilities (as well Italian Euro facilities classified as held for sale), excluding lease liabilities, is as follows:

Cromwell Trust

2023

2022

2023

2022

1 Year 137.6 205.8 137.6 205.8

2 Years 702.8 571.6 702.8 571.6

3 Years 128.8 648.2 128.8 648.2

4 Years 837.7 125.3 837.7 125.3

5 Years 50.0 575.0 50.0 575.0

6 Years - 50.0 - 50.0

C) DETAILS OF FACILITIES

i) Euro / GBP facility

This revolving facility is syndicated and is split into two tranches A, and B (30 June 2022: A & B). Interest is payable on all

tranches in arrears and is calculated as EURIBOR plus a margin. All principal amounts outstanding are due at the expiry

of the facilities. During the period tranches A & B were extended with an expiry date in September 2024. As part of this

extension, a newly established tranche C was created with an expiry date in September 2023, which was repaid in full and

cancelled before 30 June 2023.

ii) Secured bilateral loan facilities

Secured Bilateral Loan Facilities (SBLF) can be held with multiple providers. All SBLFs are secured pari passu by first

registered mortgages over a pool of investment properties. Interest is payable quarterly in arrears calculated as BBSY rate

plus a loan margin except for one facility (see below). Each provider individually contracts its commitment amount, expiry

date and fee structure and can be repaid individually.

Details of SBLFs for Cromwell and the Trust by their expiry date are as follows:

2023 2022

Limit

Drawn

Limit

Drawn

Facilities expiring Jun-24 - - 200.0 17.5

Facilities expiring Mar-25 - - 50.0 50.0

Facilities expiring Jun-25 575.0 329.0 575.0 521.0

Facilities expiring Feb-26 20.0 20.0 20.0 20.0

Facilities expiring Jun-26 60.0 60.0 60.0 60.0

Facilities expiring Jun-27 825.0 729.5 575.0 575.0

Facilities expiring Feb-28 80.0 50.0 80.0 50.0

Total SBLF’s

(1)

1,560.0 1,188.5 1,560.0 1,293.5

(1) Under the financial undertakings of the Bilateral loan facilities $168.4 million is currently available to be drawn upon.

iii) Development loan facility - AUD

This is two secured facilities in relation to the asset enhancement initiative at the property at 475 Victoria Avenue, NSW.

Interest is payable both quarterly (Facility A) and monthly (Facility B) in arrears is calculated as BBSY rate plus a loan

margin. The facility expires in April 2025.

iv) Polish Euro facilities

These facilities are secured by first registered mortgage over investment property held by CPRF. Interest is payable

quarterly in arrears calculated as the 3-month EURIBOR rate plus a margin. During the period one of the existing facilities

was extended with a new expiry date in January 2024 which required principal repayments of €10.49 million ($16.5 million)

during the 2023 calendar year. The €10.49 million ($16.5 million) was repaid in January 2023. The other facility expires in

July 2026.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 103

v) Italian loan facilities

Cromwell and the Trust entered into a secured facility in relation to the investment into the Cromwell Italy Urban Logistics

Fund. Interest is payable quarterly in arrears calculated as the EURIBOR rate plus a loan margin. The facility is composed

of two tranches (2022: three tranches, third tranche was fully repaid and cancelled in July 2022) with expiry dates in

October 2025. The two remaining tranches have been reclassified as held for sale at 30 June 2023, as Cromwell has

entered into an agreement to sell 50% of the units in the Cromwell Italy Urban Logistics Fund.

vi) Convertible bonds

During the 2018 financial year Cromwell issued 2,300 convertible bonds with a face value of €100,000 each, amounting to

a total gross face value of €230.0 million ($370.0 million on date of issue).

In June 2022, Cromwell issued a market notice to all bond holders offering to redeem the bonds in cash for 99.75% of the

face value. As a result of this process 951 of the 2300 bonds were redeemed, totalling $142.0 million (€94.9 million).

During the year, the Optional Put, which was available to bond holders was exercised by 1,325 of the remaining 1,349 bond

holders in exchange for cash equal to 100% of the face value. The convertible bonds of €132.5 million ($193.4 million) plus

any accrued interest was paid to the bond holders by Cromwell on 1 August 2022 utilising cash on hand and existing debt

facilities. The remaining 24 bonds were compulsorily acquired by Cromwell in September 2022 in accordance with the

terms and conditions of the bonds.

vii) Convertible bond – conversion features

The conversion feature of the convertible bonds represented an embedded derivative financial instrument in the host debt

contract. The embedded derivative was measured at fair value and deducted from the carrying amount of the convertible

bond (which is carried at amortised cost) and separately disclosed as a derivative financial liability on the face of the

Balance Sheet.

Considering the transactions that have occurred and are detailed in note 11(c)(vi), the conversion feature had been valued

at $nil as at 30 June 2022.

Cromwell Trust

Convertible bond – movements

2023

2022

2023

2022

Face value of bonds issued – March 2018 370.0 370.0 370.0 370.0

Derivative financial instruments – conversion feature (23.5) (23.5) (23.5) (23.5)

Convertible bond carrying amount at inception 346.5 346.5 346.5 346.5

Movements in previous years (141.5) 4.3 (141.5) 4.3

Carrying amount at 1 July 205.0 350.8 205.0 350.8

Amortisation - effective interest rate - 11.9 - 11.9

Redemption of bonds (196.7) (142.0) (196.7) (142.0)

Movements in exchange rate (8.3) (15.7) (8.3) (15.7)

Total carrying amount at 30 June - 205.0 - 205.0

viii) Lease liabilities

Cromwell recognises lease liabilities and related right-of-use assets in respect of various premises, property, plant and

equipment and motor vehicle leases. The leases in respect of assets in Australia, Europe and Singapore have varying

terms and are subject to varying rates of interest. See note 21 for further information.

Below is a maturity table of minimum lease payments in relation to leases in existence at the reporting date.

Cromwell Trust

2023

2022

2023

2022

Within one year 5.2 5.9 0.4 0.4

Later than one year but not later than five years 17.2 15.7 1.7 1.5

Greater than five years 18.5 15.3 14.1 13.0

Total lease commitments 40.9 36.9 16.2 14.9

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT104

D) ACCOUNTING POLICIES

Interest bearing liabilities are initially recognised at fair value, net of transaction costs incurred. Interest bearing

liabilities are subsequently measured at amortised cost using the effective interest rate method. Under this method

fees, costs, discounts and premiums directly related to the financial liability are spread over its expected life.

The fair value of the interest bearing liability portion of a convertible bond is determined using a market interest

rate for an equivalent non-convertible bond. This amount is recorded as an interest bearing liability on an amortised

cost basis until extinguished on conversion or maturity of the bonds. The remainder of the proceeds is allocated to

the derivative conversion feature. This is recognised as a financial liability if the convertible bond does not meet the

“fixed-for-fixed” rule, otherwise it is included in shareholders’ equity.

Borrowing costs incurred on funds borrowed for the construction of a property are capitalised, forming part of the

construction cost of the asset. Capitalisation ceases upon practical completion of the property. Other borrowing

costs are expensed.

For information in respect of accounting policies in relation to lease liabilities see note 21.

12. Derivative ﬁnancial instruments

A) OVERVIEW

Cromwell’s and the Trust’s derivative financial instruments consist of interest rate swap, interest rate cap and interest

rate collar contracts and the conversion option on the convertible bond. Derivative financial instruments are accounted

for at fair value. The table below is a summary of Cromwell’s and the Trust’s fair values of derivative financial instruments

disclosed in the Consolidated Balance Sheet.

Cromwell Trust

2023

2022

2023

2022

Current assets

Interest rate cap contracts 28.0 13.3 28.0 13.3

28.0 13.3 28.0 13.3

Non-current assets

Interest rate cap contracts 28.5 42.6 28.5 42.6

Total derivative financial instruments (assets) 56.5 55.9 56.5 55.9

B) INTEREST RATE DERIVATIVES

Cromwell and the Trust use 3 different types of interest rate derivatives to mitigate the risk of interest rates:

• interest rate swap contracts are used to fix interest on floating rate borrowings;

• interest rate cap contracts are used to cap interest on floating rate borrowings; and

• interest rate collar contracts are used to set a cap on rising interest rates on floating rate borrowings whilst also

setting a floor on declining interest rates on floating rate borrowings.

Maturity profile

At balance date, the notional principal amounts and period of expiry of all of Cromwell’s and the Trust’s interest rate

derivatives are as follows:

Cromwell and Trust

2023

2022

Less than 1 year 181.5 145.0

1 – 2 years 415.0 187.8

2 – 3 years 606.0 252.0

3 – 5 years - 400.0

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 105

Hedging profile

The table below provides an overview of the hedging of Cromwell’s and the Trust’s borrowings through interest rate swaps,

interest rate cap contracts and interest rate collar contracts at balance date:

2023 2022

Hedge

contract

notional

Average

strike

price

Interest

bearing

liability

Percent

hedged

Hedge

contract

notional

Average

strike

price

Interest

bearing

liability

Percent

hedged

Secured bilateral loan facility

Interest rate cap contracts 503.0 0.87% 400.0 0.28%

Interest rate swap contracts 180.0 1.37% 180.0 1.37%

Interest rate collar contracts 60.0 2.75% - -

Fixed rate loan 60.0 3.20% 60.0 60.0 3.20% 60.0

Total – Secured bilateral loan

facility

803.0 1,188.5 67.56% 640.0 1,293.5 49.48%

Secured loan facilities

Interest rate cap contracts 72.0 1.00% 87.0 82.76% 72.0 1.00% 77.2 93.26%

Secured Polish Euro facility 1

Interest rate cap contracts 65.5 2.00% 108.1 60.59% 60.7 2.00% 101.2 59.88%

Secured Polish Euro facility 2

Interest rate swap contracts 116.0 2.00% 137.6 84.30% 145.0 (0.28%) 169.5 85.55%

Secured Italian Euro facilities 1

& 2

(1)

- - 48.9 - - - 46.1 -

Euro / GBP facility - - 286.8 - - - 283.4 -

Convertible Bond - - - - 205.0 2.50% 205.0 100%

Total 1,056.5 1,856.9 56.90% 1,122.7 2,175.9 51.59%

(1) Italian facilities have been included even though they are shown as held for sale as at 30 June 2023, in order to provide a clear presentation of all of Cromwell’s

debt facilities and the related interest rate derivatives.

C) CONVERSION FEATURE  CONVERTIBLE BOND

The conversion option amount represented the additional value provided to convertible bond holders compared with the

same corporate bond that would have no feature to convert the bonds into Cromwell stapled securities at the end or

during the term of the bond. For accounting purposes such a conversion feature was accounted for separately from the

bond as a derivative financial instrument and was carried at fair value.

During the year, the Optional Put, which was available to bond holders was exercised by 1,325 of the remaining 1,349 bond

holders in exchange for cash equal to 100% of the face value. The convertible bonds of €132.5 million ($193.4 million)

plus any accrued interest was paid to the bond holders by Cromwell on 1 August 2022 utilising cash on hand and existing

debt facilities. The remaining 24 bonds were compulsorily acquired by Cromwell in September 2022 in accordance with

the terms and conditions of the bonds. In the prior financial year, the fair value of the derivative was written down to $nil.

Movements of the conversion features of the convertible bonds is as follows:

Cromwell and Trust

2023

2022

Derivative financial liability at 1 July - 5.5

Fair value (gain) / loss - (5.2)

Foreign exchange difference - (0.3)

Balance at 30 June - -

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT106

D) ACCOUNTING POLICY

Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is

entered into and are subsequently remeasured to fair value at balance date. Derivatives are carried as assets when

their fair value is positive and as liabilities when their fair value is negative.

13. Other ﬁnancial assets and ﬁnancial liabilities

A) OVERVIEW

This note provides further information about material financial assets and liabilities that are incidental to Cromwell’s and

the Trust’s trading activities, being receivables and trade and other payables, as well as information about restricted cash.

B) RECEIVABLES

Cromwell Trust

2023

2022

2023

2022

Current

Trade and other receivables at amortised cost 40.6 34.5 14.7 16.9

Loans at amortised cost - other 0.7 3.7 - -

Receivables – current 41.3 38.2 14.7 16.9

Non-current

Loans at amortised cost – joint venture partners 30.5 25.4 30.5 25.4

Loans at amortised cost – inter-group - - 20.6 89.5

Loans at amortised cost – other

(1)

7.8 3.1 - -

Total receivables – non-current 38.3 28.5 51.1 114.9

(1) Includes loans to related parties.

Loans – joint venture partners

Ursynów joint venture

During the prior financial year Cromwell and the Trust contributed a loan of $26.8 million (€17.0 million) to Ursynów,

which the joint venture used to repay an external debt facility. The balance receivable at year end was $30.5 million

(2022: $25.4 million).

Loans - inter-group

The Trust has provided a loan facility to the Company of €100.0 million. The loan balance was €12.6 million ($20.6 million)

(2022: €54.8 million ($83.3 million)) at balance date. The facility is unsecured and expires in February 2029.

During the prior financial year the Trust provided a new loan facility to the Company of $30.0 million in relation to the

transfer of the development property at 19 National Circuit, ACT. The loan balance at year end was $nil (June 2022:

$6.1 million). The facility is unsecured and expires in September 2026.

C) TRADE AND OTHER PAYABLES

Cromwell Trust

2023

2022

2023

2022

Trade and other payables 45.4 40.7 17.7 20.7

Lease incentives payables 22.5 31.1 22.5 31.1

Tenant security deposits 1.9 1.5 1.9 1.5

Trade and other payables 69.8 73.3 42.1 53.3

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 107

D) ACCOUNTING POLICY

Trade receivables and loans at amortised cost

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost, less

any expected credit losses. Operating lease receivables of investment properties are due on the first day of each

month, payable in advance.

Note: as a result of current global economic impacts Cromwell has undertaken a comprehensive review of tenant

receivables. All tenant receivables not considered to be recoverable have been fully provided for.

Trade payables

Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost. These

amounts represent liabilities for goods and services provided to Cromwell prior to the end of the year and which are

unpaid. The amounts are usually unsecured and paid within 30-60 days of recognition.

14. Financial risk management

A) OVERVIEW

Cromwell’s activities expose it to a variety of financial risks which include credit risk, liquidity risk and market risk.

Cromwell’s overall risk management program focuses on managing these risks and seeks to minimise potential adverse

effects on the financial performance of Cromwell.

Cromwell’s management of treasury activities is centralised and governed by policies approved by the Directors who

monitor the operating compliance and performance as required. Cromwell has policies for overall risk management

as well as policies covering specific areas such as identifying risk exposure, analysing and deciding upon strategies,

performance measurement, the segregation of duties and other controls around the treasury and cash management

functions.

Cromwell’s risk exposures and techniques used to manage these are summarised below:

Risk Definition of risk Cromwell’s exposure Cromwell’s management of risk

Credit risk

(Section 14(b))

The risk a counterparty

will default on its

contractual obligations

under a financial

instrument resulting in a

financial loss to Cromwell.

• Cash and cash

equivalents;

• Receivables;

• Derivative financial

instruments;

• Assets held for

sale.

Cromwell manages this risk by:

• establishing credit limits for counterparties and

managing exposure to individual entities;

• monitoring the credit quality of all financial assets

in order to identify any potential adverse changes

in credit quality;

• derivative counterparties and cash transactions,

when utilised, are transacted with high credit

quality financial institutions;

• regularly monitoring loans and receivables on an

ongoing basis; and

• regularly monitoring the performance of

associates on an ongoing basis.

Liquidity risk

(Section 14(c))

The risk Cromwell will

default on its contractual

obligations under a

financial instrument.

• Payables;

• Interest bearing

liabilities;

• Derivative financial

instruments.

Cromwell manages this by:

• maintaining sufficient cash reserves and undrawn

finance facilities to meet ongoing liquidity

requirements;

• preparation of rolling forecasts of short-term and

long-term liquidity requirements;

• monitoring maturity profile of interest bearing

liabilities and putting in place strategies to

ensure all maturing interest bearing liabilities are

refinanced significantly ahead of maturity.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT108

Risk Definition of risk Cromwell’s exposure Cromwell’s management of risk

Market risk –

price risk

(Section 14(d))

The risk that the fair value

of financial assets at fair

value through profit or

loss will fluctuate.

• Investments at fair

value through profit

or loss.

Cromwell has minimal exposure to this risk and

therefore does not actively manage this risk.

Market risk –

interest rate

risk

(Section

14(e))

The risk that the fair value

or cash flows of financial

instruments will fluctuate

due to changes in market

interest rates.

• Borrowings at

variable or fixed rates;

• Derivative financial

instruments.

Cromwell manages this risk through interest rate

hedging arrangements (swap or cap contracts) on not

less than 50% of Cromwell’s borrowings.

Market risk

– foreign

exchange risk

(Section 14(f))

The risk that the fair value

of a foreign currency asset

or liability will fluctuate

due to changes in foreign

currency rates.

• Cash and cash

equivalents;

• Receivables;

• Investments in foreign

subsidiaries;

• Investments in foreign

equity accounted

investments;

• Payables;

• Foreign currency

borrowings.

Cromwell manages this risk by financing Cromwell’s

foreign currency investments through foreign currency

borrowings providing a natural hedge.

B) CREDIT RISK

The maximum exposure to credit risk at balance date is the carrying amount of financial assets recognised in the

Consolidated Balance Sheet of Cromwell.

Cash is held with Australian, New Zealand, United Kingdom, Singapore and European financial institutions. Interest rate

derivative counterparties are all Australian and European financial institutions.

C) LIQUIDITY RISK

The contractual maturity of Cromwell’s and the Trust’s financial liabilities at balance date are shown in the table below.

It shows undiscounted contractual cash flows required to discharge Cromwell’s financial liabilities, including interest at

current market rates.

Cromwell Trust

1 year

or less

Greater

than 1

year - 2

years

Greater

than 2

years -

5 years

Over 5

years

Total

1 year

or less

Greater

than 1

year - 2

years

Greater

than 2

years -

5 years

Over 5

years

Total

2023

Trade and other

payables

69.8 - - - 69.8 42.1 - - - 42.1

Dividends /

distribution payable

36.0 - - - 36.0 36.0 - - - 36.0

Interest bearing

liabilities

245.1 790.9 1,074.7 - 2,110.7 245.1 790.9 1,074.7 - 2,110.7

Liabilities directly

related to assets

held for sale

3.2 2.7 49.8 - 55.7 3.2 2.7 49.8 - 55.7

Lease liabilities 5.2 8.6 8.6 18.5 40.9 0.4 0.9 0.9 14.1 16.3

Total financial

liabilities

359.3 802.2 1,133.1 18.5 2,313.1 326.8 794.5 1,125.4 14.1 2,260.8

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 109

Cromwell Trust

1 year

or less

Greater

than 1

year - 2

years

Greater

than 2

years -

5 years

Over 5

years

Total

1 year

or less

Greater

than 1

year - 2

years

Greater

than 2

years -

5 years

Over 5

years

Total

2022

Trade and other

payables

73.3 - - - 73.3 53.3 - - - 53.3

Dividends /

distribution payable

42.6 - - - 42.6 42.6 - - - 42.6

Interest bearing

liabilities

265.9 620.8 1,431.6 51.4 2,369.7 265.9 620.8 1,431.6 51.4 2,369.7

Lease liabilities 5.9 7.8 7.9 15.3 36.9 0.4 0.7 0.8 13.0 14.9

Total financial

liabilities

387.7 628.6 1,439.5 66.7 2,522.5 362.2 621.5 1,432.4 64.4 2,480.5

D) MARKET RISK  PRICE RISK

Cromwell and the Trust are exposed to price risk in relation to its unlisted equity securities (refer note 10). The impact

to Cromwell and the Trust of a 10% decrease in the value of the investment in the unlisted equity securities is a decrease

to Profit and Equity of $2.1 million (2022: $2.3 million) for Cromwell and $1.8 million (2022: $2.0 million) for the Trust. The

impact to Cromwell and the Trust of a 10% increase in the value of the investment in the unlisted equity securities is an

increase to Profit and Equity of $2.1 million (2022: $2.3 million) for Cromwell and $1.8 million (2022: $2.0 million) for

the Trust.

E) MARKET RISK  INTEREST RATE RISK

Cromwell’s interest rate risk primarily arises from interest bearing liabilities. Interest bearing liabilities issued at variable

rates expose Cromwell to cash flow interest rate risk. Interest bearing liabilities issued at fixed rates expose Cromwell to

fair value interest rate risk. Cromwell’s policy is to effectively maintain hedging arrangements on not less than 50% of its

interest bearing liabilities. At balance date interest on a total of 56.90% (2022: 51.59%) of Cromwell’s total borrowings is

hedged through fixed rate interest rate swap and cap contracts which effectively fix or limit the amount of variable interest

paid. For details about notional amounts and expiries of Cromwell’s and the Trust’s interest rate swap and interest rate

cap contracts refer to note 12.

The below table shows the impact on profit after tax and equity if interest rates changed by 100 basis points based on net

interest bearing liabilities and interest rate derivatives held at year-end with all other variables held constant. The impact

on profit after tax and equity includes impact on finance costs (cash flow risk) and the fair value of derivative financial

instruments (fair value risk).

Interest rate increase / (decrease) of: +1% -1%

Profit

Equity

Profit

Equity

2023

Cromwell 9.5 9.5 (8.6) (8.6)

Trust 8.9 8.9 (8.1) (8.1)

2022

Cromwell 9.2 9.2 (9.3) (9.3)

Trust 8.5 8.5 (8.6) (8.6)

F) MARKET RISK  FOREIGN EXCHANGE RISK

Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a

currency that is not the functional currency of the relevant currency of the relevant group entity.

Cromwell’s foreign exchange risk primarily arises from its investments in foreign subsidiaries and the investment in

CEREIT. The functional currency of these entities is Euro or Polish Zloty. No hedge accounting was applied in relation to

the net investment in the foreign subsidiaries.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT110

Cromwell’s and the Trust’s exposure to Euro foreign currency risk due to the ownership, funding and operation of the

investment property portfolios in Poland and Italy and the investment in CEREIT as well as overseas subsidiaries,

expressed in Australian dollars, was as follows:

Cromwell Trust

Euro foreign currency risk

2023

2022

2023

2022

Cash and cash equivalents 6.7 1.0 6.7 1.0

Receivables - - 20.6 83.3

Interest bearing liabilities – financial institutions (286.8) (283.4) (286.8) (283.4)

Interest bearing liabilities – convertible bond - (205.0) - (205.0)

Derivative financial instruments – conversion feature - - - -

Other - (1.3) 0.2 0.8

Total exposure (280.1) (488.7) (259.3) (403.3)

A change in the exchange rate of the Euro would have resulted in the following impact on Cromwell’s profit after

tax and equity:

2023 2022

Profit

Equity

Profit

Equity

Euro – Australian Dollar gains 1 cent in exchange 4.5 4.5 7.3 7.3

Euro – Australian Dollar loses 1 cent in exchange (4.7) (4.7) (7.5) (7.5)

Cromwell and the Trust also have exposure to Polish Złoty foreign currency risk due to the ownership and operation of the

investment property portfolio in Poland. Expressed in Australian dollars, this was as follows:

Cromwell Trust

Polish Złoty foreign currency risk

2023

2022

2023

2022

Cash and cash equivalents 15.3 15.5 14.4 15.5

Receivables 30.5 25.4 30.5 25.4

Other 0.2 0.6 0.2 0.6

Total exposure 46.0 41.5 45.1 41.5

A change in the exchange rate of the Polish Złoty of 1 cent would not result in a material impact on Cromwell’s profit after

tax and equity.

G) FAIR VALUE MEASUREMENT OF FINANCIAL INSTRUMENTS

Cromwell uses a number of methods to determine the fair value of its financial assets and financial liabilities. The

methods comprise the following:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either

directly (as prices) or indirectly (derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 111

The table below presents Cromwell’s and the Trust’s financial assets and liabilities measured and carried at fair value at

30 June 2023 and 30 June 2022 and the type of fair value measurement applied:

2023 2022

Cromwell Notes

Level 2

Level 3

Total

Level 2

Level 3

Total

Financial assets at fair value

Investments at fair value through

profit or loss

Unlisted equity securities 10(a) 17.7 2.9 20.6 20.4 2.9 23.3

Derivative financial instruments

Interest rate caps 12(a) 56.5 - 56.5 55.9 - 55.9

Total financial assets at fair value 74.2 2.9 77.1 76.3 2.9 79.2

2023 2022

Trust Notes

Level 2

Level 3

Total

Level 2

Level 3

Total

Financial assets at fair value

Investments at fair value through

profit or loss

Unlisted equity securities 10(a) 17.7 - 17.7 20.4 - 20.4

Derivative financial instruments

Interest rate caps 12(a) 56.5 - 56.5 55.9 - 55.9

Total financial assets at fair value 74.2 - 74.2 76.3 - 76.3

There were no transfers between the levels of fair value measurement during the current and prior financial years.

Also, there were no financial liabilities as at 30 June 2023 (2022: nil).

H) DISCLOSED FAIR VALUES

i) Valuation techniques used to derive Level 1 fair values

At balance date, Cromwell held no Level 1 assets. The fair value of financial assets traded in active markets is based on

their quoted market prices at the end of the reporting period without any deduction for estimated future selling costs.

ii) Valuation techniques used to derive Level 2 fair values

The fair value of financial instruments that are not traded in an active market is determined using valuation techniques.

These valuation techniques maximise the use of observable market data, assessed for the impact of current global

economic impacts where they are applicable and rely as little as possible on entity specific estimates. If all significant

inputs required to fair value an instrument are observable, the instrument is included in Level 2.

Fair value of investments at fair value through profit or loss

Level 2 assets held by Cromwell include unlisted equity securities in Cromwell managed investment schemes. The fair

value of these financial instruments is based upon the net tangible assets as publicly reported by the underlying unlisted

entity, adjusted for inherent risk where appropriate.

Fair value of interest rate swaps and caps

Level 2 financial assets and financial liabilities held by Cromwell include “Vanilla” fixed to floating interest rate swap and

interest rate cap derivatives (over-the-counter derivatives). The fair value of these derivatives has been determined using

pricing models based on discounted cash flow analysis which incorporates assumptions supported by observable market

data at balance date including market expectations of future interest rates and discount rates adjusted for any specific

features of the derivatives and counterparty or own credit risk.

iii) Valuation techniques used to derive Level 3 fair values

If the fair value of financial instruments is determined using valuation techniques and if one or more of the significant

inputs is not based on observable market data, the instrument is included in Level 3.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT112

Reconciliation from the opening balances to the closing balances for fair value measurements in Level 3 of the

fair value hierarchy:

Cromwell

Investments at fair value through profit or loss

2023

2022

Opening balance as at 1 July 2.9 8.9

Additions 1.3 0.5

Disposals - (4.5)

Fair value loss (1.4) (1.7)

Foreign exchange difference 0.1 (0.3)

Balance at 30 June 2.9 2.9

Fair value of investments at fair value through profit or loss

Level 3 assets held by Cromwell include co-investments in Cromwell Europe managed wholesale property funds. The

fair value of these investments is determined based on the value of the underlying assets held by the fund. The assets of

the fund are subject to regular external valuations which are based on discounted net cash inflows from expected future

income and/or comparable sales of similar assets. Appropriate discount rates determined by the independent valuer are

used to determine the present value of the net cash inflows based on a market interest rate adjusted for the risk premium

specific to each asset.

I) ACCOUNTING POLICY

Initial recognition and measurement

Financial assets and financial liabilities are recognised in Cromwell’s Balance Sheet when it becomes a party to the

contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. On initial recognition, financial assets

and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are

recognised net of transaction costs directly attributable to the acquisition of these financial assets or financial

liabilities. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair

value through profit or loss are recognised immediately in the Statement of Profit or Loss.

Financial assets

Classification and subsequent recognition and measurement

Subsequent to initial recognition Cromwell classifies its financial assets in the following measurement categories:

• Those to be measured at fair value (either through other comprehensive income, or through profit or loss); and

• Those to be measured at amortised cost.

The classification depends upon the whether the objective of Cromwell’s relevant business model is to hold financial

assets in order to collect contractual cash flows (business model test) and whether the contractual terms of the cash

flows give rise on specified dates to cash flows that are solely payments of principal and interest (cash flow test).

Financial assets recognised at amortised cost

Trade and other receivables are held for collection of contractual cash flows where those cash flows represent solely

payments of principal and interest and are measured at amortised cost. Interest income from these financial assets

is included in interest income using the effective interest rate method.

On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying

amount and the sum of the consideration received and receivable is recognised in the Statement of Profit or Loss.

Collectability of trade and other receivables is reviewed on an ongoing basis. Debts which are known to be

uncollectible are written off.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 113

Financial assets recognised at fair value through profit or loss

Assets that do not meet the criteria for amortised cost or recognition at fair value through other comprehensive

income are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently

measured at fair value through profit or loss is recognised in the Statement of Profit or Loss and presented net

within other gains / (losses) in the period in which it arises.

Impairment

Cromwell recognises a loss allowance for expected credit losses on trade receivables that are measured at

amortised cost and contract assets. The amount of expected credit losses is updated at each reporting date to

reflect changes in credit risk since initial recognition of the respective financial instrument.

For trade receivables, Cromwell applies the simplified approach permitted by AASB 9 Financial Instruments, which

requires expected lifetime credit losses to be recognised from initial recognition of the receivables. The expected

credit losses on these financial assets are estimated using a provision matrix based on Cromwell’s historical credit

loss experience adjusted for factors that are specific to the debtors, general economic conditions and an assessment

of both the current as well as the forecast direction of conditions at the reporting date, including time value of money

where appropriate.

Cromwell impairs a financial asset when there is information indicating that the debtor is in severe financial

difficulty and there is no realistic prospect of recovery.

Response to current global economic impacts

As a result of current global economic impacts Cromwell has undertaken a comprehensive review of the tenant

receivables schedule. Any and all tenant receivables not considered to be recoverable have been fully provided for

and are not included in the tenant receivables balance at year end.

Cromwell has also undertaken a review of its loan asset portfolio (including loans carried at fair value and loans

carried at amortised cost). This process involved a thorough examination of all loan receivable balances with

counterparties to assess the extent of expected credit losses that should be recognised. This resulted in no expected

credit losses to be recognised.

Financial liabilities and equity

Classification as debt or equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance

of the contractual arrangements and the definitions of a financial liability and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of

its liabilities.

Equity instruments issued by Cromwell are recognised at the value of the proceeds received, net of direct issue

costs. Repurchase of the Cromwell’s own equity instruments is recognised and deducted directly in equity. No gain

or loss is recognised in the Statement of Profit or Loss on the purchase, sale, issue or cancellation of Cromwell’s

own equity instruments.

Compound instruments

The component parts of convertible loan notes issued by Cromwell are classified separately as financial liabilities

and equity in accordance with the substance of the contractual arrangements and the definitions of a financial

liability and an equity instrument. A conversion option that will not be settled by the exchange of a fixed amount

of cash or another financial asset for a fixed number of the Cromwell’s own equity instruments is an embedded

derivative and not an equity instrument.

At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate

for a similar non-convertible instrument. This amount is recorded as a liability on an amortised cost basis using the

effective interest method until extinguished upon conversion or at the instrument’s maturity date.

The conversion option classified as an embedded derivative is determined by deducting the amount of the liability

component from the fair value of the compound instrument in its entirety. This component is recognised and

classified as a financial liability and categorised as being at fair value through profit or loss. This amount is

subsequently remeasured (see “Embedded derivatives” section below).

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT114

Financial liabilities

All financial liabilities are subsequently measured at amortised cost using the effective interest method or at fair

value through profit or loss.

Financial liabilities subsequently measured at amortised cost

Financial liabilities that are not contingent consideration of an acquirer in a business combination, held-for-trading,

or designated as at fair value through profit or loss, are subsequently measured at amortised cost using the effective

interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating

interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated

future cash payments (including all fees and points paid or received that form an integral part of the effective

interest rate, transaction costs and other premiums or discounts) through the expected life of the financial liability,

or (where appropriate) a shorter period, to the amortised cost of a financial liability.

Derecognition of financial liabilities

Cromwell derecognises financial liabilities when, and only when, its obligations are discharged, cancelled or have

expired. The difference between the carrying amount of the financial liability derecognised and the consideration

paid and payable is recognised in the Statement of Profit or Loss.

When Cromwell exchanges one debt instrument for another with substantially different terms with an existing

lender, such exchange is accounted for as an extinguishment of the original financial liability and the recognition of a

new financial liability. Similarly, Cromwell accounts for the substantial modification of terms of an existing liability or

part of it as an extinguishment of the original financial liability and the recognition of a new financial liability.

Derivative financial instruments

For information in relation to the accounting policies for derivative financial instruments, refer note 12(d).

15. Contributed equity

A) OVERVIEW

Issued capital of Cromwell includes ordinary shares in Cromwell Corporation Limited and ordinary units of Cromwell

Diversified Property Trust which are stapled to create Cromwell’s stapled securities. The shares of the Company and units

of the CDPT cannot be traded separately and can only be traded as stapled securities.

Stapled securities entitle the holder to participate in dividends and distributions as declared from time to time and the

proceeds on winding up. On a show of hands every holder of stapled securities present at a meeting in person, or by proxy,

is entitled to one vote, and upon a poll each stapled security is entitled to one vote.

Cromwell’s and the Trust’s issued capital at year-end were as follows:

Cromwell stapled securities Company shares CDPT units

2023

2022

2023

2022

2023

2022

Issued capital 2,618.9 2,618.9 207.3 207.3 2,072.8 2,072.8

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 115

B) MOVEMENTS IN CONTRIBUTED EQUITY

The following reconciliation summarises the movements in contributed equity. Issues of a similar nature have been

grouped and the issue price shown is the weighted average. Detailed information on each issue of stapled securities is

publicly available via the ASX.

Cromwell stapled

securities

Company shares CDPT units

Number of

securities

Issue

price $M

Issue

price $M

Issue

price $M

Opening balance at 1 July 2021 2,617,470,675 2,279.8 207.3 2,072.5

Exercise of performance rights 1,396,024 22.5¢ 0.3 4.2¢ - 18.3¢ 0.3

Balance at 30 June 2022 2,618,866,699 2,280.1 207.3 2,072.8

Movement during the year - - - - - - -

Balance at 30 June 2023 2,618,866,699 2,280.1 207.3 2,072.8

C) ACCOUNTING POLICY

The ordinary shares of the Company are stapled with the units of the Trust and are together referred to as stapled

securities. Stapled securities are classified as equity. Incremental costs directly attributable to the issue of new

shares, units or options are shown in equity as a deduction, net of tax, from the proceeds.

Where any group company purchases Cromwell’s equity instruments, for example as the result of a share buy-back

or a share-based payment plan, the consideration paid, including any directly attributable incremental costs (net of

income taxes) is deducted from equity attributable to the securityholders as treasury securities until the securities

are cancelled or reissued. Where such ordinary securities are subsequently reissued, any consideration received,

net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity

attributable to securityholders.

16. Reserves

A) OVERVIEW

Reserves are balances that form part of equity that record other comprehensive income amounts that are retained in the

business and not distributed until such time the underlying Balance Sheet item is realised. This note provides information

about movements in the other reserves disclosed in the Consolidated Balance Sheet and a description of the nature and

purpose of each reserve.

Security based payments

reserve (SBP)

This reserve is used to recognise the fair value of equity settled security based payments in

respect employee services. Refer to note 23 for details of Cromwell’s security based payments.

Fair value through other

comprehensive income

reserve (FVTOCI)

This reserve records changes in the fair value of investments classified as being at fair value

through other comprehensive income. The amount recorded in the reserve related to a pre-

stapling interest of a subsidiary of the Company in a subsidiary trust of the Trust. Upon the

disposal of the interest in the subsidiary on 30 June 2022, the reserve was released into Other

Comprehensive Income.

Treasury securities reserve The treasury securities reserve represents the cost of the securities Cromwell purchased in the

market and are held to satisfy options under the Group’s Performance Rights Plans. The number

of ordinary securities held at year end was 435,617 (2022: 700,000) which were purchased for

$0.2 million (2022: $0.5 million).

Foreign currency translation

reserve (FCTR)

This reserve records exchange differences arising on the translation of the foreign subsidiaries.

In addition, any foreign currency differences arising from inter-group loans are also transferred

to the foreign currency translation reserve upon consolidation as such loans form part of the net

investment in the foreign subsidiary.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT116

Security based

payments reserve

Fair value

through other

comprehensive

income reserve

Treasury

securities reserve

Foreign currency

translation

reserve

Total other

reserves

Cromwell

Trust

Cromwell

Trust

Cromwell

Trust

Cromwell

Trust

Cromwell

Trust

Balance at

1 July 2021

13.9 - 2.3 - - - 0.4 (11.9) 16.6 (11.9)

Net security based

payments

(0.1) - - - - - - - (0.1) -

Foreign exchange

differences

recognised in other

comprehensive

income

- - - - - - (45.2) (44.7) (45.2) (44.7)

Acquisition of

treasury securities

- - - - (0.5) - - - (0.5) -

Transfer of

FVOCI reserve to

Profit & Loss

- - (2.3) - - - - - (2.3) -

Balance at

30 June 2022

13.8 - - - (0.5) - (44.8) (56.6) (31.5) (56.6)

Net security based

payments

0.5 - - - - - - - 0.5 -

Foreign exchange

differences

recognised in other

comprehensive

income

- - - - -

- 89.4 86.1 89.4 86.1

Acquisition of

treasury securities

- - - - (1.6) - - - (1.6) -

Transfer of treasury

securities to option

holders

(1.0) - - - 1.0 - - - - -

Issue of treasury

securities to

employees

- - - - 0.9 - - - 0.9 -

Contribution of

exercise price for

options settled with

treasury securities

0.4 - - - - - - - 0.4 -

Balance at

30 June 2023

13.7 - - - (0.2) - 44.6 29.5 58.1 29.5

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 117

Group Structure

This section of the annual financial report provides information about the Cromwell Property Group structure

including parent entity information and information about controlled entities (subsidiaries).

17. Parent entity disclosures

A) OVERVIEW

The

Corporations Act 2001

(Cth) requires the disclosure of summarised financial information for the parent entity of a

consolidated group. Further, Australian Accounting Standards require stapled groups to identify the parent entity of the

group and identify equity attributable to the parent entity separately from other entities stapled to the parent entity.

The parent entity of the Cromwell stapled group is Cromwell Corporation Limited (the “Company”). The parent entity of the

Trust group is Cromwell Diversified Property Trust (“CDPT”).

B) SUMMARISED FINANCIAL INFORMATION OF THE COMPANY AND CDPT

Company CDPT

2023

2022

2023

2022

Results

(Loss) / profit after tax (29.2) (4.2) 27.9 166.9

Total comprehensive (loss) / income (29.2) (4.2) 27.9 166.9

Financial position

Current assets 3.5 17.1 55.9 172.9

Total assets 74.8 167.3 3,211.1 3,150.6

Current liabilities 7.6 - 41.1 52.3

Total liabilities 28.1 91.6 1,598.6 1,421.9

Net assets 46.7 75.7 1,612.5 1,728.7

Equity

Contributed equity 207.3 207.3 2,072.8 2,072.8

Reserves 13.5 13.3 - -

Accumulated losses (174.1) (144.9) (460.3) (344.1)

Total equity 46.7 75.7 1,612.5 1,728.7

C) COMMITMENTS

At balance date the Company and CDPT had no commitments (2022: none) in relation to capital expenditure contracted for

but not recognised as liabilities.

D) GUARANTEES PROVIDED

The Company and CDPT had provided guarantees in relation to the convertible bonds, however with the bonds being fully

redeemed during the year, the guarantees no longer exist. There are no other guarantees in place.

E) CONTINGENT LIABILITIES

At balance date the Company and CDPT had no contingent liabilities (2022: none).

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT118

F) ACCOUNTING POLICY

The financial information for the Company and CDPT is prepared on the same basis as the consolidated financial

statements, except for:

• Investments in subsidiaries and equity accounted investments – these are accounted for at cost less

accumulated impairment charges in the financial report of the parent entity. Distributions and dividends received

from subsidiaries and equity accounted investments are not eliminated and recognised in profit or loss.

• Tax consolidation legislation – the Company is the head entity of a tax consolidated group as outlined in note 7.

As the head entity, the Company recognises the current tax balances and the deferred tax assets for unused tax

losses and credits assumed from other members as well as its own current and deferred tax amounts. Amounts

receivable from or payable to the other members are recognised by the Company as intercompany receivables or

payables.

18. Controlled entities

A) COMPANY AND ITS CONTROLLED ENTITIES

Equity Holding

Name

Country of

registration

2023

2022

Cromwell Aged Care Holdings Pty Ltd Australia 100 100

Cromwell BT Pty Ltd Australia 100 100

Cromwell Capital Pty Ltd Australia 100 100

Cromwell Development Trust Australia 100 100

Cromwell Funds Management Limited Australia 100 100

Cromwell Holdings No 1 Pty Ltd Australia - 100

Cromwell Holdings No 2 Pty Ltd Australia - 100

Cromwell CMW Holdings Pty Ltd Australia 100 100

Cromwell Operations Pty Ltd Australia 100 100

Cromwell Project & Technical Solutions Pty Ltd Australia 100 100

Cromwell Property Securities Limited Australia 100 100

Cromwell Property Services Pty Ltd Australia 100 100

Cromwell Real Estate Partners Pty Ltd Australia 100 100

Cromwell Reit Holdings Pty Limited Australia 100 100

Cromwell Carparking Pty Ltd Australia 100 100

Votraint No. 662 Pty Limited Australia 100 100

Cromwell Property Group Czech Republic s.r.o. Czech Republic 100 100

Cromwell Denmark A/S Denmark 100 100

Cromwell Finland O/Y Finland 100 100

Cromwell France SAS France 100 100

Cromwell EREIT Management Germany GmbH Germany 100 100

Cromwell Germany GmbH Germany 100 100

Cromwell Property Group Italy SRL Italy 100 100

CPRF GP S.à r.l. Luxembourg 100 100

Cromwell EREIT Management Luxembourg S.à r.l. Luxembourg 100 100

Cromwell Investment Luxembourg S.à r.l. Luxembourg 100 100

Cromwell REIM Luxembourg S.à r.l. Luxembourg 100 100

Cromwell Central Europe B.V. Netherlands 100 100

Cromwell Netherlands B.V. Netherlands 100 100

Cromwell Property Group Poland Sp Zoo Poland 100 100

Cromwell EREIT Management Pte. Ltd. Singapore 100 100

Cromwell Sweden A/B

Sweden 100 100

Cromwell Asset Management UK Limited United Kingdom 100 100

Cromwell Capital Ventures UK Limited United Kingdom 100 100

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 119

Equity Holding

Name

Country of

registration

2023

2022

Cromwell CEE Coinvest LP United Kingdom - 100

Cromwell CEE Development Holdings Limited United Kingdom 100 100

Cromwell CEREIT Holdings Limited United Kingdom 100 100

Cromwell Coinvest CEIF LP United Kingdom 90 90

Cromwell Coinvest CEVAF l LP United Kingdom 100 100

Cromwell Corporate Secretarial Limited United Kingdom 100 100

Cromwell Development Holdings UK Limited United Kingdom 100 100

Cromwell Development Management UK Limited United Kingdom 100 100

Cromwell Director Limited United Kingdom 100 100

Cromwell Europe Limited United Kingdom 100 100

Cromwell European Holdings Limited United Kingdom 100 100

Cromwell European Management Services Limited United Kingdom 100 100

Cromwell GP United Kingdom 100 100

Cromwell Holdings Europe Limited United Kingdom 100 100

Cromwell Investment Holdings UK Limited United Kingdom 100 100

Cromwell Investment Management Services Limited United Kingdom 100 100

Cromwell Investment Services Limited United Kingdom 100 100

Cromwell Management Holdings Limited United Kingdom 100 100

Cromwell Poland Retail LLP United Kingdom 100 100

Cromwell Poland Retail UK Limited United Kingdom 100 100

Cromwell Promote CEIF LP United Kingdom 100 100

Cromwell Promote CEVAF l LP United Kingdom - 100

Cromwell Promote CPRF LP United Kingdom - 100

Cromwell Promote ECV LP United Kingdom - 100

Cromwell Promote HIG LP United Kingdom - 97

Cromwell WBP Poland LP United Kingdom 100 100

Cromwell YCM Coinvest LP United Kingdom 100 100

Cromwell YCM Promote LP United Kingdom 100 100

D.U.K.E. Combined GP Limited United Kingdom 100

IO Management Services Limited United Kingdom 100 100

Parc D’Activities 1 GP Limited United Kingdom - 100

The IO Group Limited United Kingdom

100 100

B) TRUST AND ITS CONTROLLED ENTITIES

Equity Holding

Name

Country of

registration

2023

2022

CDPT Finance Pty Ltd Australia 100 100

CDPT Finance No. 2 Pty Ltd Australia 100 100

Cromwell Diversified Property Trust No. 2 Australia - 100

Cromwell Diversified Property Trust No. 3 Australia - 100

Cromwell George Street Trust Australia 100 100

Cromwell Holdings Trust No 1 Australia - 100

Cromwell Holding Trust No 2 Australia - 100

Cromwell Holdings Trust No 4 Australia - 100

Cromwell HQ North Head Trust Australia 100 100

Cromwell HQ North Trust Australia 100 100

Cromwell Italy Partnership Australia 100 100

Cromwell Mary Street Property Trust Australia - 100

Cromwell Mary Street Planned Investment Australia - 100

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT120

Equity Holding

Name

Country of

registration

2023

2022

Cromwell McKell Building Trust Australia 100 100

Cromwell Newcastle Trust Australia 100 100

Cromwell Northbourne Planned Investment Australia 100 100

Cromwell NSW Portfolio Trust Australia 100 100

Cromwell Penrith Trust Australia 100 100

Cromwell Poland Holdings Trust Australia 100 100

Cromwell Property Fund Australia - 100

Cromwell Property Fund Trust No 2 Australia - 100

Cromwell Property Fund Trust No 3 Australia - 100

Cromwell SPV Finance Pty Ltd Australia 100 100

Cromwell Symantec House Trust Australia 100 100

Cromwell TGA Planned Investment Australia - 100

Cromwell VAC Finance Pty Ltd Australia 100 100

Cromwell Wollongong Trust Australia 100 100

Mascot Head Trust Australia 100 100

Mascot Trust Australia 100 100

Tuggeranong Head Trust Australia 100 100

Tuggeranong Trust Australia 100 100

Cromwell Italy Urban Logistics Fund Italy 100 100

CPRF S.C.A. Luxembourg 100 100

Cromwell European Logistics Fund Luxembourg - 100

Cromwell Logistics Fund Luxembourg 100 100

Next Real Estate Polish Retail S.à r.l. Luxembourg 100 100

Next Real Estate Polish Retail Holdco S.à r.l. Luxembourg 100 100

CH Bydgoszcz Sp Zoo Poland 100 100

CH Toruń Sp Zoo

Poland 100 100

CH Janki Sp Zoo Poland 100 100

CH Łódź Sp Zoo

Poland 100 100

CH Szczecin Sp Zoo Poland 100 100

CH Wrocław Sp Zoo Poland 100 100

CPRF Co Sp Zoo

Poland 100 100

HEL Poland Sp Zoo Poland 100 100

Cromwell Singapore Holdings Pte. Ltd. Singapore 100 100

CPRF Co Sp Zoo Poland 100 100

HEL Poland Sp Zoo Poland 100 100

Cromwell Singapore Holdings Pte. Ltd. Singapore 100 100

All new entities have been incorporated or acquired during the year. There were no business combinations during the year.

Entities, which Cromwell or the Trust controlled in the prior year with no equity holding in the current year have either

been deregistered or disposed of in the current year.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 121

19. Equity attributable to the Company and CDPT

A) OVERVIEW

Stapled entities are required to separately identify equity attributable to the parent entity from equity attributable to

other entities stapled to the parent.

B) EQUITY ATTRIBUTABLE TO THE COMPANY

The table below summarises equity, profit for the year and total comprehensive income for the year attributable

to the Company.

Attributable to Equity Holders of the Company

Contributed

equity

SBP

reserve

FVTOCI

reserve

Treasury

securities

reserve

FCT

reserve

Accumulated

losses

Total

Balance at 1 July 2021 207.3 13.9 2.3 - 12.3 (126.9) 108.9

Loss for the year - - - - - (10.5) (10.5)

Other comprehensive loss - - (2.3) - (0.5) - (2.8)

Total comprehensive loss - - (2.3) - (0.5) (10.5) (13.3)

Transactions with equity

holders in their capacity as

equity holders:

Acquisition of treasury

securities

- - - (0.5) - - (0.5)

Employee performance rights - (0.1) - - - - (0.1)

Total transactions with equity

holders

- (0.1) - (0.5) - - (0.6)

Balance as at 30 June 2022 207.3 13.8 - (0.5) 11.8 (137.4) 95.0

Loss for the year - - - - - (5.1) (5.1)

Other comprehensive income - - - - 3.3 - 3.3

Total comprehensive loss - - - - 3.3 (5.1) (1.8)

Transactions with equity

holders in their capacity as

equity holders:

Acquisition of treasury

securities

- - - (1.6) - - (1.6)

Issue of treasury securities to

employees

- - - 0.9 -

- 0.9

Transfer of treasury securities

to option holders

- (1.0) - 1.0 - - -

Contribution of exercise

price for options settled with

treasury securities

- 0.4 - - - - 0.4

Employee performance rights - 0.5 - - - - 0.5

Total transactions with equity

holders

- (0.1) - 0.3 - - 0.2

Balance as at 30 June 2023 207.3 13.7 - (0.2) 15.1 (142.5) 93.4

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT122

C) EQUITY ATTRIBUTABLE TO CDPT

The table below summarises equity, profit for the year and total comprehensive income for the year attributable to CDPT,

the entity stapled to the Company.

Attributable to Equity Holders of the CDPT

Contributed

equity

Reserve

Retained

earnings

Total

Balance at 1 July 2021 2,072.5 (11.9) 495.8 2,556.4

Profit after tax - - 273.7 273.7

Other comprehensive loss - (44.7) - (44.7)

Total comprehensive income - (44.7) 273.7 229.0

Transactions with equity holders in their capacity as

equity holders:

Contributions of equity, net of equity issue costs 0.3 - - 0.3

Distributions paid / payable - - (170.3) (170.3)

Total transactions with equity holders 0.3 - (170.3) (170.0)

Balance as at 30 June 2022 2,072.8 (56.6) 599.2 2,615.4

Loss after tax - - (438.7) (438.7)

Other comprehensive income - 86.1 - 86.1

Total comprehensive loss - 86.1 (438.7) (352.6)

Transactions with equity holders in their capacity as

equity holders:

Distributions paid / payable - - (144.0) (144.0)

Total transactions with equity holders - - (144.0) (144.0)

Balance as at 30 June 2023 2,072.8 29.5 16.5 2,118.8

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 123

Other items

This section of the annual financial report provides information about individually significant items to the Balance

Sheets, Statements of Profit or Loss and Cash Flow Statements and items that are required to be disclosed by

Australian Accounting Standards.

20. Assets held for sale and liabilities directly related

to assets held for sale

A) OVERVIEW

Non-current assets and liabilities are classified as held for sale if their carrying amounts will be recovered principally

through a sale transaction rather than through continuing use. This condition is met only when the sale is highly probable

and the asset is available for immediate sale in its present condition. Management must be committed to the sale, which

should be expected to qualify for recognition as such within one year from the date of classification. At reporting date the

following assets and liabilities have been classified as held for sale:

Cromwell Trust

2023

2022

2023

2022

Disposal group - LDK

Interest in joint venture - 12.0 - -

Loans at amortised cost – joint venture - 148.4 - 105.7

Total – disposal group - LDK - 160.4 - 105.7

Investment property

2-6 Station Street, Penrith NSW 45.3 - 45.3 -

Total – investment property 45.3 - 45.3 -

Disposal assets – CIULF

Cash 1.5 - 1.5 -

Receivables 0.1 - 0.1 -

Investment properties 91.5 - 91.5 -

Total – disposal assets – CIULF 93.1 - 93.1 -

Total assets held for sale 138.4 160.4 138.4 105.7

Liabilities directly related to assets held for sale – CIULF

Trade and other payables 0.5 - 0.5 -

Interest bearing liabilities 48.9 - 48.9 -

Total liabilities directly related to assets held for sale 49.4 - 49.4 -

Disposal group - LDK

In October 2022, the equity interest in the LDK joint venture was sold for a contract price of $20.0 million which has

resulted in Cromwell recording a $7.7 million gain on disposal after taking into account disposal costs.

As part of the sale transaction the loan portfolio was amended under a Deed of Variation whereby the loans were to be

repaid by no later than June 2023 by the LDK joint venture with LDK repaying in full in March 2023.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT124

Investment Property

Subsequent to year end, the Trust entered into a contract to sell 2-6 Station Street, Penrith NSW for $45.3 million (net of

estimated sale costs) which is expected to settle in September 2023. As a result of entering into this contract the asset has

been reclassified as held for sale.

Disposal group - CIULF

On 30 June 2023, Cromwell entered into a binding agreement with Value Partners, a Hong Kong based asset manager to

create a joint venture by selling 50% of the units in the Cromwell Italy Urban Logistics Fund. All of the assets and liabilities

within the fund, most notably the 7 investment properties 100% leased to DHL and the Italian Euro facilities (secured by

the investment properties) have been classified as held for sale at 30 June 2023. Cromwell will retain a 50% share of the

Fund which will be equity accounted post settlement in July 2023.

No impairment losses have been recognised in the current and prior years in respect of assets held for sale.

B) CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

All assets held for sale and liabilities directly related to assets held for sale have been recognised based on the

values stipulated in the relevant agreements.

21. Leased assets and related leases

A) OVERVIEW

Cromwell and the Trust are lessees in a number of leasing arrangements. Leases grant Cromwell and the Trust the

“right-of-use” for the leased asset for the contractual period of the lease in return for fixed lease payments. The right-of-

use is recognised as an asset within the Balance Sheet category the relating leased asset would ordinarily be classified in

and depreciated over the shorter of the contractual lease period or the useful life of the leased asset. The present value of

remaining lease payments is recognised as a liability within borrowings.

Cromwell and the Trust are lessees in the following leasing arrangements:

• Leasehold land – leases of land upon which some of Cromwell’s and the Trust investment properties are situated

(leasehold properties). The right-of-use assets relating to such lease leases are recognised within investment

properties. See note 8 for more information in relation to Cromwell’s and the Trust’s investment properties situated on

leasehold land.

• Office leases – leases of office space in Australia, Singapore and Europe. The relating right-of-use assets are

recognised within property, plant and equipment.

• Equipment leases – leases of office equipment. The right-of-use assets are recognised within property, plant &

equipment.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 125

B) AMOUNTS RECOGNISED IN THE FINANCIAL STATEMENTS

The below table shows the information in relation to Cromwell and Trust’s leased assets and relevant lease liabilities for

the year ending and as at 30 June 2023 (see note 11(c) also for further information):

Investment

property

(1)(2)

Office

premises

(3)

Property,

plant and

equipment

(3)

Total

Right-of-use assets

Reconciliation of movements in right-of-use assets:

Right-of-use assets recognised on 1 July 2021 6.3 15.1 1.3 22.7

Additions - 6.0 2.5 8.5

Disposals, terminations and modifications - (0.4) (0.1) (0.5)

Amortisation

(4)

(0.2) (3.1) (0.6) (3.9)

Foreign exchange movements (0.2) (0.5) 0.1 (0.6)

Balance as at 30 June 2022 5.9 17.1 3.2 26.2

Additions - 1.2 0.1 1.3

Disposals, terminations and modifications - - (1.5) (1.5)

Amortisation

(4)

(0.2) (4.3) (1.0) (5.5)

Foreign exchange movements 0.3 0.9 0.2 1.4

Right-of-use assets at 30 June 2023 6.0 14.9 1.0 21.9

Lease liabilities

Reconciliation of movements in lease liabilities:

Lease liabilities recognised on 1 July 2021 5.8 15.9 1.0 22.7

Additions - 6.3 2.6 8.9

Principle payments (0.3) (3.6) (0.6) (4.5)

Finance costs

(5)

0.3 0.4 - 0.7

Disposals, terminations and modifications - (0.6) - (0.6)

Foreign exchange movements (0.5) (0.5) - (1.0)

Balance as at 30 June 2022 5.3 17.9 3.0 26.2

Additions - 1.2 0.2 1.4

Principle payments (0.4) (4.9) (1.1) (6.4)

Finance costs

(5)

0.3 0.4 - 0.7

Disposals, terminations and modifications - 0.1 (1.5) (1.4)

Foreign exchange movements 0.7 1.0 0.1 1.8

Lease liabilities at 30 June 2023 5.9 15.7 0.7 22.3

Payments in relation to lease liabilities recognised

above

(6)

2022 (0.3) (3.6) (0.6) (4.5)

2023 (0.4) (4.9) (1.1) (6.4)

(1) Represents relevant information in respect of the Trust.

(2) Right-of-use assets included as a component of Investment property in the Balance Sheet. See note 8 for further information.

(3) Right-of-use assets included as a component of Property, plant and equipment in the Consolidated Balance Sheet.

(4) Included as a component of Administration and other expenses in the Consolidated Statement of Profit or Loss.

(5) Included as a component of Finance costs in the Consolidated Statement of Profit or Loss.

(6) Represents total cash flows in respect of leases.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT126

C) ACCOUNTING POLICY

Accounting as lessee

Cromwell recognised a lease liability and a corresponding right-of-use asset at the commencement of a lease.

The lease liability is initially measured as the present value of the lease payments that are unpaid at the

commencement date, discounted using the rate implicit in the lease or relevant incremental borrowing rate.

Subsequently the lease liability is adjusted for interest and lease payments, as well as the impact of lease

modifications. The lease liability is presented as a component of borrowings.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments

made at or before commencement, less any lease incentives received and any initial direct costs. The right-of use

asset is subsequently measured as cost less accumulated depreciation and impairments. Right-of-use assets are

depreciated on a straight-line basis over the shorter period of the lease term and useful life of the underlying asset.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 127

22. Cash ﬂow information

A) OVERVIEW

This note provides further information on the consolidated cash flow statements of Cromwell and the Trust. It reconciles

(loss) / profit for the year to cash flows from operating activities and information about non-cash transactions.

B) RECONCILIATION OF (LOSS) / PROFIT AFTER TAX TO NET CASH PROVIDED BY OPERATING ACTIVITIES

Cromwell Trust

2023

2022

2023

2022

(Loss) / profit after tax (443.8) 263.2 (438.7) 274.9

Amortisation and depreciation 7.5 6.0 0.3 0.2

Amortisation of lease costs and incentives 27.6 29.0 27.6 29.0

Capitalised lease costs and incentives - (17.2) - (17.2)

Operating lease costs 0.7 3.4 0.3 0.3

Straight-line rentals (7.4) (6.0) (7.4) (6.0)

Expected credit losses 1.9 - (0.2) -

Security based payments 0.5 - - -

Share of losses / (profits) – equity accounted investments

(net of distributions and impairments)

62.2 3.2 59.4 (4.8)

Treasury securities issued to employees 0.9 - - -

Net foreign exchange losses / (gains) 13.3 (26.7) 8.9 (25.5)

Amortisation of loan transaction costs 6.9 17.9 6.9 17.9

Gain on sale of interest in joint venture held for sale (7.7) - - -

Gain on sale of investment properties (2.0) (11.8) (2.0) (11.8)

Gain on disposal of other assets - (2.3) (1.0) -

Asset, fund and development management fees non-

cash settled

- 1.1 - -

Impact of dilution of equity holding / impairment 1.9 1.7 1.9 1.4

Finance costs attributable to discounted lease incentives 1.0 1.1 1.0 1.1

Fair value net losses / (gains) from:

Investment properties 491.6 (54.0) 491.6 (54.0)

Derivative financial instruments 4.7 (55.4) 4.7 (55.4)

Investments at fair value through profit or loss 4.9 1.7 3.3 -

Payment for other transaction costs 3.9 3.0 2.2 2.8

Changes in operating assets and liabilities:

(Increase) / decrease in Receivables (1.1) 6.6 6.9 4.0

(Increase) / decrease in Tax assets / liabilities (12.7) 18.9 (14.3) 12.4

(Increase) / decrease in Other current assets (0.1) 0.4 (0.1) (1.0)

Increase / (decrease) in Trade and other payables (6.8) (12.0) (11.5) (5.3)

Increase / (decrease) in Provisions 0.3 (0.8) - -

Increase / (decrease) in Unearned income 1.0 4.2 1.0 3.1

Net cash provided by operating activities 149.2 175.2 140.8 166.1

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT128

Cromwell Trust

Non-cash financing and investing transactions

2023

2022

2023

2022

CEREIT fees received in units:

Acquisition fees - 0.1 - -

Restructure costs - (1.2) - -

Treasury securities issued to employees 0.9 - - -

Non-cash financing and investing transactions 0.9 (1.1) - -

C) RECONCILIATION OF LIABILITIES ARISING FROM FINANCING ACTIVITIES

Cromwell

Interest

bearing

liabilities

Dividends /

distributions

payable

Derivative

financial

instruments

Total

Opening balance at 1 July 2021 2,186.2 42.5 11.4 2,240.1

Changes from financing cash flows:

Proceeds from borrowings 474.0 - - 474.0

Repayments of borrowings (447.2) - - (447.2)

Payments for lease liabilities (4.5) - - (4.5)

Payment of loan transaction costs (2.2) - - (2.2)

Payments for derivative financial instruments - - (0.3) (0.3)

Payment of dividends / distributions - (170.2) - (170.2)

Total changes from financing cash flows 20.1 (170.2) (0.3) (150.4)

Other movements:

Exchange rate gains / losses (41.5) - - (41.5)

Fair value net gains / losses - - (11.1) (11.1)

Other lease liability movements 9.0 - - 9.0

Amortisation of loan transaction costs 17.9 - - 17.9

Distributions for the year - 170.3 - 170.3

Balance at 30 June 2022 2,191.7 42.6 - 2,234.3

Changes from financing cash flows:

Proceeds from borrowings 167.7 - - 167.7

Repayments of borrowings (523.2) - - (523.2)

Payments for lease liabilities (6.4) - - (6.4)

Payment of loan transaction costs (2.7) - - (2.7)

Payments for derivative financial instruments - - (5.0) (5.0)

Payment of dividends / distributions - (150.6) - (150.6)

Total changes from financing cash flows (364.6) (150.6) (5.0) (520.2)

Other movements:

Exchange rate gains / losses 38.2 - - 38.2

Reclassified to held for sale (48.9) -

- (48.9)

Fair value net gains / losses - - 5.0 5.0

Other lease liability movements 0.8 - - 0.8

Amortisation of loan transaction costs 6.9 - - 6.9

Distributions for the year - 144.0 - 144.0

Balance at 30 June 2023 1,824.1 36.0 - 1,860.1

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 129

Trust

Interest

bearing

liabilities

Dividends /

distributions

payable

Derivative

financial

instruments

Total

Opening balance at 1 July 2021 2,169.3 42.5 11.4 2,223.2

Changes from financing cash flows:

Proceeds from borrowings 474.0 - - 474.0

Repayments of borrowings (447.2) - - (447.2)

Payments for lease liabilities (0.3) - - (0.3)

Payment of loan transaction costs (2.2) - - (2.2)

Payments for derivative financial instruments - - (0.3) (0.3)

Payment of dividends / distributions - (170.2) - (170.2)

Total changes from financing cash flows 24.3 (170.2) (0.3) (146.2)

Other movements:

Exchange rate gains / losses (40.9) - - (40.9)

Fair value net gains / losses - - (11.1) (11.1)

Amortisation of loan transaction costs 0.3 - - 0.3

Stapled securities / units issued on reinvestment of

distributions

17.9 - - 17.9

Distributions for the year - 170.3 170.3

Balance at 30 June 2022 2,170.9 42.6 - 2,213.5

Changes from financing cash flows:

Proceeds from borrowings 167.7 - - 167.7

Repayments of borrowings (523.2) - - (523.2)

Payments for lease liabilities (0.4) - - (0.4)

Payment of loan transaction costs (2.7) - - (2.7)

Payments for derivative financial instruments - - (5.0) (5.0)

Payment of dividends / distributions - (150.6) - (150.6)

Total changes from financing cash flows (358.6) (150.6) (5.0) (514.2)

Other movements:

Exchange rate gains / losses 37.2 - - 37.2

Reclassified to held for sale (48.9) (48.9)

Fair value net gains / losses - - 5.0 5.0

Other lease liability movements 0.3 - - 0.3

Amortisation of loan transaction costs 6.9 - - 6.9

Distributions for the year - 144.0 - 144.0

Balance at 30 June 2023 1,807.8 36.0 - 1,843.8

D) ACCOUNTING POLICY

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions and other

short-term highly liquid investments with original maturities of three months or less that are readily convertible

to known amounts of cash and which are subject to an insignificant risk of changes in value.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT130

23. Security based payments

A) OVERVIEW

Cromwell operates a security based compensation scheme, the Performance Rights Plan (PRP). Under the PRP, eligible

employees, including executive directors, have the right to acquire Cromwell securities at a consideration of $0.00 subject

to certain vesting conditions. Eligibility is by invitation of the Board of Directors and participation in the PRP by executive

directors is subject to securityholder approval. The PRP is designed to provide long-term incentives for employees to

continue employment and deliver long-term securityholder returns.

B) PRP

All full-time and part-time employees who meet minimum service, remuneration and performance requirements,

including executive directors, are eligible to participate in the PRP at the discretion of the Board. Under the PRP, eligible

employees are allocated performance rights. Each performance right enables the participant to acquire a stapled security

in Cromwell, at a future date and exercise price, subject to conditions. The number of performance rights allocated to

each participant is set by the Board or the Nomination & Remuneration Committee and based on individual circumstances

and performance.

The amount of performance rights that will vest under the PRP depends on a combination of factors which may include

Cromwell’s total securityholder returns (including price growth, dividends/distributions and capital returns), internal

performance measures and the participant’s continued employment. Performance rights allocated under the PRP

generally vest in three years. Until performance rights have vested, the participant cannot sell or otherwise deal with the

performance rights except in certain limited circumstances. It is a condition of the PRP that a participant must remain

employed by Cromwell in order for performance rights to vest. Any performance rights which have not yet vested on a

participant leaving employment must be forfeited.

Set out below is a summary of movements in the number of performance rights outstanding at the end of the

financial year:

2023 2022

Weighted

average

exercise price

Number of

performance

rights

Weighted

average

exercise price

Number of

performance

rights

As at 1 July $0.26 8,047,940 $0.12 10,185,693

Granted during the year - 4,076,483 - 3,814,473

Exercised during the year $0.31 (1,207,622) $0.22 (1,396,024)

Forfeited / lapsed during the year $0.03 (3,402,951) $0.08 (4,556,202)

As at 30 June $0.00 7,513,850 $0.26 8,047,940

Vested and exercisable - - - -

The weighted average price per security at the date of exercise of options exercised during the year ended 30 June 2023

was $0.68 (2022: $0.88). No options expired during the years covered in the table above.

The weighted average remaining contractual life of the 7,513,850 performance rights outstanding at the end of the

financial year (2022: 8,047,940) was 1.29 years (2022: 1.33 years).

Fair value of performance rights granted

The fair value of performance rights granted during the year was between $0.64 and $0.81 per option for PRP with an

exercise price of $nil (2022: fair value between $0.65 and $1.00 and an exercise price of $nil).

Performance rights do not have any market-based vesting conditions. The fair values at grant date are determined using a

Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the security price at

grant date and expected price volatility of the underlying security, the expected dividend/distribution yield and the risk-free

interest rate for the term of the option.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 131

The model inputs for performance rights granted during the year included:

2023 2022

Exercise price: $0.00 $0.00

Grant date(s): 7-Oct-22 11-Nov-21 & 12-Apr-22

Share price at grant date(s): $0.685 to $0.79 $0.82 to $0.87

Expected price volatility: 25% - 32.12% 20% - 25%

Expected dividend yield(s): 6.96% to 9.49% 7.88% to 7.93%

Risk free interest rate(s): 3.24% to 3.41% 0.16% to 0.19%

Expiry date(s): 30-Sept-25 30-Sept-24

The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any

expected changes to future volatility due to publicly available information.

C) EXPENSE ARISING FROM SECURITY BASED PAYMENTS

Expenses arising from share-based payments recognised during the year as part of employee benefits expense were as

follows:

Cromwell Trust

2023

2022

2023

2022

Performance rights issued under the PRP 0.5 - - -

See note 6(d) for information in relation the accounting policy in relation to security based payments.

24. Related parties

A) OVERVIEW

Related parties include directors and other key management personnel and their close family members and any entities

they control as well as subsidiaries, associates and joint ventures of Cromwell. They also include entities which are

considered to have significant influence over Cromwell, that is securityholders that hold more than 20% of Cromwell’s

issued securities.

This note provides information about transactions with related parties during the year. All of Cromwell’s transactions with

related parties are on normal commercial terms and conditions and at market rates.

B) KEY MANAGEMENT PERSONNEL DISCLOSURES

Cromwell

Key management personnel compensation

2023

2022

Short-term employee benefits 3,582,726 5,573,907

Post-employment benefits 127,061 148,613

Other long-term benefits 29,885 (27,206)

Security-based payments 546,913 551,014

Total key management personnel compensation 4,286,585 6,246,328

Loans to key management personnel

No loans have been provided to key management personnel during the current financial year (2022: nil).

C) OTHER RELATED PARTY TRANSACTIONS

i) Parent entity and subsidiaries

Cromwell Corporation Limited is the ultimate parent entity in Cromwell. Cromwell Diversified Property Trust is the

ultimate parent entity in the Trust. Details of subsidiaries for both parent entities are set out in note 17.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT132

ii) Transactions with joint ventures and associates

Cromwell European Real Estate Investment Trust

Cromwell and the Trust hold 27.8% and 27.4% interests in CEREIT (2022: 27.8% and 27.4% - refer to note 9(b) for further

details). Cromwell and the Trust received $41.1 million and $40.4 million in distributions from CEREIT during the year

(2022: $34.5 million and $34.0 million).

Cromwell EREIT Management Pte. Ltd. (“CEM”), a wholly owned subsidiary of Cromwell, is the Manager for CEREIT. A

number of other wholly owned, Europe-domiciled, subsidiaries of Cromwell provide property related services to CEREIT at

normal commercial terms.

The following income was earned by Cromwell from CEREIT:

Cromwell

2023

2022

Paid / payable by CEREIT to Cromwell and its subsidiaries:

Asset management fees 29.0 27.9

Fund management fees 11.1 11.1

Leasing fees 3.2 3.8

Project management fees 3.0 2.7

Distributions 41.1 34.5

Balances outstanding with CEREIT at year end:

Aggregate amounts receivable 15.2 12.8

LDK Healthcare Unit Trust

Cromwell held a 50% interest in the LDK Healthcare Unit Trust (LDK), a joint venture conducting an aged care operation

until October 2022 when the interest was sold to Anglicare for $20.0 million. During the period of ownership in the current

financial year Cromwell had the following loans and related party transactions with the LDK joint venture:

a) Working capital loans

This loan as well as all outstanding interest was repaid in full during the period. Refer to note 20 for further information.

b) “Waterfall” loans

Cromwell and the Trust provided a number of loan facilities to LDK Healthcare Unit Trust and a number of its subsidiaries

in order to assist in the development of the LDK business. These loans as well as all outstanding interest was repaid in full

during the period. Refer to note 20 for further information.

Ursynów

Cromwell derived $nil in property management fees at normal commercial terms during the year (2022: nil).

During the prior financial year Cromwell and its joint venture partner contributed loans of €17.0 million ($26.8 million)

each, which the joint venture used to repay an external debt facility that fell due. The balance receivable at year end was

$30.5 million (2022: $25.4 million). During the period the loan facility was utilised by Ursynów interest accrued/paid to

Cromwell was €1.0 million ($1.6 million).

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 133

iii) Transactions between the Trust and the Company and its subsidiaries (including the responsible

entity of the Trust)

Cromwell Property Securities Limited (“CPS”), a wholly owned subsidiary of Cromwell Corporation Limited (“CCL”) acts

as responsible entity for the Trust. For accounting purposes the Trust is considered to be controlled by CCL. CCL and its

subsidiaries provide a range of services to the Trust. A subsidiary of CCL rents commercial property space in a property

owned by the Trust. All transactions are performed on normal commercial terms.

The Trust made the following payments to and received income from CCL and its subsidiaries

Trust

2023

2022

Paid / payable by the Trust to the Company and its subsidiaries:

Fund management fees 20.8 20.1

Property management fees 5.8 6.3

Leasing fees 1.2 2.2

Project management fees 0.7 0.2

Accounting fees 1.0 1.0

Received / receivable by the Trust from the Company and its subsidiaries:

Interest 1.5 2.3

Rent and recoverable outgoings 1.0 2.6

Balances outstanding at year-end with the Company and its subsidiaries:

Aggregate amounts payable 1.1 2.2

Aggregate amounts receivable 20.6 89.5

The amount receivable from the Company and its subsidiaries includes loans of $20.6 million (2022: $89.5 million).

For further details regarding these loans refer to note 13(b).

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT134

25. Auditors’ remuneration

A) OVERVIEW

The independent auditors of Cromwell in Australia (Deloitte Touche Tohmatsu) and component auditors of overseas

subsidiaries and their affiliated firms have provided a number of audit and other assurance related services as well as

other non-assurance related services to Cromwell and the Trust during the year.

Below is a summary of fees paid for various services to Deloitte Touche Tohmatsu and component audit firms during

the year:

Cromwell Trust

2023

2022

2023

2022

Deloitte Touche Tohmatsu

Audit and other assurance services

Auditing or reviewing of financial reports 647,867 508,241 478,381 380,542

Auditing of controlled entities’ AFS licences 7,500 7,500 - -

Auditing of component financial reports 895,441 882,961 437,850 460,644

Other assurance services 51,683 130,000 - -

1,602,491 1,528,702 916,231 841,186

Other services

Due diligence services 19,650 452,765 19,650 452,765

Other reporting services 8,797 45,940 8,797 45,940

International consulting services 5,420 17,567 - -

Australian taxation advice 8,380 17,015 - -

Total remuneration of Deloitte Touche Tohmatsu 1,644,738 2,061,989 944,678 1,339,891

Pitcher Partners

Audit and other assurance services

Auditing of the Trust’s compliance plan 43,000 41,000 43,000 41,000

Audit of Statements of Outgoings 20,000 26,600 20,000 26,600

63,000 67,600 63,000 67,600

Other services

Valuation services 6,100 17,300 - -

Total remuneration of Pitcher Partners 69,100 84,900 63,000 67,600

Total auditors’ remuneration 1,713,838 2,146,889 1,007,678 1,407,491

26. Unrecognised items

A) OVERVIEW

Items that have not been recognised on Cromwell’s and the Trust’s Balance Sheet include contractual commitments for

future expenditure and contingent liabilities which are not sufficiently certain to qualify for recognition as a liability on the

Consolidated Balance Sheet. This note provides details of any such items.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 135

B) COMMITMENTS

Capital expenditure commitments

Commitments in relation to capital expenditure contracted for at reporting date but not recognised as a liability are as

follows:

Cromwell Trust

2023

2022

2023

2022

Investment property 4.2 1.7 4.2 1.7

Capital contributions 39.8 2.4 - -

Total capital expenditure commitments 44.0 4.1 4.2 1.7

C) CONTINGENT ASSETS AND CONTINGENT LIABILITIES

The Directors are not aware of any material contingent assets or contingent liabilities of Cromwell or the Trust (2022: $nil).

27. Subsequent events

Cromwell Italy Urban Logistics Fund

On 30 June 2023, Cromwell entered into a binding agreement with Value Partners, a Hong Kong based asset manager to

create a joint venture by selling 50% of the units in the Cromwell Italy Urban Logistics Fund. All of the assets and liabilities

within the fund, most notably the 7 investment properties 100% leased to DHL and the Italian Euro facilities (secured by

the investment properties) have been classified as held for sale at 30 June 2023 (refer to note 20). Cromwell will retain a

50% share of the Fund which will be equity accounted post settlement in July 2023.

In late July 2023, Cromwell received a payment of €13.1m upon successful completion of the conditions precedent in the

unit sale agreement.

Sale of Investment Property

Subsequent to year end, the Trust entered into a contract to sell 2-6 Station Street, Penrith NSW for $45.3 million (net of

estimated sale costs) which is expected to settle in September 2023. Cromwell has classified the asset as held for sale

(refer to note 20).

Cromwell Direct Property Fund transaction

On 7 July 2023, Cromwell announced that one of the subsidiaries in the group, Cromwell Funds Management Limited,

as responsible entity for the Cromwell Direct Property Fund (CDPF), entered into an Merger Implementation Deed with

Australian Unity Property Limited (AUPL), as the responsible entity for the Australian Unity Diversified Property Fund

(AUDPF) to merge with CDPF. The merger is conditional upon AUDPF unitholder approval and the satisfaction of other

conditions precedent. Upon completion, the merged fund will comprise a well-diversified portfolio of 15 high-quality

assets, valued at approximately $1.1 billion.

As part of the proposed merger, Cromwell will subscribe for units in CDPF (up to $12 million) to assist in funding a one-off

withdrawal facility for AUDPF unitholders.

At the same time Cromwell has entered into a separate Share Sale and Purchase Agreement with Australian Unity Limited

to acquire AUPL, the responsible entity of AUDPF, for a total consideration of $17.0 million, payable in instalments. A

condition to the acquisition of AUPL is AUDPF unitholder approval, and implementation, of the merger. These transactions

are expected to complete later in the 2024 financial year.

Other than those disclosed above, no matter or circumstance has arisen since 30 June 2023 that has significantly affected

or may significantly affect:

• Cromwell’s and the Trust’s operations in future financial years; or

• the results of those operations in future financial years; or

• Cromwell’s and the Trust’s state of affairs in future financial years.

The financial statements were approved by the Board of Directors and authorised for issue on 30 August 2023.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT136

DIRECTORS’ DECLARATION

In the opinion of the Directors of Cromwell Corporation Limited and Cromwell Property Securities Limited as Responsible

Entity for the Cromwell Diversified Property Trust (collectively referred to as “the Directors”):

a) the attached financial statements and notes are in accordance with the

Corporations Act 2001

(Cth), including:

i) complying with Australian Accounting Standards (including the Australian Accounting Interpretations), the

Corporations Regulations 2001

; and

ii) giving a true and fair view of Cromwell’s and the Trust’ financial position as at 30 June 2023 and of their

performance, for the financial year ended on that date; and

b) the financial report also complies with International Financial Reporting Standards as disclosed in About this report -

note 1 Basis of preparation; and

c) there are reasonable grounds to believe that Cromwell and the Trust will be able to pay its debts as and when they

become due and payable.

The Directors have been given the declarations by the chief executive officer and chief financial officer for the financial

year ended 30 June 2023 required by section 295A of the

Corporations Act 2001

(Cth).

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

Dr Gary Weiss AM

Chair

30 August 2023

Sydney

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 137

Cromwell Property Group | Annual Financial Report | Page 112 of 115

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Asia Pacific Limited and the Deloitte organisation.

Deloitte Touche Tohmatsu

ABN 74 490 121 060

Riverside Centre

123 Eagle Street

Brisbane QLD 4000

GPO Box 1463

Brisbane QLD 4001 Australia

DX: 10307SSE

Tel: +61 (0) 7 3308 7000

Fax: +61 (0) 2 9322 7001

www.deloitte.com.au

Independent Auditor’s Report to the Stapled Security Holders

of Cromwell Property Group and the Unitholders of Cromwell

Diversified Property Trust

Report on the Audit of the Financial Reports

Opinion

We have audited the financial reports of:

• Cromwell Property Group (the Group) which comprises the consolidated balance sheet as at 30 June

2023, the consolidated statement of comprehensive income, the consolidated statement of changes in

equity and the consolidated statement of cash flows for the year then ended, and notes to the financial

statements, including a summary of significant accounting policies and other explanatory information,

and the directors’ declaration of Cromwell Corporation Limited (the Company). The Group comprises

the consolidated stapled entity compromising the Company and Cromwell Diversified Property Trust,

and the entities they controlled at the year end or from time to time during the year; and

• Cromwell Diversified Property Trust (the Trust) which comprises the consolidated balance sheet as at 30

June 2023, the consolidated statement of comprehensive income, the consolidated statement of changes

in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial

statements, including a summary of significant accounting policies and other explanatory information,

and the directors’ declaration of Cromwell Property Securities Limited (the Responsible Entity), as

Responsible Entity of the Trust. The Trust comprises Cromwell Diversified Property Trust and the entities

it controlled at the year end or from time to time during the year.

In our opinion, the accompanying financial reports of the Group and the Trust are in accordance with the

Corporations Act 2001, including:

• Giving a true and fair view of the Group and the Trust’s financial position as at 30 June 2023 and of their

financial performance for the year then ended; and

• Complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those

standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our

report. We are independent of the Group and the Trust in accordance with the auditor independence

requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical

Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the

Code) that are relevant to our audit of the financial reports in Australia. We have also fulfilled our other ethical

responsibilities in accordance with the Code.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT138

Cromwell Property Group | Annual Financial Report | Page 113 of 115

We confirm that the independence declaration required by the Corporations Act 2001, which has been given to

the directors of the Company and of the Responsible Entity of the Trust (the directors), would be in the same

terms if given to the directors as at the time of this auditor’s report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our

opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of

the financial report of the Group for the current period. These matters were addressed in the context of our audit

of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion

on these matters.

Key Audit Matter

How the scope of our audit responded to the Key Audit

Matter

Valuation of investment property

At 30 June 2023, Cromwell Property Group

recognised investment properties at fair value of

$3.1b as disclosed in Note 8.

The Group owns either directly or through joint

ventures a portfolio of properties across

Australia, Italy and Poland.

Valuations were carried out by internal and

third-

party valuers for the majority of

investment properties in Australia, Italy, and

Poland during the year. Some investment

properties were valued with reference to recent

transactions or current offers on the respective

investment properties. Within their 30 June

2023 valuations, certain valuers included

observations as to market uncertainty caused by

inflationary pressures and tightening monetary

policy. This highlights a higher degree of caution

should be attached to the valuations than would

normally be the case.

Note 8 describes the valuation methodologies

adopted by the Group:

• the capitalisation approach applies a

capitalisation rate to normalised

market net operating income.

•

the discounted cash flow method

involves the projection of cash flows

discounted to present value.

The valuation processes require judgment and

estimation in the following valuation inputs:

• net market income

• net operating income

• compound annual growth rates

• terminal yields

• capitalisation rates; and

• discount rates.

Of these, capitalisation rates and discount rates

are considered to have the greatest propensity

to materially impact the valuations and involve

the use of significant judgement.

Our procedures included, but were not limited to:

• Understanding the relevant controls within management’s

valuation framework and assessing the oversight applied by

the directors over the valuation processes.

• Enquiring of management to obtain an understanding of

portfolio movements and their identification of any

additional property specific

matters, as well as their

assessment of the impact of inflationary pressures and

tightening monetary policy on the valuations, and the

uncertainty statement included in certain valuation reports.

• Assessing the independence, competence and objectivity of

the external valuers, as well as competence and objectivity

of internal valuers (where relevant).

• Performing an analytical review and risk assessment of the

portfolio, assessing the key inputs and assumptions.

• Testing on a sample basis, both externally and internally

valued properties, for:

‐ the completeness and accuracy of the information in

the valuation by agreeing key inputs such as annual net

operating income to underlying records and source

evidence;

‐ the reasonableness of the forecasts us

ed in the

valuations with reference to current financial results

such as net operating income, capital expenditure

requirements, occupancy and lease renewals; and

‐ the mathematical accuracy of the valuation models.

• Assessing the reasonableness of the assumptions used in

the valuations, including the capitalisation rates, and net

market income adjustments made in the capitalisation

approach and the discount rate, compound annual growth

rate, and terminal yield used in the discounted cashflow

method with refer

ence to external market trends &

transactions, property specific factors such as tenant mix

and changes since the prior valuation.

We also assessed the appropriateness of the disclosures included in

the Notes to the financial statements.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 139

Cromwell Property Group | Annual Financial Report | Page 114 of 115

Other Information

The directors of the Company and the Responsible Entity of the Trust (the directors) are responsible for the other

information. The other information comprises the Directors’ Report, which we obtained prior to the date of this

auditor’s report, and also includes the following information which will be included in the Group and Trust’s annual

report (but does not include the financial reports and our auditor’s report thereon):: Financial Highlights,

Chairman’s Report, CEO’s Report, Corporate Governance Statement and Securityholder Information, which is

expected to be made available to us after that date.

Our opinion on the financial reports does not cover the other information and we do not and will not express any

form of assurance conclusion thereon.

In connection with our audit of the financial reports, our responsibility is to read the other information identified

above and, in doing so, consider whether the other information is materially inconsistent with the financial reports

or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we

have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude

that there is a material misstatement of this other information, we are required to report that fact. We have

nothing to report in this regard.

When we read the Financial Highlights, Chairman’s Report, CEO’s Report, Corporate Governance Statement and

Securityholder Information, if we conclude that there is a material misstatement therein, we are required to

communicate the matter to the directors and use our professional judgement to determine the appropriate

action.

Responsibilities of the Directors for the Financial Reports

The directors are responsible for the preparation of the financial reports that give a true and fair view in

accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as

the directors determine is necessary to enable the preparation of the financial reports that give a true and fair

view and are free from material misstatement, whether due to fraud or error.

In preparing the financial reports, the directors are responsible for assessing the ability of the Group and the Trust

to continue as going concerns, disclosing, as applicable, matters related to going concern and using the going

concern basis of accounting unless the directors either intend to liquidate the Group or the Trust or to cease

operations, or has no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Reports

Our objectives are to obtain reasonable assurance about whether the financial reports as a whole are free from

material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.

Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance

with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements

can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably

be expected to influence the economic decisions of users taken on the basis of the financial reports.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and

maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial reports, whether due to fraud or error,

design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and

appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from

fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,

misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the

Group or the Trust’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and

related disclosures made by the directors.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT140

Cromwell Property Group | Annual Financial Report | Page 115 of 115

x Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on

the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may

cast significant doubt on the Group or the Trust’s ability to continue as a going concern. If we conclude that a

material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures

in the financial reports or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based

on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions

may cause the Group or the Trust to cease to continue as going concerns.

x Evaluate the overall presentation, structure and content of the financial reports, including the disclosures, and

whether the financial reports represent the underlying transactions and events in a manner that achieves fair

presentation.

x Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business

activities within the Group to express an opinion on the Group and Trust financial reports. We are responsible

for the direction, supervision and performance of the Group’s and Trust’s audit. We remain solely responsible

for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit

and significant audit findings, including any significant deficiencies in internal control that we identify during our

audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements

regarding independence, and to communicate with them all relationships and other matters that may reasonably

be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards

applied.

From the matters communicated with the directors, we determine those matters that were of most significance

in the audit of the Group financial report of the current period and are therefore the key audit matters. We

describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the

matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our

report because the adverse consequences of doing so would reasonably be expected to outweigh the public

interest benefits of such communication.

Report on the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 27 to 44 of the Directors’ Report for the year ended

30 June 2023.

In our opinion, the Remuneration Report of Cromwell Property Group for the year ended 30 June 2023, complies

with section 300A of the Corporations Act 2001.

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the Remuneration Report

in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the

Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

DELOITTE TOUCHE TOHMATSU DELOITTE TOUCHE TOHMATSU

David Rodgers Vanessa de Waal

Partner Partner

Chartered Accountants Chartered Accountants

Brisbane, 30 August 2023 Brisbane, 30 August 2023

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 141

CORPORATE GOVERNANCE

STATEMENT

The Board is committed to Cromwell Property Group meeting securityholders’ and stakeholders’ expectations of good

corporate governance. The Board is proactive with respect to corporate governance and actively reviews developments

to determine which corporate governance arrangements are appropriate for Cromwell Property Group and its

securityholders and stakeholders.

This Corporate Governance Statement (Statement) reports on how Cromwell Property Group (or Cromwell or Group)

complied with the fourth edition of the ASX Corporate Governance Council’s Corporate Governance Principles and

Recommendations (the Recommendations) during the 2023 financial year.

This Statement is current as at 30 June 2023 and was approved by the Board on 30 August 2023.

Cromwell Property Group comprises Cromwell Corporation Limited (or the Company) and the Cromwell Diversified

Property Trust (or the CDPT), the Responsible Entity of which is Cromwell Property Securities Limited (or CPS).

Principle 1: Lay solid foundations for management and oversight

RECOMMENDATION 1.1

The Board of Directors of Cromwell Corporation Limited is identical to the Board of Directors of Cromwell Property

Securities Limited (together, the Board; severally, the Directors). The Board’s responsibilities include to provide leadership

to Cromwell Property Group and to set its strategic objectives. The Board has adopted a formal, written Board Charter,

which sets out the Board’s role and responsibilities, including to:

• providing and demonstrating leadership to Cromwell Property Group, defining Cromwell’s purpose and defining and

setting its strategic objectives;

• monitoring the effectiveness of Cromwell’s governance practices and the sustainability framework; and

• approving Cromwell Property Group’s statement of values and Code of Conduct to underpin the desired culture within

the Group and overseeing management in instilling and reinforcing these values.

The Board holds a scheduled meeting every second calendar month and additional meetings are convened as required.

The Directors’ Report discloses the names of the Directors, the number of times that the Board met during the 2023

financial year and the attendances of individual Directors at those meetings. For easy reference, the information (including

percentages of total) is shown below:

Director

Meetings attended

(% of meetings

eligible to attend)

Meetings eligible

to attend (100%)

Dr Gary Weiss AM (Chair) 11 (100%) 11 (100%)

Mr Eng Peng Ooi (Deputy Chair) 11 (100%) 11 (100%)

Mr Robert Blain 10 (91%) 11 (100%)

Mr Jonathan Callaghan 11 (100%) 11 (100%)

Ms Tanya Cox 11 (100%) 11 (100%)

Mr Joseph Gersh AM 11 (100%) 11 (100%)

Ms Lisa Scenna 11 (100%) 11 (100%)

Ms Jialei Tang 10 ( 91%) 11 (100%)

Management is responsible through Board and other reporting for providing the Board with relevant, accurate and timely

information to inform and focus the Board’s attention on key issues affecting the business.

Management prepares Board papers to inform and focus the Board’s attention on key issues. Standing items include

progress against strategic objectives, financial performance, people, sustainability and corporate governance (including

compliance with material legal and regulatory requirements and any conduct that is materially inconsistent with Cromwell

Property Group’s values and Code of Conduct).

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT142

The Board has the following Board Committees to assist it in carrying out its responsibilities, to share detailed work and to

consider certain issues and functions in detail:

• Audit Committee;

• Environmental-Social-Governance (ESG) and Risk Committee;

• Investment Committee; and

• Nomination and Remuneration Committee.

Details of the role, responsibilities and composition of the Board Committees are contained elsewhere in this Statement.

The Directors’ Report discloses (for each Board Committee) the members of the Board Committee, the number of times

that the Board Committee met during the 2023 financial year and the individual attendances of the members at those

meetings. For easy reference, the information (including percentages of total) is shown below:

Audit Committee

Director

Meetings attended

(% of meetings

eligible to attend)

Meetings eligible to

attend (100%)

Mr Eng Peng Ooi (Committee Chair) 4 (100%) 4 (100%)

Ms Tanya Cox 4 (100%) 4 (100%)

Ms Lisa Scenna 4 (100%) 4 (100%)

Dr Gary Weiss AM 4 (100%) 4 (100%)

ESG and Risk Committee

Director

Meetings attended

(% of meetings

eligible to attend)

Meetings eligible to

attend (100%)

Ms Lisa Scenna (Committee Chair) 5 (100%) 5 (100%)

Ms Tanya Cox 5 (100%) 5 (100%)

Mr Eng Peng Ooi 5 (100%) 5 (100%)

Dr Gary Weiss AM 5 (100%) 5 (100%)

Investment Committee

Director

Meetings attended

(% of meetings

eligible to attend)

Meetings eligible to

attend (100%)

Mr Robert Blain (Committee Chair) 2 (100%) 2 (100%)

Mr Joseph Gersh AM 2 (100%) 2 (100%)

Ms Jialei Tang 1 (50%) 2 (100%)

Dr Gary Weiss AM 2 (100%) 2 (100%)

Nomination and Remuneration Committee

Director

Meetings attended

(% of meetings

eligible to attend)

Meetings eligible to

attend (100%)

Ms Tanya Cox (Committee Chair) 5 (100%) 5 (100%)

Mr Robert Blain 5 (100%) 5 (100%)

Ms Lisa Scenna 5 (100%) 5 (100%)

Dr Gary Weiss AM 5 (100%) 5 (100%)

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 143

The Board has delegated authority to the Chief Executive Officer (CEO) of Cromwell Property Group for the day-to-day

business and affairs of the Group. This has been formalised in the Board Charter and the Board-approved Delegation of

Authority Policy. The Board reviews these documents at least annually to ensure their effectiveness and appropriateness

(given the evolving needs of Cromwell Property Group).

What you can find in the corporate governance page on our website:

Board Charter

Audit Committee Charter

ESG and Risk Committee Charter

Delegation of Authority Policy

Nomination and Remuneration Committee Charter (now

known as the Nomination and People Committee

Charter)

Constitution of Cromwell Corporation Limited

Constitution of the Cromwell Diversified Property Trust

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

RECOMMENDATION 1.2

Cromwell Property Group undertakes appropriate checks before appointing a Director or senior executive, or putting

forward to securityholders a candidate for election or re-election as a Director. The checks are into matters such as

the person’s character, experience, education, criminal record and bankruptcy history. The Board and Nomination and

Remuneration Committee also consider whether or not the candidate has sufficient time available, given their other roles

and activities, to meet expected time commitments to Cromwell.

When securityholders are asked at Cromwell Property Group’s annual general meeting (AGM) to elect, or re-elect, a

Director to the Board, Cromwell will provide securityholders with the following information to enable them to make an

informed decision:

• biographical information, including relevant qualifications, experience and the skills the candidate brings to the Board;

• details of any other current material directorships;

• a statement as to whether the Board supports the candidate’s election or re-election and a summary of the reasons

why; and

• (for a candidate standing for election as a Director for the first time) a confirmation that appropriate checks into

the candidate’s background and experience have been conducted; any material adverse information revealed by

background checks; details of any interest, position, association or relationship that might influence, or reasonably

be perceived to influence, in a material respect the candidate’s capacity to bring an independent judgement to bear

on issues before the Board and to act in the best interests of the Group as a whole rather than in the interests of an

individual securityholder or other party; and a statement from the Board as to the candidate’s independence; or

• (for a candidate standing for re-election) the term of office currently served and a statement from the Board as to the

candidate’s independence.

The information will be provided in the relevant notice of meeting. Securityholders also have the opportunity to ask

questions of candidates at the AGM.

In this Statement, AGM means (together) the Annual General Meeting of the Company and the General Meeting of the

CDPT.

RECOMMENDATION 1.3

Cromwell Property Group has provided each Non-executive Director with a written letter of appointment which details the

terms of their appointment, including:

• the requirement to disclose interests and any matters which could affect the Director’s independence;

• remuneration and expected time commitments;

• the requirement to comply with key corporate policies, including Cromwell Property Group’s Code of Conduct and

Securities Trading Policy;

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT144

• the requirement to seek the Chair’s consent before accepting any new role that could impact on the time commitment

expected of the Director, and to notify the Board about anything that may lead to an actual or potential conflict of

interest or duty;

• Cromwell Property Group’s policy on when Directors may seek independent professional advice at the expense of the

entity;

• indemnity and insurance arrangements and ongoing rights of access to corporate information; and

• ongoing confidentiality obligations.

The CEO (an Executive Director) has a written formal job description, an employment contract (outlining the terms of

appointment as a senior executive) and a letter of appointment for the role as Executive Director.

Other senior executives have written employment contracts that outline the terms of their appointment.

Cromwell Property Group has a Board-approved Securities Trading Policy under which Directors, senior executives and

employees are restricted in their ability to deal in Cromwell Property Group securities. Appropriate closed periods are in

place during which Directors, senior executives and employees are not permitted to trade. Directors, senior executives and

employees are made aware of the policy and receive training annually. The policy is reviewed at least annually.

What you can find in the corporate governance page on our website:

Code of Conduct Securities Trading Policy

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

RECOMMENDATION 1.4

The Company Secretary is accountable to the Board (through the Chair) on all matters to do with the proper functioning of

the Board.

The Company Secretary’s responsibilities include:

• advising the Board and Board Committees on governance matters;

• monitoring that Board and Board Committee policies and procedures are followed;

• guiding the continuous improvement, and coordinating the timely completion and despatch, of the Board and Board

Committee papers;

• ensuring that the business at the Board and Board Committee meetings is accurately captured in minutes; and

• helping to organise and facilitate the induction and professional development of Directors.

Directors can, and do, communicate directly and regularly with the Company Secretary on Board matters. Similarly, the

Company Secretary communicates directly and regularly with the Directors on such matters.

The Board Charter states that the Board is responsible for appointing and removing the Company Secretary.

What you can find on the Corporate Governance page on our website:

What you can find in the corporate governance page on our website:

Board Charter

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

RECOMMENDATION 1.5

At Cromwell, we firmly believe that organisational diversity, where the composition of the workforce reflects that of the

local population, brings the diversity of thought needed for innovation, effective decision making, great customer service

and ultimately outstanding performance. We also believe that in order to harness that diversity, we need inclusion, where

all employees are able to be themselves at work, and equity, where everyone is treated fairly.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 145

Cromwell has a 5 year Diversity, Equity and Inclusion Strategy which spans 2021 – 2026 and specifies our Group level goals

and our regional targets. Progress against our Australian targets in 2023 is provided below.

Number Group’s Australian business’s FY23 objective

Group’s Australian business’s

performance as at 30 June 2023

1 We will significantly reduce our

gender pay gap year on year.

We further reduced our gender

pay gap in 2023.

2 We will maintain pay parity. We maintained pay parity across

all equal roles.

3 We will achieve 40:40:20 gender

diversity at all levels.

We achieved 40:40:20 at all levels except the Employee

level, where women were overrepresented.

4 We will measure our cultural diversity. We did not achieve this in 2023 but plan to do so in 2024.

5 We will commence our Reconciliation journey and

develop a Reconciliation Action Plan (RAP).

We have drafted our Reflect RAP and expect to submit

to Reconciliation Australia for endorsement in FY24.

Cromwell also has a Board-approved Diversity and Inclusion Policy which sets out the framework the Group has in place

to achieve diversity in the composition of its Board, senior executive and broader workforce.

As at the date shown, the respective proportions of females and males on the Board, in senior executive positions and

across the employee workforce were as follows:

Date Body Females (% of total) Males (% of total) Total (100%)

As at 30 June 2023 Cromwell Board 3 (37.5%) 5 (62.5%) 8 (100%)

As at 30 June 2023 Senior executive

(1)

4 (45%) 5 (55%) 9 (100%)

As at 30 June 2023 Employees

(2)

70 (50%) 70 (50%) 140 (100%)

(1) Recommendation 1.5(c)(3)(A) requires the Group to disclose how it has defined ‘senior executive’ for these purposes. In this table, ‘senior executive’ means the

Australian Executive Committee, which, as at 30 June 2023, comprised: the CEO, Fund Manager, Chief Technology Officer, Head of Corporate Operations, Head of

Property Operations, Chief Investment Officer, Head of Retail Funds Management, Chief Financial Officer, and Chief Legal and Commercial Officer.

(2) Excludes the Board, senior executive, European business, Singaporean business, Phoenix Portfolios and Oyster Property Group.

Cromwell Property Group is a ‘relevant employer’ under the

Workplace Gender Equality Act 2012

(Cth) (WGEA). Cromwell’s

latest WGEA reporting is available on the Corporate Governance page on the Group’s website.

Cromwell Board diversity information

Cromwell Property Group is pleased to disclose the following diversity information about the Cromwell Board.

No Cromwell Director identifies as an Australian Aboriginal and/or Torres Strait Islander person.

Cromwell Directors’ ages are shown in this Statement under recommendation 2.3.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT146

What you can find in the corporate governance page on our website:

Diversity and Inclusion Policy

Nomination and Remuneration Committee Charter (now

known as the Nomination and People Committee Charter)

WGEA reporting

Gender Diversity Objectives (current financial year and

previous financial years)

Our Values

ww.cromwellpropertygroup.com/securityholder-centre/corporate-governance

In line with footnote 31 of the Recommendations, the webpage on the WGEA website where its latest Gender Equality

Indicators are available is:

www.wgea.gov.au/what-we-do/compliance-reporting/wgea-procurement-principles

What you can find in the sustainability page on our website:

ESG Report (current report and previous reports)

www.cromwellpropertygroup.com/sustainability

RECOMMENDATION 1.6

The Board undertakes an annual formal performance assessment, which includes an evaluation of the performance of

the Board, Board Committees and individual Directors and also a self-evaluation. Under the annual formal performance

assessment, Directors complete a questionnaire and can make comments or raise any issues they have in relation to

the performance. The results are compiled by the Company Secretary and discussed at a subsequent Nomination and

Remuneration Committee meeting, with all Directors in attendance. The formal performance assessment was conducted

for the 2023 financial year; it did not raise any governance issues that needed to be addressed but, in line with Cromwell

Property Group’s deep commitment to continuous improvement, a number of continuous improvement measures were

identified for implementation during the 2024 financial year. As shown in this Statement under recommendation 1.1,

the majority of individual Directors attended 100% with two Directors attending more than 90% of the Board and Board

Committee meetings they were eligible to attend during the 2023 financial year. The Board considers periodically using

external facilitators to conduct its performance reviews. The Deputy Chair of the Board and senior independent director

is responsible for the performance evaluation of the Chair of the Board, after having canvassed the views of the other

Directors. The performance evaluation of the Chair of the Board was conducted for the 2023 financial year; the Board

remains supportive of the leadership of the Chair of the Board and no issues were raised that needed to be addressed.

What you can find in the corporate governance page on our website:

Nomination and Remuneration Committee Charter (now known as the Nomination and People Committee Charter)

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

RECOMMENDATION 1.7

Cromwell Property Group has an established, rigorous process for the performance review of all employees, including

senior executives. The performance of senior executives and whether they have met their individual key performance

indicators is formally evaluated annually by the CEO, with regular feedback being provided during the performance

period. At the time of the reviews, the professional development of the senior executive is also discussed, along with any

training which could enhance their performance. Both qualitative and quantitative measures are used in the evaluation. A

performance evaluation for each senior executive was completed during the reporting period.

Under its Charter, the Nomination and Remuneration Committee is responsible for facilitating an annual review of the

performance of the CEO (an Executive Director). This annual review was completed for the 2023 financial year.

What you can find in the corporate governance page on our website:

Nomination and Remuneration Committee Charter (now known as the Nomination and People Committee Charter)

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 147

Principle 2: Structure the board to add value

RECOMMENDATION 2.1

Nomination and Remuneration Committee

The Board’s Nomination and Remuneration Committee has four members, all of whom are Non-executive Directors and three

of whom are independent Directors. The Committee is chaired by an independent Director who is not the Chair of the Board.

The Nomination and Remuneration Committee operates under a Board-approved written Charter. The Charter

sets out the Nomination and Remuneration Committee’s various responsibilities, including reviewing and making

recommendations to the Board in relation to:

• Board succession planning generally;

• induction and continuing professional development programmes for Directors;

• the development and implementation of a process for evaluating the performance of the Board, Board Committees and

Directors;

• the process for recruiting new Directors;

• the appointment, or re-election, of Directors to the Board;

• the performance and education of Directors;

• reviewing and recommending remuneration arrangements for the Directors, the CEO and senior executives; and

• ensuring succession plans are in place with regard to the CEO and other senior executives.

The Nomination and Remuneration Committee:

• may seek any information it considers necessary to fulfil its responsibilities;

• has access to management to seek explanations and information;

• may seek professional advice from employees of the Group and independent professional advice and services from

appropriate external advisors (independent of management), at Cromwell Property Group’s cost; and

• may meet with external advisors without management being present.

On at least an annual basis, the Board or the Nomination and Remuneration Committee reviews the time required from a

Non-executive Director and whether Directors are meeting that requirement.

The Directors’ Report discloses the members of the Nomination and Remuneration Committee, the number of times that

the Committee met during the 2023 financial year and the individual attendances of the members at those meetings. For

easy reference, the information (including percentages of total) is shown in this Statement under recommendation 1.1.

Following the 2023 financial year the Charter for the Committee was reviewed and updated including a change of name to

the Nomination and People Committee.

What you can find in the corporate governance page on our website:

Nomination and Remuneration Committee Charter (now known as the Nomination and People Committee Charter)

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

RECOMMENDATION 2.2

Board Skills Matrix

The Board reviews, on a regular basis, the mix of skills, experience, independence, knowledge and diversity represented by

Directors on the Board and determines whether the composition and mix remain appropriate for Cromwell’s purpose and

strategic objectives and whether they cover the skills needed to address existing and emerging business and governance

issues relevant to Cromwell Property Group.

The Board has adopted a Board Skills Matrix, which sets out the collective skills and attributes of the Board. The following

table outlines detailed descriptions of the experience and skills represented by the current composition of the Board,

and considered by the Board as desirable. The Board regularly reviews and updates its Board Skills Matrix to reflect the

strategy and direction of Cromwell Property Group. The Board assesses the extent to which each skill is represented on

the Board, with Cromwell Directors rating their skills as ‘well-developed’ (strong working knowledge and experience) or

‘developed’ (solid working knowledge and some experience). As shown in the table, all skills in the Board Skills Matrix are

well represented on the Board as a whole.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT148

Board Skills Matrix

Skill

Dr Weiss AM

Mr Ooi

Mr Blain

Mr Callaghan

Ms Cox

Mr Gersh AM

Ms Scenna

Ms Tang

Directors with well-developed

skills (number of Directors and

as a percentage of entire Board)

Directors with developed skills

(number of Directors and as a

percentage of entire Board)

Leadership and culture

Non-executive Director and Board Committee

experience in a publicly listed company in

Australia or overseas

Experience at an executive level in business

including the ability to assess the performance of

the CEO and senior management

Understanding, implementing and monitoring

good organisational culture

8 (100%) N/A

Property and asset management

Experience in, and appropriate knowledge of, the

Australian and European commercial property

market in one or more of the following areas:

acquisitions and disposals; asset management;

property management; leasing; facilities

management; and development

Experience in, and knowledge of, other property

markets in other relevant jurisdictions (ie,

international) and other property market sectors

8 (100%) N/A

Funds / investment management

Significant experience in, and knowledge of,

wholesale and retail funds management, in

Australia and globally

7 (87.5%) 1 (12.5%)

Commercial capability

Deep experience at a Board or executive level

with a listed company(ies) in the ASX300 or

international equivalent, with an understanding of

capital raising, takeovers, continuous disclosure

and corporate governance

Ability to think strategically and identify and

critically assess strategic opportunities and

threats and develop effective strategies to meet

Cromwell Property Group’s identified objectives

8 (100%) N/A

Risk oversight

Ability to identify or recognise key risks to

Cromwell Property Group across its various

operations and monitor risk management

frameworks

8 (100%) N/A

Well-developed skills: strong working knowledge and experience

Developed skills: solid working knowledge and some experience

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 149

Skill

Dr Weiss AM

Mr Ooi

Mr Blain

Mr Callaghan

Ms Cox

Mr Gersh AM

Ms Scenna

Ms Tang

Directors with well-developed

skills (number of Directors and

as a percentage of entire Board)

Directors with developed skills

(number of Directors and as a

percentage of entire Board)

Financial acumen

Ability to understand key financial statements;

critically assess financial viability and

performance; contribute to financial planning;

monitor operating and capital expenditure

budgets; and monitor debt levels and funding

arrangements; and/or

Experience as a partner in a top tier accounting

firm, or as a CFO in a listed company in the

ASX300 or international equivalent, with a deep

understanding of the accounting standards

applicable to Cromwell Property Group’s financial

reports and Cromwell Property Group’s financial

accountability process

8 (100%) N/A

Debt management

Experience in the banking industry or in a

corporate treasury department giving an

understanding of the debt market in Australia,

Europe or elsewhere

5 (62.5%) 3 (37.5%)

People

Experience in managing human capital,

remuneration and reward, industrial relations,

workplace health and safety and strategic

workforce planning

8 (100%) N/A

Public policy, government, economics

Experience with either federal or state (or

equivalent) government ministers or departments

giving a knowledge of agendas, policies or

processes.

Understanding of key macro and micro economic

indicators and market cycles and their impact on

Cromwell Property Group and the environment in

which it operates

4 (50%) 4 (50%)

ESG

Demonstrate an understanding of health and

safety practices

Understanding of risks and opportunities

regarding climate change

Former or current role with direct accountability

for environment practices including energy, water

management, emissions and land management

7 (87.5%) 1 (12.5%)

Well-developed skills: strong working knowledge and experience

Developed skills: solid working knowledge and some experience

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT150

The Board considers that its current members have an appropriate mix of skills, personal attributes and experience that

allows the Directors individually, and the Board collectively, to discharge their duties effectively and efficiently. The Board

comprises individuals who understand the business of the Group and the environment in which it operates and who can

effectively assess management’s performance in meeting agreed objectives and goals.

The Directors’ Report provides the following information about each Director:

• profile, including qualifications and experience; and

• special responsibilities and attendances at Board and Board Committee meetings. For easy reference, attendances at

meetings are reproduced in this Statement.

The Nomination and Remuneration Committee refers to the Board Skills Matrix when considering Board succession

planning and professional development initiatives for the Directors.

What you can find in the corporate governance page on our website:

Nomination and Remuneration Committee Charter (now known as the Nomination and People Committee Charter)

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

RECOMMENDATION 2.3

The Board

The Group recognises that independent Directors are important in reassuring securityholders that the Board properly

fulfils its role. As at 30 June 2023, the Board comprised eight Directors, with a Non-executive Chair, an independent

Non-executive Deputy Chair and a majority of independent Non-executive Directors:

Director (age) First appointed Status

Dr Gary Weiss AM (Chair) (70) 18 September 2020 Non-executive Director/Chair

Mr Eng Peng Ooi (67) 8 March 2021

Independent Non-executive Director/Deputy Chair/

Senior Independent Director

Mr Robert Blain (68) 8 March 2021 Independent Non-executive Director

Mr Jonathan Callaghan (52)

7 October 2021

5 October 2021

Managing Director

Chief Executive Officer

Ms Tanya Cox (62) 21 October 2019 Independent Non-executive Director

Mr Joseph Gersh AM (67) 18 September 2020 Independent Non-executive Director

Ms Lisa Scenna (55) 21 October 2019 Independent Non-executive Director

Ms Jialei Tang (28) 9 July 2021 Non-executive Director

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 151

Each year, independence status is assessed using the guidelines and factors set out in the Recommendations and each

independent Non-executive Director also confirms to the Board, in writing, their continuing status as an independent

Director.

In assessing a Director’s independence status, the Board has adopted a materiality threshold of 5% of the Group’s net

operating income or 5% of the Group’s net tangible assets (as appropriate) as disclosed in its last audited financial

accounts.

The length of time that each independent Director has served on the Board is shown in the table above.

The Board is comfortable that no Director has served for a period such that their independence may have been

compromised. The Board also recognises that the interests of Cromwell Property Group and its securityholders are likely

to be well served by having a mix of Directors, some with a longer tenure with a deep understanding of Cromwell and its

business and some with a shorter tenure with fresh ideas and perspective.

Cromwell Property Group’s independent Non-executive Directors are considered by the Board to meet the test of

independence under the Recommendations.

Each independent Non-executive Director has undertaken to inform the Board as soon as practical if they think their

status as an independent Director has or may have changed.

What you can find in the corporate governance page on our website:

Board Charter

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

RECOMMENDATION 2.4

As at 30 June 2023, the Board comprised eight Directors, with a Non-executive Chair, an independent Non-executive

Deputy Chair and a majority of independent Non-executive Directors.

The Non-executive Directors confer periodically as a group without senior executives present.

What you can find in the corporate governance page on our website:

Board Charter

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

RECOMMENDATION 2.5

The Chair of the Board – Dr Gary Weiss AM – is a Non-executive Director and the Deputy Chair of the Board and senior

independent director – Mr Eng Peng Ooi – is an independent Non-executive Director. Mr Jonathan Callaghan is the CEO,

and an Executive Director, of Cromwell Property Group.

This is consistent with the Board Charter, which stipulates that the Chair of the Board will not be the same person as the

CEO and, if the Chair of the Board is not an independent Non-executive Director, then the Board will elect an independent

Non-executive Director as Deputy Chair of the Board or as the ‘senior independent director’. The Deputy Chair of the

Board or senior independent director will act as Chair of the Board if the Chair faces a conflict of interest.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT152

The Board Charter sets out the responsibilities of the Chair, including:

• leading the Board and Cromwell Property Group;

• facilitating the effective contribution and ongoing development of all Directors;

• promoting constructive and respectful relations between Board members and between the Board and management;

and

• facilitating Board discussions to ensure that core issues facing Cromwell Property Group are addressed.

The Recommendations note that the role of chair is demanding, requiring a significant time commitment. As shown in this

Statement under recommendation 1.1, Chair of the Board Dr Gary Weiss AM attended 100% of the Board and Board

Committee meetings he was eligible to attend during the 2023 financial year.

What you can find in the corporate governance page on our website:

Board Charter

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

RECOMMENDATION 2.6

An induction programme ensures that new Directors can discharge their responsibilities effectively, participate fully and

actively in decision making, and add value, upon their appointment. The programme includes:

• meeting with fellow Directors and the senior executive team and receiving briefings on Cromwell Property Group’s

strategy, structure, business operations, history, culture and key risks;

• reviewing materials and policies in relation to corporate governance, legal duties and responsibilities and key

accounting matters and directors’ responsibilities; and

• undertaking Cromwell Property Group property asset and office site visits.

Each year, the Nomination and Remuneration Committee assesses whether the Directors, as a group, have the skills,

knowledge and experience to deal with new and emerging business and governance issues and recommends to the Board

a professional development programme for Directors. This includes training relevant to each skill area of the Board

Skills Matrix and on key issues relevant to Cromwell Property Group’s operations, financial affairs and governance. The

professional development programme is compiled in light of recent or potential developments (internal and external)

as well as any skills or knowledge gaps identified by the Nomination and Remuneration Committee. Directors also have

access to the inhouse training sessions provided by Cromwell Property Group’s Risk and Compliance team and Finance

team. On an ongoing basis, Directors are provided with briefings on material changes to accounting standards, laws and

regulations relevant to Cromwell Property Group.

During the 2023 financial year, Directors undertook Cromwell Property Group property asset and office site visits.

What you can find in the corporate governance page on our website:

Nomination and Remuneration Committee Charter (now known as the Nomination and People Committee Charter)

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 153

Principle 3: Act ethically and responsibly

RECOMMENDATION 3.1

Cromwell Property Group is a ‘values led’ organisation. Its corporate values, as disclosed on the website and in the Board-

approved Code of Conduct, are as follows:

Such values underpin Cromwell Property Group’s vision, which is to be a trusted, global real estate fund manager, with a

local presence.

Cromwell Property Group’s Directors, senior executives and employees are required to act lawfully, ethically and

responsibly. This is reinforced by the values and the various practices and policies of the Group.

The Board and the senior executives reinforce Cromwell Property Group’s values in their interactions with Cromwell’s

wider team. Appropriate standards are communicated and reinforced to all employees at induction sessions, regular

refresher training and team meetings and in staff communications.

What you can find in the corporate governance page on our website:

Our Values

Code of Conduct (encompassing bribery and corruption)

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT154

RECOMMENDATION 3.2

All Directors, senior executives and employees are expected to act with integrity and strive at all times to enhance the

reputation and performance of Cromwell Property Group. To reinforce this culture, Cromwell Property Group has a Board-

approved Code of Conduct to provide guidance about the attitudes and behaviour necessary to maintain stakeholder

confidence in the integrity of Cromwell Property Group and comply with the Group’s legal obligations. The Board-approved

Code of Conduct is made available to all Directors, senior executives and employees and they are reminded of the

importance of the Code of Conduct on a regular basis, including through refresher training. The Code of Conduct is also

published on Cromwell Property Group’s website.

Compliance with Board-approved policies (including the Code of Conduct) is monitored via monthly checklists completed

by key management and proactive testing programmes and by investigation following any report of a breach. Compliance

monitoring is undertaken by the Compliance team under the direction of the Head of Risk and Compliance. The Board

and the ESG and Risk Committee are notified of any material breaches of the Code of Conduct. The Directors and senior

executives take appropriate and proportionate disciplinary action against those who breach the Code of Conduct.

There were no material breaches of the Code of Conduct during financial year 2023.

RECOMMENDATIONS 3.3 AND 3.4

Cromwell Property Group has a Board-approved Whistleblower Protection Policy and a Code of Conduct encompassing

anti-bribery and corruption.

These policies actively encourage and support reporting to appropriate management of any actual or potential breaches

of the Group’s legal obligations and/or of the Code of Conduct and any concerns about any unlawful, unethical or

irresponsible behaviour within Cromwell Property Group.

The ESG and Risk Committee is informed of any incidents reported under Cromwell Property Group’s Whistleblower

Protection Policy and any incidents of bribery or corruption prohibited by the Code of Conduct.

What you can find in the corporate governance page on our website:

Whistleblower Protection Policy

Code of Conduct (encompassing anti-bribery and corruption)

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

Principle 4: Safeguard integrity in corporate reporting

RECOMMENDATION 4.1

Audit Committee

The Board is responsible for the integrity of the Group’s corporate reporting. To assist in discharging this function, the

Board has an Audit Committee. The Board’s Audit Committee has four members, all of whom are Non-executive Directors

and a majority of whom are independent Directors. The Committee is chaired by an independent Director who is not the

Chair of the Board.

The Audit Committee operates under a Board-approved written Charter, which sets out the Audit Committee’s:

• objectives, including to maintain and improve the quality, credibility and objectivity of the financial accountability

process (including financial reporting on a consolidated basis); and

• responsibilities, including reviewing and making recommendations to the Board in relation to:

• whether Cromwell Property Group’s financial statements reflect the understanding of the Audit Committee

members, and otherwise provide a true and fair view, of the financial position and performance of the Group;

• the appropriateness of any significant estimates or judgements in the financial reports (including those in any

consolidated financial statements); and

• the appointment or removal, and review of effectiveness and independence, of the external auditor.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 155

The Directors’ Report discloses:

• the relevant qualifications and experience of the members of the Audit Committee; and

• the number of times that the Audit Committee met during the 2023 financial year and the individual attendances of

the members at those meetings. For easy reference, the information (including percentages of total) is shown in this

Statement under recommendation 1.1.

The Audit Committee:

• may seek any information it considers necessary to fulfil its responsibilities;

• has access to management to seek explanations and information;

• has access to auditors to seek explanations and information from them, without management being present;

• may seek professional advice from employees of the Group and independent professional advice from appropriate

external advisors, at Cromwell Property Group’s cost; and

• may meet with external advisors without management being present.

During the 2023 financial year, the external auditor attended all of the meetings of the Audit Committee and time was

made available for the Committee to meet with the external auditor without management being present.

The external auditor has declared its independence to the Board and to the Audit Committee. The Board is satisfied the

standards for auditor independence and associated issues have been met.

What you can find in the corporate governance page on our website:

Audit Committee Charter

Auditor Independence Policy

External Auditor – Selection, Appointment and Rotation

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

RECOMMENDATION 4.2

Before it approves the Group financial statements for a financial period, the Board receives from the CEO and CFO a

written declaration that, in their opinion, the financial records of the entity have been properly maintained and the financial

statements comply with the appropriate accounting standards and give a true and fair view of the financial position and

performance of the entity and that the opinion has been formed on the basis of a sound system of risk management and

internal control which is operating effectively.

RECOMMENDATION 4.3

For any periodic corporate report that Cromwell releases to the market that is not audited or reviewed by an external

auditor, Cromwell has a robust review, verification and approval process to verify the integrity of those reports. Cromwell

undertakes an internal review and verification exercise, with material statements verified by relevant managers and

all verification materials retained in corporate records. Review by independent advisors is obtained where appropriate.

Cromwell Property Group’s Market Disclosure Protocol provides for a sign off protocol for each announcement to ensure

that Directors review and (where applicable) approve announcements prior to release; in addition, at least two Disclosure

Officers review and approve the announcement and, in accordance with ASX Listing Rule 15.5 (as amended from time to

time), authorise the lodgement of the announcement with the ASX.

Cromwell adopts this process to satisfy itself that the relevant report is materially accurate, balanced and provides

securityholders with appropriate information to make informed investment decisions.

What you can find in the corporate governance page on our website:

Market Disclosure Protocol

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT156

Principle 5: Make timely and balanced disclosure

RECOMMENDATIONS 5.1, 5.2 AND 5.3

Cromwell Property Group believes that all stakeholders should be informed in a timely and widely available manner of all

material information concerning the Group, including its financial position, performance, ownership and governance. In

particular, Cromwell Property Group strives to ensure that any price sensitive material for public announcement is lodged

with the ASX before external disclosure elsewhere and posted on the Group’s website as soon as reasonably practicable

after lodgement with the ASX.

The Group has a Market Disclosure Protocol which includes policies and procedures designed to ensure compliance with

the continuous disclosure obligations under the ASX Listing Rules.

The Board receives copies of all market announcements promptly after such announcements have been released. This

ensures that the Board has timely visibility of the nature and quality of information disclosed to the market and the

frequency of disclosures. Cromwell Property Group’s Market Disclosure Protocol provides for a sign off protocol to ensure

that Directors review and (where applicable) approve announcements prior to release.

When Cromwell Property Group is giving a presentation, a copy of the presentation materials is released on the ASX

Market Announcements Platform ahead of the presentation. Examples of such presentations are those delivered for

half year results and full year results and at the AGM and any general meeting. In addition, for the AGM and any general

meeting, a copy of the Chair’s address and the CEO’s address is released on the ASX Market Announcements Platform

before the commencement of the meeting.

Cromwell Property Group is committed to providing securityholders with the opportunity to engage and participate in

presentations and meetings. For the AGM on 16 November 2022, securityholders were invited to attend in-person at the

Group’s Brisbane office or to participate in the meeting ‘virtually’ through an online platform provided by Cromwell’s

registry, Link Market Services Limited. Securityholders participating ‘virtually’ were able to participate in the meeting by

viewing the meeting live, viewing and hearing the Chair’s address and the CEO’s address, viewing the presentation slides,

asking questions (written via the online platform or verbal via telephone) and voting online.

What you can find in the corporate governance page on our website:

Market Disclosure Protocol

Investor Relations Policy

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 157

Principle 6: Respect the rights of securityholders

RECOMMENDATION 6.1

Cromwell Property Group aims to keep securityholders informed on an ongoing basis of the Group’s performance and

all major developments. Securityholders receive regular reports and the Group uses its website as its primary means

of providing information to securityholders and the broader investment community about the Group’s business, history,

corporate structure, corporate governance and financial performance.

The Corporate Governance page on the Group’s website provides:

• a link to information about the Board of Directors;

• key corporate governance documents, including constitutions, charters and policies;

• a link to key events in the Corporate Governance calendar;

• a link to a description of the Group’s stapled security dividends/distributions policy and information about the Group’s

dividend/distribution history;

• a link to download relevant securityholder forms; and

• materials referred to in this Statement.

The Group’s website also provides:

• an overview of the Group’s current business;

• a description of how the Group is structured;

• a summary of the Group’s history;

• a statement of the Group’s values;

• documents that the Group releases publicly (such as annual reports, ASX announcements, notices of meeting and

company news items);

• historical information about the market prices of Cromwell Property Group securities;

• ahead of the AGM (or any general meeting), information including time and venue and a copy of the Chair’s address,

the CEO’s address and the presentation materials;

• contact details for enquiries from securityholders, analysts or the media; and

• contact details for its securities registry.

Our website address:

www.cromwellpropertygroup.com

The Corporate Governance page on our website:

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

RECOMMENDATION 6.2

Cromwell Property Group has a Board-approved Investor Relations Policy, which has been designed to facilitate

effective two-way communication with all Cromwell securityholders (institutional and retail) and other financial market

participants, and to ensure that Cromwell gives all Cromwell securityholders and other financial market participants

easy and timely access to balanced and understandable information about Cromwell’s business, governance, financial

performance and prospects.

The Policy also sets out the policies and processes that the Group has in place to encourage participation of

securityholders and financial market participants in the AGM. This is important to the Group because it assists with

ensuring a high level of accountability and identification with the Group’s strategies and goals.

What you can find in the corporate governance page on our website:

Investor Relations Policy

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT158

RECOMMENDATION 6.3

Cromwell Property Group facilitates and encourages participation at meetings of securityholders.

Prior to the meeting, securityholders will be provided with a notice of meeting outlining the resolutions to be voted upon.

This will be sent to securityholders in electronic or printed form (as elected) within the timeframe set by the Corporations

Act. This material relating to the meeting will be released via the ASX Market Announcements Platform and made

available on the Cromwell website.

A proxy form, allowing securityholders to appoint a proxy in the event they cannot attend the meeting, will accompany the

notice of meeting.

A copy of the Chair’s address, CEO’s address and the meeting presentation materials are released on the ASX Market

Announcements Platform before the commencement of the meeting.

At the AGM, the Chair and the CEO each address the meeting and provide securityholders with an update on the

Group’s business, governance, financial performance and prospects and any areas of concern or interest to the

Board and management. Cromwell will also ensure that the current external audit partner is in attendance to answer

securityholders’ questions about the audit.

Securityholders are encouraged to participate and ask questions at securityholder meetings. The Chair and CEO take any

comments and questions received from securityholders during or after their address. The Chair provides securityholders

with an opportunity to ask questions about and discuss the specific resolutions put to the meeting. Securityholders have

the opportunity to ask questions about or comment on the management of the Group.

The notice of meeting for the AGM advises that securityholders entitled to cast their vote at the AGM may submit written

questions to the auditor relevant to the content of the auditor’s report or the conduct of the audit of the annual financial

report being considered at the AGM, or otherwise may submit written questions about or comments on the management

of the Group. A securityholder wishing to submit a question is asked to submit the question in writing to the Company

Secretary up to 48 hours before the AGM. A list of the questions submitted is made available to securityholders attending

the AGM at or before the start of the AGM. Where appropriate, these questions and comments are addressed at the

meeting by being read out and then responded to at the meeting. At the AGM, the Chair reminds securityholders of the

opportunity to ask questions, including questions about or comments on the management of the Group.

Securityholder meetings are held during business hours at the Group’s registered office in Brisbane, which is accessible

by public transport and near paid carparking locations. Cromwell provides ‘virtual’ online participation through a platform

provided by Cromwell’s registry, Link Market Services Limited, so that securityholders can participate (including asking

questions and voting online) if they are unable to attend the meeting in person.

For the AGM on 16 November 2022, securityholders were invited to attend in-person at the Group’s Brisbane office or

to participate in the meeting ‘virtually’ through an online platform provided by Cromwell’s registry, Link Market Services

Limited. Securityholders participating ‘virtually’ were able to participate in the meeting by viewing the meeting live,

viewing and hearing the Chair’s address and the CEO’s address, viewing the presentation slides, asking questions (written

via the online platform or verbal via telephone) and voting online.

RECOMMENDATION 6.4

At the AGM on 16 November 2022 all resolutions were decided by way of a poll rather than by a show of hands.

RECOMMENDATION 6.5

Cromwell Property Group gives its securityholders the option to receive communications from the Group and from its

securities registry electronically. Most securityholders have elected to receive all communications electronically, while

other securityholders have elected to receive all communications electronically with payment statements received by post.

Electronic communications sent by the Group and by the securities registry are formatted in a reader friendly and printer

friendly format.

Securityholders can send communications to the Group and to the securities registry electronically. The Contact page on

the Group’s website provides the email address for contacting the Group and the securities registry.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 159

Principle 7: Recognise and manage risk

RECOMMENDATION 7.1

ESG and Risk Committee

The Group is exposed to various risks across its business operations and recognises the importance of effectively

identifying and managing those risks so that informed decisions on risk issues can be made. The Board’s ESG and

Risk Committee has four members, all of whom are Non-executive Directors and a majority of whom are independent

Directors. The Committee is chaired by an independent Director who is not the Chair of the Board. The ESG and Risk

Committee operates under a Board-approved written Charter, which sets out the Committee’s various responsibilities,

including:

• assessing the effectiveness of the internal risk control system and management’s performance against the risk

management framework, including whether management is operating within the risk appetite set by the Board;

• receiving reports from management of any actual or suspected fraud, theft or other breach of internal controls and the

‘lessons learned’;

• receiving compliance assurance and internal risk control testing reports, including reviews of the adequacy of

processes for risk management, internal control and governance;

• receiving reports from management on new and emerging sources of risk and the risk controls and mitigation

measures that management has put in place to deal with those risks;

• making recommendations to the Board in relation to changes that should be made to the risk management framework

or to the risk appetite set by the Board; and

• receiving reports from management outlining the sustainability practices of the Group, including its assessment of the

potential impacts of climate change.

The ESG and Risk Committee:

• may seek any information it considers necessary to fulfil its responsibilities;

• has access to management to seek explanations and information;

• has access to auditors to seek explanations and information from them, without management being present;

• may seek professional advice from employees of the Group and independent professional advice from appropriate

external advisors, at Cromwell Property Group’s cost; and

• may meet with external advisors without management being present.

The Directors’ Report discloses:

• the relevant qualifications and experience of the members of the ESG and Risk Committee; and

• the number of times that the ESG and Risk Committee met during the 2023 financial year and the individual

attendances of the members at those meetings. For easy reference, the information (including percentages of total) is

shown in this Statement under recommendation 1.1.

What you can find in the corporate governance page on our website:

ESG and Risk Committee Charter

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

RECOMMENDATION 7.2

The Board is responsible for:

• satisfying itself that an appropriate risk management framework that covers both financial and non-financial risks is in

place and setting the risk appetite within which the Board expects management to operate; and

• reviewing and ratifying systems of internal compliance and control and legal compliance to ensure appropriate

governance and compliance frameworks and controls are in place.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT160

As outlined in its Board-approved Charter, the ESG and Risk Committee’s responsibilities include:

• overseeing the establishment and implementation of risk management and internal compliance and control systems

and ensuring there is a mechanism for assessing the efficiency and effectiveness of those systems at least annually;

• approving and recommending to the Board for adoption policies and procedures on risk oversight and management to

establish an effective and efficient system for:

• identifying, assessing, monitoring and managing risk; and

• disclosing any material change to the risk profile; and

• regularly reviewing and updating the risk profile.

Under the direction of the CEO, management is responsible for ensuring that the Group operates within the risk appetite

set by the Board. It does so by identifying relevant business risks, designing controls to manage those risks and ensuring

those controls are appropriately implemented. The Group has adopted an Enterprise Risk Management Policy, which is

a general statement of the Group’s approach to proactive, enterprise wide risk management. There is also a wide range

of underlying internal policies and procedures, which are designed to mitigate the Group’s material business risks. The

Group’s approach to enterprise risk management is guided by relevant International Standards and regulatory guidance

and the Recommendations.

Reviews of the enterprise risk management framework were completed in the 2023 financial year. The ESG and Risk

Committee and the Board were satisfied the framework continues to be sound and that Cromwell Property Group

operates within the risk appetite set by the Board.

Compliance Committee

Throughout the 2023 financial year a Compliance Committee – comprised of a majority of external members – monitored

the extent to which Cromwell Property Securities Limited (as Responsible Entity for the CDPT) complied with the CDPT’s

compliance plan and the underlying compliance framework. The Board of Cromwell Property Securities Limited received

regular reports from the Compliance Committee during the year. The roles and responsibilities of the Compliance

Committee are outlined in a Board-approved Charter, which is reviewed annually by the Compliance Committee. The

Board of the Responsible Entity may change the Charter at any time by resolution.

What you can find in the corporate governance page on our website:

Board Charter

ESG and Risk Committee Charter

Enterpris Risk Management Policy

Compliance Committee Charter

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

RECOMMENDATION 7.3

Although the Group does not have a designated internal audit function, throughout the year the Compliance team

conducts tests of the effectiveness of the controls and the appropriateness of the monitoring strategies in place for those

risks with an inherent risk rating of Very High or High. Relevant management confirm (monthly, quarterly or annually

as appropriate given the residual risk rating) that the controls remain appropriate and identify any new risks and any

new controls that should be put in place. In addition, over the course of the financial year, a number of external audit,

assurance, verification and independent review processes are undertaken in auditable focus areas such as work health

and safety, sustainability and cyber and information security. The findings are reported to the ESG and Risk Committee or

the Board or both.

RECOMMENDATION 7.4

The Group’s ESG Report discloses the extent to which the Group has material exposure to environmental or social

risks and explains how such risks are and will be managed. In previous years this disclosure was made in the Group’s

Sustainability Report.

What you can find on the Sustainability page on our website:

ESG Report (current edition and previous editions)

www.cromwellpropertygroup.com/sustainability

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 161

Principle 8: Remunerate fairly and responsibly

RECOMMENDATION 8.1

Nomination and Remuneration Committee

The Board has a long-established Nomination and Remuneration Committee, which operates under a Board-approved

written Charter. The Charter sets out the Nomination and Remuneration Committee’s various responsibilities, including

reviewing and making recommendations to the Board in relation to:

• coherent remuneration policies and practices to attract, retain and motivate senior executives and directors who will

create value for securityholders;

• the remuneration framework for Non-executive Directors, including the allocation of the pool of Directors’ fees;

• Executive Director and senior executive total remuneration;

• the design of any equity based incentive plan; and

• whether there is any gender or other inappropriate bias in remuneration policies and practices.

The Nomination and Remuneration Committee:

• may seek any information it considers necessary to fulfil its responsibilities;

• has access to management to seek explanations and information;

• may seek professional advice from employees of the Group and independent professional advice and services from

appropriate external advisors (independent of management), at Cromwell Property Group’s cost; and

• may meet with external advisors without management being present.

The Board’s Nomination and Remuneration Committee has four members, all of whom are Non-executive Directors and a

majority of whom are independent Directors. The Committee is chaired by an independent Director who is not the Chair of

the Board.

The Directors’ Report discloses the members of the Nomination and Remuneration Committee, the number of times that

the Committee met during the 2023 financial year and the individual attendances of the members at those meetings. For

easy reference, the information (including percentages of total) is shown in this Statement under recommendation 1.1.

Following the 2023 financial year the Charter for the Committee was reviewed and updated including a change of name to

the Nomination and People Committee.

What you can find in the corporate governance page on our website:

Nomination and Remuneration Committee Charter (now known as the Nomination and People Committee Charter)

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

RECOMMENDATION 8.2

The Directors’ Report (the section titled Remuneration Report) discloses information, including the policies and practices

regarding the remuneration of:

• Non-executive Directors; and

• the Executive Director and other senior executives.

The respective policies and practices reflect the different roles and responsibilities of Non-executive Directors and the

Executive Director and other senior executives.

As disclosed in the Remuneration Report, the Group’s Non-executive Directors are paid a fixed remuneration, comprising

base and committee fees or salary and superannuation (if applicable). Non-executive Directors do not receive bonus

payments or participate in security-based compensation plans and are not provided with retirement benefits other than

statutory superannuation. The Group’s Non-executive Directors are required to have a minimum holding of Cromwell

Property Group stapled securities equivalent to the Non-executive Director annual fee within three years of their start

date.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT162

The Remuneration Report details the nature and amount of remuneration of the Chief Executive Officer (Executive

Director) and other senior executives (Key Management Personnel or KMP).

Remuneration packages are designed to align the KMP’s interests with those of securityholders. Objectives and key

results (or OKRs) for each KMP consider their role within Cromwell generally as well as their expected contribution to the

achievement of Cromwell’s objectives. The OKRs are designed to best incentivise each KMP to meet Cromwell’s objectives

and therefore best serve the interests of securityholders. This is achieved by providing remuneration packages which

consist of the following three elements (or a combination thereof) where appropriate:

• Fixed component in the form of a cash salary;

• An at-risk cash and equity award that is linked solely to performance of a tailored set of objectives, where appropriate;

and

• At-risk longer-term equity payment. This third element is equity based remuneration aimed at alignment with

securityholder outcomes and retention.

The Group has an official clawback policy on unvested rights and deferred securities and malus and clawback clauses

allow unvested securities to be clawed back where a recipient has acted fraudulently, dishonestly or where there has

been a material misstatement or omission in the Group’s financial statements leading to receipt of an unfair benefit.

Unvested stapled securities held by a participant under Cromwell Property Group’s Stapled Security Incentive Plan lapse

in certain circumstances including where, in the Plan Committee’s opinion, they are liable to clawback under the clawback

policy. Additionally, performance rights under Cromwell Property Group’s Performance Rights Plan lapse under certain

circumstances including a determination by the Plan Committee that the performance right should lapse because the

participant, in the Plan Committee’s opinion, has committed any act of fraud, defalcation or gross misconduct in relation

to the affairs of a body corporate in the Group.

For all KMP except the CEO and Non-executive Directors, the CEO is responsible for setting OKR targets which are

reviewed by the Board and assessing annually whether those targets have been met. The OKR targets for the CEO are set,

revised and reviewed annually by the Nomination and Remuneration Committee and the Board.

What you can find in the corporate governance page on our website:

Nomination and Remuneration Committee Charter (now known as the Nomination and People Committee Charter)

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

RECOMMENDATION 8.3

In accordance with the remuneration policy, the Group operates:

• a Performance Rights Plan and has issued performance rights to a number of senior executives. The terms of the

Group’s Performance Rights Plan do not allow participants, whether Executive Directors or other employees, to hedge

or otherwise limit the economic risk of their participation in the Plan; and

• a Stapled Security Incentive Plan and has offered Cromwell Property Group securities to a number of senior

executives. The terms of the Group’s Stapled Security Incentive Plan do not allow participants, whether Executive

Directors or other employees, to hedge or otherwise limit the economic risk of their participation in the Plan.

What you can find in the corporate governance page on our website:

Plan Rules for the Cromwell Property Group Performance Rights Plan

Plan Rules for the Cromwell Property Group Stapled Security Incentive Plan

www.cromwellpropertygroup.com/securityholder-centre/corporate-governance

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 163

SECURITYHOLDER

INFORMATION

The securityholder information set out below was applicable as at 31 August 2023, unless stated otherwise.

Spread of Stapled Securityholders

Category of Holding Number of Securities Percentage of Holders

100,001 and Over 2,317,919,258 88.51

50,001 to 100,000 126,549,615 4.83

10,001 to 50,000 153,013,396 5.84

5,001 to 10,000 13,796,580 0.53

1,001 to 5,000 6,973,369 0.27

1 to 1,000 614,481 0.02

Total 2,618,866,699 100.00

Unmarketable Parcels

The number of stapled securityholdings held in a less than marketable parcel was 1,472.

Substantial Securityholders

Holder Stapled Securities Date of Notice

ESR Cayman Limited 803,686,459 06/08/2021

Tang family and related entities 433,607,179 19/06/2020

Vanguard Group 158,222,142 23/09/2021

Voting Rights

On a show of hands, every securityholder present at a meeting in person or by proxy shall have one vote and, upon a poll,

every securityholder shall have effectively one vote for every security held.

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT164

20 Largest Securityholders

Rank Holder

Number of

Stapled

Securities Held

% Held of

Issued Stapled

Securities

1 CITICORP NOMINEES PTY LIMITED 450,797,633 17.21

2 ARA REAL ESTATE INVESTORS XXI PTE LTD 329,520,331 12.58

3 ARA REAL ESTATE INVESTORS XXI PTE LTD 287,872,078 10.99

4 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 279,288,141 10.66

5 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 194,625,228 7.43

6 ARA REAL ESTATE INVESTORS 28 LIMITED 186,294,797 7.11

7 BNP PARIBAS NOMS PTY LTD <DRP> 105,388,352 4.02

8 BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM 61,735,467 2.36

9 NATIONAL NOMINEES LIMITED 24,081,750 0.92

10 CITICORP NOMINEES PTY LIMITED <COLONIAL FIRST STATE INV A/C> 13,450,750 0.51

11 BNP PARIBAS NOMINEES PTY LTD <AGENCY LENDING DRP A/C> 10,297,611 0.39

12 HUMGODA INVESTMENTS PTY LTD 8,328,943 0.32

13 PANMAX PTY LTD <PANMAX PTY LTD S/FUND A/C> 6,827,001 0.26

14 ELEGANT GEORGE PTY LTD 5,919,000 0.23

15 BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD <DRP A/C> 5,339,055 0.20

16 BNP PARIBAS NOMS(NZ) LTD <DRP> 5,214,636 0.20

17 WALLACE SMSF PTY LTD <PJ & BM WALLACE PS/F A/C> 4,911,779 0.19

18 NORMAN CHAN PTY LTD <BLUE ELEPHANT FAMILY A/C> 3,850,000 0.15

19 NUSHAPEMALL COM PTY LTD <MICHAEL BENJAMIN S/F A/C> 3,847,464 0.15

20 CABET PTY LTD 3,723,627 0.14

Total 1,991,313,643 76.04

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 165

Provision of Information for Securityholders

Cromwell Property Group aims to keep securityholders informed on an ongoing basis about the Group’s performance and

all major developments. Securityholders receive regular reports and the Group uses its website as its primary means

of providing information to securityholders and the broader investment community about the Group’s business, history,

corporate structure, corporate governance and financial performance, in accordance with the rules and guidelines of the

Australian Securities Exchange (ASX) and other regulatory bodies. The following information can also be found on the

Cromwell website at www.cromwellpropertygroup.com.

ASX LISTING

Cromwell Property Group is listed on the Australian Securities Exchange (ASX code: CMW).

SECURITYHOLDER DETAILS

Securityholders can access information on their holdings and update their details through Cromwell’s securities registry

provider.

Link Market Services Limited

Level 21, 10 Eagle Street

Brisbane QLD 4000

Telephone:

1300 550 841 or +61 1300 554 474

Web: www.linkmarketservices.com.au

Email: cromwell@linkmarketservices.com.au

Securityholders can change or update details in a number of ways:

• Send written authorisation to the registry quoting our SRN / HIN and signing the request:

• Log on to www.linkmarketservices.com.cu; or

• Call the registry.

You will have to verify your identity by providing your personal details. Bank detail changes must be requested in writing

or electronically and cannot be made over the phone. Address changes must requested in writing to the registry or your

CHESS Sponsor.

Securityholders are not obliged to quote their TFN, ABN or exemption. However, if these details are not lodged with the

registry, Cromwell is obliged to deduct tax from unfranked portions of dividend payments and distribution payments up to

the highest marginal tax rate, depending on residency.

DISTRIBUTIONS/DIVIDENDS

Cromwell Property Group Dividends/Distributions

During the year, the following distributions/dividends have been paid:

Quarter Ending Amount per Security Ex Date Record Date Payment Date

30 June 2023 1.37500 cents 29 June 2023 30 June 2023 18 August 2023

31 March 2023 1.37500 cents 30 March 2023 31 March 2023 19 May 2023

31 December 2022 1.37500 cents 29 December 2022 30 December 2022 17 February 2023

30 September 2022 1.37500 cents 29 September 2022 30 September 2022 18 November 2022

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT166

Further information

The Cromwell website provides a comprehensive range of information on the Group, past performance and products.

The website address is www.cromwellpropertygroup.com. Requests for further information about the Group, its dealings

and key securityholder communications should be directed to:

Cromwell’s Investor Services Team

Cromwell Property Group

GPO Box 1093

Brisbane QLD 4001 Australia

Telephone:

1300 268 078 or +61 7 3225 777

Email: Invest@cromwell.com.au

LISTING:

Cromwell Property Group is listed on the Australian Securities Exchange (ASX: CMW)

SECURITIES REGISTRY:

Link Market Services limited

Level 21, 10 Eagle Street

Brisbane QLD 4000

Telephone:

1300 550 841 or +61 1300 554 474

Fax: +61 2 9287 0303

Web: www.linkmarketservices.com.au

AUDITOR:

Deloitte Touche Tohmatsu

Level 23, Riverside Centre

123 Eagle Street

Brisbane QLD 4000

Telephone:

+61 7 3308 7000

Web: www.deloitte.com.au

CROMWELL PROPERTY GROUP I 2023 ANNUAL REPORT 167