Company research report about Mirvac group

User Generated

Lnattttt

Description

Find the most recent annual report for your company and answer the following questions in your own words.

The detail information are all in the files.

Unformatted Attachment Preview

ASSIGNMENT 20%: ASSESSMENT Criteria Criteria Understanding of cash and internal controls Company research using annual report Professional presentation of report F0 30% 40% 30% There is no supporting evidence. There is no supporting evidence. There is no supporting evidence. F1 Does not understand internal control. Does not demonstrate an understanding of the company and the information in the annual report.All questions are poorly answered and require more research. Very poorly presented and written. Writing is very hard to understand. No referencing. F2 F3 P C A very limited understanding of internal control. Shows some understanding of the internal control, with a mix of correct and incorrect application to question. A basic understanding of internal control and application to the question. Good understanding of internal control, but some errors in applying to the questions. Good understanding of internal control and application to the questions. High level of understanding of internal control. Rules were applied correctly to the questions given. Demonstrates poor understanding of the company and the information in the annual report. Most questions are poorly answered and require more research. Demonstrates a some understanding of the company and the information in the annual report. A mix of answers to the questions, with most answers requiring more research. Demonstrates a good understanding of the company and the information in the annual report. Most questions answered to a satisfactory level. Demonstrates a very good understanding of the company and the information in the annual report. Almost all questions answered to a high level. Demonstrates a high level of understanding of the company and the information in the annual report. All questions answered to a high level. Poor presentation and writing, the meaning of the answers is hard to understand. Some parts may not be written in own words. Some parts incorrectly referenced Poor presentation and writing. Some parts may not be written in own words. Some parts incorrectly referenced Basic presentation and writing. All work written using own words with correct referencing of sources. Good presentation and writing. All work written using own words with correct referencing of sources. Excellent presentation and very well written. All work written in own words using correct referencing of sources. Demonstrates a basic understanding of the company and the information in the annual report. A mix of answers to the questions, with some answers requiring more research. Satisfactory presentation. Could make some improvements in presentation and writing. All work written in own words. A mix of correct and incorrect referencing of sources D HD ASSIGNMENT 20%- Includes two parts PART 1 Company Research Report 70% My company name is:_____Mirvac group ________________ Find the most recent annual report for your company and answer the following questions in your own words. 1. Explain in your own words what the business does to earn a profit? Explain in detail in your own words: • the product or service they provide • what activities they need to do to provide this product or service • who the customers are • where does the company do its business 2. Find the financial statements in the most recent annual report. Take a screenshot the statements and include them in your report. Explain:What story do the financial statements tell about the company? In your answer critically analyse and discuss the main revenue, expenses and profit. Also discuss the main assets, liabilities and equity. Discuss the main accounts and the amounts in the statements in explaining your answer. Also look at the start of the annual report for some details explaining why the profit changed or why any balance sheet items changed. Include this in your own words in your explanations, remembering to include in-text citations. 3. Notes to the financial statements: Choose one note to the financial statement. Take a screenshot of this note and include it in your report. Explain: In your own words, what this note explains about the financial statements. 4. Independent Audit Report: Find the independent audit report. Answer the following questions in your own words: • Who is the auditor? • What information is included in the independent audit report? • How much was the auditor paid to do the audit in the most recent year? (This information is found in the notes to the financial statements) 5. Newspaper article: find a recent (after January 2017) newspaper article relating to your company. Take a screenshot of the article and copy it into your report. (Look at: smh.com.au, theaustralian.com.au, theage.com.au) Give a summary in your own words of the article and relate this to the business and its annual report. Format: In your answer you may use headings, subheadings and bullet points. No introduction or conclusion is required. Please check your writing is presented professionally and all work is written in your own words. All answers should include in-text citations and references. Words: 1000-2000 words Turnitin: less than 25% MIRVAC GROUP ANNUAL REPORT REPORT 2015 Mirvac Group Annual Report For the year ended 30 June 2015 Mirvac Group comprises Mirvac Limited (ABN 92 003 280 699) and its controlled entities (including Mirvac Property Trust (ARSN 086 780 645) and its controlled entities). Contents Directors’ report Remuneration report Auditor’s independence declaration Financial statements Directors’ declaration Independent auditor’s report to the members of Mirvac Limited Securityholder information Glossary of acronyms Directory MIRVAC GROUP ANNUAL REPORT 2015 Page 01 11 31 32 97 98 100 101 102 Directors’ report The Directors of Mirvac Limited present their report, together with the consolidated report of Mirvac Group (“Mirvac” or “Group”) for the year ended 30 June 2015. Mirvac comprises Mirvac Limited (“parent entity” or “company”) and its controlled entities, which includes Mirvac Property Trust (“MPT” or “Trust”) and its controlled entities. Directors The following persons were Directors of Mirvac Limited during the whole of the year and up to the date of this report, unless otherwise stated: — John Mulcahy — Susan Lloyd-Hurwitz — Christine Bartlett (appointed 1 December 2014) — Peter Hawkins — Samantha Mostyn (appointed 1 March 2015) — James M. Millar AM — John Peters — Elana Rubin. Principal activities The principal continuing activities of Mirvac consist of real estate investment, development and investment management. Mirvac has two core divisions: Investment (comprising MPT) and Development (comprising residential and commercial development). There are also two business units, Mirvac Investment Management which comprises third party capital management (Mirvac Capital (“Capital”)); and the property asset management business (Mirvac Asset Management (“MAM”)). Dividends/distributions Dividends/distributions paid to stapled securityholders during the year were as follows: 2015 $m June 2014 half yearly dividends/distributions paid on 28 August 2014: 4.60 cents per stapled security (“CPSS”) 169.8 June 2013 half yearly dividends/distributions paid on 26 July 2013: 4.50 CPSS December 2014 half yearly dividends/distributions paid on 26 February 2015: 4.50 CPSS 166.4 December 2013 half yearly dividends/distributions paid on 27 February 2014: 4.40 CPSS Total dividends/distributions paid 336.2 2014 $m 164.9 161.3 326.2 The June 2015 half yearly dividend/distribution of 4.90 CPSS totalling $181.2m is payable on 26 August 2015. Dividends/distributions paid and payable by Mirvac for the year ended 30 June 2015 totalled $347.6m, being 9.40 CPSS (2014: $331.1m — 9.00 CPSS). The payments for the year ended 30 June 2015 and the previous year were distributions made by the Trust. Operating and financial review The statutory profit after tax attributable to the stapled securityholders of Mirvac for the year ended 30 June 2015 was $609.9m (2014: $447.3m). The operating profit (profit before specific non-cash and significant items) was $454.8 (2014: $437.8m) which is within the market guidance provided previously. Operating profit is a financial measure which is not prescribed by Australian Accounting Standards (“AAS”) and represents the profit under AAS adjusted for specific non-cash items and significant items. The Directors consider operating profit to reflect the core earnings of the Group. The following table summarises key reconciling items between statutory profit after tax attributable to the stapled securityholders of Mirvac and operating profit. The operating profit information in the table has not been subject to any specific audit procedures by the Group’s auditor but has been extracted from note 1 to the accompanying financial statements for the year ended 30 June 2015, which have been subject to audit; refer to pages 98 and 99 for the auditor’s report on the financial statements. MIRVAC GROUP ANNUAL REPORT 2015 01 Directors’ report Operating and financial review / continued Profit attributable to the stapled securityholders of Mirvac Specific non-cash items Net gain on fair value of investment properties and investment properties under construction (“IPUC”) Net loss on fair value of derivative financial instruments and associated foreign exchange movements 1 Security based payments (“SBP“) expense 2 Depreciation of owner-occupied properties (“OOP”) 3 Straight-lining of lease revenue 4 Amortisation of lease fitout incentives 3 Net gain on fair value of investment properties, derivatives and other specific non-cash items included in share of net profit of joint ventures and associates (“JVA”) 5 Significant items Impairment of loans, investments and inventories Restructuring costs 2, 6 Impairment of goodwill Net (gain)/loss from sale of non-aligned assets 7 Tax effect Tax effect of non-cash and significant adjustments 8 Key financial highlights for the year ended 30 June 2015: — profit attributable to the stapled securityholders of Mirvac increased to $609.9m from $447.3m (June 2014); — operating profit after tax of $454.8m 9 (June 2014: $437.8m), representing 12.3 cents per stapled security (“CPSS”); — operating cash inflow of $412.7m, which is consistent with the prior year; — gearing remained within the Group’s target range of 20.0 to 30.0 per cent at 24.3 per cent 10; — distributions of $347.6m, representing 9.40 CPSS; and — net tangible assets (“NTA”) 11 per stapled security of $1.74, up from $1.66 (June 2014). Key capital management highlights for the year ended 30 June 2015: — maintained strong liquidity with $539.6m of cash and undrawn committed bank facilities held and with no debt maturities until September 2016; — reduced average borrowing costs to 5.2 per cent per annum (including margins and line fees), while maintaining weighted average debt maturity at 4.3 years; 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11) 12) 13) 02 2014 $m 609.9 447.3 (140.8) 10.0 5.6 6.1 (5.3) 9.3 (48.8) 15.8 6.5 5.9 (12.2) 10.3 (29.8) (19.6) (0.2) 6.8 — (16.1) (1.2) — 24.5 6.0 (0.7) Operating profit (profit before specific non-cash and significant items) Financial, capital management and operational highlights 2015 $m 454.8 3.3 437.8 — restructured the Group’s revolving syndicated bank loan on more favourable terms and reduced the amount of debt maturing in any one year. The facility now totals $1,400.0m (June 2014: $1,388.0m), with $200.0m maturing in FY17, $350.0m maturing in FY18, $300.0m maturing in FY19, $300.0m maturing in FY20 and $250.0m maturing in FY21; and — continued to comfortably meet all debt covenants. Key operational highlights for the year ended 30 June 2015: — acquired $527.0m 12 of key strategic assets in the Investment portfolio, including Birkenhead Point Outlet Centre, Sydney NSW and a portfolio of industrial assets from Altis Real Estate Equity Partnership Fund No. 1 (“Altis”); — acquired $412.8m of future residential development projects in key locations, and acquired Leighton Properties Pty Limited’s 50.0 per cent interest in the Green Square Consortium; — entered into an agreement with unlisted property fund manager ISPT Pty Ltd (“ISPT”) for the sale of a 50.0 per cent interest in 2 Riverside Quay, Melbourne VIC, for a total consideration of $106.0m 13. ISPT will fund 50.0 per cent of the total development costs throughout the construction period; — disposed of seven assets, comprising five office assets and two retail assets for a combined total of $406.7m. This follows the disposal of seven assets sold to an affiliate of Blackstone Real Estate Asia (“Blackstone”) in July 2014, in addition to a 50.0 per cent interest in 275 Kent Street, Sydney NSW, as outlined in the FY14 Annual Report; Total of Gain and Loss on fair value of derivative financial instruments and Foreign exchange loss in the consolidated statement of comprehensive income (“SoCI”). Included within Employee benefits expenses in the consolidated SoCI. Included within Depreciation and amortisation expenses in the consolidated SoCI. Included within Investment properties rental revenue in the consolidated SoCI. Included within Share of net profit of JVA accounted for using the equity method in the consolidated SoCI. Included within Other expenses in the consolidated SoCI. Included within Net gain on sale of assets in the consolidated SoCI. Included in Income tax expense in the consolidated SoCI. Excludes specific non-cash items, significant items and related taxation. Net debt (at foreign exchange hedged rate) excluding leases/(total tangible assets — cash). NTA per stapled security, based on ordinary securities including Employee Incentive Scheme (“EIS”) securities. Pre-transaction costs. The sale price is calculated on the basis of rents determined under the PwC Agreement for Lease, Wilson and MPT car parking leases, and the target net annual rents for the residual unlet space. MIRVAC GROUP ANNUAL REPORT 2015 Financial, capital management and operational highlights / continued Key operational highlights for Investment for the year ended 30 June 2015: — entered into an exclusive dealing period with financialservices provider, Westpac, to finalise documentation for a new lease agreement at 275 Kent Street, Sydney NSW; — achieved 2.6 per cent like-for-like net operating income growth; — maintained strong portfolio occupancy of 96.5 per cent within the Investment portfolio 1; — leased 127,858 square metres (9.2 per cent of total net lettable area) within the Investment portfolio; — settled 2,271 residential lots, in line with target of greater than 2,200 lots; — achieved strong levels of residential exchanged pre-sales contracts of $1,987.2m 2; and — achieved 5.1 Star NABERS average energy rating across the office portfolio. Outlook 3 Momentum in Australia’s property markets continues to be divergent across sector and geography, as the economy continues to rebalance away from very strong levels of miningled growth. Low interest rates are expected to remain supportive over FY16, and together with a projected low Australian dollar, economic growth is expected to gradually improve, remaining strongest in New South Wales and Victoria. Mirvac’s deliberate weighting to New South Wales and Victoria means that it is well positioned to perform across business cycles. Mirvac’s mix of passive and active capital will also ensure it continues to provide stable income and growth to the Group. Mirvac will remain focused on prudently managing its capital position by monitoring and accessing diversified sources of capital, including equity, domestic and international debt and wholesale capital. This focus will help to ensure Mirvac can continue to meet its strategic objectives without increasing its overall capital management risk profile. Divisional highlights Investment At 30 June 2015, Investment (comprising MPT and a small number of assets held by the Company) had $7,517.7m 4 invested capital across 59 5 direct property assets, covering the office, retail and industrial sectors, as well as investments in car parks, a hotel and other funds managed by Mirvac. The split of invested capital across each sector was: — office: 54.6 per cent; — retail: 28.5 per cent; — industrial: 8.8 per cent; and — other: 8.1 per cent 6. For the 12 months to 30 June 2015, Investment’s statutory profit before tax was $593.2m (June 2014: $438.1m), driven by an uplift in property revaluations, and its operating profit before tax was $418.3m, supported by acquisitions and lower borrowing costs, offset by the disposal of assets and a 50.0 per cent interest in 275 Kent Street, Sydney at the beginning of the financial year. Investment’s earnings continued to be secured by a strong weighted average lease expiry (“WALE”) profile of 4.5 years 7, 92.8 per cent of FY15 rent reviews being linked or fixed to the Consumer Price Index (“CPI”), and 65.7 per cent of revenue being derived from multinational, ASX listed and government tenants. 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) — maintained high occupancy at 96.5 per cent 8; — total investment property revaluations provided a net uplift of $146.2m 9 (or 2.3 per cent) over the previous book value for the 12 months to 30 June 2015. On a like-for-like basis (excluding IPUC, acquisitions and disposals), the net uplift was $136.2m (or 2.4 per cent); — acquired Birkenhead Point Outlet Centre, Sydney NSW, including an adjoining car parking facility and marina, for a total consideration of $310.0m; — acquired a portfolio of four industrial assets from Altis for a total consideration of $213.9m, in line with Mirvac’s strategy to acquire quality assets in key locations; — disposed of seven assets, comprising five office assets and two retail assets, for a combined total of $406.7m. This follows the disposal of seven assets which were sold to Blackstone in July 2014, in addition to a 50.0 per cent interest in 275 Kent Street, Sydney NSW, as outlined in the FY14 Annual Report; — entered into an exclusive dealing period with Westpac to finalise documentation for a new lease agreement at 275 Kent Street, Sydney NSW; — completed 437 leasing deals over 127,858 square metres of net lettable area (9.2 per cent of total net lettable area); and — key development highlights are outlined in the Commercial highlights section in this report. Key leasing achievements for assets under development included: > 200 George Street, Sydney NSW: increased pre-leasing to 81.0 per cent following the announcement that Mirvac would relocate its Sydney head office to this new commercial development. Mirvac will occupy 5,703 square metres across five floors of the tower for a ten-year term. Anchor tenant, EY, has pre-committed to approximately 66.0 per cent of office space; > Orion Springfield Central, Springfield QLD: progressed with the leasing of the Stage 2 expansion of approximately 32,000 square metres, with 75.2 per cent 10 leased (up from 59.2 per cent at 30 June 2014); > Harold Park Tramsheds, Sydney NSW: progressed with leasing for over 6,000 square metres of retail space, which will include a supermarket, market style food halls, boutique retailers, cafés, restaurants and a gymnasium on completion. The project was 58.7 per cent leased as at 30 June 2015; and > Stanhope Village, Stanhope Gardens NSW: achieved practical completion of the Stage 4 expansion in March 2015, ahead of schedule and 100.0 per cent leased on completion. By area, excludes indirect property investments, and includes 8 Chifley Square, Sydney NSW. Adjusted for Mirvac’s share of joint venture associates and Mirvac managed funds. These future looking statements should be read in conjunction with future releases to the ASX. Includes IPUC, indirect property investments and 8 Chifley Square, Sydney NSW. Includes 8 Chifley Square, Sydney NSW. Although not a direct property asset, it is treated as an investment accounted for using the equity method for statutory reporting. Includes IPUC, indirect property investments, car park assets and hotel. By income, includes 8 Chifley Square, Sydney NSW and excludes indirect property investments. By area, includes 8 Chifley Square, Sydney NSW and excludes indirect property investments. After adjustment for OOP, the net uplift was $140.8m, including IPUC. As at 31 July 2015. MIRVAC GROUP ANNUAL REPORT 2015 03 Directors’ report Divisional highlights / continued The Group demonstrated its ability to create world-class, sustainable workplaces through a continued focus on sustainability, with key highlights including: — a 5.1 Star NABERS average energy rating across the office portfolio; — 8 Chifley Square, Sydney NSW achieved a 6 Star Green Star As‑Built v2 rating; — 200 George Street, Sydney NSW awarded a 6 Star Green Star — Office Design v3 rating; — 23 Furzer Street, Phillip ACT achieved the first 6.0 Star NABERS energy rating for a major office building without the use of GreenPower. The property has reduced energy consumption by 32.4 per cent since 2011. The asset boasts Mirvac’s first large scale solar photovoltaic system, with an 80 kilowatt solar array, which will see a reduction of approximately 100 tonnes of greenhouse gas emissions per annum; and — received the NSW Green Globes 10-year Sustainability Award for demonstrating long-term environmental achievements and successful program delivery and outcomes between 2004 and 2014. Outlook 1 Global economic activity continues to be mixed, with conditions continuing to improve in the US, sluggish improvement in Europe and Japan and cooling growth in China. Domestically, the economy has recorded slightly below-trend growth, impacted by significant falls in commodity prices and a slow‑down of investment in the resource sector. However, a low Australian dollar, a sustained period of low interest rates and strong investor demand for prime assets are providing support for activity in the office, retail and industrial sectors. The office portfolio, with a solid occupancy, embedded rental increases, quality tenant covenants and a strong weighting to Australia’s largest office markets, Sydney and Melbourne, continues to be well positioned. Conditions in the retail sector have been divergent throughout Australia, with mixed levels of consumer confidence and soft household income growth. Despite this, Mirvac’s retail assets, predominantly situated in metropolitan locations, should continue to benefit from their exposure to solid catchments in urban markets, particularly Sydney where 67.3 per cent 2 of the portfolio is located and where retail sales have been robust. Tenant demand for industrial assets in New South Wales has been moderate over the past year and broadly meeting the levels of new supply. The industrial portfolio, with minimal vacancy and a long WALE of 7.6 years 3, continues to provide steady income to the Group. Overall, the Investment remains focused on providing secure passive income to the Group, with key areas of focus including: — improving the quality of the portfolio via non-aligned asset sales and creating new product to be held for the long term; — extracting the benefit of the Group’s demonstrated competitive advantage in the office sector by creating innovative, collaborative and flexible workplaces for the future; — maintaining a focus on the key markets of Sydney and Melbourne in the office and industrial sectors; and — focusing on quality retail assets located in key urban markets and unlocking value through the retail development pipeline. Investment Management Mirvac Investment Management (“MIM”) comprises two business activities for segment reporting purposes, including third party capital management (Mirvac Capital (“Capital”)) and property asset management (Mirvac Asset Management (“MAM”)). For the year ended 30 June 2015, MIM recorded a statutory profit before tax of $5.1m (June 2014: $5.8m) and an operating profit before tax of $4.5m. At 30 June 2015, Capital managed three wholesale funds: Mirvac Wholesale Residential Development Partnership, Tucker Box Hotel Group and JF Infrastructure Yield Fund; as well as two retail funds: Mirvac Development Fund — Seascapes and Mirvac Development Fund — Meadow Springs. Capital also acted as investment manager for the Australian Office Alliance (“Alliance”). The initial asset in the Alliance, 699 Bourke Street, Melbourne, reached practical completion in April 2015 and is 100.0 per cent leased to AGL. Prior to 3 December 2014, MIM was also responsible for the ASX listed Mirvac Industrial Trust (ASX: MIX). On 3 December 2014, Mirvac announced that all MIX units were transferred to AustFunding Pty Limited, a subsidiary of the Goldman Sachs Group Inc., as part of the Scheme Implementation Agreement that was entered into on 19 September 2014. MAM provides asset management services primarily for the MPT portfolio. MAM currently manages 61 properties. Outlook 1 Capital remains focused on establishing investment partnerships with strategically aligned domestic and international institutional investors to coinvest alongside Mirvac in office, industrial, retail and residential assets and development projects. MAM will also continue to provide asset management services in accordance with growth in the MPT and Capital portfolios and in assets owned by third parties where there are common interests. Development Mirvac’s Development business unit operates across national product lines consisting of Residential (comprising Masterplanned Communities and Apartments) and Commercial. At 30 June 2015, Development had $1,579.3m of invested capital. For the year ended 30 June 2015, Development’s statutory profit before tax was $126.6m (June 2014: $112.0m) and its operating profit before tax was $126.6m. Residential The business unit continued to deliver quality residential product in the Group’s core metropolitan markets, with new release projects targeted at the right price points and right locations. Key highlights across Masterplanned Communities and Apartments: Masterplanned Communities — Elizabeth Hills and Elizabeth Point NSW: 100.0 per cent of released lots sold across both projects; — Alex Avenue NSW: continued strong sales with 83.4 per cent of released lots pre-sold (267 settled and exchanged contracts); — Googong NSW: continued strong sales with 93.1 per cent of released lots pre-sold (944 settled and exchanged contracts); — Tullamore, Doncaster VIC: achieved strong sales with 96.9 per cent of released lots pre-sold (189 exchanged contracts); — Woodlea, Rockbank VIC: achieved strong sales with 100.0 per cent of released lots pre-sold (265 exchanged contracts); — Jack Road, Cheltenham VIC: achieved strong sales with 87.0 per cent of released lots pre-sold (47 exchanged contracts); — Harcrest, Melbourne VIC: continued strong sales with 99.6 per cent of total released lots sold (815 exchanged contracts); and — Greystone Terraces, Everton Park QLD: achieved solid sales with 58.3 per cent of released lots pre-sold (21 exchanged contracts). 1) These future looking statements should be read in conjunction with future releases to the ASX. 2) By book value. 3) By income. 04 MIRVAC GROUP ANNUAL REPORT 2015 Divisional highlights / continued Apartments — Bondi, Sydney NSW: achieved strong sales with 100.0 per cent of 190 total lots pre-sold; — Green Square, Sydney NSW: achieved strong sales with 100.0 per cent of Stage 1, Ebsworth and Stage 2, Ebsworth No.8 pre‑sold (174 and 64 exchanged contracts respectively), and 98.9 per cent of Ovo pre-sold (221 exchanged contracts); — Harold Park, Sydney NSW: achieved strong sales with 65.7 per cent of the first release of the final stage, Vance, pre‑sold (71 exchanged contracts); — Yarra’s Edge, Docklands VIC: commenced construction on Forge apartments and Wharf’s Entrance terraces following pre-sales of 63.2 per cent (144 exchanged contracts) and 83.3 per cent (15 exchanged contracts) respectively; — Waterfront, Unison QLD: achieved 83.3 per cent of pre-sales for Stage 1 (120 exchanged contracts) with construction progressing to schedule, and achieved 71.2 per cent of pre‑sales for Stage 2 (104 exchanged contracts), with early construction works currently underway; and — Art House, South Brisbane QLD: secured 78.2 per cent pre‑sales for Stage 1 (147 exchanged contracts), with construction commencing in July 2015. In addition to the strong sales momentum, Mirvac completed the englobo sale of provisioned projects Precinct 8 at Gainsborough Green, QLD and a portion of Glenfield Panorama. For the year ended 30 June 2015, Development’s residential pipeline totalled 33,064 lots which was supplemented by the acquisition of a number of key projects that will contribute significantly to Development’s future earnings, including: — Greenbank QLD: acquisition of a masterplanned community site in Brisbane’s south-west growth corridor with the potential to deliver approximately 3,300 lots; — Marsden Park North NSW: entered into a project delivery agreement to develop a masterplanned community site within Sydney’s north-west growth centre, with the potential to deliver over 1,200 lots; — Gledswood Hills NSW: acquisition of a masterplanned community site with the potential to deliver approximately 570 lots; — St Leonards, Sydney NSW: acquisition of a mixed-use development site in Sydney’s North Shore, with the potential for approximately 500 apartments and approximately 7,500 square metres of commercial space; — Sydney Olympic Park, Homebush NSW: entered into a project delivery agreement to develop an apartment site in Sydney’s iconic Olympic Park precinct, with the potential to deliver over 400 lots; — Claremont on the Park, Claremont WA: acquisition of an apartment site in the urban renewal area of Claremont Oval, with the potential to deliver approximately 230 lots; — Georges Cove Marina, Moorebank NSW: entered into a project delivery agreement to develop a masterplanned community site located within Sydney’s south-west growth precinct with the potential to deliver approximately 180 homes; — Jack Road, Cheltenham VIC: acquisition of a masterplanned community site in the bayside suburb of Cheltenham, with the potential to deliver approximately 180 lots; and — Darien Street, Bridgeman Downs QLD: acquisition of a masterplanned community site with the potential to deliver approximately 120 land lots. State based lot settlements by product for the year ended 30 June 2015 were as follows: State Masterplanned Communities Apartments Total NSW QLD VIC WA 770 252 186 375 482 13 184 9 1,252 265 370 384 Total 1,583 688 2,271 Commercial Mirvac’s commercial development activities include office, retail and industrial projects. For the year ended 30 June 2015, Mirvac’s office development pipeline had an end value of $3,223.3m on a 100.0 per cent ownership basis. Key leasing highlights for Commercial for the year ended 30 June 2015 were outlined in the Investment highlights section of this Report. Key development milestones were: — 200 George Street, Sydney NSW: demolition and excavation works complete with the concrete core at Level 36 and the concrete slabs at Level 32. The project remains on track, with completion expected in FY16. The office tower has been awarded a 6.0 Star Green Star — Office Design v3 rating, and is targeting a 5.0 Star NABERS energy rating and a 6.0 Star Green Star rating; — 699 Bourke Street, Melbourne VIC: reached practical completion in April 2015, with fit-out works complete and major tenant, AGL, moving into the building in June 2015. The A-grade building with premium-grade services has achieved a 6.0 Star Green Star — Office Design v2 rating, demonstrating world leadership in sustainable design, and is targeting a 5.0 Star NABERS energy rating; — 2 Riverside Quay, Melbourne VIC: commenced construction in July 2014, with completion expected in FY17. A 5.0 Stars NABERS energy rating and a 5.0 Star Green Star Office Design rating are being targeted; — Treasury Building, Perth WA: completed the structural core for the final level of the building in March 2015, with completion anticipated for the first half of FY16. The A-grade office tower located on the landmark site of the Old Treasury building is expected to achieve a 4.5 Star NABERS energy rating and 5.0 Star Green Star rating; — Orion Springfield Central, Springfield QLD: construction progressed on the Stage 2 expansion, which will add approximately 32,000 square metres. The project will introduce a Coles, Target, Event Cinemas and additional specialty stores and commercial suites to an expanded town centre, and is due for completion in the second half of FY16; — Harold Park Tramsheds, Sydney NSW: commenced construction in November 2014 for over 6,000 square metres of retail space, which will include a supermarket, market style food halls, boutique retailers, cafés, restaurants and a gymnasium on completion. Mirvac has dedicated 500 square metres of community space to Sydney Council on completion, due in the second half of FY16; — Stanhope Village, Stanhope Gardens NSW: achieved practical completion of the Stage 4 expansion in March 2015 ; and — Kawana Shopping World, Buddina QLD: achieved practical completion of Stage 4 in July 2014, incorporating a new ALDI supermarket and over 60 specialty stores, expanding the centre by approximately 9,000 square metres. For the year ended 30 June 2015, Development settled 2,271 residential lots and had secured future income of $1,987.2m 1 through residential exchange pre-sales contracts. 1) Adjusted for Mirvac’s share of joint venture associates and Mirvac managed funds. MIRVAC GROUP ANNUAL REPORT 2015 05 Directors’ report Divisional highlights / continued Outlook 1 The outlook for capital city residential markets remains mixed by location, however, a sustained low interest rate environment remains supportive for all markets. Construction of new dwellings is generally running at a strong pace in the major capital cities, although concentration is divergent by location. All major states have recorded solid levels of population growth, although this has slowed from a very strong pace in Queensland and Western Australia. New South Wales, and Sydney in particular, is benefiting from stronger levels of population and economic growth over the past three years. Demand for modern, higher density living supported by amenity and infrastructure is expected to continue, particularly in the south‑eastern states. Development remains focused on: — continuing to improve key metrics including return on invested capital (targeting 12.0 per cent by FY17) and maintaining solid gross margins; — strategically restocking the development pipeline with focus and discipline; — maintaining a high level of pre-sales to mitigate future earning risks; and — delivering the $3.2 billion commercial development pipeline. Risks As a property group involved in real estate investment, residential and commercial development and investment management, Mirvac faces a number of risks throughout the business cycle which have the potential to affect the Group’s achievement of its targeted financial outcomes. The Group’s objective is to ensure those risks are identified and appropriate strategies are implemented to control or otherwise manage the impact of those risks. Mirvac’s risk management framework is integrated with its day‑to‑day business processes and is supported by a dedicated Group Risk function. Further information on the Group’s risk management framework is detailed in the Corporate Governance statement which is available on Mirvac’s website: www.mirvac.com/about/corporate-governance. Group risks For the year ended 30 June 2015, the Group continued to review both internal and external risks which have the potential to affect the Group’s targeted financial outcomes and to implement strategies to minimise their impact. Further information on the material risks identified for each of the sectors is outlined below. At a Group level, Mirvac faces certain risks to achieving of its financial outcomes; these risks are the types of risks typical for an Australian property group. These may include debt refinancing and compliance with debt covenants, compliance with health, safety and environment regulations as well as broader economic conditions. Divisional risks At a divisional level, the key risks faced which have the potential to affect the achievement of the financial prospects for the Group include: — Office: as detailed in the outlook section for Investment, demand for office space remains challenging across the markets in which the Group operates. This has the potential to impact on the Group’s performance given that office assets represent 54.6 per cent 2 of the Investment portfolio. The office portfolio, comprising solid occupancy of 94.0 per cent 3, a WALE of 4.3 years 4 and like-for-like rent growth of 2.6 per cent, demonstrates Mirvac’s ability to maintain a strong and robust portfolio through the cycles of demand. The Group seeks to manage uncertainty around commercial office demand in a number of ways including substantial pre-letting of commercial developments in advance of construction, and by partially selling down commercial developments in advance of completion; — Retail: as detailed in the outlook section for Investment, retail sales growth was divergent throughout Australia in FY15. Despite encouraging signs in some markets, the impact of recent below-trend retail sales growth has placed pressure on retailers. With 28.5 per cent of MPT’s portfolio represented by retail assets, Mirvac is focused on continually refreshing its retail assets (via refurbishment, redevelopment or tenant remixing) to adapt to changing market dynamics. Furthermore, Mirvac maintains a focus on key metropolitan markets, and a diversified tenancy mix, where no single specialty retailer contributes greater than 1.6 per cent of the total portfolio’s gross rent; — Industrial: as detailed in the outlook section for Investment, continuing investor demand for prime-grade industrial assets in key locations is resulting in compressed capitalisation rates, weighting predominately towards the stronger markets of Sydney and Melbourne. Mirvac continues to focus on properties with long lease terms and secure cash flow profiles that will benefit from the increase in investor demand and continue to provide steady returns; and — Residential: as detailed in the outlook section for Development, Australia’s residential market varies from state to state (and within states) with growth in some markets expected to eclipse a more moderate performance in others. Despite the breadth of market, the Development division remains focused on the right product in the right location, diversifying risk across residential sub‑markets, across Australia and between Masterplanned Communities and Apartments. Weighting to key growth markets such as New South Wales further mitigates this risk, as do pre-sales. 1) These future looking statements should be read in conjunction with future releases to the ASX. 2) By invested capital within the Investment division. This includes 472 Pacific Highway and 486 Pacific Highway, St Leonards NSW. Excluding these office assets, the office portfolio represents 53.9 per cent of the Investment portfolio. 3) By area, includes 8 Chifley Square, Sydney NSW. 4) By income, includes 8 Chifley Square, Sydney NSW. 06 MIRVAC GROUP ANNUAL REPORT 2015 Environmental regulations Mirvac and its business operations are subject to compliance with both Federal and state environment protection legislation, and the Board is satisfied that adequate systems are in place for Mirvac’s compliance with the applicable legislation. Within Mirvac’s health, safety and environment performance reporting systems, including internal and external audits and inspections, Mirvac has not experienced any incidents that have resulted in any significant harm to the environment. There have been no infringement notices issued for minor environmental incidents during the reporting period. A key initiative to reduce greenhouse gas emissions was a commitment to achieve an average 4.7 Star NABERS Energy rating on applicable office buildings by July 2014. The Investment division achieved this target in December 2013, with the office portfolio now achieving 5.1 Stars. This has resulted in reduced operating costs, improved environmental performance, demonstrating excellent energy operational and management practices, and high efficiency systems and equipment. The new Mirvac sustainability strategy, ‘This Changes Everything’, sets short term targets for the whole portfolio to reduce carbon emissions by 20 per cent and increase energy generation to 1MW by 2018. This plan also includes a long term mission to be Net Positive for energy and water by 2030, whilst achieving zero waste to landfill in the same period. Mirvac is required under the National Greenhouse and Energy Reporting Act 2007 to report annually on greenhouse gas emissions, reductions, removals and offsets, and energy consumption and production figures. The Federal Government has introduced into Parliament legislation that terminates the Energy Efficiency Opportunities Program and so removes the mandatory requirement for large energy using businesses to assess opportunities to improve energy efficiency and to report publicly on the outcomes of those assessments. The Federal Government has recently repealed the carbon tax, we will thereby approximately reduce our energy bill by 10.0 per cent. The carbon tax will be replaced by direct action, details of which are still being finalised. Mirvac is also subject to the commercial Building Energy Efficiency Disclosure Act 2010. This involves the disclosure of energy efficiency-related information at the point of sale or lease of office space greater than 2,000 square metres. MIRVAC GROUP ANNUAL REPORT 2015 07 Directors’ report John Mulcahy Susan Lloyd-Hurwitz Information on Directors Directors’ experience and areas of special responsibilities The members of the Mirvac Board and their qualifications, experience and responsibilities are set out below: John Mulcahy PhD (Civil Engineering), FIEAust, MAICD Independent Non‑Executive Chair Chair of the Nomination Committee Member of the Audit, Risk and Compliance Committee Member of the Human Resources Committee John Mulcahy was appointed a Non-Executive Director of Mirvac on 19 November 2009 and the Independent Non-Executive Chair on 14 November 2013. John has more than 28 years of leadership experience in financial services and property investment. John is the former Managing Director and Chief Executive Officer of Suncorp-Metway Limited. Prior to joining Suncorp-Metway, John held a number of senior executive roles at Commonwealth Bank, including Group Executive, Investment and Insurance Services. He also held a number of senior roles during his 14 years at Lend Lease Corporation, including Chief Executive Officer, Lend Lease Property Investment and Chief Executive Officer, Civil and Civic. John is currently a Non-Executive Director of ALS Limited (formerly Campbell Brothers Limited) (appointed February 2012), Coffey International Limited (appointed September 2009 and as Chair in November 2010) and GWA Group Limited (appointed November 2010). John is also a Director of The Shore Foundation Limited and the Great Barrier Reef Foundation and a former Guardian of the Future Fund Board of Guardians (2006 until April 2015). Susan Lloyd-Hurwitz BA (Hons), MBA (Dist) Chief Executive Officer & Managing Director (“CEO/MD”) Executive Susan Lloyd-Hurwitz was appointed CEO/MD on 15 August 2012 and a Director of Mirvac Board on 5 November 2012. Prior to this appointment, Susan was Managing Director at LaSalle Investment Management, where she was responsible for the core investment accounts and funds business lines in the European region, as well as the operation of the business. Susan has also held senior executive positions at MGPA, Macquarie Group and Lend Lease Corporation, working in Australia, the US and Europe. Susan has been involved in the real estate funds management industry for over 25 years, with extensive experience in fund and portfolio management in both the direct and indirect markets, fund development, mergers and acquisitions, dispositions, research and business strategy. Susan is also President of INSEAD Australasian Council, a Director of the Green Building Council of Australia and a member of the UWS Foundation Council which supports the University of Western Sydney in its development and contribution to Greater Western Sydney. 08 MIRVAC GROUP ANNUAL REPORT 2015 Christine Bartlett Peter Hawkins Christine Bartlett BSc, MAICD Independent Non-Executive Member of the Audit, Risk and Compliance Committee Christine was appointed a Non-Executive Director of Mirvac on 1 December 2014. She is currently a Non-Executive Director of GBST Holdings Ltd (appointed June 2015) and a Director of The Smith Family. Christine is a member of the Minter Ellison Advisory Council, the UNSW Australian School of Business Advisory Council and the Australian Institute of Company Directors. Previously she has been a director of PropertyLook, National Nominees Ltd and Deputy Chairman of the Australian Custodial Services Association. Christine is an experienced CEO and senior executive with extensive line management experience gained through roles with IBM, Jones Lang LaSalle and National Australia Bank Limited. Her executive career has included Australian, regional and global responsibilities based in Australia, the USA and Japan. Christine brings a commercial perspective especially in the areas of financial discipline, identifying risk, complex project management, execution of strategy, fostering innovation and taking advantage of new emerging technologies. Christine holds a Bachelor of Science from the University of Sydney and has completed senior executive management programs at INSEAD. Peter Hawkins BCA (Hons), FAICD, SFFin, FAIM, ACA (NZ) Independent Non‑Executive Chair of the Human Resources Committee Member of the Audit, Risk and Compliance Committee Member of the Nomination Committee Peter Hawkins was appointed a Non-Executive Director of Mirvac on 19 January 2006, following his retirement from ANZ after a career of 34 years. Prior to his retirement, Peter was Group Managing Director, Group Strategic Development, responsible for the expansion and shaping of ANZ’s businesses, mergers, acquisitions and divestments and for overseeing its strategic cost agenda. Peter was a member of ANZ’s Group Leadership Team and sat on the boards of Esanda Limited, ING Australia Limited and ING (NZ) Limited, the funds management and life insurance joint ventures between ANZ and ING Group. He was previously Group Managing Director, Personal Financial Services, as well as holding a number of other senior positions during his career with ANZ. Peter was also a Director of BHP (NZ) Steel Limited from 1990 to 1991 and Visa Inc. from 2008 to 2011. Peter is currently a Non-Executive Director of Westpac Banking Corporation (appointed December 2008), MG Responsible Entity Limited, the responsible entity for MG Unit Trust (appointed April 2015 and listed in July 2015), Murray Goulburn Co-operative Co. Limited, Clayton Utz and Liberty Financial Pty Ltd, and a former Non-Executive Director of Treasury Corporation of Victoria. James M. Millar AM Samantha Mostyn Information on Directors / continued James M. Millar AM BCom, FCA, FAICD Independent Non-Executive Chair of the Audit, Risk and Compliance Committee Member of the Nomination Committee James M. Millar was appointed a Non-Executive Director of Mirvac on 19 November 2009. He is the former Chief Executive Officer of Ernst & Young (“EY”) in the Oceania Region, and was a director on their global board. James commenced his career in the Insolvency & Reconstruction practice at EY, conducting some of the largest corporate workouts of the early 1990s. He has qualifications in both business and accounting. James is a Non-Executive Director of Fairfax Media Limited (appointed July 2012), Helloworld Limited (appointed September 2010) and Macquarie Radio Network Limited (appointed April 2015). He is Chair of both the Export Finance and Insurance Corporation (appointed December 2014) and Forestry Corporation NSW (appointed March 2013). James serves a number of charities where he is the Chair of The Smith Family, and is a Trustee of the Australian Cancer Research Foundation and the Vincent Fairfax Family Foundation. He is a former Chair of Fantastic Holdings Limited (from May 2012 until June 2014). Samantha Mostyn BA, LLB Independent Non-Executive Member of the Human Resources Committee Samantha Mostyn was appointed a Non-Executive Director of Mirvac on 1 March 2015. Samantha is a Non-Executive Director and corporate advisor and is currently a Non-Executive Director of Virgin Australia Holdings Limited (appointed September 2010), Transurban Holdings Limited (appointed December 2010) and Cover-More Group Limited (appointed December 2013). She is also a Director on an Australian APRA regulated Citibank Subsidiary Board. Samantha also serves on the Climate Council, Climate Works Australia, the Advisory Board of the Crawford School of Government and Economics at the Australian National University and is the President of the Australian Council for International Development. She is Deputy Chair of the Diversity Council of Australia, and has served as an AFL Commissioner since 2005. Her other current board appointments include the Australia Council for the Arts, Australian Volunteers International, the GO Foundation and Carriageworks. Previously, Samantha has served as a Director of the Sydney Theatre Company, a Commissioner with the National Mental Health Commission, and has held senior executive positions at IAG, Optus and Cable & Wireless Plc. John Peters Elana Rubin John Peters BArch, AdvDipBCM, GAICD Independent Non-Executive Member of the Human Resources Committee John Peters was appointed a Non-Executive Director of Mirvac on 17 November 2011. John brings to the Board over 40 years’ experience in architectural design, project management, property development and property management. For the last 20 years, John has been the principal of a private property development company focused on substantial mixed use developments and redevelopments in South East Queensland. During this period, he has also consulted to various investors and other financial stakeholders in several Queensland development projects. Prior to this, John was with Lend Lease Corporation for 14 years, where he was Queensland Manager Lend Lease Development, and Director, Lend Lease Commercial. Elana Rubin BA (Hons), MA, FFin, FAICD, FAIM Independent Non-Executive Member of the Audit, Risk and Compliance Committee Member of the Nomination Committee Elana Rubin was appointed a Non-Executive Director of Mirvac on 11 November 2010 and has extensive experience in property and financial services. Elana is a Director of several NAB life insurance and asset management subsidiaries and a Director of Touchcorp Limited (appointed January 2015), Transurban Queensland (previously Queensland Motorways Holding Pty Limited) and the Victorian Funds Management Corporation. She is also a member of the Qualitas Properties Advisory Board, Committee for Melbourne and the Victorian Council of the Australian Institute of Company Directors. Elana is the former Chair of AustralianSuper (July 2007 to April 2013), one of Australia’s leading superannuation funds, having been on the board since 2006. She was a Director of Victorian WorkCover Authority (December 2001 to February 2012) and Chair from 2006. She was also a Director of Mirvac Funds Management Limited, the responsible entity and trustee for Mirvac’s listed and unlisted funds, from November 2013 to February 2015. Elana was previously a Non-Executive Director of TAL Life Limited (formerly Tower Australia Limited) (from November 2007 to April 2013) and has been a Director on a number of listed companies and other entities including Bravura Solutions Ltd. Elana is a former member of the Federal Government’s Infrastructure Australia Council (from May 2011 to September 2014). MIRVAC GROUP ANNUAL REPORT 2015 09 Directors’ report Information on Directors / continued Company Secretaries Sean Ward BEc, BComm, FGIA, FFin Natalie Allen (resigned 26 June 2015) BEc, LLB, GAICD Sean Ward was appointed Company Secretary on 23 August 2013. Sean joined Mirvac as Group Company Secretary in April 2013 and has more than 15 years’ corporate experience. Prior to joining Mirvac, Sean was the Head of Subsidiaries at Westpac Banking Corporation, providing company secretarial support for all of Westpac’s listed and unlisted entities and before this was a Senior Companies Advisor at ASX Limited. Sean is also currently studying for a Master of Business Administration with the Australian Graduate School of Management. Natalie Allen was appointed Company Secretary on 21 January 2013. Natalie joined Mirvac as Group General Counsel in August 2012, and has more than 16 years of legal experience in real estate and equity capital markets. Prior to joining Mirvac, Natalie was the Group General Counsel and Company Secretary at Charter Hall Group, and before this was General Counsel and Company Secretary for a number of listed and unlisted entities within Macquarie’s Real Estate Funds division. Natalie is a solicitor of the Supreme Court of NSW, a member of the State Bar of California and a graduate of the Australian Institute of Company Directors. Natalie resigned as Company Secretary on 26 June 2015. Meetings of Directors The number of meetings of the Board of Directors and of each standing Board committee, of which the relevant Director was a member, held during the year ended 30 June 2015 and the number of meetings attended by each Director are detailed below: Audit, Risk and Compliance Board Committee (“ARCC”) Board Committee 1 Director A B A B A B John Mulcahy Susan Lloyd-Hurwitz Christine Bartlett 2 Peter Hawkins Samantha Mostyn 3 James M. Millar AM John Peters Elana Rubin 4 1) 2) 3) 4) 15 15 9 15 5 14 15 13 15 15 9 15 5 15 15 13 2 3 — — — — 1 — 2 3 — — — — 1 — 6 — 4 6 — 6 2 6 6 — 4 6 — 6 2 6 Human Resources Committee (“HRC”) A B 5 — — 5 2 3 2 — 5 — — 5 2 3 2 — Committees of the Board established to deal with particular purposes during the year. Christine Bartlett was appointed as a Director on 1 December 2014. Samantha Mostyn was appointed as a Director on 1 March 2015. Elana Rubin did not attend two Board meetings due to a potential conflict of interest. A) Indicates the number of meetings attended during the period the Director was a member of the Board or Committee. B) Indicates the number of meetings held during the period the Director was a member of the Board or Committee (excluding meetings not attended due to a potential conflict of interest). 10 MIRVAC GROUP ANNUAL REPORT 2015 Nomination Committee A B 2 — — 2 — 2 — 2 2 — — 2 — 2 — 2 Remuneration report Contents 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Page Introduction — key questions Who is covered by this report Summary of FY15 remuneration Our people Our remuneration strategy and the link to business strategy Actual remuneration earned in FY15 Executive KMP remuneration at Mirvac Business and executive remuneration outcomes Mirvac’s approach to executive remuneration How remuneration is structured LTI grants in FY15 Total remuneration in FY15 Service agreements for the Executive KMP Non-Executive Directors’ remuneration Legacy remuneration arrangements Additional required disclosures 11 12 13 13 14 15 16 16 19 20 23 24 24 24 26 26 Please see page 29 for definitions of terms used in this remuneration report. 1 Introduction — key questions Key questions Mirvac approach Further info Remuneration in 2015 1) How is Mirvac’s performance reflected in this year’s remuneration outcomes? Mirvac’s remuneration outcomes are strongly linked to the delivery of sustainable securityholder value over the short and long term. Increased corporate earnings and high performance across non-financial measures have resulted in above target performance on our balanced scorecard and a corresponding higher than usual payout of short-term incentives (“STI”). Section 5 Page 14 However, vesting of our long-term incentive (“LTI”) awards will be substantially lower than in FY14, largely as a result of impairment losses in our residential property business during FY13 which reduced our return on equity. The LTI outcome reflects our commitment to ensuring executives’ remuneration reflects the achievement of sustainable value for securityholders. 2) What changes have been The only changes to our remuneration approach this year were to increase the made to the remuneration Non‑Executive Director (“NED”) fee pool (as approved by securityholders at the 2014 AGM) and to simplify the fee structure for Non-Executive Directors. Individual structure in FY15? NED fee levels remain in line with FY14. No changes have been made to the executive remuneration structure. Section 14 Page 24 3) Are any changes planned for FY16? Section 10 Page 20 The only change planned for FY16 is an increase to the threshold and stretch performance levels for LTI awards. The threshold level for ROIC is proposed to rise from 7.5 per cent to 8 per cent, and the stretch from 9 per cent to 10 per cent. The increase reflects Mirvac’s expectations for returns through the cycle, and over the longer term. The TSR measure for LTI awards remains unchanged. Remuneration framework 4) Where does Mirvac’s remuneration sit against the market? Fixed and variable pay are both aimed at the market median, with remuneration opportunities for outstanding performance extending up to the 75th percentile of the market. 5) What proportion of The majority of Executive KMP’s remuneration is based on performance, and is remuneration is “at risk”? therefore at risk. 6) Are there any clawback Yes. If there is a material financial misstatement, any unvested LTI or deferred STI provisions for incentives? awards can be clawed back. 7) What is Mirvac’s minimum securityholding requirement? The CEO/MD must maintain a minimum securityholding of 100 per cent of fixed remuneration. Other Executives must hold 50 per cent of their fixed remuneration. Non-Executive Directors must hold 25,000 securities. Section 9 Page 19 Section 7 Page 16 Section 10 Page 20 Section 9 Page 19, Section 14 Page 24 Short-term incentives (“STI”) 8) Are any STI payments deferred? Yes, 25 per cent of STIs are awarded as rights over Mirvac securities, half of which vest in one year and half in two years. If the Executive leaves Mirvac before the vesting period ends, the rights do not vest and are cancelled. 9) Are STI payments capped? Yes, an Executive can earn a maximum of double their STI target. Section 7 Page 16 Section 10 Page 20 MIRVAC GROUP ANNUAL REPORT 2015 11 Directors’ report Remuneration report / continued Key questions Mirvac approach Further info Long-term incentives (“LTI”) 10) What are the performance Half of the LTI awards are based on relative TSR. The other half was based on measures that determine ROE for the FY13 LTI award, and ROIC for awards made in subsequent years. if the LTI grants vest? Section 10 Page 20 11) Does the LTI have re‑testing? No, there is no re-testing. Section 10 Page 20 12) Are dividends/ distributions paid on unvested LTI awards? No dividends/distributions are paid on unvested LTI awards. This ensures that Executives are only rewarded when performance hurdles have been achieved at the end of the performance period. Section 10 Page 20 13) Is the size of LTI grants increased in light of performance conditions? No. LTI grant amounts are not increased to reflect the performance conditions necessary for vesting. Section 10 Page 20 14) Can LTI participants No. hedge their unvested LTI? 15) Does Mirvac buy securities or issue new securities for share‑based awards? For deferred STI awards, securities are purchased on-market. For LTI awards, the Board decides whether to issue new securities or buy them on-market. 16) Does Mirvac issue share options? No. Section 10 Page 20 Section 10 Page 20 Executive agreements 17) What’s the maximum an executive can receive on termination? Executive KMP termination entitlements are limited to 12 months’ fixed remuneration. Section 13 Page 24 2 Who is covered by this report? This report covers the key management personnel (“KMP”) of Mirvac, who are the people responsible for determining and executing Mirvac’s strategy. This includes both the Executive KMP (including the CEO/MD, the Chief Financial Officer (“CFO”) and heads of business units who sit on the Executive Leadership Team) as well as Non Executive Directors. There were seven Executive KMP in FY15, compared to the five that were disclosed in FY14, as a result of changes to the Executive Leadership Team structure during FY15. There have also been two changes to Non-Executive Directors. For the year ended 30 June 2015, the KMP were: KMP Position Non-Executive Directors John Mulcahy Chair Christine Bartlett Director (appointed 1 December 2014) Peter Hawkins Director James M. Millar AM Director Samantha Mostyn Director (appointed 1 March 2015) John Peters Director Elana Rubin Director Executive KMP Susan Lloyd-Hurwitz Andrew Butler John Carfi Brett Draffen Shane Gannon Susan MacDonald David Rolls CEO/MD Group Executive, Office & Industrial Group Executive, Residential Development Chief Investment Officer CFO Group Executive, Retail Group Executive, Commercial Development Term as KMP Full Year Part Year Full Year Full Year Part Year Full Year Full Year Full Year Full Year Full Year Full Year Full Year Full Year Full Year The information provided in this Remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001. 12 MIRVAC GROUP ANNUAL REPORT 2015 Remuneration report / continued 3 Summary of FY15 remuneration Strong revenue and profit growth over the past year are reflected in above-target STI payouts. However, write-downs have reduced our return on equity over the last three years, resulting in reduced LTI vesting. Fixed remuneration Fixed remuneration increases The responsibilities of Brett Draffen and Susan MacDonald were increased in the restructure on 1 July 2014. As a result, their fixed remuneration was also increased. CEO/MD remuneration Remuneration changes for CEO/MD The CEO/MD’s fixed remuneration was not increased during FY15 as it remained competitive with the market. Total remuneration for the CEO/MD in the table in section 6 increased from $2.8m to $3.9m in FY15, due a larger STI outcome, and the partial vesting of the FY13 LTI award. STI Increased STI payouts Strong results across all operating metrics resulted in increased STI payouts. The FY15 STI pool was 137% of target in FY15 (up from 110% in FY14), driven by — operating earnings increasing to $454.8m from $437.8m — ROIC performance improving to 9.0% from 7.8% — achieving target for all 12 non-financial measures. As a result, average STI payouts for Executive KMP increased from 116% of target in FY14 to 140% in FY15. LTI Vesting at 36.5%, reflecting below-target ROE and above-target TSR Vesting of LTI grants is dependent on achieving target on ROE and TSR over a three year period. This year’s vesting was impacted by below-target ROE performance, largely due to impairments recognised in the performance period. This resulted in none of the awards relating to the ROE hurdle vesting. TSR performance was above threshold but below maximum, resulting in 73% of the awards subject to the TSR hurdle vesting. As a result, 36.5% of overall LTI awards vested. Non-Executive Director Non-Executive Director fee pool increased after approval at the 2014 AGM fees An increase in the maximum aggregate Non-Executive Director annual remuneration from $1.95m to $2.25m was approved at the 2014 AGM. Non-Executive Director fee structure simplified The individual committee member fees have been replaced with a single fee of $18,000 per annum for serving on one or more Board committees. The previous fees paid to the Chairs of the ARCC and the HRC have been replaced with a fee of $30,000 per annum, which is in addition to the committee fee. Individual NED fee levels remain in line with FY14. 4 Our people At Mirvac, we believe that creating the right workplace culture will help us to attract, retain and motivate talented individuals. At Mirvac, our remuneration strategy is one element of our overall people strategy, designed to create a distinctive culture that helps us attract, grow, engage and retain high-quality employees. In FY15, our people strategy focused on diversity, inclusion and innovation, as we strove to create an environment that encourages the unique talents and experiences of our people. Initiatives included the creation of a flexible work program that will underpin our transition to our new headquarters in 2016; the introduction of an innovative new induction process to introduce new starters to our culture and organisation; and our sponsorship of the Equilibrium Man Challenge, a micro-documentary that follows a group of men moving to flexible working arrangements. Mirvac’s innovation program, Hatch, also trained 45 Innovation Champions to act as advocates of innovation throughout the company — driving behaviours, and embedding cultural change at the front line. Mirvac’s efforts to create an inclusive and innovative culture are reflected in the achievement of a ‘Best Employer’ status based on our employee engagement survey with AonHewitt, and recognition by the Workplace Gender Equality Agency as an ‘Employer of Choice for Gender Equality’. We are also particularly proud of the fact that the Mirvac Board achieved 50/50 gender representation in FY15. Our remuneration strategy — for our executives, and for our people — supports our people strategy by rewarding high performance that supports our distinctive culture. MIRVAC GROUP ANNUAL REPORT 2015 13 Directors’ report Remuneration report / continued 5 Our remuneration strategy and the link to business strategy At Mirvac, our remuneration is linked to the drivers of our business strategy, helping to create sustainable value for shareholders. Mirvac’s remuneration strategy is designed to support and reinforce its business strategy. The at-risk components of remuneration are tied to measures that reflect the successful execution of our business strategy in both the short and long term. Our strategic drivers... Are reflected in STI And LTI performance performance measures... measures... Capital efficiency and financial performance Deliver top 3 AREIT returns. Relative Total Shareholder Return (“TSR”) Measures the performance of Mirvac securities over time, relative to other entities in a comparison group. Return on Equity (“ROE”) Measures Mirvac’s profitability relative to securityholders’ investment in the Group. Operating earnings Reflects how much revenue the business has generated for the year, less operating costs. Return on Invested Capital (“ROIC”) Measures Mirvac’s profitability relative to its total assets. It is calculated by dividing the company’s annual earnings by its total assets. Customer and investor satisfaction Provide customers and investors an experience that delivers excellence, consistently exceeds expectations and engenders loyalty. Customer / investor satisfaction measures: Measures include retail customer and office tenant satisfaction surveys, as well as residential customer satisfaction surveys. High performing people and culture Have an engaged and motivated workforce with superior skills and capabilities. People measures: Measures include talent turnover, diversity targets, and succession planning targets. HSE&S leadership Be recognised as a leader in sustainability. Provide workplaces free from harm and supported by a culture where safety remains an absolute priority. HSE&S leadership measures: Measures include Lost Time Injury Frequency Rate, timely incident reporting, and sustainability targets. See section 8, page 16 for additional details 14 MIRVAC GROUP ANNUAL REPORT 2015 So Mirvac’s actual performance... Directly affects what executives are paid From FY13 – FY15 — Mirvac’s TSR was ranked at the 62nd percentile relative to its comparison group. — Mirvac’s average annual ROE is 6.7% In FY15 — Operating earnings were $454.8m, up 4% from $437.8m in FY14 — ROIC was 9.0% up from 7.8% in FY14. LTI vesting outcome in FY15 = 36.5% of target CEO/MD STI outcome in FY15 = 164% of target In FY15 — Mirvac achieved 12 out of the 12 non‑financial targets. See section 8, page 16 for additional details See section 8, page 16 for additional details Average STI in FY15 for other eligible Senior Executives = 136% of target Remuneration report / continued 6 Actual remuneration earned in FY15 This year’s remuneration reflected our ongoing commitment to paying for performance. Strong FY15 business performance resulted in increased STI payouts, but LTI vesting was substantially lower than FY14. The following table sets out the actual value of the remuneration earned by Executive KMP members during the year. The figures in this table are different from those shown in the accounting table in section 12 because that table includes an apportioned accounting value for all unvested LTI grants during the year (some of which remain subject to satisfaction of performance and service conditions and may not ultimately vest). The table below, on the other hand, shows the LTI value based on the awards that actually vested as a result of performance in FY15. The table below presents: — Fixed remuneration; — Cash STI: the non-deferred portion of STI payments to be made in September 2015 in recognition of performance during FY15; — Deferred STI realised: the value of the deferred STI from prior years that was realised in FY15; and — LTI: the value to the participant during FY15 of performance rights whose performance period ended 30 June 2015. Actual remuneration paid in FY15 Deferred Fixed Cash STI remuneration STI realised LTI Executive KMP Year $ $ $ $ Employee Termination benefits loans 1 $ $ Other 2 $ Total $ Susan Lloyd-Hurwitz 2015 2014 1,500,000 1,500,000 1,381,641 1,160,156 212,926 — 767,963 — — — — — Andrew Butler 2015 2014 700,000 700,000 550,200 415,800 76,313 — 337 14,163 — 600,159 — — 10,977 319,418 1,337,827 2,049,540 John Carfi 3 2015 700,000 481,425 — 21,051 — — 11,353 1,213,829 Brett Draffen 2015 2014 950,000 900,000 933,375 647,460 118,829 — 331,872 817,353 — 581,835 — — 15,368 2,349,444 464,702 3,411,350 Shane Gannon 2015 2014 900,000 527,962 707,400 365,878 67,149 — — — — — — — 234,685 4 1,909,234 355,614 1,249,454 Susan MacDonald 3 2015 700,000 481,425 — 379,836 — — 11,353 1,572,614 David Rolls 3 2015 700,000 481,425 — — — — 11,353 1,192,778 1) 2) 3) 4) 24,046 3,886,576 134,938 2,795,094 Amount reported includes amounts forgiven during the year, imputed interest and related fringe benefits tax (“FBT”). Includes long service leave accrued during the year. Appointed to a KMP position effective 1 July 2014. Includes a payment of $220,000 as part compensation for the STI and LTI entitlements he forfeited on resigning from his previous employer. MIRVAC GROUP ANNUAL REPORT 2015 15 Directors’ report Remuneration report / continued 7 Executive KMP remuneration at Mirvac Mirvac’s executive remuneration approach is strongly performance focused. A significant proportion of executive remuneration is based on sustained performance, aligned with the business strategy. Our executive remuneration is: 1) Performance based: more than 60 per cent of total remuneration is “at-risk”; 2) Equity focused: almost half the CEO/MD’s total remuneration is paid in equity and a third of other Executive KMP members total remuneration is paid in equity; 3) Increases ownership: Executive KMP members are required to hold securities of a minimum value of 50 per cent of their fixed remuneration, and the CEO/MD is required to hold 100 per cent; and 4) Multi-year focused: 50 per cent of STI deferral is subject to a one-year holding lock and the remaining 50 per cent to a two-year holding lock. LTI performance is measured over a three year period. The graphs below set out the remuneration structure and mix for the CEO/MD and other Executive KMP members at Mirvac. CEO/MD PERFORMANCE DEPENDENT Fixed remuneration 31% Target STI Max LTI 23% Cash 17% 46% TSR (50% of award) 23% Deferred 6% 50% deferred for 12 months 50% deferred for 24 months Subject to clawback ROIC (50% of award) 23% Granted as performance rights with performance measured over a three year period. Subject to clawback Other Executive KMP PERFORMANCE DEPENDENT Fixed remuneration 40% Target STI Max LTI 30% Cash 22.5% 30% Deferred 7.5% TSR (50% of award) ROIC (50% of award) 50% deferred for 12 months 50% deferred for 24 months Subject to clawback 8 Business and executive remuneration outcomes STI and LTI outcomes reflect and reward the strong results across all measures of performance in FY15. a) How the Group’s performance has translated into STI awards FY15 performance was strong, with both operating earnings and ROIC significantly higher than FY14. The Group’s STI scorecard of 137 per cent (of a potential 150 per cent) reflects this achievement. Mirvac’s financial performance directly affects the STI awards in two ways: — the STI has a gateway requirement of Group operating earnings being at least 90 per cent of target; and — the Group’s STI scorecard has two financial measures, each worth 35 per cent of the total pool: operating earnings and ROIC. The following graph shows how the average STI outcome for all employees has been closely tied to performance on these two measures since FY11. The increase in STI outcome for FY15 reflected Mirvac achieving stretch targets for the non‑financial measures, in addition to the strong performance on the financial measures. 16 MIRVAC GROUP ANNUAL REPORT 2015 15% 15% Granted as performance rights with performance measured over a three year period. Subject to clawback Financial performance vs average STI outcome 160% of target 140 120 100 80 60 40 FY11 FY12 Operating earnings FY13 ROIC FY14 FY15 Average STI Remuneration report / continued Financial performance in each case is expressed as a percentage of the business target set for the year, while the STI outcome represents the average STI award to participants that year as a percentage of target. b) STI awards in FY15 The diagram below sets out Mirvac’s performance and the resulting STI outcomes: Gateway achieved (over 90% of target operating earnings achieved) Threshold 75% Operating earnings (weighting = 35%) % of plan awarded = 112% ROIC (weighting = 35%) % of plan awarded = 150% Non-financial measures (weighting = 30%) % of plan awarded = 150% Target 100% Stretch 150% HRC approved a Group STI score of 137% of target (from a maximum potential pool of 150% of target) FY15 STI pool = $29.2 million (6.4% of Mirvac’s operating earnings) Each participant is awarded an individual STI score between zero and 135% of their STI target. Scores are based on an assessment of their personal performance for the year against objectives linked to Mirvac’s strategic drivers Once the Group and Individual STI scores are determined, an individual’s STI award is calculated as follows: Fixed remuneration Individual STI target Group STI score (0-150%) Individual STI score (0-135%) Individual STI award (capped at 200% of target) Executive KMP STI awards in FY15 The following table shows the actual STI outcomes for each of the Executive KMP for FY15. STI target % of fixed remuneration Susan Lloyd-Hurwitz Andrew Butler John Carfi Brett Draffen Shane Gannon Susan MacDonald David Rolls STI max % of fixed Actual STI STI forfeited remuneration % max % max 75 80 70 80 80 70 70 150 160 140 160 160 140 140 82 66 66 82 66 66 66 18 34 34 18 34 34 34 Actual STI (total) $ 1,842,188 733,600 641,900 1,244,500 943,200 641,900 641,900 c) How the Group’s performance has translated into LTI awards The three years to 30 June 2015 saw varied performance levels. The Group’s TSR was above the median of the comparator group, reflecting our focus on above-market, sustainable growth. This solid result is reflected in the vesting of 73 per cent of the FY13 award relating to TSR. The Group did not meet the threshold performance hurdle on ROE, largely due to impairments announced during the three-year performance period. As a result, the 50 per cent of the FY13 award that related to ROE will not vest. Mirvac’s financial performance directly affects the vesting of the LTI awards: — half of the LTI is subject to a relative TSR performance measure; and — the remaining half is subject to ROE (for grants made up to and including FY13) and ROIC (for grants made from FY14 onwards). MIRVAC GROUP ANNUAL REPORT 2015 17 Directors’ report Remuneration report / continued The diagram below sets out the Group’s performance and the resulting LTI outcomes for the Executive KMP. FY13 LTI grants made to eligible participants and TSR and ROE performance hurdles are set 30 June 2015: three year performance period ends for the FY13 grants and performance is measured for TSR and ROE Mirvac TSR (1 July 2012 – 30 June 2015) Mirvac’s share price & distributions over the last five years $2.0 $350m 120% 300 100% 1.5 250 80% 200 1.0 60% 150 40% 100 0.5 20% 50 0 0 FY11 FY12 FY13 Distributions paid ($m) FY14 0% FY15 30 Jun 12 Security price at 30 June ($) MGR 30 Jun 13 25th Percentile 30 Jun 14 50th Percentile 30 Jun 15 75th Percentile Mirvac achieved a TSR of 85 per cent over the three year performance period, which positioned it at the 62nd percentile relative to the entities in the comparison group 73% of the performance rights linked to the TSR measure vested ROE performance Mirvac’s ROE performance over the three years Mirvac’s ROE has fluctuated over the last three years: 12 Stretch = 11 — FY13 did not meet the threshold; — FY14 exceeded the threshold; and — FY15 exceeded the threshold. Mirvac’s average annual ROE over the three year performance period was 6.7 per cent, resulting in below threshold performance. ROE 9.9 Threshold = 7 6 7.4 6.7 2.9 0 FY13 FY14 None of the performance rights linked to the ROE measure vested 36.5% Vesting of the total FY13 LTI award 18 MIRVAC GROUP ANNUAL REPORT 2015 FY15 3 year average Remuneration report / continued Executive KMP vesting outcomes in FY15 The performance outcomes resulted in the following individual vesting results: Rights granted in FY13 Rights vested in FY15 % of % of Number Value ($) 1 total grant Executive KMP Number Value ($) 1 total grant Susan Lloyd-Hurwitz John Carfi Brett Draffen Susan MacDonald 1,137,300 30,367 489,800 127,131 816,013 21,788 351,432 91,216 36.5 36.5 36.5 36.5 415,144 11,083 178,777 46,402 297,845 7,953 128,273 33,294 63.5 63.5 63.5 63.5 Rights forfeited in FY15 Number Value ($) 1 722,186 19,284 311,023 80,729 518,168 13,835 223,159 57,922 1) Value of the grant has been estimated based on the fair value as calculated at the time of the grant. Executive KMP vesting outcomes for the past three years A summary of vesting under Mirvac’s performance-hurdled equity grants that have vested in the last three years is shown in the following table: Grant year FY11 FY12 FY13 Performance hurdle Test date Vested Lapsed TSR TSR and ROE TSR and ROE 30 June 2013 30 June 2014 30 June 2015 0% 77% 36.5% 100% 23% 63.5% 9 Mirvac’s approach to executive remuneration The Board, Human Resources Committee, advisors and management work closely to apply our remuneration principles and ensure our strategy supports sustainable securityholder value. Mirvac’s remuneration strategy is designed to attract, motivate and retain the individuals who are best equipped to successfully execute the business strategy. a) How remuneration decisions are made Roles and responsibilities Board Oversees remuneration With advice from Human Resources Committee › Four independent NED members › Advises Board on remuneration strategy › Specific recommendations on Director remuneration › Approves KMP terms of employment Based on Remuneration principles › Align and contribute to Mirvac’s key strategic business objectives and desired business outcomes › Align the interests of employees with those of securityholders › Assist Mirvac in attracting and retaining the employees required to execute the business strategy › Support Mirvac’s desired performance-based culture › Encompass the concept of pay parity and be fair and equitable › Be simple and easily understood MIRVAC GROUP ANNUAL REPORT 2015 19 Directors’ report Remuneration report / continued Expert input from management and external advisors The HRC has appointed Ernst & Young as its external remuneration advisor. Ernst & Young provides both information on current market practice and independent input into key remuneration decisions. Ernst & Young’s terms of engagement include specific measures designed to protect its independence. To effectively perform its role, Ernst & Young needs to interact with members of Mirvac management, particularly those in the Human Resources team. However, to ensure independence, members of Mirvac’s management are precluded from requesting services that would be considered to be a ‘remuneration recommendation’ as defined by the Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011. During the year ended 30 June 2015, Ernst & Young provided the HRC with: — guidance in the review and design of executive remuneration strategy; — assistance in drafting of remuneration disclosures; — relative TSR performance calculations; and — market remuneration information which was used as an input to the annual review of the KMP and other selected Executives’ remuneration. No remuneration recommendations were provided by Ernst & Young or any other advisor during the year. b) Market positioning Mirvac has adopted a market positioning strategy designed to attract and retain talented employees, and to reward them for delivering strong performance. The market positioning strategy also supports fair and equitable outcomes between employees. Definition of market When determining the relevant market for each role, Mirvac considers the companies from which it sources talent, and to whom it could potentially lose talent. For business roles: — the primary comparison group is the Australian Real Estate Investment Trust (“A-REIT”) sector, plus Lend Lease and Aveo Group; and — the secondary comparison group is a general industry comparison group with a similar market capitalisation (50‑200 per cent of Mirvac’s 12 month average market capitalisation). For corporate roles: — the primary comparison group is a general industry comparison group with a similar market capitalisation (50‑200 per cent of Mirvac’s 12 month average market capitalisation) to reflect the greater transferability of skills. Where disclosed data is unavailable, Mirvac relies on published remuneration surveys covering relevant industries and the broader market. 20 MIRVAC GROUP ANNUAL REPORT 2015 Targeted market positioning Fixed remuneration at Mirvac is positioned at the median (50th percentile), with flexibility based on: — the criticality of the role to successful execution of the business strategy; — assessment of employee performance/potential; and — the employee’s experience level. Target total remuneration is comprised of fixed remuneration, STI and LTI and is positioned at the median (50th percentile) with the opportunity to earn total remuneration up to the upper quartile (75th percentile) in the event that both the individual and the business achieve stretch targets. Minimum securityholding guidelines Executive KMP members are expected to establish and maintain a securityholding to the value of 100 per cent of fixed remuneration for the CEO/MD and 50 per cent of fixed remuneration for all other Executive KMP members. Executive KMP members have five years to build up their securityholding to the suggested level. As at 30 June 2015, progress towards the minimum securityholding guidelines for each continuing Executive KMP member was as follows: Value of security holding as Date at 30 June Executive securityholding 2015 KMP member to be attained $ Susan Lloyd-Hurwitz Andrew Butler John Carfi Brett Draffen Shane Gannon Susan MacDonald David Rolls November 2017 July 2017 July 2019 July 2017 December 2018 July 2019 July 2019 100,744 86,288 345,678 1,620,961 — 211,638 — Minimum securityholding guideline $ 1,500,000 350,000 350,000 475,000 450,000 350,000 350,000 10 How remuneration is structured Our executive remuneration is focused on execution of business strategy. We provide market-competitive remuneration and reward for performance that delivers strategic outcomes. a) Fixed remuneration: how does it work? Fixed remuneration acts as a base-level reward for a competent level of performance. It includes cash, compulsory superannuation and any salary-sacrificed items (including FBT). The following factors are taken into account when setting fixed remuneration levels at Mirvac: — the size and complexity of the role; — role accountabilities; — skills and experience of the individual; and — market pay levels for comparable roles. The opportunity value for the at-risk components of remuneration is determined by reference to fixed remuneration, so Mirvac is conscious that any adjustments to fixed remuneration have a flow-on impact on potential STI and LTI awards. Remuneration report / continued b) STI: how does it work? Purpose Motivate and reward employees for contributing to the delivery of annual business performance. Eligibility All permanent Mirvac employees employed on the award date are eligible to participate in the STI plan. Pool Group operating earnings must be at least 90 per cent of target before any STI payments are made. The size of the STI pool is then determined based on Group performance against a balanced scorecard of measures linked to Mirvac’s strategic drivers. Awards A target opportunity is set for each individual, which will be earned if Group and individual performance is on target. Actual STI awards can range from zero to double the target opportunity, depending on Group and individual performance, but is capped at a maximum of 200 per cent of target. Performance measures Performance is assessed against both Group and individual performance. Individual performance measures are set based on the specific responsibilities of each role. There are three Group performance measures: two financial measures (with a combined weighting of 70 per cent) and a scorecard of non-financial measures (with a combined weighting of 30 per cent), they are as follows: Category Measure Rationale for using Financial Operating earnings Reflects the underlying performance of Mirvac’s core business operations and represents a key driver of securityholder value. ROIC Reflects how efficiently Mirvac is using its assets to generate earnings. Customer and investor satisfaction Represents how well Mirvac is meeting the expectations of key external stakeholders. Non-financial High performing people There is a strong correlation between high and culture levels of employee engagement and total securityholder return. HSE&S leadership Mirvac is committed to providing a safe workplace for all of its employees and to ensuring its activities do not have an adverse impact on the environment. The targets for the non-financial individual measures are not disclosed as some are commercially sensitive. The measures are quantitative in nature and recurring targets will typically increase each year. Performance schedule For each performance measure on the Group STI scorecard, a threshold, plan and stretch goal is set at the start of the financial year. The Group STI score for each performance level is calculated according to the following schedule: Performance level Group STI score % target Stretch 150 A sliding scale operates between threshold and plan, and between plan and stretch. Deferral For Executives: — 25 per cent of any STI award is deferred into rights over Mirvac securities (granted on the same date as the cash payment is made) and — 75 per cent is paid as cash. The rights vest in two tranches: 50 per cent after 1 year and 50 per cent after two years. If the deferred rights vest, entitlements will be satisfied by the purchase of existing securities on-market. Executives are expected to retain the resulting securities they receive until they satisfy the minimum securityholding guidelines. Termination/forfeiture The deferred portion of an STI award is forfeited if an employee resigns or is dismissed for performance reasons prior to the vesting date. Unvested deferred STI awards may be retained if an employee leaves due to circumstances such as retirement, redundancy, agreed transfer to an investment partner, or total and permanent disablement or death. Clawback policy Mirvac has in place an incentive clawback policy for Executive KMP members and other Executives capable of influencing the results of the Group. The policy gives the HRC the ability to claw back incentives in the event of a material financial misstatement. The clawback provisions apply to unvested STI and LTI awards received after the introduction of the policy in February 2013. Hedging Consistent with the Corporations Act 2001, participants are prohibited from hedging their unvested performance rights. MIRVAC GROUP ANNUAL REPORT 2015 21 Directors’ report Remuneration report / continued c) LTI: how does it work? Purpose The purpose of LTI at Mirvac is to: — assist in attracting and retaining the required executive talent; — focus executive attention on driving sustainable long term growth; and — align the interests of executives with those of securityholders. Eligibility LTI grants are generally restricted to those Executives who are most able to influence securityholder value. Non-Executive Directors are not eligible to participate in the LTI plan. Instrument Awards under this plan are made in the form of performance rights. A performance right is a right to acquire one fully paid Mirvac security provided a specified performance hurdle is met. No dividends/distributions are paid on unvested LTI awards. This ensures that Executives are only rewarded when performance hurdles have been achieved at the end of the performance period. Grant value The maximum LTI opportunities during FY15 were equivalent to 150 per cent of fixed remuneration for the CEO/MD and 50 — 90 per cent of fixed remuneration for other Executive KMP. Grant price The grant price for a performance right is calculated as the average security price for the month leading up to grant, discounted for dividends and distributions not paid during the three year performance period. The grant price is not reduced based on performance conditions. Performance period Performance is measured over a three year period. For the FY15 grant, performance will be measured from 1 July 2014 to 30 June 2017. Performance hurdles The HRC reviews the performance conditions annually to determine the appropriate hurdles based on Mirvac’s strategy and prevailing market practice. Two performance measures apply to the LTI grants made during FY15: Relative TSR (50 per cent of the LTI allocation) Relative TSR is used because it is an objective measure of securityholder value creation and is widely understood and accepted by the various key stakeholders. Mirvac’s TSR performance is measured relative to that of a comparison group consisting of Mirvac’s primary market competitors: the constituents of the S&P/ASX 200 A-REIT Index, Lend Lease Corporation Limited and Aveo Group. ROIC (50 per cent of the LTI allocation) ROIC is used because it is aligned to Mirvac’s strategic drivers, in particular financial performance and capital efficiency. ROIC is calculated by taking the average of the three annual ROIC figures (which are calculated as adjusted earnings of a financial year divided by average monthly operating assets for the financial year). These adjustments are made to ensure that rewards reflect management’s contribution to Mirvac’s long term performance. In FY16, it is proposed that the threshold and stretch performance levels for ROIC be increased, to reflect Mirvac’s expectations for returns through the cycle, and over the longer term. Vesting schedule Relative TSR Performance level Vesting/ delivery Relative TSR (percentile) Percentage of TSR-tested rights to vest ROIC Percentage of ROIC-tested Average rights to vest annual ROIC (%)
Purchase answer to see full attachment
User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Hey, i have attached the answer, kindly confrm...thank you

RUNNING HEAD: COMPANY RESEARCH REPORT ABOUT MIRVAC GROUP

Company research report about Mirvac group
Name
Institution
Date

1

COMPANY RESEARCH REPORT ABOUT MIRVAC GROUP

2

Contents
1. Introduction ............................................................................................................................. 3
Products/Services ................................................................................................................. 3
Operating activities .............................................................................................................. 3
Customers ............................................................................................................................ 3
Location ............................................................................................................................... 3
2.

Financial statement .................................................................................................................. 4
Screenshot: The income statement and balance sheet ......................................................... 4
Overview of the statements .................................................................................................. 5

3.

The income statement .............................................................................................................. 6
Revenues .............................................................................................................................. 6
Expenses .............................................................................................................................. 6
Profits ................................................................................................................................... 6
Horizontal and vertical analysis ........................................................................................... 6

4.

Balance sheet ........................................................................................................................... 7
Assets ................................................................................................................................... 7
Liabilities ............................................................................................................................. 7
Equity ................................................................................................................................... 7
Horizontal and vertical analysis ...........................................................


Anonymous
Awesome! Made my life easier.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Related Tags