Annual report
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Appendix 4E Abacus Group (comprising Abacus Group Holdings Limited and its controlled entities, Abacus Trust and its controlled entities, Abacus Group Projects Limited and its controlled entities, Abacus Income Trust and its controlled entities) ABN: 31 080 604 619 Annual Financial Report For the year ended 30 June 2026 Results for announcement to the market (corresponding period: year ended 30 June 2025) Total revenues and other income down 13.1% to $207.1m Net profit after income tax expense attributable to stapled security holders down 380.5% to ($75.5m) Funds from operations ("FFO") (1) down 1.9% to $81.2m (1) FFO has been determined with reference to the updated Property Council of Australia’s voluntary disclosure guidelines to help investors and analysts compare many different AREITs. FFO is calculated by adding back tenant incentive amortisation, depreciation on owner occupied property, plant & equipment (PP&E), change in fair value of investments derecognised, unrealised fair value gains / losses on investment properties, adjustments arising from the effect of revaluing assets / liabilities carried at fair value (such as derivatives, financial instruments and investments), other non-recurring adjustments deemed significant on account of their nature and non-FFO tax benefit/expense. 30 June 2026 30 June 2025 Basic earnings per security (cents) (8.34) 3.01 Basic funds from operations per security (cents) 9.08 9.26 Distribution per security (cents - including proposed distribution) 8.50 8.50 Weighted average securities on issue (million) 893.7 893.7 Distribution per stapled security 4.25 cents 1 July 2026 June 2026 half year This distribution was declared on 18 June 2026 and will be paid on 31 August 2026 Record date for determining entitlement to the distribution Refer to the attached announcement for a detailed discussion of the Abacus Group's results and the above figures for the year e nded 30 June 2026. Total Half December 2025 distribution $38.0m per stapled security paid 27 February 2026 Details of individual and total distribution payments 4.25 The distribution was paid in full by Abacus Trust and Abacus Group Holdings Limited with $8.1m of franking credits attached. Net tangible assets per security (2) 30 June 2026 $1.72$1.59 30 June 2025 (2) Net tangible assets per security excludes external non-controlling interest. On 30 June 2026, Abacus Group sold to Abacus Storage King 100% of the securities in Abacus Storage Funds Management Limited, along with certain other entities acting as trustees of Abacus Storage King sub-trusts. Distribution Reinvestment Plan (DRP) The Group’s Distribution Reinvestment Plan (DRP) will not apply to the final distribution. Information on the terms of the DRP is available from our website www.abacusgroup.com.au.
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30 JUNE 202 6 2 CONTENTS DIRECTORS ’ REPORT ................................ ................................ ................................ ................................ .................. 3 AUDITOR’S INDEPENDENCE DECLARATION ................................ ................................ ................................ . 48 CONSOLIDATED INCOME STATEMENT ................................ ................................ ................................ ............ 49 CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME ................................ ................ 50 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................ ................................ ............. 51 CONSOLIDATED STATEMENT OF CASH FLOW ................................ ................................ .............................. 53 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ................................ ................................ ............. 54 NOTES TO THE FINANCIAL STATEMENTS ................................ ................................ ................................ ......... 56 CONSOLIDATED ENTITY DISCLOSURE STATEMENT ................................ ................................ ................... 106 DIRECTORS’ DECLARATION ................................ ................................ ................................ ................................ . 107 INDEPENDENT AUDITOR’S REPORT ................................ ................................ ................................ ................ 108 ABACUS GROUP HOLDINGS LIMITED ABN: 31 080 604 619 ABACUS GROUP PROJECTS LIMITED ABN: 11 104 066 104 ABACUS FUNDS MANAGEMENT LIMITED ABN: 66 007 415 590 DIRECTORS OF ABACUS GROUP HOLDINGS LIMITED: Mark Haberlin , Chair Steven Sewell, Managing Director Trent Alston Phillip Lewis Jingmin Qian REGISTERED OFFICE: Level 13, 77 Castlereagh Street , SYDNEY NSW 2000 Tel: (02) 9253 8600 Fax: (02) 9253 8616 Website: www.abacusgroup.com.au COMPANY SECRETARY: Lucy Spenceley AUDITOR (FINANCIAL AND COMPLIANCE PLAN): Ernst & Young 200 George Street , SYDNEY NSW 2000 CUSTODIAN: Perpetual Trustee Company Limited Level 14 Angel Place 123 Pitt Street , SYDNEY NSW 2000 SHARE REGISTRY: Boardroom Pty Ltd Level 8, 210 George St , SYDNEY NSW 2000 Tel: 1300 737 760 Fax: 1300 653 459 DISCLAIMER: It is recommended that this Annual Financial Report should be read in conjunction with the Annual Financial Report of Abacus Trust, Abacus Group Projects Limited and Abacus Income Trust as at 30 June 202 6 . It is also recommended that the report be considered together with any public announcements made by Abacus Group in accordance with its continuous disclosure obligations arising under the Corporations Act 20 01 .
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DIRECTORS’ REPORT 30 JUNE 202 6 3 The Directors of Abacus Group Holdings Limited (“AGHL”), Abacus Funds Management Limited (“AFML”) – the Responsible Entity of Abacus Trust (“AT”) and Abacus Income Trust (“AIT”), and Abacus Group Projects Limited (“AGPL”) present their report for the year ended 30 June 202 6 . PRINCIPAL ACTIVITIES AND STRUCTURE The principal activities of Abacus Group during the year were investment in Commercial properties ( O ffice and other). Abacus Group is a strong asset backed, annuity style business where capital is directed towards assets that provide potential for enhanced income growth to generate increased total returns and create value. The operating and financial review is intended to convey the Directors’ perspective of Abacus Group and its operational and financial performance. It sets out information to assist securityholders to understand and interpret the financial statements includ ed in this report prepared in accordance with Australian Accounting Standards and International Financial Reporting Standards (“IFRS”), as issued by the Australian Accounting Standards Board (“AASB”) and the International Accounting Standards Board (“IASB” ) respectively. It should be read in conjunction with the financial statements and accompanying notes. Listed Structure / Entities The listed Abacus Group is a diversified property group that operates predominantly in Australia. It comprises AGHL, AT, AIT and AGPL (collectively “Abacus” or “the Group”) and its securities trade on the Australian Securities Exchange (“ASX”) as ABG. Abac us was listed on the ASX in November 2002 and its market capitalisation was over $ 1.0 billion at 30 June 202 6 . Abacus Group is included in the S&P/ASX 300 A - REIT index (ASX:XP K ), a sub - index of the S&P/ASX 3 00 index that contains the listed vehicles classified as A - REITs. Shares in AGHL, AGPL and units in AT, AIT have been stapled together so that none can be dealt with without the others and are traded together on the ASX as Abacus Group securities. An Abacus Group security consists of one share in AGHL, one unit in AT, on e share in AGPL and one unit in AIT. A transfer, issue or reorganisation of a share or unit in any of the component parts requires, while they continue to be stapled, a corresponding transfer, issue or reorganisation of a share or unit in each of the other component parts. AGHL and AGPL are companies that are incorporated and domiciled in Australia. AT and AIT are Australian registered managed investment schemes. AFML is the Responsible Entity of AT and AIT. AFML is incorporated and domiciled in Australia and is a wholly own ed subsidiary of AGHL. Abacus Group Consolidation AGHL ( “ the company ” ) has been identified as the parent entity of the Group. The financial report of the Group for the year ended 30 June 202 6 comprises the consolidated financial reports of AGHL and its controlled entities, AT and its controlled entities, AIT and its controlled entities, and AGPL and its controlled entities .
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DIRECTORS’ REPORT 30 JUNE 202 6 4 OPERATING AND FINANCIAL REVIEW GROUP OVERVIEW Abacus Group is currently positioned as a pure - play Commercial REIT, focused on owning and actively managing predominately A - grade O ffice assets and R etail holdings across Australia's eastern seaboard markets. Ab acus Group completed a transformational de - staple in FY24 , t aking effect on 3 August 2023 to create a standalone Self Storage REIT, Abacus Storage King (ASX:ASK) (‘ASK’) , renamed Storage King Group on 6 July 2026 (ASX:SKG) (‘SKG’) . Post de - staple, Abacus Group wa s the manager of ASK and remain ed invested with a strategic stake of 19. 8 % of ASK. On 18 May 2026, Abacus Group announced it had entered into binding transaction documentation with ASK to internalise ASK’s management functions (the ‘Internalisation’), through the sale of 100% of the shares in Abacus Storage Funds Management Limited (‘ASF ML’), the responsible entity holding the ASK management rights. The Internalisation completed on 30 June 2026, terminating the existing management agreements between the Group and ASK and transferring the relevant ASK - focused employees to ASK. Following completion, the Group no longer manages ASK or earns investment a nd development management fees from it, has no B oard representation, and the Group’s remaining c.19.7% security holding in ASK is now held as a financial asset measured at fair value, rather than as an equity accounted investment. ABG's strategic priorities are now centred on three clear areas: simplifying the business model, strengthening the platform and positioning the Group for sustainable growth.
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DIRECTORS’ REPORT 30 JUNE 202 6 5 GROUP OVERVIEW (continued) ABG remains focused on owning and actively managing high quality commercial real estate investments and creating long - term value for securityholders. We rem ain confident that the Group is positioned to leverage our key enablers, being: • Our people and culture, repositioning capability and market insight. • Strategic investment in assets in major markets with a path to sustainable income growth. • Driving value through active management of the asset portfolio. The Board monitors a range of financial information and operating performance indicators to measure performance over time. Funds from operations (“FFO”) is the key measure that Abacus Group uses to monitor the financial success of its overall strateg y. We expect delivery of our strategy to drive value creation through active asset management, disciplined capital allocation and a focused approach to investing in our selected markets. The Group's near - term priorities are to continue disciplined non - core asset sales, capital recycling to optimise portfolio mix, reducing gearing, improving free cash flow and resetting to a sustainable payout ratio. This may provide Abacus Group opportuni ties to acquire core Office assets with medium to long term growth prospects. Despite the challenging economic conditions, we believe our Commercial Office portfolio remains robust, given that the majority of the Group’s investments: • Are well located in CBD or suburban locations with low and often below market average rent levels; • Have limited exposure to multi - floor tenants; and • Focus on the responsible and sustainable evolution of core business practices. GROUP RESULT SUMMARY While elevated interest rates and evolving macroeconomic conditions continued to create uncertainty across the Commercial Real Estate sector, Abacus Group's portfolio of quality assets delivered a resilient performance in FY26. The Group's Commercial portf olio maintained strong occupancy of 91.2% (2025: 92.1%), reflecting the quality of its assets and predominately Eastern Seaboard locations. Against this backdrop, we remain disciplined in our capital allocation, directing investment towards opportunities w ith the potential to enhance income growth, improve total returns and create long - term value. 2026 2025 Revenue ($ million) 167.0 176.3 Total income ($ million) 207.1 238.2 Statutory net profit/(loss) ($ million) (7 4.5 ) 26.9 Funds from operations ($ million) 8 1.2 82.7 Funds from operations per security (cents) 9. 08 9.26 Underlying EBIT ($ million) 1 30 . 7 13 3 .7 Underlying EBIT per security (cents) 14. 63 14.96 Distributions per security (cents) 8.50 8.50 Interest cover ratio 2. 7 x 2.5x Weighted average securities on issue (million) 893.7 893.7
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DIRECTORS’ REPORT 30 JUNE 202 6 6 GROUP RESULT SUMMARY (continued) The Group earned a statutory net loss after ta x of $ 74.5 million for the year ended 30 June 202 6 (202 5 : $ 26.9 million profit ). This profit has been calculated in accordance with Australian Accounting Standards. The decrease in the Group’s statutory net profit compared to the prior period was principally due to: • a loss on change in classification of the ASK investment from equity accounted to fair value through profit or loss of $122.1 m illion ; • a decrease in the share of profit from equity accounted investments from $74.6 million in 2025 to $ 26.6 million in 2026, primarily driven by underlying property revaluations from the ASK investment; offset by • a decrease in the fair value loss of the Commercial investment property portfolio from $72.2 million in 2025 to $16. 7 million in 2026, with capitalisation rates contracting 7 bps to 6.7 0 %. Abacus Group’s portfolio remained resilient despite challenging conditions for Office assets, r ecording an FFO decline of 1.9 % and a full year distribution per security, in line with guidance, of 8.50cps (202 5 : 8.50 cps). 4.25cps is due to be paid on or around 31 August 2026. FFO is derived from the statutory profit and presents the results of the ongoing business activities in a way that reflects our underlying performance. FFO is the basis on which distributions are determined. FFO has been determined with reference to the Property Council of Australia’s voluntary disclosure guidelines to help investors and analysts compare Australian real estate organisations. FFO is calculated by adding back the following to statutory net prof it after tax: • Tenant incentive amortisation • Depreciation on owner occupied property, plant & equipment (PP&E) • Change in fair value of investment properties derecogni s ed • Restructuring costs • Unrealised fair value gains / losses on investment properties • Adjustments arising from the effect of revaluing assets / liabilities carried at fair value (such as derivatives, financial instruments and investments) • Other non - recurring adjustments deemed significant on account of their nature and non - FFO tax benefit/expense. All adjusted items have their relevant tax impact adjusted.
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DIRECTORS’ REPORT 30 JUNE 202 6 7 GROUP RESULT SUMMARY (continued) The reconciliation between the Group’s statutory profit and FFO is as follows: 2026 2025 $'000 $'000 Consolidated statutory net profit / (loss) after tax attributable to continuing operations (74,495) 26,910 Adjust for: Net change in fair value of investment properties derecognised - (40) Net change in fair value of investment properties held at balance date 16,712 72,173 Net change in fair value of investments and financial instruments held at balance date 725 330 Net change on remeasurement of investments held at balance date 122,069 - Net change in fair value of investment properties included in equity accounted investments (7,670) (54,481) Depreciation and amortisation 129 150 Net change in fair value of derivatives (11,710) 13,895 Amortisation of rent abatement incentives 17,534 16,817 Amortisation of other tenant incentives 5,033 3,980 Impairment charges 13,394 - Straightline of rental income 247 1,254 Finance costs and other 3,529 (3,994) Net tax expense on non-FFO Items (4,337) 5,735 Abacus funds from operations ("FFO") 81,160 82,729 2026 2025 Basic earnings per security (cents) (8.34) 3.01 FFO per security (cents) 9.08 9.26 Distribution per security (cents - including proposed distribution) 8.50 8.50 Weighted average securities on issue (million) 893.7 893.7 FFO is a non - IFRS measure and t his reconciliation has not been reviewed by the Group’s auditor. Capital M anagement and A llocation Abacus maintained a solid capital position during FY2 6 , supported by active treasury management and ongoing cost discipline. As at 30 June 202 6 gearing of 36. 2 % (FY25: 34.5%) is within the Group’s target range of up to 40%. ABG’s interest coverage ratio of 2. 7 x increased from 2.5x in FY2 5 and the debt term to maturity declined slightly to 3.2 years (FY2 5 : 3. 3 years). The Group further strengthened its debt profile during the year, successfully extending the tenor of its syndicated banking facilities by an average of 0.9 years, as well as receiving a small reduction in margin. While weighted average debt term to maturi ty was 3.2 years at 30 June 2026 (FY25: 3.3 years), ABG has no bank debt maturing in FY27, with debt maturing from FY28 onwards. This further supports the Group’s financial flexibility.
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DIRECTORS’ REPORT 30 JUNE 202 6 8 ASK INTERNALISA T ION On 18 May 2026, the Group announced that it had entered into a binding transaction documentation with ASK to internalise ASK’s management functions, following a process overseen by an Independent Board Committee comprising the Group’s independent directors . Under the Share Sale and Purchase Agreement, the Group sold 100% of the shares in ASFML, the responsible entity holding the ASK management rights, and certain dormant subsidiaries, to a stapled entity of ASK. The transaction completed on 30 June 2026, with the transfer of ASK - focused employees, the termination of the Group’s management agreements with ASK, and the cessation of management fee income from ASK all taking effect from that date (other than in respect of one employee who transfers on 31 Augus t 2026). The Abacus name and logo will be removed from the Storage King business following implementation, subject to transitional arrangements. Total consideration for the Internalisation was $23.2 million, comprising the net assets of ASFML of $5.0 million, plus a headline premium of $19.0 million, less $0.8 million in respect of employee entitlement liabilities assumed by ASK on transfer of the relevant employees. Net proceeds from the transaction have been used to repay Group debt. The disposal, and the cessation of the management arrangement, gave rise to a number of consequential accounting impacts for the Group, which are summarised below a nd further explained in the notes to the financial statements. • Goodwill impairment: upon the sale of ASFML the historical $32.4 million goodwill balance was allocated between ASFML and the remaining cash - generating unit, on the basis of the relative value of ASFML to the cash - generating unit as a whole. $19.0 million was allocated to ASF ML, and has been presented net against the sale, reflecting the combined financial effect of the disposal transaction. The cessation of the ASK management arrangement reduced the forecast cash flows of the property and asset management cash - generating unit to which the Group’s remaining goodwill was allocated, resulting in the full impairment of that goodwill balance. $13.4 million of goodwill impairment is therefore recognised as an expense in the statement of profit or loss. Following this impairment, t he Group’s goodwill balance has reduced to nil. • Reclassification of the ASK investment: as a result of the Internalisation, and the resignation of the Group’s nominee, Steven Sewell, from the ASK Board on 30 June 2026, the Group ceased to have significant influence over ASK. Accordingly, the Group’s c.19.7% holding in ASK was reclassified f rom an equity accounted associate to a financial asset measured at fair value through profit or loss, with reference to the quoted market price of ASK securities (a Level 1 input) at 30 June 2026. This reclassification resulted in a loss of $122.1 million being recognised in profit or loss, including the reclassification of the Foreign Currency Translation Reserve balance relating to ASK from reserves to profit or loss. The investment continues to be held following completion, with future movements in fair valu e recognised through profit or loss. Historically, the Group recognised its proportionate share of ASK's earnings through equity accounted income. Following the Internalisation, ABG will no longer recognise a share of ASK earnings, with future returns from its investment expected to be reflec ted through distributions received from ASK. • Long - term incentives: employees transferring to ASK are treated as good leavers under the terms of the Group’s long - term incentive plans, resulting in a change in estimate to their expected vesting period and an acceleration of $1.1 million of expense, recognised within Admini strative and other expenses for the year ended 30 June 2026.
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DIRECTORS’ REPORT 30 JUNE 202 6 9 ASK INTERNALISATION (continued) Following the Internalisation, the Group will no longer earn investment and development management fees from ASK, a recurring revenue stream which contributed $19.3 million in FY26. This is expected to be partly offset by annualised cost savings of appr oximately $8.4 million, primaril y associated with the transfer of ASK - focused employees to ASK, as the Group continues to rebalance its cost base. The Group has agreed to provide certain transitional services to ASK for a period of 6 months following implementation (which may be extende d for an additional three months), on a cost recovery basis, with ASK providing certain reverse transitional services over the same period , also on a cost recovery basis . The Internalisation was conducted on arm’s length terms, supported by an independent expert opinion obtained by the Group, and accordingly did not require securityholder approval under Chapter 2E of the Corporations Act 2001 (Cth) or the ASX Listing Rules. Following the Internalisation, the Group will pursue with added focus its long - term strategy of creating value for securityholders through the identification, ownership and management of high quality commercial real estate investments, and will consider a range of strategic options to optimise its portfolio and capital structure. K EY SEGMENT RESULTS SUMMARY Commercial The Commercial portfolio consists of 17 assets ( FY 2 5 : 18 assets) and had a total value of $2. 1 billion at year end ( FY25 : $2 . 1 billion). The Commercial portfolio comprises 13 Office assets (FY25: 14 assets), 2 Retail assets (FY25: two assets) and two greenfield assets (FY25: two assets). The Commercial portfolio has a stable income growth profile, supported by high occupancy of 9 1.2 % and a diversified lease profile of 3.9 years. FY26 FY25 FY24 Portfolio Value ($ million) $2,116.9 $2,128.8 $2,207.6 Number of assets 17 18 19 Occupancy 1 (% by area) 9 1.2 % 92.1% 94.2% 2 WALE 1 3.9 years 4.0 years 4.3 years WACR 2 6.6 8 % 6.74% 6.46% 1. Excludes development affected assets 2. WACR: Weighted Average Capitalisation Rate Office Abacus Group delivered solid Office income in FY2 6 , underpinned by a high - quality Commercial Portfolio and disciplined asset management. Portfolio occupancy remained solid at 8 9.2 %, supported by 71 leasing transactions and over 46 ,000sqm of space leased . Leasing activity remained competitive, with average incentives at 33%, skewed higher for new deals of 35% compared to renewals of 25%. Average net face rent increased 3.2% on FY25 to $836psm for Sydney and Melbourne assets, with CBD assets achieving a premium of $1,037psm , reflecting the strength of Abacus Group’s positioning in core markets. Key Commercial Metrics Portfolio geographic diversification NSW 44% QLD 23% VIC 27% SA 4% ACT 2%
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DIRECTORS’ REPORT 30 JUNE 202 6 10 K EY SEGMENT RESULTS SUMMARY (continued) Retail The Group’s R etail portfolio continued to perform well in FY26, with occupancy holding firm at 97.4% and average rent reviews delivering growth of 3.6%. The portfolio’s weighted average capitalisation rate (WACR) contracted by 21 basis points over the period to 6. 25 % , reflecting the quality of the assets and sustained tenant demand. Commercial Valuations The investment property portfolio’s overall weighted average capitalisation rate contracted 7 basis points from 6.77 % in FY25 to 6.7 0 % in FY26 . The Commercial portfolio (excluding equity accounted properties) was valued at $1.8 billion at 20 26 year - end (FY25: $1.8 billion) across 1 5 assets ( FY25: 15 assets). As a result of current market conditions and a shift in future expectations in the Office sector, Abacus Group has targeted assets that offer more stabilised income streams with longer dated value enhancing strategies. This capital allocation strategy supports the Group’s drive to improve recurring earnings. Storage Abacus Group’s 19.7% equity interest in Abacus Storage King (ASK) delivered a FY26 FFO of $82.1 million, down 3.4% on FY25, and a distribution of 6.20 cents per security, in line with guidance. ASK’s scalable platform. ASK’s RevPAM rose 0.7% to $341psm, or +2 .7% excluding the impact of New Zealand. Following completion of the Internalisation on 30 June 2026, the Group ceased to manage ASK and no longer earns investment or development management fees from it. The Group’s remaining interest in ASK ceased to be equity accounted from that date and is no w recognised as a financial asset measured at fair value, with movements in fair value recognised through profit or loss in future periods (refer to “ASK Internalisation” above). 11% 5% 11% 18% 13% 15% 27% Vacant Short Term FY27 FY28 FY29 FY30 FY31+ NSW QLD VIC SA ACT Office Lease Expiry
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DIRECTORS’ REPORT 30 JUNE 2026 11 SUSTAINABILITY PERFORMANCE Over the past 12 months, we have maintained a strong focus on delivering measurable outcomes through the execution of our sustainability strategy. Our initiatives have continued to advance environmental and social priorities while supporting the organisation’s long-term business objectives. Key achievements include: • A 79 % reduction in emissions intensity compared to our FY19 baseline, reflecting our ongoing commitment to net zero 2030 (scope 1 & 2) • 100% of Office buildings (operational control) have transitioned to renewable electricity sources from 1 January 2026 • Achieved a Net Promoter Score (NPS) from our customers of +35, an eight point increase on FY25, highlighting strong customer engagement and satisfaction • Achieved an employee engagement score of 74%, and we have and continue to focus on improving employee engagement A major focus for the Group moving forward is enhancing the customer experience which we believe will continue to foster greater employee engagement and drive improved business performance. We have recalibrated our environmental sustainability targets to align with our 2030 net zero commitment and are actively preparing to meet disclosure requirements under the Australian Sustainability Reporting Standards (ASRS) as a Group 3 entity. FUTURE PROSPECTS ABG enters FY27 as a focused Commercial REIT with strategic priorities centred on simplifying the business model, strengthening the platform and positioning the Group for sustainable growth. Following completion of the Internalisation, the Board has set out a strategic framework of immediate, short term and medium term priorities to guide the Group’s focus, underpinned by disciplined execution to drive sustainable earnings growth and maximise income yield: ABG also retains more than $150 million of funding capacity, providing flexibility to execute on its capital management and portfolio optimisation initiatives. Abacus Group’s forecast level of gearing and liquidity will enable it to pursue its strategy and to take advantage of any short-term volatility in the market, which is anticipated in this fluctuating macro-economic environment.
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DIRECTORS’ REPORT 30 JUNE 202 6 12 RISK MANAGEMENT Abacus has a Business Risk Management Policy which provides a framework to identify, assess, monitor, and manage material risks to its operations, which was most recently reviewed in June 2026. The Business Risk Management Policy is based on ISO 31000:2018 Risk Management Guidelines, an internationally recognised set of principles for managing risks in organisations. Risk Category Description of Risk Potential Impact Mitigation Strategies Strategic Macroeconomic Environment Pressure on asset valuations, operating costs, customer demand and consumption levels - Disciplined approach to capital management - Diversification of property locations across Australia - Robust annual budgeting process Consumer and Working Behaviour and Competition Potential lower demand for O ffice space, reduce effective rental levels through higher tenant incentives and higher costs of O ffice fit outs. - Continuous engagement with customers and tenants to understand their needs - Monitoring performance and requirements for building and tenancy enhancements Operational Health, Safety and Wellbeing of our Employees, Suppliers, Customers and Tenants Harm to people, reputational damage, criminal penalties and costs and efforts to remediate - Culture of promoting the importance of health, safety and wellbeing - Delivery and oversight of the Abacus Work, Health and Safety Management System - Health and safety matters are monitored by the Audit and Risk Committee Asset quality and maintenance Poor functioning of assets, financial penalties for non - compliance - Professional asset, property and facility managers - Ongoing programme of capital expenditure upgrades Natural disasters (floods, bushfires, earthquakes) and climate change Property damage, service disruption, repair costs , higher operating costs - Geographic diversification - Insurance coverage - Property upgrades and resilience planning Cybersecurity and data privacy threats Data breach, operational disruption, reputational damage - Investment in cybersecurity infrastructure - Staff training and awareness - Incident response testing and planning. - Insurance cover
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DIRECTORS’ REPORT 30 JUNE 202 6 13 RISK MANAGEMENT ( continued) Risk Category Description of Risk Potential Impact Mitigation Strategies Financial Rising interest rates Increased borrowing costs, lower valuations - Interest rate hedging - Balance sheet discipline Restricted access to capital markets Inability to fund growth or refinance debt - Maintain strong credit rating - Diversify funding sources - Conservative gearing Regulatory & Legal Non - compliance with regulations Fines, litigation, reputational harm - Regular compliance reviews - Legal counsel oversight - Staff compliance training Litigation exposure Financial liability, reputational risk - Insurance coverage - Dispute resolution frameworks - Legal risk monitoring D IRECTORS AND SECRETARY The qualifications, experience and special responsibilities of the Directors and Company Secretary are as follows: Mark Haberlin BSc (Eng) Hons Chair (non - executive) Mark is a Non - Executive Director and has significant expertise in fields that cover accounting and audit, capital transactions, mergers and acquisitions and risk management in the real estate and financial services sectors. Mark was a partner at PwC for 24 years where he developed key accoun ting and audit experience. Mark was a member of the PwC Governance Board and completed his last two years as Chair and was previously a Non - Executive Director of LayBuy Holdings Limited. Mark has been a Non - Executive Director of ASX listed Australian Clini cal Labs since April 2021. Mark is a member of the Audit & Risk Committee and People Performance and Nomination Committee. Tenure: 7 years 7 months Steven Sewell BSc Managing Director Steven joined Abacus Group in October 2017, bringing over 20 years’ experience in real estate funds management, asset management, equity and debt capital markets and M&A transactions. Steven’s prior career experience is in listed and unlisted real estate f unds management businesses, across various real estate sectors, providing Commercial experience and insight in relation to institutional investors, the whole Abacus Group’s business and sector specialised investment strategies, capital allocation and devel oping third party capital relationships. Steven was appointed Abacus Group’s Managing Director in April 2018, and is a member and past Chairman of the Shopping Centre Council of Australia. Tenure: 8 years 2 months
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DIRECTORS’ REPORT 30 JUNE 202 6 14 D IRECTORS AND SECRETARY (continued) Trent Alston B. Build. (Hons), GMQ - AGSM, AMP – Insead, GAICD Trent is a Non - Executive Director and has over 30 years of experience in the real estate and funds management industry, with the last 13 years as Head of Real Estate for Challenger Limited. His experience includes direct and wholesale property roles at Colonial First State Property and Lendlease. Trent is also a Non - Executive Director of Landcom. Trent is Chair of the People Performance and Nomination Committee and a member of the Audit and Risk Committee. Tenure: 6 year s 9 months Philip Lewis FRICS – commenced 30 June, 2026 Philip based in London, has been at Ki Corporation since May 2010 and heads the Group’s property investment division. Ki Corporation is a significant securityholder in ABG and has a substantial portfolio of real estate investments in Australia , the United Kingdom and United States. He brings extensive experience in property investment, development and listed company leadership to the Board, having previously served as CEO of Milner Estates PLC, Executive Chairman of Safestore Self Storage plc and a wide ra nge of non - executive roles in property related businesses. Philip is currently Non - Executive Chairman of Smeg UK Ltd, Senior Independent Non - Executive Director of Platform 4 Ltd, Network Rail’s property development company and Chairs their Board Investment Committee and previously spent 11 years on the Board of the London Legacy Develop ment Corporation, the body responsible for the development of the Olympic Park following the 2012 Olympic Games. He is a Fellow of the Royal Institution of Chartered Surveyors. Philip commenced as a board member on 30 June 2026. Jingmin Qian CFA, BEc, MBA, FAICD Jingmin is a Non - Executive Director and has significant expertise in the property, infrastructure and investment sectors as well as rich experience in Asia. Jingmin previously worked at L.E.K. Consulting, Boral Limited and Leighton Holdings, with a broad range of commercial responsibilities covering strategy, planning, investment review, mergers and acquisitions, operational improvement and Asia expansion. Jingmin has served as a member of the business liaison program of the Reserve Bank of Australia. J ingmin is the Independent Chair of the trustee board of HMC Capital Partners Fund , a member of Macquarie University Council, a director of the CFA Society Australia, and Jing Meridian . Jingmin was formerly a non - executive director of IPH Limited and National Vice President of the Australia China Business Council. Jingmin is a member of Chief Executive Women. Jingmin is Chair of the of the Audit and Risk Committee and a member of the People Performance and Nomination Committee. Tenure: 9 years Myra Salkinder MBA, B A (Resigned 30 June 2026) Myra was a Non Independent, Non - Executive Director and is a senior executive of the Kirsh Group. She has been integrally involved over many years with the continued expansion of Kirsh Group’s property and other investments, both in South Africa, Australia and inte rnationally. Myra is a director of various companies associated with Kirsh Group worldwide. Myra was Chair of the Board and a member of the Sustainability and WHS Committee.
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DIRECTORS’ REPORT 30 JUNE 202 6 15 DIRECTORS AND SECRETARY ( continued ) Lucy Spenceley BA (Hons) AGIA Company Secretary Lucy has worked in the finance industry for over 20 years, with 1 3 years in governance roles. Lucy has a Bachelor of Arts and is a member of the Governance Institute of Australia. Directors’ Meetings The number of meetings of directors (including meetings of committees of directors) of AGHL, AFML (the Responsible Entity of AT and AIT), and AGPL, held during the year and the number of meetings attended by each director were as follows: People, Performance Sustainability Independent Audit & Risk & Nomination & WHS Board Board Committee Committee Committee * Committee Eligible Attended Eligible Attended Eligible Attended Eligible Attended Eligible Attended M Salkinder 10 10 - - - - 4 4 - - T Alston 11 11 4 4 4 4 4 4 10 10 M Haberlin 11 11 4 4 4 4 - - 10 10 J Qian 11 11 4 4 4 4 4 4 10 10 S Sewell 11 11 - - - - - - - - * As of 30 June 2026 the Sustainability & WHS Committee was retired Indemnification and Insurance of Directors and Officers The Group has paid an insurance premium in respect of a contract insuring all directors, full time executive officers and the secretary. The terms of this policy prohibit disclosure of the nature of the risks insured or the premium paid. Indemnification of Auditors To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount) – except for any loss in respect of any matters which are finally determined to have resulted from Ernst & Young’s negligent, wrongful or wilful acts or omissions. No payment has been made to indemnify Ernst & Young during or since the financial year. SIGNIFICANT EVENTS AFTER BALANCE DATE On 23 June 2026, the Group announced the appointment of Lawrence Wong as Chief Financial Officer. Mr Wong commenced with the Group on 17 August 2026 and assumes the CFO role on 1 September 2026. Departing CFO Evan Goodridge, who transfers to ASK as part of the Internalisation, will ensure a smooth transition and handover. Other than the matters noted above and elsewhere in this report, no other matter or circumstance has arisen since 30 June 2026 that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or th e state of affairs of the Group in future financial years.
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DIRECTORS’ REPORT 30 JUNE 202 6 16 REMUNERATION REPORT Letter from the Chair of the People, Performance and Nomination Committee On behalf of the People, Performance and Nomination Committee and the Board, I am pleased to present the Remuneration Report for FY26. The report summarises Abacus’ performance and remuneration outcomes for FY26, the executive remuneration framework, and changes to FY26 executive and non - executive remuneration. FY26 Performance Abacus Group (ABG) has an asset backed, annuity style business model where capital is directed towards property assets that provide potential for enhanced income growth to create value. Our people, market insight and positioning capability together with strategic partnering are key enablers of our strategy. The Funds from Operations profit result in FY26 was $81.2m, a decrease of 1.9% on the prior year’s performance from continuing operations. Beyond the FFO result, the Group delivered a resilient operating performance across its Commercial portfolio in a year marked by significant corporate change. A statutory net loss of $ 74.5 million was recorded, driven by the non - cash impact of reclassifying the Group's investment in Storage King Group (‘SKG’) 1 , formerly known as Abacus Storage King (‘ASK’) from an equity accounted investment to an investment held at fair value following its internalisation. The Internalisation was the culmination of a multi - year strategy that now repositions Abacus Group as a focused Commercial REIT from FY27. Distributions of 8.50 cents per security were maintained in line with FY25, at a payout ratio of 93.6 % of FFO, while gearing of 36.1% remained within the Group's target range of up to 40%. The weighted average capitalisation rate contracted a further 7 basis points to 6.70%, reflecting improving fundamentals across the portfolio. FY26 Remuneration The Board considered financial and non‑ financial performance both in the context of the 2026 financial year and over a multi‑ year period when determining incentive outcomes. STI awards for Executive KMP correlated with annual performance outcomes against expectations, with payments averagin g 40.04% of maximum STI. 25% of Executive KMP STI is deferred for a further 12 months. Further details on the STI Plan can be found on page 23 . The following LTI grants will vest in August 2026 for the MD and certain other Executive KMP participants: • The FY23 LTI grant will vest at 33.6 % of maximum based on combined EBIT CAGR and Relative TSR for Abacus Group and Abacus Storage King. • The FY24 LTI grant will vest at 3 7.5 % of maximum based on Abacus Group EBIT CAGR and Relative TSR . • The FY24 LTI g rant related to Abacus Storage King Relative TSR will vest at 77.3%. 1 Abacus Storage King (‘ASK’) was renamed Storage King Group (SKG) on 6 July 2026
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DIRECTORS’ REPORT 30 JUNE 202 6 17 REMUNERATION REPORT Internalisation In May 2026, Abacus Group announced to the market, that Abacus Group and Abacus Storage King entered into a binding Share Sale Agreement and Co - operation Services Agreement to effect the Internalisation, which involved the termination of the existing management agreements with ASK, the sale of 100% of the securities in ASK ’s responsible entity (AFSML) to ASK, and the transfer of key ASK focused employees to ASK. Nikki Lawson has transitioned to ASK as Managing Director on 1 July 2026 and Evan Goodridge as Chief Financial Officer will transfer with effect from 1 September. Nikki and Evan have both been part of a strong team that has been instrumental in growing ASK to where it is today. As part of the transaction, the two departing employees were treated as "good leavers" under the Group's incentive plans, meaning their outstanding awards will not lapse or be forfeited as a result of the transaction and will instead continue to vest and b e assessed on the same basis as other employees holding the same type of award. KMP Changes Abacus Group is pleased to announce the appointment of Lawrence Wong as Chief Financial Officer effective 17 August 2026. Departing CFO Evan Goodridge, will ensure a smooth transition and hand over to Lawrence. Our long serving Chair of the Board, Myra Salkinder has stepped down , effective 30 June 2026. Myra joined the Board in 2011 and was appointed Chair of the Board in 2019. During her time at Abacus, Myra oversaw the strategic evolution of the Group into a focused annuity style asset backed business model, including the concent ration of investments into the Commercial and Self Storage sectors that ultimately culminated in the destapling and separate ASX listing of Abacus Storage King. The Board would like to thank Myra for her significant contribution and dedication to the Group throughout her tenure . Upon Myra’s planned retirement effective close of business 30 June 2026, the Board has resolved to make the following appointments: • Mark Haberlin, a Non - Executive director since 2018 and currently Lead Independent Director as Independent Chair of the Board; and • Mr Philip Lewis as a Non - Independent Non - Executive Director. Looking Ahead Abacus Group will pursue with added focus its long - term strategy of creating value for securityholders through the identification, ownership and management of high quality commercial real estate investments. The Internalisation also provided an opportunit y for Abacus Group to consider a range of strategic options to optimise its portfolio and capital structure, enhancing Abacus’s ability to identify and execute on future growth opportunities and deliver long - term value for securityholders. It has been a significant year for Abacus Group, and the Board acknowledges the dedication of the team, particularly through the current uncertain environment. Trent Alston Chair – People, Performance and Nomination Committee (PPNC)
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DIRECTORS’ REPORT 30 JUNE 202 6 18 REMUNERATION REPORT The Board presents the FY2 6 Remuneration Report for Abacus in accordance with the Corporations Act 2001 and its regulations, which has been audited by EY. This report outlines the key remuneration policies and practices for the year ended 30 June 202 6 . It highlights the link between remuneration and corporate performance and provides detailed information on the remuneration for Key Management Personnel (KMP). This remuneration report is set out under the following headings: SECTION CONTENTS PAGE 1. Who is covered in this report - KMP 18 2. FY2 6 Performance Outcomes 19 3. FY2 6 : How did we perform? 21 4. Executive KMP remuneration 23 5. Remuneration governance and framework 27 6. Non - Executive Director remuneration 41 7. Additional required disclosures 45 1. WHO IS COVERED IN THIS REPORT – KMP For the purposes of this report, the KMP are those persons who for the purposes of the accounting standards are considered to have authority and responsibility for planning, directing , and controlling the major activities of the Group. NAME ROLE TERM AS KMP Non - Executive Directors (NED) 2 3 Myra Salkinder Chair of the Board Full Year Trent Alston Non - Executive Director Full year Mark Haberlin Non - Executive Director Full Year Jingmin Qian Non - Executive Director Full Year Executive KMP Steven Sewell Managing Director (MD) Full Year Kevin George Group General Manager (GGM), Commercial & Fund Manager ABG Full Year 4 Evan Goodridge Chief Financial Officer (CFO) Full Year 5 Nikki Lawson Group General Manager (GGM), Self Storage & Fund Manager ASK Full Year Gavin Lechem Chief Investment Officer (CIO) and General Counsel Full Year 2 Philip Lewis was appointed 30 June 2026. 3 Myra Salkinder has ceased as Chair of the Abacus Group Board 30 June 2026. 4 Evan Goodridge will cease as KMP and CFO 31 August 2026. 5 Nikki Lawson has ceased as KMP and Group General Manager (GGM), Self Storage & Fund Manager ASK 30 June 2026.
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DIRECTORS’ REPORT 30 JUNE 202 6 19 REMUNERATION REPORT 2. FY2 6 PERFORMANCE OUTCOMES The Abacus Performance and Reward framework aims to reward, engage, and develop our people focusing on, value creation for our customers and community. Our Remuneration Principles and Abacus Values Our people are key to our success, providing a wealth of market insight, industry experience and strategic partnering that enables our growth and evolution. The more we nurture and invest in our people, the more we achieve. The Abacus Performance and Rewa rd strategy is guided by the following principles: Reward Reward and promote the results and behaviours consistent with the Abacus purpose, objectives, and values. Balance Balanced between financial performance, strategic priorities, and continued focus on increasing engagement of our people. Alignment Alignment of interests to stakeholders to focus on long term sustainable value creation. Abacus Values Entrepreneurial Responsible Accountable Maximum Remuneration Mix Abacus strives to structure the balance between fixed and variable (at risk) remuneration so that a substantial portion of the variable reward is performance - based and at risk. This approach aligns with the Board's strategic vision for Abacus within the A - REIT industry. The graph below illustrates the relative proportions of each component in the executive remuneration framework for the Managing Director and other Executive Key Management Personnel (KMP) at Abacus for FY2 6 , expressed as a percentage of the total maximum opportunity. Fixed Remuneration STI Cash STI Deferral LTI 35% 26% 9% 30% Other Executives 27% 30%10% 33% Managing Director
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DIRECTORS’ REPORT 30 JUNE 202 6 20 REMUNERATION REPORT FY2 6 Components of Remuneration – Purpose, link to performance and outcomes PURPOSE LINK TO PERFORMANCE FY2 6 OUTCOMES Fixed Remuneration (FR) To attract, engage and retain individuals with capability, diversity of thought and experience to continue delivering on our strategy. Appropriately compensating our employees so that we remain competitive. Changes to FR are linked to a combination of the responsibilities and complexities of the role, incumbent skills and experience, and market rates informed by benchmarking. To align the interests of the Board with securityholders, the MD is required to maintain a minimum holding of securities equivalent to 100% of his fixed remuneration. Executive KMP are required to maintain a minimum holding of securities that is equivalent to 50% of their fixed remuneration. There were no remuneration changes for Executive KMP in FY26. Short Term Incentive (STI) To focus performance on key annual financial and non - financial KPIs, including FFO profit. A deferred STI was introduced to aid retention, align with securityholders’ interests, and provide for a “consequence management” governance mechanism for misconduct, fraud, malfeasance, or financial misstatement. The following factors are among those considered by the Board in making its assessment on the achievement of the annual STI opportunity: Financial performance. Strategic objectives. Environment, Social and Governance objectives. The value of STI awards offered in FY2 6 was up to a maximum of 150% of FR for the MD, and 100% for the remaining Executive KMP. STI for Executive KMP is delivered through 75% in cash and 25% deferred in the form of rights to securities, which have a deferral period of 12 months. The STI outcome in FY2 6 was 35.0% of maximum for the MD. The average STI outcome for other Executive KMP in FY2 6 was 41.7% o f maximum. As a result of the internalisation of the business during FY26, the Board determined that STI deferral would not apply to Evan Goodridge and Nikki Lawson. This determination reflected the timing of the internalisation and the consequent changes to remunera tion structures and incentive participation. The Board considers this outcome to be appropriate in the context of the transition.
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DIRECTORS’ REPORT 30 JUNE 202 6 21 REMUNERATION REPORT PURPOSE LINK TO PERFORMANCE FY2 6 OUTCOMES Long Term Incentive (LTI) The LTI Plan is aimed at attracting, rewarding, and retaining high performing Executives and other nominated participants for delivering sustained long term growth and aligning them with securityholder interests. LTI granted are in the form of performance rights. Performance rights are subject to three independent performance conditions: - EBIT per security CAGR Abacus Group - Relative TSR Abacus Group (ABG) - Relative TSR Abacus Storage King ( ASK ) 50% of the performance rights are tested on the third anniversary of the grant date and 50% on the fourth anniversary of the grant date. The maximum LTI opportunity in FY2 6 was 120% of FR for the MD, 100% of FR for the CFO and the CIO, and 75% of FR for the Group General Managers. For LTI grants that were tested based on performance requirements to 30 June 202 6 , the vesting outcomes in August 202 6 will be as follows 6 : - FY2 3 LTI g rant : 33.6% of maximum. - FY24 LTI Grant was 37.5% of maximum. - FY24 LTI Grant – ASK Cash settled – 77.3% of maximum. - FY25 LTI Grant 7 was 32.6%. (see Section 5 for more information). 3. FY2 6 : HOW DID WE PERFORM ? One of the key principles of the Group’s remuneration framework is the alignment of interests to securityholders to focus on long term sustainable value creation. This section provides a summary of both FY2 6 performance and the Company’s five year financial performance outcomes. Abacus’ FY26 FFO result was $81.2m. During the period, the Group continued to make significant progress delivering on its business priorities. Of note, the Group: ⎯ Completed the internalisation of Abacus Storage King resulting in A bacus receiv ing proceeds of $19 million for the sale of ASFML , , plus approximately $5 million representing net tangible assets. ⎯ Continued to derive fees and returns from ASK through the management and 19.7% investment in ASK ⎯ Materially held levels across its Office and Retail portfolio occupanc ies at 89.2% (FY25: 91.1%) and 97.4% (FY25: 95.5%) respectively, despite the O ffice leasing environment remaining challenging ⎯ Focussed on customer centricity, achieving an NPS score of +35% with a 72% completion rate or a 30% improvement on FY25 ; ⎯ Leasing spread growth by sector: O f f ice spreads grew 5.5%, reflecting broad - based gains from both new deals and renewals, while R etail spreads outperformed at 8.4%, driven by continued strong tenant demand at Oasis given its prime location. ⎯ Divested non - core assets at 241 Adelaide St, Brisbane ($20.3m) and continued sell down of Virginia Park ($4.8m). ⎯ Weighted average cost of debt reduced due to a focused hedging strategy - 4.5% vs FY25 5.1% 6 Vesting outcomes refer to the combined outcome from the original grant made plus the corrective grant for FY23 or FY24. 7 Kevin George was the only Executive KMP with an FY25 LTI grant tested on 30 June 2026. Grant was made prior to becoming KMP.
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DIRECTORS’ REPORT 30 JUNE 202 6 22 REMUNERATION REPORT Five year FFO P erformance FFO Total earnings 1 Abacus funds from operations ("FFO") from continuing operations per security (cents) 2 Relationship between remuneration and Abacus performance Abacus performance over the last five years is illustrated below. Key financial performance indicators Key financial performance Indicators 2022 2023 2024 2025 2026 Abacus funds from operations ("FFO") from continuing operations per security (cents) 1 7.32 8.82 9.10 9.26 9.08 FFO (total earnings) per security (cents) 2 19.01 19.58 9.24 9.26 9.08 FFO Profit $m 160.9 175.0 82.5 82.7 81.2 Underlying EBIT $m 210.0 235.5 122.7 133.7 130.7 Distributions paid and proposed (cents) 18.00 18.40 8.50 8.50 8.50 Franking credit distributions paid and proposed (cents) - - 0.91 1.82 1.82 Payout Ratio (%) 94.7% 94.0% 92.0% 91.8% 93.6% Closing security price (30 June) $2.57 $2.69 $1.16 $1.12 $0.965 Net Tangible Assets per security 3 $3.85 $3.70 $1.76 $1.72 $1.59 Weighted average securities on issue 846.3m 893.5m 893.7m 893.7m 893.7m 1 Excludes the FFO performance of the ASK entities which formed part of Abacus Group until August 2023. 2 FFO earnings are unaudited. 3 Net tangible assets per security include the impact of the fair value movements. 0 2 4 6 8 10 12 14 16 18 20 2022 2023 2024 2025 2026 Cents per security
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DIRECTORS’ REPORT 30 JUNE 202 6 23 REMUNERATION REPORT 4. EXECUTIVE KMP REMUNERATION MD FY2 6 Remuneration details – Target and maximum remuneration i n FY26 The following sets out the awards made to the Managing Director for the year ended 30 June 202 6 . FIXED REMUNERATION SHORT TERM INCENTIVE (STI) LONG TERM INCENTIVE (LTI) FR of $1,300,000 per annum Target STI of $975,000 (75% of FR) Maximum STI of $1,950,000 (150% of FR) The balanced scorecard was based on the following: - Financials - 60% - Strategy - 30% - Environment, Social, Governance - 10% The Managing Director receive d 35.0% of h is maximum STI for FY2 6 . 75% or $ 511,875 of this was received in cash and 25% or $ 170,625 has been received in rights and deferred for one year. Maximum LTI of $1,560,000 (120% of FR) 100% of the LTI is granted as performance rights. - 50% of the rights will be tested against performance requirements in FY27. - 50% of the rights will be tested against performance requirements in FY28 This at - risk portion aligns both the Group’s performance and the MD’s personal influence and contribution to the Group’s performance. The total maximum and target for the MD for the full year is summarised in the graph below. Maximum remuneration represents total potential remuneration of FR, maximum STI and face value of LTI (assuming 100% vesting subject to performance and employment conditions to be met). For STI, the amount is based on 150% achievement of performance target s. Target remuneration represents total potential remuneration of FR, target STI (amount based on 100% achievement of performance targets) and face value of LTI. Fixed Remuneration STI Cash STI Deferral LTI 1,300,000 - 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 MD at Maximum MD at Target $
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DIRECTORS’ REPORT 30 JUNE 202 6 24 REMUNERATION REPORT FY2 6 Managing Director performance against KPI’s and STI Outcome The following table sets out the performance of the MD against his KPI’s for the year ended 30 June 202 6 (scorecard) which were reviewed and approved by the People, Performance and Nomination Committee (PPNC) and the Board. These KPIs are intended to provide a link between remuneration outcomes and the key drivers of long term securityholder value. The FY2 6 STI balanced scorecard focused on four key priority areas: Financial Performance, Strategic Execution, Customer and Employee Engagement. The PPNC considers the performance of the Executive KMP against their KPIs and other applicable measures. The Committee then recommends current variable remuneration payments, if any, to the Board for its approval. The PPNC, along with the Board, reviews performance, at mid - year and the end of the financial year . These reviews, guided by leaders’ values and behaviours, evaluate the Executive KMP's achievements against the STI criteria for the entire year. MEASURE AND PERFORMANCE DETAIL ASSESSMENT THRESHOLD TARGET MAXIMUM Funds from Operations (FFO) ABG ⎯ Funds from Operations (FFO) of $81.2 million, down 1.9% on FY25 ⎯ Distribution of 8.5 cen ts per security in line with FY2 6 guidance Funds from Operations (FFO) ASK ⎯ Funds from Operations (FFO) of $ 8 2 .1 million, down 3 .4 % on FY2 5 ⎯ Distribution of 6.2 cents per security . Group Strategic Initiatives for ASK and ABG ⎯ Led the Group strategic initiative from option development through to execution, including identifying and recommending the preferred strategy, securing Board approval, and delivering material implementation within FY26 (including the ASK internalisation a nd ABG standalone repositioning). Environment, Social and Governance ⎯ Customer Engagement - Abacus Group achieved an NPS of +35, which is a 30% improvement last year with an increased response rate of 72% vs FY25 60%. ⎯ Employee Engagement - Abacus Group achieved 74% which is a 9% drop on last year. The balanced scorecards for other Executive KMPs during FY2 6 are like that of the MD, but with strategic KPIs applicable to their individual roles .
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DIRECTORS’ REPORT 30 JUNE 202 6 25 REMUNERATION REPORT Executive KMP FY2 6 STI Outcomes The FY2 6 performance assessment resulted in the Board awarding the below STI. Executive KMP STI Target % of FR STI Max % of FR Max STI Potential $ Actual STI awarded on a % of Max STI potential Actual Full STI awarded $ Actual STI deferred $ STI forfeited as a % of Max STI potential Steven Sewell 75% 150% 1,950,000 35.0% 682,500 170,625 65.0% Kevin George 60% 100% 610,000 46.8% 285,480 71,370 53.2% Evan Goodridge 60% 100% 625,000 42.0% 262,500 - 58.0% Nikki Lawson 60% 100% 610,000 36.0% 219,600 - 64.0% Gavin Lechem 60% 100% 655,200 42.0% 275,184 68,796 58.0% Executive KMP remuneration details – statutory table The table below is prepared in compliance with statutory obligations and accounting standards. A mounts shown may differ from actual amounts received. It includes accounting values for current and prior years' LTI grants, which have not been received as they are contingent upon meeting performance hurdles and service conditions. SHORT TERM BENEFITS SUPER LONG TERM BENEFIT SECURITY BASED PAYMENT TOTAL YEAR Base Pay Short Term Incentive (STI) Non - monetary benefits Super Long Service Leave Deferred STI Rights 2 LTI Rights 2 Total $ Steven Sewell – Managing Director FY2 6 1,270,000 511,875 8,041 30,000 21,223 236,162 815,109 2,892,410 FY2 5 1,270,068 889,200 10,406 29,932 21,043 307,036 1,199,325 3,727,009 Kevin George 1 - Group General Manager, Commercial and Fund Manager, ABG FY2 6 580,000 214,110 - 30,000 9,692 217,511 188,796 1,240,109 FY2 5 433,440 285,846 - 22,449 7,200 138,920 3 65,869 953,724 Evan Goodridge – Chief Financial Officer FY2 6 595,000 262,500 - 30,000 9,929 57,447 546,229 1,501,105 FY2 5 595,000 338,625 - 30,000 26,026 113,101 303,444 1,406,197 Nikki Lawson – Group General Manager, Self Storage and Fund Manager, ASK FY2 6 580,000 219,600 - 30,000 9,690 55,540 613,829 1,508,659 FY2 5 580,068 327,387 - 29,932 10,618 108,441 172,564 1,229,010 Gavin Lechem – Chief Investment Officer and General Counsel FY2 6 625,200 206,388 - 30,000 10,433 94,120 317,538 1,283,680 FY2 5 625,268 352,039 - 29,932 9,914 121,197 380,142 1,518,492 1 Remuneration reflects period of service as Executive KMP from September 2024 . 2 Accrued not presently entitled. 3 For Kevin George , this includes the ‘one off’ grant of equity aligned to his STI of $133,333. This is detaile d on page 46 .
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DIRECTORS’ REPORT 30 JUNE 202 6 26 REMUNERATION REPORT Executive KMP remuneration details – realised remuneration table This section provides details of the cash and value of other benefits received by the Executive KMP. This is a voluntary disclosure to provide securityholders with increased clarity and transparency in relation to Executive KMP remuneration. Actual pay represents the pre - tax take home amounts by each Executive KMP for the financial year ended 30 June 202 6 . This consists of cash remuneration that was received in relation to FY2 6 which includes fixed pay and the non - deferred portion of any FY2 6 STI which will be received. The table also includes the value of the deferred STI awards from FY2 5 which vested during FY2 6 and prior year LTI awards which vested during FY2 6 based on share price at vesting/exercise date. Name Year Fixed Pay $ Short Term Incentive (STI) received as cash Previous years DSTI which were realised Previous years LTI which were realised Total remuneration received and or realised Awards which lapsed or were forfeited Steven Sewell FY2 6 1,300,000 511,875 150,849 699,678 2,662,402 (607,385) Kevin George 610,000 214,110 181,826 - 1,005,936 - Evan Goodridge 625,000 262,500 57,447 69,648 1,014,595 (102,541) Nikki Lawson 610,000 219,600 55,540 59,161 944,301 (33,617) Gavin Lechem 655,200 206,388 59,722 109,357 1,030,667 (114,608)
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DIRECTORS’ REPORT 30 JUNE 202 6 27 REMUNERATION REPORT 5. REMUNERATION GOVERNANCE AND FRAMEWORK T he Abacus Performance and Reward framework aims to reward, engage, and develop our people focusing on, value creation for our customers and stakeholders.
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DIRECTORS’ REPORT 30 JUNE 202 6 28 REMUNERATION REPORT The Group’s remuneration governance The People Performance and Nomination Committee is responsible for making recommendations to the Board on the remuneration arrangements for non - executive directors and executives. Board People, Performance and Nominations Committee (PPNC) Management Ensuring that the Abacus group remuneration framework is aligned with the group’s purpose, values, strategic objectives, and risk appetite. Determining Non - Executive Directors and Executive remuneration. Monitoring performance of the Managing Director and executive team in their implementation of the strategy and overseeing succession plans for the key management team. Review and approve the Group’s remuneration policy to ensure remuneration is competitive in the market and effectively designed to attract, motivate, and retain team members. Reviewing and recommending to the Board arrangements for the Executive KMP and the Executive committee in relation to their terms of employment, remuneration and participation in the Groups incentive programs (including performance targets). Review and approve the structure of short - term incentive plans annually to ensure they are effectively designed to reward the achievement of business and individual objectives equitably. Review the design of long term incentives annually to ensure its design meets the Group’s objectives, is aligned with industry standards and is within the Group’s cost parameters. Recommend and implement the Abacus Group’s remuneration policies and practices ensuring ease of understanding. Providing information relevant to remuneration decisions and making recommendations. Recommend and implement a remuneration framework that is fit for purpose. Remuneration framework Fixed Remuneration (FR) What is fixed remuneration? Paid mainly as cash salary – comprises base salary, superannuation contributions and other non - monetary benefits. How is FR determined? Base salary is set in reference to each Executive’s position, performance, experience, and market rates.
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DIRECTORS’ REPORT 30 JUNE 202 6 29 REMUNERATION REPORT Short Term Incentive (STI) What is the purpose of the short - term incentive (STI) plan? The STI provides an incentive to deliver annual business plans that will lead to sustainable returns for securityholders. We strive to set a series of financial and non - financial targets that are appropriately ambitious in the context of our strategy, and which drive the right long term behaviours. 25% of any STI awarded to Executive KMP is deferred in the form of Rights with a 12 - month vesting period to provide increased alignment with securityholders. What is the performance period? 1 July 202 5 to 30 June 202 6 . What is the award opportunity? For FY2 6 the target and maximum STI opportunity for Executive KMP as a percentage of FR were: % of FR MD Other Executive KMP Target 75% 60% Maximum 150% 100% What key performance indicators are measured for STI to be paid? The following factors are among those considered by the Board in making its assessment on the achievement of the STI opportunity: • Unifying Financial performance - FFO • Strategic Objectives • Unifying ESG performance – Customer, People, Safety and Risk Why were these measures chosen? An FFO profit target range was chosen by the Board because FFO demonstrates the closest correlation to securityholder value creation (measured by total securityholder return). FFO profit reflects the statutory profit as adjusted by adding back tenant incen tive amortisation, depreciation on owner occupied property, plant & equipment (PP&E), change in fair value of investment properties derecognised, certain transaction costs , unrealised fair value gains / losses on investment properties, adjustments arising from the effect of revaluing assets / liabilities carried at fair value (such as derivatives, financial instruments and investments), and other non - recurring adjustments d eemed significant on account of their nature and non - FFO tax benefit/expense. This measure, although underlying, is consistent with the Property Council of Australia guidelines, is derived from financial disclosures and is hence transparent. It reflects the Directors’ assessment of the result for the ongoing business activities of A bacus, in accordance with the Property Council guidelines for reporting FFO profit. The other financial and non - financial KPIs were chosen as they represent the key drivers for the short - term success of the business and provide a framework for long term securityholder value. How is performance assessed? The People Performance and Nomination Committee considers the performance of the Executive KMP against their KPIs considering a range of factors to ensure outcomes align to overall business performance and investor outcomes. The Committee then recommends c urrent variable remuneration payments, if any, to the Board for its approval.
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DIRECTORS’ REPORT 30 JUNE 202 6 30 REMUNERATION REPORT Short Term Incentive (STI) What is the relationship between performance scales and outcomes? Performance Scales STI Outcome Below threshold 0% paid Between threshold and maximum 25% - 100% of maximum incentive paid Maximum 100% of maximum incentive paid Are any STI awards deferred? 25% of STI awarded to Executive KMP is delivered in the form of rights with a one year deferral period. As a result of the internalisation of the business during FY26, the Board determined that STI deferral would not apply to Evan Goodridge and Nikki Lawson. This determination reflected the timing of the internalisation and the consequent changes to remunera tion structures and incentive participation. The Board considers this outcome to be appropriate in the context of the transition. How is the number of rights determined? The number of rights to be granted will be calculated by dividing the deferred STI amount by the 10 - day volume - weighted average price of the ABG securities on the ASX for the period commencing on the second trading day after the full year’s financial resul ts announcement for the year in which the STI award is made were released to the market, rounded to the nearest whole number. Are distributions paid on deferred STI awards? No distributions are paid to participants during the vesting period. Participants receive an entitlement equal to accrued and reinvested distributions only on performance rights that vest. Are there any disqualification provisions? All STI incentive payouts are subject to annual ‘good behaviour’ and conduct checks, as determined by the Board (or its delegate) in its absolute discretion. Failure to demonstrate good behaviour and conduct may result in a reduction to or forfeiture of th e STI payment for the Performance Period. Examples include: • the participant resigns; • the participant has breached the Company Code of Conduct or core company policies; and • the participant’s action/s led to a material WHS incident, material compliance issue, material Corporate Social Responsibility (CSR) issue or material reputation issue. The Board has discretion to delay the payment dates set out above, for example to allow time for it to determine the appropriate outcome if there is an investigation underway by the Group or an external third party. The Group reserves the right to suspend or alter STI payments to any participant due to any action which has caused the Group loss or reputational damage. This includes any deferred STI (in the form of rights) in the event of fraud, malfeasance, dismissal for cause, or other misconduct. How is STI treated on cessation of employment? Unless the Board determines otherwise, an Executive will forfeit their STI award and unvested deferred awards if they resign or if their employment is terminated with cause.
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DIRECTORS’ REPORT 30 JUNE 202 6 31 REMUNERATION REPORT Long Term Incentive (LTI) The LTI Plan is aimed at attracting, rewarding, and retaining high performing Executives and other nominated participants for delivering sustained long term growth and aligning them with securityholder interests. Who participates in the LTI plan? Participation is limited to Executive KMP and selected senior management positions by invitation and as approved by the Board. What is the payment vehicle? LTI awards are granted in the form of performance rights. Performance rights that vest subject to ABG performance conditions entitle executives to receive Abacus Group securities or, at the discretion of the Board, cash of equivalent value at exercise. Performance rights that vest subject to ASK performance conditions will be settled in cash of equivalent value. The original terms stated that the cash received was to be invested in ASK securities within 12 months of vesting. Following the internalisation of ASK, the Board determined that the need to purchase Storage King securities and within 12 months of vesting is no longer required. This determination reflected the timing of the internalisation and the consequent changes to remuneration structures and incentive participation. The Board considers this outcome to be appropriate in the context of the transition. What is the maximum opportunity? The maximum opportunity for the MD is 120% of FR and for other Executive KMP it ranges from 75% to 100% of FR. How are the grants calculated? The number of performance rights that are granted to each participant is calculated by dividing the maximum LTI opportunity (face value) by the face value of an Abacus security. The face value is based on the 10 - day VWAP for Abacus securities measured from the second trading day after the full year results announcement for the year ended 30 June 2026 were released to the market. What are the performance periods, vesting periods, and exercise periods? The performance rights will be tested against the relevant Performance Conditions following release of audited financial results for the final year of the relevant Performance Period. For the Executive KMP, 50% of the performance rights are tested on the third anniversary of the grant date and 50% on the fourth anniversary of the grant date. Rights that vest subject to ABG performance conditions can be exercised up to 15 years from the grant date. What are the performance conditions for FY2 6 ? The performance rights are subject to the following three independent performance conditions (with a percentage of total performance rights granted to be separately tested against each performance condition) that will be tested separately at the end of eac h of the applicable performance periods:
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DIRECTORS’ REPORT 30 JUNE 202 6 32 REMUNERATION REPORT Long Term Incentive (LTI) Performance Condition Weight (MD grant) ABG EBIT per security CAGR 41.67% ABG Relative TSR 41.67% 8 ASK Relative TSR 16.66% ABG EBIT per security CAGR is measured based on the compound annual growth rate in earnings before interest and tax (EBIT) configured on a per security basis. The FY25 base year EBIT per security for performance measurement is 15.1 cps. ABG and ASK Relative Total Securityholder Return (TSR) is measured by taking into account the change in the ABG/ASK security price over the relevant performance period as well as the distributions received (and assumed to be reinvested into ABG/ASK securit ies on the ex - dividend date). Tax and any franking credits (or equivalent) will be ignored. This outcome will then be tested against a comparator group. The performance requirements for each measure are as follows: ABG EBIT per Security CAGR Percentage % of Rights that vest Less than 2% 0% 2% 50% 2 - 6% Pro rata vesting from 50% to 100% 6% 100% ABG / ASK Relative TSR percentile rank Percentage % of Rights that vest < 50 th 0% 50 th 50% > 50 th to 75 th Pro rata vesting from 50% to 100% 75 th and above 100% Why were these measures chosen? • Growth in EBIT per security reflects management operational performance. • Relative TSR provides alignment with outcomes for securityholders that invest in the A - REIT sector. The comparator group for both the Abacus Group and Abacus Storage King Relative TSR conditions is outlined below and has been derived from the ASX A - REIT’s. Who is the comparator group for FY26? The Board has the discretion to adjust the comparator group to take into account events including, but not limited to, de - listings, takeovers, and mergers or de - mergers that might occur during the Performance Period, or where it is no longer meaningful to include a company within the comparator group The Board has determined the following expanded comparator group for the FY26 LTI for the Relative TSR test for each of Abacus Group and Abacus Storage King to be: 8 This performance condition does not apply to the Group General Manager, Commercial and Fund Manager.
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DIRECTORS’ REPORT 30 JUNE 202 6 33 REMUNERATION REPORT Long Term Incentive (LTI) - BWP Trust (BWP) - Charter Hall Retail REIT (CQR) - Cromwell Property Group (CMW) - Dexus Property Group (DXS) - GPT Group (GPT) - Growthpoint Properties (GOZ) - Charter Hall Long WALE REIT (CLW) - Homeco Daily Needs REIT (HDN) - Ingenia Communities Group (INA) - Centuria Industrial REIT (CIP) - DigiCo Infrastructure REIT (DGT) - Healthco Healthcare and Wellness REIT (HCW) - Mirvac Group (MGR) - Scentre Group Limited (SCG) - Region Group (RGN) - Stockland (SGP) - Vicinity Centres (VCX) - Waypoint REIT (WPR) - Arena REIT (ARF) - Charter Hall Social Infrastructure REIT (CQE) - Dexus Industria REIT (DXI) - Centuria Office REIT (COF) - Rural Funds Group (RFF) Do we allow for re - testing? No. Additional conditions relating to the ASK related rights? On vesting, the ASK Related Rights which are tested against the Abacus Storage King Relative TSR will be automatically exercised and converted to a cash equivalent amount (including distributions). The original terms stated that this amount (net of tax) mu st be applied by relevant KMP to purchase Abacus Storage King securities within 12 months of vesting. Following the internalisation of ASK, the Board determined that the need to purchase Storage King securities and within 12 months of vesting is no longer required. This determination reflected the timing of the internalisation and the consequent changes to remuneration structures and incentive participation. The Board considers this outcome to be appropriate in the context of the transition. Are there distributions or voting rights? Rights do not carry any voting rights. No distributions are paid to Participants during the vesting period. Participants receive an entitlement to securities equal to accrued and reinvested distributions only on performance rights that vest. What happens with cessation of employment? The treatment of any unvested Performance Rights at the time of termination depends upon the nature of the termination. If the participant’s employment is terminated for cause or for any other reason determined by the Board not to be a ‘good leaver’ circumstance, any unvested Performance Rights will lapse (unless the Board determine otherwise). If the participant is a good leaver (e.g. the termination is due to death, disability, termination without cause or genuine retirement), the unvested Performance Rights will remain on foot, subject to the original performance conditions as though employmen t had not ceased and will vest on the original vesting dates. However, the Board retain the discretion to lapse all or any part of unvested Performance Rights on cessation of employment. What happens if a change in control occurs? The Board may in its absolute discretion, accelerate vesting on some or all of any unvested securities taking into consideration service and performance prior to a change in control. Forfeiture for Fraud, Dishonesty or Misstatement The Board has discretion to determine that a participants Rights lapse in certain circumstances, including where they act fraudulently or dishonestly, or they are in breach of their obligations of the Group.
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DIRECTORS’ REPORT 30 JUNE 202 6 34 REMUNERATION REPORT Long Term Incentive (LTI) When is Board discretion used? Discretion can be applied to the proportion that may vest, taking into account behaviour inconsistent with our Code of Conduct, reputational damage, and having regard to any matters that it considers relevant (including any adjustments for unusual or non - r ecurring items that the Board considers appropriate). The extent and reasons for any discretion will be disclosed. Abacus Security Trading Policy In accordance with Abacus’ Trading Policy, no director, employee, or associate may trade in ABG securities at any time if they are in possession of unpublished information which, if generally available, might materially affect the price or value of ABG sec urities. They may only trade within specified trading windows. Security based payments The tables below provide the grant date fair value and the maximum potential value of all outstanding LTI grants at grant date for the Executive KMP. If the performance conditions are not met, the minimum value of the LTI will be nil. The table below shows LTI grants made during FY2 6 , subject to performance conditions over the performance period 1 July 202 5 to 30 June 202 9 . They were granted 28 November 2025. Participant LTI max as a % of FR Performance measure Number of performance rights granted Grant date fair value per performance right Total estimated fair value Steven Sewell 50 EBIT ps1 533,564 1.20 640,283 50 ABG TSR 2 533,565 0.62 333,250 20 ASK TSR 3 213,426 0.66 141,288 Total 120 1,280,555 1,114,821 Kevin George 37.5 EBIT ps 187,773 1.20 225,330 37.5 ABG TSR 187,774 0.62 117,279 Total 75 375,547 342,609 Evan Goodridge 40 EBIT ps 205,216 1.20 246,261 40 ABG TSR 205,218 0.62 128,174 20 ASK TSR 102,609 0.66 67,927 Total 100 513,043 442,362 Nikki Lawson 18.75 EBIT ps 93,886 1.20 112,664 18.75 ABG TSR 93,888 0.62 58,640 37.5 ASK TSR 187,774 0.66 124,306 Total 75 375,548 295,610 Gavin Lechem 40 EBIT ps 215,132 1.20 258,161 40 ABG TSR 215,134 0.62 134,367 20 ASK TSR 107,567 0.66 71,209 Total 100 537,833 463,737 1 EBITps is Underlying Earnings before Interest and Tax Compound Annual Growth Rate per security. 2 ABG TSR is Relative Total Securityholder Return. 3 ASK TSR will be cash settled.
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DIRECTORS’ REPORT 30 JUNE 202 6 35 REMUNERATION REPORT Movements in LTI holdings of key management personnel during the year The table below provides the movement of all security - based payments granted to the Executive KMP in respect to LTI holdings. KMP BALANCE 1 JULY 202 5 1 GRANTED AS REMUNERATION NO. LAPSED DURING THE YEAR 1 LTIS EXERCISED BALANCE 30 JUNE 202 6 1 VESTED/ EXERCISEABLE 30 JUNE 2026 Steven Sewell 3,032,857 1,105,953 (726,177) (544,435) 2,868,198 743,739 Kevin George 386,823 389,211 - - 776,034 - Evan Goodridge 963,757 425,366 (89,910) - 1,299,213 92,738 Nikki Lawson 576,158 194,606 (66,616) - 704,148 86,171 Gavin Lechem 1,079,594 445,918 (132,448) - 1,393,064 155,520 Total 6,039,189 2,561,054 (1,015,151) (544,435) 7,040,657 1,078,168 1 Number of Abacus securities include participants receiving an entitlement equal to accrued and reinvested distributions only on performance rights that vest. Movements in STI holdings of key management personnel during the year The table below provides the movement of all security - based payments granted to the Executive KMP in respect to STI holdings. KMP BALANCE 1 JULY 2025 1 GRANTED AS REMUNERATION NO. LAPSED DURING THE YEAR 1 STIS EXERCISED BALANCE 30 JUNE 2026 1 VESTED/ EXERCISEABLE 30 JUNE 2026 Steven Sewell 619,418 252,157 - (619,418) 252,157 1,000,094 Kevin George 345,742 81,060 - (112,612) 314,190 193,672 Evan Goodridge 178,419 96,027 - - 274,446 274,446 Nikki Lawson 99,729 92,840 - - 192,569 192,569 Gavin Lechem 255,225 99,831 - - 355,056 355,056 Total 1,498,533 621,915 - (732,030) 1,388,418 2,015,837 1 Number of Abacus securities include participants receiving an entitlement equal to accrued and reinvested distributions only on performance rights that vest. Movements in LTI holdings (ASK cash settled securities) of key management personnel during the year The table below provides the movement of all security - based payments granted to the Executive KMP in respect to LTI holdings (ASK cash securities). The securities granted are in the form of ABG rights, with performance measured against ASK securities and, if vested and exercised, are settled in cash.
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DIRECTORS’ REPORT 30 JUNE 202 6 36 REMUNERATION REPORT KMP BALANCE 1 JULY 2025 1 GRANTED AS REMUNERATION NO. LAPSED DURING THE YEAR 1 LTIS EXERCISED BALANCE 30 JUNE 2026 1 Steven Sewell 461,403 221, 190 - 682,593 Evan Goodridge 207,434 106,343 - - 313,777 Nikki Lawson 296,830 194,606 - - 491,436 Gavin Lechem 232,599 111,481 - - 344,080 Total 1,198,266 633,620 - - 1,831,886 1 Number of securities include participants receiving an entitlement equal to accrued and reinvested distributions only on perf ormance rights that vest. Vesting Outcome for Managing Director and other Executive KMP In August 202 6 the following was tested for the Managing Director: • the second tranche of the FY2 3 LTI Plan, and • the first tranche of the FY2 4 LTI Plan. In August 202 6 the following was tested for the other Executive KMP: • the second tranche of the FY23 LTI plan, • the first tranche of the FY24 LTI Plan, and • the first tranche of the FY25 LTI Plan. FY2 3 LTI Vesting Outcome – Combined ABG and ASK A ugust 202 6 PERFORMANCE MEASURE WEIGHTING MINIMUM MAXIMUM GROUP RESULT VESTING OUTCOME Combined EBIT CAGR 50% 3% 8% 4.5% 6 7 . 2 % Combined Relative TSR 50% 50 th percentile 75 th percentile Not met 0% Vesting Outcome % of maximum 33.6 % FY2 4 LTI Vesting Outcome – ABG August 202 6 PERFORMANCE MEASURE WEIGHTING MINIMUM MAXIMUM GROUP RESULT VESTING OUTCOME ABG EBIT CAGR 41.67 % 3% 8% 4.0 % 75.0% ABG Relative TSR 41.67 % 50 th percentile 75 th percentile N ot met 0 % Vesting Outcome % of maximum 37.5 % FY2 4 LTI Vesting Outcome – ASK August 202 6 PERFORMANCE MEASURE WEIGHTING MINIMUM MAXIMUM GROUP RESULT VESTING OUTCOME ASK Relative TSR 16.66% 50 th percentile 75 th percentile 73 rd percentile 77.3% Vesting Outcome % of maximum 77.3 %
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DIRECTORS’ REPORT 30 JUNE 202 6 37 REMUNERATION REPORT FY2 5 LTI Vesting Outcome 9 – August 202 6 PERFORMANCE MEASURE WEIGHTING MINIMUM MAXIMUM GROUP RESULT VESTING OUTCOME ABG EBIT CAGR 50% 3% 8% 3. 2% 65.2 % ABG Relative TSR 50% 50 th percentile 75 th percentile 50 th percentile not met 0% Vesting Outcome % of maximum 32.6 % ASK Relative TSR Cash Settled Rights The inclusion of the ASK RTSR performance measure was introduced post de stapling to recognise Abacus Group’s role in managing Abacus Storage King. This was introduced to drive the growth and performance of ASK in the medium to long term. Specifically, thi s would include working with the ASK Board to develop the strategic options regarding the future state of the Self Storage business. The component was worth 20% of FR for KMP with dual ABG / ASK roles. ASK rights that met vesting conditions entitle the participant to receive a cash equivalent amount based on the latest traded price for ASK securities. The amount received net of tax is to be applied to purchase ASK securities to be held for 12 months. Following the internalisation of ASK as at 30 June 2026, the Board determined that purchasing ASK securities is no longer required. Legacy Plans a) LTI rights (Corrective Rights) Background of modification of LTI rights (Corrective Rights) At the 2024 Annual General Meeting held on 20 November 2024, securityholders voted FOR the Board resolutions to grant new performance rights to management and extend the VWAP period from 30 to 90 days from 1 August 2023 to 31 October 2023. In this context, it was proposed to grant Corrective Rights to participants which has the effect of modifying existing LTI rights (to be tested on each of 30 June 2025, 30 June 2026 and 30 June 2027) that had a starting 30 day VWAP period calculated during a period in which ABG Securities and ASK Securities were in the ASX 200. Each of these Corrective Rights are tested against a Relative TSR performance condition consistent with the LTIs issued in November 2024 detailed on page 31 , and will, on vesting and exercise, entitle each holder to receive an ABG Security. The grant date of the Corrective Rights was 10 December 2024, at a security price of $1.20. Through the issuance of Corrective Rights, the existing LTI rights that had a starting VWAP calculated during a period in which ABG Securities and ASK Securities were in the ASX 200 were effectively modified. The impact of the issuance means participants will only receive the percentage of rights which is equal to the difference between their entitlement on any vesting of the Corrective Rights for a particular testing date and their entitlement on any vesting o f their existing LTI rights to be tested on the same testing date. 9 Kevin George was the only Executive KMP with an FY25 LTI grant tested on 30 June 2026. Grant was made prior to becoming KMP
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DIRECTORS’ REPORT 30 JUNE 202 6 38 REMUNERATION REPORT This adjustment ensures that participants will not receive more than 100% of the initial intended incentivisation outcome. Summary of existing LTI rights impacted by Corrective Rights prior to modification GRANT NO. OF EXISTING LTI RIGHTS IMPACTED BY MODIFICATION GRANT DATE SECURITY PRICE $ OF EXISTING LTI RIGHTS PRIOR TO MODIFICATION MAXIMUM VESTING PERIOD OF EXISTING LTI RIGHTS Steven Sewell FY24 LTI rights FY24 ASK LTI rights FY23 LTI rights 560,345 56,035 228,102 1.16 1.16 2.74 23 August 2027 23 August 2027 24 August 2026 Evan Goodridge FY24 LTI rights FY24 ASK LTI rights FY23 LTI rights 189,655 26,983 45,621 1.16 1.16 2.74 23 August 2027 23 August 2027 24 August 2026 Nikki Lawson FY24 LTI rights FY24 ASK LTI rights FY23 LTI rights 136,315 24,785 34,976 1.16 1.16 2.74 23 August 2027 23 August 2027 24 August 2026 Gavin Lechem FY24 LTI rights FY24 ASK LTI rights FY23 LTI rights 225,931 56,483 57,482 1.16 1.16 2.74 23 August 2027 23 August 2027 24 August 2026 Impact of modification on existing LTI rights by grant of Corrective Rights Grant Relative TSR starting and ending VWAP period of Existing LTI Rights Relative TSR starting and ending VWAP period of modified LTI Rights Date of Modification Difference in Fair Value of LTI Rights due to modification $ Steven Sewell FY24 LTI rights FY24 ASK LTI rights FY23 LTI rights 30 days 30 days 30 days 90 days 90 days 90 days 10 December 2024 10 December 2024 10 December 2024 38,178 - 7,632
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DIRECTORS’ REPORT 30 JUNE 202 6 39 REMUNERATION REPORT Grant Relative TSR starting and ending VWAP period of Existing LTI Rights Relative TSR starting and ending VWAP period of modified LTI Rights Date of Modification Difference in Fair Value of LTI Rights due to modification $ Evan Goodridge FY24 LTI rights FY24 ASK LTI rights FY23 LTI rights 30 days 30 days 30 days 90 days 90 days 90 days 10 December 2024 10 December 2024 10 December 2024 12,922 - 1,526 Nikki Lawson FY24 LTI rights FY24 ASK LTI rights FY23 LTI rights 30 days 30 days 30 days 90 days 90 days 90 days 10 December 2024 10 December 2024 10 December 2024 9,288 - 1,170 Gavin Lechem FY24 LTI rights FY24 ASK LTI rights FY23 LTI rights 30 days 30 days 30 days 90 days 90 days 90 days 10 December 2024 10 December 2024 10 December 2024 15,393 - 1,923 The FY24 ASK LTI rights will vest 50% in ABG securities and 50% cash settled. b) Impact of De - stapling on Abacus Group LTI rights This section outlines the approved treatment by securityholders of the Abacus Group Incentive Awards on foot for employees that, on de - stapling implementation, either continued to be employed by Abacus Group or be employed by Abacus Storage King but contin ue to hold relevant Abacus Group Incentive Awards. The Abacus Group Board determined the treatments set out in the following table in order to preserve the overall value of the Abacus Property Group Incentive Awards following the de - stapling, and to ensure that participants do not receive a benefit that th ey would not have received before the de - stapling and are not disadvantaged by the de - stapling. This applies to the FY23 LTI Grant only. What are the performance conditions for the FY23 grant? The performance rights are subject to two independent performance conditions (with a percentage of total performance rights granted to be separately tested against each performance condition) that will be tested separately at the end of each of the applica ble performance periods: The vesting hurdles for these LTI Rights will be tested against the compound annual growth rate in Earnings Before Interest and Tax (EBIT Growth) and Relative Total Securityholder Return (TSR). The performance period for testing the relevant LTI Rights against the EBIT Growth hurdle will remain the same as the performance period which applied to those LTI Rights prior to De - stapling Implementation. The performance period for testing the relevant LTI Rights against the TSR hurdle has been adjusted and reset to commence on the 1st of August 2023.
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DIRECTORS’ REPORT 30 JUNE 202 6 40 REMUNERATION REPORT • 50% of the LTI Rights scheduled to vest in each year will be subject to the EBIT Growth hurdle. The EBIT Growth outcome will be based on the combined performance of Abacus Group and Abacus Storage King (Combined EBIT Growth Outcome). In order for the LTI Rights subject to the EBIT Growth hurdle to vest, the Combined EBIT Growth Outcome must be a minimum of 3% for the relevant performance period and target is 8%. There is a pro rata vesting between 3 - 8%. • 50% of the LTI Rights scheduled to vest in each year will be subject to the TSR hurdle. TSR measures the growth in the price of securities plus cash distributions notionally reinvested in securities. The TSR outcome will be based on the combined performanc e of Abacus Group Securities and Abacus Storage King Securities (Combined TSR Growth Outcome). Who is the comparator group? The Board has determined the comparator group for the Relative TSR test for each of Abacus Group to be: - BWP Trust (BWP) - Charter Hall Retail REIT (CQR) - Cromwell Property Group (CMW) - Dexus Property Group (DXS) - GPT Group (GPT) - Growthpoint Properties (GOZ) - Mirvac Group (MGR) - Scentre Group Limited (SGC) - Region Group (RGN) - Stockland (SGP) - Vicinity Centres (VCX) For the LTI Rights to vest based on Relative TSR Growth: • 50% of the rights vest if the Combined Relative TSR Growth Outcome is at least at the 50th percentile. • 100% of the rights vest if the outcome reaches the 75th percentile. • Pro rata vesting occurs between the 50th and 75th percentiles. FY23 Grant date fair value and maximum value for existing LTI grants PLAN 1 GRANT DATE SECURITY PRICE $ NUMBER OF LTI RIGHTS GRANTED PERFORMANCE PERIOD MAXIMUM GRANT DATE FACE VALUE $ ABG ASK Steven Sewell - MD FY23 2.74 228,102 228,102 1 Jul 2022 to 30 Jun 2025 1,250,000 228,102 228,102 1 Jul 2022 to 30 Jun 2026 Evan Goodridge 2 - CFO FY23 2.74 45,621 45,621 1 July 2022 to 30 June 2025 250,000 45,620 45,620 1 July 2022 to 30 June 2026 Gavin Lechem – CIO and GC FY23 2.74 57,482 57,482 1 July 2022 to 30 June 2025 315,000 57,482 57,482 1 July 2022 to 30 June 2026 1 The FY23 grant was issued on 23 December 2022 (FY22: November 2021). 2 Remuneration reflects period of service as Executive KMP.
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DIRECTORS’ REPORT 30 JUNE 202 6 41 REMUNERATION REPORT Minimum securityholding requirement for Executive KMP To align the interests of the Board with securityholders, the Board introduced a minimum securityholding requirement for Executive KMP. • The MD is required to maintain a minimum holding of securities equivalent to 100% of his fixed remuneration. Executive KMP are required to maintain a minimum holding of securities that is equivalent to 50% of their fixed remuneration. • Executive KMP had until the later of the de - stapling of Abacus Group and Abacus Storage King or the date they become a member of the KMP to meet the minimum holding requirement. Executive KMP ownership – securityholdings detail as of 30 June 2026 EXECUTIVE KMP BALANCE 1 JULY 202 5 VESTED/ EXERCISED 1 PURCHASED / (SOLD) BALANCE 30 JUNE 202 6 Steven Sewell 2,497,291 858,308 - 3,355,599 Kevin George - 193,672 - 193,672 Evan Goodridge 370,407 168,201 - 538,608 Nikki Lawson 175,821 154,146 - 360,981 Gavin Lechem 806,440 213,154 (202,129) 817,465 1 Includes securities that were tested on 30 June 2026 and will vest in August 2026 Executive KMP ownership – Minimum securityholding detail as at 30 June 202 6 EXECUTIVE KMP BALANCE 30 JUNE 202 6 MSH REQUIREMENT MSHR ASSESSMENT DATE Steven Sewell 4,450,333 $1,300,000 Aug - 27 Kevin George 212,794 $305,000 Sep - 28 Evan Goodridge 647,993 $312,500 Aug - 27 Nikki Lawson 228,828 $305,000 Aug - 27 Gavin Lechem 1,218,047 $327,600 Aug - 27 Unvested rights are not included in the calculation of the minimum holding of securities. 6. NON - EXECUTIVE DIRECTOR REMUNERATION Objective The Committee assesses the appropriateness of the nature and amount of remuneration of Non - Executive Directors (NEDs) on a periodic basis by reference to market rates with the overall objective of attracting and retaining Board members with an appropriate combination of industry and specialist functional knowledge and experience.
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DIRECTORS’ REPORT 30 JUNE 202 6 42 REMUNERATION REPORT Fee Structure and Policy The following table outlines the Non - Executive Directors (NEDs) fee policy and any changes introduced for FY2 6 . Maximum aggregate fees approved by securityholders Abacus’ constituent documents and the ASX Listing Rules specify that the maximum aggregate remuneration of N on - E xecutive directors must be approved by securityholders. The last determination was at the annual general meeting held on 14 November 20 22 when securityholders approved an aggregate remuneration limit of $1, 250 ,000 per year. Contracts Upon appointment to the Board, all NEDs receive a letter of appointment which summarises the Board policies and terms, including compensation, relevant to the office of Director . Non - Executive Director fees reviews The Board reviews NED fees on an annual basis in line with general industry practice. This ensures fees are appropriately positioned in the market to attract and retain high calibre individuals. The current fees were last increased in July 2021. NEDs are entitled to be reimbursed for all reasonable costs and expenses incurred by them in performing their duties. There were no changes to the Board base fees and committee fees in FY2 6. Refer to the below table for details of FY2 6 fees. The aggregation of all Board and committee fees for FY2 6 , remains below the current pool limit. NED fee changes FY27 During FY26, the Committee commissioned and reviewed independent benchmarking to assess the appropriateness of Non‑ Executive Director fees following internalisation. T he following changes will be made to the Board base fees and committee in FY2 7 . ⎯ The Board Chair has slightly reduced ⎯ The Audit and Risk Committee Chair has been reduced to align with the People Performance and Nomination Committee New Board Appointment Mr Philip Lewis was appointed as a Non - Executive Director of the Company effective 30 June 2026. Mr Lewis will not receive any director’s fees, salary or other remuneration for his services as a Non - Executive Director. Mr Lewis, based in London, has been at Ki Corporation since May 2010 and heads the Group’s property investment division. Ki Corporation is a significant securityholder in ABG and has a substantial portfolio of real estate investments across the United King dom, United States and Australia. Th e Board considers the arrangement to be appropriate and consistent with market practice for Non - Executive Directors serving in a shareholder representative capacity.
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DIRECTORS’ REPORT 30 JUNE 202 6 43 REMUNERATION REPORT Superannuation The fees set out below include superannuation contributions in accordance with relevant statutory requirements. Post - employment benefits The Non - Executive directors do not receive retirement benefits. Nor do they participate in any incentive programs. FY26 Non - Executive Director fee levels (inclusive of superannuation) – Abacus Group BOARD /COMMITTEE ROLE FY2 6 PER ROLE $ TOTAL Board Chair $252,000 $252,000 Non - Executive Director $113,000 $339,000 Audit and Risk Committee Chair $27,300 $27,300 Non - Executive Director $12,285 $24,750 Work, Health Safety and Sustainability Committee Chair $21,000 $21,000 Non - Executive Director $10,500 $10,500 People Performance and Nomination Committee Chair $23,000 $23,000 Non - Executive Director $11,250 $11,250 Total $719,870 FY27 Non - Executive Director fee levels (inclusive of superannuation) – Abacus Group BOARD /COMMITTEE ROLE FY2 7 PER ROLE $ TOTAL Board Chair $2 47 ,000 $2 47 ,000 Non - Executive Director $113,000 $ 226 ,000 Audit and Risk Committee Chair $2 3 , 0 00 $ 23,000 Non - Executive Director $12,285 $ 12,285 People Performance and Nomination Committee Chair $23,000 $23,000 Non - Executive Director $11,250 $11,250 Total $ 542,535
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DIRECTORS’ REPORT 30 JUNE 202 6 44 REMUNERATION REPORT Non - Executive Directors’ remuneration details – Abacus Group NON - EXECUTIVE DIRECTOR FY BASE FEES NON - MONETARY BENEFITS TOTAL CASH PAYMENTS AND SHORT - TERM BENEFITS SUPER $ Myra Salkinder (Chair) 1 FY26 252,000 - 252,000 - 252,000 FY25 252,000 - 252,000 - 252,000 Trent Alston FY26 141,772 - 141,772 17,014 158,785 FY25 140,054 - 140,054 16,106 156,160 Mark Haberlin FY26 135,312 - 135,312 16,238 151,550 FY25 135,919 - 135,919 15,631 151,550 Sally Herman 2 FY26 - - - - - FY25 30,224 - 30,224 3,476 33,700 Philip Lewis 3 FY26 - - - - - FY25 - - - - - Jingmin Qian FY26 140,656 - 140,656 16,880 157,535 FY25 138,764 - 138,764 15,958 154,722 1 Myra Salkinder as Chair does not receive any fees for other sub - committees. 2 Sally Herman ceased as a director 30 September 2024. 3 Philip Lewis i s a nominee of and remunerated by Ki Corporation and does not receive any payment from ABG . Assuming Mr Lewis 's role was paid by AB G, the amount that would be attributed has been assessed as the annual Non - Executive Director fee rate of $113,000 for FY2 6, pro - rated to reflect his period of service during the reporting perio d, being $ 452 . Minimum securityholding requirement for Non - Executive Directors FY2 6 The Board recognises the importance of aligning the interests of its senior executives and directors with the long - term interests of Abacus’ securityholders. To further align this interest, the Board has introduced a minimum securityholding requirement for NEDs. Each Non - Executive Director must accumulate and retain a minimum securityholding in Abacus securities equivalent to their annual director’s fee inclusive of base fee, superannuation contributions and before any tax deductions. The minimum securityholding was to be achieved progressively by the 4th anniversary of the later of 27 June 2022 or the date of their appointment, to meet the minimum holding requirement. From FY24 t he minimum securityholding is to be achieved progressively by the 4th anniversary of the later of the de - stapling of Abacus Group and Abacus Storage King or the date of their appointment as a director.
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DIRECTORS’ REPORT 30 JUNE 202 6 45 REMUNERATION REPORT NON - EXECUTIVE DIRECTOR BALANCE 1 JULY 2025 PURCHASE / SALE BALANCE 30 JUNE 2026 MSHR ASSESSMENT MSHR POLICY MSHR ASSESSMENT DATE Myra Salkinder (Chair) 14,802,171 - 14,802,171 $23,572,839 $252,000 Aug - 27 Trent Alston 87,225 - 87,225 $166,078 $1 13,000 Aug - 27 Mark Haberlin 42,292 - 42,292 $107,928 $1 13,000 Aug - 27 Jingmin Qian 45,167 - 45,167 $102,517 $1 13,000 Aug - 27 Non - Executive Directors are bound by Abacus’s Securities Trading Policy. No additional remuneration is provided to Non - Executive Directors to purchase these stapled securities. All equity transactions with Non - Executive Directors have been entered into under terms and conditions no more favourable than those that Abacus would have adopted if dealing at arm’s length. There have been no movements in holdings since 30 June 202 6 . 7. ADDITIONAL REQUIRED DISCLOSURES Executive KMP employment terms The total remuneration package is reviewed annually, and the key terms are summarised below: KMP TERM OF AGREEMENT NOTICE PERIOD (BY COMPANY OR BY EMPLOYEE) POST - EMPLOYMENT RESTRAINTS TERMINATION BENEFITS Steven Sewell, Managing Director No expiry date 9 months 12 months No redundancy payment entitlements. If there are any termination entitlements to be paid, they will be limited by the current Corporations Act 2001 (Cth) or the ASX Listing Rules or both. Other Executive KMP No expiry date Between 3 and 6 months Between 3 and 6 months Covered by National Employment Standards (NES). Abacus may terminate an Executive KMP’s service at any time without notice if serious misconduct has occurred. Where termination with cause occurs, the Executive is only entitled to remuneration up to the date of termination.
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DIRECTORS’ REPORT 30 JUNE 202 6 46 REMUNERATION REPORT Executive KMP remuneration details – Employment Arrangements The Group General Manager , Commercial and Fund Manager ABG’s employment arrangements included an invitation to participate in a one - off grant of equity with a face value of $400,000. The award was granted in the form of performance rights under the Abacus Group Equity Incentive Pla n rules and vesting is subject to Board approval at its August Meeting. The first tranche of the award (face value of $133,333) vested into Abacus stapled securities on 1 October 2025 following approval by the Board in August 2025 , and was subject to continued employment, two FY25 key performance indicators and behaviour consistent with the Group’s values and policies. The second and third tranches of the award will vest into Abacus group stapled securities on or around 1 October 2026 and 1 October 2027, respectively, subject to continued employment, two FY26 and FY27 key performance indicators and behaviour consistent with the Group’s values and policies. Key Performance indicators over the three - year period are related to satisfactory development and execution of the Group’s strategy as agreed by the Board. Use of Remuneration advisors The People and Performance and Nomination Committee engages external remuneration consultants from time to time to provide independent benchmarking data and information on best practice. This ensures the Company continually reviews assesses and adapts the remuneration governance functions to assist the Board and Committee in making informed remuneration decisions. No remuneration recommendations as defined under the Corporations Act 2001 (Cth) were provided to the Committee by remuneration consultants in FY 2 6 . Loans to Key Management Personnel There were no loans to key management personnel or their related parties at any time in 2025 or in the prior year. Other transactions with Key Management Personnel During the year, transactions occurred between Abacus and key management personnel which were within normal employee and investor relationships. Directors and Officers Insurance During the year, Abacus Group paid for a Directors and Officers Insurance policy. In accordance with usual commercial practice, the insurance policy prohibits disclosure of details relating to the nature of the liabilities covered by the insurance, the lim it of indemnity and the amount of the premium paid under the contract.
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DIRECTORS’ REPORT 30 JUNE 202 6 47 ENVIRONMENTAL REGULATION AND PERFORMANCE The Group is subject to environmental regulation in respect of its property activities and there are systems in place for the management of the Group’s environmental responsibilities, and compliance with relevant licence requirements and regulations. No ma terial breaches of requirements or any environmental issues have been identified during the year. ROUNDING The amounts contained in this report and in the annual financial report have been rounded to the nearest $1,000 (where rounding is applicable) under the option available to the Group under ASIC Corporations Instrument 20 2 6/1 83. The Group is an entity to which the instrument applies. AUDITOR’S INDEPENDENCE DECLARATION We have obtained an independence declaration from our auditor, Ernst & Young, and such declaration is set out on page 4 8 . Signed in accordance with a resolution of the directors. Abacus Group Holdings Limited (ABN 31 080 604 619) Mark Haberlin Steven Sewell Chair Managing Director Sydney, 25 August 202 6
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au Auditor’s independence declaration to the directors of Abacus Group Holdings Limited As lead auditor for the audit of the financial report of Abacus Group Holdings Limited for the financial year ended 30 June 2026, I declare to the best of my knowledge and belief, there have been: a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit. b. No contraventions of any applicable code of professional conduct in relation to the audit; and c. No non-audit services provided that contravene any applicable code of professional conduct in relation to the audit. This declaration is in respect of Abacus Group Holdings Limited and the entities it controlled during the financial year. Ernst & Young Jodie Inglis Partner 25 August 2026
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CONSOLIDATED INCOME STATEMENT 30 JUNE 202 6 49 2026 2025 Notes $'000 $'000 REVENUE Rental income 145,616 152,621 Finance income 1(a) 1,008 4,106 Fee income 1(b) 20,327 19,566 Total Revenue 166,951 176,293 OTHER INCOME Net change in fair value of investments and derivatives derecognised 1,527 1,007 Share of profit/(loss) from equity accounted investments 7(a) 26,574 74,638 Net change in fair value of derivatives 11,710 (13,895) Net change in fair value of investment properties derecognised - 40 Other income 307 115 Total Revenue and Other Income 207,069 238,198 Net change in fair value of investment properties held at balance date (16,712) (72,173) Net change in fair value of investments held at balance date 3(a) (727) (330) Net change on remeasurement of investments held 21 (122,069) - Property expenses and outgoings (43,574) (44,497) Depreciation and amortisation expense 3(b) (5,275) (4,491) Finance costs 3(c) (42,582) (46,724) Impairment charges 20 (13,394) - Administrative and other expenses 3(d) (36,178) (36,057) PROFIT/(LOSS) BEFORE TAX (73,442) 33,926 Income tax expense 4(a) (1,053) (7,016) NET PROFIT/(LOSS) AFTER TAX (74,495) 26,910 PROFIT/(LOSS) ATTRIBUTABLE TO: Equity holders of the parent entity (AGHL) (44,134) (9,950) Equity holders of other stapled entities AT members (18,646) 38,702 AGPL members (26,918) (4,033) AIT members 15,203 2,191 NET PROFIT/(LOSS) AFTER TAX (74,495) 26,910 Basic and diluted (loss)/earnings per stapled security (cents) 2 (8.34) 3.01
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CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME 30 JUNE 202 6 50 2026 2025 $'000 $'000 NET PROFIT/(LOSS) AFTER TAX (74,495) 26,910 OTHER COMPREHENSIVE INCOME Items that may be reclassified subsequently to the income statement Share of other comprehensive income of an associate (1,091) 1,582 TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE PERIOD (75,586) 28,492 Total comprehensive income attributable to: Members of the Group (75,586) 28,492 TOTAL COMPREHENSIVE INCOME/(LOSS) FOR THE PERIOD (75,586) 28,492 Total comprehensive income/ (loss) attributable to members of the Group analysed by amounts attributable to: AGHL members (44,134) (9,950) AT members (19,574) 40,047 AGPL members (27,081) (3,796) AIT members 15,203 2,191 TOTAL COMPREHENSIVE INCOME/(LOSS)E AFTER TAX ATTRIBUTABLE TO MEMBERS OF THE GROUP (75,586) 28,492
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION 30 JUNE 202 6 51 2026 2025 Notes $'000 $'000 CURRENT ASSETS Investment properties held for sale 5 55,000 194,000 Cash and cash equivalents 9 46,016 23,946 Trade and other receivables 8(a) 39,662 42,057 Other financial assets 6(a) 348,471 - Derivatives at fair value 5,709 1,279 Other 6,304 5,954 TOTAL CURRENT ASSETS 501,162 267,236 NON-CURRENT ASSETS Investment properties 5 1,770,540 1,607,800 Property loans 6(b) 49,106 55,944 Equity accounted investments 7(b) 123,562 610,185 Deferred tax assets 4(c) 2,180 2,900 Property, plant and equipment 192 168 Other financial assets 6(c) 5,869 6,523 Intangible assets and goodwill 20 - 32,403 Derivatives at fair value 4,995 730 Other - 4,500 TOTAL NON-CURRENT ASSETS 1,956,444 2,321,153 TOTAL ASSETS 2,457,606 2,588,389 CURRENT LIABILITIES Trade and other payables 8(b) 69,549 60,516 Derivatives at fair value - 538 Income tax payable 1,918 679 Employee liabilities 5,263 6,626 TOTAL CURRENT LIABILITIES 76,730 68,359 NON-CURRENT LIABILITIES Interest-bearing loans and borrowings 11(a) 955,969 942,099 Derivatives at fair value - 3,250 Deferred tax liabilities 4(c) 8,186 9,729 Other 1,276 1,623 TOTAL NON-CURRENT LIABILITIES 965,431 956,701 TOTAL LIABILITIES 1,042,161 1,025,060 NET ASSETS 1,415,445 1,563,329 TOTAL EQUITY 1,415,445 1,563,329
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CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONTINUED) 30 JUNE 202 6 52 2026 2025 Notes $'000 $'000 Equity attributable to members of AGHL: Contributed equity 568,862 568,862 Treasury shares (2,239) (4,284) Reserves 11,801 9,635 Retained earnings/(accumulated losses) (33,163) 45,394 Total equity attributable to members of AGHL: 545,261 619,607 Equity attributable to unitholders of AT: Contributed equity 1,373,217 1,373,217 Reserves - 928 Accumulated losses (615,475) (554,745) Total equity attributable to unitholders of AT: 757,742 819,400 Equity attributable to members of AGPL: Contributed equity 47,064 47,064 Reserves - 163 Retained earnings 34,330 61,248 Total equity attributable to members of AGPL: 81,394 108,475 Equity attributable to unitholders of AIT: Contributed equity 188,472 188,472 Accumulated losses (157,424) (172,625) Total equity attributable to unitholders of AIT: 31,048 15,847 TOTAL EQUITY 1,415,445 1,563,329 Contributed equity 13 2,177,615 2,177,615 Treasury shares (2,239) (4,284) Reserves 11,801 10,726 Retained earnings/(accumulated losses) (771,732) (620,728) TOTAL EQUITY 1,415,445 1,563,329
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CONSOLIDATED STATEMENT OF CASH FLOW 30 JUNE 202 6 53 2026 2025 Notes $'000 $'000 CASH FLOWS FROM OPERATING ACTIVITIES Income receipts 196,604 187,394 Interest received 898 1,006 Income tax paid (444) (272) Finance costs paid (39,386) (48,441) Operating payments (72,982) (74,344) NET CASH FLOWS FROM OPERATING ACTIVITIES 9 84,690 65,343 CASH FLOWS FROM INVESTING ACTIVITIES Payments for investments and funds advanced (735) (2,041) Proceeds from sale of investments and funds repaid 42,067 7,631 Purchase of property, plant and equipment (144) (7) Payments for investment properties and capital expenditure (39,462) (55,531) Proceeds from disposal of investment properties - 58,549 NET CASH FLOWS FROM INVESTING ACTIVITIES 1,726 8,601 CASH FLOWS FROM FINANCING ACTIVITIES Payment of borrowing costs (1,806) (2,191) Repayment of borrowings and derivatives (146,373) (91,341) Proceeds from borrowings 159,793 95,938 Distributions paid (75,960) (75,960) NET CASH FLOWS (USED IN) FINANCING ACTIVITIES (64,346) (73,554) NET INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS 22,070 390 Cash and cash equivalents at beginning of period 23,946 23,556 CASH AND CASH EQUIVALENTS AT END OF PERIOD 9 46,016 23,946
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 30 JUNE 202 6 54 Employee Issued Share of equity Treasury Retained Total capital reserves* benefits shares earnings equity CONSOLIDATED $'000 $'000 $'000 $'000 $'000 $'000 At 1 July 2025 2,177,615 1,091 9,635 (4,284) (620,728) 1,563,329 Other comprehensive income/(loss) (1,091) (1,091) Net income/(loss) for the period - - - - (74,495) (74,495) Total comprehensive income/(loss) for the period - (1,091) - - (74,495) (75,586) Performance rights - - 4,211 - - 4,211 Treasury shares exercised - - (2,045) 2,045 - - Distribution to security holders - - - - (76,509) (76,509) At 30 June 2026 2,177,615 - 11,801 (2,239) (771,732) 1,415,445 Employee Issued Share of equity Treasury Retained Total capital reserves* benefits shares earnings equity CONSOLIDATED $'000 $'000 $'000 $'000 $'000 $'000 At 1 July 2024 2,177,615 (491) 6,045 (4,358) (571,678) 1,607,133 Other comprehensive income/(loss) - 1,582 - - - 1,582 Net income/(loss) for the period - - - - 26,910 26,910 Total comprehensive income/(loss) for the period - 1,582 - - 26,910 28,492 Performance rights - - 3,664 - - 3,664 Treasury shares exercised - - (74) 74 - - Distribution to security holders - - - - (75,960) (75,960) At 30 June 2025 2,177,615 1,091 9,635 (4,284) (620,728) 1,563,329 Attributable to the stapled securityholders *The share of reserves are from equity accounted investments. Attributable to the stapled securityholders
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CONTENTS 30 JUNE 202 6 55 Notes to the financial statements About this report Page 5 6 Segment information Page 57 Results for the period Operating assets and liabilities Capital structure and financing costs Group Structure Other Items 1. Revenue 5. Investment properties 9. Cash and cash equivalents 15. Parent entity financial information 16. Commitments and contingencies 2. Earnings per stapled security 6. Property loans and other financial assets 10. Capital management 17. Related party disclosures 3. Expenses 7. Investments accounted for using the equity method 11. Interest bearing loans and borrowings 18. Key management personnel 4. Income t ax 8. Trade receivables and trade payables 12. Financial instruments 19. Security based payments 13. Contributed equity 20. Intangible assets and goodwill 14. Distributions paid and proposed 21. Disposal of Abacus Storage Funds Management Limited and Related Matters 22. Summary of material accounting policies 23. Auditor’s remuneration 24. Events after balance sheet date
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 56 Abacus Group (“Abacus” or the “Group”) is comprised of Abacus Group Holdings Limited (“AGHL”) (the nominated parent entity), Abacus Trust (“AT”), Abacus Income Trust (“AIT”) and Abacus Group Projects Limited (“AGPL”). Shares in AGHL and AGPL, and units in AT and AIT , have been stapled together so that n one can be dealt without the other. The securities trade as one security on the Australian Securities Exchange (the “ASX”) under the code ABG. The financial report of the Group for the year ended 30 June 202 6 was authorised for issue in accordance with a resolution of the directors on 2 5 August 202 6 . The nature of the operations and principal activities of the Group are described in the Directors’ Report. MATERIAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS In applying the Group’s accounting policies management continually evaluates judgements, estimates and assumptions based on experience and other factors, including expectations of future events that may have an impact on the Group. All judgements, estimate s and assumptions made are believed to be reasonable, based on the most current set of circumstances available to management. Actual results may differ from these judgements, estimates and assumptions. Material judgements, estimates and assumptions made by management in the preparation of these financial statements are outlined below: (a) Material accounting judgements Control and significant influence In determining whether the Group has control over an entity, the Group assesses its exposure or rights to variable returns from its involvement with the entity and whether it has the ability to affect those returns through its power over the investee. The Group may have significant influence over an entity when it has the power to participate in the financial and operating policy decisions of the entity but is not in control or joint control of those policies. (b) Material accounting estimates and assumptions Valuation of investment properties The Group makes judgements in respect of the fair value of investment properties (Note 2 2 (n)). The fair values of these properties are reviewed regularly by management with reference to internal and external independent property valuations and market conditions existing at reporting date, using generally accepted market practices. The assumptions underlying estimated fair values are those relating to the receipt of contractual rents, expected future m arket rentals, maintenance requirements, capitalisation rates and discount rates that reflect current market conditions and current or recent property investment prices. These judgements, assumptions and estimates have also been applied to investment prope rties held through investments accounted for using the equity method. Expected credit loss (ECL) provision and impairment of property loans and trade receivables The Group has applied the simplified approach and recorded lifetime expected losses on trade receivables with the exception of property loans. In estimating the ECL provision, historical recoverability and underlying risks within the financial asset are co nsidered. In considering the ECL provision for property loan financial assets at amortised cost, the Group has established a provision matrix which includes assessing the credit rating of each borrower to determine the probability of
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 57 MATERIAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS ( CONTINUED ) (b) Material accounting estimates and assumptions (continued) Expected credit loss (ECL) provision and impairment of property loans and trade receivables (continued) default, loss given default and exposure at default, taking into account sensitivity factors to work out the ECL provision for each property loan. In considering the impairment of property loans and financial assets, the Group undertakes a market analysis of the secured property development and other securities being utilised to support the underlying loan and financial assets and identifies if a def iciency of security exists and the extent of that deficiency, if any. If there is an indicator of impairment, fair value calculations of expected future cashflows are determined and if there are any differences to the carrying value of the loan, an impair ment is recognised. Fair value of derivatives The fair value of derivatives is determined based on discounted cash flow analysis using assumptions supported by observable market rates adjusted for counterparty creditworthiness. Fair value of financial assets The Group holds investments in listed securities which are held at fair value and based upon the quoted market price, and unlisted securities which are held at fair value based on valuation of underlying asset values Impairment of goodwill, intangible assets and other non - financial assets The Group determines whether goodwill, intangible assets and other non - financial assets are impaired at least on an annual basis. This requires an estimation of the recoverable amount of the cash - generating units to which the goodwill and intangible assets are allocated. For goodwill and intangible assets this involves fair value less costs to sell calculations (FVLCS) , and as appropriate, value in use calculations (VIU), which incorporate a number of key estimates and assumptions around cash flows and fair value of investment properties upon which these determine the revenue / cash flows. The assumptions used in the estimations of the recoverable amount and the carrying am ount of goodwill and intangible assets are discussed in Note 20 . Taxes Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. This requires management judgement to determine the amount of deferred tax assets tha t can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies. Further details on taxes are disclosed in Note 4. NOTES TO THE FINANCIAL STATEMENTS – SEGMENT INFORMATION The Group operates in Australia. The Group’s operating segments are regularly reviewed by the Chief Operating Decision Maker (“CODM”) to make decisions about resource allocation and to assess performance. The Group operates wholly within one business segment being the operation and management of Commercial assets in Australia. The operating results presented in the consolidated statement of profit or loss represent the same segment information as reported in internal management information. The Group has no individual customer which represents greater than 10% of total revenue.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 58 1. REVENUE 2026 2025 $'000 $'000 (a) Finance income Interest on secured loans - amortised cost 3,013 3,104 Gain/(loss) on modification of secured loans (2,903) - Bank interest 898 1,002 Total finance income 1,008 4,106 (b) Fee Income Asset management fees 14,856 13,065 Property management fees 744 764 Development management fees 4,727 5,737 Total funds management income 20,327 19,566 2. EARNINGS PER STAPLED SECU R ITY 2026 2025 Basic and diluted earnings per stapled security (cents) (8.34) 3.01 Reconciliation of earnings used in calculating earnings per stapled security Basic and diluted earnings per stapled security Net profit / (loss) ($'000) (74,495) 26,910 Weighted average number of securities: Weighted average number of stapled securities for basic earning per security ('000) 893,658 893,658
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 59 3. EXPENSES 2026 2025 $'000 $'000 (a) Net change in fair value of investments held at balance date Net change in fair value of unlisted property securities held at balance date 443 (20) Net change in fair value of other investments held at balance date 284 350 Total change in fair value of investments held at balance date 727 330 (b) Depreciation and amortisation expenses Depreciation and amortisation of property, plant and equipment and intangible assets 129 150 Amortisation - leasing costs 5,146 4,341 Total depreciation and amortisation expenses 5,275 4,491 (c) Finance costs Interest on loans and derivatives 41,377 46,230 Amortisation of finance costs 1,205 494 Total finance costs 42,582 46,724 (d) Administrative and other expenses Wages and salaries 24,536 26,114 Contributions to defined contribution plans 1,581 1,571 Adminstrative expenses 9,869 7,847 Restructuring cost 192 525 Total administrative and other expenses 36,178 36,057
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 60 4. INCOME TAX 2026 2025 $'000 $'000 (a) Income tax expense The major components of income tax expense are: Income Statement Current income tax Current income tax charge 3,197 4,446 Adjustments in respect of current income tax of previous years (280) (166) Deferred income tax Relating to origination and reversal of temporary differences (1,864) 2,736 Total income tax expense 1,053 7,016 (b) Numerical reconciliation between aggregate tax expense recognised in the income statement and tax expense calculated per the statutory income tax rate A reconciliation between tax expense and the product of the accounting profit before income tax multiplied by the Group's applicable income tax rate is as follows: Profit/(loss) before income tax expense (73,442) 33,926 Prima facie income tax expense/(benefit) calculated at 30% (2025: 30%) (22,033) 10,178 Less prima facie income tax expense/(benefit) on profit from Trusts 16,371 (8,535) Prima Facie income tax of entities subject to income tax (5,662) 1,643 Adjustment of prior year tax applied (280) (166) Share of results of joint ventures and associates 232 5,094 Security acquisition rights 975 (1,105) Recognition of loss on trading stock (9,739) - Capital gains on transactions 6,381 - Revaluation of investment properties 5,153 1,975 Impairment of goodwill 4,018 - Other items (net) (25) (425) Total income tax expense 1,053 7,016
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 61 4. INCOME TAX (CON TI NU ED) $'000 $'000 (c) Recognised deferred tax assets and liabilities Deferred income tax relates to the following: Deferred tax liabilities Revaluation of investment properties at fair value 5,212 5,106 Revaluation of investments and financial instruments at fair value 8,213 9,782 Other - 69 Gross deferred income tax liabilities 13,425 14,957 Set off against deferred tax assets (5,239) (5,228) Net deferred income tax liabilities 8,186 9,729 Deferred tax liabilities 8,186 9,729 Deferred tax assets Provisions - employee entitlements 6,279 6,451 Losses available for offset against future taxable income - 756 Other 1,140 921 Gross deferred income tax assets 7,419 8,128 Set off of deferred tax liabilities (5,239) (5,228) Net deferred income tax assets 2,180 2,900 TAX CONSOLIDATION AGHL and its 100% owned Australian resident subsidiaries have formed a tax consolidated group. AGHL is the head entit y of the tax consolidated group. The head entity and the controlled entities in the tax consolidated group continue to account for their own current and deferred tax amounts. These amounts are measured in a manner that is consistent with the broad principles in AA SB 112 Income Taxes. The nature of the tax funding agreements is discussed further below. Nature of the tax funding agreement Members of the respective tax consolidated groups have entered into tax funding agreements. The tax funding agreements require payments to/from the head entity to be recognised via an inter - entity receivable / (payable) which is at call. To the extent that there is a difference between the amount allocated under the tax funding agreement and the allocation under Interpretation 1052, the head entity accounts for these as equity transactions. The allocation method utilised under Interpretation 1052 is the Stand - alone taxpayer approach. The amounts receivable or payable under the tax funding agreements are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity may also require payment of int erim funding amounts to assist with its obligations to pay tax instalments.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 62 5. INVESTMENT PROPERTIES 2026 2025 $'000 $'000 Freehold investment properties 1,825,540 1,801,800 Total investment properties 1,825,540 1,801,800 2026 2025 $'000 $'000 Investment properties held for sale Commercial 1 55,000 194,000 Total investment properties held for sale 55,000 194,000 Investment properties Commercial 1,770,540 1,607,800 Total investment properties 1,770,540 1,607,800 Total investment properties including held for sale 1,825,540 1,801,800 1 - Properties held for sale include 1 81 James Ruse Drive, Camellia as at 30 June 2026 and Oasis Shopping Centre as at 30 June 2025, however is no longer held for sale as at 30 June 2026 . RECONCILIATION A reconciliation of the carrying amount of investment properties at the beginning and end of the period is as follows. All investment properties are classified as Level 3 in accordance with the fair value hierarchy outlined in Note 1 2 (d) : 30 Jun 2026 30 Jun 2025 30 Jun 2026 30 Jun 2025 Freehold investment properties $'000 $'000 $'000 $'000 Carrying amount at beginning of the financial period 194,000 123,000 1,607,800 1,762,000 Additions - - 4,500 - Capital expenditure 3,277 - 32,922 46,228 Net change in fair value as at balance date (11,777) - (4,935) (72,173) Net change in fair value derecognised - 40 - - Disposals* - (58,549) - - Properties transferred to / (from) held for sale (130,500) 129,509 130,500 (129,509) Rental straightlining adjustment - - (247) 1,254 Carrying amount at end of the period 55,000 194,000 1,770,540 1,607,800 Held for sale Non-current * Market Central, Lutwyche was sold during FY25
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 63 5. INVESTMENT PROPERTIES (CONTI NU ED) Investment properties are carried at the Directors’ determination of fair value. The determination of fair value includes reference to the original acquisition cost together with capital expenditure since acquisition and either the latest full independent valuation, latest independent update or directors’ valuation. Total acquisition costs include incidental costs of acquisition such as property taxes on acquisition, legal and professional fees and other acquisition related costs. Sensitivity Information Significant input Fair value measurement sensitivity to significant increase in input Fair value measurement sensitivity to significant decrease in input Net o perating i ncome Increase Decrease Adopted capitalisation rate Decrease Increase Rate per unit Increase Decrease Optimal occupancy Increase Decrease Adopted discount rate Decrease Increase The adopted capitalisation rate forms part of the income capitalisation approach. When calculating the income capitalisation approach, the net market rent has a strong interrelationship with the adopted capitalisation rate given the methodology involves assessing the total net market income receivable from the property and capitalising this in perpetuity to derive a capital value. In theory, an increase in the net market rent and an increase (softening) in the adopted capitalisation rate could potentially offset the impact to the fair value. The same can be said for a decrease in the n et market rent and a decrease (tightening) in the adopted capitalisation rate. A directionally opposite change in the net market rent and the adopted capitalisation rate could potentially magnify the impact to the fair value. The adopted discount rate of a discounted cash flow has a strong interrelationship in deriving a fair value given the discount rate will determine the rate in which the future cashflows and terminal value are discounted to the present value. External valuations are conducted by qualified independent valuers who are appointed by the Chief Financial Officer who is also responsible for the Group’s internal valuation process. He is assisted by in - house certified professional valuers who are experienced in valuing the types of properties in the applicable locations. Investment properties are independently valued on a staggered basis every two years unless the underlying financing requires a different valuation cycle.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 64 5. INVESTMENT P ROPERTIES (CONTI NU ED) The majority of the investment properties are used as security for secured bank debt outlined in Note 1 1 . The weighted average capitalisation rate for Abacus is 6. 7 0 % ( 30 June 202 5 : 6.77 %). The current occupancy rate for the principal commercial portfolio excluding development assets is 91.2 % ( 30 June 202 5 : 92 .1 %). The key assumptions and estimates used in the valuations include: • forecast future rental income, based on the location, type and quality of the property, which are supported by the terms of any existing leases, other contracts or external evidence such as current market rents for similar properties; • lease assumptions based on current and expected future market conditions after expiry of any current lease; and • the capitalisation rate and discount rate derived from recent comparable market transactions. The property valuations have been prepared based on the information that is available at 30 June 202 6 . In the event that there are any unanticipated material circumstances, this may impact the fair value of the Group’s investment property portfolio, and the future price achieved if a property is divested. The potential effect of a decrease / increase in weighted average capitalisation rate of 25 bps on property valuation would have the effect of increasing the fair value by up to $ 70. 7 million (202 5 : $ 69.1 million ) or decreas ing the fair value by $ 65 . 6 million (202 5 : $ 64.2 million ) respectively. During the year ended 30 June 202 6 , 6 0 % (202 5 : 6 7 %) of the number of investment properties in the portfolio were subject to external valuations; the remaining 40 % (202 5 : 3 3 %) were subject to internal valuation.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 65 5. INVESTMENT PROPERTIES (CON TI NU ED) Ownership Interest % Fair Value 2026 $'000 Capitalisation Rate 2026 % Fair Value 2025 $'000 Capitalisation Rate 2025 % Commercial Walker Street, North Sydney NSW 1 100 226,500 7.16 225,500 6.92 314-336 Bourke Street, Melbourne VIC 50 213,500 6.00 225,000 6.00 77 Castlereagh St, Sydney NSW 100 216,000 6.13 206,000 6.25 201 Elizabeth Street, Sydney NSW 32 199,040 6.38 196,800 6.38 The Oasis, Broadbeach QLD 100 220,000 6.50 194,000 7.00 324 Queen Street, Brisbane QLD 100 160,000 7.50 141,000 7.75 452 Johnston Street, Abbotsford VIC 100 90,000 7.75 103,000 7.50 14 Martin Place, Sydney NSW 50 120,000 5.88 110,000 5.88 Industry Lanes, Richmond, VIC 50 95,000 6.25 89,500 6.25 Westpac House, Adelaide SA 50 85,000 7.50 81,000 7.50 Kingsgate, Fortitude Valley QLD 50 73,000 7.50 72,000 7.50 181 James Ruse Drive, Camellia NSW 2 100 55,000 N/A 63,500 N/A Other Assets 3 100 72,500 N/A 94,500 N/A Total Commercial 1,825,540 6.70 1,801,800 6.77 1. Includes both 83 and 99 Walker Street, North Sydney NSW. 2. Held for sale and classified as current. Valued in 2026 using contractual sale price and 2025 using direct comparison method . 3. Other Assets includes 3 assets (FY25: 3 assets) which have an individual value of below $50m per asset. 6. PROPERTY LOANS AND OTHER FINANCIAL ASSETS 2026 2025 $'000 $'000 (a) Current other financial assets Investment in listed securities - fair value* 348,471 - 348,471 - (b) Non-current property loans Secured loans - amortised cost 49,123 55,972 Provision for secured loans - amortised cost (17) (28) 49,106 55,944 (c) Non-current other financial assets Investment in unlisted securities - fair value 5,869 6,523 5,869 6,523 * As at 30 June 2026, SKG ceased to be accounted for using the equity method and is an investment held at fair value. For further detail refer to Note 21.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 66 7. INVESTMENTS ACCOUN TED FOR USING THE EQUITY METHOD (a) Extract from joint ventures and a ssociates’ profit and loss statements 2026 2025 2026 2025 2026 2025 2026 2025 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Revenue 328,333 478,430 10,073 18,931 8,499 51,785 346,905 549,146 Expenses (174,014) (189,385) (13,761) (17,385) (10,264) (15,120) (198,039) (221,890) Net profit / (loss) 154,319 289,045 (3,688) 1,546 (1,764) 36,665 148,866 327,256 Share of net profit / (loss) 29,672 56,149 (2,274) 353 (824) 18,136 26,574 74,638 Storage King Group* Fordtrans Pty Ltd ^ Other Joint Ventures Total * Abacus Group’s share of profit from SKG includes the elimination of related party transactions. Interest income of $0. 6 million ( 2025 : $ 0.8 million ) and interest expense of $ 35.5 million (202 5 : $ 36.2 million ) were included in the net profit of ASK for the year ended 30 June 202 6 . ^Included in the net profit of Fordtrans Pty Ltd for the year ended 30 June 202 6 : interest income of $ 2. 9 million (202 5 : $ 2.1 million) and interest expense of $ 1.8 million (202 5 : $ 3.6 million). Abacus Group’s share of net profit from Fordtrans Pty Ltd includes additional costs related to the oversight of development activities. (b) Extract from joint ventures and ass ociates’ balance sheets 2026 2025 2026 2025 2026 2025 2026 2025 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Current assets - 167,568 1,476 2,137 1,202 5,852 2,679 175,557 Non-current assets - 3,446,425 205,212 217,704 132,337 202,035 337,548 3,866,164 - 3,613,993 206,688 219,841 133,539 207,887 340,227 4,041,721 Current liabilities - 95,677 26,187 35,291 1,790 5,440 27,977 136,408 Non-current liabilities - 1,188,734 52,864 43,789 12,084 41,838 64,948 1,274,361 Net assets - 2,329,582 127,636 140,761 119,665 160,609 247,301 2,630,952 Share of net assets - 459,670 63,818 70,381 59,744 80,134 123,562 610,185 Storage King Group* Fordtrans Pty Ltd^ Other Joint Ventures Total There were no impairment losses or contingent liabilities relating to the investment in the joint ventures and associates. * The Group has recognised $ 19.3 million (202 5 : $ 18.1 million) of management fee s as revenue ( from Abacus Storage King for the management services provided during the period. Details on transactions with ASK are disclosed in Note 1 7 ( d ). Included in the net assets of SKG as at 30 June 202 5 : cash and cash equivalents $ 119.5 million , non - current interest bearing loans and borrowi ngs $ 1,142.6 million, and deferred tax liability $ 34.2 million . ^Included in the net assets of Fordtrans Pty Ltd as at 30 June 202 6 : cash and cash equivalents $ 0. 1 million (202 5 : $0. 5 million), current interest bearing loans and borrowings $ Nil (202 5 : $ Nil ) and non - current interest bearing loans and borrowings $ 2 1 . 9 million (202 5 : $ 28.8 million ).
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 67 7. INVESTMENTS ACCOUNT ED FOR USING THE EQUITY METHOD (CONTI NU ED) 1. Storage King Group (“SKG”, formerly Abacus Storage King until 6 July 2026) Abacus owns 19. 7 % (202 5 : 19.8%) of securities in SKG . Abacus’ share of distributions (including capital distributions) which are exclusive of foreign tax credits, for the year ended 30 June 202 6 was $ 16 .0 million (202 5 : $ 16.1 million) . As at 30 June 2026, SKG ceased to be accounted for using the equity method and is an investment held at fair value. For further detail refer to Note 21. 2. Fordtrans Pty Ltd (Virginia Park) (“VP”) Abacus has a 50% interest in the ownership and voting rights of Fordtrans Pty Ltd. VP’s principal place of business is in Bentleigh East, Victoria. VP owns a sizeable Business Park providing a mixture of industrial and office buildings as well as supporting facilities including gymnasium, swim centre, childcare centre, children’s play centre and cafe. Abacus jointly controls the venture with the other partner under the terms of a Unitholders Agreement and requires unanimous consent for all major decisions over the relevant activities. Abacus’ share of distributions (including capital distributions) for the year ended 30 June 202 6 was $ 4.7 million (202 5 : $ 14.3 million). 8. TRADE RECEIV A BLES AND TRADE PAYABLES 2026 2025 $'000 $'000 (a) Trade and other receivables Distribution receivable 26,571 23,234 Trade debtors 13,564 19,429 Expected credit loss (473) (606) Total Trade and other receivables 39,662 42,057 (b) Trade and other payables Distribution payable 37,980 37,980 Trade payables and others 24,906 17,534 Unearned income 6,663 5,002 Total Trade and other payables 69,549 60,516
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CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME 30 JUNE 202 6 68 9. CASH AND CASH EQUIVALENTS 2026 2025 $'000 $'000 Reconciliation to Statement of Cash Flow For the purposes of the Statement of Cash Flow, cash and cash equivalents comprise the following: Cash at bank and in hand 1 46,016 23,946 Cash and cash equivelants 46,016 23,946 1. Cash at bank earns interest at floating rates. The carrying amounts of cash and cash equivalents represent fair value. Net profit (74,495) 26,910 Adjustments for: Depreciation and amortisation of non-current assets 5,275 4,491 Impairment Charges 13,394 - Net change in fair value of derivatives (11,710) 13,895 Net change in fair value of investment properties held at balance date 16,712 72,173 Net change in fair value of investments held at balance date 727 330 Net change in fair value of investment properties derecognised - (40) Net change in fair value of investment and financial instruments derecognised (1,527) (1,007) Net change on remeasurement of investments held at balance date 122,069 - Share of profit from equity accounted investments (13,615) (63,430) Increase / (decrease) in payables 12,745 9,656 (Increase) / decrease in receivables and other assets 15,180 2,365 Net cash from operating activities 84,755 65,343 (a) Disclosure of financing facilities Refer to Note 1 1 . (b) Disclosure of non - cash financing facilities Non - cash financing activities include capital raised pursuant to the Abacus ’ distribution reinvestment plan. During the year no stapled securities were issued (202 5 : no stapled securities issued ).
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 69 10. CAPITAL MANAG E MENT Group entities comply with capital and distribution requirements of their constitutions and/or trust deeds, the capital requirements of relevant regulatory authorities and continue to operate as a going concern. Abacus also protects its equity in assets by taking out insurance. Abacus assesses the adequacy of its capital requirements, cost of capital and gearing (i.e. debt/equity mix) as part of its broader strategic plan. In addition to tracking actual against budgeted performance, Abacus reviews its capital structure to ensure sufficient funds and financing facilities (on a cost effective basis) are available to implement its strategy, that adequate financing facilities are maintained and distributions to members are made within the stated distribution guidance (i.e. paid out of funds from operations). The following strategies are available to the Group to manage its capital: issuing new stapled securities, its distribution reinvestment plan, electing to have the distribution reinvestment plan underwritten, adjusting the amount of distributions paid to m embers, activating a security buyback program, divesting assets, active management of its fixed rate swaps and collars, directly purchasing assets from joint ventures, or (where practical) recalibrating the timing of transactions and capital expenditure so as to avoid a concentration of net cash outflows. During the year, Abacus successfully negotiated and agreed terms on its syndicated banking facility to extend the facility tranches tenor on average by a further 0. 9 years and reduce the margin on average by a further 5 basis points . Abacus has no bank debt expiring in the financial year ending 30 June 202 7 , with the majority of debt expiring from the financial year ending 30 June 202 8 onwards. Abacus has a total gearing covenant as a condition of the current $1.125 billion Headstock syndicated facility and the $11 million Bilateral facility. The total gearing covenant requires Abacus to have total liabilities (net of cash) to be less than or equ al to 50% of total tangible assets (net of cash). As at date of reporting period, Abacus was compliant in meeting all its debt covenants.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 70 11. INTEREST BEARING LOANS AND BORROWINGS 2026 2025 $'000 $'000 Non-current Bank loans - A$ 920,554 907,530 Loan from related party - A$ 1 38,015 36,543 Less: Unamortised borrowing costs (2,600) (1,974) (a) Total non-current 955,969 942,099 1 - Details of loan maturity and applicable interest rate are disclosed in Note 17(d) 2026 2025 $'000 $'000 (b) Maturity profile of non-current interest bearing loans Due between one and five years 955,969 942,099 Due after five years - - 955,969 942,099 2026 2025 $'000 $'000 Available financing facility Total facilities - bank loans 1,136,000 1,136,000 Facilities used at reporting date - bank loans (924,500) (905,560) 211,500 230,440 Abacus maintains a range of interest - bearing loans and borrowings. The sources of funding are spread over a number of counterparties and the terms of the instruments are negotiated to achieve a balance between capital availability and cost of debt. Bank loans are A$ denominated and are provided by several banks at interest rates which are set periodically on a fixed or floating basis. The loan facilities term to maturity varies from Ju ly 202 7 to May 20 3 2 . The bank loans are secured by charges over the investment properties and certain property, plant and equipment. A pproximately 81 . 1 % (30 June 202 5 : 79.7 %) of bank debt drawn was subject to fixed rate hedges and the drawn bank debt had a weighted average term to maturity of 3. 2 years (30 June 202 5 : 3. 3 years). Hedge cover as a percentage of available facilities at 30 June 202 6 is 6 6 . 0 % (30 June 202 5 : 63.8 %). Abacus’ weighted average interest rate for the year ended 30 June 202 6 was 4.54 % (30 June 202 5 : 5.11 %). The weighted average interest rate included line fees on undrawn facilities. (c) Assets pledged as security The carrying amounts of assets pledged as security for current and non - current interest bearing liabilities are: 2026 2025 $'000 $'000 Non-current First mortgage Investment properties 1,758,040 1,510,300 Total non-current assets pledged as security 1,758,040 1,510,300 Total assets pledged as security 1,758,040 1,510,300
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 71 11. INTEREST BEARING LOANS AND BORROWINGS (CONTINUED) ( d ) Defaults and breaches During the current and prior years, there were no defaults or breaches of any of the Group’s Loans. 12. FINANCIAL INSTRUMENTS FINANCIAL RISK MANAGEMENT The risks arising from the use of the Group’s financial instruments are credit risk, liquidity risk and market risk (interest rate risk, and price risk). The Group’s financial risk management focuses on mitigating the unpredictability of the financial markets and its impact on the financial performance of the Group. The Board reviews and agrees on policies for managing each of these risks, which are summarised below. Primary responsibility for identification and control of financial risks rests with the Treasury Management Committee under the authority of the Board. The Board reviews and agrees policies for managing each of the risks identified below, including the set ting of limits for trading in derivatives, hedging cover of interest rate risks and cash flow forecast projections. The main purpose of the financial instruments used by the Group is to raise finance for the Group’s operations. The Group has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operati ons. The Group also enters into derivative transactions principally interest rate derivatives. The purpose is to manage the interest rate exposure arising from the Group’s operations and its sources of finance. Details of the material accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability an d equity instruments are disclosed in the section about this report and Note 2 2 to the financial statements. (a) Credit R isk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations including any adverse economic events such as the current inflationary environment, and arises principa lly from the Group’s receivables from customers, investment in securities and options, secured property loans and interest bearing loans and derivatives with banks. The Group manages its exposure to risk by: - derivative counterparties and cash transactions are limited to high credit quality financial institutions; - policy which limits the amount of credit exposure to any one financial institution;
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 72 12. FINANCIAL INSTRUMENTS (CONTINUED) (a) Credit Risk ( c ontinued) - providing loans as an investment into joint ventures, associates, related parties and third parties where it is satisfied with the underlying property exposure within that entity; - regularly monitoring loans and receivables balances on an ongoing basis; - regularly monitoring the performance of its associates, joint ventures, related parties and third parties on an ongoing basis; and - obtaining collateral as security (where required or appropriate). Credit risk exposures The Group’s maximum exposure to credit risk at the reporting date was: 2026 2025 $'000 $'000 Trade and other receivables 39,662 42,057 Other financial assets 5,869 6,523 Cash and cash equivalents 46,016 23,946 Derivatives at fair value 10,704 2,009 Cash and other financial assets 102,251 74,535 Secured property loans - amortised cost * 49,106 55,944 Secured property loans 49,106 55,944 Total credit risk exposure 151,357 130,479 Carrying Amount * The secured property loan is with one borrower. (b) Liquidity Risk Prudent liquidity risk management implies maintaining sufficient cash and marketable securities, the availability of funding through an adequate and diverse amount of committed credit facilities, the ability to close out market positions and the flexibilit y to raise funds through the issue of new stapled securities or the distribution reinvestment plan. The Group’s policy is to maintain an available loan facility with banks sufficient to meet expected operational expenses and to finance investment acquisitions for a period of 90 days, including the servicing of financial obligations. Current loan faciliti es are assessed and extended for a maximum period based on the Group’s expectations of future interest and market conditions. The table below shows an analysis of the contractual maturities of key liabilities which forms part of the Group’s assessment of liquidity risk .
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 73 12. FINANCIAL INSTRUMENT S (CONTINUED) (b) Liquidity Risk ( c ontinued) Carrying Amount Contractual cash flows 1 Year or less Over 1 year to 5 years Over 5 years 30 June 2026 $'000 $'000 $'000 $'000 $'000 Liabilities Trade and other payables 69,549 69,549 69,549 - - Interest bearing loans and borrowings incl derivatives# 955,969 1,137,670 51,480 1,085,701 488 Total liabilities 1,025,518 1,207,219 121,029 1,085,701 488 Carrying Amount Contractual cash flows 1 Year or less Over 1 year to 5 years Over 5 years 30 June 2025 $'000 $'000 $'000 $'000 $'000 Liabilities Trade and other payables 60,516 60,516 60,516 - - Interest bearing loans and borrowings incl derivatives# 945,888 1,103,373 44,302 1,058,473 598 Total liabilities 1,006,404 1,163,889 104,818 1,058,473 598 # Carrying amount includes fair value of derivative liabilities. Contractual cash flow includes contracted debt and net swap payments using prevailing forward rates. (c) Market R isk Market risk is the risk that changes in market prices, such as interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market r isk exposures within acceptable parameters, while optimising the return. Interest rate risk / Fair value interest rate risk The Group’s exposure to the risk of changes in market interest rates relates primarily to its long - term bank debt obligations which are based on floating interest rates. The Group has a policy to maintain a mix of floating exposure and fixed interest rate hedging with fixed rate cover highest in years 1 to 5. The Group hedges to minimise interest rate risk by entering into variable to fixed interest rate swaps which also helps deliver interest covenant compliance and positive carry (net rental income in excess of interest expense) on the property portfolio. In terest rate swaps have the economic effect of converting borrowings from variable rates to fixed rates. Under the interest rate swaps, the Group agrees to exchange, at specified intervals, the difference between fixed and variable rate interest amounts ca lculated by reference to the agreed notional principal amounts. At 30 June 202 6 , after taking into account the effect of interest rate swaps, approximately 81.1 % (202 5 : 79.7 %) of the Group’s drawn debt is subject to fixed rate hedges. Hedge cover as a percentage of available facilities at 30 June 202 6 is 66.0 % (202 5 : 63.8 %).
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 74 12. FINANCIAL INSTRUMENTS (CONTINUED) (c) Market R isk ( c ontin ued) The Group’s exposure to interest rate risk and the effective weighted average interest rates for each class of financial asset and financial liability are: Floating interest rate Fixed interest less than 1 year Fixed interest 1 to 5 years Fixed interest over 5 years Non interest bearing Total 30 June 2026 $'000 $'000 $'000 $'000 $'000 $'000 Financial Assets Cash and cash equivalents 46,016 - - - - 46,016 Receivables - - - - 39,662 39,662 Secured loans - - 49,106 - - 49,106 Derivatives - 5,709 4,995 - - 10,704 Other financial assets - - - - 354,340 354,340 Total financial assets 46,016 5,709 54,101 - 394,002 499,828 Weighted average interest rate*^ 4.35% 5.50% Financial liabilities Interest bearing liabilities - bank 917,955 - - - - 917,955 Interest bearing liabilities - other - - 38,015 - - 38,015 Derivatives - - - - - - Payables - - - - 69,549 69,549 Total financial liabilities 917,955 - 38,015 - 69,549 1,025,519 Notional principal swap balance maturities* - 600,000 1,150,000 - - 1,750,000 Weighted average interest rate on drawn bank debt* 4.54% * calculated for the year ended 30 June ^ weighted average interest rate excludes the impact of derivatives
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 75 12. FINANCIAL INSTRUMENTS (CONTINUED) (c) Market R isk ( c ontinued) Floating interest rate Fixed interest less than 1 year Fixed interest 1 to 5 years Fixed interest over 5 years Non interest bearing Total 30 June 2025 $'000 $'000 $'000 $'000 $'000 $'000 Financial Assets Cash and cash equivalents 23,946 - - - - 23,946 Receivables - - - - 42,057 42,057 Secured loans - - 55,944 - - 55,944 Derivatives - 1,279 730 - - 2,009 Other financial assets - - - - 5,954 5,954 Total financial assets 23,946 1,279 56,674 - 48,011 129,910 Weighted average interest rate*^ 3.85% 5.50% Financial liabilities Interest bearing liabilities - bank 905,556 - - - - 905,556 Interest bearing liabilities - other - - 36,543 - - 36,543 Derivatives - 538 3,250 - - 3,788 Payables - - - - 60,516 60,516 Total financial liabilities 905,556 538 39,793 - 60,516 1,006,403 Notional principal swap balance maturities* - 325,000 1,250,000 - - 1,575,000 Weighted average interest rate on 5.11% * calculated for the year ended 30 June ^ weighted average interest rate excludes the impact of derivatives The following table is a summary of the interest rate sensitivity analysis: Carrying amount -1% +1% Floating Profit Equity Profit Equity 30 June 2026 $'000 $'000 $'000 $'000 $'000 Financial assets 46,016 (460) (460) 460 460 Financial liabilities 917,955 (5,880) (5,880) 5,410 5,410 Carrying amount -1% +1% Floating Profit Equity Profit Equity 30 June 2025 $'000 $'000 $'000 $'000 $'000 Financial assets 23,946 (239) (239) 239 239 Financial liabilities 905,556 (9,796) (9,796) 7,525 7,525 AUD AUD
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 76 12. FINANCIAL INSTRUMENTS (CONTINUED) (d) Fair Va lues The fair value of the Group’s financial assets and liabilities are approximately equal to that of their carrying values. Details of the Group’s fair value measurement, valuation technique and inputs are detailed below. Class of assets / liabilities Fair value hierarchy Valuation technique Inputs used to measure fair value Investment properties Level 3 Discounted Cash Flow (""DCF"") Net o perating income Direct comparison Adopted capitalisation rate Income capitalisation method Rate per unit Optimal occupancy Adopted discount rate Securities - listed Level 1 Quoted prices (unadjusted) in active market s for identical assets or liabilities Quoted security price Securities – unlisted Level 3 Pricing models Security price Underlying net asset Property valuations Derivative – financial Level 2 DCF (adjusted for counterparty Interest rates instruments Credit worthiness) Consumer price index (“CPI”) Volatility Level 1 Quoted prices (unadjusted) in active market for identical assets or liabilities; Level 2 Inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and Level 3 Inputs for the asset or liability that are not based on observable market data. There were no transfers between Levels 1, 2 and 3 during the period . Income capitalisation method This method involves assessing the total net market income receivable from the property and capitalising this in perpetuity to derive a capital value, with allowances for capital expenditure reversions. Direct comparison This method directly compares and analyses sales evidence on a rate per unit. Discounted cash flow method Under the DCF method, the fair value is estimated using explicit assumptions regarding the benefits and liabilities of ownership over the assets’ or liabilities’ life including an exit or terminal value. The DCF method involves the projection of a series of cash flows from the assets or liabilities. To this projected cash flow series, an appropriate, market - derived discount rate is applied to establish the present value of the cash flow stream associated with the assets or liabilities. Pricing models – unlisted securities The fair value is determined by reference to the net assets which approximates fair value of the underlying entities.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 77 12. FINANCIAL INSTRUMENTS (CONTINUED) (d) Fair Values ( c ontinued) The following table is a reconciliation of the movements in unlisted securities classified as Level 3 for the period ended 30 June. Unlisted securities $'000 Opening balance as at 30 June 2025 6,523 Fair value movement through the income statement (725) Additions 72 Closing balance as at 30 June 2026 5,869 Unlisted securities $'000 Opening balance as at 30 June 2024 4,938 Fair value movement through the income statement (328) Additions 1,913 Closing balance as at 30 June 2025 6,523 Sensitivity of Level 3 - unlisted securities and options The potential effect of using reasonable possible alternative assumptions based on a decrease / increase in the property valuations by 5% would have the effect of reducing the fair value by up to $ 0.1 million (30 June 202 5 : $0.1 million) or increase the fair value by $ 0.1 million ( 30 June 202 5 : $0.1 million) respectively. Sensitivity of Level 1 - listed securities The Group is exposed to price risk arising from investments in listed securities. The key risk variable is the movement in security price. The Group manages its exposure through regularly monitoring the performance of the investment and conducts sensitivity analyses for fluctuations in the security price. A fluctuation of 5% in the security price, based on an investment value of $348.5 million as at 30 June 2026, would result in an increase/(decrease) to net profit after tax of $ 16.8 million .
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 78 13. CONTRIBUTED EQUITY 2026 2025 (a) Issued stapled securities $'000 $'000 Stapled securities 2,220,407 2,220,407 Issue costs (42,792) (42,792) Total contributed equity 2,177,615 2,177,615 Number Number 2026 2025 (b) Movement in stapled securities on issue '000 '000 At beginning of financial period 893,658 893,658 - distribution reinvestment plan - - Securities on issue at end of financial period 893,658 893,658 Stapled securities 14. DISTRIBUTIONS PAID AND PROPOSED 2026 2025 $'000 $'000 (a) Distributions paid during the period June 2025 half: 4.25 cents per stapled security (2024: 4.25 cents) 37,980 37,980 December 2025 half: 4.25 cents per stapled security (2024: 4.25 cents) 37,980 37,980 (b) Distributions declared and recognised as a liability^ June 2026 half: 4.25 cents per stapled security (2025: 4.25 cents) 37,980 37,980 ^ The final distribution of 4.25 cents per stapled security was declared on 18 June 202 6 . The distribution will be paid on or around 31 August 202 6 and will be approximately $38 million. 50% of distribution is to be paid from Abacus Trust and Abacus Income Trust (which do not pay tax provided they distribute all their taxable income) hence, there were no franking credits attached. The other 50% of the distribution is to be paid from Abacus Group Holdings Limited as fully franked dividends with $8.1 million franking credits attached. The total amount of franking credits available for the subsequent financial years including franking credits that will arise from the payment of income tax payable at the end of the financial year, based on a tax rate of 30 per cent, is $ 51.4 million (202 5 : $ 67. 7 million).
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 79 15. PARENT ENTITY FINANCIAL INFORMATION 2026 2025 $'000 $'000 Results of the parent entity Profit / (loss) for the year 30,990 (1,641) Total comprehensive income / (expense) for the year 30,990 (1,641) Financial position of the parent entity at year end Current assets 645,076 630,870 Total assets 807,174 827,749 Current liabilities 19,648 19,413 Total liabilities 221,674 241,247 Net assets 585,500 586,502 Total equity of the parent entity comprising of: Issued capital 568,862 568,862 Accumulated profit/(losses) (74,243) (74,243) Profit available for dividend distribution 81,319 86,532 Employee options reserve 11,801 9,635 Treasury shares (2,239) (4,284) Total equity 585,500 586,502 (a) Parent entity contingencies There are no contingencies of the parent entity as at 30 June 202 6 (202 5 : Nil). (b) Parent entity capital commitments There are no capital commitments of the parent entity as at 30 June 202 6 (202 5 : Nil). In July 202 6 , AGHL has provided a letter of support to its subsidiaries who have entered into interest free inter - entity loans within the Group as the support for the subsidiaries to continue as a going concern.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 80 16. COMMITMENTS AND CONTINGENCIE S (a) Operating lease commitments – Group as lessor Future minimum rentals receivable under non - cancellable operating leases as at 30 June 202 6 are as follows: 2026 2025 $'000 $'000 Within one year 106,283 106,765 Within two years 91,182 91,200 Within three years 69,341 77,745 Within four years 56,655 60,453 Within five years 44,746 48,665 More than five years 57,464 81,617 425,671 466,445 These amounts do not include contingent rentals which may become receivable under certain leases on the basis of retail sales in excess of stipulated minimums and, in addition, do not include recovery of outgoings. (b) Capital and other commitments At 30 June 202 6 the Group had numerous commitments which principally related to property and investment acquisition settlements, loan facility guarantees for the Group's interest in the jointly controlled property developments and funds management vehicles, and commitmen ts relating to property refurbishing costs. Commitments planned and/or contracted at reporting date but not recognised as liabilities are as follows: 2026 2025 $'000 $'000 Within one year - gross settlement of property and investment acquisitions 699 879 - property refurbishment costs 5,409 13,843 6,108 14,722 ( c ) Contingencies At 30 June 202 6 the Group had a $1 7 .5 million bank guarantee facility which expires in J une 202 8 (202 5 : $12.5 million) and $ 5 .0 million of bank guarantees had been issued from the facility (202 5 : $ 10.0 million). Bank guarantees issued at reporting date but not recognised as liabilities are as follows: 2026 2025 $'000 $'000 Bank guarantees - Australian Financial Service Licences 5,000 10,000 - redevelopment of investment properties 1,005 1,005 6,005 11,005
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 81 17. RELATED PARTY DISCLOSURES (a) Subsidiaries The consolidated financial statements include the financial statements of the following entities: 2026 2025 Entity % % Abacus Group Holdings Limited and its subsidiaries Abacus Finance Pty Limited 100 100 Abacus Funds Management Limited 100 100 Abacus Investment Pty Ltd 100 100 Abacus Note Facilities Pty Ltd 100 100 Abacus Property Services Pty Ltd 100 100 Abacus Storage Funds Management Limited 1 - 100 Abacus Camellia Investments Pty Limited 100 100 Abacus Riverlands Investments Pty Limited 100 100 Abacus 77 Castlereagh Street Pty Limited 100 100 Abacus Repository Pty Limited 1 - 100 Abacus U Stow It A1 Pty Limited 1 - 100 Abacus U Stow It B1 Pty Limited 1 - 100 Abacus USI C Pty Limited 1 - 100 Lutwyche City Shopping Centre Pty Limited 100 100 Oasis JV Pty Limited 100 100 Abacus Group Projects Limited and its subsidiaries Abacus Property Pty Ltd 100 100 Abacus Allara Street Trust* 74 74 Abacus Ventures Trust* 51 51 Abacus U Stow It A2 Pty Limited 1 - 100 Sucaba UST Pty Limited 1 - 100 Abacus Trust and its subsidiaries: Abacus Abbotsford Trust 100 100 Abacus Bowden Street Trust 100 100 Abacus K1 Property Trust 100 100 Abacus Lutwyche Trust 2 - 100 Abacus Oasis Trust 100 100 Abacus Richmond Trust 100 100 Abacus Virginia Trust 100 100 Abacus Westpac House Trust 100 100 Abacus Westpac House No. 2 Trust 100 100 Abacus 14 Martin Place Trust 100 100 Abacus 324 Queen Street Trust 100 100 Lutwyche City Shopping Centre Unit Trust 2 - 100 Oasis JV Unit Trust 100 100 Abacus Income Trust and its subsidiaries: Castlereagh Sub 1 Trust 100 100 Castlereagh FH Sub 1 Trust 100 100 Equity interest 1 Entity was sold during the year. For details refer to Note 21 2 Entities were wound up during the year * These entities are wholly owned by Abacus (b) Ultimate parent AGHL has been designated as the parent entity of the Group. (c) Key management personnel Details of payments are disclosed in Note 1 8 .
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 82 17. RELATED PARTY DISCLOSURES (CONTINUED) (d) Transaction with related parties 2026 2025 $'000 $'000 Transactions with related parties other than associates and joint ventures Revenues Property management fees received / receivable 475 408 Transactions with associates and joint ventures Revenues Management fees received / receivable from joint ventures and associates 19,915 18,828 Share of (loss)/profit from joint ventures and associates 30,924 74,638 Other transactions Loan advanced from joint ventures 1,745 1,685 Loan repayments to joint ventures (279) (434) Sale of subsidiary to associate* 23,242 - Distribution received / receivable 18,678 17,625 * The sale of a subsidiary represents proceeeds received. For further detail regarding the transaction refer to Note 21. Terms and conditions of transactions Fees to and purchases and fees charged from related parties are made in accordance with commercial terms in the management agreements. Outstanding balances at year - end are unsecured and settlement occurs in cash. There are no ECL provisions incurred with respect to amounts payable or receivable from related parties during the year. The term to maturity of the loan facility from a related party is April 20 30 with an interest rate of 4.7 0 % ( 202 5 : 4.7 0 %) with the balance disclosed in Note 11 . Ultimate controlling entity Ki Corp oration Limited (“ Ki ”) is the ultimate controlling securityholder in the Group with a holding of approximately 50.0% of the ordinary securities of the Group . Abacus Property Services Pty Ltd was engaged to manage the following properties: Property Relationship with Ki Charge per annum 202 6 202 5 $ $ 14 Martin Place Tenants - in - common 3% of gross rental 332,174 285,111 4 Martin Place 100% owned by Ki 3% of gross rental 474,970 408,152 Mrs Myra Salkinder was the Chair of the Group (retired on 30 June 2026) and is a senior executive of Ki . Philip Lewis is a member of the Board of Directors of the Group and is a senior executive of Ki.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 83 18. KEY MANAGEMENT PERSONNEL (a) Compensation for key management personnel 2026 2025 $ $ Short-term employee benefits 5,742,452 6,404,308 Post-employment benefits 200,132 193,417 Other long-term benefits 60,968 74,800 Security-based payments 3,142,280 2,910,039 9,145,832 9,582,564 (b) Loans to key management personnel There were no loans to key management personnel or their related parties at any time in 202 6 or in the prior year. (c) Other transactions and balances with key management personnel and their related parties During the financial year, transactions occurred between the Group and key management personnel which are within normal employee and investor relationships. 19. SECURITY BASED PAYMENTS (a) Recogni s ed security payment expenses 2026 2025 $'000 $'000 Expense arising from equity-settled payment transactions 5,258 4,089 Type of security – based payment plan (i) Long Term Incentives (LTI) The LTI plan has been designed to align the interests of executives with those of securityholders by providing for a significant portion of the remuneration of participating executives to be linked to the delivery of Earnings Before Interest and Tax (“ EBIT ”) and Relative Total Securityholder Return (“RTSR”). Key executives have been allocated LTIs in the current financial year. Allocations were based on the performance assessment completed in determining current variable incentive awards for the prior financial year, adjusted to take into account other factors that the Board considers specifically relevant for the purpose of providing LTIs. The LTIs granted during the year vest as follows: Executive KMP Grant Tranche Vesting date Potential number to vest 1,235,575 FY26 Grant Tranche One – 50% of Grant August 2028 1,235,575 Tranche Two – 50% of Grant August 2029
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 84 19. SECURITY BASED PAYMENTS (CONTINUED) (a) Recogni s ed security payment expenses ( c ontinued) (i) Long Term Incentives (LTI) (continued) Other Executives Grant Tranche Vesting date Potential number to vest Tranche One – 33% of Grant August 2027 478,605 Tranche Two – 33% of Grant August 2028 478,605 Tranche Three – 33% of Grant August 2029 478,605 FY26 Grant (ii) A bacus Storage King Long Term Incentive Rights (ASK LTI Rights ) The ASK LTI Rights plan has been designed to align the interests of E xecutive KMP of Abacus Group with those of Abacus Storage King (‘ASK’) securityholders by providing for a significant portion of the remuneration of participating executives to be linked to the delivery of Relative Total Securityholder Return (“RTSR”) based on the performance of ASK. Executive KMP have been allocated LTIs of ABG securities in the current financial year linked to the performance of ASK . Allocations were based on the performance assessment completed in determining current variable incentive awards for the prior financial year, adjusted to take into account other factors that the Board considers specifically relevant for the purpose of pr oviding ASK LTIs. The ASK LTIs granted during the year vest as follows: Grant Tranche Vesting date Potential number to vest FY26 Grant Tranche One – 50% of Grant August 2028 305,688 Tranche Two – 50% of Grant August 2029 305,688 (ii) Deferred Short Term Incentives (Deferred STI) 25% of an Executive KMP’s short term incentive is deferred by 12 months and settled in the form of rights. The deferred STI was introduced to aid retention, better align Executive KMP with securityholders’ interests, and provide for a “consequence manageme nt” governance mechanism for misconduct, fraud, malfeasance, or financial misstatement. During the year, ABG has purchased no securities ($nil) on the market in advance to cover future LTI and deferred STI payments. The re are unallocated securities held in a Trust account and accounted for as a reduction in equity reserve as a result of purchases in prior periods .
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 85 19. SECURITY BASED PAYMENTS (CONTINUED) (b) Summary of Performance Rights G ranted (i) Long Term Incentives (LTI) The following table illustrates movements in LTI during this year: 2026 2025 No. No. Opening balance 12,025,115 6,067,109 Granted during the year 6,506,847 6,664,872 Forfeited during the year (1,688,862) (608,879) Exercised during the year (831,609) (97,987) Outstanding at the end of the year 16,011,491 12,025,115 Exercisable at the end of the year 854,835 2,637,761 The weighted average fair value of LTI granted during the year excluding modifications was $0. 91 (202 5 : $ 0.89 ). The fair value of LTI was calculated utili sing the security price on grant date for non - market measures, and a valuation model for market measures . The following table lists the inputs to the model used for the performance rights’ plans for the year ended 30 June 202 6 and 30 June 202 5 , in addition to share price as at grant date : 2026 2025 Expected volatility (%) 23 24 Risk-free interest rate (%) 3.79-3.94 3.72-3.76 Life of instrument (years) 1.7 - 3.7 1.7 - 3.7 Model used Monte Carlo Monte Carlo The expected life of the performance rights is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a p eriod similar to the life of the performance rights is indicative of future trends, which may not necessarily be the actual outcome.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 86 19. SECURITY BASED PAYMENTS (CONTINUED) (b) Summary of Performance Rights G ranted (continued) (ii) Abacus Storage King Long Term Incentives (ASK LTI) 2026 2025 No. No. Opening balance 1,479,116 612,000 Granted during the year 734,436 867,116 Forfeited during the year - - Exercised during the year - - Outstanding at the end of the year 2,213,552 1,479,116 Exercisable at the end of the year - - The weighted average fair value of ASK LTI granted during the year excluding modifications was $0.6 6 (202 5 : $ 0.6 1 ). The fair value of ASK LTI was calculated utili sing a valuation model . The following table lists the inputs to the model used for the performance rights’ plans for the year ended 30 June 202 6 and 30 June 202 5 , in addition to share price as at grant date : 2026 2025 Expected volatility (%) 23 25 Risk-free interest rate (%) 3.85-3.94 3.72-3.73 Life of instrument (years) 2.7 - 3.7 2.7 - 3.7 Model used Monte Carlo Monte Carlo The expected life of the performance rights is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a p eriod similar to the life of the performance rights is indicative of future trends, which may not necessarily be the actual outcome. (iii) Replacement Long Term Incentives (Replacement LTI) The following table illustrates movements in FY22 Replacement LTI during this year: 2026 2025 No. No. Opening balance 259,593 - Granted during the year 23,196 403,721 Forfeited during the year - (144,128) Exercised during the year (29,752) - Outstanding at the end of the year 253,037 259,593 Exercisable at the end of the year 253,037 259,593
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CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME 30 JUNE 202 6 87 19. SECURITY BASED PAYMENTS (CONTINUED) (b) Summary of Performance Rights G ranted (continued) (iii) Replacement Long Term Incentives (Replacement LTI) (continued) The following table illustrates movements in FY23 Replacement LTI during this year: 2026 2025 No. No. Opening balance 108,980 - Granted during the year 9,476 169,487 Forfeited during the year - (60,507) Exercised during the year (37,874) - Outstanding at the end of the year 80,582 108,980 Exercisable at the end of the year 80,582 108,980 (iv) Deferred Short Term Incentives (Deferred STI) The following table illustrates movements in Deferred STI during this year: 2026 2025 No. No. Opening balance 1,443,203 547,964 Granted during the year 699,684 931,368 Forfeited during the year - - Exercised during the year (790,598) (36,129) Outstanding at the end of the year 1,352,289 1,443,203 Exercisable at the end of the year 497,244 1,117,205 The weighted average fair value of Deferred STI was $1. 24 (202 5 : $ 1.31 ). The fair value of STI is the security price on grant date . The weighted average remaining life of the performance rights ( all tranches of LTIs) at 30 June 202 6 was 1.8 years (202 5 : 2.0 years).
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 88 20. INTANGIBLE ASSETS AND GOODWILL Description of the Group’s intangible assets 2026 2025 $'000 $'000 Goodwill Balance at 1 July 32,394 32,394 Less: allocation upon sale of subsidiary (19,000) - Less: Impairment (13,394) - At the end of the year - 32,394 Software At 1 July, net of accumulated amortisation 9 32 Amortisation charge for the year (9) (23) At the end of the year, net of accumulated amortisation - 9 Total goodwill and intangibles - 32,403 Impairment tests for goodwill and intangible assets (i) Description of the cash generating units and other relevant information Goodwill and intangible assets acquired through business combinations for the purposes of impairment testing are allocated to the respective Group’s property / asset management businesses. The property / asset management business of the Group has been identified as a cash generating unit (CGU), as it generates cash flows that are independent from the cash flows of other assets or group of assets within the Group. G oodwill is subject to annual impairment testing with t he recoverable amount of the CGU determined based on a fair value less cost to sell (FVLCS) calculation , followed by a value in use (VIU) calculation, as necessary, using cash flow projections as of 30 June 202 6 covering a five - year period. (ii) Key assumptions used in valuation calculation s Goodwill and intangible assets – the calculation is most sensitive to the following assumptions: (a) Management and other fee income: based on market rates and revenue / funds under management within the financial year and the underlying growth rate of 3% (202 5 : 3 %) . (b) Discount rates: reflects management’s estimate of the time value of money and the risks specific to each unit that are not reflected in the cash flows (c) Property values of the funds / properties under management for Abacus Funds Management Limited: based on the fair value of properties (d) Selling costs: management’s estimate of costs to sell the funds / properties under management (e) For Abacus Funds Management Limited, a pre - tax discount rate of 9.5 6% (202 5 : 8.6 %) and a terminal growth rate of 2.5 % (202 5 : 3.0 %) have been applied to the cash flow projections for goodwill. (iii) Events and circumstances regarding recognition of goodwill impairment The CGU historically earn ed management and development fees from managing Abacus Storage King (ASK). As disclosed in Not e 2 1 , the management rights of ASK were terminated on 30 June 2026, with $19m of goodwill allocated to ASFML upon its sale. The reduc tion in fees applied within cash flow projections utilised for impairment testing resulted in an impairment of $ 13 .4m. The discounted cash flow model utilised for impairment testing contains inputs that are level 3 within the fair value hierarchy classification within Note 12(d).
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 89 21. DISPOSAL OF ABACUS STORAGE FUNDS MANAGEMENT LIMITED AND RELATED MATTERS Background On 30 June 2026, Abacus Storage Funds Management Limited ('ASFML') was sold to Abacus Storage King ('ASK' , renamed Storage King Group on July 6, 2026 ) . ASFML provided management services to ASK under a management agreement, which ceased on completion of the sale. Certain employees who provided services under the management agreement also transferred from the Group to ASK on this date. Total consideration of $23.2m comprised the net assets of ASFML of $5.0m, plus a premium of $19.0m, less $0.8m in respect of employee liabilities assumed by ASK on transfer of the relevant employees. The disposal, and the cessation of the management arrangement, gave rise to consequential impacts across the Group's investment in ASK, goodwill, and long - term incentive expense, as set out below. Goodwill As ASFML represented an operation disposed of within the property and asset management cash - generating unit that goodwill is allocated to , a portion of the goodwill previously allocated to the cash - generating unit relating to ASFML was calculated upon disposal. This was based on the relative value of ASFML compared to the value of the portion of the cash - generating unit retained by the Group. The amount of goodwill attributed to ASFML upon disposal was $19m. The goodwill amount attributed to the disposal has been presented net against the gain on sale of ASFML, reflecting the combined financial effect of the disposal transaction. The remaind er of the goodwill balance relating to the cash - generating unit retained by the Group was tested for impairment as at 30 June 2026, and was impaired to nil as a result of the reduction in cash flows following cessation of management of ASK. Investment in ASK The Group holds a 19.7% interest in ASK. Prior to 30 June 2026, this investment was equity accounted on the basis that the Group held significant influence over ASK, including through Abacus' role in managing ASK and Board representation. Following completion of the sale, the Group ceased to manage ASK and no longer holds a Director role on the ASK Board. Accordingly, the Group determined that it no longer holds significant influence over ASK from this date. As a result, the investment was remeasured to fair value at 30 June 2026, with the difference between fair value and the previous equity accounted carrying amount recognised as a loss of $ 122.1 m in profit or loss. The loss includes reserves associated with the investment which have been recycled to the income statement. The investment is now carried at fair value, with movements in fair value recognised through profit or loss in future periods. Fair value is determined by reference to the quoted market price of ASK units, representing a Level 1 input under the fair value hierarchy (see Note 6(a) for balance as at 30 June 2026 ).
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CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME 30 JUNE 202 6 90 21. DISPOSAL OF ABACUS STORAGE FUNDS MANAGEMENT LIMITED AND RELATED MATTERS (CONTINUED) Long - Term Incentives ('LTIs') Employees who transferred to ASK as part of the sale are treated as good leavers under the terms of the Group's long - term incentive plans. This resulted in a change in the expected vesting period for outstanding LTIs held by the transferring employees, wit h the revised period ending on the earlier of the original vesting date and the employees' date of transfer. The change in expected vesting period was accounted for prospectively as a change in estimate, resulting in an acceleration of $1.1m of LTI expense, recognised within Administrative and other expenses for the year ended 30 June 2026. 22. SUMMARY OF MATERIAL ACCOUNTING POLICIES (a) Basis of Preparation The financial report is a general - purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standards. The financial report has also been prepared on a historical cost basi s, except for investment properties and derivative financial instruments which have been measured at fair value, interests in joint ventures and associates which are accounted for using the equity method, and certain investments and financial assets measur ed at fair value. The financial report is presented in Australian dollars and all values are rounded to the nearest thousand dollars ($'000) unless otherwise stated under the option available to the Group under ASIC Corporations Instrument 20 26 /1 83 . The Group is an entity to which the instrument applies. (b) Statement of Compliance The financial report complies with Australian Accounting Standards and International Financial Reporting Standards (IFRS), as issued by the AASB and IASB respectively. (c) New accounting standards and interpretations (i) Changes in accounting policy and disclosures The accounting policies adopted are consistent with those of the previous financial year except for the adoption of new standards and interpretations effective as of 1 July 202 5 . There are no amendments and interpretations that were applied for the first time on 1 July 2025 that had a material impact on the consolidated financial statements of the Group.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 91 22. SUMMARY OF MATERIAL ACCOUNTING POLIC I ES (CONTINUED) (c) New accounting standards and interpretations (continued) (ii) Accounting Standards and Interpretation issued but not yet effective Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have not been adopted by A BG for the annual reporting period ended 30 June 202 6 . The amendments are effective for annual reporting periods beginning on or after 1 January 202 6 and must be applied retrospectively. A BG is currently assessing the impact the amendments and standards will have on current practice and whether existing loan agreements may require amendments. The significant new standards or amendments are outlined below : - AASB 2024 - 2 Amendments to Australian Accounting Standards – Classification and Measurement of Financial Instruments (e ffective for annual reporting periods beginning on or after 1 January 2026 ) These amendments to AASB 7 and AASB 9 Financial Instruments: • Clarify the date of recognition and derecognition of some financial assets and liabilities ; • Clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest criterion; • Add new disclosures for certain instruments with contractual terms that can change cash flows (such as some financial instruments with features linked to the achievement of environment, social and governance targets); and • Update the disclosure for equity instruments designated at fair value through other comprehensive income - AASB 2024 - 3 Amendments to Australian Accounting Standards – Annual Improvements Volume II (effective 1 January 2026) This makes minor improvements to address inconsistencies or to clarify requirements in: • AASB 1 First - time Adoption of International Financial Reporting – to improve consistency between AASB 1 and AASB 9 in relation to the requirements for hedge accounting, and improve the understandability of AASB 1; • AASB 7 Financial Instruments: Disclosures to improve consistency in the language used in AASB 7 with the language used in AASB 13 Fair Value Measurement; • AASB 9 Financial Instruments – to clarify how a lessee accounts for the derecognition of a lease liability when it is extinguished and address an inconsistency between AASB 9 and AASB 15 Revenue from Contracts with Customers in relation to the term ‘transa ction price’; • AASB 10 Consolidated Financial Statements – to clarify the requirements in relation to determining de facto agents of an entity ; and • AASB 107 Statement of Cash Flows – to replace the term ‘cost method’ with ‘at cost’ as the term is no longer defined in Australian Accounting Standards
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 92 22. SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED) (c) New accounting standards and interpretations (continued) (ii) Accounting Standards and Interpretation issued but not yet effective (continued) - AASB 18 Presentation and Disclosure in Financial Statements (e ffective for annual reporting periods beginning on or after 1 January 2027 ) AASB 18 has been issued to improve how entities communicate in their financial statements, with a particular focus on information about financial performance in the statement of profit or loss. The key presentation and disclosure requirements established b y AASB 18 are: • The presentation of newly defined subtotals in the statement of profit or loss • The disclosure of management - defined performance measures (MPM) • Enhanced requirements for grouping information (i.e. aggregation and disaggregation) AASB 18 is accompanied with limited consequential amendments to the requirements in other accounting standards, including AASB 107 Statement of Cash Flows. AASB 18 will replace AASB 101 Presentation of Financial Statements. (d) Basis of consolidation The consolidated financial statements comprise the financial statements of AGHL and its subsidiaries, AT and its subsidiaries, AIT and its subsidiaries, and AGPL and its subsidiaries collectively referred to as the Group . Subsidiaries are all those entities over which the Group has power over the investee such that the Group is able to direct the relevant activities, has exposure or rights to variable returns from its involvement with the investee and has the ability to use its power over the investee to affect the amount of the investor’s returns. The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies with adjustments made to bring into line any dissimilar accounting policies that may exist. All intercompany balances and transactions, including unrealised profits from intra - group transactions, have been eliminated in full and subsidiaries are consolidated from the date on which control is transferred to the Group and cease to be consolidated f rom the date on which control is transferred out of the Group. Where there is a loss of control of a subsidiary, the consolidated financial statements include the results for the part of the reporting period during which the Group has control. The acquisition of subsidiaries is accounted for using the purchase method of accounting. The purchase method of accounting involves allocating the cost of the business combination to the fair value of the assets acquired and the liabilities and contingen t liabilities assumed at the date of acquisition. Non - controlling interests are allocated their share of net profit after tax in the consolidated income statement and are presented within equity in the consolidated statement of financial position, separately from the equity of the owners of the parent.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 93 22. SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED) (e) Foreign currency translation Functional and presentation currency Both the functional and presentation currency of the Group are in Australian dollars. Each entity in the Group determines its own functional currency and items are included in the financial statements of each entity are measured using that functional curr ency. Transactions and balances Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of ex change ruling at the balance sheet date. All exchange differences in the consolidated financial report are taken to profit or loss with the exception of differences on foreign currency borrowings on translation of foreign operations that provide a hedge against a net investment in a foreign opera tion. These are taken directly to equity until the disposal of the net investment, at which time they are recognised in profit or loss. On disposal of a foreign operation, the cumulative amount recognised in equity relating to that particular foreign oper ation is recognised in profit or loss. Tax charges and credits attributable to exchange differences on those borrowings are also recognised in equity. Non - monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. Non - monetary items measured at fair value in a foreign currency are translated using t he exchange rates at the date when the fair value was determined. At reporting date the assets and liabilities of foreign operations are translated into the presentation currency of the Group at the rate of exchange prevailing at balance date and the financial performance is translated at the average exchange rate prevai ling during the reporting period. The exchange differences arising on translation are taken directly to the foreign currency translation reserve in equity. (f) Revenue recognition Revenue is recognised when performance obligations have been met and is measured at the amount that reflects consideration received or receivable to the extent it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: Rental income Rental income from investment properties is accounted for on a straight - line basis over the lease term. Lease incentives granted are recognised as an integral part of the total rental income. Finance income Revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost or principal of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 94 22. SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTI NU ED) (f) Revenue recognition (continued) Management and other fee income Revenue from rendering of services is recognised in accordance with the performance obligations under the terms and conditions of the service agreements and the accounting standards. Dividends and distributions Revenue is recognised when the Group’s right to receive the payment is established. Net change in fair value of investments and financial instruments derecognised during the year Revenue from sale of investments is recognised on settlement when all performance obligations under the contract have been met. Performance obligations are generally considered to have been met at the time of settlement of the sale. Financial instruments are derecognised when the right to receive or pay cash flows from the financial derivative has expired or when the entity transfers substantially all the risks and rewards and the performance obligations of the financial derivative through termination. Ga ins or losses due to derecognition are recognised in the income statement. Net change in fair value of investments held at balance date Changes in market value of investments are recognised as revenue or expense in determining the net profit for the period. (g) Expenses Expenses including rates, taxes and other outgoings, are brought to account on an accrual basis and any related payables are carried at cost. (h) Cash and cash equivalents Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short - term deposits with an original maturity of three months or less that are readily convertible to known amounts of cash which are subject to an insignificant risk of c hanges in value. For the purposes of the Statement of Cash Flow, cash and cash equivalents consist of cash and cash equivalents as defined above. (i) Trade and other receivables Trade and other receivables, which generally have 30 day terms, are held to collect contractual cash flows and these contractual cash flows are solely payments of principal and interest. At initial recognition, these are measured at amortised cost at the t ransaction price. Trade and other receivables are subsequently measured at amortised cost using the effective interest rate method, reduced by impairment losses. Interest income and impairment losses are recognised in the income statement. The receivable is written off when there is no reasonable expectation of recovering the contractual cash flows. Any gain or loss on derecognition is also recognised in the income statement.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 95 22. SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTI NU ED) (i) Trade and other receivables (continued) In assessing for impairment under AASB 9, the Group assesses on a forward - looking basis the expected credit losses associated with its financial assets carried at amortised cost. For trade receivables, the Group applies the simplified approach permitted by the standard, which requires lifetime expected losses to be recognised from initial recognition of the receivables. To measure the expected credit losses, trade debtors and other receivables have been grouped based on shared credit risk characteristics and the days past due. The expected loss rates are based on outstanding balances, days past their due date and the corr esponding historical credit losses experienced. Historical loss rates are adjusted to reflect current and forward looking information on macroeconomic factors (including GDP) affecting the ability of customers to settle their debts. (j) Derivative financial instruments and hedging The Group utilises derivative financial instruments, interest rate derivatives to manage the risk associated with foreign currency and interest rate fluctuations. Such derivative financial instruments are recognised at fair value through profit or loss (“ FVTPL”). The Group has set defined policies and implemented hedging policies to manage interest and exchange rate risks. Derivative instruments are transacted in line with these policies to achieve the economic outcomes in line with the Group’s treasury and hedgin g policy. They are not transacted for speculative purposes. The Group does not employ hedge accounting and as such derivatives are recorded at fair value with gains or losses arising from the movement in fair values recorded in the income statement. (k) Investments and other financial assets All investments are initially recognised at cost, being the fair value of the consideration given. Financial assets in the scope of AASB 9 Financial Instruments are classified as either financial assets at fair value through profit or loss or financial assets at amortised cost. At 30 June the Group’s investments in unlisted securities have been classified as financial assets at fair value through profit or loss and property loans are classified as loans and receivables at amortised cost. Financial assets at fair value through profit or loss The Group classifies its financial assets that do not meet the Solely Payments of Principal Plus Interest (‘ SPPI ’) criterion and derivatives at FVTPL. At initial recognition, the financial asset is measured at its fair value and transaction costs are recognised in profit or loss as incurred. Financial assets at FVTPL are subsequently measured at fair value. Any gains and losses from changes in fair value are recognised through profit or loss unless they have been designated and qualify as cash flow or net investment hedging instruments, where the effective portion of changes in fair value is recognised in either a cash flow or foreign currency reserve wit hin equity. Any gain or loss on derecognition is recognised in the income statement. The Group holds investments in listed and unlisted securities.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 96 22. SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTI NU ED) (k) Investments and other financial assets (continued) Loans and receivables Loans and receivables are non - derivative financial assets that are not quoted in an active market with SPPI. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans an d receivables are derecognised or impaired. Subsidiaries Investment in subsidiaries are held at lower of cost or recoverable amount as disclosed within the parent entity note. (l) Interest in joint arrangements and associates The Group’s interest in joint venture entities and associate is accounted for under the equity method of accounting in the consolidated financial statements. The investment in the joint venture entities and associate is carried in the consolidated balance sheet at cost plus post - acquisition changes in the Group’s share of net assets of the joint ventures and associate, less any impairment in value. The consolidated income statement reflects the Group’s share of the results of operations of the joint ventu res and associate. Investments in joint ventures and associate are held at the lower of cost or recoverable amount in the investing entities. The Group’s interest in joint operations that give the parties a right to the underlying assets and obligations themselves is accounted for by recognising the Group’s share of those assets and obligations. (m) Property, plant and equipment Property, plant and equipment is stated at historical cost less accumulated depreciation and any impairment losses. Depreciation is calculated on a straight - line basis over the estimated useful life of the asset as follows: Plant and equipment – over 5 to 15 years Right - of - use property – up to 5 years Impairment The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable. For an asset that does not generate largely independent cash inflows, the recovera ble amount is determined for the cash - generating unit to which the asset belongs. If any such indication exists and where the carrying values exceed the estimated recoverable amount, the assets or cash - generating units are written down to their recoverable amount. The recoverable amount of property (including land and buildings), plant and equipment is the greater of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre - tax discount rate that reflects current market assessments of the time value of money and the risks specific to the assets. Impairment losses are recognised in the income statement.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 97 22. SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTINUED) (m) Property, plant and equipment (continued) Disposal An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement in the year the asset is derecognised. (n) Investment properties Investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost of replacing parts of an existing investment property at the time that the cost is incurred if the recognition criteria are met, and ex cludes the costs of day - to - day servicing of an investment property. Subsequent to initial recognition, investment properties are stated at fair value, which reflects market and property specific conditions at the balance sheet date. This includes investm ent properties under redevelopment because fair value can be calculated based on estimated fair value on completion of redevelopment after allowing for the remaining expected costs of completion plus an appropriate risk adjusted development margin. Gains o r losses arising from changes in the fair values of investment properties are recognised in the income statement in the year in which they arise. Investment properties are derecognised either when they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognised in the income statement in the year of retirement or disposal. Investment properties under construction are carried at cost until when the construction is near completion (70% - 80% complete) because the fair value of an investment property under construction cannot be reliably measured. Transfers are made to investment property when, and only when, there is a change in use, evidenced by commencement of an operating lease to another party or ending of construction or development. Transfers are made from investment property when, and only when, there is a change in use, evidenced by commencement of development with a view to sale. For a transfer from investment property to inventories, the deemed cost of property for subsequent accounting is its fair value at the date of change in use. For a transfer from inventories to investment property, any difference between the fair value of t he property at that date and its previous carrying amount is recognised in profit or loss. Land and buildings that meet the definition of investment property are considered to have the function of an investment and are therefore regarded as a composite asset, the overall value of which is influenced by many factors, the most prominent being inco me yield, rather than diminution in value of the building content due to the passing of time. Accordingly, the buildings and all components thereof, including integral plant and equipment, are not depreciated.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 98 22. SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTIN U ED) (n) Investment properties (continued) Investment properties are independently valued on a staggered basis every two years unless the underlying financing requires a more frequent independent valuation cycle. In determining fair value, the capitalisation of net income method and the discountin g of future cashflows to their present value have been used. Lease incentives provided by the Group to lessees, and rental guarantees which may be received by the Group from third parties (arising from the acquisition of investment properties) are included in the measurement of fair value of investment property. Le asing costs and incentives are included in the carrying value of investment property and are amortised over the respective lease period, either using a straight - line basis, or a basis which is more representative of the pattern of benefits. Under AASB 140, investment properties, including any plant and equipment, are not subject to depreciation. However, depreciation allowances in respect of certain buildings, plant and equipment are currently available to investors for taxation purposes. (o) Leases The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangemen t conveys a right to use the asset. Group as lessee At the lease commencement date, a right - of - use asset and a corresponding lease liability is recognised. The liabilities arising from the lease are initially measured on a present value basis. Lease liabilities include the net present value of future lease payments, less any lease incentives receivable. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right - of - use asset. Lease payments are allocated between principal and finance cost. Right - of - use assets are measured at cost comprising: – the amount of the initial measurement of the lease liability; – any lease payments made at or before the commencement date, less any lease incentives received; – any initial direct costs incurred; and – any restoration costs. Right - of - use property assets are measured and classified as either investment property or property plant and equipment in accordance with the policies above. Group as a lessor Leases in which the Group retains substantially all the risks and benefits of ownership of the lease assets are classified as operating leases. The Group accounts for a modification to an operating lease either due to a change in scope or consideration of the lease as a new lease from the effective date of the modification, considering any prepaid or accrued lease payments relating to the original lease as part of the lease payments for the new lease.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 99 22. SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTIN U ED) (p) Goodwill Goodwill on acquisition is initially measured at cost being the excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Following initial recogni tion, goodwill is measured at cost less any accumulated impairment losses and is not amortised. Goodwill is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash - generating units, or groups of cash - generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units. Each unit or group of units to which the goodwill is so allocated: - Represents the lowest level within the Group at which the goodwill is monitored for internal management purposes; and - Is not larger than a segment based on either the Group’s primary or the Group’s secondary reporting format determined in accordance with AASB 8 Operating Segments. Impairment is determined by assessing the recoverable amount of the cash - generating unit (group of cash - generating units), to which the goodwill relates. When the recoverable amount of the cash - generating unit (group of cash - generating units) is less that the carrying amount, an impairment loss is recognised . When goodwill forms part of a cash - generating unit (group of cash - generating units) and an operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determinin g the gain or loss on disposal of the operation. Goodwill disposed of in this manner is measured based on the relative values of the operation disposed of and the portion of the cash - generating unit retained. Impairment losses recognised for goodwill are not subsequently reversed. (q) Impairment of non - financial assets other than goodwill Intangible assets that have an indefinite useful life are not subject to recognised i n and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other non - financial assets are tested for impairment whenever events or changes in circumstances indicate that the carr ying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. Recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows that are largely independent of the cash inflows from other assets or groups of assets (cash - generating units). Non - financial assets other than goodwill that suffered an impairment are tested for possible reversal of the impairment whenever events or changes in circumstances indicate that the impairment may have reversed.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 100 22. SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTIUNED) ( r ) Trade and other payables Trade payables and other payables are carried at amortised cost. They represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payment s in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition. (s) Provisions and employee leave benefits Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amo unt of the obligation. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the balance sheet date. If the effect of the time value of money is material, provisions are discounted using a curr ent pre - tax rate that reflects the time value of money and the risks specific to the liability. The increase in the provision resulting from the passage of time is recognised in finance costs. Employee leave benefits i) Wages, salaries, annual leave and sick leave Liabilities for wages and salaries, including non - monetary benefits, annual leave and accumulating sick leave expected to be settled within 12 months of the reporting date are recognised in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled. Expenses for non - accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable. ii) Long service leave The liability for long service leave is recognised and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Consideration is give n to expected future wage and salary levels, experience of employee departures, and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currencies th at match, as closely as possible, the estimated future cash outflows. (t) Distributions and dividends Trusts generally distribute their distributable assessable income to their unitholders. Such distributions are determined by reference to the taxable income of the respective trusts. Distributable income may include capital gains arising from the disposal of investments and tax - deferred income. Unrealised gains and losses on investments that are recognised as income are usually retained and are generally not assessable or distributable until realised. Capital losses are not distributed to securityholders but are retained to be offset against any future realised capital gains. A liability for dividend or distribution is recognised in the Balance Sheet if the dividend or distribution has been declared prior to balance date.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 101 22. SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTIN U ED) (u) Interest - bearing loans and borrowings All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of transaction costs associated with the borrowing. Subsequent to initial recognition, interest - bearing loans and borrowings are stated at amortised cost net of establishment costs, with any difference being recognised in the Consolidated Statement of Comprehensive Income over the period of the borrowings on an effective interest basis, subject to set - off arrangements . The entity derecognises a financial liability when its contractual obligations are discharged, cancelled or expired. The entity also derecognises a financial liability when there has been a substantial modification to the terms and cash flows of the liabil ity and recognises a new financial liability based on the modified terms, with the difference being recognised in the Consolidated Statements of Comprehensive Income. Borrowings are classified as non - current liabilities where the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date . Borrowing Costs Borrowing costs are recognised as an expense when incurred unless they relate to a qualifying asset or to upfront borrowing establishment and arrangement costs, which are deferred and amortised as an expense over the life of the facility. A qualifying ass et is an asset that generally takes more than 12 months to get ready for its intended use or sale. In these circumstances, the financing costs are capitalised into the cost of the asset. Where funds are borrowed by the Group for the acquisition or constr uction of a qualifying asset, the amount of the borrowing costs capitalised are those incurred in relation to the borrowing. (v) Contributed equity Issued and paid up capital is recognised at the fair value of the consideration received by the Group. Stapled securities are classified as equity. Incremental costs directly attributable to the issue of new securities are shown in equity as a deduction, net of tax, from the proceeds. (w) Taxation The Group comprises taxable and non - taxable entities. A liability for current and deferred tax and tax expense is only recognised in respect of taxable entities that are subject to income tax and potential capital gains tax as detailed below. Trust income tax Under current Australian income tax legislation AT and AIT are not liable to Australian income tax provided securityholders are presently entitled to the taxable income of the trusts and the trusts generally distribute their taxable income. Company income tax AGHL and its Australian resident wholly - owned subsidiaries have entered into tax funding agreements with their Australian resident wholly - owned subsidiaries, so that each subsidiary agrees to pay or receive its share of the allocated tax at the current tax rate. The head tax entity and the controlled entities in each tax consolidated group continue to account for their own current and deferred tax amounts.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 102 22. SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTIN U ED) (w) Taxation (continued) In addition to its own current and deferred tax amounts, the head tax entity also recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from controlled entities in the t ax consolidated group. Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from or payable to other entities in the Group. Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreements are recognised as a contribution to (or distribution from) wholly - owned tax consolidated entities. Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substant ively enacted by the balance sheet date. Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary dif ferences, and the carry - forward of unused tax assets and unused tax losses can be utilised, except: - when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the acc ounting profit nor taxa ble profit or loss and does not give rise to equal taxable and deductible temporary differences ; or - when the deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised. The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be ut ilised. Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognised for all taxable temporary differences, except: - when the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences ; or - when the taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, and the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 103 22. SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTIN U ED) (w) Taxation (continued) Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Income taxes relating to items recognised directly in equity are recognised in equity and not in the income statement. Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority. Goods and services tax (GST) Revenues, expenses and assets are recognised net of the amount of GST except when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet. Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows . Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority. (x) Earnings per stapled security (EPSS) Basic EPSS is calculated as net profit attributable to stapled securityholders, adjusted to exclude costs of servicing equity (other than distributions) divided by the weighted average number of stapled securities on issue during the period under review. Diluted EPSS is calculated as net profit attributable to stapled securityholders, adjusted for: - costs of servicing equity (other than distributions); - the after tax effect of dividends and interest associated with dilutive potential stapled securities that have been recognised as expenses; and - other non - discretionary changes in revenues or expenses during the period that would result from the dilution of potential stapled securities; divided by the weighted average number of stapled securities and dilutive potential stapled securities, adjusted for any bonus element.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 104 22. SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTIN U ED) (y) Security based payment plans Executives of the Group receive remuneration in the form of security based payments, whereby Executives render services as consideration for equity instruments (equity - settled transactions). The cost of equity - settled transactions is determined by the fair value at the date when the grant is made, using an appropriate valuation model and is recognised, together with a corresponding increase in other capital reserves in equity, over the period in which the performance and/or service conditions are fulfilled. The cumulative expense recognised for equity - settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s b est estimate of the number of equity instruments that will ultimately vest. The income statement expense or credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period and is recognised in employ ee benefits expense (Note 1 9 ). No expense is recognised for awards that do not ultimately vest, except for equity - settled transactions for which vesting is conditional upon a market or non - vesting condition. These are treated as vesting irrespective of whether or not the market or non - vesting conditions are satisfied, provided that all other performance and / or service conditions are satisfied. If an employee is considered a ‘good leaver’ any remaining expense relating to awards which have yet to vest, is recognised immediately. When the terms of an equity - settled award are modified, the minimum expense recognised is the expense had the terms not been modified, if the original terms of the award are met. An additional expense is recognised for any modification that increases the total fair value of the security based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification. When an equity - settled award is cancelled, it is treated as if it vested on the date of cancellation, and any expense not yet recognised for the award is recognised immediately. This includes any award where non - vesting conditions within the control of ei ther the entity or the employee are not met. When the award securities are acquired from the market in advance, the unallocated securities are treated as reduction of equity reserve. A portion of security based payments are classified as cash - settled, as Executives are awarded a cash equivalent of shares to purchase securities. For these securities the fair value is measured upon issue and recorded as an expense. Until the liability is settled, the fair value will be remeasured at each reporting period . (z) Non - current assets held for sale or distribution and discontinued operations The Group classifies non - current assets and disposal groups as held for sale if their carrying amounts will be recovered principally through a sale transaction or deemed disposal rather than through continuing use. Upon classification as held for sale, ass ets of a disposal group are recognised at the lower of carrying amount and fair value less costs to sell with the exception of investment properties, other financial assets and derivatives which are valued in accordance with Note 2 2 (n) and Note 2 2 (j) respectively. Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held for sale. Assets and liabilities classified as held for sale are presented separately as current items in the statement of financial position.
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NOTES TO THE FINANCIAL STATEMENTS 30 JUNE 202 6 105 22. SUMMARY OF MATERIAL ACCOUNTING POLICIES (CONTIN U ED) (z) Non - current assets held for sale or distribution and discontinued operations (continued) A segment, entity or operation disposed of or wound up qualifies as discontinued operations if it is a component of the Group that represents a separate major line of business or geographical area of operations. Discontinued operations are excluded from th e results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the statement of profit or loss. 23. AUDITOR’S REMUNERATION 2026 2025 $ $ Amounts received or due and receivable by Ernst & Young Australia: - Fees for auditing the statutory financial report of the parent covering the Group and auditing the statutory financial reports of any controlled entities 724,784 704,465 - Services required by legislation to be provided by the auditor - compliance services 48,464 27,169 - Other assurance and agreed-upon-procedures services under other legislation or contractual arrangements where there is discretion as to whether the service is provided by the auditor or another firm 51,836 42,380 Total 825,084 774,014 24. EVENTS AFTER BALANCE SHEET DATE On 23 June 2026, the Group announced the appointment of Lawrence Wong as Chief Financial Officer. Mr Wong commenced with the Group on 17 August 2026 and assumes the CFO role on 1 September 2026. Departing CFO Evan Goodridge, who transfers to ASK as part of the Internalisation, will ensure a smooth transition and handover. Other than the matters noted above and elsewhere in this report, no other matter or circumstance has arisen since 30 June 2026 that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or th e state of affairs of the Group in future financial years.
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CONSOLIDATED ENTITY DISCLOSURE STATEMENT 30 JUNE 202 6 106 Body corporate Body corporate Country of % of share Country of Entity name Entity type incorporation capital held tax residence Abacus Group Holdings Limited Body corporate Australia 100 Australia Abacus Finance Pty Limited Body corporate Australia 100 Australia Abacus Funds Management Limited Body corporate Australia 100 Australia Abacus Investments Pty Ltd Body corporate Australia 100 Australia Abacus Note Facilities Pty Ltd Body corporate Australia 100 Australia Abacus Property Services Pty Ltd Body corporate Australia 100 Australia Abacus Camellia Investments Pty Limited Body corporate Australia 100 Australia Abacus Riverlands Investments Pty Limited Body corporate Australia 100 Australia Abacus 77 Castlereagh Street Pty Limited Body corporate Australia 100 Australia Lutwyche City Shopping Centre Pty Limited Body corporate Australia 100 Australia Oasis JV Pty Limited Body corporate Australia 100 Australia Abacus Group Projects Limited & its subsidiaries Abacus Group Projects Limited Body corporate Australia 100 Australia Abacus Property Pty Ltd Body corporate Australia 100 Australia Abacus Allara Street Trust Trust N/A N/A Australia Abacus Ventures Trust Trust N/A N/A Australia Abacus Trust & its subsidiaries Abacus Trust Trust N/A N/A Australia Abacus Abbotsford Trust Trust N/A N/A Australia Abacus Bowden Street Trust Trust N/A N/A Australia Abacus K1 Property Trust Trust N/A N/A Australia Abacus Oasis Trust Trust N/A N/A Australia Abacus Richmond Trust Trust N/A N/A Australia Abacus Virginia Trust Trust N/A N/A Australia Abacus Westpac House Trust Trust N/A N/A Australia Abacus Westpac House No. 2 Trust Trust N/A N/A Australia Abacus 14 Martin Place Trust Trust N/A N/A Australia Abacus 324 Queen Street Trust Trust N/A N/A Australia Oasis JV Unit Trust Trust N/A N/A Australia Abacus Income Trust & its subsidiaries Abacus Income Trust Trust N/A N/A Australia Castlereagh Sub 1 Trust Trust N/A N/A Australia Castlereagh FH Sub 1 Trust Trust N/A N/A Australia Abacus Group Holdings Limited & its subsidiaries
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DIRECTORS’ DECLARATION 30 JUNE 202 6 107 In accordance with a resolution of the Directors of Abacus Group Holdings Limited, we state that: In the opinion of the directors: (a) the consolidated financial statements, notes and the additional disclosures included in the D irectors’ report designated as audited , are in accordance with the Corporations Act 2001 , including: (i) giving a true and fair view of the Group’s financial position as at 30 June 202 6 and of its performance for the year ended on that date; and (ii) complying with Australian Accounting Standards (including Australian Accounting Interpretations) and the Corporations Regulations 2001 ; (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 2 2 (b); and (c) there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable. (d) The consolidated entity disclosure statement required by section 295(3A) of the Corporations Act 2001 is true and correct. This declaration has been made after receiving the declarations required to be made to the directors in accordance with sections 295A of the Corporations Act 2001 for the financial year ended 30 June 202 6 . On behalf of the Board. Mark Haberlin Steven Sewell Chair Managing Director Sydney, 2 5 August 202 6
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au Independent auditor’s report to the members of Abacus Group Holdings Limited Report on the audit of the financial report Opinion We have audited the financial report of Abacus Group Holdings Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2026, the consolidated income statement, the consolidated statement of other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flow for the year then ended, notes to the financial statements, including material accounting policy information, the consolidated entity disclosure statement and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2026 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to audits of the financial report of public interest entities in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial report section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial report. The results of our audit proc edures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial report.
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Investment Properties Why significant How our audit addressed the key audit matter The Group’s total assets include investment properties either held directly or through an interest in Joint Ventures and Associates. These assets are carried at fair value, which was assessed by the directors with reference to either external independent property valuations or internal valuations and are based on market conditions existing at the reporting date. The valuation of investment properties is inherently subjective given there are alternative assumptions and valuation methods that may result in a range of values. A small difference in any one of the key market input assumptions, when aggregated across all the properties, could result in a significant change to the valuation of investment properties. Two approaches are generally used: the Income Capitalisation approach and the Discounted Cash Flow approach to arrive at a range of valuation outcomes, from which the valuers derive their best estimate of the value at a point in time. We have considered this a key audit matter due to the extent of judgment required in determining fair value. We draw attention to Note 5 of the financial report which discloses the accounting policy and sensitivities to changes in the key assumptions that may impact these valuations. Our audit procedures included the following: • We, together with our real estate valuation specialists, discussed the following matters with management: • movements in the Group’s investment property portfolio; • changes in the condition of the properties including tenancy matters and development status on a sample basis. • On a sample basis, we performed the following procedures for selected properties: • Evaluated the key valuation assumptions and inputs. These assumptions and inputs included the adopted capitalisation rate and a number of leasing assumptions including market and contractual rent, re-leasing and vacancy assumptions, and future capital expenditure. We agreed the passing rental income in the valuations to the audited passing rental income. • Tested the mathematical accuracy of valuations. • Involved our real estate valuation specialists to assist with the assessment of the valuation assumptions and methodologies. • Where relevant we compared the valuation against comparable transactions utilised in the valuation process. • Evaluated the suitability of the valuation methodology based on the type of asset. • Assessed the qualifications, competence and objectivity of the valuers. • Assessed the appropriateness of disclosures included in Note 5 of the financial report.
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Internalisation of Abacus Storage King Management Function Why significant How our audit addressed the key audit matter During the year, the Group completed the sale of Abacus Storage Funds Management Limited (ASFML) and certain related entities to Storage King Group (‘SKG’, formerly known as Abacus Storage King) as part of SKG's internalisation of its management function. The transaction resulted in a nil gain on disposal. The transaction resulted in the termination of the existing management arrangements between the Group and SKG and the transfer of employees and related obligations to SKG. The transaction also resulted in the Group assessing that it ceased to have significant influence over SKG. Consequently, the Group derecognised its 19.72% equity-accounted investment in SKG and remeasured its retained interest at fair value through profit or loss. We considered this a key audit matter due to the significance of the transaction to the Group's financial performance and financial position, together with the extent of judgement involved in determining the related accounting outcomes. We draw attention to Note 21 of the financial report. Our audit procedures included the following: • Evaluated the key terms of the share sale agreement and related transaction documents to assess the nature of the transaction and the assets, liabilities and obligations transferred as part of the internalisation. • Evaluated management's methodology for allocating goodwill to the disposal of ASFML and related entities. • Tested the mathematical accuracy of the nil gain on disposal calculation by agreeing the consideration received to the underlying share sale agreement and re-calculating the carrying value of the assets disposed including allocated goodwill. • Evaluated management's impairment assessment of the carrying value of the remaining funds management cash generating unit. • Assessed management's evaluation of whether significant influence over SKG continued following completion of the transaction, including consideration of the termination of management agreements and changes to governance arrangements. • Compared the fair value used to remeasure the Group's retained investment in SKG to observable market information and tested the mathematical accuracy of the resulting gain or loss recognised on the cessation of the equity accounting of SKG. • Assessed the taxation implications of the transaction. • Assessed the appropriateness of the related disclosures included in the financial report. Information other than the financial report and auditor’s report thereon The directors are responsible for the other information. The other information comprises the information included in the Company’s 2026 annual report, but does not include the financial report and our auditor’s report thereon.
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the financial report The directors of the Company are responsible for the preparation of: ► The financial report (other than the consolidated entity disclosure statement) that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; and ► The consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act 2001; and for such internal control as the directors determine is necessary to enable the preparation of: ► The financial report (other than the consolidated entity disclosure statement) that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and ► The consolidated entity disclosure statement that is true and correct and is free of misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor ’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: ► Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. ► Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. ► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. ► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. ► Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. ► Plan and perform the Group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the Group financial report. We are responsible for the direction, supervision and review of the audit work performed for the purposes of the Group audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated to the directors, we determine those matters that were of most significance in the audit of the financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the audit of the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 16 to 46 of the directors’ report for the year ended 30 June 2026.
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A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation In our opinion, the Remuneration Report of Abacus Group Holdings Limited for the year ended 30 June 2026, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Ernst & Young Jodie Inglis Partner Sydney 25 August 2026
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ADDITIONAL INFORMATION Number of holders of ordinary full paid securities 7,212 Number of holders holding less than a marketable parcel or ordinary fully paid stapled securities 1,032 Voting rights attached to ordinary fully paid stapled securities. One vote per security Top 20 largest security holdings as at 27 July 2026 HOLDER NAME NUMBER OF SECURITIES % ISSUED SECURITIES Ki Corporation Limited 446,738,859 49.99% J P Morgan Nominees Australia Pty Limited 125,497,454 14.04% Citicorp Nominees Pty Limited 80,341,116 8.99% HSBC Custody Nominees (Australia) Limited 75,976,148 8.50% Arym Investment Holdings Pty Ltd 14,600,000 1.63% BNP Paribas Noms Pty Ltd 14,380,815 1.61% BNP Paribas Nominees Pty Ltd 7,305,375 0.82% BNP Paribas Nominees Pty Ltd 3,532,296 0.40% Mr Dale Christian Clarke 1,943,456 0.22% Solium Nominees (Aus) Pty Ltd 1,663,638 0.19% Quixley Finance Pty Limited 1,625,492 0.18% Solium Nominees (Australia) Pty Ltd 1,481,034 0.17% Netwealth Investments Limited 1,458,896 0.16% Certane Ct Pty Ltd 1,291,508 0.14% IOOF Investment Services Limited 1,222,110 0.14% Gil Investment Company Pty Ltd 1,118,541 0.13% Mr Peter Edward Morgan & Mr Robert Scott Morgan 960,810 0.11% Mr Simon Robert Evans 865,000 0.10% Mr Carlos Gil 842,754 0.09%
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Bodyelectric Pty Ltd 800,000 0.09% Total Securities of Top 20 Holdings 783,645,302 87.69% Total of securities 893,657,633 Spread of securities as at 27 July 2026 RANGE HOLDERS NUMBER OF SECURITIES % ISSUED SECURITIES 1-1,000 1,650 644,487 0.07% 1,001-5,000 2,085 5,944,986 0.67% 5,001-10,000 1,261 9,439,218 1.06% 10,001-100,000 2,029 57,370,599 6.42% 100,001-9,999,999,999 187 820,258,343 91.79% Totals 7,212 893,657,633 100% Substantial security holders SECURITYHOLDER NUMBER OF SECURITIES Ki Group Entities 446,738,859 Charter Hall Limited 62,922,366