Australia Plus AsiaTrust - Maple

Transcription

Maple-Brown Abbott
Australia Plus Asia Trust
Annual Financial Report
30 June 2016
Maple-Brown Abbott Australia Plus Asia Trust
Annual Financial Report
Contents
Directors’ report
Lead Auditor’s Independence Declaration
1
4
Statement of Financial Position
5
Statement of Comprehensive Income
6
Statement of Changes in Equity
7
Statement of Cash Flows
8
Notes to and forming part of the financial statements
9
1
Summary of significant accounting policies
9
2
Net assets attributable to unitholders
13
3
Other expenses
14
4
Auditor’s remuneration
14
5
Distributions paid and payable
14
6
Related parties
15
7
Notes to the Statement of Cash Flows
16
8
Financial instruments
18
9
Interests in unconsolidated structured entities
25
10
Events subsequent to balance date
25
Directors’ declaration
26
Independent auditor’s report to the unitholders
27
Maple-Brown Abbott Australia Plus Asia Trust
Directors’ report
The directors of Maple-Brown Abbott Limited, the Responsible Entity of the Maple-Brown Abbott Australia Plus
Asia Trust (the Trust), present their report together with the financial report of the Trust, for the year ended 30
June 2016 and the auditor’s report thereon.
Responsible Entity
Maple-Brown Abbott Limited is the Responsible Entity (AFSL No. 237296).
The Responsible Entity is the investment manager of the Trust. The names of the directors of the Responsible
Entity are disclosed in note 6(b) to the financial statements.
The registered office and principal place of business of the Responsible Entity and the Trust is Level 31, 259
George Street, Sydney, NSW 2000.
Principal activities
The Trust invests in equity markets in the Australian and Asia region, excluding Japan and in accordance with
the provisions of the Trust’s Constitution.
The Trust did not have any employees during the year.
There have been no significant changes in the nature of those activities during the year.
Results of operations
The Responsible Entity’s objective for the Trust is to outperform the S&P/ASX 300 Index (Total Returns) over
rolling four year periods.
The Trust achieved a rolling four year annualised return of 10.1% p.a. (2015: 10.9% p.a.) after fees versus the
relevant Benchmark return of 11.1% p.a. (2015: 8.8% p.a.).
A summary of the Trust’s annual performance after fees to 30 June is set out below:
Total return*
S&P/ASX 300 Index (Total Returns)
2016
2015
2014
2013
2012
%
%
%
%
%
(8.1)
6.0
16.1
29.9
(5.4)
0.9
5.6
17.3
21.9
(7.0)
* Total return is based on the movement in net asset value per unit plus distributions and is before tax and after all fees and charges. Imputation and foreign tax credits are not
included in the performance figures.
1
Directors’ report (continued)
Unit prices and distributions
2016
2015
2014
2013
2012
$
$
$
$
$
0.9798
1.1110
1.0901
0.9743
0.7799
0.0413
0.0435
0.0405
0.0356
0.0337
Unit prices
Redemption price per unit (ex-distribution as at
30 June)
Distribution
Distribution per unit for the year ended 30 June
(excluding tax credits) (note 5)
State of affairs
In the opinion of the Responsible Entity, there were no significant changes in the state of affairs of the Trust
during the financial year under review.
Likely developments
The Trust will continue with its principal activities as detailed earlier in this report.
As the investments are measured at their 30 June 2016 fair values in the financial report, any change in values
subsequent to the end of the reporting period is not reflected in the Statement of Comprehensive Income or the
Statement of Financial Position. However the change in the value of investments is reflected in the current unit
price.
No significant events have occurred since the end of the reporting period which would impact on the financial
position of the Trust disclosed in the Statement of Financial Position as at 30 June 2016 or on the results and
cash flows of the Trust for the year ended on that date.
Interests of the Responsible Entity
The following fees were earned by the Responsible Entity from the Trust during the year:
Responsible Entity fees
2016
2015
$
$
141,162
155,327
Please refer to note 6(b) to the financial statements for details of Trust units held by the Responsible Entity and
its associates.
2
Statement of Financial Position
As at 30 June 2016
Note
2016
2015
$
$
646,517
1,336,381
5,259,867
5,787,374
21,348,222
23,857,830
1,159,770
942,955
690
1,202
250,588
223,146
2,815
3,261
28,668,469
32,152,149
273,777
218,842
14,138
15,700
287,915
234,542
28,380,554
31,917,607
28,355,912
31,872,932
24,642
44,675
28,380,554
31,917,607
Assets
Cash at bank
7(a)
Financial assets at fair value through profit or loss:
8(a)
Overseas–listed equities
Australian–listed equities
Australian–listed equities held via unlisted unit trust
6(b), 9
Loans and receivables:
Interest receivable
Dividends and distributions receivable
Reduced input tax credit receivable
Total assets
Liabilities
Distribution payable
5
Sundry creditors and accruals
Total liabilities (excluding net assets attributable to unitholders)
Net assets attributable to unitholders (liability)
2
Represented by:
- fair value attributable to unitholders at redemption value*
- adjustment arising from different unit pricing and AASB valuation
principles
*Redemption value at redemption price, based on 28,940,511 units
(30 June 2015: 28,688,507)
The above Statement of Financial Position is to be read in conjunction with the accompanying notes.
5
Statement of Comprehensive Income
For the financial year ended 30 June 2016
Note
2016
2015
$
$
1,369,207
1,394,161
14,849
21,694
Revenue
Dividends and distributions
Interest
Net change in the fair value of financial instruments held at fair value
through profit and loss
(3,840,786)
553,940
(2,456,730)
1,969,795
Expenses
Responsible Entity fee
6(b)
Transaction costs
Other expenses
3
Profit from operating activities
141,162
155,327
18,356
16,525
6,508
4,905
166,026
176,757
(2,622,756)
1,793,038
1,192,594
1,246,235
1,192,594
1,246,235
Finance costs
Distribution paid and payable to unitholders
5
Change in net assets attributable to unitholders/ Total
Comprehensive Income
2
(3,815,350)
546,803
The above Statement of Comprehensive Income is to be read in conjunction with the accompanying notes.
6
Statement of Changes in Equity
The Trust’s net assets attributable to unitholders are classified as a liability under AASB 132 Financial
instruments: Presentation. As such, the Trust has no equity and no items of changes in equity have been
presented for the current or comparative year.
The above Statement of Changes in Equity is to be read in conjunction with the accompanying notes
7
Statement of Cash Flows
For the year ended 30 June 2016
Note
2016
2015
$
$
15,361
21,669
1,282,874
1,334,080
Operating activities
Interest received
Dividends and distributions received
7(c)
Transaction costs paid
Distributions paid
7(c)
Responsible Entity fees paid
Other expenses paid
Cash flows from operating activities
7(b)
(18,356)
(16,525)
(1,059,362)
(1,180,154)
(142,437)
(154,364)
(6,348)
(4,820)
71,732
(114)
Investing activities
Proceeds from sale of investments
Purchase of investments
7(c)
Cash flows from investing activities
4,862,938
4,078,231
(5,820,276)
(5,538,937)
(957,338)
(1,460,706)
200,000
2,050,000
200,000
2,050,000
Financing activities
Proceeds from issue of units
7(c)
Cash flows from financing activities
Change in cash and cash equivalents held
(685,606)
Cash and cash equivalents at beginning of year
1,336,381
Effect of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at 30 June
(4,258)
7(a)
646,517
589,180
751,677
(4,476)
1,336,381
The above Statement of Cash Flows is to be read in conjunction with the accompanying notes.
8
1
Summary of significant accounting policies
The Maple-Brown Abbott Australia Plus Asia Trust (the Trust) is a Trust domiciled in Australia and is a for
profit entity. The Trust was constituted on 30 November 2005 and commenced operations on 20
December 2005. The Trust will terminate 80 years (less one day) from the date of commencement or at
such earlier time as provided by the Trust’s Constitution or by the law.
Maple-Brown Abbott Limited is the Responsible Entity. The registered office and principal place of
business of the Responsible Entity is Level 31, 259 George Street, Sydney, NSW 2000.
This annual financial report covers the Trust as an individual entity.
The Annual Financial Report was authorised for issue by the directors on 8 September 2016. The
directors of the Responsible Entity have the power to amend and reissue the financial report.
(a)
Statement of compliance
The Annual Financial Report is a general purpose financial report which has been prepared in
accordance with the Trust’s Constitution (as amended) and Australian Accounting Standards and other
authoritative pronouncements of the Australian Accounting Standards Board (AASB).
The Annual Financial Report of the Trust also complies with International Financial Reporting Standards
(IFRS) and interpretations adopted by the International Accounting Standards Board.
(b)
Basis of preparation
The financial report is presented in Australian dollars.
The financial report is prepared on the basis of fair value measurement of assets and liabilities, except
where otherwise stated.
Changes in accounting policies
The following standards were available for early adoption but have not been applied in the financial
statements:
o
AASB 9 Financial Instruments and applicable amendments (effective from 1 January 2018) was
available for early adoption but has not been applied in the financial statements. AASB 9 replaces
existing guidance on classification and measurement of financial assets and introduces additions
relating to the classification and measurement of financial liabilities (as part of the project to replace
AASB 139 Financial Instruments: Recognition and Measurement). It has also introduced new hedge
accounting requirements and revised certain requirements for impairment of financial assets. AASB
9 becomes mandatory for the Trust’s 30 June 2019 financial statements. Retrospective application
is required. The Responsible Entity has not yet determined the potential effect of the standard.
9
1
Summary of significant accounting policies (continued)
(b)
Basis of preparation (continued)
o
AASB 15 Revenue from Contracts with Customers, (effective from 1 January 2018) the AASB has
issued a new standard for the recognition of revenue. This will replace AASB 118 which covers
contracts for goods and services and AASB 111 which covers construction contracts. The new
standard is based on the principle that revenue is recognised when control of a good or service
transfers to a customer – so the notion of control replaces the existing notion of risks and rewards.
The Trust’s main sources of income are interest, dividends and gains on financial instruments held
at fair value. All of these are outside the scope of the new revenue standard. As a consequence, the
directors do not expect the adoption of the new revenue recognition rules to have a significant
impact on the Trust's accounting policies or the amounts recognised in the financial statements.
The accounting policies set out below have been consistently applied to all periods presented in the
Annual Financial Report.
(c)
Specific instruments:
Cash and cash equivalents
Cash and cash equivalents include cash at bank, short term deposits held at call with banks and bank
bills of exchange and are valued at cost.
Derivatives
Derivative financial instruments are held for trading and accounted for on a fair value basis using the
most recent verifiable source of market prices. Fair values are obtained using quoted market prices or
determined through the use of valuation techniques. All derivatives are carried as assets when the fair
value is positive and as liabilities when fair value is negative.
The Trust does not designate any derivatives as hedges in a hedging relationship.
Other Financial instruments
Financial assets
Financial assets of the Trust are classified either as “fair value through profit or loss” or as “loans and
receivables”.
Fair value through profit or loss
Financial assets which are classified as “fair value through profit or loss” are recognised or derecognised
by the Responsible Entity as such at trade date. They are initially recognised at fair value, excluding
transaction costs, which are expensed as incurred. Thereafter they are re-measured at fair value, with
any resultant gain or loss recognised immediately as revenue in the Statement of Comprehensive
Income.
10
1
(c)
Financial instruments (continued)
Financial assets’ fair values are determined as follows:
Overseas-listed equities
These securities are valued at their quoted bid price on the exchange on which such securities are
traded as of the close of business on the day the securities are being valued.
Australian-listed equities
These securities are valued at their quoted bid price on the Australian Securities Exchange as of the
close of business on the day the securities are being valued.
Australian-listed equities held via unlisted unit trusts
Listed equities may be held via units in unlisted unit trusts which are valued at redemption price as
reported by the manager of the trust as at close of business on the day the trusts are being valued.
Loans and Receivables
Financial assets classified as “loans and receivables” include balances due from brokers, dividends and
distributions receivable and other income receivable. These financial assets are carried at amortised
cost using the effective interest method less impairment losses if any.
Loans and receivables are of a short term nature and hence their carrying value approximates fair value.
Financial liabilities
Financial liabilities of the Trust are either measured at “fair value through profit or loss” or at “amortised
cost” using the effective interest method.
Financial liabilities other than those at “fair value through profit or loss” include distributions payable,
balances due to brokers, redemptions payable and sundry creditors and accruals which are carried at
“amortised cost” using the effective interest method. These financial liabilities are of a short term nature
and hence their carrying value approximates fair value.
Financial liabilities arising from the issue of redeemable units in the Trust are carried at the redemption
amount representing the unitholders’ rights to a residual interest in the Trust’s assets at reporting date
which approximates fair value.
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount reported in the Statement of Financial
Position when there is a legally enforceable right to offset the recognised amounts and there is an
intention to settle on a net basis, or realise the asset and settle the liability simultaneously.
11
1
(d)
Foreign currency translation
Transactions during the year denominated in foreign currency have been translated at the exchange rate
prevailing at the transaction date. Overseas investments and currency, together with any accrued
income, are translated at the exchange rate prevailing at the reporting date. Unrealised exchange gains
and losses arising on the revaluation of investments are included in investment income, as part of the net
change in the fair value of investments. All other material foreign currency exchange differences relating
to monetary items, including cash and cash equivalents are presented separately in the Statement of
Comprehensive Income.
(e)
Revenue and expenses
Dividends are recognised as revenue on the date the shares are quoted ex-dividend. Distributions from
unlisted unit trusts are recognised as at the date the unit value is quoted ex-distribution. Where a
present entitlement to a distribution exists at year end, it is derived for tax purposes.
Interest on cash deposits is calculated using the effective interest method and is recognised as revenue
in the Statement of Comprehensive Income on an accruals basis.
Net change in the fair value of financial instruments held at fair value through profit and loss is
determined as the difference between the fair value at year end or consideration received (if sold during
the year) and the fair value as at the prior year end or acquisition (if the investment was acquired during
the year).
Transaction costs incurred in the acquisition and disposal of assets are expensed in the Statement of
Comprehensive Income on an accruals basis.
Expenses, including Responsible Entity fees, are recognised in the Statement of Comprehensive Income
on an accruals basis.
(f)
Finance costs
Distributions paid and payable are recognised in the Statement of Comprehensive Income as finance
costs. Distributions paid are included in the Statement of Cash Flows as cash flows from operating
activities.
(g)
Change in net assets attributable to unitholders
Unrealised gains and losses arising from movements in the fair value of assets are held within net assets
attributable to unitholders. The taxable and concessionally taxed portions of realised capital gains on the
disposal of investments are distributed to unitholders in the period for which they are assessable for tax
purposes.
(h)
Taxation
Under current legislation the Trust is not subject to income tax as the taxable income (including net
realised capital gains) is distributed in full to the unitholders in the period in which they are assessable for
taxation purposes.
The price of a unit is based on the fair values of underlying assets and thus may include a share of
unrealised taxable capital gains/losses. Should a net gain be realised, that portion of the gain that is
subject to capital gains tax in the hands of the unitholders will be included in any future distributions
made by the Trust.
12
1
(h)
Taxation (continued)
Any balance of realised capital losses is not distributed to unitholders but is carried forward to be offset
against any future realised capital gains. If realised capital gains exceed realised capital losses, the
excess is distributed to the unitholders.
(i)
In accordance with AASB 132, the units issued by the Trust give rise to a financial liability as:
(j)
o
all units issued by the Trust provide unitholders with the right to redeem their units at the
unitholders’ option. The fair value of redeemable units is measured at the redemption price that is
payable at the Statement of Financial Position date. As the Trust’s redemption price is based on
different valuation principles to that applied in financial reporting, a valuation difference exists, which
has been treated as a separate component of net assets attributable to unitholders;
o
distributions of the Trust’s distributable income is mandatory as prescribed by the Constitution; and
o
the Trust has a fixed life of 80 years.
Determination of redemption price for units in the Trust
The redemption price is determined in accordance with the Constitution and is calculated as the value of
the assets of the Trust less its liabilities, adjusted for estimated transaction costs, divided by the number
of units on issue.
(k)
Goods and services tax (GST)
The Responsible Entity fees and other expenses are recognised net of the amount of GST recoverable
as a reduced input tax credit (RITC). Receivables and payables are stated inclusive of GST. Cash flows
are included in the Statement of Cash Flows on a gross basis.
2
Opening balance
Applications
Redemptions
2016
2015
$
$
31,917,607
29,243,705
278,297
2,127,099
-
(3,815,350)
Closing balance
28,380,554
546,803
31,917,607
The Responsible Entity considers net assets attributable to unitholders as capital. This capital is
invested in accordance with the provisions of the Trust’s Constitution. The Responsible Entity may make
additional investments in the case of net applications, or realise investments in the case of net
redemptions, depending on the desired level of liquidity in the Trust. Under the Trust's Constitution, the
Responsible Entity may suspend applications or redemptions if it is considered to be in the best interests
of unitholders.
13
3
Other expenses
2016
2015
$
$
Total audit expense*
4,820
4,508
Bank charges & other expenses
1,688
397
Total other expenses
6,508
4,905
2016
2015
$
$
15,273
14,965
* The total audit fee paid by the Trust is partly subsidised by the Responsible Entity.
4
Auditor’s remuneration
Audit services – KPMG*:
Audit of the Annual Financial Report
* Represents the agreed fees (net of RITC) for the audit of the Annual Financial Report and Compliance plan.
5
Distributions paid and payable
2016
2015
$ per
$ per
$
unit
$
unit
Distribution paid – September quarter
518,984
0.0180
410,648
0.0144
Distribution paid – December quarter
333,135
0.0115
401,034
0.0140
Distribution paid – March quarter
Distribution payable – June quarter
Total
66,698
0.0023
215,711
0.0075
273,777
0.0095
218,842
0.0076
1,192,594
0.0413
1,246,235
0.0435
Unrealised capital gains/(losses) and realised capital losses carried forward
2016
2015
$
$
73,376
2,314,714
Balances at 30 June
Net unrealised capital gains for tax
Net realised capital losses for tax
(59,595)
(733,547)
Unrealised capital gains and realised capital losses carried forward have been calculated in accordance
with the relevant tax legislation and have not been reported in the financial statements, refer note 1(h).
14
6
Related parties
(a)
Responsible Entity and Key Management Personnel
Maple-Brown Abbott Limited (ABN 73 001 208 564) is the Responsible Entity of the Trust. Maple-Brown
Abbott Limited is also the investment manager of the Trust.
As Responsible Entity, Maple-Brown Abbott Limited is regarded as fulfilling the role and obligations of
key management personnel of the Trust. The directors of Maple-Brown Abbott Limited are regarded as
key management personnel of that company and not of the Trust.
(b)
Responsible Entity
The names of the persons who were directors of the Responsible Entity during or since the end of the
year are as follows:
Name
Period of directorship
J K Kightley
G M Rossler
E J Cloney AM
M J Wilkins
R A Grundy
G R Bazzan
D L Maple-Brown
T T Robinson
R A R Lee
Appointed 11/02/1994
Appointed 17/02/2000, Retired 22/10/2015
Loans to key management personnel of Maple-Brown Abbott Limited
The Trust has not made, guaranteed or secured, directly or indirectly, any loans to the key management
personnel of Maple-Brown Abbott Limited, or their personally related entities at any time during the
reporting period.
Other transactions with key management personnel of Maple-Brown Abbott Limited
Apart from those details disclosed in this note, no key management personnel of Maple-Brown Abbott
Limited have entered into a contract for services with the Trust since the end of the previous financial
year.
Remuneration
The Responsible Entity’s fees are calculated in accordance with the Trust’s Constitution. The
Responsible Entity’s fee is 0.47% (exclusive of GST, refer note 1(k)) per annum, accrued daily and paid
monthly based on the net asset value of the Trust. The total fee of $141,162 (2015: $155,327) is
disclosed as an item of expense in the Statement of Comprehensive Income and the fee paid during the
year is disclosed separately in the Statement of Cash Flows.
If the Trust, after all charges, outperforms the S&P/ASX 300 Index (Total Returns) (Benchmark) by more
than 3% per annum, then the Responsible Entity is entitled to an incentive fee of 20% of the amount of
such outperformance. No outperformance fee is payable unless and until all past underperformance, if
any, is made up.
15
6
Related parties (continued)
(b)
Responsible Entity (continued)
Balances payable
The aggregate amounts payable to the Responsible Entity by the Trust at 30 June are as follows:
Responsible Entity fee
2016
2015
$
$
12,212
13,898
These amounts are included in sundry creditors and accruals in the Statement of Financial Position.
Related Party Transactions
Investing activities (in other Maple-Brown Abbott trusts)
The Trust may purchase and sell units in other registered managed investment schemes managed by
the Responsible Entity in the ordinary course of business at application and redemption prices calculated
in accordance with the Constitutions of those trusts. Where the Trust invests in such other schemes, no
additional investment management or responsible entity fees are charged in respect of these inter-fund
investments.
Details of the Trust’s investment in the Maple-Brown Abbott Small Companies Trust are set out below:
Number of units
held
Fair value
Interest
held
Units purchased
during the year
Units sold
during the year
Distributions
received/receivable
during the year
2016
$
%
$
1,373,774
1,159,770
0.93
275,783
-
56,237
1,097,991
942,955
0.77
290,635
-
32,985
2015
The transactions with the Maple-Brown Abbott Small Companies Trust are carried out on the same terms
and conditions as for the other unitholders in that Trust.
7
Notes to the Statement of Cash Flows
(a)
Components of cash and cash equivalents
Cash at bank
2016
2015
$
$
646,517
1,336,381
16
7
Notes to the Statement of Cash Flows (continued)
(b)
Reconciliation of change in net assets attributable to unitholders to cash flows from
operating activities
2016
2015
$
$
(3,815,350)
546,803
Adjustment for:
Distribution reinvested
Dividend and distribution income reinvestment
78,297
77,099
(58,455)
(74,192)
Net change in the fair value of financial instruments held at fair value through
profit and loss
3,840,786
(553,940)
Changes in operating assets and liabilities during the year:
Interest, dividends and distribution receivables
(27,365)
RITC receivable
(443)
Distributions payable
54,935
(11,018)
(1,562)
1,491
Cash flows from operating activities
(c)
14,086
446
71,732
(114)
Non-cash operating, financing and investing activities
The following amounts are not included in the Statement of Cash Flows:
Operating activities
Dividend and distribution income reinvestment
During the year the Trust received dividends and distributions in the form of shares or units via a dividend
or distribution reinvestment plan (DRP). The value of the shares or units received is based on the market
value as determined by the DRP rules and is detailed below:
Dividends and distributions received in the form of shares or units
2016
2015
$
$
58,455
74,192
Financing activities
Unitholder distributions reinvested and in-specie transfer of assets
The Trust issues new units in consideration for the reinvestment of distributions payable to unitholders.
The value of the units and number of units issued during the year is summarised below:
2016
2015
$
Units
$
Units
78,297
76,718
77,099
70,406
Units issued
Unitholder distributions reinvested
17
7
Notes to the Statement of Cash Flows (continued)
(c)
Non-cash operating, financing and investing activities (continued)
Investing activities
The above dividend and distribution income reinvestments are not included in the Statement of Cash
Flows relating to the purchase of investments.
8
Risks and capital management objectives
The Trust's activities expose it to a variety of risks: market risk (including price risk, interest rate risk and
currency risk), liquidity risk, credit risk and operational risk.
The Responsible Entity seeks to minimise the Trust’s financial risks through a variety of activities,
including diversification of the investment portfolio and the selection of liquid investments in accordance
with the specific investment policies and restrictions set out in the Product Disclosure Statement.
The key element in the Trust’s investment philosophy is to seek to buy investments that offer relatively
good long term value. The investment philosophy can also be described as contrarian and conservative,
which helps to minimise its finance risks described above.
The nature and extent of the financial instruments outstanding at the balance date and the risk
management policies employed by the Trust are discussed below together with the specific investment
objectives and policies applicable to the Trust.
(a)
Market risk
Market risk is the risk that the value of a financial instrument will change as a result of exposure to
market price changes, interest rate changes and currency movements.
Price risk
The Trust’s market price risk is managed on a daily basis in accordance with the following specific
investment policies and restrictions:
Investment policies
The Responsible Entity will invest at least 70% of the portfolio in Australian-listed equity securities of
companies and may invest up to a maximum of 20% in Asian-listed equities.
Investment restrictions
The main guideline in relation to portfolio composition is that individual stock weightings will be limited to
5% of the total portfolio. Also, there is a limit of the total portfolio up to 10% that applies to stocks of any
one country outside Australia and up to 5% of the market value of the Trust may be invested in the
Maple-Brown Abbott Small Companies Trust.
18
8
(a)
Market risk (continued)
Market exposures
As at 30 June the market exposures were as follows:
2016
2015
$
$
5,259,867
5,787,374
21,348,222
23,857,830
1,159,770
942,955
27,767,859
30,588,159
Australian-listed equities held via unlisted unit trust
Total
Carrying amounts versus fair values
The fair values of financial assets and financial liabilities approximates their carrying amounts in the
Statement of Financial Position.
Sensitivity analysis
The table below details the approximate change in net assets attributable to unitholders if there is a
percentage change in the Benchmark assuming all other variables are constant:
2016
% change
2015
$
% change
$
Increase in the Benchmark
10
2,693,482
10
2,752,934
Decrease in the Benchmark
10
(2,693,482)
10
(2,752,934)
Fair value measurement recognised in the Statement of Financial Position
The fair value measurement disclosures use a three-tier value hierarchy that reflects the significance of
the inputs used in measuring fair values. The fair value hierarchy is comprised of the following levels:
o
Level 1 – fair values measured using quoted prices (unadjusted) in active markets for identical
instruments;
o
Level 2 – fair values measured using directly (i.e. as prices) or indirectly (i.e. derived from prices)
observable inputs, other than quoted prices included in Level 1; and
o
Level 3 – fair values measured using inputs that are not based on observable market data
(unobservable inputs)
19
8
(a)
At 30 June the financial instruments carried at fair value split by valuation method is summarised below:
2016
Level 1
Level 2
Level 3
Total
$
$
$
$
5,259,867
21,348,222
1,159,770
27,767,859
5,787,374
23,857,830
942,955
30,588,159
-
Total
-
-
5,259,867
-
-
21,348,222
-
-
1,159,770
-
-
27,767,859
-
-
5,787,374
-
-
23,857,830
-
-
942,955
-
30,588,159
2015
Total
Transfers between levels
The Trust’s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the
end of the reporting period.
There were also no changes made to any of the valuation techniques applied as of 30 June 2016.
There have been no transfers between levels in the fair value hierarchy at the end of 30 June 2016. The
tables below detail the movements in Level 3 securities for the year ended 30 June 2015:
Suspended listed
Opening balance
Transfer into Level 3
Total gains and losses recognised in profit or loss
Purchases
Sales
30 June 2015
security
Total
$
$
20,601
20,601
-
-
33,638
33,638
(54,239)
(54,239)
-
-
* The Responsible Entity, on the 5 August 2014, determined that the carrying value of Chaoda Modern Agriculture was to be written down to zero as the short term
prospects of resolution were significantly impaired. On the 2 February 2015 Chaoda Modern Agriculture relisted on the Hong Kong exchange and was sold on the
same day for $54,239.
20
8
(a)
Fair value measurement
Fair value in an active market (level 1)
The fair value of financial assets and liabilities traded in active markets (such as publicly traded
derivatives and equity securities) is based on bid prices at the end of the reporting period without any
deduction for estimated future selling costs. For the majority of financial assets and liabilities, information
provided by the quoted market independent pricing services is relied upon for valuation.
A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly
available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and
those prices represent actual and regularly occurring market transactions on an arm's length basis. An
active market is a market in which transactions for the financial asset or liability take place with sufficient
frequency and volume to provide pricing information on an ongoing basis.
The investments in unlisted trusts included as level 1 in the above table relate to investments in
registered managed investment schemes managed by the Responsible Entity. Further details of these
investments are disclosed in Note 6(b). These investments are valued at their quoted redemption price at
balance date in accordance with Note 1(c).
Fair value in an inactive or unquoted market (level 2 and 3)
The fair value of financial assets and liabilities that are not traded in an active market is determined by
using valuation techniques. Quoted market prices or dealer quotes for similar instruments are used for
debt securities held. The Trust may use a variety of valuation methods and makes assumptions that are
based on market conditions existing at the end of each reporting period. Valuation techniques used for
non-standardised financial instruments, such as over-the-counter derivatives, include the use of
comparable arm's length transactions, reference to the current fair value of a substantially similar other
instrument or any other valuation technique that is commonly used by market participants which
maximises the use of market inputs and relies as little as possible on entity-specific inputs.
For other pricing models, inputs are based on market data at the end of the reporting period.
The output of a model is always an estimate or approximation of a value that cannot be determined with
certainty, and valuation techniques employed may not fully reflect all factors relevant to the positions
held. Valuations are therefore adjusted, where appropriate, to allow for additional factors including
liquidity risk and counterparty risk.
Fair value measurements using significant unobservable inputs (level 3)
The Trust did not hold any financial instruments with fair value measurements using significant
unobservable inputs during the year ended 30 June 2016.
For the year ended 30 June 2015 the level 3 holding related to the Trust’s shareholding in Chaoda
Modern Agriculture. On 27 September 2011 Chaoda was suspended from trading on the Hong Kong
Exchange. The Responsible Entity, on the 5 August 2014, determined that the carrying value of Chaoda
Modern Agriculture was to be written down to zero as the short term prospects of resolution were
significantly impaired. On the 2 February 2015 Chaoda Modern Agriculture relisted on the Hong Kong
exchange and was sold on the same day for HKD 60.19c per share totalling $54,239.
21
8
(a)
Financial instruments not measured at fair value
The carrying value less impairment provision of other receivables and payables are assumed to
approximate their fair values due to their short term nature.
Interest rate risk
The majority of the Trust's financial assets and liabilities are non-interest bearing. As a result, the Trust
is not subject to significant amounts of risk due to fluctuations in the prevailing levels of market interest
rates on interest bearing financial assets and liabilities. Any excess cash and cash equivalents are
invested at short term market interest rates. The Responsible Entity monitors the overall exposure to
cash and consequently interest rate sensitivity on a daily basis.
At 30 June the Trust’s exposure to interest rate risk is set out below:
Floating interest
Fixed interest
rate
rate
Total
$
$
$
646,517
-
646,517
Total
646,517
-
646,517
1,336,381
-
1,336,381
Total
1,336,381
-
1,336,381
2016
2015
Currency risk
Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due
to changes in foreign exchange rates for financial instruments denominated in currencies other than the
functional currency (AUD) of the Trust.
The Trust holds investments in a number of countries. If the currencies of those countries change in
value relative to the base currency (AUD Dollar), the value of the financial instruments will change and
this is reflected in the fair value of the investments on the Statement of Financial Position.
The Investment Manager does not consider currency levels when determining country exposure;
however currency forecasts are taken into account when making investments at the stock level. The
risks in relation to country exposure are set out above under price risks.
The Investment Manager’s normal position with regard to foreign exchange exposure is to remain
unhedged.
22
8
(a)
The table below shows the currency exposure of the Trust’s financial assets. The Trust has no material
exposure to net monetary financial assets designated in foreign currency. Accordingly, no sensitivity
analysis has been disclosed. The exposure to movements in the fair value of the investments (which
includes foreign currency exposure) is included in the price sensitivity analysis.
At 30 June 2016
AUD
(b)
At 30 June 2015
Investments
Net
Monetary
Assets
Investments
Net
Monetary
Assets
Total
$
$
$
%
Total
$
$
$
%
22,507,993
598,365
23,106,358
81.5
24,800,784
1,298,554
26,099,338
81.8
3,163,874
19,803
3,183,677
10.0
HKD
2,661,500
12,410
2,673,910
9.4
KRW
203,213
-
203,213
0.7
170,959
-
170,959
0.5
MYR
448,804
1,920
450,724
1.6
457,764
1,704
459,468
1.4
SGD
460,884
-
460,884
1.6
425,761
-
425,761
1.3
TWD
-
-
-
-
-
25
25
-
USD
1,485,465
-
1,485,465
5.2
1,569,017
9,362
1,578,379
5.0
Total
27,767,859
612,695
28,380,554
100.0
30,588,159
1,329,448
31,917,607
100
Liquidity risk
The liquidity risk to which the Trust is exposed arises because unitholders may request redemption of their
units in the Trust from time to time, which under normal circumstances are payable within periods of up to
six business days. Liquidity risk is minimised through the Trust maintaining sufficient cash and selecting
liquid investments traded on a recognised reputable stock exchange and holding investments in unlisted
unit trusts which hold investments traded on a recognised reputable stock exchange.
The table below shows other financial liabilities at contractual undiscounted cashflow amounts, grouped
into relevant maturities based on the remaining period at 30 June to the contractual maturity date.
Less than 1
2016
Total
3-12
More than
Redeemable
month
1-3 months
months
12 months
upon request
Total*
$
$
$
$
$
$
273,777
-
-
-
-
273,777
12,212
1,926
-
-
-
14,138
-
-
-
-
28,380,554
28,380,554
285,989
1,926
-
-
28,380,554
28,668,469
2015
Total
218,842
-
-
-
-
218,842
13,898
1,802
-
-
-
15,700
-
-
-
-
31,917,607
31,917,607
232,740
1,802
-
-
31,917,607
32,152,149
* The carrying amounts equal the contractual cashflow amounts
23
8
(b)
Liquidity risk (continued)
The Trust’s Constitution permits the Responsible Entity to suspend withdrawals if it’s considered to be in
the best interests of investors.
(c)
Credit risk
Credit risk is the risk that the Trust may incur a loss if other parties fail to perform their obligations under
the financial instruments which comprise the Trust’s investment portfolio. Any non-equity investments
generally incorporate credit assessments in investment valuations and the risk of loss is implicitly provided
for in the determination of the fair value of such investments. The Trust also has a credit risk exposure in
relation to its undertaking transactions with counterparties such as brokers, banks and other financial
intermediaries.
The Trust minimises concentrations of credit risk by transacting through a number of brokers all of whom
operate on recognised and reputable exchanges. The credit risk exposure to any one counterparty is low.
Total credit risk for the Trust arising from recognised financial instruments is limited to the value of the
Trust’s investments and receivables shown in the Statement of Financial Position. Cash and cash
equivalents are held with banks with a rating of BBB+ or higher (as determined by Standard & Poor’s).
(d)
Operational risk
Operational risk is the risk of direct or indirect loss to the Trust associated with the Responsible Entity’s
processes, personnel, technology and infrastructure, and from external forces (other than credit, market
and liquidity risks) such as those arising from changes to legal and regulatory requirements.
The objective of the Responsible Entity in managing operational risk is to mitigate as much as possible the
risk of financial losses and damage to reputation, commensurate with overall cost effectiveness.
The Responsible Entity is responsible for the development and implementation of controls to address
operational risk. This responsibility is supported by the development of an overall control framework
implemented to manage operational risk, key aspects of which include:
o
appropriate segregation of duties, including the independent authorisation of transactions;
o
cash and securities positions are completely and accurately recorded and reconciled to third party
data;
o
monitoring the performance of external service providers, including financial information received
from them;
o
documentation of controls and procedures;
o
periodic assessment of operational risks faced, and the adequacy of controls and procedures to
address the risks identified;
o
reporting of operational losses and proposed remedial action, with appropriate follow-up;
o
assessment and mitigation of cyber risks and development of contingency business continuity,
including disaster recovery, plans;
o
training and professional development;
o
ethical and business standards; and
o
risk mitigation, including insurance where this is effective.
24
9
Interests in unconsolidated structured entities
At 30 June the unconsolidated structured entities held by the Trust is set out below:
Asset class
Statement of Financial Position reference
2016
Exposure
Fair value
%
$
Australian equities
100
1,159,770
Australian equities
100
942,955
2015
The fair value represents the maximum exposure to loss for each unconsolidated structured entity. The fair
value of the exposure will change daily and in subsequent periods will cease once the investments are
disposed of.
The investment manager of each unconsolidated structured entity is responsible for implementing and
monitoring the entity’s investment objective and strategy. The investment decisions are based on the
analysis conducted by the underlying investment manager. The return of the Trust is exposed to the
variability of the performance of the underlying structured entity.
10
As the investments are measured at their 30 June 2016 fair values in the financial report, any change in
values subsequent to the end of the reporting period is not reflected in the Statement of Comprehensive
Income or the Statement of Financial Position. However the change in the value of investments is
reflected in the current unit price.
No significant events have occurred since the end of the reporting period which would impact on the
financial position of the Trust disclosed in the Statement of Financial Position as at 30 June 2016 or on the
results and cash flows of the Trust for the year ended on that date.
25

Australia Plus AsiaTrust - Maple

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