Fusion Fund - Aberdeen Classic Series

Transcription

1 Fusion Fund - Aberdeen Classic Series Australian Small Companies Fund (formerly Fusion Fund - Credit Suisse Asset Management Australian Small Companies Fund) ARSN Annual report -

2 Fusion Fund - Aberdeen Classic Series Australian Small Companies Fund (formerly Fusion Fund - Credit Suisse Asset Management Australian Small Companies Fund) ARSN Annual report - Contents Directors' report Auditor's independence declaration Income statement Balance sheet Statement of changes in equity Cash flow statement, Notes to the financial statements Directors' declaration Independent auditor's report to the unitholders of Fusion Fund - Aberdeen Classic Series Australian Small Companies Fund Page This annual financial report covers Fusion Fund - Aberdeen Classic Series Australian Small Companies Fund as an individual entity. The responsible entity of Fusion Fund - Aberdeen Classic Series Australian Small Companies Fund (formerly Fusion Fund - Credit Suisse Asset Management Australian Small Companies Fund) is Macquarie Financial Products Management Limited (ABN ). The responsible entity's registered office is No.1 Martin Place, Sydney, NSW

3 (Formerly Fusion Fund - Credit Suisse Asset Management Australian Small Companies Fund) Directors' report Directors' report The directors of Macquarie FinancialProducts Management Limited (a wholly owned subsidiary of Macquarie Group Limited), the responsible entity of FusionFund - Aberdeen Classic Series Australian Small Companies Fund present their report together with the financial report of Fusion Fund - Aberdeen Classic Series Australian Small Companies Fund (the "Fund") for the year ended. Principal activities The Fund deliver:; investment returns from investments in managed funds, whilst also protecting against losses by employing a capital management technique referred to as Threshold Management. The Fund did not have any employees during the year. There were no significant changes in the nature of the Fund's activities during the year. Directors The following persons held offce as directors of Macquarie Financial Products or since the end of the year and up to the date of this report: Peter Lucas Anthony Abraham (resigned 20 February 2009) William Fox Simone Mosse Jason King (appointed 20 February 2009) Management Limited during the year Review and results of operations During the year, the Fund maintains its investment strategy in managed funds whilst employing Threshold Management techniques in accordance with provisions of the governing documents of the Fund. Results The performance of the Fund, as represented by the results of its operations, was as follows: Net operating profit/(ioss) before finance costs attributable to unitholders Year ended 30 June 30 June $ $ (1,197,017) (3,895,089) Final Distributions Distribution paid and payable Distribution (cents per unit) Distributions - to redeeming unitholders Distribution paid 136 1,116,491 Unit redemption prices It isthe opinion of the directors that adopting Australian Accounting Standards ("MS") does not have unit pricing consequences, as the basis of unit price accounting is as outlined in the Fund Constitution and the governing documents of the Fund" There is no difference between net assets for unit pricing purposes and net assets as reported in the financial statements.. Significant changes instate of affairs In the opinion of the directors, there were no significant changes in the state of affairs of the Fund that occurred during"the financial year under review. -2-

4 Fusion Fund -Aberdeen Classic Series Australian Small Companies Fund (Formerly Fusion Fund - Credit Suisse Asset Management Australian Small Companies Fund)... Directors' report Directors' report Matters subsequent to the end of the financial year No matter or circumstance has arisen since that has significantly affected, or may significantly affect: (i) the operations of the Fund in future financial years, or (ii) the results of those operations in future financial years, or (iii). the state of affairs of the Fund in future financial years. Likely developments and expected results of operations The Fund will cqntinue to be managed in accordance with the investment objectives and gui,delines as set out in the governing documents of the Fund and in accordance with the provisions of the Fund Constitution. The results of the Fund's operations will be affected by a number of factors, including the performance of investment markets in which the Fund invests. Investment performance is not guaranteed and future returns may differ from past returns. As investment conditions change over time, past returns should not be used to predict future returns. Further information on likely developments in the operations of the Fund and the expected results of those operations have not been included in this report because the responsible entity believes it would be likely to result in unreasonable prejudice to the Fund. Indemnification and insurance of officers and auditors No insurance premiums are paid for out ofthe assets of the Fund in regards to insurance cover provided to either the offcers of Macquarie Financial products Management Limited or the auditors of the Fund. So long as the offcers of Macquarie Financial Products Management Limited act in accordance with the Fund Constitution and the Law, the offcers remain indemnified out of the assets of the Fund against losses incurred while acting on behalf of the Fund. The auditors of the Fund are in no way indemnified out of the assets of the Fund. Fees paid to a"nd interests held in the Fund by the responsible entity or its associates Fees paid to the responsible entity and its associates out of Fund property during the year are disclosed in note 10 on page 18 of the financial statements. No fees were paid out of Fund property to the directors of the responsible entity during the year. The number of interests in the Fund held by the responsible entity or its associates as at the end of the financial year are disclosed in note 10 on page 180f the financial statements. ' Interests in the Fund The movement in units on issue in the Fund during the year is disclosed in note 6 of the financial statements. The value of the Fund's assets and liabilities is disclosed on the balance sheet and derived using the basis set out in note 2 of the financial statements. Environmental regulation The operations of the Fund are not subject to any particular or significant environmental regulations under a Commonwealth, State or Territory law. -3-

5 (Formerly Fusion Fund - Credit Suisse Asset Management Australian Small Companies Fund) Directors' report. 39 June 2009 Directors' report Auditor's Independence Declaration A copy of the Auditor's Independence Declaration as required under section 307C of the Corporations Act 2001 is set out on page 5. This report is made in accordance with a resolution of the directors. Sydney 21 September

6 I PricewaterhouseCoopers ASN Darling Park Tower Sussex Street GPO BOX 2650 SYDNEY NSW1171 DX 77 Sydney Australia ww.pwc.com/au Telephone Facsimile Auditor's independence declaration As lead auditor for the audit of Fusion Fund - Aberdeen Classic Series Australian Small Companies Fund for the year ended, I declare that to the best of my knowledge and belief, there have been: the (a) no contraventions of auditor year.... and 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. This declaration is in respect of Fusion Fund - Aberdeen Classic Series Australian Small Companies Fund during 1! Partner P ricewaterhousecoopers Sydney 21 September 2008 Liability limited by a scheme approved under Professional Standards Legislation -5-

7 Income statement For the year ended Income statement. Notes Year ended 30 June 30 June $ $ Investment income Interest income Distribution income Net gains/(iosses) on financial instruments held at fair value through profit or loss Other operating income Total net investment income/(ioss) 11,929 10, ,378 5 (1,194,560) 45 (4,305,180) (1,181,753) (3,750,076) Expenses Responsible entity's fees Reimbursement of responsible entity out of pocket expenses Other operating expenses Total operating expenses Operating profit/(ioss) 10 12, , ,942 17, ,538 15, ,Q3 (1,197,017) (3,895,089) Finance costs attributable to unitholders Distributions to unitholders (Increase)/decrease in net assets attributable to unitholders Profit/(Ioss) for the year 7 6 (136) 1,197,153 (1,116,491) 5,011,580 The.above income statement should be read in conjunction with the accompanying notes. -6-

8 Fusion Fund - Aberdeen Classic Series Australian Small Companies Fund (formerly Fusion Fund. Credit Suisse Asset Management Australian Small Companies Fund) Balance sheet As at Balance sheet Notes 30 June 2009 $ As at 30 June 2008 $ Assets Cash and cash equivalents 8 Receivables Financial assets held at fair value through profit or loss 9 Total assets Liabilities Responsible entity fees payable 10 Redemptions payables Witholding tax payable Other payables Total liabilities (excluding net assets attributable to unitholders) Net assets attributable to unitholders - liability 6 93, ,749 2, ,648 61,812 6,540, ,945 7,045,227 16, ,623 75, : ,810 94, ;845 63,801 6,677,382 Represented by: Fair value of outstanding units based on redemption value Units issued upon reinvestment of distribution at year end 63,801 63,801 6,667,382 6,667,382 The above balance sheet should be read in conjunction with the accompanying notes. -7-

9 , (formerly Fusion Fund.-Credit Suisse Asset Management Australian Small Companies Fund) Statement of changes in equity For the year ended Statement of changes in equity Total equity at the beginning of the financial year ProfiU(loss) for the year. Net income/(expense) recognised directly in equity Total recognised income and expense for the financial year Year ended 30 June 30 June $ $ Transactions with equity holders in their capacity as equity holders Total equity at the end of the financial year Under Australian Accounting Standards ("MS"), net assets attributable to unitholders are classified as a liability rather than equity. As a result there was no equity at the start or end of the year. The above statement of changes in equity should be read in conjunction with the accompanying notes. / -8-

10 Cash flow statement For the year ended Cash flow statement Cash flows from operating activities Proceeds from sale of financial instruments held at fair value through profi or loss Purchase of financial instruments held at fair value through profit or loss Dividends received Interest received. Other income received Responsible entity's fees paid Payment of other expenses Net cash inflow/(outflow) from operating activities Cash flows from financing activities Proceeds from applications by unitholders Payments for redemptions by unitholders Distributions paid Net cash inflow/(outflow) from financing activities Net increase/(decrease) in cash and cash equivalents~ Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year Notes Year ended 30 June 30 June $ $ 6,608,886 8,263,796 (1,080,750) (2,159,976) 11,929 19,648 10, (155,623) (214,221 ) (82) (657) 11 (a) 5,395,028 5,909,254 1,001,993 2,159,976 (6,552,880) (7,970,387) (5,550,887) (5,810,411) (155,859) 98, , , (b),8 93, ,749 The. above cash flow statement should be read in conjunction with the accompànying notes. -9-

11 (formerly Fusion Fund ~ Credit Suisse Asset Management Australian Small Companies Fund) Notes to the financial statements 1 General information This financial report covers Fusion Fund - Aberdeen Classic Series Australian Small Companies Fund ("the Fund") as an individual entity. The Fund was constituted on 2 February The Fund will terminate on 1 August 2084 unless terminated earlier in accordance with the provisions of the Fund Constitution. The financial statements were authorised for issue by the directors on 21 September2009. The directors of the responsible entity have the power to amend and reissue the financial report. 2 Summary of significant accounting policies The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated in the following text. (a) Basis of preparation This general purpose financial report has been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations and the Corporations Act The financial report is prepared on the basis of fair value measurement of assets and liabilities except where otherwise stated. Compliance with Intemational Financial Reporting Standards (IFRS) The financial report of the Fund also complies with International Financial Reporting Standards as issued by the International Accounting Standards board. (b) Financial instruments (i) Classification The Fund's investments are classified as at fair value through profit or loss. They comprise:. Financial Instruments designated at fair value through profit or loss upon initial recognition. These include financic;l assets that are not held for trading purposes and which may be. sold. These are investments in unlisted trusts. Financial assets and financial liabilities designated at fair value through profit or loss at inception are those that are managed and their performance evaluated on a fair value basis in accordance with the Fund's documented investment strategy. The Fund's policy is for the responsible entity to evaluate the information about these financial assets on a fair value basis together with other related financial information. (ii) Recognition/Derecognition The Fund recognises financial assets and financial liabilities on the date it becomes party to the contractual agreement (trade date) and recognises changes in fair value of the financial assets or financial liabilities designated in the fair value through profit or loss category from this aate. Investments are derecognised when the right to receive cash flows from the investments have expired or the Fund has transferred substantially all risks and rewards of ownership. (iii) Measurement Financial assets and liabilties held at fair value through profit or loss Investments in unit trusts are initially recorded at fair value and revalued at the recording date. Gains and losses (realised and unrealised) are included within total investment income in the income statement, with realised gains being calculated on a specific identified costs basis. Investments in unlisted unit trusts are valued by reference to the prevailing redemption value as reported by the managers of such Funds at the reporting date. - i 0-

12 Notes to the financial statements 2 Summary of significant accounting policies (c) Net assets attributable to unitholders Units are redeemable at the unitholders option and are therefore classified as financial liabilities. The units can be put back to the Fund at any time (subject to Manager approval) for cash equal to a proportionate share of the book value of the Fund's net assets. The fair value of redeemable units is measured at the redemption amount that is payable (based on the redemption unit price) at the balance sheet date if unitholders exercised their right to put the units back to the Fund. (d) Cash and cash equivalents activity. For the purposes of the cash flow statement, cash includes deposits ' at. call which are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Payments and receipts relating to the purchase and sale of financial assets are classified as cash flows from operating activities, as movements in the fair value of these securities represent the Fund's main income generating (e) Investment income Distribution income is recognised when the Fund's right to receive payment is established. Changes in the fair are recognised as value of financial assets and liabilities designated in the fair value through profit or loss category income or expenses in the income statement in the year in which the changes occur. Interest income is recognised in the income statement using the effective interest rate method. (f) Expenses All expenses, including responsible entity's fees and custodian fees, are recognised in the income statement on an accruals basis. (g) Income tax Under current iègislation, the Fund is not subject to income tax as unitholde(s are presently entitled to the income of the Fund. Realisedcapital losses are not distributed to unitholders but are retained in the Fund to be offsetagainst any realised capital gains. If realised capitai gains exceed realised capital losses, the excess is distributed to unitholders. The benefits of imputation credits and foreign tax paid are passed on to unitholders. The Fund currently incurs withholding tax imposed by certain recorded gross of withholding tax in the income statement. countries on investment income. Such income is (h) Distributions In accordance with the Fund Constitution, the Fund fully distributes its distributable (taxable) income to unitholders by cash or r.einvestment. The distributions are payable at the end of June each year and are recognised in the income statement as finance costs attributable to unitholders. (i) Increase/decrease in net assets attributable to unitholders Income not distributed is încluded in net assets attributable to unitholders. Movements in net assets àttributable to unitholders are recognised in the income statement as finance costs. -11-

13 Notes to the financial statements 2 Summary of significant accounting policies ül Redemptions çiistributions Inaccordance with thefund constitution, the Fund distributes a "redemption distribution" when a unit is redeemed and the redemption price of that unit is greater than the application price of that unit. The redemption distribution is included in the redemption price of unit and is accounted for as a distribution paid in the financial statements. (k) Receivables Receivables may include amounts for dividends, interest and trust distributions. Dividends and trust distributions are accrued when the right to receive payment is established. Interest is accrued at the reporting date from the time of last payment in accordance with the policy set out in note 2(e) above. Amounts are generally received within 30 days of being recorded as receivables. (I) Payables Payables include liabilities and accrued expenses owing by the Fund which are unpaid as at balance sheet date. The distribution amount payable to unitholders as at the reporting date is recognised separately on the balance sheet when unitholders are presently entitled to the distributable income date under the Fund's Constitution. (m) Applications and redemptions Applications received for units in the Fund are recorded net of any entry fees payable prior to the issue of units in the Fund. Redemptions from the Fund are recorded gross of any exit fees payable after the cancellation of units redeemed. Unit redemption prices are determined by reference to the net assets of the Fund divided by the number issue less any redemption costs. of units on (n) Goods and Services Tax (GST) The GST incurred on the costs of various services provided to the Fund by third parties such as audit fees and responsible entity fees have been passed onto the Fund. The Fund qualifies for Reduced Input Tax Credits (RITe) at a rate of 75% henc-e responsible entity fees and other expenses have been recognised in the income statement net of the amount of GST recoverable from the Australian Taxation Offce (ATO).Accounts payable are GST. The net amount of GST recoverable from the ATO is included in receivables in the balance sheet. flows relating to GST are Included in the cash flow statement on a gross basis. inclusive of Cash (0) Use of estimates In preparing the financial statements no estimates were made which included a high.degree of judgement. (p) New accounting standards and interpretations Certain new accounting standards and interpretations have been published that are not mandatory for reporting periods. The directors' assessment of the impact of these new standards (to the extent relevant to the Fund) and interpretations is set below:. -12-

14 . Notes to the financial statements 2 Summary of significant accounting policies (p) New accounting standards and interpretations (i) MSB 8 Operating Segments and AASB Amendments to AASB 8 (effective from 1 January 2009). Australian Accounting Standards arising from MSB 8 will result in a significant change in the approach to segment reporting, as it requires adoption of a 'management approach' to reporting on financial performance. The information being reported will be based on What the key decision makers use internally for evaluating segment performance anddeciding how to allocate resources -to operating segments. The Fund will adopt AASB 8 from 1 July The Fund is organised into one main segment which operates solely in the business of investments management within Australia. Consequently, no statements. detailed segment reporting is provided in the Fund's financial Financial Statements and MSB Amendments to Australian (ii) Revised AASB 101 Presentation of Accountig Standards arising from AASB 101 (effective from 1 January 2009). The revised MSB 101 requires the presentation of a statement of comprehensive income and makes changes to affect any of thearrounts recognised in the financial statements. If the statement of changes in equity, but will not the Fund makes a prior period adjustment or re-c1assifies items in the financial statement, it will need to disclose a third balance sheet (statement of financial position), this one being at the beginning of the comparative period. The Fund will apply the revised standard from 1. July (iii) MSB 132 Financial Instruments: Presentation and AASB Amendments to Australian Accounting Standards - Puttable Financial Instruments and Obligations Arising on Liquidation (Revised AASB 132). Revised AASB 132 equity. is applicable for reporting periods beginning on or after 1 January ) The Fund has not adopted this standard early. Application of this standard will not affect any ofthe amounts recognised in the financial statements as the Fund is obligated to distribute all of its taxable income in accordance with the Fùnd's Constitution. Accordingly, there will be no change to classification of unitholders' funds as a liability and therefore no impact on profit or loss and (q) Segment reporting A business segment is identified for a group of assets arid operations engaged in providing products or services that are subject to risks and returns that are different to those of other business segments. A geographical segment is identified when products or services are provided within a particùlar economic environment subject to risks and returns that are different from those of segments operating in othér economic environments. 3 Financial risk management The Fund's activities expose it toavariety of financial risks: market risk (including price risk, foreign exchange risk and interest rate risk), credit risk and liquidity risk. The Fund's overall risk management programme focuses on ensuring compliance with the Fund's Product, Disclosure Statement and seeks to maximise the returns derived for the level of risk to which the Fund is exposed. Financial'riskmanagement is carried out by the responsible entity under policies approved by the Board of Directors of the responsible entity. The Fund uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate, foreign exchange and other price risks and ratings analysis for credit risk. (a) Market risk (i) Price Risk The underlying fund managers provide redi:mption prices for the funds on a monthly basis and the prices as at 30 June 2009 have been used to determine those investments carrying value as at. These are investments in unlisted trusts. This risk is managed by ensuring that all activities are transacted in accordancewith the fund constitution, product disclosure statement, compliance plan and overall investment strategy

15 Notes to the financial statements 3 Financial risk management (a) Market risk The table on page 15 summarises the impact of an increaseldecrease of the underlying investment funds unit prices on the Fund's net assets attributable to unitholders at. The analysis is based on the assumptions that the underlying investment funds unit price increasedldecreased by 15% (2008: 7.5%) with all other variables held constant. The impact mainly arises from the possiblè change in the fair value of investments in unlisted unit trusts. (ii) Foreign exchange risk There is no direct foreign exchange risk in this Fund. Indirect foreign exchange risk cannot be managed as the Fund does not receive sufficient information to assess on a look-through basis. (iii) Interest rate risk The Fund's interest bearing financial assets expose it to risks associated with the effects of fluctuations in the prevailing levels of market interest rates on its financial position and cash flows. The risk is measured using sensitivity analysis. The fund does not have direct exposure to debt instruments, guarantees, collateral and derivatives. The interest rate risk disclosures have been prepared on the basis of the Fund's direct investment and not on a look-through basis for irivestments held indirectly through unit trusts. Consequently, the disclosure of interest rate risk below may not represent the true interest rate risk profie of the Fund where the Fund has significant investments in unit trusts which also have exposure to the interest rate markets. The fund may have an indirect exposure to bonds through its investment in the cash trust. Movements in interest rates will also affect amount of interest earned on cash deposits. The table below fair values. summarises the Fund's exposure to interest rate risks. It includes the Fund's assets and liabilities at Financial assets Cash and cash equivalents Receivables Financial assets held at FVTPL Financial liabilities Payables Net exposure Floating Non-interest Total interest rate bearing $ $ $ 93,890 93,890 2,243 2,243 61,812 61,812 (94,144) (94,144) 93,890 (30,089) 6~, June 2008 Financial assets Cash and cash equivalents Receivables Financial assets held at FVTPL Financial liabilities Payables Net exposure Floating Non-interest Total bearing $ $ $ interest rate 249, , , ,648 6,540,830 6,540,830 (367,845) (367,845) 249,749 6,427,633 6,677,

16 Notes to the financial statements 3 Financial risk management (a) Market risk The table below summarises the impact of an increaseldecrease of interestrates on the Fund's operating profi and net assets attributable to unitholders through changes in fair value or changes in future cash flows. The analysis is based on the assumption that interest rates changed by basis points ( basis points) from the year end rates with all other variables held constant. The impact mainly arises from changes in the fair value of fixed interest securities. (b) Summarised sensitivity analysis The following table summarises the sensitivity of the Fund's operating profit and net assets attributable to unitholders to interest rate risk and price risk. The reasonably possible movements in the risk variables have been determinecj based on management's best estimate, having regard to a number of factors, including historical levels of changes in underlying funds investment unit price. However, actual movements in the risk variables may be greater or less than anticipated due to a number of factors, including unusually large market shocks resulting from changes in the performance of the economies, markets and securities in which the underlying fund invests. As a result, historic variations in risk variables are not a definitive indicator of future variations in the risk variables. The variables for price risk represent the impact of one day's movement in the price of the underlying equity investment before taking into account the effect of Threshold Management. The Fund uses Threshold Management as an investment technique to manage price risk. Threshold Management seeks to ensure that the value of the Fund's units is at least equal to the original investment at the Threshold Management expiry date as specified in the Product Disclosure Statement. $ $ $ $ Price risk I Interest rate risk Impact on operatingprofitlnet assets attributable to unitholders (9,272) 9,272 (469) June 2008 (c) Credit risk (490,562) 490,562 (1,873) The Fund is exposed to credit risk, which is the risk that a counterparty will be unable to pay amounts in full whén they fall due. The exposure to credit risk for cash and cash equivalents is low as all counterparties have a rating of A- as determined by the Standards and Poor's rating agency. Other than the cash and cash equivalents and investment in the underlying fund, the Fund does not have a concentration of a credit risk that arises from an exposure to a single counterparty. Furthermore, the Fund does not have a material exposure to a group of counterparties which are expected to be affected similarly by changes in economic or other conditions. There are no non-performing assets in the fund. The carrying amount of the financial assets best represents the Fund's maximum credit risk exposure at balance date. 1,873 (d) Liquidity Risk Liquidity risk is the risk that the Fund will experience difficulty in either realising assets or otherwise raising sufficient funds to satisfy commitments. There is rio significant direct liquidity risk in this Fund as the responsible entity has discretion whether to accept or reject a redemption request as stipulated in the product disclosure statement. Indirect risk cannot be managed as the Fund does not have sufficient information to assess on a look-through basis. -15-

17 Fusion Fund - Aberdeen Classic.Series Australian Small Companies Fund Notes to the financial statements 4 Auditor's remuneration Auditors remuneration of $7,910 (2008:$8,800) in relation to the audit and review of the financial statements are paid for by Macquarie Financial Products Management Limited, the responsible entity. In the current year, the responsible entity has recharged an amounttocover expenses paid for on behalf of the Fund, including the 2009 audit fees. The re-charge is disclosed in Note Net gains/(iosses) on financial instruments held at fair value through profit or loss Net gains/(losses) have been calculated on a specific identified costs basis in line with the Fund's tax calculations. Net gains/(iosses) on financial instruments held at fair value through profit or loss Net unrealised gain/(loss) on financial assets at fair value through profit or loss Net realised gain/(loss) on financial assets at fair value through profi or loss Net gains/(losses) on financial assets held at fair value through profit or loss Year ended 30 June 30 June $ $ (3,812,753) 2,618,193 (1,194,560) (5,011,508) 706,328 (4,305,180) 6 Net assets attributable to unitholders As stipulated within the Fund's Constitution, each unit represents an equal undivided interest in the Fund's assets. There are 3 classes of unitholders in the Fund. The units are held in separate Threshold Management... Movements in number of) units and net assets attributable to unitholders during the year classes, by release, for the purposeof were as follows: As at 30 June 30 June 30 June 30 June , No. No. $ $. Net assets attributable to unitholders - June 2004 release Opening balance 1,369,058 6,202,083 1,444,356 8,718,581 Applications 135,360 1,661, ,519 2,159,976 Redemptions (1,501,920) (6,494,776) (1,363,346) (6,865,066) Units issued upon reinvestment of distributions Increase/(decrease) in net assets attributable to unitholders (215,469) (2,569,135) Closing balance. 2,~98 1,369,058 2,060 1,444,356-16~

18 Notes to the financial statements 6 Net assets attributable to unitholders As at 30 June 30 June 30 June 30 June No. No. $ $ Net assets attributable to unithç)lders - November 2004 release Opening balance 1,745,813 1,953,034 1,904,927 3,213,937 Applications 175, ,475 Redemptions (1,889,579) (207,221 ) (1,635,244) (246,372) Units issued upon reinvestment of distributions Increas~/(decrease) in net assets attributable to unitholders (373,670) (1,062,638) Closing balance 32,123 1,745,813 26,488 1,904,927 As at 30 June 30 June 30 June 30 June No. No. $ $ Net assets attributable to unitholders - June 2005 Release Opening balance 3,139,715 3,886,235 3,328,099 5,566,854 Applications 791, ,056 Redemptions (3,888,408) (746,520) (3,417,888) (858,948). Units issued upon reinvestment of distributions Increase/(decrease) in net assets attributable to unitholders (608,014) (1,379,807) Closing balance 42, ,715 35,253 3,328,099 Total net assets attributable to unitholders 63,801 6,677,382 7 Distributions to unitholders The distributions paidlpayable were as follows: Year ended 30 June 30 June 30 June 30 June $ CPU $ CPU Distributions paid to redeeming unitholders 136 1,116,491 Total distributions 136 1,116,491 For the various classes of units, interim distributions are paid by way of cash or reinvestment. The cents per unit are the same across all classes of units although the proportion of cash distribution and reinvested distribution are not necessarily the same. The final distribution is reinvested, effective as at 30 June 09. The total distribution per unit is the same for all classes of units and each class has an equal right to receive this distribution. -17-

19 Fusion Fund. Aberdeen Classic Series Australian Small Companies Fund (formerly Fusion Fund - Credit Suisse Asset Managemení: Australian Small Companies Fund) Notes to the financial statements 8 Cash and cash equivalents 30 June 2009 $ As at 30 June 2008 $ Cash at bank 93, ,749 Cash at the end of the financial year, as shown in the statement of cashflows,is reconciled to the related items in the balance sheet as detailed above. These accounts are interest bearing. The average interest rate for the year was 3.53% (2008: 5.24%). 9 Financial assets held at fair value through profit or loss 30 June 2009 Fair value $ As at 30 June 2008 Fair value $ Unlisted unit trusts Total financial assets held at fair value through profit or loss 61,812 61, ,830 6,540, Related party transactions Responsible entity The responsible entity of Fusion Fund - Aberdeen Classic Series Australian Small Companies Fund is Macquarie Financial Products Management Limited.. Key. management personnel (a) Directors Key management personnel includes persons who were directors of Macquarie Financial Products Management Limited at any time during the financial year as follows: Peter Lucas William Fox Simone Mosse Jason King (appointed 20 February 2009) Anthony Abraham (resigned 20 February 2009) (b) Other key management personnel There were no other persons with responsibility for planning, directing and controlling the activities of the directly or indirectly during the financial year, Fund, -18-

20 Notes to the financial statements 10 Related party transactions Responsible Entity's fees and other tran~actions Under the terms of the Fund constitution, the responsible entity is entitled to be paid from the assets of the Fund a fee of up to 3% per annum (GST exclusive) of the value of the assets calculated daily, based on the value of the assets on each day and payable from the assets on 30 June in each year. The current fee charged by the Responsible Entity is 1% per annum (GST exclusive). All related party transactions are conducted on normal commercial terms and conditions. The transactions during the year and amounts payable at the year end between the Fund and the Responsible Entity are as follows: Management fees paid by the Fund to the responsible entity Responsible entity's fees incurred and other transactions Administration expenses incurred by the responsible entity which are reimbursed in accordance with the Fund Constitution Aggregate amounts payable to the responsible entity at the reporting date Related party schemes' unitholdings Year ended 30 June 30 June $ $ 155, ,779 12, ,871 1,942 17,604 16, ,623 There were no interests held in the Fund by the responsible entity or a related party of the responsible entity during the period except as disclosed below Unitholder Jason King Simone Mosse William Fox 2008 Unitholder Number of Number of Number of Number of Distributions units held units. held units units paid/payable opening closing Interest held. acquired disposed by the Fund (Units) (Units) (%) (Units) (Units) ($) Number of Number of Number of Number of Distributions units held units held units units paid/payable opening closing Interest held acquired disposed by the Fund (Units) (ynits) (%) (Units) (Units) ($) Anthony Abraham Simone Mosse William Fox. Key management personnel remuneration Key management personnel are paid by Macquarie Financial Products Management Limited. Payments made from the Fund to Macquarie Financial Products Management Limited do not include any amounts attributable to the compensation of key management personnel. Key management personnel loan disclosures The Fund has not made, guaranteed or secured, directly or indirectly, any loans to the key management personnel or their personally related entities at any time during the year

21 Notes to the financial statements 10 Related party transactions Other transactions within the Fund From time to time the directors of the responsible entity, or their director related entities, may invest in or withdraw from the Fund. These' investments or withdrawals are on the same terms and conditions as those entered into by other Fund investors and are trivial in nature. Apart from those details disclosed in this note, no director has entered into a material contract with the Fund since the end of the previous financial year and there were no material contracts involving directo'r's interests existing at year end. The Fund holds cash balances with Macquarie Bank Limited, the parent entity of the responsible entity. These balances are held on normal commercial terms. The Fund may purchase bonds from Macquarie Bank Limited, or Macquarie Bank Limited may facilitate such a purchase. The purchase of such bonds is on normal commercial terms at market price.. 11 Reconciliation of profit/(ioss) to net cash inflow/(outflow) from operating activities (a) Reconcilation activities of profit/(ioss) to net cash inflow/(outflow) from operating Net profiu(loss) before finance costs.~ Net (gains)/loss on financial assets at fair value Proceeds from sale of financial instruments held at fair value through profit or loss (including net realised gains/(losses)) Purchase of financial instruments held at fair value through profit or loss and derivative financi :l instruments Interest accrued Distribution income reinvested Net change in amounts payable and other liabilities Net change in amounts receivable and other assets N,et cash inflow/(outt/ow) from operating activities Year ended 30 June 30 June $ $ (1,197,017). (3,895,089) 1,194,560 4,305,180 6,608,886 8,263,796 (1,080,750) (2,159,976) 8,922 (544;378) (137,435) 6,784 (74,256) 5,055 5,395,028 5,909,254 (b) Components of cash and cash equivalents Cash as at the end of the financial year as shown in the cash flow statement is reconciled to the balance sheet as follows: Cash and cash equivalents 93,890 93,890 (c) Non-cash financing and investing activities During the year, the following distribution income were satisfied by the issue of units in unlisted unit trust investments During the year, the following distribution payments were satisfied by the issue of units in the Fund 249, ,

22 . Notes to the financial statements 12 Segment information The Fund is organised into one main segment which operates solely in the business of investment management within Australia. Consequently, no segment reporting is provided in the Fund's financial statements. While the Fund operates from Australia only (the geographical segment), the Fund may have investment exposures in different countries and across different industries. The Fund assesses geographical exposure on a direct investment basis as it does not receive sufficient information from the underlying fund managers to provide exposures on a look-through basis. 13 Eventsoccurrin9 date. after the balance sheet. disclosed in the balance sheet as 30 June2009 or on the results and on that No significant events have occurred since balance date which would impact on the financial position of the Fund cash flows of the Fund for the year ended 14 Contingent assets and liabilities and commitments \ There are no outstanding contingent assets and liabilities or commitments as at and 30 June

23 Fusion Fund. Aberdeen Classic Series Australian Small Companies Fund (formerly Fusion Fund - Credit Suisse AssetManagement Australian Small Companies Fund) - Directors' declaration Directors' declaration In the opinion of the directors of the Responsible Entity: (a) the financial statements and notes set out on pages 6 to 21 are in accordance 2001, including: with the Corporations Act (i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and (ii) giving a true and fair view of the Fund's financial position as at and of its performance, for the financial year ended on that date; and (b) there are reasonable grounds to believe that the Fund will be able to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the directors. Sydney 21 September

24 fjcewtfrhouse(oopers I PricewaterhouseCoopers ABN Independent auditor's report to the unitholders of Fusion Fund - Aberdeen Classic Series Australian Small Companies Fund (formerly Fusion Fund - Credit Suisse Asset Management Australian Small Companies Fund) Darling Park Tower Sussex Street GPO BOX 2650 SYDNEY NSW 1171 DX 77 Sydney Australia Telephone Facsimile ww.pwc.com/au Report on the financial report We have audited the accompanying financial report of Fusion Fund - Aberdeen Classic Series Australian Small Companies Fund (formerly Fusion Fund - Credit Suisse Asset Management Australian Small Companies Fund) (the Trust), which comprises the balance sheet as at 30 June 2009,and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors' declaration for the Trust. Directors' responsibility for the financial report The directors of Macquarie Financial Products Management Limited (the Responsible Entity) are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1 (a), the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards. Auditor's responsibilty Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial report 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 entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. Liabilty limited by a scheme approved under Professional Standards Legislation

25 pmcewtrhouse(oopers I Our procedures include reading the other information in the Annual Report to determine whether it contains any material inconsistencies with the financial report. Our audit did not involve an analysis of the prudence of business decisions made by directors or management. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act Auditor's opinion In our opinion: (a) the financial report of Fusion Fund - Aberdeen Classic Series Australian Small Companies Fund is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Trust's financial position as at and of their performance for the year ended on that date; and (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and (b) the financial report and notes also comply with International Financial Reporting Standards as disclosed h\uw~ in Note 1 (a). PricewaterhouseCoopers!t Partner Sydney 21 September 2009