DDH INVESTMENT ACCESS FUNDS

Transcription

1 This is Annexure A of pages referred to in Form 388 dated September Thomas William Collier Company Secretary, DDH Graham Limited September Financial Reports for the year ended 30 June 2017 DDH Conservative Growth ARSN DDH Balanced Growth ARSN DDH Aggressive Growth ARSN DDH Australian Shares ARSN

2 DIRECTORS REPORT The directors of DDH Graham Limited ( the Responsible Entity ), the responsible entity of the s listed below ( the s ), present their report together with the financial report of the s for the year ended 30 June 2017 and the auditor s report thereon. DDH Conservative Growth DDH Aggressive Growth DDH Balanced Growth DDH Australian Shares The Responsible Entity The registered office and place of business of the Responsible Entity is Level 9, 324 Queen Street, Brisbane. The directors of DDH Graham Limited at any time during or since the end of the financial year are: Name and qualifications Age Experience and special responsibilities Peter B Lockhart Executive Chairman and Joint Managing Director Bachelor of Economics Master of Business Administration Ugo C Di Girolamo Joint Managing Director Associate Diploma in Business David D H Graham Director Bachelor of Commerce Bachelor of Economics (Hons) Master of Business Administration Douglas A Graham Chief Operating Officer Bachelor of Commerce Bachelor of Arts 63 Director since Extensive experience in financial advisory and trust and superannuation management services. Member of Compliance Committee. Member of Audit Committee. 55 Director since Over 28 years experience in financial markets including 13 years in an executive money market role. 75 Director since Extensive experience in financial advisory and trust management services. 43 Director since May Extensive experience across a range of industries including finance and information technology. Member of the Institute of Chartered Accountants Australia and New Zealand. Principal activities The s are registered managed investment schemes domiciled in Australia. The principal activity of the s is to invest funds in accordance with their investment objectives as set out in the current Product Disclosure Statement and in accordance with the provisions of their respective Constitutions. The s did not have any employees during the year. The Constitutions authorise investments in a wide range of domestic and overseas securities, including equities, equity derivatives, money market securities, fixed interest securities, managed investments, currencies, options, and future contracts. Exposure to these assets has been made via managed investments operated by QIC Limited. There were no significant changes in the nature of the s activities during the year. Review of operations The investment activities of the s continued to be in accordance with the target allocations as set out in the governing documents of the s and in accordance within the provisions of the s Constitutions. 1

3 DIRECTORS REPORT Results The performances of the s, as represented by the results of their operations, were as follows: DDH Conservative Growth DDH Balanced Growth DDH Aggressive Growth DDH Australian Shares Operating profit 234,574 31,221 2,282,422 (76,906) 1,224,765 (275,332) 1,040,667 16,287 Distributions paid and payable 106, ,990 1,037, , , , , ,310 CPU CPU CPU CPU CPU CPU CPU CPU Distributions (cents per unit) Performance The table below demonstrates the performance of the s as represented by the total return, which is calculated as the aggregation of the percentage capital growth and the percentage distribution of income. These are calculated in accordance with IFSA Standard 6.0 Product Performance Calculation and Presentation of Returns. DDH Conservative Growth DDH Balanced Growth DDH Aggressive Growth DDH Australian Shares % % % % % % % % Capital growth 2.46 (1.85) 5.47 (3.61) 4.27 (6.69) 5.32 (4.84) Distribution of income Total return (0.14) (2.64) Consistent with our statements in the governing documents of the s, future performance is not guaranteed. Investors should exercise care in using past performance as a predictor of future performance. 2

4 DIRECTORS REPORT Unit redemption prices Unit redemption prices are shown as follows: DDH Conservative Growth DDH Balanced Growth DDH Aggressive Growth DDH Australian Shares Redemption prices at 30 June (quoted ex distribution) Redemption prices during year (quoted cum distribution) High Low Value of assets The value of the s assets is derived using the basis set out in Note 3 to the financial statements. DDH Conservative Growth DDH Balanced Growth DDH Aggressive Growth DDH Australian Shares Asset values 4,932,338 5,656,664 23,949,434 23,898,518 8,208,204 8,720,744 8,718,763 8,345,566 Interests in the s The movement in units on issue in the s during the year is as set out below: DDH Conservative Growth DDH Balanced Growth DDH Aggressive Growth DDH Australian Shares No. of units No. of units No. of units No. of units No. of units No. of units No. of units No. of units Opening balance 6,894,708 7,380,526 27,020,845 28,709,178 15,599,530 16,804,186 12,371,085 12,569,022 Applications 63,984 48, ,308 1,123, , , , ,055 Reinvestment of distributions 115, , , , , , , ,890 Redemptions (1,209,268) (957,600) (3,009,928) (3,497,676) (3,111,649) (1,975,539) (1,110,543) (1,274,882) Closing balance 5,864,482 6,894,708 25,338,672 27,020,845 13,218,967 15,599,530 12,018,013 12,371,085 3

5 DIRECTORS REPORT Significant changes in state of affairs In the opinion of the directors, there were no significant changes in the state of affairs of the s that occurred during the financial year under review. Matters subsequent to the end of the financial period There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect significantly the operations of the s, the results of those operations, or the state of affairs of the s, in future financial years. Likely developments and expected results of operations The s will continue to pursue their investment strategies. The results of each s operations will be affected by a number of factors, including the performance of investment markets in which the s invest. 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 about likely developments in the operations of the s and the expected results of those operations have not been included in this report because disclosure of the information would be likely to result in unreasonable prejudice to the s. Indemnification and insurance of officers and auditors Indemnification Under the s Constitution, the Responsible Entity, including its officers and employees, is indemnified out of the s assets for any loss, damage, expense or other liability incurred by it in properly performing or exercising any of its powers, duties or rights in relation to the s. The s have not indemnified any auditor of the s. Insurance Premiums During the financial period the Responsible Entity has paid premiums in respect of its officers for liability and legal expenses insurance contracts for the year ended 30 June The Responsible Entity has paid or agreed to pay in respect of the s, premiums in respect of such insurance contracts for the year ended 30 June Such insurance contracts insure against certain liability (subject to specified exclusions) for persons who are or have been officers of the Responsible Entity. Details of the nature of the liabilities covered or the amount of the premium paid have not been included as such disclosure is prohibited under the terms of the contracts. Fees paid to and interests held in the s by the responsible entity or its associates Fees paid to the responsible entity and its associates out of the s property during the year are disclosed in Note 15 to the financial statements. No fees were paid out of the s property to the directors of the responsible entity during the financial year. The number of interests in the s held by the responsible entity or its associates as at the end of the financial year are disclosed in Note 15 to the financial statements. Environmental regulation The s operations are not subject to any significant environmental regulations under either Commonwealth, State or Territory legislation. 4

6

7

8 STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME Notes DDH Conservative Growth DDH Balanced Growth DDH Aggressive Growth DDH Australian Shares Investment income Trust distribution income 4 159, ,380 1,138, , , , , ,914 Interest income 1,243 1,622 5,410 7,230 2,127 2,503 1,927 2,598 Net gains on financial instruments held at fair value through profit or loss 5 138,469 1,094 1,480,147 (14,487) 672,288 (506,441) 547,535 (359,961) Other income 427 Total investment income 299, ,096 2,624, ,745 1,357,177 (137,901) 1,169, ,551 Expenses Management fees 64,745 73, , , , , , ,264 Total operating expenses 64,745 73, , , , , , ,264 Operating profit 234,574 31,221 2,282,422 (76,906) 1,224,765 (275,332) 1,040,667 16,287 Finance costs attributable to unitholders from operations Distribution to unitholders 8 106, ,990 1,037, , , , , ,310 Increase in net assets attributable to unitholders from operations 7 128,038 (107,769) 1,245,333 (931,880) 433,879 (640,575) 442,211 (433,023) Profit for the year Other comprehensive income Total comprehensive income The Statements of Profit or Loss and Other Comprehensive Income should be read in conjunction with the notes to and forming part of the financial statements set out on pages 11 to 31. 7

9 STATEMENTS OF CHANGES IN EQUITY The s net assets attributable to unitholders are classified as a liability under AASB 132 Financial Instruments: Presentation. As such the s have no equity, and no items of changes in equity have been presented for the current or comparative year. The Statements of Changes in Equity should be read in conjunction with the notes to and forming part of the financial statements set out on pages 11 to 31. 8

10 STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2017 Notes DDH Conservative Growth DDH Balanced Growth DDH Aggressive Growth DDH Australian Shares Assets Cash and cash equivalents 9 63,958 73, , , , , , ,731 Financial assets held at fair value through profit and loss 10 4,824,445 5,538,359 23,151,607 23,271,777 7,830,879 8,351,826 8,363,938 8,048,490 Receivables 11 43,935 44, , , , , , ,345 Total assets 4,932,338 5,656,664 23,949,434 23,898,518 8,208,204 8,720,744 8,718,763 8,345,566 Liabilities Payables 12 10,641 8,978 61,351 28,285 16,488 14,260 16,636 11,235 Distributions payable 8 59,936 68, , , , , , ,990 Total liabilities (excluding net assets attributable to Unitholders) 70,577 77, , , , , , ,225 Net assets attributable to Unitholders liability 7 4,861,761 5,578,690 23,182,395 23,439,674 7,473,629 8,458,559 8,246,771 8,059,341 The Statements of Financial Position should be read in conjunction with the notes to and forming part of the financial statements set out on pages 11 to 31. 9

11 STATEMENTS OF CASH FLOWS Notes DDH Conservative Growth DDH Balanced Growth DDH Aggressive Growth DDH Australian Shares Cash flows from operating activities Proceeds from sale of financial assets 1,148, ,796 2,816,106 2,571,947 7,318, , , ,226 Purchase of financial assets (185,000) (500,000) (380,000) (5,691,581) (30,000) (20,000) (185,000) Interest received 1,670 1,622 5,410 7,230 2,127 2,503 1,927 2,598 Other income Distribution received 48,948 53, , , , , , ,651 Payment of other expenses (63,068) (75,999) (341,530) (381,669) (132,844) (146,577) (128,887) (129,946) Cash from operating activities 17(a) 951, ,726 2,269,988 2,264,652 1,749, , , ,529 Cash flows from financing activities Proceeds from applications by unitholders 52,645 39, , , , , , ,951 Payments for redemption by unitholders (991,252) (789,102) (2,657,923) (3,061,975) (1,832,560) (1,099,650) (769,114) (838,185) Distributions paid (21,957) (106,535) (186,249) (199,652) (43,576) (44,630) (88,421) (156,379) Cash from financing activities (960,563) (855,799) (2,231,657) (2,272,435) (1,737,002) (969,064) (667,797) (817,613) Net increase (decrease) in cash held (9,436) (20,073) 38,331 (7,783) 12,910 (21,353) 10,671 (3,084) Cash at the beginning of the year 73,394 93, , , , , , ,815 Cash at the end of the year 17(b) 63,958 73, , , , , , ,731 The Statements of Cash Flows should be read in conjunction with the notes to and forming part of the financial statements set out on pages 11 to

12 1. REPORTING ENTITY The s listed below form part of a suite of s collectively known as the DDH Investment Access s ( the s ). Each is a registered managed investment scheme domiciled in Australia. The s were constituted on 31 January 2002 (as amended). DDH Conservative Growth DDH Balanced Growth DDH Aggressive Growth DDH Australian Shares The Responsible Entity of the s is DDH Graham Limited (the Responsible Entity). The Responsible Entity s registered office and place of business is Level 9, 324 Queen Street, Brisbane and is incorporated and domiciled in Australia. The financial statements of the s are for the year ended 30 June The financial statements were authorised for issue by the directors of the Responsible Entity on 25 August BASIS OF PREPARATION a) Statement of compliance The financial reports are a general purpose financial report which has been prepared in accordance with Australian Accounting Standards (AASBs) (including Australian Interpretations) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act Australian Accounting Standards include Australian equivalents to International Financial Reporting. The financial report of the s complies with the International Financial Reporting Standards (IFRS s) and interpretations adopted by the International Accounting Standards Board (IASB). b) Basis of measurement The financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value. Financial instruments which are classified as loans and receivables are measured at amortised cost. c) Functional & presentation currency The financial statements of the s are presented in Australian dollars. d) Use of estimates and judgements The preparation of financial statements require management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in future periods affected. There were no key adjustments during the period arising from estimates and judgements. e) Changes in accounting policies The s have consistently applied the accounting policies set out in Note 3 to all periods presented in these financial statements. There are no accounting standards, interpretations, or amendments to existing accounting standards that are effective for the first time for the financial year beginning 1 July 2016 that have a material impact on the s. 11

13 3. SIGNIFICANT ACCOUNTING POLICIES The accounting policies set out below have been applied consistently to all periods presented in these financial statements. (a) Financial Instruments (i) Classification The s investments are classified as at fair value through profit or loss. The investments comprise of financial instruments designated at fair value through profit or loss upon initial recognition including financial assets that are not held for trading purposes and which may be sold. (ii) Recognition The s recognise financial assets and financial liabilities on the date they become a party to the contractual provisions of the instrument. Financial assets are recognised using trade date accounting. From this date any gains and losses arising from changes in fair value of the financial assets or financial liabilities are recorded. Financial liabilities are not recognised unless one of the parties has performed or the contract is a derivative contract not exempted from the scope of AASB 139. (iii) Measurement Financial instruments are measured initially at fair value (transaction price) plus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liability. Transaction costs on financial assets and financial liabilities at fair value through profit or loss are expensed immediately, while on other financial instruments they are amortised. Subsequent to initial recognition, all instruments classified at fair value through profit or loss are measured at fair value with changes recognised in the Statement of Profit or Loss and Other Comprehensive Income. Financial assets classified as loans and receivables are carried at amortised cost using the effective interest rate method, less impairment losses, if any. Financial liabilities, other than those at fair value through profit or loss, are measured at amortised cost using the effective interest rate. Financial liabilities arising from the redeemable units issued by the s are carried at the redemption amount representing the investors right to a residual interest in the s assets, effectively fair value at reporting date. (iv) Fair value measurement principles The fair value of financial assets is based on the redemption value of the unlisted managed investment scheme at the balance sheet date without any deduction for estimated future selling costs. Financial liabilities are priced at current asking prices. (v) Derecognition The s derecognise a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition in accordance with AASB 139. The s use the weighted average method to determine realised gains and losses on derecognition of financial assets not at fair value. A financial liability is derecognised when the obligation specified in the contract is discharged, cancelled or expired. 12

14 (b) (c) (d) (e) (f) (vi) Specific investments Cash and cash equivalents Cash comprises current deposits with banks. Cash equivalents are shortterm highly liquid investments that are readily convertible to known amounts of cash, are subject to an insignificant risk of changes in value and are held for the purpose of meeting shortterm cash commitments rather than for investment or other purposes. Payments and receipts relating to the purchase and sale of investment securities are classified as cash flows from operating activities, as movements in the fair value of these securities represent the s main income generating activity. 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 s at any time for cash equal to proportionate share of the s net asset value. The fair value of redeemable units is measured at the redemption amount that is payable (based on redemption price) at the date if unitholders exercised their right to put the units back to the s. Interest income Interest income and expense is recognised in the Statement of Profit or Loss and Other Comprehensive Income as it accrues, using the original effective interest rate of the instrument calculated at the acquisition or origination date. Interest income includes the amortisation of any discount or premium, transaction costs or other differences between the initial carrying amount of an interestbearing instrument and its amount at maturity calculated on an effective interest rate basis. Interest income on debt instruments at fair value through profit or loss is accrued using the original effective interest rate and classified to the Interest income line item within the Statement of Profit or Loss and other Comprehensive Income. Interest income is recognised on a gross basis, including withholding tax, if any. Trust distribution Income Distribution income relating to unlisted investment funds is recognised in the Statement of Profit or Loss and Other Comprehensive Income when declared. In some cases, the s may receive or choose to receive distributions in the form of additional units rather than cash. In such cases the s recognise the distribution income for the amount of the cash distribution alternative with the corresponding debit treated as an additional investment. Net gains/(losses) on financial instruments held at fair value through profit or loss Net gains/(losses) on financial assets and financial liabilities held at fair value through profit or loss arising on a change in fair value are calculated as the difference between the fair value at year end and the fair value at the previous valuation point. Net gains/(losses) do not include interest or dividend/distribution income. Realised and unrealised gains/(losses) are shown in the notes to the financial statements. Expenses All expenses, including management fees and responsible entity fees, are recognised in the Statement of Profit or Loss and Other Comprehensive Income on an accrual basis. 13

15 (g) (h) (i) (j) (k) Taxation Under current legislation, provided the s distribute in full all taxable income to unitholders the s are not subject to income tax. Financial instruments held at fair value may include unrealised capital gains. Should such a gain be realised that portion of the gain that is subject to capital gains tax will be distributed so that the s are not subject to capital gains tax. Realised capital losses are not distributed to unitholders but are retained in the s to be offset against any future realised capital gains. If realised capital gains exceed realised capital losses the excess is distributed to the unitholders. The benefits of imputation credits and foreign tax paid are passed onto unitholders. Distributions In accordance with the Constitutions of the s and applicable taxation legislation, the s distribute their distributable income and any other amounts determined by the Responsible Entity, to unitholders by cash or reinvestment. The distributions are recognised in the Statement of Profit or Loss and Other Comprehensive Income as finance costs attributable to unitholders. Distributions paid are included in cash flows from financing activities in the Statement of Cash Flows. Unit prices The unit price is based on unit price accounting outlined in the s Constitutions and product disclosure statement. Change in net assets attributable to unitholders Nondistributable income, which may comprise unrealised changes in the fair value of investments, net capital losses, taxdeferred income, accrued income not yet assessable and nondeductible expenses are reflected in the Statement of Profit or Loss and Other Comprehensive Income as change in net assets attributable to unitholders. These items are included in the determination of distributable income in the period for which they are assessable for taxation purposes. Receivables Receivables may include amounts for distributions interest and amounts owed by the investment manager. Distributions are accrued when the right to receive payment is established. Interest is accrued at the reporting date from the time of the last payment in accordance with the policy set out in note 3(c) above. Amounts due from the investment manager represent receivables for securities sold that have been contracted for but not yet delivered at reporting date. Amounts are generally received within 30 days of being recorded as receivables. Such assets are reviewed at the end of each reporting period to determine whether there is objective evidence of impairment. If evidence of impairment exists an impairment loss is recognised in the Statement of Profit or Loss and Other Comprehensive Income as the difference between the assets carrying value and the present value of estimated future cash flows discounted at the original effective interest rate. 14

16 (l) (m) (n) (o) (p) Payables Payables include amounts owing and accrued expenses which are unpaid as at balance date. Amounts owed to the investment manager for purchases of securities and investments that are unsettled at reporting date are included in payables. The distribution amount payable to unitholders as at the reporting date is recognised separately on the Statement of Financial Position as unitholders are presently entitled to the distributable income as at 30 June 2017 under the s Constitution. Applications and redemptions Applications received for units in the s are recorded net of any entry fees payable prior to the issue of units in the s. Redemptions from the s are recorded gross of any exit fees payable after the cancellation of units redeemed. Goods and services tax Management fees, responsible entity fees and other expenses are recognised net of the amount of goods and services tax (GST) recoverable from the Australian Taxation Office (ATO) as a reduced input tax credit (RITC). Payables are stated with the amount of GST included. The net amount of GST recoverable from the ATO is included in receivables in the Statement of Financial Position. Cash flows are included in the Statement of Cash Flows on a gross basis. Impairment of assets At each reporting date, the s review the carrying amounts of its assets to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the s estimates the recoverable amount of the cashgenerating unit to which the asset belongs. Recoverable amount is the higher 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 pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. Any excess of the asset s carrying value over its recoverable amount is expensed to the Statement of Profit or Loss and Other Comprehensive Income. New Accounting Standards and interpretations Certain new accounting standards and interpretations have been published that are not mandatory for the 30 June 2017 reporting period and have not been early adopted by the s. The directors assessment of the impact of these new standards (to the extent relevant to the ) and interpretations is set out below: (i) AASB 9 Financial Instruments (and applicable amendments), (effective from 1 January 2018). AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial assets and financial liabilities. It has now also introduced revised rules around hedge accounting and impairment. The standard is not applicable until 1 January 2018 but is available for early adoption. The directors do not expect this to have a significant impact on the recognition and measurement of the s financial instruments as they are carried at fair value through profit or loss. 15

17 (p) New Accounting Standards and interpretations (continued) The derecognition rules have not been changed from the previous requirements, and the s do not apply hedge accounting. AASB 9 introduces a new impairment model. However, as the s investments are all held at fair value through profit or loss, the change in impairment rules will not impact the s. The s will adopt this standard from 1 January (i) 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 fund's main source of income are interest, distributions and gains on financial instruments held at fair value. All of these are outside the scope of the new revenue standard. As consequence, the directors do not expect the adoption of the new revenue recognition rules to have a significant impact on the 's accounting policies or the amounts recognised in the financial statements. 16

18 4. Trust distribution income DDH Conservative Growth DDH Balanced Growth DDH Aggressive Growth DDH Australian Shares Unlisted managed investment funds 159, ,380 1,138, , , , , , Net gains on financial instruments held at fair value through profit or loss 159, ,380 1,138, , , , , ,914 DDH Conservative Growth DDH Balanced Growth DDH Aggressive Growth DDH Australian Shares Net unrealised gains/losses on units in unlisted managed investment funds 131,899 10,855 1,152, ,502 (474,693) (641,727) 102,747 (438,513) Net realised gains/(losses) on units in unlisted managed investment funds 6,570 (9,761) 328,031 (122,989) 1,146, , ,788 78,552 Total net gains on financial instruments held at fair value through profit or loss 138,469 1,094 1,480,147 (14,487) 672,288 (506,441) 547,535 (359,961) 6. Auditor s remuneration DDH Conservative Growth DDH Balanced Growth DDH Aggressive Growth DDH Australian Shares Audit and review of financial reports Audit and review of Compliance Plan Total remuneration for audit services 3,367 7,036 7,817 7,036 7,817 7,036 7,817 7,036 5,467 2,886 3,367 2,886 3,367 2,886 3,367 2,886 8,834 9,922 11,184 9,922 11,184 9,922 11,184 9,922 Auditor s remuneration is paid by the responsible entity. 17

19 7. Net assets attributable to unitholders As stipulated within the s Constitution, each unit represents a right to an individual share in the relevant and does not extend to a right to the underlying assets of the s. There are no separate classes of units and each unit has the same rights attaching to it as all other units of the relevant. Movements in number of units and net assets attributable to unitholders during the year were as follows: DDH Conservative Growth 30 June 2017 No. Opening balance Applications Redemptions Units issued upon reinvestment of distributions Increase/(decrease) in net assets attributable to unitholders 6,894,708 63,984 (1,209,268) 115, June 2016 No. 7,380,526 48,822 (957,600) 422, June ,578,690 52,646 (991,252) 93, , June ,083,604 39,838 (784,602) 347,619 (107,769) Closing balance 5,864,482 6,894,708 4,861,761 5,578,690 DDH Balanced Growth Opening balance Applications Redemptions Units issued upon reinvestment of distributions Increase in net assets attributable to unitholders 27,020, ,308 (3,009,928) 655,447 28,709,178 1,123,951 (3,497,676) 685,392 23,439, ,515 (2,692,923) 577,796 1,245,333 25,839, ,192 (3,061,475) 604,186 (931,880) Closing balance 25,338,672 27,020,845 23,182,395 23,439,674 DDH Aggressive Growth Opening balance Applications Redemptions Units issued upon reinvestment of distributions Increase in net assets attributable to unitholders 15,599, ,724 (3,111,649) 497,362 16,804, ,359 (1,975,539) 454,524 8,458, ,134 (1,832,561) 274, ,879 9,765, ,216 (1,099,651) 258,396 (640,575) Closing balance 13,218,967 15,599,530 7,473,629 8,458,559 DDH Australian Shares Opening balance Applications Redemptions Units issued upon reinvestment of distributions Increase in net assets attributable to unitholders 12,371, ,839 (1,110,543) 490,632 12,569, ,055 (1,274,882) 807,890 8,059, ,739 (773,838) 329, ,211 8,605, ,951 (838,186) 547,689 (433,024) Closing balance 12,018,013 12,371,085 8,246,771 8,059,341 18

20 Capital risk management The s manage their net assets attributable to unitholders as capital, notwithstanding net assets attributable to unitholders are classified as a financial liability. The amount of net assets attributable to unitholders can change significantly on a daily basis as the s are subject to daily applications and redemptions at the discretion of unitholders. During 2017, the s strategies were to hold a certain portion of the net assets attributable to unitholders in liquid investments. Liquid assets include cash and cash equivalents and investments in unlisted managed investment schemes. The ratio of liquid assets to net applications/(redemptions) as at 30 June 2017 and 30 June 2016 were as follows: DDH Conservative Growth DDH Balanced Growth DDH Aggressive Growth DDH Australian Shares Net applications/(redemptions) (844,967) (397,144) (1,502,612) (1,468,097) (1,418,809) (666,037) (254,781) (113,546) Liquid assets of the 4,888,403 5,611,753 23,519,900 23,601,739 7,956,769 8,464,806 8,479,340 8,153,221 Net assets attributable to unitholders 4,861,761 5,578,690 23,182,395 23,439,674 7,473,629 8,458,559 8,246,771 8,059,341 Ratio of liquid assets to net assets attributable to unitholders % % % % % % % % 19

21 8. Distributions to unitholders The ordinary distributions were paid and/or payable as follows: DDH Conservative Growth 30 June June 2017 CPU 30 June June 2016 CPU 31 December 30 June payable 46,600 59, ,994 68, , , DDH Balanced Growth 31 December 30 June payable 331, , , , ,037, , DDH Aggressive Growth 31 December 30 June payable 72, , , , , , DDH Australian Shares 31 December 30 June payable 143, , , , , , Cash and cash equivalents DDH Conservative Growth DDH Balanced Growth DDH Aggressive Growth DDH Australian Shares Cash at bank 63,958 73, , , , , , ,731 20

22 10. Financial assets held at fair value through profit and loss DDH Conservative Growth DDH Balanced Growth DDH Aggressive Growth DDH Australian Shares Units in unlisted managed investment funds 4,824,445 5,538,359 23,151,607 23,271,777 7,830,879 8,351,826 8,363,938 8,048, Receivables DDH Conservative Growth DDH Balanced Growth DDH Aggressive Growth DDH Australian Shares Accrued distributions Other 42,374 43, , , , , , ,029 1,561 1,573 6,510 6,777 2,846 2,717 2,483 2,316 43,935 44, , , , , , , Payables DDH Conservative Growth DDH Balanced Growth DDH Aggressive Growth DDH Australian Shares Responsible entity fees Unsettled redemptions 10,641 8,978 26,351 35,000 28,285 16,488 14,260 16,636 11,235 10,641 8,978 61,351 28,285 16,488 14,260 16,636 11,235 21

23 13. Financial instruments (a) Objectives, strategies, policies and processes The s activities may expose them to a variety of financial risks: market risk (including price risk, foreign exchange risk and interest rate risk), credit risk and liquidity risk. The s overall risk management program focuses on ensuring compliance with the s Products Disclosure Statements and seeks to maximise the returns derived for the level of risk to which the s are exposed. The s use different methods to measure different types of risk to which they are exposed. These methods include sensitivity analysis in the case of market risk and monitoring of reporting by the Investment Manager in respect of credit risk. (b) Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: price risk, foreign currency risk and interest rate risk. Market risk is managed and monitored using sensitivity analysis, and minimised through ensuring that all investment activities are undertaken in accordance with established mandates and investment strategies. The market risk disclosures are prepared on the basis of the s direct investments and not on a look through basis for investments held in the s. Where unit trust investments are exposed to interest rate risk or foreign exchange risk, sensitivity analysis in respect of these risks is included as part of price risk sensitivity analysis (refer b) (i). The sensitivity of the s net assets attributable to unitholders (and net operating profit/loss) to price risk is measured by the reasonably possible movements approach. This approach is determined based on management s best estimate, having regard to a number of factors, including historical correlation of the s investments with the relevant benchmarks and market volatility. 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 s invest in. As a result, historic variations in the risk variables are not a definitive indicator of future variations in the risk variables. Net assets attributable to unitholders may include investments in debt and equity securities and related derivatives held in the underlying investment manager funds. At 30 June 2017, the overall market exposures were as follows: DDH Conservative Growth DDH Balanced Growth DDH Aggressive Growth DDH Australian Shares Units in unlisted investment funds managed 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June ,824,445 5,538,359 23,151,607 23,271,777 7,830,879 8,351,826 8,363,938 8,048,490 22

24 13 Financial instruments (cont d) (i) Price risk The price risk is the risk that the fair value of financial instruments will fluctuate because of changes in market prices, whether those changes are caused by factors specific to the individual instrument or its issuer, or factors affecting all similar financial instruments traded in the market. Price risk exposure arises from the s investment portfolio. The investments are classified on the Statement of Financial Position as at fair value through profit or loss. All securities investments present a risk or loss of capital. The maximum risk resulting from financial instruments is determined by the fair value of the financial instruments. The Investment Manager mitigates this price risk through diversification and a careful selection of securities and other financial instruments within specified limits set by the Board and set out the Product Disclosure Statement of each. The s overall market positions are monitored on a regular basis by the s Investment Manager. This information and the compliance with the s Product Disclosure Statements are reported to the relevant parties on a regular basis as deemed appropriate such as compliance manager, other key management personnel, compliance committees and ultimately the Board. DDH Conservative Growth At 30 June 2017, if the prices has increased by 10% (2016: 10%) with all other variables held constant, this would have increased net assets attributable to unitholders by approximately 482,445 (2016: 553,836). Conversely, if the prices had decreased by 10% (2016: 10%), this would have decreased net assets attributable to unitholders by approximately 482,445 (2016: 553,836). The analysis is performed on the same basis for DDH Balanced Growth At 30 June 2017, if the prices has increased by 10% (2016: 10%) with all other variables held constant, this would have increased net assets attributable to unitholders by approximately 2,315,161 (2016: 2,327,178). Conversely, if the prices had decreased by 10% (2016: 10%), this would have decreased net assets attributable to unitholders by approximately 2,315,161 (2016: 2,327,178). The analysis is performed on the same basis for DDH Aggressive Growth At 30 June 2017, if the prices has increased by 10% (2016: 10%) with all other variables held constant, this would have increased net assets attributable to unitholders by approximately 783,088 (2016: 835,183). Conversely, if the prices had decreased by 10% (2016: 10%), this would have decreased net assets attributable to unitholders by approximately 783,088 (2016: 835,183). The analysis is performed on the same basis for DDH Australian Shares At 30 June 2017, if the prices has increased by 10% (2016: 10%) with all other variables held constant, this would have increased net assets attributable to unitholders by approximately 836,394 (2016: 804,849). Conversely, if the prices had decreased by 10% (2016: 10%), this would have decreased net assets attributable to unitholders by approximately 836,394 (2016: 804,849). The analysis is performed on the same basis for

25 13 Financial instruments (cont d) (ii) Foreign exchange risk There was no significant direct foreign exchange risk in the s as at 30 June 2017 (2016: Nil). (iii) Interest Rate Risk There was no significant direct interest rate risk in the s as at 30 June 2017 (2016: Nil). (c) Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. Credit risk primarily arises from investments in debt securities. Other credit risk arises from cash and cash equivalents, and deposits with banks and other financial institutions. With respect to credit risk arising from the financial assets of the s, the s exposure to credit risk arises from default of the counterparty, with the current exposure equal to the fair value of these investments as disclosed in the Statement of Financial Position. This does not represent the maximum risk exposure that could arise in the future as a result of changes in values, but best represents the current maximum exposure at the reporting date. The s hold no collateral as security or any other credit enhancements. There are no financial assets that are past due or impaired, or whose terms have been renegotiated. Counterparty credit limits and the list of authorised brokers are reviewed by the relevant parties within the Responsible Entity on a regular basis as deemed appropriate. In accordance with the s policy, the Investment Manager monitors the s credit position on a regular basis. This information and the compliance with the s policy are reported to the relevant parties on a regular basis as deemed appropriate such as compliance manager, other key management personnel, compliance committees and ultimately the Board. All contracts are with counterparties included in the Investment Manager s Approved Counterparties list, as approved by the Investment Manager. Concentrations of risk Concentrations of risk arise when a number of financial instruments are entered into with the same counterparty, or where a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have similar economic conditions. These similarities would cause the counterparties liabilities to meet the contractual obligations to be similarly affected by certain changes in the risk variables. The concentrations of risk are monitored by the Investment Manager to ensure they are within acceptable limits by reducing the exposures or by other means as deemed appropriate. There were no significant concentrations of credit risk in the s at 30 June 2017 and 30 June

26 13 Financial instruments (cont d) (d) Liquidity risk Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The s are also exposed to daily cash redemptions of redeemable units. This risk is controlled through the s investment in financial instruments, which under normal market conditions are readily convertible to cash. In addition, the s maintain sufficient cash and cash equivalents to meet normal operating requirements. Under the terms of their Constitutions, the s have the ability to manage liquidity risk by delaying redemptions to unitholders, if necessary, until the funds are available to pay them. The Responsible Entity monitors the s liquidity position on a daily basis. This information and the compliance with the s policy are reported to the relevant parties on a regular basis as deemed appropriate such as compliance manager, other key management personnel, compliance committee and ultimately the Board. Maturity analysis for financial liabilities The table below analyses the s financial liabilities into relevant maturity groupings based on the remaining period at the date of the contractual maturity date. The amounts in the table are the contractual undiscounted cash flows. 25

27 13 Financial instruments (cont d) DDH Conservative Growth Less than 1 Month 13 Months 312 Months More than 12 Months As at 30 June 2017 Distributions payable Other Total financial liabilities Contractual cash flows 70,577 As at 30 June 2016 Distributions payable Other Total financial liabilities Contractual cash flows 77,974 DDH Balanced Growth As at 30 June 2017 Distributions payable Other 59,936 10,641 68,996 8, ,688 61,351 Total financial liabilities Contractual cash flows 767,039 As at 30 June 2016 Distributions payable Other 430,559 28,285 Total financial liabilities Contractual cash flows 458,844 DDH Aggressive Growth As at 30 June 2017 Distributions payable Other 718,087 16,488 Total financial liabilities Contractual cash flows 734,575 As at 30 June 2016 Distributions payable Other 247,925 14,260 Total financial liabilities Contractual cash flows 262,185 DDH Australian Shares As at 30 June 2017 Distributions payable Other 455,356 16,636 Total financial liabilities Contractual cash flows 471,992 As at 30 June 2016 Distributions payable Other 274,990 11,235 Total financial liabilities Contractual cash flows 286,225 26

28 14. Fair value measurement The carrying amounts of the s assets and liabilities are measured and recognised at fair value on a recurring basis. The s have no assets or liabilities measured at fair value on a nonrecurring basis in the current reporting period. For the years ended 30 June 2017 and 30 June 2016, disclosure of fair value measurements is based on the following fair value hierarchy: Level 1 quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (prices) or indirectly (derived from prices); and Level 3 inputs for the asset or liability that are not based on observable market data (unobservable inputs). Valuation of unlisted managed investment scheme financial assets is based on the redemption value of the at the balance sheet date without any deduction for estimated future selling costs. Financial liabilities are priced at current asking prices. The major methods and assumptions used in estimating the fair values of assets and liabilities are disclosed in note 3(a) to the financial statements. Unlisted managed investment scheme financial assets are priced daily and liquid. The s holding such assets are priced daily, there are daily applications and redemptions and prices are publically available. These financial assets are classified a Level 2 assets. The following table presents the s assets and liabilities measured and recognised at fair value according to the above fair value hierarchy. 27

29 14. Fair value measurement (cont d) DDH Conservative Growth 2017 Level 1 Level 2 Level 3 Total Financial assets held at fair value through profit or loss Unlisted managed investment schemes 4,824,445 4,824,445 Total 4,824,445 4,824,445 DDH Conservative Growth 2016 Level 1 Level 2 Level 3 Total Financial assets held at fair value through profit or loss Unlisted managed investment schemes 5,538,359 5,538,359 Total 5,538,359 5,538,359 DDH Balanced Growth 2017 Level 1 Level 2 Level 3 Total Financial assets held at fair value through profit or loss Unlisted managed investment schemes 23,151,607 23,151,607 Total 23,151,607 23,151,607 DDH Balanced Growth 2016 Level 1 Level 2 Level 3 Total Financial assets held at fair value through profit or loss Unlisted managed investment schemes 23,271,777 23,271,777 Total 23,271,777 23,271,777 DDH Aggressive Growth 2017 Level 1 Level 2 Level 3 Total Financial assets held at fair value through profit or loss Unlisted managed investment schemes 7,830,879 7,830,879 Total 7,830,879 7,830,879 DDH Aggressive Growth 2016 Level 1 Level 2 Level 3 Total Financial assets held at fair value through profit or loss Unlisted managed investment schemes 8,351,826 8,351,826 Total 8,351,826 8,351,826 DDH Australian Shares 2017 Level 1 Level 2 Level 3 Total Financial assets held at fair value through profit or loss Unlisted managed investment schemes 8,363,938 8,363,938 Total 8,363,938 8,363,938 DDH Australian Shares 2016 Level 1 Level 2 Level 3 Total Financial assets held at fair value through profit or loss Unlisted managed investment schemes 8,048,490 8,048,490 Total 8,048,490 8,048,490 28