Maple-Brown Abbott. Australian Share Fund ARSN

Transcription

1 Maple-Brown Abbott Australian Share Fund ARSN Interim financial report for the half year ended 31 December 2018

2 Maple-Brown Abbott Australian Share Fund Contents Directors report 1 Lead Auditor s Independence Declaration 4 Statement of Financial Position 5 Statement of Comprehensive Income 6 Statement of Changes in Equity 7 Statement of Cash Flows 8 Notes to and forming part of the interim financial statements 9 1 Basis of preparation of interim report 9 2 Net assets attributable to unitholders 12 3 Distributions paid and payable 13 4 Events subsequent to balance date 13 5 Contingent assets and liabilities and commitments 13 6 Related parties 14 7 Financial instruments 14 Directors declaration 17 Independent auditor s review report to the unitholders 18 This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2018 and any public announcements made in respect of Maple-Brown Abbott Australian Share Fund during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

3 Maple-Brown Abbott Australian Share Fund Directors report The directors of Maple-Brown Abbott Limited, the Responsible Entity of Maple-Brown Abbott Australian Share Fund (''the Fund''), present their interim report together with the financial report of the Fund for the half year ended 31 December 2018 and the auditor s report thereon. Responsible Entity Maple-Brown Abbott Limited is the Responsible Entity (AFSL No ). The Responsible Entity is the investment manager of the Fund. The names of the persons who were directors of the Responsible Entity during the half year or since the end of the half year are as follows: Name Period of directorship J K Kightley Appointed 11/02/1994 (retired 16/10/2018) G M Rossler Appointed 19/07/1999 R A Grundy Appointed 01/07/2008 G R Bazzan Appointed 01/07/2008 D L Maple-Brown Appointed 01/07/2009 (retired 16/10/2018) T T Robinson Appointed 07/03/2013 R A R Lee Appointed 22/10/2015 J A Elliott Appointed 04/01/2017 The registered office and principal place of business of the Responsible Entity and the Fund is Level 31, 259 George Street, Sydney, NSW Principal activities The Fund invests directly in Australian listed equities, including REITs, or indirectly via the Maple-Brown Abbott Small Companies Trust, an unlisted unit trust, in accordance with the provisions of the Fund's Constitution. The Fund did not have any employees during the half year. There have been no significant changes in the nature of those activities during the half year. Results of operations The Responsible Entity s objective for the Fund is to provide a tax-effective income stream and long-term capital growth from a wide range of shares including property trusts listed, or expected to be listed, on the Australian Securities Exchange. The Fund aims to provide investors with a total investment return (before fees and taxes) that outperforms the S&P/ASX 200 Index (Total Returns) over rolling 4 year periods. 1

4 Directors report (continued) Results of operations (continued) A summary of the Fund s performance after fees over the last two half years is set out below: Total return * 31 December 2018 % 31 December 2017 % Ordinary class (7.9) 8.4 Nil entry fee class (8.1) 8.1 Wholesale class (7.3) 9.0 S&P/ASX 200 Index (Total Returns) (6.8) 8.4 * Total return is based on the movement in net asset value per unit plus distributions and is before tax and after all fees and charges. Imputation and foreign tax credits are not included in the performance figures. Unit prices and distributions 31 December 2018 $ 31 December 2017 $ Redemption price per unit (ex-distribution): Ordinary class Nil entry fee class Wholesale class Distribution per unit for the half year ended (excluding tax credits) Ordinary class Nil entry fee class Wholesale class State of affairs In the opinion of the Responsible Entity, there were no significant changes in the state of affairs of the Fund during the half year under review. Likely developments The Fund will continue with its principal activities as detailed earlier in this report. Events subsequent to balance date As the investments are measured at their 31 December 2018 fair values in the financial report, any change in values subsequent to the end of the reporting period is not reflected in the Statement of Comprehensive Income or the Statement of Financial Position. However, the change in the value of investments is reflected in the current unit price. Since 31 December 2018, volatility in the financial markets have had an impact on the value of the Fund s investments. Subsequent to the Statement of Financial Position date, the aggregate fair value of the Fund s investments has increased by greater than 10%. No other significant events have occurred since the end of the reporting period which would impact on the financial position of the Fund disclosed in the Statement of Financial Position as at 31 December 2018 or on the results and cash flows of the Fund for the half year ended on that date. 2

5

6

7 Statement of Financial Position As at 31 December 2018 Notes 31 December 2018 $ June 2018 $ 000 Assets Cash and cash equivalents 4,499 7,391 Loans and receivables: Interest, dividends and distributions receivable 165 3,028 Balances due from brokers - 97 Other receivables 68 - Financial assets held at fair value through profit or loss: Australian-listed equities 300, ,606 Australian-listed equities held via unlisted unit trust 14,286 15,242 Bank accepted bills of exchange 14,951 6,995 Total assets 334, ,359 Liabilities Financial liabilities at amortised cost: Distributions payable 3 4,793 17,871 Sundry creditors and accruals Total liabilities (excluding net assets attributable to unitholders) 5,310 18,449 Net assets attributable to unitholders - liability 2 329, ,910 Represented by: - Fair value to unitholders at redemption value 330, ,064 - Adjustment arising from different unit pricing and AASB valuation principles (1,622) (154) 329, ,910 The above Statement of Financial Position should be read in conjunction with the accompanying notes. 5

8 Statement of Comprehensive Income Notes 31 December 2018 $ December 2017 * $ 000 Revenue Interest Dividends and distributions 8,776 8,711 Net change in the fair value of financial instruments held at fair value through profit and loss (35,275) 27,724 (26,462) 36,472 Expenses Responsible Entity fee 2,811 3,064 Transaction costs ,919 3,266 Profit/(loss) from operating activities (29,381) 33,206 Finance costs Distributions paid and payable to unitholders 3 13,813 13,141 13,813 13,141 Change in net assets attributable to unitholders 2 (43,194) 20,065 * Certain amounts shown here have been restated and, therefore, do not correspond to the 31 December 2017 interim financial report and reflect adjustments made. See Note 2 The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes. 6

9 Statement of Changes in Equity The comparative for the half-year ended 31 December 2017 disclosed a Statement of Changes in Equity. This has been restated. See note 2. In accordance with AASB 132 Financial Instruments: Presentation, the units issued by the Fund are puttable instruments and do not satisfy the exemption available for them to be classified as equity as they have units with different contractual features; therefore the units are classified as a financial liability. As such, the Fund has no equity and no items of changes in equity have been presented for the current or comparative period. The above Statement of Changes in Equity is to be read in conjunction with the accompanying notes. 7

10 Statement of Cash Flows 31 December 2018 $ December 2017 $ 000 Operating activities Dividends and distributions received 11,323 11,689 Interest received Other income received Responsible Entity fees paid (3,068) (3,278) Transaction costs paid (116) (217) Distributions paid (14,685) (18,017) Cash flows from operating activities (6,286) (9,543) Investing activities Proceeds from sale of investments 66,707 88,759 Purchase of investments (51,628) (58,243) Cash flows from investing activities 15,079 30,516 Financing activities Proceeds from applications by unitholders 9,431 14,187 Payments for redemptions by unitholders (21,116) (30,594) Cash flows from financing activities (11,685) (16,407) Change in cash and cash equivalents (2,892) 4,566 Cash and cash equivalents at the beginning of the half year 7,391 2,471 Cash and cash equivalents at 31 December 4,499 7,037 The above Statement of Cash Flows is to be read in conjunction with the accompanying notes. 8

11 Notes to and forming part of the interim financial statements The Maple-Brown Abbott Australian Share Fund (the Fund) is a Fund domiciled in Australia and is a for profit entity. The Fund was constituted on 6 May 1986 and will terminate 80 years (less one day) from date of the commencement or at such earlier time as provided by the Fund s Constitution or by the law. Maple-Brown Abbott Limited is the Responsible Entity. The registered office and principal place of business of the Responsible Entity is Level 31, 259 George Street, Sydney, NSW This interim financial report covers the Fund as an individual entity. The Interim Financial Report was authorised for issue by the directors on 7 March The directors of the Responsible Entity have the power to amend and reissue the financial report. The Responsible Entity elected into the Attribution Managed Investment Trust (AMIT) for the Fund effective from 1 July 2017 and the Fund s Constitution was amended to allow it to operate as an AMIT, and accordingly, the Fund is no longer contractually obliged to pay distributions. 1 Basis of preparation of interim report The interim financial report is presented in Australian dollars. The interim financial report is prepared on the basis of fair value measurement of assets and liabilities except where otherwise stated. These general purpose interim financial statements for the half year ended 31 December 2018 have been prepared in accordance with accounting standard AASB 134 Interim Financial Reporting and the Corporations Act This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2018 and any public announcements made in respect of the Fund during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act There have been no significant changes to the risk management policies and processes of the Fund since the previous financial year end. New accounting standards and interpretations Except as described below, the accounting policies applied in this interim financial report is the same as those applied in the Fund's financial report as at and for the year ended 30 June The Fund has initially adopted AASB 9 Financial Instruments and AASB 15 Revenue from Contracts with Customers from 1 July Under the transition methods chosen, comparative information is not restated as detailed below. There was no material effect of the adoption of these standards to the Fund for the half-year ended 31 December o AASB 9 Financial Instruments: Classification of financial assets and financial liabilities. AASB 9 largely retains the existing requirements in AASB 139 Financial Instruments for the classification and measurement of financial liabilities. However, it replaces the previous AASB 139 categories for financial assets at 'fair value through profit or loss (FVTPL)', 'financial assets held to maturity', 'loans and receivables' and 'available for sale' with 'fair value through profit or loss', 'amortised cost', 'fair value through other comprehensive income (FVOCI)'. The classification of financial assets under AASB 9 is generally based on the business model in which a financial asset is managed and the characteristics of its contractual cash flows. 9

12 Notes to and forming part of the interim financial statements 1 Basis of preparation of interim report (continued) The adoption of the standard does not have a material impact on the classification of financial assets and financial liabilities of the Fund. This is due to financial instruments currently measured at FVTPL or amortised cost, as relevant, under AASB 139 will continue to be presented as FVTPL or amortised cost under AASB 9. o AASB 15 Revenue from Contracts with Customers The Fund's main sources of income are interest, dividends/distributions and gains on financial instruments held at fair value. All of these are outside the scope of the new revenue standard. Accordingly, the new revenue recognition rules do not have a significant impact on the Fund's accounting policies or the amounts recognised in the financial statements. A number of other new standards, amendments and interpretations are effective from 1 July The Responsible Entity has assessed the impact of these other standards, amendments and interpretations as not material to the Fund's financial report in the current or future reporting periods and on foreseeable future transactions. (a) Financial instruments fair value measurement Financial assets Financial assets of the Fund are classified either as fair value through profit or loss or as loans and receivables. Fair value through profit or loss Financial assets which are classified as fair value through profit or loss are recognised or derecognised by the Responsible Entity as such at trade date. They are initially recognised at fair value, excluding transaction costs, which are expensed as incurred. Thereafter they are re-measured at fair value, with any resultant gain or loss recognised immediately in the Statement of Comprehensive Income. Financial assets fair values are determined as follows: Australian-listed equities These securities are valued at their quoted bid price on the Australian Securities Exchange, as of the close of business on the day the securities are being valued. Where dual-listed securities are thinly traded on the Australian Securities Exchange, they are valued at the Australian dollar equivalent of the quoted bid price on the relevant foreign stock exchange. 10

13 Notes to and forming part of the interim financial statements 1 Basis of preparation of interim report (continued) (a) Financial instruments fair value measurement (continued) Australian-listed equities held via unlisted unit trusts Listed equities may be held via units in unlisted unit trusts which are valued at redemption price as reported by the manager at close of business on the day the trusts are being valued. Bills of exchange Bills of exchange are priced based on appropriate yield curves taking into account factors such as credit rating, security types, and term to maturity. Loans and receivables Financial assets classified as loans and receivables include balances due from brokers, dividends and distributions receivable and other receivables. These financial assets are carried at amortised cost using the effective interest method less impairment losses if any. Loans and receivables are of a short term nature and hence their carrying value approximates fair value. Financial liabilities Financial liabilities of the Fund are either measured at fair value through profit or loss or at amortised cost using the effective interest method. Financial liabilities other than those at fair value through profit or loss include distributions payable, balances due to brokers, redemptions payable and sundry creditors and accruals which are carried at amortised cost using the effective interest method. These financial liabilities are of a short-term nature and hence their carrying value approximates fair value. Financial liabilities arising from the issue of redeemable units in the Fund are carried at the redemption amount representing the unitholders rights to a residual interest in the Fund s assets at reporting date which approximates fair value. Offsetting financial instruments Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. 11

14 Notes to and forming part of the interim financial statements 2 Net assets attributable to unitholders (bid price) In accordance with AASB 132 Financial Instruments: Presentation, the units issued by the Fund are puttable instruments and do not satisfy the exemption available for them to be classified as equity due to the different management fee structures applying to the different classes of units the interests of unitholders does not meet the criteria to be classified as equity, as the different classes of units do not have identical features. The 31 December 2017 comparatives have been restated to ensure consistent presentation, as unitholder funds were previously presented as equity. This included restating the Statement of Comprehensive Income to present distributions to unitholders and changes in net assets attributable to unitholders as finance costs attributable to unitholders. The Statement of Financial Position was restated to present net assets attributable to unitholders as a liability. The Statement of Changes in Equity was removed. No changes were made to the interim Statement of Cash Flows. Ordinary class Nil entry class Wholesale class Total Six months ended 31 December 2018 $ 000 $ 000 $ 000 $ 000 Opening balance 187,615 7, , ,910 Applications 1, ,626 9,412 Redemptions (8,897) (253) (11,956) (21,106) Units issued upon reinvestment of distributions 9, ,506 12,205 Changes in net assets attributable to unitholders (21,999) (832) (20,363) (43,194) Closing balance 167,830 6, , ,227 Six months ended 31 December 2017 Opening balance 189,572 7, , ,005 Applications 1, ,110 14,067 Redemptions (9,812) (523) (20,094) (30,429) Units issued upon reinvestment of distributions 10, ,857 13,689 Changes in net assets attributable to unitholders 10, ,646 20,065 Closing balance 202,119 7, , ,397 The Responsible Entity considers net assets attributable to unitholders as capital. This capital is invested in accordance with the provisions of the Fund s Constitution. The Responsible Entity may make additional investments in the case of net applications, or realise investments in the case of net redemptions, depending on the desired level of liquidity in the Fund. Under the Fund's Constitution, the Responsible Entity may suspend applications or redemptions if it is considered to be in the best interests of unitholders. 12

15 Notes to and forming part of the interim financial statements 3 Distributions paid and payable 31 December December 2017 $ 000 $ per unit $ 000 $ per unit Ordinary class Distribution paid September 4, , Distribution payable December 2, , , , Nil entry fee class Distribution paid September Distribution payable December Wholesale class Distribution paid September 4, , Distribution payable December 2, , , , Total distributions paid and payable 13,813 13,141 4 Events subsequent to balance date As the investments are measured at their 31 December 2018 fair values in the financial report, any change in values subsequent to the end of the reporting period is not reflected in the Statement of Comprehensive Income or the Statement of Financial Position. However, the change in the value of investments is reflected in the current unit price. Since 31 December 2018, volatility in the financial markets have had an impact on the value of the Fund s investments. Subsequent to the Statement of Financial Position date, the aggregate fair value of the Fund s investments has increased by greater than 10%. No other significant events have occurred since the end of the reporting period which would impact on the financial position of the Fund disclosed in the Statement of Financial Position as at 31 December 2018 or on the results and cash flows of the Fund for the half year ended on that date. 5 Contingent assets and liabilities and commitments There are no outstanding contingent assets, liabilities or commitments as at 31 December 2018 and 30 June

16 Notes to and forming part of the interim financial statements 6 Related parties There have been no significant changes to the related party transactions disclosed in the last Annual Financial Report. All transactions with related parties are conducted on normal commercial terms and conditions. From time to time Maple-Brown Abbott Limited or its director related entities may invest in or withdraw from the Fund. These transactions are on the same terms and conditions as for other unitholders of the Fund. 7 Financial instruments Market exposures As the end of the reporting period the market exposures were as follows: 31 December 2018 $ June 2018 $ 000 Financial assets at fair value through profit or loss: Australian-listed equities 300, ,606 Australian-listed equities held via unlisted unit trust 14,286 15,242 Bank accepted bills of exchange 14,951 6,995 Total 329, ,843 Carrying amounts versus fair values The fair values of financial assets and financial liabilities approximates their carrying amounts in the Statement of Financial Position. Fair value measurement recognised in the Statement of Financial Position Fair value measurements are classified using a fair value hierarchy that reflects the subjectivity of the inputs used in making the measurements. The fair value hierarchy has the following levels: o o o Level 1 fair values measured using quoted prices (unadjusted) in active markets for identical instruments; Level 2 fair values measured using directly (i.e. as prices) or indirectly (i.e. derived from prices) observable inputs, other than quoted prices included in Level 1; and Level 3 fair values measured using inputs that are not based on observable market data (unobservable inputs). 14

17 Notes to and forming part of the interim financial statements 7 Financial instruments (continued) At the end of the reporting period the financial instruments carried at fair value split by valuation method is summarised below: Level 1 Level 2 Level 3 Total At 31 December 2018 $ 000 $ 000 $ 000 $ 000 Financial assets at fair value through profit or loss: Australian-listed equities 300, ,568 Australian-listed equities held via unlisted unit trust 14, ,286 Bank accepted bills of exchange - 14,951-14,951 Total 314,854 14, ,805 At 30 June 2018 Financial assets at fair value through profit or loss: Australian-listed equities 357, ,606 Australian-listed equities held via unlisted unit trust 15, ,242 Bank accepted bills of exchange - 6,995-6,995 Total 372,848 6, ,843 Transfers between levels The Fund s policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period. There have been no transfers between levels in the fair value hierarchy at the end of 31 December 2018 and 30 June There were also no changes made to any of the valuation techniques applied as of 30 June Fair value measurement Fair value in an active market (level 1) The fair value of financial assets and liabilities traded in active markets (such as publicly traded derivatives and equity securities) is based on bid prices at the end of the reporting period without any deduction for estimated future selling costs. For the majority of financial assets and liabilities, information provided by the quoted market independent pricing services is relied upon for valuation. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm's length basis. An active market is a market in which transactions for the financial asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The investments in unlisted unit trusts included as level 1 in the above table relate to investments in other managed trusts where Maple-Brown Abbott is the responsible entity. These investments are valued at their quoted redemption price at balance date in accordance with Note 1(a). 15

18 Notes to and forming part of the interim financial statements 7 Financial instruments (continued) Fair value in an inactive or unquoted market (level 2 and 3) The fair value of financial assets and liabilities that are not traded in an active market is determined by using valuation techniques. Quoted market prices or dealer quotes for similar instruments are used for debt securities held. The Fund may use a variety of valuation methods and makes assumptions that are based on market conditions existing at the end of each reporting period. Valuation techniques used for non-standardised financial instruments, such as over-the-counter derivatives, include the use of comparable arm's length transactions, reference to the current fair value of a substantially similar other instrument or any other valuation technique that is commonly used by market participants which maximises the use of market inputs and relies as little as possible on entity-specific inputs. For other pricing models, inputs are based on market data at the end of the reporting period. The output of a model is always an estimate or approximation of a value that cannot be determined with certainty, and valuation techniques employed may not fully reflect all factors relevant to the positions held. Valuations are therefore adjusted, where appropriate, to allow for additional factors including liquidity risk and counterparty risk. The Fund s investments in bills of exchange are priced on appropriate yield curves taking into account factors such as credit rating, security types, and term to maturity in accordance with Note 1(a). Fair value measurements using significant unobservable inputs (level 3) The Fund did not hold any financial instruments with fair value measurements using significant unobservable inputs during the half-year ended 31 December 2018 or year ended 30 June Financial instruments not measured at fair value The carrying value less impairment provision of other receivables and payables are assumed to approximate their fair values due to their short term nature. 16

19

20

21