Retail Direct Property 19 ARSN Responsible Entity Retail Responsible Entity Limited ABN

Transcription

1 ARSN Responsible Entity Retail Responsible Entity Limited ABN Financial report for the year ended

2 Page Corporate directory 1 Directors' report 2 Auditor's independence declaration 5 Financial report Income statement 6 Statement of comprehensive income 7 Balance sheet 8 Statement of changes in equity 9 Cash flow statement 10 Notes to the financial statements 11 Directors' declaration 25 Independent auditor's report to the unitholders 26 This financial report covers ('''', ''the Trust'', or ''the Syndicate''). The financial report is presented in Australian dollars. is a trust established and domiciled in Australia. The registered office and principal place of business of the Responsible Entity is: Level Collins Street Melbourne, VIC 3000 A description of the nature of 's operations and its principal activities is included in the Directors' report on page 2. The financial report was authorised for issue by the Directors of the Responsible Entity on 5 September The Responsible Entity has the power to amend and reissue the financial report. All press releases, financial reports and other information are available on our website:

3 Corporate directory Responsible Entity Directors of the Responsible Entity Secretary of the Responsible Entity Auditor Security Registry Retail Responsible Entity Limited A.B.N Level Collins Street Melbourne, VIC 3000 Telephone: (03) Barry McWilliams (Chairman) Tim Hammon Jan West Elizabeth Hourigan Moore Stephens Level 10, 530 Collins Street Melbourne, VIC 3000 Link Market Services Limited Level 4, 333 Collins Street Melbourne, VIC

4 Directors' report Directors' report The Directors of Retail Responsible Entity Limited, the Responsible Entity, present their report on ('''', ''the Trust'', or ''the Syndicate'') for the year ended. Responsible Entity Retail Responsible Entity Limited was appointed as the Responsible Entity of the Trust on 10 May The registered office and principal place of business of Retail Responsible Entity Limited is Level 28, 35 Collins Street, Melbourne, Victoria Directors The following persons were Directors of Retail Responsible Entity Limited during the financial year and up to the date of this report (unless otherwise stated): Barry McWilliams (Chairman) Tim Hammon Jan West Peter Day (Retired 28 February 2014) Peggy O'Neal (Retired 28 February 2014) Company Secretary The Company Secretary of Retail Responsible Entity Limited is Elizabeth Hourigan. Dimitri Kiriacoulacos resigned as Company Secretary on 9 May Principal activities The principal activity of the Trust was investment in property. In the current financial year, the Trust sold its remaining investment property, Kiama, extinguished all its liabilities and distributed a final return of equity, utilising the residual net assets. Consequently, the Trust carried out a voluntary liquidation process. Significant changes in the nature of these activities during the year are detailed below under ''Significant changes in the state of affairs''. Review of operations The Trust recorded a net profit of $326,735 for the year ended (2013: $3,574,765 profit). The movement in net profit for the year compared to the corresponding year is largely due to: Minimal net property income in the current year as a result of disposal of the last investment property, Kiama in July Altone Park and Melville were disposed in the prior year; and Lower net gain on disposal of Kiama in the current year compared to the gains on disposal of Altone Park and Melville in the prior year. Distributions and return of equity attributable to unitholders Return of equity amounting to cents per unit were paid for the year ended (2013: cents per unit). Return of equity paid to unitholders for the year totalled $19,162,984 (2013: $49,730,650 comprising return of equity and income distribution). Month Cents per unit Date paid August Return of equity August 2013 June Return of equity June 2014 Total paid to unitholders The tax components of the annual distribution are set out below: Cents per unit Tax deferred component Net distribution per unit

5 Directors' report (continued) Significant changes in the state of affairs During the year the following significant changes in the state of affairs occurred: Sale of Kiama and Payment of Liabilities On 15 July 2013, Kiama was sold for a consideration of $22,700,000. On 29 July 2013, part of the net sale proceeds were used to pay termination fees and deferred management fees to the Responsible Entity of $3,090,840 and $2,088,092 respectively. Wind up of the Trust Prior to June 2014, the Trust extinguished all its liabilities, distributed a final return of equity, utilising the residual net assets and closed all bank accounts. Consequently, the Trust carried out a voluntary liquidation process and commenced deregistration with the Australian Securities and Investments Commission ( ASIC ). For the purpose of the Trust's Constitution, its termination date is on. Accordingly, all issued units were cancelled on and this will be the final financial report issued by the Trust. Events occurring after the reporting period No matter or circumstance has arisen in the interval between and the date hereof. Likely developments and expected results of operations There are no likely developments in the operations of the Trust as it has been liquidated with a termination date of 30 June Environmental regulation As a property owner, the Trust was subject to the normal environmental laws and regulations of landowners within Australia up to the date of disposal. These included regulation against air pollution, liquid discharge and soil contamination. Environmental laws and regulations in force in the various jurisdictions in which the Trust operated were applicable to certain areas of the Trust s operations. The Trust had in place procedures to identify and comply with such requirements including, where applicable, obtaining and complying with the conditions of the relevant authority consents and approvals and the obtaining of any necessary licences. Other information Issued Units During the year ended, no units were issued (2013: no units). On, 57,650,370 units were cancelled and units on issue as at that date was nil (2013: 57,650,370 units on issue). Total Assets At the Trust's total assets were $nil (2013: $25,840,335). Fees paid to and interests held in by the Responsible Entity Ongoing management and services fees paid to the Responsible Entity during the year totalled $15,035 (2013: $401,258) as disclosed in note 16. Additionally, termination fees of $3,090,840 and deferred management fees of $2,088,092 were paid to the Responsible Entity during the year (2013: nil). No fees were paid out of the Trust to the Directors of the Responsible Entity during the year. The number of interests in the Trust held by related parties of the Responsible Entity as at the end of the year are disclosed in note 16. Indemnification and Insurance of Directors and Other Officers The Responsible Entity must indemnify the Directors on a full indemnity basis and to the extent permitted by law, against all losses or liabilities incurred by the Directors as an officer of the Responsible Entity or of a related body corporate provided that the loss or liability does not arise out of misconduct including lack of good faith. -3-

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7 Level 10, 530 Collins Street Melbourne VIC 3000 T + ( ) F + ( ) A UNDER SECTION 307C OF THE CORPORATIONS ACT TO THE DIRECTORS OF THE RESPONSIBLE ENTITY OF RETAIL DIRECT PROPERTY 19 I declare that, to the best of my knowledge and belief, during the year ended there has been: (i) (ii) No contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit, and No contraventions of any applicable code of professional conduct in relation to the audit. MOORE STEPHENS Chartered Accountants Nick Michael Partner Melbourne, 5 September 2014 Moore Stephens ABN. Liability limited by a scheme approved under Professional Standards Legislation. An independent member of Moore Stephens International Limited members in principal cities throughout the world. The Melbourne Moore Stephens firm is not a partner or agent of any other Moore Stephens firm. And is a separate partnership in Victoria.

8 Income statement For the year ended Notes Revenue Property rental revenue 3 100,951 4,822,985 Property outgoings recovered 3 70,462 1,101,901 Interest revenue 51, ,910 Total revenue 223,034 6,134,796 Share of net profits from investment accounted for using the equity method 7-13,087 Expenses, gains and losses Direct property expenses 3 (72,545) (2,722,453) Responsible Entity management fees (3,520) (322,616) Other Responsible Entity fees 10 - (47,000) Net gain on sale of investment property 174,029 2,565,441 Fair value adjustment to investment property 8 - (1,228,421) Estimated selling costs 7 - (290,250) Liquidation expenses - (80,000) Other recoveries/(expenses) 5,737 (447,819) Total expenses, gains and losses 103,701 (2,573,118) Net profit before income tax expense 326,735 3,574,765 Income tax benefit/(expense) - - Net profit for the year ,735 3,574,765 The above income statement has been prepared on a liquidation basis and should be read in conjunction with the accompanying notes. -6-

9 Statement of comprehensive income For the year ended Net profit for the year 326,735 3,574,765 Other comprehensive income for the year - - Total comprehensive income for the year 326,735 3,574,765 The above statement of comprehensive income has been prepared on a liquidation basis and should be read in conjunction with the accompanying notes. -7-

10 Balance sheet As at Notes ASSETS Current assets Cash and cash equivalents 5-3,018,332 Trade and other receivables 6-412,253 Non-current assets classified as held for sale 7-22,409,750 Total current assets - 25,840,335 Total assets - 25,840,335 LIABILITIES Current liabilities Trade and other payables 9-657,734 Other financial liabilities 10-5,178,932 Provisions 11-1,167,420 Total current liabilities - 7,004,086 Total liabilities - 7,004,086 Net assets - 18,836,249 EQUITY Contributed equity 12-10,753,944 Retained earnings - 8,082,305 Total equity - 18,836,249 The above balance sheet has been prepared on a liquidation basis and should be read in conjunction with the accompanying notes. -8-

11 Statement of changes in equity For the year ended Contributed Retained Total equity earnings equity Notes $ Balance at 1 July ,209,258 13,782,876 64,992,134 Net profit for the year - 3,574,765 3,574,765 Total comprehensive income for the year - 3,574,765 3,574,765 Transactions with owners in their capacity as owners: Distributions provided for or paid 4 - (4,186,858) (4,186,858) Return of equity 4 (45,543,792) - (45,543,792) Transfer equity raising costs to retained earnings 12 5,088,478 (5,088,478) - Balance at 30 June ,753,944 8,082,305 18,836,249 Contributed Retained Total equity earnings equity Notes $ Balance at 1 July ,753,944 8,082,305 18,836,249 Net profit for the year - 326, ,735 Total comprehensive income for the year - 326, ,735 Transactions with owners in their capacity as owners: Return of equity 4 (10,753,944) (8,409,040) (19,162,984) Balance at The above statement of changes in equity has been prepared on a liquidation basis and should be read in conjunction with the accompanying notes. -9-

12 Cash flow statement For the year ended Notes Cash flows from operating activities Receipts from customers (inclusive of goods and services tax) 353,706 6,885,789 Distributions received from associates - 894,313 Payments to suppliers (inclusive of goods and services tax) (614,323) (3,932,662) Payments for termination fees (3,090,840) - Payments for deferred management fees (2,088,092) - Interest received 51, ,910 Net cash (outflow)/inflow from operating activities 15 (5,387,928) 4,057,350 Cash flows from investing activities Payments for investment property - (458,199) Proceeds from disposal of investment property 22,700,000 44,071,457 Net cash inflow from investing activities 22,700,000 43,613,258 Cash flows from financing activities Distributions paid (1,167,420) (4,954,035) Return of equity (19,162,984) (45,543,792) Net cash outflow from financing activities (20,330,404) (50,497,827) Net decrease in cash and cash equivalents (3,018,332) (2,827,219) Cash and cash equivalents at the beginning of the financial year 5 3,018,332 5,845,551 Cash and cash equivalents at the end of the financial year 5-3,018,332 The above cash flow statement has been prepared on a liquidation basis and should be read in conjunction with the accompanying notes. -10-

13 Notes to the financial statements 1 Summary of significant accounting policies The principal accounting policies adopted in the preparation of the financial report are set out below. The financial report includes financial statements for ('''', ''the Trust'', or ''the Syndicate''). (a) Statement of compliance with International Financial Reporting Standards This general purpose financial report complies with Australian Accounting Standards as applied under the liquidation basis of preparation. Compliance with Australian Accounting Standards ensures that the financial report, comprising the financial statements and the notes thereto, complies with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). (b) Basis of preparation This general purpose financial report for the year ended has been prepared in accordance with the Corporations Act For the purpose of preparing the financial statements, the Trust is a for-profit entity. The financial report is presented in Australian dollars. When preparing financial statements, Australian Accounting Standards require the Directors of the Responsible Entity to make an assessment of the Trust s ability to continue as a going concern. Financial statements are required to be prepared on a going concern basis unless the Directors of the Responsible Entity either intend to liquidate the Trust or to cease trading, or have no realistic alternative but to do so. The Directors of the Responsible Entity have determined that the Trust will not continue as a going concern and these financial statements, therefore, have not been prepared on a going concern basis. The Australian Accounting Standards do not prescribe the impact on, or the adjustments to be made to, the financial statements when it is determined that the going concern basis is not appropriate and, therefore, the Responsible Entity is required to consider carefully individual circumstances of the Trust to arrive at an appropriate basis. Accordingly, the Directors of the Responsible Entity have determined that the 'liquidation basis' (as explained below) is the appropriate basis on which these financial statements should be prepared. Liquidation basis of preparation The Trust has continued to adopt the liquidation basis of preparation of its financial statements as at. The Trust's remaining investment property, Kiama was sold on 15 July 2013 and the majority of its net assets were distributed to investors as return of equity on 9 August In the current financial year, the Trust extinguished all its liabilities, distributed a final return of equity, utilising the residual net assets and closed all its bank accounts. Consequently, the Trust carried out a voluntary liquidation process and commenced deregistration with Australian Securities and Investments Commission ( ASIC ). For the purpose of the Trust's Constitution, its termination date is. Accordingly, all issued units were cancelled on and this will be the final financial report issued by the Trust. The Directors of the Responsible Entity have applied the requirements of paragraph 25 of AASB 101 Presentation of Financial Statements which indicates that when the financial report is not prepared on a going concern basis, that fact shall be disclosed, together with the basis on which the financial report is prepared and the reason why the Trust is not regarded as a going concern. Impact of adopting the liquidation basis of preparation on measurement, classification of assets and liabilities, and disclosures in the financial report Under the liquidation basis of accounting all assets and liabilities are measured at liquidation value. The liquidation value of assets is their net realisable value. With reference to the assets of the Trust however, net realisable value approximates the current carrying amount of the assets measured under the relevant Australian Accounting Standards. The liquidation value of liabilities recognised represents their estimated settlement amount. Any gains or losses resulting from measuring assets and liabilities to the liquidation value are recognised in the income statement. Under the liquidation basis of accounting, all assets and liabilities previously classified as non-current are classified as current. -11-

14 Notes to the financial statements (continued) 1 Summary of significant accounting policies (continued) In adopting the liquidation basis, the Directors of the Responsible Entity have continued to apply the disclosure requirements of Australian Accounting Standards to the extent they are relevant to the liquidation basis, and modified them where considered appropriate. In particular, the financial report does not include all of the disclosures required by the following standards on the basis that the disclosures are not considered relevant for decision making by users as described below: AASB 5 Non-current Assets Held for Sale and Discontinued Operations Given that the Trust is considered a discontinued operation, the disclosures under AASB 5 that separate continuing and discontinuing operations on the income statement are not considered relevant to users. AASB 7 Financial Instruments: Disclosures The information on exposures to financial risks is not considered relevant to users given that the financial risk exposures are not representative of the risks that exist. AASB 101 Presentation of Financial Statements Information on capital management is not considered relevant for users to understand what is managed as capital given the basis of preparation change from 'going concern' to 'liquidation'. AASB 117 Leases Finance lease and operating lease payments disclosures have not been provided as it is not considered that users would need this information given that operating leases and finance leases relate to investment property that is already sold or classified as non-current asset held for sale. The accounting policies adopted are consistent with those of the previous financial year. The Trust has not elected to early adopt any new Accounting Standards that have been issued but are not yet effective. Comparative information for the year ended 30 June 2013 has also been measured and presented on a liquidation basis. Significant accounting estimates, judgements and assumptions The preparation of financial statements in conformity with Australian Accounting Standards requires the use of certain significant accounting estimates. It also requires management to exercise its judgement in the process of applying the Trust's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in note 2. (c) Revenue recognition Revenue is measured at the fair value of the consideration received or receivable. The Trust recognises revenue when the amount of revenue can be reliably measured and it is probable that the future economic benefits will flow to the Trust and specific criteria have been met for each of the Trust's activities as described below. The amount of revenue is not considered to be reliably measurable until all contingencies relating to the revenue have been resolved. (i) Property ownership revenue As the owner of a number of shopping centres (up to the date of disposal), the Trust derived rental revenue from the leasing of retail space in these properties. Lease income was recognised on a straight-line basis over the lease term. Contingent rental revenue was recognised on an accrual basis as earned. (ii) Distribution revenue Distribution revenue is recognised as revenue when the right to receive payment is established. (iii) Interest revenue Interest revenue is recognised on a time proportion basis using the effective interest method. -12-

15 Notes to the financial statements (continued) 1 Summary of significant accounting policies (continued) (d) Income tax Under current income tax legislation no income tax is payable by the Trust provided that the taxable income is or is deemed to be fully distributed to unitholders or the unitholders become presently entitled to all the taxable income. (e) Cash and cash equivalents Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions and other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. (f) Trade and other receivables Trade and other receivables are measured at their net realisable value. No adjustment has been recognised on the change to liquidation basis as the net realisable value approximates the amortised cost using the effective interest method. (g) Assets held for sale Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. All assets held for sale are stated at fair value less estimated selling costs. Non-current assets classified as held for sale are presented separately from the other assets in the balance sheet. (h) Investment properties Investment properties are measured at their net realisable value which equals fair value less estimated selling costs. Estimated selling costs comprise professional fees paid or payable to lawyers and advisors to effect the sale of the properties. Estimated selling costs are calculated on 1.5% of the total carrying value of investment properties at balance date. (i) Investments in associates Investments in associates are measured at their fair value which is equivalent to their net realisable value. No adjustment has been recognised on the change to liquidation basis as the net realisable value approximates fair value. (j) Financial assets The Trust classifies its investments in financial assets in the following categories: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. The classification depends on the purpose for which the investments were acquired. Classification (i) Financial assets at fair value through profit or loss These include financial assets that are held for trading purposes which may be sold. Financial assets 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 Trust's documented investment strategy. The Trust'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) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Trust provides money, goods or services directly to a debtor with no intention of selling the receivable. Loans and receivables are included in current receivables in the balance sheet. (iii) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Trust has the positive intention and ability to hold to maturity. (iv) Available-for-sale financial assets Available-for-sale financial assets, comprising principally marketable securities, are non-derivatives that are either designated in this category or not classified in any of the other categories. -13-

16 Notes to the financial statements (continued) 1 Summary of significant accounting policies (continued) Recognition and derecognition Purchases and sales of investments are recognised on trade date - the date on which the Trust commits to purchase or sell the asset. Financial assets are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Trust has transferred substantially all the risks and rewards of ownership. Subsequent measurement All financial assets are measured at their net realisable value. No adjustment has been recognised on the change to liquidation basis as the net realisable value approximates fair value or amortised cost. (k) Other financial liabilities (i) Performance fee contracts Performance fees are recognised as a financial liability in accordance with the Constitution and are measured at their anticipated settlement amount. No adjustment has been recognised on the change to liquidation basis as the anticipated settlement amounts approximate amortised cost. (ii) Deferred management fees Deferred management fees are recognised as a financial liability. The Trust s Constitution and Product Disclosure Statement provides for the subsequent recovery of any prior year management fees at the end of the Trust s term or on wind up of the Trust. The liability is measured at its anticipated settlement amount. No adjustment has been recognised on the change to liquidation basis as the anticipated settlement amount approximate the amortised cost. (l) Trade and other payables Trade and other payables are measured at their anticipated settlement amount. No adjustment has been recognised on the change to liquidation basis as the anticipated settlement amount approximates the undiscounted amortised cost. (m) Borrowing costs Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. All other borrowing costs are expensed to the Income statement using the effective interest rate method. Borrowing costs consist of interest and other costs that the Trust incurs in connection with borrowing funds. Other costs, for example, establishment fees incurred, are deferred on the Balance sheet as deferred borrowing costs under interest bearing liabilities and amortised as part of borrowing costs using the effective interest rate method. (n) Provisions Provisions are recognised when the Trust has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the present value of management's best estimate of the expenditure required to settle the present obligation at the end of the reporting period, which is the settlement amount. No adjustment has been recognised on the change to liquidation basis as the settlement amount approximates the present value of expected future payments. (o) Fair value estimation The fair value of financial instruments is based on their quoted market prices at the end of the reporting period less deduction for estimated future selling costs. Financial assets are valued at bid prices (which approximate their net realisable value), while financial liabilities are valued at asking prices (which approximate their estimated settlement amounts). If a quoted market price is not available on a recognised stock exchange or from a broker / dealer for non-exchange-traded financial instruments, the fair value of the instrument is estimated using valuation techniques, including use of recent arm s length market transactions, reference to the current fair value of another instrument that is substantially the same, discounted cash flow techniques, or any other valuation technique that provides a reliable estimate of prices obtained in actual market transactions. -14-

17 Notes to the financial statements (continued) 1 Summary of significant accounting policies (continued) Where discounted cash flow techniques are used, estimated future cash flows are based on management's best estimates and the discount rate used is a market rate at the end of the reporting period applicable for an instrument with similar terms and conditions. Where other pricing models are used, inputs are based on market data at the end of the reporting period. The fair value of derivatives that are not exchange traded is estimated at the amount that the Trust would receive or pay to terminate the contract at the end of the reporting period taking into account current market conditions (e.g. appropriate yield curve) and the current creditworthiness of the counterparties. Specifically, the fair value of a forward exchange contract is determined as a net present value of estimated future cash flows, discounted at appropriate market rates on the valuation date. The fair value of interest rate swaps and cross currency interest rate swaps is the estimated amount that the entity would receive or pay to terminate the swap at the end of the reporting period taking into account current interest rates, foreign exchange rates and the current creditworthiness of swap counterparties. Investments in other unlisted funds are recorded at the exit price as reported by the managers of the funds. (p) Contributed equity Ordinary units are classified as equity. Incremental costs directly attributable to the issue of new units or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new units or options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration. (q) Net tangible asset backing per unit (i) Basic net tangible asset backing per unit Basic net tangible asset backing per unit is determined by dividing the net assets attributable to unitholders (excluding intangible assets) by the number of units outstanding at balance date. (r) Distributions or return of equity A provision is made for the amount of any distribution or return of equity announced or to which the unitholders became presently entitled on or before the end of the reporting period but not distributed at the end of the reporting period. (s) Goods and Services Tax (GST) Revenues, expenses and assets of Australian entities are recognised net of the amount of GST, except where the amount of the GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the balance sheet are shown inclusive of GST. The net amount of GST recoverable from or payable to the taxation authority is included in other receivables or payables in the balance sheet. Cashflows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from or payable to the taxation authority, are presented as operating cashflow. (t) Accounting Standards and Interpretations issued but not yet effective The Trust financial report is prepared on a liquidation basis for the reasons outlined in note 1(b) above. As a result, Accounting Standards and Interpretations currently on issue but not yet effective are not expected to have any impact on the Trust. -15-

18 Notes to the financial statements (continued) 2 Significant accounting estimates, judgements and assumptions The preparation of financial statements of the Trust requires estimates and assumptions concerning the application of accounting policies to be made by the Responsible Entity. Estimates are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities are discussed below. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. Investment property values Investment properties are carried at net realisable value which comprises the fair value less estimated selling costs. Fair value is either based on an independent valuation or on a Directors' valuation which is supported by the extrapolation of independent valuations on similar properties. Valuations are determined based on assessments and estimates of uncertain future events, including upturns and downturns in property markets and availability of similar properties, vacancy rates, market rents and capitalisation and discount rates. At, the carrying value of non-current assets classified as held for sale held by the Trust is $nil (2013: $22,409,750). Refer to note 7 for the reconciliation of the movements in non-current assets classified as held for sale. Collectability of trade receivables Collectability of trade receivables is reviewed on an ongoing basis. An allowance account (provision for impairment of trade receivables) is used when there is objective evidence that the Trust will not be able to collect all amounts due according to the original terms of the receivables. The Responsible Entity estimates the amount to be provided for based on knowledge of individual retailer's circumstances, customer creditworthiness, and current economic trends. The amount of the allowance is continually reassessed following any changes in individual retailer's circumstances, such as bankruptcy, with a complete review undertaken every six months. 3 Net property income Property rental revenue 100,951 4,822,985 Property outgoings recovered 70,462 1,101,901 Property revenue 171,413 5,924,886 Less Direct property expenses (72,545) (2,722,453) Net property income 98,868 3,202,

19 Notes to the financial statements (continued) 4 Distributions and return of equity Total income distributions - 4,186,858 Total return of equity 19,162,984 45,543,792 19,162,984 49,730,650 Of the total net cash distributed by, 100% is tax advantaged (2013: 48.98%). 5 Current assets - Cash and cash equivalents Cash at bank and on hand - 3,018,332 6 Current assets - Trade and other receivables Trade receivables Property receivables - 55,584 Other receivables Accrued income - 353,892 Other receivable - 2,777 Total trade and other receivables - 412,253 7 Non-current assets classified as held for sale Valuation basis Property investment Kiama (S) - 22,700,000 Less: Estimated selling costs - (290,250) - 22,409,750 (S) On 21 December 2012, an unconditional contract was entered into for the sale of Kiama for consideration of $22,700,000. The 30 June 2013 valuation was based on the sale contract price and the settlement was completed on 15 July As at 30 June 2013, Kiama was accounted for as 'non-current assets classified as held for sale' as during the year, the Responsible Entity announced its intention to sell all remaining investment properties and wind up the Trust accordingly. -17-

20 Notes to the financial statements (continued) 7 Non-current assets classified as held for sale (continued) The reconciliation below details the movements for the year: Opening balance at 1 July 22,409,750 - Transfer from investment property (Note 8) - 22,700,000 Estimated selling costs - (290,250) Share of net profits from investment accounted for using the equity method - 13,087 Distribution received/receivable - (13,087) Disposal of investment property (22,409,750) - Closing balance at 30 June - 22,409,750 8 Non-current assets - Investment property Property investments Kiama (transferred to non-current assets classified as held for sale) (Refer Note 7) Melville Plaza (S) Altone Park (S) The reconciliation below details the movements for the year: At fair value Opening balance at 1 July - 65,050,000 Capitalised expenditure - 372,766 Fair value adjustment to investment property - (1,228,421) Disposal of investment property - (41,494,345) Transfer to non-current assets classified as held for sale - Kiama (Note 7) - (22,700,000) Closing balance at 30 June - - (S) Altone Park and Melville Plaza were sold on 28 September 2012 and 30 April 2013 for consideration of $15,900,000 and $29,000,000 respectively. -18-

21 Notes to the financial statements (continued) 9 Current liabilities - Trade and other payables Related party payables - 23,665 Other payables - 361,198 Accrued property expenses - 75,759 Deferred property rental revenue - 197,112 Total trade and other payables - 657,734 10Other financial liabilities Current Termination fees Deferred management fees - 3,090,840-2,088,092-5,178,932 The reconciliation below details the movements for the year: Termination fees movement Opening balance at 1 July 3,090,840 3,043,840 Termination fees paid (3,090,840) - Increase in financial liability - 47,000 Closing balance at 30 June - 3,090,840 Deferred management fees movement Opening balance at 1 July 2,088,092 2,088,092 Deferred management fees paid (2,088,092) - Closing balance at 30 June - 2,088,092 (a) Termination fees The Responsible Entity will be entitled to a termination fee if following the sale of the properties and wind up, the amount available to be paid to investors (which is represented by the unit value), is greater than the value of equity subscribed at the start of the current investment term. Termination fees of $3,090,840 were paid to the Responsible Entity on 29 July (b) Deferred management fees The Responsible Entity's entitlement to management fees is set out in the Trust's Product Disclosure Statement. The Responsible Entity has deferred the payment of a proportion of these fees but is entitled to recover unpaid fees at the end of the Trust term. Deferred management fees of $2,088,092 were paid to the Responsible Entity on 29 July

22 Notes to the financial statements (continued) 11Current liabilities - Provisions Provision for distribution or returns of equity - 1,167,420 (a) Movements in provisions The reconciliation below details the movements for the year: Provision for distribution or returns of equity Opening balance at 1 July 1,167,420 1,934,597 Amounts provided 19,162,984 49,730,650 Distributions paid or return of equity (20,330,404) (50,497,827) Closing balance at 30 June - 1,167, Contributed equity (a) Units issued The reconciliation below details the movements for the year: No. No. Number of units Opening balance at 1 July 57,650,370 57,650,370 Issued during the year - - Units cancelled during the year (57,650,370) - Closing balance at 30 June - 57,650,370 The reconciliation below details the movements for the year: Opening balance at 1 July 10,753,944 51,209,258 Issued during the year - - Return of equity (10,753,944) (45,543,792) Transfer equity raising costs to retained earnings - 5,088,478 Closing balance at 30 June - 10,753,

23 Notes to the financial statements (continued) 13 Underlying earnings Underlying earnings is a financial measure that represents the profit/(loss) under Australian Accounting Standards adjusted for certain unrealised and non-cash items, reserve transfers, capital transactions and other non-core items. It is not a term defined by Australian Accounting Standards. Underlying earnings is used by the Responsible Entity to make strategic decisions and as a guide to assessing an appropriate distribution to announce. In accordance with the Trust's Constitution, the amounts distributed to unitholders are at the discretion of the Responsible Entity. Net profit for the year 326,735 3,574,765 Adjusted for: Fair value adjustment to investment property - 1,228,421 Net gain on sale on investment property (174,029) (2,565,441) Estimated selling costs - 290,250 Liquidation expenses - 80,000 Other Responsible Entity fees - 47,000 Underlying earnings 152,706 2,654,995 14Net tangible asset backing (NTA) Net tangible assets attributable to unitholders ($) - 18,836,249 (a) Basic Number of units Number of units outstanding at the end of the year used in calculating basic net tangible asset backing per unit - 57,650,370 Basic NTA ($)

24 Notes to the financial statements (continued) 15Cash flow information Net profit for the year 326,735 3,574,765 Other Responsible Entity fees - 47,000 Fair value adjustment to investment property - 1,228,421 Liquidation expenses - 80,000 Estimated selling costs - 290,250 Net gain on sale of investment property (174,029) (2,565,441) Decrease in assets Trade and other receivables 412, ,223 Other assets - 808,257 Decrease in liabilities Trade and other payables (5,952,887) (395,125) Net cash (outflow)/inflow from operating activities (5,387,928) 4,057,350 16Related party transactions (a) Key Management Personnel Key Management Personnel ('KMP') are defined in AASB 124 Related Party Disclosures as those having the authority and responsibility for planning, directing and controlling the activities of the Trust. The Responsible Entity meets the definition of KMP as it has authority in relation to the activities of the Trust. Ongoing management and services fees paid/payable to the Responsible Entity during the year totalled $15,035 (2013: $401,258). (b) Transactions with related parties Transactions relating to termination fees and deferred management fees are disclosed in note 10. Other than these, the following transactions occurred with related parties: Key Management Personnel Responsible Entity management fees 3, ,612 Accounting recovery fees 2,125 48,750 Tax recovery fees 7,796 11,330 Legal recovery fees 1,594 18,566 15, ,258 Other related parties Trustee fees ,924 Property management fees 4, ,851 Leasing fees - 45,580 5, ,355 Joint venture and partnership Distribution revenue - (13,087) - (13,087) -22-

25 Notes to the financial statements (continued) 16 Related party transactions (continued) (c) Outstanding balances Balances relating to termination fees and deferred management fees are disclosed in notes 10. Other than these, the following balances are outstanding at the reporting date in relation to transactions with related parties: Payables to: Key Management Personnel Responsible Entity management fees - 14,357 Trustee fees - 1,049-15,406 Other related parties Property management fees - 8,259-8,259 The related entities of the Responsible Entity did not hold any ordinary units in the Trust as at the end of the financial year as all units were cancelled on (2013: 7,541,854). (d) Terms and conditions Units issued to related parties are on the same terms and conditions as all other issued units. Outstanding balances are unsecured and are repayable in cash. Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. 17Remuneration of auditors During the year the following fees were paid or payable for services provided by the auditor and/or its related practices: (a) Audit services Moore Stephens Audit and review of financial reports 15,500 51,800 (b) Non-audit services Moore Stephens Tax compliance service 2,750 7,305 18Commitments The Trust has no capital, finance lease or remuneration commitments in existence at the reporting date which have not been recognised as liabilities. -23-

26 Notes to the financial statements (continued) 19Contingencies At the date of this report, the Directors are not aware of any contingent liabilities that may have a material impact on the Trust's financial position, results of its operations or cash flows. 20 Events occurring after the reporting period No matter or circumstance has arisen in the interval between and the date hereof. -24-

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28 Level 10, 530 Collins Street Melbourne VIC 3000 T + ( ) F + ( ) TO THE MEMBERS OF RETAIL DIRECT PROPERTY 19 Report on the Financial Report We have audited the accompanying financial report of (the registered scheme), which comprises the balance sheet as at, the income statement, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information Responsibility for the Financial Report The directors of Retail Responsible Entity Limited, the Responsible Entity of the registered scheme, are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards. 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. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures 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 registered procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Moore Stephens ABN. Liability limited by a scheme approved under Professional Standards Legislation. An independent member of Moore Stephens International Limited members in principal cities throughout the world. The Melbourne Moore Stephens firm is not a partner or agent of any other Moore Stephens firm. And is a separate partnership in Victoria.

29 Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act Opinion In our opinion: (a) the financial report of is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of position as at and of its performance for the year ended on that date; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1. Emphasis of Matter Without qualifying our opinion, we draw attention to Note 1 to the financial statements, which describes the liquidation basis of accounting. Under the liquidation basis of preparation, all assets and liabilities are measured at their liquidation value. The liquidation value of assets is their net realisable value. Net realisable value approximates the current carrying amount of the assets measured under the relevant Australian Accounting Standards. The liquidation value of liabilities represents their expected settlement amount. MOORE STEPHENS Chartered Accountants Nick Michael Partner Melbourne, 5 September 2014