2015 CONCISE ANNUAL REPORT

Transcription

1 2015 CONCISE ANNUAL REPORT MAYNE INVESTMENTS LIMITED Responsible Entity for Northern Investment Trust Fund

2 Corporate Data Auditors Crowe Howarth, Lismore Solicitors Walters, Lismore Hosie and Partners, Ballina McCartney Young, Ballina McCullough Robertson, Brisbane Bankers ANZ Banking Group Limited Registered Office 29 Molesworth Street PO Box 1198 Lismore NSW 2480 Ph Fax Mayne Investments Limited 2015 Concise Annual Report

3 MAYNE INVESTMENT LIMITED ABN AS RESPONSIBLE ENTITY FOR NORTHERN INVESTMENT TRUST FUND ARSN Contents Chairman s Report 4 Chief Executive Officer s Report 6 Directors Report 7 Discussions and Analysis of the Financial Statements 13 Auditor s Independence Declaration 14 Statement of Profit or Loss and Other Comprehensive Income 15 Statement of Financial Position 16 Statement of Changes In Equity 17 Statement of Cash Flows 18 Notes to the Financial Statements 19 Directors Declaration 20 Independent Audit Report 21 Mayne Investments Limited 2015 Concise Annual Report 3

4 CHAIRMAN S REPORT Since the announcement by the Board of Directors on 12 June 2012 to wind down the Fund, we have been working through the issues involved in ensuring this process takes place in a well organised, structured and as timely a manner as possible. The 2015 financial year has been one of steady progress in achieving that aim. The value of the units in the Fund as at 31 May 2015 is $0.98 per unit. The results for the year disclosed a loss for the year of $950,341. This result was affected primarily by the decisions of two (2) borrowers. One borrower decided to significantly reduce the sale prices of its investment in vacant land in order to sell down and exit the market. The properties were sold during the 2015-year with the net receipts from sale being insufficient to repay the loans, resulting in a loss to the Fund. The Board will continue to seek recovery of the loss through legal recourse. Another larger borrower, having attempted to refinance its loan over many months, decided to appoint an administrator to their Company on 4 June, 2015, when the refinance could not be achieved. The Fund in turn immediately appointed a Receiver over the property held as security for the loan. The eventual sale price and associated costs, including legal and receivers costs are unknown, however, a provision for impairment has been accounted for at 31 May 2015 in anticipation of a loss after the proceed from the eventual sale of the security property are applied against the loan. Significant progress has been made in selling assets where the Fund has taken over the management of properties as mortgagee in possession after the borrower has defaulted in its commitments under the loan agreement. The proceeds from the sales of these properties are returned to investors as part of the capital returns on a quarterly basis. It is pleasing to note that a borrower over which a receiver had been appointed some forty two (42) months ago has sold all the property held as security for the loan as at 31 May Again, the sales of these properties are part of the capital returns paid to investors on a quarterly basis. The real estate market, particularly on the North Coast of NSW, is showing signs of confidence returning to the market place, nevertheless, it is still slow and price sensitive. This has meant that some borrowers have not been able to sell their properties to either reduce their debt exposures or pay interest on their current debts. Loan repayments during the 2015-year however amounted to $16,865,478. We are continually monitoring our loan portfolio and are taking recovery action where deemed appropriate on loans in default. Your directors continue to adopt the policy of not forcing a fire sale of property held as security for those loans in default, where there is potential for an uplift in values as the property market improves. We believe it is important to manage the loans through the current economic climate to obtain the best outcome for investors. There have been 4 quarterly returns of capital to investors as loans are repaid either from asset sales or refinancing of loans with other organisations. During the year an amount of $21,924,657 has been returned to investors in cash. This is in addition to the $139,657,500 returned since May Since the Board adopted the policy of periodic compulsory returns of capital in May 2011, investors have had 84.3% of their funds returned to them in cash. Investors want to know how long will it take to wind down the Fund and return all funds to investors. During the 2015-year and subsequently, there have been a significant number of property sales of vacant land over which Mayne Investments Ltd has control as mortgagee in possession and property controlled by receivers. Loans are continually being refinanced and it is expected that all current loans, other than loans in default where recovery action is currently being undertaken and mortgagee in possession loans, will be repaid within the next financial year. 4 Mayne Investments Limited 2015 Concise Annual Report

5 CHAIRMAN S REPORT xxxx. The Board and management are endeavouring to complete the process as expeditiously as possible. I acknowledge the effort put in by staff, management and my fellow Directors over the past year. I also wish to thank you, the investors, for your patience, support and understanding during the year. We recognise the difficulties faced by all investors in having your investment being frozen and inaccessible. We will continue to return capital to investors on a quarterly basis within the constraints of our liquidity position at that time. However, we remain committed to protecting the unit value at $1.00, or close to it, so that investors have no, or little loss of capital in the wind down process. Investors can be assured that the Boards main priority is the protection of their investment and achieving the best possible result in the wind down process. I thank you for the personal support expressed by many during the year and I have every confidence we will successfully manage the fund through the remaining period ahead. Kevin McGregor Chairman Mayne Investments Limited 2015 Concise Annual Report 5

6 CHIEF EXECUTIVE OFFICER S REPORT When the Board of Directors of Mayne Investments Limited made the difficult but necessary decision to suspend redemptions, following the Federal Government s decision to guarantee bank deposits, it was hoped that we would be able to unfreeze and recommence normal operations within a short period of time. Circumstances however conspired to make this impossible to achieve, as the mortgage funds industry fell into rapid decline. It is well documented that many similar managed investment schemes suffered significant losses of investor capital. Once it became apparent that the Fund could not continue, despite exploring every possible option, the Board determined to wind the Fund down with the express purpose of preserving investor capital and returning it to investors as soon as possible. Given that much of our loan portfolio contained a number of unfinished property developments, we always knew that the process would take some time to achieve. It is pleasing to report that at long last there appears to be light at the end of the tunnel. Most of these developments are now nearing their end, with sales being achieved at significantly higher prices than what would have been achieved had they been rushed to the market, undeveloped or as is. It is expected that most, if not all remaining lots, will find a buyer in what is a much improved property market. There is just one fully approved land development, currently in the hands of receivers, to be disposed of. It is expected that it will find a ready buyer once put to market in the coming months. Those few remaining loans are all due to expire in the coming months and are expected to be fully repaid, by the end of the year. During the last financial year, the Fund made four capital returns totalling $21,924,657; the last being 15% of unitholders funds. It is hoped that the quantum of these returns can be increased in the near future. As at 31 May, 2015, Funds under management totalled $34,485,299 ( $57,360,297) from a pre-gfc high of $333 million and included: Cash and cash equivalents $7,036,293 ( $10,599,082) Loans & receivables $27,604,489 ( $46,775,211) The unit value, although fluctuating from quarter to quarter, has consistently hovered at or just below the $1.00 mark and it is the Director s intention to do all within its powers to ensure the unit value is maintained. At the end of the financial year the value of the unit was $0.98. Following a further 15% return of capital for the quarter ending 31 August 2015, the Fund is now just $30 million. The Board will continue to work towards the successful wind down of the Fund as quickly as possible. They firmly believe that this task is drawing to an end and thank all investors for their continued patience and understanding in what has been a difficult and protracted process. Greg Andersen CEO 6 Mayne Investments Limited 2015 Concise Annual Report

7 DIRECTORS REPORT The Directors of Mayne Investments Limited (the Responsible Entity), the Responsible Entity of Northern Investment Trust Fund (the Scheme) present their report together with the financial report of the Scheme, for the year ended 31 May 2015 and the auditor s report thereon. Responsible Entity The registered office and principal place of business of the Responsible Entity and the Scheme is 29 Molesworth Street, Lismore, NSW. Directors The Directors of Mayne Investments Limited during or since the end of the financial year are: Kevin Joseph McGregor Stephen John Connelly Patrick Joseph Rummery Michael Gerard Shay Principal Activities The Scheme is a registered managed investment scheme domiciled in Australia. The principal activities of the Scheme during the year were to offer individual investors the opportunity to combine their funds with the funds of other investors to collectively, within the trust, invest in bank securities, and loans secured primarily by mortgages over real estate. There was no significant change in the nature of the principal activities during this period. Review of Operations Operating Results The Scheme s net profit / (loss) from operations after income tax and before finance costs for the current year was ($950,341) (2014 profit $1,895,164). The Scheme s Constitution contains a clause that permits the Responsible Entity to provide for the anticipated losses, expenses or obligations of the Scheme in a Reserve under Clause 8.2 (b) of the Constitution. The Responsible Entity has determined that the Scheme has no known losses, expenses or obligations at 31 May 2015, other than the provision for impairment of loan receivables, that require an amount to be provided out of the distributable income of the Scheme for the year ended 31 May 2015, for the purposes of Clause 8.2 (b). The Directors of the Responsible Entity have reviewed the loan receivables as at 31 May 2015 and have declared, there were three loans requiring impairment and a provision for impairment has been made in the amount of $915,000. Distribution to Unit holders There were no distributions to unit holders for the year ended 31 May Distributions to unit holders for the previous year ended 31 May 2014, amounted to $659,028. Mayne Investments Limited 2015 Concise Annual Report 7

8 DIRECTORS REPORT 31/05/ /05/2014 Revenue $ $ Interest Income 2,733,094 3,447,445 Total Revenue 2,733,094 3,447,445 Expenses Responsible Entity Fees 508, ,618 Employees Benefits Expenses 346, ,467 Custodian Fees 15,416 18,768 Bad Debts Written Off 1,424,244 - Provision for Impairment of Loan Receivables 881,000 (203,251) Receivers Fees and Property Expenses 238, ,444 Other Expenses 269, ,948 Total Expenses 3,683,435 1,499,994 Profit / (Loss) Before Income Tax (950,341) 1,947,451 Interests of the Responsible Entity The Responsible Entity held 366,122 units in the Scheme as at 31 May 2015 ( ,854 units). Fees paid to the Responsible Entity The Responsible Entity was entitled to claim fees totalling $486,410 (exclusive of GST) for the year ended 31 May 2015 ( $730,666 excluding GST), in accordance with the Constitution of the Scheme. The Responsible Entity will be paid fees of $486,410 (exclusive of GST) for the year ended 31 May 2015 ( $552,744 excluding GST). There is also an unrecoverable GST cost of $21,889 ( $24,874) resulting in the Responsible Entity Fees expense of $508,299 for the year ended 31 May 2015 ( $577,618). The balance of Responsible Entity fees not claimed by the Responsible Entity was nil for the year ended 31 May 2015 ( $177,922 exclusive of GST). Significant Changes in the State of Affairs of the Scheme Since freezing all redemption requests on 21 October 2008, the Board has made ten partial redemption offers to investors up to 31 May Since 31 May 2011 partial redemption offers were discontinued and a policy of compulsory capital returns was adopted. Four compulsory capital returns and returns of capital under the Hardship provisions were made during the year to 31 May 2014 totalling $30,492,235. Four compulsory capital returns and returns of capital under the Hardship provisions were made during the year to 31 May 2015 totalling $21,924,657. On 19 May 2011 the Responsible Entity suspended the taking of new investments in the Scheme until further notice. The Scheme continues to follow that policy. 8 Mayne Investments Limited 2015 Concise Annual Report

9 DIRECTORS REPORT Since 31 May 2011, when the policy of paying periodic compulsory capital returns to investors was adopted and the decision on 15 June 2012 to wind down the Scheme, borrowers were actively encouraged to either refinance their loans or sell properties to repay their loans. Since 31 May 2013 loan receivables have reduced by $44,419,663 with capital returned to investors amounting to $52,416,892. This reduction in loan receivables and cash equivalents has substantially affected the asset position and interest income of the Scheme. The results for the year were also affected by bad debts written off of $1,424,244 and an increase in the provision for impairment of loan receivables of $881,000. In the opinion of the Responsible Entity there were no other significant changes in the state of affairs of the Scheme that occurred during the current year. Events Subsequent to Balance Date It is likely income distributions to unit holders will be adversely affected in the next financial year due to the ongoing policy of reducing assets and returning the capital to unitholders. On 1 June 2015, the Directors of a major borrower appointed an Administrator to their company. Mayne, as the only secured creditor of the company, appointed a receiver over the major asset of that company on 18 June The major asset of the company being vacant land with an approved Development application attached thereto. Likely Developments The Board of Mayne Investments Limited expects that the Scheme will be affected by the following issues in the future: On 19 May 2011, the Responsible Entity suspended the taking of new investments in the Scheme until further notice; The scheme has suspended periodic redemption offers and adopted a policy of periodic compulsory returns of capital as determined by the liquidity position at the time; and On 15 June 2012, the Board announced its intention to wind down the Scheme with the eventual aim of returning capital to unit holders. This policy continues to be followed. It is expected this process could take some considerable time to achieve as loans are repaid, either through refinancing of the debt by the borrower or the sale of security property. Future income of the Scheme will be substantially affected as income producing assets are reduced as the Scheme winds down its operations. Environmental Regulation The Scheme s operations are not subject to any significant environmental regulation under either Commonwealth, State or Territory legislation. The Board of Mayne has assessed the recoverable amount of the security for the loan based on available information and have included a provision for impairment of this loan in the financial statements as at 31 May Mayne Investments Limited 2015 Concise Annual Report 9

10 DIRECTORS REPORT Indemnities and Insurance Premiums for Officers or Auditors Indemnification Under the Scheme s Constitution, the Responsible Entity, including its officers and employees, is indemnified out of the assets of the scheme 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 Scheme. The Scheme has not indemnified any auditor of the scheme. Insurance Premiums No insurance premiums are paid out of the Scheme s assets in relation to insurance cover for the Responsible Entity, its officers and employees, the Compliance Committee or the Auditors of the Scheme. Proceedings on behalf of the Scheme Mayne Investments Ltd as Responsible Entity for the Scheme commenced legal proceedings for the recovery of monies outstanding from five of the Guarantors of two loans in default. As at the date of this report legal proceedings for recovery from three of the Guarantors are ongoing. Valuation of the Scheme Assets The value of the Scheme assets at 31 May 2015 was $34,719,248 ( : $57,543,258). The basis for valuation of the Scheme s assets is discussed in Note 3 to the financial statements. Information on Directors of Responsible Entity Kevin Joseph McGregor Non Executive Chairman of Directors/Compliance Officer Age 65 Mr McGregor is a qualified Chartered Accountant and is a former senior partner in the firm of WCA Chartered Accountants formerly Wappetts Chartered Accountants of Lismore. He practiced as a Chartered Accountant in public practice from 1971 to up until his retirement on 1 July 2010 and has considerable experience in audit, taxation, commercial and financial accounting. He has been a Director of Mayne Investments Limited since 1994 and is a member of the Audit and Compliance Committees. He was elected Chairman of Directors on 27 June Patrick Joseph Rummery Non Executive Director Age 76 Mr Rummery is a Foundation Manager and Director of Mayne Investments Limited serving in those roles since formation on 3 June 1968 and occupied the position of Chairman from 13 March 1995 to 17 November He is a retired solicitor and was involved in legal practice from 1963 to 1998, specialising in the fields of Property, Commercial Law, Liquor Law and Probate. He has recently retired as Executive Director of a wholesaling business involving importing goods for distribution to the retail market throughout Australia. He is a member of the Audit Committee. 10 Mayne Investments Limited 2015 Concise Annual Report

11 DIRECTORS REPORT Michael Gerard Shay Non Executive Director Age 63 Mr Shay is a licensed Real Estate Agent, Business Agent and Stock and Station Agent and has been in that business for 42 years. He is a partner in the firms LJ Hooker Ballina and Lennox Head. He has been involved in marketing and management and development of subdivisions, shopping centres, industrial and residential projects and general advice regarding property development. He has been a Director of Mayne Investments Limited since 1988 and occupied the position of Deputy Chairman of Directors between 1995 and November He has also been involved in other Funds management since He is a member of the Audit Committee. Stephen John Connelly Non Executive Director Age 59 Mr Connelly is a Certified Practising Planner and Fellow of the Planning Institute of Australia. He has over 34 years experience in town planning. He also holds a Masters Degree in Environmental and Business Management. His specialist skills are in the fields of statutory, concept and ESD planning. Mr Connelly is also extensively involved in regional planning in the NSW Northern Rivers and is a former President of the Northern NSW Branch of the Planning Institute of Australia. Mr Connelly is regularly called upon to give expert town planning testimony to various courts and tribunals. He has been a Director of Mayne Investments Limited since August 2002 and became Chairman of the Compliance Committee on 1 December He is a member of the Audit Committee. Meetings of Directors of the Responsible Entity During the year 24 meetings of Directors were held. The number of meetings attended by each Director during the year were: Directors Meetings attended No of meetings eligible to attend Kevin Joseph McGregor Stephen John Connelly Patrick Joseph Rummery Michael Gerard Shay During the year there were 2 meetings of the Audit Committee. The meeting attendance by each Director on this committee was: Audit Committee Meetings attended No of meetings eligible to attend Kevin Joseph McGregor 2 2 Stephen John Connelly 1 2 Patrick Joseph Rummery 2 2 Michael Gerard Shay 2 2 During the year there were 5 meetings of the Compliance Committee. The meeting attendance by each Director on this committee was: Compliance Committee Meetings attended No of meetings eligible to attend Kevin Joseph McGregor 5 5 Stephen John Connelly 5 5 Mayne Investments Limited 2015 Concise Annual Report 11

12 DIRECTORS REPORT Lead Auditors Independence Declaration The lead auditors independence declaration is set out on page 14 and forms part of the Directors report for the year ended 31 May This report is made with a resolution of the Directors of the Responsible Entity. Kevin J McGregor Stephen J Connelly Dated at Lismore this 31st day of August Mayne Investments Limited 2015 Concise Annual Report

13 DISCUSSIONS AND ANALYSIS of the FINANCIAL STATEMENTS Information on Northern Investment Trust Fund Concise Financial Report. The concise financial report is an extract from the full financial report for the year ended 31 May The Financial Statements and disclosures in the Concise Financial Report have been derived from the 2015 Financial Report of Northern Investment Trust Fund. A copy of the full Financial Report and auditors report will be sent to any unit holder, free of charge, upon request. The discussion and analysis is provided to assist unit holders in understanding the Concise Financial Report. The discussion and analysis is based on Northern Investment Trust Fund s financial statements and the information contained in the Concise Financial Report has been derived from the full 2015 Financial Report of Northern Investment Trust Fund. Statement of Profit or Loss and Other Comprehensive Income For the year ending 31 May 2015, the Scheme s net profit / (loss) from operations after income tax and before finance costs was ($950,341) ( $1,895,164). This result was after an increase in the provision for impairment of loan receivables of $881,000 ( ($203,251)) and bad debts written off of $1,424,244 ( Nil). There were no distributions to unit holders for the year ended 31 May 2015 ( $659,028). There was no income tax expense for the year ended 31 May 2015 ( $52,287). Statement of Financial Position Cash and cash equivalents decreased by $3,562,789. Loans and receivables reduced $16,865,478 from loan repayments during the year, there was an increase in the provision for impairment of loan receivables of $881,000. Bad debts written off totalled $1,424,244. The cash generated by the items above were applied as compulsory capital returns and returns of capital under the Hardship provisions to unit holders. Cash returned to unit holders amounted to $21,924,657. Statement of Cash Flows The Scheme reported net cash flows from operating activities of $1,496,390 for the year ended 31 May 2015 ( $1,694,982). The reduction in loans over this period, as a result of Borrowers refinancing and paying down their loans, resulted in net cash flows from investing activities of $16,865,478 ( $25,378,192). There was a net outflow of funds of $21,924,657 by periodic compulsory capital returns and returns of capital under the Hardship provisions during the year. Cash and cash equivalents amounting to $3,562,789 were reduced to fund the net outflows of funds. Statement of Changes in Equity Unit holders equity reduced by $22,874,998 during the year. Redemption of units by way of compulsory capital returns and returns of capital under the Hardship provisions to unit holders, amounted to $21,924,657. The loss in the Statement of Comprehensive Income amounting to ($950,341) decreased unit holders equity as at the end of the year. Net assets decreased by $22,874,998 or 39.88% to $34,485,299 during the year. The decrease in the Scheme was mainly attributable to the following: Mayne Investments Limited 2015 Concise Annual Report 13

14 AUDITOR S INDEPENDENCE DECLARATION Under section 307C of the Corporations Act 2001 to the Directors of Mayne Investments Limited ABN (as Responsible Entity for the Northern Investment Trust Fund ARSN ). I declare that, to the best of my knowledge and belief, during the year ended 31 May 2015 there have been: i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and ii. no contraventions of any applicable code of professional conduct in relation to the audit. Crowe Horwath Central North Bradley D Bohun Registered Company Auditor (ASIC RAN ) 53 Carrington Street LISMORE NSW 2480 Dated: 31 August Mayne Investments Limited 2015 Concise Annual Report

15 STATEMENT OF PROFIT OR LOSS And other comprehensive income for the year ended 31 May /05/ /05/2014 Revenue $ $ Interest Income 2,733,094 3,447,445 Total Revenue 2,733,094 3,447,445 Expenses Auditors Remuneration 53,034 55,646 Provision for Impairment of Loan receivables 881,000 (203,251) Responsible Entity Fees 508, ,618 Employee Benefits Expense 346, ,467 Custodian Fees 15,416 18,768 Bad Debts Written Off 1,424,244 - Receivers Fees & Property Expenses 238, ,444 Other Expenses 216, ,302 Operating Expenses before Finance Costs 3,683,435 1,499,994 Profit / (Loss) before Income Tax (950,341) 1,947,451 Income Tax (Expense) / Revenue - (52,287) Profit / (Loss) after Income Tax (950,341) 1,895,164 Finance Costs Distribution Expense to Unit Holders - 659,028 Total Comprehensive Income (950,341) 1,236,136 Mayne Investments Limited 2015 Concise Annual Report 15

16 STATEMENT OF FINANCIAL POSITION As at 31 May /05/ /05/2014 $ $ Assets Cash and Cash Equivalents 7,036,293 10,599,082 Loans and Receivables 27,604,489 46,775,211 Other Receivables 78, ,965 Total Assets 34,719,248 57,543,258 Liabilities Accounts Payable 180,491 84,132 Tax Liability - 52,287 Provisions 53,458 46,542 Total Liabilities 233, ,961 Net Assets 34,485,299 57,360,297 Equity Unit Holders Equity 34,485,299 57,360,297 Total Equity 34,485,299 57,360, Mayne Investments Limited 2015 Concise Annual Report

17 STATEMENT OF CHANGES IN EQUITY For the year ended 31 May 2015 The unit holders contributions were reclassified from financial liabilities to equity at 31 May 2012 as a result of changes in acceptance, redemption, and distribution of funds to unit holders by the Scheme that characterises the relationship between unit holders and the Scheme as equity. Units on Issue $ Balance of Units issued at 1 June ,783,044 86,607,067 Issue of Units - - Redemption of Units (30,497,421) (30,497,421) Redeemed Units Valuation Adjustment - 5,186 Comprehensive Income - 1,236,136 Balance of Units issued 31 May ,285,623 57,350,968 Undistributed Income - 9,329 Unit Holders Equity at 31 May ,285,623 57,360,297 Balance of Units issued at 1 June ,285,623 57,350,968 Issue of Units - - Redemption of Units (21,925,784) (21,925,784) Redeemed Units Valuation Adjustment - 1,127 Comprehensive Income - (950,341) Balance of Units issued 31 May ,359,839 34,475,970 Undistributed Income - 9,329 Unit Holders Equity at 31 May ,359,839 34,485,299 Mayne Investments Limited 2015 Concise Annual Report 17

18 STATEMENT OF CASH FLOWS For the year ended 31 May /05/ /05/2014 $ $ Cash Flows From Operating Activities Interest Received 2,733,094 3,447,445 Operating Expenses Paid (1,236,704) (1,752,463) Net Cash Flows from Operating Activities 1,496,390 1,694,982 Cash Flows From Investing Activities Net Decrease in Investment in Loans 16,865,478 25,378,192 Net Cash Flows from Investing activities 16,865,478 25,378,192 Cash Flows From Financing Activities Distribution Paid - (659,028) Payments on Redemption of Redeemable Units (21,924,657) (30,492,235) Net Cash Flows used in Financing Activities (21,924,657) (31,151,263) Net (Decrease) / Increase in Cash & Cash Equivalents (3,562,789) (4,078,089) Cash & Cash Equivalents at 1 June ,599,082 14,677,171 Cash & Cash Equivalents at 31 May ,036,293 10,599, Mayne Investments Limited 2015 Concise Annual Report

19 NOTES TO THE FINANCIAL STATEMENTS For the year ended 31 May 2015 Note 1: Basis of Preparation of the Concise Financial Report The concise financial report is an extract from the full financial report for the year ended 31 May The concise financial report has been prepared in accordance with Accounting Standard AASB 1039: Concise Financial Reports, and the Corporations Act The financial statements, specific disclosures and other information included in the Concise Financial Report are derived from and are consistent with the full Financial Report of Northern Investment Trust Fund. The Concise Financial Report cannot be expected to provide as detailed an understanding of the financial performance, financial position and financing and investing activities of Northern Investment Trust Fund as the full Financial Report. A copy of the full Financial Report and Auditor s Report will be sent to any unit holder, free of charge, upon request. The Financial Report of Northern Investment Trust Fund complies with all Australian equivalents to International Financial Reporting Standards (AIRFS) in their entirety. The presentation currency used in this Concise Financial Report is Australian dollars. Note 2: Interest Income 31/05/ /05/2014 $ $ Interest income from financial assets carried at amortised cost Cash and Cash Equivalents 400, ,449 Loans & Receivables 2,332,171 2,950,996 Total Interest Income 2,733,094 3,447,445 Note 3: Business Continuity As a consequence of economic circumstances, Directors elected, in line with industry trends and acting in the best interests of unit holders and other stakeholders, to place a moratorium on redemptions of unit holders investments. In concert with this action, Directors withdrew the PDS on 21 October 2008 and issued a new PDS on 2 March On 19 May 2011 the Board ceased taking new investments, including reinvestments, because of the uncertainty of the valuation of the security supporting a significant loan. As the credit crisis continued, other significant loans went into default. The Board continued with the policy of not taking new investments, but in all other respects continued to operate the fund as a going concern including managing the portfolio of loans and funding new borrowings. The policy of periodic redemption offers to unit holders ceased in May 2011, with the Board adopting a policy of periodic compulsory returns of capital allowing unit holders limited access to their funds. On 15 June 2012, the Board announced its intention to wind down the Scheme. No new investments will be taken and as loan receivables are collected, these funds will ultimately be returned to unit holders as returns of capital. The Board recognises this process will take some considerable time to finalise. Whilst this process is in place the Scheme will continue to operate with the management of the current portfolio of loans, including loans in default whilst periodically returning capital to unit holders as and when the liquidity position allows. Mayne Investments Limited 2015 Concise Annual Report 19

20 Notes to the Financial Statements cont. DIRECTORS DECLARATION Note 4: Events subsequent to reporting date Borrowers are actively encouraged to either refinance their loans or sell properties to repay their loans. The continued repayment of loans and the subsequent return of these funds as capital returns to unit holders means that future income of the Scheme will be substantially reduced. It is likely income distributions to unit holders will be adversely affected in the next financial year due to these conditions. On 1 June 2015, the Directors of a major borrower appointed an Administrator to their company. Mayne, as the only secured creditor of the company, appointed a receiver over the major asset of that company on 18 June The major asset of the company being vacant land with an approved Development Application attached thereto. Directors Declarations In accordance with a resolution of the directors of Mayne Investments Limited, the responsible entity of Northern Investment Trust Fund (the Scheme), the directors of the company declare that the concise financial report of the Scheme for the year ended 31 May 2015, set out on pages 15 to 20; (a) complies with Australian Accounting Standard 1039; Concise Financial Reports; and (b) is an extract from the full financial report for the year ended 31 May 2015 and has been derived from and is consistent with the full financial report of Northern Investment Trust Fund. Signed in accordance with a resolution of the directors of the Responsible Entity. The Board of Mayne has assessed the recoverable amount of the security for the loan based on available information and have included a provision for impairment of this loan in the financial statements as at 31 May Other than the matter mentioned above, there has not arisen in the interval between the end of the financial year and the date of this report any other item, transaction or event of a material and unusual nature likely, in the opinion of the Responsible Entity, to affect significantly the operations of the Scheme, the results of those operations, or the state of affairs of the Scheme in future financial years. KJ McGregor SJ Connelly Dated at Lismore this 31st day of August Mayne Investments Limited 2015 Concise Annual Report

21 Mayne Investments Limited 2015 Concise Annual Report 21

22 22 Mayne Investments Limited 2015 Concise Annual Report

23 Mayne Investments Limited 2015 Concise Annual Report 23

24 24 Mayne Investments Limited 2015 Concise Annual Report