HC Mansion UK Student Accommodation Income and Growth Feeder Trust

Transcription

1 HC Mansion UK Student Accommodation Income and Growth Feeder Trust ( A NURS feeder fund for the HC Mansion UK Student Accommodation Income and Growth Fund) Half-yearly Unaudited Long Report For the period 14 December 2012 to 1 July 2013

2 Contents Investment Structure 2 Statement of Manager s Responsibilities 3 Manager s Report 3 Review of Investment Activities during the Period HC Mansion PAIF 4 5 Aggregated Financial statements Aggregated Statement of Total Return 6 Aggregated Statement of Changes in Net Assets Attributable to Unitholders 6 Aggregated Balance Sheet 7 Aggregated Statement of Cash Flows 8 Notes to the Aggregated Financial Statements 9 14 HC Mansion Student Accommodation Class A Net Accumulation Feeder Trust Comparative Table Investment Manager s Report 18 Statement of Changes in Net Assets Attributable to Unitholders 19 Statement of Total Return 19 Balance Sheet 20 Statement of Cash Flows 21 Notes to the Financial Statements HC Mansion Student Accommodation Class A Net Income Feeder Trust Comparative Table Investment Manager s Report 27 Statement of Changes in Net Assets Attributable to Unitholders 28 Statement of Total Return 28 Balance Sheet 29 Statement of Cash Flows 30 Notes to the Financial Statements 31 32

3 HC Mansion UK Student Accommodation Income and Growth Feeder Trust Statement of the Authorised Status of the Scheme The HC Mansion UK Student Accommodation Income & Growth Feeder Trust ( the Trust ) is a non-ucits retail scheme (NURS) and umbrella unit trust and was authorised by the Financial Conduct Authority ( FCA ) with effect from 25th September Basis of Reporting As at 1st July 2013, the Trust has two sub-funds in issue, the HC Mansion Student Accommodation Class A Net Accumulation Feeder Trust and HC Mansion Student Accommodation Class A Net Income Feeder Trust. In view of this aggregate financial statements have been included in this report. The aggregated financial statements and the statements of the HC Mansion Student Accommodation Class A Net Accumulation Feeder Trust and HC Mansion Student Accommodation Class A Net Income Feeder Trust, are disclosed on pages 6 to 32, and represent the financial statements of the Trust for reporting purposes. The Manager has elected to issue a short report for each of the sub-funds. 1

4 HC Mansion UK Student Accommodation Income and Growth Feeder Trust Investment Structure The Trust has two sub-funds in issue. HC Mansion Student Accommodation Class A Net Accumulation Feeder Trust and HC Mansion Student Accommodation Class A Net Income Feeder Trust are feeder NURS funds for the Class A Accumulation and Class A Income Shares of HC Mansion UK Student Accommodation Income and Growth Fund. HC Mansion UK Student Accommodation Income and Growth Fund ( the HC Mansion PAIF ) is an Investment Company with Variable Capital ( ICVC ) non-ucits retail scheme and Property Authorised Investment Fund ( PAIF ). Head Office: 73 New Bond Street, London W1S 1RS Authorised Corporate Director ( ACD ): Host Capital Limited Depository: National Westminster Bank Plc Property Manager: Mansion Property Management Limited Standing Independent Valuer: DTZ The investment objective of the HC Mansion PAIF is to carry on Property Investment Business and to manage cash raised from investors for investment in Property Investment Business with the aim of providing investors with regular income and some capital growth over the longer term. Its investment policy is to invest not less than 60% of its assets in UK commercial and residential property and in shares or units of UK or non-uk real estate investment trusts. The property assets the HC Mansion PAIF intends to acquire will be freehold interests or long-term leasehold interests in properties located in the top 30 (measured by student population) university towns and cities of the UK. The properties will be either purpose built student accommodation or other buildings (i.e. offices or hostels, hotels, services apartments or residences which can be adapted for use as student accommodation). In some instances, the assets acquired will also contain some ancillary retail, office or other commercial accommodation but these areas will rarely amount to any more than 20% of the overall accommodation. The ACD will endeavour to ensure the HC Mansion PAIF maintains an appropriate level of liquidity for the purposes of redemptions on a normal basis. For this purpose, the HC Mansion PAIF may invest up to 25% of its Net Asset Value in liquid assets which may include cash and deposits, transferable securities, money market instruments and government and public securities. The half-yearly unaudited long report for the HC Mansion PAIF is Published on the ACD s website or is available from the ACD on request by calling +44(0) during normal business hours. 2

5 HC Mansion UK Student Accommodation Income and Growth Feeder Trust Statement of Managers Responsibilities The Manager is responsible for preparing the financial statements in accordance with applicable law and United Kingdom Generally Accepted Accounting Practice. The Financial Services Authority s Collective Investment Schemes Sourcebook (the COLL Sourcebook) requires the Manager to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the Trust and of the net revenue/ expense and of the net capital gains/losses on the scheme property of the Trust for that year. In preparing those financial statements, the Manager is required to: select suitable accounting policies, as described in the attached financial statements, and then apply them consistently; make suitable judgements and estimates that are reasonable and prudent; state whether applicable United Kingdom accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; prepare the financial statements in accordance with the requirements of the IMA SORP; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Trust will continue in business. The Manager is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Trust and to enable it to ensure that the financial statements comply with the COLL Sourcebook. The Manager is also responsible for safeguarding the assets of the Trust and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Manager s Report This report has been prepared in accordance with the requirements of the Collective Investment Schemes Sourcebook as issued and amended by the Financial Conduct Authority. Director Director Host Capital Limited Host Capital Limited 30th August th August

6 HC Mansion UK Student Accommodation Income and Growth Feeder Trust Review of Investment Activities during the Period HC Mansion PAIF Student Accommodation Sector Over the first half of 2013, university applicants have been seen to increase compared to the previous year. Universities and Colleges Admissions Service ( UCAS ) recently released the 2013 cycle applicant figures. These figures include all applicants until the end of June 2013 which typically represents 95% of total applicants with the remaining 5% coming through the clearing process. The key highlights are of UCAS statistics are 1 : 3.1% increase in applicants to circa 637,000 for all courses across the UK for the 2013/14 intake applicant rates of 18 year olds across the UK increased by 0.7% compared to 2012/13 applicants from EU countries have increased by 4.3% for the 2013/14 intake applicants from outside the EU have increased by 6% for the 2013/14 intake Portfolio Update The HC Mansion UK Student Accommodation Income and Growth Fund ( the Company ), completed its first property purchase on 19th April 2013 at Haigh Court, Liverpool. Haigh Court is a well located asset situated in the heart of the student district, within five minutes walking distance of The University of Liverpool and Liverpool John Moore s University and comprises of 158 en-suite bed spaces in 1 7 bedroom flat configurations. This summer the property is undergoing a full refurbishment to bring it up to the Mansion Standard and is already demonstrating positive occupancy levels for the next academic year. On the 28th June 2013 the Company purchased a 219 bed asset in Exeter located minutes from the University campus with the property offering a high-level specification in a great location. Constructed approximately 3 years ago this property provides a combination of en-suite cluster flat and studio accommodation close to Exeter University s main campus at highly competitive rental levels. The property is being refurbished this summer to further enhance its current specification and is already posting good occupancy levels for the next student year. Exeter is a highly regarded and established university town with improving student numbers in attendance and is experiencing a high level of student demand with applications outstripping supply. In addition, the university has further plans in progress for a continued expansion of the university and therefore this purchase represents a rare opportunity to purchase a trading asset in an established and growing market. 1 UCAS 2013 cycle applicant figures June deadline 4

7 HC Mansion UK Student Accommodation Income and Growth Feeder Trust Post Period End Review The Company continues to raise capital and on 17th July 2013 the Company acquired its third property, Poland House, situated in London being the largest university city in the UK. Poland House contains 100 non en-suite rooms, in 23 cluster flats and is targeted at a much neglected end of the market, providing lower cost accommodation in a generally expensive city. The property will be subject to a comprehensive refurbishment during summer The refurbishment of Haigh Court and Exeter One is ongoing and will be finalised during September The occupancy rate across the portfolio for the 2013/2014 academic year currently stands at 91%. Host Capital Limited Investment Manager 30th August

8 HC Mansion UK Student Accommodation Income and Growth Feeder Trust Aggregated Statement of Total Return for the period 14th December 2012 to 1st July /12/2012 to 01/07/ Income Net capital gains 336 Expenses (7) Net revenue/(expenses) before taxation (7) Net revenue/(expense) after taxation (7) Total return before distributions 329 Change in net assets attributable to unitholders from investment activities 329 Aggregated Statement of Changes in Net Assets Attributable to Unitholders for the period 14th December 2012 to 1st July /12/2012 to 01/07/ Opening net assets attributable to unitholders Amounts receivable on creation of units 8,942 Less: Amounts payable on cancellation of units (753) 8,189 Change in net assets attributable to unitholders from investment activities 329 Closing net assets attributable to unitholders 8,518 6

9 HC Mansion UK Student Accommodation Income and Growth Feeder Trust Aggregated Balance Sheet as at 1st July /07/ Assets Investment in HC Mansion PAIF 8,525 Debtors 236 Bank balances (Citibank International plc) 11 Total other assets 247 Total assets 8,772 Liabilities Creditors (254) Total other liabilities Total liabilities (254) (254) Net assets attributable to unitholders 8,518 7

10 HC Mansion UK Student Accommodation Income and Growth Feeder Trust Aggregated Statement of Cash Flows for the period 14th December 2012 to 1st July 2013 Note 14/12/2012 to 01/07/ Net cash flows from operating activities 2 11 Cash flows from financial investment Proceeds from sale of investments 585 Paid for the purchase of investments (8,881) Net cash flows from financial investment (8,296) Cash flows from financing Net amounts received on issue of shares 8,881 Net amounts paid on cancellation of shares (585) Net cash flows from financing 8,296 Net increase in cash and bank balances 11 8

11 HC Mansion UK Student Accommodation Income and Growth Feeder Trust Notes to the Aggregated Financial Statements 1. Accounting policies 1.1 Basis of accounting The financial statements have been prepared under the historical cost basis, as modified by the revaluation of investments, and in accordance with the Statement of Recommended practice ( SORP ) issued by the Investment Management Association in October Aggregation There are two sub-funds currently available, therefore aggregate financial statements have been prepared for the period. The aggregated financial statements represent the sum of the relevant items from the financial statements of the individual sub-funds within the umbrella unit trust. 1.3 Revenue Distributions from collective investment schemes are recognised when the schemes are quoted ex-distribution. Equalisation returned within the distribution is deducted from the cost of the scheme and does not form part of distributable revenue. Interest on bank and other cash deposits is recognised on an accruals basis. 1.4 Expenses All expenses, except for those relating to the purchase and sale of investments and stamp duty reserve tax, are charged against revenue. Subsidies receivable from the HC Mansion PAIF Property Manager to cover expenses are credited to expenses and are recognised on an accruals basis. 1.5 Allocation of income and expenses to sub-funds Any revenue or expense not directly attributable to a particular sub-fund will normally be allocated pro-rata to the net assets of the relevant sub-fund, unless a different allocation method is more appropriate. 1.6 Taxation Corporation tax is provided at 20% on taxable revenue, after the deduction of allowable expenses. Deferred tax is provided using the liability method on all timing differences arising on the treatment of certain items for taxation and accounting purposes, calculated at the rate at which it is anticipated the timing differences will reverse. Deferred tax assets are recognised only when, on the basis of available evidence, it more likely than not that there will be taxable profits in the future against which the deferred tax asset can be offset. Stamp duty reserve tax suffered on surrender of shares is deducted from capital. 9

12 HC Mansion UK Student Accommodation Income and Growth Feeder Trust Notes to the Aggregated Financial Statements (continued) 1. Accounting policies (continued) 1.7 Distribution policy Surplus revenue, as disclosed in the financial statements, after adjustment for items of a capital nature, is distributable to shareholders. Any deficit of revenue is deducted from capital. Interim distributions may be made at the ACD s discretion and the balance of revenue is distributed in accordance with the regulations. Distributions which have remained unclaimed by shareholders for more than six years are credited to the capital property of the Trust. 1.8 Equalisation Equalisation only applies to shares purchased during the distribution period (group 2 units). It is the average amount of revenue included in the purchase price of all group 2 shares that is refunded to holders of these units as a return of capital. Being capital, it is not liable to income tax but must be deducted from the cost of units for capital gains tax purposes. 1.9 Cash and bank balances Cash and bank balances represent the nominal value of cash in hand and deposits, including those denominated in foreign currency, repayable on demand with any bank or qualifying financial institution Investments Investments are recognised when a legally binding and unconditional right to obtain the investment asset arises. Investments are measured initially at the total amount of consideration payable including transaction costs. Collective investment schemes are valued at quoted bid prices for dual priced funds and at quoted prices for single priced funds Investment Properties acquisition method by the HC Mansion PAIF The ACD envisages normally pursing a property acquisition approach which will involve acquiring appropriate properties typically in need of refurbishment which have been identified to it by the Preferred Property Procurer which is an associate of the Property Manager. Such properties would be acquired by the Company from the Preferred Property Procurer or its associates at a negotiated price and on an arm s length basis and based on an independent valuation. The ACD will, however, not be restricted to acquiring properties from the Preferred Property Procurer and may source properties from other parties or on a referral basis via the Preferred Property Procurer. 10

13 HC Mansion UK Student Accommodation Income and Growth Feeder Trust 1. Accounting policies (continued) 1.11 Investment Properties acquisition method by the HC Mansion PAIF (continued) Particular emphasis will be placed on acquiring existing buildings which are being used as, or are suitable for use as, student accommodation requiring refurbishment for the purposes of enhancing the economic life of the assets and the investment proposition as a whole. It is envisaged that where such properties are acquired by the Company from the Preferred Property Procurer, the purchase price will be at an agreed level of discount to the independently assessed open Market valuation as confirmed by the Standing Independent Valuer or an alternative independent valuation. If the assets are acquired directly from the Preferred Property Procurer, it is envisaged that a condition of that arrangement will normally be that the Preferred Property Procurer will undertake to deliver a pre-agreed level of specification of refurbishment, usually within 12 months of the acquisition of the property, and will also guarantee to the Company receipt of an agreed minimum level of rent on the property for 5 years from the date of acquisition of the property, increasing by up to 4% every September (after the refurbishment has been completed). Accordingly, where rental income received from the property falls below that guaranteed by the Preferred Property Procurer, such shortfall shall be paid by the Preferred Property Procurer to the Company in a timely and regular manner as agreed with the ACD. For the avoidance of doubt, where rental income received exceeds the minimum rental level guaranteed, the excess income with be retained by the Company. In valuing the property, the Standing Independent Valuer will, amongst other things, assume a level of refurbishment of the property necessary to support a certain rental yield. In order to then deliver on this assumption, in addition to the rental guarantee, the Preferred Property Procurer will be subject to a legal obligation to refurbish the property (with the cost of the pre-agreed specification of works to be borne by the Preferred Property Procurer). Subject to the commercial terms agreed and the requirements of the Depositary, it is envisaged that in order to ensure that the Company is appropriately protected against a default on the part of the Preferred Property Procurer in delivering the agreed level of refurbishment, the independently assessed cost of the pre-agreed specification of refurbishment will normally be set aside by the Preferred Property Procurer from the purchase price it receives on the sale of the property in an account with a charge in favour of the Company. The refurbishment monies may only be released from the charge upon authorisation of the ACD and on a phased basis as against work completed in accordance with the agreed schedule of works. If the final costs of the refurbishment works exceed the total originally agreed to be set aside in the charged account, then any additional costs shall be met by the Preferred Property Procurer (and if the total costs do not reach the level anticipated, the sums held will be fully released from the charge account on practical completion of the refurbishment works as the Preferred Property Procurer will have fulfilled its obligations with regard to the delivery of the agreed level of refurbishment). 11

14 HC Mansion UK Student Accommodation Income and Growth Feeder Trust Notes to the Aggregated Financial Statements (continued) 1. Accounting policies (continued) 1.12 Investment Properties held by the HC Mansion PAIF Investment property comprises completed property and property under construction or re-development held to earn rentals or for capital appreciation or both. Investment property is measured initially at cost including transaction costs. Transaction costs include transfer taxes, professional fees for legal services and initial leasing commissions to bring the property to the condition necessary for it to be capable of operating. The carrying amount also includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met. Subsequent to initial recognition, investment property is stated at fair value. Gains or losses arising from changes in the fair values are included in the statement of total return in the year in which they arise. Investment properties are valued by the Standing Independent Valuer on the basis of a full valuation with physical inspection at least once a year. Any valuation of an Immovable by the Standing Independent Valuer must be undertaken in accordance with current RICS Valuation Standards (the Red Book), or in the case of overseas immovables, on an appropriate basis, but subject to the FCA Rules. Accounting policies (continued) For the purposes of these financial statements, in order to avoid double accounting, the assessed fair value is: Reduced by the carrying amount of any accrued income resulting from the spreading of lease incentives and/or minimum lease payments Increased by the carrying amount of any liability to the superior leaseholder or freeholder that has been recognised in the balance sheet as a finance lease obligation. Movements in the valuation of investment properties are recognised in the Statement of Total Return as net capital gains/losses. No depreciation has been provided on investment properties in accordance with SSAP 19: Accounting for investment properties. Investment property is derecognised when it has been disposed of or permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of investment property are recognised in the income statement in the year of retirement or disposal. Gains or losses on the disposal of investment property are determined as the difference between net disposal proceeds and the carrying value of the asset in the previous full period financial statements. 12

15 HC Mansion UK Student Accommodation Income and Growth Feeder Trust 1. Accounting policies (continued) 1.13 Dilution adjustment In the HC Mansion PAIF, the ACD may apply a dilution adjustment to the price to protect existing investors from the costs of buying or selling investments as a result of large net inflows/outflows or periods of net inflows/outlay. The dilution adjustment affects everyone who deals on a particular day when the adjustment is applied. As a consequence of the adjustment being applied to the HC Mansion PAIF price, the effect is recognised within the portfolio valuation of the Trust Significant estimation techniques The preparation of the Trust s financial statements requires management to make estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods. The fair value of investment property held by the HC Mansion PAIF is determined by independent real estate valuation experts using recognised valuation techniques. These techniques comprise both the Yield Method and the Discounted Cash Flow Method. In some cases, the fair values are determined based on recent real estate transactions with similar characteristics and location to those of the Company assets. Any valuation of a property by the Standing Independent Valuer must be undertaken in accordance with the current issue of RICS Valuation Professional Standards (the Red Book ), or in the case of overseas property, on an appropriate basis, but subject to the FCA Rules Unit classes Each sub-fund has one class of units in issue. All units are redeemable at the unitholder s option and thus in accordance with the IMA SORP are classified as financial liabilities. The liabilities arising from the units are carried at the redemption amount being the net asset value at the period end date. The holders of units can redeem on any working day for cash equal to a proportionate share of the sub-fund s net asset value. The net asset value per unit is calculated by dividing the net assets attributable to that sub-fund by the number of units in issue. 13

16 HC Mansion UK Student Accommodation Income and Growth Feeder Trust Notes to the Aggregated Financial Statements (continued) 2. Reconciliation of net operating income to net cash flow from operating activities Net operating income 329 Net gains on investments (336) Increase in trade and other receivables (7) Increase in trade and other payables 25 Net cash flow from operating activities Related party transactions The Manager identifies the following entities as related parties of the Trust: Host Capital Limited as Manager and Investment Manager There were no amounts paid to the Manager/Investment Manager during the period and there are no balances outstanding. 4. Other material transactions During the period, in order to keep the ongoing charge to a low level, Mansion Property Management, the Property Manager of the HC Mansion PAIF subsidised expenses totalling 57,000. At 1st July ,000 was outstanding. 14

17 HC Mansion Student Accommodation Class A Net Accumulation Feeder Trust ( the Accumulation Trust ) 15

18 HC Mansion Student Accommodation Class A Net Accumulation Feeder Trust a sub-fund of: HC Mansion UK Student Accommodation Income and Growth Feeder Trust Comparative Table Accounting and Distribution dates Accounting Distribution Initial offer period commenced 15 November 2012 Launch date 14 December 2012 Interim 1 July April 2013* 1 July 2013* 1 October 2013 Final 1 January January 2014 *No distributions were paid for these dates Ongoing Charge for the accounting period Actual Per KIID Net Accumulation (standalone basis) 0.11% Net Accumulation (look through basis) 0.61% 2.88% The Ongoing Charge represents the total annualised expenses of the Accumulation Trust excluding transaction costs and interest payable expressed as a percentage of the average net assets during the accounting period. Figures are shown on a standalone basis for the Accumulation Trust and also on a look through basis, including the ongoing charge figures for the HC Mansion PAIF. During the period, the Property Manager of the HC Mansion PAIF subsidised a proportion of the accrued expenses. This is in order to cover the fixed costs of the Accumulation Trust whilst the Accumulation Trust has a low level of investment and no income. The subsidies and current small size of the Accumulation Trust distort the calculation of the ongoing charge so the table also shows the expected ongoing charge as published in the Key Investor Information Document (KIID). 16

19 HC Mansion Student Accommodation Class A Net Accumulation Feeder Trust a sub-fund of: HC Mansion UK Student Accommodation Income and Growth Feeder Trust Performance Record Calendar Year Unit Class Highest published unit price (p) Lowest published unit price (p) Net Distribution per unit (p) 2013 Net Accumulation * Net Accumulation Allocated for Accumulation Units From 1st January 2013 to 1st July 2013 *From launch to 31st December 2012 Units were launched on 14th December 2012 Net Asset Value Date Unit Class Net Asset Value of unit class ( ) Units in issue Net Asset Value per unit (p) 1 July 2013 Net Accumulation 8,425, ,058, The table above shows the net asset value per share class at the end of the accounting period, 1st July These figures are different to the published net asset value per share class at 12 noon on 1st July 2013 due to transactions which occurred in the intervening period. Risk Warning Investors should be aware that there are risks inherent in the holding of investments:- An investment in a unit trust should be regarded as a medium to long term investment. Investors should be aware that the price of units and the income from them can fall as well as rise and investors may not receive back the full amount invested. Past performance is not a guide to future performance. 17

20 HC Mansion Student Accommodation Class A Net Accumulation Feeder Trust a sub-fund of: HC Mansion UK Student Accommodation Income and Growth Feeder Trust Investment Manager s Report Investment Objective The investment objective of the Accumulation Trust is to provide investors with regular income and some capital growth over the longer term. Investment Policy The Accumulation Trust will invest solely in the Class A Accumulation Shares issued by the HC Mansion PAIF. Please see page 2 for the investment objectives, policy of the HC Mansion PAIF. While the Accumulation Trust will normally be solely invested in the HC Mansion PAIF, cash and near cash may be held by the Accumulation Trust where the Manager regards this as necessary in order to enable the making of payments to unitholders and creditors. Investment of the assets of the Accumulation Trust must comply with the COLL Sourcebook. Review of investment activities during the period During the period, the Accumulation Trust was fully invested in Class A Accumulation Shares of the HC Mansion PAIF. Please see pages 4 to 5 for the review of investment activities in the period for the HC Mansion PAIF. Host Capital Limited Investment Manager 30th August

21 HC Mansion Student Accommodation Class A Net Accumulation Feeder Trust a sub-fund of: HC Mansion UK Student Accommodation Income and Growth Feeder Trust Statement of Total Return for the period 14th December 2012 to 1st July /12/2012 to 01/07/ Income Net capital gains 331 Expenses (4) Net revenue/(expenses) before taxation (4) Net revenue/(expense) after taxation (4) Total return before distributions 327 Change in net assets attributable to unitholders from investment activities 327 Statement of Changes in Net Assets Attributable to Unitholders for the period 14th December 2012 to 1st July /12/2012 to 01/07/ Opening net assets attributable to unitholders Amounts receivable on creation of units 8,849 Less: Amounts payable on cancellation of units (751) 8,098 Change in net assets attributable to unitholders from investment activities 327 Closing net assets attributable to unitholders 8,425 19

22 HC Mansion Student Accommodation Class A Net Accumulation Feeder Trust a sub-fund of: HC Mansion UK Student Accommodation Income and Growth Feeder Trust Balance Sheet as at 1st July /07/ Assets Investment in HC Mansion PAIF 8,429 Debtors 232 Bank balances (Citibank International plc) 6 Total other assets 238 Total assets 8,667 Liabilities Creditors (242) Total other liabilities (242) Total liabilities (242) Net assets attributable to unitholders 8,425 20

23 HC Mansion Student Accommodation Class A Net Accumulation Feeder Trust a sub-fund of: HC Mansion UK Student Accommodation Income and Growth Feeder Trust Statement of Cash Flows for the period 14th December 2012 to 1st July 2013 Note 14/12/2012 to 01/07/ Net cash flows from operating activities 2 6 Cash flows from financial investment Proceeds from sale of investments 583 Paid for the purchase of investments (8,788) Net cash flows from financial investment (8,205) Cash flows from financing Net amounts received on issue of shares 8,788 Net amounts paid on cancellation of shares (583) Net cash flows from financing 8,205 Net increase in cash and bank balances 6 21

24 HC Mansion Student Accommodation Class A Net Accumulation Feeder Trust a sub-fund of: HC Mansion UK Student Accommodation Income and Growth Feeder Trust Notes to the Financial Statements 1. Accounting policies The Accumulation Trust s Financial Statements have been prepared on the same basis as the Aggregated Financial Statements described on pages 9 to Reconciliation of net operating income to net cash flow from operating activities Net operating income 327 Net gains on investments (331) Increase in trade and other receivables (3) Increase in trade and other payables 13 Net cash flow from operating activities 6 3. Related party transactions The Manager identifies the following entities as related parties of the Accumulation Trust: Host Capital Limited as Manager and Investment Manager. There were no amounts paid to the Manager/Investment Manager during the period and there are no balances outstanding. 4. Other material transactions During the period, in order to keep the ongoing charge to a low level, Mansion Property Management, the Property Manager of the HC Mansion PAIF subsidised expenses totalling 34,000. At 1st July ,000 was outstanding. 22

25 HC Mansion Student Accommodation Class A Net Accumulation Feeder Trust a sub-fund of: HC Mansion UK Student Accommodation Income and Growth Feeder Trust Notes to the Financial Statements (continued) 5. Portfolio Statement Holdings Market Value 000 Total Net Assets % Investments in Collective Investment Schemes HC Mansion UK Student Accommodation Income & Growth Fund Class A Accumulation Shares 8,058, , Portfolio of Investments 8, Net other Liabilities (4) (0.05) Total Net Assets per Financial Statements 8, Summary of Material Portfolio Changes for the period 14th December 2012 to 1st July 2013 Cost 000 Proceeds 000 Total purchases for the period 8,849 Total sales for the period 751 Major purchases HC Mansion UK Student Accommodation Income & Growth Fund Class A Accumulation Shares 8,849 Major sales HC Mansion UK Student Accommodation Income & Growth Fund Class A Accumulation Shares

26 HC Mansion Student Accommodation Class A Net Income Feeder Trust ( the Income Trust ) 24

27 Comparative Table HC Mansion Student Accommodation Class A Net Income Feeder Trust a sub-fund of: HC Mansion UK Student Accommodation Income and Growth Feeder Trust Accounting and Distribution dates Accounting Distribution Initial offer period commenced 15 November 2012 Launch date 14 January 2013 Interim 1 July April 2013* 1 July 2013* 1 October 2013 Final 1 January January 2014 *No distributions were paid for these dates Ongoing Charge for the accounting period Actual Per KIID Net Income (standalone basis) 6.73% Net Income (look through basis) 7.23% 2.88% The Ongoing Charge represents the total annualised expenses of the Income Trust excluding transaction costs and interest payable expressed as a percentage of the average net assets during the accounting period. Figures are shown on a standalone basis for the Income Trust and also on a look through basis, including the ongoing charge figures for the HC Mansion PAIF. During the period, the Property Manager of the HC Mansion PAIF subsidised a proportion of the accrued expenses. This is in order to cover the fixed costs of the Income Trust whilst the Income Trust has a low level of investment and no income. The subsidies and current small size of the Income Trust distort the calculation of the ongoing charge so the table also shows the expected ongoing charge as published in the Key Investor Information Document (KIID). 25

28 HC Mansion Student Accommodation Class A Net Income Feeder Trust a sub-fund of: HC Mansion UK Student Accommodation Income and Growth Feeder Trust Comparative Table (continued) Performance Record Calendar Year Unit Class Highest published unit price (p) Lowest published unit price (p) Net Distribution per unit (p) 2013* Net Income Distributed for Income Units *From launch to 1st July 2013 Units were launched on 14th January 2013 Net Asset Value Date Unit Class Net Asset Value of unit class ( ) Units in issue Net Asset Value per unit (p) 1 July 2013 Net Income 92, , The table above shows the net asset value per share class at the end of the accounting period, 1st July These figures are different to the published net asset value per share class at 12 noon on 1st July 2013 due to transactions which occurred in the intervening period. Risk Warning Investors should be aware that there are risks inherent in the holding of investments:- An investment in a unit trust should be regarded as a medium to long term investment. Investors should be aware that the price of shares and the income from them can fall as well as rise and investors may not receive back the full amount invested. Past performance is not a guide to future performance. 26

29 HC Mansion Student Accommodation Class A Net Income Feeder Trust a sub-fund of: HC Mansion UK Student Accommodation Income and Growth Feeder Trust Investment Manager s Report Investment Objective The investment objective of the Income Trust is to provide investors with regular income and some capital growth over the longer term. Investment Policy The Income Trust will invest solely in the Class A Income Shares issued by the HC Mansion PAIF. Please see page 2 for the investment objectives, policy of the HC Mansion PAIF. While the Income Trust will normally be solely invested in the HC Mansion PAIF, cash and near cash may be held by the Income Trust where the Manager regards this as necessary in order to enable the making of payments to unitholders and creditors. Investment of the assets of the Income Trust must comply with the COLL Sourcebook. Review of Investment Activities during the Period During the period, the Income Trust was fully invested in Class A Income Shares of the HC Mansion PAIF. Please see pages 4 to 5 for the review of investment activities in the period for the HC Mansion PAIF. Host Capital Limited Investment Manager 30th August

30 HC Mansion Student Accommodation Class A Net Income Feeder Trust a sub-fund of: HC Mansion UK Student Accommodation Income and Growth Feeder Trust Statement of Total Return for the period 14th January 2013 to 1st July /01/2013 to 01/07/ Income Net capital gains 5 Expenses (3) Net revenue/(expenses) before taxation (3) Net revenue/(expense) after taxation (3) Total return before distributions 2 Change in net assets attributable to unitholders from investment activities 2 Statement of Changes in Net Assets Attributable to Unitholders for the period 14th January 2013 to 1st July /01/2013 to 01/07/ Opening net assets attributable to unitholders Amounts receivable on creation of units 93 Less: Amounts payable on cancellation of units (2) Change in net assets attributable to unitholders from investment activities 2 Closing net assets attributable to unitholders

31 Balance Sheet as at 1st July 2013 HC Mansion Student Accommodation Class A Net Income Feeder Trust a sub-fund of: HC Mansion UK Student Accommodation Income and Growth Feeder Trust 01/07/ Assets Investment in HC Mansion PAIF 96 Debtors 4 Bank balances (Citibank International plc) 5 Total other assets 9 Total assets 105 Liabilities Creditors (12) Total other liabilities (12) Total liabilities (12) Net assets attributable to unitholders 93 29

32 HC Mansion Student Accommodation Class A Net Income Feeder Trust a sub-fund of: HC Mansion UK Student Accommodation Income and Growth Feeder Trust Statement of Cash Flows for the period 14th January 2013 to 30th June 2013 Note 14/01/2013 to 01/07/ Net cash flows from operating activities 2 5 Cash flows from financial investment Proceeds from sale of investments 2 Paid for the purchase of investments (93) Net cash flows from financial investment (91) Cash flows from financing Net amounts received on issue of shares 93 Net amounts paid on cancellation of shares (2) Net cash flows from financing 91 Net increase in cash and bank balances 5 30

33 HC Mansion Student Accommodation Class A Net Income Feeder Trust a sub-fund of: HC Mansion UK Student Accommodation Income and Growth Feeder Trust Notes to the Financial Statements 1. Accounting policies The Income Trust s Financial Statements have been prepared on the same basis as the Aggregated Financial Statements described on pages 9 to Reconciliation of net operating income to net cash flow from operating activities Net operating income 2 Net gains on investments (5) Increase in trade and other receivables (4) Increase in trade and other payables 12 Net cash flow from operating activities 5 3. Related party transactions The Manager identifies the following entities as related parties of the Income Trust: Host Capital Limited as Manager and Investment Manager There were no amounts paid to the Manager/Investment Manager during the period and there are no balances outstanding. 4. Other material transactions During the period, in order to keep the ongoing charge to a low level, Mansion Property Management, the Property Manager of the HC Mansion PAIF subsidised expenses totalling 23,000. At 1st July ,000 was outstanding. 31

34 HC Mansion Student Accommodation Class A Net Income Feeder Trust a sub-fund of: HC Mansion UK Student Accommodation Income and Growth Feeder Trust Notes to the Financial Statements (continued) 5. Portfolio Statement Holdings Market Value 000 Total Net Assets % Investments in Collective Investment Schemes HC Mansion Student Accommodation Income & Growth Fund Class A Income Shares 91, Portfolio of Investments Net other Liabilities (3) (3.23) Total Net Assets per Financial Statements Summary of Material Portfolio Changes for the period 14th January 2013 to 1st July 2013 Cost 000 Proceeds 000 Total purchases for the period 93 Total sales for the period 2 Major purchases HC Mansion Student Accommodation Income & Growth Fund Class Income A Shares 93 Major sales HC Mansion Student Accommodation Income & Growth Fund Class Income A Shares 2 32

35 Trust and Head Office HC Mansion UK Student Accommodation Income & Growth Feeder Trust 73 New Bond Street London W1S 1RS Manager (and Investment Manager) Host Capital Limited 73 New Bond Street London W1S 1RS Directors of the Manager CT Finch (Chief Executive) CP Chapman GL Brooks B Primrose Trustee National Westminster Bank Plc Legal Advisers to the Trust Eversheds LLP One Wood Street London EC2V 7WS Registrar Capita Financial Administrators Limited 17 Rochester Row Westminster London SW1P 1QT Auditors Grant Thornton UK LLP 30 Finsbury Square London EC2P 2YU Registered Office: 135 Bishopsgate London EC2M 3UR Principal Place of Business: 1st Floor Younger Building 3 Redheughs Avenue Edinburgh EH12 9RH Custodian: Citibank International plc Administrator Capita Sinclair Henderson Limited The Registry 34 Beckenham Road Beckenham Kent BR3 4TU