AVENIR GLOBAL FUND (FORMERLY KNOWN AS AVENIR VALUE FUND) ABN

Transcription

1 GENERAL PURPOSE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2017

2 TABLE OF CONTENTS Fund Particulars 1-2 Directors Report 3-5 Statement of Comprehensive Income 6 Statement of Financial Position 7 Statement of Changes in Net Assets Attributable to Unitholders 8 Statement of Cash Flows 9 Notes to the Financials Statements Directors Declaration 26 Independent Auditor s Report 27-28

3 FUND PARTICULARS MANAGER OF THE FUND Avenir Capital Pty Limited ABN AFS License Number TRUSTEE FOR THE UNITHOLDERS Avenir Capital Pty Limited ABN AFS License Number (until 17 July 2017) Fidante Partners Limited AFS License Number (as from 18 July 2017) REGISTERED OFFICE Level 11, 2 Bulletin Place Sydney NSW Australia 2000 (until 17 July 2017) Level 2, 5 Martin Place Sydney NSW Australia 2000 (as from 18 July 2017) PRIME BROKER OF THE FUND CUSTODIAN OF THE FUND Interactive Brokers LLC Suite 1512, Two Pacific Place 88 Queensway, Admiralty Hong Kong Australian Executor Trustees Level 22, 207 Kent Street Sydney NSW 2000 (until 17 July 2017) Citigroup Pty Limited Level 23 2 Park Street Sydney NSW 2000 (as from 18 July 2017) 1

4 FUND PARTICULARS (CONTINUED) ADMINISTRATOR OF THE FUND Apex Fund Services Ltd. 20 Reid Street 3rd Floor, Williams House P.O. Box 2460 HMJX Hamilton HM11 Bermuda (until 17 July 2017) Fidante Partners Limited Level 2, 5 Martin Place Sydney NSW Australia 2000 (as from 18 July 2017) ADMINISTRATOR S DELEGATE LAWYERS INDEPENDENT AUDITOR Apex Fund Services (Australia) Pty Ltd Level 8, Westfield Tower 100 William Street Woolloomooloo, NSW 2011 Australia (until 17 July 2017) Henry Davis York 44 Martin Place Sydney NSW 2000 Australia Ernst & Young 200 George Street Sydney NSW

5 DIRECTORS REPORT The Directors of Fidante Partners Limited, the Trustee of Avenir Global Fund (Formerly known as Avenir Value Fund) ( the Fund ) present their report together with the financial statements of Avenir Global Fund for the financial year ended 30 June Directors The name of the Director of the previous Trustee and Manager, Avenir Capital Pty Ltd, who held office up to the date of change of Trustee and Manager on 17 July 2017 is Adrian Warner. The name of the Directors of the Trustee, Fidante Partners Limited, who held office since the date of change of Trustee on 18 July 2017 are: Andrew Tobin Ian Saines Richard Willis Angela Murphy (appointed 10 March 2017) Audrey Collins (appointed 25 November 2016) Principal Activities The principal activity of the Fund during the year was investing funds in accordance with the Information Memorandum and Constitution of the Fund. Significant Changes in the State of Affairs No significant changes occurred in the Fund s state of affairs during the financial year. Distributions proposed and payable For the year ended 30 June 2017, the distribution payable to unitholders is $1,724,480 (2016: $175,827). Review and Results of Operations The income from ordinary activities for the financial year was $2,559,256 (2016: loss $187,019). In accordance with the Fund's Constitution performance fees of $588,207 (2016: $nil) inclusive of nonclaimable GST were charged by the Manager, Avenir Capital Pty Ltd, to the Fund. The Trustee is entitled to recoup fund expenses from the assets of the fund. The recouped expenses are calculated each month as a Management Expense Ratio (MER). The ratio is currently 0.55% of the Net Asset Value of the fund. During the year, MER fees of $103,551 (2016: $74,921) were charged to the Fund, of which $35,278 (2016: $20,626) was payable at 30 June

6 Significant Events after Balance Date AVENIR GLOBAL FUND DIRECTORS REPORT (CONTINUED) Effective from 4 August 2017, the name of the Fund was changed from Avenir Value Fund to Avenir Global Fund. Effective from 18 July 2017, Avenir Capital Pty Ltd was replaced by Fidante Partners Limited as the Trustee of the Fund. Effective from 18 July 2017, Apex Fund Services Ltd was replaced by Fidante Partners Limited as the Administrator of the Fund. Effective from 18 July 2017, Apex Fund Services (Australia) Pty Ltd resigned as the Administrator s Delegate. On 14 August 2017, the Fund was registered as a Managed Investment Scheme under the Corporations Act Effective from 18 July 2017, the registered office of the Fund changed from Level 11, 2 Bulletin Place to Level 2, 5 Martin Place. On 25 August 2017, the Fund launched a new retail unit class, A. Future Developments The Fund will continue to be managed in accordance with the investment objectives and guidelines as set out in the governing documents of the Fund and in accordance with the provisions of the Fund's Constitution. Further information on likely developments in the operations of the Fund and the expected results of those operations in the future financial years have not been included in this report because the Trustee believes the inclusion of such information is likely to result in unreasonable prejudice to the Fund. Environmental Issues The Fund's operations are not regulated by any significant environmental regulation under the law of the Commonwealth or of a State or Territory. Indemnifications and Insurance of Officers and Auditors Other than detailed below, no indemnities have been given or insurance premiums paid, during or since the end of the financial year, for any person who is or has been an officer or auditor of the Fund, or the Trustee Company. The Trustee has paid premiums to insure the Director of the Trustee Company, Adrian Warner, against liabilities for the costs and expenses incurred by him in defending any legal proceedings arising out of his conduct while acting in the capacity of Director. The contract of insurance prohibits disclosure of the nature of liability and the amount of the premium. 4

7 DIRECTORS' REPORT (CONTINUED) Proceedings on Behalf of the Fund No person has applied for leave of Court to bring proceedings on behalf of the Fund or intervene in any proceedings to which the Fund is a party for the purpose of taking responsibility on behalf of the Fund for all or any part of those proceedings. The Fund was not a party to any such proceedings during the year. s~a A Collins Director CbeG,~ Sydney 30 October

8 STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2017 Note Year ended Year ended 30 June June 2016 $ $ Revenue Interest income 30,655 29,207 Dividend income 361, ,156 Total revenue 392, ,363 Other income/(loss) Change in fair value of financial assets and liabilities at fair value through profit or loss 2,595,634 (404,745) Fee income 17,478 15,893 Other income 284,640 - Total other income/(loss) 2,897,752 (388,852) Total revenue and other income/(loss) 3,290,191 (72,489) Expenses Performance fees 13 (588,207) - MER expenses 13 (103,551) (74,921) Interest expenses (37) - Commission & other charges (706) (5,552) Other expenses (38,434) (34,057) Total expenses (730,935) (114,530) Income /(loss) before tax 2,559,256 (187,019) Distribution to unitholders (1,726,683) (175,827) Net income/(loss) attributable to unitholders 832,573 (362,846) Other comprehensive income - - Change in net assets attributable to unitholders 832,573 (362,846) The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes. 6

9 STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2017 Note 30 June June 2016 $ $ ASSETS Cash and cash equivalents 3 6,088,931 1,361,823 Financial assets at fair value through profit or loss 5 18,569,423 13,848,343 Trade and other receivables 4 88,336 33,339 TOTAL ASSETS 24,746,690 15,243,505 LIABILITIES Distributions payable 1,724, ,827 Trade and other payables 7 37,481 20,626 TOTAL LIABILITIES (excluding net assets attributable to unitholders) 1,761, ,453 Net assets attributable to unitholders 22,984,729 15,047,052 TOTAL LIABILITIES 24,746,690 15,243,505 The above Statement of Financial Position should be read in conjunction with the accompanying notes. 7

10 STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS FOR THE YEAR ENDED 30 JUNE 2017 Net assets attributable to unitholders $ Balance at 1 July ,047,052 Application for units 6,968,864 Redemption of units (24,611) Change in net assets attributable to unitholders 832,573 Distributions reinvested 160,851 Balance at 30 June ,984,729 Balance at 1 July ,650,729 Application for units 5,287,009 Redemption of units (1,069,662) Change in net assets attributable to unitholders (362,846) Distributions reinvested 541,822 Balance at 30 June ,047,052 The above Statement of Changes in Net Assets Attributable to Unitholders should be read in conjunction with the accompanying notes. 8

11 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2017 Note Year ended Year ended 30 June June 2016 $ $ CASH FLOWS FROM OPERATING ACTIVITIES Interest received 28,948 28,014 Dividends received 314, ,161 Other income received 278, Payments for purchase of financial investments at fair value through profit or loss (11,121,717) (14,973,897) Proceeds from sale of financial investments at fair value through profit and loss 8,947,054 8,896,914 Performance fees paid (588,207) (3,995) MER expenses paid (88,899) (70,204) Interest expenses paid (37) - Commissions and other charges paid (706) (5,552) Other expenses paid (38,434) (34,057) Net cash used in operating activities (2,268,864) (5,882,825) CASH FLOWS FROM FINANCING ACTIVITIES Applications 6,986,342 5,302,902 Redemptions (24,611) (1,069,662) Distributions paid (14,976) (96,979) Net cash provided by financing activities 6,946,755 4,136,261 Net increase in cash and cash equivalents held 4,677,891 (1,746,564) Cash and cash equivalents at the beginning of the financial year 1,361,823 2,819,477 Effect of exchange rate changes 49, ,910 Cash and cash equivalents at the end of the financial year 3 6,088,931 1,361,823 Non Cash Financing Activities Distribution reinvestment - 161,869 The above Statement of Cash Flows should be read in conjunction with the accompanying notes. 9

12 The financial statements cover the Avenir Global Fund (Formerly known as Avenir Value Fund) (the Fund ) as an individual entity. The Fund is a unit trust, established and domiciled in Australia. NOTE 1: CORPORATE INFORMATION The Fund was constituted on 11 July The Fund commenced its operations on 1 August The Trustee of the Fund is Fidante Partners Limited. The registered office of the trustee is located at Level 2, 5 Martin Place, Sydney NSW, Australia The investment objective of the Fund is to minimise the risk of permanent loss of capital and achieve superior risk adjusted investment returns via capital appreciation over the medium to long-term. These financial statements were authorised for issue by the Directors on 30 October NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Preparation The financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards Reduced Disclosure Requirements of the Australian Accounting Standards Board (AASB) and the Fund s Constitution. The Fund is a for profit entity for financial reporting purposes under Australian Accounting Standards. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Material accounting policies adopted in the preparation of these financial statements are presented below and have been consistently applied unless stated otherwise. The financial statements, except for the cash flow information, have been prepared on an accruals basis and are based on historical costs, modified, where applicable, by the financial assets and financial liabilities held at fair value through profit or loss, that have been measured at fair value. The financial report is presented in Australian dollars and all values are rounded to the nearest dollar unless otherwise stated (b) Statement of Compliance The financial statements have been prepared in accordance with the Australian Accounting Standards as issued by the Australian Accounting Standards Board. 10

13 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (c) New Accounting Standards and Interpretation Certain new accounting standards and interpretations have been published that are not mandatory for the 30 June 2017 reporting periods. The Directors assessment of the impact of these new standards (to the extent relevant to the Fund) and interpretations are set out below: AASB 9 Financial Instruments (and applicable amendments), (effective from 1 January 2018) AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial assets and financial liabilities. It has now also introduced revised rules around hedge accounting and impairment. The standard is not applicable until 1 January 2018 but is available for early adoption. The Directors do not expect this to have a significant impact on the recognition and measurement of the Fund s financial instruments as they are carried at fair value through profit or loss. The derecognition rules have not been changed from the previous requirements, and the Fund does not apply hedge accounting. AASB 9 introduces a new impairment model. However, as the Fund s investments are all held at fair value through profit or loss, the change in impairment rules will not impact the Fund. There are no other standards that are not yet effective and that are expected to have a material impact on the Fund in the current or future reporting periods and on foreseeable future transactions. (d) Financial Instruments Initial recognition and measurement Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the Fund commits itself to either purchase or sell the asset (i.e. trade date accounting is adopted). Financial instruments are initially measured at fair value plus transaction costs except where the instrument is classified at fair value through profit or loss in which case transaction costs are expensed to profit or loss immediately. Classification The Fund classifies its financial assets and liabilities into the categories below in accordance with AASB 139. Financial instruments are subsequently measured at fair value, amortised cost using the effective interest rate method or cost. Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted. Financial assets at fair value through profit or loss Financial assets are classified at fair value through profit or loss when they are either held for trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a financial asset is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss. 11

14 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (d) Financial Instruments (continued) Impairment At the end of each reporting year, the Fund assesses whether there is objective evidence that a financial asset has been impaired. A financial asset is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events (a loss event ) that has occurred, which has an impact on the estimated future cash flows of the financial asset(s). Derecognition Financial assets are derecognised when the contractual right to receipt of cash flows expires or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised when the related obligations are either discharged, cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss. Subsequent measurement After initial measurement, the Fund measures financial instruments which are classified as at fair value through profit or loss at their fair values. Subsequent changes in the fair value of financial instruments at fair value through profit or loss are recorded in Change in fair value of financial assets and liabilities at fair value through profit or loss. Interest earned is recorded in Interest income according to the terms of the contract. Dividend income is recorded in Dividend income. Offsetting financial instruments Financial assets and financial liabilities are offset and the net amount reported in the Statement of Financial Position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realize the asset and settle the liability simultaneously. For the reporting periods ending 30 June 2017, and 30 June 2016 there are no financial assets or liabilities subject to offsetting in the Statement of Financial Position. (e) Cash and Cash equivalents Cash and cash equivalents include cash on hand, deposits held at call with banks, and other shortterm highly liquid investments with original maturities of three months or less in the statement of financial position. (f) Revenue and Other income Fee and underwriting commission income is measured at the fair value of the consideration received or receivable after taking into account any discounts and rebates allowed. Interest revenue and expense is recognised in the Statement of Comprehensive Income for all financial instruments not at fair value through profit or loss using the effective interest method. Interest earned on financial assets classified as at fair value through profit or loss is recorded in interest revenue according to the terms of the contract. Dividend revenue is recognised when the Fund s right to receive the payment is established. Dividend revenue is presented gross of any non-recoverable withholding taxes, which are disclosed separately as tax expense in the Statement of Comprehensive Income. (g) Due to broker Amounts due to broker represents payables from securities purchased that have been contracted but not yet delivered at year end. Trades are recorded on trade date, and normally settled within three business days. 12

15 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (h) Foreign currency translations Transactions during the year, including purchases and sales of securities, income and expenses, are translated at the rate of exchange prevailing on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rates of exchange at the reporting date. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Foreign currency transaction gains and losses on financial instruments, classified as at fair value through profit or loss, are included in the Statement of Comprehensive Income as part of the Change in fair value of financial assets and liabilities at fair value through profit or loss. (i) Change in the fair value of financial assets and liabilities The item includes changes in the fair value of financial assets held for trading or designated upon initial recognition as held at fair value through profit or loss and excludes interest and dividend income. Gains and losses are calculated as the difference between the fair value at sale or at year end, and the fair value at the previous valuation point. This includes both realised and unrealised gains and losses. (j) Expense recognition Expenses are recognised in the Statement of Comprehensive Income when the Fund has a present obligation (legal or constructive) as a result of a past event that can be reliably measured. Expenses are recognised in the Statement of Comprehensive Income if expenditure does not produce future economic benefits for recognition in the Statement of Financial Position. (k) Dividend income Dividend income is recognised when the Fund s right to receive the payment is established. (l) Determination of fair value Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Refer to Note 6 to the financial statements for further details of the methods and assumptions applied in determining the fair value of each class of financial instruments (m) Trade and other receivables Trade and other receivables include amounts due in the ordinary course of business. Receivables expected to be collected within 12 months of the end of the reporting year are classified as current assets. Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest rate method, less any impairment losses. (n) Trade and Other payables Trade and other payables represent the liabilities for services received by the entity that remain unpaid at the end of the reporting year. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability. 13

16 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (o) Income taxes Under current Australian legislation, the Fund is not subject to income tax provided the unitholders are presently entitled to the income of the Fund and the Fund fully distributes its net taxable income. (p) Redeemable participating units Redeemable participating units are redeemable at the unitholder s option and are classified as financial liabilities. The liabilities arising from the redeemable units are carried at the redemption amount being the net asset value in accordance with the redemption requirements. The Fund s net asset value per unit is calculated by dividing the net assets attributable to unitholders (calculated in accordance with redemption requirements) by the number of units on issue. (q) Unit prices Unit prices are determined in accordance with the Funds Constitution and are calculated as the net assets attributable to the unitholders of the Fund, less estimated costs, divided by the number of units on issue, on a forward pricing basis as determined by the Trustee. (r) Capital management The Trustee manages its net assets attributable to unitholders as capital, notwithstanding net assets attributable to unitholders are classified as a liability. The amount of net assets attributable to unitholders can change significantly on a daily basis as the Fund is subject to daily applications and redemptions at the discretion of unitholders. The trustee monitors the level of daily applications and redemptions relative to the liquid assets in the Fund. In order to maintain or adjust the capital structure, the Trustee may return capital to unitholders. The Fund is not subject to any externally imposed capital requirements. (s) Net assets attributable to unitholders Non-distributable income is transferred directly to net assets attributable to unitholders and may consist of unrealised changes in the net fair value of investments, accrued income not yet assessable, expenses accrued which are not yet deductible, net capital losses and tax free or tax deferred income. Net capital gains on the realisation of any investments (including any adjustments for tax deferred income previously taken directly to net assets attributable to unitholders) and accrued income not yet assessable will be included in the determination of distributable income in the same year it became assessable for tax. (t) Distribution to unitholders In accordance with the Fund s Constitution, the Fund fully distributes its distributable income to unitholders. Distributions are payable at the end of each year as at 30 June each year or more frequently at the Trustee s discretion. Such distributions are determined by reference to the net taxable income of the Fund. Distribution income includes capital gains arising from the disposal of investments. Unrealised gains and losses are transferred to net assets attributable to unitholders and are not assessable or distributable until realised. Capital losses are not distributed to unitholders but are retained to be offset against any future realised capital gains. 14

17 NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED (u) Goods and Services Tax (GST) Revenue, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office (ATO). Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the Statement of Financial Position. Reduced input tax credits (RITC) recoverable by the Fund from the ATO are recognised as a receivable in the statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from the investing or financing activities which are recoverable from, or payable to, the ATO are presented as operating cash flows included in receipts from customers or payments to suppliers. (v) Critical Accounting Estimates and Judgments The Trustee evaluates estimates and judgments incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Fund. NOTE 3: CASH AND CASH EQUIVALENTS $ $ CURRENT Cash at bank 542,297 63,608 Cash held with the prime broker 5,546,634 1,298,215 Total cash and cash equivalents 6,088,931 1,361,823 NOTE 4: TRADE AND OTHER RECEIVABLES Deferred incorporation costs - 85 Receivable bank interest 3,463 1,756 RITC receivable 6,971 1,028 Dividends receivable 77,902 30,470 88,336 33,339 NOTE 5: FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS Listed investments, at fair value shares in listed corporations 16,785,563 12,933,645 Derivative, at fair value options 1,783, ,698 Total financial assets at fair value through profit or loss 18,569,423 13,848,343 15

18 NOTE 6: FAIR VALUE OF FINANCIAL INSTRUMENTS The following table shows financial instruments recorded at fair value, analysed between those whose fair value is based on quoted market prices (Level 1), those involving valuation techniques where all the model inputs are observable in the market (Level 2) and those where the valuation technique involves the use of non-market observable inputs (Level 3). 30 June 2017 Valuation Valuation Valued at technique - technique - non - quoted market market market observable observable price inputs inputs (Level 1) (Level 2) (Level 3) Total $ $ $ $ Financial assets at fair value through profit or loss Financial instruments designated at fair value through profit or loss Listed investments, at fair value shares in listed corporations 16,785, ,785,563 Financial instruments held for trading Derivative, at fair value options 1,783, ,783,860 18,569, ,569, June 2016 Valuation Valuation Valued at technique - technique - non - quoted market market market observable observable price inputs inputs (Level 1) (Level 2) (Level 3) Total $ $ $ $ Financial assets at fair value through profit or loss Financial instruments designated at fair value through profit or loss Listed investments, at fair value shares in listed corporations 12,933, ,933,645 Financial instruments held for trading Derivative, at fair value options 914, ,698 13,848, ,848,343 The level in which instruments are classified in the hierarchy is based on lowest level input that is significant to the fair value measurement in its entirety. Assessment of the significance of an input requires judgement after considering factors specific to the instrument. The fair values of listed equity securities, fund investment and options are based on quoted market prices in active markets for identical assets or liabilities at the reporting date, without any deductions for transactions. 16

19 NOTE 7: TRADE AND OTHER PAYABLES $ $ MER payable 35,278 20,626 Withholding tax payable 2,203-37,481 20,626 NOTE 8: NUMBER OF UNITS HELD BY UNITHOLDERS Opening balance Closing balance as at Series Reinvestment as at 1 July 2016 Application Redemption roll-up of distributions 30 June 2017 Units Units Units Units Units Units Main Series 5,936,288 88,611 (5,670) 1,267,209 64,495 7,350,933 Manager Series 809, , ,696 Future Gen Global 4,440,000 5,092, ,197 9,584,722 Series Oct ,990 2,351 - (684,949) 5,608 - Series May , (100,000) - - Series Aug , (200,000) - - Series Sep ,000 - (15,623) (236,140) 1,763 - Series Nov , (200,000) - - Series Dec , (8,290) 90 - Series Mar , (204,403) 2,375 - Series Dec ,000 - (150,000) - - Series Mar ,000 - (100,000) - - Series Jun , ,000 12,822,689 5,533,487 (21,293) (616,573) 136,041 17,854,351 Opening balance as at Series Reinvestment Closing balance as at 1 July 2015 Application Redemption roll-up of distributions 30 June 2016 Units Units Units Units Units Units Main Series 6,413,758 - (805,391) - 327,921 5,936,288 Manager Series 763, , ,183 Future Gen Global - 4,440, ,440,000 Series Oct , , ,990 Series May , ,000 Series Aug , ,000 Series Sep , ,000 Series Nov , ,000 Series Dec , ,200 Series Mar , ,028 7,927,155 5,300,228 (805,391) - 400,697 12,822,689 17

20 NOTE 8: NUMBER OF UNITS HELD BY UNITHOLDERS (CONTINUED) There are no separate classes of units and each unit in the Fund has the same rights attached to it as all other units in the Fund. Unitholders participate in distributions and proceeds on winding up of the Fund in proportion to the number of units held. The Fund adopts series accounting to offer an equitable performance fee structure. Each series of units will have the same entitlements as those previously issued except that manager series of units will not be charged performance fees. Each series of units issued will accrue a liability for the payment of performance fees. After the date performance fees are paid, units in those series in which a performance fee has been paid will generally be reclassified into a single series. Reclassifications will not result in any economic change in a unit holder s investment. NOTE 9: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES Introduction The Fund s objective in managing risk is the creation and protection of unitholder value. Risk is inherent in the Fund s activities but it is managed through a process of ongoing identification, measurement and monitoring, subject to risk limits and other controls. The process of risk management is critical to the Fund s continuing profitability. The Fund is exposed to market risk (which includes currency risk, interest rate risk and price risk), credit risk and liquidity risk arising from the financial instruments it holds or issues. Risk Management Structure The Fund s Investment Manager is responsible for identifying and controlling risks. The Board of Directors supervises the Investment Manager and is ultimately responsible for the overall risk management approach within the Fund. Monitoring and controlling risks is primarily set up to be performed based on limits established by the Investment Manager. These limits reflect the business strategy and market environment of the Fund as well as the level of the risk that the Fund is willing to accept. In addition, the Fund monitors and measures the overall risk bearing capacity in relation to the aggregate risk exposure across all risk type and activities. Market risk Market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market variables such as interest rates, foreign exchange rates, and equity prices. (a) Interest rate risk Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair values of financial instruments. The Fund s interest bearing financial assets expose it to risks associated with the effects of fluctuations in the prevailing levels of market interest rates on its financial position and cash flows. The table below summarises the Fund s exposure to interest rate risks. It includes the Fund s assets and trading liabilities at fair values, categorised by the earlier of maturity dates. 18

21 NOTE 9: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) As at 30 June 2017 Less than 1 to 12 Non interest one month months bearing Total $ $ $ $ ASSETS Financials assets at fair value through profit or loss 113,104-18,456,319 18,569,423 Cash and cash equivalents 6,088, ,088,931 Trade and other receivables ,336 88,336 TOTAL ASSETS 6,202,035-18,544,655 24,746,690 LIABILITIES Distributions payable - - 1,724,480 1,724,480 Trade and other payables ,481 37,481 TOTAL LIABILITIES - - 1,761,961 1,761,961 As at 30 June 2016 Less than 1 to 12 Non interest one month months bearing Total $ $ $ $ ASSETS Financials assets at fair value through profit or loss 75,734-13,772,609 13,848,343 Cash and cash equivalents 1,361, ,361,823 Trade and other receivables ,339 33,339 TOTAL ASSETS 1,437,557-13,805,948 15,243,505 LIABILITIES Distributions payable , ,827 Trade and other payables ,626 20,626 TOTAL LIABILITIES , ,453 19

22 NOTE 9: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) (b) Foreign exchange risk The Fund may hold both monetary and non-monetary assets and liabilities denominated in currencies other than Australian dollars. The foreign exchange risk related to non-monetary assets is a component of price risk. Foreign exchange risk arises as the value of monetary securities denominated in other currencies will fluctuate due to changes in exchange rates. The majority of the Fund s monetary assets and liabilities are denominated in foreign currencies. The Fund values its securities and other capital in Australian dollars. Therefore, the value of the Fund will fluctuate with the Australian dollar exchange rate as well as with price changes of the Fund s investments. Therefore the Fund is exposed to significant amount of risk due to fluctuations in foreign exchange rates. 30 June 2017 United Australian Hong Kong States Other Total Dollars EUR Dollars Dollar Currencies $ $ $ $ $ $ Assets Financials assets at fair value through profit or loss 1,788,880 1,645,731 1,789,203 13,345,609-18,569,423 Cash and cash equivalents 6,088, ,088,960 Trade and other receivables 10,433-32,990 44,913-88,336 Total assets 7,888,273 1,645,731 1,822,193 13,390,522-24,746,719 Liabilities Due to broker - - (29) - - (29) Distributions payable (1,724,480) (1,724,480) Trade and other payables (37,481) (37,481) Total liabilities (1,761,961) - (29) - - (1,761,990) Total foreign exchange risk sensitivity gap 6,126,312 1,645,731 1,822,164 13,390,522-22,984, ,457 18, , ,584 20

23 NOTE 9: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) 30 June 2016 United Australian Hong Kong States Other Total Dollars EUR Dollars Dollar Currencies $ $ $ $ $ $ Assets Financials assets at fair value through profit or loss 1,806,056 1,716,135 1,029,934 9,296,218-13,848,343 Cash and cash equivalents 3,839, ,839,568 Trade and other receivables 2,870-15,415 15,054-33,339 Total assets 5,648,494 1,716,135 1,045,349 9,311,272-17,721,250 Liabilities Due to broker - (390,015) (21,716) (1,877,915) (188,099) (2,477,745) Distribution payable (175,827) (175,827) Trade and other payables (20,626) (20,626) Total liabilities (196,453) (390,015) (21,716) (1,877,915) (188,099) (2,674,198) Total interest rate sensitivity gap 5,452,041 1,326,120 1,023,633 7,433,357 (188,099) 15,047, ,261 10,236 74,334 (1,881) 95,950 (c) Equity price risk Equity price risk is the risk that the fair values of equities or equity-linked derivatives decrease as the result of changes in the levels of equity indices and the value of individual shares. The equity price risk exposure arises from the Fund s investments in equity securities. The Fund manages this risk by investing in a variety of stocks. At 30 June, the overall market exposures were as follows: Fair value % of net assets Fair value $ $ % of net assets Listed equities - long positions 16,785, % 12,933, % Option Contracts 1,783, % 914, % 21

24 NOTE 9: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) (c) Equity price risk (continued) If the value of the investment portfolio at 30 June 2017 had increased by 10% with all other variables held constant, this would have increased net assets attributable to holders of redeemable shares by approximately $1,856,942 (2016: $1,384,834) respectively. Conversely, if the price had decreased by 10%, this would have decreased net assets attributable to holders of redeemable shares by an equal and opposite amount. Liquidity risk Liquidity risk is defined as the risk that the Fund will encounter difficulty in meeting obligations associated with financial liabilities. Liquidity risk arises because of the possibility that the Fund could be required to pay its liabilities earlier than expected. The Fund is exposed to cash redemptions of its redeemable units on a regular basis. Units are redeemable at the holder s option based on the Fund s net asset value per unit at the time of redemption calculated in accordance with the Fund s constitution. The table below analyses the Fund s financial liabilities into relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date. The amounts in the table are the contractual undiscounted cash flows: As at 30 June 2017 Less than 1 to 12 No stated one month months maturity $ $ $ Distributions payable 1,724, Trade and other payables - 37,481 - Net assets attributable to unitholders 22,984, ,709,209 37,481 - As at 30 June 2016 Less than 1 to 12 No stated one month months maturity $ $ $ Distributions payable 175, Trade and other payables - 20,626 - Net assets attributable to unitholders 15,047, ,222,879 20,626-22

25 NOTE 9: FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) Credit risk Credit risk is the risk that the counterparty to a financial instrument will cause a financial loss for the Fund by failing to discharge an obligation The Fund is exposed to the risk of credit-related losses that can occur as a result of a counterparty or issuer being unable or unwilling to honour its contractual obligations. These credit exposures exist within financing relationships, derivatives and other transactions. It is the Fund s policy to enter into financial instruments with reputable counterparties. The Investment Manager closely monitors the creditworthiness of the Fund s counterparties (e.g. brokers, custodian, banks etc.) by reviewing their credit ratings, financial statements and press releases on a regular basis. Credit risk relating to unsettled transactions in listed securities is considered to be minimal as the Fund only uses brokers with high creditworthiness and the transactions are settled or paid for only upon delivery. Payments on securities acquired are only made after the broker has received the securities. Securities sold are only delivered after the broker has received the payment. The table below analyses the Fund s maximum exposure to credit risk: $ $ Cash and cash equivalents 6,088,931 1,361,823 Trade and other receivables 88,336 33,339 Total credit risk exposure 6,177,267 1,395,162 Credit quality of financial assets The table below analyses the credit quality of cash and cash equivalents by rating agency category and class of financial instrument. The Fund s exposure to each grade is monitored on a daily basis to ensure credit risk remains within specified limits: AA- BBB+ Total 30 June 2017 $ $ $ Cash and cash equivalents 542,297 5,546,634 6,088,931 Total 542,297 5,546,634 6,088, June 2016 Cash and cash equivalents 63,607 1,298,216 1,361,823 Total 63,607 1,298,216 1,361,823 23

26 NOTE 10: CONTINGENT LIABILITIES There are no contingent liabilities at the reporting date. NOTE 11: REMUNERATION OF AUDITORS The costs of auditing the financial statements are paid directly by Avenir Capital Pty Ltd who was the trustee and manager of the Fund. Auditors Remuneration (excluding GST) for the financial year ended 30 June 2017 was $12,000 (2016 $13,500). As at 30 June 2017, the audit fees payable were $12,000 (2016 $13,500). NOTE 12: EVENTS AFTER THE REPORTING YEAR Effective from 4 August 2017, the name of the Fund was changed from Avenir Value Fund to Avenir Global Fund. Effective from 18 July 2017, Avenir Capital Pty Ltd was replaced by Fidante Partners Limited as the Trustee of the Fund. Effective from 18 July 2017, Apex Fund Services Ltd was replaced by Fidante Partners Limited as the Administrator of the Fund. Effective from 18 July 2017, Apex Fund Services (Australia) Pty Ltd resigned as the Administrator s Delegate. On 14 August 2017, the Fund was registered as a Managed Investment Scheme under the Corporations Act Effective from 18 July 2017, the registered office of the Fund changed from Level 11, 2 Bulletin Place to Level 2, 5 Martin Place. On 25 August 2017, the Fund launched a new retail unit class, A. NOTE 13: RELATED PARTY TRANSACTIONS The Fund s main related parties are as follows: (a) Key management personnel The Director of Avenir Capital Pty Ltd, being the trustee company of the Fund, as at 30 June 2017 have the authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, and are considered key management personnel of the Fund. The Director during the year was Adrian Warner. Fees incurred with related parties during the year and amounts payable to related parties at 30 June 2017 and 2016 are disclosed below: There is no management fee as this aligns Investment Manager s interests with the interests of the unit holders in the Fund and creates an appropriate focus on performance. The Investment Manager is entitled to receive performance fees of 25% of the increase in the net asset value of all units in the Fund during the month (Performance period) subject to a High-Water Mark for each series. The performance fee is accrued monthly and payable quarterly. During the year, performance fees of $588,207 (2016: $nil) were charged to the Fund, of which $nil was payable at 30 June 2017 (2016: $nil). 24

27 NOTE 13: RELATED PARTY TRANSACTIONS (CONTINUED) (a) Key management personnel (continued) The Trustee is entitled to recoup Fund s expenses from the assets of the Fund. The recouped expenses are calculated each month as a Management Expense Ratio (MER). The ratio is capped at 0.55% of the Net Asset Value of the Fund. During the year, MER fees of $103,551 were charged to the Fund (2016: $74,921), of which $35,378 was payable at 30 June 2017 (2016: $20,626). (b) Unit Holdings of Key Management Personnel The Director of the Investment Manager indirectly holds 1,789,095 units in the Fund as of 30 June 2017 (2016: 1,768,307). (c) Other related parties Other related parties include close family members of key management personnel (KMP), and entities that are controlled or jointly controlled by those KMP or their close family members, individually or collectively with family members or KMP. NOTE 14: FUND DETAILS The registered office and principal place of business of the Fund is Level 2, 5 Martin Place, Sydney NSW, Australia

28 DIRECTORS' DECLARATION OF THE TRUSTEE COMPANY In accordance with a resolution of the Directors of The Fund, the Directors of the Trustee company declare that: 1. the financial statements and notes, as set out on pages 6 to 25 present fairly the Fund's financial position as at 30 June 2017 and its performance for the year ended on that date in accordance with Australian Accounting Standards Reduced Disclosure Requirements; and 2. in the Directors' opinion there are reasonable grounds to believe that the Fund will be able to pay its debts as and when they become due and payable. A Collins Director Sydney 30 October

29 Ey Building a better working world Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Tel: Fax: ey.com/au Independent Auditor's Report to the unitholders of Avenir Global Fund (formerly known as Avenir Value Fund) Opinion We have audited the financial report of Avenir Global Fund (the "Fund"), which comprises the statement of financial position as at 30 June 2017, the statement of comprehensive income, statement of changes in in net assets attributable to unitholders and statement of cash flows for the year then ended, notes to the financial statements, including a summary of significant accounting policies, and the directors' declaration. In our opinion the accompanying financial report presents fairly, in all material respects, the financial position of the Fund as of 30 June 2017, and its financial performance and its cash flows for the year then ended in accordance with Australian Accounting Standards - Reduced Disclosure Requirements. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Fund in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Information Other than the Financial Report and Auditor's Report Thereon The directors of the Trustee are responsible for the other information. The other information is the directors' report accompanying the financial report. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Report The directors of the Trustee are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards - Reduced Disclosure Requirements and for such internal control as the directors determine is necessary to enable the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

30 Ey Building a better working world In preparing the financial report, the directors are responsible for assessing the Fund's ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Fund or to cease operations, or have no realistic alternative but to do so. Auditor's Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website at: files/ar3.pdf. This description forms part of our auditor's report. Ernst & Young Rita Da Silva Engagement Partner Sydney 30 October 2017 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation