Antares Funds Equities. Financial Report For the period ending 30 June 2018

Transcription

1 Antares Funds Equities Financial Report For the period ending 30 June 2018

2 Financial Report

3 Financial Report Contents Page List of Schemes 1 Directors' report 2 Auditor's independence declaration 5 Statements of Profit or Loss and Other Comprehensive Income 6 Statements of Financial Position 9 Statements of Changes in Unitholders' Fund 11 Statements of Cash Flows Directors' declaration 40 Independent auditor's report 41

4 List of Schemes The Antares Funds - Equities consists of 8 separate schemes: Antares Australian Equities Fund ARSN Antares Australian Shares Fund ARSN Antares Dividend Builder ARSN Antares Elite Opportunities Fund ARSN Antares Elite Opportunities Shares Fund ARSN Antares High Growth Shares Fund ARSN Antares Listed Property Fund ARSN Antares Long Term Equity Fund - Series 1 ARSN

5 Directors' report Directors' report The Directors of Antares Capital Partners Limited, the Responsible Entity of the following schemes (the 'Schemes'): Antares Australian Equities Fund ('Australian Equities Fund') Antares Australian Shares Fund ('Australian Shares Fund') Antares Dividend Builder ('Dividend Builder') Antares Elite Opportunities Fund ('Elite Opportunities Fund') Antares Elite Opportunities Shares Fund (''Elite Opportunities Shares Fund') Antares High Growth Shares Fund ('High Growth Shares Fund') Antares Listed Property Fund ('Listed Property Fund') Antares Long Term Equity Fund - Series 1 ('Long Term Equity Fund') present their report together with the financial report of the Schemes for the year ended 30 June 2018 and the independent audit report thereon. The Schemes are disclosed in the Antares Funds - Equities Product Disclosure Statement and therefore they are presented together in this financial report and related notes in accordance with Corporations Instrument 2015/839. Directors of the Responsible Entity The names of the persons who were directors of Antares Capital Partners Limited at any time during the financial year were as follows: Name Appointment / Resignation Date J G Duffield Appointed 7 July 2014 P Gupta Appointed 7 July 2014 C M Keating Appointed 5 December 2016 G J Mulcahy Appointed 7 July 2014 K A Watt Appointed 5 December 2016 The registered office of Antares Capital Partners Limited is located at Ground Floor, MLC Building, Miller Street, North Sydney NSW Principal activities The Schemes are unlisted registered managed investment schemes domiciled in Australia. The Schemes invest and transact in listed equities, unit trusts, unlisted managed investment schemes and derivatives in accordance with the provisions of the Constitutions of the Schemes. The Schemes did not have any employees during the year (2017: Nil). There have been no significant changes to the activities of the Schemes during the year. The Schemes are for profit entities for the purposes of preparing financial statements. Results and review of operations The results of the operations of the Schemes are disclosed in the Statements of Profit or Loss and Other Comprehensive Income. These results are affected by the performance of the markets to which the individual Schemes have exposure. For details in relation to the Schemes' investment exposure and strategy, information can be obtained from the Product Disclosure Statements. Distributions The distributions for the year ended 30 June 2018 were as follows: $'000 c/unit Australian Equities Fund Professional Selection unit class 1, Dividend Builder Professional Selection unit class 11, Elite Opportunities Fund Professional Selection unit class 20, Elite Opportunities Fund Wholesale unit class 4, High Growth Shares Fund Professional Selection unit class 80, High Growth Shares Fund Personal Choice unit class 1, Listed Property Fund Professional Selection unit class 13, Listed Property Fund Personal Choice unit class Long Term Equity Fund Professional Selection unit class 1,

6 Directors' report Distributions (continued) Whole Dollars $ c/unit Australian Shares Fund Professional Selection unit class 52, Australian Shares Fund Personal Choice unit class 580, Elite Opportunities Shares Fund Personal Choice unit class 89, Units on issue Units on issue as at year end and movements during the year are shown in the Statements of Changes in Unitholders' Fund. The total assets of the Schemes are set out in the Statements of Financial Position. The basis for valuation of the Schemes' assets is disclosed in Note 1 to the financial statements. State of affairs On 5 May 2016, the Attribution Managed Investment Trust ('AMIT') regime, applying to Managed Investment Trusts was enacted under the Tax Laws Amendment (New Tax System for Managed Investment Trusts) Act With its introduction, the Responsible Entity has amended the Schemes' Constitutions to allow the Schemes to operate as AMITs. By 29 June 2018, the Responsible Entity has sent notice to unitholders on the Schemes' intention to elect into the AMIT regime for the financial year ended 30 June 2018 (and for subsequent financials years). As of 30 June 2018, the Schemes meet the other conditions to adopt the AMIT tax regime and consequently, in accordance with the requirements of AASB 132 Financial Instruments: Presentation relating to puttable instruments, for the Schemes where the units are single class only, the net assets available to uniholders have been re-classified from a financial liability to equity on 30 June However, for multi-class schemes that have units which are equally subordinate but do not have identical features, in accordance with the requirements of AASB 132 Financial Instruments: Presentation relating to puttable instruments, the units in the Schemes remain as a financial liability on 30 June The Directors of Antares Capital Partners Limited approved the commencement of termination of Antares Elite Opportunities Shares Fund (the "Fund"). In the opinion of the Responsible Entity, there were no other significant changes in the state of affairs of the Schemes that occurred during the year. Likely developments The investment strategies of the Schemes will be managed in accordance with the Schemes' Constitutions and investment objectives. Further information about likely developments in the operations of the Schemes and the expected results of those operations in future financial years has not been included in this report because disclosure of the information would be likely to result in unreasonable prejudice to the Schemes. Auditor's independence The Directors received a declaration of independence from the auditor of the Schemes, a copy of which is attached to the Directors' report on page 5. Events subsequent to the balance date There has not arisen in the interval between the year end and the date of this report any other item, transaction or event of a material and unusual nature likely, in the opinion of the Responsible Entity, to significantly affect the operations of the Schemes, the results of those operations, or the state of affairs of the Schemes in future financial years. Interests of the Responsible Entity Units held by Antares Capital Partners Limited and its related parties in the Schemes during the financial year ended 30 June 2018 are detailed in Note 8(i) to the financial statements. Fees paid to the Responsible Entity during the financial year ended 30 June 2018 are detailed in Note 8(e) to the financial statements. Environmental regulation The operations of the Schemes are not subject to any particular or significant environmental regulations under a Commonwealth, State or Territory law

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8 Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Tel: Fax: ey.com/au Auditor s Independence Declaration to the Directors of Antares Capital Partners Limited, as Responsible Entity for Antares Funds Equities As lead auditor for the audit of Antares Funds Equities consisting of the Schemes listed below for the financial year ended 30 June 2018, I declare to the best of my knowledge and belief, there have been: a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b) no contraventions of any applicable code of professional conduct in relation to the audit. Antares Australian Equities Fund Antares Elite Opportunities Shares Fund Antares Australian Shares Fund Antares High Growth Shares Fund Antares Dividend Builder Antares Listed Property Fund Antares Elite Opportunities Fund Antares Long Term Equity Fund - Series 1 Ernst & Young Darren Handley-Greaves Partner Sydney 20 September 2018 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation -5-

9 Statements of Profit or Loss and Other Comprehensive Income Investment income Australian Equities Fund Australian Shares Fund Dividend Builder Notes $'000 $'000 $ $ $'000 $'000 Dividend and distribution income , ,816 13,488 11,734 Interest income ,905 3, Changes in the fair value of financial assets and liabilities at fair value through profit or loss 1,036 2, , ,878 (6,962) 14,423 Other income 9-9, Total investment income 1,748 3, ,510 1,190,524 6,701 26,279 Expenses Responsible Entity's fees 8(e) , ,534 1,487 1,344 Transaction costs ,696 8, Interest overdraft fee Stock loan fees Other expenses Total operating expenses , ,807 1,725 1,542 Net operating profit/(loss) 1,580 2, ,753 1,050,717 4,976 24,737 Financing costs Distributions 4 1,665 1, ,180 1,015,323 11,752 20,853 Net (loss)/profit (85) 1,116 (74,427) 35,394 (6,776) 3,884 Other comprehensive income Change in net assets attributable to unitholders (85) 1,116 (74,427) 35,394 (6,776) 3,884 The above Statements of Profit or Loss and Other Comprehensive Income are to be read in conjunction with the accompanying notes

10 Statements of Profit or Loss and Other Comprehensive Income Investment income Elite Opportunities Fund Elite Opportunities Shares Fund High Growth Shares Fund Notes $'000 $'000 $ $ $'000 $'000 Dividend and distribution income 2 9,036 7,839 82,583 79,607 22,338 25,528 Interest income , Changes in the fair value of financial assets and liabilities at fair value through profit or loss 21,199 28,170 9,599 66,844 94,588 84,256 Other income Total investment income 30,363 36,123 93, , , ,737 Expenses Responsible Entity's fees 8(e) 1,630 1,462 6,189 6,679 6,355 6,452 Transaction costs ,865 5,356 Interest overdraft fee ,163 3,039 Stock loan fees Other expenses Total operating expenses 2,097 1,878 6,189 6,679 16,002 15,332 Net operating profit/(loss) 28,266 34,245 86, , ,417 95,405 Financing costs Distributions 4 25,158 20,228 89,550 42,431 81,754 81,002 Net (loss)/profit 3,108 14,017 (2,613) 97,720 20,663 14,403 Other comprehensive income Change in net assets attributable to unitholders 3,108 14,017 (2,613) 97,720 20,663 14,403 The above Statements of Profit or Loss and Other Comprehensive Income are to be read in conjunction with the accompanying notes

11 Statements of Profit or Loss and Other Comprehensive Income Investment income Listed Property Fund Long Term Equity Fund Notes $'000 $'000 $'000 $'000 Dividend and distribution income 2 4,886 4, Interest income Changes in the fair value of financial assets and liabilities at fair value through profit or loss 6,231 (11,922) 734 1,721 Other income Total investment income 11,142 (6,986) 1,692 2,645 Expenses Responsible Entity's fees 8(e) Transaction costs Interest overdraft fee Stock loan fees Other expenses Total operating expenses Net operating profit/(loss) 10,380 (7,964) 1,525 2,471 Financing costs Distributions 4 13,904 18,651 1,212 1,576 Net (loss)/profit (3,524) (26,615) Other comprehensive income Change in net assets attributable to unitholders (3,524) (26,615) The above Statements of Profit or Loss and Other Comprehensive Income are to be read in conjunction with the accompanying notes

12 Statements of Financial Position As at 30 June 2018 Assets Australian Equities Fund Australian Shares Fund Dividend Builder Notes $'000 $'000 $ $ $'000 $'000 Cash and cash equivalents 11(b) 528 1, , ,383 13,538 14,933 Receivables 6 1, ,907 51,962 3,175 2,441 Financial assets designated at fair value through profit or loss 5 14,774 16,552 6,422,938 6,452, , ,040 Financial assets held for trading 9(c) Total assets 16,771 17,951 6,865,153 6,905, , ,414 Liabilities Payables ,230 8, Financial liabilities held for trading 9(c) Distributions payable 4 1,180 1, , ,547 2,272 8,793 Total liabilities excluding net assets attributable to unitholders 1,187 1, , ,395 2,553 8,967 Net assets attributable to unitholders - Liability - 16,713 6,525,548 6,234, ,447 Net assets attributable to unitholders - Equity 15, ,090 - Assets Elite Opportunities Fund Elite Opportunities Shares Fund High Growth Shares Fund Notes $'000 $'000 $ $ $'000 $'000 Cash and cash equivalents 11(b) 7,782 10,297 39,134 7,982 32,961 33,157 Receivables 6 3,008 1,499 51,000 39,469 23,249 15,293 Financial assets designated at fair value through profit or loss 5 246, , , , Financial assets held for trading 9(c) , ,340 Total assets 256, , , , , ,790 Liabilities Payables ,474 7,828 Financial liabilities held for trading 9(c) , ,166 Distributions payable 4 15,803 10,787 44,045 15,706 59,076 43,335 Total liabilities excluding net assets attributable to unitholders 15,931 11,022 44,562 16, , ,329 Net assets attributable to unitholders - Liability 240, , , , ,461 Net assets attributable to unitholders - Equity , The above Statements of Financial Position are to be read in conjunction with the accompanying notes

13 Statements of Financial Position As at 30 June 2018 Assets Listed Property Fund Long Term Equity Fund Notes $'000 $'000 $'000 $'000 Cash and cash equivalents 11(b) ,786 1,650 Receivables 6 7,473 9, Financial assets designated at fair value through profit or loss 5 87,644 93,447 18,535 18,863 Financial assets held for trading 9(c) Total assets 95, ,548 20,469 20,656 Liabilities Payables Financial liabilities held for trading 9(c) Distributions payable 4 9,684 12, ,033 Total liabilities excluding net assets attributable to unitholders 9,913 12, ,044 Net assets attributable to unitholders - Liability 85,331 90,806-19,612 Net assets attributable to unitholders - Equity ,803 - The above Statements of Financial Position are to be read in conjunction with the accompanying notes

14 Statements of Changes in Unitholders' Fund Net assets attributable to unitholders Total liability at 30 June 2016 Applications Redemptions Change in net assets attributable to unitholders Balance at 30 June 2017 Applications Redemptions Change in net assets attributable to unitholders Total liability/equity at 30 June 2018* Australian Equities Fund Australian Shares Fund Australian Shares Fund Professional Selection Professional Selection Personal Choice Number of Units Number of Units Number of Units $'000 No. '000 $ No. $ No. 17,335 20, , ,190 5,929,117 7,406,451 3,915 4, , ,725 (5,653) (6,071) (65,243) (73,133) (767,595) (884,119) 1,116-4,336-31,058-16,713 18, , ,057 5,723,504 7,157,057 3,136 3, , ,148 (4,180) (4,571) (24,733) (29,604) (300,873) (367,446) (85) - (5,509) - (68,918) - 15,584 17, , ,453 6,045,097 7,649,759 Net assets attributable to unitholders Total liability at 30 June 2016 Applications Redemptions Change in net assets attributable to unitholders Balance at 30 June 2017 Applications Redemptions Change in net assets attributable to unitholders Total liability/equity at 30 June 2018* Dividend Builder Elite Opportunities Fund Elite Opportunities Fund Professional Selection Professional Selection Wholesale Number of Units Number of Units Number of Units $'000 No. '000 $'000 No. '000 $'000 No. ' , , , ,845 45,552 41,571 60,059 48,527 42,665 32,792 2,465 2,083 (44,433) (36,062) (27,291) (21,101) (12,577) (10,322) 3,884-10,305-3, , , , ,536 39,152 33,332 73,503 62,473 61,426 46,583 4,101 3,442 (51,084) (43,975) (37,580) (28,484) (5,000) (4,004) (6,776) - 2, , , , ,635 39,079 32,770 Net assets attributable to unitholders Total liability at 30 June 2016 Applications Redemptions Change in net assets attributable to unitholders Balance at 30 June 2017 Applications Redemptions Change in net assets attributable to unitholders Elite Opportunities Shares Fund High Growth Shares Fund High Growth Shares Fund Personal Choice Professional Selection Personal Choice $ Number of Units No. $'000 Number of Units No. '000 $'000 Number of Units No. ' , , , ,658 11,944 11,828 21,420 13,729 65,610 58, (221,445) (138,767) (123,081) (109,693) (1,895) (1,739) 97,720-14, , , , ,150 10,841 10,530 40,116 24, , , (32,524) (20,025) (85,524) (76,648) (1,394) (1,285) (2,613) - 20, Total liability at 30 June , , , ,651 10,825 10,104 The above Statements of Changes in Unitholders' Fund are to be read in conjunction with the accompanying notes

15 Statements of Changes in Unitholders' Fund Net assets attributable to unitholders Total liability at 30 June 2016 Applications Redemptions Change in net assets attributable to unitholders Balance at 30 June 2017 Applications Redemptions Change in net assets attributable to unitholders Listed Property Fund Listed Property Fund Long Term Equity Fund Professional Selection Personal Choice Professional Selection Number of Units Number of Units Number of Units $'000 No. '000 $'000 No. '000 $'000 No. ' ,998 3, ,116 23,292 19, (40,910) (1,227) - - (620) (679) (26,612) - (3) ,792 3, ,612 22,857 18, (20,096) (712) (1) (3) (129) (146) (3,523) - (1) Total liability/equity at 30 June 2018* 85,317 3, ,803 22,719 *Reclassified due to AMIT tax regime implementation see Note 1. The above Statements of Changes in Unitholders' Fund are to be read in conjunction with the accompanying notes

16 Statements of Cash Flows Cash flows from operating activities Australian Equities Fund Australian Shares Fund Dividend Builder Notes $'000 $'000 $ $ $'000 $'000 Proceeds from sale of investments held for trading Purchase of investments held for trading Transaction costs paid (22) (23) (7,696) (8,273) (238) (198) Dividend and distribution income received , ,567 10,624 7,728 Interest received ,905 3, Other income received 9-9, Responsible Entity's fees paid (150) (158) (126,679) (131,429) (1,488) (1,333) Interest paid Stock loan fees paid Payment of other expenses Net cash provided by/(used in) operating activities 11(a) ,701 61,695 9,073 6,319 Cash flows from investing activities Proceeds from sale of investments 8,410 9,151 3,225,865 3,364,611 76,156 67,507 Purchases of investments (6,831) (5,932) (2,750,067) (2,188,541) (91,123) (67,193) Net cash provided by/(used in) investing activities 1,579 3, ,798 1,176,070 (14,967) 314 Cash flows from financing activities Applications received 2,956 3,830 10,716-73,200 59,537 Redemptions paid (4,192) (5,720) (325,606) (832,838) (50,976) (44,437) Distributions paid (1,525) (978) (282,684) (253,154) (17,725) (17,385) Net cash (used in)/provided by financing activities (2,761) (2,868) (597,574) (1,085,992) 4,499 (2,285) Net increase/(decrease) in cash and cash equivalents (738) 694 (10,075) 151,773 (1,395) 4,348 Cash and cash equivalents at the beginning of the financial year 1, , ,610 14,933 10,585 Cash and cash equivalents at the end of the financial year 11(b) 528 1, , ,383 13,538 14,933 The above Statements of Cash Flows are to be read in conjunction with the accompanying notes

17 Statements of Cash Flows Cash flows from operating activities Elite Opportunities Fund Elite Opportunities Shares Fund High Growth Shares Fund Notes $'000 $'000 $ $ $'000 $'000 Proceeds from sale of investments held for trading ,369,021 2,003,027 Purchase of investments held for trading (2,340,765) (1,927,182) Transaction costs paid (467) (416) - - (5,865) (5,356) Dividend and distribution income received 8,014 8, ,455 27,465 Interest received , Other income received Responsible Entity's fees paid (1,614) (1,444) (6,173) (6,728) (6,334) (6,500) Interest paid (3,163) (3,039) Stock loan fees paid (593) (460) Payment of other expenses (26) (25) Net cash provided by/(used in) operating activities 11(a) 6,061 6,725 (5,229) (6,349) 34,223 88,883 Cash flows from investing activities Proceeds from sale of investments 163, , , , Purchases of investments (174,758) (140,291) (55,000) Net cash provided by/(used in) investing activities (11,528) 2,708 90, , Cash flows from financing activities Applications received 55,162 38, ,666 59,949 Redemptions paid (42,676) (39,771) (32,524) (221,445) (87,487) (124,535) Distributions paid (9,534) (4,871) (21,095) (9,990) (55,598) (33,270) Net cash (used in)/provided by financing activities 2,952 (5,805) (53,619) (231,435) (34,419) (97,856) Net increase/(decrease) in cash and cash equivalents (2,515) 3,628 31,152 (47,785) (196) (8,973) Cash and cash equivalents at the beginning of the financial year 10,297 6,669 7,982 55,767 33,157 42,130 Cash and cash equivalents at the end of the financial year 11(b) 7,782 10,297 39,134 7,982 32,961 33,157 The above Statements of Cash Flows are to be read in conjunction with the accompanying notes

18 Statements of Cash Flows Cash flows from operating activities Listed Property Fund Long Term Equity Fund Notes $'000 $'000 $'000 $'000 Proceeds from sale of investments held for trading Purchase of investments held for trading Transaction costs paid (80) (102) (6) (7) Dividend and distribution income received 4,584 4, Interest received Other income received Responsible Entity's fees paid (690) (894) (161) (168) Interest paid Stock loan fees paid Payment of other expenses Net cash provided by/(used in) operating activities 11(a) 3,839 3, Cash flows from investing activities Proceeds from sale of investments 48,769 45,250 2,776 3,519 Purchases of investments (34,427) (19,398) (1,623) (1,575) Net cash provided by/(used in) investing activities 14,342 25,852 1,153 1,944 Cash flows from financing activities Applications received 17,037 18, Redemptions paid (20,059) (40,767) (129) (620) Distributions paid (15,654) (13,617) (1,583) (3,731) Net cash (used in)/provided by financing activities (18,676) (35,937) (1,712) (4,130) Net increase/(decrease) in cash and cash equivalents (495) (6,193) 136 (1,704) Cash and cash equivalents at the beginning of the financial year 622 6,815 1,650 3,354 Cash and cash equivalents at the end of the financial year 11(b) ,786 1,650 The above Statements of Cash Flows are to be read in conjunction with the accompanying notes

19 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated. The financial report of the Schemes for the financial year ended 30 June 2018 was authorised for issue in accordance with a resolution of the Directors of the Responsible Entity on 20 September On 5 May 2016, the Attribution Managed Investment Trust ('AMIT') regime, applying to Managed Investment Trusts was enacted under the Tax Laws Amendment (New Tax System for Managed Investment Trusts) Act With its introduction, the Responsible Entity has amended the Schemes' Constitutions to allow the Schemes to operate as AMITs. By 29 June 2018, the Responsible Entity has sent notice to unitholders on the Schemes' intention to elect into the AMIT regime for the financial year ended 30 June 2018 (and for subsequent financials years). As of 30 June 2018, the Schemes meet the other conditions to adopt the AMIT tax regime and consequently, in accordance with the requirements of AASB 132 Financial Instruments: Presentation relating to puttable instruments, for the Schemes where the units are single class only, the net assets available to uniholders have been reclassified from a financial liability to equity on 30 June However, for multi-class schemes that have units which are equally subordinate but do not have identical features, in accordance with the requirements of AASB 132 Financial Instruments: Presentation relating to puttable instruments, the units in the Schemes remain as a financial liability on 30 June On 17 August 2018, the Directors of Antares Capital Partners Limited approved the commencement of termination of Antares Elite Opportunities Shares Fund (the "Fund").The financial statement for 30 June 2018 is prepared on going concern basis with no impact to the financial position of the Scheme. (a) Statement of compliance The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Standards Board ('AASB') and International Financial Reporting Standards ('IFRS'), as issued by the International Accounting Standards Board ('IASB'). (b) Basis of preparation The Schemes' financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act The financial report has been prepared on the basis of historical costs, except for financial assets and financial liabilities designated at fair value through profit or loss and held for trading, that have been measured at fair value through profit and loss. The Statements of Financial Position are presented on a liquidity basis. Assets and liabilities are presented in decreasing order of liquidity and are designated current assets and liabilities as they are expected to be recovered or settled within twelve months. Financial assets and liabilities designated at fair value through profit or loss and net assets attributable to unitholders are expected to be settled upon contractual requirements. Where necessary, comparative information has been reclassified to achieve consistency in disclosure with current financial year amounts and other disclosures. The financial statements are presented in Australian Dollars, and all values are rounded to the nearest thousand dollars except where otherwise indicated. (c) Basis of consolidation The Schemes are investment entities under the definition in AASB 10 Consolidated Financial Statements and, as such, do not consolidate any entities subject to their control. The Schemes do not hold a controlling interest in any of their underlying investments and therefore are not required to provide additional disclosures. (d) Unit prices The unit prices for the units of the Schemes are calculated as at the close of business on each business day. (e) Terms and conditions on units Each unit issued confers upon the unitholders of each Scheme an equal interest in the Scheme, and is of equal value. A unit does not confer any interest in any particular asset or investment of each Scheme. Unitholders have various rights under the Constitution and the Corporations Act 2001, including the right to: (i) have their units redeemed; (ii) accumulate income, which is reflected in the unit price; (iii) attend and vote at meetings of unitholders; and (iv) participate in the termination and winding up of the Scheme. The rights, obligations and restrictions attached to any unit of a Scheme are identical in all respects

20 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (f) Financial assets and liabilities designated at fair value through profit or loss The Schemes have classified all of their investments as designated at fair value through profit or loss except for High Growth Shares Fund that holds its investments for active trading purposes, and Elite Opportunities Fund which classifies its derivatives as held for trading for risk management purposes. Securities designated at fair value through profit or loss are initially recognised at fair value. Investments are valued at their fair value as at reporting date. Gains and losses arising from changes in the fair value of the financial assets designated at fair value through profit or loss are included in the Statements of Profit or Loss and Other Comprehensive Income in the year in which they arise. (g) Financial assets and liabilities held for trading For accounting purposes, the High Growth Shares Fund has categorised all its investments as held for trading, and the Elite Opportunities Fund has categorised its derivative financial instruments as held for trading. The Elite Opportunities Fund does not designate any derivatives as hedges in a hedging relationship. Derivatives are recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at their fair value with movements taken to the Statements of Profit or Loss and Other Comprehensive Income. Fair values are obtained from quoted market prices in active markets and valuation techniques, including discounted cash flow models and options pricing models. All derivatives are carried as assets when fair value is positive and as liabilities when fair value is negative. Financial assets and liabilities held for trading are offset and the net amount reported in the Statements of Financial Position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. Futures Contracts Futures contracts are contractual obligations to buy or sell financial instruments on a future date at a specified price established on an organised market. The futures contracts are collateralised by cash and cash equivalents or by other assets ("initial margin"). Subsequent payments, known as "variation margin", are made or received by the Schemes each day, depending on the daily fluctuations in the fair value of the underlying security. The futures contracts are marked to market daily. (h) Fair value measurement Assets and liabilities measured at fair value in the financial statements are categorised within the fair value hierarchy based on the lowest level input that is significant to the fair value measurement in its entirety as detailed below: Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities. Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable. Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. (i) Significant accounting judgements, estimates, or assumptions The Schemes may make estimates and assumptions that affect the reported amounts of assets and liabilities in the financial statements. Estimates and assumptions Estimates are continually evaluated and based on historical experience, available information and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Fair value of financial assets and liabilities designated at fair value through profit or loss Fair value is the price that would be received from disposing an asset or paid to transfer a liability in an orderly transaction between market participants at the transaction date. The Schemes measure investments in financial assets and financial liabilities at fair value through profit or loss. Management applies judgement in selecting valuation techniques where there is no market price available for an instrument. Further details on the determination of fair values of financial instruments are set out in Note 9(g). Fair value of financial assets and liabilities held for trading The Schemes have assessed the impact of credit/debit value adjustments to their derivative positions to comply with the requirements of AASB 13 Fair value Measurement, and concluded that there are no significant adjustments to the valuation of derivatives

21 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (i) Significant accounting judgements, estimates, or assumptions (continued) Judgements (i) The Schemes meet the definition criteria of an investment entity under AASB 10 Consolidated Financial Statements and therefore are required to measure their interests in controlled entities at fair value through profit or loss. The criteria which define an investment entity are as follows: (a) An entity that obtains funds from one or more investors for the purpose of providing those investors with investment services; (b) An entity that commits to its investors that its business purpose is to invest funds solely for returns from capital appreciation, investment income or both; and (c) An entity that measures and evaluates the performance of substantially all of its investments on a fair value basis. (ii) The Elite Opportunities Shares Fund has assessed whether its investment in an unlisted managed investment scheme should be classified as a structured entity. A structured entity is an entity in which voting or similar rights are not the dominant factor in deciding control. The Scheme has considered the voting rights and other similar rights and concluded on whether these rights are the dominant factor in determining control. The Scheme has concluded that its investment in an unlisted managed investment scheme meets the definition of a structured entity as the voting rights of the unlisted managed investment scheme are not substantive in nature. (j) Cash and cash equivalents Cash and cash equivalents in the Statements of Financial Position comprise cash at bank and futures margin. (k) Receivables Receivables may include amounts for dividends, distributions, interest, outstanding settlements and other income and are measured initially at fair value plus transaction costs. Amounts are generally received within 30 days of being recorded as receivable. (l) Payables Payables include outstanding settlements and accrued expenses owing by the Schemes which are unpaid as at the balance date. They are measured initially at fair value plus transaction costs. (m) Income and expenses Revenue is brought to account on an accrual basis except where otherwise stated. Dividend and distribution income from listed securities, unit trusts and unlisted managed investment schemes, is recognised on the date the shares or trust units are quoted ex dividend/distribution. Changes in the fair value of investments are recognised as income and are determined as the difference between the fair value at year end or consideration received (if sold during the year) and the fair value as at the prior year end or cost (if the investment was acquired during the year). Expenses are brought to account on an accrual basis. The Responsible Entity is entitled to receive a fee, calculated in accordance with the Schemes' Constitutions, for the provision of management services to the Schemes. The Responsible Entity is entitled to be reimbursed, under the Schemes' Constitutions, for certain expenses incurred in administering the Schemes. The amount reimbursed has been calculated in accordance with the Schemes' Constitutions. Other expenses also include government duties and bank interest expense. Auditor's remuneration has not been charged against the Schemes' income as this cost is borne by the Responsible Entity. (n) Taxation The Schemes have elected to have the new taxation regime (AMIT) for the taxation of managed investment schemes apply for the 2018 tax year and later years of income. The Schemes are not subject to income tax as the taxable income (including assessable realised net capital gains) is fully attributed to the unitholders each year. Unitholders are taxed on the income attributed to them. The unit price is based upon fair values of underlying assets and thus may include a share of unrealised capital gains. Should such a gain be realised, that portion of the gain that is subject to capital gains tax will be distributed. Net realised capital losses are not distributed to unitholders, but are retained to be offset against any future realised capital gains. Where realised assessable capital gains exceed realised capital losses, the excess will be distributed and attributed to unitholders as assessable income for taxation purposes

22 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (o) Distributions to unitholders The income of the Schemes is accumulated and reinvested or paid to unitholders on the last day of September, December, March and June except for the income of Long Term Equity Fund which is accumulated and reinvested or paid on the last business day of December and June. Distributable income does not include unrealised gains and losses arising on movements in the fair value of investments; as such, unrealised gains and losses are transferred to net assets attributable to unitholders and are not attributed to unitholders as assessable income or distributed until realised. Distributions are expressed as cents per unit for the distribution period. (p) Goods and services tax Responsible Entity fees and other expenses are recognised net of the amount of goods and services tax ('GST') recoverable from the Australian Taxation Office ('ATO') as a reduced input tax credit ('RITC'). Creditors and accruals are stated with the amount of GST included. The net amount of GST recoverable from the ATO is included in the payables in the Statements of Financial Position. (q) Derecognition of financial instruments The derecognition of financial instruments takes place when the Schemes no longer control the contractual rights of a financial instrument, which is normally the case when the instrument is sold, or all the cash flows attributable to the instrument are passed through to an independent third party. (r) Capital Management The Responsible Entity manages its net assets attributable to unitholders as capital. As at 30 June 2017, the net assets attributable to unitholders were classified as a liability. As of 30 June 2018, the Schemes meet the conditions required to adopt the AMIT tax regime consequently the Schemes where the units are single class only, these units have been re-classified from a financial liability to equity, the Schemes where units are multi-class remain as a financial liability on 30 June 2018 in accordance with the requirements of AASB 132 Financial Instruments: Presentation relating to puttable instruments. The amount of net assets attributable to unitholders can change significantly on a daily basis as the Schemes are subject to daily applications and redemptions at the discretion of unitholders. The Responsible Entity monitors the level of daily applications and redemptions relative to the liquid assets in the Schemes. In order to maintain or adjust the capital structure, the Responsible Entity may return capital to unitholders. The Schemes do not have any externally imposed capital requirements. (s) Net assets attributable to unitholders Units are redeemable at the unitholders' option and do not require mandatory cash distributions as a result of entering the AMIT regime. Further as of 30 June 2018, and future years, where unitholders funds have reclassed from liabilities to equity, the Schemes' distributions are no longer classified as a finance cost in the Statements of Profit or Loss and Other Comprehensive Income, but rather as amounts paid in the Statements of Changes in Unitholders' Fund. The Schemes which are multi-class and have units classified as a liability in accordance with the requirements of AASB 132 Financial Instruments: Presentation relating to puttable instruments continue to show their distributions as a finance cost in the Statements of Profit or Loss and Other Comprehensive Income. The units can be put back to the Schemes at any time for cash based on the redemption price. The fair value of redeemable units is measured at the redemption amount that is payable (based on the redemption unit price) at the end of the reporting period if unitholders exercised their right to put the units back to the Schemes. (t) Short selling of listed investments Short selling involves the sale of securities the Scheme does not own, based on the expectation that the securities can be bought back at a later date at a lower price in order to realise a profit. Any gains or losses made as a result of short selling are brought to account in the Statements of Profit or Loss and Other Comprehensive Income. Securities are borrowed from another financial institution and interest is payable on the value of the securities borrowed. Short selling is performed in accordance with the provisions of the Scheme's Constitution. Short positions are determined by reference to Stock Exchange quoted market offer prices at the close of business on the year end date. Only the High Growth Shares Fund can undertake short selling

23 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) (u) Application of accounting standards Australian Accounting Standards issued but not yet effective Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have not been adopted by the Schemes for the annual reporting year ended 30 June The impact of these standards and interpretations has been assessed, to the extent applicable to the Schemes and is discussed below. AASB 9 Financial Instruments This standard makes changes to the way financial assets and liabilities are classified for the purpose of determining their measurement basis. AASB 9 applies to annual reporting periods beginning on or after 1 January 2018 and will therefore apply to the Schemes from 1 July The Schemes do not intend to early adopt AASB 9 as permitted by the standard. The application of the standard is not expected to change the measurement basis of any of the Schemes' current financial instruments. AASB 15 Revenue from Contracts with Customers This standard requires an entity to measure revenue from contracts with customers at the amount of consideration to which the entity expects to be entitled in exchange for transferring promised goods or services. AASB 15 applies to annual reporting periods beginning on or after 1 January 2018 and will therefore apply to the Schemes from 1 July The Schemes do not intend to early adopt AASB 15 as permitted by the standard. The application of the standard is still being assessed, but it is expected that it will have no significant changes to the Schemes' current financial instruments. NOTE 2 - DIVIDEND AND DISTRIBUTION INCOME Dividend/Scheme distribution income: Australian Equities Fund Australian Shares Fund Dividend Builder $'000 $'000 $ $ $'000 $'000 Listed equities and unit trusts , ,816 13,488 11,734 Unlisted managed investment schemes , ,816 13,488 11,734 Dividend/Scheme distribution income: Elite Opportunities Fund Elite Opportunities Shares Fund High Growth Shares Fund $'000 $'000 $ $ $'000 $'000 Listed equities and unit trusts 9,036 7, ,338 25,528 Unlisted managed investment schemes ,583 79, ,036 7,839 82,583 79,607 22,338 25,528 Dividend/Scheme distribution income: Listed Property Fund Long Term Equity Fund $'000 $'000 $'000 $'000 Listed equities and unit trusts 4,886 4, Unlisted managed investment schemes ,886 4,

24 NOTE 3 - AUDITOR'S REMUNERATION Total amount paid or due and payable to Ernst & Young: Australian Equities Fund Australian Shares Fund Dividend Builder $ $ $ $ $ $ Audit and review of financial reports 7,019 7,105 10,027 7,105 10,027 7,105 Other assurance engagements 4,514 3,630 4,514 3,630 4,514 3,630 11,533 10,735 14,541 10,735 14,541 10,735 Total amount paid or due and payable to Ernst & Young: Elite Opportunities Fund Elite Opportunities Shares Fund High Growth Shares Fund $ $ $ $ $ $ Audit and review of financial reports 10,027 7,105 7,019 7,105 10,027 7,105 Other assurance engagements 4,514 3,630 4,514 3,630 4,514 3,630 14,541 10,735 11,533 10,735 14,541 10,735 Total amount paid or due and payable to Ernst & Young: Listed Property Fund Long Term Equity Fund $ $ $ $ Audit and review of financial reports 10,027 7,105 7,019 7,105 Other assurance engagements 4,514 3,630 4,514 3,630 14,541 10,735 11,533 10,735 Auditors' remunerations for the Schemes have been paid by the Responsible Entity. Other assurance engagements consist of compliance plan audit and specified procedures performed on the direct investments of the Schemes. NOTE 4 - DISTRIBUTIONS Distributions paid/payable during the year by the Schemes were as follows: Australian Equities Fund Australian Shares Fund Australian Shares Fund Professional Selection Professional Selection Personal Choice $'000 c/unit $ c/unit $ c/unit 2018 September , , December , , March , , June - payable 1, , , , , , September , , December , , March , , June - payable 1, , , , , ,

25 NOTE 4 - DISTRIBUTIONS (continued) Dividend Builder Elite Opportunities Fund Elite Opportunities Fund Professional Selection Professional Selection Wholesale $'000 c/unit $'000 c/unit $'000 c/unit 2018 September 4, , December 2, , March 2, , June - payable 2, , , , , , September 3, , December 4, , March 4, , June - payable 8, , , , , , Elite Opportunities Shares Fund High Growth Shares Fund High Growth Shares Fund Personal Choice Professional Selection Personal Choice $ c/unit $'000 c/unit $'000 c/unit 2018 September 9, , December 29, , March 6, , June - payable 44, , , , , , September 7, , December 12, , March 6, , June - payable 15, , , , , Listed Property Fund Listed Property Fund Long Term Equity Fund Professional Selection Personal Choice Professional Selection $'000 c/unit $'000 c/unit $'000 c/unit 2018 September 1, December March 2, June - payable 9, , , September 1, December 2, March 2, June - payable 12, , , ,

26 NOTE 5 - FINANCIAL ASSETS DESIGNATED AT FAIR VALUE THROUGH PROFIT OR LOSS Australian Equities Fund Australian Shares Fund Dividend Builder $'000 $'000 $ $ $'000 $'000 Listed equities and unit trusts Shares and units listed on a stock exchange Unlisted managed investment schemes 14,774 16,552 6,422,938 6,452, , ,040 Antares Elite Opportunities Fund Total financial assets designated at fair value through profit or loss 14,774 16,552 6,422,938 6,452, , ,040 Elite Opportunities Fund Elite Opportunities Shares Fund Listed Property Fund $'000 $'000 $ $ $'000 $'000 Listed equities and unit trusts Shares and units listed on a stock exchange Unlisted managed investment schemes 246, , ,644 93,447 Antares Elite Opportunities Fund , , Total financial assets designated at fair value through profit or loss 246, , , ,178 87,644 93,447 Long Term Equity Fund $'000 $'000 Listed equities and unit trusts Shares and units listed on a stock exchange Unlisted managed investment schemes 18,535 18,863 Antares Elite Opportunities Fund - - Total financial assets designated at fair value through profit or loss 18,535 18,