Macquarie Timber Land Trust 2006 ARSN Annual report - 30 June 2017

Transcription

1 ARSN Annual report - 30 June 2017

2 ARSN Annual report - 30 June 2017 Contents Page Directors' Report 1 Auditor's Independence Declaration 4 Statement of Comprehensive Income 5 Statement of Financial Position 6 Statement of Changes in Equity 7 Statement of Cash Flows 8 Notes to the Financial Statements 9 Directors' Declaration 19 Independent Auditor's Report 20 This financial report covers Macquarie Timber Land Trust 2006 as an individual entity. The Responsible Entity of Macquarie Timber Land Trust 2006 is Macquarie Financial Products Management Limited (ABN ). The Responsible Entity's registered office is No. 50 Martin Place, Sydney, NSW 2000.

3 Directors' Report 30 June 2017 The directors of Macquarie Financial Products Management Limited ("MFPML"), a wholly owned subsidiary of Macquarie Group Limited, the Responsible Entity of Macquarie Timber Land Trust 2006, present their report together with the financial report of Macquarie Timber Land Trust 2006 (the "Trust") for the year ended 30 June Principal activities The principal activities of the Trust are to invest in forestry plantation land and receive lease rental income through operating leases. The lease rental income earned will be equal to 10% of net harvest proceeds, which will be paid in instalments during the harvest period. The Trust did not have any employees during the year. There were no significant changes in the nature of the Trust's activities during the year. Directors The following persons held office as directors of MFPML (the "Responsible Entity'') during the year or since the end of the year and up to the date of this report: A J Abraham A Clubb W D Fox J King G Shneier Review and results of operations During the year, the Trust continued to be managed in accordance with the investment objective and strategy set out in the Trust s offer document and in accordance with the Trust Constitution. Results The performance of the Trust, as represented by the results of its operations, was as follows: Operating profit before finance costs attributable to unitholders () 125, ,542 Distributions Distributions paid and payable () 125, ,542 Distributions (dollars per unit) Significant changes in state of affairs The harvest of the Macquarie Eucalypt Project 2006 forestry plantation, that is situated on the Trust s land, commenced in April The Trust recognised lease rental income from the harvest for the year of 125,131. In the opinion of the directors, there were no other significant changes in the state of affairs of the Trust that occurred during the financial year under review. 1

4 Directors' Report 30 June 2017 Matters subsequent to the end of the financial year No matter or circumstance has arisen since 30 June 2017 that has significantly affected, or may significantly affect: (i) the operations of the Trust in future financial years, or (ii) the results of those operations in future financial years, or (iii) the state of affairs of the Trust in future financial years. Likely developments and expected results of operations The Trust will continue to be managed in accordance with the investment objective and strategy set out in the Trust s offer document and in accordance with the Trust Constitution. Further information on likely developments in the operations of the Trust and the expected results of those operations have not been included in this report because the Responsible Entity believes it would be likely to result in unreasonable prejudice to the Trust. Indemnification and insurance of officers and auditors No insurance premiums are paid for out of the assets of the Trust in regards to insurance cover provided to either the officers of the Responsible Entity or the auditors of the Trust. Under the Trust Constitution, the Responsible Entity of the Trust is entitled to be indemnified out of the assets of the Trust for any liability incurred by it in properly performing or exercising any of its powers or duties in relation to the Trust. Fees paid to and units held in the Trust by the Responsible Entity or its associates No fees were paid to the Responsible Entity and its associates out of Trust property during the year (2016: Nil). No fees were paid out of Trust property to the directors of the Responsible Entity during the year (2016: Nil). The number of units in the Trust held by the Responsible Entity, its directors or its associates as at the end of the financial year are disclosed in note 9 of the financial statements. Units in the Trust The movement in units on issue in the Trust during the year is disclosed in note 6 of the financial statements. The value of the Trust s assets and liabilities is disclosed on the statement of financial position and derived using the basis set out in note 2 of the financial statements. Environmental regulation The operations of the Trust are not subject to any particular or significant environmental regulations under a Commonwealth, State or Territory law. 2

5 Directors' Report 30 June 2017 Rounding of amounts to the nearest dollar Pursuant to ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191 issued by the Australian Securities & Investments Commission, relating to the "rounding off" of amounts in the directors' report and financial report, amounts in the directors' report and financial report have been rounded off to the nearest dollar, unless otherwise indicated. Auditor's independence declaration A copy of the Auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 4. This report is made in accordance with a resolution of the directors. Director:... G Shneier Sydney 25 September

6 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 Macquarie Financial Products Management Limited As lead auditor for the audit of Macquarie Timber Land Trust 2006 for the financial year ended 30 June 2017, 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. Ernst & Young Rita Da Silva Partner 25 September 2017 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

7 Statement of Comprehensive Income Notes Investment income Interest income ,915 Lease rental income 9 125, Gain on sale of land - 97,068 Total investment income 125, ,710 Expenses Other operating expenses 9-31,832 Total operating expenses - 31,832 Operating profit 125, ,542 Finance costs attributable to unitholders Distributions to unitholders 5 (125,695) (133,542) Increase/(decrease) in net assets attributable to unitholders Profit/(loss) for the year - - Other comprehensive income for the year - - Total comprehensive income for the year - - The above statement of comprehensive income should be read in conjunction with the accompanying notes. 5

8 Statement of Financial Position As at 30 June 2017 Notes Assets Cash and cash equivalents ,439 Lease rental income receivable 125,131 - Other receivables Land 8 7,446,639 7,446,639 Total assets 7,572,610 7,712,482 Liabilities Distributions payable 5 125, ,542 Return of capital payable 6-127,839 Amounts payable to Macquarie Bank Limited 9-1,276 Other payables 273 3,183 Total liabilities (excluding net assets attributable to unitholders) 125, ,840 Net assets attributable to unitholders - liability 6 7,446,642 7,446,642 The above statement of financial position should be read in conjunction with the accompanying notes. 6

9 Statement of Changes in Equity Total equity at the beginning of the year - - Total comprehensive income for the year - - Transactions with owners in their capacity as owners - - Total equity at the end of the year - - Under Australian Accounting Standards, net assets attributable to unitholders are classified as a liability rather than equity. As a result there was no equity at the start or end of the year. The above statement of changes in equity should be read in conjunction with the accompanying notes. 7

10 Statement of Cash Flows Notes Cash flows from operating activities: Interest received 967 3,569 Lease rental income received Proceeds from sale of land (net of expenses) - 226,183 Amounts paid to Macquarie Bank Limited (1,276) - GST (paid)/received (3,183) 8 Net cash (outflow)/inflow from operating activities 10(a) (3,492) 230,559 Cash flows from financing activities: Return of capital Distributions paid Withholding tax paid Net cash outflow from financing activities (127,839) - (117,815) - (15,727) - (261,381) - Net (decrease)/increase in cash and cash equivalents (264,873) 230,559 Cash and cash equivalents at the beginning of the year 265,439 34,880 Cash and cash equivalents at the end of the year ,439 Non-cash financing activities 10(b) - - The above statement of cash flows should be read in conjunction with the accompanying notes. 8

11 Notes to the Financial Statements 1 General information This financial report covers Macquarie Timber Land Trust 2006 (the "Trust") as an individual entity. The Trust was constituted on 16 January The Trust is expected to terminate on 30 June 2020 or at a later date, in accordance with the provisions of Trust Constitution. The Trust is a registered managed investment scheme domiciled in Australia. The financial report is presented in Australian dollars. The Responsible Entity of the Trust is Macquarie Financial Products Management Limited (the "Responsible Entity''). The Responsible Entity s registered office is No. 50 Martin Place, Sydney, NSW The Trust issued units at 1,950 per unit (GST free) in order to purchase the land on which the forestry plantations are situated. Land owned by the Trust is used for forestry plantation purposes by the investors of the Macquarie Eucalypt Project The Macquarie Eucalypt Project 2006 is a managed investment scheme and its Responsible Entity is Macquarie Alternative Assets Management Limited, a wholly owned subsidiary of Macquarie Group Limited ("MGL"). The harvest of the Macquarie Eucalypt Project 2006 forestry plantation, that is situated on the Trust s land, commenced in April The Trust recognised lease rental income from the harvest for the year of 125,131. During the year ended 30 June 2016, the Trust sold land that was affected by bushfires in the financial year ended 30 June 2013 and recognised a gain on sale of land for the year of 97,068. The Trust will continue to be managed in accordance with the investment objective and strategy set out in the Trust s offer document and in accordance with the Trust Constitution. The financial statements were authorised for issue by the directors on 25 September The directors of the Responsible Entity have the power to amend and reissue the financial report. 2 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 in the following text. (a) Basis of preparation This general purpose financial report has been prepared in accordance with Australian Accounting Standards and the Corporations Act 2001 in Australia. The financial report is prepared on the basis of fair value measurement of assets and liabilities except where otherwise stated. The statement of financial position is presented on a liquidity basis. Assets and liabilities are presented in decreasing order of liquidity and do not distinguish between current and non-current. All balances are expected to be recovered or settled within twelve months, except for land and net assets attributable to unitholders. The amount expected to be recovered or settled within twelve months after the end of each reporting period cannot be reliably determined. Where necessary, comparative information has been reclassified to be consistent with current period disclosures. 9

12 Notes to the Financial Statements 2 Summary of significant accounting policies (continued) (a) Basis of preparation (continued) Changes in Australian Accounting Standards The Trust has adopted all mandatory Australian Accounting Standards and Interpretations for the financial year beginning on or after 1 July The following key Accounting Standards and amendments to Accounting Standards became applicable in the current financial year: (i) AASB Amendments to Australian Accounting Standards Disclosure initiative: AASB 101 Presentation of Financial Statements These amendments clarify the materiality requirements in AASB 101. These amendments also clarify that specific line items in the statement of comprehensive income and the statement of financial position may be disaggregated and that the entities have flexibility as to the order in which they present the notes to financial statements. Application in the current period has not had a material impact on the financial position nor performance of the Trust. (ii) AASB Amendments to Australian Accounting Standards Investment Entities: Applying the Consolidation Exception AASB introduces a choice in application of the equity method by a non-investment entity investor to an investment entity investee. When a non-investment entity investor applies the equity method to an investment entity associate or joint venture, the investor may retain the fair value measurement applied by the investment entity associate or joint venture to its interests in subsidiaries, or reverse the fair value measurement to conform to the accounting policies of the investor. As the Trust does not have any subsidiary investments, the application of this standard has no impact on the financial position nor performance of the Trust. Compliance with International Financial Reporting Standards The financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. (b) Net assets attributable to unitholders Units are redeemable at the end of the Trust's finite life and are therefore classified as financial liabilities. The fair value of redeemable units is measured at the redemption amount that would be received if units were redeemed at the reporting date. (c) Cash and cash equivalents For the purpose of presentation in the statement of cash flows, cash includes cash on hand and deposits held at call with financial institutions. Cash equivalents include other short-term, highly liquid investments with original maturities of three months or less from the date of acquisition that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. Bank overdrafts, if any, are shown separately on the statement of financial position. 10

13 Notes to the Financial Statements 2 Summary of significant accounting policies (continued) (d) Land Land is initially recognised at acquisition cost. The Responsible Entity assesses at each reporting date whether there is an indication that the carrying value of the land may be impaired. Impairment exists if there is objective evidence of impairment as a result of one or more events, which have an impact on the estimated future cash flows of the land that can be reliably estimated. When such instances occur, the land is written down to its recoverable amount and the decrement recognised as impairment losses in the statement of comprehensive income in the financial year in which the recoverable amount write-down occurs. An impairment is generally reversed, if the recoverable amount of an investment is more than its carrying value and that can be related objectively to an event occurring after the impairment losses were recognised, the previously recognised impairment losses are reversed in the statement of comprehensive income. (e) Investment income Lease rental income and interest income are recognised in the statement of comprehensive income on an accruals basis. Land sale is recognised when the significant risks and rewards of ownership of the property have passed to the buyer and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Risk and rewards of ownership are considered passed to buyer on settlement. Gains and losses on disposals of land are determined by comparing the proceeds with the carrying amount and are recognised within investment income in the statement of comprehensive income. (f) Expenses All expenses are recognised in the statement of comprehensive income on an accruals basis. (g) Income tax Under current legislation, the Trust is not subject to income tax as unitholders are presently entitled to the income of the Trust. (h) Distributions to unitholders In accordance with the Trust Constitution, the Trust fully distributes its distributable income, and any other amounts determined by the Responsible Entity, to unitholders by cash or reinvestment. The distributions to unitholders are recognised in the statement of comprehensive income as finance costs attributable to unitholders. (i) Movement in net assets attributable to unitholders Income and expenses that are not included in distributable income and not distributed to unitholders are included in net assets attributable to unitholders. Movements in net assets attributable to unitholders are recognised in the statement of comprehensive income as finance costs attributable to unitholders. 11

14 Notes to the Financial Statements 2 Summary of significant accounting policies (continued) (j) Functional and presentation currency Items included in the Trust s financial statements are measured using the currency of the primary economic environment in which it operates (the functional currency ). This is the Australian dollar, which reflects the currency of the economy in which the Trust competes for funds and is regulated. The Australian dollar is also the Trust s presentation currency. (k) Receivables Receivables include assets and accrued income owing to the Trust which have not been received at statement of financial position date and may include such items as lease rental income, interest accrued on cash at bank and Reduced Input Tax Credits ("RITC"). (l) Payables Payables include liabilities, accrued expenses and Goods and Service Tax ("GST") owing by the Trust which are unpaid as at statement of financial position date. The distribution amount payable to unitholders as at statement of financial position date is recognised separately in the statement of financial position as unitholders are presently entitled to the distributable income under the Trust Constitution. (m) GST Income, expenses and assets are recognised net of the amount of GST to the extent that the GST is recoverable from the Australian Taxation Office ("ATO"). Where GST is not recoverable, it is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable. Receivables and payables are recognised inclusive of GST. RITC recoverable by the Trust from the ATO are recognised as receivables in the statement of financial position. Cash flows are disclosed in the statement of cash flows on a gross basis and cash flows relating to GST, recoverable from, or payable to, the ATO are included as cash flows from operating activities. (n) Use of estimates The Trust may make estimates and assumptions that affect the reported amounts of assets and liabilities within the next financial year. Estimates are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. 12

15 Notes to the Financial Statements 2 Summary of significant accounting policies (continued) (o) New accounting standards and interpretations Certain new accounting standards and interpretations have been published that are not mandatory for the 30 June 2017 reporting period. The Responsible Entity s assessment of the impact of these new standards (to the extent relevant to the Trust) and interpretations is set out below: (i) AASB 9 Financial Instruments, AASB Amendments to Australian Accounting Standards arising from AASB 9, AASB Amendments to Australian Accounting Standards - Conceptual Framework, Materiality and Financial Instruments - Part C and related amendment AASB and AASB Amendments to Accounting Standards AASB 9 Financial Instruments applies to annual reporting periods beginning on or after 1 January 2018 and will therefore apply to the Trust from 1 July AASB 9 Financial Instruments requires all financial instruments to be measured at fair value unless the criteria for amortised cost are met. The application of the standard is not expected to change the measurement basis of any of the Trust's current financial instruments, however, AASB 9 Financial Instruments allows the Trust to elect to present gains and losses on financial instruments held at fair value through other comprehensive income, which may impact the presentation of these gains and losses. The impact of the standard may also change if the nature of the Trust's activities or investments changes prior to initial application. The Trust is continuing to assess the full impact of adopting AASB 9 Financial Instruments. (ii) AASB 16 Amendments to Australian Accounting Standards - Leases AASB 16 Leases applies to annual reporting periods beginning on or after 1 January 2019 and will therefore apply to the Trust from 1 July AASB 16 Leases requires recognition of a right of use asset along with the associated lease liability where the entity is a lessee. Interest expense will be recognised in profit or loss using the effective interest rate method, and the right of use asset will be depreciated. Lessor accounting will largely remain unchanged. The Trust is continuing to assess the full impact of adopting AASB 16 Leases. Standards and interpretations that are not expected to have material impact on the Trust have not been included. (p) Rounding of amounts Pursuant to ASIC Corporations (Rounding in Financial/Directors' Reports) Instrument 2016/191 issued by the Australian Securities & Investments Commission, relating to the "rounding off" of amounts in the directors' report and financial report, amounts in the directors' report and financial report have been rounded off to the nearest dollar, unless otherwise indicated. 13

16 Notes to the Financial Statements 3 Financial risk management (a) Strategy in using financial instruments The Trust's activities expose it to interest rate risk, credit risk and liquidity risk. The Responsible Entity s overall risk management programme focuses on ensuring compliance with the Trust s Product Disclosure Statement ("PDS") and seeks to maximise the returns derived for the level of risk to which the Trust is exposed. The Responsible Entity reviews any identified high and medium severity exceptions to internal risk policies and procedures on a quarterly basis. (b) Interest rate risk The Trust is not subject to significant amounts of interest rate risk due to fluctuations in the prevailing levels of market interest rates. (c) Credit risk Credit risk arises from cash and cash equivalents, deposits with banks and other receivables. None of these assets are impaired nor past due but not impaired. The exposure to credit risk is managed by only holding bank accounts with Macquarie Bank Limited ("MBL") which has an investment grade credit rating (2016: investment grade credit rating) as determined by Standard and Poor's rating agency. The maximum exposure to credit risk at the reporting date is the carrying amount of cash and cash equivalents, unsettled receipts and other financial assets. (d) Liquidity risk The Trust is subject to liquidity risk in relation to the financial liabilities it holds. The Trust is required to pay the net assets attributable to unitholders on termination of the Trust, which is expected to occur on 30 June 2020 or at a later date, in accordance with the provisions of Trust Constitution. All other liabilities are payable within 90 days (2016: 365 days). (e) Fair value estimation The carrying amounts of all the Trust's financial assets and financial liabilities at the end of each reporting period approximated their fair values. 14

17 Notes to the Financial Statements 4 Auditor's remuneration During the year, the following fees were paid or payable for services provided by Ernst & Young, auditor of the Trust: Audit services Audit of financial reports 10,585 10,277 Other audit work under the Corporations Act Non-audit services Taxation 2,050 2,000 Total remuneration paid/payable 13,102 12,731 Audit fees are paid out of the Responsible Entity's own resources. 5 Distributions to unitholders During the year, the Trust has declared distributions to unitholders of 125,695 (2016: 133,542). At 30 June 2017, the Trust has distributions payable to unitholders of 125,695 (2016: 133,542). 6 Net assets attributable to unitholders As stipulated within the Trust Constitution, each unit (approximately one hectare of land) represents an undivided share in the beneficial interest in the Trust. There are no separate classes of units and each unit has the same rights attaching to it as all other units of the Trust. Movements in number of units and net assets attributable to unitholders during the year were as follows: 2017 No No Opening balance 3,981 3,981 7,446,642 7,574,481 Return of capital (127,839) Increase/(decrease) in net assets attributable to unitholders Closing balance 3,981 3,981 7,446,642 7,446,642 Capital risk management The Trust manages its net assets attributable to unitholders as capital, notwithstanding net assets attributable to unitholders are classified as a liability. The Trust has issued 3,981 units at 1,950 per unit amounting to 7,762,950. The money received was utilised towards purchase of land as per the PDS. During the year, no amount was determined to be returned as capital to investors from the proceeds of sale of land (2016: 127,839). 15

18 Notes to the Financial Statements 7 Cash and cash equivalents Cash at bank ,439 Total cash and cash equivalents ,439 8 Land Opening balance 7,446,639 7,575,754 Less: Land sold during the year - (129,115) Closing balance 7,446,639 7,446,639 During the year ended 30 June 2016, the Trust sold land that was affected by bushfires in the financial year ended 30 June 2013 and recognised a gain on sale of land for the year in the statement of comprehensive income of 97, Related party disclosures (a) Responsible Entity The Responsible Entity of the Trust is Macquarie Financial Products Management Limited ("MFPML"), a wholly owned subsidiary of MGL. (b) Key management personnel The following persons held office as directors of MFPML from 1 July 2015 to the date of this report: A J Abraham A Clubb W D Fox (appointed 18/01/2016) J King G Shneier No amount is paid by the Trust directly to the directors of the Responsible Entity. Consequently, no compensation as defined in AASB 124 Related Party Disclosures is paid by the Trust to the directors as key management personnel. (c) Key management personnel unitholdings Key management personnel and their close family members held units in the Trust as follows: 30 June 2017 Number of units held opening Number of units held closing Units held Number of units acquired Number of units disposed Distributions declared by the Trust Unitholders (Units) (Units) % (Units) (Units) A J Abraham A M King

19 Notes to the Financial Statements 9 Related party disclosures (continued) (c) Key management personnel unitholdings (continued) 30 June 2016 Unitholders Number of units held opening (Units) Number of units held closing (Units) Units held % Number of units acquired (Units) Number of units disposed (Units) Distributions declared by the Trust A J Abraham A M King At 30 June 2017, the Trust has distributions payable to the above related parties of 1,042 (2016: 1,107). (d) Key management personnel loan disclosures The Trust has not made, guaranteed or secured, directly or indirectly, any loans to the key management personnel or their personally related entities at any time during the reporting period (2016: Nil). (e) Responsible Entity fees and other transactions The Responsible Entity did not receive any fees from the Trust during the year ended 30 June 2017 (2016: Nil). All expenses in connection with the preparation of accounting records and the maintenance of the unit register have been fully borne by the Responsible Entity. All related party transactions are conducted on normal commercial terms and conditions. At 30 June 2017, 273 (2016: Nil) was payable to the Responsible Entity. During the year ended 30 June 2016, the Responsible Entity reversed land maintenance expenses previously charged to the Trust amounting to 31,832. (f) Related party unitholdings Parties related to the Trust (including MFPML, its affiliates and other schemes managed by MFPML) held no units in the Trust (2016: Nil). (g) Other transactions within the Trust No directors of the Responsible Entity have entered into a material contract with the Trust in the current or previous financial year and there were no material contracts involving directors' interests subsisting at 30 June 2017 or 30 June The Trust holds a bank account with MBL, a wholly owned subsidiary of MGL, with the carrying amount disclosed in Note 7. During the year, interest earned on the bank account was 564 (2016: 3,915). At 30 June 2017, interest receivable of 1 (2016: 404) is due from MBL. At 30 June 2017, there are no amounts payable to MBL for payments made on the behalf of the Trust (2016: 1,276). Bond Street Custodians Limited, a wholly owned subsidiary of MGL, is a custodian of the Trust. Fees and expenses are negotiated on an arm's length basis for all transactions with related parties. 17

20 Notes to the Financial Statements 9 Related party disclosures (continued) (g) Other transactions within the Trust (continued) The Trust has earned lease rental income of 125,131 (2016: 727) from Macquarie Eucalypt Project At 30 June 2017, the Trust has a lease rental income receivable of 125,131 (2016: Nil) from Macquarie Eucalypt Project Reconciliation of profit/(loss) to net cash (outflow)/inflow from operating activities (a) Reconciliation of profit/(loss) to net cash (outflow)/inflow from operating activities Profit/(loss) for the year - - Increase/(decrease) in net assets attributable to unitholders - - Proceeds from sale of land - 226,183 Gain on sale of land - (97,068) Distributions to unitholders 125, ,542 Net change in receivables and other assets (125,001) (264) Net change in payables and other liabilities (4,186) (31,834) Net cash (outflow)/inflow from operating activities (3,492) 230,559 (b) Non-cash financing activities The Trust did not engage in any non-cash financing or investment activities during the financial year (2016: Nil). 11 Events occurring after the reporting date No significant events have occurred since the reporting date which would impact on the financial position of the Trust disclosed in the statement of financial position as at 30 June 2017 or on the results and cash flows of the Trust for the year ended on that date. 12 Contingent assets, contingent liabilities and commitments There are no outstanding contingent assets, contingent liabilities or commitments as at 30 June 2017 and 30 June

21 Directors' Declaration In the opinion of the directors of the Responsible Entity: (a) the financial statements and notes as set out on pages 5 to 18 are in accordance with the Corporations Act 2001, including: (i) (ii) complying with Australian Accounting Standards; and giving a true and fair view of the Trust's financial position as at 30 June 2017 and of its performance for the financial year ended on that date; and (b) there are reasonable grounds to believe that the Trust will be able to pay its debts as and when they become due and payable. The directors declare that the notes to the financial statements include an explicit and unreserved statement of compliance with the International Financial Reporting Standards (see note 2(a)). This declaration is made in accordance with a resolution of the directors. Director... G Shneier Sydney 25 September

22 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 Macquarie Timber Land Trust 2006 Opinion We have audited the financial report of Macquarie Timber Land Trust 2006 ( the Trust ), which comprises the statement of financial position as at 30 June 2017, the statement of comprehensive income, statement of changes in equity 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 of the Macquarie Timber Land Trust 2006 is in accordance with the Corporations Act 2001, including: a) giving a true and fair view of the Trust's financial position as at 30 June 2017 and of its financial performance for the year ended on that date; and b) complying with Australian Accounting Standards and the Corporations Regulations 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 Trust in accordance with the auditor independence requirements of the Corporations Act 2001 and 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 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. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

23 Responsibilities of the Directors for the Financial Report The directors of Macquarie Financial Products Management Limited ( the Responsible Entity ) are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the Trust 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 Trust 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. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Responsible Entity s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. Conclude on the appropriateness of the directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Trust s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor s report. However, future events or conditions may cause the Trust to cease to continue as a going concern. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

24 Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Ernst & Young Rita Da Silva Partner Sydney 25 September 2017 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation