Macquarie Wholesale Co-investment Fund ARSN Annual report - 30 June 2008

Transcription

1 ARSN Annual report -

2 ARSN Annual report - Contents Directors' report Auditor's independence declaration Income statements Balance sheets Statements of changes in equity Cash flow statements Directors' declaration Independent auditor's report to the unitholders of Page This financial report covers as an individual entity and the consolidated entity consisting of and its subsidiaries. The Responsible Entity of is Macquarie Investment Management Limited (ABN ). The Responsible Entity's registered offce is Level 7, 1 Martin Place, Sydney, NSW

3 Directors' report Directors' report The directors of Macquarie Investment Management Limited (a wholly owned subsidiary of Macquarie Group Limited), the Responsible Entity of, present their report together with the consolidated financial report of ("the Trust" ) and its controlled entities (collectively, "the consolidated entity") for the year ended. Principal activities The Trust invests in unlisted equities and unlisted unit trusts in accordance with the provisions of the Trust Constitution. The consolidated entity did not have any employees during the year. There were no significant changes in the nature of the consolidated entity's activities during the year. Directors The following persons held offce as directors of Macquarie Investment Management Limited during the year or since the end of the year and up to the date of this report: B N Terry B Bruck (resigned 18/08/2008) N Roderick P Maher R Cartright V Malley C Vignes (appointed 18/08/2008) Review and results of operations During the year, the Trust continued to invest funds in accordance with target asset allocations as set out in the governing documents of the Trust and in accordance with the provisions of the Trust Constitution. Results The performance of the Trust, as represented by the results of its operations, was as follows: Operating profiu(loss) before finance costs attributable to unitholders ($'000) Distributions Distribution paid and payable ($'000) Distribution (cents per unit) 4,246 13, , Significant changes in state of affairs In the opinion of the directors, there were no significant changes in the state of affairs of the Trust that occurred during the financial year under review. Matters subsequent to the end of the financial year No matter or circumstance has arisen since 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. -2-

4 Directors' report Directors' report Likely developments and expected results of operations The Trust wil continue to be managed in accordance with the investment objectives and guidelines as set out in the governing documents of the Trust and in accordance with the provisions of the Trust Constitution. The results of the Trust's operations will be affected by a number of factors, including the performance of investment markets in which the Trust invests. Investment performance is not guaranteed and future returns may differ from past returns. As investment conditions change over time, past returns should not be used to predict future returns. 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 offcers of Macquarie Investment Management Limited or the auditors of the Trust. So long as the offcers of Macquarie Investment Management Limited act in accordance with the Trust Constitution and the Law, the offcers remain indemnified out of the assets of the Trust against losses incurred while acting on behalf of the Trust. The auditors of the Trust are in no way indemnified out of the assets of the Trust. Fees paid to and interests held in the Trust by the Responsible Entity or its associates Fees paid to the Responsible Entity and its associates out of Trust property during the year are disclosed in note 11 on page 20 of the financial statements. No fees were paid out of Trust property to the directors of the Responsible Entity during the year. The number of interests in the Trust held by the Responsible Entity or its associates as at the end of the financial year are disclosed in note 11 on page 20 of the financial statements. Interests in the Trust The movement in units on issue in the Trust during the year is disclosed in note 7 of the financial statements. The value of the Trust's assets and liabilities is disclosed on the balance sheets 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. Rounding of amounts to the nearest thousand dollars The Trust is an entity of the kind referred to in Class Order 98/0100 (as amended) issued by the Australian Securities and Investments Commission relating to the "rounding off' of amounts in the directors' report. Amounts in the directors' report have been rounded to the nearest thousand dollars in accordance with that Class Order, 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 5. This report is made in accordance with a resolution of the directors. -3-

5 Directors' report Directors' report ~ R Cartright Director Sydney 22 September

6 fjcew1erhousfßpers I PricewaterhouseCoopers ABN Darling Park Tower Sussex Street GPO BOX 2650 SYDNEY NSW 1171 DX 77 Sydney Australia Telephone Facsimile ww.pwc.com/au Auditor's Independence Declaration As lead auditor for the audit of for the year ended 30 June 2008, I declare that 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. This declaration is in respect of and the entities it controlled during the year. ~Craig Stafford Partner PricewaterhouseCoopers Sydney 29 September 2008 Liabilty limited by a scheme approved under Professional Standards Legislation

7 Income statements For the year ended Income statements Notes Investment income Distribution/dividend income Net gains/(iosses) on financial instruments held at fair value through profi or loss 5 3,695 12,486 4,796 10,330 Other operating income 2 2 Total net investment income/(ioss) 4,359 13,236 5, Expenses Other operating expenses Total operating expenses Operating profit/(ioss) 4,246 13,026 5,348 10,869 Finance costs attributable to unitholders Distributions to unitholders of the parent entity (504) (2,341) (504) (2,341) (Increase)/decrease in net assets attributable to unitholders of the parent entity - arising from operations 2,504 (8,528) 2,504 (8,528) - arising from difference in valuation used in unit pricing compared to financial statements (7,348) (7,348) (Increase)/decrease in net assets attributable to minority interests 1,102 (2,157) Profit/(Ioss) for the year The above income statements should be read in conjunction with the accompanying notes. -6-

8 Balance sheets As at Balance sheets Notes Assets Cash and cash equivalents Receivables Financial assets held at fair value through profit or loss 9 100,182 96,317 91,572 86,605 Total assets 100,377 96,365 91,767 86,653 Liabilties Bank Overdraft Distributions payable Payables Net assets attributable to minority interests (redemption price of units) 8,610 9,712 Total liabilities (excluding net assets attributable to unitholders of the parent entity) 8, Net assets attributable to unitholders of the parent entity - liability 91,588 86,092 91,588 86,092 Represented by: Fair value of outstanding units based on redemption value Difference in valuation used in unit 7 98,936 85,019 98,936 85,019 pricing compared to financial statements (7,348) 1,073 (7,348) 1,073 91,588 86,092 91,588 86,092 The above balance sheets should be read in conjunction with the accompanying notes. -7-

9 Statements of changes in equity For the year ended Statements of changes in equity Total equity at the beginning of the financial year ProfiU(loss) for the year Total recognised income and expense for the financial year Transactions with equity holders in their capacity as equity holders Distributions to equity holders Total equity at the end of the financial year Under AIFRS, 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 statements of changes in equity should be read in conjunction with the accompanying notes. -8-

10 Cash flow statements For the year ended Cash flow statements Notes Cash flows from operating activities Proceeds from sale of financial instruments held at fair value through 9,553 35,553 9,553 35,553 profit or loss Purchase of financial instruments held at fair value through profit or loss (17,574) (65,571) (17,574) (65,571) Distribution/dividend income Return on capital 626 1, ,181 Payment of other expenses (112) (209) (112) (209) Net cash inflow/(outflow) from 12(a) (6,966) (28298) (6,966) (28,298) operating activities Cash flows from financing activities Proceeds from applications by unitholders 8,000 31,200 8,000 31,200 Distributions paid (873) (2,944) (873) (2,944) Expenses paid on behalf of unitholders (388) (405) (388) (405) Net cash inflow/(outflow) from financing activities 6,739 27,851 6,739 27,851 Net increase/(decrease) in cash and cash equivalents (227) (447) (227) (447) Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 8(a) (179) 48 (179) 48 The above cash flow statements should be read in conjunction with the accompanying notes. -9-

11 1 General information This financial report includes separate financial statements for ("the Trust") as an individual entity and the consolidated entity consisting of and its subsidiaries. The Trust was constituted on 10 May The Responsible Entity of the Trust is Macquarie Investment Management Limited (the "Responsible Entity"). The Responsible Entity's registered offce is Level 7, 1 Martin Place, Sydney, NSW The financial report is presented in Australian currency. During the year, the Trust continued to invest funds in 'accordance with target asset allocations as set out in the current offer document and in accordance with the provisions of the Trust Constitution. The financial statements were authorised for issue by the directors on 22 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, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretations 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. Compliance with Intemational Financial Reporting Standards (IFRS) Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report of the Trust, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards. (b) Principles of consolidation (i) Subsidiaries The consolidated financial statements incorporate the assets and liabilties of all subsidiaries of Macquarie Wholesale Co-investment Fund ("the parent entity") as at and the results of all subsidiaries for the year then ended. and its subsidiaries together are referred to in this financial report as the consolidated entity. Subsidiaries are all those entities (including special purpose entities) over which the Trust has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Trust controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Trust. They are deconsolidated from the date that control ceases. The purchase method of accounting is used to account for the acquisition of subsidiaries by the Trust. All transactions (including gains and losses) and balances between entities in the consolidated group are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Trust. Minority interests in the results and net assets of subsidiaries are shown separately in the consolidated income statements and balance sheets respectively. -10-

12 2 Summary of significant accounting policies (c) Financial instruments (i) Classifcation The Trust's investments are categorised as at fair value through profi or loss. They comprise: Financial instruments designated at fair value through profit or loss upon initial recognition These include financial assets that are not held for trading purposes and which may be sold. These are investments in exchange traded listed equity instruments and unlisted trusts. Financial assets and financial liabilities designated at fair value through profit or loss at inception are those that are managed and their performance evaluated on a fair value basis in accordance with the Trust's documented investment strategy. The Trust's policy is for the Responsible Entity to evaluate the information about these financial assets on a fair value basis together with other related financial information. Loans and receivables/payables comprise amounts due to or from the Trust. (ii) Recognition/derecogniton The Trust recognises financial assets and financial liabilties on the date it becomes party to the contractual agreement (trade date) and recognises changes in fair value of the financial assets or financial liabilities from this date. Investments are derecognised when the right to receive cashflows from the investments has expired or the Trust has transferred substantially all risks and rewards of ownership. (iii) Measurement (a) Financial assets and liabilties held at fair value through profit or loss Financial assets and liabilities held at fair value through profit or loss are measured initially at fair value excluding any transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liabilty. Transaction costs on financial assets and financial liabilties at fair value through profit or loss are expensed immediately. Subsequent to initial recognition, all instruments held at fair value through profi or loss are measured at fair value with changes in their fair value recognised in the income statements. Fair value in an active market The fair value of financial assets and liabiliies traded in active markets is based on their quoted market prices at the balance sheets date without any deduction for estimated future selling costs. Financial assets are priced at current bid prices, while financial liabilities are priced at current asking prices. Fair value in an inactive or unquoted market Investments in unlisted unit trusts are recorded at the redemption value per unit as reported by the managers of such trusts. (b) Loans and receivables Loan assets are measured initially at fair value plus transaction costs and subsequently amortised using the effective interest rate method, less impairment losses if any. Such assets are reviewed at each balance sheet date to determine whether there is objective evidence of impairment for example when there has been a significant or prolonged decline in the fair value below carrying amount. If any such indication of impairment exists, an impairment loss is recognised in the income statement as the difference between the asset's carrying amount and the present value of the revised estimated future cash flows discounted at the original effective interest rate. If in a subsequent period the amount of an impairment loss recognised on a financial asset carried at amortised cost decreases and the decrease can be linked objectively to an event occurring after the write-down, the writedown is reversed through the income statements. -11-

13 2 Summary of significant accounting policies (d) Investments in subsidiaries Investments in subsidiaries are measured in accordance with note 2(c). (e) Business combinations Business combinations relate to the acquisition by the Trust of controllng interests in other entities. The purchase method of accounting is used to account for all business combinations, including business combinations involving entities or businesses under common control, regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of the consideration given plus costs directly attributable to the acquisition. (f) Net assets attributable to unitholders The Trust is a close-end fund and is not subject to daily applications and redemptions. The fair value of units is measured at the redemption amount that is payable (based on the redemption unit price) at the balance sheet date if unitholders were able to exercise their right to put the units back to the Trust. (g) Cash and cash equivalents For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term, high liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown separately on the balance sheet. Payments and receipts relating to the purchase and sale of investment securities are classified as cash flows from operating activities, as movements in the fair value of these securities represent the Trust's main income generating activity. (h) Investment income Trust distributions are recognised on an entitlements basis. (i) Income tax Under current legislation, the Trust is not subject to income tax provided the taxable income of the Trust is fully distributed either by way of cash or reinvestment (ie unitholders are presently entitled to the income of the Trust). Financial instruments held at fair value may include unrealised capital gains. Should such a gain be realised, that portion of the gain that is subject to capital gains tax will be distributed so that the Trust is not subject to capital gains tax. Realised capital losses are not distributed to unitholders but are retained in the Trust to be offset against any losses, the excess is distributed to realised capital gains. If realised capital gains exceed realised capital unitholders. The benefis of imputation credits and foreign tax paid are passed on to unitholders. ü) Distributions In accordance with the Trust Constitution, the Trust distributes its distributable (taxable) income, and any other amounts determined by the Responsible Entity, to unitholders by cash or reinvestment. The distributions are recognised in the income statements as finance costs attributable to unitholders. -12-

14 2 Summary of significant accounting policies (k) Increaseldecrease in net assets attributable to unitholders Income not distributed is included in net assets attributable to unitholders. Movements in net assets attributable to unitholders are recognised in the income statements as finance costs. (I) Foreign currency translation i) 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. ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailng at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translations at year end exchange rates of monetary assets and liabilties denominated in foreign currencies are recognised in the income statements. The Trust does not isolate that portion of gains or losses on securities and derivative financial instruments that are measured at fair value through profit or loss and which is due to changes in foreign exchange rates from that which is due to changes in the market price of securities. Such fluctuations are included with the net gains or losses on financial instruments at fair value through profi or loss. (m)accrued income Accrued income may include amounts for dividends, trust distributions and interest. Dividends and trust distributions are accrued when the right to receive payment is established. Interest is accrued at the reporting date from the time of last payment. Amounts are generally received within 30 days of being recorded as receivables. (n) Receivables Receivables may include amounts for dividends, interest and trust distributions. Dividends and trust distributions are accrued when the right to receive payment is established. Interest is accrued at the reporting date from the time of last payment in accordance with the policy set out in note 2(h) above. Amounts are generally received within 30 days of being recorded as receivables. Receivables include such items as RITC and application monies receivable from unitholders. (0) Payables Payables includes liabilties and accrued expenses owing by the Trust which are unpaid as at balance date. Trades are recorded on trade date, and normally settled within three business days. Purchases of financial instruments that are unsettled at reporting date are included in payables. The distribution amount payable to unitholders as at the reporting date is recognised separately on the balance sheets when unitholders are presently entitled to the distributable income under the Trust's Constitution. -13-

15 2 Summary of significant accounting policies (p) Goods and Services Tax (GST) The GST incurred on the costs of various services provided to the Trust by third parties such as audit fees, custodial services and investment management fees have been passed onto the Trust. The Trust qualifies for Reduced Input Tax Credits (RITC) at a rate of 75% hence investment management fees, custodial fees and other expenses have been recognised in the income statements net of the amount of GST recoverable from the Australian Taxation Offce (ATO). Accounts payable are inclusive of GST. The net amount of GST recoverable from the ATO is included in receivables in the balance sheets. Cash flows relating to GST are included in the cash flow statements on a gross basis. (q) Use of estimates The Trust makes 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. (r) New accounting standards and interpretations Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2008 reporting periods. The directors' assessment of the impact of these new standards (to the extent relevant to the Trust) and interpretations is set below: AASB 8 and AASB are effective for annual reporting periods beginning on or after 1 January The Trust has not adopted these standards early. Application of these standards wil not affect any of the amounts recognised in the financial statements, but may affect the segment disclosures provided in note 13. AASB 101 (Revised) is applicable to annual reporting period beginning on or after 1 January The Trust has not adopted this standard early. It requires the presentation of a statement of comprehensive income and makes changes to the statement of changes in equity will not affect any of the amounts recognised in the financial statements. If the Trust makes a prior period adjustment or re-classifies items in the financial statement, it will need to disclose a third balance sheet (statement of financial position), this one being at the beginning of the comparative period. Revised AASB 132 is applicable for reporting periods beginning on or after 1 January The Trust has not adopted this standard early. Application of this standard will not affect any of the amounts recognised in the financial statements as the Trust is obligated to distribute all of its taxable income in accordance with the Trust's Constitution. Accordingly, there wil be no change to classification of unitholders' funds as a liability and therefore no impact on profit or loss and equity. (s) Rounding of amounts The Trust is an entity of the kind referred to in Class Order 98/0100 (as amended), issued by the Australian Securities and Investments Commission, relating to the "rounding off' of amounts in the financial report. Amounts in the financial report have been rounded off to the nearest thousand dollars in accordance with that Class Order, unless otherwise indicated. (t) Segment reporting A business segment is identified for a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different to those of other business segments. A geographical segment is identified when products or services are provided within a particular economic environment subject to risks and returns that are different from those of segments operating in other economic environments. -14-

16 3 Financial risk management (a) Strategy in using financial instruments The consolidated entiry and the Trust's activities expose it to a variety of financial risks: market risk (including price risk and interest rate risk), foreign exchange risk, credit risk and liquidity risk. Entity The consolidated entity's financial risk is managed by the Investment Manager of the individual unit trusts within the consolidated entity. No other risk management occurs for the consolidated entity. Entity The Trust's overall risk management programme focuses on ensuring compliance with the Trust's Information Memorandum and seeks to maximise the returns derived for the level of risk to which the Trust is exposed. Financial risk management is carried out by the investment management department under policies approved by the Board of Directors of the Responsible Entity (the Board). (b) Market risk (i) Price risk All securities investments present a risk of loss of capital. The Investment Manager moderates this risk through a careful selection of securities and other financial instruments within specified limits. The maximum risk resulting from financial instruments is determined by the fair value of the financial instruments. The overall market positions are monitored on a daily basis by each Investment Manager of the individual unit trust within the consolidated entity. In accordance with the Trust's policy, the risk management department of the Trust's Investment Manager monitors the Trust's overall market price sensitivity on a daily basis. This is done by ensuring the Trust is fully invested in underlying trusts as per the Trust's Information Memorandum. The consolidated entity and the Trust's investments are susceptible to market price risk arising from uncertainties about future prices of the underlying trusts. At, the Trust's market risk is affected by changes in market prices. If the S&P/ASX 300 Accumulation Index at had increased by 20% with all other variables held constant, this would have increased net assets attributable to unitholders by approximately $18,317,600 (2007: $17,218,400). Conversely, if the S&P/ASX 300 Accumulation Index at had decreased by 20% with all other variables held constant, this would have decreased net assets attributable to unitholders by approximately $18,317,600 (2007: $17,218,400). At, the subsidiary's market risk is affected by changes in market prices. If the S&P/ASX 300 Accumulation Index at had increased by 20% with all other variables held constant, this would have increased net assets attributable to unitholders by approximately $1,903,976 (2007: $1,971,826). Conversely, if the S&P/ASX 300 Accumulation Index at had decreased by 20% with all other variables held constant, this would have decreased net assets attributable to unitholders by approximately $1,903,976 (2007: $1,971,826). (ii) Foreign exchange risk The Trust's investments are held in Australia and New Zealand. 28% of the Trust's net assets are denominated in New Zealand dollars. No cash or cash equivalents are held in New Zealand dollars. The Trust does not hedge the exposure back to Australian dollars. A currency risk exists where the fluctuations in exchange rates between the Australian dollar and New Zealand dollar may cause the value of the Trusts investments to decline. The subsidiary is not exposed to foreign exchange risk as all assets are denominated in Australian dollars. The table below summarises the Trust's assets and liabilities that are denominated in a currency other than the Australian dollar. -15-

17 3 Financial risk management (b) Market risk New Zealand Dollars A$'OOO Total A$'OOO Equity securities 26,353 26,353 26,353 26, June 2007 New Zealand Dollars A$'OOO Total A$'OOO Equity securities 25, , (ii) Interest rate risk The majority of the consolidated entity and the Trust's financial assets and liabilities are non-interest bearing. As the Trust has no significant interest-bearing assets apart from its investments in cash and cash equivalents, the Trust's income and operating cash flows are substantially independent of changes in market interest rates. (c) Credit risk Credit risk arises from the Trust's investment in underlying trusts. Other credit risk arises from cash and cash equivalents, deposits with banks and other financial institutions. None of these are impaired nor past due but not impaired. The risk management area of the Investment Manager monitors the overall credit position of the Trust on a daily basis. The Compliance Committee of the Responsible Entity reviews any identified exceptions to internal risk policies and procedures on a quarterly basis. The Investment Manager of the subsidiary is responsible for monitoring compliance on an individual fund basis. Exceptions to compliance with the credit policy are not monitored on a consolidated basis. (d) Liquidity risk The consolidated entity and the Trust invest in illquid private equity securities. Liquidity risk is mitigated by restricting redemptions from the Trust. Liquidity risk is not monitored on a consolidated basis. (e) Fair value estimation The carrying amounts of the Trust's assets and liabilities at the balance sheet date approximate their fair values. Financial assets and liabilities held at fair value through profi or loss are measured initially at fair value excluding any transaction costs that are directly attributable to the acquisition or issue of the financial asset or financial liabilty. Transaction costs on financial assets and financial liabilities at fair value through profi or loss are expensed immediately. Subsequent to initial recognition, all instruments held at fair value through profit or loss are measured at fair value with changes in their fair value recognised in the income statement.. Fair value in an active market The fair value of financial assets and liabilities traded in active markets is based on their quoted market prices at the balance sheets date without any deduction for estimated future sellng costs. Financial assets are priced at current bid prices, while financial liabilities are priced at current asking prices.. Fair value in an inactive or unquoted market -16-

18 3 Financial risk management (e) Fair value estimation Investments in other unlisted unit trusts are recorded at the redemption value per unit as reported by the managers of such funds. 4 Auditor's remuneration During the year the following fees were paid or payable for services provided by the auditor of the Trust: Audit services PricewaterhouseCoopers Australian firm Audit and review of financial reports Other audit work under the Corporations Act 2001 Total remuneration for audit services $ $ 8,804 1,715 10,519 7,453 1,454 8,907 8,804 1,715 10,519 7,453 1,454 8,907 Audit fees are paid out of the Responsible Entity's own resources. All other expenses are paid by the Trust. 5 Net gains/(iosses) on financial instruments held at fair value through profit or loss Net gains/(iosses) recognised in relation to financial assets and financial loss: liabilities held at fair value through profi or Net unrealised gain/(loss) on financial instruments designated as at fair value through profi or loss Net realised gain/(loss) on trading securities Net gains/(iosses) on financial assets held at fair value through profit or loss 3,696 (1 ) 12, ,695 12,486 4,797 (1 ) 10, ,796 10,330 Realised and unrealised gains and losses are calculated on a weighted average cost basis. 6 Other operating expenses Sundry

19 7 Net assets attributable to unitholders of the parent Movements in number of units and net assets attributable to unitholders of the parent during the year were as follows: As stipulated within the Trust Constitution, each unit represents a right to an individual share in the Trust and does not extend to a right to the underlying assets of 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. Opening balance Call payments Increase/(decrease) in net assets attributable to unitholders Closing balance 30 June 2008 No. '000 Liabilty 80,000 80, No. '000 $'000 Liability Liability 80,000 86,092 8,000 80,000 4,844 98, June 2007 $'000 Liability 46,364 31,200 8,528 86,092 Capital risk management The Trust is a closed-end fund and is not subject to daily applications and redemptions. Investment in the Trust is made in instalments. Applications to invest are the committed capital and the unitholder makes a commitment to meet all future instalment calls made on them over the life of the Trust, until the committed capital is drawn. The committed capital is converted into units by dividing it by the application price applicable on the day that the application is accepted. Generally, units are non-transferable and non-redeemable. Procedures relating to transfer requests are disclosed in the Trust's Constitution. The Manager commits to underlying investments, based on the committed capital in the Trust. Instalments from the unitholder are payable at Manager's request but wil usually coincide with the Trust's obligation to meet calls by the underlying investment managers. All investors must be paid up to the same proportion at any given time. 8 Cash and cash equivalents Cash at bank (a) Reconciliation to cash at the end of the year The above figures are reconciled to cash at the end of the financial year as shown in the cash flow statement as follows: Balances as above Bank overdrafts Balances per cash flow statement (179) (179) (179) (179)

20 9 Financial assets held at fair value through profit or loss Fair value Fair value Fair value Fair value Designated at fair value through profit or loss Equity securities 91,982 85,202 72,686 59,421 Unlisted unit trusts 8,200 11,115 18,886 27,184 Total designated at fair value through profi or loss 100,182 96,317 91,572 86,605 Fair value Fair value Fair value Fair value Equity securities Unlisted Australian equity securities Unlisted International equity securities Total equity securities 65,525 26,457 91,982 59,936 25,266 85,202 46,333 26,353 72,686 34,155 25,266 59,421 Fair value Fair value Fair value Fair value Unlisted unit trusts Units in Australian unit trusts Total unlisted unit trusts 8,200 8,200 1U15 11,115 18,886 18,886 27,184 27,184 Total financial assets held at fair value through profit or loss 100,182 96,317 91,572 86,605 An overview of the risk exposures relating to financial assets at fair value through profi or loss is included in note Receivables Amounts recoverable from unitholders

21 11 Related part transactions entities The ultimate parent and ultimate controlling part is, which at 30 June 2008 owns 62.33% (2007: 62.33%) of the units of Macquarie Co-investment Holding Trust. Subsidiaries Interests in subsidiaries are set out below. Responsible entity The Responsible Entity of is Macquarie Investment Management Limited (MIML), a wholly owned subsidary of Macquarie Group Limited. Key management personnel The following persons held offce as directors of Macquarie Investment Management Limited during the year or since the end of the year and up to the date of this report: N Roderick P Maher R Cartright V Malley C Vignes (appointed 18/08/2008) B N Terry B Bruck (resigned 18/08/2008) Key management personnel unitholdings At no key management personnel held units in the Trust (2007: Nil). 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. Responsible entity'slmanager's fees and other transactions The Responsible Entity's remuneration has been calculated daily at a rate of 1.65% pa (2007: 1.65%) of the committed capital less return on capital of the Trust and charged quarterly direct to each unitholders account and is therefore not an expense of the fund. Performance fees may also be payable to the Responsible Entity. This wil be calculated as prescribed in the Information Memorandum. 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. The transactions during the year and amounts payable at year end between the Trust and the Responsible Entity were as follows: Aggregate amounts payable to the Responsible Entity at the reporting date Aggregate amounts recoverable from the unitholders at the reporting date $000 $000 $ $

22 11 Related part transactions Related part schemes' unitholdings Parties related to the Trust (including Macquarie Investment Management Limited, its related parties and other schemes managed by Macquarie Investment Management Limited), held units in the Trust as follows: 2008 Number of Number of Number of Number of Distributions units held units held units units paidlpayable opening closing Interest held acquired disposed by the Trust Unitholder (Units) '000 (Units) '000 (%) (Units) '000 (Units) '000 ($'000) Macquarie Alternative Investment Fund III 18,368 18, Macquarie Private Capital Trust 15,000 15, MacquarieCo- Investment Fund 8,382 8, Total 41,750 41, Number of Number of Number of Number of Distributions units held units held units units paid/payable opening closing Interest held acquired disposed by the Trust Unitholder (Units) '000 (Units) '000 (%) (Units) '000 (Units) '000 ($'000) Macquarie Alternative Investment Fund III 18,368 18, Macquarie Private Capital Trust 15,000 15, Macquarie Coinvestment Fund 8,382 8, Total 41,750 41,750 1,818 Investments The consolidated entity held investments in the following schemes which are also managed by Macquarie Investment Management Limited or its related parties: Fair value of investment Interest held % % Distributions received/receivable Macquarie Treasury Fund Macquarie Co-invest Holding Trust Total ,809 18,682 4,018 16,070 20,088 0, No distributions receivable remain unpaid as at (2007: $Nil). -21-

23 11 Related part transactions Other transactions within the Trust Apart from those details disclosed in this note, no director of the Responsible Entity has entered into a material contract with the Trust since the end of the previous financial year and there were no material contracts involving directors' interests subsisting at year end. 12 Reconciliation of profit/(ioss) to net cash inflow/(outflow) from operating activities (a) Reconcilation of profit/(ioss) to net cash inflow/(outflow) from operating activities Increase/(decrease) in net assets attributable to unitholders 3,743 13,813 4,844 8,528 Net (gains)/iosses on financial instruments held at fair value through profi or loss (3,695) (15,615) (4,796) (10,330) Proceeds from sale of financial instruments held at fair value through profi or loss 9,553 35,553 9,553 35,553 Purchase of financial instruments held at fair value through profi or loss (17,574) (65,571) (17,574) (65,571) Distributions reinvested (123) (123) Distributions to unitholders 504 2, ,341 Return on capital J ,181 Net cash inflow/(outflow) from operating activities (6,966) (28,298) (6,966) (28,298) Cash and cash equivalents (179) 48 (179)

24 13 Segment information While the Trust operates from Australia only (the geographical segment), the Trust may have investment exposures in different countries and across different industries. Geographical exposure. Total assets $' June 2008 Percentage of total assets % Total assets $' June 2007 Percentage of total assets % Country Australia New Zealand Total 65,219 26,353 91, ,339 25,266 86, The above disclosures have been prepared on the basis of the consolidated entity's direct investments and not on a look-through basis for investments held indirectly through unit trusts. The above investments are classified on the balance sheets at fair value through profit or loss. 14 Events occurring after the balance sheet date No significant events have occurred since balance date which would impact on the financial position of the Trust disclosed in the balance sheets as at or on the results and cash flows of the Trust for the year ended on that date. 15 Contingent assets and liabilties and commitments There are no outstanding contingent assets and liabilities as at and 30 June Outstanding commitments in respect of partly paid units at totalled $ 1,296,994 (2007: $ 3,6Ö1,988). The investment commitments presented above represent commitments to purchase interests in assets at such time as the managers of those assets request. The precise timing of future calls, and whether such calls will be made at all, is at the discretion of the investment managers of each individual asset within the investment portolio. -23-

25 Directors' declaration In the opinion of the directors of the Responsible Entity: (a) the financial statements and notes set out on pages 6 to 23 are in accordance with the Corporations Act 2001, including: (i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and This declaration is made in accordance with a resolution of the directors. (I( R Cartright Director Sydney 22 September

26 fjcew1erhousfßpers I PricewaterhouseCoopers ABN Independent auditor's report to the unitholders of Darling Park Tower Sussex Street GPO BOX 2650 SYDNEY NSW 1171 DX 77 Sydney Australia Telephone Facsimile Report on the financial report We have audited the accompanying financial report of (the Trust), which comprises the balance sheet as at, and the income statement, statement of changes in equity and cash flow statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors' declaration for both and the Macquarie Wholesale Co-investment Fund Group (the consolidated entity). The consolidated entity comprises the Trust and the entities it controlled at the year's end or from time to time during the financial year. Directors' responsibilty for the financial report The directors of Macquarie Investment Management Limited (the responsible entity) are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards. Auditor's responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial report 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 entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. Our procedures include reading the other information in the Annual Report to determine whether it contains any material inconsistencies with the financial report. Liabilty limited by a scheme approved under Professional Standards Legislation

27 fjcew1erhousfßpers I Independent auditor's report to the unitholders of For further explanation of an audit, visit our website Our audit did not involve an analysis of the prudence of business decisions made by directors or management. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act Auditor's opinion In our opinion: (a) the financial report of is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Trust's and consolidated entity's financial position as at and of their performance for the year ended on that date; and (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 2. ~wjv~ 1 p~i~~waterhousecoopers ~Craig Stafford Partner Sydney 29 September 2008