Macquarie Asia Pacific Private Equity Fund. Annual report - 30 June 2009

Transcription

1 Annual report

2 Annual report Contents Income statement Balance sheet Statement of changes in equity Cash flow statement Trustees declaration Independent auditor's report to the unitholders of Macquarie Asia Pacific Private Equity Fund Page This financial report covers Macquarie Asia Pacific Private Equity Fund as an individual entity. The Trustee of Macquarie Asia Pacific Private Equity Fund is Macquarie Investment Management Limited (ABN ). The Trustee's registered offce is Mezzanine Level, NO.1 Martin Place, Sydney, NSW

3 Income statement For the year ended 2009 Income statement Notes Investment income Interest income from financial assets not held at fair value through profit or loss Distribution income Net gains/(iosses) on financial instruments held at fair value through profi or loss Other operating income Total net investment income/(ioss) ,167 4 (9,946) (7,410) 552 Expenses Trustee's fees Other operating expenses Total operating expenses 1, ,027 1,665 1,665 Operating profit/(ioss) (9,437) (1,113) Finance costs attributable to unitholders Distributions to unitholders (Increase)/decrease in net assets attributable to unitholders Profit/(Ioss) for the year 5 (2,147) 11,584 1,113 The above income statement should be read in conjunction with the accompanying notes. -2-

4 Balance sheet As at 2009 Balance sheet Notes Assets Cash and cash equivalents 6 4,355 2,021 Receivables Financial assets held at fair value through profit or loss 7 43,321 41,059 Total assets 48,080 43,223 Liabilties Distributions payable 14 Payables 5 Trustee fees payable 173 1,787 Total liabilities (excluding net assets attributable to unitholders) 178 1,801 Net assets attributable to unitholders - liability 5 47, The above balance sheet should be read in conjunction with the accompanying notes. -3-

5 Statement of changes in equity For the year ended 2009 Statement of changes in equity Total equity at the beginning of the financial year Profitl(loss) for the year Net income/(expense) recognised directly in equity Total recognised income and expense for the financial year Transactions with equity holders in their capacity as 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 statement of changes in equity should be read in conjunction with the accompanying notes. -4-

6 Cash flow statement For the year ended 2009 Cash flow statement Notes Cash flows from operating activities Interest received Distributions received 2,167 Other income received 158 Proceeds from sale of financial instruments held at fair value through profit or loss 4,469 Purchase of financial instruments held at fair value through profit or loss (1,361 ) (23,987) Call payments Return of capital received (25,374) 10,064 (12,234) Trustee's fees paid (3,074) Other operating expenses (662) Net cash inflow/(outflow) from operating activities 8(a) (13,578) (36,197) Cash flows from financing activities Calls on unitholders 18,064 37,490 Distributions paid (2,147) Net cash inflow/(outflow) from financing activities 15,917 37,490 Net increase/(decrease) in cash and cash equivalents 2,339 1,293 Cash and cash equivalents at the beginning of the year 2, Effects of foreign currency exchange rate changes on cash and cash equivalents (5) Cash and cash equivalents at the end of the year 6 4,355 2,021 The above cash flow statement should be read in conjunction with the accompanying notes. -5-

7 General information This financial report covers Macquarie Asia Pacific Private Equity Fund ("the Trust" as an individual entity. The Trust was constituted on 17 January The Manager and Trustee of the Trust is Macquarie Investment Management Limited (the "Trustee"). The Trustee's registered offce is Mezzanine Level, NO.1 Martin Place, Sydney, NSW The financial report is presented in United States dollars. 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 Deed. The financial statements were authorised for issue by the directors on 7 September The directors of the Trustee 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. This is a special purpose financial report that has been prepared for the sole purpose of fulfilling the Trustee's responsibilities to prepare and distribute a financial report to members and must not be used for any other purpose. The Trustee has agreed that the accounting policies adopted are appropriate to meet the needs of the unitholders. As the Trust is not a reporting entity it is not required to prepare financial reports in accordance with Accounting Standards and Urgent Issues Group Consensus Views. However, the financial report has been prepared in accordance with accounting policies set out below. These policies have been consistently applied to all periods presented, unless otherwise stated in the following text. (a) Basis of preparation This special purpose financial report has been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board and Urgent Issues Group Interpretations except as follows: * AASB 7 Financial Instruments: Disclosures * AASB 124 Related Party Disclosures * AASB 127 Consolidated and Separate Financial Statements * AASB 128 Investments in Associates and any other accounting standard by reasonable determination of the Trustee. The financial report is prepared on the basis of fair value measurement of assets and liabilities except where otherwise stated. (b) Financial instruments (i) Classification The Trust's investments are categorised as at fair value through profit 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, such as investments in limited partnerships and unlisted international equities. 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 Trustee 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. -6-

8 2009 (continued) 2 Summary of significant accounting policies (continued) (b) Financial instruments (continued) (ii) Recognition/derecognition The Trust recognises financial assets and financial liabilities 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. Returns of capital received are accounted for on a receipts basis, based on notification provided by the underlying manager, as a deduction in the cost base of the asset. (iii) Measurement (a) Financial assets and liabilities 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 liability. Transaction costs on financial assets and financial liabilities at fair value through profit 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. Securities which are not listed on a securities exchange or are thinly traded are valued by using quotes from brokers. Investments in limited partnerships and unlisted equities are recorded at the redemption value per unit as reported by the managers of such investments, provided redemptions can be effected at such values at reporting date. Where redemptions from such investments have been frozen at balance date, a valuation technique is applied. In the absence of quoted values or brokers' representative prices, trading securities are valued using appropriate valuation techniques as reasonably determined by the manager. For example, the estimated fair market value of a trading security may be based on the International Private Equity and Venture Capital Valuation Guidelines as endorsed by the Australian Private Equity & Venture Capital Association Limited (AVCAL), or equivalent standards for non-australian domiciled investments. Where this is not appropriate, for example in the area of infrastructure investment, a discounted cash flows (DCF) valuation process is used with reference to similar third party valuations where available. (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 statement. (c) Net assets attributable to unitholders The Trust is a closed-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 redemption unit price) at the balance sheet date if unitholders were able to excercise their right to put units back to the Trust. -7-

9 2009 (continued) 2 Summary of significant accounting policies (continued) (d) Cash and cash equivalents For cash flow statement presentation purposes, cash equivalents includes cash on hand, deposits held at call with financial institutions 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. (e) Investment income Interest income and expenses are recognised in the income statement for all financial instruments that are not held at fair value through profit or loss using the effective interest method. Interest income on assets held at fair value through profit or loss is included in the net gains/(iosses) on financial instruments. Other changes in fair value for such instruments are recorded in accordance with the policies described in note 2(b). The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts throughout the expected life of the financial instrument, or a shorter period where appropriate, to the net carrying amount of the financial asset or liability. When calculating the effective interest rate, the Trust estimates cash flows considering all contractual terms of the financial instrument (for example, prepayment options) but does not consider future credit losses. The calculation includes all fees paid or received between the parties to the contract that are an integral part of the effective interest rate, including transaction costs and all other premiums or discounts. Distributions are recognised on an entitlements basis. Dividend income is recognised on the ex-dividend date. (f) Expenses Trustee fees are recognised on an accrual basis, all other expenses are recognised when incurred. (g) 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 realised capital gains. If realised capital gains exceed realised capital losses, the excess is distributed to unitholders. The benefis of imputation credits and foreign tax paid are passed on to unitholders. (h) Distributions In accordance with the Trust Deed, the Trust distributes its distributable (taxable) income, and any other amounts determined by the Trustee, to unitholders by cash. The distributions are recognised in the income statement as finance costs attributable to unitholders. (i) Increase/decrease 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 statement as finance costs. -8-

10 2009 (continued) 2 Summary of significant accounting policies (continued) m 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"). Contributions to and distributions from the Trust wil generally be made in United States dollars. The United States dollar therefore, is the Trust's presentation currency. ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing 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 liabilities denominated in foreign currencies are recognised in the income statement. The Trust does not isolate that portion of gains or losses on securities that are measured at fair value through profi 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 profit or loss. (k) Receivables Receivables may include amounts for distributions. These are accrued when the right to receive payment is established. Amounts are generally received within 30 days of being recorded as receivables. (I) Payables Payables includes liabilities and accrued expenses owing by the Trust which are unpaid as at balance date. The distribution amount payable to unitholders as at the reporting date is recognised separately on the balance sheet when unitholders are presently entitled to the distributable income under the Trust Deed. (m) Goods and Services Tax (GST) The GST incurred on the costs of various services provided to the Trust by third parties such as Trustee fees have been passed onto the Trust. The Trust qualifies for Reduced Input Tax Credits (RITC) at a rate of 75% hence Trustee fees and other expenses have been recognised in the income statement 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 sheet. Cash flows relating to GST are included in the cash flow statement on a gross basis. (n) 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. (0) New accounting standards and interpretations Certain new accounting standards and interpretations have been published that are not mandatory for 2009 reporting periods. The Trustee's assessment of the impact of these new standards (to the extent relevant to the Trust) and interpretations is set out below: -9-

11 2009 (continued) 2 Summary of significant accounting policies (continued) (0) New accounting standards and interpretations (continued) (i) Revised AASB 101 Presentation of Financial Statements and AASB Amendments to Australian Accounting Standards arising from AASB 101 (effective from 1 January 2009) The revised AASB 101 requires the presentation of a statement of comprehensive income and makes changes to the statement of changes in equity, but will not affect any of the amounts recognised in the financial statements. If a Trust has made a prior period adjustment or has reclassified items in the financial statements, it will need to disclose a third balance sheet (statement of financial position), this one being as at the beginning of the comparative period. The Trust will apply the revised standard from 1 July (ii) AASB 132 Financial Standards - Puttable Financial from 1 January 2009) Instruments: Presentation and AASB Amendments to Australian Accounting Instruments and Obligations Arising on Liquidation (Revised AASB 132) (effective 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 will be no change to classification of unitholder's funds as a liability and therefore no impact on profit or loss and equity. (iii) AASB Amendments to Australian Accounting Standards - Improving Disclosures about Financial Instruments (effective from 1 January 2009) In April 2009, the AASB published amendments to AASB 7 Financial Instruments: Disclosures to improve the information that entities report about their liquidity risk and the fair value of their financial instruments. The amendments require fair value measurement disclosures to be classified into a new three-level hierarchy and additional disclosures for items whose fair value is determined by valuation techniques rather than observable market values. The AASB also clarified and enhanced the existing requirements for the disclosure of liquidity risk of derivatives. The Trust has not early adopted the amendments. The amendments will not affect any of the amounts recognised in the financial statements but may affect certain disclosures, if followed. (p) Early adoption of standards The Trust has early adopted AASB 8 Operating Segments in the year ended The application of AASB 8 will not impact the Trust as the Trust is outside the scope of AASB 8 because it does not have debt or equity instruments traded in a public market, or file its financial statements with a securities commission or other regulatory organisation for the purpose of issuing any class of instruments in a public market. Following the early adoption of AASB 8, the Trust has omitted the segment disclosure previously required under AASB 114 Segment Reporting. (q) 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. -10-

12 2009 (continued) 3 Auditor's remuneration During the year the following fees were paid or payable for services provided by the auditor of the Trust: 2009 USD 2008 USD Audit services PricewaterhouseCoopers Australian firm Audit and review of financial reports Other audit work under the Corporations Act 2001 Total remuneration for audit services 5, ,677 8,364 1,629 9,993 4 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 profit or Net gains/(iosses) on financial instruments designated as at fair value through profit or loss (9,946) Net assets attributable to unitholders Movements in number of units and net assets attributable to unitholders during the year were as follows: As stipulated within the Trust Deed, 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 No. '000 No. '000 Opening balance 112,000 39,000 41,422 5,045 Calion unitholders 15,000 73,000 18,064 37,490 Increase/(decrease) in net assets attributable to unitholders (11,584) (1,113) Closing balance 127, ,902 41,422 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 Deed. The Manager commits to underlying investments, based on the committed capital in the Trust. Instalments from the unitholder are payable at the Manager's request but will 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. -11-

13 2009 (continued) 6 Cash and cash equivalents Cash at bank 4,355 2,021 7 Financial assets held at fair value through profit or loss Designated at fair value through profit or loss Limited partnerships Unlisted equity securities Total designated at fair value through profit or loss Total financial assets held at fair value through profit or loss Fair value Fair value 34,519 31,344 8,802 9,715 43,321 41,059 43,321 41, Fair value Fair value Limited partnerships International limited partnerships Total limited partnerships 34,519 31,344 34,519 31, Fair value Fair value Unlisted equity securities Shares in International unlisted equities Total unlisted equity securities Total financial assets held at fair value through profit or loss 8,802 9,715 8,802 9,715 43,321 41,

14 2009 (continued) 8 Reconcilation of profit/(ioss) to net cash inflow/(outflow) from operating activities (a) Reconciliation of profit/(ioss) to net cash inflow/(outflow) from operating activities Profitl(loss) for the year Increase/(decrease) in net assets attributable to unitholders Net (gains)/iosses on financial instruments held at fair value through profit or loss Proceeds from sale of financial instruments held at fair value through profit or loss Purchase of financial instruments held at fair value through profi or loss Call payments Return of capital received Distributions to unitholders Net change in receivables and other assets Net change in payables and other liabilities Net cash inflow/(outt/ow) from operating activities (11,584) (1,113) 9,946 (507) 4,469 (1,361 ) (23,987) (25,374) (12,234) 10,064 2,147 (262) (143) (1,623) 1J87 (13,578) (36,197) As described in note 2(i), income not distributed is included in net assets attributable to unitholders. The change in this amount each year (as reported in (a) above) represents a non-cash financing cost as it is not setted in cash until such time as it becomes distributable (ie taxable). 9 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 sheet as at 2009 or on the results and cash flows of the Trust for the year ended on that date. 10 Contingent assets and liabilties and commitments Outstanding commitment in respect of partly paid units at 2009 totalled $83,723,995 (2008: $90,472,155). The investment commitments presented above represent commitments to purchase interests in assets at such time as the Manager 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 portfolio. There are no other outstanding contingent assets and liabilities as at 2009 and

15 Trustees declaration 2009 Trustees declaration Macquarie Investment Management Limited, the Trustee of Macquarie Asia Pacific Private Equity Fund (the "Trust") declares, for the year ended 2009, that: (a) the financial statements and notes set out on pages 2 to 13 are in accordance with the Trust Deed, including: (i) complying with Accounting Standards, and other mandatory professional reporting requirements, and (ii) giving a true and fair view of the Trust's financial position as at 2009 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. (l, (" R Cartright Director Sydney 7 September

16 PRcEWtRHOUsE(OOPERS I Independent auditor's report to the unitholders of Macquarie Asia Pacific Private Equity Fund Report on the financial report PricewaterhouseCoopers ABN Darling Park Tower Sussex Street GPO BOX 2650 SYDNEY NSW 1171 DX 77 Sydney Australia Telephone Facsimile Direct Phone Enter your phone number Direct Fax Enter your fax number ww.pwc.com/au We have audited the accompanying financial report, being a special purpose financial report, of Macquarie Asia Pacific Private Equity Fund (the Trust), which comprises the balance sheet as at 2009, the income statement, statement of changes in equity and cash flow statement for the year then ended, a summary of significant accounting policies, other explanatory notes and the trustees' declaration. The responsibility of the directors of the trustee for the financial report The directors of the trustee is responsible for the preparation and fair presentation of the financial report and have determined that the accounting policies described in Note 2 to the financial statements, which form part of the financial report, are appropriate to meet the requirements of the trust deed dated 17 January 2007 and are appropriate to meet the needs of the unitholders. The responsibility of the directors of the trustee also includes establishing and maintaining internal control 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. Auditor's responsibílty Our responsibility is to express an opinion on the financial report based on our audit. No opinion is expressed as to whether the accounting policies used, as described in Note 2, are appropriate to meet the needs of the unitholders. 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 Trust'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 Trust's internal control. An audit also includes evaluating the reasonableness of accounting estimates made by the directors of the trustee, as well as evaluating the overall presentation of the financial report. The financial report has been prepared for distribution to unitholders for the purpose of fulfillng the financial reporting obligations of the directors of the trustee under the trust deed, We disclaim any assumption of responsibility for any reliance on this audit report or on the financial report to which it relates to any person other than the unitholders, or for any purpose other than that for which they were prepared. Liabilty limited by a scheme approved under Professional Standards Legislation

17 fjcew1erhouseßpers I Independent auditor's report to the unitholders of Macquarie Asia Pacific Private Equity Fund (continued) 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 opinion. Auditor's opinion In our opinion, the financial report presents fairly, in all material respects, the financial position of Macquarie Asia Pacific Private Equity Fund as of 2009 and its financial performance for the year then ended in accordance with the accounting policies described in Note 2 to the financial statements. A,(QJJ:u1...( ~ PricewaterhouseCoopers ~E A Barron Partner Sydney 7 September 2009