2003 Full Financial Report for

Transcription

1 Full Financial Report for Macquarie Direct Property No. 9 (ARSN ) Macquarie Direct Property Management Limited (ABN ) is a wholly owned subsidiary of Macquarie Bank Limited and is the Responsible Entity of Macquarie Direct Property No. 9. Investments in this Trust are not deposits with nor liabilities of Macquarie Bank Limited (ABN ) nor any Macquarie Bank Group company and are subject to investment risk including possible delays in repayment and loss of income or principal invested. Neither Macquarie Bank Limited, Macquarie Direct Property Management Limited nor any Macquarie Bank Group company guarantees the performance of the Trust or the repayment of capital from the Trust. This report does not contain investment advice nor is it an offer to invest in units of the Trust. This report has been prepared without taking into account the personal objectives, financial situation or needs of particular individuals. Before acting, we recommend potential investors speak to a financial and/or other professional adviser. Macquarie Direct Property Management Limited is entitled to fees for acting in the capacity of Responsible Entity. Macquarie Bank Limited, its related bodies corporate and officers and directors of those entities may hold units in the Trust from time to time.

2 DIRECTORS REPORT The directors of Macquarie Direct Property Management Limited (manager), the responsible entity of Macquarie Direct Property No. 9 (MDP No. 9, the Scheme), present their report together with the financial report of MDP No. 9, and the consolidated financial report of MDP No. 9 and its controlled entities for the financial year ended 30 June. 1. Directors The following persons held office as directors of Macquarie Direct Property Management Limited during the financial year and up to the date of this report: Stephen Girdis Ian Pratt James Rae Richard Cutler Simon Jones (appointed 17 April as alternate for Stephen Girdis). 2. Principal Activities of the Scheme The principal activity of MDP No. 9 during the financial year was property investment. There were no significant changes in the nature of MDP No. 9 s activities during the financial year. 3. Distributions The distribution of MDP No.9 s income for the financial year ended 30 June was 8.8 cents per unit. Interim distributions of 2.2, 2.2 and 2.2 cents per unit were paid on 31 October, 7 February and 30 April respectively. A final distribution for the financial year ended 30 June of 2.2 cents per unit was paid on 11 August. 4. Review of Operations The performance of MDP No. 9, as represented by the results of its operations, was as follows: Property Rental Income 1, Net Profit/(Loss) 1,062 (463) 5. Value of Assets Value of Scheme s Assets 24,667 24,633 The value of the Scheme s assets is derived using the basis set out in Note 1 to the financial statements. 1

3 DIRECTORS REPORT (CONT.) 6. Interests in the Scheme The movement in equity of MDP No. 9 during the financial year is set out below: Units Issued under Prospectus during the Year - 12,000,000 Units on Issue 12,000,000 12,000, Changes in the State of Affairs In the opinion of the directors, there were no significant changes in the state of affairs of MDP No. 9 that occurred during the financial year under review. 8. Matters Subsequent to the End of the Financial Year On 23 July the Office of State Revenue in Victoria issued Trust Company of Australia Limited (custodian for MDP No. 9) with an assessment for stamp duty arising from the transfer of title of the Scheme's property at 456 Lonsdale Street, Melbourne, Victoria. The manager has reviewed the original advice and has also sought additional legal opinion confirming the Scheme's position that no stamp duty was payable on transfer of the property. As set out in section 4.3 of the Prospectus stamp duty was not included in the capitalised cost of the property. The manager believes it is in a strong position in defending this assessment. These amounts have not been recognised in the Scheme's financial statements as at 30 June as the manager believes that this assessment will be overturned. Since the end of the financial year, the directors are not aware of any other matter or circumstance not otherwise dealt with in this report or the financial report that has significantly affected or may significantly affect the operations of MDP No. 9, the results of its operations or the state of affairs of MDP No. 9 in the financial years subsequent to the financial year ended 30 June. 9. Likely Developments and Expected Results of Operations At the time of making this report, it is anticipated that the results of MDP No. 9 will continue to be in accordance with Prospectus forecasts. 10. Indemnification and Insurance of Officers and Auditor No insurance premiums are paid for out of the assets of MDP No. 9 in regards to insurance cover provided to either the officers of Macquarie Direct Property Management Limited or the auditor of the Scheme. So long as the officers of Macquarie Direct Property Management Limited act in accordance with the Scheme s Constitution (Constitution) and the Corporations Act 2001, the officers remain indemnified out of the assets of MDP No. 9 against losses incurred while acting on behalf of MDP No. 9. The auditor of MDP No. 9 is in no way indemnified out of the assets of the Scheme. 11. Fees Paid to and Interests Held in the Scheme by the Manager or its Associates Fees paid or payable to the manager and its associates by MDP No. 9 during the financial year are disclosed in Note 4 to the financial statements. The interests in MDP No. 9 held by the manager or its associates as at 30 June are disclosed in Note 19 to the financial statements. 12. Environmental Regulations The operations of MDP No. 9 are not subject to any particular environmental regulations under a Commonwealth, State or Territory law. 2

4 DIRECTORS REPORT (CONT.) 13. Rounding of Amounts to the Nearest Thousand Dollars MDP No. 9 is a registered scheme of the kind referred to in Class Order 98/0100 issued by Australian Securities and Investments Commission (ASIC) 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 to the nearest thousand dollars in accordance with that Class Order, unless otherwise indicated. This report is made in accordance with a resolution of the Board of Directors. Stephen Girdis Chairman Sydney 12 September 3

5 FINANCIAL REPORT STATEMENTS OF FINANCIAL PERFORMANCE FOR THE YEAR ENDED 30 JUNE Income Note Property Income Property Rental Income 1, Property Expenses 3 (37) - (2) - Net Property Income 1, Other Income Investment Income - 1, Interest Income Total Income 1,911 1, Expenditure Manager s Fee Borrowing Costs Other Expenses Total Expenditure Net Profit/(Loss) 6 1,062 1,062 (463) (463) Distribution Net Profit/(Loss) 1,062 1,062 (463) (463) Undistributed Income Brought Forward Transfer from Reserves Undistributed Income Carried Forward 6 (17) (17) (3) (3) Distribution Paid and Payable 6,7 1,056 1, Distribution Paid and Payable per Unit (cents) Basic Earnings/(Loss) per Unit (cents) (3.86) Diluted Earnings/(Loss) per Unit (cents) (3.86) The above Statements of Financial Performance should be read in conjunction with the accompanying notes. 4

6 STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE Current Assets Note Cash 16 1,109 1,109 1,486 1,486 Receivables , ,397 Other Total Current Assets 1,140 2,867 1,684 2,883 Non-Current Assets Investments 10 23,527 21,750 22,949 21,750 Total Non-Current Assets 23,527 21,750 22,949 21,750 Total Assets 24,667 24,617 24,633 24,633 Current Liabilities Payables Provisions Total Current Liabilities Non-Current Liabilities Interest Bearing Liabilities 13 13,100 13,100 13,100 13,100 Total Non-Current Liabilities 13,100 13,100 13,100 13,100 Total Liabilities 13,513 13,463 13,446 13,446 Net Assets 11,154 11,154 11,187 11,187 Equity Contributed Equity 14 11,875 11,875 11,914 11,914 Reserves 15 (738) (738) (730) (730) Undistributed Income Total Equity 11,154 11,154 11,187 11,187 The above Statements of Financial Position should be read in conjunction with the accompanying notes. 5

7 STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE Cash Flows from Operating Activities Note Inflows/ (Outflows) Inflows/ (Outflows) Inflows/ (Outflows) Inflows/ (Outflows) Property Rental Income Received* 2, Amounts Received on Behalf of Controlled Entities - 2, Property Expenses Paid (611) - (7) - Amounts Paid on Behalf of Controlled Entities - (875) - (1,353) Other Operating Expenses Paid (91) (33) (129) (10) Interest Received Net GST (Remitted to)/received from ATO (35) Net Cash Flows from Operating Activities 17 2,100 1, (910) Cash Flows from Investing Activities Payments for Unit Trust Investments (21,750) Payments for Investments (578) - (22,949) - Net Cash Flows from Investing Activities (578) - (22,949) (21,750) Cash Flows from Financing Activities Proceeds from Borrowings ,100 13,100 Borrowing Costs Paid (807) (807) (865) (865) Proceeds from Issue of Units ,997 11,997 Redemption of Stamping Fee Rebates Issue Costs Paid (39) (39) (86) (86) Distributions Paid to Unitholders (1,056) (1,056) - - Net Cash Flows from Financing Activities (1,899) (1,899) 24,146 24,146 Net (Decrease)/Increase in Cash Held (377) (377) 1,486 1,486 Cash at the Beginning of the Year 1,486 1, Cash at the End of the Year 16 1,109 1,109 1,486 1,486 *Property rental income is inclusive of outgoings income received from tenants. The above Statements of Cash Flows should be read in conjunction with the accompanying notes. 6

8 FOR THE YEAR ENDED 30 JUNE 1. Significant Accounting Policies The significant policies which have been adopted in the preparation of these financial statements are stated to assist in a general understanding of the financial report. (a) Basis of Preparation This financial report has been prepared in accordance with the historical cost convention, except for certain assets which, as noted, are at fair value. The financial report of MDP No. 9 is a general purpose financial report and has been prepared in accordance with the requirements of the Constitution and in accordance with Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Consensus Views and the Corporations Act The accounting policies adopted in preparing the financial report have been consistently applied by the Scheme except as otherwise indicated. (b) Principles of Consolidation The consolidated financial statements incorporate the assets and liabilities of all entities controlled by the Scheme as at 30 June and for the financial year then ended. The effects of all transactions between entities in the consolidated entity are eliminated in full. (c) Valuation of Investments The Constitution requires that all investments in real property must be revalued at regular intervals appropriate to the nature of the property. The property investment is revalued to market value by an independent valuer at intervals not exceeding three years. In addition, the property investment will be revalued whenever there is a significant change in market value within the relevant period. This revaluation is based on market value which represents the price at which the property investment could be sold at the date of revaluation assuming reasonable exposure to the market and a reasonable settlement period. The property investment is stated at fair value. In accordance with Accounting Standard AASB 1041: Revaluation of Non-Current Assets, properties that have been independently valued in the past 12 months are carried at that valuation. Where properties have not been independently valued in the past 12 months, they are carried at directors valuation. Unrealised gains arising on revaluation of the property investment are accounted for by crediting the asset revaluation reserve. Unrealised losses arising on revaluation of the property investment are charged to the asset revaluation reserve to the extent they reverse any previous revaluation increment and any residual is charged to the Statements of Financial Performance and transferred to the capital reserve. Property acquisition costs are capitalised into the value of the property investment at the time of the purchase. Additions and other expenditure on the property investment which are capital in nature are capitalised as incurred. The liability for capital gains tax that may arise if the property were sold is not accounted for in these financial statements. MDP No. 9 is required to distribute to unitholders any taxable capital gains arising on the sale of the property investment and is therefore not liable to pay capital gains tax. (d) Depreciation Land and buildings have the function of an investment and are regarded as a composite asset. In accordance with Accounting Standards, property investments are not subject to depreciation. Accordingly, the buildings and any component thereof (including plant and equipment) are not depreciated. Taxation allowances for the depreciation of buildings and plant and equipment are claimed by MDP No. 9 and contribute to the tax deferred component of distributions. 7

9 FOR THE YEAR ENDED 30 JUNE 1. Significant Accounting Policies (Cont.) (e) Receivables Receivables are carried at the amounts due to MDP No. 9 and its controlled entities. Rent and outgoings receivable are due for settlement within 30 days of recognition. The collectability of debts is reviewed on an ongoing basis. Debts which are known to be uncollectable are written off in the relevant period in which they are identified. A provision for doubtful debts is raised where some doubt as to collection exists. (f) Borrowing Costs Borrowing costs associated with the acquisition or construction of a qualifying asset are capitalised as part of the cost of that asset. Borrowing costs not associated with qualifying assets are capitalised and amortised over the term of the borrowing period. (g) Deferred Expenditure Significant items of expenditure having a future benefit are amortised over the periods to which they relate. (h) Payables Liabilities are recognised for amounts to be paid in the future for goods or services received, whether or not billed to MDP No. 9 and its controlled entities. The amounts are unsecured and are usually paid within 30 or 60 days of recognition. (i) Interest Bearing Liabilities Bank loans are carried at their principal amounts. Interest is accrued on bank loans over the relevant period it becomes due and is recorded as part of payables, in current liabilities. (j) Equity Transaction Costs Transaction costs arising on the issue of equity are recognised directly in equity as a reduction of the proceeds of equity instruments to which the costs relate. (k) Capital Reserve In accordance with the Constitution, amounts may be transferred from the capital reserve to fund distributions. (l) Property Rental Income Property rental income represents income earned from the rental of the property investment (exclusive of outgoings recovered from tenants) and is brought to account on an accruals basis. (m) Income Tax Under current income tax legislation, MDP No. 9 is not liable to income tax provided its taxable income (including assessable realised capital gains) is fully distributed to unitholders. 8

10 FOR THE YEAR ENDED 30 JUNE 1. Significant Accounting Policies (Cont.) (n) Derivatives The Scheme has entered into an interest rate cap agreement to hedge against the risk of an increase in interest rates on the Scheme s debt. Derivative financial instruments are not held for speculative purposes and are not recognised in the financial statements on inception. The net payments or receipts due under the cap agreement are accounted for on an accruals basis and are included in interest expense. (o) Comparative Figures Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current financial year. 2. Scheme Formation and Termination MDP No. 9 was established on 14 January and operations of the Scheme commenced with the acquisition of 456 Lonsdale Street, Melbourne on 28 March and will terminate on its 80th anniversary unless terminated earlier in accordance with the provisions of the Constitution dated 14 January. 3. Property Expenses Airconditioning Cleaning Council Rates Electricity and Gas Fire Protection Insurance Land Tax Lease Fees Legal Fees Lift Property Management Fees Repairs and Maintenance Security Water Rates Other Less: Recoveries from Tenants (541) - (84) - Total Property Expenses

11 FOR THE YEAR ENDED 30 JUNE 4. Manager s Fee The manager of MDP No. 9 is Macquarie Direct Property Management Limited, a wholly owned subsidiary of Macquarie Bank Limited. Pursuant to the Prospectus, the manager has agreed to postpone the manager s fee for the financial year to 30 June (manager s fee for the period to 30 June : $7,000). In the event that distributable income exceeds Prospectus forecasts the manager may recoup up to $125,000 (calculated as 0.5% of the gross assets of MDP No. 9, payable quarterly in arrears) in subsequent years. 5. Other Expenses* Note ASIC Fees Audit Fees Bank Fees Compliance Fees Postage Printing Registry Fees Taxation Advice Fees Unitholders Communication Valuation Fees *Other expenses have been paid in accordance with the Constitution Undistributed Income Undistributed Income Brought Forward Net Profit/(Loss) 1,062 1,062 (463) (463) Transfer from Reserves Available for Distribution 1,073 1, Distributions to Unitholders during the Year 7 (792) (792) - - Provision for Distribution 7,12 (264) (264) (264) (264) Undistributed Income Carried Forward

12 FOR THE YEAR ENDED 30 JUNE 7. Distribution Payable Distributions paid or provided for by MDP No. 9 are: Distributions Paid Interim distributions of 2.2, 2.2 and 2.2 cents per unit, paid on 31 October, 7 February and 30 April respectively Distribution Payable Final distribution of 2.2 cents per unit was paid on 11 August Total Distributions Paid and Payable 1,056 1, The distribution for the financial year by MDP No. 9 was 100% tax deferred (period to 30 June : 100% tax deferred). 8. Receivables Rent Receivable Sundry Debtors GST Receivable Outgoings Receivable Loans to Controlled Entities - 1,757-1, , , Other Assets Prepayments Investments 456 Lonsdale Street, Melbourne* 23,527-22,949 - Investments in Controlled Entities - 21,750-21,750 *Acquisition date: 28 March. 23,527 21,750 22,949 21,750 The property was last independently valued on 20 December 2001 at $21,900,000. The valuer was Dan Magree, MRE AAPI, Certified Practising Valuer, LandMark White (Vic) Pty Ltd. 11

13 FOR THE YEAR ENDED 30 JUNE 10. Investments (Cont.) Carrying Amount at the Beginning of the Year 22,949 21, Additions ,949 21,750 Disposals Revaluation Increments Carrying Amount at the End of the Year 23,527 21,750 22,949 21, Payables Manager s Fee Sundry Creditors and Accruals Interest Payable Outgoings Payable GST Payable Provisions Distribution Opening Balance Amount Available for Distribution 1,073 1, Paid during the Year (1,056) (1,056) - - Undistributed Income Carried Forward (17) (17) (3) (3) Closing Balance* *The provision for distribution represents the distribution of MDP No. 9 for the quarter ended 30 June, which was paid on 11 August (quarter to 30 June : 9 August ). 13. Interest Bearing Liabilities Bank Loan** 13,100 13,100 13,100 13,100 **The bank loan is secured by a registered first mortgage over the property investment held by the consolidated entity. 12

14 FOR THE YEAR ENDED 30 JUNE 14. Contributed Equity No. of Units Details Date 12,000,000 Unit Issued 14 January (1) ,914 11,914 12,000,000 Units on Issue 30 June (2) 11,875 11,875 11,914 11,914 12,000,000 Units on Issue 30 June 11,875 11,875 11,914 11,914 (1) Net of transaction costs of $86,000. (2) The 1 July opening balance is net of transaction costs of $39,000 relating to the 14 January unit issue, incurred post 30 June. As stipulated in the Constitution, each unit represents a right to an individual share in the Scheme and does not extend to a right to the underlying assets of the scheme. There are no separate classes of units and each unit has the same rights attaching to it as all other units in the Scheme. 15. Reserves Capital Reserve Opening Balance (730) (730) - - Transfer to Distribution (8) (8) (730) (730) Closing Balance (738) (738) (730) (730) 16. Reconciliation of Cash For the purposes of the Statements of Cash Flows, cash includes cash on deposit. Cash as at 30 June as shown in the Statements of Cash Flows is reconciled to the related item in the Statements of Financial Position as follows: Cash on Deposit 1,109 1,109 1,486 1,486 Total Cash 1,109 1,109 1,486 1,486 13

15 FOR THE YEAR ENDED 30 JUNE 17. Reconciliation of Net Profit/(Loss) to Net Cash Flows from Operating Activities Net Profit/(Loss) 1,062 1,062 (463) (463) Classified as Financing Activities Borrowing Costs Change in Assets and Liabilities Decrease/(Increase) in Assets Receivables 186 (363) (195) (1,394) Other (6) Increase/(Decrease) in Liabilities Payables Net Cash Flows from Operating Activities 2,100 1, (910) 18. Net Tangible Assets Net tangible assets are calculated as follows: Total Tangible Assets 24,667 24,617 24,633 24,633 Less: Total Liabilities (13,513) (13,463) (13,446) (13,446) Net Tangible Assets 11,154 11,154 11,187 11,187 Total Number of Units on Issue 12,000,000 12,000,000 12,000,000 12,000,000 Net Tangible Asset Backing per Unit $0.93 $0.93 $0.93 $

16 FOR THE YEAR ENDED 30 JUNE 19. Related Party Transactions Manager The manager of MDP No. 9 is Macquarie Direct Property Management Limited, a wholly owned subsidiary of Macquarie Bank Limited. Directors The names of persons who were directors of Macquarie Direct Property Management Limited at any time during the financial year were as follows: Stephen Girdis Ian Pratt James Rae Richard Cutler Simon Jones (appointed 17 April as alternate for Stephen Girdis). No amounts were paid by the Scheme directly to the directors of the manager. Manager s Fee and Other Transactions Under the terms of the Constitution, the manager is entitled to receive a management fee of a maximum of 1.0% per annum of the gross assets of MDP No. 9, calculated monthly. Pursuant to the Prospectus, the manager has agreed to postpone the manager s fee for the financial year to 30 June. In the event that distributable income exceeds Prospectus forecasts the manager may recoup up to $125,000 (calculated as 0.5% of the gross assets of MDP No. 9, payable quarterly in arrears) in subsequent years. Manager s fee for the financial year paid or payable directly by the Scheme Syndication fee received by the manager on the Scheme s purchase of the property - - 1,088 - The manager paid any relevant commissions in relation to the equity raising from the fee. As at 30 June, MDP No. 9 held funds totalling $1,109,000 (: $1,486,000) on deposit with Macquarie Bank Limited. These balances may differ from the Statements of Financial Position due to unsettled transactions. MDP No. 9 earns interest on deposits at commercial rates. Interest income from these deposits totalling $88,000 (period to 30 June : $29,000) was included in the determination of the net profit for MDP No. 9 for the period to 30 June. The above transactions were based on normal commercial terms and conditions. Units Held by the Manager and Related Bodies Corporate of the Manager Related bodies corporate and their associates of the manager held 2,500 units (: 2,500) in MDP No. 9 as at 30 June. 20. Segment Information The Scheme is an unlisted property trust which invests in the commercial property market in Australia. 15

17 FOR THE YEAR ENDED 30 JUNE 21. Earnings/(Loss) per Unit Basic Earnings/(Loss) per Unit (cents) 8.85 (3.86) Diluted Earnings/(Loss) per Unit (cents) 8.85 (3.86) Weighted Average Number of Ordinary Units Used in the Calculation of Basic Earnings per Unit 12,000,000 12,000,000 Net Profit of $1,062,000 (Net Loss for period to 30 June : $463,000) was used as earnings in calculating the basic and diluted earnings per unit. 22. Subsequent Events On 23 July the Office of State Revenue in Victoria issued Trust Company of Australia Limited (custodian for MDP No. 9) with an assessment for stamp duty arising from the transfer of title of the Scheme's property at 456 Lonsdale Street, Melbourne, Victoria. The manager has reviewed the original advice and has also sought additional legal opinion confirming the Scheme's position that no stamp duty was payable on transfer of the property. As set out in section 4.3 of the Prospectus stamp duty was not included in the capitalised cost of the property. The manager believes it is in a strong position in defending this assessment. The potential liability for stamp duty is $1,580,000, including general interest charges and penalties to date, however it is not possible to make an estimate of the final amount likely to be incurred by the Scheme with reasonable certainty. These amounts have not been recognised in the Scheme's financial statements as at 30 June as the manager believes that this assessment will be overturned. 23. Additional Financial Instruments Disclosures (a) Terms and Conditions Cash Surplus funds of MDP No. 9 are held on deposit. Interest is receivable on maturity. At 30 June, the interest rate on these funds was 3.96% per annum (: 3.96% per annum). Bank Loan The bank loan is an interest only loan and is due for repayment on 28 March Details of security held by the bank are included in Note 13. The interest rate on the borrowings is variable and is reset monthly. As at 30 June, the interest rate on the borrowings including margin was 6.00% per annum (: 5.80% per annum). Interest Rate Cap The manager has entered into a 6.25% per annum fixed rate interest rate cap agreement on behalf of unitholders for a period of two years maturing April For the period from April 2004 to April 2007 the manager has entered into a further interest rate cap agreement at a fixed rate of 6.75% per annum. These caps enable MDP No. 9 to minimise exposure to interest rate risk on variable rate borrowings. As at 30 June, the interest rate cap has not been utilised as variable interest rates have not exceeded the fixed rate of the cap of 6.25% per annum. 16

18 FOR THE YEAR ENDED 30 JUNE 23. Additional Financial Instruments Disclosures (Cont.) (b) Interest Rate Risk The Scheme s exposure to interest rate risk and the effective interest rate on financial instruments at balance date are: Entity 30 June Floating Interest Rate Fixed Interest Rate Maturing 1 Year or Less 1 to 5 Years Over 5 Years Non- Interest Bearing Total Assets Cash 1, ,109 Receivables Total Financial Assets 1, ,134 Weighted Average Effective Interest Rate (% pa) 3.96% Liabilities Payables Interest Bearing Liabilities 13, ,100 Distribution Payable Total Financial Liabilities 13, ,513 Weighted Average Effective Interest Rate (% pa) 6.00% Net Financial Liabilities (11,991) (388) (12,379) 17

19 FOR THE YEAR ENDED 30 JUNE 23. Additional Financial Instruments Disclosures (Cont.) (b) Interest Rate Risk (Cont.) Entity 30 June Floating Interest Rate Fixed Interest Rate Maturing 1 Year or Less 1 to 5 Years Over 5 Years Non- Interest Bearing Total Assets Cash 1, ,486 Receivables Total Financial Assets 1, ,684 Weighted Average Effective Interest Rate (% pa) 3.96% Liabilities Payables Interest Bearing Liabilities 13, ,100 Distribution Payable Total Financial Liabilities 13, ,446 Weighted Average Effective Interest Rate (% pa) 5.80% Net Financial Liabilities (11,614) (148) (11,762) Note Reconciliation of Net Financial Liabilities to Net Assets Net Financial Liabilities as Above (12,379) (11,762) Non-Financial Assets Investments 10 23,527 22,949 Prepayments Net Assets per Statements of Financial Position 11,154 11,187 18

20 FOR THE YEAR ENDED 30 JUNE 23. Additional Financial Instruments Disclosures (Cont.) (c) Credit Risk Credit risk represents the economic loss that would be recognised if counterparties failed to perform as contracted. Financial Instruments Recognised in the Statements of Financial Position The credit risk on the financial assets of MDP No. 9 which have been recognised in the Statements of Financial Position is the carrying amount, net of any provisions for doubtful debts. (d) Net Fair Values of Financial Assets and Liabilities Financial Instruments Recognised in the Statements of Financial Position The financial assets and liabilities of MDP No. 9 are carried at amounts that approximate their net fair value. 24. Remuneration of Auditor During the financial year, the auditor of the Scheme, PricewaterhouseCoopers, and its related practices earned the following remuneration: $ $ $ $ Audit of the Financial Report 5,675 5, Other Assurance Services ,888 26,888 Taxation 7,978 7,978 1,575 1,575 Total Remuneration 13,653 13,653 28,463 28,463 19

21 DIRECTORS DECLARATION The directors of Macquarie Direct Property Management Limited, the responsible entity, declare that the financial statements as set out on pages 4 to 19: (a) (b) comply with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and give a true and fair view of MDP No. 9 and the consolidated entity s financial position as at 30 June and of their performance, as represented by the results of their operations and their cash flows, for the financial year ended on that date. In the directors opinion: (a) (b) the financial statements and notes are in accordance with the Corporations Act 2001; and there are reasonable grounds to believe that MDP No. 9 will be able to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the directors. Stephen Girdis Chairman Sydney 12 September 20

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