for the year ended 30 June 2013

Transcription

1 MACQUARIE DIVERSIFIED PRIVATE EQUITY FUND ANNUAL REPORT for the year ended

2 MACQUARIE DIVERSIFIED PRIVATE EQUITY FUND Financial statements for the year ended ANNUAL REPORT Contents Statement of comprehensive income 3 Statement of financial position 4 Statement of changes in equity 5 Statement of cash flows 6 Notes to and forming part of the financial statements 7-21 Trustee's statement 22 Independent auditor's report 23 Macquarie Investment Management Limited ABN The Trustee's registered offce is No.1 Martin Place, SYDNEY NSW 2000

3 Statement of comprehensive income For the year ended Statement of comprehensive income For the year ended or loss 4 Investment income Net loss on financial instruments held at fair value through profi Other income Total net investment income Notes Distribution income 11 (g) Expenses Trustee fees 11 (e) Total operating expenses Operating loss for the year Year ended 30 June 30 June $'000 $' ,723 (196) (1,692) (5) (86) Income tax (benefit)/expense Operating gainl(loss) after income tax expense 6 (146) (290) Finance costs attributable to unitholders Distributions to unitholders Decrease in net assets attributable to unitholders Profit/(Ioss) for the year after tax Total comprehensive income for the year 5 (850) The above statement of comprehensive income should be read in conjunction with the accompanying notes. 3

4 Statement of financial position As at Statement of financial position As at 30 June 30 June Notes $'000 $'000 Assets Cash and cash equivalents Other receivables 2 6 Current tax asset Deferred tax asset Financial assets held at fair value through profit or loss 9 7,538 10,918 Total assets 7,709 11,030 Liabilties Redemptions payable 3,368 Distribution payable 850 Trustee fees payable 11 (e) Total liabilties (excluding net assets attributable to unitholders) 870 3,398 Net assets attributable to unitholders - liabilty 5 6,839 7,632 The above statement of financial position should be read in conjunction with the accompanying notes. 4

5 Statement of changes in equity For the year ended Statement of changes in equity Year ended 30 June 30 June $'000 $'000 Total equity at the beginning of the year Total comprehensive income for the year Transactions with owners in their capacity as owners Total equity at the end of the year Under Australian Accounting Standards, net assets attributable to unitholders are classified as a liability rather than equity. As a result, there was no equity at the start or end of the year. The above statement of changes in equity should be read in conjunction with the accompanying notes. 5

6 Statement of cash flows For the year ended Statement of cash flows For the year ended Notes Year ended 30 June 30 June $'000 $'000 Cash flows from operating activities Distributions received Other income received Income tax paid Trustee fees paid Purchase of financial instruments held at fair value through profit or loss Proceeds from sales of financial instruments held at fair value through profit or loss Net cash inflow from operating activities 12(a) (40) (85) (267) 3,518 3,439 1,908 4 (56) (126) (1.899) 1, Cash flows from financing activities Proceeds from applications by unitholders Payments for redemptions by unitholders Distributions paid Net cash outflow from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Cash and cash equivalents at the end of the year Non - cash financing and investing activities (3,450) (932) (3,450) (932) (11) (b) The above statement of cash flows should be read in conjunction with the accompanying notes. 6

7 1 General information This financial report covers Macquarie Diversified Private Equity Fund ("the Trust") as an individual entity. The Trust was constituted on 5 July In accordance with amendments to the Superannuation Industry (Supervision) Act 1993 the Fund was registered with the Australian Prudential Regulation Authority (APRA) on 17 July The Trust is a pooled superannuation trust whereby contributions of members and employers are made in accordance with the Trust Deed. The Trustee of the Trust is Macquarie Investment Management Limited (the "Trustee" and "MIML"). The Trustee's registered office is NO.1 Martin Plaæ, Sydney, NSW The financial report is presented in Australian currency. The Investment Manager is Macquarie Investment Management Limited ("the Investment Manager") During the year, the Trust continued to be managed in accordance with the investment objective and strategy set out in the Trust's offer document and in accordance with the provisions of the Trust Deed. The financial statements were authorised for issue by the directors on 18 October The directors of have the power to amend and reissue the financial report. the Trustee 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 Australia.. This general purpose financial report has been prepared in accordance with the Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, and the Corporations Act 2001 in The financial report is prepared on the basis of fair value measurement of assets and liabilities except where otherwise stated. The statement of financial position is presented on a liquidity basis. Assets and liabilities are presented in decreasing order of liquidity and do not distinguish between current and non current. All balances are expected to be recovered or settled within twelve months, exæpt for investments in financial assets, deferred tax assets and net assets attributable to unitholders. The amount expected to be recovered or settled within twelve months after the end of each reporting period cannot be reliably determined. Compliance with International Financial Reporting Standards The financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. (b) 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, such as investments in unlisted unit 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 accordanæ 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. 7

8 2 Summary of significant accounting policies (continued) (b) Financial Instruments (continued) Loans and reæivables/payables comprise amounts due to or from the Trust. (ii) Recognition/derecognition The Trust recognises financial assets and financial liabilities on the date it becomes party to the contractual agreement liabilities from this date. (trade date) and recognises changes in fair value of the financial assets or financial Investments are derecognised when the right to receive cash flows from the investments has expired or the Trust has transferred substantially all risks and rewards of ownership. (iii) Measurement (a) Financial assets and liabiliies held at fair value through profit or loss Financial assets and liabilities held at fair value through profit and 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 profi and 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 statement of comprehensive income. '" 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 statement of financial position date without any deduction for estimated future selling costs. Financial assets are priæd at current bid priæs, while financial liabilities are priæd at current asking prices. '" Fair value in an inactive market or unquoted market The fair value of financial assets and liabilities that are not traded in an active market is determined using valuation techniques. These include the use of reænt arm's length market transactions, reference to the current fair value of a substantially similar other instrument, discounted cash flow techniques, option pricing models or any other valuation technique that provides a reliable estimate of priæs obtained in actual market transactions. Where discounted cash flow techniques are used, estimated future cash flows are based on management's best estimates and the discount rate used in a market rate at the statement of financial position date applicable for an instrument with similar terms and conditions. For other pricing models, inputs are based on market data at the statement of financial position date. Fair values for unquoted equity investments are estimated, if possible, using applicable pricing/earning ratios for similar listed companies adjusted to reflect the specific circumstances of the issuer. Investments in unlisted trusts are recorded at the redemption value per unit as reported by the managers of such investments. In the absence of quoted values, securities are valued using appropriate valuation techniques as reasonably determined by the Investment Manager, which generally comply with 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. Details on how the fair value of financial instruments is determined are disclosed in note 10(e). (b) Loans and receivables Loan and reæivables 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 statement of financial position date to determine whether there is objective evidence of impairment. If any such indication of impairment exists, an impairment calculation is undertaken and any impairment loss is recognised in the statement of comprehensive income 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. 8

9 Macquarie Divers~ied Private Equity Fund 2 Summary of significant accounting policies (continued) (b) Loans and receivables (continued) 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 write-down is reversed through the statement of comprehensive income. (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 the redemption unit price) at the statement of financial position date if unitholders were able to exercise their right to put their units back into the Trust. Generally, units are nontransferable and non-redeemable, these transactions are only allowed with the appropriate approval. Procedures relating to transfer requests and redemptions are disclosed in the Trust's Product Disclosure Statement. (d) Cash and cash equivalents For the purpose of presentation in the statement of cash flows, cash includes cash on hand and deposits held at call with financial institutions. Cash equivalents include other short term, highly liquid investments with original maturities of three months or less from the date of acquisition that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value and are held for the purpose of meeting short-term commitments rather than for investments or other purposes. Bank overdrafts, if any, are shown separately on the statement of financial position. 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. Ie) Investment income Trust distributions are recognised on an entitlements basis. If) Expenses All expenses are recognised in the statement of comprehensive income on an accruals basis. Ig) Income tax The income tax expense or revenue for the period is the tax payable on the current period's income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements, and to unused tax losses. Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are setted, based on those tax rates which are enacted. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. Deferred tax assets are recognised for deductible temporary differences and unused tax losses to the extent that it is probable that future taxable amounts will be available to utilise those temporary differences and losses. (h) Distributions The Trust may make a.special distribution at the discretion of the Trustee Distributions are recognised in the statement of comprehensive income as finance costs attributed to unitholders. 9

10 2 Summary of significant accounting policies (continued) (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 statement of comprehensive income as finance costs. (j Receivables Receivables may include amounts for trust distributions. Trust distributions are accrued when the right to receive payment is established. Interest is accrued at the reporting date from the time of the last payment in accordance with the policy set out in note 2(e) above. Amounts are generally received within 30 days of being recorded as receivables. Receivables include such items as Reduced Input Tax Credits (RITC). (k) Payables Payables include liabilities and accrued expenses owing by the Trust which are unpaid as at the reporting date. (I) Applications and redemptions Whilst the Trust is a closed-end fund, the Product Disclosure Statement describes certain instances where applications and redemptions are allowed. Applications received for units in the Trust are recorded net of any entry fees payable prior to the issue of units in the Trust. Redemptions from the Trust are recorded gross of any exit fees payable after the cancellation of units redeemed. (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 RITC hence Trustee fees have been recognised in the statement of comprehensive income net of the amount of GST recoverable from the Australian Taxation Ofce (ATO). Accounts payable are inclusive of GST. The net amount of GST recoverable from the ATO is included in receivables in the statement of financial position. Cash flows relating to GST are included in the statement of cash flows 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. Certain financial instruments, for example, unquoted securities are fair valued using valuation techniques. Where valuation techniques (for example, pricing models) are used to determine fair values, they are validated and periodically reviewed by experienced personnel of the Responsible Entity, independent of the area that created them. Models are calibrated by back testing to actual transactions to ensure that outputs are reliable. Models use observable data to the extent practicable. However, inputs such as credit risk (both own and counterparty), volatilities and correlations require management to make estimates. Changes in assumptions about these inputs could affect the reported fair value of financial instruments. For certain other financial instruments the carrying amounts approximate fair value due to the immediate or short term nature of these financial instruments. 10

11 Notes to the financiai statements 2 Summary of significant accounting policies (continued) (0) New accounting standards and interpretations Certain new accounting standards and interpretations have recently been issued or amended but are not yet effective and have not been adopted by the Trust for the annual reporting year ended. The Trustees have not early adopted any of these new or amended standards or interpretations as listed below: (i) AASB 13 Fair Value Measurement and AASB Amendments to Australian Accounting Standards arising from AASB 13 (effective 1 January 2013) AASB 13 establishes a single source of guidance for determining the fair value of assets and liabilities. AASB 13 does not change when an entity is required to use fair value, but rather, provides guidance on how to determine fair value when fair value is required or permitted. Application of this definition may result in different fair values being determined for the relevant assets. AASB 13 also expands the disclosure requirements for all assets or liabilities carried at fair value. The Plan will adopt the new standard from its operative date, which means that it will be applied in the annual reporting period ending 30 June The Trustee has yet to determine the impact (if any) on the changes to the current measurement techniques that may be required as a result of the adoption of the above standard. Whilst at this stage it is not possible to state the impact of the above standard on the future financial statement reporting, it is expected that the new standard will alter the type of information disclosed in the notes to the financial statements. (ii) AASB Amendments to Australian Accounting Standards - Investment Entities (effective from 1 January 2014) AASB provides an exemption to investment entities from consolidation required by AASB 10 Consolidated Financial Statements and requires unconsolidated subsidiaries to be measured at fair value through profit or loss. The amendments also introduce new disclosure requirements for investment entities that have subsidiaries. At this stage the Trustee does not expect the adoption of the above standard will significantly change future financial statement reporting Standards and interpretations that are not expected to have material impact on the Trust have not been included. (p) Rounding of amounts Amounts in the financial report have been rounded off to the nearest thousand dollars, unless otherwise indicated. 11

12 3 Auditor's remuneration During the year the following fees were paid or payable for services provided by the auditor of the Trust: Year ended 30 June 30 June $ $ Audit Services Audit of financial reports 14,033 14,033 13,585 13,585 Audit fees are paid out of the Trustee's own resources. 4 Net loss on financial instruments held at fair value through profit or loss Net loss recognised in relation to financial assets and financial liabilities held at fair value through profit or loss: Year ended 30 June 30 June $'000 $'000 Net loss on financial instruments designated at fair value through profit or loss Net loss on financial instruments held at fair value through profit or loss (196) (196) (1,692) (1,692) 5 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. The Trust is separated into two classes of units (2012: four) and each unit has the same rights attaching to it as all other units of the Trust. Diversified Private Equity Fund 2003 units - Pension 30 June 2013 No. '000 Year ended 30 June 30 June No. '000 $' June 2012 $'000 Opening balanæ Redemptions Decrease in net assets attributable to unitholders Closing balance 209 (209) 307 (262) (45) Diversified Private Equity Fund 2004 units - Pension 30 June 2013 No. '000 Year ended 30 June 30 June No. '000 $' June 2012 $'000 Opening balance Redemptions Decrease in net assets attributable to unitholders Closing balance 427 (427) 552 (461) (91) 12

13 5 Net assets attributable to unitholders (continued) Diversified Private Equity Fund 2003 units - Super Opening balance Redemptions Decrease in net assets attributable to unitholders Closing balance Diversified Private Equity Fund 2004 units - Super Opening balance Redemptions Decrease in net assets attributable to unitholders Closing balance Total for Macquarie Diversified Private Equity Fund Opening balance Redemptions Decrease in net assets attributable to unitholders Closing balance Year ended 30 June 30 June 30 June 30 June No. '000 No. '000 $'000 $'000 2,202 3,327 3,028 4,631 (58) (1,125) (79) (1,542) (194) (61) 2,144 2,202 2,755 3,028 Year ended 30 June 30 June 30 June 30 June No. '000 No. '000 $'000 $' ,431 4,604 6,619 (2) (1,605) (5) (1,922) (515) (93) 3,824 3,826 4,084 4,604 Year ended 30 June 30 June 30 June 30 June No. '000 No. '000 $'000 $'000 6,028 9,394 7, (60) (3,366) (84) (4,187) (709) (290) 5,968 6,028 6,839 7,632 Capital risk management The Trust is a closed-end fund and is not subject to daily applications and redemptions. Generally, units are nontransferable and non-redeemable. Proædures relating iò redemptions or transfer requests are disclosed in the Trust's Product Disclosure Statement. As at, the Trust has called up all capital from its unitholders to meet the capital calls by the underlying investment manager. The Trust has sufficient liquid investments to fund future calls by the underlying investment manager. 13

14 6 Income tax expense 30 June 2013 (a) Income tax expense $' June 2012 $'000 Current tax Deferred tax Income tax (benefit)/expense (148) 2 (146) (b) Numerical reconciliation of income tax expense to prima facie tax payable Net loss before tax (5) (86) Tax at Australian tax rate of 15% Tax effect of amounts which are not (deductible)/taxable in calculating taxable income: Add back tax effect on unrealised losses Non assessable investment income (net of expenses) Prior year over tax provision Income tax (benefit)/expense (1 ) (13) (15) 20 (159) (128) (146) Current and deferred tax assets Current tax asset Movements in current tax asset during the year: Opening balance Tax (received)/paid Credited/(expensed) to the statement of comprehensive income Closing balanæ Deferred tax asset The balance comprises temporary differences attributed to: Tax effect on unrealised losses Tax loss capping Closing balance Movements in deferred tax asset during the year: Opening balance Expensed to the statement of comprehensive income Closing balance 30 June 30 June $'000 $' (72) (95) June 30 June $'000 $' (329) (409) (2) (109) A tax rate of 10% has been applied to net unrealised losses in accordance with the Trust's tax policy. The deferred tax asset has been capped, resulting in an unrecognised deferred tax asset of $328,731 (2012: $409,180) at as management have determined that it is probable that the future tax losses would not be available to be utilised by the Trust. 14

15 8 Cash and cash equivalents 30 June 2013 $' June 2012 $'000 Cash at bank Financial assets held at fair value through profit or loss 30 June 2013 value $'000 Fair 30 June 2012 value $'000 Fair Designated at fair value through profit or loss Unlisted unit trusts Total designated at fair value through profit or loss Total financial assets held at fair value through profit or loss Unlisted unit trusts Units in Australian unlisted money market trusts Units in Australian unlisted private equity trusts Total unlisted unit trusts Total financial assets held at fair value through profit or loss 7,538 10,918 7,538 10,918 7,538 10,918 1,950 5,133 5,588 5,785 7,538 10,918 7,538 10,918 15

16 10 Financial risk management (a) Strategy in using financial instruments Risk is inherent in the Trust's activities but it is managed through a process of ongoing identification, measurement, monitoring and other controls. A risk framework is documented in the Trust's Risk Management Plan and Strategy which is reviewed regularly by the Trustee. The Trust's activities expose it to a variety of financial risks: market risk (including price risk), credit risk and liquidity risk. The Trust's overall risk management program focuses on ensuring compliance with the Trust's governing documents and seeks to maximise the returns derived for the level of risk to which the Trust is exposed. Financial risk management is monitored by the Investment Manager's risk management department under policies approved by the Trustee's senior managers or by the board of directors of the Trustee (the "Board"). (b) Market risk Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: price risk, currency risk and interest rate risk. (i) Price risk The Trust trades in financial instruments by taking positions in unlisted trusts. All securities investments present a risk of loss of capital. The Investment Manager manages this risk through a careful selection of securities and other financial instruments within specified limits. The Trust's overall market positions are monitored on a daily basis by the Investment Manager. Price risk is managed by seeking to ensure that the Trust is invested in accordance with its stated objectives. The Trust's unlisted 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 value of the underlying unit trusts had increased by 10% with all other variables held constant, this would have increased net assets attributable to unitholders by approximately $753,804 (2012: 10% $1,091,796). Conversely, if the value of the underlying trusts had decreased by 10% with all other variables held constant, this would have decreased net assets attributable to unitholders by approximately $753,804 (2012: 10% $1,091,796). (ii) Currency risk The Trust is not exposed to foreign exchange risk as all assets and liabilities are denominated in Australian dollars. (iii) Interest rate risk The majority of the Trust's financial assets and liabilities are non-interest bearing. While the Trust is normally fully invested in underlying trusts, a small cash balance may be maintained at times and interest may be earned. This is unlikely to be material. As a result, the Trust is not subject to significant amounts of risk due to fluctuations in the prevailing levels of market interest rates. 16

17 10 Financial risk management (continued) (c) Credit risk Credit risk arises from cash and cash equivalents and deposits with banks and other financial institutions. None of these assets are impaired nor past due but not impaired. The Trust manages credit risk by managing its exposures to deposit taking institutions and other counterparties. The exposure to credit risk for cash and cash equivalents, deposits with banks and other financial institutions is low as all counterparties have a rating of at least A- (2012: A-) as determined by Standard and Poor's rating agency. The maximum exposure to credit risk at the reporting date is the carrying amount of cash and cash equivalents and other financial assets. In accordance with the Trust's policy, the risk management department of the Investment Manager monitors the credit exposure on a daily basis. The Compliance Committee of the Trustee reviews any identified exceptions to internal risk policies and procedures on a quarterly basis. (d) Liquidity risk Liquidity risk is the risk that the Trust will encounter diffculty in meeting its financial obligations as they fall due. Liquidity risk is mitigated by restricting redemptions from the Trust. In accordance with the Trust's Product Disclosure Statement, the risk management department of the Investment Manager monitors the Trust's liquidity position on a daily basis. The Trust's cash and liquidity policy is to hold suffcient cash balances and other liquid assets to rneet anticipated benefit payments and Trust expenses as they fall due. The Complianæ Committee of the Trustee reviews any identified exceptions to internal risk policies and proædures on a quarterly basis. Redeemable units are redeemed at the request of unitholders subject to the Trust's offer document and Trust Constitution (as applicable). Other liabiliies are payable within 90 days (e) Fair Value Hierarchy of Investments The Trust classify fair value measurements using a fair value hierarchy that reflects the subjectivity of the inputs used in making the measurements. The fair value hierarchy has the following levels: - Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1 ). - Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as priæs) or indirectly (that is, derived from prices) (Level 2). - Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3). Fair value measurements are categorised on the basis of the lowest level input that is significant to the fair value measurement in its entirety..a fair value measurement using observable inputs that require significant adjustment based on unobservable inputs would be a Level 3 measurement. Assessing the significance of a particular input to the fair value measurement in its entirety requires judgement, considering factors specific to the asset or liability. The determination of what constitutes 'observable' requires significant judgement by the Trust. The Trust considers observable data to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market. 17

18 10 Financial risk management (continued) (e) Fair Value Hierarchy of Investments (continued) The table below sets out the Trust's financial assets by class categorised according to the fair value hierarchy at 30 June 2013 and 30 June Financial assets Level 1 Level 2 Level 3 Total balance $'000 $'000 $'000 $'000 Financial assets designated at fair value through profi or loss at inception: Unlisted unit trusts 1,950 5,588 7,538 Total financial assets 1,950 5,588 7,538 Financial assets Level 1 Level 2 Level 3 Total balance 30 June 2012 $'000 $'000 $'000 $'000 Financial assets designated at fair value through profi or loss at inception: Unlisted unit trusts 5,133 5,785 10,918 Total financial assets 5,133 5,785 10,918 During the year there were no transfers between Level 1 and Level 2 (2012: Nil). Financial instruments that trade in markets that are not considered to be active but are valued based on quoted market prices, dealer quotations or alternative pricing sources supported by observable inputs are classified within level 2. These include unlisted unit trusts values at the redemption value per unit, as reported by the managers of such trusts. Investments classified within Level 3 have significant observable inputs as they trade frequently. These include investments into unlisted private equity unit trusts. The following table shows a reconciliation of the movement in the fair value of financial instruments categorised within Level 3 between the beginning and the end of the year Unlisted unit trusts 30 June 30June $'000 $'000 Opening balance -1 July 2012 Total losses Sales Closing balance - 5,784 7,805 (196) (857) (1,164) 5,588 5,784 During the year ended there were no transfers into or out of Level 3 (2012: nil). 18

19 Macquarie Diversified Private Equity Func 11 Related part tra nsactions (a) Trustee The Trustee of Macquarie Diversified Private Equity Fund is Macquarie Investment Management Limited (MIML), a wholly owned subsidiary of Macquarie Group Limited. (b) Key management personnel The following persons held offce as directors of MI ML during the year or since the end of the year and up to the date of this report: B N Terry T Graham (resigned 30/ ) R Cartright (resigned 30/ ) C Vignes (resigned 30/ ) M Aubrey (resigned 30/06/2013) J Edstein (appointed 01107/2013) J Skender (appointed 01/ ) I Miller (appointed 01107/2013) No amount is paid by the Trust directly to the directors of the Trustee. Consequently no compensation as defined in AASB 124 "Related Party Disclosures" is paid by the Trust to the directors as key management personnel. (c) Key management personnel unitholdings At no key management personnel held units in the Trust (2012: Nil). (d) Key management personnel loan disclosures The Trust has not made, guaranteed or secured, directly or indirectly, any loans to the key management personnel or their personally related entities at any time during the reporting period (2012: Nil). (e) Trustee's fees and other transactions The Trustee's remuneration has been calculated daily at the rate of 0.97% (inclusive of GST. net of RITe available to the Trust) per annum (2012: 0.97%), of the net asset value of the Trust and is paid quarterly out of the Trust. For the year ended, all expenses in connection with the preparation of accounting records and the maintenance of the unit register have been fully borne by the Trustee. 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 Trustee were as follows: Year ended 30 June 30 June $ $ Trustee fees paid for the year by the Trust to the Trustee 70, Aggregate amounts payable to the Trustee at the reporting date 19,632 29,545 19

20 Macquarie Diversified Private Equity Func Notes to Ihe financial statements 11 Related part transactions (continued) (f) Related party schemes' unit holdings Parties related to the Trust (including MIML, its affliates and other schemes managed by MIML), held units in the Trust as follows: Number of Number of Number of units held units held units Number of Distribution opening closing Interest acquired units disposed declared by Unitholders (Units) (Units) held (%) (Units) (Units) the Trust ($) Macquarie Wrap Account 1,646, , , , June 2012 Number of Number of Number of units held units held units Number of Distribution opening closing Interest acquired units disposed declared by Unitholders (Units) (Units) held (%) (Units) (Units) the Trust ($) Macquarie Wrap Account 1,919,624 1,646, ,696 There is a $130,726 distribution payable to the above account as at (2012: Nil). There are no redemptions payable to the above account as at (2012: Nil). (g) Investments The Trust held investments in the following schemes which are also managed by MIML or its related parties: Fair value of investment i nterest held Distributions received/receivable $ $ % % Macquarie Treasury Fund 1,949,744 5,133, Macquarie Alternative Investment Trust 3 5,588,296 5,784, ,538,040 10,917, $ $ 69, , ,924 1,488, ,183 1,722,670 No distributions receivable from the underlying schemes remain unpaid as at (2012: Nil). There are no amounts due from the underlying schemes in respect of units redeemed as at (2012: Nil). (h) Other transactions within the Scheme Apart from those details disclosed in this note, no directors of the Trustee have 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. The bank accounts for the Trust are held with Macquarie Bank Limited. Fees and expenses are negotiated on an arm's length basis for all transactions with related parties. Bond Street Custodians Limited, a wholly owned subsidiary of Macquarie Group Limited, is the custodian of the Trust. 20

21 Macquarie Diversified Private Equity Fune 12 Reconcilation of profit/(ioss) to net cash inflow from operating activities (a) Reconciliation of profit/(ioss) to net cash inflow/(outflow) from operating activities Profit/(Ioss) for the year Decrease in net assets attributable to unitholders Distributions to unitholders Net losses on financial instruments held at fair value through profi 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 profit or loss Distribution reinvested Net change in other assets Net change in accounts payable and accrued liabilities Net cash inflow from operating activities 30 June 30 June $'000 $'000 (709) (290) ,692 3,518 1,111 (267) (1,899) (69) (252) (70) 580 (10) 3, (b) Non-cash financing and investing activities As described in note 2(i), income not distributed is included in net assets attributable to unitholders. The change in this amount each period (as reported in (a) above) represents a non-cash financing cost as it is not settled in cash until such time as it becomes distributable. 13 Events occurring after year end No significant events have occurred since year end which would impact on the financial position of the Trust disclosed in the statement of financial position as at or on the results and cash flows of the Trust for the year ended on that date, 14 Contingent assets and liabilities As at and 30 June 2012 the Trust had outstanding commitments in respect of partly paid units, Investment commitments 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 As at the Trust had uncalled capital commitments of $989,198 (2012: 989,198) on its underlying investments. The Trust has suffcient liquid investments to fund future calls by the underlying investments managers, as disclosed in note 5. There are no other outstanding contingent assets, contingent liabilities or commitments as at and 30 June

22 Trustee's statement Trustee's statement In the opinion of the Trustee: (a) the financial statements and notes set out on pages 2 to 21 are drawn up so as to present fairly the financial position of Macquarie Diversified Private Equity Fund as at, the results of its operations, changes in equity and its cash flows for the financial year ended in accordance with Australian Accounting Standards and other mandatory professional reporting requirements. (b) the financial statements are prepared in accordance with the requirements of the Trust Deed dated 5 July 2002, as amended, and the Superannuation Industry (Supervision) Act 1993 and Regulations, and The directors declare that the notes to the financial statements include an explicit and unreserved statement of compliance with the International Financial Reporting Standards (see note 2(a)). This statement is made in accordance with a resolution of the directors of the Trustee company, Macquarie Investment Management Limited. B N Terry Director i Miller Director Sydney, 18 October 2013 Sydney, 18 October

23 EY BuildintJ a better working world Ernst & Young 680 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Tel: Fax: ey.com/au REPORT BY THE INDEPENDENT APPROVED AUDITOR TO THE TRUSTEE AND MEMBERS MACQUARIE DIVERSIFIED PRIVATE EQUITY FUND - ABN Financial statements I have audited the financial statements of Macquarie Diversified Private Equity Fund for the 30 June 2013 comprising the statement of financial position, statement of comprehensive income, statement of changes in equity, statement of cash flows, summary of significant accounting policies, other explanatory notes and the Trustee statement. Trustee's Responsibilty for the Financial Statements The superannuation entity's trustee is responsible for the preparation and fair presentation of the financial statements in accordance with Australian Accounting Standards and the requirements of the SiS Act and the Superannuation Industry (Supervision) Regulations 1994 (SiS Regulations). The trustee is also responsible for such internal control as the trustee determines is necessary to enable the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility My responsibility is to express an opinion on the financial statements based on my audit. I have conducted an independent audit of the financial statements in order to express an opinion on them to the trustee and members of Macquarie Diversified Private Equity Fund. My audit has been conducted in accordance with Australian Auditing Standards. These Auditing Standards require that I comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance as to whether the financial statements are free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to the trustee's preparation and fair presentation of the financial statements 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 trustee's internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the trustee, as well as evaluating the overall presentation of the financial statements. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. A r..embec firm of Errs, & Young Global Limited Liability lirnited by a scheme approved tinder Professional Standards Legislation

24 EY Page 2 Building a better working world Auditor's Opinion In my opinion, the financial statements present fairly, in all material respects, in accordance with Australian Accounting Standards, the financial position of Macquarie Diversified Private Equity Fund as at and the results of its operations and its cash flows for the. C"V,~) 'ì y Ernst & Young i 1\ Graeme McKenzie Partner Sydney 18 October 2013 A meinber ~rm of Errs! & Young Global Liiiited Liability limited by 8. scheme appravad under Proressional Standards Legislation