MAP POOLED SUPERANNUATION TRUST ABN: RSE: R

Transcription

1 MAP POOLED SUPERANNUATION TRUST ABN: RSE: R Financial Statements For the Year Ended 30 June 2017

2 Financial Statements For the year ended 30 June 2017 Contents Page Statement of Financial Position Income statement Statements of changes in Equity Statement of cash flows Reporting entity 6 2. Basis of preparation 6 3. Significant accounting policies 8 4. Financial assets held at fair value through profit or loss Net gains/(losses) on financial instruments held at fair value through profit or loss Other receivables Other payables General operating expense Auditors remuneration Income tax expense Current tax assets and liabilities Deferred tax assets and liabilities Unitholder funds Reserves Notes to the statement of cash flows Related parties Additional financial instruments disclosure Events subsequent to reporting date Commitments and Contingencies 20 Trustee s declaration to the members of MAP Pooled Superannuation Trust 21 1

3 Statement of Financial Position As at 30 June 2017 Restated ASSETS Cash and cash equivalents Units in unlisted unit trusts Note , ,235 79, ,099 Receivables Interest receivable Distributions and dividends receivable Receivable unsettled trades Other receivables ,278 3,453 2, Other assets Current tax asset Deferred tax assets Total assets , , ,136 LIABILITIES Accounts payable and accrued expenses Current tax liabilities Deferred tax liabilities , Total liabilities (excluding net assets attributable to investors) 1,150 1,135 NET ASSETS ATTRIBUTABLE TO INVESTORS 392, ,001 Represented by: Allocated to Investors 384, ,714 Reserves 14 8, ,428 3, ,001 The statement of financial position is to be read in conjunction with the notes to the financial statements set out on pages 6 to 20. 2

4 Income statement For the year ended 30 June 2017 Restated Note 2017 Investment revenue Interest 1,420 1,867 Dividends and distributions from investments 12,205 10,569 Changes in net fair value of financial assets 5 16,534 (4,634) 30,159 7,802 Investment manager expense on investments (120) (244) Net investment revenue 30,039 7,558 Other revenue Sundry income Total Revenue 30,412 7,764 Less expenses General administration expenses Total expenses Surplus as a result of operations before income tax 30,294 7,681 Income tax expense / (benefit) 10 (168) 1,704 Surplus as a result of operations after income tax 30,462 5,977 The income statement is to be read in conjunction with the notes to the financial statements set out on pages 6 to 20. 3

5 Statements of changes in Equity For the year ended 30 June 2017 Balance allocated to investors at the beginning of the financial year Correction of error (net of tax) Restated balance at the beginning of the financial year 2 Restated , ,006 (43,920) (26,512) 370, ,494 Surplus as a result of operations after income tax Transfers from/(to) the reserves Surplus available to allocate to investors 30,462 (5,116) 25,346 5, ,279 Applications Redemptions 65,178 (77,213) 70,097 (74,156) Total allocated to investors at the end of the financial year 384, ,714 Total Reserves Total assets attributable to investors 14 8,403 3, , ,001 The statement of changes in equity is to be read in conjunction with the notes to the financial statements set out on pages 6 to 20. 4

6 Statement of cash flows For the year ended 30 June 2017 Restated Note 2017 Cash flows from operating activities Interest received Dividends and distributions received Other revenue received Insurance premiums paid Cash payments in the course of operations Adviser Service Fees Paid Income taxes refund / (paid) Net cash outflows from operating activities 15 1,578 1, (250) (2,180) 654 2, (242) (26) (3,434) (721) Cash flows from investing activities Proceeds from sale of investments Payments for purchases of investments Net cash outflows from investing activities 56, ,715 (55,114) (146,657) 1, Cash flows from financing activities Applications received 65,178 70,097 Redemptions paid Net cash flows from financing activities (77,213) (12,035) (74,156) (4,059) Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Cash and cash equivalents at the end of the financial year 15 (9,973) 79,996 70,023 (4,722) 84,718 79,996 The statement of cash flows is to be read in conjunction with the notes to the financial statements set out on pages 6 to 20. 5

7 1. Reporting entity These financial statements cover MAP Pooled Superannuation Trust (ABN ) ( the Trust ) as an individual entity. The Trust provides an opportunity for Australian superannuation funds to invest in a diversified portfolio of investments. It was constituted by a Trust Deed dated 7 February 1992, as amended. In accordance with amendments to the Superannuation Industry (Supervision) Act 1993 the Trust is registered with the Australian Prudential Regulation Authority ( APRA ) as a Registrable Superannuation Entity ( RSE ) R The Trustee of the Trust during the reporting period from 10 May 2017 was Diversa Trustees Limited (ABN ) (RSE No L ). During the period 1 July to 9 May 2017 the Trustee of the Trust was MAP Funds Management Ltd (ABN ) (RSE No L ). The address of the Trust s registered office is Level 20, 357 Collins Street, Melbourne. 2. (a) Basis of preparation Statement of compliance The Trust is a forprofit entity for the purposes of preparing the financial statements. The financial statements are general purpose financial statements which have been prepared in accordance with Australian Accounting Standards, other applicable Australian Accounting Standards, the provisions of the Trust Deed and the requirements of the Superannuation Industry (Supervision) Act 1993 and Regulations. International Financial Reporting Standards ( IFRS ) form the basis of Australian Accounting Standards adopted by the Australian Accounting Standards Board. The financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. The financial statements were authorised for issue by the trustee on the day of (b) (c) Functional and presentation currency The financial report is presented in Australian dollars, which is the functional currency of the Trust rounded to the nearest thousand dollars except where otherwise noted. Restatement of prior year financials The comparative financial statements for the MAP Pooled Superannuation Trust for the year ended 30 June have been restated following a review of the accounting treatment of some assets based on the actual rights and obligations associated with them. In the prior financial statements, the assets erroneously reported as part of the MAP Pooled Superannuation Trust assets that are legally held by the MAP Superannuation Plan. Where necessary, comparative figures have been reclassified and represented for consistency with current year disclosures. These restatements have impacted the statement of financial position in the table below. Original Adjustment Restated Cash and cash equivalents 91,038 (11,042) 79,996 Shares and units in listed companies/ trusts 2,720 (2,720) Units in unlisted unit trusts 320,477 (29,378) 291,099 Total assets 418,275 (43,139) 375,136 Current Tax Liability Net Assets Attributable To Investors 417,921 (43,920) 374,001 The income statement is affected by the changes with a reduction in the income reported associated with the assets now excluded from the statement of financial position. Interest Dividends and distributions from investments Changes in net fair value of financial assets Original Adjustment Restated 1,994 11,573 (4,782) (127) (1,004) 148 1,867 10,569 (4,634) Net Investment revenue 8,541 (983) 7,558 6

8 2. Basis of preparation (continued) The statement of changes in equity is affected by the changes with a reduction in the income reported associated with the assets now excluded from the statement of financial position. Additionally the applications and redemptions have been revised to reflection the exclusion of the assets. The adjustment to the opening balance reflects the impact on the 30 June 2015 statement of financial position. Original Adjustment Restated Total allocated to investors at the beginning of the financial year 395,006 (26,512) 368,494 Surplus available to allocate to investors 5, ,279 Applications less redemptions 13,764 (17,823) (4,059) Total allocated to investors at the end of the financial year 414,066 (43,351) 370,714 Total Reserves Total assets attributable to investors 3,287 3, ,353 (43,351) 374,001 The statement of changes in cash flow is affected by the changes with a reduction in the income reported associated with the assets now excluded from the statement of financial position. Original Adjustment Restated Cash flows from operating activities Interest received 2,313 (127) 2,186 Dividends and distributions received 1,570 (1,004) 566 Other revenue received Insurance premiums paid Cash payments in the course of operations (242) (242) Adviser Service Fees Paid (26) (26) Income taxes refund / (paid) (4,215) 781 (3,434) Net cash outflows from operating (371) (350) (721) Cash flows from investing activities Payment for purchases of investments net of sales (12,548) 12, Net cash outflows from investing (12,548) 12, Cash flows from financing activities Applications less redemptions Net cash flows from financing activities 13,763 13,763 (17,822) (17,822) (4,059) (4,059) Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Cash and cash equivalents at the end of the 90,194 91,038 (5,476) (11,041) 84,718 79,996 (d) Use of estimates and judgements The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of asset and liabilities, income and expenses. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and any future period affected. 7

9 3. (a) Significant accounting policies The accounting policies set out below have been consistently applied to all periods presented in these financial statements. Financial Instruments Classification The Trust s investments are classified 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. These are investments in exchange traded debt and equity instruments, unlisted trusts and commercial paper. Financial assets designated at fair value through profit or loss at inception are those that are managed and their performance evaluated on a fair value basis in accordance with the Trust s documented investment strategy. The Trust s policy is for the responsible entity to evaluate the information about these financial instruments on a fair value basis together with other related financial information. 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 the fair value of the financial assets or financial liabilities from this date. Investments are derecognised when the right to receive cash flows from the investments have expired or have been transferred and the Trust has transferred substantially all of the risks and rewards of ownership. Measurement Financial assets and liabilities held at fair value through profit or loss At initial recognition, the Trust measures a financial asset at its fair value. Transaction costs of financial assets carried at fair value through profit or loss are expensed in the statement of comprehensive income. Subsequent to initial recognition, all financial assets and financial liabilities at fair value through profit or loss are measured at fair value. Gains and losses arising from changes in the fair value of the financial assets or financial liabilities at fair value through profit or loss category are presented in the statement of comprehensive income within net gains/(losses) on financial instruments held at fair value through profit or loss in the period in which they arise. This also includes dividend expense on short sales of securities, which have been classified at fair value through profit or loss. Offsetting financial instruments Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. (b) Unitholders funds The Trust issues redeemable units, which are redeemable at the holder s option and are classified as equity in accordance with AASB 132 Financial Instruments: Presentation. Should the terms or conditions of the redeemable units change such that they no longer comply with the criteria for classification as equity in AASB 132, the redeemable units would be reclassified to a financial liability from the date the instrument ceases to meet the criteria. The financial liability would be measured at the instrument s fair value at the date of reclassification. Any difference between the carrying amount of the equity instrument and the fair value of the liability at the date of reclassification would be recognised in equity. Redeemable units can be sold back to the Trust at any time for cash equal to a proportionate share of the Trust s net asset value. The consideration received or paid for units is based on the value of the Trust s net assets value per redeemable unit at the date of the transaction. In accordance with the provisions of the Trust Deed, investment positions are valued based on the last traded market price, net of transaction costs, for the purpose of determining the Trust s net asset value for unit pricing purposes. The Trust s net asset value per unit is calculated by dividing the Trust s net assets by the total number of outstanding units. (c) (d) Cash and cash equivalents Cash comprises cash on hand and cash at bank. Cash equivalents are short term, highly liquid investments that are readily convertible to known cash amounts which are subject to an insignificant risk of changes in value. Receivables Receivable amounts are generally received within 60 days of being recorded as receivable. 8

10 3. (e) (f) Significant accounting policies (continued) Payables Other payables are payable on demand or over short time frames of less than 60 days. Revenue recognition Interest Interest income is recognised on the statement of comprehensive income as it accrues, taking into account the effective yield on the financial asset. Interest income not received at reporting date is reflected on the balance sheet as a receivable. Distributions Distributions from managed investment schemes are recognised on the date the unit value is quoted exdistribution and if not received at reporting date, are reflected on the balance sheet as a receivable. Dividends Income from dividends is recognised on the date the shares are quoted exdividend and if not received at reporting date, are reflected on the balance sheet as a receivable. Rebates Rebate revenue is recognised when the Trust has established that it has a right to receive the rebate. (g) Income tax Income tax expense or benefit accrued for the year comprises of current and deferred tax. Current tax Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted on reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable). Deferred tax Deferred tax is provided using the balance sheet method, providing for temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation of the asset or settlement of the liability, using tax rates enacted or substantively enacted at reporting date. The measure of deferred tax reflects the tax consequences that would follow the manner in which the Trust expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. A deferred tax asset is recognised only to the extent that is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Further, the Trust applies a deferred tax asset cap in line with its current deferred tax asset capping policy, whereby any deferred tax asset is capped at 3% of the Trust s net assets. (h) Goods and services tax Revenue, expenses and assets are recognised net of amounts of goods and services tax (GST) recoverable from the Australian Taxation Office (ATO) as a reduced input tax credit (RITC). In circumstances where GST is not recoverable, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability on the balance sheet. Cash flows are included on the statement of cash flows on a gross basis. The GST component of cash flows arising from investing and financing activities, which are recoverable from, or payable to the ATO, is classified as operating cash flows. 9

11 3. (i) Significant accounting policies (continued) New standards and interpretations not yet adopted A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 30 June 2017, and have not been applied in preparing these financial statements. Those of which may be relevant to the Trust are set out below. The Trust does not plan to adopt these standards early. AASB 9 Financial Instruments, (effective 1 January 2018) AASB 9 addresses classification, measurement and derecognition of financial assets and financial liabilities. This standard applies to annual reporting periods beginning on or after 1 January The adoption of this standard is expected to have no impact on the Trust s accounting for financial instruments as movements in the fair value of investments and derivatives will continue to be recognised on the statement of comprehensive income for periods in which they occur. AASB 15 Revenue from Contracts with Customers, (effective 1 January 2018) The AASB has issued a new standard for the recognition of revenue. This standard applies to annual reporting periods beginning on or after 1 January It will replace AASB 118 which covers contracts for goods and services and AASB 111 which covers construction contracts. The new standard is based on the principle that revenue is recognised when control of a good or service transfers to a customer so the notion of control replaces the existing notion of risks and rewards. The Trust s main sources of income are interest, dividends, distributions and gains on financial instruments held at fair value. All of these are outside the scope of the new revenue standard. As consequence, the directors do not expect the adoption of the new revenue recognition rules to have a significant impact on the Trust s accounting policies or the amounts recognised in the financial statements. 4. Financial assets held at fair value through profit or loss Restated 2017 Designated at fair value through profit or loss Unlisted investment schemes 314, ,100 Total 314, ,100 An overview of the Trust s investment management framework and investment risk exposure is included in Note 17 to the financial statements. 5. Net gains/(losses) on financial instruments held at fair value through profit or loss Financial assets Net gain/(loss) on financial assets designated at fair value through profit or loss Total ,534 (4,634) 16,534 (4,634) 10

12 6. Other receivables Investment Income receivable Other receivables ,427 3, ,773 4,040 Due to the short term nature of these receivables, their carrying value is assumed to approximate their net market value. The maximum exposure to credit risk is the net market value of receivables. Information regarding credit risk exposure is set out in Note Other payables 2017 MAP Superannuation Plan 824 Administration fees payable 69 (88) Audit fees payable 77 Other fees payable , Due to the short term nature of these payables, their carrying value is assumed to approximate their net market value. Information regarding interest rate, foreign exchange and liquidity risk exposure is set out in Note General operating expense Other general operating expenses Auditors remuneration Fees for services rendered to the Trust by the auditor are as follows: Audit services 2017 Consolidated Audit of the financial report PricewaterhouseCoopers (: BDO) Other regulatory services (2017: Grant Thornton; : BDO) 3 20 Taxation assistance (BDO) Income tax expense Recognised in the statement of comprehensive income 2017 Restated Current tax expense Current year (56) 2,483 (Over)/under provision from prior year (1,638) Deferred tax expense (Over)/under provision from prior year write back of DTA 841 Movement in other temporary differences (112) 18 Total income tax expense / (benefit) (168) 1,704 11

13 10. Income tax expense (continued) Reconciliation between tax expenses to prima face tax payable Restated 2017 Operating profit for the year before income tax expense (benefit) 30,294 7,681 Tax at the complying superannuation fund tax rate of 15% (: 15%) Adjustments for Capital gains tax on unrealised gains Capital gains tax on realised gains Nonassessable income Tax benefit of unbooked capital losses utilised Over provision from prior period Imputation and foreign tax credits S transfer from unitholders 4,544 1,152 2, (3,490) 34 (2,735) (319) (797) (1,222) (946) 2,580 Income tax expense / (benefit) (168) 1, Current tax assets and liabilities The current tax liability for the Trust of $0 (: $783,000) represents the amount of income taxes payable in respect of current and prior financial periods. The current tax asset for the Trust of $1,435,000 ($: $0) represents the amount of income tax refund in respect of current and prior financial periods after calculating the amount of income tax payable less any payments made to the ATO. 12. Deferred tax assets and liabilities Deferred tax assets and liabilities are attributable to the following: 2017 Unrealised gains in investments Realised gains in investments Sundry creditors Net deferred tax asset/ (liabilities) Assets Liabilities Net (2,279) (2,279) 2,735 (456) 2, (22) 112 2,869 (2,757) 112 Unrealised gains in investments (995) (995) Realised gains in investments Sundry creditors 28 (46) (18) Net deferred tax asset/ (liabilities) 1,023 (1,041) (18) 13. Unitholder funds Movements in the number of units and unitholder funds during the year were as follows: Change in the year in dollars held 2017 Opening balance 370, ,494 Applications 65,178 69,528 Redemptions (77,213) (74,156) Transfer to reserves (5,116) (681) Net profit 30,462 7, , ,714 12

14 14. (a) Reserves Operational risk reserve Under APRA Prudential Standard SPS 114: Operational Risk Financial Requirement ( ORFR ), the Trustee is required to establish and maintain an operational risk reserve, typically at an amount of at least 0.10% of funds under management (FUM). The operational risk reserve is operated in accordance with the Trustee s capital risk management framework as disclosed in Note 17(c) to the financial statements. The operational risk reserve may be used in certain circumstances to address operational risk events or claims against the Trust arising from an operational risk event. Reserve balance at the beginning of the reporting period Plus: Transfers into reserve Less: Transfers out of reserve Reserve balance at the end of the reporting period , (223) (756) (b) Unallocated reserve The Unallocated reserve has been established for the purpose of meeting the Trust's operating costs 2017 Reserve balance at the beginning of the reporting period 2,743 2,268 Plus: Transfers into reserve 5, Less: Transfers out of reserve Reserve balance at the end of the reporting period 8,082 2, Notes to the statement of cash flows For the purposes of the statements of cash flows, cash includes cash at bank in operating and investment accounts. Cash as at the end of the financial year as shown in the statements of cash flows is reconciled to the related items in the balance sheet as follows: (a) Reconciliation of cash Cash at Bank Investments Cash ,201 51,822 70,023 Restated 24,924 55,072 79,996 (b) Reconciliation of cash flows from operating activities Profit/(loss) for the year Add/(less): Distributions and dividends reinvested Movement in net market value/fair value of investments Net cash provided by / (used in) operating activities before change in assets and liabilities Change in assets and liabilities: Decrease / (increase) in receivables Increase / (decrease) in sundry creditors and accruals (Increase)/ decrease in current tax assets (Increase) in deferred tax balances (Decrease) / increase in current tax liabilities Restated ,462 (9,182) (16,534) (1,733) (11,205) (1,435) Net cash provided by/(used in) operating activities 654 (721) 7,529 4,782 4,746 1, (11) 245 (130) 859 (783) (3,158) 13

15 16. (a) Related parties Trustee and key management personnel The trustee of the Trust is Diversa Trustees Limited (RSE No L ). Key management personnel include persons who were directors of the Trustee at any time during the reporting period. The directors of Diversa Trustees Limited are as follows: Directors Mr Vincent Plant (Chair) Ms Karen Gibson 04 May 2017 Mr Garry Wayling 04 May 2017 Mr Murray Jones 01 September 2014 Mr Vincent Parrott 01 September 2014 Mr Mark Cerché (Chair) 01 September May 2017 Mr Luke Barrett 23 June 04 May 2017 Mr Andrew de Vries 01 September January 2017 None of the directors nor the Trustee are or were unitholders of the Trust. Ms Karen Gibson resigned effective 20 December Appointed 04 May 2017 Resigned Remuneration of directors of the Trustee There have been no transactions between the Trustee and the Trust other than trustee fees disclosed in the statement of comprehensive income. The compensation received or due and receivable by the Trustee is included in the Management Fees outlined in Note 16(b) and not separately identifiable as trustee fees. The directors of the Trustee do not receive remuneration directly from the Trust. (b) Other Related party transactions Select Investment Partners Ltd is a wholly owned subsidiary of OneVue Holdings Limited and provides investment management services to the Trust Investment management fees paid or payable to: Select Investment Partners Ltd The Trust is constituted under the MAP Master Superannuation Plan Trust Deed which also constitutes the MAP Superannuation Plan. As 30 June 2017 the MAP Superannuation Plan had invested $380 million (: $366 million) in the MAP Pooled Superannuation Trust. The Administrator of MAP Pooled Superannuation Trust is OneVue Super Services, a related party of Diversa Trustees Limited. The Administrator earns fees for providing services which are payable by out of the management fees earned by the Trustee paid by the MAP Superannuation Plan. 14

16 17. (a) Additional financial instruments disclosure Financial Instruments management The investments of the Trust (other than cash held for meeting daily administrative and benefit expenses), are managed on behalf of the Trustee in accordance with the investment strategy to achieve the Trust s investment objectives. The Trustee has engaged an asset consultant to monitor and provide regular reports on the Trust s investments to the Trustee. The Trustee may seek information from the trustee and/or manager of each collective investment (and also may seek independent advice from other qualified persons) so as to determine the nature and extent of any risks, and the expected returns, associated with each investment prior to determining its suitability as an investment for the Trust. JP Morgan acts as a custodian on behalf of the Trustee and as such provides services including physical custody and safekeeping of assets, settlement of trades, collection of dividends and accounting for investment transactions. The Trust s financial assets and liabilities adopted on the balance sheet are carried at their net market value, which directors believe approximate their fair value. (b) Significant accounting policies Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which revenues and expenses are recognised, in respect of each class of financial asset and financial liability are disclosed in Note 3 to the financial statements. (c) Capital Risk management The Trustee has established an operational risk reserve ( ORR ) in response to the operational risk financial requirement introduced into the Superannuation Industry (Supervision) Act 1993 from 1 July The reserve is operated in accordance with the Operational Risk Financial Requirement Strategy. The purpose is to provide funding for incidents where losses may arise from an operational risk event relating to the Trust. The level of reserve is determined by the Trustee based on an assessment of the risks faced by the Trust. The ORR balance at the end of the reporting period was $321,000 (: $544,000). (d) Financial risk management objectives The Trust is exposed to a variety of financial risks as a result of its activities. These risks include market risk (including currency risk, cash flow interest rate risk, fair value interest rate risk and price risk), credit risk and liquidity risk. The fund s risk management and investment policies, approved by the Trustee, seek to minimise the potential adverse effects of these risks on the Trust s financial performance. These policies may include the use of certain financial derivative instruments. It is ultimately the responsibility of the Trustee to ensure that there is an effective risk management control framework in place. Consistent with regulatory requirements the Trustee has the function of overseeing the establishment and maintenance of riskbased systems and controls for the fund. The Trustee has developed, implemented and maintains a Risk Management Framework ( RMF ). The RMF identifies the Trustee s policies and procedures, processes and controls that comprise its risk management and control systems. These systems address all material risks, financial and nonfinancial, likely to be faced by the Trust. Annually, the Trustee is required to certify to APRA whether adequate strategies have been put in place to monitor those risks, that the Trustee has systems in place to ensure compliance with legislative and prudential requirements and that the Trustee has satisfied itself as to the compliance with the RMF. (e) Investment risk The Trust s assets principally consist of financial instruments which comprise of cash, fixed income assets, listed shares, exchange traded funds, pooled superannuation trusts, unlisted shares and managed investment schemes. The Trustee has determined that this type of investment is appropriate for the Trust and is in accordance with the Trust s investment strategy. The Trust s investment activities expose it to the following risks from its use of financial instruments: market risk credit risk liquidity risk 15

17 17. (e) Additional financial instruments disclosure (continued) Investment risk (continued) Market risk Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return on risk. To mitigate market risk, the Trust undertakes due diligence prior to the approval of fund managers to ensure they have appropriate expertise and skill for monitoring of the market conditions and benchmark analysis. Further the Trust s asset consultant provides additional expert advice as required. Currency risk Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Trust is open to currency risk through its exposure to international investments. To mitigate currency risk fund managers may use derivatives to manage currency exposure. Derivatives are not used for speculative purposes. Sensitivity analysis currency risk The Trust's total net exposure to fluctuations in foreign currency exchange rates at the balance sheet date was as follows: Change for the year in net assets available to pay benefits Net assets available to pay benefits as a result of change 10% 10% $ $ Carrying Amount 30 June 2017 Decrease increase Decrease Increase Net exposure to foreign currency 128,617 (12,862) 12, , , ,617 (12,862) 12, , , June Net exposure to foreign currency 133,232 (13,323) 13, , , ,232 (13,323) 13, , ,555 A 10% strengthening/weakening of the Australian dollar against the unhedged currency at 30 June would have increased/ (decreased) the operating profit/net assets attributable to unitholders as shown above, with all other variables held constant. Interest rate risk Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The majority of the Trust s financial instruments are noninterest bearing with only cash and fixed interest securities being subjected to interest rate risk. The Trust s exposure to interest rate risk is set out below. 16

18 17. (e) Additional financial instruments disclosure (continued) Investment risk (continued) Consolidated 30 June 2017 Cash & Cash Equivalents Fixed Interest Securities Carrying Amount $,000 70,023 82,500 Change for the year in net assets available to pay benefits increase Net assets available to pay benefits as a result of change 1% +1% $ $ Decrease (700) (825) Decrease 69,323 81,675 Increase 70,723 83, June Cash & Cash Equivalents Fixed Interest Securities 91,038 63,174 (910) (632) ,128 62,542 91,948 63,806 Interest bearing instruments Cash & Cash Equivalents Fixed Interest Securities ,023 91,038 82,500 63, , ,212 An increase/(decrease) of 1% in interest rates at reporting date would have increased/(decreased) the change for the year in net assets attributable to unitholders by the amounts shown above, with all other variables held constant. Other market price risk Other 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 (other than those arising from interest rate risk or currency risk), whether those changes are caused by factors specific to the individual financial instrument or its issuer, or factors affecting all similar financial instruments traded in the market. As all of the Trust s financial instruments are carried at fair value through profit or loss with changes recognised on the statement of comprehensive income, all changes in market conditions will directly affect changes in net market values. Investments of the Trust (other than cash held for operational purposes) comprise fixed income, listed shares, exchange traded funds, pooled superannuation trusts, unlisted shares and managed investment schemes. The Trust s exposure to other market price risk is therefore limited to market price movement in the asset classes of these investments. Following an analysis of historical data over the past 20 years and expected market movement the Trustee considers the following movements in other market price risk reasonably possible for the reporting period. 15% 15% $ $ Carrying Amount 30 June 2017 Decrease increase Decrease Increase Australian equity 85,769 (12,865) 12,865 72,904 98,635 Property Infrastructure Other 30 June Australian equity 68,228 (10,234) 10,234 57,994 78,462 International equity 115,145 (17,272) 17,272 97, ,417 Infrastructure 15, ,099 (2,289) (47,186) 47,186 (2,129) 2,129 (9,810) 2,289 9,810 (43,665) 43,665 57,516 12,064 16,322 An increase/(decrease) by the average return at reporting date would have increased/(decreased) the change for the year in net assets available to pay benefits by the amounts shown above with all other variables held constant. 65,402 Change for the year in net assets available to pay benefits Net assets available to pay benefits as a result of change International equity 113,933 (17,090) 17,090 96, ,023 Property 28,131 (4,220) 4,220 23,911 32,351 Other 31,949 (4,792) 4,792 67,666 (10,150) 314,575 14,193 10,150 27,156 12, ,389 55,592 36,741 17,546 77, ,761 75, , ,764 17

19 17. (e) Additional financial instruments disclosure (continued) Investment risk (continued) Credit risk Credit risk refers to the risk that the counterparty to the financial instrument will default on its contractual obligations resulting in a financial loss to the Trust. The carrying amounts of financial assets best represent the maximum credit risk exposure at reporting date. No collateral is held as security or other credit enhancement exists for all financial assets held. No financial assets are considered past due as all payments are considered recoverable when contractually due. The Trust s financial assets exposed to credit risk amounted to the following: Cash and cash equivalents Australian equities Unlisted investment schemes 60,075 Unlisted equity trusts International equity trusts Interest, dividends and other receivables Liquidity risk ,023 79,996 32,387 21,071 98,333 95,750 69, , ,710 7,885 4, , ,136 Liquidity risk is the risk that the Trust will not be able to meet its obligations when they fall due. The risk is controlled through the Trust s investment in financial instruments which under normal market conditions are readily convertible to cash. In addition the Trust maintains sufficient cash and cash equivalents to meet normal operating conditions. The Trust s overall liquidity risks are monitored by the Trustee at least annually. The following table summarises the maturity profile of the Trust s financial liabilities. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Trust can be required to pay. Sensitivity analysis liquidity risk 30 June 2017 Accounts payable and accrued expenses 1,150 1,150 Current tax liabilities Net assets attributable to unitholders Carrying Amount 30 June Accounts payable and accrued expenses Current tax liabilities Net assets attributable to unitholders 374,001 Less than 1 month 1 to 3 months 392, , , , ,001 Greater than 3 months 375, ,118 Fair value measure Fair value estimation The carrying amounts of the Trust s financial assets and financial liabilities at the end of the reporting period approximate their fair values. 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 statement of comprehensive income. 18

20 17. (e) Additional financial instruments disclosure (continued) Investment risk (continued) Fair value in an active market (level 1) The fair value of financial assets and liabilities traded in active markets is based on their quoted market prices at the end of the reporting period without any deduction for estimated future selling costs. The Trust values its investments in accordance with the accounting policies set out in Note 3 to the financial statements. For the majority of its investments, the Trust relies on information provided by independent pricing services for the valuation of its investments. The quoted market price used for financial assets held by the Trust is the current bid price; the appropriate quoted market price for financial liabilities is the current asking price. When the Trust holds derivatives with offsetting market risks, it uses midmarket prices as a basis for establishing fair values for the offsetting risk positions and applies this bid or asking price to the net open position, as appropriate. A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm s length basis. Fair value in an inactive or unquoted market (level 2 and level 3) 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 recent 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 prices 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 is a market rate at the end of the reporting period applicable for an instrument with similar terms and conditions. Fair value hierarchy The Fund measures its financial instruments at fair value through profit or loss, by valuation using the following fair value hierarchy that reflects the significance of inputs used in making the measurement: Level 1 measurements are those instruments valued based on quoted prices (unadjusted) in active markets for identical instruments. Level 2 measurements are those instruments valued based on inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices). This category includes instruments valued using quoted: quoted prices in active markets for similar instruments; quoted prices for identical or similar instruments in markets that are considered less than active; or other valuation techniques for which significant inputs are directly or indirectly observable from market data. Level 3 measurements are those instruments valued based on inputs for the asset or liability that are not based on observable market data (unobserved inputs) and the unobservable inputs have significant effect on the instrument s valuation. This category includes instruments that are value based on quoted prices for similar instruments for which significant unobservable adjustments or assumptions are required to reflect differences between the instruments. The following table provides and analysis of the financial instruments that are measured subsequent to initial recognition at fair value through profit or loss, grouped into Levels 1, 2 and 3 based on the degree to which the fair value is observable. Level 1 Level 2 Level 3 Total 30 June 2017 Cash and cash equivalents 70,023 70,023 Australian equities 32,387 32,387 Unlisted investment schemes 60,075 60,075 Unlisted equity trusts 95,750 95,750 International equity trusts 126, , , , ,258 19

21 17. (e) Additional financial instruments disclosure (continued) Investment risk (continued) Level 1 Level 2 Level 3 Total 30 June Cash and cash equivalents 79,996 79,996 Australian equities 21,071 21,071 Unlisted investment schemes 98,333 98,333 Unlisted equity trusts 69,985 69,985 International equity trusts 101, , , , , Events subsequent to reporting date There have been no significant events since the end of the reporting period and the date of this report that would have an impact on the financial position of the Trust or on the results of its operations, or the state of affairs of the Trust in future years. 19. Commitments and Contingencies There are no commitments or contingencies the Trustee is aware of as at the date of this report. 20

22 Trustee s declaration to the members of MAP Pooled Superannuation Trust In the opinion of the Trustee of the MAP Pooled Superannuation Trust: 1. The accompanying financial statements of the MAP Pooled Superannuation Trust are properly drawn up as to present fairly the financial position of the Trust as at 30 June 2017, the statement of comprehensive income for the year ended 30 June 2017 and its cash flows for the year ended on that date; and 2. The operation of the MAP Pooled Superannuation Trust has been carried out in accordance with its Trust Deed as amended and in compliance with: The requirements of the Superannuation Industry (Supervision) Act 1993 and Regulations; Applicable sections of the Corporations Act 2001 and Regulations; The requirements under Section 13 of the Financial Sector (Collection of Data) Act 2001; and 3. The accompanying financial statements have been drawn up in accordance with Australian Accounting Standards and the Trust Deed, as amended. Signed in accordance with a resolution of the directors of the Trustee: Dated at Melbourne this day of Director 21