Maple-Brwn Abbtt Australian Share Fund ARSN 087 294 504 Annual Financial Reprt 30 June 2018
Maple-Brwn Abbtt Australian Share Fund Annual Financial Reprt Cntents Directrs reprt 1 Lead Auditr s Independence Declaratin 4 Statement f Financial Psitin 5 Statement f Cmprehensive Incme 6 Statement f Changes in Equity 7 Statement f Cash Flws 8 Ntes t and frming part f the financial statements 9 1 Summary f significant accunting plicies 9 2 Net assets attributable t unithlders 15 3 Auditr s remuneratin 15 4 Distributins paid and payable 16 5 Related parties 17 6 Ntes t the Statement f Cash Flws 19 7 Financial instruments 20 8 Interests in uncnslidated structured entities 27 9 Events subsequent t balance date 27 Directrs declaratin 28 Independent auditr s reprt t the unithlders 29
Maple-Brwn Abbtt Australian Share Fund Directrs reprt The directrs f Maple-Brwn Abbtt Limited, the Respnsible Entity f Maple-Brwn Abbtt Australian Share Fund (the Fund), present their reprt tgether with the financial reprt f the Fund fr the year ended 30 June 2018 and the auditr's reprt theren. Respnsible Entity Maple-Brwn Abbtt Limited is the Respnsible Entity (AFSL N. 237296). The Respnsible Entity is the investment manager f the Fund. The names f the persns wh were directrs f the Respnsible Entity during r since the end f the year are as fllws: Name Perid f directrship J K Kightley Appinted 11/02/1994 G M Rssler Appinted 19/07/1999 R A Grundy Appinted 01/07/2008 G R Bazzan Appinted 01/07/2008 D L Maple-Brwn Appinted 01/07/2009 T T Rbinsn Appinted 07/03/2013 R A R Lee Appinted 22/10/2015 J A Ellitt Appinted 04/01/ The registered ffice and principal place f business f the Respnsible Entity and the Fund is Level 31, 259 Gerge Street, Sydney, NSW 2000. Principal activities The Fund invests directly in Australian listed equities, including REITs, r indirectly via the Maple-Brwn Abbtt Small Cmpanies Trust, an unlisted unit trust, in accrdance with the prvisins f the Fund's Cnstitutin. The Fund did nt have any emplyees during the year. There were n significant changes in the nature f thse activities during the year. Review and results f peratins The Respnsible Entity s bjective fr the Fund is t prvide a tax-effective incme stream and lng-term capital grwth frm a wide range f shares including listed prperty trusts, r expected t be listed, n the Australian Securities Exchange. The Fund aims t prvide unithlders with a ttal investment return (befre fees and taxes) that utperfrms the S&P/ASX 200 Index (Ttal Returns) ver rlling 4 year perids. A summary f the Fund s annual perfrmance after fees t 30 June is set ut belw. 2018 % % 2016 % Ttal return * 2015 % 2014 % - Ordinary class 9.0 17.9 (9.6) 5.0 15.1 - Nil entry fee class 8.5 17.3 (10.0) 4.5 14.5 - Whlesale class 10.4 19.4 (8.5) 6.3 16.5 S&P/ASX 200 Index (Ttal Returns) 13.0 14.1 0.6 5.7 17.4 * Ttal return is based n the mvement in withdrawal value per unit plus distributins and is befre tax and after all fees and charges. Imputatin credits are nt included in the perfrmance figures. 1
Directrs reprt (cntinued) Unit prices and distributins 2018 2016 2015 2014 $ $ $ $ $ Redemptin price per unit (ex-distributin as at 30 June): - Ordinary class 1.0514 1.0564 0.9860 1.1797 1.2200 - Nil entry fee class 1.0488 1.0537 0.9834 1.1762 1.2160 - Whlesale class 1.0546 1.0594 0.9881 1.1820 1.2219 Distributin per unit fr the year ended 30 June (excluding tax credits) (nte 4) - Ordinary class 0.0978 0.1057 0.0815 0.1018 0.0315 - Nil entry fee class 0.0921 0.0996 0.0755 0.0946 0.0251 - Whlesale class 0.1111 0.1191 0.0941 0.1171 0.0456 State f affairs The Respnsible Entity annunced that it has elected int the Attributin Managed Investment Trust (AMIT) regime fr the Fund frm 1 July t 30 June 2018 and subsequent years. In the pinin f the Respnsible Entity, there were n ther significant changes in the state f affairs f the Fund during the financial year under review. Likely develpments The Fund will cntinue with its principal activities as detailed earlier in this reprt. Events subsequent t balance date As the investments are measured at their 30 June 2018 fair values in the financial reprt, any change in values subsequent t the end f the reprting perid is nt reflected in the Statement f Cmprehensive Incme r the Statement f Financial Psitin. Hwever the change in the value f investments is reflected in the current unit price. N significant events have ccurred since the end f the reprting perid which wuld impact n the financial psitin f the Fund disclsed in the Statement f Financial Psitin as at 30 June 2018 r n the results and cash flws f the Fund fr the year ended n that date. Interests f the Respnsible Entity The fllwing fees were earned by the Respnsible Entity frm the Fund during the year: 2018 $ $ Respnsible Entity fees 6,018,581 6,456,876 Please refer t nte 5(b) t the financial statements fr details f Fund units held by the Respnsible Entity and its assciates. 2
Statement f Financial Psitin As at 30 June 2018 Ntes 2018 Assets Cash and cash equivalents 6(a) 7,391 2,471 Lans and receivables: Interest, dividends and distributins receivable 3,028 3,608 Other receivables 97 280 Financial assets held at fair value thrugh prfit r lss: 7(a) Australian-listed equities 357,606 372,079 Australian-listed equities held via unlisted unit trust 5(b), 8 15,242 16,455 Bank accepted bills f exchange 6,995 14,979 Ttal assets 390,359 409,872 Liabilities Financial liabilities at amrtised cst: Distributins payable 4 17,871 23,081 Sundry creditrs and accruals 578 786 Ttal liabilities (excluding net assets attributable t unithlders) 18,449 23,867 Net assets attributable t unithlders liability 2 371,910 386,005 Represented by: - Fair value t unithlders at redemptin value 372,064 386,203 - Adjustment arising frm different unit pricing and AASB valuatin principles (154) (198) 371,910 386,005 The abve Statement f Financial Psitin shuld be read in cnjunctin with the accmpanying ntes. 5
Statement f Cmprehensive Incme Ntes 2018 Revenue Interest 76 64 Dividends and distributins 17,041 18,604 Net change in the fair value f financial instruments held at fair value thrugh prfit and lss 25,569 62,465 42,686 81,133 Expenses Respnsible Entity fee 5(b) 6,019 6,457 Transactin csts 304 307 6,323 6,764 Prfit/(lss) frm perating activities 36,363 74,369 Finance csts Distributins paid and payable t unithlders 4 37,342 42,258 37,342 42,258 Change in net assets attributable t unithlders 2 (979) 32,111 The abve Statement f Cmprehensive Incme shuld be read in cnjunctin with the accmpanying ntes. 6
Statement f Changes in Equity The Fund s net assets attributable t unithlders are classified as a liability under AASB 132 Financial instruments: Presentatin. As such, the Fund has n equity and n items f changes in equity have been presented fr the current r cmparative year. The abve Statement f Changes in Equity shuld be read in cnjunctin with the accmpanying ntes. 7
Statement f Cash Flws Ntes 2018 Operating activities Dividends and distributins received 16,863 18,784 Interest received 76 64 Other incme received 470 496 Respnsible Entity fees paid (6,492) (6,925) Transactin csts (326) (331) Other expenses paid (1) (2) Distributins paid (24,209) (19,440) Cash flws frm perating activities 6(b) (13,619) (7,354) Investing activities Prceeds frm sale f investments 148,352 142,739 Purchase f investments (98,355) (75,308) Cash flws frm investing activities 49,997 67,431 Financing activities Prceeds frm applicatins by unithlders 21,327 63,886 Payments fr redemptins by unithlders (52,785) (125,949) Cash flws frm financing activities 6(d) (31,458) (62,063) Change in cash and cash equivalents 4,920 (1,986) Cash and cash equivalents at the beginning f the year 2,471 4,457 Cash and cash equivalents at 30 June 6(a) 7,391 2,471 The abve Statement f Cash Flws shuld be read in cnjunctin with the accmpanying ntes. 8
Ntes t and frming part f the financial statements 1 Summary f significant accunting plicies The Maple-Brwn Abbtt Australian Share Fund (the Fund) is a fund dmiciled in Australia and is a fr prfit entity. The Fund was cnstituted n 6 May 1986 and will terminate 80 years (less ne day) frm the date f cmmencement r at such earlier time as prvided by the Fund s Cnstitutin r by the law. Maple-Brwn Abbtt Limited is the Respnsible Entity. The registered ffice and principal place f business f the Respnsible Entity is Level 31, 259 Gerge Street, Sydney, NSW 2000. This annual financial reprt cvers the Fund as an individual entity. The Annual Financial Reprt was authrised fr issue by the directrs n 13 September 2018. The directrs f the Respnsible Entity have the pwer t amend and reissue the financial reprt. On 5 May 2016, a new tax regime applying t Managed Investment Trusts was established under the Tax Law Amendment (New Tax System fr Management Investment Trusts) Act 2016. The Attributin Management Investment Trust (AMIT) regime allws the funds that meet certain requirements t make an irrevcable electin t be an AMIT. The Respnsible Entity elected int the AMIT regime fr the Fund effective frm 1 July and the Fund is n lnger bliged t pay distributins due t the amendments in the Fund's Cnstitutin. (a) Statement f cmpliance The Annual Financial Reprt is a general purpse financial reprt which has been prepared in accrdance with the Fund s Cnstitutin (as amended), the Crpratins Act 2001 and Australian Accunting Standards and ther authritative prnuncements f the Australian Accunting Standards Bard (AASB). The Annual Financial Reprt f the Fund als cmplies with Internatinal Financial Reprting Standards (IFRS) and interpretatins adpted by the Internatinal Accunting Standards Bard. (b) Basis f preparatin The financial reprt is presented in Australian dllars. The financial reprt is prepared n the basis f fair value measurement f assets and liabilities, except where therwise stated. There are n new standards, interpretatins r amendments t existing standards that are effective fr the first time fr the financial year beginning 1 July that have a material impact n the Fund. Changes in accunting plicies The fllwing standards were available fr early adptin but have nt been applied in the financial statements fr the reprting perid ended 30 June 2018. The assessment f the impact f these new standards (t the extent relevant t the Fund) and interpretatins is set ut belw: 9
Ntes t and frming part f the financial statements 1 Summary f significant accunting plicies (cntinued) (b) Basis f preparatin (cntinued) AASB 9 Financial Instruments (and applicable amendments) (effective frm 1 July 2018 fr the Fund). AASB 9 replaces AASB 139 Financial Instruments: Recgnitin and Measurement and addresses the classificatin, measurement and derecgnitin f financial assets and financial liabilities. The derecgnitin rules have nt been changed frm the previus requirements. Classificatin and measurement f financial assets and financial liabilities AASB 9 cntains a new classificatin and measurement apprach fr financial assets that reflects the business mdel in which assets are managed and their cash flw characteristics. The standard includes three principal classificatin categries fr financial assets: measured at amrtised cst; fair value thrugh ther cmprehensive incme (FVOCI); and fair value thrugh prfit r lss (FVTPL). It eliminates the existing AASB 139 categries f held t maturity; lans and receivables; and available fr sale. Based n the Respnsible Entity's assessment, the adptin f the standard is nt expected t have a material impact n the classificatin f financial assets and financial liabilities f the Fund. This is because, financial instruments currently measured at FVTPL r amrtised cst, as relevant, under AASB 139 will cntinue t be presented as FVTPL r amrtised cst under AASB 9. Impairment f financial assets The new impairment mdel will apply t financial assets measured at amrtised cst r FVOCI, except fr investments in equity instruments. Based n the Respnsible Entity's assessment, changes t the impairment mdel are nt expected t have a material impact n the financial assets because they are shrt-term in nature (i.e. n lnger than 12 mnths). Hedge accunting The Fund des nt apply hedge accunting. AASB 15 Revenue frm Cntracts with Custmers (effective frm 1 July 2018 fr the Fund) The AASB has issued a new standard fr the recgnitin f revenue. This will replace AASB 118 Revenue and AASB 111 Cnstructin Cntracts. The new standard is based n the principle that revenue is recgnised when cntrl f a gd r service transfers t a custmer - s the ntin f cntrl replaces the existing ntin f risks and rewards. The Fund's main surces f incme are interest, dividends/distributins and gains n financial instruments held at fair value. All f these are utside the scpe f the new revenue standard. The Respnsible Entity has cncluded that the new revenue recgnitin rules d nt have a significant impact n the Fund's accunting plicies r the amunts recgnised in the financial statements. The accunting plicies set ut belw have been cnsistently applied t all perids presented in the Annual Financial Reprt. 10
Ntes t and frming part f the financial statements 1 Summary f significant accunting plicies (cntinued) (c) Financial instruments Specific instruments: Cash and cash equivalents Cash and cash equivalents may include cash at bank, depsits at call with banks and term depsits and are valued at amrtised cst. Derivatives Derivative financial instruments are held fr trading and accunted fr n a fair value basis using the mst recent verifiable surce f market prices. Fair values are btained using quted market prices r determined thrugh the use f valuatin techniques. All derivatives are carried as assets when the fair value is psitive and as liabilities when fair value is negative. The Fund des nt designate any derivatives as hedges in a hedging relatinship. Other Financial instruments Financial assets Financial assets f the Fund are classified either as fair value thrugh prfit r lss r as lans and receivables. Fair value thrugh prfit r lss Financial instruments held fr trading: Derivative financial instruments such as futures are included under this classificatin. Derivatives are nt designated as hedges in a hedging relatinship. Financial assets which are classified as fair value thrugh prfit r lss are recgnised r derecgnised by the Respnsible Entity as such at trade date. They are initially recgnised at fair value, excluding transactin csts, which are expensed as incurred. Thereafter they are re-measured at fair value, with any resultant gain r lss recgnised immediately as revenue in the Statement f Cmprehensive Incme. Financial assets fair values are determined as fllws: Australian-listed equities These securities are valued at their quted bid price n the Australian Securities Exchange as f the clse f business n the day the securities are being valued. Where dual-listed securities are thinly traded n the Australian Securities Exchange, they are valued at the Australian dllar equivalent f the quted bid price n the relevant freign stck exchange. 11
Ntes t and frming part f the financial statements 1 Summary f significant accunting plicies (cntinued) (c) Financial instruments (cntinued) Australian-listed equities held via unlisted unit trusts Listed equities may be held via units in unlisted unit trusts which are valued at redemptin price as reprted by the manager at clse f business n the day the trusts are being valued. Bills f exchange Bills f exchange are priced based n apprpriate yield curves taking int accunt factrs such as credit rating, security types, and term t maturity. Lans and receivables Financial assets classified as lans and receivables include balances due frm brkers, dividends and distributins receivable and ther receivables. These financial assets are carried at amrtised cst using the effective interest methd less impairment lsses if any. Lans and receivables are f a shrt term nature and hence their carrying value apprximates fair value. Financial liabilities Financial liabilities f the Fund are either measured at fair value thrugh prfit r lss r at amrtised cst using the effective interest methd. Financial liabilities ther than thse at fair value thrugh prfit r lss include distributins payable, balances due t brkers, redemptins payable and sundry creditrs and accruals which are carried at amrtised cst using the effective interest methd. These financial liabilities are f a shrt-term nature and hence their carrying value apprximates fair value. Financial liabilities arising frm the issue f redeemable units in the Fund are carried at the redemptin amunt representing the unithlders rights t a residual interest in the Fund s assets at reprting date which apprximates fair value. Offsetting financial instruments Financial assets and liabilities are ffset and the net amunt reprted in the Statement f Financial Psitin when there is a legally enfrceable right t ffset the recgnised amunts and there is an intentin t settle n a net basis, r realise the asset and settle the liability simultaneusly. 12
Ntes t and frming part f the financial statements 1 Summary f significant accunting plicies (cntinued) (d) Revenue and expenses Dividends are recgnised as revenue n the date the shares are quted ex-dividend. Distributins frm unlisted unit trusts are recgnised as at the date the unit value is quted ex-distributin. Where a present entitlement t a distributin exists at year end, it is derived fr tax purpses. Interest n cash depsits and bank bills f exchange is calculated using the effective interest methd and is recgnised as revenue in the Statement f Cmprehensive Incme n an accruals basis. Net change in the fair value f financial instruments held at fair value thrugh prfit and lss is determined as the difference between the fair value at year end r cnsideratin received (if sld during the year) and the fair value as at the prir year end r acquisitin (if the investment was acquired during the year). Transactin csts incurred in the acquisitin and dispsal f assets are expensed in the Statement f Cmprehensive Incme n an accruals basis. Expenses, including Respnsible Entity fees, are recgnised in the Statement f Cmprehensive Incme n an accruals basis. (e) (f) (g) Finance csts Distributins paid and payable are recgnised in the Statement f Cmprehensive Incme as finance csts. Distributins paid are included in the Statement f Cash Flws as cash flws frm perating activities. Change in net assets attributable t unithlders Unrealised gains and lsses arising frm mvements in the fair value f assets are held within net assets attributable t unithlders. The taxable and cncessinally taxed prtins f realised capital gains n the dispsal f investments are attributed t unithlders in the perid fr which they are assessable fr tax purpses. Taxatin The Fund has elected int the AMIT regime. On the basis that unithlders are attributed all f the taxable incme f the Fund (which includes net realised capital gains) fr a financial year, the Fund itself shuld nt be liable fr tax. Unithlders will be attributed a share f the taxable incme f the Fund and will be required t include the amunt attributed t them in their assessable incme. Prir t 1 July, unithlders were presently entitled t the incme f the Fund and were taxed n the distributin incme paid and payable by the Fund during the year. The price f a unit is based n the market values f underlying assets and thus may include a share f unrealised taxable capital gains/lsses. Shuld a net gain be realised, that prtin f the gain that is subject t capital gains tax will be attributed t unithlders. Any balance f realised capital lsses is nt attributed t unithlders but is carried frward t be ffset against any future realised capital gains. If realised capital gains exceed realised capital lsses, the excess is attributed t unithlders. 13
Ntes t and frming part f the financial statements 1 Summary f significant accunting plicies (cntinued) (h) Net assets attributable t unithlders In accrdance with AASB 132, the units issued by the Fund give rise t a financial liability as: all units issued by the Fund prvide unithlders with the right t redeem their units at the unithlders ptin. The fair value f redeemable units is measured at the redemptin price that is payable at the Balance Sheet date. As the Fund s redemptin price is based n different valuatin principles t that applied in financial reprting, a valuatin difference exists, which has been treated as a separate cmpnent f net assets attributable t unithlders; and due t the different management fee structures applying t the different classes f units (nte 1(k)) the interests f unithlders des nt meet the criteria t be classified as equity, as the different classes f units d nt have identical features. (i) (j) (k) Determinatin f redemptin price fr units in the Fund The redemptin price is determined in accrdance with the Cnstitutin and is calculated as the value f the assets f the Fund less its liabilities, adjusted fr estimated transactin csts, divided by the number f units n issue. Gds and services tax (GST) The Respnsible Entity fees and ther expenses are recgnised net f the amunt f GST recverable as a reduced input tax credit (RITC). Receivables and payables are stated inclusive f GST. Cash flws are included in the Statement f Cash Flws n a grss basis. Classes f units The Fund has the fllwing classes f units: rdinary class nil entry class whlesale class All classes f units in the Fund are expsed t the same underlying pl f assets. The unit classes are differentiated by the management fee structures as detailed in nte 5 and by the entry fees. 14
Ntes t and frming part f the financial statements 2 Net assets attributable t unithlders Ordinary class Nil entry class Whlesale class Ttal 2018 Opening balance 189,572 7,110 189,323 386,005 Applicatins 3,131 62 17,958 21,151 Redemptins (18,476) (650) (33,484) (52,610) Units issued upn reinvestment f distributins 13,898 544 3,901 18,343 Changes in net assets attributable t unithlders (510) (20) (449) (979) Clsing balance 187,615 7,046 177,249 371,910 Opening balance 186,042 6,774 209,006 401,822 Applicatins 7,364 160 56,536 64,060 Redemptins (28,089) (698) (97,150) (125,937) Units issued upn reinvestment f distributins 9,896 376 3,677 13,949 Changes in net assets attributable t unithlders 14,359 498 17,254 32,111 Clsing balance 189,572 7,110 189,323 386,005 The Respnsible Entity cnsiders net assets attributable t unithlders as capital. This capital is invested in accrdance with the prvisins f the Fund s Cnstitutin. The Respnsible Entity may make additinal investments in the case f net applicatins, r realise investments in the case f net redemptins, depending n the desired level f liquidity in the Fund. Under the Fund's Cnstitutin, the Respnsible Entity may suspend applicatins r redemptins if it is cnsidered t be in the best interests f unithlders. 3 Auditr s remuneratin 2018 $ $ Audit services KPMG*: Audit f the Annual Financial Reprt 28,188 28,700 Audit f the Cmpliance Plan 7,431 8,062 * The audit fees were paid by the Respnsible Entity and represents the agreed fees (net f RITC). 15
Ntes t and frming part f the financial statements 4 Distributins paid and payable 2018 $ per unit $ per unit Ordinary class Distributins paid September 4,001 0.0218 2,684 0.0143 Distributins paid December 1,990 0.0109 2,577 0.0139 Distributins paid March 2,919 0.0161 2,939 0.0160 Distributin payable June 8,745 0.0490 11,045 0.0615 17,655 0.0978 19,245 0.1057 Nil entry fee class Distributins paid September 139 0.0204 89 0.0129 Distributins paid December 64 0.0095 85 0.0124 Distributins paid March 99 0.0147 102 0.0146 Distributin payable June 319 0.0475 403 0.0597 621 0.0921 679 0.0996 Whlesale class Distributins paid September 4,484 0.0251 3,597 0.0174 Distributins paid December 2,462 0.0142 3,401 0.0171 Distributins paid March 3,313 0.0193 3,703 0.0194 Distributin payable June 8,807 0.0525 11,633 0.0652 19,066 0.1111 22,334 0.1191 Ttal distributins paid and payable 37,342 42,258 (a) Unrealised capital gains/(lsses) 2018 Balances at 30 June Net unrealised capital gains fr tax 38,475 38,861 Unrealised taxable capital gains/(lsses) have been calculated in accrdance with the relevant tax legislatin and have nt been reprted in the financial statements, refer nte 1(g). 16
Ntes t and frming part f the financial statements 5 Related parties (a) Respnsible Entity and Key Management Persnnel Maple-Brwn Abbtt Limited (ABN 73 001 208 564) is the Respnsible Entity f the Fund. Maple-Brwn Abbtt Limited is als the investment manager f the Fund. As Respnsible Entity, Maple-Brwn Abbtt Limited is regarded as fulfilling the rle and bligatins f key management persnnel f the Fund. The directrs f Maple-Brwn Abbtt Limited are regarded as key management persnnel f that cmpany and nt f the Fund. (b) Respnsible Entity The names f the persns wh were directrs f Maple-Brwn Abbtt Limited during r since the end f the year are as fllws: Name Perid f directrship J K Kightley Appinted 11/02/1994 G M Rssler Appinted 19/07/1999 R A Grundy Appinted 01/07/2008 G R Bazzan Appinted 01/07/2008 D L Maple-Brwn Appinted 01/07/2009 T T Rbinsn Appinted 07/03/2013 R A R Lee Appinted 22/10/2015 J A Ellitt Appinted 04/01/ Lans t key management persnnel f Maple-Brwn Abbtt Limited The Fund has nt made, guaranteed r secured, directly r indirectly, any lans t the key management persnnel f Maple-Brwn Abbtt Limited, r their persnally related entities at any time during the reprting perid. Other transactins with key management f Maple-Brwn Abbtt Limited Apart frm thse details disclsed in this nte, n key management persnnel f Maple-Brwn Abbtt Limited have entered int a cntract fr services with the Fund since the end f the previus financial year. Remuneratin The Respnsible Entity s fees are calculated in accrdance with the Fund s Cnstitutin (as amended). The Respnsible Entity s fee is (inclusive f GST, net f RITC available t the Fund) accrued daily and paid mnthly based n the net asset value f the Fund. The ttal fee f $6,018,581 (: $6,456,876) is disclsed as an item f expense in the Statement f Cmprehensive Incme and the fee paid during the year is disclsed separately in the Statement f Cash Flws. The Respnsible Entity fee is as fllws: Ordinary class: 2.05% per annum (: 2.05%) Nil entry class: 2.56% per annum (: 2.56%) Whlesale class: 0.92% per annum (: 0.92%) 17
Ntes t and frming part f the financial statements 5 Related parties (cntinued) (b) Respnsible Entity (cntinued) Balances payable The aggregate amunts payable t the Respnsible Entity by the Fund at 30 June are as fllws: 2018 Respnsible Entity fee payable 518 550 These amunts are included in sundry creditrs and accruals in the Statement f Financial Psitin. Related Party Transactins Investing activities (in ther Maple-Brwn Abbtt funds) The Fund may purchase and sell units in ther registered managed investment trusts managed by the Respnsible Entity in the rdinary curse f business at applicatin and redemptin prices calculated in accrdance with the Cnstitutins f thse trusts. Where the Fund invests in ther such schemes, n additinal investment management r respnsible entity fees are charged in respect f these inter-fund investments. At 30 June details f the Fund s investment in the Maple-Brwn Abbtt Small Cmpanies Trust are set ut belw: Number f units held Fair value Interest held Units purchased during the year Units sld during the year Distributins received/receivable during the year 2018 $ % $ 18,568,429 15,242,033 14.4 907,186 2,906,032 592,418 20,567,275 16,455,333 14.3 838,665-821,178 The transactins with the Maple-Brwn Abbtt Small Cmpanies Trust are carried ut n the same terms and cnditins as fr ther unithlders in that trust. Transactins with ther parties Other entities assciated with the Respnsible Entity may hld units in the Fund frm time t time in varius capacities. The transactins with thse entities are carried ut n the same terms and cnditins as fr ther unithlders in the Fund. 18
Ntes t and frming part f the financial statements 6 Ntes t the Statement f Cash Flws (a) Cmpnents f cash and cash equivalents 2018 Cash at bank 7,391 2,471 Cash at the end f financial year 7,391 2,471 (b) Recnciliatin f prfit/(lss) frm perating activities t net cash flws frm perating activities 2018 Prfit/(lss) frm perating activities 36,363 74,369 Net (gains)/lsses n financial instruments held at fair value thrugh prfit r lss (25,569) (62,465) Dividend and distributin incme reinvestment (758) (755) Net change in accrued incme and receivables 586 935 Net change in payables (32) 2 Distributins paid (24,209) (19,440) Net cash flws frm perating activities (13,619) (7,354) (c) Nn-cash perating, financing and investing activities The fllwing amunts are nt included in the Statement f Cash Flws: Operating activities Dividend and distributin incme reinvestment During the year the Fund received dividends and distributins in the frm f shares r units via a dividend r distributin reinvestment plan (DRP). The value f the shares r units received is based n the market value as determined by the DRP rules and is detailed belw. 2018 Dividends and distributin received in the frm f shares r units 758 755 Financing activities Unithlder distributins reinvested The Fund issues new units in cnsideratin fr the reinvestment f distributins payable t unithlders. The value f the units and number f units issued during the year is summarised belw: 2018 Units 000 Units 000 Units issued: Unithlder distributin reinvested 18,343 17,330 13,949 13,180 19
Ntes t and frming part f the financial statements 6 Ntes t the Statement f Cash Flws (cntinued) (c) (d) Nn-cash perating, financing and investing activities (cntinued) Investing activities The abve distributin incme reinvestments are nt included in the Statement f Cash Flws relating t the purchase f investments. Recnciliatin f liabilities frm financing activities The net change in financing activities during the year is ($31,456,320) which was frm applicatin and redemptin transactins made by unithlders (: ($62,063,586)). 7 Financial Instruments The Fund's activities may expse it t a variety f financial risks: market risk (including price risk and interest rate changes), liquidity risk, credit risk and peratinal risk. The Respnsible Entity seeks t minimise the Fund s financial risks thrugh a variety f activities, including diversificatin f the investment prtfli and the selectin f liquid investments in accrdance with the specific investment plicies and restrictins set ut in the Prduct Disclsure Statement. The key element in the Respnsible Entity s investment philsphy is t seek t buy investments that ffer relatively gd lng term value. The investment philsphy can als be described as cntrarian and cnservative, which helps t minimise its financial risks. The nature and extent f the financial instruments utstanding at the balance date and the risk management plicies emplyed by the Respnsible Entity are discussed belw tgether with the specific investment bjectives and plicies applicable t the Fund. (a) Market risk Market risk is the risk that the value f a financial instrument will change as a result f expsure t market price changes and interest rate changes. Price risk The Fund s market price risk is managed n a daily basis in accrdance with the fllwing specific investment plicies and restrictins: Investment Plicies The Fund will invest at least 85% f its ttal assets in Australian-listed equity securities. 20
Ntes t and frming part f the financial statements 7 Financial Instruments (cntinued) (a) Market risk (cntinued) Investment Restrictins The main guideline in relatin t prtfli cmpsitin is that generally the equity expsure t a single entity shuld nt be greater than 5% abve the single entity weighting in the benchmark, being the S&P/ASX 200 Index (Ttal Returns) (Benchmark). Expsure t the Maple-Brwn Abbtt Small Cmpanies Trust shuld nt be greater than 5% f the Fund s market value. Market expsures As at 30 June the market expsures were as fllws: 2018 Financial assets at fair value thrugh prfit r lss: Australian-listed equities 357,606 372,079 Australian-listed equities held via unlisted unit trust 15,242 16,455 Bank accepted bills f exchange 6,995 14,979 Ttal 379,843 403,513 Carrying amunts versus fair values The fair values f financial assets and financial liabilities apprximates their carrying amunts in the Statement f Financial Psitin. Sensitivity analysis The table belw details the apprximate change in net assets attributable t unithlders if there is a percentage change in the Benchmark assuming all ther variables are cnstant: 2018 % change % change Increase in Benchmark 10 39,224 10 41,107 Decrease in Benchmark 10 (39,224) 10 (41,107) Fair value hierarchy measurement recgnised in the Statement f Financial Psitin Fair value measurements are classified using a fair value hierarchy that reflects the subjectivity f the inputs used in making the measurements. The fair value hierarchy has the fllwing levels: Level 1 fair values measured using quted prices (unadjusted) in active markets fr identical instruments; Level 2 fair values measured using directly (i.e. as prices) r indirectly (i.e. derived frm prices) bservable inputs, ther than quted prices included in Level 1; and Level 3 fair values measured using inputs that are nt based n bservable market data (unbservable inputs) 21
Ntes t and frming part f the financial statements 7 Financial Instruments (cntinued) (a) Market risk (cntinued) At 30 June the financial instruments carried at fair value split by valuatin methd is summarised belw: Level 1 Level 2 Level 3 Ttal 2018 Financial assets at fair value thrugh prfit r lss: Australian-listed equities 357,606 - - 357,606 Australian-listed equities held via unlisted unit trust 15,242 - - 15,242 Bank accepted bills f exchange - 6,995-6,995 Ttal 372,848 6,995-379,843 Financial assets at fair value thrugh prfit r lss: Australian-listed equities 372,079 - - 372,079 Australian-listed equities held via unlisted unit trust 16,455 - - 16,455 Bank accepted bills f exchange - 14,979-14,979 Ttal 388,534 14,979-403,513 Transfers between levels The Funds plicy is t recgnise transfers int and transfers ut f fair value hierarchy levels as at the end f the reprting perid. There have been n transfers between levels in the fair value hierarchy at the end f 30 June 2018 and 30 June. There were als n changes made t any f the valuatin techniques applied as f 30 June 2018. Fair value measurement Fair value in an active market (level 1) The fair value f financial assets and liabilities traded in active markets (such as publicly traded derivatives and equity securities) is based n bid prices at the end f the reprting perid withut any deductin fr estimated future selling csts. Fr the majrity f financial assets and liabilities, infrmatin prvided by the quted market independent pricing services is relied upn fr valuatin. A financial instrument is regarded as quted in an active market if quted prices are readily and regularly available frm an exchange, dealer, brker, industry grup, pricing service, r regulatry agency, and thse prices represent actual and regularly ccurring market transactins n an arm's length basis. An active market is a market in which transactins fr the financial asset r liability take place with sufficient frequency and vlume t prvide pricing infrmatin n an nging basis. The investments in unlisted trusts included as level 1 in the abve table relate t investments in registered managed investment schemes managed by the Respnsible Entity. Further details f these investments are disclsed in nte 5(b). These investments are valued at their quted redemptin price at balance date in accrdance with nte 1(c). 22
Ntes t and frming part f the financial statements 7 Financial Instruments (cntinued) (a) Market risk (cntinued) Fair value in an inactive r unquted market (level 2 and 3) The fair value f financial assets and liabilities that are nt traded in an active market is determined by using valuatin techniques. Quted market prices r dealer qutes fr similar instruments are used fr debt securities held. The Fund may use a variety f valuatin methds and makes assumptins that are based n market cnditins existing at the end f each reprting perid. Valuatin techniques used fr nn-standardised financial instruments, such as ver-the-cunter derivatives, include the use f cmparable arm's length transactins, reference t the current fair value f a substantially similar ther instrument r any ther valuatin technique that is cmmnly used by market participants which maximises the use f market inputs and relies as little as pssible n entity-specific inputs. Fr ther pricing mdels, inputs are based n market data at the end f the reprting perid. The utput f a mdel is always an estimate r apprximatin f a value that cannt be determined with certainty, and valuatin techniques emplyed may nt fully reflect all factrs relevant t the psitins held. Valuatins are therefre adjusted, where apprpriate, t allw fr additinal factrs including liquidity risk and cunterparty risk. The Fund s investments in bills f exchange are priced n apprpriate yield curves taking int accunt factrs such as credit rating, security types, and term t maturity in accrdance with nte 1 (c). Fair value measurements using significant unbservable inputs (level 3) The Fund did nt hld any financial instruments with fair value measurements using significant unbservable inputs during the year ended 30 June 2018 r year ended 30 June. Financial instruments nt measured at fair value The carrying value less impairment prvisin f ther receivables and payables are assumed t apprximate their fair values due t their shrt term nature. Interest rate risk The majrity f the Fund s financial assets and liabilities are nn-interest bearing. As a result, the Fund is nt subject t significant amunts f risk due t fluctuatins in the prevailing levels f market interest rates n interest bearing financial assets and liabilities. Any excess cash and cash equivalents are invested at shrt term market interest rates. The Respnsible Entity mnitrs the verall expsure t cash and cnsequently interest rate sensitivity n a daily basis. 23
Ntes t and frming part f the financial statements 7 Financial Instruments (cntinued) (a) Market risk (cntinued) At 30 June the Fund s expsure t interest rate risk fr classes f financial assets is set ut belw: Flating interest Fixed interest rate rate Ttal 2018 Depsits at call with banks 7,391-7,391 Bank accepted bills f exchange - 6,995 6,995 Ttal 7,391 6,995 14,386 Depsits at call with banks 2,471-2,471 Bank accepted bills f exchange - 14,979 14,979 Ttal 2,471 14,979 17,450 (b) Liquidity risk The liquidity risk t which the Fund is expsed arises because unithlders may request redemptin f their units in the Fund frm time t time, which under nrmal circumstances are payable within perids f up t five business days. Liquidity risk is minimised thrugh the Fund maintaining sufficient cash and selecting liquid investments traded n a recgnised reputable stck exchange and hlding investments in unlisted unit trusts which hld investments traded n a recgnised reputable stck exchange. The table belw shws financial liabilities at cntractual undiscunted cashflw amunts, gruped int relevant maturities based n the remaining perid at 30 June t the cntractual maturity date: Less than 1 mnth 1-3 mnths 3-12 mnths Mre than 1 year Redeemable upn request Ttal* 2018 Distributins payable 17,871 - - - - 17,871 Sundry creditrs and accruals 578 - - - - 578 Net assets attributable t unithlders - - - - 371,910 371,910 Ttal 18,449 - - - 371,910 390,359 Distributins payable 23,081 - - - - 23,081 Sundry creditrs and accruals 786 - - - - 786 Net assets attributable t unithlders - - - - 386,005 386,005 Ttal 23,867 - - - 386,005 409,872 * The carrying amunts equal the cntractual cashflw amunts 24
Ntes t and frming part f the financial statements 7 Financial Instruments (cntinued) (b) (c) Liquidity risk (cntinued) The Fund s Cnstitutin permits the Respnsible Entity t suspend withdrawals if it s cnsidered t be in the best interests f unithlders. Credit risk Credit risk is the risk that the Fund may incur a lss if ther parties fail t perfrm their bligatins under the financial instruments which cmprise the Fund s investment prtfli. Any nn-equity investments generally incrprate credit assessments in investment valuatins and the risk f lss is implicitly prvided fr in the determinatin f the fair value f such investments. The Fund als has a credit risk expsure in relatin t its transactins with cunterparties such as brkers, banks and ther financial intermediaries. The Fund minimises cncentratins f credit risk by transacting thrugh a number f brkers all f whm perate n recgnised and reputable exchanges. All bank bill securities held by the Fund are endrsed r accepted by majr Australian trading banks. The credit risk expsure is lw t any ne cunterparty. Ttal credit risk fr the Fund arising frm recgnised financial instruments is limited t the value f the Fund s investments and receivables shwn n the Statement f Financial Psitin. All derivatives transactins are cnducted thrugh cunterparties wh are members f a recgnised market exchange and are apprved by the Respnsible Entity. As 30 June the credit rating fr cash and cash equivalents is set ut belw: 2018 Credit rating* Depsit at call with banks 7,391 A1+ Bank accepted bills f exchange 6,995 A1+ Ttal 14,386 Depsit at call with banks 2,471 A1+ Bank accepted bills f exchange 14,979 A1+ Ttal 17,450 *Standard and Pr s 25
Ntes t and frming part f the financial statements 7 Financial Instruments (cntinued) (d) Operatinal risk Operatinal risk is the risk f direct r indirect lss t the Fund assciated with the Respnsible Entity s prcesses, persnnel, technlgy and infrastructure, and frm external frces (ther than credit, market and liquidity risks) such as thse arising frm changes t legal and regulatry requirements. The bjective f the Respnsible Entity in managing peratinal risk is t mitigate as much as pssible the risk f financial lsses and damage t reputatin, cmmensurate with verall cst effectiveness. The Respnsible Entity is respnsible fr the develpment and implementatin f cntrls t address peratinal risk. This respnsibility is supprted by the develpment f an verall cntrl framewrk implemented t manage peratinal risk, key aspects f which include: apprpriate segregatin f duties, including the independent authrisatin f transactins; cash and securities psitins are cmpletely and accurately recrded and recnciled t third party data; mnitring the perfrmance f external service prviders; dcumentatin f cntrls and prcedures; peridic assessment f peratinal risks faced, and the adequacy f cntrls and prcedures t address the risks identified; reprting f peratinal lsses and prpsed remedial actin, with apprpriate fllw up; assessment and mitigatin f cyber risks and develpment f cntingency business cntinuity, including disaster recvery, plans; training and prfessinal develpment; ethical and business standards; and risk mitigatin, including insurance where this is effective. 26
Ntes t and frming part f the financial statements 8 Interests in uncnslidated structured entities At 30 June the uncnslidated structured entities held by the Fund is set ut belw: Asset class Statement f Financial Psitin reference Fair value 2018 Australian equities Australian-listed equities held via unlisted unit trust 15,242 Australian equities Australian-listed equities held via unlisted unit trust 16,455 The fair value represents the maximum expsure t lss fr each uncnslidated structured entity. The fair value f the expsure will change daily and in subsequent perids will cease nce the investments are dispsed f. The investment manager f each uncnslidated structured entity is respnsible fr implementing and mnitring the entity s investment bjective and strategy. The investment decisins are based n the analysis cnducted by the underlying investment manager. The return f the Fund is expsed t the variability f the perfrmance f the underlying structured entity. 9 Events subsequent t balance date As the investments are measured at their 30 June 2018 fair values in the financial reprt, any change in values subsequent t the end f the reprting perid is nt reflected in the Statement f Cmprehensive Incme r the Statement f Financial Psitin. Hwever the change in the value f investments is reflected in the current unit price. N significant events have ccurred since the end f the reprting perid which wuld impact n the financial psitin f the Fund disclsed in the Statement f Financial Psitin as at 30 June 2018 r n the results and cash7 flws f the Fund fr the year ended n that date. 27