ARSN 132 446 103 Interim report for the half-year ended
ARSN 132 446 103 Interim report for the half-year ended Contents Directors' report 1 Auditor's independence declaration 3 Statement of comprehensive income 4 Balance sheet 5 Statement of changes in equity 6 Statement of cash flows 7 Notes to the financial statements 8 Directors' declaration 16 Independent auditor's report to the unitholders of 17 This interim report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June and any public announcements made in respect of as during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. These financial statements cover as an individual entity. The responsible entity of is Schroder Investment Management Australia Limited. The responsible entity's registered office is Level 20, 123 Pitt Street, Sydney, NSW 2000.
Directors' report Directors' report The directors of Schroder Investment Management Australia Limited ("Schroders"), the responsible entity of Schroder Real Return CPI Plus 5% Fund ("the Fund"), present their report together with the financial report of the Fund for the half-year ended. Directors The following persons held office as directors of Schroders during the half-year and up to the date of this report: M A Coble M W Conlon G J A Cooper S Doyle C J Durack (resigned 11 January 2016) R Mellor-Bessant Review of operations During the period, the Fund continued to invest in accordance with target asset allocations as set out in the governing documents of the Fund and in accordance with the provisions of the Fund's Constitution. Results of operations Half-year ended $'000 $'000 Operating (loss)/profit before finance costs attributable to unitholders (14,510) 195,206 Distributions - Professional Class Distributions paid and payable 23,924 19,157 Distributions (cents per unit) 1.30 1.11 Distributions - Wholesale Class Distributions paid and payable 12,965 8,254 Distributions (cents per unit) 1.16 1.07 Distributions - Institutional Class Distributions paid and payable 42,850 26,772 Distributions (cents per unit) 1.44 1.31 Distributions - Client Class Distributions paid and payable 1,205 1,289 Distribution (cents per unit) 1.13 1.00 Significant changes in state of affairs In the opinion of the directors, there were no significant changes in the state of affairs of the Fund that occurred during the period under review. - 1 -
Directors' report Directors' report (continued) Rounding of amounts to the nearest thousand dollars The Fund is a registered scheme of a kind referred to in Class Order 98/100 (as amended), issued by the Australian Securities & Investments Commission (ASIC) relating to the ''rounding off'' of amounts in the directors' report and the financial report. Amounts in the directors' report and financial report have been rounded off to the nearest thousand dollars in accordance with that Class Order, unless otherwise stated. Auditor's independence declaration A copy of the auditor's independence declaration as required under Section 307C of the Corporations Act 2001 is set out on page 3. This report is made in accordance with a resolution of the directors. Director M A Coble Director G J A Cooper Sydney 11 March 2016-2 -
Auditor's independence declaration As lead auditor for the audit review of for the half-year ended, I declare that to the best of my knowledge and belief, there have been: (a) (b) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and no contraventions of any applicable code of professional conduct in relation to the review. This declaration is in respect of during the period. Craig Stafford Sydney Partner 11 March 2016 PricewaterhouseCoopers... PricewaterhouseCoopers, ABN Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171 DX 77 Sydney, Australia T +61 2 8266 0000, F +61 2 8266 9999, www.pwc.com.au Liability limited by a scheme approved under Professional Standards Legislation. - 3 -
Statement of comprehensive income Statement of comprehensive income Half-year ended Notes $'000 $'000 Investment income Interest income 16,483 13,629 Dividend income 4,022 2,658 Distribution income 68,198 50,303 Net (losses)/gains on financial instruments held at fair value through profit or loss (90,680) 140,070 Total investment (loss)/income (1,977) 206,660 Expenses Responsible entity's fees 12,506 11,399 Transaction costs 15 29 Other operating expenses 12 26 Total operating expenses 12,533 11,454 Operating (loss)/profit (14,510) 195,206 Finance costs attributable to unitholders Distributions to unitholders 5 (80,944) (55,472) (Decrease)/increase in net assets attributable to unitholders 4 95,454 (139,734) Profit/(loss) for the half-year Other comprehensive income - - - - Total comprehensive income for the half-year - - The above statement of comprehensive income should be read in conjunction with the accompanying notes. - 4 -
Balance sheet As at Balance sheet As at 30 June Notes $'000 $'000 Assets Cash and cash equivalents 22,522 7,449 Deposits held with brokers for margin 54,096 50,666 Accrued income 6,425 6,132 Receivables 563 668 Financial assets held at fair value through profit or loss 6 6,618,881 6,225,309 Total assets 6,702,487 6,290,224 Liabilities Distribution payable 5 14,210 41,129 Payables 2,341 2,353 Financial liabilities held at fair value through profit or loss 7 18,184 14,839 Redemptions payable 565 1,284 Total liabilities (excluding net assets attributable to unitholders) 35,300 59,605 Net assets attributable to unitholders - liability 4 6,667,187 6,230,619 The above balance sheet should be read in conjunction with the accompanying notes. - 5 -
Statement of changes in equity Statement of changes in equity Half-year ended $'000 $'000 Total equity at the beginning of the half-year - - Profit/(loss) for the half-year - - Other comprehensive income - - Total comprehensive income for the half-year - - Transactions with owners in their capacity as owners - - Total equity at the end of the half-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 half-year. The above statement of changes in equity should be read in conjunction with the accompanying notes. - 6 -
Statement of cash flows Statement of cash flows Half-year ended $'000 $'000 Cash flows from operating activities Proceeds from sale of financial instruments held at fair value through profit or loss 998,170 746,555 Purchase of financial instruments held at fair value through profit or loss (1,414,834) (1,317,474) Transaction costs (15) (29) Interest received 14,287 12,274 Dividends received 5,651 2,652 Distributions received 622 246 Other income received 116 346 Responsible entity's fees paid (12,389) (11,357) Payment of interest and other expenses (12) (3,167) Net cash outflow from operating activities (408,404) (569,954) Cash flows from financing activities Proceeds from applications by unitholders 856,160 1,918,408 Payments for redemptions by unitholders (391,591) (1,352,344) Distributions paid (41,129) (34,269) Net cash inflow from financing activities 423,440 531,795 Net increase/(decrease) in cash and cash equivalents 15,036 (38,159) Cash and cash equivalents at the beginning of the half-year 7,449 84,525 Effects of foreign currency exchange rate changes on cash and cash equivalents 37 (27) Cash and cash equivalents at the end of the half-year 22,522 46,339 Non-cash financing activities 66,734 44,944 The above statement of cash flows should be read in conjunction with the accompanying notes. - 7 -
Notes to the financial statements 1 Basis of preparation of interim report This general purpose financial report for the half-year ended has been prepared in accordance with accounting standard AASB 134 Interim Financial Reporting and the Corporations Act 2001. This interim financial report includes financial statements for ("the Fund") as an individual entity. This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June and any announcements made in respect of the Fund during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. The responsible entity of the Fund is Schroder Investment Management Australia Limited ("Schroders"). The registered office of the responsible entity is Level 20, 123 Pitt Street, Sydney, NSW 2000. The accounting policies adopted are consistent with those of the previous financial year and the corresponding interim reporting period. 2 Summary of significant accounting policies (a) New and amended standards adopted by the Fund There were no standards, interpretations or amendments to existing standards that are effective for the first time for the half year beginning 1 July that have a material impact on the Fund. (b) Impact of standards issued but not yet applied by the Fund Certain new accounting standards and interpretations have been published that are not mandatory for the reporting period and have not been early adopted by the Fund. The director's assessment of the impact of these new standards (to the extent relevant to the Fund) and interpretations is set out below: (i) AASB 9 Financial Instruments (and applicable amendments), (effective from 1 January 2018) AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial assets and financial liabilities. It has now also introduced revised rules around hedge accounting and impairment. The standard is not applicable until 1 January 2018 but is available for early adoption. The directors do not expect this to have a significant impact on the recognition and measurement of the Fund s financial instruments as they are carried at fair value through profit or loss. The derecognition rules have not been changed from the previous requirements, and the Fund does not apply hedge accounting. AASB 9 introduces a new impairment model. However, as the Fund s investments are all held at fair value through profit or loss, the change in impairment rules will not impact the Fund. The Fund has not yet decided when to adopt AASB 9. (ii) AASB 15 Revenue from Contracts with Customers, (effective from 1 January 2018) The AASB has issued a new standard for the recognition of revenue. This 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 Fund's main sources of income are interest, dividends 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 Fund's accounting policies or the amounts recognised in the financial statements. (c) Comparatives Certain prior year comparatives have been reclassified to be consistent with current year presentation. (d) Margin accounts Margin accounts comprise cash held as collateral for derivative transactions and short sales. The cash is held by the broker and is only available to meet margin calls. - 8 -
Notes to the financial statements 3 Fair value measurement of financial instruments (a) Fair value estimation The carrying amounts of the Fund's assets and liabilities at the end of the each 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 profit or loss. (i) 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 end of the reporting period without any deduction for estimated future selling costs. The Fund values its investments in accordance with the accounting policies set out in Note 2. For the majority of its investments, the Fund 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 Fund is the current bid price; the appropriate quoted market price for financial liabilities is the current asking price. When the Fund holds derivatives with offsetting market risks, it uses mid market 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. (ii) Fair value in an inactive 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 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. For other pricing models, inputs are based on market data at the end of the reporting period. Fair values for unquoted equity investments are estimated, if possible, using applicable price/earnings ratios for similar listed companies adjusted to reflect the specific circumstances of the issuer. The fair value of derivatives that are not exchange traded is estimated at the amount that the Fund would receive or pay to terminate the contract at the end of the reporting period taking into account current market conditions (volatility and appropriate yield curve) and the current creditworthiness of the counterparties. The fair value of a forward contract is determined as a net present value of estimated future cash flows, discounted at appropriate market rates as at the valuation date. Investments in other unlisted unit trusts are recorded at the redemption value per unit as reported by the investment managers of such funds. Some of the inputs to these models may not be market observable and are therefore estimated based on assumptions. The output of a model is always an estimate or approximation of a value that cannot be determined with certainty, and valuation techniques employed may not fully reflect all factors relevant to the positions the Fund holds. Valuations are therefore adjusted, where appropriate, to allow for additional factors including liquidity risk and counterparty risk. The carrying value less impairment provision of other receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Fund for similar financial instruments. (b) Fair value hierarchy (i) Classification of financial assets and financial liabilities The Fund classifies 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: - 9 -
Notes to the financial statements 3 Fair value measurement of financial instruments (continued) (b) Fair value hierarchy (continued) 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 prices) 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). The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety. For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is 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 Schroders. Schroders 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. The tables below set out the Fund's financial assets and liabilities (by class) measured and recognised at fair value. Level 1 Level 2 Level 3 Total $'000 $'000 $'000 $'000 Financial Assets Financial assets held for trading: Derivatives 15,557 7,302-22,859 Financial assets designated at fair value through profit and loss: Equity securities 173,415 - - 173,415 Fixed interest securities - 474,670-474,670 Unlisted unit trusts (with both listed equity exposure and fixed income exposure) - 5,396,249-5,396,249 Listed unit trusts 24,252 - - 24,252 Money market securities - 527,436-527,436 Total 213,224 6,405,657-6,618,881 Financial Liabilities Financial liabilities held for trading: Derivatives 17,160 1,024-18,184 Total 17,160 1,024-18,184-10 -
Notes to the financial statements 3 Fair value measurement of financial instruments (continued) (b) Fair value hierarchy (continued) 30 June Level 1 Level 2 Level 3 Total $'000 $'000 $'000 $'000 Financial Assets Financial assets held for trading: Derivatives 7,856 14,534-22,390 Financial assets designated at fair value through profit and loss: Equity securities 215,049 - - 215,049 Fixed interest securities - 411,547-411,547 Unlisted unit trusts (with both listed equity exposure and fixed income exposure) - 5,127,878-5,127,878 Listed unit trusts 27,104 - - 27,104 Money market securities - 421,341-421,341 Total 250,009 5,975,300-6,225,309 Financial Liabilities Financial liabilities held for trading: Derivatives 7,201 7,638-14,839 Total 7,201 7,638-14,839 Investments whose values are based on quoted market prices in active markets, and therefore classified within level 1, include active equity securities, active listed unit trusts and exchanged traded derivatives. 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. As level 2 investments include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non transferability, which are generally based on available market information. Investments in unlisted equity unit trusts have been classified as Level 2. However, the underlying investments of the unlisted equity unit trust are predominantly classified as level 1. Investments classified within level 3 have significant unobservable inputs, as they are infrequently traded. The Fund did not hold any Level 3 instruments as at and 30 June. (c) Transfers between levels There have been no transfers between levels for the half year ended and year ended 30 June. There were no changes made to valuation techniques as at. - 11 -
Notes to the financial statements 4 Net assets attributable to unitholders Movements in number of units and net assets attributable to unitholders during the half-year were as follows: No. '000 No. '000 $'000 $'000 Professional Class Opening balance 1,790,537 2,242,751 2,110,958 2,589,815 Applications 285,479 529,779 338,174 623,653 Redemptions (242,763) (1,047,380) (284,731) (1,231,020) Units issued upon reinvestment of distributions 17,667 13,252 20,576 15,791 Units issued upon reinvestment of fee rebates 612 1,550 725 1,825 (Decrease)/increase in net assets attributable to unitholders (32,381) 70,490 Closing balance 1,851,532 1,739,952 2,153,321 2,070,554 No. '000 No. '000 $'000 $'000 Wholesale Class Opening balance 923,156 545,369 1,053,418 610,650 Applications 251,469 298,494 288,123 341,322 Redemptions (58,951) (71,166) (67,202) (81,071) Units issued upon reinvestment of distributions 2,503 1,483 2,820 1,711 Units issued upon reinvestment of fee rebates 6 8 6 8 (Decrease)/increase in net assets attributable to unitholders (19,153) 19,227 Closing balance 1,118,183 774,188 1,258,012 891,847 No. '000 No. '000 $'000 $'000 Institutional Class Opening balance 2,773,995 1,149,105 2,928,575 1,189,349 Applications 210,007 891,656 223,092 941,423 Redemptions (16,355) (3,615) (17,287) (3,799) Units issued upon reinvestment of distributions 41,044 25,060 42,830 26,759 Units issued upon reinvestment of fee rebates - 370-393 (Decrease)/increase in net assets attributable to unitholders (42,238) 45,385 Closing balance 3,008,691 2,062,576 3,134,972 2,199,510 No. '000 No. '000 $'000 $'000 Client Class Opening balance 120,580 151,219 137,668 169,125 Applications 5,256 8,566 6,040 9,784 Redemptions (18,964) (31,229) (21,652) (35,474) Units issued upon reinvestment of distributions 450 592 508 683 (Decrease)/increase in net assets attributable to unitholders (1,682) 4,632 Closing balance 107,322 129,148 120,882 148,750-12 -
Notes to the financial statements 4 Net assets attributable to unitholders (continued) As stipulated within the Fund Constitution, each unit represents a right to an individual share in the Fund and does not extend to a right to the underlying assets of the Fund. There are four separate classes of unitholders in the Fund being Professional class, Wholesale class, Institutional class and Client class. 5 Distributions to unitholders The distributions during the half-year were as follows: Distributions - Professional Class Distributions paid/payable $'000 CPU $'000 CPU paid* 20,576 1.30 15,791 1.11 payable* 3,348 1.30 3,366 1.11 23,924 19,157 Distributions - Wholesale Class Distributions paid/payable $'000 CPU $'000 CPU paid* 2,820 1.16 1,711 1.07 payable* 10,145 1.16 6,543 1.07 12,965 8,254 Distributions - Institutional Class Distributions paid/payable $'000 CPU $'000 CPU paid* 42,830 1.44 26,759 1.31 payable* 20 1.44 13 1.31 42,850 26,772 Distributions - Client Class Distributions paid/payable $'000 CPU $'000 CPU * 508 1.13 683 1.00 payable* 697 1.13 606 1.00 1,205 1,289 *CPU shown is the rate applicable to both distributions paid and payable. - 13 -
Notes to the financial statements 6 Financial assets held at fair value through profit or loss Held for trading $'000 30 June $'000 Derivatives 22,859 22,390 Total held for trading 22,859 22,390 Designated at fair value through profit or loss Equity securities 173,415 215,049 Fixed interest securities 474,670 411,547 Unlisted unit trusts (with both listed equity exposure and fixed income exposure) 5,396,250 5,127,878 Listed unit trusts 24,252 27,104 Money market securities 527,436 421,341 Total designated at fair value through profit or loss 6,596,023 6,202,919 Total financial assets held at fair value through profit or loss 6,618,882 6,225,309 Comprising: Derivatives Forward currency contracts 2,302 1,523 International fixed interest futures 1,719 5,205 International credit default index swaps - 59 International money market futures 1,548 - Australian share price index futures 8,467 555 International share price index futures 3,823 2,096 Australian currency options - 5,471 International exchange traded equity options 5,000 7,481 Total derivatives 22,859 22,390 Equity securities Australian equity securities listed on a prescribed stock exchange 173,415 215,049 Total equity securities 173,415 215,049 Fixed interest securities Australian corporate bonds 119,667 59,761 International corporate bonds 83,115 73,505 Australian indexed bonds 159,300 168,933 Australian semi-government bonds 77,786 74,725 Australian term deposits 34,802 34,623 Total fixed interest securities 474,670 411,547 Unlisted unit trusts Australian unlisted unit trust (with both listed equity exposure and fixed income exposure) 5,203,549 4,945,677 International unlisted unit trust (with listed equity exposure) 192,701 182,201 Total unlisted unit trusts 5,396,250 5,127,878 Listed unit trusts Australian listed property trusts 14,651 17,075 Australian listed unit trusts 9,601 10,029 Total listed unit trusts 24,252 27,104-14 -
Notes to the financial statements 6 Financial assets held at fair value through profit or loss (continued) Money market securities Australian floating rate notes 383,611 291,987 International floating rate notes 60,498 53,255 Australian certificates of deposit 76,039 76,099 Australian promissory notes 7,288 - Total money market securities 527,436 421,341 Total financial assets held at fair value through profit or loss 6,618,882 6,225,309 7 Financial liabilities held at fair value through profit or loss Held for trading $'000 30 June $'000 Derivatives 18,184 14,839 Total held for trading 18,184 14,839 Total financial liabilities held at fair value through profit or loss 18,184 14,839 Comprising: Derivatives Forward currency contracts - 138 Australian share price index futures 10,387 374 International share price index futures 2,742 2,009 Australian fixed interest futures 601 1,047 International fixed interest futures 3,430 3,136 International money market futures - 635 International credit default index swaps 1,024 7,500 Total derivatives 18,184 14,839 Total financial liabilities held at fair value through profit or loss 18,184 14,839 8 Events occurring after the reporting period No significant events have occurred since the end of the reporting period which would impact on the financial position of the Fund disclosed in the balance sheet as at or on the results and cash flows of the Fund for the half-year ended on that date. 9 Contingent assets and liabilities and commitments There are no outstanding contingent assets, liabilities or commitments as at and 30 June. - 15 -
Directors' declaration Directors' declaration In the opinion of the directors of the responsible entity : (a) the financial statements and notes set out on pages 4 to 15 are in accordance with the Corporations Act 2001, including: (i) (ii) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; giving a true and fair view of the Fund's financial position as at and of its performance for the half-year ended on that date; (b) there are reasonable grounds to believe that the Fund will be able to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the directors. Director M A Coble Director G J A Cooper Sydney 11 March 2016-16 -
Independent auditor's report to the unitholders of Schroder Real Return CPI Plus 5% Fund Report on the half-year financial report We have reviewed the accompanying half-year financial report of ( the Fund ), which comprises the balance sheet as at, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year then ended on that date, selected explanatory notes and the directors declaration. Directors responsibility for the half-year financial report The directors of the responsible entity are responsible for the preparation and fair presentation of the half-year financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the half-year financial report that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor s responsibility Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of an Interim Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the financial position of the Fund as at and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of the, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report. A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. It also includes reading the other information included with the financial report to determine whether it contains any material inconsistencies with the financial report. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. While we considered the effectiveness of management s internal controls over financial reporting when determining the nature and extent of our procedures, our review was not designed to provide assurance on internal controls. Our audit did not involve an analysis of the prudence of business decisions made by directors or management. Independence In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.... PricewaterhouseCoopers, ABN Darling Park Tower 2, 201 Sussex Street, GPO BOX 2650, SYDNEY NSW 1171 DX 77 Sydney, Australia T +61 2 8266 0000, F +61 2 8266 9999, www.pwc.com.au Liability limited by a scheme approved under Professional Standards Legislation. - 17 -
Independent auditor's report to the unitholders of (continued) Conclusion Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of is not in accordance with the Corporations Act 2001, including: (a) (b) giving a true and fair view of the Fund's financial position as at and of its performance for the half-year ended on that date; and complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. PricewaterhouseCoopers Craig Stafford Sydney Partner 11 March 2016-18 -