ARSN 149 549 575 Annual report - 30 June 2018
ARSN 149 549 575 Annual report - 30 June 2018 Contents Page Directors' Report 1 Auditor's Independence Declaration 4 Statement of Comprehensive Income 5 Statement of Financial Position 6 Statement of Changes in Equity 7 Statement of Cash Flows 8 Notes to the Financial Statements 9 Directors' Declaration 19 Independent Auditor's Report 20 This financial report covers as an individual entity. The Responsible Entity of is Macquarie Financial Products Management Limited (ABN 38 095 135 694). The Responsible Entity's registered office is No. 50 Martin Place, Sydney, NSW 2000.
Directors' Report 30 June 2018 The directors of Macquarie Financial Products Management Limited ("MFPML"), a wholly owned subsidiary of Macquarie Group Limited, the Responsible Entity of, present their report together with the financial report of (the "Trust") for the year ended 30 June 2018. Principal activities The principal activities of the Trust are to invest in forestry plantation land to gain from appreciation in the value of the land and receive lease rental income through operating leases. The Trust has leased the plantable land to Macquarie Alternative Assets Management Limited ("MAAML") and is entitled to receive annual lease rental income at the rate of 669 per hectare (2017: 649 per hectare) of plantable land (escalating each year by 3%). Deferred rent equal to 4.95% of net harvest proceeds (or insurance proceeds) will also be receivable from MAAML during the harvest period. The Trust did not have any employees during the year. There were no significant changes in the nature of the Trust's activities during the year. Directors The following persons held office as directors of MFPML (the "Responsible Entity") during the year or since the end of the year and up to the date of this report: A J Abraham A Clubb W D Fox J King G Shneier Review and results of operations During the year, the Trust was managed in accordance with the investment objective and strategy set out in the Trust s offer document and in accordance with the Trust Constitution. Results The performance of the Trust, as represented by the results of its operations, was as follows: 2018 2017 Operating profit before finance costs attributable to unitholders () 405,688 360,259 Distributions Distributions paid and payable () 405,688 360,259 Distributions (dollars per unit) 0.13 0.14 Significant changes in state of affairs In the opinion of the directors, there were no significant changes in the state of affairs of the Trust that occurred during the financial year under review. 1
Directors' Report 30 June 2018 Matters subsequent to the end of the financial year No matter or circumstance has arisen since 30 June 2018 that has significantly affected, or may significantly affect: (i) the operations of the Trust in future financial years, or (ii) the results of those operations in future financial years, or (iii) the state of affairs of the Trust in future financial years. Likely developments and expected results of operations The Trust will continue to be managed in accordance with the investment objective and strategy set out in the Trust s offer document and in accordance with the Trust Constitution. Further information on likely developments in the operations of the Trust and the expected results of those operations have not been included in this report because the Responsible Entity believes it would be likely to result in unreasonable prejudice to the Trust. Indemnification and insurance of officers and auditors No insurance premiums are paid for out of the assets of the Trust in regards to insurance cover provided to either the officers of the Responsible Entity or the auditors of the Trust. Under the Trust Constitution, the Responsible Entity of the Trust is entitled to be indemnified out of the assets of the Trust for any liability incurred by it in properly performing or exercising any of its powers or duties in relation to the Trust. Fees paid to and units held in the Trust by the Responsible Entity or its associates No fees were paid to the Responsible Entity and its associates out of the Trust property during the year (2017: Nil). No fees were paid out of the Trust property to the directors of the Responsible Entity during the year (2017: Nil). The number of units in the Trust held by the Responsible Entity, its directors or its associates as at the end of the financial year are disclosed in note 10 of the financial statements. Units in the Trust The movement in units on issue in the Trust during the year is disclosed in note 6 of the financial statements. The value of the Trust s assets and liabilities is disclosed on the statement of financial position and derived using the basis set out in note 2 of the financial statements. Environmental regulation The operations of the Trust are not subject to any particular or significant environmental regulations under a Commonwealth, State or Territory law. 2
Directors' Report 30 June 2018 Rounding of amounts In accordance with Australian Securities and Investments Commission Corporations (Rounding in Financial/Directors Reports) Instrument 2016/191, amounts in the directors report and the financial report have been rounded off to the nearest Australian dollar, unless otherwise indicated. 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 4. This report is made in accordance with a resolution of the directors. Director:... A Clubb Sydney 25 September 2018 3
Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au Auditor s Independence Declaration to the Directors of Macquarie Financial Products Management Limited As lead auditor for the audit of for the financial year ended 30 June 2018, I declare to the best of my knowledge and belief, there have been: a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b) no contraventions of any applicable code of professional conduct in relation to the audit. Ernst & Young Rita Da Silva Partner 25 September 2018 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation
Statement of Comprehensive Income Notes 2018 2017 Investment income Lease rental income 10 595,617 578,269 Total investment income 595,617 578,269 Expenses Interest on loan from Macquarie Bank Limited (189,929) (218,010) Total operating expenses (189,929) (218,010) Operating profit 405,688 360,259 Finance costs attributable to unitholders Distributions to unitholders 5 (405,688) (360,259) Increase/(decrease) in net assets attributable to unitholders 6 - - Profit/(loss) for the year - - Other comprehensive income for the year - - Total comprehensive income for the year - - The above statement of comprehensive income should be read in conjunction with the accompanying notes. 5
Statement of Financial Position As at 30 June 2018 Notes 2018 2017 Assets Cash and cash equivalents 7 71,717 69,878 Land 8 4,471,473 4,471,473 Total assets 4,543,190 4,541,351 Liabilities Other payables 59,666 57,827 Loan from Macquarie Bank Limited 9 2,083,886 2,489,574 Total liabilities (excluding net assets attributable to unitholders) 2,143,552 2,547,401 Net assets attributable to unitholders - liability 6 2,399,638 1,993,950 The above statement of financial position should be read in conjunction with the accompanying notes. 6
Statement of Changes in Equity 2018 2017 Total equity at the beginning of the year - - Total comprehensive income for the year - - Transactions with owners in their capacity as owners - - Total equity at the end of the year - - Under Australian Accounting Standards, net assets attributable to unitholders are classified as a liability rather than equity. As a result there was no equity at the start or end of the year. The above statement of changes in equity should be read in conjunction with the accompanying notes. 7
Statement of Cash Flows Notes 2018 2017 Cash flows from operating activities: Interest received - 18 Lease rental income received 655,179 691,670 Interest on loan paid to Macquarie Bank Limited (189,929) (218,010) GST paid (57,723) (56,143) Other amounts received - 289 Net cash inflow from operating activities 11(a) 407,527 417,824 Cash flows from financing activities: Loan repaid to Macquarie Bank Limited 9 (405,688) (360,259) Net cash outflow from financing activities (405,688) (360,259) Net increase in cash and cash equivalents 1,839 57,565 Cash and cash equivalents at the beginning of the year 69,878 12,313 Cash and cash equivalents at the end of the year 7 71,717 69,878 Non-cash financing activities 11(b) 405,688 360,259 The above statement of cash flows should be read in conjunction with the accompanying notes. 8
Notes to the Financial Statements 1 General information This financial report covers (the "Trust") as an individual entity. The Trust was constituted on 25 February 2011. The Trust is expected to terminate on 31 December 2022 or at a later date, in accordance with the provisions of the Trust Constitution. The Trust is a registered managed investment scheme domiciled in Australia. The financial report is presented in Australian dollars. The Responsible Entity of the Trust is Macquarie Financial Products Management Limited (the "Responsible Entity''). The Responsible Entity s registered office is No. 50 Martin Place, Sydney, NSW 2000. The Trust issued units at 1 per unit (GST free) in order to purchase the land on which the forestry plantations are situated. Land owned by the Trust is used for forestry plantation purposes by the investors of the Macquarie Eucalypt Project 2011. The Macquarie Eucalypt Project 2011 is a managed investment scheme and its Responsible Entity is Macquarie Alternative Assets Management Limited ("MAAML"), a wholly owned subsidiary of Macquarie Group Limited ("MGL"). The Trust has leased the plantable land to MAAML and is entitled to receive annual lease rental income at the rate of 669 per hectare (2017: 649 per hectare) of plantable land (escalating each year by 3%). Deferred rent equal to 4.95% of net harvest proceeds (or insurance proceeds) will also be receivable from MAAML during the harvest period. The Trust will continue to be managed in accordance with the investment objective and strategy set out in the Trust s offer document and in accordance with the Trust Constitution. The financial statements were authorised for issue by the directors on 25 September 2018. The directors of the Responsible Entity have the power to amend and reissue the financial report. 2 Summary of significant accounting policies The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all years presented, unless otherwise stated in the following text. (a) Basis of preparation This general purpose financial report has been prepared in accordance with Australian Accounting Standards and the Corporations Act 2001 in Australia. The financial report is prepared on the basis of fair value measurement of assets and liabilities except where otherwise stated. The statement of financial position is presented on a liquidity basis. Assets and liabilities are presented in decreasing order of liquidity and do not distinguish between current and non-current. All balances are expected to be recovered or settled within twelve months, except for land and net assets attributable to unitholders. The amount expected to be recovered or settled within twelve months after the end of each reporting period cannot be reliably determined. Where necessary, comparative information has been reclassified to be consistent with current period disclosures. Compliance with International Financial Reporting Standards The financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. 9
Notes to the Financial Statements 2 Summary of significant accounting policies (continued) (b) Net assets attributable to unitholders Units are redeemable at the end of the Trust's finite life and are therefore classified as financial liabilities. The fair value of redeemable units is measured at the redemption amount that would be received if units were redeemed at the reporting date. (c) Cash and cash equivalents For the purpose of presentation in the statement of cash flows, cash includes cash on hand and deposits held at call with financial institutions. Cash equivalents include other short-term, highly liquid investments with original maturities of three months or less from the date of acquisition that are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes. Bank overdrafts, if any, are shown separately on the statement of financial position. (d) Land Land is initially recognised at acquisition cost. The Responsible Entity assesses at each reporting date whether there is an indication that the carrying value of the land may be impaired. Impairment exists if there is objective evidence of impairment as a result of one or more events, which have an impact on the estimated future cash flows of the land that can be reliably estimated. When such instances occur, the land is written down to its recoverable amount and the decrement recognised as impairment losses in the statement of comprehensive income in the financial year in which the recoverable amount write-down occurs. The recoverable amount of the land is measured at the higher of the land's fair value less costs of disposal and its value in use. In assessing value in use, the estimated future cash flows including expected lease rental income are discounted to their present value. As the lease rolls off in future years, this may impact the assessment of value in use and the recoverable amount. An impairment is generally reversed if the recoverable amount of an investment is more than its carrying value and that can be related objectively to an event occurring after the impairment losses were recognised. The previously recognised impairment losses are reversed in the statement of comprehensive income. (e) Loan The loan is recognised at fair value initially and is subsequently carried at amortised cost. (f) Investment income Lease rental income is recognised in the statement of comprehensive income on an accruals basis. (g) Expenses All expenses are recognised in the statement of comprehensive income on an accruals basis. (h) Income tax Under current legislation, the Trust is not subject to income tax as unitholders are presently entitled to the income of the Trust. 10
Notes to the Financial Statements 2 Summary of significant accounting policies (continued) (i) Distributions to unitholders In accordance with the Trust Constitution, the Trust fully distributes its distributable income, and any other amounts determined by the Responsible Entity, to unitholders by cash or reinvestment. Reinvested distributions will be utilised for the repayment of the loan from Macquarie Bank Limited ("MBL"). The distributions to unitholders are recognised in the statement of comprehensive income as finance costs attributable to unitholders. (j) Movement in net assets attributable to unitholders Income and expenses that are not included in distributable income and not distributed to unitholders are included in net assets attributable to unitholders. Movements in net assets attributable to unitholders are recognised in the statement of comprehensive income as finance costs attributable to unitholders. (k) Functional and presentation currency Items included in the Trust s financial statements are measured using the currency of the primary economic environment in which it operates (the functional currency ). This is the Australian dollar, which reflects the currency of the economy in which the Trust competes for funds and is regulated. The Australian dollar is also the Trust s presentation currency. (l) Receivables Receivables include assets and accrued income owing to the Trust which have not been received as at the statement of financial position date and may include such items as lease rental income and Reduced Input Tax Credits ("RITC"). (m) Payables Payables include liabilities, accrued expenses and Goods and Services Tax ("GST") owing by the Trust which are unpaid as at the statement of financial position date. (n) GST Income, expenses and assets are recognised net of the amount of GST to the extent that the GST is recoverable from the Australian Taxation Office ("ATO"). Where GST is not recoverable, it is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable. Receivables and payables are recognised inclusive of GST. RITC recoverable by the Trust from the ATO are recognised as receivables in the statement of financial position. Cash flows are disclosed in the statement of cash flows on a gross basis and cash flows relating to GST, recoverable from, or payable to, the ATO are included as cash flows from operating activities. (o) Use of estimates The Trust may make estimates and assumptions that affect the reported amounts of assets and liabilities within the next financial year. Estimates are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. 11
Notes to the Financial Statements 2 Summary of significant accounting policies (continued) (p) New accounting standards and interpretations Certain new accounting standards and interpretations have been published that are not mandatory for the 30 June 2018 reporting period. The Responsible Entity s assessment of the impact of these new standards (to the extent relevant to the Trust) and interpretations is set out below: (i) AASB 9 Financial Instruments and consequential amendments AASB 9 Financial Instruments applies to annual reporting periods beginning on or after 1 January 2018 and will therefore apply to the Trust from 1 July 2018. AASB 9 Financial Instruments addresses the classification and measurement of financial assets and financial liabilities. The current four categories of financial assets, stipulated in AASB 139 Financial Instruments: Recognition and Measurement, will be replaced with three classification categories: amortised cost, fair value through other comprehensive income and fair value through profit or loss. The application of the Standard does not have a significant impact on the recognition, classification and measurement of the Trust's financial instruments. (ii) AASB 15 Revenue from Contracts with Customers AASB 15 Revenue from Contracts with Customers applies to annual reporting periods beginning on or after 1 January 2018 and will therefore apply to the Trust from 1 July 2018. AASB 15 replaces all current guidance on revenue recognition from contracts with customers. It requires identification of discrete performance obligations within a transaction and an associated transaction price allocation to these obligations. Revenue is recognised upon satisfaction of these performance obligations, which occur when control of the goods or services are transferred to the customer. The application of the requirements of AASB 15 are consistent with the Trust's accounting policies. Consequently, the application of the standard will not have a significant effect on the financial position, performance or financial report disclosures of the Trust. (iii) AASB 16 Leases AASB 16 Leases applies to annual reporting periods beginning on or after 1 January 2019 and will therefore apply to the Trust from 1 July 2019. AASB 16 Leases requires recognition of a right of use asset along with the associated lease liability where the entity is a lessee. Interest expense will be recognised in profit or loss using the effective interest rate method, and the right of use asset will be depreciated. Lessor accounting will largely remain unchanged. The Trust is continuing to assess the full impact of adopting AASB 16 Leases. Standards and interpretations that are not expected to have material impact on the Trust have not been included. (q) Rounding of amounts In accordance with Australian Securities and Investments Commission Corporations (Rounding in Financial/Directors Reports) Instrument 2016/191, amounts in the directors report and the financial report have been rounded off to the nearest Australian dollar, unless otherwise indicated. 12
Notes to the Financial Statements 3 Financial risk management (a) Strategy in using financial instruments The Trust's activities expose it to interest rate risk, credit risk and liquidity risk. The Responsible Entity s overall risk management programme focuses on ensuring compliance with the Trust s Product Disclosure Statement and seeks to maximise the returns derived for the level of risk to which the Trust is exposed. The Responsible Entity reviews any identified high and medium severity exceptions to internal risk policies and procedures on a quarterly basis. (b) Interest rate risk The Trust is not subject to significant amounts of interest rate risk due to fluctuations in the prevailing levels of market interest rates. The Trust holds a loan from MBL. There is no interest rate risk in relation to the loan balance as it carries a fixed interest rate of 7.65% per annum. (c) Credit risk Credit risk arises from cash and cash equivalents, deposits with banks and other receivables. The maximum exposure to credit risk at the reporting date is the carrying amount of cash and cash equivalents, unsettled receipts and other financial assets. None of these assets are impaired nor past due but not impaired. The exposure to credit risk is managed by only holding bank accounts with MBL which has an investment grade credit rating (2017: investment grade credit rating) as determined by Standard and Poor's rating agency. (d) Liquidity risk The Trust is subject to liquidity risk in relation to the financial liabilities it holds. The Trust is required to pay the net assets attributable to unitholders on termination of the Trust, which is expected to occur on 31 December 2022 or at a later date, in accordance with the provisions of the Trust Constitution. The table below analyses the Trust s financial liabilities (excluding net assets attributable to unitholders) into relevant maturity groupings based on the remaining period to the earliest possible contractual maturity date at 30 June 2018 and 30 June 2017. The amounts in the table are contractual undiscounted cash flows. On demand Less than 3 months 3-12 months 1-5 years Total 30 June 2018 Other payables - 59,666 - - 59,666 Loan from Macquarie Bank Limited - - 454,507 1,629,379 2,083,886 Total liabilities (excluding net assets attributable to unitholders) - 59,666 454,507 1,629,379 2,143,552 13
Notes to the Financial Statements 3 Financial risk management (continued) (d) Liquidity risk (continued) On demand Less than 3 months 3-12 months 1-5 years Total 30 June 2017 Other payables - 57,827 - - 57,827 Loan from Macquarie Bank Limited - - 405,688 2,083,886 2,489,574 Total liabilities (excluding net assets attributable to unitholders) - 57,827 405,688 2,083,886 2,547,401 (e) Fair value estimation The carrying amounts of all the Trust's financial assets and financial liabilities at the end of each reporting period approximated their fair values. 4 Auditor's remuneration During the year, the following fees were paid or payable for services provided by Ernst & Young, auditor of the Trust: 2018 2017 Audit services Audit of financial reports 7,000 10,585 Other audit work under the Corporations Act 2001 467 467 Non-audit services Taxation 1,040 2,050 Total remuneration paid/payable 8,507 13,102 Audit fees are paid out of the Responsible Entity's own resources. 5 Distributions to unitholders During the year, the Trust has declared distributions to unitholders of 405,688 (2017: 360,259). At 30 June 2018, the Trust has no distributions payable to unitholders (2017: Nil). 6 Net assets attributable to unitholders As stipulated within the Trust Constitution, each unit represents an undivided share in the beneficial interest in the Trust. There are no separate classes of units and each unit has the same rights attaching to it as all other units of the Trust. 14
Notes to the Financial Statements 6 Net assets attributable to unitholders (continued) Movements in number of units and net assets attributable to unitholders during the year were as follows: 2018 No. 2017 No. 2018 2017 Opening balance 3,017,636 2,657,377 1,993,950 1,633,691 Units issued upon reinvestment of distributions 405,688 360,259 405,688 360,259 Increase/(decrease) in net assets attributable to unitholders - - - - Closing balance 3,423,324 3,017,636 2,399,638 1,993,950 Capital risk management The Trust manages its net assets attributable to unitholders as capital, notwithstanding net assets attributable to unitholders are classified as a liability. The Trust has issued 3,423,324 units at 1 per unit amounting to 3,423,324. Of this, 1,692,425 was used for purchase of land and the balance of 1,730,899 (2017: 1,325,211) was used to repay the Trust's loan as per the Product Disclosure Statement. 7 Cash and cash equivalents 2018 2017 Cash at bank 71,717 69,878 Total cash and cash equivalents 71,717 69,878 8 Land 2018 2017 Land at cost 5,495,159 5,495,159 Less: Accumulated impairment losses on land (1,023,686) (1,023,686) Land at cost less accumulated impairment losses 4,471,473 4,471,473 9 Loan from Macquarie Bank Limited 2018 2017 Opening balance 2,489,574 2,849,833 Amount repaid during the year* (405,688) (360,259) Closing balance 2,083,886 2,489,574 *Principal repayments of 405,688 (2017: 360,259) were made as per the loan agreement during the year with the final payment anticipated to be made on 30 June 2022. The Trust's land is provided as security against the loan. 15
Notes to the Financial Statements 10 Related party disclosures (a) Responsible Entity The Responsible Entity of the Trust is Macquarie Financial Products Management Limited ("MFPML"), a wholly owned subsidiary of MGL. (b) Key management personnel The following persons held office as directors of MFPML from 1 July 2016 to the date of this report: A J Abraham A Clubb W D Fox J King G Shneier No amount is paid by the Trust directly to the directors of the Responsible Entity. Consequently, no compensation as defined in AASB 124 Related Party Disclosures is paid by the Trust to the directors as key management personnel. (c) Key management personnel unitholdings No key management personnel held units in the Trust at any time during the year (2017: Nil). (d) Key management personnel loan disclosures The Trust has not made, guaranteed or secured, directly or indirectly, any loans to the key management personnel or their personally related entities at any time during the reporting period (2017: Nil). (e) Responsible Entity fees and other transactions The Responsible Entity did not receive any fees from the Trust during the year ended 30 June 2018 (2017: Nil). All expenses in connection with the preparation of accounting records and the maintenance of the unit register have been fully borne by the Responsible Entity. All related party transactions are conducted on normal commercial terms and conditions. At 30 June 2018, there are no amounts payable to the Responsible Entity (2017: Nil). (f) Related party unitholdings Parties related to the Trust (including MFPML, its affiliates and other schemes managed by MFPML) held units in the Trust as follows: 30 June 2018 Unitholder Number of units held opening (Units) Number of units held closing (Units) Units held % Number of units acquired (Units) Number of units disposed (Units) Distributions declared by the Trust MBL 10,163 11,529 0.34 1,366* - 1,366 16
Notes to the Financial Statements 10 Related party disclosures (continued) (f) Related party unitholdings (continued) 30 June 2017 Unitholder Number of units held opening (Units) Number of units held closing (Units) Units held % Number of units acquired (Units) Number of units disposed (Units) Distributions declared by the Trust MBL 8,950 10,163 0.34 1,213* - 1,213 There are no distributions payable to the above related party as at 30 June 2018 (2017: Nil). *Units allocated from re-investment of distributions. (g) Other transactions within the Trust No directors of the Responsible Entity have entered into a material contract with the Trust in the current or previous financial year and there were no material contracts involving directors' interests subsisting at 30 June 2018 or 30 June 2017. The Trust holds a bank account with MBL, a wholly owned subsidiary of MGL, with the carrying amount disclosed in Note 7. The Trust has entered into a loan agreement with MBL to finance the purchase of the Trust's land. Under the loan agreement, the Trust is required to pay a fixed interest rate of 7.65% per annum on the loan balance effective from the loan commencement date and make annual principal repayments commencing on 30 June 2012. During the year, the Trust has repaid 405,688 (2017: 360,259) of the loan principal. The carrying value of the loan is disclosed in note 9. The interest expense on the loan is disclosed in the statement of comprehensive income. Bond Street Custodians Limited, a wholly owned subsidiary of MGL, is a custodian of the Trust. Fees and expenses are negotiated on an arm's length basis for all transactions with related parties. The Trust has earned lease rental income of 595,617 (2017: 578,269) from MAAML. At 30 June 2018, the Trust has no lease rental income receivable from MAAML (2017: Nil). 11 Reconciliation of profit/(loss) to net cash inflow from operating activities (a) Reconciliation of profit/(loss) to net cash inflow from operating activities 2018 2017 Profit/(loss) for the year - - Increase/(decrease) in net assets attributable to unitholders - - Distributions to unitholders 405,688 360,259 Net change in receivables and other assets - 55,920 Net change in payables and other liabilities 1,839 1,645 Net cash inflow from operating activities 407,527 417,824 17
Notes to the Financial Statements 11 Reconciliation of profit/(loss) to net cash inflow from operating activities (continued) (b) Non-cash financing activities 2018 2017 Reinvestment of unitholder distributions 405,688 360,259 12 Events occurring after the reporting date No significant events have occurred since the reporting date which would impact on the financial position of the Trust disclosed in the statement of financial position as at 30 June 2018 or on the results and cash flows of the Trust for the year ended on that date. 13 Contingent assets, contingent liabilities and commitments There are no outstanding contingent assets, contingent liabilities or commitments as at 30 June 2018 and 30 June 2017. 18
Directors' Declaration In the opinion of the directors of the Responsible Entity: (a) the financial statements and notes as set out on pages 5 to 18 are in accordance with the Corporations Act 2001, including: (i) (ii) complying with Australian Accounting Standards; and giving a true and fair view of the Trust's financial position as at 30 June 2018 and of its performance for the financial year ended on that date; and (b) there are reasonable grounds to believe that the Trust will be able to pay its debts as and when they become due and payable. The directors declare that the notes to the financial statements include an explicit and unreserved statement of compliance with the International Financial Reporting Standards (see note 2(a)). This declaration is made in accordance with a resolution of the directors. Director... A Clubb Sydney 25 September 2018 19
Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001 Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au Independent auditor s report to the unitholders of Macquarie Timber Land Trust 2011 Opinion We have audited the financial report of ( the Trust ), which comprises the statement of financial position as at 30 June 2018 the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes to the financial statements, including a summary of significant accounting policies, and the directors' declaration. In our opinion, the accompanying financial report of the Trust is in accordance with the Corporations Act 2001, including: a) giving a true and fair view of the Trust's financial position as at 30 June 2018 and of its financial performance for the year ended on that date; and b) complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Trust in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Information Other than the Financial Report and Auditor s Report Thereon The directors of Macquarie Financial Products Management Limited ( the Responsible Entity ) are responsible for the other information. The other information is the directors report accompanying the financial report. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation
Responsibilities of the Directors for the Financial Report The directors of the Responsible Entity are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the Trust s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Trust or to cease operations, or have no realistic alternative but to do so. Auditor's Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Trust s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. Conclude on the appropriateness of the directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Trust s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor s report. However, future events or conditions may cause the Trust to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Ernst & Young Rita Da Silva Partner Sydney 25 September 2018 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation