annual financialreport 2014...james besson is responsible for fund strategy and capital management...

AUSTRALIAN PROPERTYOPPORTUNITIES FUND II(ARSN 169 190 498)

ANNUAL FINANCIAL REPORT 2014FOR THE PERIOD FROM 6 MAY 2014 (DATE OF REGISTRATION) TO 30 JUNE 2014

(ACN 152 367 649) (AFSL 410 433)

FUND MANAGER

Walsh & Company Asset Management Pty Limited(ACN 159 902 708)

Level 15, 100 Pacific HighwayNORTH SYDNEY NSW 2060

T: 1300 454 801F: 1300 883 159E: [email protected]

SOLICITOR

Watson Mangioni Lawyers Pty Limited

Level 13, 50 Carrington StreetSYDNEY NSW 2000

T: +61 2 9262 6666F: +61 2 9262 2626E: [email protected]

www.wmlaw.com.au

AUDITOR

Deloitte Touche Tohmatsu

Grosvenor Place, 225 George StreetSYDNEY NSW 2000

T: +61 2 9322 7000F: +61 2 9322 7001

www.deloitte.com.au

UNIT REGISTRAR

Boardroom Limited

Level 7, 207 Kent StreetSYDNEY NSW 2000

T: 1300 737 760 (Australia)T: +61 2 9290 9600 (International)F: 1300 653 459

www.boardroomlimited.com.au

AUSTRALIAN PROPERTY OPPORTUNITIES FUND II



www.australianpropertyopportunitiesfund.com.au

RESPONSIBLE ENTITY

Walsh & Company Investments Limited(ACN 152 367 649) (AFSL 410 433)



www.dixon.com.au/walshandco

DirectorsAlex MacLachlanTristan O’ConnellTom Kline

SecretariesTristan O’ConnellHannah Chan

INVESTMENT MANAGER & PROPERTY MANAGER

Fort Street Real Estate Capital Pty Limited(ACN 164 101 731)

Level 11, 1 O’Connell StreetSYDNEY NSW 2000

T: +61 2 8241 1300F: +61 2 8241 1333E: [email protected]

www.australianpropertyopportunitiesfund.com.au

DIRECTORY

CONTENTS

CHAIRMAN’S LETTER i

DIRECTORS’ REPORT 1

AUDITOR’S INDEPENDENCE DECLARATION 6

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 8

CONSOLIDATED STATEMENT OF FINANCIAL POSITION 9

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 10

CONSOLIDATED STATEMENT OF CASH FLOWS 11

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 12

DIRECTORS’ DECLARATION 29

INDEPENDENT AUDITOR’S REPORT 30

i

CHAIRMAN’S LETTER

Dear Unitholders

Welcome to the inaugural Annual Report for the Australian Property Opportunities Fund II (Fund) for the financial period ended 30 June 2014 (FY14).

The Fund was established to provide retail investors with the opportunity to gain exposure to an attractive part of the commercial property market. Through the Australian Property Opportunities Trust II (Trust), the Fund targets small-to-medium-sized assets in the office, retail and industrial sectors, predominantly located in major real estate markets on Australia’s eastern seaboard. It seeks assets that deliver reliable income and capital growth to investors.

The Fund was registered with the Australian Securities Investments Commission (ASIC) on 6 May 2014 and is required under the Corporations Act 2001 to report to Unitholders for FY14. However, as allotment of units for the Fund’s capital raising was only completed shortly prior to 30 June 2014, there were no activities in the Fund during FY14.

INITIAL PUBLIC OFFERThe initial public offer (Offer) was successfully completed in June 2014, with the allotment of units on 20 June 2014. The Offer was substantially oversubscribed, with applications totalling approximately $110 million.

The successful capital raising places the Fund in an excellent position to engage with vendors of small-to-medium-sized assets that meet the Fund’s investment criteria. The Fund aims to invest in a diversified portfolio of assets within the next 12 to 24 months.

INVESTMENT AND PROPERTY MANAGEMENTSince the inception of the Fund, Fort Street Real Estate Capital Pty Limited (Investment Manager) has identified, sourced and screened a number of potential investments, and through its relationships with Fort Street Advisers and Archerfield Capital Partners has forged networks with vendors, real estate agents, property valuers, property managers and banks.

Subsequent to year end, the Fund acquired its first asset, Northpoint Shopping Centre in North Toowoomba for $36.5 million. The Centre was completed in March 2014 and is prominently located on the New England Highway. It is the only major shopping centre in North Toowoomba, just 3km north of the Toowoomba CBD. Northpoint features a full-line Coles supermarket and 20 speciality shops including prominent national retailers Priceline, The Reject Shop, Subway and Brumby’s Bakery. Given the centre’s recent construction, minimal capital expenditure is required in the short-to-medium term. The Investment Manager is already exploring opportunities to decrease the small number of vacancies and improve trading within the centre.

AUSTRALIAN PROPERTY OPPORTUNITIES FUND I I | ANNUAL REPORT JUNE 2014 ii

INVESTMENT OUTLOOKThe Responsible Entity believes Australian commercial property conditions remain positive, with strong underlying fundamentals and a rich pipeline of investment opportunities in the small-to-medium market.

With the spread between commercial property yields and cash rates at near 10-year highs, we believe there is an attractive opportunity to generate stable rental income, and potentially longer-term capital gains. Taking advantage of historically low interest rates, the Fund is targeting a consolidated gearing level of around 40% to 50%.

We would like to take this opportunity to thank you for your support of the Australian Property Opportunities Fund II.

Yours sincerely

Alex MacLachlanChairman of Walsh & Company Investments LimitedDated 12 September 2014

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MEMBERS OF THE INVESTMENT COMMITTEE

STUART NISBETT | CHAIRMAN

Stuart Nisbett is currently the Managing Director and Principal at Archerfield Capital Partners, a boutique corporate advisory firm specialising in real estate, which he established in 2008.

He has more than 25 years experience in property development, property funds management, equity and debt raising, corporate advisory and project finance. Previously, Stuart was Executive Director, Head of Property Funds at ANZ Investment Bank. He was also the Managing Director, Head of Property Banking & Property Investment Banking at N M Rothschild & Sons (Australia) Limited.

Stuart holds a Bachelor of Commerce with Merit and a Masters of Commerce from the University of NSW and in 2005 was appointed a Fellow of the Australian Property Institute.

RICHARD HUNT

Richard is a principal of Fort Street Advisers, with more than 20 years of investment banking and corporate advisory experience.

Prior to establishing Fort Street in 2009, Richard was Co-Head of Investment Banking, UBS AG, Australasia from 2003 to 2008, having been Head of UBS Real Estate Australasia from 1999 to 2003. A successful commercial property market professional in Australia, Richard has been actively involved in a significant number of listed real estate transactions over the past 20 years. Richard’s real estate experience covers a range of transactions including mergers, acquisitions, disposals, debt restructuring and capital raisings.

Richard has a Bachelor of Economics, Actuarial Studies from Macquarie University and is a Member of the Takeovers Panel.

ALEX MACLACHLAN

Alex MacLachlan is Managing Director, CEO – Funds Management at Dixon Advisory.

Before joining Dixon Advisory, Alex was an investment banker specialising in the natural resources sector, most recently serving as Head of Energy, Australasia, for UBS AG in Sydney and, prior to that, as an investment banker at Credit Suisse First Boston. During his career as an investment banker, Alex advised many leading Australian and global natural resources companies, working with over 30 companies on more than $100 billion in announced mergers and acquisitions and capital markets transactions.

Alex has a Bachelor of Arts from Cornell University and a Master of Business Administration from The Wharton School, University of Pennsylvania.

AUSTRALIAN PROPERTY OPPORTUNITIES FUND I I | ANNUAL REPORT JUNE 2014 iv

MANAGEMENT OF FORT STREET REAL ESTATE CAPITAL

DAVID ROGERS | DIRECTOR, INVESTMENTS

David Rogers is responsible for sourcing and executing all transactions for the Fund with extensive experience across commercial office, retail and industrial markets.

Prior to joining Fort Street Real Estate, David was Capital Transactions Manager with Charter Hall, where he was involved across 16 listed and unlisted funds, with total exposure to $10 billion commercial real estate funds under management. David also previously served as Capital Transactions Manager with Macquarie Real Estate.

David has a Master in Chemical Engineering from Imperial College, London and Associateship of the City and Guilds of London Institute.

JAMES BESSON | FUND MANAGER

James Besson is responsible for fund strategy and capital management of the Fund.

Before joining Fort Street Real Estate Capital, he was an Associate Director at UBS AG in Sydney, where he spent four years in the real estate equity research team covering real estate investment trusts with a combined market capitalisation of over $35 billion.

Prior to this, he was a Financial Analyst at the Westfield Group, where he spent four years working in the Sydney and London offices in a number of different operational and finance roles.

James has a Bachelor of Commerce from the University of Sydney and a Master of Business Administration from the London Business School.

FERGUS ADAMSON | ASSET MANAGER

Fergus Adamson is responsible for asset management, strategy and implementation.

Before joining Fort Street Real Estate Capital, Fergus spent 12 years working in commercial property, including five years focusing on valuation and seven years focusing on property and asset management. He worked for Jones Lang LaSalle in London for four years before returning to Sydney, where he spent just over two years as an asset manager for a specialist real estate funds management firm.

Fergus has a Bachelor of Business (Property & Property Valuation) from the University of South Australia and is an associate member of the Australian Property Institute.

AUSTRALIAN PROPERTY OPPORTUNITIES FUND I I | ANNUAL REPORT JUNE 2014 1

DIRECTORS’ REPORTFOR THE PERIOD FROM 6 MAY 2014 (DATE OF REGISTRATION) TO 30 JUNE 2014

The directors of Walsh & Company Investments Limited, as Responsible Entity of Australian Property Opportunities Fund II (Fund), present their report together with the annual financial report for the Fund and its wholly-owned subsidiary, Australian Property Opportunities Trust II (Trust), (collectively referred to as the ‘Group’) for the financial period from 6 May 2014 (date of registration) to 30 June 2014.

DIRECTORSThe directors of the Responsible Entity at any time during the financial period are listed below:Alex MacLachlanTristan O’ConnellTom Kline

Directors were in office from the start of the financial period to the date of this report, unless otherwise stated.

INFORMATION ON DIRECTORS

ALEX MACLACHLAN BA (Cornell), MBA (Wharton) | CHAIRMAN

Alex joined Dixon Advisory in 2008 to lead the then newly formed Funds Management division. Alex focused the efforts of the Funds Management division on providing Dixon Advisory clients with access to asset classes and investment opportunities that would normally only be available to institutional investors. From funds under management of under $100 million at the time of his start, Alex has grown the Funds Management division to over $1.8 billion of funds under management today, with investments across residential and commercial property, fixed income, private equity, and listed equities and commodities.

Following his success in growing the Funds Management division, Alex moved to New York in mid-2013, where, in addition to his role as CEO of Funds Management, he now also leads the strategy and growth of Dixon USA, a leading provider of urban single-family home rentals in the New York metropolitan area.

Prior to joining Dixon Advisory, Alex was an investment banker at UBS, where he rose to Head of Energy for Australasia. During his tenure in investment banking, Alex worked on more than $100 billion in mergers and acquisitions and capital markets transactions, advising some of the world’s leading companies.

Alex has a Bachelor of Arts from Cornell University and a Master of Business Administration from The Wharton School, University of Pennsylvania.

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During the past three years, he has acted as a non-executive director or director of a responsible entity of the following Australian listed entities:– Asian Masters Fund Limited (since 2009)– Australian Masters Corporate Bond Fund No 1 Limited (since 2009, delisted 14 July 2011) – Australian Masters Corporate Bond Fund No 2 Limited (since 2009, delisted 15 July 2011) – Australian Masters Corporate Bond Fund No 3 Limited (since 2008, delisted 20 December 2011) – Australian Masters Corporate Bond Fund No 4 Limited (since 2008, delisted 14 January 2013) – Australian Masters Corporate Bond Fund No 5 Limited (since 2009) – Australian Masters Yield Fund No 1 Limited (since 2010)– Australian Masters Yield Fund No 2 Limited (since 2010) – Australian Masters Yield Fund No 3 Limited (since 2011) – Australian Masters Yield Fund No 4 Limited (since 2011) – Emerging Markets Masters Fund (since 2012)– Global Resource Masters Fund Limited (since 2008)– US Masters Residential Property Fund (since 2011) – US Select Private Opportunities Fund (since 2011) – US Select Private Opportunities Fund II (since 2012) – van Eyk Three Pillars Limited (since 2009 until 31 October 2011).

TRISTAN O’CONNELL BCom (ANU), CPA | DIRECTOR

Tristan O’Connell joined Dixon Advisory in 2005 after 10 years experience in corporate financial and management roles within the wholesale financial markets industry. He is currently a director of the responsible entity for Emerging Markets Masters Fund and of the responsible entity for US Masters Residential Property Fund, US Select Private Opportunities Fund I, US Select Private Opportunities Fund II and Australian Property Opportunities Fund I.

Among Tristan’s previous roles were Financial Controller of Tullett Prebon in Australia, one of the world’s leading inter-dealer broker firms, specialising in over-the-counter interest rate, foreign exchange, energy and credit derivatives. He subsequently held senior finance roles for the Tullett Prebon Group in Singapore and London and returned to Australia to be responsible for the financial management and growth of Dixon Advisory.

Tristan has a Bachelor of Commerce from the Australian National University, is a member of CPA Australia and is a Fellow of the Financial Services Institute of Australasia.

During the past three years, he has acted as a non-executive director or director of a responsible entity of the following Australian listed entities:– Emerging Markets Masters Fund (since 2012)– US Masters Residential Property Fund (since 2006) – US Select Private Opportunities Fund (since 2006) – US Select Private Opportunities Fund II (since 2012).


TOM KLINE BCom, LLB (HONS) (ANU) | DIRECTOR

Tom Kline is the Chief Operating Officer of the Funds Management division of the Dixon Advisory Group.

He works closely with the Dixon Advisory Group Investment Committee and Corporate Finance teams to deliver investment opportunities for clients. He is chairman of Australian Masters Yield Fund No 4 Limited and Australian Masters Yield Fund No 5 Limited and a director of the responsible entity for Emerging Markets Masters Fund, US Select Private Opportunities Fund I, US Select Private Opportunities Fund II and Australian Property Opportunities Fund I.

Before joining Dixon Advisory, Tom was at UBS AG in Sydney. During his time at UBS, he was a member of the Infrastructure and Utilities team and advised on a wide range of public and private mergers & acquisitions and capital market transactions. Prior to joining UBS AG, Tom worked at Deloitte in the Corporate Finance division, working in the Transaction Services, Business Modelling and Valuation teams.

Tom has a Bachelor of Commerce and a Bachelor of Laws (with honours) from Australian National University.

During the past three years, he has acted as a non-executive director or director of a responsible entity of the following Australian listed entities:– Australian Masters Yield Fund No 4 Limited (since 2012)– Emerging Markets Masters Fund (since 2012)– US Select Private Opportunities Fund (since 2014)– US Select Private Opportunities Fund II (since 2012).

FUND INFORMATIONAustralian Property Opportunities Fund II (Fund) is an unlisted managed investment scheme registered in Australia. Walsh & Company Investments Limited, the responsible entity of the Fund, is incorporated and domiciled in Australia. The registered office and principal place of business of the responsible entity is located at Level 15, 100 Pacific Highway, North Sydney, New South Wales.

The Fund had no employees during the financial period.

PRINCIPAL ACTIVITIES AND CHANGES TO NATURE OF ACTIVITIES The principal activity of the Group during the financial period was its establishment and the undertaking of a capital raising which was completed on 20 June 2014.

The Group will invest in Australian commercial property.

REVIEW AND RESULTS OF OPERATIONS The Fund was registered on 6 May 2014. There were no investment activities during the financial period.

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DISTRIBUTIONS No distributions were recommended, declared or paid during, or since the end of, the reporting period.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRSRefer to the Chairman’s Letter on pages i to ii of this report. Other than as noted, there were no further changes in the state of affairs during the financial period.

EVENTS SUBSEQUENT TO REPORTING PERIODOn 9 September 2014, the Group acquired its first investment property, Northpoint Shopping Centre, in North Toowoomba, Queensland for $36.5 million. Settlement of the property was funded by equity.

Other than those disclosed in the financial report, there are no other matters or circumstances that have arisen since the end of the financial period that will significantly affect the operations of the Group, the results of those operations or the state of affairs in future financial years.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS The investment strategy of the Group will be maintained in accordance with the Fund’s constitution and investment objectives as detailed in the most recent product disclosure statement.

Likely developments in and expected results of the Group in subsequent years are referred in the Chairman’s letter on pages i to ii.

ENVIRONMENTAL REGULATIONThe Directors of the Responsible Entity are satisfied that adequate systems are in place for management of the Group’s environmental responsibility and compliance with various requirements and regulations.

The Directors are not aware of any material breaches to these requirements, and to the best of their knowledge, all activities have been undertaken in compliance with environmental requirements.

INDEMNITIES AND INSURANCE OF DIRECTORS AND AUDITORSUnder the Fund’s constitution, the Responsible Entity, including its officers and employees, is indemnified out of the Fund’s assets for any loss, damage, expense or other liability incurred by it in properly performing or exercising any of its powers, duties or rights in relation to the Fund.

Insurance premiums have been paid, during or since the end of, the financial period for all directors of the Responsible Entity of the Fund. The contract prohibits disclosure of the nature of the liability and the amount of the premium.

No indemnities have been given or insurance premiums paid, during or since the end of the financial period, for the auditor of the Group.


OTHER RELEVANT INFORMATIONThe following lists other relevant information required under the Corporations Act 2001:– Details of fees paid to the Responsible Entity and its associates are disclosed in note 12 to the consolidated

financial statements.– Details of the interests in the Group held by the Responsible Entity and its associates at the end of the period

are disclosed in note 12 to the consolidated financial statements.– Details of issued interests in the Group during the financial period are disclosed in note 8 to the consolidated

financial statements.

AUDITOR’S INDEPENDENCE DECLARATIONThe auditor’s independence declaration is set out on page 6 and forms part of the Directors’ Report for the financial period ended 30 June 2014.

Made in accordance with a resolution of the directors pursuant to section 298(2) of the Corporations Act 2001.

On behalf of the directors

Tom KlineDirector of Walsh & Company Investments LimitedDated 12 September 2014

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AUDITOR’S INDEPENDENCE DECLARATION

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CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE PERIOD FROM 6 MAY 2014 (DATE OF REGISTRATION) TO 30 JUNE 2014

30 JUNE 2014 NOTES $

RevenueFinance income 2 85,494

Total revenue 85,494

ExpensesResponsible entity and trustee fees 12 (25,745)Accounting and audit fees 13 (8,000)Other operating expenses 3 (33,623)

Total expenses (67,368)

Profit before tax 18,126

Income tax expense –

Profit after tax for the period 18,126

Other comprehensive income –

Total comprehensive income for the period 18,126

Earnings per unitBasic and diluted earnings (cents) 4 0.15

The consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the notes to the consolidated financial statements.


CONSOLIDATED STATEMENT OF FINANCIAL POSITIONAS AT 30 JUNE 2014


ASSETSCurrent assetsCash and cash equivalents 5 106,244,472 Trade and other receivables 6 141,882

Total current assets 106,386,354

Total assets 106,386,354

LIABILITIESCurrent liabilitiesTrade and other payables 7 199,972

Total current liabilities 199,972

Total liabilities 199,972

Net assets 106,186,382

EQUITYIssued capital 8 106,168,256 Retained earnings 18,126

Total equity 106,186,382

The consolidated statement of financial position should be read in conjunction with the notes to the consolidated financial statements.

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD FROM 6 MAY 2014 (DATE OF REGISTRATION) TO 30 JUNE 2014

ISSUED RETAINED CAPITAL EARNINGS TOTAL NOTES $ $ $

Balance at 6 May 2014 – – –

Profit for the period – 18,126 18,126 Other comprehensive income – – –

Total comprehensive income for the period – 18,126 18,126

Issued capital 8(i) 108,019,859 – 108,019,859 Issue costs 8(i) (1,851,603) – (1,851,603)

Balance at 30 June 2014 106,168,256 18,126 106,186,382

The consolidated statement of changes in equity should be read in conjunction with the notes to the consolidated financial statements.


CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE PERIOD FROM 6 MAY 2014 (DATE OF REGISTRATION) TO 30 JUNE 2014


Cash flows from operating activitiesInterest income received 39,956 Payments to suppliers (90,782)

Net cash flows (used in) operating activities 5(i) (50,826)

Cash flows from investing activities –

Net cash flows from investing activities –

Cash flows from financing activitiesProceeds from the issue of units 108,019,859 Issue costs paid (1,724,561)

Net cash flows generated by financing activities 106,295,298

Net increase in cash and cash equivalents 106,244,472 Cash at the beginning of the period –

Cash and cash equivalents at the end of the period 5 106,244,472

The consolidated statement of cash flows should be read in conjunction with the notes to the consolidated financial statements.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTSFOR THE PERIOD FROM 6 MAY 2014 (DATE OF REGISTRATION) TO 30 JUNE 2014

GENERAL INFORMATIONAustralian Property Opportunities Fund II (Fund) is an unlisted managed investment scheme registered in Australia. The financial statements comprise the Fund and its subsidiaries (collectively referred to as the ‘Group’). At the reporting date, the Fund’s only subsidiary is Australian Property Opportunities Trust II (Trust), in which the Fund has a 100% interest. The principal activity of the Group is to invest in Australian commercial property.

This is the first Annual Financial Report for the Group. The Fund was registered on 6 May 2014 and accordingly only the current year figures covering the period from the Fund’s registration to 30 June 2014 are shown.

STATEMENT OF COMPLIANCEThe consolidated financial statements are general purpose financial statements which have been prepared in accordance with the Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes comply with International Financial Reporting Standards (IFRS).

For the purposes of preparing the consolidated financial statements, the Group is a for-profit entity.

The financial statements were authorised for issue by the board of directors of the Responsible Entity, Walsh & Company Investments Limited (Walsh & Co) on 12 September 2014.


APPLICATION OF NEW AND REVISED ACCOUNTING STANDARDS

NEW AND REVISED AASBS AFFECTING AMOUNTS REPORTED AND/OR DISCLOSURES IN THE FINANCIAL STATEMENTS

The Group has applied the following new and revised AASBs issued by the Australian Accounting Standards Board (AASB) that are mandatorily effective for an accounting period that begins on or after 1 January 2013. The adoption of these standards did not have any material impact on the financial statements.

– AASB 2011-4 ‘Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements’

– AASB 2012-2 ‘Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and Financial Liabilities’

– AASB 2012-5 ‘Amendments to Australian Accounting Standards arising from Annual Improvements 2009-2011 Cycle’

– AASB 2012-9 ‘Amendments to AASB 1048 arising from the Withdrawal of Australian Interpretation 1039’– AASB CF 2013-1 ‘Amendments to the Australian Conceptual framework’ and AASB 2013-9 ‘Amendments

to Australian Accounting Standards – Conceptual Framework, Materiality and Financial Instruments’ (Part A Conceptual Framework)

– AASB 10 ‘Consolidated Financial Statements’ and AASB 2011-7 ‘Amendments to Australian Accounting Standards arising from the consolidation and Joint Arrangements standards’

– AASB 11 ‘Joint Arrangements’ and ‘AASB 2011-7 ‘Amendments to Australian Accounting Standards arising from the consolidation and Joint Arrangements standards’

– AASB 12 ‘Disclosure of Interests in Other Entities’ and AASB 2011-7 ‘Amendments to Australian Accounting Standards arising from consolidation and Joint Arrangements standards’

– AASB 13 ‘ Fair Value Measurement’ and AASB 2011-8 ‘Amendments to Australian Accounting Standards arising from AASB 13’

– AASB 2012-10 ‘Amendments to Australian Accounting Standards – Transition Guidance and Other Amendments’

– AASB 119 ‘Employee Benefits’ (2011) and AASB 2011-10 ‘Amendments to Australian Accounting Standards arising from AASB 119 (2011)’

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STANDARDS AND INTERPRETATIONS IN ISSUE NOT YET ADOPTED

At the date of authorisation of the financial statements, the Standards and Interpretations listed below were in issue but not yet effective. The potential impact of the new or revised Standards and Interpretations has not yet been determined, but is not expected to be material.

STANDARD/INTERPRETATION EFFECTIVE FOR ANNUAL REPORTING PERIODS BEGINNING ON OR AFTER

EXPECTED TO BE INITIALLY APPLIED IN THE FINANCIAL YEAR ENDING

AASB 9 ‘Financial Instruments’ 1 January 2018 30 June 2019

AASB 1031 ‘Materiality’ (2013) 1 January 2014 30 June 2015

AASB 2012-3 ‘Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities’

1 January 2014 30 June 2015

AASB 2013-3 ‘Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets’


AASB 2013-4 ‘Amendments to Australian Accounting Standards – Novation of Derivatives and Continuation of Hedge Accounting’


AASB 2013-5 ‘Amendments to Australian Accounting Standards – Investment Entities’


AASB 2013-9 ‘Amendments to Australian Accounting Standards – Conceptual Framework, Materiality and Financial Instruments’


INT 21 ‘Levies’ 1 January 2014 30 June 2015

AASB 2014-1 ‘Amendments to Australian Accounting Standards’ – Part A: ‘Annual Improvements 2010–2012

and 2011–2013 Cycles’ – Part B: ‘Defined Benefit Plans: Employee

Contributions (Amendments to AASB 119)’ – Part C: ‘Materiality’

1 July 2014 30 June 2015

AASB 2014-1 ‘Amendments to Australian Accounting Standards’ – Part D: ‘Consequential Amendments arising from AASB 14’





AASB 2014-1 ‘Amendments to Australian Accounting Standards’ – Part E: ‘Financial Instruments’


AASB 14 ‘Regulatory Deferral Accounts’ 1 January 2016 30 June 2014

AASB 2014-2 ‘Amendments to AASB 1053 – Transition to and between Tiers, and related Tier 2 Disclosure Requirements’ (AASB 1053)

1 July 2014 30 June 2015

AASB 2014-3 ‘Amendments to Australian Accounting Standards – Accounting for Acquisitions of interest in Joint Operations’ (AASB 1 and AASB 11)


AASB 2014-4 ‘Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of depreciation and Amortisation’ (AASB 116 and AASB 138)


At the date of authorisation of the financial statements, the following IASB Standards and IFRIC Interpretations were also in issue but not yet effective, although Australian equivalent Standards and Interpretations have not yet been issued.



IFRS 15 ‘Revenue from Contracts with Customers’


Agriculture: Bearer Plants (Amendments to IAS 16 and IAS 41)


IFRS 9 Financial Instruments (2014) and all related amendments


Equity Method in Separate Financial Statements (Amendments to IAS 27)


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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(A) BASIS OF PREPARATION

The financial statements have been prepared on an accruals basis and are based on historical cost except for certain financial instruments which are measured at fair value.

(B) FUNCTIONAL AND PRESENTATION CURRENCY

The functional and presentation currency of the Group is Australian dollars.

All amounts are presented in Australian dollars and are rounded to the nearest whole dollar unless otherwise noted.

(C) REMOVAL OF PARENT ENTITY FINANCIAL STATEMENTS

The Group has applied amendments to the Corporations Act 2001 that remove the requirement for the Group to lodge parent entity financial statements. Parent entity financial statements have been replaced by the specific parent entity disclosures in note 11.

(D) BASIS OF CONSOLIDATION

Subsidiaries are those entities in which the Fund has power over the investee, it is exposed, or has rights, to variable returns from its involvement in the investee, and has the ability to use its power to affect its returns.

All inter-entity balances and transactions, incomes and expenses and profits and losses resulting from intra-group transactions are eliminated in full on consolidation.

(E) FINANCIAL INSTRUMENTS

Financial Instruments, incorporating financial assets and financial liabilities, are recognised when the Group becomes a party to the contractual provisions of the instrument. The Group has early adopted AASB 9 Financial Instruments issued on 7 December 2009. AASB 9 includes requirements for the classification and measurement of financial investments.

i. Financial assets When financial assets are recognised initially, they are measured at fair value, plus in the case of financial assets not at fair value through profit and loss, directly attributable transaction costs. Financial assets are subsequently measured at amortised cost using the effective interest rate method only if the following conditions are met, otherwise they are measured at fair value: – where a financial asset is held within a business model for the objective to collect contractual cash flows; and – contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of

principal and interest on the principal amount outstanding.

The effective interest rate method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability.


ii. Financial liabilities Financial liabilities are classified as derivative and non-derivative instruments as appropriate. The Group determines the classification of its financial liabilities at initial recognition. All financial liabilities are recognised initially at fair value. Non-derivative instruments are subsequently measured at amortised cost using the effective interest rate method.

iii. Derecognition Financial assets are derecognised where the contractual rights to receipt of cash flows expire or the asset is transferred to another party whereby the entity no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are discharged or cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.

iv. Fair value Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is determined based on the bid price for all quoted investments in an active market. Valuation techniques are applied to determine the fair value for all unlisted securities and securities in markets that are not active, including recent arm’s length transactions, and reference to similar instruments and valuation techniques commonly used by market participants. At 30 June 2014, the fair value of financial assets and financial liabilities approximates their carrying value.

(F) IMPAIRMENT OF ASSETS

The directors of the Responsible Entity assess at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, an estimate is made of the asset’s recoverable amount. When the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount through profit or loss.

(G) INVESTMENT PROPERTY

Investment property is commercial real estate investments held to earn long-term rental income and for capital appreciation and comprises of land, buildings and plant and equipment. Investment properties are measured at cost, including transaction costs directly attributable to acquisition, less accumulated depreciation (see below) and impairment losses (see note 1(f)). Subsequent to initial measurement, the Group applies the cost model for the measurement of all its investment properties.

DepreciationDepreciation is charged to profit or loss on a straight-line basis for separate items of investment property over their estimated useful lives. The estimated useful lives in the current period are as follows:

CLASS OF ASSET ESTIMATED USEFUL LIFE

Buildings 40 yearsPlant and Equipment 4 to 20 years

The residual value, the useful life and depreciation method applied to the asset are measured at least annually.

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Subsequent costsThe cost of replacing part of an item of land, buildings or plant and equipment is recognised in the carrying amount of such an item when that cost is incurred if it is probable that the future economic benefits embodied within the item will flow to the Group and the cost of the item can be measured reliably. All other costs are recognised in profit or loss as an expense as incurred. The present value of the expected cost for decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision is met.

(H) CASH AND CASH EQUIVALENTS

Cash and cash equivalents comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(I) RECEIVABLES

Receivables are financial assets with a contractual right to receive fixed or determinable payments. Receivables are recorded at amounts due less any impairment losses. Balances are written off when the probability of recovery is assessed as being remote.

(J) TRADE AND OTHER PAYABLES

Trade and other payables are recognised when the Group becomes obliged to make payments resulting from the purchase of goods or services. The balance is unsecured and is recognised as a current liability with the amount being normally paid within 30 days of the recognition of the liability.

(K) PROVISIONS

Provisions are recognised when there is a present obligation (legal or constructive) as a result of a past event and it is probable an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of obligation.

(L) TAXES

i. Income tax Under current Australian income tax laws, the Fund is not liable to pay income tax provided it is not a public trading trust and its distributable income for each income year is fully distributed to unitholders, by way of cash or reinvestment.

ii. Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except to the extent the amount of GST incurred is not recoverable from the Australian Taxation Office. In these circumstances, the unrecoverable GST is recognised as part of the cost of acquisition of the asset or as part of an item of expense. Where fees are stated to be exclusive of GST and GST is payable on any fee, the fee will be increased by an amount equal to the GST payable.

Cash flows are presented in the statement of cash flows on a gross basis.


(M) REVENUE RECOGNITION

Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised.

i. Interest income Interest income is recognised in profit or loss using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial asset.

ii. Rental income Rental income from operating leases is recognised as income over the lease term. Where a lease has fixed annual increases, the total rent receivable over the operating lease is recognised as revenue on a straight-line basis over the lease term. When the Fund provides lease incentives to tenants, the cost of the incentives are initially capitalised and then recognised over the lease term on a straight-line basis, as a reduction in rental income.

Costs that are directly associated with negotiating and executing ongoing renewal of tenant lease agreements (including commissions, legal fees and costs of preparing and processing documentation for new leases) are expensed over the lease term on the same basis as the lease income.

All income is stated net of GST.

(N) EARNINGS PER UNIT

Basic earnings per unit is calculated by dividing the profit or loss attributable to unitholders by the weighted average number of units outstanding during the financial period. Diluted earnings per unit is the same as there are no potential dilutive ordinary units.

(O) UNIT CAPITAL

i. Ordinary unitsOrdinary units are classified as equity. Issued capital is recognised at the fair value of consideration received by the Fund. Incremental costs directly attributable to the issue of ordinary units are recognised as a deduction from equity.

ii. Distribution to unitholders Distributions are recognised in the reporting period in which the distributions are declared, determined, or publicly recommended by the board of the Responsible Entity.

(P) CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

In the application of the Group’s accounting policies, management is required to make judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

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2. FINANCE INCOME

30 JUNE 2014 $

Recognised directly in profit or lossFinance income – interest income from bank deposits 85,494

85,494

3. OTHER OPERATING EXPENSESLegal and compliance costs (2,260)Other operating expenses (31,363)

(33,623)

4. EARNINGS PER UNIT

CENTS

(i) Calculated earnings per unitBasic and diluted earnings per unit 0.15

$

(ii) Earnings used to calculate earnings per unitProfit from continued operations used to calculate basic and diluted earnings per unit 18,126

NO.

(iii) Weighted average number of units Weighted average number of units outstanding used to calculate basic and diluted earnings per unit 12,257,979

12,257,979

There are no transactions that would significantly change the number of ordinary units at the end of the reporting period.


5. CASH AND CASH EQUIVALENTS

30 JUNE 2014 $

Cash at bank 106,244,472

106,244,472

Cash at bank earns interest at floating rates based on daily bank deposit rates.

(i) Reconciliation of profit to net cash flows from operating activitiesProfit for the period before tax 18,126

Movements in assets and liabilities:(Increase) in receivables (141,882)Increase in payables 72,930

Net cash flows (used in) operating activities (50,826)

6. TRADE AND OTHER RECEIVABLES Interest receivable 45,538 GST receivable 96,344

141,882

The Group’s exposure to credit risk related to trade and other receivables is disclosed in note 9(ii).

7. TRADE AND OTHER PAYABLESTrade payables 85,332 Accrued liabilities 114,640

199,972

The average credit period for trade payables is generally 30 days. No interest is charged on trade payables from the date of invoice. The Group has risk management policies to ensure payables are paid within credit terms.

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8. ISSUED CAPITAL

30 JUNE 2014 $

(i) Movements in issued capitalBalance at beginning of period – Registration unit 1 Issue of 68,644,677 fully paid ordinary units at net price of $1.57 108,019,858 Issue costs (1,851,603)

Balance at the end of period 106,168,256

NO.

(ii) Movements in ordinary unitsBalance at beginning of period – 06-May-14 Registration unit 1 20-Jun-14 Fully paid ordinary units 68,664,677

Balance at the end of period 68,664,678

Issue costs comprises of a structuring fee (refer to note 12) and other costs associated with the issue of units such as legal, accounting and tax advice costs.

All issued units are fully paid. The holders of ordinary units are entitled to receive distributions as declared from time to time by the Responsible Entity and are entitled to one vote per unit at meetings of the Fund.


9. FINANCIAL INSTRUMENTS(i) Capital managementThe Group manages its capital to ensure it will be able to continue as a going concern while maximising the return to unitholders. The capital structure of the Group consists of issued capital amounting to $106,168,256.

The Group is not subject to any externally imposed capital requirements.

(ii) Financial risk managementOverview The Group is exposed to the following risks from its use of financial instruments: – credit risk – liquidity risk – market risk (interest rate risk)

Financial risk and risk management frameworkThe Responsible Entity has overall responsibility for the establishment and oversight of the risk management framework, including developing and monitoring risk management policies. Financial risk and capital management is carried out by the Investment Committee which provides advice in relation to commercial matters regarding the Group.

Credit risk Credit risk is the risk that contracting parties to a financial instrument will cause a financial loss for the Group by failing to discharge an obligation.

The Group has exposure to credit risk on all its financial assets included in the Group’s consolidated statement of financial position. The carrying amount of the financial assets represents the maximum credit exposure.

There were no impairment losses recognised on financial assets at 30 June 2014.

Summary of exposure

WEIGHTED AVERAGE 30 JUNE 2014 INTEREST RATE $

Financial assetsCash and cash equivalents 2.5% 106,244,472 Trade and other receivables – 141,882

106,386,354

Cash and cash equivalentsThe Group manages credit risk on cash and cash equivalents by ensuring deposits are made with reputable financial institutions with investment grade credit ratings.

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Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.

The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The cash flow forecasts are regularly updated and reviewed to assist in managing the Group’s liquidity.

The following is the contractual maturity of financial liabilities. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table include both interest and principal cash flows.

CARRYING CONTRACTUAL 12 MONTHS MORE THAN AMOUNT CASH FLOWS OR LESS 1-5 YEARS 5 YEARS $ $ $ $ $

30 June 2014Non-derivative financial liabilitiesTrade payables 85,332 85,332 85,332 – – Accrued liabilities 114,640 114,640 114,640 – –

199,972 199,972 199,972 – –

Market riskMarket risk is the risk that changes in market prices, such as interest rates, will affect the Group’s income or the value of its financial instruments.

Interest rate riskInterest rate risk is the risk that cash flows associated with financial instruments will fluctuate due to changes in market interest rates. The Group’s exposure to interest rate risk arises from its cash at bank.

Sensitivity analysisThe following sensitivity analysis shows the effect on the Group’s profit or loss, and equity and has been determined assuming the variable interest cash balance outstanding at year end was outstanding for the whole year and based on a 50 basis point change in interest rates taking place at the beginning of the financial year and held constant throughout the reporting period, with all other variables held constant.

PROFIT BEFORE TAX EQUITY

50 BASIS 50 BASIS 50 BASIS 50 BASIS POINTS POINTS POINTS POINTS INCREASE DECREASE INCREASE DECREASE $ $ $ $

30 June 2014Cash and cash equivalents 14,554 (14,554) 14,554 (14,554)

Impact on profit before tax and equity 14,554 (14,554) 14,554 (14,554)


10. CONTROLLED ENTITIES

NAME OF ENTITY

PRINCIPAL ACTIVITY

PLACE OF REGISTRATION AND OPERATION

OWNERSHIP INTEREST

Australian Property Opportunities Trust II

Direct investment in Australian commercial property

Australia 100%

11. PARENT ENTITY INFORMATIONDuring the period ended 30 June 2014, the parent entity of the Group was Australian Property Opportunities Fund II.

30 JUNE 2014 $

(i) Results of the parent entityProfit for the period 37,277

Total comprehensive income for the period 37,277

(ii) Financial position of the parent entity AssetsCurrent assets 106,384,438

Total assets 106,384,438

LiabilitiesCurrent liabilities 178,905

Total liabilities 178,905

EquityIssued capital 106,168,256 Retained Earnings 37,277

Total equity 106,205,533

The parent entity does not have any contingent liabilities, contractual commitments and has not entered into any guarantees during or since the end of the financial period.

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12. RELATED PARTY DISCLOSURESKey management personnel Alex MacLachlan, Tristan O’Connell and Tom Kline are directors of the Responsible Entity of Australian Property Opportunities Fund II (Fund), Walsh & Company Investments Limited, the Fund Manager, Walsh & Company Asset Management Pty Limited and the Trustee of Australian Property Opportunities Trust II (Trust), Walsh & Company Investment Services Pty Limited, and are deemed to be key management personnel.

Key management personnel are not compensated by the Fund or by the Responsible Entity directly for the management function provided to the Fund.

As at 30 June 2014, details of directors who hold units for their own benefit or who have an interest in holdings through a third party and the total number of such units held are listed below:

BALANCE AT RECEIVED AS OTHER BALANCE AT REGISTRATION REMUNERATION CHANGES 30 JUNE 2014 NO. NO. NO. NO.

Alex MacLachlan – – – – Tristan O’Connell – – – – Tom Kline – – 3,126 3,126

Related party investments in the schemeDetails of the investments in the scheme by the Responsible Entity or its associates are set out below:

DISTRIBUTION UNITS PAID OR HELD AT INTEREST PAYABLE BY 30 JUNE 2014 HELD ACQUIRED DISPOSED SCHEME30 JUNE 2014 NO. % NO. NO. $

Australian Property Opportunities Fund II 250,000 0.36% 250,000 – –

Responsible Entity Fees and other transactionsResponsible Entity FeeWalsh & Company Investment Limited, as Responsible Entity of the Fund is entitled to receive a Responsible Entity Fee for the performance of its duties under the constitution of the Fund. The Responsible Entity Fee is 0.08% per annum (exclusive of GST) calculated on the gross asset value of the Fund and payable monthly in advance.

For the period ended 30 June 2014, $2,604, exclusive of GST, was paid or payable to the Responsible Entity. Total Responsible Entity Fees included in trade and other payables at 30 June 2014 was $2,604 (exclusive of GST).


Trustee FeeWalsh & Company Investment Services Pty Limited in its capacity as Trustee of Australian Property Opportunities Trust II, a wholly owned subsidiary of the Fund, is entitled to receive 0.10% per annum (exclusive of GST) for services provided under the terms of the Trust’s trust deed. The Trustee fee is calculated on the gross asset value of the Trust, payable monthly. There were no Trustee fees paid or payable for the period ended 30 June 2014

Issue Costs The Responsible Entity is entitled to receive a Structuring Fee of 1.5% (exclusive of GST) on the gross proceeds raised (referred to as ‘issue costs’) under the Product Disclosure Statement dated 23 May 2014. The issue costs are due to the Responsible Entity upon allotment of units which occurred on 20 June 2014.

For the period ended 30 June 2014, issue costs paid to the Responsible Entity amounted to $1,620,298, exclusive of GST. No amount was outstanding at 30 June 2014.

Fund Manager FeeWalsh & Company Asset Management Pty Limited, as Fund Manager of the Fund is entitled to receive a Fund Manager Fee of 0.69% per annum (exclusive of GST) calculated on the gross asset value of the Fund and payable monthly in arrears.

For the period ended 30 June 2014, $22,462, exclusive of GST, was paid or payable to the Fund Manager. Total Property Manager Fee included in trade and other payables at 30 June 2014 was $22,462 (exclusive of GST).

Property Manager FeeFort Street Real Estate Capital Pty Limited is an established joint venture between Dixon Advisory Group Limited, parent of the Responsible Entity, and Fort Street Capital Pty Limited. Alex MacLachlan and Tom Kline, directors of the Responsible Entity, are also directors of Fort Street Real Estate Capital Pty Limited. Fort Street Real Estate Capital Pty Limited acts as Property Manager of the Trust and is responsible for managing and maintaining the property portfolio of the Trust, optimising tenancy profile and maximising returns. The Property Manager is entitled to receive a Property Manager Fee of 3% per annum, payable monthly (exclusive of GST) calculated on the gross income value of the Trust. There were no Property Manager Fees paid or payable for the period ended 30 June 2014.

Acquisition FeeFort Street Real Estate Capital Pty Limited, in its capacity as Investment Manager, is responsible for sourcing, undertaking due diligence investigations and recommending property acquisitions to the Trustee. The Investment Manager receives an Acquisition Fee of 1.25% (exclusive of GST) on the purchase price (excluding acquisition costs) of assets acquired by the Trust. This fee is included in the acquisition cost of investment properties. The Acquisition Fee is payable to the Investment Manager upon transfer of title to the Trust. There were no Acquisition Fees paid or payable for the period ended 30 June 2014.

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13. AUDITOR’S REMUNERATION

30 JUNE 2014 $

Audit servicesDeloitte Touche TohmatsuAudit of financial report 8,000

Other non-audit related servicesDeloitte Touche TohmatsuTaxation services 30,000 Investigating accountants report 22,000

60,000

The auditor of the Group during the period ended 30 June 2014 was Deloitte Touche Tohmatsu.

Non-audit related services totalling $52,000 are included in Group’s issue costs (refer to note 8).

14. CAPITAL COMMITMENTSThe Group had no capital commitments at 30 June 2014.

15. CONTINGENT LIABILITYThe directors of the Responsible Entity are not aware of any potential liabilities or claims against the Group as at the end of the reporting period.

16. EVENTS SUBSEQUENT TO REPORTING DATEOn 9 September 2014, the Group acquired its first investment property, Northpoint Shopping Centre, in North Toowoomba, Queensland for $36.5 million. Settlement of the property was funded by equity.

Other than those disclosed in the financial report, there are no other matters or circumstances that have arisen since the end of the financial period that will significantly affect the operations of the Group, the results of those operations or the state of affairs in future financial years.


DIRECTORS’ DECLARATIONFOR THE PERIOD FROM 6 MAY 2014 (DATE OF REGISTRATION) TO 30 JUNE 2014

The directors of the Responsible Entity declare that, in the directors’ opinion:a) there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become

due and payable; b) the financial statements are in compliance with the International Financial Reporting Standards as stated in

the notes to the consolidated financial statements; andc) the financial statements and notes thereto are in accordance with the Corporations Act 2001, including

compliance with accounting standards and giving a true and fair view of the financial position and performance of the Group.

This declaration is made in accordance with a resolution of the directors made pursuant to section 295(5) of the Corporations Act 2001.

On behalf of the directors of the Responsible Entity, Walsh & Company Investments Limited

Tom KlineDirector of Walsh & Company Investments LimitedDated 12 September 2014

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INDEPENDENT AUDITOR’S REPORTFOR THE PERIOD FROM 6 MAY 2014 (DATE OF REGISTRATION) TO 30 JUNE 2014

RESPONSIBLE ENTITY

Walsh & Company Investments Limited(ACN 152 367 649) (AFSL 410 433)

annual financialreport 2014...james besson is responsible for fund strategy and capital management...

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