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Australian Unity High Yield Mortgage TrustARSN 113 151 705

Annual financial statements for the reporting periodended 30 June 2014

Australian Unity High Yield Mortgage TrustARSN 113 151 705

Annual financial statements for the reporting periodended 30 June 2014

Contents Page

Directors' report 2Auditor's independence declaration 5Statement of comprehensive income 6Statement of financial position 7Statement of changes in net assets attributable to unitholders 8Statement of cash flows 9Notes to the financial statements 10Directors' declaration 32Independent auditor's report to the unitholders of Australian Unity High Yield Mortgage Trust 33

These financial statements cover Australian Unity High Yield Mortgage Trust as an individual entity.

The Responsible Entity of Australian Unity High Yield Mortgage Trust is Australian Unity Funds ManagementLimited (ABN 60 071 497 115). The Responsible Entity's registered office is Level 14, 114 Albert Road, SouthMelbourne, VIC 3205.

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Australian Unity High Yield Mortgage TrustDirectors' report

For the reporting period ended 30 June 2014

Directors' report

The directors of Australian Unity Funds Management Limited (ABN 60 071 497 115), the Responsible Entity ofAustralian Unity High Yield Mortgage Trust ("the Scheme"), present their report together with the financialstatements of the Scheme for the year ended 30 June 2014 ("the reporting period").

Effective 9 December 2011, the Scheme was terminated and the winding up process of the Scheme began.Detailed information regarding the termination of the Scheme is outlined in the 'Significant changes in the state ofaffairs’ section of the directors’ report and elsewhere in the financial statements.

Directors

The following persons held office as directors of the Responsible Entity during the reporting period or since theend of the reporting period and up to the date of this report:

Glenn Barnes (Chairman)David Bryant (Chief Executive Officer and Chief Investment Officer)Melinda Cilento (Non-Executive Director) (appointed 28 May 2014)Stephen Maitland (Non-Executive Director)Kevin McCoy (Chief Financial Officer) (appointed 24 March 2014)Rohan Mead (Group Managing Director)Peter Promnitz (Non-Executive Director) (appointed 1 August 2014)Warren Stretton (Non-Executive Director)Anthony Connon (Executive Director) (ceased 24 March 2014)Ian Ferres (Non-Executive Director) (ceased 1 August 2014)Amanda Hagan (appointed alternate for Rohan Mead for the period 1 September 2013 to 27 October 2013)

Principal activities

Up until 9 December 2011, the Scheme's aim was to provide investors with attractive levels of income, togetherwith capital stability. On 9 December 2011, the Responsible Entity issued a notice of termination of the Scheme.Since then the process of orderly wind up has commenced.

The Scheme has investments in a portfolio of loans secured by first registered mortgages over retail, commercial,investment, residential, and industrial property. The Scheme also has investments in specialised loans,construction and development loans, vacant land and other income producing assets.

The Scheme was designed to spread exposure and reduce risk through diversification by geographical location,loan size, interest rate type and loan maturity profile.

Review and results of operations

The directors do not regard the Scheme as a going concern as the Scheme has been terminated and is in theprocess of being wound up.

The financial statements of the Scheme for the reporting period were prepared on a liquidation basis.

Results

For the reporting period ended 30 June 2014, the Scheme posted a total return of (3.28%), split between adistribution return of 0.00% and a growth return of (3.28%)*.

Unit prices (ex distribution) as at 30 June 2014 (2013) is as follows:

Retail units $0.9672 ($1.0000)*

*The reported performance numbers and reported unit prices (which are not audited) have been derived basedon the declared unit prices calculated in accordance with the Responsible Entity’s unit pricing policy, and are notbased on the net assets of these IFRS compliant financial statements.

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Australian Unity High Yield Mortgage TrustDirectors' report

For the reporting period ended 30 June 2014(continued)

Results (continued)

The performance of the Scheme, as represented by the results of its operations, was as follows:

For the reporting periodended

30 June2014$'000

30 June2013$'000

Loss before finance costs attributable to unitholders (3,433) (2)

Distributions

Distributions paid and payable - -

Significant changes in state of affairs

On 9 December 2011, the Responsible Entity issued a notice of termination of the Scheme. Consistent with thedetails stated in the Notice, effective on that date, the Scheme was terminated and the wind up process hasbegun with the commencement of an orderly liquidation of the Scheme’s assets and progressive return of capitalto all unitholders. This will be done in an equitable manner and having regard to market conditions and otherfactors outside the Responsible Entity's control.

The effect of the decision to wind up the Scheme is outlined below:

• An initial payment equivalent to 10% of the unitholder’s current investment in the Scheme was paid inDecember 2011.

• A second payment equivalent to 5% of the unitholder’s current investment in the Scheme was paid in March2012.

• A third payment equivalent to 20% of the unitholder’s current investment in the Scheme was paid inSeptember 2012.

• A fourth payment equivalent to 20% of the unitholder’s current investment in the Scheme was paid in March2013.

• A fifth payment equivalent to 5% of the unitholder’s current investment in the Scheme was paid inSeptember 2013.

• A sixth payment equivalent to 5% of the unitholder’s current investment in the Scheme was paid in March2014.

• A seventh payment equivalent to 29% of the unitholder’s current investment in the Scheme was declared on30 June 2014. Payment occurred on 3 July 2014.

• Future payments are anticipated to be made on a six monthly basis.

• Monthly income distributions have been ceased from 9 December 2011. Income may be distributed withfuture repayments of capital, as part of the distribution of the Scheme’s assets.

Events occurring after the reporting period

Except as disclosed in note 12 of the financial statements, no other matter or circumstance has arisen since 30June 2014 that has significantly affected, or may significantly affect:

(i) the operations of the Scheme in future reporting periods, or(ii) the results of those operations in future reporting periods, or(iii) the state of affairs of the Scheme in future reporting periods.

Likely developments and expected results of operations

The directors expect the wind up process to be completed in due course, subject to market conditions and otherfactors outside the Responsible Entity’s control. The Responsible Entity's continued objective during the wind upprocess will be to optimise the full amount of the unitholders’ return over a period of time.

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Australian Unity High Yield Mortgage TrustStatement of comprehensive income


Statement of comprehensive income


30 June2014

30 June2013

Notes $'000 $'000

Investment income

Interest income 3 2,064 4,274

Distribution income 4 908 1,510

Other income 1,668 2,633

Total investment income 4,640 8,417

Expenses

Responsible Entity's fees 10 2,017 2,613

Loan loss expense 4,664 4,192

Legal fees 237 485

Other expense 1,155 1,129

Total expenses 8,073 8,419


Finance costs attributable to unitholders

Decrease in net assets attributable to unitholders 6 3,433 2

Total comprehensive income for the reporting period attributableto unitholders - -

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

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Australian Unity High Yield Mortgage TrustStatement of financial position

As at 30 June 2014

Statement of financial position

As at

30 June2014

30 June2013

Notes $'000 $'000

Assets

Cash and cash equivalents 7 42,190 17,805

Receivables 671 793

Mortgage loans 8 58,579 97,494

Total assets 101,440 116,092

Liabilities

Payables 29,627 201

Total liabilities (excluding net assets attributable to unitholders) 29,627 201

Net assets attributable to unitholders 6 71,813 115,891

The above statement of financial position should be read in conjunction with the accompanying notes.

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Australian Unity High Yield Mortgage TrustStatement of changes in net assets attributable to unitholders


Statement of changes in net assets attributable to unitholders


30 June2014

30 June2013

$'000 $'000

Net assets attributable to unitholders at the beginning of the reportingperiod 115,891 181,162


Applications for units 11 1,779

Return of capital to unitholders (40,656) (67,048)

Net assets attributable to unitholders at the end of the reporting period 71,813 115,891

The above statement of changes in net assets attributable to unitholders should be read in conjunction with theaccompanying notes.

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Australian Unity High Yield Mortgage TrustStatement of cash flows


Statement of cash flows


30 June2014

30 June2013

Notes $'000 $'000

Cash flows from operating activities

Proceeds from sale of financial instruments 35,742 41,020

Purchase of financial instruments (1,491) (394)

Interest received 2,064 4,667

Distributions received 908 1,618

Other income received 1,740 2,729

Responsible entity's fees paid (1,991) (2,891)

Payment of other expenses (1,276) (3,673)

RITC received - 180

Net cash inflows from operating activities 11(a) 35,696 43,256

Cash flows from financing activities

Proceeds from applications by unitholders 11 1,781

Repayment of capital to unitholders (11,322) (67,048)

Net cash outflows from financing activities (11,311) (65,267)

Net increase/(decrease) in cash and cash equivalents 24,385 (22,011)

Cash and cash equivalents at the beginning of the reporting period 17,805 39,816

Cash and cash equivalents at the end of the period 7 42,190 17,805

The above statement of cash flows should be read in conjunction with the accompanying notes.

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Australian Unity High Yield Mortgage TrustNotes to the financial statements


Contents

Page

1 General information 112 Summary of significant accounting policies 113 Interest income 184 Distribution income 185 Auditor's remuneration 186 Net assets attributable to unitholders 197 Cash and cash equivalents 198 Mortgage loans 209 Financial risk management 2110 Related party transactions 2811 Reconciliation of loss to net cash inflows from operating activities 3112 Events occurring after the reporting period 3113 Contingent assets and liabilities and commitments 31

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1 General information

These financial statements cover Australian Unity High Yield Mortgage Trust ("the Scheme") as an individualentity. The Scheme was constituted on 24 February 2005.

The Responsible Entity of the Scheme is Australian Unity Funds Management Limited (ABN 60 071 497 115)(the "Responsible Entity"), a wholly owned subsidiary of Australian Unity Limited (ABN 23 087 648 888). TheResponsible Entity's registered office is Level 14, 114 Albert Road, South Melbourne, VIC 3205.

The Responsible Entity is incorporated and domiciled in Australia.

The financial statements are for the period from 1 July 2013 to 30 June 2014 ("the reporting period").

On 9 December 2011, the Responsible Entity issued a notice of termination of the Scheme. Consistent with thedetails stated in the notice, effective on that date, the Scheme was terminated and the wind up process hasbegun with the commencement of an orderly liquidation of the Scheme’s assets and progressively return ofcapital to all unitholders. This will be done in an equitable manner and having regard to market conditions andother factors outside the Responsible Entity’s control.

The financial statements were authorised for issue by the directors of the Responsible Entity on 11 September2014. The directors of the Responsible Entity have the power to amend and reissue the financial statements.

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.

(a) Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian AccountingStandards, other authoritative pronouncements of the Australian Accounting Standards Board and theCorporations Act 2001 in Australia.

The Scheme is a for-profit unit trust for the purposes of preparing the financial statements.

The directors do not regard the Scheme as going concern as the Scheme has been terminated and is in theprocess of being wound up.

The financial statements of the Scheme for the reporting period were prepared on a 'liquidation' basis. Theaccounting policies are consistent with those previously applied.

The statement of financial position is presented on a liquidity basis. Assets and liabilities are presented indecreasing order of liquidity and are not distinguish between current and non-current. All balances are generallyexpected to be recovered or settled within twelve months, except for investment properties, financial assets heldat fair value through profit or loss and net assets attributable to unitholders, where the amount expected to berecovered or settled within 12 months after the end of the reporting period cannot be reliably determined.

Compliance with Australian Accounting Standards and International Financial Reporting Standards

The financial statements of the Scheme comply with Australian Accounting Standards as issued by the AustralianAccounting Standards Board and also comply with International Financial Reporting Standards as issued by theInternational Accounting Standards Board.

The financial statements are presented in the local reporting currency being Australian dollars.

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2 Summary of significant accounting policies (continued)

(a) Basis of preparation (continued)

New and amended standards adopted by the Scheme

The Scheme has applied the following major accounting standards and amendments (to the extent that isrelevant to the Scheme) for the first time for the reporting period.

• AASB 13 Fair Value Measurement and AASB 2011 8 Amendments to Australian Accounting Standardsarising from AASB 13

AASB 13 establishes a single source of guidance under Australian Accounting Standards for all fair valuemeasurements and defines fair value as the price that would be received to sell an asset or paid to transfera liability in an orderly transaction between market participants at the measurement date. AASB 13 does notchange when an entity is required to use fair value but rather provides guidance on how to measure fairvalue when it is required or permitted. The application of AASB 13 has not materially impacted theScheme’s financial statements for the reporting period.

• AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key ManagementPersonnel Disclosure Requirements

AASB 124 Related Party Disclosures was amended whereby the individual key management personneldisclosures are no longer required. Therefore the Scheme has no longer disclosed these disclosures in itsfinancial statements for the reporting period.

• AASB 2012-2 Amendments to Australian Accounting Standards - Disclosures - Offsetting Financial Assetsand Financial Liabilities

AASB 2012-2 amends AASB 7 Financial Instruments: Disclosures requiring expanded disclosures aboutrecognised financial instruments that are currently offset in the statement of financial position and/or aresubject to enforceable master netting agreements (or similar) irrespective of whether they are currentlyoffset. Where applicable, the additional disclosures are provided in the notes to the financial statements forthe reporting period.

(b) Financial instruments

(i) Classification

• Financial assets and liabilities held at fair value through profit or loss

The Scheme's investments are categorised as held at fair value through profit or loss. They comprise:

• Financial assets and liabilities held at fair value through profit and loss upon initial recognition

These include financial assets and financial liabilities that are not held for trading purposes and whichmay be sold. These may include investments in listed property trusts, unlisted property trusts and otherunlisted trusts.

Financial assets designated at fair value through profit or loss at inception are those that are managedand their performance evaluated on a fair value basis in accordance with the Scheme's documentedinvestment strategy. The Scheme's policy is for the Responsible Entity to evaluate the information aboutthese financial instruments on a fair value basis together with other related financial information.

The information on the fair value basis is provided internally to the Scheme's key managementpersonnel. In addition, the designation of financial assets and financial liabilities at fair value throughprofit or loss will reduce any measurement or recognition inconsistencies and any accounting mismatchthat would otherwise arise.

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(b) Financial instruments (continued)

(i) Classification (continued)

• Loans and receivables/payables

Loans and receivables/payables are non-derivative financial assets/liabilities with fixed or determinable paymentsthat are not quoted in an active market. This category includes short term receivables/payables.

(ii) Recognition/derecognition

The Scheme recognises financial assets and financial liabilities on the date it becomes party to the contractualagreement (trade date) and recognises changes in fair value of the financial assets or financial liabilities from thisdate.

A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) isderecognised where:

• the rights to receive cash flows from the asset have expired;• the Scheme retains the right to receive cash flows from the asset, but has assumed an obligation to pay

them in full without material delay to a third party under a 'pass through' agreement; or• the Scheme has transferred its rights to receive cash flows from the asset and either:

(a) has transferred substantially all the risks and rewards of the asset; or

(b)has neither transferred nor retained substantially all the risks and rewards of the asset but hastransferred control of the asset.

A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.

Any gains or losses arising on derecognition of the asset (calculated as the difference between the disposalproceeds and the carrying amount of the asset) is included in the statement of comprehensive income in thereporting period the asset is derecognised as realised gains or losses on financial instruments.

(iii) Measurement

• Financial assets and liabilities held at fair value through profit or loss

Financial assets and liabilities held at fair value through profit or loss are measured initially at fair value excludingany transaction costs that are directly attributable to the acquisition or issue of the financial asset or financialliability. Transaction costs on financial assets and financial liabilities held at fair value through profit or loss areexpensed immediately. Subsequent to initial recognition, all instruments held at fair value through profit or lossare measured at fair value with changes in their fair value recognised in the statement of comprehensive income.

• Fair value in an active market

The fair value of financial assets and liabilities traded in active markets is based on their quoted market prices atthe end of the reporting period without any deduction for estimated future selling costs. Financial assets arepriced at current bid prices, while financial liabilities are priced at current asking prices.

A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularlyavailable from an exchange, dealer, broker, industry group, pricing service or regulatory agency, and those pricesrepresent actual and regularly occurring market transactions on an arm's length basis.

Investments in other unlisted unit trusts are recorded at the redemption value per unit as reported by themanagers of such trusts.

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(b) Financial instruments (continued)

(iii) Measurement (continued)

• Mortgage loans

Mortgage loans are measured initially at fair value plus transaction costs and subsequently amortised using theeffective interest rate method, less impairment losses if any.

The Responsible Entity assesses at each reporting period date whether there is any objective evidence thatmortgage loans are impaired. A mortgage loan is deemed to be impaired if there is objective evidence ofimpairment as a result of one or more events that has occurred after the initial recognition of the mortgage loan(an incurred "loss event") and that loss event (or events) has an impact on the estimated future cash flows of themortgage loan that can be reliably estimated.

Evidence of impairment may include indications that the borrower or a group of borrowers is experiencing otherfinancial difficulty, default or delinquency in interest or principal payments, the probability that they will enterbankruptcy or other financial reorganisation and where observable data indicate that there is a measurabledecrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlatewith defaults.

If any such indication of impairment exists, an impairment loss is recognised in the statement of comprehensiveincome as the difference between the asset’s carrying amount and the present value of estimated future cashflows discounted at the original effective interest rate.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be relatedobjectively to an event occurring after the impairment was recognised, the previously recognised impairment lossis reversed by adjusting the loan loss provision account.

For the purpose of a collective evaluation of impairment the Scheme considers credit risk characteristics such asasset type, industry, geographic location, collateral type, past due status and other relevant factors.

(iv) Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the statement of financial position whenthere is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a netbasis, or realise the asset and settle the liability simultaneously.

(c) Net assets attributable to unitholders

Units are redeemable at the unitholders option and are classified as financial liabilities due to mandatorydistributions. The units can be put back to the Scheme at any time for cash based on the redemption price. Thefair value of redeemable units is measured at the redemption amount that is payable (based on the redemptionunit price) at the end of the reporting period if unitholders exercised their right to put the units back to theScheme.

(d) Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash onhand, deposits held at call with financial institutions, other short term, highly liquid investments with originalmaturities of three months or less from the date of acquisition that are readily convertible to known amounts ofcash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts areshown within borrowings in the statement of financial position.

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(e) Investment income

Interest income is recognised in the statement of comprehensive income for all financial instruments that are notheld at fair value through Statement of comprehensive income using the effective interest method. Other changesin fair value for such instruments are recorded in accordance with the policies described in note 2(b).

Trust distributions (including distributions from cash management trusts) are recognised on an entitlements basis.

Net gains/(losses) on financial assets held at fair value through profit or loss arising on a change in fair value arecalculated as the difference between the fair value at the end of the reporting period and the fair value at theprevious valuation point. Net gains/(losses) do not include interest or dividend/distribution income. Realised andunrealised gains/(losses) are shown in the notes to the financial statements.

(f) Expenses

All expenses, including Responsible Entity's fees and custodian fees, are recognised in the statement ofcomprehensive income on an accruals basis.

(g) Income tax

Under current legislation, the Scheme is not subject to income tax as unitholders are presently entitled to theincome of the Scheme.

Financial instruments held at fair value may include unrealised capital gains. Should such a gain be realised, thatportion of the gain that is subject to capital gains tax will be distributed so that the Scheme is not subject tocapital gains tax.

(h) Distributions

In accordance with the Scheme's Constitution, the Scheme distributes income adjusted for amounts determinedby the Responsible Entity, to unitholders by cash or reinvestment. The distributions are recognised in thestatement of comprehensive income as finance costs attributable to unitholders.

(i) Increase/decrease in net assets attributable to unitholders

Income not distributed is included in net assets attributable to unitholders. Movements in net assets attributableto unitholders are recognised in the statement of comprehensive income as finance costs.

(j) Receivables

Receivables may include amounts for interest, rental income arrears, trust distributions, and securities sold wheresettlement has not yet occurred. Dividends and trust distributions are accrued when the right to receive paymentis established. Interest is accrued at the end of each reporting period from the time of last payment in accordancewith the policy set out in note 2(e) above. Amounts are generally received within 30 days of being recorded asreceivables.

Receivables include such items as Reduced Input Tax Credits (RITC) and application monies receivable fromunitholders.

(k) Payables

Payables include liabilities and accrued expenses owing by the Scheme which are unpaid as at the end of thereporting period.

Trades are recorded on trade date, and normally settled within three business days. Purchases of financialinstruments that are unsettled at the end of each reporting period are included in payables.

The distribution amount payable to unitholders as at the end of each reporting period is recognised separately inthe statement of financial position when unitholders are presently entitled to the distributable income under theScheme's Constitution.

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(l) Applications and redemptions

Applications received for units in the Scheme are recorded net of any entry fees payable prior to the issue ofunits in the Scheme. Redemptions from the Scheme are recorded gross of any exit fees payable after thecancellation of units redeemed.

Unit redemption prices are determined in accordance with the Scheme’s Constitution by reference to the netassets of the Scheme divided by the number of units on issue.

(m) Goods and Services Tax (GST)

The statement of comprehensive income is shown exclusive of GST, unless the GST incurred (or part thereof) onexpenses that are not recoverable. Expenses of various services provided to the Scheme by third parties, suchas custodial services and investment management fees, may have non-recoverable GST components, asapplicable. In these cases, the non-recoverable GST component is recognised as part of the particular expensein the statement of comprehensive income.

Accounts payable and receivable are stated inclusive of the GST receivable and payable, respectively. The netamount of GST recoverable, or payable, is included in receivables or payables in the statement of financialposition.

Cash flows relating to GST are included in the statement of cash flows on a gross basis.

(n) Use of judgements and estimates

The preparation of the Scheme's financial statements requires it to make judgements, estimates andassumptions that affect the reported amounts of assets and liabilities. Uncertainty about these assumptions andestimates could result in outcomes that could require a material adjustment to the carrying amount of the asset orliability affected in the future. However, estimates are continually evaluated and based on historical experienceand other factors, including expectations of future events that are believed to be reasonable under thecircumstances.

The Scheme's financial instruments are valued primarily based on the prices provided by independent pricingservices.

When the fair values of the reported financial instruments cannot be derived from active markets, they aredetermined using prices obtained from inactive or unquoted markets and/or other valuation techniques. Theinputs to these valuation techniques (if applicable) are taken from observable markets to the extent practicable.Where observable inputs are not available, the inputs may be estimated based on a degree of judgements andassumptions in establishing fair values.

Where appropriate, the outcomes of the valuation techniques that are used in establishing fair values arevalidated using prices from observable current market transactions for similar instruments (without modification orrepackaging) or based on relevant available observable market data.

The determination of what constitutes 'observable' requires significant judgement by the Scheme. The Schemeconsiders observable data to be market data that is readily available, regularly distributed or updated, reliableand verifiable, not proprietary, and provided by independent sources that are actively involved in the relevantmarket.

In addition, areas such as credit risk (both own and counterparty), volatilities and correlations requiremanagement to make estimates and judgements. Changes in assumptions about these factors could affect thereported fair value of financial instruments.

For certain other financial instruments, including amounts due from/to brokers, accounts payable and the carryingamounts approximate fair value due to the immediate or short term nature of these financial instruments.

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(o) New accounting standards and interpretations

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June2014 reporting periods and have not been early adopted by the Scheme. The directors' assessment of the impactof these new standards (to the extent relevant to the Scheme) and interpretations is set out below:

(i) AASB 9 Financial Instruments (2009 or 2010 version), AASB 2009 11 Amendments to Australian AccountingStandards arising from AASB 9, AASB 2010 7 Amendments to Australian Accounting Standards arising fromAASB 9, AASB 2012 6 Amendments to Australian Accounting Standards - Mandatory Effective Date ofAASB 9 and Transition Disclosures, AASB 2013 9 Amendments to Australian Accounting Standards -Conceptual Framework, Materiality and Financial Instruments, and AASB 2014 1 Amendments to AustralianAccounting Standards, Part E Financial Instruments (effective from 1 January 2018)

AASB 9 Financial Instruments addresses the classification, measurement, recognition and derecognition offinancial assets and financial liabilities. It has now also introduced revised rules around hedge accounting.The Standard is not applicable until 1 January 2018 but is available for early adoption. The Scheme does notexpect this to have a significant impact on the recognition and measurement of the Scheme's financialinstruments as they are carried at fair value through profit or loss. The derecognition rules have not beenchanged from the previous requirements, and the Scheme does not apply hedge accounting. The Schemedoes not intend to early adopt AASB 9.

(ii) AASB 2012 3 Amendments to Australian Accounting Standard Offsetting Financial Assets and FinancialLiabilities (effective 1 January 2014)

In June 2012, the AASB approved amendments to the application guidance in AASB 132 FinancialInstruments: Presentation, to clarify some of the requirements for offsetting financial assets and financialliabilities in the statement of financial position. These amendments are effective from 1 January 2014. Theadoption of the amendments will not have a significant impact on the financial statements of the Scheme.The Scheme does not intend to early adopt the amendments.

(iii) AASB 1031 Materiality, AASB 2013 9 Amendments to Australian Accounting Standards ConceptualFramework, Materiality and Financial Instruments, Part B Materiality (effective 1 January 2014), and AASB2014 1 Amendments to Australian Accounting Standards, Part C Materiality (effective 1 July 2014)

The AASB decided to withdraw AASB 1031. Part B of AASB 2013 9 deletes references to AASB 1031 invarious Australian Accounting Standards (including Interpretations). Part C of AASB 2014 1 deletesreferences to AASB 1031 in various other Australian Accounting Standards. Once all references to AASB1031 have been deleted from all Australian Accounting Standards, AASB 1031 will be withdrawn. Theadoption of the new rules will not impact the financial statements of the Scheme. Early adoption is notpermitted.

(iv) AASB 2014 1 Amendments to Australian Accounting Standards, Part A Annual Improvements 2010 2012and 2011 2013 Cycles (effective 1 July 2014)

Part A of AASB 2014 1 makes various amendments and editorial corrections to a number of AustralianAccounting Standards, particularly in relation to the meaning of effective IFRSs and in relation to theclarification of the definition of a related party. The adoption of the amendments will not impact the financialstatements of the Scheme.

There are no other standards that are not yet effective and that are expected to have a material impact onthe entity in the current or future reporting periods and on foreseeable future transactions.

(p) Rounding of amounts

The Scheme is an entity of the kind referred to in Class Order 98/0100 (as amended), issued by AustralianSecurities and Investments Commission, relating to the "rounding of" of amounts in the financial statements.Amounts in the financial statements have been rounded off to the nearest thousand dollars in accordance withthat Class Order, where indicated.

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3 Interest income


30 June2014

30 June2013

$'000 $'000

Mortgage income 2,063 4,264

Cash and cash deposits - domestic 1 10

Total interest income 2,064 4,274

4 Distribution income


30 June2014

30 June2013

$'000 $'000

Related unlisted managed investment schemes 908 1,510

908 1,510

5 Auditor's remuneration

The auditor's remuneration is paid directly by the Responsible Entity.

During the reporting period the following fees were paid or payable for services provided by the auditor of theScheme:


30 June2014

30 June2013

$ $

(a) Audit services

Audit and review of financial statements 15,000 19,270

Total remuneration for audit services 15,000 19,270

(b) Non-audit services

Tax compliance services 1,700 3,683

Total remuneration for taxation services 1,700 3,683

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6 Net assets attributable to unitholders

As stipulated within the Scheme's Constitution, each unit represents a right to an individual share in the Schemeand does not extend to a right to the underlying assets of the Scheme. There are no separate classes of unitsand each unit has the same rights attaching to it as all other units of the Scheme.

Movements in the number of units and net assets attributable to unitholders during the reporting period were asfollows:

For the reporting period ended30 June

201430 June

201330 June

201430 June

2013

No. '000 No. '000 $'000 $'000

Net assets attributable to unitholders

Opening balance 115,891 181,160 115,891 181,162

Applications 11 1,779 11 1,779

Return of capital to unitholders (41,649) (67,048) (40,656) (67,048)

Decrease in net assets attributable tounitholders - - (3,433) (2)

Closing balance 74,253 115,891 71,813 115,891

Capital risk management

The Scheme considers its net assets attributable to unitholders as capital, notwithstanding net assets attributableto unitholders are classified as a liability. The amount of net assets attributable to unitholders can changesignificantly on a daily basis as the Scheme is subject to daily applications and redemptions at the discretion ofunitholders. On 30 June 2014, 29% of the unitholders current investment in the Scheme was declared. Paymentwas made on 3 July 2014 and is disclosed within the statement of financial position as payables.

Under the terms of the Scheme's Constitution, the Responsible Entity has the discretion to reject an applicationfor units and to defer or adjust a redemption of units if the exercise of such discretion is in the best interests ofunitholders.

7 Cash and cash equivalents

As at

30 June2014

30 June2013

$'000 $'000

Cash management trusts 42,168 17,777

Cash at bank 22 28

42,190 17,805

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8 Mortgage loans

As at

30 June2014

30 June2013

$'000 $'000

Mortgages 67,939 105,865

Loan Loss Provision (9,360) (8,371)

Total 58,579 97,494

Gross impaired assets represent those assets that are contractually past due with security insufficient to coverthe principal and arrears. The Scheme holds certain gross assets that are considered impaired at 30 June 2014.The impairment on these assets less anticipated recoveries including security (being real property held ascollateral) has been provided for through the loan loss provision.

The Scheme's assets past due but with adequate security is shown below:

As at 30 June 2014Days past due

$'000

<30 30-60 60-90 >90 Total

Mortgage loans - - - 40,035 40,035

As at 30 June 2013Days past due

$'000

<30 30-60 60-90 >90 Total

Mortgage loans - 24,222 27,907 - 52,129

The fair value of collateral held for total assets past due with adequate security was $30,667,861 as at 30 June2014 (2013: $45,270,000). The mortgage loans disclosed above are gross of the loan loss provision.

As at30 June

201430 June

2013$'000 $'000

Loan loss reconciliationBalance as at 30 June 2013 8,371 6,134Charge for the reporting period 4,664 4,230Loan loss write off (3,675) (1,993)Balance as at 30 June 2014 9,360 8,371

The Scheme does not issue credit commitments to any third parties.

- 20 -



9 Financial risk management

(a) Objectives, strategies, policies and processes

The Scheme’s activities expose it to a variety of financial risks: market risk (including price risk and interest raterisk), credit risk and liquidity risk.

The Scheme's overall risk management program focuses on ensuring compliance with the Scheme's disclosuredocuments and seeks to maximise the returns derived for the level of risk to which the Scheme is exposed.Financial risk management is carried out by the Investment Manager ("the Investment Manager") under policiesapproved by the Board of Directors of the Responsible Entity ("the Board").

The Scheme uses different methods to measure different types of risk to which it is exposed. These methodsinclude sensitivity analysis in the case of interest rates, other price risks, and ratings analysis for credit risk.

As part of its risk management strategy, the Scheme may use derivatives and other investments, including shareprice and bond futures, interest rate swaps and forward currency contracts, to manage exposures resulting fromchanges in interest rates, foreign currencies, equity price risks, and exposures arising from forecast transactions.

(b) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because ofchanges in market prices. Market risk comprises two types of risk: price risk, foreign currency risk and interestrate risk. Market risk is managed and monitored using sensitivity analysis, and minimised through ensuring thatall investment activities are undertaken in accordance with established mandates and investment strategies.

The market risk disclosures are prepared on the basis of the Scheme's direct investments and not on a lookthrough basis for investments held in the Scheme.

The sensitivity of the Scheme’s net assets attributable to unitholders (and profit/(loss) before finance costsattributable to unitholders) to price risk, foreign exchange risk and interest rate risk is measured by thereasonably possible movements approach. This approach is determined based on management's best estimate,having regard to a number of factors, including historical levels of changes in interest rates and foreign exchangerates, historical correlation of the Scheme's investments with the relevant benchmarks and market volatility.However, actual movements in the risk variables may be greater or less than anticipated due to a number offactors, including unusually large market shocks resulting from changes in the performance of the economies,markets and securities in which the Scheme invests. As a result, historic variations in the risk variables are not adefinitive indicator of future variations in the risk variables.

At 30 June 2014, the overall market exposures were as follows:

As at30 June

201430 June

2013$'000 $'000

Mortgage loans 58,579 97,494

(i) Price risk

Price risk is the risk that the fair value or future cash flows of equities will fluctuate because of changes in marketprices (other than those arising from interest rate risk or currency risk), whether those changes are caused byfactors specific to the individual financial instrument or its issuer, or factors affecting all similar financialinstruments traded in the market.

Price risk exposure arises from the Scheme's investment in listed and unlisted property securities. Theinvestments are classified on the statement of financial position as at fair value through profit or loss. Allsecurities investments present a risk of loss of capital.

The Scheme has no exposures to price risk.

- 21 -



9 Financial risk management (continued)

(b) Market risk (continued)

(ii) Foreign exchange risk

There was no significant direct foreign exchange risk in the Scheme as at 30 June 2014 (2013: Nil).

(iii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate becauseof changes in market interest rates.

The Scheme’s interest bearing financial assets and financial liabilities expose it to risks associated with theeffects of fluctuations in the prevailing levels of market interest rates on its financial position and cash flows. TheScheme has established limits on investments in interest bearing assets, which are monitored on a daily basis.The Scheme may use derivatives to hedge against unexpected increases in interest rates and/or multiple rolloverdates for debt instruments to manage repricing risk. The interest rate risk is measured using sensitivity analysis.

In accordance with the Scheme’s policy, the Investment Manager monitors the Scheme’s overall interestsensitivity on a regular basis. This information and the compliance with the Scheme’s policy are reported to therelevant parties on a regular basis as deemed appropriate such as compliance manager, other key managementpersonnel, compliance committees and ultimately the Board.

The Scheme has direct exposure to interest rate changes on the valuation and cash flows of its interest bearingassets and liabilities. However, it may also be indirectly affected by the impact of interest rate changes on theearnings of certain entities in which the Scheme invests and impact on the valuation of certain assets that useinterest rates as an input in their valuation model.

The table below summarises the Scheme’s exposure to interest rate risks. It includes the Scheme’s assets andliabilities at fair values, categorised by the maturity dates:

Fixed interest rate

30 June 2014 Floatinginterest

rate

3monthsor less

4 to 12months

1 to 5years

Over 5years

Non-interestbearing Total

$'000 $'000 $'000 $'000 $'000 $'000 $'000

Assets

Cash and cash equivalents 22 42,168 - - - - 42,190

Receivables - - - - - 671 671

Mortgage loans 14,351 2,850 13,956 - - 27,422 58,579

Total assets 14,373 45,018 13,956 - - 28,093 101,440

Liabilities

Payables - - - - - 29,627 29,627

Total liabilities - - - - - 29,627 29,627

Net assets attributable tounitholders 14,373 45,018 13,956 - - (1,534) 71,813

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(b) Market risk (continued)

(iii) Interest rate risk (continued)

Fixed interest rate

30 June 2013Floating

interest rate

3monthsor less

4 to 12months

1 to 5years

Over 5years

Non-interestbearing Total

$'000 $'000 $'000 $'000 $'000 $'000 $'000

Assets

Cash and cash equivalents 28 17,777 - - - - 17,805

Receivables - - - - - 793 793

Mortgage loans 78,741 2,636 1,565 14,552 - - 97,494

Total assets 78,769 20,413 1,565 14,552 - 793 116,092

Liabilities

Payables - - - - - 201 201

Total liabilities - - - - - 201 201

Net assets attributable tounitholders 78,769 20,413 1,565 14,552 - 592 115,891

At 30 June 2014, should interest rates have (decreased)/increased by the basis points indicated below, with allother variables held constant, the net assets attributable to unitholders (and profit/(loss) before finance costsattributable to unitholders) would have changed by the following amounts, approximately and respectively:

As at 30 June 2014 As at 30 June 2013

Increasedby 25 bps

Decreasedby 25 bps

Increasedby 25 bps

Decreased by25 bps

$'000 $'000 $'000 $'000

Increase/(decrease) in net assets attributableto unitholders (and profit/(loss) beforefinance costs attributable to unitholders) 37 (37) 265 (265)

These changes are calculated on an undiscounted basis. The analysis is performed on the same basis for 2014and 2013.

(iv) Prepayment risk

Prepayment risk is the risk that the Scheme may incur a reduced margin of earnings because its borrowers repayor request repayment earlier than expected. The Scheme manages prepayment risk by actively monitoring itsborrowers. Due to the Scheme's largely variable rate mortgage book the likelihood of prepayment riskeventuating is reduced.

- 23 -




(c) Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failingto discharge an obligation.

Credit risk primarily arises from cash and cash equivalents, and deposits with banks and other financialinstitutions.

With respect to credit risk arising from the financial assets of the Scheme, other than derivatives, the Scheme’sexposure to credit risk arises from default of the counterparty, with the current exposure equal to the fair value ofthese investments as disclosed in the statement of financial position. This does not represent the maximum riskexposure that could arise in the future as a result of changes in values, but best represents the current maximumexposure at the end of the reporting period.

Credit risk arising from derivative financial instruments is, at any time, limited to those with positive fair values.

All transactions in listed securities are settled/paid for upon delivery using approved brokers. The risk of default isconsidered low, as delivery of securities sold is only made once the broker has received payment. Payment ismade once purchase of the securities has been received by the broker. The trade will fail if either party fails tomeet its obligations.

Counterparty credit limits and the list of authorised brokers are reviewed by the relevant parties within theResponsible Entity on a regular basis as deemed appropriate.

In accordance with the Scheme’s policy, the Investment Manager monitors the Scheme’s credit position on aregular basis. This information and the compliance with the Scheme policy are reported to the relevant parties ona regular basis as deemed appropriate such as compliance manager, other key management personnel,compliance committees and ultimately the Board.

Credit quality per class of instrument

The credit quality of mortgage loans is managed by the Scheme using LVR analysis. Within the portfolio thereexist some loans that are actively managed by the Responsible Entity.

The table below shows the LVR of the loan portfolio based on the Scheme's credit rating system. As the fund is inwind up the value of the underlying collateral associated with the loan is based upon management's bestestimate of recoverable value as at the forecasted date of loan maturity or exit. These estimates are judgementaland subject to change.

As at 30 June 2014Loan to valuationratios

$'000 <40% 40%-60% 60%-80% 80%-85% >85% Total

Mortgage loans 915 - 5,209 6,011 46,444 58,579

As at 30 June 2013Loan to valuation ratios

$'000 <40% 40%-60% 60%-80% 80%-85% >85% Total

Mortgage loans - 13,040 48,991 12,552 22,911 97,494

- 24 -




(d) Concentrations of risk

Concentrations of risk arise when a number of financial instruments are entered into with the same counterparty,or where a number of counterparties are engaged in similar business activities, or activities in the samegeographical region, or have similar economic conditions. These similarities would cause the counterparties'liabilities to meet the contractual obligations to be similarly affected by certain changes in the risk variables.

The concentrations of risk are monitored by the Investment Manager to ensure they are within acceptable limitsby reducing the exposures or by other means as deemed appropriate.

Concentrations of risk are managed by industry sector for equity instruments and by counterparty for debtinstruments and selected derivatives.

Based on the concentrations of risk that are managed by industry sector and/or counterparty, the followinginvestments can be analysed by the industry sector and/or counterparty as at 30 June 2014 and 30 June 2013:

At 30 June 2014 $'000

Property type

Retail 14,808

Industrial 13,557

Office 1,762

Licensed clubs 15,282

Land 5,298

Residential investment 2,405

Carpark 5,467

Total 58,579

At 30 June 2013 $'000

Property type

Retail 21,396

Industrial 21,117

Office 17,339

Licensed clubs 13,964

Land 10,225

Residential investment 7,131

Carpark 6,322

Total 97,494

As at 30 June 2014, the Scheme held a mortgage loan which represented 23.83% of the total mortgage book(2013: 15.6%). This mortgage loan is classified within the retail sector in the table above.

- 25 -




(e) Liquidity risk

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financialliabilities that are settled by delivering cash or another financial asset. This risk is controlled through theScheme's investment in financial instruments, which under normal market conditions are readily convertible tocash. In addition, the Scheme maintains sufficient cash and cash equivalents to meet normal operatingrequirements.

Under the terms of its constitution, the Scheme has the ability to manage liquidity risk by delaying redemptions tounitholders, if necessary, until the funds are available to pay them. Units are redeemed on demand at theunitholders option. However, the Responsible Entity does not envisage that the contractual maturity disclosed inthe table below will be representative of the actual cash outflows, as holders of these instruments typically retainthem for the medium to long term.

As stated elsewhere in the financial statements, the Scheme was terminated and the wind up process has begunwith the commencement of an orderly liquidation of the Scheme's assets and progressive return of capital to allunitholders in an equitable manner. It is anticipated that the wind up process will be completed in due course,subject to market conditions and other factors outside the Responsible Entity's control.

Maturity analysis for financial liabilities

The table below analyses the Scheme's financial liabilities into relevant maturity groupings based on theremaining period at the end of the reporting period to the contractual maturity date. The amounts in the table arethe contractual undiscounted cash flows. Financial liabilities such as trade payables, where there are no specificcontractual settlement dates, have been grouped into the 'less than 1 year' maturity grouping as such liabilitiesare typically settled within 30 days.

Less than 1year

1-2years

2-3years

3+years

$'000 $'000 $'000 $'000

30 June 2014

Payables 29,627 - - -

Net assets attributable to unitholders 71,813 - - -Total financial liabilities 101,440 - - -

Less than 1year

1-2years

2-3years

3+years

$'000 $'000 $'000 $'000

30 June 2013

Payables 201 - - -

Net assets attributable to unitholders 115,891 - - -Total financial liabilities 116,092 - - -

As disclosed above, the Investment Manager manages the Scheme's liquidity risk by investing in liquid assetsthat it expects to be able to liquidate within seven days or less. Liquid assets include cash and cash equivalentsand listed property trusts. As at 30 June 2014, these assets amounted to $42,189,573 (2013: $17,805,214).

Investment in Australian Unity Wholesale Cash Fund is included in the liquid assets of the Scheme above.

- 26 -




(f) Estimation of fair values of financial assets and financial liabilities

The carrying amounts of the Scheme's financial assets and financial liabilities at the end of each reporting periodapproximate their fair values, other than certain mortgage loans whereby fair value has been assessed based onvaluation techniques including discounted cash flows and capitalisation approaches.

The fair value of mortgage loans as at 30 June 2014 is $53,588,231 (2013: $91,238,704).

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transactionbetween market participants at the measurement date.

The Scheme values its investments in accordance with the accounting policies set out in note 2(b).

For the reporting periods ended 30 June 2014 and 30 June 2013, the Scheme did not hold financial assets thatwere determined using valuation techniques. The fair values of the Scheme's financial assets held at fair valuethrough profit and loss for the years then ended were determined directly, in full or in part, by reference to quotedprices that were available from various sources, such as exchanges, dealers, brokers, industry groups andpricing services.

(g) Fair value hierarchy

The Scheme is required to classify fair value measurements using a fair value hierarchy that reflects thesubjectivity of the inputs used in making the measurements. The fair value hierarchy has the following levels:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability,either directly (that is, as prices) or indirectly (that is, derived from prices); quoted prices for similar securitiesin active and/or inactive markets; market corroborated inputs; inputs that are developed based on availablemarket data and reflect assumptions that markets would use when pricing similar securities.

• Level 3:Inputs for the asset or liability that are not based on observable market data (that is, unobservableinputs).

The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety isdetermined on the basis of the lowest level input that is significant to the fair value measurement in its entirety.For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If afair value measurement uses observable inputs that require significant adjustment based on unobservable inputs,that measurement is a level 3 measurement. Assessing the significance of a particular input to the fair valuemeasurement in its entirety requires judgment, considering factors specific to the asset or liability.

The determination of what constitutes ''observable'' requires significant judgment by the Responsible Entity. TheResponsible Entity considers observable data to be that market data that is readily available, regularly distributedor updated, reliable and verifiable, not proprietary, and provided by independent sources that are activelyinvolved in the relevant market.

The Scheme has no financial instruments held at fair value therefore there is no further disclosure.

- 27 -



10 Related party transactions

Responsible entity

The Responsible Entity of Australian Unity High Yield Mortgage Trust is Australian Unity Funds ManagementLimited (ABN 60 071 497 115) whose immediate and ultimate parent entity is Australian Unity Limited (ABN 23087 648 888).

Key management personnel

(a) Directors

Key management personnel includes persons who were directors of Australian Unity Funds Management Limitedat any time during the reporting period as follows:

Glenn Barnes (Chairman)David Bryant (Chief Executive Officer and Chief Investment Officer)Melinda Cilento (Non-Executive Director) (appointed 28 May 2014)Stephen Maitland (Non-Executive Director)Kevin McCoy (Chief Financial Officer) (appointed 24 March 2014)Rohan Mead (Group Managing Director)Peter Promnitz (Non-Executive Director) (appointed 1 August 2014)Warren Stretton (Non-Executive Director)Anthony Connon (Executive Director) (ceased 24 March 2014)Ian Ferres (Non-Executive Director) (ceased 1 August 2014)Amanda Hagan (appointed alternate for Rohan Mead for the period 1 September 2013 to 27 October 2013)

(b) Other key management personnel

There were no other persons with responsibility for planning, directing and controlling the activities of theScheme, directly or indirectly during the reporting period.

Other transactions within the Scheme

From time to time directors of Australian Unity Funds Management Limited, or their director related entities, mayinvest in or withdraw from the Scheme. These investments or withdrawals are on the same terms and conditionsas those entered into by other Scheme unitholders and are trivial in nature.

Related party unitholdings

The Australian Unity High Yield Mortgage Trust has entered into pari passu arrangements with other AustralianUnity entities. The Australian Unity High Yield Mortgage Trust ranks as equal first for the loans which areconducted on normal commercial terms and conditions.

Responsible Entity's fees and other transactions

Under the terms of the Scheme's Constitution, the Responsible Entity is entitled to receive Responsible Entity'sfees, calculated daily by reference to the average daily net assets (excluding net assets attributable tounitholders) of the Scheme.

The transactions during the reporting period and amounts payable at reporting period end between the Schemeand the Responsible Entity were as follows:

30 June2014

30 June2013

$ $

Responsible Entity's fees for the reporting period paid by the Scheme to theresponsible entity 2,017,062 2,612,941Fees earned by the Responsible Entity in respect of investments by theScheme in other schemes managed by the Responsible Entity 49,450 51,943Aggregate amounts payable to the Responsible Entity at the end of thereporting period 159,068 183,734

- 28 -



10 Related party transactions (continued)

Related party unitholdings

Parties related to the Scheme (including Australian Unity Funds Management Limited, its related parties andother schemes managed by Australian Unity Funds Management Limited), held units in the Scheme as follows:

30 June 2014

No. ofunits heldopening

No. ofunits held

closing

Fair valueof

investmentInterest

held

No. ofunits

acquired

No. ofunits

disposed

Distributionspaid/payable

by theScheme

Unitholders (Units) (Units) $ % (Units) (Units) $

Australian Unity Wholesale High YieldMortgage Trust 69,726,732 44,679,147 43,213,671 60.17 - (25,047,585) -

Australian Unity Conservative GrowthPortfolio 209,340 134,140 129,740 0.18 - (75,200) -

Discovery Investment Services CoreIncome Fund 3,031,835 1,942,723 1,879,002 2.62 - (1,089,112) -

Australian Unity Balanced GrowthPortfolio 552,922 354,299 342,678 0.48 - (198,623) -

Australian Unity Balance Growth Bond 529,958 339,584 328,445 0.46 - (190,374) -

Australian Unity Capital GuaranteedBond 2,532,093 1,622,502 1,569,284 2.19 - (909,591) -

Australian Unity Capital GuaranteedFuneral Bond (Taxed) 653,016 418,436 404,711 0.56 - (234,580) -

Australian Unity Capital GuaranteedFuneral Bond (Untaxed) 674,654 432,301 418,122 0.58 - (242,353) -

Australian Unity Capital GuaranteedMortgage Bond 616,125 394,797 381,848 0.53 - (221,328) -

Australian Unity Capital Secure FuneralBond 516,774 331,136 320,275 0.45 - (185,638) -

Australian Unity Conservative GrowthBond 432,312 277,015 267,929 0.37 - (155,297) -

Total 79,475,761 50,926,080 49,255,705 68.59 - (28,549,681) -

- 29 -



10 Related party transactions (continued)

30 June 2013

No. of unitsheld

opening

No. ofunits held

closing

Fair valueof

investmentInterest

held

No. ofunits

acquired

No. ofunits

disposed

Distributionspaid/payable

by theScheme

Unitholders (Units) (Units) $ % (Units) (Units) $

Australian Unity Wholesale High YieldMortgage Trust 108,948,019 69,726,732 69,726,732 60.17 - (39,221,287) -

Australian Unity Conservative Growth Portfolio 327,093 209,340 209,340 0.18 - (117,753) -

Discovery Investment Services Core IncomeFund 4,737,241 3,031,835 3,031,835 2.62 - (1,705,406) -

Australian Unity Balanced Growth Portfolio 863,941 552,922 552,922 0.48 - (311,019) -

Australian Unity Balance Growth Bond 828,059 529,958 529,958 0.46 - (298,101) -

Australian Unity Capital Guaranteed Bond 3,956,395 2,532,093 2,532,093 2.18 - (1,424,302) -

Australian Unity Capital Guaranteed FuneralBond (Taxed) 1,020,337 653,016 653,016 0.56 - (367,321) -

Australian Unity Capital Guaranteed FuneralBond (Untaxed) 1,054,147 674,654 674,654 0.58 - (379,493) -

Australian Unity Capital Guaranteed MortgageBond 962,695 616,125 616,125 0.53 - (346,570) -

Australian Unity Capital Secure Funeral Bond 807,460 516,774 516,774 0.45 - (290,686) -

Australian Unity Conservative Growth Bond 675,488 432,312 432,312 0.37 - (243,176) -

Total 124,180,875 79,475,761 79,475,761 68.58 - (44,705,114) -

Investments

The Scheme held investments in the following schemes which are also managed by Australian Unity FundsManagement Limited or its related parties:

Fair value ofinvestment Interest held

Distributionsreceived/receivable

30 June2014

30 June2013

30June2014

30June2013

30 June2014

30 June2013

$ $ % % $ $

Australian Unity Wholesale Cash Fund 42,167,772 17,776,896 5.42 2.21 908,171 1,510,155

42,167,772 17,776,896 5.42 2.21 908,171 1,510,155

Distributions received/receivable includes an amount of $95,291 (2013: $41,996) in respect of Australian UnityWholesale Cash Fund which remains unpaid at the end of the reporting period.

- 30 -



11 Reconciliation of loss to net cash inflows from operating activities

(a) Reconciliation of loss to net cash inflows from operating activities


30 June2014

30 June2013

$'000 $'000

Decrease in net assets attributable to unitholders (3,433) (2)

Proceeds from sale of financial instruments 35,742 41,020

Purchase of financial instruments (1,491) (394)

Net change of accrued income and receivables 122 498

Net change in payables and other liabilities 29,426 2,134

Less Redemption payable (29,334) -

Add Loan Loss Expense 4,664 -

Net cash inflows from operating activities 35,696 43,256

(b) Components of cash and cash equivalents

Cash as at the end of the reporting period as shown in the statement of cashflows is reconciled to the statement of financial position as follows:

Cash and cash equivalents 42,190 17,805

12 Events occurring after the reporting period

No significant events have occurred since the end of the reporting period which would impact on the financialposition of the Scheme disclosed in the statement of financial position as at 30 June 2014 or on the results andcash flows of the Scheme for the reporting period ended on that date.

13 Contingent assets and liabilities and commitments

There are no outstanding contingent assets and liabilities or commitments as at 30 June 2014 and 30 June 2013.

- 31 -

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