ASX Release
P‐REIT (PXT)
30 June 2012 – Full Year Result
31 August 2012
Attached to this ASX Release are the financial statements for the full year to 30 June 2012
along with the Appendix 4E. P‐REIT incurred a loss of $15.5 million and net assets are now
22 cents per unit. The loss and decline in net assets are caused by the Trust making a
provision of $19 million with respect to the adverse judgment of the NSW Supreme Court
(Judgment) disclosed to the market on 10 August 2012.
The Judgment relates to court proceedings commenced by the MacarthurCook Property
Securities Fund (ASX Code: MPS) and involves claims in relation to three contracts under
which MPS invested $15 million in the Trust in late 2007, that is, before BlackWall began
managing the Trust. BlackWall disputes those claims and will be lodging an appeal. More
details on these proceedings and the effect of the provisions are set out in the financial
statements following.
Excluding the provision for the Judgment, the operating profit would have been $3.5
million and net assets per unit 31 cents.
Between 30 June 2011 and the date of this announcement interest bearing debt has
reduced from $57.9 million to $54.5 million giving rise to a loan to value ratio of 45%
(against total assets) and 67% against direct real estate. The Trust intends to make a
further debt repayment of $600,000 on 7 September 2012.
Distributions
The MPS proceedings were before the court again today to determine the status of the
Judgment pending the intended appeal. By consent the court has ordered that, subject to
TFML giving a number of undertakings the Judgment will be stayed. This means that MPS
cannot take steps to enforce the Judgment debt. The stay will be reviewed before the court
on 19 October 2012. In negotiating the stay TFML has agreed to a number of undertakings
with respect to the assets of the Trust and the use of its funds pending the appeal. In
summary the undertakings will have the effect that surplus cash flow must be applied to
reducing bank debt. In addition, the Trust cannot make income or capital distributions to
its unitholders.
It is expected that these undertakings will continue until the outcome of the appeal is
known and as a consequence the Trust will not be in a position to pay distributions until
that time.
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Stuart Brown
Chief Executive Officer
TFML LIMITED ACN 079 608 825
Level 1, 50 Yeo Street, Neutral Bay, Sydney NSW 2089 Australia | PO Box 612, Neutral Bay, Sydney
NSW 2089 Australia | Tel +61 2 9033 8611 | Fax +61 2 9033 8600 | www.blackwallfunds.com.au
Managed By
Consolidated Annual Financial Statements
Year Ended 30 June 2012
P-REIT
CONTENTS
Financial Statements
Directors’ Report
Auditor’s Independence Declaration
Corporate Governance
ASX Additional Information
Trust Details
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Net Assets Attributable
to Unitholders
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor’s Report
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P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
Page 3
Page 9
Page 10
Page 18
Page 20
Page 21
Page 22
Page 23
Page 24
Page 25
Page 49
Page 50
2
P-REIT
Directors’ Report
On 9 May 2012 a meeting of P-REIT (“P-REIT” or “the Trust”) members approved resolutions to move the
responsible entity duties from the Trust’s original responsible entity RFML Limited (“RFML”) (now called
Zhaofeng Funds Management Limited (“Zhaofeng”)) to TFML Limited (“the Responsible Entity” or
“TFML”). The Directors present their report for the year ended 30 June 2012.
Principal Activities and Review of Operations
The Trust is a registered managed investment scheme incorporated and domiciled in Australia.
The principal activity of the Trust and its controlled entity during the financial year was investing in
income-producing real estate and real estate interests. There were no significant changes in the principal
activity during the financial year, however, as disclosed in the ASX release accompanying these financial
statements the Trust is subject to a significant judgment relating to court proceedings initiated by a listed
trust known as MacarthurCook Property Securities Fund (“MPS”). MPS invested in the Trust prior to
BlackWall acquiring control of the Trust. The proceedings relate to contracts with respect to MPS’s
investment which were not disclosed to other unitholders at the time. The case was heard before Justice
Hammerschlag in the Supreme Court of NSW Equity Division in early July 2012.
On 10 August 2012 Justice Hammerschlag handed down a judgment (“Judgment”) in favour of MPS. The
Judgment is for $17,764,204 including Judgment court interest (to the date of Judgment) but excluding
costs. The responsible entity has estimated costs to be in the order of $1.2 million bringing the total
provision for the Judgment to $19,000,000. The Judgment amount has been recognised as an expense in
these financial statements. With this adjustment the net result for the Trust for the financial year ended
30 June 2012 was a loss of $15,526,000 (2011: profit of $1,596,000) Refer to the ASX announcement
made on 10 August 2012 for details of the Judgment. Further details on the litigation expenses are
included in Note 16.
The Responsible Entity has sought further legal advice since the Judgment and has determined that it will
lodge an appeal. Subject to court time tabling and work loads the appeal process is expected to take at
least six months.
Significant Changes in Affairs
The Trust was listed on the Australian Securities Exchange (ASX) on 28 October 2011.
Distributions
There were no distributions paid or declared for the year ended 30 June 2012 (2011: $nil).
Events Subsequent to Reporting Date and Likely Developments
On 9 July 2012 $1.08 million of borrowings was repaid to the Trust’s lender (refer to Note 14).
Other than the other matters referred to in these financial statements, to the best knowledge of the
Directors, there have been no other matters or circumstances that have arisen since the end of the year
that have materially affected or may materially affect the Trust’s operations in future financial years, the
results of those operations or the Trust’s state of affairs in future financial years.
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P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
3
P-REIT
Directors’ Report (continued)
Going Concern
In assessing if it is appropriate to prepare these financial statements on a going concern basis the
Directors have considered the following factors:
1. The Trust borrowings of $55,580,000 (at 30 June, now $54,500,000) is classified as a current
liability as it has a term to maturity of less than 12 months, it is outside of its loan to value ratio
covenant (direct property to debt – currently 67% against a covenant of 65%) and the Judgment
disclosed above constitutes a review event or breach under the facility;
2. The Judgment gives rise to a current liability of $19,000,000;
3. The Judgment gives rise to a litigation expense which generates a loss of $15,526,000 (a $3.5
million profit if the Judgment is not brought to account);
4. The Trust has non-current assets of $119.7 million ($81.4 million direct property and $37.5
million property securities);
5. The Trust’s direct property portfolio has no material vacancies or bad debts; and
6. Pending the determination of the appeal it is likely that the court or MPS will not consent to the
Trust paying distributions to its members. As a consequence all free cashflow will be applied to
debt amortisation.
The Trust has over $121 million of gross assets to satisfy total liabilities of $76 million (including the
Judgment). As a consequence the Directors have concluded that it is reasonable to assume that:
1. The Trust's borrowings will either be extended by the current lender or can be refinanced; and
2.
If the Trust is unsuccessful in its appeal (and any subsequent appeals to higher appellant courts)
the Trust can sell assets to fund the Judgment debt.
The Directors have therefore taken the view that it is appropriate to prepare these financial statements on
a going concern basis.
Information on Directors of the Responsible Entity
The names of the Directors of the Responsible Entity (Zhaofeng then TFML) in office at any time during or
since the end of the year are set out below. Unless otherwise stated, Directors have been in office since the
beginning of the financial year to the date of these financial statements.
Name
Richard Hill
Position
Non-Executive
Director and
Chairman
TFML
Special Experience
Richard Hill has extensive investment banking experience and
was the founding partner of the corporate advisory firm Hill
Young & Associates. Richard has invested in BlackWall’s projects
since the early 1990’s. Prior to forming Hill Young, Richard held a
number of Senior Executive positions in Hong Kong and New
York with Hong Kong & Shanghai Banking Corporation (HSBC).
He was admitted as an attorney in New York State and was
registered by the US Securities & Exchange Commission and the
Ontario Securities Commission. He is the Chairman of Calliden
Group Limited and Sirtex Medical Limited and a Director of Biota
Holdings Limited (all listed on the ASX). In addition Richard is
Chairman of the Westmead Millennium Institute for Medical
Research. Previously, Richard was an
Independent Non-
Executive Director of formerly ASX listed Pelorus Property
Group. He is now a Chairman of the ASX listed company,
BlackWall Property Funds Limited.
4
4
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
P-REIT
Directors’ Report (continued)
Information on Directors of the Responsible Entity (continued)
Joseph (Seph)
Glew
Robin Tedder
Stuart Brown
Seph has worked in the commercial property industry in New
Zealand, the USA and Australia. Seph has driven large scale
property development and financial structuring for real estate
for over 30 years. In addition, since the early 1990’s Seph has
run many “turn-around” processes in relation to distressed
properties and property structures for both private and
institutional property owners.
While working for the Housing Corporation of New Zealand
and then AMP, Seph qualified as a registered valuer and holds a
Bachelor of Commerce. In the 1980’s he served as an Executive
Director with New Zealand based property group Chase
Corporation and as a Non-Executive director with a number of
other listed companies in New Zealand and Australia. Seph was
Chairman of formerly ASX listed Pelorus Property Group and
he is now the Executive Chairman of Pelorus Private Equity
Limited and a Director of the ASX listed company, BlackWall
Property Funds Limited.
Robin has over 35 years’ experience in investment and
financial markets. He has been an investor in BlackWall’s
projects since 1997. Robin manages private equity interests
and is the Chairman of Vintage Capital Pty Ltd. He is a former
member of the ASX and has served on the boards of several
merchant banks in Australia and overseas, including Rand
Merchant Bank Ltd, Kleinwort Benson Australia Ltd and
Australian Gilt Securities Ltd (as CEO from 1988 to 1995). He is
a Director of Italtile Australia Pty Ltd (a national retailer under
the CTM brand, and developer of bulky goods stores),
Chairman of Apollo Health Management and Australian
Ambassador for Singularity University (sponsored by NASA
and Google) of Mountain View California. Robin is also a
Fellow of the Financial Services Institute of Australasia.
Previously, Robin was a Director of formerly ASX listed Pelorus
Property Group and he is now a Non-Executive director of
Pelorus Private Equity Limited and a Non-Executive director of
the ASX listed company, BlackWall Property Funds Limited.
Stuart has been involved in property investment for over 15
years across funds management, property services and finance.
In 2006 he was appointed Chief Operating Officer and Chief
Financial Officer of the then ASX listed Pelorus Property Group
and later Managing Director. Stuart has run debt and equity
raising in relation to listed and unlisted real estate structures
with assets valued at over a half a billion dollars. In his earlier
career, Stuart practised as a solicitor in the areas of real estate,
mergers and acquisitions and corporate advisory with
Mallesons and Gilbert + Tobin. Stuart is also a Director of the
unlisted public company, Pelorus Private Equity Limited and
the ASX listed company, BlackWall Property Funds Limited.
Non-Executive
Director TFML and
Zhaofeng
Non-Executive
Director
TFML
Executive
Director and Chief
Executive Officer
TFML and
Zhaofeng
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
5
5
P-REIT
Directors’ Report (continued)
Information on Directors of the Responsible Entity (continued)
Tim Brown
(only relevant
for Zhaofeng
Funds
Management
Limited)
Tim is the Chief Financial Officer for BlackWall and its funds.
Tim is responsible for all aspects of these entities’ financial
reporting, debt management and accounting operations. Tim
joined the formerly listed Pelorus Property Group Limited in
2008 as Group Financial Controller and became Chief Financial
Officer in 2009.
Non-Executive
Director
Zhaofeng
Chief Financial
Officer TFML and
Zhaofeng
He has a Bachelor of Commerce from the University of New
South Wales, is a member of the Institute of Chartered
Accountants of Australia and has a Graduate Diploma from the
Financial Services Institute of Australasia. He started his career
with Deloitte in their middle market audit division working on
a wide variety of SMEs. In 2002 he joined Lend Lease
Corporation and held a number of finance roles across the Lend
financial
Lease portfolio
management
including Treasury
Manager for Lend Lease's European operations based in
London.
from development and retail
treasury,
to corporate
Company Secretary
Don Bayly is the Company Secretary. He has a Bachelor of Commerce and Administration degree from
Victoria University. Don has over 20 years’ compliance management experience.
The Board has looked to achieve a board membership that includes a mix of skills, experience and
technical expertise that is best suited to the business.
Meeting Attendances
Attendance at the Responsible Entity’s Board meetings held during the financial year is detailed below:
Director
Meetings Held
Richard Hill
Seph Glew
Robin Tedder
Stuart Brown
Tim Brown
Directors’ Relevant Interests
Zhaofeng TFML
3 1
n/a 1
3 1
n/a 1
3 1
3 n/a
As at the date of this report the Directors’ relevant interests in units or options in the Trust are:
Director
Richard Hill
Seph Glew
Robin Tedder
Stuart Brown
Options
Units (No.)
-
52,150,000
4,481,765
853,650
Units (%)
-
25.13
2.16
0.41
Shares (%)
There were no options granted during the year ended 30 June 2012.
6
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
6
P-REIT
Directors’ Report (continued)
Remuneration Report (Audited)
There was no remuneration paid from the Trust to the Directors of the Responsible Entity and its key
management personnel.
Custodian Remuneration
The Custodian is The Trust Company Limited. The custody fee is calculated at the greater of $15,000 p.a.
or 0.025% p.a. of the gross asset value of the Trust, plus GST. In addition, the Custodian is entitled to be
paid any out-of-pocket expenses incurred in the performance of its duties. Refer to Note 25 for details.
Responsible Entity Remuneration
In accordance with the terms of the Trust Constitution and the product disclosure statement, the
Responsible Entity is entitled to receive a management fee based on 0.65% p.a. of the gross asset value of
the Trust. Refer to Note 25 for total remuneration paid to the Responsible Entity.
Interests in the Fund
The number of units on issue at 30 June 2012 was 207,524,039. There were no additional issues or
redemptions of units during the financial year.
TFML Limited, the Responsible Entity of the Trust, holds 5,000,000 units in the Trust.
Environmental Regulation and Performance
The Trust and its controlled entity’s operations are not regulated by any significant environmental law or
regulation under either Commonwealth or State legislation. However, the Responsible Entity believes that
the Trust and its controlled entity have adequate systems in place for the management of its
environmental requirements and is not aware of any instances of non-compliance of those environmental
requirements as they apply to the Trust.
Measurable Objectives For Achieving Gender Diversity
While the Responsible Entity is committed to employing people on best fit for the job based on ability,
performance and potential, our goal is to build a workforce that reflects the diversity of the communities
in which we operate.
This means creating a work environment where employee differences such as gender, age, culture,
disability and lifestyle choice are valued. The objective is therefore one of a 50/50 gender split and is
reflected as follows:
Board
Executive Management
Other
Female (No. of people)
0
3
6
Female (%) Male (No. of people)
4
3
5
0
50
55
Male (%)
100
50
45
Proceedings On Behalf of The Trust
See commentary earlier in these financial statements and Note 16.
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P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
7
P-REIT
Directors’ Report (continued)
Indemnities of Officers
During the financial period the Responsible Entity has paid premiums to insure each of the Directors named
in this report along with Officers of the Responsible Entity against all liabilities for costs and expenses
incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity
of Director or Officer of the Responsible Entity, other than conduct involving a willful breach of duty. The
insurance policy prohibits disclosure of the nature of the liability, the amount of the premium and the limit of
liability.
No indemnities have been given or insurance premiums paid, during or since the end of the financial year,
for any person who is or has been an auditor to the Trust.
Non-audit Services
Amounts paid to the auditor for non-audit services during the year are detailed at Note 19 of the financial
statements. The Directors are satisfied that the provision of non-audit services is compatible with the
general standard of independence for auditors imposed by the Corporations Act 2001. The nature and
scope of each type of non-audit service provided means that auditor independence was not compromised.
Auditor’s Independence Declaration
A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act
2001 is set out in these financial statements.
Auditor
ESV Chartered Accountants continues in office in accordance with section 327 of the Corporations Act
2001.
Rounding of Amounts
The Trust is a group of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998, and in
accordance with that Class Order, amounts in the Directors’ Report and the financial statements are
rounded off to the nearest thousand dollars, unless otherwise indicated.
Signed in accordance with a resolution of the Board of Directors.
Stuart Brown
Director
Sydney, 30 August 2012
8
8
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
Directors’ Report (continued)
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
9
P-REIT
Corporate Governance
The Board of Directors of TFML Limited as Responsible Entity for P-REIT (an open ended unit trust) is
responsible for the corporate governance practices that provide an appropriate framework for managing
the Trust for the benefit of unitholders. Good corporate governance is a fundamental part of the culture
and business practices of TFML. The Board has adopted comprehensive systems of control and
accountability as the basis for administration of corporate governance. The Board is committed to
administering the policies and procedures with openness and integrity, pursuing the true spirit of
corporate governance commensurate with TFML’s needs. To the extent they are applicable and
appropriate for a company of TFML’s size and nature, TFML has adopted the ASX Corporate Governance
Council’s “Corporate Governance Principles and Recommendations Second Edition” and “Summary Table
of the 30 June 2010 Changes to Second Edition of the Corporate Governance Principles and
Recommendations”.
Recommendation
Principle No
Principle 1: Lay solid foundations for management and oversight
1.1
Compliance
Establish the
functions
reserved to the Board
and those delegated to
Senior Executives and
disclose those functions.
Entity
The Responsible Entity has
appointed
Compliance
a
Committee but for the purposes
of corporate governance has
largely
adopted BlackWall’s
policies and procedures. The
Responsible
and
BlackWall operate with a flat
management
structure. The
Chief Executive Officer and
Chief Financial Officer are
the day-to-day
involved
operations of
the business.
Decisions at the Board level and
the assessment of executive
performance are based on
reports received from the Chief
Executive Officer
the
consideration of
issues by
Executive and Non-Executive
Directors at Board meetings.
and
in
1.2
Disclose the process for
evaluating
the
performance of Senior
Executives.
of
The Responsible Entity does not
directly employ executives or
staff. The Board of TFML and
the BlackWall Remuneration
Committee (or full Board in
absence
Remuneration
Committee) will oversee the
performance evaluation of the
executive team. This will be
criteria,
specific
based on
business
the
including
performance of TFML and the
Trust,
strategic
objectives are being achieved
and
of
management and personnel.
Performance reviews of Senior
Executives have taken place
development
whether
the
10
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
Reason for Non-compliance
Comply.
Comply.
10
P-REIT
Principle No
Recommendation
Compliance
Reason for Non-compliance
during the reporting period and
they were in accordance with
the process above.
1.3
Provide the information
The Board Charter can be
Comply.
indicated in the Guide to
accessed
from
BlackWall’s
reporting on Principle 1.
website.
Principle 2: Structure the Board to add value
2.1
A majority of the Board
The Board has considered the
The Directors monitor the
should be Independent
guidance
to
Principle
2:
Directors.
Structure the Board to Add
Value and in particular, Box 2.1,
which
contains
a
“relationships
independent status”.
list of
affecting
Currently TFML Limited has
one Independent Director, Mr
Richard Hill, who is also the
Chairman, and
three Non-
Independent Directors, Mr
Brown, who acts in an executive
capacity, and Mr Glew and Mr
Tedder who act
in a Non-
Executive capacity.
business
affairs of
the
Responsible Entity on behalf
of the unitholders of the
Trust with a specific focus
on
the profitability
of
business activities and the
efficiency of its managers. In
keeping
with
consideration,
this
Board
positions are held by a
majority of members who
are significant unitholders.
The Responsible Entity has
not
therefore
adopted
recommendations 2.1 and
2.2 of the ASX Corporate
Governance Council.
The Board’s primary focus is
on
driving
returns
to
unitholders by growing Net
Tangible
Assets
and
earnings per unit over the
long
term. The Board
considers risk management
and the ethical conduct of
business.
The Board is structured with
a combination of skills and
experiences.
The Board
members’
skills
and
experience are consistent
with the business operations
that the Responsible Entity
undertakes including:
(cid:120) Structured finance and
fund management
(cid:120) Property management
11
P-REIT
Corporate Governance (continued)
Principle No
Recommendation
Compliance
during the reporting period and
they were in accordance with
the process above.
Reason for Non-compliance
1.3
Provide the information
indicated in the Guide to
reporting on Principle 1.
The Board Charter can be
accessed
BlackWall’s
website.
from
Comply.
Principle 2: Structure the Board to add value
2.1
A majority of the Board
should be Independent
Directors.
to
Principle
The Board has considered the
2:
guidance
Structure the Board to Add
Value and in particular, Box 2.1,
list of
which
“relationships
affecting
independent status”.
contains
a
Currently TFML Limited has
one Independent Director, Mr
Richard Hill, who is also the
Chairman, and
three Non-
Independent Directors, Mr
Brown, who acts in an executive
capacity, and Mr Glew and Mr
Tedder who act
in a Non-
Executive capacity.
affairs of
The Directors monitor the
the
business
Responsible Entity on behalf
of the unitholders of the
Trust with a specific focus
on
of
the profitability
business activities and the
efficiency of its managers. In
keeping
this
consideration,
Board
positions are held by a
majority of members who
are significant unitholders.
The Responsible Entity has
adopted
not
recommendations 2.1 and
2.2 of the ASX Corporate
Governance Council.
therefore
with
Assets
driving
returns
The Board’s primary focus is
on
to
unitholders by growing Net
and
Tangible
earnings per unit over the
long
term. The Board
considers risk management
and the ethical conduct of
business.
The Board is structured with
a combination of skills and
The Board
experiences.
members’
and
skills
experience are consistent
with the business operations
that the Responsible Entity
undertakes including:
(cid:120) Structured finance and
fund management
(cid:120) Property management
11
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
11
P-REIT
Corporate Governance (continued)
Principle No
Recommendation
Compliance
Reason for Non-compliance
and leasing
(cid:120) Property development.
The Board considers risk
management and the ethical
conduct of business. In this
regard the Board has
established a Related Party
Transactions Committee and
an Audit Committee.
2.2
2.3
2.4
2.5
2.6
The Chair should be an
Independent Director.
Refer to 2.1.
The roles of Chair and
Chief Executive Officer
should not be exercised
by the same individual.
TFML’s Chairman and Chief
Executive Officer are not the
same person.
Comply.
Comply.
Board
The
should
establish a Nomination
Committee.
Disclose the process for
the
evaluating
performance
the
of
Board,
its Committees
and individual Directors.
Provide the information
indicated in the Guide to
reporting on Principle 2.
The Responsible Entity does not
foresee the Board composition
changing in the near future and
therefore has not established a
Nomination Committee. The
Board
the
independence of a Director is
not compromised simply by the
fact that the Director
is a
significant investor in P-REIT.
considers
that
gained
a
The Board considers that no
efficiencies or other benefits
by
be
would
establishing
separate
committee. TFML has not,
therefore,
adopted
Recommendation 2.4 of the
ASX Corporate Governance
Council.
The full Board will arrange an
annual performance evaluation
of the Board, its Committees
and individual Directors.
Comply.
Comply.
to
skills, experience and
The
expertise
the
relevant
position held by each Director
will be disclosed
the
Directors’ Report which forms
part of the financial statements.
in
The Directors are entitled to
take independent professional
advice at the expense of the
Responsible Entity. The period
of office held by each Director
the
will be disclosed
in
12
12
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
P-REIT
Corporate Governance (continued)
Principle No
Recommendation
Reason for Non-compliance
Compliance
Directors’ Report which forms
part of the financial statements.
A statement will be included in
the Directors’ Report of the
financial statements as to the
mix of skills and diversity that
the Board is looking to achieve
in its membership.
Principle 3: Promote ethical and responsible decision making
3.1
Establish
code of
a
conduct and disclose the
code or a summary of the
code as to:
(cid:120) The practice
The Responsible Entity has
adopted a Code of Conduct,
which can be accessed at the
website,
BlackWall
www.blackwallfunds.com.au.
Comply.
necessary to maintain
confidence in the
Company’s integrity;
(cid:120) The practices
necessary to take into
account their legal
obligations and the
reasonable
expectations of their
stakeholders.
(cid:120) The
responsibility
and accountability of
for
individuals
reporting
and
investigating reports
of unethical practices.
a
Establish
policy
concerning diversity and
disclose the policy or a
summary of that policy.
The policy should include
for
requirements
the
Board
establish
to
objectives
measurable
gender
for
achieving
diversity and
the
Board to assess annually
the objectives and the
progress
in achieving
them.
for
The Responsible Entity has
adopted a Diversity Policy
which can be accessed at the
website,
BlackWall
www.blackwallfunds.com.au.
Comply.
Disclose in each annual
report
the measurable
objectives for achieving
gender diversity set by
the Board in accordance
with the Diversity Policy
towards
and progress
information will
be
The
disclosed
the Directors’
Report of the Trust’s financial
statements.
in
Comply.
13
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
13
3.2
3.3
P-REIT
Corporate Governance (continued)
Principle No
Recommendation
achieving them.
Compliance
Reason for Non-compliance
3.4
3.5
Disclose in each annual
report the proportion of
women employees in the
organisation,
whole
Senior
in
women
Executive positions and
women on the Board.
Provide the information
indicated in the Guide to
reporting on Principle 3.
information will
be
The
disclosed
the Directors’
Report of the Trust’s financial
statements.
in
information will
be
The
disclosed
the Directors’
Report of the Trust’s financial
statements.
in
Principle 4: Safeguard integrity in financial reporting
Board
4.1
The
establish
Committee.
should
Audit
an
The
Entity
Responsible
currently has a separate Audit
Committee.
The roles and
responsibilities of the Audit
Committee are set out in the
Audit Committee Charter. This
charter can be accessed at the
website,
BlackWall
www.blackwallfunds.com.au.
the
The Audit Committee consists
independent
of
members of the Compliance
Committee.
two
4.2
The Audit Committee
should be structured so
that it:
(cid:120) Consists only of Non-
Executive Directors;
(cid:120) Consists of a majority
of Independent
Directors;
(cid:120) Is chaired by an
independent chair,
who is not chair of the
Board;
(cid:120) Has at least three
members.
Comply.
Comply.
Comply.
Audit
Given
The Board has established
an Audit Committee and
adopted an Audit Charter.
The
Committee
consists of the independent
members of the Compliance
the
Committee.
composition of the Board
and the size of the company,
ASX Recommendation 4.2 is
in all
not complied with
respects. The Board takes
the view that the Committee
as constituted can discharge
role effectively. The
its
Committee
the
auditing process for half-
yearly and annual financial
statements and meets prior
to, during and post the audit
to discuss. During meetings
the Committee minutes its
roles and responsibilities in
regards
audit
addressing the need for a
formal
The
Committee has direct access
to the auditor during the
the
auditing period and
reviews
charter.
the
to
14
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
14
P-REIT
Corporate Governance (continued)
Principle No
Recommendation
Compliance
attends
Reason for Non-compliance
auditor
the
Committee meetings. The
Committee may make
recommendations
the
Board.
to
4.3
4.4
The Audit Committee
should have formal
charter.
formal charter can be
the BlackWall
The
accessed at
website,
www.blackwallfunds.com.au.
Comply.
Provide the information
in the Guide to reporting
on Principle 4.
The Audit Committee will meet
at least twice in each year,
before sign off of the annual and
half year financial statements.
Comply.
Principle 5: Make timely and balanced disclosure
5.1
Establish written policies
and procedures designed
compliance
to ensure
with ASX Listing Rule
disclosure requirements,
ensure accountability at a
Senior Executive level for
that
and
compliance
disclose those policies or
a
those
policies.
summary of
Officer
TFML will undertake timely
market disclosures. The Chief
in
Executive
consultation with the Board will
manage investor relations and
the release of market sensitive
information. The Responsible
Entity will maintain a timetable
for its compliance and periodic
disclosure requirements.
5.2
Provide the information
indicated in the Guide to
reporting on Principle 5.
The
disclosed
statements.
information will
in
the
be
financial
Principle 6: Respect the rights of shareholders
6.1
Responsible
a
to
Entity
The
of
undertakes
measures
its
unitholders are informed of its
operations including:
number
ensure
Design a communications
policy
for promoting
effective communications
with shareholders and
their
encouraging
participation at general
meetings and disclose
that policy or a summary
of that policy.
Comply.
Comply.
Comply.
(cid:120) The Non-Executive
Directors and Chief
Executive Officer are
available to meet or speak
to unitholders;
(cid:120) The Non-Executive
Directors and Chief
Executive Officer make
themselves available to
independent research
houses, brokers and other
participants in the financial
markets;
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
15
15
P-REIT
Corporate Governance (continued)
Principle No
Recommendation
Reason for Non-compliance
Compliance
(cid:120) Making available P-REIT’s
annual and half-yearly
reports electronically via
email and website;
(cid:120) Enabling access to P-REIT’s
external auditor at the
Annual General Meeting;
and
(cid:120) Placing on its website all
releases to the ASX and the
media, and full notices of all
meetings and the Trust’s
information on its website
including access to archived
information.
Comply.
Comply.
Comply.
information will
in
the
be
financial
The
disclosed
statements.
The Responsible Entity and
BlackWall have adopted a Risk
Management Policy. This Policy
outlines the key material risks
faced by P-REIT.
through a
The Responsible Entity and
BlackWall identify and manage
risk
framework
managed by the Chief Executive
Officer. Risks are reported to
the Board by management at
each Board meeting and the
an
Chairman may
extraordinary meeting when
circumstances require.
call
6.2
Provide the information
indicated in the Guide to
reporting on Principle 6.
Principle 7: Recognise and manage risk
Establish policies for the
7.1
oversight
and
management of material
business
and
disclose a summary of
those policies.
risk
to
The Board should require
management to design
and implement the risk
and
management
internal control system
to manage the Trust’s
material business risks
it on
and report
whether those risks are
being
managed
efficiently. The Board
should
that
has
management
reported to it as to the
effectiveness
the
company’s management
of its material business
risks.
disclose
of
7.2
7.3
Chief
Board
The
should
disclose whether it has
received assurance from
the
Executive
Officer (or equivalent)
and the Chief Financial
Officer (or equivalent)
declaration
that
the
Comply.
Board will
receive
The
in the form of a
assurance
declaration
the Chief
from
Executive Officer and the Chief
Financial Officer as required by
the Corporations Act 2001.
16
16
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
Compliance
Reason for Non-compliance
P-REIT
Corporate Governance (continued)
Principle No
7.4
Recommendation
provided in accordance
with section 295A of the
Corporations Acts 2001
is founded on a sound
risk
system
management
and
internal control and that
the system is operating
effectively in all material
respects in relation to
financial reporting risks.
of
Companies
should
provide the information
indicated in the Guide to
reporting on Principle 7.
Principle 8: Remunerate fairly and responsibly
8.1
Board
The
should
establish a Remuneration
Committee.
The Responsible Entity does not
directly employ executives or
staff.
information will
in
the
be
financial
The
disclosed
statements.
Comply.
The Responsible Entity does
employ
not
executives or staff.
directly
8.2
The Remuneration
Committee should be
structured so that it:
Refer 8.1
Refer 8.1
(cid:120) Consists of a majority
of Independent
Directors;
(cid:120)
Is chaired by an
Independent
Director; and
(cid:120) Has a least three
members.
Companies should clearly
distinguish the structure
of
Non-Executive
Directors’ remuneration
from that of Executive
Directors
Senior
Executives.
and
Companies
should
provide the information
indicated in the Guide to
reporting on Principle 8.
8.3
8.4
Refer 8.1
Refer 8.1
Refer 8.1
Refer 8.1
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
17
17
P-REIT
ASX Additional Information
Additional information required by the Australian Securities Exchange Limited and not shown elsewhere
in this report is as follows. The unitholder information set out below was current as at 24 August 2012.
1. Unitholders
The Trust’s top 20 largest unitholdings were:
Investor
Units (No.)
Units (%)
1
2
3
4
5
6
7
8
9
Kirela Pty Ltd ATF Kirela Development Unit Trust
Sandhurst Trustees Ltd ACF MacarthurCook PSF A/C
Australian Executor Trustees Ltd ACF Tankstream
Property Investments Fund
BlackWall Property Funds Ltd
Pelorus Private Equity Ltd
Vintage Capital Pty Ltd
Jagar Property Consultants Pty Ltd
JP Morgan Nominees Australia Limited ACF Multiplex
Income UPT Domestic Investment Trust
TFML Limited
Trust Company of Australia Ltd ACF Diversified Property
Fund
10
11 Koonta Pty Ltd ATF Koonta Superannuation Fund
Trust Company Limited ACF Recap Enhanced Income
Fund
12
13 Benyaya Holdings Pty Ltd
14 Harmareed Pty Ltd ATF The Reed Superannuation Fund
Seno Management Pty Ltd ATF Seno Superannuation
Fund
Midhurst Associates Pty Ltd ATF Midhurst
Superannuation Fund
15
16
17 Netwealth Investments Ltd
18
I P R Nominees Pty Ltd <1965 Irvin Peter Rockman A/C>
Mr Andrew Craig Irvine & Ms Beverley Frances Irvine
19
20 Excalibur Trading Pty Ltd
18
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
43,460,337
22,581,875
19,238,234
12,173,489
11,615,594
10,236,859
6,539,664
5,515,213
5,000,000
4,842,058
4,154,347
3,770,251
2,764,732
2,159,942
2,000,000
1,600,000
1,375,843
1,252,033
1,151,142
1,028,381
20.94
10.88
9.27
5.87
5.60
4.93
3.15
2.66
2.41
2.33
2.00
1.82
1.33
1.04
0.96
0.77
0.66
0.60
0.55
0.52
18
P-REIT
ASX Additional Information (continued)
2. Distribution of Shareholders
The distribution of unitholders by size of holding was:
Category
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 and over
Total number of unitholders
No. of Holders
1
57
133
513
117
821
P-REIT has 88 holders of less than a marketable parcel. The Trust has 207,524,039 units on issue as at 24
August 2012. All units carry one vote per unit without restrictions. All units are quoted on the Australian
Securities Exchange (ASX Code: PXT).
3. Substantial Unitholders
Substantial unitholders in the Trust are set out below:
Investor
Units (No.)
Units (%)
Joseph (Seph) Glew and Paul Tresidder
Sandhurst Trustees Ltd ACF MacarthurCook PSF A/C
Australian Executor Trustees Ltd ACF Tankstream
Property Investments Fund
BlackWall Property Funds Ltd
Pelorus Private Equity Ltd
52,150,000
22,581,875
19,238,234
17,173,489
11,615,594
25.13
10.88
9.27
8.28
5.60
19
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
19
P-REIT
Trust Details
The Responsible Entity’s details are as follows:
Registered office and principal
place of business
TFML Limited
Level 1, 50 Yeo Street
Neutral Bay NSW 2089
Telephone
Fax
Website
Registry
02 9033 8611
02 9033 8600
www.blackwallfunds.com.au
Computershare Investor Services Pty Limited
60 Carrington Street
Sydney NSW 2000
www.computershare.com.au
20
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
20
P-REIT
ARSN 109 684 773
Consolidated Statement of Comprehensive Income
For the Year Ended 30 June 2012
Consolidated Statement of Comprehensive Income
For the Year Ended 30 June 2012
Notes
4
5
5
5, 16
Rental income
Dividends and distributions
Interest income
Other income
Unrealised gain on revaluation of investment properties
Total Revenue
Property outgoings
Custodian fees
Administration expenses
Finance costs
Unrealised loss on revaluation of financial assets and
financial instruments
Other operating expenses
Loss on sale of investments
Litigation expenses
Profit / (Loss) For the Year
Other Comprehensive Income / (Loss)
Unrealised gain/(loss) on available-for-sale investments
taken to equity
Other Comprehensive Income / (Loss) For the Year
Total Comprehensive Income / (Loss) For the Year
2012
$’000
10,261
2,226
37
297
2,394
15,215
(2,136)
(23)
(1,053)
(4,783)
(2,556)
(462)
(9)
(19,719)
(15,526)
(602)
(602)
(16,128)
2011
$’000
9,604
443
41
-
1,231
11,319
(1,887)
(20)
(967)
(5,163)
(1,046)
(354)
-
(286)
1,596
353
353
1,949
Earnings / (Loss) Per Unit
Basic and diluted earnings/(loss) per unit
18
($ 0.07)
$ 0.01
The accompanying notes form part of these consolidated financial statements.
21
(cid:23)(cid:138)(cid:135)(cid:3)(cid:131)(cid:133)(cid:133)(cid:145)(cid:143)(cid:146)(cid:131)(cid:144)(cid:155)(cid:139)(cid:144)(cid:137)(cid:3)(cid:144)(cid:145)(cid:150)(cid:135)(cid:149)(cid:3)(cid:136)(cid:145)(cid:148)(cid:143)(cid:3)(cid:146)(cid:131)(cid:148)(cid:150)(cid:3)(cid:145)(cid:136)(cid:3)(cid:150)(cid:138)(cid:135)(cid:149)(cid:135)(cid:3)(cid:133)(cid:145)(cid:144)(cid:149)(cid:145)(cid:142)(cid:139)(cid:134)(cid:131)(cid:150)(cid:135)(cid:134)(cid:3)(cid:976)(cid:139)(cid:144)(cid:131)(cid:144)(cid:133)(cid:139)(cid:131)(cid:142)(cid:3)(cid:149)(cid:150)(cid:131)(cid:150)(cid:135)(cid:143)(cid:135)(cid:144)(cid:150)(cid:149)(cid:484)
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
21
P-REIT
ARSN 109 684 773
Consolidated Statement of Financial Position
Consolidated Statement of Financial Position
As at 30 June 2012
As at 30 June 2012
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total Current Assets
Non-Current Assets
Available-for-sale financial assets
Financial assets at fair value through profit and loss
Investment properties
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Other liabilities
Borrowings
Derivative financial instruments
Provision
Total Current Liabilities
Non-Current Liabilities
Derivative financial instruments
Borrowings
Total Non-Current Liabilities
TOTAL LIABILITIES (EXCLUDING NET ASSETS
ATTRIBUTABLE TO UNITHOLDERS)
Net Assets Attributable to Unitholders
Note
6
7
8
9
10
11
12
13
14
15
16
15
14
2012
$’000
1,306
455
373
2,134
37,451
917
81,350
119,718
121,852
525
102
55,580
1,069
19,000
76,276
-
-
-
76,276
45,576
2011
$’000
450
75
512
1,037
38,309
2,522
78,375
119,206
120,243
411
71
2,900
-
-
3,382
129
54,980
55,109
58,491
61,752
TOTAL LIABILITIES
121,852
120,243
The accompanying notes form part of these consolidated financial statements.
22
(cid:23)(cid:138)(cid:135)(cid:3)(cid:131)(cid:133)(cid:133)(cid:145)(cid:143)(cid:146)(cid:131)(cid:144)(cid:155)(cid:139)(cid:144)(cid:137)(cid:3)(cid:144)(cid:145)(cid:150)(cid:135)(cid:149)(cid:3)(cid:136)(cid:145)(cid:148)(cid:143)(cid:3)(cid:146)(cid:131)(cid:148)(cid:150)(cid:3)(cid:145)(cid:136)(cid:3)(cid:150)(cid:138)(cid:135)(cid:149)(cid:135)(cid:3)(cid:133)(cid:145)(cid:144)(cid:149)(cid:145)(cid:142)(cid:139)(cid:134)(cid:131)(cid:150)(cid:135)(cid:134)(cid:3)(cid:976)(cid:139)(cid:144)(cid:131)(cid:144)(cid:133)(cid:139)(cid:131)(cid:142)(cid:3)(cid:149)(cid:150)(cid:131)(cid:150)(cid:135)(cid:143)(cid:135)(cid:144)(cid:150)(cid:149)(cid:484)
22
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
P-REIT
ARSN 109 684 773
Consolidated Statement of Changes in Net Assets Attributable to Unitholders
Consolidated Statement of Changes in Net Assets Attributable to Unitholders
For the Year Ended 30 June 2012
For the Year Ended 30 June 2012
Units on
Issue
No.’000
207,524
-
-
-
207,524
79,123
-
-
128,401
-
-
207,524
Issued
Units
$’000
106,006
-
-
(48)
105,958
70,343
-
-
38,695
(3,000)
(32)
106,006
Retained
Earnings /
(Accumulated
Losses)
$’000
(44,607)
(15,526)
-
-
(60,133)
(46,203)
1,596
-
-
-
-
(44,607)
Balance at 1 July 2011
Loss for the year
Other comprehensive loss
Listing costs
Balance at 30 June 2012
Balance at 1 July 2010
Profit for the year
Other comprehensive income
Issue of units
Return of capital
Listing costs
Balance at 30 June 2011
Amounts
recognised in
equity relating
to assets
classified as
available-for-
sale
$’000
353
-
(602)
-
(249)
-
-
353
-
-
-
353
Total
$’000
61,752
(15,526)
(602)
(48)
45,576
24,140
1,596
353
38,695
(3,000)
(32)
61,752
The accompanying notes form part of these consolidated financial statements.
23
(cid:23)(cid:138)(cid:135)(cid:3)(cid:131)(cid:133)(cid:133)(cid:145)(cid:143)(cid:146)(cid:131)(cid:144)(cid:155)(cid:139)(cid:144)(cid:137)(cid:3)(cid:144)(cid:145)(cid:150)(cid:135)(cid:149)(cid:3)(cid:136)(cid:145)(cid:148)(cid:143)(cid:3)(cid:146)(cid:131)(cid:148)(cid:150)(cid:3)(cid:145)(cid:136)(cid:3)(cid:150)(cid:138)(cid:135)(cid:149)(cid:135)(cid:3)(cid:133)(cid:145)(cid:144)(cid:149)(cid:145)(cid:142)(cid:139)(cid:134)(cid:131)(cid:150)(cid:135)(cid:134)(cid:3)(cid:976)(cid:139)(cid:144)(cid:131)(cid:144)(cid:133)(cid:139)(cid:131)(cid:142)(cid:3)(cid:149)(cid:150)(cid:131)(cid:150)(cid:135)(cid:143)(cid:135)(cid:144)(cid:150)(cid:149)(cid:484)
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
23
P-REIT
ARSN 109 684 773
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2012
Consolidated Statement of Cash Flows
As at 30 June 2012
Cash Flows From Operating Activities
Receipts from customers
Payments to suppliers
Litigation expenses
Distributions received
Interest paid
Interest received
Net Cash Flows From Operating Activities
Cash Flows From Investing Activities
Payments for purchase of securities
Payments for purchase of plant & equipment
Proceeds from disposal and redemption of securities
Net Cash Flows From/(Used in) Investing Activities
Cash Flows From Financing Activities
Payments for listing costs
Repayment of borrowings
Net Cash Flows Used in Financing Activities
Net Increase / (Decrease) in Cash Held
Cash and cash equivalents at the beginning of the year
Cash and Cash Equivalents at End of the Year
Notes
21
6
2012
$’000
10,709
(4,326)
(552)
596
(4,670)
1,274
3,031
(149)
(42)
396
205
(80)
(2,300)
(2,380)
856
450
1,306
2011
$’000
10,290
(4,407)
(286)
373
(5,074)
41
937
(700)
(30)
-
(730)
(32)
(792)
(824)
(617)
1,067
450
The accompanying notes form part of these consolidated financial statements.
24
(cid:23)(cid:138)(cid:135)(cid:3)(cid:131)(cid:133)(cid:133)(cid:145)(cid:143)(cid:146)(cid:131)(cid:144)(cid:155)(cid:139)(cid:144)(cid:137)(cid:3)(cid:144)(cid:145)(cid:150)(cid:135)(cid:149)(cid:3)(cid:136)(cid:145)(cid:148)(cid:143)(cid:3)(cid:146)(cid:131)(cid:148)(cid:150)(cid:3)(cid:145)(cid:136)(cid:3)(cid:150)(cid:138)(cid:135)(cid:149)(cid:135)(cid:3)(cid:133)(cid:145)(cid:144)(cid:149)(cid:145)(cid:142)(cid:139)(cid:134)(cid:131)(cid:150)(cid:135)(cid:134)(cid:3)(cid:976)(cid:139)(cid:144)(cid:131)(cid:144)(cid:133)(cid:139)(cid:131)(cid:142)(cid:3)(cid:149)(cid:150)(cid:131)(cid:150)(cid:135)(cid:143)(cid:135)(cid:144)(cid:150)(cid:149)(cid:484)
24
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
1.
Statement of Significant Accounting Policies
The financial statements cover the economic entity of P-REIT and its controlled entity, the Yandina Sub-
trust (together referred to as “the Trust”). P-REIT is a registered managed investment scheme incorporated
under the Corporations Act 2001 in Australia. The Yandina Sub-trust is a discretionary trust established and
domiciled in Australia.
TFML Limited is the Responsible Entity and investment manager of the Trust. At a meeting of unitholders
held on 9 May 2012 resolutions were passed to remove RFML Limited (subsequently changed name to
Zhaofeng Funds Management Limited) as Responsible Entity for P-REIT and appoint TFML Limited as the
new Responsible Entity of P-REIT.
The Trust Company Limited is the Custodian of the Trust. The relationship of these parties with the Trust is
governed by the terms and conditions specified in the Constitution.
The financial statements for the Trust for the year ended 30 June 2012 were authorised for issue in
accordance with the resolution of the Directors of the Responsible Entity on 30 August 2012.
Basis of Preparation
These financial statements are general purpose financial statements that have been prepared in accordance
with Australian Accounting Standards and other authoritative pronouncements of the Australian
Accounting Standards Board and the Corporations Act 2001. The financial statements of the Trust also
comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board.
The financial statements have been prepared on an accruals basis and are based on historical costs modified
by the revaluation of selected non-current assets, financial assets and financial liabilities for which the fair
value basis of accounting has been applied.
The Trust is a group of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998, and in
accordance with that Class Order amounts in the Directors’ Report and the financial statements are rounded
off to the nearest thousand dollars, unless otherwise indicated.
The following is a summary of the material accounting policies adopted by the Trust in the preparation of
the financial statements. The accounting policies have been consistently applied, unless otherwise stated.
New and amended standards adopted
None of the new standards and amendments to standards that are mandatory for the first time for the
financial year beginning 1 July 2011 affected any of the amounts recognised in the current period or any
prior period and are not likely to affect future periods. However, the adoption of the revised AASB 124
Related Party Disclosures were reflected in Note 25, and the adoption of AASB 1054 Australian Additional
Disclosures and AASB 2011-1 Amendments to Australian Accounting Standards arising from the Trans-
Tasman Convergence Project enabled the removal of certain disclosures in relation to commitments.
25
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
25
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
1. Statement of Significant Accounting Policies (continued)
Going concern
In assessing if it is appropriate to prepare these financial statements on a going concern basis the Directors
have considered the following factors:
(cid:120) The Trust borrowings of $55,580,000 (at 30 June, now $54,500,000) is classified as a current liability
as it has a term to maturity of less than 12 months, it is outside of its loan to value ratio covenant
(direct property to debt – currently 67% against a covenant of 65%) and the Judgment disclosed above
constitutes a review event or breach under the facility;
(cid:120) The Judgment gives rise to a current liability of $19,000,000;
(cid:120) The Judgment gives rise to a litigation expense which generates a loss of $15,526,000 (a $3.5 million
profit if the Judgment is not brought to account);
(cid:120) The Trust has non-current assets of $119.7 million ($81.4 million direct property and $37.5 million
property securities);
(cid:120) The Trust’s direct property portfolio has no material vacancies or bad debts; and
(cid:120) Pending the determination of the appeal it is likely that the court or MPS will not consent to the Trust
paying distributions to its members. As a consequence all free cashflow will be applied to debt
amortisation.
The Trust has over $121 million of gross assets to satisfy total liabilities of $76 million (including the
Judgment). As a consequence the Directors have concluded that it is reasonable to assume that:
(cid:120) The Trust's borrowing will either be extended by the current lender or can be refinanced; and
(cid:120)
If the Trust is unsuccessful in its appeal (and any subsequent appeals to higher appellant courts) the
Trust can sell assets to fund the Judgment debt.
The Directors have therefore taken the view that it is appropriate to prepare these financial statements on a
going concern basis.
Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year. Any change of presentation has been made in order to make the
financial statements more relevant and useful to the user.
Presentation currency
Both the functional and presentation currency of the Trust is Australian dollars.
Principles of Consolidation
Controlled entities
The consolidated financial statements comprise the financial statements of P-REIT and its controlled entity
as at 30 June 2012 (refer to Note 24). The controlled entity has a June financial year end and uses
consistent accounting policies. Investments in the controlled entity held by the parent entity are accounted
for at cost less any impairment charges (refer to Note 26).
26
26
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
1.
Statement of Significant Accounting Policies (continued)
Controlled entities (continued)
Acquisitions of controlled entities are accounted for using the acquisition method. The consideration for
each acquisition is measured at the aggregate of the fair values (at the date of exchange) of assets given,
liabilities incurred or assumed, and equity instruments issued by P-REIT in exchange for control of the
acquiree. Acquisition-related costs are recognised in profit or loss as incurred.
Where a controlled entity has entered or left the economic entity during the year, its operating results have
been included from the date control was obtained or until the date control ceased.
A controlled entity is an entity P-REIT has the power to control the financial and operating policies of so as
to obtain benefits from its activities.
Inter-entity balances
All inter-entity balances and transactions between entities in the Trust, including any unrealised profits or
losses, have been eliminated on consolidation. Accounting policies of the controlled entity have been
changed where necessary to ensure consistencies with those policies applied by the parent entity.
Impairment of assets
At each reporting date, the Trust reviews the carrying values of its assets to determine whether there is any
indication that those assets have been impaired.
If such an indication exists, the recoverable amount of the asset, being the higher of the asset's fair value
less costs to sell and value in use, is compared to the asset's carrying value. In assessing value in use, either
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset, or the
income of the asset is capitalised at its relevant capitalisation rate.
An impairment loss is recognised if the carrying value of an asset exceeds its recoverable amount.
Impairment losses are expensed to the income statement.
Impairment losses recognised in prior periods are assessed at each reporting date for any indication that
the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that
the asset's carrying amount does not exceed the carrying amount that would have been determined, net of
depreciation or amortisation, if no impairment loss has been recognised.
Financial Instruments
Derivative financial instruments and hedging
The Trust uses derivative financial instruments such as interest rate swaps to hedge its risks associated
with interest rates. Such derivative financial instruments are initially recognised at fair value on the date
the derivative contract is entered into and are subsequently remeasured to fair value. Derivatives are
carried as assets when their fair value is positive and as liabilities when their fair value is negative.
The fair values of interest rate swaps are determined by reference to market values for similar instruments.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss
for the year.
27
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
27
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
1. Statement of Significant Accounting Policies (continued)
Non-derivative financial instruments
Non-derivative financial instruments comprise investments in equity and debt instruments, trade and other
receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.
Non-derivative financial instruments are recognised at fair value plus, for instruments not at fair value
through profit or loss, any directly attributable transaction costs. Subsequent to initial recognition non-
derivative financial instruments are measured as described below.
Recognition
A financial instrument is recognised if the Trust becomes a party to the contractual provisions of the
instrument. Financial assets are derecognised if the Trust's contractual rights to the cash flow from the
financial assets expire or if the Trust transfers the financial assets to another party without retaining
control or substantially all risks and rewards of the asset. Purchases and sales of financial assets are
accounted for at trade date, i.e. the date that the Trust commits itself to purchase or sell the asset. Financial
liabilities are derecognised if the Trust's obligations specified in the contract expire or are discharged or
cancelled.
Loans and receivables
Loans and receivables including loans to related entities and to key management personnel are non-
derivative financial assets with fixed or determinable payments that are not quoted in an active market and
are stated at amortised cost using the effective interest rate method. Gains and losses are recognised in
profit and loss when the loans and receivables are derecognised or impaired, as well as through the
amortisation process.
Available-for-sale financial assets
The Trust's investments in related party unlisted unit trusts are classified as available-for-sale financial
assets. Subsequent to initial recognition, they are measured at fair value. Unrealised gains and losses
arising from changes in fair value are recognised in other comprehensive income and accumulated in
equity, with the exception of impairment losses, interest calculated using the effective interest method, and
foreign exchange gains and losses on monetary assets, which are recognised in profit or loss. Where the
investment is disposed of or is determined to be impaired, the cumulative gain or loss previously
accumulated in the investments revaluation reserve is reclassified to profit or loss.
Financial assets at fair value through profit and loss
Investments in financial assets at fair value through profit and loss are initially and in subsequent periods
carried at fair value. Gains or losses arising from changes in the fair value are presented in the statement of
comprehensive income in the period in which they arise. Distribution income from financial assets
accounted at fair value through the profit and loss is recognised in the statement of comprehensive income
as part of the revenue.
Fair value
The fair values of investments that are actively traded in organised financial markets are determined by
reference to quoted market bid prices at the close of business on the balance date. For investments in
related party unlisted unit trusts, fair values are determined by reference to published unit prices of these
investments which are based on the net tangible assets of each of the investments.
28
28
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
1. Statement of Significant Accounting Policies (continued)
1. Statement of Significant Accounting Policies (continued)
Non-derivative financial instruments
Impairment
Non-derivative financial instruments comprise investments in equity and debt instruments, trade and other
receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.
Non-derivative financial instruments are recognised at fair value plus, for instruments not at fair value
through profit or loss, any directly attributable transaction costs. Subsequent to initial recognition non-
derivative financial instruments are measured as described below.
Recognition
A financial instrument is recognised if the Trust becomes a party to the contractual provisions of the
instrument. Financial assets are derecognised if the Trust's contractual rights to the cash flow from the
financial assets expire or if the Trust transfers the financial assets to another party without retaining
control or substantially all risks and rewards of the asset. Purchases and sales of financial assets are
accounted for at trade date, i.e. the date that the Trust commits itself to purchase or sell the asset. Financial
liabilities are derecognised if the Trust's obligations specified in the contract expire or are discharged or
cancelled.
Loans and receivables
Loans and receivables including loans to related entities and to key management personnel are non-
derivative financial assets with fixed or determinable payments that are not quoted in an active market and
are stated at amortised cost using the effective interest rate method. Gains and losses are recognised in
profit and loss when the loans and receivables are derecognised or impaired, as well as through the
amortisation process.
Available-for-sale financial assets
The Trust's investments in related party unlisted unit trusts are classified as available-for-sale financial
assets. Subsequent to initial recognition, they are measured at fair value. Unrealised gains and losses
arising from changes in fair value are recognised in other comprehensive income and accumulated in
equity, with the exception of impairment losses, interest calculated using the effective interest method, and
foreign exchange gains and losses on monetary assets, which are recognised in profit or loss. Where the
investment is disposed of or is determined to be impaired, the cumulative gain or loss previously
accumulated in the investments revaluation reserve is reclassified to profit or loss.
Investments in financial assets at fair value through profit and loss are initially and in subsequent periods
carried at fair value. Gains or losses arising from changes in the fair value are presented in the statement of
comprehensive income in the period in which they arise. Distribution income from financial assets
accounted at fair value through the profit and loss is recognised in the statement of comprehensive income
as part of the revenue.
Fair value
The fair values of investments that are actively traded in organised financial markets are determined by
reference to quoted market bid prices at the close of business on the balance date. For investments in
related party unlisted unit trusts, fair values are determined by reference to published unit prices of these
investments which are based on the net tangible assets of each of the investments.
At each reporting date, the Trust assesses whether there is objective evidence that a financial instrument
has been impaired. A financial instrument is considered to be impaired if objective evidence indicates that
one or more events have had a negative effect on the estimated future cash flows of that asset. In the case of
available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to
determine whether an impairment has arisen.
An impairment loss in respect of a financial instrument measured at amortised cost is calculated as the
difference between its carrying amount, and the present value of the estimated future cash flows discounted
at the original effective interest rate. An impairment loss in respect of an available-for-sale financial asset is
calculated by reference to its fair value.
Individually significant financial instruments are tested for impairment on an individual basis. The
remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.
Impairment losses are recognised in the statement of comprehensive income. An impairment loss is
reversed if the reversal can be related objectively to an event occurring after the impairment loss was
recognised. For financial instruments measured at amortised cost, the reversal is recognised in profit and
loss.
Financial liabilities
Non-derivative financial liabilities are recognised at amortised cost, comprising original debt less principal
payments and amortisation.
Investment Properties
Investment properties are measured initially at cost, including transaction costs. The carrying amount
includes the cost of replacing part of an existing investment property at the time that cost is incurred if the
recognition criteria are met and excludes the costs of day-to-day servicing of an investment property.
Subsequent to initial recognition, investment properties are stated at fair value, which is based on active
market prices, adjusted if necessary, for any difference in the nature, location or condition of the specific
asset at the balance sheet date. Gains or losses arising from changes in the fair values of investment
properties are recognised in profit or loss in the year in which they arise. Included in the value
measurement are adjustments for straightlining of lease income.
Financial assets at fair value through profit and loss
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short term highly
liquid investments with original maturities of three months or less, and bank overdrafts.
Trade and Other Receivables
Trade receivables are recognised and carried at original invoice amount less a provision for any
uncollectable debts. An estimate for doubtful debts is made when there is objective evidence that the Trust
will not be able to collect the receivable. Financial difficulties of the debtor and default payments are
considered objective evidence of impairment. Bad debts are written off when identified as uncollectable.
28
29
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
29
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
1. Statement of Significant Accounting Policies (continued)
Trade and Other Payables
Liabilities for trade creditors are carried at cost which is the fair value of the consideration to be paid in the
future for goods or services received, whether or not billed to the Trust at balance date. The amounts are
unsecured and are usually paid within 30 days of recognition.
Interest Bearing Borrowings
Interest bearing borrowings are initially recognised at fair value less any related transaction costs.
Subsequent to initial recognition, interest bearing borrowings are stated at amortised cost.
Provisions
Provisions are recognised when the Trust has a legal or constructive obligation, as a result of past events,
for which it is probable that an outflow of economic benefits will result and that outflow can be reliably
measured.
Where the Trust expects some or all of a provision to be reimbursed, for example under an insurance
contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually
certain. The expense relating to any provision is presented in the statement of comprehensive income net of
any reimbursement.
Revenue
Property income
Property income comprises rental and recovery of outgoings from property tenants. Rental income from
investment properties is accounted for on a straight-line basis over the lease term. Lease incentives granted
are recognised as an integral part of total rental income.
Investment income
Finance income comprises interest on funds invested, gains on the disposal of available-for-sale financial
assets and changes in the fair value of financial assets at fair value through profit and loss.
Interest income is recognised as interest accrues 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.
Dividend revenue is recognised when the right to receive a dividend has been established, which in the case
of quoted securities is the ex-dividend date.
All revenue is stated net of the amount of goods and services tax (GST).
Income Tax
Under current income tax legislation the Trust is not liable to Australian income tax provided the
unitholders are presently entitled to the taxable income of the Trust.
30
30
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
1. Statement of Significant Accounting Policies (continued)
1. Statement of Significant Accounting Policies (continued)
Trade and Other Payables
Goods and Services Tax (GST)
Provisions
measured.
any reimbursement.
Revenue
Property income
Investment income
Liabilities for trade creditors are carried at cost which is the fair value of the consideration to be paid in the
future for goods or services received, whether or not billed to the Trust at balance date. The amounts are
unsecured and are usually paid within 30 days of recognition.
Interest Bearing Borrowings
Interest bearing borrowings are initially recognised at fair value less any related transaction costs.
Subsequent to initial recognition, interest bearing borrowings are stated at amortised cost.
Provisions are recognised when the Trust has a legal or constructive obligation, as a result of past events,
for which it is probable that an outflow of economic benefits will result and that outflow can be reliably
Where the Trust expects some or all of a provision to be reimbursed, for example under an insurance
contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually
certain. The expense relating to any provision is presented in the statement of comprehensive income net of
Property income comprises rental and recovery of outgoings from property tenants. Rental income from
investment properties is accounted for on a straight-line basis over the lease term. Lease incentives granted
are recognised as an integral part of total rental income.
Finance income comprises interest on funds invested, gains on the disposal of available-for-sale financial
assets and changes in the fair value of financial assets at fair value through profit and loss.
Interest income is recognised as interest accrues 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.
Dividend revenue is recognised when the right to receive a dividend has been established, which in the case
of quoted securities is the ex-dividend date.
All revenue is stated net of the amount of goods and services tax (GST).
Income Tax
Under current income tax legislation the Trust is not liable to Australian income tax provided the
unitholders are presently entitled to the taxable income of the Trust.
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Taxation Office. In these circumstances the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables
and payables in the balance sheet are shown inclusive of GST.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of
investing and financing activities, which are disclosed as operating cash flows.
Earnings / (Loss) Per Unit
The Trust presents basic and diluted earnings / (loss) per unit (EPU) data for its units. Basic EPU is
calculated by dividing the profit or loss attributable to ordinary unitholders of the Trust by the weighted
average number of units outstanding during the period. Diluted EPU is determined by adjusting the profit or
loss attributable to ordinary unitholders and the weighted average number of units outstanding for the
effects of all dilutive potential units.
New Accounting Standards and Interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for 30
June 2012 reporting periods. The Trust’s assessment of the impact of these new standards and
interpretations is set out below.
(i) AASB 9 Financial Instruments, AASB 2009(cid:827)11 Amendments to Australian Accounting Standards arising
from AASB 9 and AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9
(December 2010) (effective from 1 January 2015)
AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial
assets and financial liabilities. The standard is not applicable until 1 January 2015 but is available for early
adoption. When adopted, the standard will affect in particular the Trust’s accounting for its available-for-
sale financial assets, since AASB 9 only permits the recognition of fair value gains and losses in other
comprehensive income if they relate to equity investments that are not held for trading. Fair value gains and
losses on available-for-sale debt investments, for example, will therefore have to be recognised directly in
profit or loss. In the current reporting period, unrealised gains of $353,000 (2011: $Nil) on Bakehouse
Bonds were included as other comprehensive income.
There will be no impact on the Trust’s accounting for financial liabilities, as the new requirements only
affect the accounting for financial liabilities that are designated at fair value through profit or loss and the
Trust does not have any such liabilities. The derecognition rules have been transferred from AASB 139
Financial Instruments: Recognition and Measurement and have not been changed. The Trust has not yet
decided when to adopt AASB 9.
(ii) AASB 10 Consolidated Financial Statements, AASB 11 Joint Arrangements, AASB 12 Disclosure of Interests
in Other Entities, revised AASB 127 Separate Financial Statements and AASB 128 Investments in Associates and
Joint Ventures and AASB 2011-7 Amendments to Australian Accounting Standards arising from the
Consolidation and Joint Arrangements Standards (effective 1 January 2013)
30
31
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
31
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
1.
Statement of Significant Accounting Policies (continued)
New Accounting Standards and Interpretations (continued)
In August 2011, the AASB issued a suite of five new and amended standards which address the accounting
for joint arrangements, consolidated financial statements and associated disclosures. AASB 10 replaces all
of the guidance on control and consolidation in AASB 127 Consolidated and Separate Financial Statements,
and Interpretation 12 Consolidation – Special Purpose Entities. The core principle that a consolidated entity
presents a parent and its subsidiaries as if they are a single economic entity remains unchanged, as do the
mechanics of consolidation. However, the standard introduces a single definition of control that applies to
all entities. It focuses on the need to have both power and rights or exposure to variable returns. Power is
the current ability to direct the activities that significantly influence returns. Returns must vary and can be
positive, negative or both. Control exists when the investor can use its power to affect the amount of its
returns. There is also new guidance on participating and protective rights and on agent/principal
relationships. While the Trust does not expect the new standard to have a significant impact on its
composition, it has yet to perform a detailed analysis of the new guidance in the context of its various
investees that may or may not be controlled under the new rules.
AASB 11 introduces a principles based approach to accounting for joint arrangements. The Trust is not
affected by this standard as it does not have any joint arrangements.
AASB 12 sets out the required disclosures for entities reporting under the two new standards, AASB 10 and
AASB 11, and replaces the disclosure requirements currently found in AASB 127 and AASB 128. Application
of this standard by the Trust will not affect any of the amounts recognised in the financial statements, but
will impact the type of information disclosed in relation to the Trust’s investments. The Trust is not affected
by these amendments.
The Trust does not expect to adopt the new standards before their operative date. They would therefore be
first applied in the financial statements for the annual reporting period ending 30 June 2014.
(iii) AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards
arising from AASB 13 (effective 1 January 2013)
AASB 13 was released in September 2011. It explains how to measure fair value and aims to enhance fair
value disclosures. The Trust has yet to determine which, if any, of its current measurement techniques will
have to change as a result of the new guidance. It is therefore not possible to state the impact, if any, of the
new rules on any of the amounts recognised in the financial statements. However, application of the new
standard will impact the type of information disclosed in the notes to the financial statements. The Trust
does not intend to adopt the new standard before its operative date, which means that it would be first
applied in the annual reporting period ending 30 June 2014.
(iv) AASB 2011-9 Amendments to Australian Accounting Standards – Presentation of Items of Other
Comprehensive Income
This amendment requires entities to separate items presented in other comprehensive income into two
groups, based upon whether they might be recycled to profit and loss in the future. The Trust has not yet
assessed the impact of the amendments, if any.
There are no other standards that are not yet effective and that are expected to have a material impact on
the entity in the current or future reporting periods and on foreseeable future transactions.
32
32
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
2.
Critical Accounting Estimates and Judgments
The Directors of the Responsible Entity evaluate estimates and judgments incorporated into the financial
statements based on historical knowledge and best available current information. Estimates assume a
reasonable expectation of future events and are based on current trends and economic data, obtained both
externally and within the Trust.
Key estimates - impairment
The Trust assesses impairment at each reporting date by evaluating conditions specific to the Trust that
may lead to impairment of assets. The Directors of the Responsible Entity believed it appropriate to raise no
impairment provisions for the year ended 30 June 2012 except for the provisions for impairment
recognised under Note 7.
Key estimates – available-for-sale financial assets
Investments in unlisted securities and debt instruments have been classified as available-for-sale financial
assets and movements in fair value are recognised directly in the asset revaluation reserve. The fair value of
the unlisted securities is determined by reference to the net assets of the underlying entities. The fair value
of the listed securities is based on the closing price from the Australian Securities Exchange as at the
reporting date. The fair value of the Bakehouse Bonds is measured by its face value adjusted for CPI
movements.
Key estimates - fair values of investment properties
The Trust carries its investment properties at fair value with changes in the fair values recognised in profit
or loss. It obtains independent valuations at least every three years. At the end of each reporting period, the
Directors of the Responsible Entity update their assessment of the fair value of each property, taking into
account the most recent independent valuations. The key assumptions used in this determination are set
out in Note 11. If there is any material change in the key assumptions due to changes in economic
conditions, the fair value of the investment properties may differ and may need to be re-estimated.
3.
Segment Information
AASB 8 requires operating segments to be identified on the basis of internal reports about components of
the Trust that are regularly reviewed by the chief operating decision maker in order to allocate resources to
the segment and to assess its performance.
The Trust's primary format for segment reporting is based on business segments. The business segments
are determined based on the Trust management and internal reporting structure. There is only one
geographical segment being Australia.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that
can be allocated on a reasonable basis. The operating businesses are organised and managed separately
according to the nature of the products and services provided, with each segment representing a strategic
business unit that offers different products and serves different markets.
The Trust has adopted three reporting segments, Direct Property, Other Investments and Corporate. The
Direct Property segment includes the ownership and leasing out of commercial, industrial and retail
properties in Australian Capital Territory, New South Wales and Queensland. Income is derived from rent
and property revaluations. The Other Investments segment includes interests in debt instruments and
property related securities such as units in unlisted unit trusts. It generates income from dividends,
distributions, and interest. The Corporate segment covers general functions.
33
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
33
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
3. Segment Information (continued)
The segment information for the year ended 30 June 2012 is as follows:
30 June 2012
Sales to external customers
Unrealised gain on revaluation
Total segment revenue
Segment operating profit
Unrealised loss on revaluation
Finance costs
Litigation expenses
Profit / (loss) for the year
30 June 2011
Sales to external customers
Unrealised gain on revaluation
Total segment revenue
Segment operating profit
Unrealised loss on revaluation
Finance costs
Litigation expenses
Profit / (loss) for the year
30 June 2012
Segment assets
Segment liabilities
30 June 2011
Segment assets
Segment liabilities
4.
Revenue
Rent
Investment income
- Dividends and distributions
- Finance income
Direct
Property
$’000
Other
Investments
$’000
10,298
2,394
12,692
9,328
(951)
(4,783)
-
3,594
2,523
-
2,523
2,204
(1,605)
-
-
599
Corporate
$’000
-
-
-
-
-
-
(19,719)
(19,719)
Consolidated
Total
$’000
12,821
2,394
15,215
11,532
(2,556)
(4,783)
(19,719)
(15,526)
Direct
Property
$’000
Other
Investments
$’000
Corporate
$’000
Consolidated
Total
$’000
9,645
1,231
10,876
7,718
(129)
(5,163)
-
2,426
443
-
443
373
(917)
-
-
(544)
82,906
(57,077)
79,343
(58,457)
38,946
(199)
40,900
(34)
-
-
-
-
-
-
(286)
(286)
-
(19,000)
-
-
2012
$’000
10,261
2,226
37
2,263
297
2,394
15,215
10,088
1,231
11,319
8,091
(1,046)
(5,163)
(286)
1,596
121,852
(76,276)
120,243
(58,491)
2011
$’000
9,604
443
41
484
-
1,231
11,319
34
Other income (*)
Unrealised gain on revaluation of investment properties
Total revenue
* This income was later provided for in full as at 30 June 2012. Refer to Note 7.
34
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
5.
Expenses
Finance costs
Unrealised loss on revaluation of financial instruments:
- financial assets through profit and loss
- derivative financial instruments
- impairment of trade receivables and other assets
Notes
2012
$’000
4,783
1,605
940
11
2,556
Litigation expenses
16
19,719
6.
Current Assets - Cash and Cash Equivalents
Cash at bank
Cash on deposit
Total cash and cash equivalents
2012
$’000
706
600
1,306
2011
$’000
5,163
917
129
-
1,046
286
2011
$’000
450
-
450
An amount of $600,000 was held as cash on deposit on 29 June 2012 and was used to settle part of the
$1,080,000 repayment to the borrowings (refer to Note 14) by the same financial institution
simultaneously on 9 July 2012.
(a) Effective interest rate
Cash at bank earns interest at floating rates based on daily bank deposit rates.
(b) Reconciliation of cash
Cash at the end of the financial year as shown in the cash flow statement is reconciled to items in the
statement of financial position as follows:
Cash and cash equivalents
Total cash and cash equivalents
7.
Current Assets - Trade and Other Receivables
Trade receivables, net of impairment:
- Other parties
Distribution receivables
Total Trade and Other Receivables
2012
$’000
1,306
1,306
2012
$’000
406
49
455
A net amount of $11,000 of receivables was impaired as at 30 June 2012 (2011: $Nil).
2011
$’000
450
450
2011
$’000
6
69
75
35
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
35
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
8.
Current Assets - Other Assets
Prepayments
Total other assets
9.
Non-current Assets – Available-for-sale Financial Assets
Available-for-sale financial assets
Total available-for-sale financial assets
(a) Available-for-sale financial assets
Bakehouse Bonds
Unlisted managed investment schemes
Total available-for-sale financial assets
Note
9(a)
2012
$’000
373
373
2012
$’000
37,451
37,451
30,353
7,098
37,451
2011
$’000
512
512
2011
$’000
38,309
38,309
30,000
8,309
38,309
The Bakehouse Bonds are CPI linked debt instruments against a large scale mixed use property known as
the Bakehouse Quarter in North Strathfield, Sydney. The Bonds’ face value of $30 million is indexed to CPI
and the current value at 30 June 2012 is $30.353 million. The Bonds will mature on 30 June 2020. In
addition, a coupon of 5.5% per annum is paid quarterly in arrears.
All other available-for-sale assets are investments in various managed investment schemes.
10.
Non-current Assets - Financial Assets At Fair Value Through Profit and Loss
Investments - BlackWall Pub Group
Total financial assets at fair value through profit and loss
2012
$’000
917
917
The Trust holds a 34.1% interest (2011: 36.8%) in the BlackWall Pub Group, a related entity.
11.
Non-current Assets - Investment Properties
Chancellor Homemaker Centre
Silver @ The Exchange
APN Yandina
BlueScope Coolum
Canberra Eye Hospital
APN Toowoomba
Total investment properties
2012
$’000
20,400
18,250
24,100
4,700
7,900
6,000
81,350
2011
$’000
2,522
2,522
2011
$’000
19,900
18,000
23,100
4,375
7,300
5,700
78,375
36
36
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
11.
Non-current Assets - Investment Properties (continued)
Movements in investment properties:
Balance at the beginning of the financial year
Additions (subsequent expenditures)
Revaluation
Balance at the end of the financial year
2012
$’000
78,375
581
2,394
81,350
2011
$’000
76,775
369
1,231
78,375
The Trust obtained independent valuations for its investment properties Silver @ The Exchange, APN
Yandina and Canberra Eye Hospital in February 2012. The valuations were performed by registered
independent valuers under the instructions from the Trust’s bank based on an active market by reference to
recent market sales of similar properties around the area. The valuations are also based on common
valuation methodologies including capitalisation rate, capitalised income projections and discounted cash
flow projections.
During the year, the Directors also updated their assessment of the fair value of Chancellor Homemaker
Centre, BlueScope Coolum and APN Toowoomba. The key assumptions of the Directors’ valuations have
been taken from the last independent valuation reports (June 2010) performed for these investment
properties with adjustments made for changes in net income since the previous independent valuations.
Independent and Directors’ valuations conducted during the year were based on the following
capitalisation rates (initial yield):
Chancellor Homemaker
Silver @ The Exchange
APN Yandina
BlueScope Coolum
Canberra Eye Hospital
APN Toowoomba
12.
Current Liabilities - Trade and Other Payables
Trade payables:
- Related parties
- Other parties
Sundry payables and accrued expenses
Total trade and other payables
9.75%
10.00%
9.50%
8.25%
8.25%
10.00%
2012
$’000
81
401
482
43
525
Further information relating to trade payables from related parties is set out in Note 25.
2011
$’000
35
240
275
136
411
37
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
37
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
13.
Current Liabilities - Other liabilities
Rental income received in advance
Total other liabilities
14.
Current and Non-current Liabilities - Borrowings
Current - secured bank bill facilities
Non-current - secured bank bill facilities
Total borrowings
2012
$’000
102
102
2012
$’000
55,580
-
55,580
2011
$’000
71
71
2011
$’000
2,900
54,980
57,880
The bill facilities are secured by registered first mortgages over the freehold land and buildings (refer to
Note 11). During the financial year $2,300,000 of debt has been repaid to the Trust’s lenders. On 9 July
2012, the Trust repaid a further $1,080,000 to reduce the debt to $54.5 million.
The Trust borrowings of $55,580,000 (at 30 June, now $54,500,000) is classified as a current liability as it
has a term to maturity of less than 12 months. The facility is outside of its loan to value ratio covenant
(direct property to debt – currently 67% against a covenant of 65%) and the Judgment disclosed in the
Director’s Report constitutes a review event or breach under the facility.
The Trust’s debt facilities are based on the following terms:
(cid:120) Total facilities are due for renewal in 30 April 2013.
(cid:120) Facilities incur an all up margin of around 3.25%, including credit margin and treasury margin.
(cid:120) Amortisation of $600,000 quarterly until expiry.
$29 million of the borrowings are hedged at fixed interest rates. Refer to Note 15 for further details. The
average interest rate on the facility for the year was 7.76% (2011: 7.81%.)
15.
Current and Non-current Liabilities – Derivative Financial Instruments
Current - derivative financial instruments
Non-current - derivative financial instruments
Total derivative financial instruments
2012
$’000
1,069
-
1,069
2011
$’000
-
129
129
The Trust is a party to derivative financial instruments in the normal course of business in order to hedge
exposure to fluctuations in interest rates. The Trust has entered into interest rate swap contracts to protect
part of the interest bearing liabilities ($29 million) from exposure to increasing interest rates. The gain or
loss from remeasuring the hedging instruments at fair value is recognised in profit or loss. The increase
from June 2011 to June 2012 is a result of the reduction in interest swap rates over the financial year. The
terms of the hedges are:
(cid:120)
(cid:120)
(cid:120)
$10 million swapped at 5.22% to 9 June 2014.
$9 million swapped at 4.22% to 10 November 2014.
$10 million swapped at 5.26% to 1 June 2014.
38
38
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
16.
Provision
Provision for litigation costs
Total provision
2012
$’000
19,000
19,000
2011
$’000
-
-
TFML (as P-REIT’s Responsible Entity) is a defendant in a Supreme Court action initiated by the MPS. The
proceedings relate to a series of transactions entered into before TFML became Responsible Entity of P-
REIT. On 10 August 2012 judgment was entered against TFML for approximately $17.8 million including
Judgment court interest (to the date of Judgment) but excluding costs. Further information on the Judgment
can be found in the Review of Operations section of the Directors’ Report. TFML is appealing the decision,
however given the Judgment, a provision for litigation claim of $19 million (including a plaintiff’s cost
estimate of $1.2 million), has been included in the accounts.
17.
Distributions
There were no distributions paid or declared for the year ended 30 June 2012 (2011: $nil).
18.
Earnings / (Loss) Per Unit
Basic and diluted earnings/(loss) per unit
Calculated as follows:
Profit /(loss) for the year
Weighted average number of units for basic and diluted
earnings per unit
19.
Auditors’ Remuneration
Remuneration of ESV (the auditor of the Trust) for:
- auditing or reviewing the financial statements for the Trust
- taxation and compliance services
Total auditors’ remuneration
2012
($0.07)
2011
$0.01
($15,526,000)
$1,596,000
207,524,039
146,682,705
2012
$’000
51
19
70
2011
$’000
46
15
61
20.
Lease Commitments Receivable
Future minimum rental receivable under non-cancellable operating leases as at 30 June are as follows:
Lease commitments receivable:
- receivable within 1 year
- receivable within 2 – 5 years
- receivable more than 5 years
Total lease commitments receivable
2012
$’000
7,788
22,501
30,080
60,369
2011
$’000
7,740
24,929
32,618
65,287
There are no operating lease commitments payable or any other capital commitments as at 30 June 2012
(2011: Nil).
39
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
39
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
21.
Reconciliation of Operating Cash Flows
Profit/(loss) for the year
Non-cash flows in profit:
- Unrealised (gains)/losses on investments
- Straightlined rental income
- Loss on sale of financial assets
- Litigation expenses
Changes in assets and liabilities:
(Increase)/decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Increase in other liabilities
Net cash flows from operating activities
2012
$’000
(15,526)
151
(539)
9
19,000
(295)
199
32
3,031
2011
$’000
1,596
(185)
(339)
-
38
(191)
18
937
22.
Contingent Assets and Contingent Liabilities
There are no other contingent liabilities or contingent assets as at 30 June 2012.
23.
Subsequent Events
On 9 July 2012 $1.08 million of borrowings was repaid to the Trust’s lender (refer to Note 14).
On 10 August 2012 Judgment was entered against TFML as P-REIT’s Responsible Entity in a Supreme Court
action initiated by MPS. For full disclosure refer to the Directors’ Report and Note 16.
Other than the other matters referred to in these financial statements, to the best knowledge of the Directors,
there have been no other matters or circumstances that have arisen since the end of the year that have
materially affected or may materially affect the Trust’s operations in future financial years, the results of
those operations or the Trust’s state of affairs in future financial years.
24.
Controlled Entities
Name
Parent entity:
P-REIT
Controlled entity of parent entity:
Yandina Sub-trust
Country of
incorporation
Percentage Owned
2011
%
2012
%
Australia
Australia
100
100
100
100
40
40
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
25.
Related Party Transactions
(a) Related Entities
The Trust is managed by TFML Limited as Responsible Entity (changed on 9 May 2012 from RFML
Limited now known as Zhaofeng Funds Management Limited) and investment manager. BlackWall
Property Funds Limited is the ultimate parent of TFML Limited.
The Directors of TFML Limited are key management personnel of the Trust. The names of persons holding
position of Directors of Zhaofeng Funds Management Limited and TFML Limited during the year until the
signing of this report unless otherwise stated are:
Zhaofeng Funds Management Limited
Joseph (Seph) Glew
Stuart Brown
Tim Brown
(b) Interests in Related Parties
TFML Limited
Joseph (Seph) Glew
Stuart Brown
Robin Tedder
Richard Hill
During the year the Trust owned units in the following funds. The funds and the Trust have a common
Responsible Entity or Investment Manager, TFML Limited.
Fund
BlackWall Storage Fund
BlackWall Pub Group
BlackWall Penrith Fund No. 2
WRV Unit Trust
Unitholdings (units)
2012
-
22,923,810
1,050,000
175,000
2011
260,000
22,923,810
1,000,000
125,000
24,148,810 24,308,810
Distribution
Received ($’000)
2011
2012
18
26
-
-
93
85
-
10
111
121
The Trust also holds Bakehouse Bonds with a fair value of $30.353 million (refer to Note 9).
(c) Related Entity Transactions
In accordance with the terms of the Trust Constitution and the product disclosure statement, the
Responsible Entity and Investment Manager is entitled to receive a management fee based on 0.65% p.a.
of the value of the Trust’s assets.
41
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
41
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
25
Related Party Transactions (continued)
(c) Related Entity Transactions (continued)
The Custodian is remunerated for the performance of its duties. Custody fee is calculated at the greater of
$15,000 p.a. or 0.025% p.a. of the gross asset value of the Trust, plus GST.
All transactions with related parties were made on normal commercial terms and conditions and at
market rates, and were approved by the Board where applicable.
Related party transactions that occurred during the year other than those described in (a) to (c) above are
as follows:
Income
Other income (*)
Expenses
Remuneration paid to Responsible Entity / Investment Manager
Remuneration paid to Custodian
Property management, leasing fees, accounting fees, and expense
reimbursements
Capital raising and refinance fees
Architectural fees
* The income was later provided for in full as at 30 June 2012.
Outstanding Balances with Related Parties
Payables to related parties
2012
$’000
297
790
23
497
-
10
1,320
2012
$’000
81
2011
$’000
-
696
19
308
375
9
1,407
2011
$’000
35
(d) Other Related Party Transactions
Related party transactions that occurred during the year other than those described above are as follows:
Date of
transaction
1 April 2012
Purchaser/Seller
Fund
Units
Purchased /
(Sold) No.
BlackWall Property Funds Ltd
/P-REIT
BlackWall Storage Fund
(48,160)
Total
Consideration
Paid/(Received)
$’000
(53)
29 June 2012
Alerik Pty Ltd /P-REIT
BlackWall Storage Fund
(135,110)
29 June 2012
Alerik Pty Ltd /P-REIT
BlackWall Telstra House
Trust
(87,856)
(149)
(88)
42
42
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
26
Parent Entity Disclosures
The following summarises the financial information of the Trust’s parent entity, P-REIT, as at and for the year
ended 30 June 2012.
Results:
Profit/(loss) for the year
Other comprehensive income/(loss)
Total comprehensive income/(loss) for the year
Financial position:
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets attributable to unitholders
2012
$’000
(15,526)
(602)
(16,128)
2,022
120,555
122,577
(75,681)
-
(75,681)
46,896
2011
$’000
1,596
353
1,949
991
121,668
122,659
(3,326)
(56,261)
(59,587)
63,072
Other than as disclosed in Note 22, the parent entity had no contingencies at 30 June 2012 (2011: Nil).
The parent entity has not entered into any capital commitments as at 30 June 2012 (2011: Nil).
27
Directors and Key Management Personnel
(a) Directors and key management personnel relevant interests
Key management personnel include all Directors and Chief Financial Officer of the Responsible Entity
(refer to the Directors’ Report).
The Directors and key management personnel have relevant interests in units of the Trust as set out in
the following table:
Joseph (Seph) Glew
Stuart Brown
Robin Tedder
Richard Hill
Tim Brown
Total shareholding
Balance at 30 June
2011
No. ’000
8,957
854
-
-
-
9,811
Net change *
No. ’000
43,183
-
4,482
-
20
47,685
Balance at 30 June
2012
No. ’000
52,140
854
4,482
-
20
57,496
* Net change refers to changes in relevant interests in units during the financial year.
(b) Key management personnel compensation
No salary, cash bonus or monetary benefit was paid out of the Trust’s assets to any key management
personnel during the year (2011: Nil).
43
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
43
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
28
Financial Risk Management
(a) Financial risk management
The main risks the Trust are exposed to through its financial instruments are market risk (including
interest rate risk and price risk), credit risk and liquidity risk. The Trust's principal financial instruments
are financial assets and borrowings (including derivative financial instruments). Additionally, the Trust
has various other financial instruments such as cash, trade debtors and trade creditors, which arise
directly from its operations.
This note presents information about the Trust's exposure to each of the above risks, their objectives,
policies and processes for measuring and managing risk, and the management of capital.
The Board of Directors of the Responsible Entity have overall responsibility for the establishment and
oversight of the risk management framework. They monitor the Trust’s risk exposure by regularly
reviewing finance and property markets.
Major financial instruments held by Trust which are subject to financial risk analysis are as follows:
Financial assets
Available-for-sale financial assets
Financial liabilities
Borrowings
(b) Market risk
(i)
Interest rate risk
2012
$’000
37,451
55,580
2011
$’000
38,309
57,880
The Trust has exposure to market risk for changes in variable interest rates on borrowings. This
risk is managed by the Trust by entering into hedging transactions with financial institutions to
protect part of the borrowings ($29 million) as detailed in Note 15. The major available-for-sale
financial asset - the Trust’s $30 million interest in Bakehouse Bonds is subject to a fixed coupon
rate of 5.5% p.a., and as a result is not directly exposed to the interest rate risk. However the Bonds’
value is linked to inflation and therefore affected by the inflation rate.
The Trust’s exposure to interest rate risk, which is the risk that a financial instrument’s value will
fluctuate as a result of changes in market interest rates, and the effective weighted average interest
rates on borrowings is as follows.
30 June 2012
30 June 2011
Weighted average
effective interest
rate
%
7.76
Weighted average
effective interest
rate
%
7.81
Balance
$’000
(55,580)
Balance
$’000
(57,880)
Borrowings
44
44
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
28
Financial Risk Management (continued)
(b) Market risk (continued)
(i) Interest rate risk (continued)
Sensitivity analysis
At 30 June, if interest rates on borrowings had moved (after hedging effects), as illustrated in the
table below, with all other variables held constant, profit would have been affected as follows:
Movement in interest rates
+ 1.0%
- 0.5%
Net profit
Higher / (Lower)
2012
$’000
(552)
276
2011
$’000
(562)
281
(ii) Price risk
The Trust is not exposed to any major price risk except for a material change in the property
valuation of the Bakehouse Quarter, which could potentially lead to a decrease in the Bakehouse
Bonds’ value. With all other variables held constant, the Bonds’ value will only decrease should the
current property value decrease by more than 29%, which is highly unlikely.
(c) Credit risk
The Trust is not exposed to any major credit risk except for the Bakehouse Bonds. The credit risk for the
Bakehouse Bonds is of the same nature as the price risk described above.
(d) Liquidity risk
The Trust is exposed to the following major liquidity risks:
1. Borrowings that are due for renewal within 12 months, are currently in breach due to the loan to
direct property value ratio and the Judgment, however, management is confident that the
borrowings will be renewed. In addition, the Trust repaid $1.08 million on 9 July 2012 to reduce the
borrowings to $54.5 million. Refer to Note 14 for further details.
2. Ability to realise assets – Refer to going concern paragraph under Note 1 as to management’s view on
the Trust’s ability to realise assets.
45
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
45
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
28
Financial Risk Management (continued)
(d) Liquidity risk (continued)
At the end of the reporting period, the Trust held the following financial arrangements:
At 30 June 2012
Financial assets
Cash and cash equivalents
Trade and other receivables
Available-for-sale financial assets
Financial assets at FVTPL
Financial liabilities
Trade and other payables
Other liabilities
Derivative financial instruments
Borrowings
Provision for litigation costs
At 30 June 2011
Financial assets
Cash and cash equivalents
Trade and other receivables
Available-for-sale financial assets
Financial assets at FVTPL
Financial liabilities
Trade and other payables
Other liabilities
Derivative financial instruments
Borrowings
Maturing
within 1 year
$’000
Maturing
1 – 5
years
$’000
Maturing
over 5 years
$’000
1,306
455
-
-
1,761
525
102
1,069
55,580
19,000
76,276
-
-
7,098
917
8,015
-
-
-
-
-
-
-
-
30,353
-
30,353
-
-
-
-
-
-
Maturing
within 1 year
$’000
Maturing
1 – 5
years
$’000
Maturing
over 5 years
$’000
450
75
-
-
525
411
71
-
2,900
3,382
-
-
8,309
2,522
10,831
-
-
129
54,980
55,109
-
-
30,000
-
30,000
-
-
-
-
-
Total
$’000
1,306
455
37,451
917
40,129
525
102
1,069
55,580
19,000
76,276
Total
$’000
450
75
38,309
2,522
41,356
411
71
129
57,880
58,491
46
46
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
28
Financial Risk Management (continued)
(d) Liquidity risk (continued)
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
28
Financial Risk Management (continued)
(e) Fair value measurements
AASB 7 Financial Instruments: Disclosures requires disclosure of fair value measurements by level of the
following fair value measurement hierarchy:
(cid:120) Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1),
(cid:120)
(cid:120)
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (as prices) or indirectly (derived from prices) (Level 2), and
Inputs for the asset or liability that are not based on observable market data (unobservable inputs)
(Level 3).
The following table presents the Trust’s financial assets and liabilities measured at fair value as at 30
June. Refer to Note 2 for further details of assumptions used and how fair values are measured.
Level 1
$’000
Total balance
$’000
Level 3
$’000
Level 2
$’000
At 30 June 2012
Available-for-sale financial assets
- Unquoted equities
- Debt instruments
Financial assets at FVTPL
Derivative financial instruments
At 30 June 2011
Available-for-sale financial assets
- Unquoted equities
- Debt instruments
Financial assets at FVTPL
Derivative financial instruments
-
-
-
-
-
-
-
-
7,098
30,353
917
38,368
(1,069)
7,098
30,353
917
38,368
(1,069)
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total balance
$’000
-
-
-
-
-
-
-
-
-
-
8,309
30,000
2,522
40,831
(129)
8,309
30,000
2,522
40,831
(129)
The following table is a reconciliation of the movements in financial assets classified as Level 3 for the
year ended 30 June:
At 30 June 2012
Balance at the beginning of the year
Purchases
Disposals/redemptions
Fair value movement
Balance at the end of the year
Financial assets
at FVTPL
$’000
2,522
-
-
(1,605)
917
Available-for-
sale financial
assets
$’000
38,309
149
(405)
(602)
37,451
Level 3 Total
$’000
40,831
149
(405)
(2,207)
38,368
47
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
47
At the end of the reporting period, the Trust held the following financial arrangements:
At 30 June 2012
Financial assets
Cash and cash equivalents
Trade and other receivables
Available-for-sale financial assets
Financial assets at FVTPL
Financial liabilities
Trade and other payables
Other liabilities
Derivative financial instruments
Borrowings
Provision for litigation costs
At 30 June 2011
Financial assets
Cash and cash equivalents
Trade and other receivables
Available-for-sale financial assets
Financial assets at FVTPL
Financial liabilities
Trade and other payables
Other liabilities
Derivative financial instruments
Borrowings
Maturing
Maturing
within 1 year
$’000
1 – 5
years
$’000
Maturing
over 5 years
$’000
7,098
917
8,015
30,353
30,353
1,306
455
-
-
1,761
525
102
1,069
55,580
19,000
76,276
-
-
-
-
-
-
-
-
Maturing
Maturing
within 1 year
$’000
1 – 5
years
$’000
Maturing
over 5 years
$’000
8,309
2,522
30,000
525
10,831
30,000
450
75
-
-
411
71
-
2,900
3,382
-
-
-
-
129
54,980
55,109
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
$’000
1,306
455
37,451
917
40,129
525
102
1,069
55,580
19,000
76,276
Total
$’000
450
75
38,309
2,522
41,356
411
71
129
57,880
58,491
46
P-REIT
ARSN 109 684 773
Notes to the Consolidated Financial Statements
For the Year Ended 30 June 2012
28
Financial Risk Management (continued)
(e) Fair value measurements (continued)
At 30 June 2011
Balance at the beginning of the year
Purchases
Disposals
Fair value movement
Balance at the end of the year
Financial assets
at FVTPL
$’000
-
3,439
-
(917)
2,522
Available-for-
sale financial
assets
$’000
5,000
36,956
(4,000)
353
38,309
Level 3 Total
$’000
5,000
40,395
(4,000)
(564)
40,831
The fair value of available-for-sale financial assets and financial assets at FVTPL is determined by
reference to the net assets of the underlying entities. All these instruments are included in Level 3.
There were no transfers between Level 1, 2 and 3 financial instruments during the year. For all other
financial assets and liabilities carrying value is an approximation of fair value.
48
48
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
P-REIT
Managed by
Directors’ Declaration
Directors’ Declaration
In the opinion of the Directors of TFML Limited, the Responsible Entity of P-REIT:
(a)
the financial statements and notes set out on pages 21 to 48 are in accordance with the Corporations
Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements, and
(ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2012 and of
its performance for the financial year ended on that date, and
(b)
there are reasonable grounds to believe that the Trust will be able to pay its debts as and when they
become due and payable.
Note 1 confirms that the financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
The Directors of the Responsible Entity have been given the declarations by the Chief Executive Officer and
Chief Financial Officer required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of the Board of Directors of the Responsible Entity.
Stuart Brown
Director
Sydney, 30 August 2012
49
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
49
Independent Auditor’s Report
50
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
Independent Auditor’s Report (continued)
P-REIT - Consolidated Financial Statements For The Year Ended 30 June 2012
51
Consolidated Financial ReportFor The Year Ended 30 June 2012Managed By:Level 1, 50 Yeo Street Neutral Bay, NSW 2089Responsible Entity: TFML LimitedABN 39 079 608 825