!!
ASX'Release'
BlackWall'Property'Trust'I'BWR'
30'June'2015'–'Full'Year'Results'
!
Key'Details'
!
!
17!August!2015!
• A'final'distribution'of'6'cents'per'unit'declared,!to!be!paid!
on!6!November!2015.!
!
• The!full!year!distribution!of!11.5!cents!per!unit!(5.5!cents!paid!
in!April!2015).!
!
• NTA!of!$1.40!per!unit!with!gearing!of!43%.!
Distributions*
The! Trust! has! carried! forward! revenue! losses! of! over! $20! million! and! capital! losses! of!
approximately!$17!million.!!As!a!consequence,!for!a!significant!period!all!distributions!will!
be!tax!deferred.*
Property*Portfolio*
The! Trust’s! $87.4! million! property! portfolio! is! stable! with! less! than! 5%! vacancy! and! a!
weighted! average! lease! expiry! of! 6.3! years.! At! 30! June! the! property! portfolio! is! held! at! a!
weighted!average!capitalisation!rate!of!9.1%.!
Bakehouse*Bonds*
The!Trust!holds!$21.7!million!of!Bakehouse!Bonds.!!The!bonds!are!subordinated!debt!notes!
secured!against!a!large!mixedXuse!development!known!as!the!Bakehouse!Quarter.!!
During!the!2015!financial!year!the!Bakehouse!Quarter!was!formally!marketed!for!sale!as!a!
result!of!a!number!of!unsolicited!approaches!to!purchase.!Through!the!marketing!process!
an!offer! of!$270!million!was!received!but!was!rejected!by!the! Directors.!Subsequently!an!
offer!(from!a!different!party)!of!$300!million!was!declined!as!it!was!subject!to!unacceptable!
conditions.! Specifically,! completion! may! not! have! occurred! until! 2020! (at! the! purchaser’s!
election)!and!the!proposed!upfront!payment!of!$20!million!was!insufficient.!!
The! Bakehouse! Quarter! has! $108! million! of! bank! debt,! which! ranks! in! priority! to! $27.1!
million! worth! of! Bakehouse! Bonds! ($21.7! million! held! by! BWR! and! $5.4! million! held! by!
BlackWall! Property! Funds! Limited! –! BWF).! The! bonds! pay! a! coupon! of! 5.5%! per! annum!
and! their! face! value! is! indexed! to! CPI! annually. Total! debt! (bank! and! Bakehouse! Bonds)!
secured! against! the! project! is! just! over! $135! million.! Depending! on! the! value! of! the!
BLACKWALL'FUND'SERVICES'LIMITED'!ABN!39!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!
!
!
!
property! adopted! Bakehouse! Bonds! are! protected! by! an! equity! buffer! of! between! $134!
million!and!$165!million.!Should!an!opportunity!present!the!Trust!will!look!to!convert!its!
interest!in!the!Bakehouse!Bonds!to!ordinary!equity!in!the!Bakehouse!Quarter.!
The! Bakehouse! has! approximately! 40,000! sqm! of! commercial,! entertainment! and! retail!
premises! generating! significant! cash! flow.! In! addition,! it! has! close! to! 20,000! sqm! of!
developable! land.! It! is! anticipated! that! this! land! would! be! suitable! for! substantial!
residential!development.!
While!the!site!is!no!longer!being!actively!marketed!for!sale!there!are!a!number!of!parties!
conducting! due! diligence! and! revised! offers! will! be! assessed! if! received.! BlackWall! has!
resolved!to!make!an!application!for!a!rezoning!of!the!site!and!either:!
• sell!the!individual!residential!development!sites;!or!
•
joint!venture!a!residential!development.!
If!the!Bakehouse!were!to!be!sold!in!one!line!the!Bakehouse!Bonds!would!be!redeemed!for!
cash.! ! A! partial! sale! or! residential! development! would! likely! result! in! the! bonds! being!
redeemed!in!part!or!in!full!for!cash.!
!
The!financial!statements!for!the!full!year!to!30!June!2015!together!with!the!Appendix!4E!
are! attached! to! this! release.! For! more! information! contact! Stuart! Brown! (Chief! Executive!
Officer)!or!Tim!Brown!(Chief!Financial!Officer)!on!+612!9033!8611.!
'
'
X2-!
Managed By
Consolidated Annual Financial Report
Year Ended 30 June 2015
CONTENTS
Financial Statements
Directors’ Report
Auditor’s Independence Declaration
ASX Additional Information
Trust Details
Consolidated Statement of Profit or Loss and Other 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 Financial Statements
Directors’ Declaration
Independent Auditor’s Report
Contents – Notes to the Financial Statements
Glossary
* Front cover pictures:
Top – Chancellor Homemaker Centre
Bottom Left – 55 Pyrmont Bridge Road
Bottom Right – WOTSO WorkSpace Silver @ The Exchange
Page 3
Page 9
Page 10
Page 12
Page 13
Page 14
Page 15
Page 16
Page 17
Page 36
Page 37
Page 39
Page 40
2
2
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
Directors’ Report
The BlackWall Property Trust is an ASX(cid:486)listed real estate investment trust (cid:523)ASX(cid:483) BWR(cid:524) with commercial(cid:481)
retail and industrial property interests(cid:484)
BWR has (cid:836)120 million of gross assets with (cid:836)50 million of bank debt giving rise to net tangible assets of
(cid:836)64 million or (cid:836)1(cid:484)40 per unit(cid:484) The Trust has 46 million units(cid:484)
A final distribution of 6 cents per unit was declared on the date of this report with a payment date of 6
November 2015(cid:484) This brings the full year distribution to 11(cid:484)5 cents per unit (cid:523)an interim distribution of 5(cid:484)5
cents per unit paid in April 2015(cid:524)(cid:484) The Trust has carried forward revenue losses of over (cid:836)20 million and
capital losses of approximately (cid:836)17 million(cid:484) As a conse(cid:147)uence for a significant period all distributions will
be 100(cid:936) tax deferred(cid:484)
BlackWall Fund Services Limited is BWR’s Responsible Entity and wholly(cid:486)owned by ASX(cid:486)listed BlackWall
Property Funds Limited (cid:523)ASX(cid:483) BWF(cid:524)(cid:484) BlackWall is a vertically integrated property management(cid:481) funds
management and investment business(cid:484) It provides property and asset management services to a range of
property syndicates including BWR(cid:484) BlackWall holds 7(cid:484)5 million (cid:523)16(cid:936)(cid:524) units in the Trust(cid:484)
Review of Operations
Recently BWR announced and commenced an on market unit buy(cid:486)back scheme(cid:484) At the date of this report
150(cid:481)515 units have been bought back under this scheme(cid:484)
The Trust’s (cid:836)(cid:890)7(cid:484)4 million property portfolio is stable with less than 5(cid:936) vacancy and a weighted average
lease expiry of 6(cid:484)3 years(cid:484) At 30 (cid:13)une the property portfolio is held at a weighted average capitalisation rate
of 9(cid:484)1(cid:936)(cid:484)
APN (cid:28)andina
Chancellor Homemaker Centre
Silver @ The Exchange
Canberra Eye Hospital
Toowoomba
Coolum
Bald Rock Hotel (cid:535)
(cid:535) Contracts exchanged
Value
$’000
24(cid:481)750
22(cid:481)000
1(cid:890)(cid:481)500
(cid:890)(cid:481)500
6(cid:481)100
4(cid:481)000
3(cid:481)500
(cid:890)7(cid:481)350
Implied Cap
Rate
10(cid:484)0(cid:936)
(cid:890)(cid:484)3(cid:936)
(cid:890)(cid:484)5(cid:936)
(cid:890)(cid:484)5(cid:936)
9(cid:484)(cid:890)(cid:936)
10(cid:484)5(cid:936)
N(cid:512)A
NLA
sqm
9(cid:481)100
9(cid:481)500
5(cid:481)100
2(cid:481)600
4(cid:481)100
2(cid:481)900
N(cid:512)A
As foreshadowed in the 2014 Annual Report the Trust’s property portfolio had a number of lease expiries
in the 2015 financial year(cid:484) Specifically(cid:483)
(cid:120)
Silver @ The Exchange on the Gold Coast had 4(cid:481)300 s(cid:147)m of vacant space with the expiry of the
Gold Coast City Council lease(cid:484) BlackWall has leased all but 500 s(cid:147)m of this space(cid:484) Significantly(cid:481) the
GCCC space has been split amongst four new tenants spreading future leasing risk and increasing
flexibility(cid:484) One of these tenants is a gym and health operator which adds amenity to the building
for existing and prospective tenants(cid:484) BlackWall’s serviced office business has established an
operation at Silver and has expanded on the back of strong take up(cid:484) Negotiations are underway
with respect to the balance of the vacant space(cid:484) The let up period and incentives have had an
impact on the rental income for the 2015 financial year(cid:484) The ma(cid:140)ority of the incentives have now
run off(cid:484)
(cid:120) A potential vacancy arose at Chancellor Homemaker Centre with the failure of Retail Adventure
Group and subse(cid:147)uently DSG Holdings(cid:484) A short term replacement tenant was secured and
3
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
3
BlackWall has negotiated for this tenant to take up a long term lease of part of the premises(cid:484) This
will leave a vacancy of 1(cid:481)200 s(cid:147)m(cid:484)
In November 2013 BWR made an investment in a BlackWall syndicate known as the Bald Rock Fund(cid:484) The
Trust holds 39(cid:936) of the fund and(cid:481) as a conse(cid:147)uence(cid:481) it was consolidated onto the Trust’s balance sheet(cid:484)
Contracts for the sale of the Bald Rock Hotel were recently exchanged and the asset has now been
reclassified as current(cid:484) Completion of this transaction is scheduled for 30 September 2015(cid:484) At completion
BWR’s investment of (cid:836)390(cid:481)000 will be returned along with a profit of (cid:836)210(cid:481)000(cid:484)
The Trust’s rental and distribution income for the 2015 financial year has decreased by (cid:836)2(cid:484)2 million(cid:484) This
decrease was caused by(cid:483)
(cid:120) one(cid:486)off let up and lease incentives with respect to the leasing transactions explained above(cid:482) and
(cid:120)
a reduction in distributions from Bakehouse Bonds following the redemption of 10 million
Bakehouse Bonds which in part discharged the Trust’s litigation liability in (cid:13)une 2014(cid:484)
In (cid:13)une 2015 agents were appointed to market the Chancellor Homemaker Centre for sale with the
instructions that the asset would only sell at a significant premium to its carrying value with the aim of
redeploying the capital into a more active asset(cid:484) The property has been revalued to (cid:836)22 million which
reflects the best unconditional offer received(cid:484) The Directors resolved that this was not a sufficient
premium to warrant selling and the property will be retained(cid:484)
Bakehouse Bonds
The Trust holds (cid:836)21(cid:484)7 million of Bakehouse Bonds(cid:484) The bonds are subordinated debt notes secured
against a large mixed(cid:486)use development known as the Bakehouse (cid:20)uarter(cid:484)
During the 2015 financial year the Bakehouse (cid:20)uarter was formally marketed for sale as a result of a
number of unsolicited approaches to purchase(cid:484) Through the marketing process an offer of (cid:836)270 million
was received but was re(cid:140)ected by the Directors(cid:484) Subse(cid:147)uently an offer (cid:523)from a different party(cid:524) of (cid:836)300
million was declined as it was sub(cid:140)ect to unacceptable conditions(cid:484) Specifically(cid:481) completion may not have
occurred until 2020 (cid:523)at the purchaser’s election(cid:524) and the proposed upfront payment of (cid:836)20 million was
insufficient(cid:484)
The Bakehouse (cid:20)uarter has (cid:836)10(cid:890) million of bank debt(cid:481) which ranks in priority to (cid:836)27(cid:484)1 million worth of
Bakehouse Bonds (cid:523)(cid:836)21(cid:484)7 million held by BWR and (cid:836)5(cid:484)4 million held by BlackWall Property Funds Limited
– BWF(cid:524)(cid:484) The bonds pay a coupon of 5(cid:484)5(cid:936) per annum and their face value is indexed to CPI annually(cid:484)
Total debt (cid:523)bank and Bakehouse Bonds(cid:524) secured against the pro(cid:140)ect is (cid:140)ust over (cid:836)135 million(cid:484) Depending
on the value of the property adopted Bakehouse Bonds are protected by an e(cid:147)uity buffer of between (cid:836)134
million and (cid:836)165 million(cid:484) Should an opportunity present itself(cid:481) the Trust will look to convert its interest in
the Bakehouse Bonds to ordinary e(cid:147)uity in the Bakehouse (cid:20)uarter(cid:484)
The Bakehouse has approximately 40(cid:481)000 s(cid:147)m of commercial(cid:481) entertainment and retail premises
generating significant cash flow(cid:484) In addition(cid:481) it has close to 20(cid:481)000 s(cid:147)m of developable land(cid:484) It is
anticipated that this land would be suitable for substantial residential development(cid:484)
While the site is no longer being actively marketed for sale there are a number of parties conducting due
diligence and revised offers will be assessed if received(cid:484) BlackWall has resolved to make an application for
a re(cid:156)oning of the site and either(cid:483)
(cid:120)
(cid:120)
sell the individual residential development sites(cid:482) or
(cid:140)oint venture a residential development(cid:484)
If the Bakehouse were to be sold in one line the Bakehouse Bonds would be redeemed for cash(cid:484) A partial
sale or residential development would likely result in the bonds being redeemed in part or in full for cash(cid:484)
4
4
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
Events Subsequent to Reporting Date and Likely Developments
To the best of the Directors’ knowledge(cid:481) since the end of the financial year there have been no matters or
circumstances that have materially affected the Trust’s operations or may materially affect its operations(cid:481)
state of affairs or the results of operations in future financial years(cid:484)
Information on Officeholders of the Responsible Entity
The Responsible Entity is a wholly owned subsidiary of BlackWall Property Funds Limited(cid:484) BlackWall’s
Officeholders comprise the board of the Responsible Entity(cid:484) The Officeholders of the Responsible Entity
during or since the end of the year are set out below(cid:484) Unless otherwise stated(cid:481) Officeholders have been in
office since the beginning of the financial year(cid:484)
Name and Position
Richard Hill
Non(cid:486)Executive Director
and Independent
Chairman
(cid:13)oseph (cid:523)Seph(cid:524) Glew
Non(cid:486)Executive Director
Special Experience
Richard Hill has extensive investment banking experience and was the
founding partner of the corporate advisory firm Hill (cid:28)oung (cid:428) Associates(cid:484)
Richard has invested in BlackWall’s pro(cid:140)ects since the early 1990s(cid:484) Prior to
forming Hill (cid:28)oung(cid:481) Richard held a number of Senior Executive positions in
Hong (cid:14)ong and New (cid:28)ork with HSBC(cid:484) He was admitted as an attorney in
New (cid:28)ork State and was registered by the US Securities (cid:428) Exchange
Commission and the Ontario Securities Commission(cid:484) He is the Chairman of
Sirtex (cid:16)edical Limited (cid:523)listed on the ASX(cid:524)(cid:484) In addition Richard is Chairman
of the Westmead (cid:16)illennium Institute for (cid:16)edical Research(cid:484)
Seph has worked in the commercial property industry in New (cid:29)ealand(cid:481) the
USA and Australia(cid:484) Seph has driven large scale property development and
financial structuring for real estate for over 30 years(cid:484) In addition(cid:481) since the
early 1990s Seph has run many (cid:498)turn(cid:486)around(cid:499) processes in relation to
distressed properties and property structures for both private and
institutional property owners(cid:484)
While working for the Housing Corporation of New (cid:29)ealand and then A(cid:16)P(cid:481)
Seph (cid:147)ualified as a registered valuer and holds a Bachelor of Commerce(cid:484) In
the 19(cid:890)0s he served as an Executive Director with New (cid:29)ealand based
property group Chase Corporation and as a Non(cid:486)Executive Director with a
number of other listed companies in New (cid:29)ealand and Australia(cid:484)
5
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
5
Robin Tedder
Non(cid:486)Executive Director
Robin has around 40 years’ experience in investment and financial
markets(cid:484) He has been an investor in BlackWall’s pro(cid:140)ects since 1997(cid:484) Robin
is the Chairman of (cid:25)intage Capital Pty Ltd(cid:481) an investment company with
interests in property(cid:481) wealth management(cid:481) logistics and healthcare(cid:484) He is a
former member of the ASX and has served on the boards of several
investment banks in Australia and overseas(cid:484) He is a Director of Probiotec
Ltd (cid:523)a pharmaceutical manufacturing company listed on the ASX(cid:524)(cid:484) Robin is
also a Fellow of the Financial Services Institute of Australasia(cid:484)
Stuart Brown
Executive Director and
Chief Executive Officer
Stuart has been involved in property investment for over 17 years(cid:484) Stuart
has run debt and e(cid:147)uity raising in relation to listed and unlisted real estate
structures with over a half a billion dollars in value(cid:484)
In his earlier career(cid:481) Stuart practised as a solicitor in the areas of real
estate(cid:481) mergers and ac(cid:147)uisitions and corporate advisory with (cid:16)allesons
and Gilbert (cid:938) Tobin(cid:484) Stuart is an independent Director of Coogee Boys’
Preparatory School(cid:484)
Caroline Raw
Company Secretary from
1(cid:890) February 2015
(cid:523)Don Bayly
Company Secretary until
1(cid:890) February 2015(cid:524)
Caroline Raw (cid:140)oined the BlackWall team in 2013 and is responsible for
executing corporate and fund transactions across the BlackWall Group(cid:484)
Caroline has been practising as a solicitor in NSW since 2005 and has
worked predominantly on IPOs(cid:481) public and private capital raisings(cid:481) funds
management(cid:481) corporate advisory(cid:481) takeovers and mergers and ac(cid:147)uisitions(cid:484)
Caroline holds a Bachelor of Commerce(cid:481) Bachelor of Laws and Graduate
Diploma in Applied Corporate Governance(cid:484) Caroline is also a Chartered
Secretary and Associate (cid:16)ember of the Governance Institute of Australia(cid:484)
Meeting Attendances
Director
Richard Hill
Seph Glew
Robin Tedder
Stuart Brown
No. of Board
Meetings Held
10
10
10
10
Board Meeting
Attendance
10
10
10
10
Key Management Personnel’s Relevant Interests
(cid:14)(cid:16)P include all Directors and the Chief Financial Officer (cid:523)Tim Brown(cid:524)(cid:484) Their current relevant interests in
the Trust and at the release of the 2014 Annual Report are shown below(cid:484) For ease of comparison the 2014
numbers have been restated as if the 10(cid:483)1 unit consolidation completed in (cid:16)arch 2015 had occurred(cid:483)
Richard Hill
Seph Glew
Robin Tedder
Stuart Brown
Tim Brown
Total
26 August 2014
394(cid:481)215
3(cid:481)595(cid:481)437
5(cid:481)0(cid:890)5(cid:481)915
412(cid:481)297
2(cid:890)(cid:481)(cid:890)44
9,516,708
Net change
0
539(cid:481)066
55(cid:481)050
55(cid:481)049
0
649,165
12 August 2015
394(cid:481)215
4(cid:481)134(cid:481)503
5(cid:481)140(cid:481)965
467(cid:481)346
2(cid:890)(cid:481)(cid:890)44
10,165,873
No salary(cid:481) cash bonus or monetary benefit was paid out of the Trust’s assets to any key management
personnel during the year(cid:484)
6
6
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
Options
There were no options granted during the year ended 30 (cid:13)une 2015(cid:484) There are no options on issue as at
the date of this report(cid:484)
Responsible Entity and Custodian Remuneration
The Responsible Entity’s remuneration details can be found under the Related Party Transactions note of
the financial statements(cid:484)
The Custodian is Perpetual Limited(cid:484) The custody fee is calculated at the greater of (cid:836)15(cid:481)000 p(cid:484)a(cid:484) or 0(cid:484)025(cid:936)
p(cid:484)a(cid:484) of the gross asset value (cid:523)up to (cid:836)100 million then 0(cid:484)015(cid:936) for gross assets value between (cid:836)100(cid:486)(cid:836)500
million(cid:524) of the Trust(cid:481) plus GST(cid:484) In addition(cid:481) the Custodian is entitled to be paid any out(cid:486)of(cid:486)pocket expenses
incurred in the performance of its duties(cid:484)
Interests in the Trust
The number of units on issue at 30 (cid:13)une 2015 was 45(cid:481)977(cid:481)273 (cid:523)excluding 716(cid:481)057 units BWR holds in
itself(cid:524)(cid:484) As at 30 (cid:13)une 2015 and the date of this report(cid:481) the Responsible Entity and its associates held 7(cid:484)5
million units in the Trust(cid:484)
Subse(cid:147)uent to 30 (cid:13)une 2015(cid:481) the Trust purchased 150(cid:481)515 ordinary units on(cid:486)market as part of The Trust’s
buy(cid:486)back(cid:484) The Trust currently has 45(cid:481)(cid:890)26(cid:481)75(cid:890) units on issue(cid:484)
Value of the Trust’s Assets
At 30 (cid:13)une 2015(cid:481) the Trust’s assets were valued at (cid:836)119(cid:481)946(cid:481)000 as set out in the Trust’s Consolidated
Statement of Financial Position(cid:484) Refer to the Financial Assets and Investment Properties notes for
valuation details(cid:484)
Environmental Regulation
The Trust and its controlled entity’s operations are not regulated by any significant environmental law or
regulation under either Commonwealth or State legislation(cid:484) However(cid:481) the Responsible Entity believes that
the Trust and its controlled entity have ade(cid:147)uate systems in place for the management of its
environmental re(cid:147)uirements and is not aware of any instances of non(cid:486)compliance of those environmental
re(cid:147)uirements as they apply to the Trust(cid:484)
Indemnities of Officers
During the financial year 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(cid:481) other than conduct involving a wilful breach of
duty(cid:484) The insurance policy prohibits disclosure of the nature of the liability(cid:481) the amount of the premium
and the limit of liability(cid:484)
No indemnities have been given or insurance premiums paid(cid:481) during or since the end of the financial year(cid:481)
for any person who is or has been an auditor to the Trust(cid:484)
Corporate Governance Statement
A description of the Trust’s current corporate governance practices is set out in the Trust’s corporate
governance statement which can be viewed at http(cid:483)(cid:512)(cid:512)www(cid:484)blackwallfunds(cid:484)com(cid:484)au(cid:512)about(cid:486)us(cid:484)html(cid:484)
7
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
7
Auditor and Non(cid:486)audit Services
(cid:836)12(cid:481)17(cid:890) was paid to the auditor for non(cid:486)audit services during the year (cid:523)2014(cid:483) (cid:836)9(cid:481)547(cid:524) as detailed in the
Auditor’s Remuneration note of the financial statements(cid:484) The Directors are satisfied that the provision of
non(cid:486)audit services is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001(cid:484) The nature and scope of each type of non(cid:486)audit service provided means that
auditor independence was not compromised(cid:484)
A copy of the auditor’s independence declaration as re(cid:147)uired under Section 307C of the Corporations Act
2001 is set out in these financial statements(cid:484)
ES(cid:25) continues in office in accordance with section 327 of the Corporations Act 2001(cid:484)
Rounding of Amounts
The Trust is a group of the kind referred to in ASIC Class Order 9(cid:890)(cid:512)100 and in accordance with that Class
Order(cid:481) amounts in the Directors’ Report and the financial statements are rounded off to the nearest
thousand dollars(cid:481) unless otherwise indicated(cid:484)
Signed in accordance with a resolution of the Board of Directors(cid:484)
Stuart Brown
Director
Sydney(cid:481) 17 August 2015
(cid:890)
8
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
Auditor’s Independence Declaration Under Section 307C of the Corporations Act 2001
As auditor for the audit of Blackwall Property Trust and its Controlled Entities for the year ended 30
June 2015, I declare that, to the best of my knowledge and belief, there have been:
(i) no contraventions of the auditor’s independence requirements as set out in the Corporations Act
2001 in relation to the audit; and
(ii) no contraventions of any applicable code of professional conduct in relation to the audit.
Dated at Sydney the 14th day of August 2015.
ESV Accounting and Business Advisors
Tim Valtwies
Partner
ASX Additional Information
Additional information re(cid:147)uired by the Australian Securities Exchange and not shown elsewhere in this
report is as follows(cid:484) The unitholder information set out below was current as at 12 August 2015(cid:484)
1. Unitholders
The Trust’s top 20 largest unitholdings were(cid:483)
Investor
Pelorus Private E(cid:147)uity Limited
Sandhurst Trustees Ltd (cid:948)AI(cid:16)S PSF A(cid:512)C(cid:949)
Blackwall Property Funds Limited
(cid:25)intage Capital Pty Limited
Seno (cid:16)anagement Pty Ltd
BlackWall Fund Services Limited
Lymkeesh Pty Ltd (cid:948)Employers Super Fund A(cid:512)C(cid:949)
BlackWall Fund Services Limited (cid:948)B(cid:20)T A(cid:512)C(cid:949)
1
2
3
4
5
6
7
(cid:890)
9 (cid:14)oonta Pty Ltd (cid:948)(cid:14)oonta Super Fund A(cid:512)C(cid:949)
10 Seno (cid:16)anagement Pty Ltd (cid:948)Seno Super Fund A(cid:512)C(cid:949)
11 Stanbox Pty Limited (cid:948)The Salem Family Account(cid:949)
12 Pinnatus Pty Ltd
13 Stanbox No 2 Pty Ltd
14
I P R Nominees Pty Ltd (cid:948)1965 Irvin Peter Rockman A(cid:512)C(cid:949)
15 (cid:14)oonta Pty Ltd (cid:948)The Tedder Family A(cid:512)C(cid:949)
16 Sao Investments Pty Ltd
17
(cid:13) P (cid:16)organ Nominees Australia Limited
1(cid:890) Lymkeesh Pty Ltd
19 Castlebay Pty Limited
20 (cid:16)ethuselah Capital (cid:16)anagement Pty Ltd
Units (No.)
Units (%)
7(cid:481)400(cid:481)000
5(cid:481)(cid:890)47(cid:481)669
5(cid:481)400(cid:481)000
3(cid:481)557(cid:481)505
2(cid:481)735(cid:481)000
2(cid:481)100(cid:481)000
1(cid:481)41(cid:890)(cid:481)717
1(cid:481)225(cid:481)776
1(cid:481)0(cid:890)1(cid:481)4(cid:890)9
500(cid:481)000
500(cid:481)000
476(cid:481)501
430(cid:481)000
422(cid:481)639
415(cid:481)435
410(cid:481)9(cid:890)2
402(cid:481)003
373(cid:481)103
370(cid:481)047
222(cid:481)070
16(cid:484)15
12(cid:484)76
11(cid:484)7(cid:890)
7(cid:484)76
5(cid:484)97
4(cid:484)5(cid:890)
3(cid:484)10
2(cid:484)67
2(cid:484)36
1(cid:484)09
1(cid:484)09
1(cid:484)04
0(cid:484)94
0(cid:484)92
0(cid:484)91
0(cid:484)90
0(cid:484)(cid:890)(cid:890)
0(cid:484)(cid:890)1
0(cid:484)(cid:890)1
0(cid:484)4(cid:890)
10
10
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
2. Distribution of Unitholders
The distribution of unitholders by si(cid:156)e of holding was(cid:483)
Category
1(cid:486)1(cid:481)000
1(cid:481)001(cid:486)5(cid:481)000
5(cid:481)001(cid:486)10(cid:481)000
10(cid:481)001(cid:486)100(cid:481)000
100(cid:481)001 and over
Total number of unitholders
No. of Holders
203
519
170
1(cid:890)4
39
1,115
The Trust has 53 holders of less than a marketable parcel(cid:484) The Trust has 45(cid:481)(cid:890)26(cid:481)75(cid:890) units on issue after
150(cid:481)515 buy(cid:486)back and 716(cid:481)057 units of which BWR holds in itself(cid:484) All units carry one vote per unit
without restrictions(cid:484) All units are (cid:147)uoted on the Australian Securities Exchange (cid:523)ASX(cid:483) BWR(cid:524)(cid:484)
3. Substantial Unitholders
The Trust’s substantial unitholders are set out below(cid:483)
Investor
BlackWall Property Funds Ltd
Pelorus Private E(cid:147)uity Ltd
Sandhurst Trustees Ltd (cid:948)AI(cid:16)S PSF A(cid:512)C(cid:949)
Robin Tedder
(cid:13)oseph (cid:523)Seph(cid:524) Glew
Paul Tresidder
Units (No.)
Units (%)
7(cid:481)500(cid:481)000
7(cid:481)400(cid:481)000
5(cid:481)(cid:890)47(cid:481)669
5(cid:481)140(cid:481)965
4(cid:481)134(cid:481)503
2(cid:481)(cid:890)(cid:890)6(cid:481)296
16(cid:484)37
16(cid:484)15
12(cid:484)76
11(cid:484)22
9(cid:484)02
6(cid:484)30
11
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
11
Trust Details
The Responsible Entity’s details are as follows(cid:483)
Registered office and principal
place of business
BlackWall Fund Services Limited
Level 1(cid:481) 50 (cid:28)eo Street
Neutral Bay NSW 20(cid:890)9
Telephone
Fax
Website
Registry
(cid:938)612 9033 (cid:890)611
(cid:938)612 9033 (cid:890)600
www(cid:484)blackwallfunds(cid:484)com(cid:484)au
Computershare Investor Services Pty Limited
GPO Box 2975
(cid:16)elbourne (cid:25)IC 3001
www(cid:484)computershare(cid:484)com(cid:484)au
Telephone(cid:483) (cid:938)613 9415 4329
12
12
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
BlackWall Property Trust
ARSN 109 684 773
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the Year Ended 30 June 2015
Revenue
Rental income
Property securities distribution income
Interest income
Net unrealised gain on revaluation
Revenue From Ordinary Activities
Reversal of prior years’ litigation provision
Total Revenue
Property outgoings
Depreciation expense
Administration expenses
Finance costs
Loss on sale of investments
Other expenses
Litigation expenses
Profit For the Year
Total Comprehensive Income For the Year
Profit Attributable To:
Owners of the Trust
Outside e(cid:147)uity interests
Total Comprehensive Income Attributable To:
Owners of the Trust
Outside e(cid:147)uity interests
Note
2(cid:523)b(cid:524)
2(cid:523)a(cid:524)
3
3
3
2015
$’000
9(cid:481)094
1(cid:481)316
24(cid:890)
4(cid:481)073
14,731
(cid:486)
14,731
(cid:523)2(cid:481)319(cid:524)
(cid:523)2(cid:481)176(cid:524)
(cid:523)1(cid:481)200(cid:524)
(cid:523)2(cid:481)4(cid:890)6(cid:524)
(cid:523)35(cid:524)
(cid:523)24(cid:524)
(cid:486)
6,491
6,491
6(cid:481)336
155
6,491
6(cid:481)336
155
6,491
2014
$’000
10(cid:481)604
2(cid:481)031
106
2(cid:481)067
14,808
2(cid:481)790
17,598
(cid:523)2(cid:481)137(cid:524)
(cid:523)2(cid:481)253(cid:524)
(cid:523)1(cid:481)170(cid:524)
(cid:523)3(cid:481)215(cid:524)
(cid:523)2(cid:481)254(cid:524)
(cid:486)
(cid:523)165(cid:524)
6,404
6,404
6(cid:481)150
254
6,404
6(cid:481)150
254
6,404
Earnings Per Unit
Basic and diluted earnings per unit
14
(cid:836)0(cid:484)14
(cid:836)0(cid:484)03
The accompanying notes form part of these financial statements(cid:484)
The accompanying notes form part of these (cid:976)inancial statements(cid:484)
13
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
13
BlackWall Property Trust
ARSN 109 684 773
Consolidated Statement of Financial Position
As at 30 June 2015
ASSETS
Current Assets
Cash and cash e(cid:147)uivalents
Trade and other receivables
Other assets
Bald Rock Hotel
Total Current Assets
Non(cid:486)current Assets
Financial assets
Investment properties
Total Non(cid:486)current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Other liabilities
Borrowings
Interest rate hedges
Total Current Liabilities
Non(cid:486)current Liabilities
Borrowings
Interest rate hedges
Total Non(cid:486)current Liabilities
TOTAL LIABILITIES (EXCLUDING NET ASSETS)
NET ASSETS
Attributable to owners of the parent
Outside e(cid:147)uity interests
TOTAL NET ASSETS
Note
4
5
6
(cid:890)
7
(cid:890)
9
10
11
12
11
12
19
2015
$’000
316
3(cid:890)(cid:890)
12(cid:890)
3(cid:481)500
4(cid:481)332
2014
$’000
230
1(cid:481)(cid:890)59
159
(cid:486)
2(cid:481)24(cid:890)
31(cid:481)764
(cid:890)3(cid:481)(cid:890)50
115(cid:481)614
119,946
29(cid:481)404
(cid:890)3(cid:481)950
113(cid:481)354
115,602
90(cid:890)
1(cid:481)96(cid:890)
50(cid:481)000
(cid:486)
52(cid:481)(cid:890)76
(cid:486)
5(cid:890)0
5(cid:890)0
53,456
63(cid:481)457
3(cid:481)033
66,490
1(cid:481)042
3
(cid:486)
47
1(cid:481)092
51(cid:481)721
(cid:486)
51(cid:481)721
52,813
61(cid:481)975
(cid:890)14
62,789
TOTAL LIABILITIES (cid:523)INCLUDING NET ASSETS(cid:524)
119(cid:481)946
115(cid:481)602
BlackWall Property Trust
ARSN 109 684 773
Consolidated Statement of Changes in Net Assets Attributable to Unitholders
For the Year Ended 30 June 2015
Units on
Issue
No.’000
466,929
(cid:523)420(cid:481)236(cid:524)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
46,693
(cid:523)716(cid:524)
45,977
(cid:523)151(cid:524)
45,826
113,364
(cid:523)652(cid:524)
112,712
(cid:523)1(cid:890)5(cid:524)
112,527
259(cid:481)405
(cid:486)
(cid:486)
7(cid:481)7(cid:890)2
(cid:523)376(cid:524)
Retained
Earnings /
Attributable
Issued
(Accumulated
to Owners of
Units
$’000
Losses)
$’000
the Parent
$’000
Outside
Equity
Interests
$’000
113,364
(51,389)
61,975
6(cid:481)336
(cid:523)4(cid:481)202(cid:524)
(49,255)
(49,255)
(55,983)
6(cid:481)150
(cid:523)1(cid:481)556(cid:524)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
6(cid:481)336
(cid:523)4(cid:481)202(cid:524)
64,109
(cid:523)652(cid:524)
63,457
49,975
6(cid:481)150
(cid:523)1(cid:481)556(cid:524)
7(cid:481)7(cid:890)2
(cid:523)376(cid:524)
61,975
Total
$’000
62,789
(cid:486)
6(cid:481)491
(cid:523)4(cid:481)245(cid:524)
2(cid:481)107
67,142
(cid:523)652(cid:524)
66,490
49,975
6(cid:481)404
(cid:523)1(cid:481)592(cid:524)
(cid:890)(cid:481)392
(cid:523)390(cid:524)
62,789
814
(cid:486)
155
(cid:523)43(cid:524)
2(cid:481)107
3,033
(cid:486)
3,033
(cid:486)
254
(cid:523)36(cid:524)
610
(cid:523)14(cid:524)
814
Balance at 1 July 2014
Unit consolidation (cid:535)
Profit for the year
Distributions paid
Consolidation of BOF (cid:535)(cid:535)
Balance
BWR Holdings in itself
Balance at 30 June 2015
Buy(cid:486)back to 13 August 2015
Balance at signing date
Profit for the year
Distributions paid
Issue of units
Transaction costs
Balance at 1 July 2013
207,524
105,958
Balance at 30 June 2014
466,929
113,364
(51,389)
(cid:535) Represents a 10 to 1 unit consolidation in (cid:16)arch 2015(cid:484)
(cid:535)(cid:535) In (cid:13)une 2015(cid:481) the Trust ac(cid:147)uired a controlling interest in BlackWall Opportunities Fund(cid:484) As a result(cid:481) BOF has been consolidated onto the Trust’s accounts(cid:484)
15
14
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
14
BlackWall Property Trust
ARSN 109 684 773
Consolidated Statement of Changes in Net Assets Attributable to Unitholders
For the Year Ended 30 June 2015
Units on
Issue
No.’000
466,929
(cid:523)420(cid:481)236(cid:524)
(cid:486)
(cid:486)
(cid:486)
46,693
(cid:523)716(cid:524)
45,977
(cid:523)151(cid:524)
45,826
207,524
(cid:486)
(cid:486)
259(cid:481)405
(cid:486)
466,929
Issued
Units
$’000
113,364
(cid:486)
(cid:486)
(cid:486)
(cid:486)
113,364
(cid:523)652(cid:524)
112,712
(cid:523)1(cid:890)5(cid:524)
112,527
105,958
(cid:486)
(cid:486)
7(cid:481)7(cid:890)2
(cid:523)376(cid:524)
113,364
Retained
Earnings /
(Accumulated
Losses)
$’000
Attributable
to Owners of
the Parent
$’000
Outside
Equity
Interests
$’000
(51,389)
(cid:486)
6(cid:481)336
(cid:523)4(cid:481)202(cid:524)
(cid:486)
(49,255)
(cid:486)
(49,255)
(55,983)
6(cid:481)150
(cid:523)1(cid:481)556(cid:524)
(cid:486)
(cid:486)
(51,389)
61,975
(cid:486)
6(cid:481)336
(cid:523)4(cid:481)202(cid:524)
(cid:486)
64,109
(cid:523)652(cid:524)
63,457
49,975
6(cid:481)150
(cid:523)1(cid:481)556(cid:524)
7(cid:481)7(cid:890)2
(cid:523)376(cid:524)
61,975
814
(cid:486)
155
(cid:523)43(cid:524)
2(cid:481)107
3,033
(cid:486)
3,033
(cid:486)
254
(cid:523)36(cid:524)
610
(cid:523)14(cid:524)
814
Total
$’000
62,789
(cid:486)
6(cid:481)491
(cid:523)4(cid:481)245(cid:524)
2(cid:481)107
67,142
(cid:523)652(cid:524)
66,490
49,975
6(cid:481)404
(cid:523)1(cid:481)592(cid:524)
(cid:890)(cid:481)392
(cid:523)390(cid:524)
62,789
Balance at 1 July 2014
Unit consolidation (cid:535)
Profit for the year
Distributions paid
Consolidation of BOF (cid:535)(cid:535)
Balance
BWR Holdings in itself
Balance at 30 June 2015
Buy(cid:486)back to 13 August 2015
Balance at signing date
Balance at 1 July 2013
Profit for the year
Distributions paid
Issue of units
Transaction costs
Balance at 30 June 2014
(cid:535) Represents a 10 to 1 unit consolidation in (cid:16)arch 2015(cid:484)
(cid:535)(cid:535) In (cid:13)une 2015(cid:481) the Trust ac(cid:147)uired a controlling interest in BlackWall Opportunities Fund(cid:484) As a result(cid:481) BOF has been consolidated onto the Trust’s accounts(cid:484)
15
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
15
BlackWall Property Trust
ARSN 109 684 773
Consolidated Statement of Cash Flows
For the Year Ended 30 June 2015
Cash Flows From Operating Activities
Receipts from customers
Payments to suppliers
Property securities distributions received
Interest received
Interest paid
Litigation related legal expenses
Net Cash Flows From Operating Activities
Cash Flows From Investing Activities
Proceeds from disposal of financial assets
Payments for purchase of financial assets
Payments for capital expenditure
Deposit received for Bald Rock Hotel
Returns of capital from financial assets
Payments for (cid:13)udgment Debt
Payments for purchase of Bald Rock Hotel (cid:523)net(cid:524)
Net Cash Flows From / (Used in) Investing Activities
Cash Flows From Financing Activities
Net proceeds (cid:512)(cid:523)repayment(cid:524) of borrowings
Distributions paid
Proceeds from issue of units
Transaction costs for issue of units
Net Cash Flows From / (Used in) Financing Activities
Note
17
Net Increase in Cash Held
Cash and cash e(cid:147)uivalents at the beginning of the year
Cash and Cash Equivalents at End of the Year
4
2015
$’000
9(cid:481)136
(cid:523)4(cid:481)677(cid:524)
1(cid:481)331
196
(cid:523)2(cid:481)49(cid:890)(cid:524)
(cid:486)
3,488
2(cid:481)(cid:890)(cid:890)4
(cid:523)1(cid:481)751(cid:524)
(cid:523)645(cid:524)
150
177
(cid:486)
(cid:486)
815
(cid:523)15(cid:524)
(cid:523)4(cid:481)202(cid:524)
(cid:486)
(cid:486)
(4,217)
86
230
316
16
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
2014
$’000
11(cid:481)439
(cid:523)4(cid:481)410(cid:524)
2(cid:481)1(cid:890)2
106
(cid:523)3(cid:481)174(cid:524)
(cid:523)165(cid:524)
5,978
7(cid:481)109
(cid:523)2(cid:481)377(cid:524)
(cid:523)13(cid:524)
(cid:486)
(cid:486)
(cid:523)16(cid:481)761(cid:524)
(cid:523)2(cid:481)734(cid:524)
(14,776)
2(cid:481)221
(cid:523)1(cid:481)5(cid:890)5(cid:524)
(cid:890)(cid:481)392
(cid:523)39(cid:524)
8,989
191
39
230
16
BlackWall Property Trust
ARSN 109 684 773
Notes to the Financial Statements
For the Year Ended 30 June 2015
1.
Segment Information
AASB (cid:890) re(cid:147)uires 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(cid:484) The Trust’s primary format for segment reporting is based on
business segments(cid:484) The business segments are determined based on the Trust management and internal
reporting structure(cid:484) There is only one geographical segment being Australia(cid:484)
Segment results(cid:481) assets and liabilities include items directly attributable to a segment as well as those that
can be allocated on a reasonable basis(cid:484) The operating businesses are organised and managed separately
according to the nature of the products and services provided(cid:481) with each segment representing a strategic
business unit that offers different products and serves different markets(cid:484)
The Trust has adopted three reporting segments(cid:481) Direct Property(cid:481) Other Investments and Unallocated(cid:484) The
Direct Property segment includes the ownership and leasing out of commercial(cid:481) industrial and retail
properties in Australian Capital Territory(cid:481) New South Wales and (cid:20)ueensland(cid:484) Income is derived from rent
and property revaluations(cid:484) The Other Investments segment includes interests in debt instruments and
property related securities such as units in unlisted unit trusts(cid:484) It generates income from dividends(cid:481)
distributions(cid:481) and interest(cid:484) The Unallocated segment covers general functions(cid:484) The segment information for
the year ended 30 (cid:13)une is as follows(cid:483)
Direct
Property
$’000
Other
Investments
$’000
Unallocated
$’000
Consolidated
Total
$’000
30 June 2015
Revenue from ordinary activities
Net unrealised gain on revaluation
Total segment revenue
Segment operating profit
Finance costs
Profit
Segment assets
Segment liabilities
30 June 2014
Revenue from ordinary activities
Reversal of prior years’ litigation provision
Net unrealised gain(cid:512)(cid:523)loss(cid:524) on revaluation
Total segment revenue
Segment operating profit
Finance costs
Litigation expenses
Profit
9(cid:481)094
3(cid:481)44(cid:890)
12(cid:481)542
7(cid:481)006
(cid:523)2(cid:481)4(cid:890)6(cid:524)
4,520
1(cid:481)564
625
2(cid:481)1(cid:890)9
1(cid:481)971
(cid:486)
1,971
(cid:890)7(cid:481)541
(cid:523)53(cid:481)456(cid:524)
32(cid:481)405
(cid:486)
10(cid:481)604
(cid:486)
2(cid:481)373
12(cid:481)977
7(cid:481)636
(cid:523)3(cid:481)215(cid:524)
(cid:486)
4,421
2(cid:481)137
(cid:486)
(cid:523)306(cid:524)
1(cid:481)(cid:890)31
1(cid:481)35(cid:890)
(cid:486)
(cid:486)
1,358
Segment assets
Segment liabilities
(cid:890)5(cid:481)672
(cid:523)52(cid:481)663(cid:524)
29(cid:481)930
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
2(cid:481)790
(cid:486)
2(cid:481)790
790
(cid:486)
(cid:523)165(cid:524)
625
(cid:486)
(cid:523)150(cid:524)
10(cid:481)65(cid:890)
4(cid:481)073
14(cid:481)731
(cid:890)(cid:481)977
(cid:523)2(cid:481)4(cid:890)6(cid:524)
6,491
119(cid:481)946
(cid:523)53(cid:481)456(cid:524)
12(cid:481)741
2(cid:481)790
2(cid:481)067
17(cid:481)59(cid:890)
9(cid:481)7(cid:890)4
(cid:523)3(cid:481)215(cid:524)
(cid:523)165(cid:524)
6,404
115(cid:481)602
(cid:523)52(cid:481)(cid:890)13(cid:524)
17
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
17
Note
2(cid:523)b(cid:524)
BlackWall Property Trust
ARSN 109 684 773
Notes to the Financial Statements
For the Year Ended 30 June 2015
2.
Revenue
(a) Revenue
Rent(cid:483)
(cid:486) Rental income
(cid:486) Straight(cid:486)line rental income
Investment income(cid:483)
(cid:486) Property securities distribution income
(cid:486) Interest income
Net unrealised gain on revaluation
Reversal of prior years’ litigation provision
Total revenue
(b) Net unrealised gain on revaluation
Unrealised gain(cid:512)(cid:523)loss(cid:524) on financial assets
Unrealised gain on investment properties
Unrealised gain(cid:512)(cid:523)loss(cid:524) on interest rate hedges
Net unrealised gain
3.
Expenses
Property outgoings(cid:483)
(cid:486) Leasing fees
(cid:486) Property outgoings
Administration expenses(cid:483)
(cid:486) Responsible entity fees
(cid:486) Compliance expenses (cid:523)listing(cid:481) registry etc(cid:524)
(cid:486) Other fund expenses
Loss on sale of investments(cid:483)
(cid:486) Bakehouse Bonds
(cid:486) Other financial assets
4.
Current Assets (cid:486) Cash and Cash Equivalents
Cash at bank
Total
Cash at bank earns interest at floating rates based on daily bank deposit rates(cid:484)
2015
$’000
(cid:890)(cid:481)757
337
9(cid:481)094
1(cid:481)316
24(cid:890)
1(cid:481)564
4(cid:481)073
(cid:486)
14,731
625
3(cid:481)9(cid:890)1
(cid:523)533(cid:524)
4,073
2015
$’000
230
2(cid:481)0(cid:890)9
2(cid:481)319
7(cid:890)5
231
1(cid:890)4
1(cid:481)200
(cid:486)
35
35
2015
$’000
316
316
2014
$’000
10(cid:481)226
37(cid:890)
10(cid:481)604
2(cid:481)031
106
2(cid:481)137
2(cid:481)067
2(cid:481)790
17,598
(cid:523)306(cid:524)
1(cid:481)727
646
2,067
2014
$’000
101
2(cid:481)036
2(cid:481)137
(cid:890)05
202
163
1(cid:481)170
2(cid:481)000
254
2(cid:481)254
2014
$’000
230
230
1(cid:890)
18
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
BlackWall Property Trust
ARSN 109 684 773
Notes to the Financial Statements
For the Year Ended 30 June 2015
5.
Current Assets (cid:486) Trade and Other Receivables
Trade and other receivables
(cid:486) Related parties
(cid:486) Other parties
Total
2015
$’000
3(cid:890)1
7
388
2014
$’000
1(cid:481)625
234
1,859
Further information on receivables from related parties is set out in the Related Party Transactions note(cid:484)
(cid:836)43(cid:481)000 of Bald Rock Hotel’s debtors have been provided for as at 30 (cid:13)une 2015 (cid:523)2014(cid:483) Nil(cid:524)(cid:484)
6.
Current Assets (cid:486) Other Assets
Prepayments
Total
7.
Non(cid:486)current Assets (cid:486) Financial Assets
Financial assets at F(cid:25)TPL
Total
(a) Financial assets at FVTPL
Investment in unlisted related entities(cid:483)
(cid:486) Bakehouse Bonds
(cid:486) Pyrmont Bridge Trust
(cid:486) Pelathon Pub Group
(cid:486) Planloc Preference Shares
(cid:486) BlackWall Penrith Fund No(cid:484)3
(cid:486) WR(cid:25) Unit Trust
(cid:486) BlackWall Telstra House Trust
(cid:486) BlackWall Opportunities Fund (cid:523)BOF(cid:524)
Investment in unlisted other entities
Total
2015
$’000
12(cid:890)
128
2015
$’000
31(cid:481)764
31,764
21(cid:481)670
2(cid:481)(cid:890)00
2(cid:481)(cid:890)7(cid:890)
1(cid:481)900
541
1(cid:481)400
4
(cid:486)
31(cid:481)193
571
31,764
2014
$’000
159
159
2014
$’000
29(cid:481)404
29,404
21(cid:481)350
(cid:486)
2(cid:481)15(cid:890)
1(cid:481)9(cid:890)5
(cid:486)
900
3
1(cid:481)1(cid:890)5
27(cid:481)5(cid:890)1
1(cid:481)(cid:890)23
29,404
Note
7(cid:523)a(cid:524)
7(cid:523)b(cid:524)
7(cid:523)c(cid:524)
7(cid:523)d(cid:524)
7(cid:523)e(cid:524)
7(cid:523)e(cid:524)
7(cid:523)f(cid:524)
7(cid:523)g(cid:524)
(b) Bakehouse Bonds
The Bakehouse Bonds are CPI linked debt instruments secured against a large scale mixed use property
known as the Bakehouse (cid:20)uarter in North Strathfield(cid:481) Sydney(cid:484) The Bonds’ face value of (cid:836)20 million is
indexed to CPI annually (cid:523)sub(cid:140)ect to impairment assessment(cid:524) and the current value is (cid:836)21(cid:484)7 million(cid:484) The
Bonds will mature on 30 (cid:13)une 2020(cid:484) In addition(cid:481) a coupon of 5(cid:484)5(cid:936) per annum is paid (cid:147)uarterly in arrears(cid:484)
Investment in unlisted other entities represents investments in various managed investment schemes(cid:484)
(c) Pyrmont Bridge Trust
In December 2014(cid:481) BlackWall completed an (cid:836)(cid:890)0 million debt ac(cid:147)uisition with NAB(cid:484) PBT controls an office(cid:481)
media and technology hub on the Western fringe of Sydney CBD’s known as 55 Pyrmont Bridge Road(cid:481)
Pyrmont(cid:484) BOF subscribed for 2(cid:481)(cid:890)00(cid:481)000 units in PBT(cid:481) of which BlackWall is the Responsible Entity(cid:484) BOF is
now consolidated into the Trust(cid:484)
19
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
19
BlackWall Property Trust
ARSN 109 684 773
Notes to the Financial Statements
For the Year Ended 30 June 2015
(d) Pelathon Pub Group
The Trust owns the following Pub Group units(cid:484) The Preferred units are now fully paid to 6 cents per unit
(cid:523)the second instalment of 3(cid:484)6 cents per unit totalling (cid:836)4(cid:890)0(cid:481)000 was paid in (cid:13)une 2015(cid:524)(cid:484)
26(cid:481)641(cid:481)640 Ordinary Units
13(cid:481)333(cid:481)333 Preferred Units
Total
2015
$’000
1(cid:481)91(cid:890)
960
2(cid:481)(cid:890)7(cid:890)
2014
$’000
1(cid:481)75(cid:890)
400
2(cid:481)15(cid:890)
(e) Planloc and BlackWall Penrith Fund No.3
Both investments are property investment securities with an interest in a big box retail property located on
(cid:16)ulgoa Road(cid:481) Penrith(cid:484) The Planloc Preference Shares are preferred e(cid:147)uity securities issued by an unlisted
company(cid:481) Planloc Pty Ltd(cid:484) Planloc’s sole asset is the (cid:16)ulgoa Road property(cid:484) The Planloc Preference Shares
rank in priority to ordinary shares but are subordinated to secured debt(cid:484) These securities earn a coupon of
10(cid:936) per annum and share in any value increase in the real estate held by the issuer(cid:484) BlackWall Penrith
Fund No(cid:484)3 is the third investment syndicate structure over the (cid:16)ulgoa Road property since 2002 and pays
(cid:147)uarterly interest at a rate of 9(cid:936) per annum(cid:484) That fund also has an interest in any increase in the property
value(cid:484)
(f) WRV Unit Trust
WR(cid:25) Unit Trust is a single asset unit trust with an interest in The Woods Action Centre(cid:481) (cid:25)illawood(cid:484) The
property’s key tenants are A(cid:16)F Bowling(cid:481) Chipmunks Playland(cid:481) Sydney Indoor Climbing Gym and (cid:14)artatak
Raceway(cid:484)
(g) BlackWall Opportunities Fund (BOF)
In (cid:13)une 2015(cid:481) the Trust ac(cid:147)uired a further 4(cid:484)1 million units in BOF which has resulted in a controlling
interest in BOF(cid:484) The Trust has now consolidated BOF in its accounts therefore the investment in BOF has
been eliminated(cid:484) Refer to the Controlled Entities note for further details(cid:484)
Further information relating to related party investments is set out in the Related Party Transactions note(cid:484)
8.
Current and Non(cid:486)current Assets (cid:486) Investment Properties
Balance at the beginning of the financial year
Revaluation
Capital improvements
Lease incentives
Straight(cid:486)line rental income
Depreciation
Purchase of Bald Rock Hotel (cid:523)net(cid:524)
Balance at the end of the financial year
2015
$’000
(cid:890)3(cid:481)950
3(cid:481)9(cid:890)1
646
612
337
(cid:523)2(cid:481)176(cid:524)
(cid:486)
87,350
2014
$’000
(cid:890)1(cid:481)350
1(cid:481)727
13
(cid:486)
37(cid:890)
(cid:523)2(cid:481)253(cid:524)
2(cid:481)735
83,950
20
20
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
BlackWall Property Trust
ARSN 109 684 773
Notes to the Financial Statements
For the Year Ended 30 June 2015
APN (cid:28)andina
Chancellor Homemaker Centre
Silver @ The Exchange
Canberra Eye Hospital
Toowoomba
Coolum
Bald Rock Hotel (cid:523)held as current asset(cid:524)
Total
2015
$’000
24(cid:481)750
22(cid:481)000
1(cid:890)(cid:481)500
(cid:890)(cid:481)500
6(cid:481)100
4(cid:481)000
(cid:890)3(cid:481)(cid:890)50
3(cid:481)500
87,350
2014
$’000
24(cid:481)100
20(cid:481)500
1(cid:890)(cid:481)250
7(cid:481)900
6(cid:481)100
4(cid:481)000
(cid:890)0(cid:481)(cid:890)50
3(cid:481)100
83,950
The Bald Rock Hotel was sold in August 2015 for (cid:836)3(cid:484)5 million with completion scheduled for September
2015(cid:484)
The Trust obtained a new independent valuation for APN (cid:28)andina in October 2014(cid:484) The valuation was
performed by registered independent valuers by reference to recent market sales of similar properties and
common valuation methodologies including capitalisation of income pro(cid:140)ections and discounted cash flow
pro(cid:140)ections(cid:484)
For the year ended 30 (cid:13)une 2015(cid:481) the Directors have updated their assessment of the fair value of the
properties(cid:484) Chancellor Homemaker Centre has been revalued to the highest offer made in the recent sale
process(cid:484) The offer was not accepted by the Responsible Entity(cid:484) The current holding values generate the
following initial capitalisation rates(cid:483)
APN (cid:28)andina
Chancellor Homemaker Centre
Silver @ The Exchange
Canberra Eye Hospital
Toowoomba
Coolum
Value $’000
24(cid:481)750
22(cid:481)000
1(cid:890)(cid:481)500
(cid:890)(cid:481)500
6(cid:481)100
4(cid:481)000
9.
Current Liabilities (cid:486) Trade and Other Payables
Trade payables(cid:483)
(cid:486) Related parties
(cid:486) Other parties
Sundry payables and accrued expenses
Deposit received for Bald Rock Hotel
Total
Cap Rate
10(cid:484)0(cid:936)
(cid:890)(cid:484)3(cid:936)
(cid:890)(cid:484)5(cid:936)
(cid:890)(cid:484)5(cid:936)
9(cid:484)(cid:890)(cid:936)
10(cid:484)5(cid:936)
2014
$’000
311
524
(cid:890)35
207
(cid:486)
1,042
2015
$’000
41
524
565
193
150
908
Further information relating to trade payables from related parties is set out in the Related Party
Transactions note(cid:484)
21
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
21
BlackWall Property Trust
ARSN 109 684 773
Notes to the Financial Statements
For the Year Ended 30 June 2015
10.
Current Liabilities (cid:486) Other liabilities
Rental income received in advance
Bald Rock facility
Loan from BlackWall to Bald Rock Fund
Total
2015
$’000
262
1(cid:481)256
450
1,968
2014
$’000
3
(cid:486)
(cid:486)
3
The Bald Rock (cid:523)CBA(cid:524) facility of (cid:836)1(cid:481)256(cid:481)000 is secured over the Bald Rock Hotel(cid:484) Both the facility and the loan
from BlackWall will be fully repaid from the proceeds of the sale of the Bald Rock Hotel(cid:484)
11.
Current and Non(cid:486)current Liabilities (cid:486) Borrowings
Current (2014: held as Non(cid:486)current)
NAB bill facility
Bald Rock facility
Loan from BlackWall to Bald Rock Fund
Total
Note
11(cid:523)a(cid:524)
2015
$’000
50(cid:481)000
(cid:486)
(cid:486)
50,000
2014
$’000
50(cid:481)000
1(cid:481)256
465
51,721
(a) NAB bill facility
The facility is secured by registered first mortgages over the freehold land and buildings (cid:523)refer to the
Investment Properties note excluding the Bald Rock Hotel(cid:524)(cid:484) The borrowings will mature in (cid:16)ay 2016 and
therefore are classified as a current liability(cid:484) They are sub(cid:140)ect to a margin of 1(cid:484)95(cid:936) p(cid:484)a(cid:484) (cid:523)(cid:13)une 2014(cid:483) 1(cid:484)95(cid:936)
p(cid:484)a(cid:484)(cid:524) over BBS(cid:28)(cid:484)
Refer to the Interest Rate Hedges and Financial Risk (cid:16)anagement notes below for further details(cid:484)
12.
Current and Non(cid:486)current Liabilities – Interest Rate Hedges
Interest rate hedges (cid:523)current(cid:524)
Interest rate hedges (cid:523)non(cid:486)current(cid:524)
Total
2015
$’000
(cid:486)
5(cid:890)0
580
2014
$’000
47
(cid:486)
47
Details of the terms are as follows(cid:483)
(cid:486) (cid:836)20 million collar with a floor rate of 2(cid:484)72(cid:936) p(cid:484)a(cid:484) and a cap rate of 4(cid:484)55(cid:936) p(cid:484)a(cid:484) The collar will expire in (cid:13)uly
2019(cid:484)
(cid:486) (cid:836)30 million collar with a floor rate of 2(cid:484)24(cid:936) p(cid:484)a(cid:484) and a cap rate of 3(cid:484)24(cid:936) p(cid:484)a(cid:484) The collar will expire in
(cid:13)anuary 2020(cid:484)
The gain or loss from remeasuring the interest rate collar at fair value is recognised in profit and loss(cid:484) As
the current interest rate is below the floor rates(cid:481) any further interest rate reduction will not have a profit
and loss impact(cid:484) If interest rates were to move above 4(cid:484)55(cid:936) the maximum increase in interest expenses as a
result would be (cid:836)666(cid:481)000(cid:484)
22
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
22
BlackWall Property Trust
ARSN 109 684 773
Notes to the Financial Statements
For the Year Ended 30 June 2015
13.
Distributions
Parent
2014 final distribution 3(cid:484)5 cents paid in October 2014 (cid:523)2013(cid:483) nil(cid:524)
2015 interim distribution 5(cid:484)5 cents paid in April 2015 (cid:523)2014(cid:483) 7(cid:484)5 cents(cid:524)
Total
2015
$’000
1(cid:481)634
2(cid:481)56(cid:890)
4,202
2014
$’000
(cid:486)
1(cid:481)556
1,556
In (cid:16)arch 2015(cid:481) units on issue were consolidated on a 10 to 1 basis(cid:484) Pre(cid:486)consolidation distributions have
been restated on this basis(cid:484) In addition(cid:481) the Board has declared a final distribution of 6 cents per unit to be
paid on 6 November 2015(cid:484)
14.
Earnings Per Unit
Basic and diluted EPU
Calculated as follows(cid:483)
Profit for the year
Weighted average number of units for EPU
Weighted average number of units for EPU (cid:523)less BWR holdings in itself(cid:524)
2015
(cid:836)0(cid:484)14
2014
(cid:836)0(cid:484)03
(cid:836)6(cid:481)336(cid:481)000
46(cid:481)693(cid:481)330
46(cid:481)646(cid:481)247
(cid:836)6(cid:481)150(cid:481)000
210(cid:481)366(cid:481)(cid:890)35
210(cid:481)366(cid:481)(cid:890)35
(cid:16)ovements in the number of units from 2014 to 2015 relate to a rights issue and unit consolidation during
the (cid:13)une 2014 and (cid:16)arch 2015 periods respectively(cid:484) Profit for (cid:13)une 2014 included the reversal of a litigation
provision of (cid:836)2(cid:484)(cid:890) million and litigation related expenses of (cid:836)2(cid:484)2 million (cid:523)(cid:836)2 million loss on sale of Bakehouse
Bonds and (cid:836)165(cid:481)000 for litigation expenses(cid:524)(cid:484)
15.
Auditor’s Remuneration
Remuneration of ES(cid:25) for(cid:483)
(cid:486) Audit and assurance services
(cid:486) Taxation services
Total
16.
Commitments and Contingencies
2015
$’000
43
12
55
2014
$’000
45
10
55
Future minimum rental receivable under non(cid:486)cancellable operating leases as at 30 (cid:13)une are as follows(cid:483)
Receivable within 1 year
Receivable within 2 – 5 years
Receivable more than 5 years
Total
2015
$’000
7(cid:481)559
24(cid:481)371
1(cid:890)(cid:481)99(cid:890)
50,928
2014
$’000
7(cid:481)55(cid:890)
23(cid:481)905
22(cid:481)1(cid:890)2
53,645
There are no operating lease or other capital commitments as at 30 (cid:13)une 2015 (cid:523)2014(cid:483) Nil(cid:524)(cid:484) There are no
contingencies as at 30 (cid:13)une 2015 (cid:523)2014(cid:483) (cid:836)nil(cid:524)(cid:484)
23
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
23
BlackWall Property Trust
ARSN 109 684 773
Notes to the Financial Statements
For the Year Ended 30 June 2015
17.
Reconciliation of Operating Cash Flows
Profit for the year
Non(cid:486)cash flows in profit(cid:483)
(cid:486) Unrealised gain on revaluation
(cid:486) Depreciation
(cid:486) Straight(cid:486)line rental income
(cid:486) Loss on sale of financial assets
(cid:486) Litigation provisions
Changes in assets and liabilities(cid:483)
(cid:523)Increase(cid:524) (cid:512) decrease in trade and other receivables
Increase in other assets
Decrease in trade and other payables
Increase (cid:512) (cid:523)decrease(cid:524) in other liabilities
Net cash flows from operating activities
18.
Subsequent Events
2015
$’000
6(cid:481)491
(cid:523)4(cid:481)073(cid:524)
2(cid:481)176
(cid:523)337(cid:524)
35
(cid:486)
(cid:523)154(cid:524)
(cid:523)5(cid:890)1(cid:524)
(cid:523)329(cid:524)
260
3,488
2014
$’000
6(cid:481)404
(cid:523)2(cid:481)067(cid:524)
2(cid:481)253
(cid:523)37(cid:890)(cid:524)
2(cid:481)254
(cid:523)2(cid:481)790(cid:524)
624
(cid:486)
(cid:523)266(cid:524)
(cid:523)56(cid:524)
5,978
Since 30 (cid:13)une 2015(cid:481) the Trust purchased 150(cid:481)515 ordinary units on(cid:486)market as part of the Trust’s buy(cid:486)back
(cid:523)commenced on 7 (cid:13)uly 2015(cid:524)(cid:484) A total cost of (cid:836)1(cid:890)5(cid:481)000 was deducted from issued units(cid:484)
To the best of the Directors’ knowledge(cid:481) since the end of the financial year there have been no other matters
or circumstances that have materially affected the Trust’s operations or may materially affect its operations(cid:481)
state of affairs or the results of operations in future financial years(cid:484)
19.
Controlled Entities
Name
Country of incorporation
Percentage Owned
Parent entity:
BlackWall Property Trust
Controlled entity of parent entity:
(cid:28)andina Sub(cid:486)trust
Bald Rock Fund
BlackWall Opportunities Fund
Australia
Australia
Australia
Australia
2015
100(cid:936)
100(cid:936)
39(cid:936)
29(cid:484)79(cid:936)
2014
100(cid:936)
100(cid:936)
39(cid:936)
16(cid:484)54(cid:936)
On 30 (cid:13)une 2015(cid:481) the Trust ac(cid:147)uired a further 4(cid:484)1 million units in BOF that has resulted in a controlling
interest in BOF (cid:523)9(cid:481)2(cid:890)0(cid:481)52(cid:890) BOF units(cid:524)(cid:484) Outside e(cid:147)uity interests represent non(cid:486)BWR interests in the Bald
Rock Fund and BOF(cid:484)
20.
Related Party Transactions
(a) Related Entities
In these financial statements(cid:481) related parties are parties as defined by AASB 124 Related Party Disclosures
rather than the definition of related parties under the Corporations Act 2001 and ASX Listing Rules(cid:484)
24
24
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
BlackWall Property Trust
ARSN 109 684 773
Notes to the Financial Statements
For the Year Ended 30 June 2015
(b) Interests in Related Parties
As at year end the Trust owned units in the following funds(cid:484) The funds and the Trust have a common
Responsible Entity or are related entities of BlackWall(cid:483)
Entity
Holdings (No.’000)
Bakehouse Bonds
Pyrmont Bridge Trust
Pelathon Pub Group (cid:523)Ordinary(cid:524)
Pelathon Pub Group (cid:523)Preferred(cid:524)
Planloc Preference Shares
BlackWall Penrith Fund No(cid:484) 3
WR(cid:25) Unit Trust
BlackWall Telstra House Trust
BlackWall Opportunities Fund
BlackWall Penrith Fund No(cid:484) 2
2015
20(cid:481)000
2(cid:481)(cid:890)00
26(cid:481)642
13(cid:481)333
1(cid:481)900
541
1(cid:481)400
4
9(cid:481)2(cid:890)1
(cid:486)
2014
20(cid:481)000
(cid:486)
26(cid:481)642
13(cid:481)333
1(cid:481)9(cid:890)5
(cid:486)
900
3
5(cid:481)154
(cid:486)
Distribution Received ($’000)
2014
1(cid:481)513
(cid:486)
(cid:486)
(cid:486)
(cid:890)(cid:890)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
56
1,657
2015
1(cid:481)100
(cid:486)
(cid:486)
(cid:486)
199
55
52
(cid:486)
(cid:486)
(cid:486)
1,406
For further details refer to the Financial Assets note(cid:484)
All interests in BOF were eliminated as the Trust has now consolidated BOF in its accounts(cid:484) Income
received from WR(cid:25) was in the form of returns of capital(cid:484)
(c) Related Entity Transactions
In accordance with the terms of the Trust Constitution and the Information (cid:16)emorandum(cid:481) the
Responsible Entity is entitled to receive a management fee based on 0(cid:484)65(cid:936) p(cid:484)a(cid:484) of the value of the Trust’s
assets and the recovery of other administrative costs(cid:484)
All transactions with related parties were made on normal commercial terms and conditions and at
market rates(cid:481) and were approved by the Board(cid:484) Related party transactions that occurred during the year
are as follows(cid:483)
Expenses
Remuneration paid to Responsible Entity
Property management(cid:481) leasing fees and accounting fees
Underwriting fees
Interest paid
Outstanding Balances with Related Parties
Receivables from related parties (cid:486) current
Payables to related parties (cid:486) current
Loan from related parties –current (cid:523)2014(cid:483) non(cid:486)current(cid:524)
2015
$’000
7(cid:890)5
411
(cid:486)
25
1,221
3(cid:890)1
41
450
2014
$’000
(cid:890)05
394
156
14
1,369
1(cid:481)625
311
465
25
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
25
BlackWall Property Trust
ARSN 109 684 773
Notes to the Financial Statements
For the Year Ended 30 June 2015
21.
Parent Entity Disclosures
The following summarises the financial information of the Trust’s parent entity(cid:481) BlackWall Property Trust(cid:481) as
at and for the year ended 30 (cid:13)une(cid:484)
Profit for the year
Total comprehensive income for the year
Financial position:
Current assets
Non(cid:486)current assets
Total assets
Current liabilities
Non(cid:486)current liabilities
Total liabilities
Net assets attributable to unitholders
2015
$’000
6(cid:481)479
6,479
779
115(cid:481)052
115,831
(cid:523)50(cid:481)345(cid:524)
(cid:523)5(cid:890)0(cid:524)
(50,925)
64,906
2014
$’000
6(cid:481)127
6,127
2(cid:481)034
112(cid:481)19(cid:890)
114,232
(cid:523)951(cid:524)
(cid:523)50(cid:481)000(cid:524)
(50,951)
63,281
The parent entity had no contingencies at 30 (cid:13)une 2015 (cid:523)2014(cid:483) Nil(cid:524)(cid:484) The parent entity has not entered into
any capital commitments as at 30 (cid:13)une 2015 (cid:523)2014(cid:483) Nil(cid:524)(cid:484)
22.
Financial Risk Management
(a) Financial risk management
The main risks the Trust is exposed to through its financial instruments are market risk (cid:523)including
interest rate risk and price risk(cid:524)(cid:481) credit risk and li(cid:147)uidity risk(cid:484) The Trust(cid:821)s principal financial instruments
are financial assets and borrowings (cid:523)including interest rate swaps(cid:524)(cid:484) Additionally(cid:481) the Trust has various
other financial instruments such as cash(cid:481) trade debtors and trade creditors(cid:481) which arise directly from its
operations(cid:484)
This note presents information about the Trust(cid:821)s exposure to each of the above risks(cid:481) their ob(cid:140)ectives(cid:481)
policies and processes for measuring and managing risk(cid:481) and the management of capital(cid:484)
The Board of Directors of the Responsible Entity has overall responsibility for the establishment and
oversight of the risk management framework(cid:484) The Board monitors the Trust’s risk exposure by regularly
reviewing finance and property markets(cid:484) (cid:16)a(cid:140)or financial instruments held by the Trust which are sub(cid:140)ect
to financial risk analysis are as follows(cid:483)
Financial assets
Financial assets at F(cid:25)TPL
Financial liabilities
Borrowings
(b) Market risk
(i)
Interest rate risk (cid:3)
2015
$’000
31(cid:481)764
50(cid:481)000
2014
$’000
29(cid:481)404
51(cid:481)721
The Trust has exposure to market risk for changes in variable interest rates on borrowings(cid:484) This
risk is managed by the Trust by entering into interest rate swap contracts with financial institutions
to protect part of the borrowings (cid:523)(cid:836)50 million(cid:524) as detailed in Borrowings note(cid:484) The ma(cid:140)or financial
26
26
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
BlackWall Property Trust
ARSN 109 684 773
Notes to the Financial Statements
For the Year Ended 30 June 2015
asset (cid:486) the Trust’s interest in Bakehouse Bonds is sub(cid:140)ect to a fixed coupon rate of 5(cid:484)5(cid:936) p(cid:484)a(cid:484) and as a
result is not directly exposed to the interest rate risk(cid:484) However(cid:481) the Bonds’ value is linked to
inflation and therefore affected by the inflation rate(cid:484)
The Trust’s exposure to interest rate risk(cid:481) which is the risk that a financial instrument’s value will
fluctuate as a result of changes in market interest rates(cid:481) and the current interest rates on
borrowings are as follows(cid:483)
Borrowings – unhedged portion
2015
2014
Interest rate
% p.a.
(cid:486)
Balance
$’000
(cid:486)
Interest rate
% p.a.
4(cid:484)49
Balance
$’000
(cid:523)42(cid:481)721(cid:524)
During the year the Trust entered into a (cid:836)20 million collar with a floor rate of 2(cid:484)72(cid:936) p(cid:484)a(cid:484) and a cap
rate of 4(cid:484)55(cid:936) p(cid:484)a(cid:484) and a (cid:836)30 million collar with a floor rate of 2(cid:484)24(cid:936) p(cid:484)a(cid:484) and a cap rate of 3(cid:484)24(cid:936) p(cid:484)a(cid:484)
Both have 5 year terms (cid:523)2014(cid:483) 4(cid:484)22(cid:936) p(cid:484)a(cid:484) for one hedge (cid:836)9 million(cid:524)(cid:484) See the Interest Rate Hedges
note for a sensitivity analysis(cid:484)
(ii) Price risk
The Trust is not exposed to any ma(cid:140)or price risk except for a material change in the property
valuation of the Bakehouse (cid:20)uarter(cid:481) which could potentially lead to a decrease in the Bakehouse
Bonds’ value on their maturity(cid:484)
(c) Credit risk
The Trust is not exposed to any ma(cid:140)or credit risk except for the Bakehouse Bonds(cid:484) The credit risk for the
Bakehouse Bonds is of the same nature as the price risk described above(cid:484)
(d) Liquidity risk
The ma(cid:140)or li(cid:147)uidity risks faced by the Trust is its ability to realise assets(cid:484) The Trust has borrowings of (cid:836)52
million and total gross assets of (cid:836)120 million(cid:481) of which (cid:836)(cid:890)4 million are income producing real estate for
which there is a deep and active market(cid:484) At the end of the reporting period(cid:481) the Trust held the following
financial arrangements(cid:483)
At 30 June 2015
Financial assets
Cash and cash e(cid:147)uivalents
Trade and other receivables
Financial assets at F(cid:25)TPL
Financial liabilities
Trade and other payables
Borrowings
Interest rate hedges
Maturing
within 1 year
$’000
Maturing 1
– 5 years
$’000
Maturing
over 5 years
$’000
316
3(cid:890)(cid:890)
(cid:486)
704
90(cid:890)
50(cid:481)000
(cid:486)
50,908
(cid:486)
(cid:486)
31(cid:481)764
31,764
(cid:486)
(cid:486)
457
457
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
123
123
Total
$’000
316
3(cid:890)(cid:890)
31(cid:481)764
32,468
90(cid:890)
50(cid:481)000
5(cid:890)0
51,488
27
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
27
BlackWall Property Trust
ARSN 109 684 773
Notes to the Financial Statements
For the Year Ended 30 June 2015
At 30 June 2014
Financial assets
Cash and cash e(cid:147)uivalents
Trade and other receivables
Financial assets at F(cid:25)TPL
Financial liabilities
Trade and other payables
Interest rate hedges
Borrowings
(e) Fair value measurements
(i) Fair value hierarchy
Maturing
within 1
year
$’000
Maturing 1
– 5 years
$’000
Maturing
over 5 years
$’000
230
1(cid:481)(cid:890)59
(cid:486)
2,089
1(cid:481)042
47
(cid:486)
1,089
(cid:486)
(cid:486)
(cid:890)(cid:481)054
8,054
(cid:486)
(cid:486)
51(cid:481)721
51,721
(cid:486)
(cid:486)
21(cid:481)350
21,350
(cid:486)
(cid:486)
(cid:486)
(cid:486)
Total
$’000
230
1(cid:481)(cid:890)59
29(cid:481)404
31,493
1(cid:481)042
47
51(cid:481)721
52,810
AASB 7 Financial Instruments: Disclosures re(cid:147)uires disclosure of fair value measurements by level of the
following fair value measurement hierarchy(cid:483)
(cid:120) Level 1 (cid:486) (cid:20)uoted prices (cid:523)unad(cid:140)usted(cid:524) in active markets for identical assets or liabilities(cid:481)
(cid:120) Level 2 (cid:486) Inputs other than (cid:147)uoted prices included within Level 1 that are observable for the asset(cid:481)
either directly (cid:523)as prices(cid:524) or indirectly (cid:523)derived from prices(cid:524)(cid:481) and
(cid:120) Level 3 (cid:486) Inputs for the asset that are not based on observable market data (cid:523)unobservable inputs(cid:524)(cid:484)
The fair value of financial assets and liabilities traded in active markets is subse(cid:147)uently based on their
(cid:147)uoted market prices at the end of the reporting period without any deduction for estimated future
selling costs(cid:484) The (cid:147)uoted market price used for financial assets held by the Trust is the current bid price
and the (cid:147)uoted market price for financial liabilities is the current asking price(cid:484)
The fair value of financial assets and liabilities that are not traded in an active market are determined
using valuation techni(cid:147)ues(cid:484) For investments in related party unlisted unit trusts(cid:481) fair values are
determined by reference to published unit prices of these investments which are based on the net
tangible assets of the investments(cid:484)
The following table presents the Trust’s financial assets and liabilities measured at fair value as at 30
(cid:13)une(cid:484) Refer to the Critical Accounting Estimates and (cid:13)udgment note for further details of assumptions
used and how fair values are measured(cid:484)
At 30 June 2015
Financial assets at F(cid:25)TPL
(cid:486) E(cid:147)uities
(cid:486) Debt instruments
Interest rate hedges
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total balance
$’000
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:523)5(cid:890)0(cid:524)
10(cid:481)174
21(cid:481)590
31(cid:481)764
(cid:486)
10(cid:481)174
21(cid:481)590
31(cid:481)764
(cid:523)5(cid:890)0(cid:524)
2(cid:890)
28
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
BlackWall Property Trust
ARSN 109 684 773
Notes to the Financial Statements
For the Year Ended 30 June 2015
At 30 June 2014
Financial assets at F(cid:25)TPL
(cid:486) E(cid:147)uities
(cid:486) Debt instruments
Interest rate hedges
Level 1
$’000
Level 2
$’000
Level 3
$’000
Total balance
$’000
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:486)
(cid:523)47(cid:524)
(cid:890)(cid:481)054
21(cid:481)350
29(cid:481)404
(cid:486)
(cid:890)(cid:481)054
21(cid:481)350
29(cid:481)404
(cid:523)47(cid:524)
(ii) Valuation techniques used to derive Level 3 fair values
The fair value of the unlisted securities is determined by reference to the net assets of the underlying
entities(cid:484) The fair value of the Bakehouse Bonds is measured by its face value ad(cid:140)usted for annual CPI
movements(cid:481) sub(cid:140)ect to recoverability assessment(cid:484) All these instruments are included in Level 3(cid:484)
(iii) Fair value measurements using significant observable inputs (Level 3)
The following table is a reconciliation of the movements in financial assets classified as Level 3 for the
year ended 30 (cid:13)une(cid:483)
At 30 June 2015
Balance at the beginning of the year
Purchases
Disposals(cid:512)returns of capital
Fair value movement
Consolidation of BOF (cid:523)eliminate investment(cid:524)
Balance at the end of the year
At 30 June 2014
Balance at the beginning of the year
Purchases
Disposals(cid:512)returns of capital
Fair value movement
Balance at the end of the year
$’000
29(cid:481)404
4(cid:481)626
(cid:523)1(cid:481)706(cid:524)
625
(cid:523)1(cid:481)1(cid:890)5(cid:524)
31,764
$’000
3(cid:890)(cid:481)323
4(cid:481)367
(cid:523)12(cid:481)9(cid:890)0(cid:524)
(cid:523)306(cid:524)
29,404
The fair value of financial assets at F(cid:25)TPL is determined by reference to the net assets of the underlying
entities(cid:484) All these instruments are included in Level 3(cid:484) There were no transfers between Level 1(cid:481) 2 and 3
financial instruments during the year(cid:484) For all other financial assets and liabilities carrying value is an
approximation of fair value(cid:484)
23.
Critical Accounting Estimates and Judgments
The Directors of the Responsible Entity evaluate estimates and (cid:140)udgments incorporated into the financial
statements based on historical knowledge and best available current information(cid:484) Estimates assume a
reasonable expectation of future events and are based on current trends and economic data(cid:481) obtained both
externally and within the Trust(cid:484)
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(cid:484) Refer to Trade and Other Receivables note for impairment details(cid:484)
29
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
29
BlackWall Property Trust
ARSN 109 684 773
Notes to the Financial Statements
For the Year Ended 30 June 2015
Key estimates – financial assets
All investments have been classified as financial assets at F(cid:25)TPL with gains and losses recognised in profit
or loss(cid:484) The fair value of the unlisted securities is determined by reference to the net assets of the
underlying entities(cid:484) The fair value of the Bakehouse Bonds is measured by its face value ad(cid:140)usted for annual
CPI movements and is sub(cid:140)ect to impairment(cid:484)
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(cid:484) At the end of each reporting period(cid:481) the Directors of the Responsible Entity update their assessment
of the fair value of each property(cid:481) taking into account the most recent independent valuations(cid:484) The key
assumptions used in this determination are set out in Investment Properties note(cid:484) If there are any material
changes in the key assumptions due to changes in economic conditions(cid:481) the fair value of the investment
properties may differ and may need to be re(cid:486)estimated(cid:484)
24.
Statement of Significant Accounting Policies
The financial statements cover BlackWall Property Trust and its controlled entities(cid:481) the (cid:28)andina Sub(cid:486)trust(cid:481)
Bald Rock Fund and BlackWall Opportunities Fund(cid:484) BlackWall Property Trust is a managed investment
scheme registered in Australia(cid:484) The (cid:28)andina Sub(cid:486)trust is a discretionary trust established and domiciled in
Australia(cid:484) Bald Rock Fund was established on 17 September 2013(cid:484) BlackWall Opportunities Fund is a
registered managed investment scheme and has been consolidated into the Trust’s accounts on 30 (cid:13)une
2015(cid:484)
The financial statements for the Trust were authorised for issue in accordance with a resolution of the
Directors of the Responsible Entity on the date they were issued(cid:484)
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(cid:484) The financial statements of the Trust also
comply with IFRS as issued by the International Accounting Standards Board(cid:484)
The financial statements have been prepared on an accruals basis and are based on historical costs modified
by the revaluation of selected non(cid:486)current assets(cid:481) financial assets and financial liabilities for which the fair
value basis of accounting has been applied(cid:484)
The Trust is a group of the kind referred to in ASIC Class Order 9(cid:890)(cid:512)100(cid:481) dated 10 (cid:13)uly 199(cid:890)(cid:481) and in
accordance with that Class Order amounts in the Directors’ Report and the financial statements are rounded
off to the nearest thousand dollars(cid:481) unless otherwise indicated(cid:484)
The following is a summary of the material accounting policies adopted by the Trust in the preparation of
the financial statements(cid:484) The accounting policies have been consistently applied(cid:481) unless otherwise stated(cid:484)
New and amended standards adopted
The Trust has not elected to adopt any accounting standards or amendments to standards or
interpretations issued prior to the date of this report where application is not mandatory for the year ended
30 (cid:13)une 2015(cid:484) (cid:16)anagement has considered the accounting standards that have been issued but are not yet
effective and do not anticipate any having a significant impact on the financial statements(cid:484)
30
30
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
BlackWall Property Trust
ARSN 109 684 773
Notes to the Financial Statements
For the Year Ended 30 June 2015
Going concern
The Trust has a current asset deficiency as at 30 (cid:13)une 2015 as bank borrowings were classified as current
liabilities(cid:484) Given the Trust generates operating cashflow of around (cid:836)3(cid:484)5 million per annum(cid:481) the Directors do
not consider there to be a going concern issue(cid:484) These financial statements have been prepared on a going
concern basis(cid:481) which contemplates continuity of normal business activities and the realisation of assets and
settlement of liabilities in the ordinary course of business(cid:484)
Comparative figures
When re(cid:147)uired by Accounting Standards(cid:481) comparative figures have been ad(cid:140)usted to conform to changes in
presentation for the current financial year(cid:484) Any change of presentation has been made in order to make the
financial statements more relevant and useful to the user(cid:484)
Presentation currency
Both the functional and presentation currency of the Trust is Australian dollars(cid:484)
Principles of Consolidation
Controlled entities
The consolidated financial statements comprise the financial statements of the Trust (cid:523)refer to Controlled
Entities note(cid:524)(cid:484) The controlled entity has a (cid:13)une financial year end and uses consistent accounting policies(cid:484)
Investments in the controlled entity held by the parent entity are accounted for at cost less any impairment
charges (cid:523)refer to Parent Entity Disclosures note(cid:524)(cid:484)
Subsidiaries are all those entities over which the consolidated entity has control(cid:484) The consolidated entity
controls an entity when the consolidated entity is exposed to(cid:481) or has rights to(cid:481) variable returns from its
involvement with the entity and has the ability to affect those returns through its power to direct the
activities of the entity(cid:484) Subsidiaries are fully consolidated from the date on which control is transferred to
the consolidated entity(cid:484) They are de(cid:486)consolidated from the date that control ceases(cid:484)
Inter(cid:486)entity balances
All inter(cid:486)entity balances and transactions between entities in the Trust(cid:481) including any unrealised profits or
losses(cid:481) have been eliminated on consolidation(cid:484) Accounting policies of the controlled entity have been
changed where necessary to ensure consistencies with those policies applied by the parent entity(cid:484)
Impairment of assets
At each reporting date(cid:481) the Trust reviews the carrying values of its assets to determine whether there is any
indication that those assets have been impaired(cid:484)
If such an indication exists(cid:481) the recoverable amount of the asset(cid:481) being the higher of the asset’s fair value
less costs to sell and value in use(cid:481) is compared to the asset’s carrying value(cid:484) In assessing value in use(cid:481) either
the estimated future cash flows are discounted to their present value using a pre(cid:486)tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset(cid:481) or the
income of the asset is capitalised at its relevant capitalisation rate(cid:484)
An impairment loss is recognised if the carrying value of an asset exceeds its recoverable amount(cid:484)
Impairment losses are expensed to the income statement(cid:484)
31
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
31
BlackWall Property Trust
ARSN 109 684 773
Notes to the Financial Statements
For the Year Ended 30 June 2015
Impairment losses recognised in prior periods are assessed at each reporting date for any indication that
the loss has decreased or no longer exists(cid:484) An impairment loss is reversed if there has been a change in the
estimates used to determine the recoverable amount(cid:484) 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(cid:481) net of
depreciation or amortisation(cid:481) if no impairment loss has been recognised(cid:484)
Financial Instruments
Derivatives (Interest rate hedges)
The Trust uses derivative financial instruments such as interest rate swaps to hedge its risks associated
with interest rates(cid:484) Such derivative financial instruments are initially recognised at fair value on the date
the derivative contract is entered into and are subse(cid:147)uently remeasured to fair value(cid:484) Derivatives are
carried as assets when their fair value is positive and as liabilities when their fair value is negative(cid:484)
The fair values of interest rate swap and collar are determined by reference to market values for similar
instruments(cid:484) Any gains or losses arising from changes in the fair value of derivatives are taken directly to
profit or loss for the year(cid:484)
Non(cid:486)derivative financial instruments
Non(cid:486)derivative financial instruments comprise investments in e(cid:147)uity and debt instruments(cid:481) trade and other
receivables(cid:481) cash and cash e(cid:147)uivalents(cid:481) loans and borrowings(cid:481) and trade and other payables(cid:484)
Non(cid:486)derivative financial instruments are recognised at fair value plus(cid:481) for instruments not at fair value
through profit or loss(cid:481) any directly attributable transaction costs(cid:484) Subse(cid:147)uent to initial recognition non(cid:486)
derivative financial instruments are measured as described below(cid:484)
Recognition
A financial instrument is recognised if the Trust becomes a party to the contractual provisions of the
instrument(cid:484) Financial assets are recognised 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(cid:484) Purchases and sales of financial assets are
accounted for at trade date(cid:481) i(cid:484)e(cid:484) the date that the Trust commits itself to purchase or sell the asset(cid:484) Financial
liabilities are derecognised if the Trust’s obligations specified in the contract expire or are discharged or
cancelled(cid:484)
Loans and receivables
Loans and receivables including loans to related entities and to key management personnel are non(cid:486)
derivative financial assets with fixed or determinable payments that are not (cid:147)uoted in an active market and
are stated at amortised cost using the effective interest rate method(cid:484) Gains and losses are recognised in
profit and loss when the loans and receivables are derecognised or impaired(cid:481) as well as through the
amortisation process(cid:484)
Fair value
The fair values of investments that are actively traded in organised financial markets are determined by
reference to (cid:147)uoted market bid prices at the close of business on the balance date(cid:484) For investments in
related party unlisted unit trusts(cid:481) 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(cid:484)
32
32
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
BlackWall Property Trust
ARSN 109 684 773
Notes to the Financial Statements
For the Year Ended 30 June 2015
Impairment
At each reporting date(cid:481) the Trust assesses whether there is ob(cid:140)ective evidence that a financial instrument
has been impaired(cid:484) A financial instrument is considered to be impaired if ob(cid:140)ective evidence indicates that
one or more events have had a negative effect on the estimated future cash flows of that asset(cid:484) In the case of
available(cid:486)for(cid:486)sale financial instruments(cid:481) a prolonged decline in the value of the instrument is considered to
determine whether an impairment has arisen(cid:484)
An impairment loss in respect of a financial instrument measured at amortised cost is calculated as the
difference between its carrying amount(cid:481) and the present value of the estimated future cash flows discounted
at the original effective interest rate(cid:484) An impairment loss in respect of an available(cid:486)for(cid:486)sale financial asset is
calculated by reference to its fair value(cid:484)
Individually significant financial instruments are tested for impairment on an individual basis(cid:484) The
remaining financial assets are assessed collectively in groups that share similar credit risk characteristics(cid:484)
Impairment losses are recognised in the statement of profit or loss and other comprehensive income(cid:484) An
impairment loss is reversed if the reversal can be related ob(cid:140)ectively to an event occurring after the
impairment loss was recognised(cid:484) For financial instruments measured at amortised cost(cid:481) the reversal is
recognised in profit and loss(cid:484)
Financial liabilities
Non(cid:486)derivative financial liabilities are recognised at amortised cost(cid:481) comprising original debt less principal
payments and unrealised movements(cid:484)
Financial assets
The Trust classifies its financial assets in the following measurement categories(cid:483) those to be measured
subse(cid:147)uently at fair value and those to be measured at amortised cost(cid:484) The classification depends on the
Trust’s business model for managing the financial assets and the contractual terms of the cash flows(cid:484)
(i) Debt investments – at fair value through profit or loss
The Bakehouse Bonds are classified as a debt investment at fair value through profit or loss(cid:484)
(ii) Equity investments
All e(cid:147)uity investments are measured at fair value(cid:484) E(cid:147)uity investments that are held for trading are
measured at fair value through profit or loss(cid:484)
Measurement
At initial recognition(cid:481) the Trust measures a financial asset at its fair value(cid:484) Transaction costs of financial
assets carried at fair value through profit or loss are expensed in profit or loss(cid:484)
A gain or loss on a debt investment that is subse(cid:147)uently measured at fair value and is not part of a hedging
relationship is recognised in profit or loss and presented net in the profit or loss within other income or
other expenses in the period in which it arises(cid:484)
The Trust subse(cid:147)uently measures all e(cid:147)uity investments at fair value(cid:484) Changes in the fair value of financial
assets at fair value through profit or loss are recognised in profit or loss as applicable(cid:484)
33
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
33
BlackWall Property Trust
ARSN 109 684 773
Notes to the Financial Statements
For the Year Ended 30 June 2015
Assets Classified as Held for Sale
Assets are classified as held for sale if their carrying amount will be recovered principally through a sale
transaction rather through continuing use and a sale is considered highly probable(cid:484) They are measured at
their carrying amount(cid:484) Any subse(cid:147)uent increases or decreases in carrying amount is recognised in the profit
and loss(cid:484)
Investment Properties
Investment properties are measured initially at cost(cid:481) including transaction costs(cid:484) 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(cid:486)to(cid:486)day servicing of an investment property(cid:484)
Subse(cid:147)uent to initial recognition(cid:481) investment properties are stated at fair value(cid:481) which is based on active
market prices(cid:481) ad(cid:140)usted if necessary(cid:481) for any difference in the nature(cid:481) location or condition of the specific
asset at the balance sheet date(cid:484) 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(cid:484) Included in the value
measurement are ad(cid:140)ustments for straightlining of lease income(cid:484)
Cash and Cash Equivalents
Cash and cash e(cid:147)uivalents include cash on hand(cid:481) deposits held at call with banks(cid:481) other short term highly
li(cid:147)uid investments with original maturities of three months or less(cid:481) and bank overdrafts(cid:484)
Trade and Other Receivables
Trade receivables are recognised and carried at original invoice amount less a provision for any
uncollectable debts(cid:484) An estimate for doubtful debts is made when there is ob(cid:140)ective evidence that the Trust
will not be able to collect the receivable(cid:484) Financial difficulties of the debtor and default payments are
considered ob(cid:140)ective evidence of impairment(cid:484) Bad debts are written off when identified as uncollectable(cid:484)
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(cid:481) whether or not billed to the Trust at balance date(cid:484) The amounts are
unsecured and are usually paid within 30 days of recognition(cid:484)
Interest Bearing Borrowings
Interest bearing borrowings are initially recognised at fair value less any related transaction costs(cid:484)
Subse(cid:147)uent to initial recognition(cid:481) interest bearing borrowings are stated at amortised cost(cid:484)
Revenue
Rent
Rent comprises rental and recovery of outgoings from property tenants(cid:484) Rental income from investment
properties is accounted for on a straight(cid:486)line basis over the lease term(cid:484)
Lease incentives
Rent free incentives granted are recognised as an integral part of total rental income(cid:484)
Cash incentives paid or payable to tenants are capitalised as part of investment properties(cid:484)
34
34
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
BlackWall Property Trust
ARSN 109 684 773
Notes to the Financial Statements
For the Year Ended 30 June 2015
Investment income
Interest income is recognised as interest accrues using the effective interest method(cid:484) Dividend and
distribution revenue is recognised when the right to receive income has been established(cid:484) All revenue is
stated net of the amount of GST(cid:484)
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(cid:484) The Trust has over (cid:836)20 million of
carried forward revenue tax losses and approximately (cid:836)17 million in capital losses(cid:484)
GST
Revenues(cid:481) expenses and assets are recognised net of the amount of GST(cid:481) except where the amount of GST
incurred is not recoverable from the Australian Taxation Office(cid:484) In these circumstances the GST is
recognised as part of the cost of ac(cid:147)uisition of the asset or as part of an item of the expense(cid:484) Receivables
and payables in the balance sheet are shown inclusive of GST(cid:484) Cash flows are presented in the cash flow
statement on a gross basis(cid:481) except for the GST component of investing and financing activities(cid:481) which are
disclosed as operating cash flows(cid:484)
EPU
The Trust presents basic and diluted EPU(cid:484) 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(cid:484) Diluted EPU is determined by ad(cid:140)usting the profit or loss attributable to ordinary unitholders and
the weighted average number of units outstanding for the effects of all dilutive potential units(cid:484)
New Accounting Standards and Interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for the
current reporting period(cid:484) The Trust’s assessment of the impact of these new standards and interpretations
is set out below(cid:484)
AASB 9 Financial Instruments (effective for annual reporting periods beginning on or after 1 January 2018)
The Trust has adopted AASB 9 early on 1 (cid:13)anuary 2013 except for the new hedging rules which should not
have any material changes to the Trust’s financial statements(cid:484)
35
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
35
Directors’ Declaration
In the opinion of the Directors of BlackWall Fund Services Limited(cid:481) the Responsible Entity of BlackWall
Property Trust(cid:483)
(cid:523)a(cid:524)
the financial statements and notes are in accordance with the Corporations Act 2001(cid:481) including(cid:483)
(cid:523)i(cid:524) complying with Accounting Standards(cid:481) the Corporations Regulations 2001 and other mandatory
professional reporting re(cid:147)uirements(cid:482) and
(cid:523)ii(cid:524) giving a true and fair view of the Trust’s financial position as at 30 (cid:13)une 2015 and of its
performance for the financial year ended on that date(cid:482) and
(cid:523)b(cid:524)
there are reasonable grounds to believe that the Trust will be able to pay its debts as and when they
become due and payable(cid:484)
Statement of Significant Accounting Policies confirms that the financial statements also comply with
International Financial Reporting Standards as issued by the International Accounting Standards Board(cid:484)
The Directors of the Responsible Entity have been given the declarations by the Chief Executive Officer and
Chief Financial Officer re(cid:147)uired by section 295A of the Corporations Act 2001(cid:484)
This declaration is made in accordance with a resolution of the Board of Directors of the Responsible Entity(cid:484)
Stuart Brown
Director
Sydney(cid:481) 17 August 2015
36
36
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
Independent Audit Report to the Investors of Blackwall Property Trust and Controlled Entities
Report on the Financial Report
We have audited the accompanying financial report of Blackwall Property Trust and Controlled
Entities ("the Trust"), which comprises the statement of financial position as at 30 June 2015, the
statement of profit or loss and other comprehensive income, the statement of changes in net assets
attributable to unit holders and the statement of cash flows for the year then ended, notes
comprising a summary of significant accounting policies and other explanatory information, and the
directors’ declaration of the Trust and the entities it controlled at 30 June 2015 year end.
Directors' Responsibility for the Financial Report
The directors of Blackwall Fund Services Limited, the Responsible Entity of the Trust, are responsible
for the preparation of the financial report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001 and for such internal control as the directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view
and is free from material misstatement, whether due to fraud or error. In Note 24, the directors also
state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the
financial statements comply with International Financial Reporting Standards.
Auditor's Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
with relevant ethical requirements relating to audit engagements, and plan and perform the audit to
obtain reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the Trust’s
preparation of the financial report that gives a true and fair view in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Trust’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the directors, as
well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the directors of Blackwall Fund Services Limited, the Responsible Entity of the
Trust, would be in the same terms if given to the directors as at the time of this auditor’s report. We
have given the directors of the Responsible Entity an Auditor’s Independence Declaration, a copy
which is included in the financial report.
Independent Audit Report to the Investors of Blackwall Property Trust and Controlled Entities
Opinion
In our opinion:
(a)
the financial report of Blackwall Property Trust and its Controlled Entities is in accordance
with the Corporations Act 2001, including:
(i) giving a true and fair view of the Trust’s financial position as at 30 June 2015 and of its
performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
and
(b)
the financial report also complies with International Financial Reporting Standards as
disclosed in Note 24.
Dated at Sydney the 17th day of August 2015.
ESV Accounting and Business Advisors
Tim Valtwies
Partner
CONTENTS
Notes to the Financial Statements
1(cid:484) Segment Information
2(cid:484) Revenue
3(cid:484) Expenses
4(cid:484) Current Assets (cid:486) Cash and cash e(cid:147)uivalents
5(cid:484) Current Assets (cid:486) Trade and other receivables
6(cid:484) Current Assets (cid:486) Other assets
7(cid:484) Non(cid:486)current Assets (cid:486) Financial assets
(cid:890)(cid:484) Current and Non(cid:486)current Assets (cid:486) Investment properties
9(cid:484) Current Liabilities (cid:486) Trade and other payables
10(cid:484) Current Liabilities (cid:486) Other liabilities
11(cid:484) Current and Non(cid:486)current Liabilities (cid:486) Borrowings
12(cid:484) Current and Non(cid:486)current Liabilities – Interest rate hedges
13(cid:484) Distributions
14(cid:484) Earnings Per Unit
15(cid:484) Auditor’s Remuneration
16(cid:484) Commitments and Contingencies
17(cid:484) Reconciliation of Operating Cash Flows
1(cid:890)(cid:484) Subse(cid:147)uent Events
19(cid:484) Controlled Entities
20(cid:484) Related Party Transactions
21(cid:484) Parent Entity Disclosures
22(cid:484) Financial Risk (cid:16)anagement
23(cid:484) Critical Accounting Estimates and (cid:13)udgments
24(cid:484) Statement of Significant Accounting Policies
Page 17
Page 1(cid:890)
Page 1(cid:890)
Page 1(cid:890)
Page 19
Page 19
Page 19
Page 20
Page 21
Page 22
Page 22
Page 22
Page 23
Page 23
Page 23
Page 23
Page 24
Page 24
Page 24
Page 24
Page 25
Page 25
Page 29
Page 30
39
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
39
GLOSSARY
BWR (cid:512) Trust
BlackWall
BOF
BlackWall Property Trust
BlackWall Property Funds Limited and(cid:481) where
applicable(cid:481) its subsidiaries (cid:523)including BlackWall
Fund Services Limited(cid:524)
BlackWall Opportunities Fund
Consolidated annual financial report Financial statements
Custodian
EPU
F(cid:25)TPL
GST
IFRS
(cid:14)(cid:16)P
Perpetual Limited
Earnings per unit
Fair value through profit and loss
Goods and services tax
International Financial Reporting Standards
(cid:14)ey management personnel
Outside e(cid:147)uity interests
Non(cid:486)controlling interests
p(cid:484)a(cid:484)
PBT
Planloc
Per annum
Pyrmont Bridge Trust
Planloc Pty Ltd
Responsible Entity
BlackWall Fund Services Limited
40
40
BlackWall Property Trust - Consolidated Annual Financial Report For The Year Ended 30 June 2015
Consolidated Annual Financial ReportYear Ended 30 June 2015Managed By:Level 1, 50 Yeo Street Neutral Bay, NSW 2089Responsible Entity: BlackWall Fund Services LimitedABN 39 079 608 825