PERPETUAL
CREDiT
iNCOME
TRUST
ARSN 626 053 496
ANNUAL FiNANCiAL REPORT
30 JUNE 2021
ANNUAL FINANCIAL REPORT 2021 | i
Perpetual Credit Income Trust
Appendix 4E
For the year ended 30 June 2021
Details of reporting period
This annual financial report is for the year ended 30 June 2021. The previous corresponding year ended was 30
June 2020.
The Directors of Perpetual Trust Services Limited, the Responsible Entity of the Perpetual Credit Income Trust
(the Trust) announce the audited results of the Trust for the year ended 30 June 2021 as follows:
Results for announcement to the market
Extracted from 30 June 2021 annual financial report.
Revenue from ordinary activities
Profit/(loss)
Total comprehensive income/(loss)
Details of distributions
30 June
2021
$'000
30 June
2020
$'000
38,927
34,659
34,659
5,072
643
643
Increase/(decrease)
$'000
33,855
34,016
34,016
%
667.49
5,290.20
5,290.20
The distributions for the year ended 30 June 2021 were $14,541,413 (3.6318 cents per ordinary unit). The
Responsible Entity aims to make distributions each month. For such distributions, the record date is generally the
last ASX trading day of each month.
Subsequent to year end, on 26 July 2021, the Directors declared a distribution of 0.3165 cents per ordinary unit
which amounted to $1,267,438 and was paid on 9 August 2021.
Details of distribution reinvestment plan
The Responsible Entity has established a Distribution Reinvestment Plan (DRP) under which units are issued at
the net asset value of a unit, determined in accordance with the Trust's Constitution, on the record date. The last
day for electing into the DRP in respect of a distribution is 5.00pm (Sydney time) on the first business day after
the record date.
Net Tangible Assets
Total Net Tangible Assets attributable to unitholders ($'000)
Units on issue ('000)
Net Tangible Assets attributable to unitholders per unit ($)
Control gained or lost over entities during the year
There was no gain or loss of control of entities during the year.
As at
30 June
2021
30 June
2020
445,475
400,489
1.112
425,186
400,334
1.062
Details of associates and joint venture entities
The Trust did not have any interest in associates and joint venture entities during the year.
Independent audit report
This report is based on the annual financial report which has been audited by the Trust's auditor, KPMG.
Additional disclosure requirements can be found in the notes to the Trust's annual financial report for the year
ended 30 June 2021.
PERPETUAL CREDIT INCOME TRUST
CONTENTS
Directors’ report
Investment manager’s report
Corporate governance statement
Lead auditor’s independence declaration
Statement of comprehensive income
Balance sheet
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors’ declaration
Independent auditor’s report to the unitholders
ASX additional information
2
6
10
18
19
20
21
22
23
47
48
52
Perpetual Credit Income Trust
Appendix 4E
For the year ended 30 June 2021
Details of reporting period
June 2020.
This annual financial report is for the year ended 30 June 2021. The previous corresponding year ended was 30
The Directors of Perpetual Trust Services Limited, the Responsible Entity of the Perpetual Credit Income Trust
(the Trust) announce the audited results of the Trust for the year ended 30 June 2021 as follows:
Results for announcement to the market
Extracted from 30 June 2021 annual financial report.
Revenue from ordinary activities
Profit/(loss)
Total comprehensive income/(loss)
Details of distributions
30 June
2021
$'000
30 June
2020
$'000
38,927
34,659
34,659
Increase/(decrease)
$'000
%
5,072
643
643
33,855
34,016
34,016
667.49
5,290.20
5,290.20
The distributions for the year ended 30 June 2021 were $14,541,413 (3.6318 cents per ordinary unit). The
Responsible Entity aims to make distributions each month. For such distributions, the record date is generally the
last ASX trading day of each month.
Subsequent to year end, on 26 July 2021, the Directors declared a distribution of 0.3165 cents per ordinary unit
which amounted to $1,267,438 and was paid on 9 August 2021.
Details of distribution reinvestment plan
The Responsible Entity has established a Distribution Reinvestment Plan (DRP) under which units are issued at
the net asset value of a unit, determined in accordance with the Trust's Constitution, on the record date. The last
day for electing into the DRP in respect of a distribution is 5.00pm (Sydney time) on the first business day after
the record date.
Net Tangible Assets
As at
30 June
2021
30 June
2020
445,475
400,489
1.112
425,186
400,334
1.062
Total Net Tangible Assets attributable to unitholders ($'000)
Units on issue ('000)
Net Tangible Assets attributable to unitholders per unit ($)
Control gained or lost over entities during the year
There was no gain or loss of control of entities during the year.
Details of associates and joint venture entities
The Trust did not have any interest in associates and joint venture entities during the year.
Independent audit report
This report is based on the annual financial report which has been audited by the Trust's auditor, KPMG.
Additional disclosure requirements can be found in the notes to the Trust's annual financial report for the year
ended 30 June 2021.
ANNUAL FINANCIAL REPORT 2021 | 1
DiRECTORS’
REPORT
Directors' report
Perpetual Credit Income Trust
Directors' report
For the year ended 30 June 2021
Perpetual Trust Services Limited (ACN 000 142 049, AFSL 236 648) is the Responsible Entity of Perpetual Credit
Income Trust (the Trust). The Directors of the Responsible Entity (the Directors) present their report together with
the annual financial report of the Trust for the year ended 30 June 2021 and the auditor's report thereon.
Principal activities
The Trust is a registered managed investment scheme domiciled in Australia.
The Trust was constituted on 9 May 2018, registered with the Australian Securities and Investments Commission
on 22 May 2018, commenced operations on 8 May 2019 and its units commenced trading on the Australian
Securities Exchange (ASX: PCI) on 14 May 2019.
The investment objective of the Trust is to provide investors with monthly income by investing in a diversified pool
of credit and fixed income assets in accordance with the Product Disclosure Statement and the provisions of the
Trust's Constitution.
The Investment Manager of the Trust is Perpetual Investment Management Limited (AFSL 234 426) (Investment
Manager).
The Trust did not have any employees during the year.
There were no significant changes in the nature of the Trust’s activities during the year.
Directors
The Directors of Perpetual Trust Services Limited during the year and up to the date of this report are shown
below. The Directors were in office for this entire year except where stated otherwise.
Name
Glenn Foster
Richard McCarthy
Simone Mosse
Vicki Riggio
Phillip Blackmore
Units on issue
Date of appointment/resignation
Resigned as Director on 23 October 2020
Appointed as Non-Executive Director on 1 February 2021
Alternate Director for Vicki Riggio
Units on issue in the Trust at the end of the year are set out below:
Units on issue
As at
30 June
2021
As at
30 June
2020
Units '000 Units '000
400,489
400,334
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2 | PERPETUAL CREDIT INCOME TRUST
Perpetual Credit Income Trust
Directors' report
For the year ended 30 June 2021
Directors' report
Perpetual Trust Services Limited (ACN 000 142 049, AFSL 236 648) is the Responsible Entity of Perpetual Credit
Income Trust (the Trust). The Directors of the Responsible Entity (the Directors) present their report together with
the annual financial report of the Trust for the year ended 30 June 2021 and the auditor's report thereon.
Principal activities
The Trust is a registered managed investment scheme domiciled in Australia.
The Trust was constituted on 9 May 2018, registered with the Australian Securities and Investments Commission
on 22 May 2018, commenced operations on 8 May 2019 and its units commenced trading on the Australian
Securities Exchange (ASX: PCI) on 14 May 2019.
The investment objective of the Trust is to provide investors with monthly income by investing in a diversified pool
of credit and fixed income assets in accordance with the Product Disclosure Statement and the provisions of the
The Investment Manager of the Trust is Perpetual Investment Management Limited (AFSL 234 426) (Investment
The Trust did not have any employees during the year.
There were no significant changes in the nature of the Trust’s activities during the year.
The Directors of Perpetual Trust Services Limited during the year and up to the date of this report are shown
below. The Directors were in office for this entire year except where stated otherwise.
Name
Glenn Foster
Date of appointment/resignation
Resigned as Director on 23 October 2020
Appointed as Non-Executive Director on 1 February 2021
Alternate Director for Vicki Riggio
Units on issue in the Trust at the end of the year are set out below:
Trust's Constitution.
Manager).
Directors
Richard McCarthy
Simone Mosse
Vicki Riggio
Phillip Blackmore
Units on issue
Units on issue
As at
30 June
2021
As at
30 June
2020
Units '000 Units '000
400,489
400,334
Perpetual Credit Income Trust
Directors' report
For the year ended 30 June 2021
(continued)
Directors' report (continued)
Review and results of operations
During the year, the Trust invested in accordance with the investment objective and guidelines as set out in the
governing documents of the Trust and in accordance with the provisions of the Trust's Constitution.
The performance of the Trust, as represented by the results of its operations, was as follows:
Profit/(loss) ($'000)
Distributions paid and payable ($'000)
Distributions (cents per unit)
30 June
2021
$'000
34,659
14,541
3.6318
30 June
2020
$'000
643
17,051
4.2605
As at 30 June 2021, the Trust's Net Tangible Assets (NTA) were $1.112 per unit. This represents an increase of
4.71% compared to the NTA of $1.062 per unit as at 30 June 2020. The increase in the NTA during the year was
predominantly attributable to the tightening of credit spreads following the market recovery and the advent of
coronavirus (COVID-19) vaccines. The Trust paid distributions of 3.63 cents per unit during the year.
The Investment Manager continues to follow a robust, active and risk-aware approach to invest across a broad
range of credit and fixed income assets. This involves market screening of the credit environment and research
which aims to screen out issuers with poor credit quality or susceptibility to downside shock.
Where applicable, the volatility in global and local capital markets resulting from the COVID-19 pandemic
continues to be reflected in the valuation of the Trust's investment portfolio and its financial results for the year
ended 30 June 2021.
Further information on the operating and financial performance of the Trust is contained in the Investment
Manager's Report.
Units in the Trust
The movement in units on issue in the Trust during the year is disclosed in note 7 to the financial statements.
The value of the Trust's assets and liabilities is disclosed on the balance sheet and derived using the basis set
out in note 2 to the financial statements.
Significant changes in state of affairs
The Directors continue to assess the potential financial and other impacts of the COVID-19 outbreak to the Trust.
The current high-level of uncertainty regarding the severity and length of COVID-19 on investment markets has
impacted investment outcomes and increased volatility in investment performance during the period.
At the date of signing, the future impacts of COVID-19 on global and domestic economies and investment market
indices, and their resulting impact on the Trust are uncertain. The Directors and management will continue to
monitor this situation.
On 1 February 2021, Glenn Foster was appointed as a Non-Executive Director.
In the opinion of the Directors, there were no other significant changes in the state of affairs of the Trust during
the financial year.
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ANNUAL FINANCIAL REPORT 2021 | 3
Perpetual Credit Income Trust
Directors' report
For the year ended 30 June 2021
(continued)
Directors' report (continued)
Likely developments and expected results of operations
The Trust will continue to be managed in accordance with its investment objectives and guidelines as set out in
the governing documents of the Trust and in accordance with the provisions of the Trust's Constitution.
The results of the Trust's operations will be affected by a number of factors, including the performance of
investment markets in which the Trust invests. Investment performance is not guaranteed and future returns may
differ from past returns. As investment conditions change over time, past returns should not be used to predict
future returns.
Matters subsequent to the end of the financial year
On 26 July 2021, the Directors declared a distribution of 0.3165 cents per ordinary unit which amounted to
$1,267,438 and was paid on 9 August 2021.
No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may
significantly affect:
(i)
(ii)
(iii)
the operations of the Trust in future financial years; or
the results of those operations in future financial years; or
the state of affairs of the Trust in future financial years.
Environmental regulation
The operations of the Trust are not subject to any particular or significant environmental regulations under
Commonwealth, or of a State or Territory.
Fees paid to and interests held in the Trust by the Responsible Entity or its related parties
Fees paid to the Responsible Entity and its related parties out of Trust property during the year are disclosed in
note 14 to the financial statements.
No fees were paid out of Trust property to the Directors of the Responsible Entity during the year.
The number of units in the Trust held by the Responsible Entity or its related parties as at the end of the financial
year are disclosed in note 14 to the financial statements.
Indemnification and insurance of officers and auditors
No insurance premiums are paid for out of the assets of the Trust in regards to insurance cover provided to either
the officers of Perpetual Trust Services Limited or the auditor of the Trust. So long as the officers of Perpetual
Trust Services Limited act in accordance with the Trust's Constitution and the law, the officers remain indemnified
out of the assets of the Trust against losses incurred while acting on behalf of the Trust. The auditor of the Trust
is in no way indemnified out of the assets of the Trust.
Rounding of amounts to the nearest thousand dollars
The Trust is an entity of a kind referred to in ASIC Corporations (Rounding in Financial/Directors' Reports)
Instrument 2016/191 issued by the Australian Securities and Investments Commission (ASIC) relating to the
“rounding off” of amounts in the Directors' report. Amounts in the Directors' report and financial report have been
rounded to the nearest thousand dollars in accordance with that ASIC Corporations Instrument, unless otherwise
indicated.
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4 | PERPETUAL CREDIT INCOME TRUST
Perpetual Credit Income Trust
Directors' report
For the year ended 30 June 2021
(continued)
Perpetual Credit Income Trust
Directors' report
For the year ended 30 June 2021
(continued)
Directors' report (continued)
Directors' report (continued)
Likely developments and expected results of operations
Lead auditor's independence declaration
The Trust will continue to be managed in accordance with its investment objectives and guidelines as set out in
the governing documents of the Trust and in accordance with the provisions of the Trust's Constitution.
A copy of the lead auditor's independence declaration as required under section 307C of the Corporations Act
2001 is set out on page 18.
This report is made in accordance with a resolution of the Directors of Perpetual Trust Services Limited.
Director
Sydney
24 August 2021
The results of the Trust's operations will be affected by a number of factors, including the performance of
investment markets in which the Trust invests. Investment performance is not guaranteed and future returns may
differ from past returns. As investment conditions change over time, past returns should not be used to predict
future returns.
Matters subsequent to the end of the financial year
On 26 July 2021, the Directors declared a distribution of 0.3165 cents per ordinary unit which amounted to
$1,267,438 and was paid on 9 August 2021.
No other matter or circumstance has arisen since 30 June 2021 that has significantly affected, or may
significantly affect:
(i)
(ii)
(iii)
the operations of the Trust in future financial years; or
the results of those operations in future financial years; or
the state of affairs of the Trust in future financial years.
Environmental regulation
The operations of the Trust are not subject to any particular or significant environmental regulations under
Commonwealth, or of a State or Territory.
Fees paid to and interests held in the Trust by the Responsible Entity or its related parties
Fees paid to the Responsible Entity and its related parties out of Trust property during the year are disclosed in
note 14 to the financial statements.
No fees were paid out of Trust property to the Directors of the Responsible Entity during the year.
The number of units in the Trust held by the Responsible Entity or its related parties as at the end of the financial
year are disclosed in note 14 to the financial statements.
Indemnification and insurance of officers and auditors
No insurance premiums are paid for out of the assets of the Trust in regards to insurance cover provided to either
the officers of Perpetual Trust Services Limited or the auditor of the Trust. So long as the officers of Perpetual
Trust Services Limited act in accordance with the Trust's Constitution and the law, the officers remain indemnified
out of the assets of the Trust against losses incurred while acting on behalf of the Trust. The auditor of the Trust
is in no way indemnified out of the assets of the Trust.
Rounding of amounts to the nearest thousand dollars
The Trust is an entity of a kind referred to in ASIC Corporations (Rounding in Financial/Directors' Reports)
Instrument 2016/191 issued by the Australian Securities and Investments Commission (ASIC) relating to the
“rounding off” of amounts in the Directors' report. Amounts in the Directors' report and financial report have been
rounded to the nearest thousand dollars in accordance with that ASIC Corporations Instrument, unless otherwise
indicated.
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ANNUAL FINANCIAL REPORT 2021 | 5
iNVESTMENT
MANAGER’S
REPORT
Dear Investors,
Perpetual Investment Management
Limited (‘Perpetual’, ‘we’) are pleased
to present the Annual Financial Report
for the Perpetual Credit Income Trust
(the “Trust”).
During the financial year to 30 June
2021 (FY21), the Trust has continued
to deliver its investment objective
of providing investors with monthly
income by investing in a diversified
pool of credit and fixed income
assets. The Trust has paid monthly
distributions since inception, which
are in line with the target return of
the Reserve Bank of Australia (RBA)
Cash Rate plus 3.25% p.a. (net of fees)
through the economic cycle1. For FY21,
3.63 cents per unit2 has been paid to
investors, which equates to an annual
distribution return of 3.5%3.
iNVESTMENT PHiLOSOPHY
AND PROCESS
At Perpetual, we believe the key to
investing in credit and fixed income
assets is constructing, and actively
managing, a well-diversified portfolio
of quality assets.
The Portfolio Managers for the Trust,
Michael Korber, Managing Director,
Credit and Fixed Income, and Anne
Moal, Head of Corporate High Yield
and Portfolio Manager for the Perpetual
Loan Fund, together have over 60
years’ experience. They have invested
through many market cycles and are
supported by the broader Perpetual
Credit and Fixed Income team.
The team follows a robust, active and
risk-aware approach to investing
in credit and fixed income assets.
This involves top-down market
screening of the credit environment
and extensive bottom-up fundamental
research to develop a list of approved
issuers. This research seeks to screen
out issuers with poor credit quality or
susceptibility to downside shock.
The formal credit review process
involves consideration of where the
asset sits in the capital structure and
in-depth financial analysis and
modelling. We look for companies
that have a good balance sheet and
predictable cash flows, who hold a
competitive market position and
have a quality management team.
For unrated or sub-investment grade
assets, we undertake a more extensive
due diligence process, which includes
a number of meetings with arrangers
and borrowers. We will not invest unless
we have high conviction.
Our investment process aims to
find the most attractive segments
of the market and ensure adequate
compensation is provided for
investments. We actively manage risk
via our thorough investment process
and by diversifying the portfolio across
industry sectors, maturities and credit
rating bands.
1 This is a target only and may not be achieved.
2 Rounded to two decimal places.
3 Distribution return has been calculated based on the PCI investment portfolio return less the
growth of NTA. Past performance is not indicative of future performance.
6 | PERPETUAL CREDIT INCOME TRUST
PORTFOLiO COMPOSiTiON
The Trust’s investment strategy is
to hold a diversified and actively-
managed portfolio of credit and fixed
income assets. The strategy allows for
a combination of domestic and global
credit, floating and fixed income assets.
As at 30 June 2021, PCI’s portfolio
had 119 holdings across 90 issuers4.
Investments include corporate
bonds, floating rate notes, securitised
assets and private debt (for example,
corporate loans).
While the investment universe for the
Trust is relatively broad and includes
the ability to invest in assets of foreign
issuers, the focus is on Australian
issuers. The Trust can hold a maximum
of 30% of the portfolio in assets
denominated in foreign currencies.
As at 30 June 2021, 86.1% of assets were
denominated in Australian dollars and
89.7% of assets were issued by entities
domiciled in Australia. This includes
Australian corporations, banks, property
trusts, asset backed securities (ABS)
and infrastructure groups. We believe
our local presence and ability to meet
borrowers and their management team
provides an advantage in assessing
opportunities and managing credit risk
for the portfolio.
As at 30 June 2021, 48.55% of the
portfolio was invested in investment
grade assets, and 3.77% allocated to
cash. Investment grade assets are
those where the issuer is in the rating
bands BBB to AAA, as rated by an
independent agency. The Trust can
also invest up to 70% of the portfolio
in unrated or sub-investment grade
assets. We believe that unrated or
sub-investment grade assets provide a
point of differentiation for the Trust’s
investment strategy as they typically
pay higher coupons when compared
to investment grade assets. While
inherently riskier, by undertaking
in-depth and enhanced due diligence in
this asset class, we are able to critically
assess the strength of a borrower
and their capacity for repayments,
mitigating the potential downside while
generating a valuable source of income.
As at 30 June 2021, 47.68% of the
portfolio was invested in sub-investment
grade or unrated assets5. Investments
in sub-investment grade and unrated
corporate bonds and loans will generally
be focused on senior positions in the
capital structure, which means they
are given higher priority in the event
an issuer or company is wound-up
or liquidated.
MARKET OVERViEW
FY21 saw a sustained rally in credit
spreads driven by promising economic
and public health developments
alongside an extraordinary level of
fiscal and monetary support.
Over the second half of the year, the
economic recovery from the COVID-19
pandemic gained strong momentum.
Fuelling the remarkable growth
story were the expansionary policy
positions of governments and central
banks, which kept markets awash with
liquidity. Governments continued
to pump fiscal stimulus into their
economies to close the output gap.
4 Number of holdings and number of issuers reported on a full look through basis
(excluding derivatives).
5 A sub-investment grade asset has a rating below BBB-/Baa3 and includes unrated assets.
ANNUAL FINANCIAL REPORT 2021 | 7
In the meantime, valuations have been
supported throughout by extraordinary
monetary policy conditions. Global
interest rates were at or near zero
throughout the year. Central bank
balance sheets have also increased at an
unprecedented rate, led by the Federal
Reserve’s aggressive quantitative
easing program. In Australia, the RBA
has pursued its own unconventional
monetary policy agenda with
quantitative easing, yield curve control
and the Term Funding Facility providing
more liquidity to markets.
Persistent low yields and rapid economic
growth have reintroduced inflation
risk. In February, long term yields rose
dramatically on inflation fears; while
PCI’s portfolio is shielded through
exposure to floating rate credit, this
typically impacts fixed income portfolios,
and can increase discount rates.
Credit spreads remained tight, having
dropped below their pre-COVID
lows during the year. In a low-yield
environment, we believe the premium
paid for prudently taking on credit
risk is essential to building a portfolio
that can generate a competitive yield.
Despite full valuations, the outlook
for corporate credit is positive.
Market demand for Australian
dollar issuance remains strong and
alongside the strong economic outlook,
is expected to support spreads.
Credit risks have also subsided
somewhat with a raft of ratings
upgrades and robust earnings results
over the past year. In the context of low
interest rates and tight credit spreads,
we believe active portfolio management
is essential to defending capital and
generating yield.
TRUST PERFORMANCE
Over the 12 months to 30 June 2021, the
Trust’s portfolio returned 8.3%6, while
over the same period total unitholder
return was 12.8%7. Unitholder return was
attributable to income generated and
distributed by the Trust portfolio, capital
appreciation of the Trust’s assets and the
contraction of discount to Net Tangible
Assets (NTA).
The Trust continued to provide monthly
income throughout FY21. The total
distributions for the year was 3.63 cents
per unit and the 30 June 2021 annual
distribution return was 3.5%, which is
in line with the Trust’s target return8 of
the RBA cash rate + 3.25% (net of fees)
over the economic cycle. We believe
that in the current environment of
extremely low and negative yielding
interest rates, this represents a healthy
yield for investors. The Trust remains
near fully invested and we believe the
portfolio is well positioned to continue
to offer investors regular, competitive
monthly distributions.
6 Investment returns, net of management costs have been calculated on the growth of
Net Tangible Assets (NTA) after taking into account all operating expenses (including
management costs) and assuming reinvestment of distributions on the ex-date. Past
performance is not indicative of future performance.
7 Total unitholder return – ASX unit price performance with reinvestment of distributions has
been calculated on the growth of the ASX unit price and assumes reinvestment of distributions
on the ex-date. Past performance is not indicative of future performance.
8 This is a target only and may not be achieved.
8 | PERPETUAL CREDIT INCOME TRUST
We believe that the outlook for credit
remains strong and that the portfolio
is well positioned to capitalise. As at
30 June 2021, the Trust was near fully
invested across multiple sectors with
exposure to the breadth of the capital
structure and credit rating spectrum.
The Trust remains weighted towards
corporate credit in the BBB, high yield
and non-rated spaces where we believe
there are quality issuers offering
healthy yields. In a persistent low-yield
environment with credit spreads at very
tight levels, active management based
on rigorous research and due diligence
is, in our view, essential. We would like
to take this opportunity to thank you
for your continued support and we look
forward to providing you with further
updates on the progress of the Trust’s
investments over the coming year via
regular ASX announcements.
Perpetual Investment Management
Limited
The Trust’s ability to maintain its
monthly distributions is attributable to
the running income of its investments.
The Trust’s income was primarily
generated by coupon payments and
interest income from investments
in loans. The Trust predominately
collected income return from non-
financial corporates, prime Residential
Mortgage Backed Securities (RMBS),
property, domestic banks and non-bank
financials.
The most significant factor for Trust
performance was capital appreciation
as a result of tightening credit spreads.
Credit spreads continued to recover
from the COVID-19 related selloff
in February 2020 through the year.
Following the development of vaccines
in November – and the accompanying
improvement in economic expectations
– credit spreads extended their rally,
with spreads in many markets ending
FY21 tighter than pre-pandemic levels.
The Trust’s allocation to non-financial
corporates, property, domestic banks
and non-bank financials were the
most significant contributors to credit
spread return. Throughout the first five
months of the year, the allocation to
non-financial corporates was increased
at attractive prices as the recovery in
corporate spreads lagged financial
spreads. This tactical positioning
benefitted the Trust as corporate
spreads outperformed following the
advent of COVID vaccines and the start
of global reopening.
ANNUAL FINANCIAL REPORT 2021 | 9
CORPORATE
GOVERNANCE
STATEMENT
BACKGROUND
Perpetual Trust Services Limited
ACN 000 142 049, AFS Licence No.
236648 (“Responsible Entity”) is the
responsible entity for the Perpetual
Credit Income Trust (“Trust”), a
registered managed investment
scheme that is listed on the Australian
Securities Exchange (“ASX”).
The Responsible Entity is a wholly
owned subsidiary of Perpetual Limited
(ASX: PPT) (“Perpetual”).
The Responsible Entity is reliant
on Perpetual for access to adequate
resources including directors,
management, staff, functional
support (such as company secretarial,
responsible managers, legal,
compliance, risk and finance) and
financial resources. As at the date of
this Corporate Governance Statement,
Perpetual has at all times made such
resources available to the Responsible
Entity.
In operating the Trust, the Responsible
Entity’s overarching principle is to
always act in good faith and in the best
interests of the Trust’s unitholders, in
accordance with our fiduciary duty.
The Responsible Entity’s duties and
obligations in relation to the Trust
principally arise from: the Constitution
of the Trust; the Compliance Plan
for the Trust; the Corporations Act
2001 (“Act”); the ASX Listing Rules;
the Responsible Entity’s Australian
Financial Services Licence; relevant
regulatory guidance; relevant
contractual arrangements; and other
applicable laws and regulations.
CORPORATE GOVERNANCE
At Perpetual, good corporate
governance includes a genuine
commitment to the ASX Corporate
Governance Council Corporate
Governance Principles and
Recommendations 4th Edition
(“Principles”).
The directors of the Responsible Entity
are committed to implementing high
standards of corporate governance in
operating the Trust and, to the extent
applicable to registered managed
investment schemes, are guided by
the values and principles set out in
Perpetual’s Corporate Responsibility
Statement and the Principles. The
Responsible Entity is pleased to advise
that, to the extent the Principles are
applicable to registered managed
investment schemes, its practices are
largely consistent with the Principles.
As a leading responsible entity, the
Responsible Entity operates a number
of registered managed investment
schemes (“Schemes”). The Schemes
include the Trust as well as other
schemes that are listed on the ASX.
The Responsible Entity’s approach
in relation to corporate governance
in operating the Trust is consistent
with its approach in relation to the
Schemes generally.
The Responsible Entity addresses each
of the Principles that are applicable to
externally managed listed entities in
relation to the Schemes, including the
Trust, as at the date of this Corporate
Governance Statement.
10 | PERPETUAL CREDIT INCOME TRUST
10 | PERPETUAL CREDIT INCOME TRUST
PRiNCiPLE 1
LAY SOLiD FOUNDATiONS
FOR MANAGEMENT AND
OVERSiGHT
The role of the Responsible Entity’s
Board is generally to set objectives
and goals for the operation of the
Responsible Entity and the Schemes,
to oversee the Responsible Entity’s
management, to regularly review
performance and to monitor the
Responsible Entity’s affairs and act in
the best interests of the unitholders
of the Trust. The Responsible Entity’s
Board is accountable to the unitholders
of the Trust, and is responsible for
approving the Responsible Entity’s
overall objectives and overseeing their
implementation in discharging their
duties and obligations and operating
the Trust.
Directors, management and staff are
guided by Perpetual’s Code of Conduct
and Perpetual Risk Appetite Statement
which is designed to assist them in
making ethical business decisions.
The role of the Responsible Entity’s
management is to manage the
business of the Responsible Entity in
operating the Trust. The Responsible
Entity Board delegates to management
all matters not reserved to the
Responsible Entity’s Board, including
the day-to-day management of the
Responsible Entity and the operation
of the Trust.
The Responsible Entity appoints
agents (Service Providers) to
manage the key operations of the
Trust which include investment
management, administration, custody
and other specialist services and
functions as required depending on the
nature of the Trust. The Responsible
Entity obtains relevant services from
third party service providers under
outsourcing agreements.
Effective processes for monitoring
Service Providers are integral to
the Responsible Entity’s operations,
given that substantial operational
activities are outsourced to third
parties. The Management of the
Responsible Entity ensure a systematic
and rigorous approach is applied with
respect to monitoring the performance
of outsourced Service Providers to
the Trust.
The Responsible Entity views all
interactions with Service Providers
as a monitoring opportunity, from the
informal discussions that regularly
occur with Service Providers, to
more formalised monitoring reviews.
The outcomes of all interactions
with Service Providers inform the
Responsible Entity’s view as to the
extent to which the Service Provider
is complying with their operational
obligations to the Responsible Entity.
Prior to appointment, all Service
Providers are subject to operational
due diligence, to verify that the Service
Provider can deliver the outsourced
services in an efficient, effective
and compliant manner. All Service
Providers are assigned an initial
operational risk rating.
The Responsible Entity’s approach
to Service Provider monitoring is
outlined in the diagram below.
informal
engagement
Formal
Reviews
Compliance
Reporting
The
Responsible
Entity and
Management
Market
intelligence2
Key Scheme
Data1
1
Includes information regarding investment performance, actual versus strategic asset
allocation, liquidity where applicable and complaints, incidents and issues arising with
respect to the operation of the Trust.
2 Information from secondary sources, including the media and analysts and rating house
reports.
CORPORATE GOVERNANCE STATEMENT 2021 | 11
ANNUAL FINANCIAL REPORT 2021 | 11
In addition to the continuous
monitoring that occurs through day
to day interactions with Service
Providers in the regular course of
business, all Service Providers are
required to periodically report to the
Responsible Entity as to the extent to
which they have met their obligations.
Periodically, the Service Provider’s risk
rating is reviewed by the stakeholders
within the business, based on the
outcomes of all interactions that have
occurred with the Service Provider
during the review period.
The Responsible Entity maintains
policy, procedure and program
documents that determine the nature
and frequency of formal Service
Provider monitoring reviews. Service
Providers are typically subject to
reviews every 18 months.
The Service Provider risk rating
dictates any additional monitoring
measures required to be put in place
– for example a Service Provider
assessed as ‘low to medium risk’ will
be subject to the standard monitoring
measures the Responsible Entity
utilises under the Service Provider
Monitoring Framework. Service
Providers risk rated ‘high to very
high’ may be subject to additional
oversight measures to deal with
the factors that caused the Service
Providers risk rating to be high or
very high. In addition, management
and stakeholders utilise the risk
assessment rating in determining
if any action is required when
considering information and the
outcomes of all interactions that have
occurred with the Service Provider
during the review period.
PRiNCiPLE 2
STRUCTURE THE BOARD TO BE
EFFECTiVE AND ADD VALUE
At present the Responsible Entity
Board consists of three executive
directors, one non-executive director
and one alternate director. The names
of the current directors and year of
appointment is provided below:
Name of
Director
Year of
Appointment
Glenn Foster
Resigned
23 October 2020
as an Executive
Director
Appointed on
1 February
2021 as a Non-
executive Director
Simone Mosse
2019
Richard McCarthy 2018
Vicki Riggio
2018
Phillip Blackmore
(Alternate for
Vicki Riggio)
2018
As the Responsible Entity’s Board
consists of a majority of executive
directors, a Compliance Committee is
appointed in relation to the Trust (refer
to Principle 7). None of the directors of
the Responsible Entity are independent
and they are not remunerated by the
Responsible Entity. The Compliance
Committee comprises a majority of
external members and is chaired by an
external member who is not the chair
of the Responsible Entity Board.
12 | PERPETUAL CREDIT INCOME TRUST
PRiNCiPLE 3
iNSTiL A CULTURE OF ACTiNG
LAWFULLY, ETHiCALLY AND
RESPONSiBLY
The Responsible Entity relies on a
variety of mechanisms to monitor and
maintain a culture of acting lawfully,
ethically and responsible:
• policies and procedures: a Code
of Conduct which articulates
and discloses Perpetual’s values,
cyclical mandatory training, a
Whistleblowing Policy and a Gifts,
Political Donations, Bribery and
Corrupt Practices Policy (further
details noted below);
• “The Way We Work” behaviour
framework, and risk ratings that
are intertwined into its annual
performance, remuneration and
hiring processes; and
• a regular feedback mechanism in
place to assess employee sentiment,
with actions implemented in
response to results .
These apply to all directors and
employees of Perpetual, and the
Responsible Entity. The Code of
Conduct, The Way We Work and core
values supports all aspects of the
way the Responsible Entity conducts
its business and is embedded into
Perpetual’s performance management
process.
The Code of Conduct draws from and
expands on Perpetual’s Core Values of
integrity, partnership and excellence.
The Code of Conduct underpins
Perpetual’s culture. The Responsible
Entity Board and the Compliance
Committee are informed of material
breaches of the Code of Conduct
which relate to the Scheme and the
Responsible Entity.
Additional policies deal with a range
of issues such as the obligation to
maintain client confidentiality and
to protect confidential information,
the need to make full and timely
disclosure of any price sensitive
information and to provide a safe
workplace for employees, which is
free from discrimination. Compliance
with Perpetual’s Code of Conduct is
mandatory for all employees. A breach
is considered to be a serious matter
that may impact an employee’s
performance and reward outcomes
and may result in disciplinary action,
including dismissal.
A full copy of the Code of Conduct
is available on Perpetual’s website;
(https://www.perpetual.com.au/
about/corporate-governance/code-of-
conduct).
Perpetual also has a Whistleblowing
Policy to protect directors, executives,
employees (including current and
former), contractors and suppliers
(and relatives and dependants of any of
these people) who report misconduct,
including:
• any other conduct which could
cause loss to, or be detrimental
to the interests or reputation of,
Perpetual or its clients.
As part of Perpetual’s Whistleblowing
Policy, a third party has been engaged
to provide an independent and
confidential hotline for whistle-blowers
who prefer to raise their concern with
an external organisation.
A full copy of the Whistleblowing
Policy is available on Perpetual’s
website (https://www.perpetual.com.
au/about/corporate-governance/code-
of-conduct).
As part of Perpetual’s commitment to
promoting good corporate conduct and
to conducting business in accordance
with the highest ethical and legal
standards, bribery and corrupt
practices will not be tolerated by
Perpetual under any circumstances.
Perpetual’s Gifts, Political Donations,
Bribery and Corrupt Practices
Policy supports Perpetual’s
commitment by:
• prohibiting the payment of political
donations;
• conduct that breaches any law,
• instituting proper procedures
regulation, regulatory licence or
code that applies to Perpetual;
• fraud, corrupt practices or unethical
behaviour;
• bribery;
• unethical behaviour which breaches
Perpetual’s Code of Conduct or
policies;
• inappropriate accounting, control
or audit activity; including the
irregular use of Perpetual or client
monies;
• any conduct that amounts to
modern slavery, such as debt
bondage and human trafficking of
employees; and
regarding the exchange of gifts;
• clearly outlining Perpetual’s
zero tolerance for bribery and
corruption; and
• including avenues where concerns
may be raised.
Material breaches of the Code
of Conduct or the Gifts, Political
Donations, Bribery and Corrupt
Practice policy are managed in
accordance with Perpetual’s usual
issues management process which
would include reporting to the
Responsible Entity Board and
Compliance Committee where the
breach relates to a product or service
offered by the Responsible Entity.
CORPORATE GOVERNANCE STATEMENT 2021 | 13
A full copy of the Gifts, Political
Donations, Bribery and Corrupt
Practices Policy is available on
Perpetual’s website
(https://www.perpetual.com.au/
about/corporate-governance/code-of-
conduct).
Mechanisms are in place to ensure
the Responsible Entity Board and
the Compliance Committee are
informed of material breaches which
impact the Trust and the Responsible
Entity which would include material
breaches of the Code of Conduct and
material incidences reported under the
Whistleblowing Policy.
PRiNCiPLE 4
SAFEGUARD THE iNTEGRiTY
OF CORPORATE REPORTS
The functions of an audit committee
are undertaken by the full Responsible
Entity Board with assistance from
management. The Responsible Entity
has policies and procedures designed
to ensure that the Trust’s:
• financial reports are true and
fair and meet high standards of
disclosure and audit integrity; and
• other reports released on ASX are
materially accurate and balanced.
This includes policies relating to the
preparation, review and sign off process
required for the Trust’s financial
reports, the engagement of the Trust’s
independent auditors and the review and
release of certain reports on the ASX.
The declarations under section 295A
of the Corporations Act 2001 provide
formal statements to the Responsible
Entity Board in relation to the Trust
(refer to Principle 7). The declarations
confirm the matters required by the
Corporations Act in connection with
financial reporting. The Responsible
Entity receives confirmations from the
Service Providers involved in financial
reporting and management of the Trust,
including the Investment Manager.
These confirmations together with the
Responsible Entity’s Risk and Compliance
Framework which includes the service
provider oversight framework, assist its
staff in making the declarations provided
under section 295A of the Corporations
Act. The Responsible Entity manages
the engagement and monitoring of
independent ‘external’ auditors for the
Trust. The Responsible Entity Board
receives periodic reports from the
external auditors in relation to financial
reporting and the compliance plans for
the Trust.
14 | PERPETUAL CREDIT INCOME TRUST
The Responsible Entity is also
committed to communicating with
unitholders electronically in relation to
communications from the unit registry.
Unitholders may elect to receive
information from the Company’s unit
registry electronically.
PRiNCiPLE 5
PRiNCiPLE 6
MAKE TiMELY AND BALANCED
DiSCLOSURE
RESPECT THE RiGHTS OF
UNiTHOLDERS
The Responsible Entity has a
continuous disclosure policy to ensure
compliance with the continuous
disclosure requirements of the
Corporations Act and the ASX Listing
Rules in relation to the Trust which
sets out the processes to review and
authorise market announcements
and which is periodically reviewed to
ensure that it is operating effectively.
The policy requires timely disclosure
of information to be reported to the
Responsible Entity’s management
and/or directors to ensure that,
information that a reasonable person
would expect to have a material effect
on the unit price or would influence
an investment decision in relation
to any of the Trust, is disclosed to
the market. The Responsible Entity’s
Company Secretary may assist
management and/or the directors in
making disclosures to the ASX after
appropriate Responsible Entity’s
Board consultation for material market
announcements. The Responsible
Entity requires service providers,
including the Investment Manager,
to comply with its policy in relation to
continuous disclosure for the Trust.
The Responsible Entity’s Company
Secretary is the Continuous Disclosure
Officer for the Trust in accordance with
the ASX Listing Rules.
The Responsible Entity is committed
to ensuring timely and accurate
information about the Trust is
available to security holders
via the Trust’s website. All ASX
announcements are promptly posted
on the Trust’s website:
https://www.perpetual.com.
au/income/pci-investors/asx-
announcements. The annual and half
year results financial statements and
other communication materials are
also published on the website.
In addition to the continuous
disclosure obligations, the Responsible
Entity receives and responds to formal
and informal communications from
unitholders and convenes formal and
informal meetings of unitholders as
requested or required. The meetings
are held in accordance with the
requirements of the Corporations Act
that apply to a registered managed
investment scheme. The Responsible
Entity has an active program for
effective communication with the
unitholders and other stakeholders in
relation to Trust.
The Responsible Entity is ultimately
responsible for ensuring that any
complaints received from unitholders
are handled in accordance with
its policy settings and regulatory
requirements. The Responsible
Entity is a member of the Australian
Financial Complaints Authority
(“AFCA”) external dispute resolution
scheme and, if unitholders are
dissatisfied with the handling of
their complaint by the Responsible
Entity, AFCA may be able to assist
unitholders achieve resolution to
their complaint.
CORPORATE GOVERNANCE STATEMENT 2021 | 15
PRiNCiPLE 7
RECOGNiSE AND
MANAGE RiSK
The Responsible Entity has established
a Compliance Committee, comprised
of Johanna Turner (“Chair”), Virginia
Malley and Simone Mosse. A majority
of the Responsible Entity Compliance
Committee is comprised of external
members, including an external
independent Chair.
The Compliance Committee meets
at least quarterly. The Compliance
Committee Terms of Reference sets
out its role and responsibilities,
which is available on request. The
Compliance Committee is responsible
for monitoring compliance by the
Responsible Entity of the Compliance
Plan for the Trust, Trust Constitution
and the Corporations Act. It is also
responsible for assessing the adequacy
of the Compliance Plan for the Trust
and making recommendations to the
Responsible Entity board.
The Responsible Entity values
the importance of robust risk and
compliance management. The
Responsible Entity operates under the
Perpetual Limited (“Perpetual”) Risk
Management Framework (“RMF”)
which applies to all the activities
Perpetual undertakes as Responsible
Entity. The RMF aligns to International
Standard ISO 31000:2018 ‘Risk
Management Guidelines’ and
consists of supporting frameworks,
programs and policies which have
been developed, implemented and are
regularly assessed for effectiveness
to support the management of the
following risk categories considered
material to Perpetual: Strategic,
People, Financial, Investment,
Operational, IT & Cyber Security,
Outsourcing, Environmental, Social &
Governance, Compliance & Legal and
Conduct Risk.
At Perpetual, a current risk register
is maintained as part of our formal
risk management program. The
systems supporting the business
have been designed to ensure risks
are managed within the boundaries
of the Perpetual Risk Appetite
Statement (“RAS”) which articulates
the expected behaviours, measures
and tolerances that management are
to take into account when setting and
implementing strategy and running
their day-day areas of responsibility.
Perpetual’s RMF is reviewed annually
and was last updated and approved
by the Perpetual Board in June 2021,
with other programs and policies
supporting the RMF regularly
reviewed to ensure they remain fit-for
purpose and effective.
All Perpetual Group Executives are
accountable for managing risk within
their area of responsibility, including
the extent to which the Responsible
Entity is effectively applying and
acting in accordance with the RMF.
They are also required to manage risk
as part of their business objectives
with risk management integrated
across business processes.
The RMF is underpinned by the
“Three Lines of Defence” model
to implement best practice risk
management. This model sees
the first line, being business unit
management, accountable for the
day to day identification, ownership
and management of risks. The
Group Risk, Compliance and Client
Advocacy functions represent the
second line and consists of risk and
compliance management professionals
who provide the framework, tools,
advice and assistance to enable
management to effectively identify,
assess and manage risk and meet
their compliance obligations, and
16 | PERPETUAL CREDIT INCOME TRUST
PRiNCiPLE 8
REMUNERATE FAiRLY AND
RESPONSiBLY
The Responsible Entity does not have
a Remuneration Committee. The fees
and expenses which the Responsible
Entity is permitted to pay out of the
assets of the Trust are set out in the
Trust constitution. The Trust financial
statements provide details of all fees
and expenses paid by the Trust during
a financial period.
is responsible for overseeing and
monitoring first line activities. Internal
Audit provides independent assurance,
representing the third line, and reports
to the Audit, Risk and Compliance
Committee (“ARCC”).
The Perpetual Board has the
responsibility and commitment to
monitor that the organisation has a
framework in place to manage risk.
The Board’s commitment is reflected
through the establishment of, and
investment in the Perpetual Group Risk,
Group Compliance and Internal Audit
functions, led by the Chief Risk Officer.
Internal Audit is an integral part
of Perpetual’s governance and risk
management culture and aims to
protect Perpetual’s earnings, reputation
and customers. Perpetual’s Internal
Audit function reports functionality
to the Perpetual Limited Audit, Risk
& Compliance Committee, and for
administrative purposes, through
the Perpetual Chief Risk Officer and
is independent from the External
Auditor and from Perpetual Executive
Management. Internal Audit provides
independent and objective assurance, a
disciplined approach to the assessment
and improvement of risk management
and monitoring and reporting on audit
findings and recommendations. The
Internal Audit Plan (Plan) is approved
formally by the ARCC each year and
re-assessed quarterly to ensure it is
dynamic and continues to address the
key risks faced by the Group. Progress
against the Plan, changes to the Plan
and results of audit activity are reported
quarterly to the ARCC.
Perpetual’s Audit, Risk and Compliance
Committee is responsible for oversight
and monitoring of the Perpetual’s
risk appetite statement, compliance
and risk management frameworks
and internal control systems, and risk
culture. The ARCC is also responsible
for monitoring overall legal and
regulatory compliance across Perpetual
including the Responsible Entity.
The RMF was reviewed, updated and
approved by the Perpetual Limited
Board during the 2021 financial year.
The RMF consists of programs and
policies which are designed to address
specific risk categories - strategic,
financial, operational, outsourcing,
investment, reputation, people and
compliance, legal and conduct risk.
Programs supporting the RMF are
regularly reviewed to confirm their
appropriateness. The Audit, Risk and
Compliance Committee is comprised
of Ian Hammond (Chair), Nancy Fox,
Craig Ueland and Gregory Cooper.
The Audit, Risk and Compliance
Committee Terms of Reference sets out
its role and responsibilities. This can be
obtained on the Perpetual website.
In respect of economic, environmental
and social sustainability risks, the
Investment Manager is a signatory
to the United Nations-supported
Principles for Responsible Investment
(PRI) and has sought to integrate
ESG considerations within its
Investment Process via a Responsible
Investment Policy. This policy outlines
the necessary considerations for
incorporating environmental, social
and corporate governance factors
in the investment decision. The
Investment Manager’s consideration of
ESG factors and labour standards does
not include making ethical or moral
judgements on particular practices or
issues. Instead, when deciding whether
to buy, retain or sell an investment,
the Manager will consider those ESG
factors only to the extent that they are
relevant to the current or future value
of the investment.
CORPORATE GOVERNANCE STATEMENT 2021 | 17
ANNUAL FINANCIAL REPORT 2021 | 17
LEAD AUDiTOR’S
iNDEPENDENCE
DECLARATiON
18 | PERPETUAL CREDIT INCOME TRUST
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent memberfirms of the KPMG global organisation.Liability limited by a scheme approved under Professional Standards Legislation.Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Perpetual Trust Services Limited as the Responsible Entity of Perpetual Credit Income Trust I declare that, to the best of my knowledge and belief, in relation to the audit of Perpetual Credit Income Trust for the financial year ended 30 June 2021 there have been: i.no contraventions of the auditor independence requirements as set out in theCorporations Act 2001 in relation to the audit; andii.no contraventions of any applicable code of professional conduct in relation to the audit.KPMG Jessica Davis Partner Sydney 24 August 2021 KPM_INI_01 PAR_SIG_01 PAR_NAM_01 PAR_POS_01 PAR_DAT_01 PAR_CIT_01 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent memberfirms of the KPMG global organisation.Liability limited by a scheme approved under Professional Standards Legislation.Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Perpetual Trust Services Limited as the Responsible Entity of Perpetual Credit Income Trust I declare that, to the best of my knowledge and belief, in relation to the audit of Perpetual Credit Income Trust for the financial year ended 30 June 2021 there have been: i.no contraventions of the auditor independence requirements as set out in theCorporations Act 2001 in relation to the audit; andii.no contraventions of any applicable code of professional conduct in relation to the audit.KPMG Jessica Davis Partner Sydney 24 August 2021 KPM_INI_01 PAR_SIG_01 PAR_NAM_01 PAR_POS_01 PAR_DAT_01 PAR_CIT_01 STATEMENT OF
COMPREHENSiVE
iNCOME
Statement of comprehensive income
Investment income
Distribution income
Interest income
Net gains/(losses) on financial instruments at fair value through profit
or loss
Net foreign exchange gains/(losses)
Other income
Total net investment income/(loss)
Expenses
Responsible Entity's fees
Investment Manager's fees
Other operating expenses
Total expenses
Profit/(loss)
Other comprehensive income
Total comprehensive income/(loss) for the year
Earnings per unit
Basic and diluted earnings per unit - cents per unit
Perpetual Credit Income Trust
Statement of comprehensive income
For the year ended 30 June 2021
30 June
2021
$'000
30 June
2020
$'000
Notes
3
4
5(a), 14
5(b)
5(c)
6,254
12,421
20,330
(102)
24
38,927
137
3,148
983
4,268
34,659
-
34,659
3,598
14,492
(13,091)
33
40
5,072
130
3,144
1,155
4,429
643
-
643
8
8.66
0.16
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
-19-
ANNUAL FINANCIAL REPORT 2021 | 19
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent memberfirms of the KPMG global organisation.Liability limited by a scheme approved under Professional Standards Legislation.Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Perpetual Trust Services Limited as the Responsible Entity of Perpetual Credit Income Trust I declare that, to the best of my knowledge and belief, in relation to the audit of Perpetual Credit Income Trust for the financial year ended 30 June 2021 there have been: i.no contraventions of the auditor independence requirements as set out in theCorporations Act 2001 in relation to the audit; andii.no contraventions of any applicable code of professional conduct in relation to the audit.KPMG Jessica Davis Partner Sydney 24 August 2021 KPM_INI_01 PAR_SIG_01 PAR_NAM_01 PAR_POS_01 PAR_DAT_01 PAR_CIT_01 KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent memberfirms of the KPMG global organisation.Liability limited by a scheme approved under Professional Standards Legislation.Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Perpetual Trust Services Limited as the Responsible Entity of Perpetual Credit Income Trust I declare that, to the best of my knowledge and belief, in relation to the audit of Perpetual Credit Income Trust for the financial year ended 30 June 2021 there have been: i.no contraventions of the auditor independence requirements as set out in theCorporations Act 2001 in relation to the audit; andii.no contraventions of any applicable code of professional conduct in relation to the audit.KPMG Jessica Davis Partner Sydney 24 August 2021 KPM_INI_01 PAR_SIG_01 PAR_NAM_01 PAR_POS_01 PAR_DAT_01 PAR_CIT_01 BALANCE SHEET
Balance sheet
Assets
Cash and cash equivalents
Financial assets at fair value through profit or loss
Receivables for securities sold
Receivables
Total assets
Liabilities
Financial liabilities at fair value through profit or loss
Distributions payable
Payables for securities purchased
Payables
Total liabilities
Net assets attributable to unitholders - equity
Perpetual Credit Income Trust
Balance sheet
As at 30 June 2021
As at
30 June
2021
$'000
30 June
2020
$'000
10,116
441,076
-
1,945
453,137
287
1,298
5,700
377
7,662
11,942
415,073
5,824
1,364
434,203
2,968
1,210
4,475
364
9,017
445,475
425,186
Notes
13(b)
9
11
10
6
12
7
The above balance sheet should be read in conjunction with the accompanying notes.
-20-
20 | PERPETUAL CREDIT INCOME TRUST
Balance sheet
Assets
Cash and cash equivalents
Financial assets at fair value through profit or loss
Receivables for securities sold
Receivables
Total assets
Liabilities
Financial liabilities at fair value through profit or loss
Distributions payable
Payables for securities purchased
Payables
Total liabilities
Perpetual Credit Income Trust
Balance sheet
As at 30 June 2021
As at
30 June
2021
$'000
30 June
2020
$'000
10,116
441,076
-
1,945
453,137
287
1,298
5,700
377
7,662
11,942
415,073
5,824
1,364
434,203
2,968
1,210
4,475
364
9,017
Notes
13(b)
9
11
10
6
12
7
STATEMENT OF
CHANGES iN
EQUiTY
Statement of changes in equity
Total equity at the beginning of the year
Comprehensive income for the year
Profit/(loss)
Other comprehensive income
Total comprehensive income for the year
Transactions with unitholders
Units issued upon reinvestment of distributions
Distributions to unitholders
Total transactions with unitholders
Net assets attributable to unitholders - equity
445,475
425,186
Total equity at the end of the year
Perpetual Credit Income Trust
Statement of changes in equity
For the year ended 30 June 2021
Notes
7
30 June
2021
$'000
30 June
2020
$'000
425,186
-
-
441,226
-
-
34,659
-
34,659
-
171
(14,541)
(14,370)
-
-
445,475
643
-
643
-
368
(17,051)
(16,683)
-
-
425,186
7
6, 7
7
The above balance sheet should be read in conjunction with the accompanying notes.
The above statement of changes in equity should be read in conjunction with the accompanying notes.
-20-
-21-
ANNUAL FINANCIAL REPORT 2021 | 21
STATEMENT OF
CASH FLOWS
Statement of cash flows
Cash flows from operating activities
Distributions received
Interest received
Other income received
Investment Manager's fees paid
Other operating expenses paid
Net cash inflow/(outflow) from operating activities
13(a)
Cash flows from investing activities
Proceeds from sale of investments
Payments for purchase of investments
Net cash inflow/(outflow) from investing activities
Cash flows from financing activities
Distributions paid
Net cash inflow/(outflow) from financing activities
Net increase/(decrease) in cash and cash equivalents
Perpetual Credit Income Trust
Statement of cash flows
For the year ended 30 June 2021
30 June
2021
$'000
30 June
2020
$'000
Notes
5,639
12,406
336
(3,364)
(1,153)
13,864
2,963
14,654
258
(3,385)
(1,405)
13,085
338,493
(339,907)
(1,414)
452,220
(586,919)
(134,699)
(14,283)
(14,283)
(15,800)
(15,800)
(1,833)
(137,414)
Cash and cash equivalents at the beginning of the year
11,942
149,358
Effects of exchange rate changes on cash and cash equivalents
7
(2)
Cash and cash equivalents at the end of the year
13(b)
10,116
11,942
The above statement of cash flows should be read in conjunction with the accompanying notes.
The annual financial report is prepared on the basis of fair value measurement of assets and liabilities except
-22-
22 | PERPETUAL CREDIT INCOME TRUST
-23-
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
1 General Information
The annual financial report covers the Perpetual Credit Income Trust (the Trust) as an individual entity. The Trust
is a registered managed investment scheme, which was constituted on 9 May 2018, registered with the
Australian Securities and Investments Commission on 22 May 2018, commenced operations on 8 May 2019 and
its units commenced trading on the Australian Securities Exchange (ASX: PCI) on 14 May 2019. The Trust is
domiciled in Australia. For the purpose of the financial statements, the Trust is a for-profit entity.
The Responsible Entity of the Trust is Perpetual Trust Services Limited (ACN 000 142 049, AFSL 236 648) (the
Responsible Entity). The Responsible Entity's registered office is Level 18, Angel Place, 123 Pitt Street, Sydney,
The Investment Manager of the Trust is Perpetual Investment Management Limited (AFSL 234 426) (the
The investment objective of the Trust is to provide investors with monthly income by investing in a diversified pool
of credit and fixed income assets in accordance with the Product Disclosure Statement and the provisions of the
NSW 2000.
Investment Manager).
Trust's Constitution.
The annual financial report was authorised for issue by the Directors on 24 August 2021. The Directors of the
Responsible Entity have the power to amend and reissue the annual financial report.
2 Summary of significant accounting policies
The principal accounting policies applied in the preparation of this annual financial report are set out below.
These policies have been consistently applied to all years presented, unless otherwise stated.
The annual financial report is a general purpose financial report prepared in accordance with the Australian
Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) and the
(a) Basis of preparation
Corporations Act 2001 in Australia.
where otherwise stated.
Compliance with International Financial Reporting Standards
The annual financial report also complies with International Financial Reporting Standards and Interpretations
issued by the International Accounting Standards Board.
Functional and presentation currency
Use of estimates
The annual financial report is presented in Australian dollars, which is the Trust's functional currency.
Management makes estimates and assumptions that affect the reported amounts in the financial statements.
Estimates and associated assumptions are reviewed regularly and are based on historical experience and
various other factors, including expectations of future events that are believed to be reasonable under the
circumstances. Where applicable to the fair value measurement, the impact of coronavirus (COVID-19) pandemic
is assessed and estimated. Actual results may differ from these estimates.
The use of estimates and critical judgements in fair value measurement that can have significant effect on the
amounts recognised in the financial statements is described in note 16(d).
NOTES TO THE
FiNANCiAL
STATEMENTS
1 General Information
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
The annual financial report covers the Perpetual Credit Income Trust (the Trust) as an individual entity. The Trust
is a registered managed investment scheme, which was constituted on 9 May 2018, registered with the
Australian Securities and Investments Commission on 22 May 2018, commenced operations on 8 May 2019 and
its units commenced trading on the Australian Securities Exchange (ASX: PCI) on 14 May 2019. The Trust is
domiciled in Australia. For the purpose of the financial statements, the Trust is a for-profit entity.
The Responsible Entity of the Trust is Perpetual Trust Services Limited (ACN 000 142 049, AFSL 236 648) (the
Responsible Entity). The Responsible Entity's registered office is Level 18, Angel Place, 123 Pitt Street, Sydney,
NSW 2000.
The Investment Manager of the Trust is Perpetual Investment Management Limited (AFSL 234 426) (the
Investment Manager).
The investment objective of the Trust is to provide investors with monthly income by investing in a diversified pool
of credit and fixed income assets in accordance with the Product Disclosure Statement and the provisions of the
Trust's Constitution.
The annual financial report was authorised for issue by the Directors on 24 August 2021. The Directors of the
Responsible Entity have the power to amend and reissue the annual financial report.
2 Summary of significant accounting policies
The principal accounting policies applied in the preparation of this annual financial report are set out below.
These policies have been consistently applied to all years presented, unless otherwise stated.
(a) Basis of preparation
The annual financial report is a general purpose financial report prepared in accordance with the Australian
Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) and the
Corporations Act 2001 in Australia.
The annual financial report is prepared on the basis of fair value measurement of assets and liabilities except
where otherwise stated.
Compliance with International Financial Reporting Standards
The annual financial report also complies with International Financial Reporting Standards and Interpretations
issued by the International Accounting Standards Board.
Functional and presentation currency
The annual financial report is presented in Australian dollars, which is the Trust's functional currency.
Use of estimates
Management makes estimates and assumptions that affect the reported amounts in the financial statements.
Estimates and associated assumptions are reviewed regularly and are based on historical experience and
various other factors, including expectations of future events that are believed to be reasonable under the
circumstances. Where applicable to the fair value measurement, the impact of coronavirus (COVID-19) pandemic
is assessed and estimated. Actual results may differ from these estimates.
The use of estimates and critical judgements in fair value measurement that can have significant effect on the
amounts recognised in the financial statements is described in note 16(d).
-23-
ANNUAL FINANCIAL REPORT 2021 | 23
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
2 Summary of significant accounting policies (continued)
2 Summary of significant accounting policies (continued)
(b) New accounting standards and interpretations
(d) Net assets attributable to unitholders
There are no new accounting standards, amendments and interpretations effective for the first time for the
financial year beginning 1 July 2020 that would be expected to have a material impact on the Trust.
The Trust is a closed-end vehicle and accordingly there are no redemptions by investors. Instead, while the Trust
is listed, unitholders who wish to exit their investment will be able to do so via the ASX.
(c) Financial instruments
(i) Classification
The Trust classifies its investments based on its business model for managing those financial instruments and
their contractual cash flow characteristics. The Trust’s investment portfolio is managed and its performance is
evaluated on a fair value basis in accordance with the Trust’s documented investment strategy. The Trust
evaluates the information about its investments on a fair value basis together with other related financial
information.
Derivatives and unlisted unit trusts are classified as financial assets at fair value through profit or loss. Derivative
contracts that have negative values are presented as financial liabilities at fair value through profit or loss.
For debt securities, the contractual cash flows are solely payments of principal and interest, however, they are
neither held for collecting contractual cash flows nor held both for collecting contractual cash flows and for sale.
The collection of contractual cash flows is only incidental to achieving the Trust’s business model’s objective.
Consequently, the debt securities are classified as financial assets at fair value through profit or loss.
(ii) Recognition/derecognition
The Trust recognises financial assets and liabilities on the date it becomes party to the purchase contractual
agreement (trade date) and recognises changes in fair value of the financial assets or financial liabilities from this
date.
Investments are derecognised on the date the Trust becomes party to the sale contractual agreement (trade
date).
(iii) Measurement
At initial recognition, a financial asset or liability is measured at fair value. Transaction costs are expensed in
profit or loss as incurred. Subsequently all financial assets and liabilities are measured at fair value without any
deduction for estimated future selling cost. Gains and losses arising from changes in the fair value measurement
are recognised in profit or loss in the period in which they arise.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. Further details of fair value measurement are disclosed in
note 16(d).
(iv) Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet when there is a
legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or
realise the asset and settle the liability simultaneously.
(g) Payables
Units in the Trust are listed on the ASX and traded by unitholders. The units can be traded on the ASX at any
time for cash based on the listed price. While the Trust is listed and liquidity is generally expected to exist in the
secondary market (ASX), there are no guarantees that an active trading market with sufficient liquidity will be
available.
The Trust's units are classified as equity as the Trust satisfies all criteria for the classification of puttable financial
instruments as equity under AASB 132 Financial Instruments: Presentation.
For the purpose of presentation in the statement of cash flows, cash and cash equivalents include cash at bank,
margin accounts, other short term and highly liquid financial assets with a maturity period of three months or less
from the date of acquisition that are readily convertible to known amounts of cash and which are subject to an
Margin accounts comprise cash held as collateral for derivative transactions. The cash is held by the broker and
(e) Cash and cash equivalents
insignificant risk of changes in value.
is only available to meet margin calls.
(f) Receivables
30 days of being accrued for.
Receivables include accrued income and receivables for securities sold. Amounts are generally received within
These amounts are recognised initially at fair value and subsequently measured at amortised cost. At each
reporting date, the Trust shall measure the loss allowance on receivables at an amount equal to the lifetime
expected credit losses if the credit risk has increased significantly since initial recognition. If, at the reporting date,
the credit risk has not increased significantly since initial recognition, the Trust shall measure the loss allowance
at an amount equal to 12-month expected credit losses. Significant financial difficulties of the counterparty,
probability that the counterparty will enter bankruptcy or financial reorganisation, and default in payments are all
considered indicators that a loss allowance may be required. If the credit risk increases to the point that it is
considered to be credit impaired, interest income will be calculated based on the gross carrying amount adjusted
for the loss allowance.
The amount of the impairment loss is recognised in profit or loss within other operating expenses. When a trade
receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent
period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off
are credited against other operating expenses in profit or loss.
Payables include accrued expenses and payables for securities purchased which are unpaid at the end of the
reporting date. Amounts are generally paid within 30 days of being accrued for.
-24-
-25-
24 | PERPETUAL CREDIT INCOME TRUST
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
2 Summary of significant accounting policies (continued)
(d) Net assets attributable to unitholders
The Trust is a closed-end vehicle and accordingly there are no redemptions by investors. Instead, while the Trust
is listed, unitholders who wish to exit their investment will be able to do so via the ASX.
Units in the Trust are listed on the ASX and traded by unitholders. The units can be traded on the ASX at any
time for cash based on the listed price. While the Trust is listed and liquidity is generally expected to exist in the
secondary market (ASX), there are no guarantees that an active trading market with sufficient liquidity will be
available.
The Trust's units are classified as equity as the Trust satisfies all criteria for the classification of puttable financial
instruments as equity under AASB 132 Financial Instruments: Presentation.
(e) Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents include cash at bank,
margin accounts, other short term and highly liquid financial assets with a maturity period of three months or less
from the date of acquisition that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value.
Margin accounts comprise cash held as collateral for derivative transactions. The cash is held by the broker and
is only available to meet margin calls.
(f) Receivables
Receivables include accrued income and receivables for securities sold. Amounts are generally received within
30 days of being accrued for.
These amounts are recognised initially at fair value and subsequently measured at amortised cost. At each
reporting date, the Trust shall measure the loss allowance on receivables at an amount equal to the lifetime
expected credit losses if the credit risk has increased significantly since initial recognition. If, at the reporting date,
the credit risk has not increased significantly since initial recognition, the Trust shall measure the loss allowance
at an amount equal to 12-month expected credit losses. Significant financial difficulties of the counterparty,
probability that the counterparty will enter bankruptcy or financial reorganisation, and default in payments are all
considered indicators that a loss allowance may be required. If the credit risk increases to the point that it is
considered to be credit impaired, interest income will be calculated based on the gross carrying amount adjusted
for the loss allowance.
The amount of the impairment loss is recognised in profit or loss within other operating expenses. When a trade
receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent
period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off
are credited against other operating expenses in profit or loss.
(g) Payables
Payables include accrued expenses and payables for securities purchased which are unpaid at the end of the
reporting date. Amounts are generally paid within 30 days of being accrued for.
-25-
ANNUAL FINANCIAL REPORT 2021 | 25
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
2 Summary of significant accounting policies (continued)
3 Interest income
(h) Investment income
Interest income from financial assets at amortised cost is recognised using the effective interest method and
includes interest from cash and cash equivalents.
Interest from financial assets at fair value through profit or loss is determined based on the contractual coupon
interest rate and includes interest from debt securities.
Distribution income from financial assets at fair value through profit or loss is recognised in profit or loss when the
Trust's right to receive payment is established.
Other changes in fair value for such instruments are recorded in accordance with the accounting policies
described in note 2(c).
(i) Expenses
All expenses, including Investment Manager's fees and Responsible Entity's fees are recognised in profit or loss
on an accruals basis.
(j)
Income tax
The Trust is not subject to income tax provided the taxable income of the Trust is attributed in full to its
unitholders each financial year either by way of cash or reinvestment. Unitholders are subject to income tax at
their own marginal tax rates on amounts attributable to them.
The benefits of foreign tax paid are passed on to unitholders, providing certain conditions are met.
(k) Distributions
Distributions are payable as set out in the Trust's Constitution. Such distributions are recognised as payable
when they are determined by the Responsible Entity of the Trust.
5 Expenses
(l) Goods and Services Tax
Goods and Services Tax (GST) is incurred on the cost of various services provided to the Trust by third parties.
The Trust qualifies for Reduced Input Tax Credit; hence expenses such as Responsible Entity's fees have been
recognised in profit or loss net of the amount of GST recoverable from the Australian Taxation Office. Payables
are stated with the amount of GST included. The net amount of GST recoverable is included in receivables in the
balance sheet. Cash flows are included in the statement of cash flows on a gross basis.
(m) Foreign currency translation
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at
the date of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translations at year end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in profit or loss.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates
at the date when fair value was determined. Translation differences on assets and liabilities carried at fair value
are reported in profit or loss on a net basis within net gains/(losses) on financial instruments at fair value through
profit or loss.
30 June
2021
$'000
30 June
2020
$'000
(3)
12,424
12,421
109
14,383
14,492
30 June
2021
$'000
30 June
2020
$'000
17,320
(11,583)
3,010
(1,508)
20,330
(13,091)
Cash and cash equivalents
Debt securities
Total
4 Net gains/(losses) on financial instruments at fair value through profit or loss
Net gains/(losses) arising from changes in the fair value measurement comprise:
Net unrealised gains/(losses) on financial instruments at fair value through profit or
Net realised gains/(losses) on financial instruments at fair value through profit or
Net gains/(losses) on financial instruments at fair value through profit or
loss
loss
loss
All expenses are recognised, net of the amount of Goods and Services Tax (GST) recoverable from the taxation
authority, in profit or loss on an accruals basis.
(a) Responsible Entity's fees
The Responsible Entity, Perpetual Trust Services Limited, is entitled to receive between 0.03% - 0.05% per
annum (net of RITC) of the Net Asset Value of the Trust and is also entitled to be paid remuneration for
Additional Fund Administration Services in the manner and at the time as set out in Investment Management
Agreement. The Responsible Entity’s fees are calculated and accrued daily and paid monthly in arrears. Further
details of the Responsible Entity’s fees are disclosed in note 14.
-26-
-27-
26 | PERPETUAL CREDIT INCOME TRUST
3 Interest income
Cash and cash equivalents
Debt securities
Total
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
30 June
2021
$'000
30 June
2020
$'000
(3)
12,424
12,421
109
14,383
14,492
4 Net gains/(losses) on financial instruments at fair value through profit or loss
Net gains/(losses) arising from changes in the fair value measurement comprise:
30 June
2021
$'000
30 June
2020
$'000
Net unrealised gains/(losses) on financial instruments at fair value through profit or
loss
Net realised gains/(losses) on financial instruments at fair value through profit or
loss
Net gains/(losses) on financial instruments at fair value through profit or
loss
17,320
(11,583)
3,010
(1,508)
20,330
(13,091)
5 Expenses
All expenses are recognised, net of the amount of Goods and Services Tax (GST) recoverable from the taxation
authority, in profit or loss on an accruals basis.
(a) Responsible Entity's fees
The Responsible Entity, Perpetual Trust Services Limited, is entitled to receive between 0.03% - 0.05% per
annum (net of RITC) of the Net Asset Value of the Trust and is also entitled to be paid remuneration for
Additional Fund Administration Services in the manner and at the time as set out in Investment Management
Agreement. The Responsible Entity’s fees are calculated and accrued daily and paid monthly in arrears. Further
details of the Responsible Entity’s fees are disclosed in note 14.
-27-
ANNUAL FINANCIAL REPORT 2021 | 27
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
5 Expenses (continued)
(b) Investment Manager's fees
The Investment Manager, Perpetual Investment Management Limited, receives management fees of 0.72% per
annum (net of RITC) of the Net Asset Value of the Trust. In accordance with the PDS dated 8 March 2019, the
Net Asset Value of the Trust is calculated daily by deducting all liabilities, which includes declared but unpaid
distributions, calculated in accordance with the Responsible Entity’s Unit pricing and Valuation Policy and
Australian Accounting Standards (AAS) from the total value of assets of the Trust. The management fees are
calculated and accrued daily and paid monthly in arrears.
Investment Manager's fees
30 June
2021
$'000
30 June
2020
$'000
3,148
3,144
The Manager is appointed for an initial term of ten years unless terminated earlier (Initial Term). The Investment
Management Agreement will be automatically extended for a further five year term on the expiry of the Initial
Term (Extended Term) unless terminated earlier in accordance with its terms.
If the Investment Management Agreement is terminated during the term, then in certain circumstances the
Manager will be entitled to a termination payment equal to the Management fee rate multiplied by the number of
years in the Initial Term or Extended Term and the value of the total Portfolio as at the termination date, reduced
by one one hundred and twentieth (1/120) for Initial Term or one sixtieth (1/60) for Extended Term for each whole
calendar month that has elapsed between the commencement date or the commencement of the Extended Term
and the termination date.
The Manager paid for all of the costs incurred in raising capital under the Offer in accordance with the PDS dated
8 March 2019. If the Investment Management Agreement is terminated during the Initial Term, then in certain
circumstances the Manager will be entitled to be reimbursed for these costs, reduced by one one hundred and
twentieth (1/120) for each whole calendar month that has elapsed between the commencement date and the
termination date.
(c) Other operating expenses
Auditors’ remuneration
ASX fees
Registry services
Custody administration fees
Other expenses
Total other operating expenses
30 June
2021
$'000
30 June
2020
$'000
55
95
182
79
572
983
59
56
204
59
777
1,155
-28-
28 | PERPETUAL CREDIT INCOME TRUST
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
5 Expenses (continued)
(b) Investment Manager's fees
The Investment Manager, Perpetual Investment Management Limited, receives management fees of 0.72% per
annum (net of RITC) of the Net Asset Value of the Trust. In accordance with the PDS dated 8 March 2019, the
Net Asset Value of the Trust is calculated daily by deducting all liabilities, which includes declared but unpaid
distributions, calculated in accordance with the Responsible Entity’s Unit pricing and Valuation Policy and
Australian Accounting Standards (AAS) from the total value of assets of the Trust. The management fees are
calculated and accrued daily and paid monthly in arrears.
30 June
2021
$'000
30 June
2020
$'000
3,148
3,144
Investment Manager's fees
The Manager is appointed for an initial term of ten years unless terminated earlier (Initial Term). The Investment
Management Agreement will be automatically extended for a further five year term on the expiry of the Initial
Term (Extended Term) unless terminated earlier in accordance with its terms.
If the Investment Management Agreement is terminated during the term, then in certain circumstances the
Manager will be entitled to a termination payment equal to the Management fee rate multiplied by the number of
years in the Initial Term or Extended Term and the value of the total Portfolio as at the termination date, reduced
by one one hundred and twentieth (1/120) for Initial Term or one sixtieth (1/60) for Extended Term for each whole
calendar month that has elapsed between the commencement date or the commencement of the Extended Term
and the termination date.
The Manager paid for all of the costs incurred in raising capital under the Offer in accordance with the PDS dated
8 March 2019. If the Investment Management Agreement is terminated during the Initial Term, then in certain
circumstances the Manager will be entitled to be reimbursed for these costs, reduced by one one hundred and
twentieth (1/120) for each whole calendar month that has elapsed between the commencement date and the
termination date.
(c) Other operating expenses
Auditors’ remuneration
ASX fees
Registry services
Custody administration fees
Other expenses
Total other operating expenses
30 June
2021
$'000
30 June
2020
$'000
55
95
182
79
572
983
59
56
204
59
777
1,155
5 Expenses (continued)
(d) Auditor's remuneration
Audit and review of financial statements - KPMG
Tax compliance services - KPMG
Audit and review of compliance plan - PwC
Total auditor's remuneration
Audit fees were paid or payable by the Trust.
6 Distributions to unitholders
The distributions for the year were as follows:
Distributions paid - July
Distributions paid - August
Distributions paid - September
Distributions paid - October
Distributions paid - November
Distributions paid - December
Distributions paid - January
Distributions paid - February
Distributions paid - March
Distributions paid - April
Distributions paid - May
Distributions payable - June
Total distributions
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
30 June
2021
$
30 June
2020
$
44,133
8,567
2,422
55,122
48,235
8,034
2,836
59,105
30 June
2021
$'000
30 June
2021
CPU
30 June
2020
$'000
30 June
2020
CPU
1,264
1,273
1,188
1,227
1,139
1,191
1,197
1,084
1,210
1,168
1,302
1,298
14,541
0.3157
0.3179
0.2968
0.3066
0.2845
0.2974
0.2989
0.2707
0.3022
0.2917
0.3253
0.3241
3.6318
1,599
1,597
1,544
1,499
1,449
1,497
1,498
1,401
1,307
1,209
1,241
1,210
17,051
0.3997
0.3993
0.3860
0.3745
0.3622
0.3741
0.3741
0.3501
0.3264
0.3019
0.3099
0.3023
4.26
-28-
-29-
ANNUAL FINANCIAL REPORT 2021 | 29
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
7 Net assets attributable to unitholders
9 Financial assets at fair value through profit or loss
Movements in the number of units and net assets attributable to unitholders during the year were as follows:
30 June
2021
Units '000
30 June
2020
Units '000
30 June
2021
$'000
30 June
2020
$'000
Net assets attributable to unitholders
Opening balance
Units issued upon reinvestment of distributions
Distributions to unitholders
Profit/(loss)
Closing balance
400,334
155
-
-
400,489
400,000
334
-
-
400,334
425,186
171
(14,541)
34,659
445,475
441,226
368
(17,051)
643
425,186
As stipulated within the Trust's Constitution, each unit represents a right to an individual unit in the Trust and
does not extend to a right to the underlying assets of the Trust. There are no separate classes of units and each
unit has the same right attaching to it as all other units of the Trust.
Capital risk management
The Trust considers its net assets attributable to unitholders as capital.
8 Earnings per unit
blank
blank
blank
Profit/(loss) attributable to unitholders ($'000)
blank
Weighted average number of units on issue ('000)
blank
blank
Basic and diluted earnings per unit (cents per unit)
30 June
2021
30 June
2020
blank
34,659
643
400,383
400,210
8.66
0.16
Basic and diluted earnings per unit is calculated by dividing the profit attributable to unitholders of the Trust by the
weighted average number of units on issue during the year. There is no difference between basic and diluted
earnings per unit as no units are dilutive in nature.
Derivatives
Futures
Swaps
Debt securities
Unlisted unit trusts
Total financial assets at fair value through profit or loss
10 Financial liabilities at fair value through profit or loss
Total financial liabilities at fair value through profit or loss
Derivatives
Futures
Swaps
11 Receivables
Distributions receivable
Interest receivable
Other receivables
Total receivables
30 June
2021
$'000
30 June
2020
$'000
358
1,720
306,653
132,345
441,076
24
458
331,992
82,599
415,073
30 June
2021
$'000
30 June
2020
$'000
-
287
287
447
2,521
2,968
30 June
2021
$'000
30 June
2020
$'000
1,769
129
47
1,945
1,154
114
96
1,364
-30-
-31-
30 | PERPETUAL CREDIT INCOME TRUST
9 Financial assets at fair value through profit or loss
Derivatives
Futures
Swaps
Debt securities
Unlisted unit trusts
Total financial assets at fair value through profit or loss
10 Financial liabilities at fair value through profit or loss
Derivatives
Futures
Swaps
Total financial liabilities at fair value through profit or loss
11 Receivables
Distributions receivable
Interest receivable
Other receivables
Total receivables
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
30 June
2021
$'000
30 June
2020
$'000
358
1,720
306,653
132,345
441,076
24
458
331,992
82,599
415,073
30 June
2021
$'000
30 June
2020
$'000
-
287
287
447
2,521
2,968
30 June
2021
$'000
30 June
2020
$'000
1,769
129
47
1,945
1,154
114
96
1,364
-31-
ANNUAL FINANCIAL REPORT 2021 | 31
12 Payables
Responsible Entity's fees payable
Investment Manager's fees payable
Audit fees payable
Other payable
Total payables
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
30 June
2021
$'000
30 June
2020
$'000
69
283
11
14
377
69
269
11
15
364
13 Reconciliation of profit/(loss) to net cash inflow/(outflow) from operating activities
(a)Reconciliation of operating profit/(loss) to net
(a) Reconciliation of profit/(loss) to net cash inflow/(outflow) from
operating activities
Profit/(loss)
(Increase)/decrease in distributions receivable
(Increase)/decrease in interest receivable
(Increase)/decrease in other receivables
Increase/(decrease) in payables
Net (gains)/losses on financial instruments at fair value through profit or loss
Net foreign exchange (gains)/losses
Net cash inflow/(outflow) from operating activities
(b)Components of cash and cash equivalents
(b) Components of cash and cash equivalents
Cash at the end of the year as shown in the statement of cash flows is reconciled to
the balance sheet as follows:
Cash at bank
Margin accounts
Total cash and cash equivalents
(c)Non-cash financing activities
(c) Non-cash financing activities
During the year, the following distribution payments were satisfied by the issue of
units under the distribution reinvestment plan
One
30 June
2021
$'000
30 June
2020
$'000
34,659
(615)
(15)
49
14
(20,330)
102
13,864
643
(635)
162
(52)
(91)
13,091
(33)
13,085
9,813
303
10,116
9,400
2,542
11,942
171
368
-32-
32 | PERPETUAL CREDIT INCOME TRUST
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
12 Payables
Responsible Entity's fees payable
Investment Manager's fees payable
Audit fees payable
Other payable
Total payables
30 June
2021
$'000
30 June
2020
$'000
69
283
11
14
377
69
269
11
15
364
30 June
2021
$'000
30 June
2020
$'000
34,659
(615)
(15)
49
14
(20,330)
102
13,864
643
(635)
162
(52)
(91)
13,091
(33)
13,085
9,813
303
10,116
9,400
2,542
11,942
13 Reconciliation of profit/(loss) to net cash inflow/(outflow) from operating activities
(a)Reconciliation of operating profit/(loss) to net
(a) Reconciliation of profit/(loss) to net cash inflow/(outflow) from
Net (gains)/losses on financial instruments at fair value through profit or loss
Cash at the end of the year as shown in the statement of cash flows is reconciled to
operating activities
Profit/(loss)
(Increase)/decrease in distributions receivable
(Increase)/decrease in interest receivable
(Increase)/decrease in other receivables
Increase/(decrease) in payables
Net foreign exchange (gains)/losses
Net cash inflow/(outflow) from operating activities
(b)Components of cash and cash equivalents
(b) Components of cash and cash equivalents
the balance sheet as follows:
Cash at bank
Margin accounts
Total cash and cash equivalents
(c)Non-cash financing activities
(c) Non-cash financing activities
One
During the year, the following distribution payments were satisfied by the issue of
units under the distribution reinvestment plan
171
368
14 Related party transactions
Responsible Entity
The Responsible Entity of Perpetual Credit Income Trust is Perpetual Trust Services Limited (ACN 000 142 049,
AFSL 236 648), a wholly owned subsidiary of Perpetual Limited (ACN 000 431 827).
The Trust does not employ personnel in its own right. However, it is required to have an incorporated
Responsible Entity to manage the activities of the Trust and this is considered the key management personnel.
Key management personnel
(a) Directors
The Directors of Perpetual Trust Services Limited during the year and up to the date of this report are shown
below. The Directors were in office for this entire year except where stated otherwise.
Name
Glenn Foster
Richard McCarthy
Simone Mosse
Vicki Riggio
Phillip Blackmore
Date of appointment/resignation
Resigned as Director on 23 October 2020
Appointed as Non-Executive Director on 1 February 2021
Alternate Director for Vicki Riggio
(b) Other key management personnel
There were no other persons with responsibility for planning, directing and controlling the activities of the Trust,
directly or indirectly, during or since the end of the financial year.
Key management personnel unitholdings
No key management personnel of the Responsible Entity held units in the Trust as at 30 June 2021.
Key management personnel compensation
Key management personnel do not receive any remuneration directly from the Trust. They receive remuneration
from a related party of the Responsible Entity in their capacity as Directors or employees of the Responsible
Entity or its related parties. Consequently, the Trust does not pay any compensation to its key management
personnel. Payments made from the Trust to the Responsible Entity do not include any amounts attributable to
the compensation of key management personnel.
Key management personnel loan disclosures
The Trust has not made, guaranteed or secured, directly or indirectly, any loans to the key management
personnel or their personally related entities at any time during the reporting year.
Other transactions within the Trust
Apart from those details disclosed in this note, no key management personnel have entered into a material
contract with the Trust since the end of the previous financial year and there were no material contracts involving
Director's interests existing at year end.
-32-
-33-
ANNUAL FINANCIAL REPORT 2021 | 33
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
14 Related party transactions (continued)
14 Related party transactions (continued)
Investment Manager
The Investment Manager, Perpetual Investment Management Limited, is a related party to the Trust. In
accordance with AASB 124 Related Party Disclosures, a member of the same group as the Responsible Entity
(who provides key management personnel services) is a related party.
Under the terms of the Investment Management Agreement, the Investment Manager is entitled to receive
Investment Manager's fees calculated by reference to the net asset value of the Trust. Further details of the
Investment Manager's fees are disclosed in note 5.
Responsible Entity's fees and other transactions
Under the terms of the Trust's Constitution, the Responsible Entity is entitled to receive Responsible Entity's fees
calculated by reference to the net asset value of the Trust.
The transactions during the year and amounts payable at the reporting date between the Trust and the
Responsible Entity were as follows:
Responsible Entity's fees
Responsible Entity's fees payable
Related party unitholdings
30 June
2021
$
30 June
2020
$
136,655
69,462
129,729
68,857
Parties related to the Trust (including the Responsible Entity, its related parties and other schemes managed by
the Responsible Entity) held units in the Trust as follows:
15 Structured entities
30 June 2021
Unitholders
Number of
units held
'000
Interest
held
%
Number of
units
acquired
'000
Number of
units
disposed
'000
Distributions
paid/payable
$'000
Perpetual Super Wrap
32
0.0
-
-
1
distributions.
30 June 2020
Unitholders
Number of
units held
'000
Interest
held
%
Number of
units
acquired
'000
Number of
units
disposed
'000
Distributions
paid/payable
$'000
Perpetual Super Wrap
32
0.0
32
-
1
The Trust held investments in the following scheme which is also managed by the Responsible Entity or its
Investments
related parties:
30 June 2021
Investments
30 June 2020
Investments
Fair value
Number of
Number of
Distributions
Number of
units held
'000
of
Interest
units
investments
held
acquired
disposed
$'000
%
'000
units
'000
received/
receivable
$'000
Perpetual Loan Fund
127,554
132,345
67.6
45,467
6,254
Fair value
Number of
Number of
Number of
units held
'000
of
Interest
investments
$'000
held
%
units
acquired
'000
units
disposed
'000
Distributions
received/
receivable
$'000
Perpetual Loan Fund
82,087
82,599
56.4
34,233
3,598
-
-
A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor
in deciding control and the relevant activities are directed by means of contractual arrangements.
The Trust considers all investments in unlisted unit trusts to be structured entities. The Trust invests in related
unlisted unit trusts for the purpose of capital appreciation and earning investment income.
The unlisted unit trusts are invested in accordance with the investment strategy by their respective investment
managers. The return of the unlisted unit trusts is exposed to the variability of the performance of their
investments. The unlisted unit trusts finance their operations by issuing redeemable units which are puttable at
the holder's option and entitle the holder to a proportional stake in the respective trusts' net assets and
The Trust's exposure to structured entities at 30 June 2021 was $132,344,807 (2020: $82,599,041).
The fair value of these entities is included in financial assets at fair value through profit or loss in the balance
sheet.
The Trust's maximum exposure to loss from its interests in the structured entities is equal to the total fair value of
its investments in these entities as there are no off balance sheet exposures relating to them. The Trust's
exposure to any risk from the structured entities will cease when these investments are disposed of.
The Trust does not have current commitments or intentions and contractual obligations to provide financial or
other support to the structured entities. There are no loans or advances currently made to these entities.
-34-
-35-
34 | PERPETUAL CREDIT INCOME TRUST
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
14 Related party transactions (continued)
Investments
The Trust held investments in the following scheme which is also managed by the Responsible Entity or its
related parties:
30 June 2021
Investments
Number of
units held
'000
Fair value
of
investments
$'000
Interest
held
%
Number of
units
acquired
'000
Number of
units
disposed
'000
Distributions
received/
receivable
$'000
Perpetual Loan Fund
127,554
132,345
67.6
45,467
-
6,254
30 June 2020
Investments
Number of
units held
'000
Fair value
of
investments
$'000
Interest
held
%
Number of
units
acquired
'000
Number of
units
disposed
'000
Distributions
received/
receivable
$'000
Perpetual Loan Fund
82,087
82,599
56.4
34,233
-
3,598
15 Structured entities
A structured entity is an entity that has been designed so that voting or similar rights are not the dominant factor
in deciding control and the relevant activities are directed by means of contractual arrangements.
The Trust considers all investments in unlisted unit trusts to be structured entities. The Trust invests in related
unlisted unit trusts for the purpose of capital appreciation and earning investment income.
The unlisted unit trusts are invested in accordance with the investment strategy by their respective investment
managers. The return of the unlisted unit trusts is exposed to the variability of the performance of their
investments. The unlisted unit trusts finance their operations by issuing redeemable units which are puttable at
the holder's option and entitle the holder to a proportional stake in the respective trusts' net assets and
distributions.
The Trust's exposure to structured entities at 30 June 2021 was $132,344,807 (2020: $82,599,041).
The fair value of these entities is included in financial assets at fair value through profit or loss in the balance
sheet.
The Trust's maximum exposure to loss from its interests in the structured entities is equal to the total fair value of
its investments in these entities as there are no off balance sheet exposures relating to them. The Trust's
exposure to any risk from the structured entities will cease when these investments are disposed of.
The Trust does not have current commitments or intentions and contractual obligations to provide financial or
other support to the structured entities. There are no loans or advances currently made to these entities.
-35-
ANNUAL FINANCIAL REPORT 2021 | 35
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
15 Structured entities (continued)
Unconsolidated subsidiaries
The Trust applies the investment entity exception to consolidation available under AASB 10 Consolidated
Financial Statements and measures its subsidiaries at fair value through profit or loss.
The following unconsolidated structured entities are considered to be the Trust's subsidiaries at the reporting
date:
Fair value
30 June
2021
$'000
30 June
2020
$'000
Ownership interest
30 June
30 June
2020
2021
%
%
Perpetual Loan Fund
132,345
82,599
67.6
56.4
The principal place of business for the above entity is Sydney, Australia.
16 Financial risk management
The Trust's activities expose it to a variety of financial risks. The management of these risks is undertaken by the
Trust's Investment Manager who has been appointed by the Responsible Entity under an Investment
Management Agreement to manage the Trust's assets in accordance with the Investment Objective and Strategy.
The Responsible Entity has in place a framework which includes:
• The Investment Manager providing the Responsible Entity with regular reports on their compliance with the
Investment Management Agreement;
• Completion of regular reviews on the Service Provider which may include a review of the investment managers
risk management framework to manage the financial risks of the Trust; and
• Regular reporting on the liquidity of the Trust in accordance with the Trust’s Liquidity Risk Management
Statement.
The Trust’s Investment Manager has in place a framework to identify and manage the financial risks in
accordance with the investment objective and strategy. This includes an investment due diligence process and
on-going monitoring of the investments in the Trust. Specific controls the Investment Manager applies to manage
the financial risks are detailed under each risk specified below.
(a) Market risk
(i) Currency risk
Currency risk arises as the fair value or future cash flows of monetary securities denominated in foreign currency
will fluctuate due to changes in exchange rates. The currency risk relating to non-monetary assets and liabilities
is a component of price risk not currency risk. However, Investment Manager monitors the exposures on all
foreign currency denominated assets and liabilities.
The Trust held cross currency swaps to protect the valuation of financial assets and liabilities against variations in
the exchange rates. The Trust does not designate any derivatives as hedges, and hence these derivative
financial instrument are classified at fair value through profit or loss.
The Trust did not have any significant exposure to currency risk (net of foreign currency exposure arising from
derivatives) at the reporting date.
-36-
36 | PERPETUAL CREDIT INCOME TRUST
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
15 Structured entities (continued)
Unconsolidated subsidiaries
The Trust applies the investment entity exception to consolidation available under AASB 10 Consolidated
Financial Statements and measures its subsidiaries at fair value through profit or loss.
The following unconsolidated structured entities are considered to be the Trust's subsidiaries at the reporting
date:
Fair value
Ownership interest
30 June
2021
$'000
30 June
2020
$'000
30 June
2021
%
30 June
2020
%
Perpetual Loan Fund
132,345
82,599
67.6
56.4
The principal place of business for the above entity is Sydney, Australia.
16 Financial risk management
The Trust's activities expose it to a variety of financial risks. The management of these risks is undertaken by the
Trust's Investment Manager who has been appointed by the Responsible Entity under an Investment
Management Agreement to manage the Trust's assets in accordance with the Investment Objective and Strategy.
The Responsible Entity has in place a framework which includes:
• The Investment Manager providing the Responsible Entity with regular reports on their compliance with the
Investment Management Agreement;
• Completion of regular reviews on the Service Provider which may include a review of the investment managers
risk management framework to manage the financial risks of the Trust; and
• Regular reporting on the liquidity of the Trust in accordance with the Trust’s Liquidity Risk Management
Statement.
The Trust’s Investment Manager has in place a framework to identify and manage the financial risks in
accordance with the investment objective and strategy. This includes an investment due diligence process and
on-going monitoring of the investments in the Trust. Specific controls the Investment Manager applies to manage
the financial risks are detailed under each risk specified below.
(a) Market risk
(i) Currency risk
Currency risk arises as the fair value or future cash flows of monetary securities denominated in foreign currency
will fluctuate due to changes in exchange rates. The currency risk relating to non-monetary assets and liabilities
is a component of price risk not currency risk. However, Investment Manager monitors the exposures on all
foreign currency denominated assets and liabilities.
The Trust held cross currency swaps to protect the valuation of financial assets and liabilities against variations in
the exchange rates. The Trust does not designate any derivatives as hedges, and hence these derivative
financial instrument are classified at fair value through profit or loss.
The Trust did not have any significant exposure to currency risk (net of foreign currency exposure arising from
derivatives) at the reporting date.
16 Financial risk management (continued)
(a) Market risk (continued)
(ii)
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market interest rates. The Trust is exposed to cash flow interest rate risk on financial instruments
with floating interest rates. Financial instruments with fixed interest rates expose the Trust to fair value interest
rate risk.
The Trust's exposure to interest rate risk also arises from cash and cash equivalents, which earn/charge a
floating rate of interest.
The following table summarises the Trust’s exposure to interest rate risk:
30 June 2021
Financial assets
Cash and cash equivalents
Debt securities
Derivatives
Financial liabilities
Derivatives
30 June 2020
Financial assets
Cash and cash equivalents
Debt securities
Derivatives
Financial liabilities
Derivatives
Floating
interest
rate
$'000
Fixed
interest
rate
$'000
Non-interest
bearing
$'000
Total
$'000
10,116
153,432
-
-
153,221
2,078
-
287
-
-
-
-
10,116
306,653
2,078
287
Floating
interest
rate
$'000
Fixed
interest
rate
$'000
Non-interest
bearing
$'000
Total
$'000
11,942
156,544
-
-
175,448
482
-
2,968
-
-
-
-
11,942
331,992
482
2,968
The table presented in note 16(a)(iv) summarises sensitivity analysis to interest rate risk. This analysis assumes
that all other variables, in particular foreign currency exchange rates remain constant.
-36-
-37-
ANNUAL FINANCIAL REPORT 2021 | 37
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
16 Financial risk management (continued)
(a) Market risk (continued)
(iii) Price risk
Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market prices (other than those arising from interest rate risk or currency risk).
The Trust predominantly invests in debt securities. As a result, the price risk arising from the Trust's investments
is impacted by movements in interest rates and is reflected in note 16(a)(ii).
The fair value of the Trust's investments exposed to price risk was as follows:
Blank
Units in fixed income trust
a
30 June
2021
$'000
30 June
2020
$'000
132,345
132,345
82,599
82,599
The table presented in note 16(a)(iv) summarises sensitivity analysis to price risk. This analysis assumes that all
other variables remain constant.
(iv) Sensitivity analysis
The following table summarises the sensitivity of the profit and net assets attributable to unitholders to interest
rate risk and price risk. The reasonably possible movements in the risk variables have been determined based on
Investment Manager's best estimate, having regard to a number of factors, including historical levels of changes
in interest rates and historical correlation of the Trust's investments with the relevant benchmark and market
volatility. However, actual movements in the risk variables may be greater or less than anticipated due to a
number of factors, including unusual large market movements resulting from changes in the performance of
and/or correlation between the performance of the economies, markets and securities in which the Trust invests.
As a result, historic variations in risk variables should not be used to predict future variations in the risk variables.
Sensitivity rates
Impact on profit/net
assets attributable to unitholders
30 June
2021
$'000
319
(319)
-
-
6,617
(6,617)
30 June
2020
$'000
-
-
1,279
(1,279)
4,130
(4,130)
+0.10%
-0.10%
+0.25%
-0.25%
+5%
-5%
-38-
blank
Interest rate risk
blank
Price risk
Units in fixed income trust
38 | PERPETUAL CREDIT INCOME TRUST
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
16 Financial risk management (continued)
16 Financial risk management (continued)
(a) Market risk (continued)
(iii) Price risk
Price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in market prices (other than those arising from interest rate risk or currency risk).
The Trust predominantly invests in debt securities. As a result, the price risk arising from the Trust's investments
is impacted by movements in interest rates and is reflected in note 16(a)(ii).
The fair value of the Trust's investments exposed to price risk was as follows:
30 June
2021
$'000
30 June
2020
$'000
132,345
132,345
82,599
82,599
Units in fixed income trust
Blank
a
other variables remain constant.
(iv) Sensitivity analysis
The table presented in note 16(a)(iv) summarises sensitivity analysis to price risk. This analysis assumes that all
The following table summarises the sensitivity of the profit and net assets attributable to unitholders to interest
rate risk and price risk. The reasonably possible movements in the risk variables have been determined based on
Investment Manager's best estimate, having regard to a number of factors, including historical levels of changes
in interest rates and historical correlation of the Trust's investments with the relevant benchmark and market
volatility. However, actual movements in the risk variables may be greater or less than anticipated due to a
number of factors, including unusual large market movements resulting from changes in the performance of
and/or correlation between the performance of the economies, markets and securities in which the Trust invests.
As a result, historic variations in risk variables should not be used to predict future variations in the risk variables.
Sensitivity rates
Impact on profit/net
assets attributable to unitholders
Interest rate risk
blank
blank
Price risk
Units in fixed income trust
+0.10%
-0.10%
+0.25%
-0.25%
+5%
-5%
30 June
2021
$'000
319
(319)
-
-
6,617
(6,617)
30 June
2020
$'000
-
-
1,279
(1,279)
4,130
(4,130)
(b) Credit risk
Credit risk is the risk that a counterparty will be unable to pay amounts when they fall due. The main
concentration of counterparty credit risk, to which the Trust is exposed to, arises predominantly from the Trust's
investments in debt securities. The Trust is also exposed to counterparty credit risk on derivative financial
instruments, cash and cash equivalents, and receivables for securities sold. The maximum exposure to credit risk
at the reporting date is the carrying amount of the financial assets. None of these assets are impaired nor past
due but not impaired.
The Trust determines credit risk and measures expected credit losses for financial assets measured at amortised
cost using probability of default, exposure at default and loss given default. Investment Manager considers
relevant, historical analysis and forward looking information in determining any expected credit loss. At the
reporting date, all receivables and cash and cash equivalents are held with approved counterparties and are
either callable on demand or due within 30 days. Investment Manager considers the probability of default to be
low, as a result, no loss allowance has been recognised based on 12-month expected credit losses as any such
impairment would be wholly insignificant to the Trust.
(i) Debt securities
Investment management processes include the consideration of counterparty risk. The Investment Manager may
refer to the credit ratings issued by rating agencies to assess the creditworthiness of counterparties. The
Investment Manager consider (among other things) branding, stability and security marketability of counterparties
and consistently monitor exposure through electronic systems.
The Investment Manager monitors the credit ratings of debt securities on a regular basis.
The table below sets out the analysis of debt securities by credit ratings as issued by Standard & Poor's:
30 June 2021
Debt securities
30 June 2020
Debt securities
AAA to
AA-
$'000
A+ to
A-
$'000
891
891
19,120
19,120
AAA to
AA-
$'000
A+ to
A-
$'000
BBB+ to
BBB-
$'000
136,248
136,248
BBB+ to
BBB-
$'000
BB+ to
B-
$'000
NON-
RATED
$'000
Total
$'000
19,023
19,023
131,371
131,371
306,653
306,653
BB+ to
B-
$'000
NON-
RATED
$'000
Total
$'000
-
-
37,489
37,489
149,639
149,639
15,299
15,299
129,565
129,565
331,992
331,992
Debt securities that are not rated by Standard & Poor's may be rated by other rating agencies.
(ii) Derivative financial instruments
The risk of counterparty default in a derivative transaction is minimised by predominantly using exchange traded
derivatives (except for currency hedging, contracts for differences, and occasionally other approved over the
counter instruments). The exchange traded derivatives are only executed and cleared through approved
members of the exchanges. For over the counter derivatives, minimum credit ratings apply for counterparties at
the time of entering into a contract and ISDA agreements are put in place with counterparties.
-38-
-39-
ANNUAL FINANCIAL REPORT 2021 | 39
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
16 Financial risk management (continued)
(b) Credit risk (continued)
(iii) Cash and cash equivalents
The exposure to credit risk for cash and cash equivalents is low as all counterparties have a rating of A or higher
(as determined by Standard & Poor's).
(iv) Receivables for securities sold
All transactions in debt securities are settled/paid for upon delivery using approved brokers. The risk of default is
considered low, as delivery of securities sold is only made once the broker has received payment from the
counterparty. Payments on securities acquired are only made after the broker has received the securities. The
trade will fail if either party fails to meet its obligations.
All transactions in unlisted unit trusts are settled/unitised when unit prices are issued. The risk of default is
considered low except when trading in a suspended unlisted unit trust.
(c) Liquidity risk
Liquidity risk is the risk that the Trust will not be able to meet its financial obligations as they fall due.
The Trust is a closed end vehicle and not exposed to any cash redemptions.
The Trust's investment in Perpetual Loan Fund is considered illiquid as the redemption is subject to the
withdrawal offer made by its responsible entity.
The following table summarises the contractual maturities of financial liabilities, including interest payments
where applicable:
Carrying
amount
$'000
At call
$'000
Contractual cash flows
less
than 6
months
$'000
6 - 12
months
$'000
more
than 12
months
$'000
-
-
-
-
-
-
-
-
1,298
5,700
377
7,375
-
48
(22)
26
-
-
-
-
-
-
-
-
-
48
(22)
26
-
2,803
(2,392)
411
1,298
5,700
377
7,375
287
-
-
287
-40-
30 June 2021
Non-derivative financial liabilities
Distributions payable
Payables for securities purchased
Payables
Total
Derivative financial liabilities
Swaps
Outflow
Inflow
Total
40 | PERPETUAL CREDIT INCOME TRUST
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
16 Financial risk management (continued)
16 Financial risk management (continued)
(b) Credit risk (continued)
(iii) Cash and cash equivalents
(as determined by Standard & Poor's).
(iv) Receivables for securities sold
The exposure to credit risk for cash and cash equivalents is low as all counterparties have a rating of A or higher
All transactions in debt securities are settled/paid for upon delivery using approved brokers. The risk of default is
considered low, as delivery of securities sold is only made once the broker has received payment from the
counterparty. Payments on securities acquired are only made after the broker has received the securities. The
trade will fail if either party fails to meet its obligations.
All transactions in unlisted unit trusts are settled/unitised when unit prices are issued. The risk of default is
considered low except when trading in a suspended unlisted unit trust.
Liquidity risk is the risk that the Trust will not be able to meet its financial obligations as they fall due.
The Trust is a closed end vehicle and not exposed to any cash redemptions.
The Trust's investment in Perpetual Loan Fund is considered illiquid as the redemption is subject to the
withdrawal offer made by its responsible entity.
The following table summarises the contractual maturities of financial liabilities, including interest payments
(c) Liquidity risk
where applicable:
30 June 2021
Non-derivative financial liabilities
Distributions payable
Payables for securities purchased
Derivative financial liabilities
Payables
Total
Swaps
Outflow
Inflow
Total
Carrying
amount
$'000
At call
$'000
Contractual cash flows
less
than 6
months
$'000
6 - 12
months
$'000
more
than 12
months
$'000
-
-
-
-
-
-
-
-
1,298
5,700
377
7,375
-
48
(22)
26
-
-
-
-
-
-
-
-
-
-
48
(22)
26
2,803
(2,392)
411
1,298
5,700
377
7,375
287
-
-
287
-40-
(c) Liquidity risk (continued)
30 June 2020
Non-derivative financial liabilities
Distributions payable
Payables for securities purchased
Payables
Total
Derivative financial liabilities
Futures
Swaps
Outflow
Inflow
Total
(d) Fair value measurement
Carrying
amount
$'000
At call
$'000
Contractual cash flows
less
than 6
months
$'000
6 - 12
months
$'000
more
than 12
months
$'000
1,210
4,475
364
6,049
447
2,521
-
-
2,968
-
-
-
-
-
-
-
-
-
1,210
4,475
364
6,049
447
-
599
(329)
717
-
-
-
-
-
-
-
-
-
-
599
(329)
270
-
-
27,010
(24,958)
2,052
The Trust classifies fair value measurement of its financial assets and liabilities using a fair value hierarchy model
that reflects the subjectivity of the inputs used in making the measurements. The fair value hierarchy has the
following levels:
• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1);
•
•
Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either
directly (that is, as prices) or indirectly (that is, derived from prices) (level 2); and
Inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).
(i) Fair value in an active market (level 1)
The fair value of financial assets and liabilities traded in active markets is based on quoted market prices at the
end of the reporting period without any deduction for estimated future selling costs.
A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly
available from an exchange, dealer, broker, industry group, pricing service or regulatory agency, and those prices
represent actual and regularly occurring market transactions on an arm's length basis.
Listed securities and exchange traded derivatives are valued at the last traded price. For the majority of these
financial instruments, information provided by the independent pricing services is relied upon for valuation.
(ii) Fair value in an inactive or unquoted market (level 2 and level 3)
The fair value of financial assets and liabilities that are not traded in an active market is determined by using
valuation techniques. These include the use of recent arm's length transactions, reference to current fair value of
a substantially similar other instrument, discounted cash flow techniques, option pricing models or any other
valuation techniques that provide a reliable estimate of prices obtained in actual market transactions.
-41-
ANNUAL FINANCIAL REPORT 2021 | 41
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
16 Financial risk management (continued)
(d) Fair value measurement (continued)
(ii) Fair value in an inactive or unquoted market (level 2 and level 3) (continued)
Valuation models use observable data to the extent practicable. However, areas such as credit risk (both own
and counterparty), volatilities and correlations require Investment Manager to make estimates. Changes in the
assumptions about these factors could affect the reported fair value of financial instruments. The output of a
model is always an estimate or approximation of a value that cannot be determined with certainty, and valuation
techniques employed may not fully reflect all factors relevant to the positions held.
Debt securities are generally valued using broker quotes. Where discounted cash flow techniques are used,
estimated future cash flows are based on Investment Manager's best estimates and the discount rate used is a
market rate at the end of the reporting period applicable for an instrument with similar terms and conditions.
Management monitored credit spreads closely and conducted regular review to ensure any estimates and
assumptions used in the valuation model remained appropriate.
The fair value of derivatives that are not exchange traded is estimated at the amount that would be received or
paid to terminate the contract at the end of the reporting period taking into account current market conditions
(volatility and appropriate yield curve) and the current creditworthiness of the counterparties.
Investments in unlisted unit trusts are recorded at the redemption value per unit as reported by the investment
managers of such trusts.
The Scheme's level 3 asset include Perpetual Loan Fund which is valued using the redemption value per unit as
reported by the Investment Manager without any adjustment.
The following tables present the Trust's financial assets and liabilities (by class) measured at fair value according
to the fair value hierarchy:
30 June 2021
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
Financial assets at fair value
through profit or loss
Derivatives
Futures
Swaps
Debt securities
Unlisted unit trusts
Total
Financial liabilities at fair value
through profit or loss
Derivatives
Swaps
Total
358
-
16,644
-
17,002
-
1,720
290,009
-
291,729
-
-
-
132,345
132,345
358
1,720
306,653
132,345
441,076
-
-
287
287
-
-
287
287
-42-
42 | PERPETUAL CREDIT INCOME TRUST
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
16 Financial risk management (continued)
16 Financial risk management (continued)
(d) Fair value measurement (continued)
(ii) Fair value in an inactive or unquoted market (level 2 and level 3) (continued)
Valuation models use observable data to the extent practicable. However, areas such as credit risk (both own
and counterparty), volatilities and correlations require Investment Manager to make estimates. Changes in the
assumptions about these factors could affect the reported fair value of financial instruments. The output of a
model is always an estimate or approximation of a value that cannot be determined with certainty, and valuation
techniques employed may not fully reflect all factors relevant to the positions held.
Debt securities are generally valued using broker quotes. Where discounted cash flow techniques are used,
estimated future cash flows are based on Investment Manager's best estimates and the discount rate used is a
market rate at the end of the reporting period applicable for an instrument with similar terms and conditions.
Management monitored credit spreads closely and conducted regular review to ensure any estimates and
assumptions used in the valuation model remained appropriate.
The fair value of derivatives that are not exchange traded is estimated at the amount that would be received or
paid to terminate the contract at the end of the reporting period taking into account current market conditions
(volatility and appropriate yield curve) and the current creditworthiness of the counterparties.
Investments in unlisted unit trusts are recorded at the redemption value per unit as reported by the investment
managers of such trusts.
The Scheme's level 3 asset include Perpetual Loan Fund which is valued using the redemption value per unit as
reported by the Investment Manager without any adjustment.
The following tables present the Trust's financial assets and liabilities (by class) measured at fair value according
to the fair value hierarchy:
30 June 2021
Financial assets at fair value
through profit or loss
Derivatives
Futures
Swaps
Debt securities
Unlisted unit trusts
Total
Financial liabilities at fair value
through profit or loss
Derivatives
Swaps
Total
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
358
16,644
1,720
290,009
-
-
17,002
291,729
132,345
132,345
-
-
-
-
287
287
-
-
-
-
-
358
1,720
306,653
132,345
441,076
287
287
(d) Fair value measurement (continued)
30 June 2020
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
Financial assets at fair value
through profit or loss
Derivatives
Futures
Swaps
Debt securities
Unlisted unit trusts
Total
Financial liabilities at fair value
through profit or loss
Derivatives
Futures
Swaps
Total
Transfers between levels
24
-
5,204
-
5,228
-
458
326,788
-
327,246
-
-
-
82,599
82,599
24
458
331,992
82,599
415,073
447
-
447
-
2,521
2,521
-
-
-
447
2,521
2,968
The Trust's policy is to recognise transfers into and transfers out of fair value hierarchy levels at the end of the
reporting period.
There were no transfers between levels for the years ended 30 June 2021 and 30 June 2020.
Fair value measurements using significant unobservable inputs (level 3)
The following tables present the movement in level 3 instruments, by class of financial instruments, for the years
ended 30 June 2021 and 30 June 2020:
30 June 2021
Opening balance
Purchases
Gains/(losses) recognised in profit or loss
Closing balance
Total unrealised gains/(losses) for the year included in the statement of
comprehensive income for financial instruments held at the end of the year
Unlisted
unit trusts
$'000
Total
$'000
82,599
46,486
3,260
132,345
82,599
46,486
3,260
132,345
3,260
3,260
-42-
-43-
ANNUAL FINANCIAL REPORT 2021 | 43
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
16 Financial risk management (continued)
(d) Fair value measurement (continued)
Fair value measurements using significant unobservable inputs (level 3) (continued)
30 June 2020
Opening balance
Purchases
Gains/(losses) recognised in profit or loss
Closing balance
Total unrealised gains/(losses) for the year included in the statement of
comprehensive income for financial instruments held at the end of the year
Unlisted
unit trusts
$'000
Total
$'000
49,712
35,850
(2,963)
82,599
49,712
35,850
(2,963)
82,599
(2,963)
(2,963)
17 Offsetting financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount is reported in the balance sheet when there is a
legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or
realise the asset and settle the liability simultaneously. The gross and net positions of financial assets and
liabilities that have been offset in the balance sheet are disclosed in the first three columns of the table below:
Effects of offsetting on the
balance sheet
Gross
amounts
set off in
the
balance
sheet
$'000
Net
amounts
presented
in the
balance
sheet
$'000
Gross
amounts
$'000
Related amounts not
offset
Amounts
subject to
master
netting
arrange-
ments
$'000
Net
amounts
$'000
-
-
-
-
-
2,078
2,078
(663)
(663)
1,415
1,415
(510)
(287)
(797)
376
287
663
(134)
-
(134)
2,078
2,078
(510)
(287)
(797)
-44-
30 June 2021
Financial assets
Derivative financial instruments
Total
Financial liabilities
Margin accounts
Derivative financial instruments
Total
44 | PERPETUAL CREDIT INCOME TRUST
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
16 Financial risk management (continued)
17 Offsetting financial assets and financial liabilities (continued)
(d) Fair value measurement (continued)
Fair value measurements using significant unobservable inputs (level 3) (continued)
30 June 2020
Opening balance
Purchases
Closing balance
Gains/(losses) recognised in profit or loss
Total unrealised gains/(losses) for the year included in the statement of
comprehensive income for financial instruments held at the end of the year
Unlisted
unit trusts
$'000
Total
$'000
49,712
35,850
(2,963)
82,599
49,712
35,850
(2,963)
82,599
(2,963)
(2,963)
17 Offsetting financial assets and financial liabilities
Financial assets and liabilities are offset and the net amount is reported in the balance sheet when there is a
legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or
realise the asset and settle the liability simultaneously. The gross and net positions of financial assets and
liabilities that have been offset in the balance sheet are disclosed in the first three columns of the table below:
30 June 2021
Financial assets
Derivative financial instruments
Total
Total
Financial liabilities
Margin accounts
Derivative financial instruments
Effects of offsetting on the
Related amounts not
balance sheet
offset
Gross
amounts
set off in
the
balance
sheet
$'000
Net
amounts
presented
in the
balance
sheet
$'000
Amounts
subject to
master
netting
arrange-
ments
$'000
Net
amounts
$'000
Gross
amounts
$'000
-
-
-
-
-
2,078
2,078
(663)
(663)
1,415
1,415
(510)
(287)
(797)
376
287
663
(134)
-
(134)
2,078
2,078
(510)
(287)
(797)
-44-
Effects of offsetting on the
balance sheet
Gross
amounts
set off in
the
balance
sheet
$'000
Net
amounts
presented
in the
balance
sheet
$'000
Gross
amounts
$'000
Related amounts not
offset
Amounts
subject to
master
netting
arrange-
ments
$'000
Net
amounts
$'000
2,542
482
3,024
(2,968)
(2,968)
-
-
-
-
-
2,542
482
3,024
(697)
-
(697)
1,845
482
2,327
(2,968)
(2,968)
697
697
(2,271)
(2,271)
30 June 2020
Financial assets
Margin accounts
Derivative financial instruments
Total
Financial liabilities
Derivative financial instruments
Total
Master netting arrangement - not currently enforceable
Agreements with derivative counterparties are based on the ISDA Master Agreements. Under the terms of these
arrangements, only where certain credit events occur (such as default), the net position owing/receivable to a
single counterparty in the same currency will be taken as owing and all the relevant arrangements terminated. As
the Trust does not presently have a legally enforceable right of set-off, these amounts have not been offset in the
balance sheet, but have been presented separately in this note.
18 Derivative financial instruments
A derivative is a financial instrument or other contract which is settled at a future date and whose value changes
in response to the change in a specified interest rate, financial instrument price, commodity price, foreign
currency exchange rates, index of prices or rates, credit rating or credit index or other variables.
Derivative financial instruments require no initial net investment or an initial net investment that is smaller than
would be required for other types of contracts that would be expected to have a similar response to changes in
market factors.
Derivative transactions include many different instruments such as foreign exchange forward contracts, futures
and options. Derivatives are considered to be part of the investment process and the use of derivatives is an
essential part of the Trust's portfolio management. Derivatives are not managed in isolation. Consequently, the
use of derivatives is multifaceted and includes:
•
•
•
hedging to protect an asset or liability of the Trust against a fluctuation in market values or to reduce
volatility;
a substitution for trading of physical securities; and
adjusting asset exposures within the parameters set in the investment strategy, and adjusting the duration of
fixed interest portfolios or the weighted average maturity of cash portfolios.
-45-
ANNUAL FINANCIAL REPORT 2021 | 45
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
18 Derivative financial instruments (continued)
While derivatives are used for trading purposes, they are not used to gear (leverage) a portfolio. Gearing a
portfolio would occur if the level of exposure to the markets exceeds the underlying value of the Trust.
The Trust held the following derivative instruments during the year:
(a) Futures
Futures are contractual obligations to buy or sell financial instruments on a future date at a specified price
established in an organised market. The futures contracts are collateralised by cash or marketable securities.
Changes in futures contracts' values are usually settled net daily with the exchange.
(b) Swaps
Swaps are derivative instruments in which two counterparties agree to exchange one stream of cash flow against
another stream.
Cross currency swaps are valued at fair value which is based on the estimated amount the Trust would pay or
receive to terminate the currency derivatives at the balance sheet date, taking into account current interest rates,
foreign exchange rates, volatility and the current creditworthiness of the currency derivatives counterparties.
Cross currency swaps are used to hedge the Trust’s interest rate and foreign currency exposure. However,
hedge accounting has not been applied.
Risk exposures and fair value measurements
Information about the Trust's exposure to financial risks and the methods and assumptions used in determining
fair values is provided in note 16. The maximum exposure to credit risk at the end of the reporting period is the
carrying amount of the derivative financial instruments.
19 Segment information
The Trust is organised into one main operating segment with only one key function, being the investment of funds
predominantly in Australia together with opportunistic investments globally.
20 Events occurring after the reporting period
On 26 July 2021, the Directors declared a distribution of 0.3165 cents per ordinary unit which amounted to
$1,267,438 and was paid on 9 August 2021.
The uncertainty around COVID-19 continues to present social and economic challenges and the resulting impact
on the capital markets remains uncertain. Since the reporting date, there have been no significant changes in the
valuation of the Trust’s investment portfolio arising from the changes in the estimates and assumptions in relation
to COVID-19.
No other significant events have occurred since the reporting date which would have an impact on the financial
position of the Trust disclosed in the balance sheet as at 30 June 2021 or on the results and cash flows of the
Trust for the year ended on that date.
21 Contingent assets, liabilities and commitments
There were no outstanding contingent assets, liabilities or commitments as at 30 June 2021 and 30 June 2020.
-46-
46 | PERPETUAL CREDIT INCOME TRUST
Perpetual Credit Income Trust
Notes to the financial statements
For the year ended 30 June 2021
(continued)
DiRECTORS’
DECLARATiON
Directors' declaration
Perpetual Credit Income Trust
Directors' declaration
For the year ended 30 June 2021
In the opinion of the Directors of Perpetual Trust Services Limited, the Responsible Entity of Perpetual Credit
Income Trust:
(a)
the annual financial report and notes, set out on pages 19 to 46, are in accordance with the Corporations
Act 2001, including:
(i)
(ii)
complying with Australian Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
giving a true and fair view of the Trust's financial position as at 30 June 2021 and of its
performance for the financial year ended on that date;
there are reasonable grounds to believe that the Trust will be able to pay its debts as and when they
become due and payable; and
note 2(a) confirms that the annual financial report complies with International Financial Reporting
Standards and Interpretations issued by the International Accounting Standards Board.
(b)
(c)
This declaration is made in accordance with a resolution of the Directors.
Director
Sydney
24 August 2021
18 Derivative financial instruments (continued)
While derivatives are used for trading purposes, they are not used to gear (leverage) a portfolio. Gearing a
portfolio would occur if the level of exposure to the markets exceeds the underlying value of the Trust.
The Trust held the following derivative instruments during the year:
Futures are contractual obligations to buy or sell financial instruments on a future date at a specified price
established in an organised market. The futures contracts are collateralised by cash or marketable securities.
Changes in futures contracts' values are usually settled net daily with the exchange.
(a) Futures
(b) Swaps
another stream.
Swaps are derivative instruments in which two counterparties agree to exchange one stream of cash flow against
Cross currency swaps are valued at fair value which is based on the estimated amount the Trust would pay or
receive to terminate the currency derivatives at the balance sheet date, taking into account current interest rates,
foreign exchange rates, volatility and the current creditworthiness of the currency derivatives counterparties.
Cross currency swaps are used to hedge the Trust’s interest rate and foreign currency exposure. However,
hedge accounting has not been applied.
Risk exposures and fair value measurements
Information about the Trust's exposure to financial risks and the methods and assumptions used in determining
fair values is provided in note 16. The maximum exposure to credit risk at the end of the reporting period is the
carrying amount of the derivative financial instruments.
19 Segment information
The Trust is organised into one main operating segment with only one key function, being the investment of funds
predominantly in Australia together with opportunistic investments globally.
20 Events occurring after the reporting period
On 26 July 2021, the Directors declared a distribution of 0.3165 cents per ordinary unit which amounted to
$1,267,438 and was paid on 9 August 2021.
The uncertainty around COVID-19 continues to present social and economic challenges and the resulting impact
on the capital markets remains uncertain. Since the reporting date, there have been no significant changes in the
valuation of the Trust’s investment portfolio arising from the changes in the estimates and assumptions in relation
to COVID-19.
No other significant events have occurred since the reporting date which would have an impact on the financial
position of the Trust disclosed in the balance sheet as at 30 June 2021 or on the results and cash flows of the
Trust for the year ended on that date.
21 Contingent assets, liabilities and commitments
There were no outstanding contingent assets, liabilities or commitments as at 30 June 2021 and 30 June 2020.
-46-
-47-
ANNUAL FINANCIAL REPORT 2021 | 47
iNDEPENDENT
AUDiTOR’S
REPORT
TO THE UNITHOLDERS
OF PERPETUAL CREDIT
INCOME TRUST
48 | PERPETUAL CREDIT INCOME TRUST
KPMG, an Australian partnership and a member firm of the KPMG global organisationof independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent memberfirms of the KPMG global organisation.Liability limited by a scheme approved under Professional Standards Legislation.Independent Auditor’s Report To the unitholders of Perpetual Credit Income TrustOpinion We have audited the Financial Report of Perpetual Credit Income Trust (the Trust). In our opinion, the accompanying Financial Report of the Trust is in accordance with the Corporations Act 2001, including: •giving a true and fair view of theTrust’s financial position as at 30 June2021 and of its financial performancefor the year ended on that date; and•complying with Australian AccountingStandards and the CorporationsRegulations 2001.The Financial Report comprises: •Balance sheet as at 30 June 2021•Statement of comprehensive income, Statement ofchanges in equity, and Statement of cash flows forthe year then ended•Notes including a summary of significant accountingpolicies•Directors’ Declaration.Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Trust in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code. KPMG, an Australian partnership and a member firm of the KPMG global organisationof independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent memberfirms of the KPMG global organisation.Liability limited by a scheme approved under Professional Standards Legislation.Independent Auditor’s Report To the unitholders of Perpetual Credit Income TrustOpinion We have audited the Financial Report of Perpetual Credit Income Trust (the Trust). In our opinion, the accompanying Financial Report of the Trust is in accordance with the Corporations Act 2001, including: •giving a true and fair view of theTrust’s financial position as at 30 June2021 and of its financial performancefor the year ended on that date; and•complying with Australian AccountingStandards and the CorporationsRegulations 2001.The Financial Report comprises: •Balance sheet as at 30 June 2021•Statement of comprehensive income, Statement ofchanges in equity, and Statement of cash flows forthe year then ended•Notes including a summary of significant accountingpolicies•Directors’ Declaration.Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Trust in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code. ANNUAL FINANCIAL REPORT 2021 | 49
KPMG, an Australian partnership and a member firm of the KPMG global organisationof independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent memberfirms of the KPMG global organisation.Liability limited by a scheme approved under Professional Standards Legislation.Independent Auditor’s Report To the unitholders of Perpetual Credit Income TrustOpinion We have audited the Financial Report of Perpetual Credit Income Trust (the Trust). In our opinion, the accompanying Financial Report of the Trust is in accordance with the Corporations Act 2001, including: •giving a true and fair view of theTrust’s financial position as at 30 June2021 and of its financial performancefor the year ended on that date; and•complying with Australian AccountingStandards and the CorporationsRegulations 2001.The Financial Report comprises: •Balance sheet as at 30 June 2021•Statement of comprehensive income, Statement ofchanges in equity, and Statement of cash flows forthe year then ended•Notes including a summary of significant accountingpolicies•Directors’ Declaration.Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Trust in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code. Key Audit Matters Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Report of the current period. These matters were addressed in the context of our audit of the Financial Report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Valuation and existence of financial assets ($441.1m) and financial liabilities ($0.29m) at fair value through profit or loss Refer to Note 9 and 10 to the Financial Report The key audit matter How the matter was addressed in our audit Financial assets and liabilities at fair value through profit or loss (FVTPL) are comprised of investments in: •unlisted unit trusts (Perpetual Loan Fund);•debt securities, including corporate bonds,international bonds, mortgage backedsecurities, loans and floating rate notes;•derivative assets including futures andswaps;•derivative liabilities (swaps).Valuation and existence of financial assets andfinancial liabilities at FVTPL is a key audit matterdue to the:•size of the Trust’s investments which aresignificant to its financial position. Theinvestment in Perpetual Loan Fund and theinvestments in debt securities comprise29% and 68%, respectively, of the Trust’stotal assets at year end;•Trust outsources certain financial reportingprocesses and controls in relation to thevaluation and existence of these assets andliabilities to external service organisations.These service organisations include thecustodian, the fund administrator, whichprovide administrative support to the Trust,and the investment manager. This requiresus to understand processes, assesscontrols and the flow of informationbetween these service organisations,Our procedures included: •We assessed the appropriateness of theaccounting policies applied by the Trust,including those relevant to the fair valuehierarchy of investments against therequirements of the accounting standards.•We obtained and read the Trust’s custodian’sand fund administrator’s GS007 (GuidanceStatement 007 Audit Implications of the Useof Service Organisations for InvestmentManagement Services) assurance reports tounderstand the custodian’s and fundadministrator’s processes and controls torecord and value the Trust’s financial assetsand liabilities.•We obtained and read the Trust’s investmentmanager’s GS007 assurance report tounderstand the investment manager’sprocesses and controls to maintain andprovide transactional information to theTrust’s custodian.•We assessed the reputation, professionalcompetence and independence of theauditors of the GS007 assurance reports.•We checked the valuation of the unitholdings in Perpetual Loan Fund, as recordedin the Trust’s Financial Report, to the auditedfinancial report of Perpetual Loan Fund.•With the involvement of our valuationKPMG, an Australian partnership and a member firm of the KPMG global organisationof independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent memberfirms of the KPMG global organisation.Liability limited by a scheme approved under Professional Standards Legislation.Independent Auditor’s Report To the unitholders of Perpetual Credit Income TrustOpinion We have audited the Financial Report of Perpetual Credit Income Trust (the Trust). In our opinion, the accompanying Financial Report of the Trust is in accordance with the Corporations Act 2001, including: •giving a true and fair view of theTrust’s financial position as at 30 June2021 and of its financial performancefor the year ended on that date; and•complying with Australian AccountingStandards and the CorporationsRegulations 2001.The Financial Report comprises: •Balance sheet as at 30 June 2021•Statement of comprehensive income, Statement ofchanges in equity, and Statement of cash flows forthe year then ended•Notes including a summary of significant accountingpolicies•Directors’ Declaration.Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Trust in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code. 50 | PERPETUAL CREDIT INCOME TRUST
relevant to the Trust’s financial reporting; and •Importance of the performance of PerpetualLoan Fund and debt securities in driving theTrust’s investment income and capitalperformance, as reported in the FinancialReport.As a result, this was the area with greatest effect on our overall audit strategy and allocation of senior resources in planning and performing our audit. In assessing this Key Audit Matter, we involved our valuation specialists, who understand the Trust’s investment profile and business and the economic environment it operates in. specialists, we performed the valuation of the underlying assets of Perpetual Loan Fund using independently sourced market data for observable inputs, such as, published credit spreads and margins. We compared these valuations to the fair value of the underlying assets. •We assessed the valuation of the unit priceof Perpetual Loan Fund against the netassets per unit held of the Perpetual LoanFund.•With the involvement of our valuationspecialists, we assessed the fair value ofdebt securities by re-performing the valuationby comparing observable inputs, includingbroker-quoted prices to independentlysourced market data providers.•With the involvement of our valuationspecialists, we independently recalculatedthe valuation of derivative liabilities usingindependently sourced market data forobservable inputs, such as interest rates andforeign exchange rates. We compared thisvaluation to the fair value of derivativeliabilities recognised by the Trust.•We checked the ownership and quantity ofinvestments to external custody reports as at30 June 2021.•We assessed quantitative and qualitativedisclosures, including those relevant to thefair value hierarchy of investments, againstthe requirements of the accountingstandards.Other Information Other Information is financial and non-financial information in Perpetual Credit Income Trust’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors of Perpetual Trust Services Limited (the Responsible Entity) are responsible for the Other Information. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit opinion or any form of assurance conclusion thereon. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. We are required to report if we conclude that there is a material misstatement of this Other ANNUAL FINANCIAL REPORT 2021 | 51
relevant to the Trust’s financial reporting; and •Importance of the performance of PerpetualLoan Fund and debt securities in driving theTrust’s investment income and capitalperformance, as reported in the FinancialReport.As a result, this was the area with greatest effect on our overall audit strategy and allocation of senior resources in planning and performing our audit. In assessing this Key Audit Matter, we involved our valuation specialists, who understand the Trust’s investment profile and business and the economic environment it operates in. specialists, we performed the valuation of the underlying assets of Perpetual Loan Fund using independently sourced market data for observable inputs, such as, published credit spreads and margins. We compared these valuations to the fair value of the underlying assets. •We assessed the valuation of the unit priceof Perpetual Loan Fund against the netassets per unit held of the Perpetual LoanFund.•With the involvement of our valuationspecialists, we assessed the fair value ofdebt securities by re-performing the valuationby comparing observable inputs, includingbroker-quoted prices to independentlysourced market data providers.•With the involvement of our valuationspecialists, we independently recalculatedthe valuation of derivative liabilities usingindependently sourced market data forobservable inputs, such as interest rates andforeign exchange rates. We compared thisvaluation to the fair value of derivativeliabilities recognised by the Trust.•We checked the ownership and quantity ofinvestments to external custody reports as at30 June 2021.•We assessed quantitative and qualitativedisclosures, including those relevant to thefair value hierarchy of investments, againstthe requirements of the accountingstandards.Other Information Other Information is financial and non-financial information in Perpetual Credit Income Trust’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors of Perpetual Trust Services Limited (the Responsible Entity) are responsible for the Other Information. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit opinion or any form of assurance conclusion thereon. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report. Responsibilities of the Directors for the Financial Report The Directors of Perpetual Trust Services Limited (the Responsible Entity) are responsible for: •preparing the Financial Report that gives a true and fair view in accordance with AustralianAccounting Standards and the Corporations Act 2001•implementing necessary internal control to enable the preparation of a Financial Report thatgives a true and fair view and is free from material misstatement, whether due to fraud orerror•assessing the Trust’s ability to continue as a going concern and whether the use of the goingconcern basis of accounting is appropriate. This includes disclosing, as applicable, mattersrelated to going concern and using the going concern basis of accounting unless they eitherintend to liquidate the Trust or to cease operations, or have no realistic alternative but to doso.Auditor’s responsibilities for the audit of the Financial Report Our objective is: •to obtain reasonable assurance about whether the Financial Report as a whole is free frommaterial misstatement, whether due to fraud or error; and•to issue an Auditor’s Report that includes our opinion.Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Financial Report. A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar2_2020.pdf. This description forms part of our Auditor’s Report. KPM_INI_01 KPMG Jessica Davis Partner Sydney 24 August 2021 ASX ADDiTiONAL
iNFORMATiON
Perpetual Credit Income Trust
ARSN 626 053 496
ASX additional information
Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed
elsewhere in this report is as follows. The information is current as at 30 July 2021 unless otherwise indicated.
A. Corporate governance statement
Refer to the annual financial report.
B. Substantial unitholders
There are no substantial unitholders.
C. Classes of units
Refer to the annual financial report, note 7.
D. Voting rights
Voting rights which may attach to or be imposed on any unit or class of units is as follows:
(a) on a show of hands each unitholder has one vote; and
(b) on a poll, each unitholder has one vote for each dollar of the value of the total units they have in Trust.
E. Distribution of units
Analysis of numbers of unitholders by size of holding:
Size of holding
BLANK
1 - 1000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Blank
Number of
holders
Total units
Percentage
139
619
917
6,207
587
8,469
47,349
2,054,917
7,645,223
227,586,874
163,178,382
400,512,745
0.01%
0.52%
1.91%
56.82%
40.74%
100.00%
The number of unitholders holding less than a marketable parcel is 82 and they hold 4,058 units.
F. Twenty largest unitholders
The names of the twenty largest unitholders are listed below:
Unitholder
xx
HSBC Custody Nominees (Australia) Limited
BNP Paribas Nominees Pty Ltd
Navigator Australia Ltd
J P Morgan Nominees Australia Pty Limited
The Art Gallery Board
Netwealth Investments Limited (Wrap Services A/C)
Elizikat Investments Pty Ltd
First Samuel Ltd
Netwealth Investments Limited (Super Services A/C)
The Corporation Of The Trustees Of The Order Of The Sisters Of
Mercy In QLD
Beluga Blue Pty Ltd
Geat Incorporated (Geat-Preservation Fund A/C)
AK Clough Holdings Pty Ltd
Mrs Gillian Mary Smith
Luna Pty Limited
Milpera Pty Ltd
-52-
52 | PERPETUAL CREDIT INCOME TRUST
Numbers of units
Percentage
14,352,225
7,380,452
7,054,263
3,090,656
2,692,471
2,584,142
1,933,244
1,852,687
1,823,769
1,363,636
1,363,636
1,359,372
1,021,103
1,011,000
995,000
909,091
3.58%
1.84%
1.76%
0.77%
0.67%
0.65%
0.48%
0.46%
0.46%
0.34%
0.34%
0.34%
0.25%
0.25%
0.25%
0.23%
Perpetual Credit Income Trust
ARSN 626 053 496
ASX additional information
Additional information required by the Australian Securities Exchange Limited Listing Rules and not disclosed
elsewhere in this report is as follows. The information is current as at 30 July 2021 unless otherwise indicated.
A. Corporate governance statement
Refer to the annual financial report.
B. Substantial unitholders
There are no substantial unitholders.
C. Classes of units
Refer to the annual financial report, note 7.
D. Voting rights
Voting rights which may attach to or be imposed on any unit or class of units is as follows:
(a) on a show of hands each unitholder has one vote; and
(b) on a poll, each unitholder has one vote for each dollar of the value of the total units they have in Trust.
E. Distribution of units
Analysis of numbers of unitholders by size of holding:
Size of holding
BLANK
1 - 1000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Blank
Number of
holders
Total units
Percentage
139
619
917
6,207
587
8,469
47,349
2,054,917
7,645,223
227,586,874
163,178,382
400,512,745
0.01%
0.52%
1.91%
56.82%
40.74%
100.00%
The number of unitholders holding less than a marketable parcel is 82 and they hold 4,058 units.
F. Twenty largest unitholders
The names of the twenty largest unitholders are listed below:
Unitholder
xx
HSBC Custody Nominees (Australia) Limited
BNP Paribas Nominees Pty Ltd
Navigator Australia Ltd
J P Morgan Nominees Australia Pty Limited
The Art Gallery Board
Netwealth Investments Limited (Wrap Services A/C)
Elizikat Investments Pty Ltd
First Samuel Ltd
Netwealth Investments Limited (Super Services A/C)
The Corporation Of The Trustees Of The Order Of The Sisters Of
Geat Incorporated (Geat-Preservation Fund A/C)
Mercy In QLD
Beluga Blue Pty Ltd
AK Clough Holdings Pty Ltd
Mrs Gillian Mary Smith
Luna Pty Limited
Milpera Pty Ltd
-52-
Numbers of units
Percentage
14,352,225
7,380,452
7,054,263
3,090,656
2,692,471
2,584,142
1,933,244
1,852,687
1,823,769
1,363,636
1,363,636
1,359,372
1,021,103
1,011,000
995,000
909,091
3.58%
1.84%
1.76%
0.77%
0.67%
0.65%
0.48%
0.46%
0.46%
0.34%
0.34%
0.34%
0.25%
0.25%
0.25%
0.23%
F. Twenty largest unitholders (continued)
Unitholder
xx
Sisters Of The Perpetual Adoration Of The Blessed Sacrament Ltd
The Law Society Of SA Legal Practitioners Fidelity Fund
Stewartville Pty Ltd
Carama Pty Ltd
G. Stock exchange listing
Numbers of units
Percentage
909,090
909,090
868,707
720,000
0.23%
0.23%
0.22%
0.18%
The Trust's units are listed on the Australian Securities Exchange (ASX) and are traded under the code PCI.
H. Voluntary escrow
There are no restricted units in the Trust or units subject to voluntary escrow.
I. Unquoted units
There are no unquoted units on issue.
J. Review of operations and activities for the reporting period
Refer to the Directors' report contained within the annual report.
K. On-market buy back
There is no current on-market buy back.
L. Cash and Assets used
During the year, the Trust invested in accordance with the investment objective and guidelines as set out in the
latest Product Disclosure Statement of the Trust dated 8 March 2019 and in accordance with the Trust's
Constitution.
M. List of investments held by the Trust at 30 June 2021
Investments held as at 30 June 2020
XXXXXXXXXXXX
XXX
XXX
Unlisted unit trust
XXX
Perpetual Loan Fund
Total Unlisted unit trust
Debt securities
XXX
ALE Direct Property Trust
Ampol Limited
Apollo Trust SR 2017-2
APT Pipeline Limited
Aurizon Finance Pty Limited
Aurizon Network Pty Limited
AusNet Services Holdings
Bank Of Queensland Limited
Barclays Bank PLC
Bendigo and Adelaide Bank
Bluescope Finance
BNP Paribas
Boral Finance Pty Limited
Brisbane Airport
Byrns Smith Unit Trust
Centuria Capital 2 Fund
Challenger Limited
XXX
-53-
Fair Value
$'000
132,345
132,345
1,107
7,135
2,758
1,625
3,059
3,013
5,790
6,057
3,510
3,480
9,917
12,802
1,158
2,243
8,772
5,978
254
ANNUAL FINANCIAL REPORT 2021 | 53
M. List of investments held by the Trust at 30 June 2021 (continued)
x
Debt securities (continued)
X
Civmec Holdings Limited
Conquest Trust Srs2018-1
CPIF Finance Pty Limited
Credit Agricole S.A.
Downer Grp Finance Pty Limited
Emeco Pty Limited
Flexi Trust Srs2020-1
Flexi Trust Srs2019-2
FP Turbo Srs2019-1
GAIF
GTA Finance Co Pty Limited
Heritage Bank Limited
HSBC
Humm ABS Trust Srs2021-1
IMB Limited
Incitec Pivot Limited
Insurance Australia Group Limited
Kingfisher Trust Series 2019-1
Lendlease Finance Limited
Liberty Funding Pty Limited Srs 2019-1SME
Liberty Funding Pty Limited Srs 2020-1A
Liberty Funding Pty Limited Srs2020-1SME
Light Trust Srs 2019-1
Lion Trust Srs 2020-1
Longwall Relocation Syndicated Loan
Macquarie Bank Limited
Macquarie Group Limited
Mineral Resources Limited
National Australia Bank
Omni Bridgeway Limited
Pacific National Finance
Peet Limited
Perenti Finance Pty Limited
Qantas Airways Limited
QBE Insurance Group Limited
QPH Finance Co Pty Limited
Salute Trust Srs 2021-1
Santos Finance Limited
Scentre Group Trust
SMHL Srs2020-1
Suncorp Bank
The Superannuation Members Srs 2019-2
The Superannuation Members Srs 2019-1
The Superannuation Members Srs 2016-1
Think Tank Trust Srs 2019-1
Torrens Trust Series 2019-1
Torrens Trust Srs 2021-1
Transurban Queensland Finance Pty Limited
Vicinity Centres
Wesfarmers Limited
Westconnex Finance Company Pty Limited
Westpac Banking Corporation
Woodside Finance Limited
Zenith Pacific Pty Limited
Total Debt securities
XXX
XXX
XXX
-54-
54 | PERPETUAL CREDIT INCOME TRUST
5,505
411
3,233
2,834
7,543
5,772
3,365
2,020
506
1,867
1,712
3,356
3,012
610
4,029
8,836
9,271
9,243
7,807
6,234
947
1,249
3,685
2,059
1,706
10,798
2,008
5,160
5,197
11,168
4,525
4,366
5,695
7,145
4,145
2,048
723
5,093
6,627
1,830
5,146
4,076
5,345
891
2,316
6,192
2,296
4,138
3,887
2,626
6,157
3,135
5,337
3,113
306,653
x
X
Debt securities (continued)
Civmec Holdings Limited
Conquest Trust Srs2018-1
CPIF Finance Pty Limited
Credit Agricole S.A.
Downer Grp Finance Pty Limited
Emeco Pty Limited
Flexi Trust Srs2020-1
Flexi Trust Srs2019-2
FP Turbo Srs2019-1
GAIF
HSBC
GTA Finance Co Pty Limited
Heritage Bank Limited
Humm ABS Trust Srs2021-1
IMB Limited
Incitec Pivot Limited
Insurance Australia Group Limited
Kingfisher Trust Series 2019-1
Lendlease Finance Limited
Liberty Funding Pty Limited Srs 2019-1SME
Liberty Funding Pty Limited Srs 2020-1A
Liberty Funding Pty Limited Srs2020-1SME
Light Trust Srs 2019-1
Lion Trust Srs 2020-1
Longwall Relocation Syndicated Loan
Macquarie Bank Limited
Macquarie Group Limited
Mineral Resources Limited
National Australia Bank
Omni Bridgeway Limited
Pacific National Finance
Peet Limited
Perenti Finance Pty Limited
Qantas Airways Limited
QBE Insurance Group Limited
QPH Finance Co Pty Limited
Salute Trust Srs 2021-1
Santos Finance Limited
Scentre Group Trust
SMHL Srs2020-1
Suncorp Bank
The Superannuation Members Srs 2019-2
The Superannuation Members Srs 2019-1
The Superannuation Members Srs 2016-1
Think Tank Trust Srs 2019-1
Torrens Trust Series 2019-1
Torrens Trust Srs 2021-1
Transurban Queensland Finance Pty Limited
Vicinity Centres
Wesfarmers Limited
Westconnex Finance Company Pty Limited
Westpac Banking Corporation
Woodside Finance Limited
Zenith Pacific Pty Limited
Total Debt securities
XXX
XXX
XXX
-54-
5,505
411
3,233
2,834
7,543
5,772
3,365
2,020
506
1,867
1,712
3,356
3,012
610
4,029
8,836
9,271
9,243
7,807
6,234
947
1,249
3,685
2,059
1,706
4,525
4,366
5,695
7,145
4,145
2,048
723
5,093
6,627
1,830
5,146
4,076
5,345
891
2,316
6,192
2,296
4,138
3,887
2,626
6,157
3,135
5,337
3,113
10,798
2,008
5,160
5,197
11,168
306,653
M. List of investments held by the Trust at 30 June 2021 (continued)
M. List of investments held by the Trust at 30 June 2021 (continued)
Derivatives
Futures
Swaps
Total Derivatives
xxx
xxx
Total
N.
Investment transactions
358
1,433
1,791
440,789
The total number of transactions entered during the year was 520. The total brokerage paid during the year was
$17,261.
O. Total Management Fees paid or accrued during the year
Refer to the annual financial report, note 5.
-55-
ANNUAL FINANCIAL REPORT 2021 | 55
DiRECTORY
RESPONSiBLE ENTiTY
Perpetual Trust Services Limited
ABN 48 000 142 049
AFSL 236 648
REGiSTERED OFFiCE
Level 18, Angel Place
123 Pitt Street
Sydney NSW 2000
DiRECTORS
Glenn Foster
Richard McCarthy
Simone Mosse
Vicki Riggio
Phillip Blackmore (Alternate)
COMPANY SECRETARiES
Gananatha Minithantri
Sylvie Dimarco
Mary Kapoka
iNVESTMENT MANAGER
Perpetual Investment Management Limited
Level 18, 123 Pitt Street
Sydney NSW 2000
AFSL 234 426
AUDiTOR
KPMG
International Towers Sydney 3
300 Barangaroo Avenue
Sydney NSW 2000
AUSTRALiAN SECURiTiES EXCHANGE CODE
ASX:PCI
UNiT REGiSTRY
Automic Pty Ltd
Level 5, 126 Phillip Street
Sydney NSW 2000
WEBSiTE
www.perpetualincome.com.au
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