ANNUAL REPORT - Macquarie€¦ · MACQUARIE TIMBER LAND TRUST 2005 Annual Report for the year ended ... William Dudley Fox ... Units in the Trust There were no movements in units

MACQUARIE TIMBER LAND TRUST2005ARSN 112774599

ANNUAL REPORTFOR THE FINANCIAL YEAR ENDED30 JUNE 2011

oMACQUARIE

MACQUARIE TIMBER LAND TRUST 2005

Annual Reportfor the year ended 30 June 2011

Contents

Directors' Report 2

Auditor's Independence Declaration 5

Statement of Comprehensive Income 6

Statement of Financial Position 7

Statement of Changes in Equity 8

Statement of Cash Flows 9

Notes to the Financial Statements 10

Directors' Declaration 22

Independent Auditor's Report to the Unitholders ofMacquarie Timber Land Trust 2005 23

This annual financial report covers the Macquarie Timber Land Trust 2005 as an individual entity.

Responsible Entity:Macquarie Financial Products Management LimitedABN 38 095 1 35 694No.1, Martin Place,

Sydney, New South Wales, 2000AUSTRALIA

Neither the Responsible Entity, nor any member of the Macquarie Group Limited, guarantees the performance of the Macquarie Timber Land Trust 2005, therepayments of capital or the payment of a particular rate of return on the units issued.

Macquarie Financial Products Management Limited is not an authorised deposit-taking institution for the purposes of the Banking Act (Cth) 1959, andMacquarie Financial Products Management Limited's obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542.Macquarie Bank Limited does not guarantee or otherwise provide assurance in respect of the obligations of Macquarie Financial Products Management Limited.

1


Directors' ReportFor the year ended 30 June 2011

The Directors of Macquarie Financial Products Management Limited (ABN 38 095 135 694) (a wholly ownedsubsidiary of Macquarie Group Limited), the Responsible Entity of the Macquarie Timber Land Trust 2005 ("theTrust"), submit their report for the Trust for the year ended 30 June 2011.

Principal activities

The principal activity of the Trust is to invest in timber plantation land and receive rental income throughoperating leases. The rental income earned will be equal to 10% of net harvest proceeds, which will be paid ininstalrnents during the harvest payment period.

The Trust did not have any employees during the year.

There has been no significant change in the nature of this activity during the year.

Directors

The names of the Directors of the Responsible Entity in office during the financial year and until the date of thisreport are:

Antony Clubb (appointed on 11 February 2011)Simone Alison Mosse (resigned on 11 February 2011)Jason King

William Dudley FoxPeter Bruce Lucas

The Directors were in office from the beginning of the financial year until the date of this report, unless otherwisestated.

Review of results and operations

The Trust was constituted on 31 January 2005 and registered on 16 February 2005.

The Trust continued to invest funds in accordance with target asset allocations as set out in the governingdocuments of the Trust and in accordance with the provisions of the Trust Constitution.

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

Operating profit before finance costs attributable to unitholders

2011 2010$ $

16,188 34,909

16,188 34,9043.30 7.12

DistributionsDistribution paid and payableDistribution (dollars per unit)

Significant changes in the state of affairs

In the opinion of the Directors, there were no significant changes in the state of affairs of the Trust during theyear.

2


Directors' Report (continued)for the year ended 30 June 2011

Significant events after the balance date

The weighted average price per hectare paid for land has been determined to be less than the applicationamount Unitholders were charged. On 29 July 2011 the directors resolved to return the difference toUnitholders. The total amount determined to be returned as capital is $351 ,116 (2010: None).

Likely developments and expected results of operations

The investment strategy of the Trust will be maintained in accordance with the Trust constitution and investmentobjectives as detailed in the most recent Product Disclosure Statement.

Further information on likely developments in the operations of the Trust and the expected results of thoseoperations have not been included in this report because the Responsible Entity believes it would be likely toresult in unreasonable prejudice to the Trust.

Indemnification and insurance of Directors and officers

No insurance premiums are paid for out of the assets of the Trust in regards to insurance cover provided toeither the Directors or officers of the Responsible Entity. So long as they act in accordance with the TrustConstitution and the Corporations Act 2001 (the ':4ct'), the Directors and officers remain indemnified out of theassets of the Trust against losses incurred while acting on behalf of the Trust.

Fees paid to and units held in the Trust by the Responsible Entity and its associates

No fees were paid to the Responsible Entity and its associates out of Trust property during the financial year(2010: $Nil).

No fees were paid out of Trust property to the Directors of the Responsible Entity during the financial year(2010: $NiI).

The number of units held by the Responsible Entity and its associates as at the end of the financial year aredisclosed in Note 10 of the financial statements.

Units in the Trust

There were no movements in units on issue in the Trust during the financial year. The units on issue at 30 June2011 were 4,904 (2010: 4,904).

Trust assets

The value of the Trust's assets and liabilities is disclosed in the statement of financial position and derived usingthe basis set out in Note 2 of the financial statements.

3


Directors' Report (continued)for the year ended 30 June 2011

Environmental regulation and performance

The operations of the Trust are not subject to any particular or significant environmental regulation under a lawof the Commonwealth or of a State or Territory. There have been no known significant breaches of any otherenvironmental requirements applicable to the Trust.

Auditor's independence declaration

An independence declaration has been provided to the Directors by the auditor of Macquarie Timber Land Trust2005, Ernst & Young, and is attached to the Director's Report.

Rounding of amounts

In accordance with Australian Securities and Investments Commission Class Order 98/0100 (as amended),amounts in the Directors' Report and the Financial Report have been rounded off to the nearest dollar unlessotherwise indicated.

Signed in accordance with a resolution of the Directors.

~. . .. . .. ~~ . ... .. ...................................................DirectorSydney26 September 2011

4

11111111111111111111111111111111,'''''' go ERNST & YOUNG

Ernst & Young Centre680 George StreetSydney NSW 2000 AustraliaGPO Box 2646 Sydney NSW 2001

Tel: +61 2 9248 5555Fax: +61 2 9248 5959www.ey.com/au

Auditor's Independence Declaration to the Directors of MacquarieFinancial Products Management Limited, as the Responsible Entity forMacquarie Timber Land Trust 2005

In relation to our audit of the financial report of Macquarie Timberland Trust 2005 for the financial yearended 30 June 2011, to the best of my knowledge and belief, there have been no contraventions oftheauditor independence requirements of the Corporations Act 2001 or any applicable code of professionalconduct.

bmt ~ ~hui-Ernst & Young

~Clare SporlePartnerSydney.26 September 2011


Statement of Comprehensive Incomefor the year ended 30 June 2011

Notes

Investment Income

Lease rental income

Interest income

Net investment income

Expenses

Total operating expenses

Operating profit

Finance costs attributable to unitholders

Distribution to unitholders(Increase)/decrease in net assets attributable tounitholders

Total finance costs attributable to unitholders

Profit/(Ioss) for the year

Other comprehensive income

Total comprehensive income/(Ioss) for the year

2011

$

16,188

16,188

16,188

8 (16,188)

2010$

21,954

12,955

34,909

34,909

(34,904)

(5)

(34,909)

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

9

(16,188)

6


Statement of Financial Positionas at 30 June 2011

Notes 2011 2010$ $

Assets

Cash and cash equivalents 5 372,721 375,302

Receivables and prepayments 6 1 ,427 2,600

Land 9,452,610 9,484,962

Total assets 9,826,758 9,862,864

Liabilties

Distribution payable 8 18,573 54,677

Other payables 7 137 139

T otalliabilities (excluding net assets attributable tounitholders) 18,710 54,816

Net assets attributable to unitholders - liability 9 9,808,048 9,808,048

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

7


Statement of Changes in Equityfor the year ended 30 June 2011

2011$

2010$

Total equity at the beginning of the financial year

ProfiV(loss) for the year

Other comprehensive income for the year

Total comprehensive income/(Ioss) for the year

Transactions with owners in their capacity as owners

Total equity at the end of the financial year

Under Australian Accounting Standards, net assets attributable to unitholders are classified as a liability ratherthan equity. As a result, there was no equity at the start or end of the year.

The above statement of changes in equity should be read in conjunction with the accompanying notes.

8


Statement of Cash Flowsfor the year ended 30 June 2011

Notes 2011 2010$ $

Cash flows from operating activities

Interest received 16,046 12,794

Lease rental income 24,149

Net GST (paid)/refund (106)

Payment of expenses (22,976)

Net cash provided by operating activities 11 (a) 16,046 13,861

Cash flows from investing activitiesAmounts received from MBL for amendments in land purchaseprice 33,667

Net cash provided by investing activities 33,667

Cash flows from financing activities

Withholding tax paid (139) (539)Received from Macquarie Timber Land Trust 2006 on account ofincorrect funding 123

Distributions paid (52,278) (118,893)

Net cash (used in)/provided by financing activities (52,294) (119,432)

Net decrease in cash and cash equivalents (2,581) (105,571 )

Cash and cash equivalents at the beginning of the year 375,302 480,873

Cash and cash equivalents at the end of the year 5 372,721 375,302

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

9


Notes to the Financial StatementsFor the year ended 30 June 2011

1 . Corporate information

This financial report covers the Macquarie Timber Land Trust 2005 ("the Trust") as an individual entity. The Trustwas constituted on 31 January 2005 and registered on 16 February 2005. The Trust is expected to terminate on31 December 2016 or at a later date in accordance with the provisions of the Trust Constitution.

Macquarie Timber Land Trust 2005 is a managed investment scheme. Macquarie Financial ProductsManagement Limited ("the Responsible Entity" of the Trust) has its registered office at No.1, Martin Place,Sydney, New South Wales, 2000, Australia. The financial report is presented in the Australian currency.

The Trust issued units at $2,000 per unit (GST free) in order to purchase the land on which the timberplantations are situated. Land owned by the Trust is used for forestry plantation purposes by the investors of theMacquarie Eucalypt Project 2005. The Macquarie Eucalypt Project 2005 is a managed investment scheme andits Responsible Entity is Macquarie Alternative Assets Management Limited (a wholly owned subsidiary ofMacquarie Group Limited).

The financial statements of Macquarie Timber Land Trust 2005 for the year ended 30 June 2011 wereauthorised for issue in accordance with a resolution of the Board of Directors on 26 September 2011.

2. Accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below.These policies have been consistently applied to all periods presented, unless otherwise stated in the followingtext.

2.1 Basis of preparation

This general purpose financial report has been prepared in accordance with Australian Accounting Standards,other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act2001 in Australia.

The financial report is prepared on the basis of fair value measurement of assets and liabilities except whereotherwise stated.

The statement of financial position is presented on a liquidity basis. Assets and liabilities are presented indecreasing order of liquidity and are not distinguished between current and non-current. All balances areexpected to be recovered or settled within twelve months, except land and net assets attributable tounitholders.

Amounts in the financial report have been rounded off to the nearest dollar unless otherwise indicated.

Statement of compliance

The financial statements have been prepared in accordance with the Australian Accounting Standards as issuedby the Australian Accounting Standards Board and International Financial Reporting Standards as issued by theInternational Accounting Standards Board.

10


Notes to the Financial Statements (continued)for the year ended 30 June 2011

2. Accounting policies (continued)

2.1 Basis of preparation (continued)

New accounting standards and interpretations

Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yeteffective have not been adopted by the Trust for the annual reporting period ended 30 June 2011. The impactof these standards and interpretations has been assessed and to the extent applicable to the Trust arediscussed below. Standards and Interpretations that are not expected to have a material impact on the Trusthave not been included.

(i) MSB 9 Rnancial Instruments and MSB 2009-11 Amendments to Australian Accounting Standards arisingfrom MSB 9 and MSB 20 10 Amendment to Australia Accounting Standards arising from MSB 9 (December2010) (effective from 1 January 2013).

AASB 9 Financial Instruments addresses the classification and measurement of financial assets. The standard isnot applicable until 1 January 2013 but is available for early adoption. AASB 9 only permits the recognition of fairvalue gains and losses in other comprehensive income if they relate to equity investments that are not held fortrading. Fair value gains and losses on available-for-sale debt investments, for example, will therefore have to berecognised directly in profit or loss. The Trust has not yet decided when to adopt AASB 9. However,management does not expect any impact on the Trust's financial statements as the Trust does not hold anyavailable-for-sale investments nor any investments in debt instruments.

(ii) Revised MSB 124 Related Party Disclosures and MSB 2009-12 Amendments to Australian AccountingStandards (effective from 1 January 20 11).

In December 2009 the AASB issued a revised AASB 124 Related Party Disclosures. It is effective for accountingperiods beginning on or after 1 January 2011 and must be applied retrospectively. The amendment clarifies andsimplifies the definition of a related party and removes the requirement for government related entities todisclose details of all transactions with the government and other government related entities. The Trust willapply the amended standard from 1 July 2011. The amendments will not have any effect on the Trust's financialstatements.

(iii) MSB 20 10-6 Amendments to Australian Accounting Standards - Disclosures on Transfers of FinancialAssets (effective for annual reporting periods beginning on or after 1 July 2011).

In November 2010, the AASB issued AASB 2010-6 Disclosures on Transfers of Financial Assets which amendsAASB 1 First time Adoption of Australian Accounting and AASB 7 Financial Instruments: Disclosures tointroduce additional disclosures in respect of risk exposures arising from transferred financial assets. Theamendments will affect particularly entities that sell, factor, securitize, lend or otherwise transfer financial assetsto other parties. The amendments will not have any impact on the Trust's disclosures. The Trust intends toapply the amendment from 1 July 2011.

11




2.1 Basis of preparation (continued)

(iv) Amendments to MSB 2010-4 Further Amendments to Australian Accounting Standards arising from theAnnual Improvements Project (effective for annual reporting periods beginning on or after 1 July 2010).

In June 2010, the AASB made a number of amendments to Australian Accounting Standards as a result of theIASB's annual improvements project. The Trust does not expect that any adjustments will be necessary as theresult of applying the revised rules.

(v) IFRS 10 establishes a new control model that applies to all entities. It replaces parts of IAS 27 Consolidatedand Separate Financial Statements dealing with the accounting for consolidated financial statements and SIC-12 Consolidation -Special Purpose Entities.

This standard is yet to be approved by the Australian Accounting Standards Board and has not been issued inAustralia. The standard is not applicable until 1 January 2013 but is available for early adoption.

The Trust has not yet decided when to adopt IFRS 10. Management does not expect this will have a significanteffect on the Trust's financial statements.

(vi) IFRS 12 includes all disclosures relating to an entity's interests in subsidiaries, joint arrangements, associatesand structured entities. New disclosures have been introduced about the judgements made by management todetermine whether control exists, and to require summarised information about joint arrangements, associatesand structured entities and subsidiaries with non-controlling interests.



(vii) IFRS 13 establishes a single source of guidance under IFRS for determining the fair value of assets andliabilities. IFRS 13 does not change when an entity is required to use fair value, but rather, provides guidance onhow to determine fair value under IFRS when fair value is required or permitted by IFRS. Application of thisdefinition may result in different fair values being determined for the relevant assets.

IFRS 13 also expands the disclosure requirements for all assets or liabilities carried at fair value. This includesinformation about the assumptions made and the qualitative impact of those assumptions on the fair valuedetermined.



12




2.2 Summary of significant accounting policies

(a) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with banks and investments in moneymarket instruments which are readily convertible to cash on hand and are subject to an insignificant risk ofchanges in value, and bank overdrafts.

(b) Land

Land is initially recognised at acquisition cost and is subsequently measured at cost unless the carrying amountof land is greater than its recoverable amount. When such instances occur, the land is written down to itsrecoverable amount and the decrement recognised as an expense in the statement of comprehensive income inthe reporting financial year in which the recoverable amount write-down occurs.

(c) Investment income and expenses

Investment income and expenses, including interest income and the Responsible Entity's fees, are recognised inthe statement of comprehensive income on an accrual basis.

The Trust is entitled to rental revenue equal to 10% of the net harvest proceeds of unitholders in the MacquarieEucalypt Project 2005, a managed investment scheme offered by Macquarie Alternative Assets ManagementLimited. Rental income will be recognised on a straight line basis over the lease term when it can be reliablymeasured, which is expected to coincide with the harvest period when the proceeds from the harvest ofplantation timber in the Macquarie Eucalypt Project 2005 occurs. The harvest period will end by approximatelyDecember 2016, 11.5 years after the project has begun.

(d) Income tax

Under current legislation, the Trust is not subject to income tax provided the distributable (taxable) income of theTrust is fully distributed by way of cash (i.e. unitholders are presently entitled to the income of the Trust).Distributable income is determined by reference to the taxable income of the Trust.

(e) Distributions to unitholders

In accordance with the Trust's Constitution, the Trust fully distributes its distributable (taxable) income tounitholders by way of cash. The distributions are payable at the end of June each financial year and recognisedas finance costs attributable to unitholders in the statement of comprehensive income.

13




2.2 Summary of significant accounting policies (continued)

(~ Net assets attributable to unitholders

Units are redeemable at the end of the Trust's finite life and are therefore classified as financial liabilities. The fairvalue of redeemable units is measured at the redemption amount that would be received if units were redeemedat the reporting date.

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

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

(h) Functional and presentation currency

Items included in the Trust's financial statements are measured using the currency of the primary economicenvironment in which it operates (the "functional currency"). This is the Australian Dollar, which reflects thecurrency of the economy in which the Trust competes for capital funds and is regulated. The Australian Dollar isalso the Trust's presentation currency.

(i) Receivables and prepayments

Receivables may include amounts for interest and Goods and Services Tax receivable from the AustralianTaxation Office (ATO). Prepayments may include advance payments made to Macquarie Bank Limited ("MBL")for purchase of land.

u) Payables

Payables include liabilities and accrued expenses owing by the Trust which are unpaid at the reporting date.

The distribution amount payable to unitholders as at the reporting date is recognised separately in the statementof financial position as unitholders are presently entitled to the distributable income as at 30 June 2011 underthe Trust's Constitution.

(k) Goods and Services Tax (GST)

Management fees and other expenses are recognised net of the amount of GST in the statement ofcomprehensive income. The Trust qualifies for tax credits at a rate of 100%. The net amount of GST receivablefrom the ATO is included in receivables in the statement of financial position. Cash flows relating to GST areincluded in the statement of cash flows on a gross basis.

(I) Use of estimates

The preparation of the Trust's financial statements requires management to make judgements, estimates andassumptions that affect the amounts recognised in the financial statements. However, uncertainty about theseassumptions and estimates could result in outcomes that could require a material adjustment to the carryingamount of the asset or liability affected in the future. Estimates related to the value of the land are based onrecent market activity for comparable lots.

14



3. Financial risk management

The Trust may be exposed to a variety of financial risks including interest rate risk, credit risk and liquidity riskarising from the financial instruments it holds. There is no exposure to market risk from financial instruments. TheTrust's overall risk management programme focuses on ensuring compliance with the Trust's ProductDisclosure Statement and seeks to maximise the returns derived for the level of risk to which the Trust isexposed.

The Trust uses different methods to measure different types of risk to which it is exposed. These methodsinclude sensitivity analysis in the case of interest rate risk and ratings analysis for credit risk.

The risk management policies employed by the Trust to manage these risks are discussed below.

(i) Interest rate risk

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

The Trust has no significant interest bearing assets other than cash and cash equivalents. No interest rate riskanalysis is presented due to Responsible Entity's assessment that such risks are insignificant.

(ii) Credit risk

Credit risk is the risk that a counterparty will fail to perform contractual obligations, either in whole or in part,under a contract. Potential areas of credit risk consist of cash balances at bank and interest receivables. Otherthan cash and cash equivalents, and receivables, the Trust does not have a concentration of a credit risk thatarises from an exposure to a single counterparty. Furthermore, the Trust does not have a material exposure to agroup of counterparties which are expected to be affected similarly by changes in economic or other conditions.

The Trust manages its exposure to credit risk by dealing with well established financial institutions that theResponsible Entity has assessed to have a high quality credit standing.

Maximum exposure to credit risk

The carrying amounts of financial assets best represent the maximum credit risk exposure at the reporting date.The table below details credit quality of financial assets held by the Trust.

Credit quality Neither past due nor impaired

2011(in $)

InvestmentGrade

$

BelowInvestment

Grade$

Default$

Unrated$

Past dueor

individuallyimpaired

$Total

$Cash and cashequivalentsFinancial institutionsOther assets

Financial institutionsTotal

372,721 372,721

1 ,427

374,1481 ,427

374,148

15



3. Financial risk management (continued)

(ii) Credit risk (continued)

Credit quality Neither past due nor impaired

2010(in $)

InvestmentGrade

$

BelowInvestment

Grade$

Default$

Unrated$

Past dueor

individuallyimpaired

$Total

$Cash and cashequivalentsFinancial institutions

Other assetsFinancial institutions

Total

375,302 375,302

2,600377,902

2,600377,902

(iii) Liquidity risk

Liquidity risk is the risk that the Trust will encounter difficulty in meeting obligations associated with financialliabilities. The Trust is subject to minimal liquidity risk in relation to the financial liabilities it holds. The onlysignificant financial liability held by the Trust is net assets attributable to unitholders. The Trust is required to paythis liability only on its termination (expected to occur in approximately 2016). This financial liability will be paid offby using proceeds from the sale of land.

The table below analyses the Trust's financial liabilities into relevant maturity groupings based on the remainingperiod at the reporting date to the contractual maturity date. The amounts disclosed in the table are thecontractual undiscounted cash flows.

2011 On Less than 3 to 12 1 to 5 Over 5 Total

(In $) demand 3 months months years years$ $ $ $ $ $

Distribution payable 2,385 - 16,188 - - 18,573

Other payables - - 137 - - 137

Net assets attributable tounitholders - - - - 9,808,048 9,808,048

Total undiscounted cash flows 2,385 - 16,325 - 9,808,048 9,826,758

2010 On Less than 3 to 12 1 to 5 Over 5 Total

(In $) demand 3 months months years years$ $ $ $ $ $

Distribution payable 19,912 - 34,765 - - 54,677

Other payables - - 139 - - 139

Net assets attributable tounitholders . - - - - 9,808,048 '9,808,048

Total undiscounted cash flows 19,912 - 34,904 - 9,808,048 9,862,864

16



3. Financial risk management (continued)

(iv) Fair value estimation

The carrying amounts of the Trust's financial assets and financial liabilities at the reporting date approximatetheir fair values.

4. Auditor's remuneration2011

$

2010

$

Amounts received or due and receivable byErnst & Young for:

- an audit and review of the financial report of the Trust- other services related to the Trust: audit of complianceplan

5,140 5,010

310

5,450

290

5,300

No non-audit fees were paid/payable during the year (2010: $Nil).

The Responsible Entity pays fees to auditors on behalf of the Trust. It is not the intention of the ResponsibleEntity to recharge the fees to the Trust, as permitted by the Constitution. No contingent liability has beenrecognised by the Trust in relation to the fees.

5. Cash and cash equivalents

2011 2010$ $

Cash at bank (Macquarie Bank Limited "MBL") 6,845 28,086Money Market deposits (MBL) 365,876 347,216

372,721 375,302

6. Receivables and prepayments

2011 2010

$ $

Interest receivable 1 ,427 1,285

Other receivables from MBL 1,315

1 ,427 2,600

17



7. Other payables

2011

$

2010

$

WHT (With Holding Tax) payablePayable to Macquarie Timber Land Trust 2006 on account ofincorrect funding

14 139

123

137 139

8. Distribution to unitholders*

The distributions were paid/payable as follows:

2011$

2011dollars/unit

2010$

2010dollars/unit

Distribution paid - Current yearDistribution paid - Prior years 52,278

52,278118,893118,893

Distribution payable - Current yearDistribution payable - Prior years

16,1 742,399

18,573

3.30 34,76519,91254,677

7.09

* Distributions paid/payable is net of withholding tax amounting to $14 (2010: $139). Refer Note 7 of thefinancial statements for WHT payable.

9. Net assets attributable to unitholders

As stipulated within the Trust Constitution, each unit (approximately 1 hectare of land) represents a right to anindividual share in the Trust and does not extend to a right to the underlying assets of the Trust. There are noseparate classes of units and each unit has same rights attached to it as all other units of the Trust.

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

Opening balanceIncrease/(decrease) in net assetsattributable to unitholdersClosing balance

Units on Issue2011

No.4,904

2010No.

4,904

Unitholders Funds2011

$9,808,048

2010$

9,808,043

4,904 4,904 9,808,0485

9,808,048

18



9. Net assets attributable to unitholders (continued)

Capital risk management

The Trust considers its net assets attributable to unitholders as capital, notwithstanding net assets attributableto unitholders are classified as a liability. The amount of net assets attributable to unitholders is expected toremain constant until harvest payment period (expected to occur in approximately 2016).

The Trust has issued 4,904 units at $2,000 per unit amounting to $9,808,000. The money received has to beinvested in the purchase of land as per the Product Disclosure Statement. As at the reporting date, the Trusthad invested $9,452,610 in land. Unitholders will receive distributions on receipt of lease rentals and/or from thenet proceeds from the sale of land (expected to be in approximately 2016).

10. Related part disclosures

Responsible Entity

The Responsible Entity of the Macquarie Timber Land Trust 2005 is Macquarie Financial Products ManagementLimited (a wholly owned subsidiary of Macquarie Group Limited).

Key management personnel

(a) Responsible Entity

The Responsible Entity was the only key management personnel for the financial year. The following personshave held offices as Directors of Macquarie Financial Products Management Limited during the year ended 30June 2011:

Antony Clubb (appointed on 11 February 2011)Simone Alison Mosse (resigned on 11 February 2011)Jason King

William Dudley FoxPeter Bruce Lucas

(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 the financial year.

Related part and key management personnel unitholdings

Parties related to the Trust (including the Responsible Entity, its Directors, its affiliates and other Trusts managedby the Responsible Entity) held units in the Trust as follows:

2011Unitholder Number of Number of Units held Number of Number of Distributions

Units held Units held (%) units units paid/payableopening closing acquired disposed by the Trust

- (Units) (Units). (Units) (Units) ($)

Anna Marie King 1 1 0.02 - - 3

19



10. Related part disclosures (continued)

(b) Other key management personnel (continued)

2010Number of Number of Number of Number of DistributionsUnits held Units held units units paid/payableopening closing Units held acquired disposed by the Trust

Unitholder (Units) (Units) (%) (Units) (Units) ($)

Anna Marie King 1 1 0.02 - - 7

Key management personnel compensation

Payments, if any, made from the Trust to the Responsible Entity do not include any amounts directly attributableto the compensation of Directors of the Responsible Entity.

Key management personnel loan disclosures

The Trust has not made, guaranteed or secured, directly or indirectly, any loans to the Responsible Entity or itsDirectors or their personally related entities at any time during the reporting period.

Other transactions within the Trust

Apart from those details disclosed in this note, no Director has entered into a material contract with the Trustsince the end of the previous financial year and there were no material contracts involving Directors' interestsexisting at year end.

Responsible Entity's fees

The Responsible Entity did not receive any fees during the financial year ended 30 June 2011 (2010: $Nil).

All expenses in connection with the preparation of accounting records and the maintenance of the unit registerhave been fully borne by the Responsible Entity.

Other transactions

Macquarie Group Limited ("MGL"), a related party of the Responsible Entity, and the companies within the MGLGroup have undertaken various transactions with, and performed various services for the Trust as follows:

The Trust places funds on deposit with MBL, a wholly-owned subsidiary of MGL. The carrying value of thesedeposits is disclosed in Note 5 to the financial statements. Interest income from deposits with MBL is $16,188(2010: $12,955) for the financial year ended 30 June 2011.

All the above transactions are conducted on normal commercial terms and conditions.

20



11. Reconciliation of cashflows from operating activities to net profit for the year

2011$

2010$

(a) Reconciliation of profiV(loss) to net cash provided byoperating activities

ProfiV(loss) for the yearIncrease in net assets attributable to unitholdersDistribution made to unitholders(Increase)/decrease in receivables(Decrease) in payablesNet cash provided by operating activities 16,046

534,904

1,928(22,976)

13,861

16,188(142)

(b) Non-cash financing activities

The Trust did not engage in any non-cash financing and investment activities during the financial year (2010:$Nil).

12. Commitments and contingencies

There are no commitments or contingencies at the reporting date (2010: None).

13. Events after balance date

The weighted average price per hectare paid for land has been determined to be less than the applicationamount Unitholders were charged. On 29 July 2011 the directors resolved to return the difference toUnitholders. The total amount determined to be returned as capital is $351,116 (2010: None).

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Directors' Declaration30 June 2011

In accordance with a resolution of the Directors of Macquarie Alternative Assets Management Limited, I statethat:

In the opinion of the directors:

(a) the financial statements and notes set out on pages 6 to 21 are in accordance with the CorporationsAct 2001 including:

(i) Giving a true and fair view of the Scheme's financial position as at 30 June 2011 and of itsperformance for the year ended on that date; and

(ii) Complying with Accounting Standards and Corporations Regulations 2001.

(b) There are reasonable grounds to believe that the Scheme will be able to pay its debts as and when theybecome due and payable.

The directors declare that the notes to the financial statements include an explicit and unreserved statement ofcompliance with the International Financial Reporting Standards (see note 2.1).

On behalf of the board.

DirectorSydney26 September 2011

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Ernst & Young Centre680 George StreetSydney NSW 2000 AustraliaGPO Box 2646 Sydney NSW 2001

Tel: +61 2 9248 5555Fax: +61 2 9248 5959www.ey.com/au

Independent auditor's report to the unitholders of Macquarie TimberLand Trust 2005

We have audited the accompanying financial report of Macquarie Timber Land Trust 2005 (the "trust"),which comprises the statement of financial position as at 30 June 2011, the statement of comprehensiveincome, statement of changes in equity and statement of cash flows for the year then ended, notescomprising a summary of significant accounting policies and other explanatory information, and thedirectors'declaration.

Directors' responsibilty for the financial report

The directors of Macquarie Financial Products Management Limited, the responsible entity of the trust,are responsible for the preparation of the financial report that gives a true and fair view in accordancewith Australian Accounting Standards and the Corporations Act 2001 and for such internal controls asthe directors determine are necessary to enable the preparation of the financial report that is free frommaterial misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordancewith Accounting Standard AASB 101 Presentation of Financial statements, that the financial statementscomply with International Financial Reporting Standards.

Auditor's responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted ouraudit in accordance with Australian Auditing Standards. Those standards require that we comply withrelevant ethical requirements relating to audit engagements and plan and perform the audit to obtainreasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures inthe financial report. The procedures selected depend on the auditor's judgment, including the assessmentof the risks of material misstatement of the financial report, whether due to fraud or error. In makingthose risk assessments, the auditor considers internal controls relevant to the preparation of the financialreport that gives a true and fair view in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the responsibleentity's internal controls. An audit also includes evaluating the appropriateness of accounting policiesused and the reasonableness of accounting estimates made by the directors, as well as evaluating theoverall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.

Independence

In conducting our audit we have complied with the independence requirements of the Corporations Act2001. We have given to the directors of the responsible entity a written Auditor's IndependenceDeclaration, a copy of which is included with the directors' report.

Liability limited by a scheme approvedunder Professional Standards Legislation

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Opinion

In our opinion:

a. the financial report of Macquarie Timber Land Trust 2005 is in accordance with the Corporations

Act 2001, including:

giving a true and fair view of the trust's financial position as at 30 June 2011 and of itsperformance for the year ended on that date; and

ii complying with Australian Accounting Standards and the Corporations Regulations 2001;

and

b. the financial report also complies with International Financial Reporting Standards as disclosed in

Note 2.

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~Clare SporlePartnerSydney26 September 2011

Documents

ANNUAL REPORT - Macquarie€¦ · MACQUARIE TIMBER LAND TRUST 2005 Annual Report for the year ended ... William Dudley Fox ... Units in the Trust There were no movements in units