AUSTRALIAN MASTERS CORPORATE BOND FUND NO 5 LIMITED … · 2015-11-15 · Results and Review of Operations The Company has invested in a portfolio of Australian dollar denominated

AUSTRALIAN MASTERS CORPORATE BOND FUND NO 5 LIMITED

ABN 57 139 247 564

FINANCIAL REPORT

FOR THE HALF-YEAR ENDED

31 DECEMBER 2012

AUSTRALIAN MASTERS CORPORATE BOND FUND NO 5 LIMITED

ABN 57 139 247 564

CONTENTS

Directors' Report 1

Auditor’s Independence Declaration 3

Condensed Statement of Profit or Loss and Other Comprehensive Income 4

Condensed Statement of Financial Position 5

Condensed Statement of Changes in Equity 6

Condensed Statement of Cash Flows 7

Notes to the Condensed Financial Statements 8

Directors' Declaration 12

Auditor’s Review Report 13

Australian Masters Corporate Bond Fund No 5 Limited

ABN 57 139 247 564

DIRECTORS’ REPORT

FOR THE HALF-YEAR ENDED 31 DECEMBER 2012

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The directors present their report together with the condensed financial report of Australian Masters Corporate

Bond Fund No 5 Limited (“the Company”) for the half-year ended 31 December 2012.

Directors

The names of directors who held office during or since the end of the half-year:

Mr Maximilian Sean Walsh – Non-Executive Chairman

Mr Daryl Albert Dixon – Non-Executive Director

Mr Alan Cochrane Dixon – Non-Executive Director

Mr Christopher Matthew Brown – Non-Executive Director

Mr Alexander Gen MacLachlan – Non-Executive Director

Directors have been in office since the start of the half-year to the date of this report unless otherwise stated.

Principal Activities

The principal activity of the Company during the financial period was investing in Australian corporate bonds.

Dividends Paid or Recommended

Fully franked dividends of $1.00 per share paid on 30 October 2012 was $782,465 and $0.89 per share paid on

18 December 2012 was $696,394.

Results and Review of Operations

The Company has invested in a portfolio of Australian dollar denominated Corporate bonds.

The profit of the Company after providing for income tax amounted to $1,621,353 (2011: $2,109,026). The net

assets of the Company have decreased by $2,838,698 from $65,355,765 at 30 June 2012 to $62,517,067 at 31

December 2012. The net asset value per share at 31 December 2012 was $79.90 (30 June 2012: $83.53).

As approved by shareholders at the general meeting held on 27 March 2012, the Second Capital Return of $3.81

per share was paid on 18 December 2012.

Events Subsequent to Reporting Date

There has not arisen in the interval between the end of the financial period and the date of this report any item,

transaction or event of material and unusual nature likely, in the opinion of the directors, to significantly affect the

operations of the Company, the result of those operations, or the state of affairs of the Company, in future

financial years.


ABN 57 139 247 564

DIRECTORS’ REPORT


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Auditor’s Independence Declaration

The auditor’s independence declaration under s. 307C of the Corporations Act 2001 is set out on page 3 for the

period ended 31 December 2012.

This report is signed in accordance with a resolution of the Board of Directors pursuant to s. 306(3) of the

Corporations Act 2001.

Mr. Maximilian Sean Walsh

Dated this 26th day of February 2013

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Touche Tohmatsu Limited

Deloitte Touche Tohmatsu

ABN 74 490 121 060

Grosvenor Place

225 George Street

Sydney NSW 2000

PO Box N250 Grosvenor Place

Sydney NSW 1220 Australia

Tel: +61 2 9322 7000

Fax: +61 (0)2 9322 7001

www.deloitte.com.au

The Board of Directors


Level 15

100 Pacific Highway

NORTH SYDNEY NSW 2060

26 February 2013

Dear Board Members


In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following

declaration of independence to the directors of Australian Masters Corporate Bond Fund No 5 Limited.

As lead audit partner for the review of the financial statements of Australian Masters Corporate Bond Fund No

5 Limited for the half-year ended 31 December 2012, I declare that to the best of my knowledge and belief,

there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and

(ii) any applicable code of professional conduct in relation to the review.

Yours sincerely

DELOITTE TOUCHE TOHMATSU

Michael Kaplan

Partner

Chartered Accountants


ABN 57 139 247 564

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CONDENSED STATEMENT OF PROFIT OR LOSS

AND OTHER COMPREHENSIVE INCOME


31 December 2012 31 December 2011

Notes $ $

Revenue 2 2,515,475 3,226,128

Profit on disposal of financial assets - 33,303

Management fee (149,999) (177,242)

Listing and registry fees (26,582) (35,881)

Legal and compliance expenses (8,234) (7,019)

Other expenses (14,441) (22,110)

Profit before income tax 2,316,219 3,017,179

Income tax expense 3 (694,866) (908,153)

Profit for the period 1,621,353 2,109,026

Other comprehensive income - -

Total other comprehensive income

for the period, net of tax - -

Total comprehensive income for the period 1,621,353 2,109,026

Earnings per share

Basic earnings per share 2.07 2.70

Diluted earnings per share 2.07 2.70

The Condensed Statement of Profit or Loss and Other Comprehensive Income is to be read in conjunction with the notes to the condensed financial statements.


ABN 57 139 247 564

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CONDENSED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2012

31 December 2012 30 June 2012

Notes $ $

Assets

Current

Cash and cash equivalents 1,654,584 1,459,810

Other receivables 17,963 92,668

Prepayments 149,999 -

Current tax assets - 110,818

Financial assets 5 6,411,205 3,512,414

Total Current Assets 8,233,751 5,175,710

Non-Current

Financial assets 5 54,404,546 60,067,925

Deferred tax assets 6 92,356 124,038

Total Non-current Assets 54,496,902 60,191,963

Total Assets 62,730,653 65,367,673

Liabilities

Current

Other payables 11,180 11,908

Current tax liabilities 202,406 -

Total Current Liabilities 213,586 11,908

Total Liabilities 213,586 11,908

Net Assets 62,517,067 65,355,765

Equity

Issued capital 7 61,894,291 64,875,483

Retained earnings 622,776 480,282

Total Equity 62,517,067 65,355,765

The Condensed Statement of Financial Position is to be read in conjunction with the notes to the condensed financial statements.


ABN 57 139 247 564

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CONDENSED STATEMENT OF CHANGES IN EQUITY


Issued Capital

Retained

Earnings Total

$ $ $

Balance at

76,502,913 703,327 77,206,240

Profit for the period - 2,109,026 2,109,026

Other comprehensive income - - -

Total comprehensive income for the period - 2,109,026 2,109,026

Dividends paid 4 - (2,308,272) (2,308,272)

Balance at

76,502,913 504,081 77,006,994

Balance at

64,875,483 480,282 65,355,765

Profit for the period - 1,621,353 1,621,353

Other comprehensive income - - -

Total comprehensive income for the period - 1,621,353 1,621,353

Dividends paid 4 - (1,478,859) (1,478,859)

Capital returns paid 7 (2,981,192) - (2,981,192)

Balance at

61,894,291 622,776 62,517,067

1 July 2011

31 December 2011

31 December 2012

1 July 2012

The Condensed Statement of Changes in Equity is to be read in conjunction with the notes to the condensed financial statements.


ABN 57 139 247 564

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CONDENSED STATEMENT OF CASH FLOWS



Notes $ $

Cash flows from operating activities

Receipts from ATO 25,284 27,668

Interest received from bank 47,355 109,211

Interest received from investments 2,306,720 2,848,211

Management fees paid (321,949) (380,422)

Payments to suppliers (52,625) (69,741)

Net income tax paid (349,960) (655,160)

Net cash flows provided by operating activities 1,654,825 1,879,767

Cash flows from investing activities

Payments for purchase of investments - (3,000,000)

Proceeds from disposal and redemption of investments 3,000,000 14,715,590

Net cash flows provided by investing activities 3,000,000 11,715,590

Cash flows from financing activities

Dividends paid 4 (1,478,859) (2,308,272)

Capital returns paid 7 (2,981,192) -

Net cash flows (used in) financing activities (4,460,051) (2,308,272)

Net increase in cash

and cash equivalents 194,774 11,287,085

Cash and cash equivalents

at beginning of the period 1,459,810 2,061,860

Cash and cash equivalents

at end of the period 1,654,584 13,348,945

The Condensed Statement of Cash Flows is to be read in conjunction with the notes to the condensed financial statements.


ABN 57 139 247 564

NOTES TO THE CONDENSED FINANCIAL STATEMENTS


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1. Statement of Significant Accounting Policies

a. Basis of Preparation

These general purpose condensed financial statements for the interim half-year reporting period ended 31 December 2012 have been prepared in accordance with requirements of the Corporations Act 2001 and Australian Accounting Standards including AASB 134: Interim Financial Reporting. Compliance with AASB 134 ensures that the financial statements and notes also comply with International Financial Reporting Standard IAS 34: Interim Financial Reporting.

This interim financial report is intended to provide users with an update on the latest annual financial statements of Australian Masters Corporate Bond Fund No 5 Limited (“the Company”). It is therefore recommended that this interim financial report be read in conjunction with the annual financial statements of the Company for the year ended 30 June 2012.

The same accounting policies and methods of computation have been followed in this interim financial report as were applied in the most recent annual financial statements.

The condensed financial statements have been prepared on an accrual basis and are based on historical cost with the exception of financial assets which have been measured at amortised cost.

The interim financial report was authorised for issue on 26 February 2013 by the board of directors.

b. New or revised Standards and Interpretations that are first effective in the current reporting period

The Company has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current half-year. New and revised Standards and amendments thereof and Interpretations effective for the current half-year that are relevant to the Fund include: Amendments to AASB 1, 5, 7, 101, 112, 120, 121, 132, 133 and 134 as a consequence of AASB 2011-9 ‘Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income’. The adoption of all the new and revised Standards and Interpretations has not resulted in any changes to the Company’s accounting policies and has no effect on the amounts reported for the current half-year. However, the application of AASB 2011-9 has resulted in changes to the Company’s presentation of, or disclosure in, its half-year financial statements. AASB 2011-9 introduces new terminology for the statement of comprehensive income and income statement. Under the amendments to AASB 101, the statement of comprehensive income is renamed as a statement of profit or loss and other comprehensive income. The amendments to AASB 101 require items of other comprehensive income to be funded into two categories in the other comprehensive income section:

• items that will not be reclassified subsequently to profit or loss and • items that may be reclassified subsequently to profit or loss when specific conditions are met.

Income tax on items of other comprehensive income is required to be allocated on the same basis – the amendments do not change the option to present items of other comprehensive income either before tax or net of tax. Other than the above mentioned presentation changes, the application of the amendments to AASB 101 does not result in any impact on profit or loss, other comprehensive income and total comprehensive income.

c. Operating Segments

The Company is engaged in investing activities conducted in Australia and derives revenue from fixed and floating interest financial assets.


ABN 57 139 247 564



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2. Revenue


$ $

Interest from investments in corporate bonds 2,483,077 3,138,782

Interest from banks 30,492 76,573

Other income 1,906 10,773

2,515,475 3,226,128

3. Income Tax Expense

The components of tax expense comprise:

Current tax 663,185 877,737

Deferred tax 31,681 30,416

694,866 908,153

4. Dividends

Distributions paid

- 2,308,272

782,465 -

696,394 -

1,478,859 2,308,272

Total dividends per share for the period 1.89 2.95

The tax rate at which paid dividends have been franked is 30% (2011: 30%).

Fully franked dividend of $2.95 per share paid on 15 December 2011

Fully franked dividend of $1.00 per share

paid on 30 October 2012

Fully franked dividend of $0.89 per share paid on 18 December 2012


ABN 57 139 247 564



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5. Financial Assets


$ $

Current

Corporate bonds at amortised cost 6,411,205 3,512,414

Non-Current

Corporate bonds at amortised cost 54,404,546 60,067,925

60,815,751 63,580,339

6. Deferred Tax Assets

Non-Current

Deferred tax assets comprise:

Transaction costs on equity issue 90,496 120,466

Other 1,860 3,572

92,356 124,038

7. Issued Capital

(a) Issued capital

Balance at beginning of the period 64,875,483 76,502,913

- (11,627,430)

(2,981,192) -

Balance at end of the period 61,894,291 64,875,483

First Capital Return of $14.86 per share paid on

17 April 2012

Second Capital Return of $3.81 per share paid on

18 December 2012


ABN 57 139 247 564



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7. Issued Capital (cont.)


No. No.

(b) Movement in ordinary shares

Balance at beginning of the period 782,465 782,465

Balance at end of the period 782,465 782,465

8. Related Party Transactions

The names of persons who were directors of the Company at any time during the half-year and to the date of these financial statements are:

Maximilian Sean Walsh

Daryl Albert Dixon

Alan Cochrane Dixon

Christopher Matthew Brown

Alexander Gen MacLachlan

Transactions between related parties are on normal commercial terms and conditions unless otherwise stated and are as follows:

Dixon Advisory & Superannuation Services Limited

Mr Maximilian Walsh, Mr Daryl Dixon, Mr Alan Dixon, Mr Christopher Brown and Mr Alexander MacLachlan are directors of the Company and directors of the Manager, Dixon Advisory & Superannuation Services Limited.

The Manager is entitled to receive an annualised management fee of 0.45% of the pre-tax value of the Portfolio. As Manager of the Company, Dixon Advisory & Superannuation Services Limited was paid a management fee of $321,949 (2011: $380,422), inclusive of GST. Of the total management fee, $149,999 is included in prepayments at 31 December 2012 (2011: $177,242).

9. Events Subsequent to Reporting Date

There has not arisen in the interval between the end of the financial period and the date of this report any item, transaction or event of material and unusual nature likely, in the opinion of the directors, to significantly affect the operations of the Company, the result of those operations, or the state of affairs of the Company, in future financial years.

10. Contingent Liabilities and Capital Commitments

No material amounts of contingent liabilities or capital commitments exist at balance date.


ABN 57 139 247 564

DIRECTORS’ DECLARATION


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The directors of the Company declare that:

(a) in the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its

debts as and when they become due and payable; and

(b) in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the

Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of

the financial position and performance of the Company.

Signed in accordance with a resolution of the directors made pursuant to s. 303(5) of the Corporations Act

2001.

On behalf of the Directors

Director

Mr. Maximilian Sean Walsh

Sydney, 26th

February 2013

Documents

AUSTRALIAN MASTERS CORPORATE BOND FUND NO 5 LIMITED … · 2015-11-15 · Results and Review of Operations The Company has invested in a portfolio of Australian dollar denominated