Results for the Half Year Ended 31 December 2011 · • Distributable income of $1.9 million, up $0.2 million or 8% on the previous corresponding period (“pcp”). • Distribution

Responsible Entity: Austock Funds Management Limited

ABN: 29 094 185 092 AFSL: 238506

Level 12, 15 William Street Melbourne VIC 3000

Phone: 61 3 8601 2000 Fax: 61 3 9200 2282

Email: [email protected] www.austock.com

ASX ANNOUNCEMENT THE AUSTRALIAN SOCIAL INFRASTRUCTURE FUND (ASX: AZF) 8 February 2012

Results for the Half Year Ended 31 December 2011 The Directors of Austock Funds Management Limited, the responsible entity for The Australian Social Infrastructure Fund (“ASIF or Fund”), today announced the results of the Fund for the half year ended 31 December 2011.

(a) Highlights

• Distributable income of $1.9 million, up $0.2 million or 8% on the previous corresponding period (“pcp”).

• Distribution for half year of 7.0 cpu, an increase of 1.0 cpu on the pcp.

• Net tangible asset (“NTA”) per unit of $2.32.

• Debt maturity extended to December 2015 (assuming option exercised) following proactive refinancing of the Fund’s debt facility.

• Overall gearing reduced to 35.6% and LVR reduced to 42.0%.

• Direct property portfolio has 100% occupancy.

• Weighted average lease expiry maintained at 8.4 years.

(b) Results

The following tables provide a summary of ASIF’s 31 December 2011 results:

For the half year ended Dec 2011 Dec 2010 Variance

Total revenue $5.2m $5.2m stable Total expenses $3.3m $3.5m (5.2%) Distributable income $1.9m $1.7m 8.2% Distribution (per unit) 7 cents 6 cents 16.7% Net profit $2.2m $3.1m (28.7%)

As at Dec 2011 June 2011 Variance

Total Assets $105.8m $106.8m Investment Property $86.1m $86.8m Borrowings1 $37.7m $40.1m Net Assets $66.0m $65.0m Gearing2 35.6% 37.5% NTA per unit $2.32 $2.28

stable

1 Drawn Debt 2 Gearing is calculated by borrowings / total assets

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(c) Asset portfolio

ASIF’s asset portfolio as at 31 December 2011 is summarised as follows:

No of

Properties Carrying Value

$m’s % of Total Portfolio

Current Rent (pa) $m’s

Passing Yield (%)

Early Learning Properties 49 69.4 67% 6.6 9.6%

Commercial Properties 2 16.7 16% 1.5 8.9%

Total Properties 51 86.1 83% 8.1 9.4%

Carrying Value

$m’s % of Total Portfolio

Annualised income

(pa) $m’s3

Yield (%)

Securities 18.2 17% 1.0 5.5%

Tenants

The Fund has 6 appropriately qualified tenants leasing its property portfolio. The tenants of the early learning properties are Goodstart, Leading Childcare, G8 Education and Bright Horizons. The commercial properties are tenanted by Guardian Storage and Primary Health. The leases contain strong lease covenants, with typical bank guarantees for 6 months gross rent (total value held is $4.5 million)

Goodstart - tenant of 42 early learning properties

The not-for-profit group Goodstart Early Learning (“Goodstart”) a consortium of the major not-for-profit groups Mission Australia, the Benevolent Society, Social Ventures Australia and the Brotherhood of St Laurence is the tenant of 42 of the ASIF’s properties.

Key information extracted from Goodstart’s 30 June 2011 Annual Report includes: • Goodstart repaid $21.0 million of bank debt (only $6.0 million of this debt repayment was required by the lenders - an

additional $15.0 million was repaid); • Achieved positive operating cash flows of $58.1 million; • Achieved EBITDA of $40.4 million; • Achieved a surplus of $5.6 million; and • Occupancy has steadily increased post 30 June 2011.

(d) Debt funding In December 2011, the Fund extended its debt facility with Australia and New Zealand Banking Group Limited (ANZ). The key commercial terms are:

Facility Limit $37.65 million (fully drawn) Facility Term 3 years from December 2011 with an option for 1 further year at ASIF’s election Financier ANZ Maximum Loan to Value Ratio Covenant (LVR)

52.5% (based on 100% of secured property values and 50% value of Australian Education Trust units)

Interest Cover Ratio Covenant (ICR) Not to be less 1.6x (EBITDA) measured on a yearly basis Amortisation No mandatory amortisation requirement whilst the LVR remains below 50%

During the half, ASIF has reduced its debt from $40.1 million to $37.65 million due to the sale of an investment property in Hilton and more efficient cash management. As at 31 December 2011, ASIF’s LVR was 42% and its ICR for the previous rolling 12 month period was 2.2x. ASIF remains compliant with all of its debt covenants and obligations.

3 Based on annualising the income received in the half ended 31 December 2011

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Hedging arrangements

ASIF currently has the following fixed interest rate swap arrangement with ANZ. These rates are exclusive of lender margins.

• $35 million swap maturing 28 September 2012 at a rate of 5.7% p.a. ASIF has taken advantage of recent pronounced falls in interest rates to put in place the following forward dated fixed interest rate swaps: • $5 million swap from September 2012 to June 2013 at a rate of 3.72% p.a. • $5 million swap from September 2012 to June 2014 at a rate of 3.97% p.a. The new swaps are being put in place pursuant to a new interest rate hedging policy approved by ASIF’s Board and ANZ. The policy aims to provide an appropriate balance between limiting the affect of adverse interest rate movements and providing some flexibility to capture competitive rates. Hence, a staggered periodic approach to hedging has been adopted with an emphasis on reducing volatility in short term forecast earnings. Management expects to progressively increase the amount hedged subsequent to September 2012.

Based on the current drawn debt of $37.65 million, ASIF is currently hedged at 93% of its interest rate exposure against interest rate movements until September 2012.

Cost of debt

As at 31 December 2011, ASIF’s current weighted average cost of debt is 7.9% p.a., which is based on the existing swap arrangement, bank margin and amortisation of borrowing costs. Due to the fall in interest rates, ASIF has the potential for a significant decrease in borrowing costs following the $35 million swap maturing in September 2012. With the forward starting hedges and based on an assumed market interest rate of 4.5%, borrowing costs from September 2012 would reduce to 6.6% p.a., a saving of $0.4 million for the remainder of FY13, equivalent to an increase in distributions per unit of 1.3 cents.

(e) Financial summary

The table below provides a comparison of the results for the half year ended 31 December 2011 and the previous corresponding half year:

Half year ended 31 December ($m’s) Note 2011 2010

Revenue

Property Income 1 4.0 4.0

Property Outgoings 2 0.7 0.6

Distributions & Dividend Income 3 0.5 0.6

5.2 5.2

Expenses

Finance Costs 4 1.8 1.9

Responsible Entity’s Remuneration 0.6 0.6

Direct Property Expenses 2 0.8 0.7

Other Expenses 5 0.1 0.3

3.3 3.5

Distributable Income 1.9 1.7

Change in the fair value of derivative financial instrument 6 (0.2) (0.1)

Net gain/(loss) on sale of financial assets - 0.2

Impairment of available-for-sale financial assets (0.1) (0.2)

Net revaluation increment of investment properties 7 0.7 1.5

Net gain/(loss) on sale of investment property (0.1) -

Net profit / (loss) for the half year 2.2 3.1

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Notes

1. Lease income has remained stable at $4.0 million for the half ended 31 December 2011 compared with the prior half. During the half year, rental increases of $0.1 million were offset by reduced rent on the closed flooded properties of $0.1 million. Across the portfolio, the annual CPI rent increase ranged between 2.7%- 3.5% with an average increase of 3.1%.

2. ASIF receives property outgoings from its tenants on a monthly basis which is used for paying all of the property outgoings in relation to these properties. The property outgoings revenue of $0.7 million is fully offset by a corresponding expense of $0.7 million. Property expenses also incurred by ASIF include non-recoverable property outgoings in respect of land tax in Queensland and non-recoverable property management fees.

3. During the half year ended 31 December 2011, ASIF received distributions from its security investments totaling $0.5 million. The reduction in distributions is due to a reduced number of securities held and an decrease in distributions from some of the unlisted securities (in particular the CIB Fund for which some distributions are expected to be reinvested to fund capital works) partially offset by increased distributions from the Australian Education Trust units.

4. Finance costs decreased to $1.8 million for the half ended 31 December 2011 compared with $1.9 million in the prior year. This comprises both interest expense of $1.5 million and amortisation of borrowing costs of $0.3 million. Interest expense decreased by $0.4 million due to lower levels of borrowings in this period (weighted average balance of $39.5 million compared with $48.8 million in the previous half) due largely to the sale of securities in April/May 2011.

Amortisation of borrowing costs of $0.3 million includes $0.2 million of accelerated amortisation which would have been amortised through to September 2012, in line with the length of the facility. However as the facility was extended prior to December 2011, these capitalised costs were all written off.

5. Other expenses of $0.1 million include such items as registry maintenance, custodian fees, legal fees, valuation fees and consultant fees. This has reduced by $0.2 million primarily due to non-recurring listing costs being incurred in the previous period.

6. ASIF has hedging arrangements in place to protect against adverse interest rate movements. As at 31 December 2011, due to a lower interest rate yield curve than when the arrangements were entered into, the fair value of the hedging arrangements were out of the money by $0.5 million. This is a negative movement of $0.2 million from the position as at 30 June 2011.

7. During the half ended 31 December 2011, ASIF only revalued 1 property, which was performed in order to ensure that the whole portfolio was valued in the previous 3 years. The result of the valuation was a decrease of $0.1 million or 8.3%.

As at 30 June 2011, revaluation decrements totaling $1.1 million were made to two properties which had been significantly damaged by flood. The re-building of these properties has been completed and the centres are operational with the tenants recommencing rent payments. As a result at 31 December 2011, these properties have been revalued to a going concern valuation resulting in an increment of $0.8 million.

(f) Key operational achievements

• Capitalised on improved risk profile and banking relationships to renew early the Fund’s existing debt facility with the ANZ for a 3 year term plus an option for a further 1 year.

•••• ASIF’s gearing reduced to 35.6% as at 31 December 2011. This has been achieved primarily through debt reduction as a result of the Hilton investment property sale and improved cash management.

•••• Maintained ASIF’s WALE at 8.4 years through the renewal of four leases to Leading.

•••• Ensured that the two flood affected properties were rebuilt and returned to normal operations, with the cost of works substantially covered by the Fund’s insurer.

•••• Initiatives undertaken by Management in the past 12 months have resulted in cost reductions and measures have been put in place to readily identify potential cost savings in the future. Management continues to actively manage cost saving opportunities across the asset portfolio in addition to the Fund’s expenses.

•••• ASIF back to an uncomplicated property trust model and paying regularly quarterly distributions to its unitholders.

•••• Independent research to be initiated by PIR in February 2012.

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(g) Distributions Previous FY12 distribution guidance in August 2011 was 14-15 cpu. Management confirms the distribution guidance given previously remains current. Any future financial guidance provided by Management will be based on the Fund’s distributable income rather than statutory profit as done previously.

(h) Outlook

The Fund aims to provide unitholders with a secure, growing income stream and long-term capital growth through investing in direct property and property securities predominantly in the social infrastructure sector.

Tenants: • Childcare sector sustainable with continued government funding and support and improving demand • Major tenant, Goodstart, showing improving childcare occupancy numbers and financial performance • Bank guarantees totaling $4.5 million secure rental income for 6 months across the portfolio

Property portfolio: • No vacancies with no lease expiries for balance of FY12 and no significant lease expiries until 2019 • 100% of rental income for FY12 has CPI or fixed rent escalation

Securities portfolio: • Investments in the Australian Education Trust and CIB property trusts remain core holdings • Monitoring Stockland Direct Retail Trust and Australian Property Growth Fund investments for suitable liquidity or

divestment opportunities, though not expected in the short term

Debt funding: • Debt maturity extended by up to 4 years to December 2015 (if option exercised) • Funding costs to reduce from September 2012 following debt renewal, maturity of current fixed interest rate swap and

new interest rate swaps commencing

Distributions: • Management reaffirms the FY12 distribution guidance of 14 – 15 cpu provided in August 2011, of which 7 cpu has been

paid during the first half of the year. • The annual rental income escalations and future reduction in borrowing costs are expected to be key drivers for an

improvement in distribution for FY13.

(i) Investor relations

The Fund’s internet site, www.asifund.com.au provides useful information for unitholders, including a summary of the Fund’s asset portfolio and access to annual and half year reports and releases made to the ASX.

Unitholders are invited to contact the Fund’s Investor Relations Manager, Lula Liossi for any further information. Boardroom is the Fund’s registry and can be contacted on 1300 737 760 with respect to any queries in relation to investors unitholdings.

(The documents attached to this release comprise the information required by ASX Listing Rule 4.3A and should be read in conjunction with the half year results to 31 December 2011)

Mark Stewien For further information contact: Fund Manager Lula Liossi The Australian Social Infrastructure Fund Investor Relations Manager +61 3 8601 2668 Travis Butcher [email protected] Chief Financial Officer The Australian Social Infrastructure Fund

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AZF – Appendix 4D, 31 December 2011 Page 1

Appendix 4D

Half Year Report For the Period Ended 31 December 2011

Name of entity:

The Australian Social Infrastructure Fund ABN:

29 094 185 092

1. Details of the reporting period

This report details the results of The Australian Social Infrastructure Fund (the “Fund”) for the half year ended 31 December 2011 (previous corresponding period: half year ended 31 December 2010).

2. Results for announcement to the market

$A'000 $A'000

2.1 Revenue from ordinary activities Down 985 14.3% to 5,914

2.2 Profit (loss) from ordinary activities after tax attributable to members

Down 883 28.7% to 2,199

2.3 Net profit (loss) for the period attributable to members Down 883 28.7% to 2,199

2.4 Interim Distributions – Quarter ending 31 December 2011 – 3.5 cents per unit

2.5 Record date – 30 December 2011

2.6 Brief explanation of the figures reported above:

For further explanation of the results refer to the ASX Release and the Directors’ Report of the half-year report.

2.7 Earnings Per Unit (EPU)

Basic earnings per unit Diluted earnings per unit

Dec 2011

7.73 7.73

Dec 2010

10.80 10.80

3. Net tangible assets per unit

Dec 2011 Jun 2011

Net tangible asset backing per ordinary unit $2.32 $2.28

4. Details of entities over which control has been gained or lost during the period

None.

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The Australian Social Infrastructure Fund Half Year Report For the Period to 31 December 2011

AZF – Appendix 4D, 31 December 2011 Page 2

5. Details of distributions

Period Paid Cents per unit

Quarter ending 30 September 2011 20 October 2011 3.5

Quarter ending 31 December 2011 20 January 2012 3.5 Total 7.0

6. Distribution Reinvestment Plan

Not applicable.

7. Details of associates and joint venture entities

Not applicable.

8. Foreign entities

None. 9. Disputes with auditors or qualifications

Nil

Victor David Cottren Chairman Austock Property Management Limited Melbourne, 8 February 2012

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HALF YEAR FINANCIAL REPORT

31 December 2011

Responsible Entity: Austock Funds Management Limited ABN 29 094 185 092 AFSL 238506

The Australian Social Infrastructure Fund ABN 29 094 185 092 ARSN 094 614 874

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HALF YEARLY FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2011

TABLE OF CONTENTS

DIRECTORS’ REPORT ........................................................................................................................................................2

AUDITOR’S INDEPENDENCE DECLARATION ........................ ..........................................................................................6

STATEMENT OF COMPREHENSIVE INCOME...................................................................................................................7

BALANCE SHEET.......................................... ......................................................................................................................8

STATEMENT OF CHANGES IN EQUITY........................... ..................................................................................................9

CASH FLOW STATEMENT.................................... ............................................................................................................10

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS .... .....................................................................11

DIRECTORS’ DECLARATION ................................ ...........................................................................................................15

INDEPENDENT AUDITOR’S REVIEW REPORT TO THE UNITHOLDERS ......... .............................................................16

DIRECTORY .......................................................................................................................................................................18

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FINANCIAL REPORT FOR THE HALF YEAR ENDED 31 DECEMBER 2011

Page 2

DIRECTORS’ REPORT

The Directors of Austock Funds Management Limited (“the Responsible Entity”), the Responsible Entity of The Australian Social Infrastructure Fund (“the Fund”), present their report together with the financial report of the Fund for the half year ended 31 December 2011.

THE RESPONSIBLE ENTITY

The registered office and principal place of business of the Responsible Entity and the Fund is Level 12, 15 William Street, Melbourne, Victoria 3000.

Directors of the Responsible Entity

The Directors of the Responsible Entity during the whole of the half year and to the date of this report comprise:

Name Period of Directorship

Mr Victor David Cottren Appointed 2 March 2007 Mr Michael Francis Johnstone Appointed 2 March 2007 Mr Warner Kenneth Bastian Appointed 1 March 2009

PRINCIPAL ACTIVITIES

The principal activity of the Fund during the financial year was investment in income producing social infrastructure assets. As at 31 December 2011 the Fund owned 49 early learning centres, a self storage facility, a medical centre and has investments in a number of property securities. Details of the Fund’s portfolio are as follows:

$000’s Notes 31 Dec 2011 30 June 2011

Investment Properties 4 86,147 86,772 Securities 3 18,214 17,506 Cash 964 2,237 Receivables and Other Assets 436 315 Total Gross Assets 105,761 106,830 Borrowings 5 37,442 39,849 Other Liabilities 2,300 1,991 Net Assets 66,019 64,990 Number of units on Issue 28,450 28,450 Per Unit NTA ($) 2.32 2.28

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*

*

*

DIRECTORS’ REPORT (continued)

REVIEW AND RESULTS OF OPERATIONS

A summary of the key results during the half year are as follows:

• Distributable income of $1.9 million, an increase of 8% on the previous corresponding period (“pcp”). • Statutory profit of $2.2 million compared to a profit of $3.1 million in the pcp, primarily due to higher revaluation

increment of investment properties in the prior period. • Distribution for the half year of 7.0 cents per unit, compared to 6.0 cents per unit in the pcp. • Unit price has increased from $1.40 at 30 June 2011 to $1.49 at 31 December 2011, an increase of 6%. • Debt facility with ANZ renewed through to December 2014. • Gearing reduced to 35.6%. • Weighted average lease expiry at 31 December 2011 of 8.4 years.

DISTRIBUTIONS

Distributions paid for the half year ended 31 December 2011 totalled 7.0 cents per unit (2010: 6.0 cents per unit).

Distributions declared by the Fund since the end of 30 June 2011 were:

Paid/ payable

Cents per unit

Amou nt $’000

Quarter ending 30 September 2011 20 Oct 2011 3.5 996 Quarter ending 31 December 2011 20 Jan 2012 3.5 996 Total 7.0 1,992

Distributable income is not a statutory measure of profit.

Half year ended 31 December ($m's) 2011 2010

Revenue

Lease income 4.0 4.0 Property outgoings recoverable 0.7 0.6 Distributions & dividends received 0.5 0.6 5.2 5.2 Expenses

Finance costs 1.8 1.9 Responsible entity’s remuneration 0.6 0.6 Direct property expenses 0.8 0.7 Other expenses 0.1 0.3 3.3 3.5 Distributable income 1.9 1.7 Change in fair value of derivative instruments (0.2) (0.1) Net gain/(loss) on sale of financial assets - 0.2 Net revaluation increment of investment properties 0.7 1.5 Impairment of available-for-sale financial assets (0.1) (0.2) Net gain/(loss) on sale of investment property (0.1) -

Net Profit attributable to the Unitholders for the half year 2.2 3.1

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FUNDING

As at 31 December 2011 the Fund had total assets of $105.8 million, borrowings of $37.65 million and net assets of

$66.0 million. The Fund has 28,449,729 fully paid ordinary units on issue as at 31 December 2011.

The Fund has renewed its existing debt facility with the Australia and New Zealand Banking Corporation Limited (ANZ) which commenced on 24 September 2010. The renewed facility is for 3 years plus an option for a further one year period. The key commercial terms of the facility are as follows:

Facility Limit $37.65 million (fully drawn)

Facility Term 3 years from December 2011 with an option for 1 further year exercisable at ASIF’s election

All-in Cost Debt 7.9% per annum, which is based on existing interest rates and swap arrangements and includes amortisation of establishment and legal fees

Maximum Loan to Value Ratio (“LVR”)

52.5% (Value based on 100% of secured property values and 50% value of Australian Education Trust units)

Interest Cover Ratio Not to be less than 1.60 times (EBITDA) measured on a yearly basis

Amortisation No mandatory amortisation requirement whilst the LVR remains below 50%

The Fund’s gearing level (borrowings to total asset value) is 35.6% and the LVR is 42%.

As at 31 December 2011, the Fund complied with all of its debt covenant ratios and obligations.

Hedging Arrangements

As part of the debt facility which commenced on 24 September 2010 the Fund entered into an interest rate swap arrangement with ANZ, as follows:

• Notional amount $35 million; • Fixed rate 5.7% p.a.; and • Termination date 28 September 2012

The Fund has taken advantage of recent pronounced falls in interest rates to put in place the following forward dated interest rate swaps: • Start date 28 September 2012; • Notional amount $5 million; • Fixed rate 3.72% p.a.; and • Termination date 25 June 2013.

• Start date 28 September 2012; • Notional amount $5 million; • Fixed rate 3.97% p.a.; and • Termination date 25 June 2014.

MATTERS SUBSEQUENT TO END OF THE FINANCIAL PERIOD

Subsequent to the period end, there are no obvious events that have occurred which the Directors believe significantly affect the operations of the Fund, the results of those operations, or the state of affairs of the Fund.

ROUNDING OF AMOUNTS

The Fund is of a kind referred to in ASIC Class order 98/100 issued by the Australian Securities and Investments Commission, relating to the “rounding off” of amounts in the Directors report and financial report. Amounts in the financial report and the Directors’ report have been rounded off to the nearest thousand dollars, unless in accordance with that Class Order otherwise stated.

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AUDITOR’S INDEPENDENCE DECLARATION

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 6.

Signed in accordance with a resolution of the Board of Directors of the Responsible Entity:

Victor David Cottren Chairman Austock Funds Management Limited Melbourne, 8 February 2012

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AUDITOR’S INDEPENDENCE DECLARATION

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STATEMENT OF COMPREHENSIVE INCOME

31 Dec 2011 31 Dec 2010

$'000 $'000

Revenue Lease income 3,990 3,953 Property outgoing recoveries 655 625 Distributions and dividends 504 629 Interest income 20 39 Net property revaluation increment 716 1,483 Net gain on sale of available-for-sale financial assets - 168 Other income 29 2 Total revenue 5,914 6,899 Expenses Finance costs 1,814 1,941 Property outgoings 811 717 Responsible entity's remuneration 619 593 Other expenses 109 286 Net loss on sale of investment properties 98 6 Change in fair value of derivative financial instruments 150 127 Impairment of available-for-sale financial assets 114 147 Total expenses 3,715 3,817 Net profit attributable to Unitholders for the half year 2,199 3,082 Other comprehensive income

Gain/(loss) on revaluation of available-for-sale financial assets 822 4,831 Other comprehensive income

822 4,831 Total comprehensive income for the half year 3,021 7,913 Earnings per unit Cents Cents Basic earnings per unit 7.73 10.80 Diluted earnings per unit 7.73 10.80

The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

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BALANCE SHEET

Note 31 Dec 2011 30 June 2011

$'000 $'000

ASSETS

Current assets

Cash and cash equivalents 964 2,237 Trade and other receivables 253 290 Other current assets 2 275 110 Total current assets 1,492 2,637 Non-current assets

Available-for-sale financial assets 3 18,214 17,506 Investment properties – Straight line rental account 4 396 446 Investment properties 4 85,659 86,241 Total non-current assets 104,269 104,193 Total assets 105,761 106,830 LIABILITIES

Current liabilities

Trade and other payables 814 700 Distribution payable 1,026 981 Derivative financial instruments 6(a) 439 298 Total current liabilities 2,279 1,979 Non-current liabilities

Borrowings 5 37,442 39,849 Derivative financial instruments 6(b) 21 12 Total non-current liabilities 37,463 39,861 Total liabilities 39,742 41,840

Net assets 66,019 64,990 EQUITY

Contributed equity 7 58,273 58,273 Distribution reserve 1,522 1,315 Available-for-sale financial assets reserve 6,224 5,402 Total equity 66,019 64,990

The above Balance Sheet should be read in conjunction with the accompanying notes.

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STATEMENT OF CHANGES IN EQUITY

Units on Issue

Available-for-sale financial assets

reserve

Distribution reserve Total

$'000 $'000 $'000 $'000

Balance at 1 July 2010 57,420

5,449 (3,184) 59,685 Net profit attributable to Unitholders - - 3,082 3,082 Distribution paid or provided for - - (1,707) (1,707)

Gain on revaluation of available-for-sale financial assets - 4,831 - 4,831 Balance at 31 December 2010 57,420 10,280 (1,809) 65,891 Balance at 1 July 2011 58,273 5,402 1,315 64,990 Net profit attributable to Unitholders - - 2,199 2,199 Distribution paid or provided for - - (1,992) (1,992)

Gain on revaluation of available-for-sale financial assets - 822 - 822 Balance at 31 December 2011 58,273 6,224 1,522 66,019

The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.

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CASH FLOW STATEMENT

31 Dec 2011 31 Dec 2010

$'000 $'000

Cash flows from operating activities

Cash receipts in the course of operations (inclusive of GST) 4,916 4,626

Cash payments in the course of operations (inclusive of GST) (1,934) (2,628) Distributions and dividends received 491 637

Interest received 20 39

Finance costs paid (1,569) (1,186) Net cash inflow from operating activities 1,924 1,488Cash flows from investing activities

Proceeds from sale of investment properties 1,342 765

Proceeds from sale of financial assets - 1,492

Payments for construction of investment properties damaged by flood (440) -

Insurance proceeds from construction of investment properties damaged by flood 338 -

Net cash inflow from investing activities 1,240 2,257Cash flows from financing activities

Proceeds from borrowings - 47,700

Repayment of borrowings (2,490) (49,883) Distributions paid (1,947) (3,012) Net cash (outflow) from financing activities (4,437) (5,195) Net (decrease) / increase in cash held (1,273) (1,450) Cash at the beginning of the half year 2,237 4,064

Cash at the end of the half year 964 2,614

The above Cash Flow Statement should be read in conjunction with the accompanying notes.

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NOTES TO AND FORMING PART OF THE FINANCIAL

STATEMENTS

1. Basis of preparation of half year report

This general purpose interim financial report for the half-year reporting period ended 31 December 2011 has been prepared in accordance with the Australian Accounting Standard AASB 134: Interim Financial Reporting and the Corporations Act 2001.

This interim financial report does not include all notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2011 and any public announcements made by the Fund during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 .

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.

Impact of standards issued but not yet applied by t he Fund

AASB9 Financial Instruments addresses the classification, measurement and derecognition of financial assets and financial liabilities. The standard is not applicable until 1 January 2013 but is available for early adoption. AASB 9 only permits the recognition of fair value gains and losses in other comprehensive income if they relate to equity investments that are not held for trading. Fair value gains and losses on available-for-sale debt investments, for example, will therefore have to be recognised directly in profit or loss. The Fund does not expect that any adjustments will be necessary as a result of applying the revised rules.

2. Other current assets

31 Dec 2011 $’000

30 Jun 2011 $’000

Investment properties – straight line rental account 92 85 Prepayments 183 25 275 110

3. Available-for-sale financial assets

31 Dec 2011 30 Jun 2011 $'000 $'000 Available -for -sale Financial Assets

(a) Represented by: Units in listed property trusts - at market valuation 6,958 6,185Units in listed property trusts - at Directors’ valuation 2,526 2,639Units in unlisted property trusts - at Directors' valuation 8,730 8,682Carrying amount at the end of the half year 18,214 17,506 (b) Movements in available-for-sale financial asset s: Opening balance 17,506 12,066Disposals

- (5,608) Impairment of available-for-sale financial assets (114) (4) Movement in available-for-sale financial assets to be sold within 12 months - 8,999Gain on revaluation of available-for-sale financial assets reserve 822 2,053Carrying amount at the end of the half year

18,214

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NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS (Continued)

4. Investment properties

a) Investment properties are carried at fair value. The determination of fair value is based on independent valuations where appropriate. This includes the original acquisition costs together with capital expenditure since acquisition and either the latest independent valuation or latest independent update. Total acquisition costs include incidental costs of acquisition such as stamp duty and legal fees.

b) An independent valuation of a property is carried out at least once every three years. Independent valuations are prepared using both the capitalisation of net income method and the discounting of future net cash flows to their present value. Capital expenditure since valuation includes purchases of sundry properties (and associated expenses such as stamp duty, legal fees etc) and capital expenditure in respect of completed projects which has taken place since or was not included in the latest valuation of the properties.

c) An independent valuation for one of the 51 properties owned by the Fund was undertaken during the period ending 31 December 2011. The independent valuation was prepared using both the capitalisation of net income and direct comparison method which are consistent with the requirements of the relevant Accounting Standards. The result of the valuation was a decrease of $0.1 million or 8.3%.

As at 30 June 2011, revaluation decrements totalling $1.1 million were made to two properties which had been significantly damaged by flood. The re-building of these properties has been completed and the centres are operational with the tenants recommencing rent payments. As a result at 31 December 2011, these properties have been revalued to a going concern valuation resulting in an increment of $0.8 million.

31 Dec 2011 30 Jun 2011 $’000 $’000

(a) Investment properties – at valuation

Total property investments 86,147 86,772

Less: straight line rental account – current (refer note 2) (92) (85) Less: straight line rental account – non-current (396) (446)

Carrying amount at the end of the half year 85,659 86,241

(b) Movement in investment properties: Balance at the beginning of the period – at valuation 86,241 85,894

Net construction costs of investment properties damaged by flood 102 -

Disposal of properties (1,400) (700) Net revaluation increment 716 347Movement in investment properties to be sold within 12 months - 700Carrying amount at the end of the half year 85,659 86,241

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5. Borrowings

31 Dec 2011 30 Jun 2011 $’000 $’000

Secured Liabilities - Bank loans 37,650 40,140 - Less: unamortised transaction costs (208) (291) 37,442 39,849

The Fund has renewed its existing debt facility with the Australia and New Zealand Banking Corporation Limited (ANZ) which commenced on 24 September 2010. The renewed facility is for 3 years plus an option for a further one year period. The key commercial terms of the facility are as follows:

Facility Limit $37.65 million (fully drawn)

Facility Term 3 years from December 2011 with an option for 1 further year exercisable at ASIF’s election

All-in Cost Debt 7.9% per annum, which is based on existing interest rates and swap arrangements and includes amortisation of establishment and legal fees

Maximum Loan to Value Ratio (“LVR”)

52.5% (value based on 100% of secured property values and 50% value of Australian Education Trust units)

Interest Cover Ratio Not to be less than 1.60 times (EBITDA) measured on a yearly basis

Amortisation No mandatory amortisation requirement whilst the LVR remains below 50%

The Fund’s gearing level (borrowings to total asset value) is 35.6% and the LVR is 42%.

As at 31 December 2011, the Fund complied with all of its debt covenant ratios and obligations.

Hedging Arrangements

As part of the debt facility which commenced on 24 September 2010 the Fund entered into an interest rate swap arrangement with ANZ, as follows:

• Notional amount $35 million; • Fixed rate 5.7% p.a.; and • Termination date 28 September 2012

The Fund has taken advantage of recent pronounced falls in interest rates to put in place the following forward dated interest rate swaps: • Start date 28 September 2012; • Notional amount $5 million; • Fixed rate 3.72% p.a.; and • Termination date 25 June 2013.

• Start date 28 September 2012; • Notional amount $5 million; • Fixed rate 3.97% p.a.; and • Termination date 25 June 2014.

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6. Derivative financial instruments

31 Dec 2011 $’000

30 Jun 2011 $'000

(a) Current Derivative financial instruments – interest rate swaps 439 298 439 298 (b) Non current Derivative financial instruments – interest rate swaps 21 12 21 12

The Fund uses derivative financial instruments comprising of interest rate swaps to hedge its risk associated with interest rate fluctuations. Such derivative financial instruments are initially recognised at fair value on the date on which the derivative contract is entered into and are subsequently remeasured to fair value.

Refer to note 5 for further information on these contracts.

7. Contributed equity

Units on issue No '000

Units on issue $’000

Balance at 1 July 2010 28,450 57,420

Units issued during the period - -

Balance as 31 December 2010 28,450 57,420

Balance at 1 July 2011 28,450 58,273

Units issued during the period - -

Balance at 31 December 2011 28,450 58,273

8. Segment reporting

The Fund operates wholly within Australia and operates predominately in the one business segment of property investment, including direct property ownership and units in other property schemes.

9. Lease revenue commitments

Investment properties are leased to tenants under long-term operating leases with rentals generally payable monthly. Future minimum lease payments receivable on leases of investment properties are as follows:

31 Dec 2011 31 Dec 2010

$'000 $'000

Receivable:

Not later than 1 year 7,896 8,047 Between 1 years and 5 years 31,504 20,131 later than 5 years 40,652 17,599

80,052 45,777

10. Contingent liabilities

No contingent liabilities to the Fund exist of which the Responsible Entity is aware.

11. Events occurring after the reporting period

The financial report was authorised on 8 February 2012 by the Board of Directors of the Responsible Entity.

There have been no other significant events since 31 December 2011 that have or may significantly affect the results and operations of the Fund.

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DIRECTORS’ DECLARATION

In the opinion of the Directors of Austock Funds Management Limited, the Responsible Entity of The Australian Social Infrastructure Fund ("the Fund"):

1. the financial statements and notes, set out on pages 7 to 14 are in accordance with the Corporations Act 2001, including:

i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;

ii) giving a true and fair view of the Fund’s financial position as at 31 December 2011 and of its performance for the half year ended on that date;

2. there are reasonable grounds to believe that the Fund will be able to pay its debts as and when they become due and payable; and

3. the Fund has operated during the half year ended 31 December 2011 in accordance with the provisions of the Fund Constitution (as amended).

Signed in accordance with a resolution of the Directors of Austock Funds Management Limited.

Dated at Melbourne this 8 day of February 2012.

Victor David Cottren Chairman Austock Funds Management Limited

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INDEPENDENT AUDITOR’S REVIEW REPORT TO THE

UNITHOLDERS

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INDEPENDENT AUDITOR’S REVIEW REPORT TO THE UNITHOLDERS (CONTINUED)

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DIRECTORY

Responsible Entity and principal place of business of the Fund

Austock Funds Management Limited Level 12, 15 William Street Melbourne VIC 3000

Directors of the Responsible Entity Victor David Co ttren (Chairman) Michael Francis Johnstone Warner Kenneth Bastian

Solicitors Macrossans Lawyers Level 23, AMP Place 10 Eagle Street Brisbane Qld 4000

Auditors/Taxation Advisors PricewaterhouseCoopers Freshwater Place 2 Southbank Boulevard Southbank Vic 3000

Bank

Australia & New Zealand Banking Corporation Limited Level 29, 100 Queen Street Melbourne Vic 3000

Custodian The Trust Company Limited Level 15, 20 Bond Street Sydney NSW 2000

Secretary of the Responsible Entity Amanda Jane Gaw ne Level 12, 15 William Street Melbourne VIC 3000

Adrian Seamus Hill Level 12, 15 William Street Melbourne VIC 3000

Unit Registry Boardroom Pty Limited Level 7, 207 Kent Street Sydney NSW 2000

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Documents

Results for the Half Year Ended 31 December 2011 · • Distributable income of $1.9 million, up $0.2 million or 8% on the previous corresponding period (“pcp”). • Distribution