CONSOLIDATED INTERIM FINANCIAL REPORT - …gardacapital.com.au/assets/OCL/Reports/20151231 GCL...GARDA CAPITAL LIMITED AND ITS CONTROLLED ENTITIES ABN 53 095 039 366 CONSOLIDATED INTERIM

GARDA CAPITAL LIMITED AND ITS CONTROLLED ENTITIES

ABN 53 095 039 366

CONSOLIDATED INTERIM FINANCIAL REPORTFOR THE HALF YEAR ENDED 31 DECEMBER 2015

CONTENTS

This interim financial report does not include all the 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 2015 and any public announcements made by GARDA Capital Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

This financial report covers the consolidated financial statements for the Consolidated Entity consisting of GARDA Capital Limited and its controlled entities. The financial report is presented in the Australian currency.

GARDA Capital Limited is a company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is:

GARDA Capital LimitedLevel 2112 Creek StreetBRISBANE QLD 4000

A description of the nature of the Consolidated Entity's operations and its principal activities is included in the Directors’ Report on page 4, which is not part of this financial report.

The financial report was authorised for issue by the directors on 26 February 2016. The Company has the power to amend and reissue the financial report.

01 DIRECTORS’ REPORT

02 AUDITOR’S INDEPENDENCE DECLARATION 03 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

04 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

05 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

06 CONSOLIDATED STATEMENT OF CASH FLOWS

07 NOTES TO THE CONSOLIDATED INTERIM FINANCIAL REPORT

08 DIRECTORS’ DECLARATION

09 INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS

4

6 7

8

9

10

11

21

22

4 | GARDA CAPITAL LIMITED INTERIM FINANCIAL REPORT

Your directors present their report on the Consolidated Entity (referred to hereafter as the Group) consisting of GARDA Capital Limited (GCL or the Company) and the entities it controlled at the end of, or during, the half year ended 31 December 2015.

Directors The following persons were directors of GARDA Capital Limited during the half year and up to the date of this report:

MR DAVID USASZ Independent Chairman

MR MATTHEW MADSEN Managing Director

MR MARK HALLETT Non-Executive Director

MR PHILIP LEE Non-Executive Director

MR LEYLAN NEEP Executive Director

PRINCIPAL ACTIVITYThe GARDA Capital Group is an integrated real estate business comprising funds management, real estate investment, real estate and property management services and commercial real estate debt advisory and arrangement activities.

There were no other changes in the nature of the Group’s activities during the financial period.

REVIEW AND RESULTS OF OPERATIONSThe performance of the Group, as represented by the results of operations, was as follows:

31 DECEMBER 2015$

31 DECEMBER 2014 $

Revenue and other income 2,904,481 2,619,296

Net profit before tax 151,095 459,483

Net profit after tax 123,598 166,021

01 DIRECTORS’ REPORT

GARDA CAPITAL LIMITED INTERIM FINANCIAL REPORT | 5

REVIEW AND RESULTS OF OPERATIONS CONT.Revenue and other income for the half year ended 31 December 2015 was $2,904,481 which is an increase of $285,186 compared to $2,691,295 in prior year.

The net profit after tax of the Group for the half year ended 31 December 2015 was $123,598 (2014: $166,021).

The Group generated a negative operating cash flow of $256,973 (2014: negative $196,292) for the half year.

The net asset position as at 31 December 2015 was $1,199,821 which is an increase of $123,598 compared to $1,076,223 as at 30 June 2015. The increase represents net profits of the consolidated entity for the half year.

The Group was in a net current asset deficiency position as at 31 December 2015 by $57,565 which was primarily caused by reclassification of land from inventories being a current asset to investment properties being a non-current asset. The change in reclassification aligns with directors intention on the use of the land in the long term. As at 30 June 2015, the Group was in a net current asset surplus position by $350,175.

The directors believe that the going concern basis of preparation is appropriate, and accordingly have prepared the financial report on this basis. The directors are of the reasonable opinion that the Group will be able to meet its liabilities as and when they fall due.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRSApart from disclosures elsewhere in this report, there were no significant changes in the state of the affairs of the Group during the half year.

SUBSEQUENT EVENTS At an extraordinary general meeting of shareholders of the Company held on 11 February 2016, a share conversion was approved to convert the shares currently on issue in GARDA Capital Limited from 1,955,050 shares to 8,000,000 shares.

There are no other significant matters or circumstances that have arisen since the end of the financial period which significantly affected or could significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future periods.

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

This report is made in accordance with a resolution of Directors.

DIRECTORS’ REPORT CONT.

Mr Matthew MadsenManaging Director

26 February 2016

Mr David UsaszChairman

26 February 2016


02 AUDITOR’S INDEPENDENCE DECLARATION


FOR THE HALF YEAR ENDED 31 DECEMBER 2015CONSOLIDATED GROUP

NOTES 31 DECEMBER 2015$

31 DECEMBER 2014$

Revenue and other revenue 2(a) 2,392,925 2,619,161

Other income 2(b) 511,556 134

Employee benefits expense (598,430) (847,283)

Professional costs (427,252) (405,170)

Facilities management costs (107,040) (118,168)

Depreciation (8,805) (16,560)

Amortisation of intangibles (49,151) (176,123)

Insurance (64,219) (81,790)

Occupancy costs (121,321) (104,386)

Finance costs 3 (677,782) (172,191)

Impairment of receivables - (95,488)

Net loss on fair value of financial assets 7 (534,763) -

Other expenses (164,623) (142,654)

Profit before income tax 151,095 459,482

Income tax expense (27,497) (293,461)

Profit after income tax 123,598 166,021

Other comprehensive income for the half year, net of tax - -

Total comprehensive income for the half year attributable to:Owners of GARDA Capital Limited 123,598 166,021

Basic and diluted earnings per share (cents) 6.32 12.3

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

03 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME


AS AT 31 DECEMBER 2015CONSOLIDATED GROUP

NOTES 31 DECEMBER 2015$

30 JUNE 2015$

ASSETSCurrent assetsCash and cash equivalents 4 3,039,346 2,426,668Trade and other receivables 975,623 438,245Inventories 5 - 663,791Other assets 3,025 3,024Total current assets 4,017,994 3,531,728

Non current assetsInterest bearing loan 2,000,000 2,000,000Property, plant and equipment 49,247 58,052Financial assets 7 9,469,947 10,004,824Investment properties 6 1,200,000 -Intangible assets 987,289 1,036,439Total non current assets 13,706,483 13,099,315Total assets 17,724,477 16,631,043

LIABILITIESCurrent liabilitiesTrade and other payables 633,735 665,839Interest bearing loans 9 500,000 250,000Financial liability held at fair value through profit or loss 1,250,000 1,250,000Provisions 8 1,303,563 659,456Provision for income tax 388,261 356,258Total current liabilities 4,075,559 3,181,553

Non current liabilitiesDeferred tax liability 50,950 37,674Interest bearing loans 9 4,043,927 3,979,643Financial liability held at fair value through profit or loss 8,350,000 8,350,000Provisions 4,220 5,950Total non current liabilities 12,449,097 12,373,267Total liabilities 16,524,656 15,554,820

Net assets 1,199,821 1,076,223

EQUITYContributed equity 10 1,942,421 1,942,421Retained earnings (742,600) (866,198)Total equity 1,199,821 1,076,223

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

04 CONSOLIDATED STATEMENT OF FINANCIAL POSITION


FOR THE HALF YEAR ENDED 31 DECEMBER 2015

CONSOLIDATED GROUPCONTRIBUTED

EQUITY$

RETAINED EARNINGS

$TOTAL

$

Balance at 1 July 2014 1,387,555 (1,349,708) 37,847

Profit for the half year - 166,021 166,021

Other comprehensive income - - -

Total comprehensive income for the half year - 166,021 166,021

Transactions with owners in their capacity as owners

Share issue on acquisition of entity 589,026 - 589,026

Share buy back (34,160) - (34,160)

Balance at 31 December 2014 1,942,421 (1,183,687) 758,734

Balance at 1 July 2015 1,942,421 (866,198) 1,076,223

Profit for the half year - 123,598 123,598

Other comprehensive income - - -

Total comprehensive income for the half year - 123,598 123,598

Transactions with owners in their capacity as owners

Share issue on acquisition of entity - - -

Share buy back - - -

Balance at 31 December 2015 1,942,421 (742,600) 1,198,821

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

05 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


FOR THE HALF YEAR ENDED 31 DECEMBER 2015

CONSOLIDATED GROUP

31 DECEMBER 2015$

31 DECEMBER 2014$

Cash flows from operating activities

Receipts from customers 1,960,481 2,653,317

Cash payments in the course of operations (2,061,149) (2,626,438)

Interest received 150,751 29,390

Distributions received 225,361 141

Interest paid (397,499) (134,729)

Income tax refund 17,787 -

GST paid (152,705) (117,973)

Net cash provided used in operating activities (256,973) (196,292)

Cash flows from investing activities

Payments for property, plant and equipment - (8,090)

Proceeds on sale of property, plant and equipment - 2,480

Payments for inventory improvements (24,652) -

Funds transferred for wind up expenses 1,004,515 5,442

Wind up expenses paid (360,332) (224,937)

Return of unit capital 120 -

Payments for acquisition of shares - (454,482)

Net cash provided by / (used in) investing activities 619,651 (679,587)

Cash flows from financing activities

Repayment of shareholder loan - (100,000)

Payment for share buyback – owners of the parent entity - (34,160)

Funding from loans from related parties 250,000 -

Net cash provided by / (used in) financing activities 250,000 (134,160)

Net increase / (decrease) in cash held 612,678 (1,010,039)

Cash at beginning of the half year 2,426,668 3,942,707

Cash at end of the half year 3,039,346 2,932,668

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

06 CONSOLIDATED STATEMENT OF CASH FLOWS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These general purpose financial statements for the half year reporting period ended 31 December 2015 have been prepared in accordance with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.

The historical cost basis has been used, except for land and buildings, derivatives and available-for-sale financial assets which have been measured at fair value.

These half year financial statements do not include all the notes of the type normally included in annual financial statements and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and, financing and investing activities of the consolidated Group as the full financial statements. Accordingly, these half year financial statements are to be read in conjunction with the annual financial statements for the year ended 30 June 2015 and any public announcements made by GARDA Capital Limited.

The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to its operations and effective for the current annual reporting period. The adoption of these new and revised Standards and Interpretations did not have any material impact on the amounts recognised in the financial statements of the Group for the current or prior periods.

The same accounting policies and methods of computation have generally been followed in these half year financial statements as compared with the most recent annual financial statements. There has been no new accounting policies adopted for the first time in these financial statements except for the following:

Investment properties

Investment properties held for indefinite future use or long term capital appreciation are initially measured at cost including transaction costs. Subsequent to initial recognition, investment properties are carried at fair value, which is measured using the direct comparison approach as the primary valuation method. Gains and losses arising from changes in fair values of investment properties are included in profit or loss as part of other income in the year in which they arise.

Segment reporting

The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board of Directors (Chief Operating Decision Makers) in assessing performance and determining the allocation of resources. Operating segments are determined on the basis of financial information reported to the Board which is on a Group performance basis.

All significant operating decisions are based upon analysis of the Group as one segment, being an integrated real estate business. The financial results from the segment are equivalent to the financial statements of the Group as a whole.

Significant judgements

The preparation of the interim financial report required management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported assets and liabilities, income and expenses. The significant judgements made by management in applying Group accounting policies were the same as those applied to the annual financial report for the year ended 30 June 2015 except for the following:

• As at 30 June 2015 land at Palmer Street, Townsville was classified as inventory, as in management’s judgement it was not definitive to conclude the viability of the land, as significant costs for rectification works were still being incurred and it was considered appropriate by management to hold the land for short-term sale. Rectification works on the land have been completed during the period and the directors currently intend to hold the land for undetermined future use or long term capital appreciation. As such the directors have determined that the land be classified as investment property as at 31 December 2015, which is supported by an independent valuation. Refer notes 5 and 6 for further details.

07 NOTES TO THE FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

Going Concern

The Group was in a net current asset deficiency position as at 31 December 2015 by $57,565 which was primarily caused by reclassification of land from inventories being a current asset to investment properties being a non-current asset. The change in reclassification aligns with directors intention on the use of the land in the long term. As at 30 June 2015, the Group was in a net current asset surplus position by $350,175.

The directors believe that the going concern basis of preparing the interim financial report is appropriate considering the Group has significant positive net assets and has adequate cash resources to continue operations for the foreseeable future. The directors are of the reasonable opinion that the Group will be able to meet its liabilities as and when they fall due.

NOTE 2 (a) - REVENUE

CONSOLIDATED

31 DECEMBER 2015$

31 DECEMBER 2014$

Operating revenueManagement fees - responsible entity 524,506 615,505

Management fees - property management 362,904 393,590

Management fees - facilities management 116,574 124,074

Projects income 63,136 103,439

Real estate commission - 215,250

Leasing fees 65,954 243,837

Recovery of accounting expense 73,843 96,256

Registry costs 13,500 40,500

Capital works fee 57,472 69,185

Interest 131,071 -

Procurement fees 382,889 380,523

Trail fees 119,929 99,318

1,911,778 2,381,477

Non-operating revenueInterest 19,680 29,390

Distributions received 450,467 141

Sundry Income 11,000 208,153

481,147 237,684

2,392,925 2,619,161

NOTE 2 (b) - OTHER INCOME

Profit on disposal of assets - 134

Fair value gain on investment property 511,556 -

511,556 134


NOTE 3 - FINANCE COSTS

Finance costs for the half year ended 31 December 2015 are $677,782 compared to $172,191 in prior year. The increase of $505,591 is mainly attributable to interest expense on related party loans advanced to the Group in June 2015 to fund the acquisition of units by a subsidiary of GARDA Capital Limited in the GARDA Diversified Property Fund. Refer Note 11 Related Party Transactions for further details.

NOTE 4 - CASH AND CASH EQUIVALENTS

At 31 December 2015, included in the cash and cash equivalents balance of $3,039,346 (30 June 2015: $2,426,668), is $1,283,881 (30 June 2015: $639,700) which represents amounts transferred to the Group in relation to the wind-up of various schemes and is therefore to be utilised for that purpose.

NOTE 5 - INVENTORIES

CONSOLIDATED

31 DECEMBER 2015$

30 JUNE 2015$

Land at Palmer Street, Townsville - 663,791

Total Inventories - 663,791

Movements during the periodBalance at beginning of year 663,791 -

Acquisition of property at fair value - 200,000

Capital additions 24,653 463,791

Transfer to investment properties (688,444) -

Balance at end of half year - 663,791

Land at Palmer Street, Townsville was transferred into a subsidiary, GARDA TSV Unit Trust during the year ended 30 June 2015 from Opus Development Fund 1 (DF1). This was in part satisfaction of DF1’s outstanding debt to GCL as first mortgagee. The transfer of the property allowed GCL as the responsible entity of DF1 to wind-up the scheme.

As at 30 June 2015 land at Palmer Street, Townsville was classified as inventory, as in management’s judgement it was not definitive to conclude the viability of the land, as significant costs for rectification works were still being incurred and it was considered appropriate by management to hold the land for short-term sale.

Rectification works on the land have been completed during the period and the directors currently intend to hold the land for undetermined future use or long term capital appreciation. As such the directors have determined that the land be classified as investment property as at 31 December 2015, which is supported by an independent valuation. Refer note 6 for details on independent valuation.


NOTE 6 - INVESTMENT PROPERTIES

CONSOLIDATED

31 DECEMBER 2015$

30 JUNE 2015$

Land at Palmer Street, Townsville 1,200,000 -

Total Investment properties 1,200,000 -

Movements during the period

Balance at beginning of year - -

Transfer from inventories 688,444 -

Fair value movement 511,556 -

Balance at end of half year 1,200,000 -

As at 31 December 2015 land was valued at $1,200,000. The basis of the valuation is fair value being the amounts for which the property could be exchanged between willing parties in an arm’s length transaction, based on current prices in an active market.

The valuation was based on independent assessments made by qualified and suitably experienced certified practicing external valuers using a direct comparison approach as the primary valuation method. Direct comparison valuation methodology primarily analyses historical sales of similar properties to determine rate per square metre of total land and ultimately an appropriate value is determined. These valuations were undertaken by independent assessment in December 2015.

NOTE 7 - FINANCIAL ASSETS

CONSOLIDATED

31 DECEMBER 2015$

30 JUNE 2015$

Financial assets measured as at fair value through profit or loss

Units in GARDA Diversified Property Fund 9,469,947 10,004,704

Movements during the periodBalance at beginning of year 10,004,704 -

Additions 6 10,004,704

Fair value movement (534,763) -

Balance at end of half year 9,469,947 10,004,704

CONSOLIDATED

31 DECEMBER 2015$

30 JUNE 2015$

Available for sale financial assets Units in unit trusts - 120

Total - 120


NOTE 8 - PROVISIONS

Provision balance relates to wind-up costs which have been recognised to reflect the costs associated with the wind-up of the trusts for which GARDA Capital Limited is the responsible entity for. The costs are based on an estimate of the costs to wind-up the remaining trusts.

The increase in the provision balance during the half year is attributable to the transfer of funds from the Opus Magnum Fund to be utilised for wind-up costs incurred in relation to the fund.

NOTE 9 - INTEREST BEARING LOANS

CONSOLIDATED

31 DECEMBER 2015$

30 JUNE 2015$

Current

Related party loan 500,000 250,000

500,000 250,000

Non-Current

Shareholder loan 3,171,403 3,150,000

Establishment fee (127,476) (170,357)

Shareholder loan 200,000 200,000

Related party loans 250,000 250,000

Unsecured loans 550,000 550,000

4,043,927 3,979,643

The approximate fair value of financial liabilities is determined to be the carrying value.

During the half year a further related party loan of $250,000 was entered into by GARDA TSV Unit Trust, a subsidiary of GCL, with MB & PM Madsen Investments Pty Ltd, a related entity of a director. This loan was sought to fund ongoing remedial works at the property acquired in Townsville. This loan is repayable by 30 June 2016 and has therefore been classified as current. An interest rate of 10% is applicable.

There were no other new loan arrangements with shareholders and related parties during the half year other than those already disclosed in the annual financial report for the year ended 30 June 2015.


NOTE 10 - CONTRIBUTED EQUITY

CONSOLIDATED

31 DECEMBER 2015$

30 JUNE 2015$

1,955,050 ordinary shares ( June 2015: 1,955,050) 1,942,421 1,942,421

31 DECEMBER 2015NUMBER

30 JUNE 2015NUMBER

31 DECEMBER 2015$

30 JUNE 2015$

Movements during the period

Balance at beginning of year 1,955,050 1,288,975,860 1,942,421 1,387,555

Shares issued on acquisition of subsidiary*

- 691,751,161 - 589,026

Share buyback** - (25,702,940) - (34,160)

Share consolidation 1000:1*** - (1,953,069,031) - -

Balance at end of half year 1,955,050 1,955,050 1,942,421 1,942,421

* Acquisition of GARDA Finance Pty Ltd (formerly Madsen Finance Pty Ltd). ** On 2 December 2014 25,702,940 shares were bought back at a price of $0.001329. *** Subsequent to the buyback on 3 December 2014 a 1,000 to 1 share consolidation occurred.

NOTE 11 - RELATED PARTY TRANSACTIONS

The related parties that exist are key management personnel, entities which GARDA Capital Limited acts as the responsible entity for, and other related parties which includes entities over which key management personnel have significant influence over. Key management personnel receive compensation in the form of short term employee benefits, post-employment benefits and share based payments.

Billings are made to the funds and trusts that GARDA Capital Limited acts as the responsible entity for on an arm’s length basis. Repayment terms are on normal terms and conditions being payment within 30 days with no interest being charged. Transactions between related parties are on normal terms and conditions no more favourable than those available to other parties unless otherwise stated.


NOTE 11 - RELATED PARTY TRANSACTIONS (continued)

Entities for which GARDA Capital Limited is the responsible entity

CONSOLIDATED

31 DECEMBER 2015$

30 JUNE 2015$

Amounts receivable

Trade and other receivables 103,133 203,683

Transactions with related parties

Responsible entity management and administration fees 524,506 615,505

Property and facility management fees 343,590 384,151

Facility maintenance and project charges 111,217 124,074

Projects income 63,136 100,713

Real estate commission - 215,250

Leasing commissions 65,954 243,837

Recovery of professional expenses 73,843 96,256

Registry costs 9,000 40,500

Capital works fee 57,472 69,185

Procurement fees - 323,023

Trail fees - 57,600

Investment income 450,467 141

1,699,185 2,270,235

The Group paid expenses on behalf of the trusts/funds that it acts as responsible entity during the half year of $59,538 (31 December 2014: $135,137). These costs are on-charged to the relevant entity and reimbursed at no mark-up.

Registered charges

In its capacity as responsible entity the Group has entered into a number of registered charges in relation to borrowings of the trusts/funds. The liability in relation to these charges is limited and enforceable to the extent to which it can be satisfied out of the property of the scheme to which the charge relates.

Other related parties

Hallett Legal Pty Ltd, a law firm in which Mark Hallett is a director, provided legal services to the Consolidated Entity during the half year. Fees of $3,327 (31 December 2014: $25,666) were paid by the Consolidated Entity for these services. These transactions were entered into on normal commercial terms.

As at 31 December 2015, loan facilities exist with M3SIT Pty Ltd as trustee for the M3 Solutions Investment Trust, being a major shareholder in the company. The amount outstanding under the secured facility at 31 December 2015 was $3,171,403 (30 June 2015: $3,150,000). Interest of $105,633 has been paid (31 December 2014: $130,060) and interest of $21,403 was payable at balance date.

Madsen Advisory Pty Ltd, an entity which Matthew Madsen is a Director, provided advisory services to the subsidiary GARDA Finance Pty Ltd during the period and fees of $127,500 (31 December 2014: $Nil) were paid by GARDA Finance Pty Ltd for these services. During the period GARDA Finance Pty Ltd received rent of $5,000 (31 December 2014: $Nil) from Madsen Advisory Pty Ltd for sublet office space.


NOTE 11 - RELATED PARTY TRANSACTIONS (continued)

GARDA Property Finance Pty Ltd, being a subsidiary of GCL, is the vehicle in which the Group currently invests into real estate via debt positions with third parties. Capital has been advanced from a number of parties to fund the Group’s initial investment. One of these entities is a related party to Matthew Madsen, a director and one is a shareholder of GCL.

Details of the lenders and the amounts are detailed in the table below:

LENDERAMOUNT OWING

31 DECEMBER 2015$

AMOUNT OWING 30 JUNE 2015

$

INTEREST PAID 31 DECEMBER 2015

$

INTEREST PAID31 DECEMBER 2014

$

MB & PM Madsen Investments Pty Ltd

250,000 250,000 12,603 -

M3SIT Pty Ltd ATF M3 Solutions Investment Trust

200,000 200,000 10,082 -

In May 2015 a loan was entered into by GARDA TSV Unit Trust, a subsidiary of GCL, with MB & PM Madsen Investments Pty Ltd for $250,000. This loan was sought to fund remedial works at the property acquired in Townsville. A second tranche of $250,000 has been advanced during the half year resulting in a balance of $500,000 as at 31 December 2015. The first tranche of the loan is due by 1 May 2016 and the second tranche by 30 June 2016 and have therefore been classified as current. An interest rate of 10% is applicable. Interest of $20,902 (31 December 2015: $Nil) was paid during the period.

GARDA REIT Holdings Unit Trust, a subsidiary of GCL, was incorporated to hold the units in GARDA Diversified Property Fund (GDF). The acquisition of the units in GARDA Diversified Property Fund was funded via a number of related entity loans. Interest is payable at a rate equivalent to the respective annual distributions from GDF.

LENDERAMOUNT OWING 31 DECEMBER 2015

$

AMOUNT OWING 30 JUNE 2015

$

INTEREST PAID 31 DECEMBER 2015

$

INTEREST PAID31 DECEMBER 2014

$TERM

MONTHS

MB & PM Madsen Investments Pty Ltd

666,667 666,667 15,000 - 24

MB & PM Madsen ATF MB & PM Madsen Superfund

266,666 266,666 6,000 - 24


7,416,667 7,416,667 168,875 - 24


1,250,000 1,250,000 28,125 - 12

Interest paid relates to the September 2015 quarter payment. Interest for the December 2015 quarter of $225,000 was owing at balance date, and subsequently paid in January 2016.


NOTE 12 - FAIR VALUE MEASUREMENT

The following assets and liabilities are recognised and measured at fair value on a recurring basis:

• Financial assets at fair value through profit or loss (FVTPL)

• Available-for-sale financial assets

There are various methods used in estimating the fair values of a financial instrument. The methods comprise:

Level 1 – the fair value is calculated using quoted prices in active markets.

Level 2 – the fair value is estimated using inputs other than quoted prices included in level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices).

Level 3 – the fair value is estimated using inputs for the asset or liability that are not based on observable market data.

Due to their short-term nature the net fair values of financial assets and liabilities approximate their carrying value as disclosed in the statement of financial position. No financial assets or liabilities are readily traded on organised markets in standardised form.

LEVEL 1 LEVEL 2 LEVEL 3 TOTAL

31 DECEMBER 2015

Assets

Financial assets held at fair value through profit or loss

9,469,947 - - 9,469,947

9,469,947 - - 9,469,947

Liabilities

Financial liabilities held at fair value through profit or loss

9,600,000 - - 9,600,000

9,600,000 - - 9,600,000

30 JUNE 2015

Assets


10,004,704 - 120 10,004,824

10,004,704 - 120 10,004,824

Liabilities

Financial liabilities held at fair value through profit or loss

9,600,000 - - 9,600,000

9,600,000 - - 9,600,000

There were no transfers during the period between Level 1 and Level 3 for recurring fair value measurements.


NOTE 12 - FAIR VALUE MEASUREMENT (continued)

Disclosed fair values

Due to their short-term nature, the carrying amount of trade receivables and payables are assumed to approximate their fair values.

The fair value of financial assets and financial liabilities held at fair value through profit or loss were determined by reference to share price in an active market (Level 1).

The following table sets out the valuation techniques used to measure fair value within Level 3, including details of the significant unobservable inputs used and the relationship between unobservable inputs and fair value.

DESCRIPTION VALUATION APPROACH

UNOBSERVABLE INPUTS RANGE OF INPUTS

RELATIONSHIP BETWEEN UNOBSERVABLE INPUTS AND FAIR VALUE


Based on net asset value of the funds

Net asset value of the fund

N/A The higher the net asset value of the fund the higher the investment value.

NOTE 13 - CONTINGENT ASSETS AND LIABILITIES

There are no contingent assets or contingent liabilities as at 31 December 2015.

NOTE 14 - EVENTS SUBSEQUENT TO THE END OF THE REPORTING PERIOD

At an extraordinary general meeting of shareholders of the Company held on 11 February 2016, a share conversion was approved to convert the shares currently on issue in GARDA Capital Limited from 1,955,050 shares to 8,000,000 shares.

There are no other significant matters or circumstances that have arisen since the end of the financial period which significantly affected or could significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future periods.


The Directors of GARDA Capital Limited (‘Consolidated Entity’) declare that:

(a) the financial statements, comprising the Statement of Comprehensive Income, Statement of Financial Position, Statements of Changes in Equity and Statement of Cash Flows, and accompanying notes, are in accordance with the Corporations Act 2001 and:

(i) comply with Accounting Standard AASB 134 'Interim Financial Reporting' and the Corporations Regulations 2001; and

(ii) give a true and fair view of the consolidated Group's financial position as at 31 December 2015 and of its performance for the half year ended on that date.

(b) In the Directors’ opinion, there are reasonable grounds to believe that the Consolidated Entity will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of Directors of GARDA Capital Limited made pursuant to section 303(5) of the Corporations Act 2001.

Mr Matthew MadsenManaging Director

26 February 2016

Mr David UsaszChairman

26 February 2016

08 DIRECTORS’ DECLARATION


09 INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS


Documents

CONSOLIDATED INTERIM FINANCIAL REPORT - …gardacapital.com.au/assets/OCL/Reports/20151231 GCL...GARDA CAPITAL LIMITED AND ITS CONTROLLED ENTITIES ABN 53 095 039 366 CONSOLIDATED INTERIM