Fusion Fund - Ausbil Australian Emerging Leaders Fund · 2009-10-09 · Fusion Fund - Ausbil Australian Emerging Leaders Fund Directors' report 30 June 2009 Directors'report The directors

Fusion Fund - Ausbil Australian EmergingLeaders FundARSN 113115423

Annual report - 30 June 2009

Fusion Fund - AusbiiAustralian EmergingLeàders FundARSN 113 115 423

Annual report - 30 Jüne 2009Contents

PageDirectors' report 2Auditor's independence declaration 5Incomestatèment 6Balance sheet 7Statement of changes in equity 8Cash flow statement 9Notes to the financial statements 10Directors' dèclaration 23Independent auditor's report to the unitholders of Fusion Fund- Ausbil Australian Emerging Leaders Fund 24

This annual financial report coverS Fusion Fund - Ausbil Australian Emerging Leaders Fund as an individual entity.

The responsible entity of Fusion Fund - Ausbil Australian Emerging Leaders Fund is Macquarie Financial ProductsManagement Limited (ABN 38095135694). The responsible entity's registered offce is NO.1 Martin Placè,Sydney, NSW 2000.

-1-

Fusion Fund - Ausbil Australian Emerging Leaders FundDirectors' report

30 June 2009

Directors'report

The directors of Macquarie Financial Products Management Limited (a wholly ownèd subsidiary of Macquarie GroupLimited), the responsible entity of Fusion Fund - Ausbil Australian Emerging Leaders Fund, present their reporttogether with the financial report of Fusion Fund - Ausbil Australian Emerging Leaders Fund ("the Fund") for the yearended 30 June 2009. .Principal activities

The Fund delivers investment returns from investments in managed funds, whilst also protecting against losses byemploying a capital management technique referred to as Threshold Management.

The Fund did not have any employees during the year.

Thère were no significant changes in the nature of the Fund's activities during the year.

Directors

The following persons held offce as directors of Macquarie Financial Products Management Limited during the yearor since the end of thé year and up to the date of this report:

Peter LucasAnthony Abraham (resigned 20 February 2009)William FoxSimone MosseJason King (appointed 20 February 2009)

Review and results of operations

During the year, the Fund maintains its investment strategy in managed funds whilst employing ThresholdManagement techniques in accordance with provisions of the governing documents of the Fund.

ResultsThe performance of the Fund, as represented by the results of its operations, was as follows:

Year ended30 June 30 June2009 2008$ $

Net operating profit/(Ioss) before finance costsaUributable to unitholders

Final DistributionsDistribution paid and payableDistribution (cents per unit)

Distributions - to redeeming unitholdersDistribution paid

(7.885.071) (11,442,854)

3.074 574,037

Unit redemption prices

It is the opinion of the directors that adopting Australian Accounting Standards ("AAS") does not have unit pricingconsequences, as the basis of unit price accounting is as outlined in the Fund Constitution and the governingdocuments of the Fund. There is no difference between net assets for unit pricing purposes and net assets asreported in the financial statements.

-2-


30 June 2009(continued)

Directors' report (continued)

Significant changes in state of affairs

In the opinion of the directors, there were no significant changes in the state of affairs of the Fund that occurredduring the financial year under review.

Matters subsequent to the end of the financial year

No matter or circumstance has arisen since 30 June 2009 that has significantly affected, or may significantly affect:

(i) the operations of the Fund in future financial years,or

(ii) the rèsults of those operations in future financial years, or

(iii) the state of affairs of the Fund in future financial years.

Likely developments and expected results of operations

The Fund will continue to be managed in accordance with the investment objectives and guidelines as set out in thegoverning documents.ofthe Fund and in accordance with the provisions of the Fund Constitution.

The results of the Fund's operations will be affècted by a number of factors, including the performance of investmentmarkets in which the Fund invests. Investment performance is not guaranteed and future returns may differ frompast. returns. As investment conditions change over time, past returns should not be used to predict future returns.

Further information on likely developments in the operations of the Fund and the expected results of thoseoperations have not been included in this report because the responsible entity believes it would be likely to result inunreasonable prejudice to the Fund.

Indemnification and insurance of officers and auditors

No insurance premiums are paid for out of the assets of the Fund in regards to insurance cover provided to eitherthe offcers of Macquarie Financial Products Management Limited or the auditors of the Fund. So long as theoffcers of Macquarie Financial Products Management Limited act in accordance with the Fund Constitution and theLaw, the offcers remain indèhinified out ofthe assets of the Fund against iosses incurred while acting on behalf ofthe Fund. The auditors of the Fund are in no way indemnified out of the assets of the Fund.

Fees paid to and interests held in the Fund by the responsible entity or its associates

Fees paid to the responsible entity and its associates out of Fund property during the year are disclosed in note 10on page 20 of the financial statements.

No fees Were paid out of Fund property to the directors of the responsible entity during the year.

The number of interests in the Fund held by the responsible entity or its associates as at thè end of the financialyear are disclosed in note 10 on page 20 of the financial statements.

Interests in the Fund

The movement in units on issue in the Fund during the year is disclosed in note 6 of the financial statements.

The value of the Fund's assets and liabilities is disclosed on the balance sheet and derived using the basis set out innote 2 of the financial statements.

Environmental regulation

The operations of the Fund are not subject to any particular or significant environmental regulations under aCommonwealth, State or Territory law.

-3-



Directors' report (continued)

Auditor's Independence Declaration

A copy ofthe Auditor's Independence Declaration as required under section 307C of the Corporations Act 2001 isset out on pagè 5. .This report is made in accordance with a resolution of the directors.

iSydney28 September 2009

-4-

PRICEWATERHOUSE@PERS I

PricewaterhouseCoopersABN 52780433 157

Darling Park Tower 2201 Sussex StreetGPO BOX 2650SYDNEY NSW 1171DX 77 SydneyAustraliaww.pwc.com/auTelephone +61 2 8266 0000Facsimile +61 2 8266 9999

Auditor's independence declaration

As lead auditor for the audit of Fusion Fund - Ausbil Australian Emerging Leaders Fund for the year ended 30 June2009, i declare that to the best of my knowledge and belief, there have been:

(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit;and

(b) no contraventions of any applicable code of professional conduct iii relation to the audit.

This declaration is in respect of Fusion Fund - Ausbil Australian Emerging Leaders Fund during the year.

SJ~PartnerP ricewaterhouseCoopers

Sydney28 September 2009

Liabilty limited by a scheme approved under Professional Standards Legislation

-5-

Income statement

Fusion Fund - Ausbil Australian Emerging Leaders FundIncome statement

For the year ended 30 June 2009

Investment incomeInterest incomeDistribution incomeNet gains/(Iosses) on financial instruments held at fair value through profitor loss ,Other operating incomeTotal net investment income/(Ioss)

ExpensesResponsible entity's fees-Reimbursement of responsible entity out of pocket expènsesOther operating expensesTotal operating expenses

Operating profit/(Ioss)

Finance costs attributable to unitholdersDistributions to unitholders(Increase)/decrease in net assets attributable to unitholdersProfit/(Ioss) for the year

Year ended30 June 30 June2009 2008Notes $ $

51,305 67,58134,314 1,164,243

5 (7,873,217) (11,939,601 )19,842 14,881

(7,767,756) (10,692,896)

10 104,273 639,19610 10,176 92,461

2,866 18,301117,315 749,958

(7,885,071 ) (11,442,864)

76

(3,074)7,888,145

(574,037)12,016,891

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

-6-

Fusion Fund - Ausbil Australian Emerging Leaders FundBalance sheet

As at 30 June 2009

Balance sheetAs at

Notes

.30 June2009

$

30June2008

$

AssetsCash and cash equivalents 8 3,078,051 376,716Receivables. . 9,913,611 4,266,134

. Financial assets held at fair value through profit or loss 9 2,099,339 41,627,418Total assets 15,091,001 46,270,268

LiabilitiesResponsible entity fees payable 10 125,861 804,822Redemptions payable 3,027,666 668,816Other payables 70

. Total liabilities (excluding net assets attributable to unitholders) 3,153,597 1 ,473,638

Net assets attributable to unitholder:' -liability 6 11,937,404 44,796,630

The above balance sheet should be read in conjunction with the accompanying notes. .

-7-

Fusion Fund - Ausbil Australian Emerging Leaders FundStatement of changes in equity


Statement of changes in equity

Total equity at the beginning of the financial yearProfiU(loss) for the yearNet income/(expense) recognised directly in equityTotal recognised income and expense for the financial year

Transactions with equity holders in their capacity as equity holdersTotal equity at the end of the financial year


Under Australian Accounting Standards ("AAS") net assets attributable to unitholders are classified as a liabilityrather than 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-

Fusion Fund - Alisbil Australian Emerging Leaders FundCash flow statement


Cash flow statement

Cash flows from operating activitiesProceeds from sale of financial. instruments held at fair value through profior lossPurchase of financial instruments held at fair value through profit or lossDividends receivedInterest receivedOther income receivedResponsible entity's fees paidPayment of other expensesNet cash inflow/(outflow) from operating activities

Cash flows from financing activitiesProceeds from applications by unitholdersPayments for redemptions by unitholdersDistributions paidNet cash inflow/(outflow) from financing activities

Net incl"ease/(decrease) in cash and cash equivalents

Cash and cash equivalents at the beginning of the year

Cash and cash equivalents at the end of the year

Year ended30 June 30 June2009 2008Notes $ $

44,400,157 54,691,849(12,100,369) (59,173,147)

51,305 36,03154,945 14,580

(804,853) (468,198)(69) (14,580)

11 (a) 31,601,116 (4,913,465)

10,903,011 59,675,222(39,802,792) (54,717,030)

(28,899,781 ) 4,968,192

2,701,335 44,727

376,716 331,989

11 (b),8 3,078,051 376,716

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

-9-

Fusion Fund - Ausbil Australian Emerging Leaders FundNotes to the financial statements

30 June 2009

1 General information

. This financial report covers Fusion Fund - Ausbil Australian Emerging Leaders Fund ("the Fund") as an individualentity. The Fund was constituted on 3 March 2005. The Fund wìl terminate on 2 March 2085 unless terminatedearlier in accordance with the provisions of the Fund Constitution.

The financial statements were authorised for issue by the directors on 2'8 September 2009. The directors of theresponsible entity have the power to amend and reissue the financial report.

2 Summary of significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. Thesepolicies have been consistently applied to all years presented, unless otherwise stated in the following text.

(a) Basis of preparation

This general purpose financial report has been prepared in accordance with Australian Accounting Standards, otherauthoritative pronouncements of the Australian Accounting Standards Board, Urgent Issues Group Interpretationsand the Corporations Act 2001.

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

Compliance with International Financial Reporting Statlards (IFRS)

The financial report of the Fund also complies with International Financial Reporting Standards as issued by theInternational Accounting Standards board. .

(b) Financial instruments

(i) Classification

The Fund's investments are classified as at fair value through profit or loss. They comprise:

. Financial Instruments designated at fair value through profit or loss upon initial recognition.

These include financial assets that are not held for trading purposes and which may be sold. These areinvestments in unlisted trusts. .Financial assets and financialliabilities designated at fair value through profit or loss at inception are those thatare managed and their performance evaluated on a fair value basis in accordance with the Fund's documentedinvestment strategy. The Fund's policy is for the responsible entity to evaluate the information about thesefinancial assets on a fair value basis together with other related financial information.

(ii) Recogniton/Derecognition

The Fund recognises financial assets and financial liabilities on the date it becomes party to the contractualagreement (trade date) and recognises changes in fair value of the financial assets or financial liabilities designatedin the fair value through profit or loss category from this date.

Investments are derecognised when the right to receive cash flows from the investments have expired or the Fundhas transferred substantially all risks and rewards óf ownership.

(iii) Measurement

Financial assets and liabilities held at fair value through profit orloss

Investments in unit trusts are initially recorded at fair value and revalued at the recording date. Gains and losses(realised and unrealised) are included within total investment income in.

the income statement, with realised gainsbeing calculated on a specific identified costs basis. Investments in unlisted unit trusts arè valued by reference tothe prevailing redemption value as reported by the managers of such Funds at the reporting date.

-10-



2 Summary of significant accounting policies (continued)

(c) Net assets attributable to unitholders

Units are redeemable at the unitholders option and are therefore classified as financial liabilities. The units can beput back to the Fund at any time (subject to Manager approval) for cash equal to a proportionate share of the bookvalue of the Fund's net assets. The fair value of redeemable units is measured at the redemption amount that ispayable (based on the redemption unit pricè) at the balance sheet date if unitholders exercised their right to put theunits back to the Fund.

(d) Cash and cash equivalents

For the purposes of the cash flow statement, cash includes deposits at call which are readily convertible to knownamounts of cash and are subject to an insignificant risk of changes in value.

Payments and receipts relating to the purchase and sale of financial assets are classified as cash flows fromoperating activities, as movements in the fair value of these securities represent the Fund's main income generatingactivity.

(e) Investment income

Distribution income is recognised when the Fund's righUo receive payment is established.

Changes in the fair value of financial assets and liabilities designated in the faii value through profi or loss categoryare recognised as income or expenses in the income statement in the year in which the changes occur.

Interest income is recognised in the income statement using the effective interest rate method.

(f) Expenses

All expenses, including responsible entity's fees and custodian fees, are recognised in the income statement on anaccruals basis.

(g) Income tax

Under current legislation, the Fund is not subject to income tax as unitholders are presently entitled to the income ofthe Fund.

Realised capital losses are not distributed to unitholders but are retained in the Fund to be offset against anyrealised capital gains. If realised capital gains exceed realised capital losses, the excess is distributed to unitholders.

The benefits of imputation credits and foreign tax paid are passed on to unitholders.

The Fund currently incurs withholding tax imposed by certain countries on investment income. Such income isrecorded gross of withholding tax in the income statement.

(h) Distributions

In accordance with the Fund Constitution, the Fund fully distributes its distributable (tàxable) income to unitholdersby cash or reinvestment. The distributions are payable at the end of June each year and are recognised in theincome statement as finance costs attributable to unitholders. .

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

Income not distributed is included in net assets attributable to unitholders. Movements in net assets attributable tounitholders are recqgnised in the income statement as finance costs.

-11-




(j Redemption distributions

In accordance with the Fund constitution, the Fund distributes a "redemption distribution" when a unit is redeemedand the redemption price of that unit is greater than the application price of that unit. The redemption distribution isincluded in the redemption price of the unit and is accounted for as a distribution paid in the financial statements.

(k) Receivables

Receivables may include amounts for dividends; interest and trust distributions. Dividends and trust distributions areaccrued when th.e right to receive payment is established. Intèrest is accrued at the reporting date from the time oflast payment in accordance with the policy set out in note 2(e) above. Amounts are generally received within 30days of being recorded as receivables. .

(I) Payables

Payables include liabilities and accrued expenses owing by the Fund which are unpaid as at balance sheet date.

The distribution amount payable to unitholders as at the reporting date is recognised separately on the balancesheet when unitholders are presently entitled to the distributable income under the Fund's Constitution.

(m) Applications and redemptions

Applicationsreceived for units in the Fund are recorded net of any entry fees payable prior to the issue of units in

the Fund. Redemptions from -the Fund are recorded gross of any exit fees payable after the cancellation of unitsredeemed,

Unit redemption prices are determined by reference to the net assets of the Fund divided by the number of units onissue less any redemption costs.

(n) Goods and Services Tax (GST)

The GST incurred on the costs pf various services provided to the Fund by third parties such as audit fees andresponsible entity fees have been passed onto the Fund. The Fund qualifies for Reduced Input Tax Credits (RITC)at a rate of 75% hence responsible entity fees and other expenses have been recognised inthe income statementnet of the amount of GST recoverable from the Australian Taxation Office (ATO). Accounts payable are inclusive ofGST. The net amount of GST recoverable from the ATO is included in receivables in the balance sheet. Cash flowsrelating to GST are included in the cash flow statement on a gross basis.

(0) Use of estimates

In preparing the financial statements no estimates were made which included a high degree of judgement.

. (p) New accounting standards and interpretations

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2009reporting periods. The directors' assessment of the impact of these new standards (to the extent relevant to theFund) and interpretations is set below: .

-12-




. (p) New accounting standards and interpretations (co.ntinued)

(i) MSB 8 Operating Segments andMSB 2007-3 Amendments to Australian Accounting Standards arising fromAASB 8 (effective from 1 January 2009) ,

MSB 8 will result in a significant change in the approach to segment reporting, as it requires adoption of a'management approach' to reporting on financial performance. The information being reported will be based on whatthe key decision makers use internally for evaluating segment performance and deciding how to allocate resourcesto operating segments. The Fund wil adopt AASB 8 from 1 July 2009. The Fund is organised into one mainsegment which operates solely in the business of investments management within Australia. Consequently, nodetailed segment reporting is provided in the Fund's financial statements.

(ii) Revised MSB 101 Presentation of Financial Statements and MSB 2007-8 Amendments to AustralianAccounting Standards arising from AASB 101 (effective from 1 January 2009)

The revised AASB1 01 requires the presentation of a statement of comprehensive income and makes changes tothe statement of changes in equity; but will not affect any of the amounts recognised in the financial statements. Ifthe Fund makes a prior period adjustment or re-c1assifies items in the financial statement, it will neèd to disclose athird balance sheet (statement of finanCial position), this one being at the beginning of the comparative period. TheFund wil apply the revised standard from 1 July 2009.

(iii) MSB 132 Financial Instruments: Presentation and MSB 2008-2 Amendments to Australian AccountingStandards - Puttable Financial Instruments and Obligations Arising on Liquidation (Revised MSB 132).

Revised AASB 132 is applicable for reporting periods beginning on or after 1 January 2009. The Fund has notadopted this standard early. Application of this standard will not affect any of the amounts recognised in the financialstatements as the Fund is obligated to distribute all of its taxable income in accordance with the Fund's Constitution.Accordingly, there will be no change to classification of unitholders' funds as a liability and therefore no impact onprofit or loss and equity.

(q) Segment reporting

A business segment is identified for a group of assets and operations engaged in providing products or services thatare Subject to risks and returns that are different to those of other business segments. A geographical segment isidentified when products or services are provided within a particular economic environment subject to risks andreturns that are different from those of segments operating in other economic environments. .

3 Financial risk management

The Fund's activities expose it to a variety of financial risks: market risk (including price risk, foreign exchange riskand interest rate risk), credit risk and liquidity risk.

The Fund's overall risk management programme focuses on ensuring compliance with the Fund's ProductDisclosure Statement and seeks to maximise the returns derived for the level of risk to which the Fund is exposed.Financial risk management is carried out by the responsible entity under policies approved by the Board of pirectorsof the responsible entity. .The Fund uses different methods to measure different types of risk to which it is exposed. These methods includesensitivity analysis in the case of interest rate, foreign exchange and other price risks and ratings analysis for creditrisk.

(a) Market risk

(i) Price Risk

The underlying fund managers provide redemption prices for the funds on a monthly basis and the prices as at 30June 2009 have been used to determine those investments carrying value as at 30 June 2009. These areinvestments in unlisted trusts. This risk is managed by ènsuring that all activities are transacted in accordance withthe fund constitution, product disclosure statement, compliance plan and overall investment strategy.

-13-


,. 30 June 2009(continued)

3 Financial risk management (continued)

(a) Market risk (continued)

The table on page 15 summarises the impact of an increaseldecrease òf the underlying investment funds unit priceson the Fund's net assets attributable to unitholders at 30 June 2009. The analysis is based on the assumptions thatthe underlying investment funds unit price increasedldecreased by 15% (2008: 7.5%) with all other variables heldconstant. The impact mainly arises from the possible change in the fair value of investments in unlisted unit trusts.

(ii) Foreign exchange risk

There is no direct foreign exchange risk in this Fund. Indirect foreign exchange risk cannot be managed as the Funddoes not receive sufficent information to assess on a look-through basis.

(iii) Interest rate fisk

The Fund's interest bearing financial assets expose it to risks associated with the effects of fluctuations in theprevailing levels of market interest rates on its financial position and cash flows. The risk is measured usingsensitivity analysis. 'The fund does not have direct exposure to debtinstruments, guarantees, collateral and derivatives.

The interest rate risk disclosures have been prepared on the basis of the Fund's direct investment and not on alook-through basis for investments held indirectly through unit trusts. Consequently, the disclosure of interest raterisk below may not represent the true interest rate risk profile of the Fund where the Fund has significantinvèstments in unit trusts which also have exposure to the interest rate markets.

The fund may have an indirect exposure to bonds through its investment in the cash trust. Movements in interestrates will also affect amount of interest earned on cash deposits.

The table below summarises the Fund's exposure to interest rate risks. It includes the Fund's assets and liabilities atfair values.

30June 2009Financial assetsCash and cash equivalentsReceivablesFinancial assets held at FVTPLFinancial liabilitiesPayablesNet exposure

Floating Non-interest Totalinterest rate bearing

$ $ $

3,078,051 3,078,0519,913,611 9,913,6112,099,339 2,099,339

(3,153,597) (3,153,597)3,078,051 8,859,353 11,937,404

Floating Non-interest Totalinterest rate bearing

$ $ $

376,716 376,7164,266,134 4,266,134

41,627,418 41,627,418

(1,473,638) (1,473,638)376,716 44,419,914 44,796,630

30 June 2008

Financial assetsCash and cash equivalentsReceivablesFinancialassets held at FVTPLFinancial liabilitiesPayablesNet exposure

\

-14-

Fusion Fund - Ausbil Australian Emerging LeaderS FundNotes to the financial statements


3 Fina~cial risk management (continued)

(a) Market risk (continued)

The table below summarises the impact of an increaseldecrease of interest rates on the Fund's operating profit andnet assets attributable to unitholders through changes in fair value or changes in future cash flows. The analysis isbased on the assumption that interest rates changed by +1 - 50 basis points (2008 - +1 - 75 basis points) from theyear end rates with all other variables held constant. The impact mainly arises from changes in the fair value of fixedinterest securities.

(b) Summarised sensitivity analysis

The following table summarises the sensitivity of the Fund's operating profit and net assets attributable tounitholders to interest rate risk and price risk. The reasonably possible movements in the risk variables have beendetermined based on Management's best estimate, having regard to a number of factors, including historical levelsof changes in underlying funds investment unit price. However, actual movements in the risk variables may begreater or less than anticipated due to a number of factors, including unusually large market shocks resulting fromchanges in the performance of the economies, markets and securities. in which the underlying fund inv,ests. As aresult, historic variations in risk variables are not a definitive indicator of future variations in the risk variables.

The variables for price risk represent the impact of one day's movement in the price of the underlying equityinvestment before taking into account the effect of Threshold Management. The Fund uses Threshold Managementas an investment technique to manage price risk. Threshold Management seeks to ensure that the value of theFund's units is at least equal to the original investment at the Threshold Management expiry date as specified in theProduct Disclosure Statement.

Price risk I Interest rate riskImpact on operating profit/Net assets attributable to unitholders$ $ $ $

30 June 2009

30 June 2008

(314,901)

(3,122,056)

314,901

3,122,056

(15,390)

(2,825)

15,390

2,825

(c) Credit risk

The Fund is exposed to credit risk, which is the risk that a counterparty will be unable to pay amounts in full whenthey fall due.

The exposure to credit risk for cash and cash equivalents is low as all counterparties have a rating of A- asdetermined by the Standards and Poor's rating agèncy.

Other than the cash and cash equivalents and .investment in the underlying fund, the Fund does not have aconcentration of a credit risk that arises from an exposure to a single counterparty. Furthermore, the Fund does nothave a material exposure to a group of counterparties which are expected to be affected similarly by changes ineconomic or other conditions.

There are no non-performing assets in the fund.

The carrying amount of the financial assets best represents the Fund's maximum credit risk exposure at balancedate.

(d) Liquidity Risk

Liquidity risk is the risk that the Fund will experience difficulty in either realising assets or otherwise raising suffcientfunds to satisfy commitments. There is no significant direct liquidity risk in this Fund asthe responsible entity hasdiscretion whether to accept or reject a redemption request as stipulated in the product disclosure statement.Indirect risk cannot be managed as the Fund does not have sufficient information to assess, on a look-through basis.

-15-

Fusion Fund. Ausbil Australian Emerging LeaderS FundNotes to the financial statements


4 Auditor's remuneration

Auditors remuneration of $7,910 (2008:$8,800) in relation to the audit and review of the financial statements arepaid for by Macquarie Financial Products. Management Limited, the responsible entity. .

In the current year, the responsible entity has recharged an amount to cover expenses paid for on behalfof theFund, including the 2009 audit fees.

5 Net gains/(Iosses) on financial instruments held at fair value through profit or ioss

Net gains/(losseš) have been calculated on a specific identified costs basis in line with the Fund's tax calculations.


Net gains/(losses) on financial instruments held at fair value through profit orlossNet unrealised gain/(loss) on financial assets at fair value through profit or lossNet realised gain/(loss) on financial assets at fair value through profit or lossNet gains/(losses) on financial assets held atfair value through profi or loss

3,888,114(11,761,331 ),(7,873,217)

(7,530,654)(4,408,947)

(11,939,601)

6 Net assets attributable to unitholders

As stipulated within the Fund's Constitution, each unit represents an equal undivided interest in the Fund's assets.

There are 7 classes of unitholdersin the Fund. The units are held in separate classes, by release, for the purpose ofThreshold Management.

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

As at30 June 30 June 30 June 30 June

2009 2008 2009 2008No. No. $ $

Net 'assets attributable to unitholders - June2006 releaseOpening balance 15,046,535 26,800,608 14,813,392 29,704,455Applications 1,994,195 9,318,262 1,793,857 9,725,630Redemptions (16,763,418) (21,072,335) (13,758,513) (21,157,935) ,Units issued upon reinvestment of distributionsIncrease/(decrease) in net assets attributable tounitholders (2,624,654) (3,458,758)Closing balance 277,312 15,046,535 224,082 14,813,392

-16-



6 Net assets attributable to unitholders(continued)As at

30 June2009No.

30 June2008No.

30 June2009

$

30 June2008

$

Net assets attributable to unitholders -November 2006 releaseOpening balanceApplicationsRedemptionsUnits issued upon reinvestment of distributionsIncrease/(decrease) in net assets attributablétounitholdersClosing balance

13,768,534 15,812,290 13,517,920 18,614,2092,256,281 2,110,692

(15,581 ,2a1) (2,043,756) (12,778,455) (2,153,502)

(2,491,710) (2,942,787)443,594 13,768,534 358,447 13,517,920


2009 2008 2009 2008No. No. $ $

Net assets attributable to unitholders - June2007 releaseOpening balance 12,165,135 28,036,093 11,976,216 31,984,131Applications 1,421,063 14,986,439 1,353,631 15,969,781Redemptions (13,001,276) (30,857,397) (10,859,676) (30,624,062)Units issued upon reinvestment of distributionsIncrease/(decrease) in net assets attributable to

unitholders (1,997,523) (5,353,634)Closing balance 584,922 12,165,135 472,648 11,976,216

As at30 June 30 Junë 30 June 30June

2009 2008 2009 2008No. No. $ $

Net assets attributable to unitholders -November 2007 releaseOpening balance 983,757 952,437Applications 123,902 1,751,495 118,312 1,995,680Redemptions (1,074,017) (767,738) (903,248) (781,531)Units issued upon reinvestment of distributionsIncrease/(decrease) in net assets attributable tounitholders (140,317) (261,712)Closing balance 33,642 983,757 27,184 952,437

-17-


30 June 2009'(continued)

6 Net assets attributable tounitholders (continued)As at

30 June 30 June 30 June 30 June2009' 2008 2009 2008No. No. $ $

Net assets attributable to unitholders - June2008 releaseOpening balance 3,596,876 3,536,665Applications 765,798 3,596,876 716,384 3,536,665Redemptions (4,292,027) (3,406,194)Units issued upon reinvestment of distributionsIncrease/(decrease) in net assets attributable tounitholders (789,769)Ciosing balance 70,647 3,596,876 57,086 . 3,536,665


2009 2008 2009 2008No. No. $ $

Net assets attributable to unitholders -November 2008 releaseOpening balanceApplications 1,823,714 1,213,599Redemptions (688,954) (452,482)Units issued upon reinvestment of distributionsIncrease/(decrease) in net assets attributable tounitholdérs 155,828Closing balance 1,134,760 916,945


2009 2008 2009 2008No. No. $ $

Net assets attributable to unitholders . June2009 release 'Opening balanceApplications 12,277,700 9,881,012RedemptionsUnits issued upon reinvestment of distributionsIncrease/(decrease) in net assets attributable tounitholdersClosing balance 12,277,700 9,881,012

Total net assets attributable to unitholders 11,937,404 44,796,630

-18-

Fusion Fund - Ausbil,AustralianEmerging Leaders FundNotes to the financial statements


7 ' Distributions to unitholders

The distributions paidlpayable were as follows:

30 June2009

$

Year ended30 June 30 June2009 2008CPU $

Distributions paid to redeeming unitholders 3,0743,074

574,037574,037

30 June2008CPU

For the various classes of units, interim distributions are paid by way of cash or reinvestment. The cents per unit arethe same across all classes of units although the proportion of cash distribution and reinvested distribution are notnecessarily the same.

The final distribution is reinvested,. effective as at 30 June 2009. The total distribution per unit is the same for allclasses of units ahd each class has an equal right to receive this distribution. '

8 Cash and cash equivalents

30 June2009

$

Cash at bank 3,078,051

As at30 June

2008$

376,716

Cash at the end of the financial year, as shown in the statement of cashflows, is reconciled to the related items inthe balance sheet as detailed above. These accounts are interest bearing.

The average interest rate for the year was 3.53% (2008: 5.29%).

i9 Financial assets held at fair value through profit or loss

30 June2009

Fair value$

Unlisted unit trustsTotal financial asi;etsheldat fair value through profit or loss

2,099,3392,099,339

- 19-

As at30 June

2008Fair value

$

41 ,627,41841 ,627,418


30 June 2009 \(continued)

10 Related party transactions

Responsible entity

The Responsible Entity of Fusion Fund - Ausbil Australian Emerging Leaders Fund is Macquarie Financial ProductsManagement Limited. .

Key management personnel

(a) Directors

Key management personnel includes persons who were directors of Macquarie Financial Products ManagementLimited at any time during the fi~ancial year as follows:

Peter LucasWillam Fox'Simone MosseJason King (appointed 20 February 2009)

Anthony Abraham (resigned 20 February 2009)

(b) Other key management personnel

There wère no other persons with responsibility for planning, directing and controlling the activities of the Fund,directly or indirectly during the financial year.

Responsible Entity's fees and other transactions

Under the terms of the Fund constitution, the responsible entity is entitled to be paid from the assets of the Fund afee òf up to 3% per annum (GST exclusive) of the value of the assets calculated daily, based on the value of theassets on each day and payable from the assets on 30 June in each year. The current fee charged by theResponsible Entity is 1% per annum (GST exclusive).

All related party transactions are conducted on normal commercial terms and conditions. The transactions duringthe year and amounts payable at the year end between the Fund and the Responsible Entity are as follows:


Management fees paid by the Fund to the responsible entityResponsible entity's fees incurred and other transactions

Administration expenses incurred by the responsible entity which are reimbursed inaccordance with the Fund Constitution 'Aggregate amounts payable to the responsible entity at the reporting date

804,853 498,264104,273 639,196

,.10,176 92,461125,861 804,822

-20-

Fusion Fund. Ausbil Australian Emerging Leaders FundNoteS to the financial statements


10 Related party transactions (continued)

Related party schemes' unitholdings

There were no interests held in the Fund by the responsible entity or a related party of the responsible entity duringthe period as disclosed below.

2009

Unitholder

Number of Number of Number of Distributionsunits held units held Number of units paid/p~yableopening closing Interest held units acquired disposed by the Fund

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

154 10 0.0004 21 165

Number of Number of Number of Distributionsunits held units held Number of units paid/payableopening closing Interest held units acquired disposed by the Fund(Units) (Units) (%) (Units) (Units) ($)

203 154 0.0003 88 137

William Fox

2008

Unitholder

William Fox

Key management personnel remuneration

Key management personnel are paid by Macquarie Financial Products Management Limited. Payments made fromthe Fund to Macquarie Financial Products Management Limited do not include any amounts attributable to thecompensation of key management personneL.

Key management personnel loan disclosures

The Fund has not made, guaranteed or secured, directly or indirectly, any loans to the key management personnelor their personally related entities at any time during the year.

Other transactions within the Fund

From time to time the directors of the responsible entity, or their director related entities, may invest in or withdrawfrom the Fund. These investments or withdrawals are on the same terms and conditions as those entered into byother Fund investors and are trivial in nature.

Apart from those details disclosed in this note, no director has entered into a material contract with the Fund sincethe end of the previous financial year and there were no material contracts involving director's interests existing atyear end.

The Fund holds cash balances with Macquarie Bank Limited, the parent entity of the responsible entity. Thesebalances are held on normal commercial terms.

The Fund may purchase bonds from Macquarie Bank Limited, or Macquarie Bank Limited may facilitate such apurchase. The purchase of such bonds is on normal commercial terms at market price.

I

-21-

Fusiòn Fund - .Ausbil Australian Emerging Leaders FundNotes to the financial statements


11 Reconciliation of profit/(Ioss) to net cash inflow/(outflow) from operating activitiesYear ended

30 June 30 June2009 2008$ $

(a) Reconcilation of profit/(Ioss)"to net cash inflow/(outflow) from operatingactivitiesNet profiU(loss) before finance costs

\ Net (gains)/loss on financial assets at fair valueProceeds from sale of financial instruments held at fair value through profit or loss(including net realised gains/(losses))

Purchase of financial instruments held at fair value through profit or loss andderivative financial instrumentsInterest accruedDistribution income reinvestedNet change in amounts payable and other liabilitiesNet change in amounts receivable and other assetsNet cash inflow/(outt/ow) from operating activities

(7,885,071 ) (11,442,854)7,873,217 11,939,601

44,400,157 54,691,849

(12,100,369) (59,173,147)(31,550)

(13,769) (1,164,243)(678,891) 302,652

5,842 (35,773)31,601,116 (4,913,465)

(b) Components of cash and cash equivalentsCash as at the end of the financial year as shown in the cash flow statement isreconciled to the balance sheet as follows:Cash and cash equivalents 3,078,051

3,078,051376,716376,716

(c) Non-cash financing and investing activitiesDuring the year, the following distribution income were satisfieò by the issue of unitsin unlisted unit trust investmentsDuring the year, the following distribution payments were satisfied by the issue ofunits in the Fund

/13,769 1,164,243

12 Segment information

The Fund is organised into one main segment which operates solely in the business of invèstment managementwithin Australia. Consequently, no segment reporting is provided in the Fund's financial statements.

While the Fund operates from Australia only (the geographical segment), the Fund may have investment exposures

in different countries and across different industries. '

The Fund assesses geographical exposure on a direct investment basis as it does not receive sufficient informationfrom the underlying fund managers to provide exposures on a look-throug,h basis.

13 Events occurring after the balance sheet date

No significant events have occurred since balance date which would impacton the financial position of the Funddisclosed in the balance sheet as at 30 June 2009 or on the results and cash flows of the Fund for the year endedon that date.

14Contingent assets and liabilities and commitments

There are no outstanding contingent assets and liabilities or commitments as at 30 June 2009 and 30 June 2008.

-22-

Fusion Fund - Ausbil Australian Emerging Leaders FundDirectors' declaration

30 June 2009

Directors'declaration

In the opinion of the directors of the Responsible Entity:

(a) the financial statements and notes set out on pages 6 to 22 are in accordance with the Corporations Act2001, including:

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

(ii) giving a true and fair view of the Fund's financial position as at 30 June 2009 and of its performance,for the financial year ended on that date; and .

(b) there are reasonable grounds to believe that the Fund wil be able to pay its debts as and when they

become due and payable. .

This declaration is made in accordance with a resolution of the directors.

Il.Sydney28 September 2009

-23-

fJCEW1ERHousE@PERS I

PricewaterhouseCoopersABN 52 780 433 757

Independent auditor's report to the unitholders of FusionFund. Ausbil Australian Emerging Leaders Fund

Darling Park Tower 2201 Sussex StreetGPO BOX 2650SYDNEY NSW 1171DX 77 SydneyAustraliaTelephone +61 282660000Facsimile +61 2 8266 9999ww.pwc.com/au

Report on the financial report

We have audited the accompanying financial report of Fusion Fund - Ausbil Australian EmergingLeaders Fund (the Trust), which comprises the balance sheet as at 30 June 2009, and the incomestatement, statement of changes in equity and cash flow statement for the year ended on that date,a summary of significant accounting policies, other explanatory notes and the directors' declarationfor the Trust.

Directors' responsibilty for the financial report

The directors of Macquarie Financial Products Management Limited (the Responsible Entity) areresponsible for the preparation and fair presentation of the financial report in accordance withAustralian Accounting Standards (including the Australian Accounting Interpretations) and theCorporations Act 2001. This responsibility includes establishing and maintaining internal controlsrelevant to the preparation and fair presentation of the financial report that is free from materialmisstatement, whether due to fraud or error; selecting and applying appropriate accountingpolicies; and making accounting estimates that are reasonable in the circumstances. In Note 1 (a),the directors also state, in accordance with Accounting Standard AASB 101 Presentation ofFinancial Statements, that compliance with the Australian equivalents to International FinancialReporting Standards ensures that the financial report, comprising the financial statements andnotes, complies with International Financial Reporting Standards.

Auditor's responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conductedour audit in accordance with Australian Auditing Standards. These Auditing Standards require thatwe comply with relevant ethical requirements relating to audit engagements and plan and performthe audit to obtain reasonable assurance whether the financial report is free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial report. The procedures selected depend on the auditor's judgement,including the assessment of the risks of material misstatement of the financial report, whether dueto fraud or error. In making those risk assessments, the auditor considers internal control relevantto the entity's preparation and fair presentation of the financial report in order to design auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing anopinion on the effectiveness of the entity's internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of accounting estimatesmade by the directors, as well as evaluating the overall presentation of the financial report.

Our procedures include reading the other information in the Annual Report to determine whether itcontains any material inconsistencies with the financial report.

Liability limited by a scheme approved under Professional Standards Legislation

pmCEW1ERHousE(roPERS IiOur audit did not involve an analysis of the prudence of business decisions made by directors ormanagement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide abasis for our audit opinions.

Independence

In conducting our audit, we have complied with the independence requirements of the CorporationsAct 2001.

Auditor's opinion

In our opinion:

(a) the financial report of Fusion Fund - Ausbil Australian Emerging Leaders Fund is in accordancewith the Corporations Act 2001, including:

(i) giving a true and fair view of the Trusts financial position as at 30 June 2009 and of theirperformance for the year ended on that date; and

(ii) complying with Australian Accounting Standards (including the Australian AccountingInterpretations) and the Corporations Regulations 2001; and

(b) the financial report and notes also comply with International Financial Reporting Standards asdisclosed in Note 1(a).

h'æaf~ ¥clPricewaterhouseCoopers

flS JSmithPartnerSydney28 September 2009

Documents

Fusion Fund - Ausbil Australian Emerging Leaders Fund · 2009-10-09 · Fusion Fund - Ausbil Australian Emerging Leaders Fund Directors' report 30 June 2009 Directors'report The directors