retail direct property 19 · the directors of retail responsible entity limited, the responsible...

Retail Direct Property 19ARSN 099 937 416

Responsible EntityRetail Responsible Entity LimitedABN 80 145 213 663

Financial reportfor the year ended 30 June 2014

PageCorporate directory 1Directors' report 2Auditor's independence declaration 5Financial report

Income statement 6Statement of comprehensive income 7Balance sheet 8Statement of changes in equity 9Cash flow statement 10Notes to the financial statements 11Directors' declaration 25

Independent auditor's report to the unitholders 26

This financial report covers Retail Direct Property 19 (''RDP 19'', ''the Trust'', or ''the Syndicate''). The financial report ispresented in Australian dollars.

Retail Direct Property 19 is a trust established and domiciled in Australia. The registered office and principal place ofbusiness of the Responsible Entity is:

Level 2835 Collins StreetMelbourne, VIC 3000

A description of the nature of RDP 19's operations and its principal activities is included in the Directors' report on page 2.

The financial report was authorised for issue by the Directors of the Responsible Entity on 5 September 2014. TheResponsible Entity has the power to amend and reissue the financial report.

All press releases, financial reports and other information are available on our website: www.retaildirectproperty.com.au

http://www.retaildirectproperty.com.au

Retail Direct Property 19Corporate directory

30 June 2014

Responsible Entity Retail Responsible Entity LimitedA.B.N. 80 145 213 663

Level 2835 Collins StreetMelbourne, VIC 3000Telephone: (03) 9236 6300

Directors of the Responsible Entity Barry McWilliams (Chairman)Tim HammonJan West

Secretary of the Responsible Entity Elizabeth Hourigan

Auditor Moore StephensLevel 10, 530 Collins StreetMelbourne, VIC 3000

Security Registry Link Market Services LimitedLevel 4, 333 Collins StreetMelbourne, VIC 3000

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Retail Direct Property 19Directors' report

30 June 2014

Directors' reportThe Directors of Retail Responsible Entity Limited, the Responsible Entity, present their report on Retail Direct Property 19(''RDP 19'', ''the Trust'', or ''the Syndicate'') for the year ended 30 June 2014.

Responsible EntityRetail Responsible Entity Limited was appointed as the Responsible Entity of the Trust on 10 May 2012.

The registered office and principal place of business of Retail Responsible Entity Limited is Level 28, 35 Collins Street,Melbourne, Victoria 3000.

DirectorsThe following persons were Directors of Retail Responsible Entity Limited during the financial year and up to the date ofthis report (unless otherwise stated):

Barry McWilliams (Chairman)Tim HammonJan WestPeter Day (Retired 28 February 2014)Peggy O'Neal (Retired 28 February 2014)

Company SecretaryThe Company Secretary of Retail Responsible Entity Limited is Elizabeth Hourigan. Dimitri Kiriacoulacos resigned asCompany Secretary on 9 May 2014.

Principal activitiesThe principal activity of the Trust was investment in property.

In the current financial year, the Trust sold its remaining investment property, Kiama, extinguished all its liabilities anddistributed a final return of equity, utilising the residual net assets. Consequently, the Trust carried out a voluntaryliquidation process.

Significant changes in the nature of these activities during the year are detailed below under ''Significant changes in thestate of affairs''.

Review of operationsRDP 19

The Trust recorded a net profit of $326,735 for the year ended 30 June 2014 (2013: $3,574,765 profit).

The movement in net profit for the year compared to the corresponding year is largely due to:

• Minimal net property income in the current year as a result of disposal of the last investment property, Kiama in July2013. Altone Park and Melville were disposed in the prior year; and

• Lower net gain on disposal of Kiama in the current year compared to the gains on disposal of Altone Park and Melvillein the prior year.

Distributions and return of equity attributable to unitholdersRDP 19Return of equity amounting to 33.24 cents per unit were paid for the year ended 30 June 2014 (2013: 86.27 cents perunit). Return of equity paid to unitholders for the year totalled $19,162,984 (2013: $49,730,650 comprising return of equityand income distribution).

Month Cents per unit Date paidAugust 2013 - Return of equity 31.50 9 August 2013June 2014 - Return of equity 1.74 23 June 2014Total paid to unitholders 33.24

The tax components of the annual distribution are set out below:

Cents per unitTax deferred component 33.24Net distribution per unit 33.24

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Retail Direct Property 19Directors' report

30 June 2014(continued)

Significant changes in the state of affairsDuring the year the following significant changes in the state of affairs occurred:

Sale of Kiama and Payment of Liabilities

On 15 July 2013, Kiama was sold for a consideration of $22,700,000. On 29 July 2013, part of the net sale proceeds wereused to pay termination fees and deferred management fees to the Responsible Entity of $3,090,840 and $2,088,092respectively.

Wind up of the Trust

Prior to June 2014, the Trust extinguished all its liabilities, distributed a final return of equity, utilising the residual netassets and closed all bank accounts. Consequently, the Trust carried out a voluntary liquidation process and commencedderegistration with the Australian Securities and Investments Commission (“ASIC”).

For the purpose of the Trust's Constitution, its termination date is on 30 June 2014. Accordingly, all issued units werecancelled on 30 June 2014 and this will be the final financial report issued by the Trust.

Events occurring after the reporting periodNo matter or circumstance has arisen in the interval between 30 June 2014 and the date hereof.

Likely developments and expected results of operationsThere are no likely developments in the operations of the Trust as it has been liquidated with a termination date of 30 June2014.

Environmental regulationAs a property owner, the Trust was subject to the normal environmental laws and regulations of landowners withinAustralia up to the date of disposal. These included regulation against air pollution, liquid discharge and soilcontamination. Environmental laws and regulations in force in the various jurisdictions in which the Trust operated wereapplicable to certain areas of the Trust’s operations. The Trust had in place procedures to identify and comply with suchrequirements including, where applicable, obtaining and complying with the conditions of the relevant authority consentsand approvals and the obtaining of any necessary licences.

Other informationRDP 19 Issued Units

During the year ended 30 June 2014, no units were issued (2013: no units). On 30 June 2014, 57,650,370 units werecancelled and units on issue as at that date was nil (2013: 57,650,370 units on issue).

RDP 19 Total Assets

At 30 June 2014 the Trust's total assets were $nil (2013: $25,840,335).

Fees paid to and interests held in RDP 19 by the Responsible EntityOngoing management and services fees paid to the Responsible Entity during the year totalled $15,035 (2013: $401,258)as disclosed in note 16.

Additionally, termination fees of $3,090,840 and deferred management fees of $2,088,092 were paid to the ResponsibleEntity during the year (2013: nil).

No fees were paid out of the Trust to the Directors of the Responsible Entity during the year.

The number of interests in the Trust held by related parties of the Responsible Entity as at the end of the year aredisclosed in note 16.

Indemnification and Insurance of Directors and Other OfficersThe Responsible Entity must indemnify the Directors on a full indemnity basis and to the extent permitted by law, againstall losses or liabilities incurred by the Directors as an officer of the Responsible Entity or of a related body corporateprovided that the loss or liability does not arise out of misconduct including lack of good faith.

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Moore Stephens ABN . Liability limited by a scheme approved under Professional Standards Legislation. An independent member of Moore Stephens International Limited members in principal cities throughout the world. The Melbourne Moore Stephens firm is not a partner or agent of any other Moore Stephens firm. And is a separate partnership in Victoria.

Level 10, 530 Collins Street Melbourne VIC 3000

T + ( ) F + ( )

www.moorestephens.com.au

A UNDER SECTION 307C OF THE CORPORATIONS ACT TO THE DIRECTORS OF THE RESPONSIBLE ENTITY OF RETAIL DIRECT PROPERTY 19 I declare that, to the best of my knowledge and belief, during the year ended 30 June 2014 there has been:

(i) No contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit, and

(ii) No contraventions of any applicable code of professional conduct in relation to the audit. MOORE STEPHENS Chartered Accountants Nick Michael Partner Melbourne, 5 September 2014

http://www.moorestephens.com.au

Retail Direct Property 19Income statement

For the year ended 30 June 2014

RDP 1930 June 30 June

2014 2013Notes $ $

RevenueProperty rental revenue 3 100,951 4,822,985Property outgoings recovered 3 70,462 1,101,901Interest revenue 51,621 209,910Total revenue 223,034 6,134,796

Share of net profits from investment accounted for using the equity method 7 - 13,087

Expenses, gains and lossesDirect property expenses 3 (72,545) (2,722,453)Responsible Entity management fees (3,520) (322,616)Other Responsible Entity fees 10 - (47,000)Net gain on sale of investment property 174,029 2,565,441Fair value adjustment to investment property 8 - (1,228,421)Estimated selling costs 7 - (290,250)Liquidation expenses - (80,000)Other recoveries/(expenses) 5,737 (447,819)

Total expenses, gains and losses 103,701 (2,573,118)

Net profit before income tax expense 326,735 3,574,765

Income tax benefit/(expense) - -Net profit for the year 13 326,735 3,574,765

The above income statement has been prepared on a liquidation basis and should be read in conjunction with theaccompanying notes.

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Retail Direct Property 19Statement of comprehensive income



2014 2013$ $

Net profit for the year 326,735 3,574,765

Other comprehensive income for the year - -

Total comprehensive income for the year 326,735 3,574,765

The above statement of comprehensive income has been prepared on a liquidation basis and should be read inconjunction with the accompanying notes.

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Retail Direct Property 19Balance sheet

As at 30 June 2014


2014 2013Notes $ $

ASSETSCurrent assetsCash and cash equivalents 5 - 3,018,332Trade and other receivables 6 - 412,253Non-current assets classified as held for sale 7 - 22,409,750Total current assets - 25,840,335

Total assets - 25,840,335

LIABILITIESCurrent liabilitiesTrade and other payables 9 - 657,734Other financial liabilities 10 - 5,178,932Provisions 11 - 1,167,420Total current liabilities - 7,004,086

Total liabilities - 7,004,086

Net assets - 18,836,249

EQUITYContributed equity 12 - 10,753,944Retained earnings - 8,082,305Total equity - 18,836,249

The above balance sheet has been prepared on a liquidation basis and should be read in conjunction with theaccompanying notes.

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Retail Direct Property 19Statement of changes in equity


RDP 19Contributed

equityRetainedearnings

Totalequity

Notes $ $ $

Balance at 1 July 2012 51,209,258 13,782,876 64,992,134

Net profit for the year - 3,574,765 3,574,765Total comprehensive income for the year - 3,574,765 3,574,765

Transactions with owners in their capacity as owners:Distributions provided for or paid 4 - (4,186,858) (4,186,858)Return of equity 4 (45,543,792) - (45,543,792)Transfer equity raising costs to retained earnings 12 5,088,478 (5,088,478) -Balance at 30 June 2013 10,753,944 8,082,305 18,836,249

RDP 19Contributed

equityRetainedearnings

Totalequity

Notes $ $ $

Balance at 1 July 2013 10,753,944 8,082,305 18,836,249

Net profit for the year - 326,735 326,735Total comprehensive income for the year - 326,735 326,735

Transactions with owners in their capacity as owners:Return of equity 4 (10,753,944) (8,409,040) (19,162,984)Balance at 30 June 2014 - - -

The above statement of changes in equity has been prepared on a liquidation basis and should be read in conjunction withthe accompanying notes.

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Retail Direct Property 19Cash flow statement



2014 2013Notes $ $

Cash flows from operating activitiesReceipts from customers (inclusive of goods and services tax) 353,706 6,885,789Distributions received from associates - 894,313Payments to suppliers (inclusive of goods and services tax) (614,323) (3,932,662)Payments for termination fees (3,090,840) -Payments for deferred management fees (2,088,092) -Interest received 51,621 209,910Net cash (outflow)/inflow from operating activities 15 (5,387,928) 4,057,350

Cash flows from investing activitiesPayments for investment property - (458,199)Proceeds from disposal of investment property 22,700,000 44,071,457Net cash inflow from investing activities 22,700,000 43,613,258

Cash flows from financing activitiesDistributions paid (1,167,420) (4,954,035)Return of equity (19,162,984) (45,543,792)Net cash outflow from financing activities (20,330,404) (50,497,827)

Net decrease in cash and cash equivalents (3,018,332) (2,827,219)Cash and cash equivalents at the beginning of the financial year 5 3,018,332 5,845,551Cash and cash equivalents at the end of the financial year 5 - 3,018,332

The above cash flow statement has been prepared on a liquidation basis and should be read in conjunction with theaccompanying notes.

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Retail Direct Property 19Notes to the financial statements

30 June 2014

1 Summary of significant accounting policiesThe principal accounting policies adopted in the preparation of the financial report are set out below. The financial reportincludes financial statements for Retail Direct Property 19 (''RDP 19'', ''the Trust'', or ''the Syndicate'').

(a) Statement of compliance with International Financial Reporting Standards

This general purpose financial report complies with Australian Accounting Standards as applied under the liquidation basisof preparation. Compliance with Australian Accounting Standards ensures that the financial report, comprising thefinancial statements and the notes thereto, complies with International Financial Reporting Standards (IFRS) as issued bythe International Accounting Standards Board (IASB).

(b) Basis of preparation

This general purpose financial report for the year ended 30 June 2014 has been prepared in accordance with theCorporations Act 2001. For the purpose of preparing the financial statements, the Trust is a for-profit entity. The financialreport is presented in Australian dollars.

When preparing financial statements, Australian Accounting Standards require the Directors of the Responsible Entity tomake an assessment of the Trust’s ability to continue as a going concern. Financial statements are required to beprepared on a going concern basis unless the Directors of the Responsible Entity either intend to liquidate the Trust or tocease trading, or have no realistic alternative but to do so.

The Directors of the Responsible Entity have determined that the Trust will not continue as a going concern and thesefinancial statements, therefore, have not been prepared on a going concern basis.

The Australian Accounting Standards do not prescribe the impact on, or the adjustments to be made to, the financialstatements when it is determined that the going concern basis is not appropriate and, therefore, the Responsible Entity isrequired to consider carefully individual circumstances of the Trust to arrive at an appropriate basis. Accordingly, theDirectors of the Responsible Entity have determined that the 'liquidation basis' (as explained below) is the appropriatebasis on which these financial statements should be prepared.

Liquidation basis of preparation

RDP 19

The Trust has continued to adopt the liquidation basis of preparation of its financial statements as at 30 June 2014.

The Trust's remaining investment property, Kiama was sold on 15 July 2013 and the majority of its net assets weredistributed to investors as return of equity on 9 August 2013.

In the current financial year, the Trust extinguished all its liabilities, distributed a final return of equity, utilising the residualnet assets and closed all its bank accounts. Consequently, the Trust carried out a voluntary liquidation process andcommenced deregistration with Australian Securities and Investments Commission (“ASIC”). For the purpose of theTrust's Constitution, its termination date is 30 June 2014. Accordingly, all issued units were cancelled on 30 June 2014and this will be the final financial report issued by the Trust.

The Directors of the Responsible Entity have applied the requirements of paragraph 25 of AASB 101 Presentation ofFinancial Statements which indicates that when the financial report is not prepared on a going concern basis, that factshall be disclosed, together with the basis on which the financial report is prepared and the reason why the Trust is notregarded as a going concern.

Impact of adopting the liquidation basis of preparation on measurement, classification of assets and liabilities, anddisclosures in the financial report

Under the liquidation basis of accounting all assets and liabilities are measured at liquidation value. The liquidation valueof assets is their net realisable value. With reference to the assets of the Trust however, net realisable value approximatesthe current carrying amount of the assets measured under the relevant Australian Accounting Standards. The liquidationvalue of liabilities recognised represents their estimated settlement amount. Any gains or losses resulting from measuringassets and liabilities to the liquidation value are recognised in the income statement.

Under the liquidation basis of accounting, all assets and liabilities previously classified as non-current are classified ascurrent.

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1 Summary of significant accounting policies (continued)In adopting the liquidation basis, the Directors of the Responsible Entity have continued to apply the disclosurerequirements of Australian Accounting Standards to the extent they are relevant to the liquidation basis, and modified themwhere considered appropriate. In particular, the financial report does not include all of the disclosures required by thefollowing standards on the basis that the disclosures are not considered relevant for decision making by users asdescribed below:

• AASB 5 Non-current Assets Held for Sale and Discontinued Operations

Given that the Trust is considered a discontinued operation, the disclosures under AASB 5 that separate continuingand discontinuing operations on the income statement are not considered relevant to users.

• AASB 7 Financial Instruments: Disclosures

The information on exposures to financial risks is not considered relevant to users given that the financial riskexposures are not representative of the risks that exist.

• AASB 101 Presentation of Financial Statements

Information on capital management is not considered relevant for users to understand what is managed as capitalgiven the basis of preparation change from 'going concern' to 'liquidation'.

• AASB 117 Leases

Finance lease and operating lease payments disclosures have not been provided as it is not considered that userswould need this information given that operating leases and finance leases relate to investment property that isalready sold or classified as non-current asset held for sale.

The accounting policies adopted are consistent with those of the previous financial year. The Trust has not elected toearly adopt any new Accounting Standards that have been issued but are not yet effective.

Comparative information for the year ended 30 June 2013 has also been measured and presented on a liquidation basis.

Significant accounting estimates, judgements and assumptionsThe preparation of financial statements in conformity with Australian Accounting Standards requires the use of certainsignificant accounting estimates. It also requires management to exercise its judgement in the process of applying theTrust's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptionsand estimates are significant to the financial statements, are disclosed in note 2.

(c) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable.

The Trust recognises revenue when the amount of revenue can be reliably measured and it is probable that the futureeconomic benefits will flow to the Trust and specific criteria have been met for each of the Trust's activities as describedbelow. The amount of revenue is not considered to be reliably measurable until all contingencies relating to the revenuehave been resolved.

(i) Property ownership revenueAs the owner of a number of shopping centres (up to the date of disposal), the Trust derived rental revenue from theleasing of retail space in these properties. Lease income was recognised on a straight-line basis over the lease term. Contingent rental revenue was recognised on an accrual basis as earned.

(ii) Distribution revenueDistribution revenue is recognised as revenue when the right to receive payment is established.

(iii) Interest revenueInterest revenue is recognised on a time proportion basis using the effective interest method.

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1 Summary of significant accounting policies (continued)

(d) Income tax

Under current income tax legislation no income tax is payable by the Trust provided that the taxable income is or isdeemed to be fully distributed to unitholders or the unitholders become presently entitled to all the taxable income.

(e) Cash and cash equivalents

Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions and other short-term,highly liquid investments with original maturities of three months or less that are readily convertible to known amounts ofcash and which are subject to an insignificant risk of changes in value.

(f) Trade and other receivables

Trade and other receivables are measured at their net realisable value. No adjustment has been recognised on thechange to liquidation basis as the net realisable value approximates the amortised cost using the effective interest method.

(g) Assets held for sale

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a saletransaction rather than through continuing use. All assets held for sale are stated at fair value less estimated selling costs. Non-current assets classified as held for sale are presented separately from the other assets in the balance sheet.

(h) Investment properties

Investment properties are measured at their net realisable value which equals fair value less estimated selling costs.Estimated selling costs comprise professional fees paid or payable to lawyers and advisors to effect the sale of theproperties. Estimated selling costs are calculated on 1.5% of the total carrying value of investment properties at balancedate.

(i) Investments in associates

Investments in associates are measured at their fair value which is equivalent to their net realisable value. No adjustmenthas been recognised on the change to liquidation basis as the net realisable value approximates fair value.

(j) Financial assets

The Trust classifies its investments in financial assets in the following categories: financial assets at fair value throughprofit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. Theclassification depends on the purpose for which the investments were acquired.

Classification (i) Financial assets at fair value through profit or loss These include financial assets that are held for trading purposes which may be sold.

Financial assets designated at fair value through profit or loss at inception, are those that are managed and theirperformance evaluated on a fair value basis in accordance with the Trust's documented investment strategy. The Trust'spolicy is for the Responsible Entity to evaluate the information about these financial assets on a fair value basis togetherwith other related financial information.

(ii) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in anactive market. They arise when the Trust provides money, goods or services directly to a debtor with no intention of sellingthe receivable. Loans and receivables are included in current receivables in the balance sheet.

(iii) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturitiesthat the Trust has the positive intention and ability to hold to maturity.

(iv) Available-for-sale financial assets Available-for-sale financial assets, comprising principally marketable securities, are non-derivatives that are eitherdesignated in this category or not classified in any of the other categories.

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1 Summary of significant accounting policies (continued)Recognition and derecognition Purchases and sales of investments are recognised on trade date - the date on which the Trust commits to purchase orsell the asset. Financial assets are initially recognised at fair value plus transaction costs for all financial assets notcarried at fair value through profit or loss. Financial assets are derecognised when the rights to receive cash flows fromthe financial assets have expired or have been transferred and the Trust has transferred substantially all the risks andrewards of ownership.

Subsequent measurement All financial assets are measured at their net realisable value. No adjustment has been recognised on the change toliquidation basis as the net realisable value approximates fair value or amortised cost.

(k) Other financial liabilities

(i) Performance fee contracts Performance fees are recognised as a financial liability in accordance with the Constitution and are measured at theiranticipated settlement amount. No adjustment has been recognised on the change to liquidation basis as the anticipatedsettlement amounts approximate amortised cost.

(ii) Deferred management feesDeferred management fees are recognised as a financial liability. The Trust’s Constitution and Product DisclosureStatement provides for the subsequent recovery of any prior year management fees at the end of the Trust’s term or onwind up of the Trust.

The liability is measured at its anticipated settlement amount. No adjustment has been recognised on the change toliquidation basis as the anticipated settlement amount approximate the amortised cost.

(l) Trade and other payables

Trade and other payables are measured at their anticipated settlement amount. No adjustment has been recognised onthe change to liquidation basis as the anticipated settlement amount approximates the undiscounted amortised cost.

(m) Borrowing costs

Borrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time that isrequired to complete and prepare the asset for its intended use or sale. All other borrowing costs are expensed to theIncome statement using the effective interest rate method. Borrowing costs consist of interest and other costs that theTrust incurs in connection with borrowing funds. Other costs, for example, establishment fees incurred, are deferred onthe Balance sheet as deferred borrowing costs under interest bearing liabilities and amortised as part of borrowing costsusing the effective interest rate method.

(n) Provisions

Provisions are recognised when the Trust has a present obligation (legal or constructive) as a result of a past event, it isprobable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliableestimate can be made of the amount of the obligation.

Provisions are measured at the present value of management's best estimate of the expenditure required to settle thepresent obligation at the end of the reporting period, which is the settlement amount. No adjustment has been recognisedon the change to liquidation basis as the settlement amount approximates the present value of expected future payments.

(o) Fair value estimation

The fair value of financial instruments is based on their quoted market prices at the end of the reporting period lessdeduction for estimated future selling costs. Financial assets are valued at bid prices (which approximate their netrealisable value), while financial liabilities are valued at asking prices (which approximate their estimated settlementamounts).

If a quoted market price is not available on a recognised stock exchange or from a broker / dealer for non-exchange-tradedfinancial instruments, the fair value of the instrument is estimated using valuation techniques, including use of recent arm’slength market transactions, reference to the current fair value of another instrument that is substantially the same,discounted cash flow techniques, or any other valuation technique that provides a reliable estimate of prices obtained inactual market transactions.

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1 Summary of significant accounting policies (continued)Where discounted cash flow techniques are used, estimated future cash flows are based on management's best estimatesand the discount rate used is a market rate at the end of the reporting period applicable for an instrument with similarterms and conditions. Where other pricing models are used, inputs are based on market data at the end of the reportingperiod.

The fair value of derivatives that are not exchange traded is estimated at the amount that the Trust would receive or pay toterminate the contract at the end of the reporting period taking into account current market conditions (e.g. appropriateyield curve) and the current creditworthiness of the counterparties. Specifically, the fair value of a forward exchangecontract is determined as a net present value of estimated future cash flows, discounted at appropriate market rates on thevaluation date. The fair value of interest rate swaps and cross currency interest rate swaps is the estimated amount thatthe entity would receive or pay to terminate the swap at the end of the reporting period taking into account current interestrates, foreign exchange rates and the current creditworthiness of swap counterparties.

Investments in other unlisted funds are recorded at the exit price as reported by the managers of the funds.

(p) Contributed equity

Ordinary units are classified as equity.

Incremental costs directly attributable to the issue of new units or options are shown in equity as a deduction, net of tax,from the proceeds. Incremental costs directly attributable to the issue of new units or options for the acquisition of abusiness are not included in the cost of the acquisition as part of the purchase consideration.

(q) Net tangible asset backing per unit

(i) Basic net tangible asset backing per unitBasic net tangible asset backing per unit is determined by dividing the net assets attributable to unitholders (excludingintangible assets) by the number of units outstanding at balance date.

(r) Distributions or return of equity

A provision is made for the amount of any distribution or return of equity announced or to which the unitholders becamepresently entitled on or before the end of the reporting period but not distributed at the end of the reporting period.

(s) Goods and Services Tax (GST)

Revenues, expenses and assets of Australian entities are recognised net of the amount of GST, except where the amountof the GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised aspart of the cost of acquisition of the asset or as part of an item of the expense.

Receivables and payables in the balance sheet are shown inclusive of GST.

The net amount of GST recoverable from or payable to the taxation authority is included in other receivables or payables inthe balance sheet.

Cashflows are presented on a gross basis. The GST components of cash flows arising from investing or financingactivities which are recoverable from or payable to the taxation authority, are presented as operating cashflow.

(t) Accounting Standards and Interpretations issued but not yet effective

The Trust financial report is prepared on a liquidation basis for the reasons outlined in note 1(b) above. As a result,Accounting Standards and Interpretations currently on issue but not yet effective are not expected to have any impact onthe Trust.

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2 Significant accounting estimates, judgements and assumptionsThe preparation of financial statements of the Trust requires estimates and assumptions concerning the application ofaccounting policies to be made by the Responsible Entity. Estimates are continually evaluated and are based on historicalexperience and other factors, including expectations of future events that are believed to be reasonable under thecircumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to thecarrying amounts of assets and liabilities are discussed below. Revisions to accounting estimates are recognised in theperiod in which the estimate is revised and in any future periods affected.

Investment property valuesInvestment properties are carried at net realisable value which comprises the fair value less estimated selling costs. Fairvalue is either based on an independent valuation or on a Directors' valuation which is supported by the extrapolation ofindependent valuations on similar properties. Valuations are determined based on assessments and estimates ofuncertain future events, including upturns and downturns in property markets and availability of similar properties, vacancyrates, market rents and capitalisation and discount rates.

At 30 June 2014, the carrying value of non-current assets classified as held for sale held by the Trust is $nil (2013:$22,409,750). Refer to note 7 for the reconciliation of the movements in non-current assets classified as held for sale.

Collectability of trade receivablesCollectability of trade receivables is reviewed on an ongoing basis. An allowance account (provision for impairment oftrade receivables) is used when there is objective evidence that the Trust will not be able to collect all amounts dueaccording to the original terms of the receivables.

The Responsible Entity estimates the amount to be provided for based on knowledge of individual retailer's circumstances,customer creditworthiness, and current economic trends. The amount of the allowance is continually reassessed followingany changes in individual retailer's circumstances, such as bankruptcy, with a complete review undertaken every sixmonths.

3 Net property incomeRDP 19

30 June 30 June2014 2013

$ $

Property rental revenue 100,951 4,822,985Property outgoings recovered 70,462 1,101,901Property revenue 171,413 5,924,886LessDirect property expenses (72,545) (2,722,453)

Net property income 98,868 3,202,433

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4 Distributions and return of equityRDP 19

30 June 30 June2014 2013

$ $

Total income distributions - 4,186,858Total return of equity 19,162,984 45,543,792

19,162,984 49,730,650

Of the total net cash distributed by RDP 19, 100% is tax advantaged (2013: 48.98%).

5 Current assets - Cash and cash equivalentsRDP 19

30 June 30 June2014 2013

$ $

Cash at bank and on hand - 3,018,332

6 Current assets - Trade and other receivablesRDP 19

30 June 30 June2014 2013

$ $

Trade receivablesProperty receivables - 55,584

Other receivablesAccrued income - 353,892Other receivable - 2,777Total trade and other receivables - 412,253

7 Non-current assets classified as held for saleRDP 19

30 June 30 June2014 2013

Valuationbasis $ $

Property investmentKiama (S) - 22,700,000Less: Estimated selling costs - (290,250)

- 22,409,750

(S) On 21 December 2012, an unconditional contract was entered into for the sale of Kiama for consideration of$22,700,000. The 30 June 2013 valuation was based on the sale contract price and the settlement was completed on 15July 2013.

As at 30 June 2013, Kiama was accounted for as 'non-current assets classified as held for sale' as during the year, theResponsible Entity announced its intention to sell all remaining investment properties and wind up the Trust accordingly.

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7 Non-current assets classified as held for sale (continued)The reconciliation below details the movements for the year:


2014 2013$ $

Opening balance at 1 July 22,409,750 -Transfer from investment property (Note 8) - 22,700,000Estimated selling costs - (290,250)Share of net profits from investment accounted for using the equity method - 13,087Distribution received/receivable - (13,087)Disposal of investment property (22,409,750) -Closing balance at 30 June - 22,409,750

8 Non-current assets - Investment propertyRDP 19

30 June 30 June2014 2013

$ $

Property investmentsKiama (transferred to non-current assets classified as held for sale) (ReferNote 7) - -Melville Plaza (S) - -Altone Park (S) - -

- -

The reconciliation below details the movements for the year:


2014 2013$ $

At fair valueOpening balance at 1 July - 65,050,000Capitalised expenditure - 372,766Fair value adjustment to investment property - (1,228,421)Disposal of investment property - (41,494,345)Transfer to non-current assets classified as held for sale - Kiama (Note 7) - (22,700,000)Closing balance at 30 June - -

(S) Altone Park and Melville Plaza were sold on 28 September 2012 and 30 April 2013 for consideration of $15,900,000and $29,000,000 respectively.

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9 Current liabilities - Trade and other payablesRDP 19

30 June 30 June2014 2013

$ $

Related party payables - 23,665Other payables - 361,198Accrued property expenses - 75,759Deferred property rental revenue - 197,112Total trade and other payables - 657,734

10 Other financial liabilitiesRDP 19

30 June 30 June2014 2013

$ $

CurrentTermination fees - 3,090,840Deferred management fees - 2,088,092

- 5,178,932



2014 2013$ $

Termination fees movementOpening balance at 1 July 3,090,840 3,043,840Termination fees paid (3,090,840) -Increase in financial liability - 47,000Closing balance at 30 June - 3,090,840

Deferred management fees movementOpening balance at 1 July 2,088,092 2,088,092Deferred management fees paid (2,088,092) -Closing balance at 30 June - 2,088,092

(a) Termination fees

The Responsible Entity will be entitled to a termination fee if following the sale of the properties and wind up, the amountavailable to be paid to investors (which is represented by the unit value), is greater than the value of equity subscribed atthe start of the current investment term.

Termination fees of $3,090,840 were paid to the Responsible Entity on 29 July 2013.

(b) Deferred management fees

The Responsible Entity's entitlement to management fees is set out in the Trust's Product Disclosure Statement. TheResponsible Entity has deferred the payment of a proportion of these fees but is entitled to recover unpaid fees at the endof the Trust term.

Deferred management fees of $2,088,092 were paid to the Responsible Entity on 29 July 2013.

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11 Current liabilities - ProvisionsRDP 19

30 June 30 June2014 2013

$ $

Provision for distribution or returns of equity - 1,167,420

(a) Movements in provisions



2014 2013$ $

Provision for distribution or returns of equityOpening balance at 1 July 1,167,420 1,934,597Amounts provided 19,162,984 49,730,650Distributions paid or return of equity (20,330,404) (50,497,827)Closing balance at 30 June - 1,167,420

12 Contributed equity(a) Units issued



2014 2013No. No.

Number of unitsOpening balance at 1 July 57,650,370 57,650,370Issued during the year - -Units cancelled during the year (57,650,370) -Closing balance at 30 June - 57,650,370



2014 2013$ $

Opening balance at 1 July 10,753,944 51,209,258Issued during the year - -Return of equity (10,753,944) (45,543,792)Transfer equity raising costs to retained earnings - 5,088,478Closing balance at 30 June - 10,753,944

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13 Underlying earningsUnderlying earnings is a financial measure that represents the profit/(loss) under Australian Accounting Standardsadjusted for certain unrealised and non-cash items, reserve transfers, capital transactions and other non-core items. It isnot a term defined by Australian Accounting Standards. Underlying earnings is used by the Responsible Entity to makestrategic decisions and as a guide to assessing an appropriate distribution to announce.

In accordance with the Trust's Constitution, the amounts distributed to unitholders are at the discretion of the ResponsibleEntity.


2014 2013$ $

Net profit for the year 326,735 3,574,765Adjusted for:Fair value adjustment to investment property - 1,228,421Net gain on sale on investment property (174,029) (2,565,441)Estimated selling costs - 290,250Liquidation expenses - 80,000Other Responsible Entity fees - 47,000Underlying earnings 152,706 2,654,995

14 Net tangible asset backing (NTA)RDP 19

30 June 30 June2014 2013

Net tangible assets attributable to unitholders ($) - 18,836,249

(a) Basic

Number of unitsNumber of units outstanding at the end of the year used in calculating basic net tangibleasset backing per unit - 57,650,370

Basic NTA ($) - 0.33

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15 Cash flow informationRDP 19

30 June 30 June2014 2013

$ $

Net profit for the year 326,735 3,574,765Other Responsible Entity fees - 47,000Fair value adjustment to investment property - 1,228,421Liquidation expenses - 80,000Estimated selling costs - 290,250Net gain on sale of investment property (174,029) (2,565,441)Decrease in assets

Trade and other receivables 412,253 989,223Other assets - 808,257

Decrease in liabilitiesTrade and other payables (5,952,887) (395,125)

Net cash (outflow)/inflow from operating activities (5,387,928) 4,057,350

16 Related party transactions

(a) Key Management Personnel

Key Management Personnel ('KMP') are defined in AASB 124 Related Party Disclosures as those having the authority andresponsibility for planning, directing and controlling the activities of the Trust. The Responsible Entity meets the definitionof KMP as it has authority in relation to the activities of the Trust.

Ongoing management and services fees paid/payable to the Responsible Entity during the year totalled $15,035 (2013:$401,258).

(b) Transactions with related parties

Transactions relating to termination fees and deferred management fees are disclosed in note 10. Other than these, thefollowing transactions occurred with related parties:


2014 2013$ $

Key Management Personnel Responsible Entity management fees 3,520 322,612Accounting recovery fees 2,125 48,750Tax recovery fees 7,796 11,330Legal recovery fees 1,594 18,566

15,035 401,258

Other related parties Trustee fees 503 26,924Property management fees 4,510 223,851Leasing fees - 45,580

5,013 296,355

Joint venture and partnershipDistribution revenue - (13,087)

- (13,087)

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16 Related party transactions (continued)

(c) Outstanding balances

Balances relating to termination fees and deferred management fees are disclosed in notes 10. Other than these, thefollowing balances are outstanding at the reporting date in relation to transactions with related parties:


2014 2013$ $

Payables to:

Key Management Personnel Responsible Entity management fees - 14,357Trustee fees - 1,049

- 15,406

Other related parties Property management fees - 8,259

- 8,259

The related entities of the Responsible Entity did not hold any ordinary units in the Trust as at the end of the financial yearas all units were cancelled on 30 June 2014 (2013: 7,541,854).

(d) Terms and conditions

Units issued to related parties are on the same terms and conditions as all other issued units.

Outstanding balances are unsecured and are repayable in cash.

Transactions between related parties are on normal commercial terms and conditions no more favourable than thoseavailable to other parties unless otherwise stated.

17 Remuneration of auditorsDuring the year the following fees were paid or payable for services provided by the auditor and/or its related practices:


2014 2013$ $

(a) Audit services

Moore StephensAudit and review of financial reports 15,500 51,800

(b) Non-audit services

Moore StephensTax compliance service 2,750 7,305

18 CommitmentsThe Trust has no capital, finance lease or remuneration commitments in existence at the reporting date which have notbeen recognised as liabilities.

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19 ContingenciesAt the date of this report, the Directors are not aware of any contingent liabilities that may have a material impact on theTrust's financial position, results of its operations or cash flows.

20 Events occurring after the reporting periodNo matter or circumstance has arisen in the interval between 30 June 2014 and the date hereof.

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Moore Stephens ABN . Liability limited by a scheme approved under Professional Standards Legislation. An independent member of Moore Stephens International Limited members in principal cities throughout the world. The Melbourne Moore Stephens firm is not a partner or agent of any other Moore Stephens firm. And is a separate partnership in Victoria.

Level 10, 530 Collins Street Melbourne VIC 3000

T + ( ) F + ( )

www.moorestephens.com.au

TO THE MEMBERS OF RETAIL DIRECT PROPERTY 19

Report on the Financial Report We have audited the accompanying financial report of Retail Direct Property 19 (the registered scheme), which comprises the balance sheet as at 30 June 2014, the income statement, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information

Responsibility for the Financial Report The directors of Retail Responsible Entity Limited, the Responsible Entity of the registered scheme, are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards.

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures

assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the registered

procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion control. An audit also includes evaluating the

appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

http://www.moorestephens.com.au

Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. Opinion In our opinion: (a) the financial report of Retail Direct Property 19 is in accordance with the Corporations Act 2001,

including:

(i) giving a true and fair view of Retail Direct Property 19 position as at 30 June 2014 and of its performance for the year ended on that date; and

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

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

Note 1. Emphasis of Matter Without qualifying our opinion, we draw attention to Note 1 to the financial statements, which describes the liquidation basis of accounting. Under the liquidation basis of preparation, all assets and liabilities are measured at their liquidation value. The liquidation value of assets is their net realisable value. Net realisable value approximates the current carrying amount of the assets measured under the relevant Australian Accounting Standards. The liquidation value of liabilities represents their expected settlement amount. MOORE STEPHENS Chartered Accountants Nick Michael Partner Melbourne, 5 September 2014

retail direct property 19 · the directors of retail responsible entity limited, the responsible...

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