BLACKWALL

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CONTENTS

Financial Report

Directors’ Report (Part 1)	Page 3
Consolidated Statement of Profit or Loss and Other
Comprehensive Income	Page 8
Consolidated Statement of Financial Position	Page 9
Consolidated Statement of Changes in Equity	Page 10
Consolidated Statement of Cash Flows	Page 11
Notes to the Financial Statements	Page 12
Directors’ Report (Part 2)	Page 34
Auditor’s Independence Declaration	Page 38
Directors’ Declaration	Page 39
ASX Additional Information	Page 40
Group Details	Page 42
Independent Auditor’s Report	Page 43
Contents – Notes to the Financial Statements	Page 45
Glossary	Page 46

2 BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

DIRECTORS’ REPORT (Part 1)

��

For the year to 30 �une 2016 �lac��all generated an after� ta� profit of �2�9 million� �he Directors have declared a fully franked final dividend of 1.8 cents per share to �e paid on 11 Novem�er 2016 �ringing the full year dividend to 3.5 cents per share fully franked �

�lac��all has two separate �ut complementary operating su�sidiaries� �O�SO �or�Space and �lac��all Property Funds� Our �23 million �alance sheet is used in growth or strategic opportunities for our operating �usinesses�

Shares on Issue		52�3 million
Gross Revenue	�10�8 m	20�6 cps
NPAT	�2�9 m	5�6 cps
NTA per share		�0�36
Share Price*		�0�55
Market Cap		�28�8 million

* Closing price on the day prior to release of results.

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�lac��all Property Funds has a trac� record of generating consistent recurring fee income and periodically generates significant transaction�performance fees� �hese ma�e up our traditional activities and with success grow steadily over time (see the ta�le on page 6)�

�O�SO� �y contrast� has the capacity to grow quic�ly� Over the past three years we have chosen to refine the model in real estate controlled �y �lac��all� Now we are starting to increase the pace of e�pansion �y entering into leases� �oint ventures and management arrangements with third party property owners� Our e�pansion to Singapore and the recent launch of �O�SO Penrith are e�amples of this�

�o put this growth in conte�t� in the 12 months ended 30 �une 2016� �O�SO generated turnover of �3�4 million (up 80� on 2015) whereas annualised sales for �uly and August are �ust over �4�2 million� Of course� as we have more sites in �uild�up phase than are mature� in the short term �O�SO’s contri�ution to our consolidated profit is modest at �460�000 for the full year�

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

DIRECTORS’ REPORT (Part 1)

In short� �O�SO is a start�up that generates a profit and has significant growth potential� with access to a �23 million �alance sheet and the �enefit of an esta�lished and complementary sister �usiness� �lac��all Property Funds� �ased on our e�perience� the sites we have in operation or development have the potential to generate gross revenue of �11 million and an E�I�DA contri�ution of �3�8 million�

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*�� *
	June 2016	June 2015
WOTSO WorkSpace Revenue	�3�35��000	�1�863�000
BlackWall Property Funds
Asset �anagement Fees	�2�114�000	�2�049�000
Property �anagement Fees	�1�96��000	�1�868�000
�ransaction Fees	�892�000	�250�000
Total Blackwall Property Funds Revenue	�4�9�3�000	�4�16��000
Operating Revenue	�8�330�000	�6�030�000
Investment	�2�464�000	�2�99��000
Gross Revenue	$10,794,000	$9,027,000
Expense	(��249�000)	(�5�016�000)
Tax	(�631�000)	(�1�191�000)
Profit After Tax	$2,914,000	$2,820,000

��

�O�SO’s �usiness model is an e�tension of the way we manage commercial real estate� �he foundation of our property activities is the �elief that well positioned property� offering amenity and efficient design will attract and retain users and� over time� command premium rent� �his approach has �een proven at our large�scale mi�ed�use development sites for over 20 years� �e are now applying it to the small�scale office pro�ects that have �ecome �O�SO �or�Space�

�O�SO’s opportunity� however� is driven �y more universal factors�

�he most significant and o�vious is technology� It is only over the last 5 to 10 years that sta�le connectivity has �een generally availa�le� In more recent times we have seen an e�ponential increase in the utility and sophistication of devices� the storage of information in the cloud and software as a service� �hese innovations mean that the prover�ial filing ca�inet is accessi�le from any location and automated �usiness processes require less human resource� Small and even medium si�e �usinesses can operate out of less space� �O�SO provides that space and adds amenity� design and fle�i�le terms to drive a higher margin than conventional leasing arrangements�
�he way �O�SO designs and operates its space reflects �activity �ased wor� environments� which have �een evolving at the corporate level for many years� An increasing proportion of corporate employees do not have a dedicated des�� in fact� their des� is a com�ination of their laptop� phone and ta�let which go home with them each night� Accordingly� many people do not identify wor� with a particular space or location� ��ot des�ing� is an accepted way to wor��
Corporate downsi�ing and technological changes have �oth driven the growth of the consultant and freelance class� �hese groups and the tech start�up sector want wor�space where they live and play with the fle�i�ility of different locations� in some cases internationally�

4 BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

DIRECTORS’ REPORT (Part 1)

�he com�ination of these and other factors have led to what we regard as a new sector in commercial office space� �O�SO fits into an emerging mar�et �etween traditional serviced offices and conventional long�term leases� Similar to the interplay �etween hotels and an Air�n� apartment� �O�SO and �usinesses li�e it are providing a fle�i�le alternative and to a certain degree� disrupting the current convention� A growing mar�et now chooses to wor� for the long term on fle�i�le arrangements�

��

�e rent space at wholesale commercial rates�
�e add value �y installing contemporary fit�out� high�speed connections� office equipment� meeting rooms� pro�ect�event space and provide concierge�secretarial services�
�e sell that space �y the des� or office at short�term fle�i�le rates�

Our profit is the margin of short term rental revenue a�ove operating costs� Operating costs include rent� staff� repairs and maintenance� utilities and consuma�les� At our more mature sites we are achieving a profit margin �etween 25�35�� nli�e traditional leasing arrangements �O�SO’s growth is not limited to inflation� �here demand is high our margins can grow quic�ly �ecause our costs are fi�ed� �y way of e�ample� the gross revenue at our Neutral �ay site has grown �y 10� p�a� over the past 2 years where as our rental cost has only increased �y CPI�

Ideally� a �O�SO �or�Space is �etween 1�000 and 2�000 square metres and our fit�out costs average �etween �400 to �500 per square metre�

�he ta�le �elow shows the �rea�down of our sites in operation or under development� Inception to maturity can ta�e �etween 24 to 48 months� Often we have �een a�le to grow �y ta�ing on more space within the property to meet demand� Neutral �ay� North Strathfield� Gold Coast and Dic�son are e�amples of spaces that have a �igger footprint now than when they �egan operating�

			Current	Current	August	Capacity
BlackWallControlled	Total Area	Start Date	Revenue	Rate	Members	Members
Neutral �ay� NS�	1��00 sqm	�un�13	�1�458�000p�a�	�85� �sqm	162	200
North Strathfield� NS�	1�880 sqm	�un�13	�951�000p�a�	�50� �sqm	118	225
Gold Coast� �LD	1�610 sqm	�un�14	�869�000p�a�	�540 �sqm	163	225
Pyrmont� NS�	1�310 sqm	�un�14	�689�000p�a�	�526 �sqm	96	200
Dic�son� AC�	440 sqm	Dec�14	�28��000p�a�	�65� �sqm	43	�5
Symonston� AC�	330 sqm	Dec�15	�115�000p�a�	�34� �sqm	26	50
Adelaide� SA	1�620 sqm	�ay�16	��4�000p�a�	�46 �sqm	10	200
�ris�ane� �LD	800 sqm	�ul�16	�29�000p�a�	�36 �sqm	8	125
Third Party Property
Penrith� NS� �	600 sqm	Aug�16	��2�000p�a�	�119 �sqm	15	100
Singapore�	950 sqm	Aug�16	�980�000p�a�	�1�030 �sqm	88	150
Total	11,240 sqm		$5,524,000p.a.		729	1,550

* Existing operation

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

DIRECTORS’ REPORT (Part 1)

��

Our property management and funds �usiness has �een in operation for over 20 years� It generates consistent fee income from a portfolio of real estate held in investment structures capitalised �y wholesale and retail investors� Periodically we earn significant performance or transaction fees�

	June 2016	June 2015	June 2014	June 2013	June 2012
BlackWall Property Funds
Asset �anagement Fees	�2�114�000	�2�049�000	�1�9��000	�2�393�000	�2�130�000
Property �anagement Fees	�1�96��000	�1�868�000	�1�54��000	�1��00�000	�1��49�000
�ransaction Fees	�892�000	�250�000	�3�894�000	�21��000	�180�000
Total	$4,973,000	$4,167,000	$7,418,000	$4,310,000	$4,059,000

BlackWall Property Trust

�lac��all Property �rust is an ASX�listed real estate investment trust with commercial� retail and industrial property interests� �lac��all Property Funds earns property and funds management fees from the trust as well as leasing and transactional fees�

�he �rust has �139 million of gross assets with �62 million of �an� de�t giving rise to net tangi�le assets of ��3 million or �1�2� per unit� �he �rust has 5��8 million units on issue of which 16� are held �y �lac��all� For the year ended 30 �une 2016� the trust generated a total return to unitholders in e�cess of 20� under �lac��all Property Funds’ management�

�lac��all Property Funds completed a series of transactions� which have simplified ��R’s �alance sheet and grown gross assets from �120 million to �139 million� �he most significant transaction was the ta�eover of an unlisted trust also managed �y �lac��all Property Funds� �he sole asset of that trust is a commercial office �uilding located at 490 North�ourne Ave� Can�erra� which was previously leased to �elstra� Recently� �elstra agreed to surrender its lease paying a cash settlement of �5 million� �ith the �elstra tenancy vacated� �lac��all is progressively leasing up the vacant space and transitioning the �uilding from single to multi�tenant� �O�SO is also increasing its footprint in the �uilding which has �een re�randed �O�SO �ouse� �lac��all is wor�ing up plans for a small development to increase the amenity of the office �uilding�

��R has a significant investment in a pro�ect �nown as the �a�ehouse �uarter� �he pro�ect comprises over 40�000 sqm of commercial� retail and entertainment space leased to tenants including Arnott’s� NR�A� Aldi� Fitness First and A�F �owling�

During the 2015 financial year the �a�ehouse �uarter was formally mar�eted for sale as a result of a num�er of unsolicited approaches to purchase� �hrough the mar�eting process an offer of �2�0 million was received �ut was re�ected �y the Directors� Su�sequently an offer (from a different party) of �300 million was declined as it was su��ect to unaccepta�le conditions�

�he Directors have resolved to progress a master plan application and capitalise on a significant residential development potential of the site� Consultants have �een appointed to progress this application and� if successful� the residential development sites will �e sold or �oint ventured� A �oint venture may involve �lac��all structuring a residential investment syndicate with a residential development partner�

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

DIRECTORS’ REPORT (Part 1)

BlackWall’s Balance Sheet

�lac��all’s �alance sheet holds a strategic investment in the �lac��all Property �rust with surplus capital deployed to underwrite funds management positions or secure e�pansion opportunities for �O�SO� A summary is set out �elow�

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*�� *
	2016	2015
Cash and Receivables	�2�183�000	�1�112�000
BlackWall Property Trust	�11�860�000	�9�150�000
�O�SO �ris�ane �alue	�4�500�000	�
Less� Secured De�t	(�2�100�000)	�
WOTSO Brisbane	�2�400�000	�
�O�SO Adelaide �alue	�3�000�000	�
Less� Secured De�t	(�1�400�000)	�
WOTSO Adelaide	�1�600�000	�
Net Tangible Assets	�18�6�0�000	�16�834�000
NTA Per Share	�0�36	�0�33
Shares on Issue	52�340�445	50�395�445

�O�SO Adelaide and �ris�ane were acquired this year (Fe�ruary and April respectively) in separate wholly�owned special purpose vehicles� Each property was vacant when purchased and� after some minor upgrades� the �O�SO offer is starting to gain traction� Once mature a conventional lease on mar�et rental terms will �e entered into �etween �O�SO and the respective SP�s with each rolled into a stand�alone investment trust or individually syndicated� �e would e�pect this transaction to return up to �5 million in cash to �lac��all’s �alance sheet�

Share Buy�Back

�he share �uy��ac� scheme has �een e�tended until �arch 201�� No shares have �een acquired since 30 �une 2015�

Subsequent Events And Significant Changes in Affairs

�o the �est of the Directors’ �nowledge� since the end of the financial year there have �een no other matters or circumstances e�cept for the comments a�ove� that have materially affected the Group’s operations or may materially affect its operations� state of affairs or the results of operations in the current or future financial years�

Directors Report (Part 2) continues on pages 34 to 3��

Signed in accordance with a resolution of the �oard of Directors�

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Stuart Brown Director Sydney� 15 August 2016

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the Year Ended 30 June 2016

Note �O�SO �or�Space income �lac��all property fees Asset management fees Property management fees �ransaction fees Total Operating Revenue Investment �nrealised gain on revaluation Investment Total Revenue 2 �usiness operating e�penses 3 Depreciation Finance costs Other e�penses Profit Before Income Tax Income ta� e�pense 4 Profit For the Year Total Comprehensive Income For the Year Earnings Per Share Continuing operations� �asic earnings per share 19 Diluted earnings per share 19	2016 $’000 2015 $’000 3�35� 1�863 2�114 2�049 1�96� 1�868 892 250
	4�9�3 4�16�
	8,330 6,030 2�301 2�685 163 312
	10,794 9,027 (6�8�5) (4�82�) (290) (160) (59) (19) (25) (10)
	3,545 4,011 (631) (1�191)
	2,914 2,820
	2,914 2,820
	5�� cents 5�6 cents 5�� cents 5�6 cents

�he accompanying notes form part of these �inancial statements�

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Consolidated Statement of Financial Position

As at 30 June 2016

Note ASSETS Current Assets Cash and cash equivalents 5 �rade and other receiva�les 6 Investment properties � Total Current Assets Non�current Assets Financial assets 8 Property� plant and equipment 9 Equity accounted investments 10 Total Non�current Assets TOTAL ASSETS LIABILITIES Current Liabilities �rade and other paya�les 11 Current ta� paya�le 12 Provisions 13 �orrowings 14 Total Current Liabilities Non�current Liabilities Other paya�les 15 Deferred ta� lia�ilities 16 Provisions 13 Total Non�current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Share capital 1�(a) Reserves 1�(c) Retained earnings TOTAL EQUITY	2016 $’000 2015 $’000 1�965 483 218 629 ��500 �
	9�683 1�112
	12�011 16�024 1��14 831 � 5
	13��25 16�860
	23,408 17,972
	5�4 632 59 � 308 248 3�500 �
	4�441 880
	183 164 1�566 1�388 114 94
	1�863 1�646
	6,304 2,526
	17,104 15,446
	11��33 11�24� � 8 5�3�1 4�191
	17,104 15,446

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Consolidated Statement of Changes in Equity

For the Year Ended 30 June 2016

Restated balance at 1 July 2015 Profit for the year Dividend paid Issue of shares Balance at 30 June 2016 Balance at 1 July 2014 Profit for the year Dividend paid Balance at 30 June 2015*	Ordinary shares $’000 Retained earnings $’000 Share options reserve $’000 Total $’000 11,247 4,204 8 15,459 � 2�914 � 2�914 � (1��4�) � (1��4�) 486 � (8) 4�8
	11,733 5,371 � 17,104
	11,247 2,681 8 13,936 � 2�820 � 2�820 � (1�310) � (1�310)
	11,247 4,191 8 15,446

� In �une 2016 the Group acquired a further 50� interest in APG Asset �anagement Pty Ltd such that APG is now wholly owned� As a result� APG has �een consolidated onto the Group’s accounts and current year profit of �13�000 has �een ad�usted against opening retained earnings�

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Consolidated Statement of Cash Flows

For the Year Ended 30 June 2016

Note Cash Flows From Operating Activities �lac��all property fee receipts �O�SO �or�Space receipts �ransaction fee receipts Investment income Payments to suppliers and employees Income ta� paid �an� charges and interests paid Net Cash Flows From Operating Activities 22 Cash Flows From Investing Activities Proceeds from redemption of �a�ehouse �onds Returns of capital from ��R Net proceeds from �ald Roc� Fund loan repayment Payments for investment properties Payments for �O�SO �or�Space fitout Loan to non�related party Payments for fi�ed assets Receipts from sale of other related funds units Payments for Pelathon Pu� Group Preferred units Net payments for ��R units Net Cash Flows Used in Investing Activities Cash Flows From Financing Activities Proceeds from NA� �orrowings Proceeds from issue of shares Dividend paid Net Cash Flows Used in Financing Activities Net Increase / (Decrease) in Cash Held Cash and cash equivalents at the �eginning of the year Cash and Cash Equivalents at End of the Year 5	2016 $’000 2015 $’000 4�803 5�296 3��22 2�018 666 250 164 312 (��58�) (5��92) (544) (1�2��) (59) (19)
	1,165 788
	5�420 � 900 6�2 450 15 (��46�) � (1�122) (5�2) (50) � (51) (32) � 1�4 � (225) � (166)
	(1,920) (134)
	3�500 � 486 � (1��49) (1�294)
	2,237 (1,294)
	1,482 (640) 483 1�123
	1,965 483

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

1. Segment Information

�he segment information for the year ended 30 �une is as follows� For information on segment reporting� refer to Notes to the Financial Statements for more details�

�he segment information for the year ended 30 �une is as follows� For information on segment reporting� refer to Notes to the Financial Statements for more details�	�he segment information for the year ended 30 �une is as follows� For information on segment reporting� refer to Notes to the Financial Statements for more details�
Profit & Loss 2016 ($’000) Income Gains Total Revenue Expenses EBTDA Pre�tax Profit
�lac��all Property 4�8�5 � 4�8�5 (3�3�4) 1�501 1�433 �O�SO �or�Space 3�455 � 3�455 (2�99�) 458 236 Investment 163 2�301 2�464 (588) 1�8�6 1�8�6 Consolidated 8,493 2,301 10,794 (6,959) 3,835 3,545
Restated Profit & Loss 2015 ($’000) Income Gains Total Revenue Expenses EBTDA Pre�tax Profit
�lac��all Property 4�042 � 4�042 (2�683) 1�359 1�345 �O�SO �or�Space 1�9�2 � 1�9�2 (1�63�) 335 189 Investment 328 2�685 3�013 (536) 2�4�� 2�4��
Consolidated 6,342 2,685 9,027 (4,856) 4,171 4,011

June 2016 June 2015
Balance Sheet ($’000) Assets Liabilities Net Assets Assets Liabilities Net Assets
�lac��all Property 9��26 (4�09�) 5�629 1�134 (�13) 421 �O�SO �or�Space 1�6�1 (488) 1�183 814 (316) 498 Investment 12�011 (1��19) 10�292 16�024 (1�49�) 14�52�
Consolidated 23,408 (6,304) 17,104 17,972 (2,526) 15,446
2. Revenue �O�SO �or�Space income �lac��all property fees Asset management fees Property management fees �ransaction fees �otal �lac��all property fees �otal Operating Revenue Investment �nrealised gain on revaluation of assets Interest from �a�ehouse �onds Other investment income �otal Investment �otal Revenue 3. Expenses Employee � consultants’ costs �O�SO �or�Space rent and leasing e�penses �O�SO �or�Space operating e�penses Administration e�penses Asset disposal e�penses �otal �usiness operating e�penses	2016 $’000 2015 $’000 3�35� 1�863 2�114 2�049 1�96� 1�868 892 250 4�9�3 4�16� 8�330 6�030 2�301 2�685 138 2�5 25 3� 2�464 2�99� 10��94 9�02� 2016 $’000 2015 $’000 2�9�9 2�514 1�239 655 1��58 982 �48 6�6 151 � 6�8�5 4�82�

12 BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

4. Income Tax Expense

5.

Income Tax Expense
	2016	2015
	$’000	$’000
Current ta�	453	412
Deferred ta�	1�8	��9
Total	631	1,191
Prima facie ta� paya�le on profit from ordinary activities
�efore income ta� at 30� (2015� 30�)	1�064	1�203
Add � (less) ta� effect of�
� Non�deducti�le items	11	5
� Deducti�le item	(9)	(1�)
� Sale of financial assets	(435)	�
Total	631	1,191
Current Assets � Cash and Cash Equivalents
	2016	2015
	$’000	$’000
Cash on hand	1	1
Cash at �an�	1�964	482
Total	1,965	483
Cash at �an� earns interest at floating rates �ased on daily �an� deposit rates�

6. Current Assets � Trade and Other Receivables

rrent Assets � Trade and Other Receivables
�rade receiva�les� � Related parties � Other parties �otal trade receiva�les Other receiva�les� � Other parties � �ald Roc� Fund loan receiva�le � Related parties �otal other receiva�les Total	2016 $’000 2015 $’000 200 158 13 15
	213 1�3 5 5 � 450 � 1
	5 456
	218 629

Further information relating to trade and other receiva�les to related parties is set out in the Related Party �ransactions note� None of the receiva�les were impaired as at 30 �une 2016 (2015� �nil)�

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

7. Current Assets – Investment Properties

30 June 2016 �alance at the �eginning of year Purchase Capital improvements Revaluations Depreciation Balance at the end of year	WOTSO Brisbane $’000 WOTSO Adelaide $’000 Total $’000 � � � 4�501 2�959 ��460 � 50 50 19 21 40 (20) (30) (50)
	4,500 3,000 7,500

�he �O�SO Adelaide and �ris�ane properties were purchased in Fe�ruary and April 2016 respectively� Refer to the �orrowings note for details of �orrowings secured against the properties�

�he properties are classified as current assets� Once �O�SO’s operations are more mature a conventional lease on mar�et rental terms will �e entered into �etween �O�SO and the respective SP�’s with each rolled into a stand alone investment trust or individually syndicated�

�O�SO �ris�ane is located at 84 �runswic� St� Fortitude �alley� It was purchased for �4�25 million in April 2016 and has �een fitted�out to house the first �O�SO �or�Space in �ris�ane� �O�SO has now opened and welcomed its first mem�ers in �uly 2016� �he site will also house a caf��

�O�SO Adelaide was purchased in Fe�ruary 2016 for �2�8 million and is located at 21��219 Flinders St� Adelaide� �O�SO opened its doors to its first mem�ers in �arch 2016 and the �uilding is also loo�ing to secure a gymnasium and caf� operator to add amenity to the site�

8. Non�current Assets – Financial Assets

Note (a) Financial assets �lac��all Property �rust 8(�) Pelathon �anagement Group Loan to other �a�ehouse �onds 8(c) Pelathon Pu� Group 8(d) Total	2016 $’000 2015 $’000 11�860 9�150 100 100 51 � � 5�420 � 1�354
	12,011 16,024

(b) BlackWall Property Trust

�lac��all Property �rust is an ASX�listed real estate investment trust managed �y �lac��all� �lac��all holds 9�4 million (16�) ��R units (2015� ��5 million ��R units)�

(c) Bakehouse Bonds

�he �a�ehouse �onds were CPI lin�ed de�t instruments secured against a large scale mi�ed�use property �nown as the �a�ehouse �uarter in North Strathfield� Sydney� �he �onds were fully redeemed in Decem�er 2015 for cash consideration of �5�42 million�

(d) Pelathon Pub Group

In �une 2016 the Group sold all units in the Pelathon Pu� Group (including in�specie distri�ution of pu� units from ��R)� in e�change for appro�imately 1�9 million additional ��R units�

14 BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

9. Non�current Assets � Property, Plant and Equipment

Non�current Assets � Property, Plant and Equipment
Furniture� fi�tures and fittings� � At cost � Less accumulated depreciation Office equipment� � At cost � Less accumulated depreciation Total 30 June 2016 �alance at the �eginning of year Additions Depreciation e�pense �alance at the end of year 30 June 2015 �alance at the �eginning of year Additions Depreciation e�pense �alance at the end of year	2016 $’000 2015 $’000 2�564 1�488 (940) (�26)
	1�624 �62 180 133 (90) (64)
	90 69
	1,714 831
	Furniture, fixtures and fittings $’000 Office equipment $’000 Total $’000 �62 69 831 1�0�� 46 1�123 (215) (25) (240)
	1�624 90 1��14
	352 35 38� 551 53 604 (141) (19) (160)
	�62 69 831

�he growth in property� plant equipment reflects the e�pansion of the �O�SO �usiness over the past 12 months with 5 new sites fitted out through the period�

10. Non�current Assets � Equity Accounted Investments

on�current Assets � Equity Accounted Investments
Ownership Interest Name Principal Country of Incorporation 2016 % 2015 % APG Asset �anagement Pty Ltd Financial services and management company Australia 100 50 Total	Carrying Amount of Investment 2016 $’000 2015 $’000 � 5
	� 5

�he Group acquired the remaining 50� interest in the company in 2016 as part of the �lac��all �elstra �ouse �rust transaction with ��R� therefore APG has now �een consolidated in these financial statements�

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

11. Current Liabilities � Trade and Other Payables

�rade paya�les� � Related parties � Other parties Sundry paya�les and accrued e�penses Income received in advance� � Other parties � Related parties Total	2016 $’000 2015 $’000 53 1 444 481
	49� 482 43 41 34 25 � 84
	34 109
	574 632

Further information relating to trade paya�les from related parties is set out in the Related Party �ransactions note�

12. Current Liabilities � Current Tax Payable

13.

14.

Income ta� paya�le Total Income ta� paya�le included �90�000 PA�G instalment that w Current and Non�current Liabilities � Provisions Current – employee �enefits Non�current – employee �enefits Total provisions �alance at the �eginning of year Net additional provisions recognised �alance at the end of year �he num�er of employees for the Group as at 30 �une 2016 w Current Liabilities � Borrowings NA� �ill facility Total	2016 $’000 2015 $’000 59 �
	59 �
	as paid in �uly 2016� 2016 $’000 2015 $’000 308 248 114 94
	422 342
	342 263 80 �9
	422 342
	as 2� (2015� 23)� 2016 $’000 2015 $’000 3�500 �
	3,500 �

�he Group has ta�en out a new de�t facility as part of the acquisition of the �O�SO �ris�ane and Adelaide properties� �he facility is secured against �oth of these properties (refer to the Investment Properties note)� �he �orrowings will mature in �ay 201� and therefore are classified as a current lia�ility� �hese �orrowings are su��ect to a margin of 2�5� p�a� over ��S��

16 BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

15. Non�current Liabilities � Other Payables �enant deposits Total 16. Non�current Liabilities � Deferred Tax Liabilities Deferred ta� lia�ilities � (assets) �alance comprises� Financial assets Provision for employee �enefits Accrued e�penses Interest receiva�les Total Movements: �alance at the �eginning of year Charged to the profit and loss Balance at the end of year 17. Share Capital and Reserves (a) Summary table 52�340�445 (2015� 50�395�445) Ordinary Total (b) Movement in shares on issue At the �eginning of reporting period Issue of shares (A Option e�ercised) At reporting date		2016 $’000 2015 $’000 183 164
		183 164
		2016 $’000 2015 $’000 1��19 1�484 (124) (93) (29) (24) � 21
		1,566 1,388
		1�388 609 1�8 ��9
		1,566 1,388
		2016 $’000 2015 $’000 11��33 11�24�
		11,733 11,247
		No. No. 50�395�445 50�395�445 1�945�000 �
		52,340,445 50,395,445

1�945�000 shares were issued during the year on the e�ercise of the A Options (granted in Octo�er 2013) at 25 cents per share� No further shares have �een issued since 30 �une 2016� No amounts are unpaid on any of the shares�

Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the num�er of shares held� At shareholders’ meetings� each ordinary share is entitled to one vote when a poll is called� otherwise each shareholder has one vote on a show of hands� All shares are fully paid and have no par value�

(c) Reserves Share options reserve Total	2016 $’000 2015 $’000 � 8
	� 8

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

�he following options are currently on issue at the date of this report�

	Options	Expiry date		Exercise	Exercise	price	Number
	Stuart �rown (� Option)	30 �une 2018			�0�35		2�000�000
	Employees	15 �uly 2019			�0�60		2�000�000
18.	Dividends
	Fully fran�ed dividends paid to mem�ers during the financial year were as follows�
						2016	2015
						$’000	$’000
	2015 final dividend of 1�� cents paid on 6 Novem�er 2015 (2014� 1�3 cents)					85�	655
	2016 interim dividend of 1�� cents paid on 4 April 2016 (2015� 1�3 cents)					890	655
	Total					1,747	1,310
	In addition� the �oard has declared a final fully fran�ed dividend of 1�8			cents per share to �e			paid on 11
	Novem�er 2016�
	Fran�ing credits availa�le for the su�sequent periods �ased on a ta� rate of			30�
	(2015� 30�)					793	1,110
	�he a�ove amounts represent the �alance of the fran�ing account as		at	the	end of	the reporting period�
	ad�usted for�
	(a) fran�ing credits that will arise from the payment	of the amount of the provision for income ta��
	(�) fran�ing de�its that will arise from the payment of dividends recognised				as a lia�ility at the reporting
	date� and
	(c) fran�ing credits that will arise from the receipt	of dividends recognised as receiva�les at the reporting
	date�
19.	Earnings Per Share
				2016			2015
	�asic EPS			5�� cents			5�6 cents
	Diluted EPS			5�� cents			5�6 cents
	Calculated as follows�
	Profit attri�uta�le to the owners of the Group		�2�914�000				�2�820�000
	�eighted average num�er of shares for �asic EPS		50�990�636				50�395�445
	�eighted average num�er of shares for diluted EPS		51�323�9�0				50�885�900
20.	Auditor’s Remuneration
				2016			2015
				$’000			$’000
	Remuneration of ES� for�
	� audit and assurance services				63		�0
	� ta�ation services				8		11
					71		81
	Remuneration of non�ES� firm for�
	� other assurance services				4		4
	Total				75		85

18 BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

21. Commitments

(a) Operating lease commitments

Operating leases relate to tenancy leases with lease terms of �etween 1 and 5 years�

Lease commitments paya�le� � paya�le within 1 year � paya�le within 2 – 5 years Total	2016 $’000 2015 $’000 2�089 1�4�4 6�265 3�349
	8,354 4,823

(b) Capital lease commitments

No capital commitments were in e�istence as at 30 �une 2016 (2015� Nil)�

22. Reconciliation of Operating Cash Flows

Profit for the year
Non�cash flows in profit�
Depreciation
�nrealised gain on revaluation
Gain on disposal of assets
Changes in assets and lia�ilities�
Decrease � (increase) in trade and other receiva�les
Increase in deferred ta� lia�ilities
Increase � (decrease) in trade and other paya�les
Increase � (decrease) in income ta�es paya�le
Increase in provisions
Net cash flows from operating activities

2016
$’000
2015
$’000
2�914
2�820
290
160
(2�301)
(2�685)
�
(5)
(115)
��3
1�8
�90
60
(208)
59
(925)
80
68

1,165
788

23. Contingencies

�he Group had no contingent assets or lia�ilities at 30 �une 2016 (2015� �nil)�

24. Subsequent Events

Other than the su�sequent events disclosed in the Directors’ Report� to the �est of the Directors’ �nowledge� since the end of the financial year there have �een no matters or circumstances that have materially affected the Group’s operations or may materially affect its operations� state of affairs or the results of operations in future financial years�

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

25. Controlled Entities

Controlled Entities
	Country of
Name	incorporation	Percentage	Owned
		2016	2015
		%	%
Parent entity:
�lac��all Limited	Australia	100	100
Subsidiaries of parent entity:
�lac��all �anagement Services Pty Ltd	Australia	100	100
�lac��all Fund Services Limited	Australia	100	100
�O�SO �or�Space Pty Ltd	Australia	100	100
�O�SO Coffee Pty Ltd	Australia	100	�
Flinders Street �nit �rust	Australia	99�98	�
84 �runswic� Street �nit �rust	Australia	99�98	�

26. Related Party Transactions

(a) Related Entities, Associates, Managed Funds

In these financial statements� related parties are parties as defined �y AASB 124 Related Party Disclosures rather than the definition of related parties under the Corporations Act 2001 and ASX Listing Rules�

Associates

Interests held in associates �y the Group are set out in the Equity Accounted Investment note to the financial statements�

Managed Funds

�he Group holds investments in a num�er of property funds for which it acts as either manager or responsi�le entity (refer to the Financial Assets note)�

Fees and Transactions

�anagement fees are charged to these entities predominantly for property and fund management services� �he management fees are paid under a management agreement and the fees charged are determined with reference to arm�s length commercial rates�

�hese services principally relate to�

investment management� provision of strategic investment advice� asset management and investment portfolio services� and
asset management� provision of property management services� property portfolio advisory services� maintenance and insurances� strategic advice and management supervision services� administration� mar�eting and ris� management services�

�he Group recharges its related entities� associates and managed funds� for administration services which include accounting and �oo��eeping fees� corporate secretarial services and those e�penses that are incurred �y mem�ers of the Group on �ehalf of the related entities� associates and managed funds� In addition� the Group pays the following fees to related entities�

rent for use of the Group�s �a�ehouse �uarter� �O�SO �or�Space and Neutral �ay head office� �he rent paid is determined with reference to arm�s length commercial rates� and
director fees�

20 BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

Other transactions and outstanding �alances with related entities� associates and managed funds relate to loans paya�le and receiva�le and distri�utions from managed funds� All transactions with related parties were made on normal commercial terms and conditions and at mar�et rates� and were approved �y the �oard where applica�le� �he following transactions occurred during the financial year and the �alances were outstanding at the year end �etween the Group and its related entities�

	2016	2015
	$’000	$’000
Revenue:
� �lac��all property fees	3�326	3�000
� �ransaction fees	892	250
� �O�SO �or�Space income	36	34
� Distri�ution�returns of capital from funds	1�038	94�
� Interest income from loan to �ald Roc� Fund	�	25
Expenses:
� Rent and outgoings paid	1�81�	1�209
Outstanding balances:
� �rade and other receiva�les � current	200	609
� �rade and other paya�les � current	53	85

(b) Interests in Related Parties

As at year end the Group owned units in the following related funds�

Entity Holdings (No.’000) 2016 2015 �lac��all Property �rust 9�413 ��500 �a�ehouse �onds � 5�000 Pelathon Pu� Group � 18�811	Distribution/Returns of Capital/Interest ($’000) 2016 2015 900 6�2 138 2�5 � �
	1,038 947

(c) Key management personnel compensation

�otal remuneration paid

2016	2015
$’000	$’000
80�	805

Detailed remuneration disclosures and relevant interests are provided in the Directors’ Report�

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

27. Parent Entity Information

�he following summarises the financial information of the Group’s parent entity� �lac��all Limited� as at and for the year ended 30 �une�

Results: Profit after ta� Total comprehensive income after tax Financial position: Current assets Non�current assets Total assets Current lia�ilities Non�current lia�ilities Total liabilities Net assets Share capital Accumulated losses Reserves Total equity	2016 $’000 2015 $’000 1�43� 1�368
	1,437 1,368
	3� 451 14�521 13�393
	14,558 13,844 (2�325) (2�036) (1�119) (862)
	(3,444) (2,898)
	11,114 10,946
	11��33 11�24� (619) (309) � 8
	11,114 10,946

�he parent entity had no contingencies or capital commitments at 30 �une 2016 (2015� Nil)�

28. Financial Risk Management

(a) Financial risk management

�he main ris�s the Group is e�posed to through its financial instruments are mar�et ris� (including foreign e�change ris�� interest rate ris� and price ris�)� credit ris� and liquidity ris�� he Group�s principal financial instruments are cash� financial assets and �orrowings� Additionally� the Group has various other financial instruments such as trade de�tors and trade creditors� which arise directly from its operations�

�his note presents information a�out the Group�s e�posure to each of the a�ove ris�s� their o��ectives� policies and processes for measuring and managing ris�� and the management of capital� �he �oard has overall responsi�ility for the esta�lishment and overseeing of the ris� management framewor�� It monitors the Group’s ris� e�posure �y regularly reviewing finance and property mar�ets� �he Group holds the following ma�or financial instruments�

holds the following ma�or financial instruments�
	2016	2015
	$’000	$’000
Cash and cash equivalents	1�965	483
Investments in ��R	11�860	9�150
�orrowings	(3�500)	�

(b) Sensitivity analysis

�he Group is not e�posed to any material foreign e�change� credit or liquidity ris�s� Investment in ��R units is su��ect to price ris�� a 10� decrease in the ASX trading price (from the price at 30 �une 2016� i�e�

22 BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

�1�26 per unit) would result in an unrealised loss after ta� of �830�000�

In relation to interest rate ris�� if interest rates on �orrowings were to increase �y 1� profit after ta� would �e reduced �y �25�000�

(c) Capital management

�he Group’s o��ectives when managing capital are to�
safeguard their a�ility to continue as a going concern� so that they can continue to provide returns for shareholders and �enefits for other sta�eholders� and
maintain an optimal capital structure to reduce the cost of capital�

In order to maintain or ad�ust the capital structure� the Group may ad�ust the amount of dividends paid to shareholders� issue new shares� �uy��ac� shares� purchase or sell assets�

�he Group complies with the current loans to values ratio (50�)�

(d) Liquidity risk

At 30 June 2016 Financial assets Cash and cash equivalents �rade and other receiva�les Investment properties Financial assets Financial liabilities �rade and other paya�les �orrowings At 30 June 2015 Financial assets Cash and cash equivalents �rade and other receiva�les Financial assets Financial liabilities �rade and other paya�les	Maturing within 1 year $’000 Maturing 1 – 5 years $’000 Maturing over 5 years $’000 Total $’000 1�965 � � 1�965 218 � � 218 ��500 � � ��500 � 12�011 � 12�011
	9,683 12,011 � 21,694 5�4 � � 5�4 3�500 � � 3�500
	4,074 � � 4,074 483 � � 483 629 � � 629 � 16�024 � 16�024
	1,112 16,024 � 17,136 632 � � 632

At the end of the reporting period the Group held �19 million in properties and financial assets that are e�pected to generate cash inflows for managing liquidity ris��

(e) Fair value measurements

(i) Fair value hierarchy

AASB 13 Fair Value Measurement requires disclosure of fair value measurements �y level of the following fair value measurement hierarchy�

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

Level 1 � quoted prices (unad�usted) in active mar�ets for identical assets or lia�ilities�
Level 2 � inputs other than quoted prices included within Level 1 that are o�serva�le for the asset or lia�ility� either directly (as prices) or indirectly (derived from prices)� and
Level 3 � inputs for the asset or lia�ility that are not �ased on o�serva�le mar�et data (uno�serva�le inputs)�

�he fair value of financial assets traded in active mar�ets is su�sequently �ased on their quoted mar�et prices at the end of the reporting period without any deduction for estimated future selling costs� �he quoted mar�et price used for financial assets held �y the Group is the current �id price�

�he following ta�le presents the Group’s financial assets measured at fair value as at 30 �une� Refer to the Critical Accounting Estimates and �udgments note for further details of assumptions used and how fair values are measured�

	Level 1	Level 2	Level 3	Total balance
	$’000	$’000	$’000	$’000
At 30 June 2016
Financial assets	11�860	�	151	12�011
At 30 June 2015
Financial assets	9�150	�	6�8�4	16�024

(ii) Valuation techniques used to derive Level 3 fair values

�he fair value of the unlisted securities is determined �y reference to the net assets of the underlying entities� All these instruments are included in Level 3�

(iii) Fair value measurements using significant observable inputs (Level 3)

�he following ta�le is a reconciliation of the movements in financial assets classified as Level 3 for the year ended 30 �une�

At 30 June 2016 �alance at the �eginning of year Purchase Sale �alance at the end of year At 30 June 2015 �alance at the �eginning of year Purchase Sale Fair value movement �alance at the end of year	$’000 6�8�4 51 (6��4)
	151
	6�811 225 (444) 282
	6,874

�here were no transfers �etween Levels 1� 2 and 3 financial instruments during the year�

29. Critical Accounting Estimates and Judgments

�he Directors evaluate estimates and �udgments incorporated into the financial statements �ased on historical �nowledge and �est availa�le current information� Estimates assume a reasona�le e�pectation of future events and are �ased on current trends and economic data� o�tained �oth e�ternally and within the Group�

24 BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

Key estimates � Impairment

�he Group assesses impairment at each reporting date �y evaluating conditions specific to the Group that may lead to impairment of assets� �he Directors �elieved it appropriate to raise no impairment provisions for the year ended 30 �une 2016�

Key estimates – Financial assets

All financial assets at F��PL have �een classified as financial assets� with gains and losses recognised as profit or loss� �he fair value of the unlisted securities is determined �y reference to the net assets of the underlying entities� �he fair value of the listed securities is �ased on the closing price from the Australian Securities E�change as at the reporting date� �he fair value of the �a�ehouse �onds (redeemed in Decem�er 2015) was measured �y its face value ad�usted for annual CPI movements� su��ect to impairment assessment�

30. Statement of Significant Accounting Policies

�lac��all Limited is a pu�licly listed company� incorporated and domiciled in Australia� �he financial statements for the Group were authorised for issue in accordance with a resolution of the Directors on the date they were issued�

�hese financial statements are general purpose financial statements that have �een prepared in accordance with Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards �oard and the Corporations Act 2001� �he financial statements of the Company also comply with IFRS as issued �y the International Accounting Standards �oard�

�he financial statements have �een prepared on an accruals �asis and are �ased on historical costs modified �y the revaluation of selected non�current assets� financial assets and financial lia�ilities for which the fair value �asis of accounting has �een applied�

�he Group is a group of the �ind referred to in ASIC Class Order 2016�191 and� in accordance with that Class Order� amounts in the Directors’ Report and the financial statements are rounded off to the nearest thousand dollars� unless otherwise indicated�

�he following is a summary of the material accounting policies adopted �y the Group in the preparation of the financial statements� �he accounting policies have �een consistently applied� unless otherwise stated�

Going concern

�he financial statements have �een prepared on a going concern �asis� which contemplates continuity of normal �usiness activities and the realisation of assets and settlement of lia�ilities in the ordinary course of �usiness�

Segment Reporting

AAS� 8 requires operating segments to �e identified on the �asis of internal reports a�out components of the Group that are regularly reviewed �y the chief operating decision ma�er in order to allocate resources to the segment and to assess its performance� �he Group�s primary format for segment reporting is �ased on �usiness segments� �he �usiness segments are determined �ased on the Group management and internal reporting structure� �here is only one geographical segment �eing Australasia� Segment results� assets and lia�ilities include items directly attri�uta�le to a segment as well as those that can �e allocated on a reasona�le �asis� �he operating �usinesses are organised and managed separately according to the

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

nature of the products and services provided� with each segment representing a strategic �usiness unit that offers different products and serves different mar�ets�

�he Group has adopted three reporting segments� �lac��all Property� �O�SO �or�Space and Investment�

�he �lac��all Property segment engages in funds and asset management as well as property services that include property management� leasing and general property consultancy� Income earned �y the �lac��all Property segment includes recurring income from fund and asset management mandates and transaction� �ased income typically related to those mandates� �anagement treats these operations as one �fee earning� operating segment� �he �O�SO �or�Space segment represents the serviced office and cowor�ing space �usiness and generates recurring licence and services fees �y providing short�term office accommodation� shared wor�space and meeting and event venues� �he Investment segment includes interests in property related investments such as units in related party listed and unlisted unit trusts� loans and cash� It generates income from dividends� distri�utions and interest�

Presentation of Financial Statements

�oth the functional and presentation currency of �lac��all Limited and its Australian su�sidiaries is Australian dollars� �he New �ealand su�sidiary�s functional currency is New �ealand Dollars� which is translated to presentation currency�

Principles of Consolidation

�he consolidated financial statements comprise the financial statements of �lac��all Limited and its su�sidiaries� A list of controlled entities is contained in the Controlled Entities note to the financial statements� All controlled entities have a �une financial year end and use consistent accounting policies� Investments in su�sidiaries held �y the Group are accounted for at cost� less any impairment charges (refer to Parent Entity Information note)�

Su�sidiaries are all those entities over which the consolidated entity has control� �he consolidated entity controls an entity when the consolidated entity is e�posed to� or has rights to� varia�le returns from its involvement with the entity and has the a�ility to affect those returns through its power to direct the activities of the entity� Su�sidiaries are fully consolidated from the date on which control is transferred to the consolidated entity� �hey are de�consolidated from the date that control ceases�

Inter�company balances

All inter�company �alances and transactions �etween entities in the Group� including any unrealised profits or losses� have �een eliminated on consolidation� Accounting policies of su�sidiaries have �een changed where necessary to ensure consistencies with those policies applied �y the parent entity�

Non�controlling interests

Non�controlling interests (not held �y the Group) are allocated their share of net profit and comprehensive income after ta� in the statement of profit or loss and other comprehensive income and are presented within equity in the consolidated �alance sheet� separately from parent shareholders� equity� Comprehensive income after ta� in the statement of profit or loss and other comprehensive income are presented within equity in the consolidated �alance sheet� separately from parent shareholders� equity�

Investment Properties

Investment properties are measured initially at cost� including transaction costs� �he carrying amount includes the cost of replacing part of an e�isting investment property at the time that cost is incurred if the

26 BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

recognition criteria are met and e�cludes the costs of day�to�day servicing of an investment property� Su�sequent to initial recognition� investment properties are stated at fair value� which is �ased on active mar�et prices� ad�usted if necessary� for any difference in the nature� location or condition of the specific asset at the �alance sheet date� Gains or losses arising from changes in the fair values of investment properties are recognised in profit or loss in the year in which they arise�

Property, Plant and Equipment

Each class of property� plant and equipment is carried at cost or fair value less� where applica�le� any accumulated depreciation and impairment losses�

Plant and equipment are measured on the cost �asis less accumulated depreciation and impairment losses� �he cost of replacing part of an item of property� plant and equipment is recognised in the carrying amount of an item if it is pro�a�le that the future economic �enefits em�odied within the part will flow to the Group and its cost can �e measured relia�ly� �he carrying amount of the replaced part is derecognised� �he costs of the day�to�day servicing of property� plant and equipment are recognised in profit and loss as incurred�

Depreciation

�he deprecia�le amount of all fi�ed assets is depreciated on a diminishing value �asis over their useful lives to the Group commencing from the time the asset is held ready for use�

�he estimated useful lives used for each class of deprecia�le assets are� Furniture� Fi�tures and Fittings over 2 to 40 years Office Equipment over 4 to 10 years

�he assets� residual values and useful lives are reviewed� and ad�usted if appropriate� at each �alance sheet date�

Disposal

An item of property� plant and equipment is derecognised upon disposal or when no further economic �enefits are e�pected from its use or disposal�

Any gain or loss arising on derecognition of the asset (calculated as the difference �etween the net disposal proceeds and the carrying amount of the asset) is included in the profit or loss in the year the asset is derecognised�

Impairment of assets

At each reporting date� the Group reviews the carrying values of its tangi�le and intangi�le assets to determine whether there is any indication that those assets have �een impaired�

If such an indication e�ists� the recovera�le amount of the asset� �eing the higher of the asset�s fair value less costs to sell and value in use� is compared to the asset�s carrying value� In assessing value in use� either the estimated future cash flows are discounted to their present value using a pre�ta� discount rate that reflects current mar�et assessments of the time value of money and the ris�s specific to the asset� or the income of the asset is capitalised at its relevant capitalisation rate�

An impairment loss is recognised if the carrying value of an asset e�ceeds its recovera�le amount� Impairment losses are e�pensed to the profit and loss�

Impairment losses recognised in prior periods are assessed at each reporting date for any indication that the loss has decreased or no longer e�ists� An impairment loss is reversed if there has �een a change in the

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

estimates used to determine the recovera�le amount� An impairment loss is reversed only to the e�tent that the asset�s carrying amount does not e�ceed the carrying amount that would have �een determined� net of depreciation or amortisation� if no impairment loss has �een recognised�

Financial Instruments

Non�derivative financial instruments

Non�derivative financial instruments comprise investments in equity and de�t securities� trade and other receiva�les� cash and cash equivalents� loans and �orrowings� and trade and other paya�les�

Non�derivative financial instruments are recognised at fair value plus� for instruments not at fair value through profit or loss� any directly attri�uta�le transaction costs� Su�sequent to initial recognition non� derivative financial instruments are measured as descri�ed �elow�

Recognition

A financial instrument is recognised if the Group �ecomes a party to the contractual provisions of the instrument� Financial assets are derecognised if the Group�s contractual rights to the cash flow from the financial assets e�pire or if the Group transfers the financial assets to another party without retaining control or su�stantially all ris�s and rewards of the asset� Purchases and sales of financial assets are accounted for at trade date� i�e� the date that the Group commits itself to purchase or sell the asset� Financial lia�ilities are derecognised if the Group�s o�ligations specified in the contract e�pire or are discharged or cancelled�

Financial assets

All financial assets at F��PL have �een classified as financial assets� with gains and losses recognised in profit or loss� �he Group classifies its financial assets in the following measurement categories� those to �e measured su�sequently at fair value and those to �e measured at amortised cost� �he classification depends on the Group’s �usiness model for managing the financial assets and the contractual terms of the cash flows�

(i) Debt investments – at fair value through profit or loss

�he �a�ehouse �onds were classified as a de�t investment at fair value through profit or loss�

(ii) Equity investments

All equity investments are measured at fair value� Equity investments that are held for trading are measured at fair value through profit or loss�

(iii) Loans and receivables

Loans and receiva�les including loans to related entities are non�derivative financial assets with fi�ed or determina�le payments that are not quoted in an active mar�et and are stated at amortised cost using the effective interest rate method� Gains and losses are recognised in profit and loss when the loans and receiva�les are derecognised or impaired� as well as through the amortisation process�

Fair value

�he fair values of investments that are actively traded in organised financial mar�ets are determined �y reference to quoted mar�et �id prices at the close of �usiness on the �alance date� For investments in related party unlisted unit trusts� fair values are determined �y reference to pu�lished unit prices of these investments which are �ased on the net tangi�le assets of each of the investments�

28 BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

Impairment

At each reporting date� the Group assesses whether there is o��ective evidence that a financial instrument has �een impaired� A financial instrument is considered to �e impaired if o��ective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset� In the case of availa�le�for�sale financial instruments� a prolonged decline in the value of the instrument is considered to determine whether an impairment has arisen�

An impairment loss in respect of a financial instrument measured at amortised cost is calculated as the difference �etween its carrying amount� and the present value of the estimated future cash flows discounted at the original effective interest rate� An impairment loss in respect of an availa�le�for�sale financial asset is calculated �y reference to its fair value�

Individually significant financial instruments are tested for impairment on an individual �asis� �he remaining financial assets are assessed collectively in groups that share similar credit ris� characteristics�

Impairment losses are recognised in the profit or loss� An impairment loss is reversed if the reversal can �e related o��ectively to an event occurring after the impairment loss was recognised� For financial instruments measured at amortised cost� the reversal is recognised in profit and loss�

Financial liabilities

Non�derivative financial lia�ilities are recognised at amortised cost� comprising original de�t less principal payments and amortisation�

Investments in Associates

Investments in associate companies are recognised in the financial statements �y applying the equity method of accounting where significant influence is e�ercised over an investee� Significant influence e�ists where the investor has the power to participate in the financial and operating policy decisions of the investee �ut does not have control or �oint control over those policies�

�nder the equity method of accounting� investments in the associates are carried in the consolidated �alance sheet at cost plus post�acquisition changes in the Group�s share of net assets of the associates� �he Group�s share of its associates� post�acquisition profits or losses is recognised in the income statement� and its share of post�acquisition movements in reserves is recognised in reserves� �he cumulative post acquisition movements are ad�usted against the carrying amount of the investment� �hen the Group�s share of losses e�ceeds its interest in an equity accounted investee� the carrying amount of the interest is reduced to nil and the recognition of further losses is discontinued e�cept to the e�tent that the Group has an o�ligation or has made payments on �ehalf of the investee�

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand� deposits held at call with �an�s� other short�term highly liquid investments with original maturities of three months or less� and �an� overdrafts�

Trade and Other Receivables

�rade receiva�les are recognised and carried at original invoice amount less a provision for any uncollecta�le de�ts� An estimate for dou�tful de�ts is made when there is o��ective evidence that the Group will not �e a�le to collect the receiva�le� Financial difficulties of the de�tor and default payments are considered o��ective evidence of impairment� �ad de�ts are written off when identified as uncollecta�le�

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

Trade and Other Payables

Lia�ilities for trade creditors are carried at cost which is the fair value of the consideration to �e paid in the future for goods or services received� whether or not �illed to the Group at �alance date� �he amounts are unsecured and are usually paid within 30 days of recognition�

Interest Bearing Borrowings

Interest �earing �orrowings are initially recognised at fair value less any related transaction costs� Su�sequent to initial recognition� interest �earing �orrowings are stated at amortised cost�

Employee Benefits

Defined contribution plans

A defined contri�ution plan is a post�employment �enefit plan under which an entity pays fi�ed contri�utions to a separate entity and will have no legal or constructive o�ligation to pay further amounts� O�ligations for contri�ution to defined contri�ution plans are recognised as a personnel e�pense in profit and loss when they are due�

Other long term employee benefits

�he Group�s net o�ligation in respect of long term employee �enefits other than defined �enefit plans is the amount of future �enefit that employees have earned in return for their service in the current and prior periods plus related on�costs� �hese employee �enefits have not �een discounted to the present value of the estimated future cash outflows to �e made for those �enefits�

Short term benefits

Lia�ilities for employee �enefits for wages� salaries and annual leave represent present o�ligations resulting from employees’ services provided to the reporting date and are calculated at undiscounted amounts �ased on remuneration wage and salary rates that the Group e�pects to pay as at reporting date including related on�costs�

Provisions

Provisions are recognised when the Group has a legal or constructive o�ligation� as a result of past events� for which it is pro�a�le that an outflow of economic �enefits will result and that outflow can �e relia�ly measured� �here the Group e�pects some or all of a provision to �e reim�ursed� for e�ample under an insurance contract� the reim�ursement is recognised as a separate asset �ut only when the reim�ursement is virtually certain� �he e�pense relating to any provision is presented in the income statement net of any reim�ursement�

Revenue

�lac��all Property Fees include �anagement fees and transaction fees� �hey are recognised when it �ecomes legally due and paya�le to the Group�

�O�SO �or�Space income comprises rental and recovery of outgoings from property tenants� Rental income is accounted for on a straight�line �asis over the lease term� if applica�le�

Investment income

Finance income comprises interest on funds invested� gains on the disposal of financial assets� Interest

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

income is recognised as interest accrues using the effective interest method� Dividend and distri�ution revenue is recognised when the right to receive income has �een esta�lished�

In�specie distri�utions and returns of capital are �rought on to the �alance sheet �y an ad�ustment in the carrying value of the relevant investment and then reflected in the profit and loss as an unrealised gain�

All revenue is stated net of the amount of GS��

Leases

Leases of property� plant and equipment in which a significant portion of the ris�s and rewards of ownership are not transferred to the Group as lessee are classified as operating leases� Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss�

Business Combination

�he acquisition method of accounting is used to account for all �usiness com�inations� regardless of whether equity instruments or other assets are acquired� �he consideration transferred for the acquisition of a su�sidiary comprises the�

fair values of the assets transferred
equity interests issued �y the Group
fair value of any asset or lia�ility resulting from a contingent consideration arrangement�

Identifia�le assets acquired and lia�ilities and contingent lia�ilities assumed in a �usiness com�ination are� with limited e�ceptions� measured initially at their fair values at the acquisition date�

Income Tax

Current income tax expense

�he charge for current income ta� e�pense is �ased on the profit year ad�usted for any non�assessa�le or disallowed items� It is calculated using the ta� rates that have �een enacted or are su�stantially enacted �y the �alance sheet date�

Accounting for deferred tax

Deferred ta� is accounted for using the �alance sheet lia�ility method in respect of temporary differences arising �etween the ta� �ases of assets and lia�ilities and their carrying amounts in the financial statements� No deferred income ta� will �e recognised from the initial recognition of an asset or lia�ility� e�cluding a �usiness com�ination� where there is no effect on accounting or ta�a�le profit or loss�

Deferred tax calculation

Deferred ta� is calculated at the ta� rates that are e�pected to apply to the period when the asset is realised or lia�ility is settled� Deferred ta� is credited in the income statement e�cept where it relates to items that may �e credited directly to equity� in which case the deferred ta� is ad�usted directly against equity�

Deferred ta� assets and lia�ilities are offset if there is a legally enforcea�le right to offset current ta� lia�ilities and assets� and they relate to income ta�es levied �y the same ta� authority on the same ta�a�le entity� or on different ta� entities� �ut they intend to settle current ta� lia�ilities and assets on a net �asis or their ta� assets and lia�ilities will �e realised simultaneously�

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

Deferred income tax assets

Deferred income ta� assets are recognised to the e�tent that it is pro�a�le that future ta� profits will �e availa�le against which deducti�le temporary differences can �e utilised� �he carrying amount of deferred income ta� assets is reviewed at each �alance sheet date and reduced to the e�tent that it is no longer pro�a�le that sufficient ta�a�le profit will �e availa�le to allow all or part of the deferred income ta� asset to �e utilised�

Benefit brought to account

�he amount of �enefits �rought to account or which may �e realised in the future is �ased on the assumption that no adverse change will occur in income ta�ation legislation and the anticipation that the economic entity will derive sufficient future assessa�le income to ena�le the �enefit to �e realised and comply with the conditions of deducti�ility imposed �y the law�

Tax consolidation

�lac��all Limited has elected to form a ta� consolidated group with its wholly�owned entities for income ta� purposes under the ta� consolidation regime with effect from 1 �anuary 2011� As a consequence� all mem�ers of the ta� consolidated group are ta�ed as a single entity from that date� �he head entity within the ta� consolidated group is �lac��all Limited�

In addition to its own current and deferred ta� amounts� �lac��all Limited also recognises the current ta� lia�ilities (or assets) and the deferred ta� assets arising from unused ta� losses and unused ta� credits assumed from controlled entities in the ta� consolidated group in con�unction with any ta� funding arrangement amounts�

�he Group recognises deferred ta� assets arising from unused ta� losses of the ta� consolidated group to the e�tent that it is pro�a�le that future ta�a�le profits of the ta� consolidated group will �e availa�le against which the asset can �e utilised�

Any su�sequent period ad�ustments to deferred ta� assets arising from unused ta� losses as a result of revised assessments of the pro�a�ility of recovera�ility is recognised �y the head entity only�

Assets or lia�ilities arising under ta� funding agreements with the ta� consolidated entities are recognised as amounts receiva�le from or paya�le to other entities in the Group�

GST

Revenues� e�penses and assets are recognised net of the amount of GS�� e�cept where the amount of GS� incurred is not recovera�le from the Australian �a�ation Office� In these circumstances the GS� is recognised as part of the cost of acquisition of the asset or as part of an item of the e�pense� Receiva�les and paya�les in the �alance sheet are shown inclusive of GS��

Cash flows are presented in the cash flow statement on a gross �asis� e�cept for the GS� component of investing and financing activities� which are disclosed as operating cash flows�

Equity

Ordinary shares are classified as equity� Incremental costs directly attri�uta�le to the issue of new shares or options are shown in equity as a deduction� net of ta�� from the proceeds�

32 BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

FINANCIAL STATEMENTS

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

Dividends

�he final dividend for �une period is declared and authorised after the end of the reporting period� therefore provision for dividend is not �oo�ed in the current year accounts�

EPS

�he Group presents �asic and diluted EPS data for its ordinary shares� �asic EPS is calculated �y dividing the profit or loss attri�uta�le to ordinary shareholders of the Company �y the weighted average num�er of ordinary shares outstanding during the year� Diluted EPS is determined �y ad�usting the profit or loss attri�uta�le to ordinary shareholders and the weighted average num�er of ordinary shares outstanding for the effects of all dilutive potential ordinary shares�

Comparative figures

�hen required �y Accounting Standards� comparative figures have �een ad�usted to conform to changes in presentation for the current financial year� Any change of presentation has �een made in order to ma�e the financial statements more relevant and useful to the user�

New Accounting Standards and Interpretations

Certain new accounting standards and interpretations have �een pu�lished that are not mandatory for the current reporting period� �he Group’s assessment of the impact of these new standards and interpretations is set out �elow�

AASB 9 Financial Instruments (effective for annual reporting periods beginning on or after 1 January 2018)

�he Group has early adopted the AAS� 9 on 1 �anuary 2013 e�cept for the new hedging rules which will not have any material effects to the Group’s financial statements�

AASB 15 Revenue from Contracts with Customers (effective for annual reporting periods beginning on or after 1 January 2018)

�he new standard is �ased on the principle that revenue is recognised when control of a good or service transfers to a customer� �he Group is currently assessing the effects of applying the new standard on the financial statements and has not identified any material changes�

IFRS 16 Leases (effective for annual reporting periods beginning on or after 1 January 2019)

�he new standard introduces a single lessee accounting model and requires a lessee to recognise assets and lia�ilities for all leases with a term of more than 12 months� unless the underlying asset is of low value� �he standard also requires enhanced disclosure to �e provided �y lessors that will improve information disclosed a�out a lessor’s ris� e�posure� particularly to residual ris�� ith the Group’s continued e�pansion� management is currently assessing the impact of applying the new standard on the Group’s accounts�

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

DIRECTORS’ REPORT (Part 2)

�his Part 2 continues from Directors’ Report (Part 1) from pages 3 to ��

Information on Officeholders

�he names of the Officeholders during or since the end of the year are set out �elow� �nless otherwise stated� Officeholders have �een in office since 20 Octo�er 2010�

Name and Position	Special Experience
Richard �ill	Richard �ill has e�tensive investment �an�ing e�perience and was the founding
Non�E�ecutive Director and	partner of the corporate advisory firm �ill �oung � Associates� Richard has
Chairman	invested in the Group’s pro�ects since the early 1990s� Prior to forming �ill �oung�
	Richard held a num�er of Senior E�ecutive positions in �ong �ong and New �or�
	with �S�C� �e was admitted as an attorney in New �or� State and was registered
	�y the �S Securities � E�change Commission and the Ontario Securities
	Commission� �e is the Chairman of Sirte� �edical Limited listed on the ASX� In
	addition Richard is Chairman of the �estmead �illennium Institute for �edical
	Research�
�oseph (Seph) Glew	Seph has wor�ed in the commercial property industry in New �ealand� the �SA
Non�E�ecutive Director	and Australia� Seph has driven large scale property development and financial
	structuring for real estate for over 30 years� In addition� since the early 1990s
	Seph has run many �turn�around� processes in relation to distressed properties
	and property structures for �oth private and institutional property owners�
	�hile wor�ing for the �ousing Corporation of New �ealand and then A�P� Seph
	qualified as a registered valuer and holds a �achelor of Commerce� In the 1980s
	he served as an E�ecutive Director with New �ealand �ased property group Chase
	Corporation and as a Non�E�ecutive Director with a num�er of other listed
	companies in New �ealand and Australia�
Ro�in �edder	Ro�in has wor�ed in finance and investment since 19�6 during which time he has
Non�E�ecutive Director	served as the CEO of an investment �an� and as non e�ecutive director on the
	�oards of pu�lic and private companies in �an�ing� insurance� funds management�
	property� healthcare� retail and wine� �e was a mem�er of ASX for many years� �e
	is the Chairman of investment company �intage Capital and has �een an investor
	in �lac��all Group pro�ects since 199�� Ro�in is also the Chairman of the
	�lac��all �oard Audit Committee�
Stuart �rown	Stuart has �een involved in property investment for over 18 years� Stuart has run
E�ecutive Director and Chief	de�t and equity raising in relation to listed and unlisted real estate structures
E�ecutive Officer	with over a half a �illion dollars in value�
	In his earlier career� Stuart practised as a solicitor in the areas of real estate�
	mergers and acquisitions and corporate advisory with �allesons and Gil�ert �
	�o�in� Stuart is also an independent Director of Coogee �oys’ Preparatory School
	and Randwic� District Rug�y �nion Foot�all Clu��

34 BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

DIRECTORS’ REPORT (Part 2)

Caroline Raw Company Secretary Since 18 Fe�ruary 2015

Caroline has practised as a solicitor in NS� since 2005 and has wor�ed predominantly on IPOs� pu�lic and private capital raisings� funds management� corporate advisory� ta�eovers and mergers and acquisitions� Caroline holds a �achelor of Commerce� �achelor of Laws and Graduate Diploma in Applied Corporate Governance� Caroline is also a Chartered Secretary and Associate �em�er of the Governance Institute of Australia�

Meeting Attendances

Director	No. of Board	Board Meeting
	Meetings Held	Attendance
Richard �ill	10	10
SephGlew	10	10
Ro�in �edder	10	10
Stuart�rown	10	10

�he Audit Committee� comprised of Seph Glew and Ro�in �edder� met twice during the reporting period� �oth committee mem�ers attended each meeting�

Environmental Regulation

�he Group’s operations are not regulated �y any environmental regulation under a law of the Commonwealth or of a State or a �erritory other than those that pertain to the ownership and development of real estate�

Indemnities of Officers

During the financial year the Group has paid premiums to insure each of the Directors named in this report along with Officers of the Group against all lia�ilities for costs and e�penses incurred �y them in defending any legal proceedings arising out of their conduct while acting in the capacity of Director or Officer of the Group� other than conduct involving a wilful �reach of duty�

No indemnities have �een given or insurance premiums paid� during or since the end of the financial year� for any person who is or has �een an auditor to the Group�

Corporate Governance Statement

A description of the Group’s current corporate governance practices is set out in the Group’s corporate governance statement which can �e viewed at http��www��lac�wall�com�au�a�out�us�html�

Auditor and Non�audit Services

�8�250 was paid to the auditor for non�audit services during the year (2015� �11�450) as detailed in the Auditor’s Remuneration note of the financial statements� �he Directors are satisfied that the provision of non�audit services is compati�le with the general standard of independence for auditors imposed �y the Corporations Act 2001� �he nature and scope of each type of non�audit service provided means that auditor independence was not compromised�

A copy of the auditor’s independence declaration as required under Section 30�C of the Corporations Act 2001 is set out in these financial statements�

ES� continues in office in accordance with section 32� of the Corporations Act 2001�

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

DIRECTORS’ REPORT (Part 2)

Rounding of Amounts

�he Group is a group of the �ind referred to in ASIC Class Order 2016�191� and in accordance with that Class Order� amounts in the Directors’ Report and the financial statements are rounded off to the nearest thousand dollars� unless otherwise indicated�

Remuneration Report (Audited)

�he �oard is responsi�le for determining the remuneration of ��P� For the reporting period the �oard has determined that ��P included the Chief E�ecutive Officer and the Chief Financial Officer� ��P determine the senior e�ecutive and employees’ remuneration�

�hen determining the remuneration of ��P� senior e�ecutives or employees� the following is ta�en into consideration�

remuneration is aligned with the delivery of returns to shareholders�
responsi�ilities� results� innovation and entrepreneurial �ehaviour are recognised and rewarded� and
the Group’s financial position and mar�et conditions�

�he remuneration paya�le to ��P is reviewed at times deemed appropriate �y the �oard� �here are no performance conditions for �oard mem�ers or contracts for ��P� Any performance payments are at the discretion of the �oard� �he nature and the amount of each element of remuneration paid to the �oard mem�ers and ��P for the reporting period are listed �elow�

	Short term Directors’ fees Salary and other Post�employment superannuation Total 2016 2015 2016 2015 2016 2015 2016 2015 $ $ $ $ $ $ $ $
Richard�ill	85�000 85�000 � � � � 85�000 85�000
SephGlew	�5�000 �5�000 � � � � �5�000 �5�000
Ro�in �edder	�5�000 �5�000 � � � � �5�000 �5�000
Stuart �rown	� � 321�606 321�405 30�000 30�201 351�606 351�606
�im �rown	� � 200�913 199�312 19�08� 18�935 220�000 218�24�
Total	235,000 235,000 522,519 520,717 49,087 49,136 806,606 804,853

Share options

(a) Unissued ordinary options

�he following options are currently on issue�

	Expiry date	Issue price of shares	Number under option
Stuart �rown (� Option)	30 �une 2018	35 cents	2�000�000
Employees�	15 �uly2019	60 cents	2�000�000
�See ASX announcement on 15 July 2016

36 BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

DIRECTORS’ REPORT (Part 2)

(b) Shares issued on the exercise of options

�he following ordinary shares were issued during the year on the e�ercise of the A Options (granted in Octo�er 2013)� No further shares have �een issued since 30 �une 2016� No amounts are unpaid on any of the shares�

	Issue price of shares	Number of shares issued
Richard �ill	25 cents	250�000
Seph Glew	25 cents	200�000
Ro�in �edder	25 cents	200�000
Stuart �rown	25 cents	900�000
�im �rown	25 cents	395�000
Total		1,945,000

Directors and KMPs’ Relevant Interests

Details of each ��P’s relevant interests in the Company are shown �elow�

	14 August 2015	Net change	*5 August 2016 **
Richard �ill	1�66��686	250�000	1�91��686
Seph Glew	9�253�510	24��420	9�500�930
Ro�in �edder	8�442�502	264��29	8��0��231
Stuart �rown	2�200�230	962�420	3�162�650
�im �rown	533�141	395�000	928�141
Total	22,097,069	2,119,569	24,216,638

* Same holdings as at 30 June 2016

Signed in accordance with a resolution of the �oard of Directors�

==> picture [88 x 43] intentionally omitted <==

Stuart Brown Director

Sydney� 15 August 2016

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

==> picture [187 x 137] intentionally omitted <==

Auditor’s Independence Declaration Under Section 307C of the Corporations Act 2001

As auditor for the audit of Blackwall Limited and its Controlled Entities for the year ended 30 June 2016, I declare that, to the best of my knowledge and belief, there have been:

(i) no contraventions of the auditor’s 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.

Dated at Sydney the 12[th] day of August 2016.

==> picture [43 x 26] intentionally omitted <==

ESV Accounting and Business Advisors

==> picture [107 x 34] intentionally omitted <==

Chris Kirkwood Partner

==> picture [595 x 81] intentionally omitted <==

DIRECTORS’ DECLARATION

In the Directors’ opinion�

(a) the financial statements and notes are in accordance with the Corporations Act 2001� including�
(i) complying with Accounting Standards� the Corporations Regulations 2001 and other mandatory professional reporting requirements� and
(ii) giving a true and fair view of the consolidated entity’s financial position as at 30 �une 2016 and of its performance for the financial year ended on that date� and
(�) there are reasona�le grounds to �elieve that the Group will �e a�le to pay its de�ts as and when they �ecome due and paya�le�

�he Statement of Significant Accounting Policies confirms that the financial statements also comply with International Financial Reporting Standards as issued �y the International Accounting Standards �oard�

�he Directors have �een given the declarations �y the Chief E�ecutive Officer and Chief Financial Officer required �y section 295A of the Corporations Act 2001�

�his declaration is made in accordance with a resolution of the �oard of Directors�

==> picture [90 x 43] intentionally omitted <==

Stuart Brown Director Sydney� 15 August 2016

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

ASX ADDITIONAL INFORMATION

Additional information required �y the Australian Securities E�change and not shown elsewhere in this report is as follows� �he shareholder information set out �elow was current as at 5 August 2016�

1. Shareholders

�he Company’s top 20 largest shareholdings were�

	Investor	Ordinary Shares (No.)	Shares (%)
1	�intage Capital Pty Limited	5�413�800	10�34
2	Seno �anagement Pty Ltd �Seno Super Fund A�C�	5�300�000	10�13
3	Lym�eesh Pty Ltd �Employees Super Fund A�C�	4�304��42	8�22
4	I�OP Pty Ltd ��eppel Investments �nit A�C�	2�859�1�5	5�46
5	Sandhurst �rustees Ltd �AI�S PSF A�C�	2��62�000	5�28
6	�oonta Pty Ltd ��oonta Super Fund Account�	2�216�011	4�23
�	Frogstorm Pty Ltd ��he Roc�ahula A�C�	1�890�223	3�61
8	�agar Property Consultants Pty Limited	1�464�581	2�80
9	Sao Investments Pty Ltd	1�428�262	2��3
10	�c�ullin Nominees Pty Ltd	1�213��13	2�32
11	Pinnatus Pty Ltd	1�141�088	2�18
12	�r Richard �ill � �rs Evelyn �ill �Richard �ill Super Fund A�C�	1�123�604	2�15
13	�in24 �usiness Advisors Pty Limited	1�06��420	2�04
14	�ethuselah Capital �anagement Pty Ltd �Feldman Family A�C�	805�412	1�54
15	Glenahilty Limited	��2�088	1�48
16	I P R Nominees Pty Ltd �1965 Irvin Peter Roc�man A�C�	�55��81	1�44
1�	�ampopo Pty Ltd ��he �ill Family A�C�	�54�082	1�44
18	�rue�ell Capital Pty Ltd ��rue�ell Investment Fund A�C�	600�000	1�15
19	�PG Funds �anagement Ltd	591��3	1�13
20	�S�C Custody Nominees (Australia) Limited	501�3�1	0�96

40 BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

ASX ADDITIONAL INFORMATION

2. Distribution of Shareholders

�he distri�ution of shareholders �y si�e of holding was�

Category	No. of Shareholders
1�1�000	233
1�001�5�000	509
5�001�10�000	205
10�001�100�000	201
100�001and over	50
Total number of shareholders	1,198

�lac��all has 1�8 holders of less than a mar�eta�le parcel� �he Company has 52�340�445 ordinary shares on issue� All shares carry one vote per share without restrictions� All shares are quoted on the Australian Securities E�change (ASX� ��F)�

3. Substantial Shareholders

�he Company’s su�stantial shareholders are set out �elow�

Investor	Ordinary Shares (No.)	Shares (%)
�R (Seph) Glew	9�500�930	18�15
Ro�in �edder	8��0��231	16�64
Paul �residder	8�489�6�2	16�22
I�OP Pty Limited ��eppel Investments �nit A�C�	5�130�83�	9�80
Stuart �rown	3�162�650	6�04
Sandhurst �rustees Ltd �AI�S PSF A�C�	2��62�000	5�28

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

GROUP DETAILS

�he Group’s details are as follows�

Registered office and principal place of �usiness	Level 1� 50 �eo Street Neutral �ay NS� 2089
�elephone	�612 9033 8611
Fa�	�612 9033 8600
�e�sites	www��lac�wall�com�au www�wotsowor�space�com�au
Registry	Computershare Investor Services Pty Limited GPO �o� 29�5 �el�ourne �IC 3001 www�computershare�com�au �elephone� �613 9415 4329

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

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Independent Audit Report to the Members of Blackwall Limited and Controlled Entities

Report on the Financial Report

We have audited the accompanying financial report of Blackwall Limited and Controlled Entities ("the Group"), which comprises the statement of financial position as at 30 June 2016, the statement of profit or loss and other comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, notes comprising a summar� of si�nificant accountin� po�icies and other e�p�anator� information� and the directors’ dec�aration of the Group.

Directors' Responsibility for the Financial Report

The directors of the Group 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 controls 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 30, 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 .

Auditor's Responsibility

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 in the financial report� �he procedures se�ected depend on the auditor’s �ud�ement� i ncluding the 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 Group ’s preparation of the financia� report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group ’s interna� contro�� n audit a�so inc�udes eva�uatin� the appropria teness 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.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001 . We confirm that the independence declaration required by the Corporations Act 2001 , which has been given to the directors of the Group � �ou�d �e in the same terms if �iven to the directors as at the time of this auditor’s report�

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Independent Audit Report to the Members of Blackwall Limited and Controlled Entities

Opinion

In our opinion:

(a) the financial report of Blackwall Limited and Controlled Entities is in accordance with the Corporations Act 2001 , including:
(i) giving a true and fair view of the financial position of the Group for the year ended 30 June 2016 and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001 .
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 30.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 36 to 37 of part 2 to the directors' report, for the year ended 30 June 2016. The directors of the Group are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Opinion

In our opinion, the Remuneration Report of Blackwall Limited and Controlled Entities for the year ended 30 June 2016 complies with section 300A of the Corporations Act 2001 .

Dated at Sydney the 15[th] day of August 2016.

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ESV Accounting and Business Advisors

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Chris Kirkwood Partner

CONTENTS - Notes to the Financial Statements

1�	Segment Information	Page 12
2�	Revenue	Page 12
3�	E�penses	Page 12
4�	Income �a� E�pense	Page 13
5�	Current Assets – Cash and Cash Equivalents	Page 13
6�	Current Assets – �rade and Other Receiva�les	Page 13
��	Current Assets – Investment Properties	Page 14
8�	Non�current Assets – Financial Assets	Page 14
9�	Non�current Assets – Property� Plant and Equipment	Page 15
10�	Non�current Assets – Equity Accounted Investments	Page 15
11�	Current Lia�ilities – �rade and Other Paya�les	Page 16
12�	Current Lia�ilities � Current �a� Paya�le	Page 16
13�	Current and Non�current Lia�ilities – Provisions	Page 16
14�	Current Lia�ilities – �orrowings	Page 16
15�	Non�current Lia�ilities – Other Paya�les	Page 1�
16�	Non�current Lia�ilities – Deferred �a� Lia�ilities	Page 1�
1��	Share Capital and Reserves	Page 1�
18�	Dividends	Page 18
19�	Earning Per Share	Page 18
20�	Auditor’s Remuneration	Page 18
21�	Commitments	Page 19
22�	Reconciliation of Operating Cash Flows	Page 19
23�	Contingencies	Page 19
24�	Su�sequent Events	Page 19
25�	Controlled Entities	Page 20
26�	Related Party �ransactions	Page 20
2��	Parent Entity Information	Page 22
28�	Financial Ris� �anagement	Page 22
29�	Critical Accounting Estimates and �udgments	Page 24
30�	Statement of Significant Accounting Policies	Page 25

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

GLOSSARY

APG APG Asset �anagement Pty Ltd �lac��all ��F�Company �lac��all Limited (formerly �nown as �lac�wall Property Funds Limited) ��R �lac��all Property �rust Consolidated annual financial report Financial statements EPS Earnings per share Financial assets Financial assets at F��PL F��PL Fair value through profit and loss Group �lac��all Limited � su�sidiaries GS� Goods and services ta� IFRS International Financial Reporting Standards ��P �ey management personnel N�A Net tangi�le assets p�a� Per annum SP� Special purpose vehicles sqm Square metre �O�SO Adelaide 21� Flinders Street� Adelaide� South Australia �O�SO �ris�ane 84 �runswic� Street� Fortitude �alley� �ueensland

BlackWall Limited - Consolidated Annual Financial Report For The Year Ended 30 June 2016

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& Controlled Entities ACN 146 935 131 ABN 37 146 935 131

Level 1, 50 Yeo Street, Neutral Bay, Sydney NSW 2089 Australia PO Box 612, Neutral Bay, Sydney NSW 2089 Australia

www��lac�wall�com�au

AI assistant

BLACKWALL LIMITED — Annual Report 2016

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Financial Report

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BlackWall’s Balance Sheet

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Share Buy�Back

Subsequent Events And Significant Changes in Affairs

BlackWall Limited and Controlled Entities

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Consolidated Statement of Financial Position

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

BlackWall Limited and Controlled Entities

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

1. Segment Information

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

4. Income Tax Expense

5.

6. Current Assets � Trade and Other Receivables

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

7. Current Assets – Investment Properties

8. Non�current Assets – Financial Assets

(b) BlackWall Property Trust

(c) Bakehouse Bonds

(d) Pelathon Pub Group

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

9. Non�current Assets � Property, Plant and Equipment

10. Non�current Assets � Equity Accounted Investments

BlackWall Limited and Controlled Entities

Notes to the Financial Statements

11. Current Liabilities � Trade and Other Payables

12. Current Liabilities � Current Tax Payable

13.

14.

BlackWall Limited and Controlled Entities

Notes to the Financial Statements

BlackWall Limited and Controlled Entities

Notes to the Financial Statements

BlackWall Limited and Controlled Entities

21. Commitments

(a) Operating lease commitments

(b) Capital lease commitments

22. Reconciliation of Operating Cash Flows

23. Contingencies

24. Subsequent Events

BlackWall Limited and Controlled Entities

25. Controlled Entities

Associates

Managed Funds

Fees and Transactions

BlackWall Limited and Controlled Entities

Notes to the Financial Statements

For the Year Ended 30 June 2016

(b) Interests in Related Parties

(c) Key management personnel compensation

BlackWall Limited and Controlled Entities

ABN 37 146 935 131

Notes to the Financial Statements

For the Year Ended 30 June 2016

27. Parent Entity Information

28. Financial Risk Management

(b) Sensitivity analysis

BlackWall Limited and Controlled Entities

BLACKWALL LIMITED Annual Report 2016

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