FUTURE GENERATION AUSTRALIA LIMITED - Annual Report 2007

Total pages: 94

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Results announcement

Australian Infrastructure Fund (AIX)

29 August 2007

Appendix 4E – Report for the year ended 30 June 2007

Please find enclosed the following documents:

A. Results for announcement to the market
B. Commentary on the results
C. Financial report for the year ended 30 June 2007
D. Audit information

For further enquiries, please contact:

Peter McGregor Chief Operating Officer

Australian Infrastructure Fund Tel: +61 3 9654 4477 Fax: +61 3 9650 6555 Email: [email protected] Website: www.hfm.com.au

Simon Ondaatje

Head of Investor Relations

Hastings Funds Management Tel: +61 3 9654 4477 Fax: +61 3 9650 6555 Email: [email protected] Website: www.hfm.com.au

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Claire Filson Company Secretary Australian Infrastructure Fund

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Australian Infrastructure Fund Appendix 4E Report for the year ended 30 June 2007

A. Results for announcement to the market

	Change from		Year to	Year to
	previous		30 June	30 June
	corresponding		2007	2006
	period		($’000)	($’000)
Revenues from ordinaryactivities(1)	Up42%	to	185,853	131,313
Revenue from ordinaryactivities excludingunrealisedgains and losses	Up13%	to	55,798	49,296
Profit from ordinaryactivities after tax attributable to members	Up54%	to	168,157	109,516
Netprofit for theperiod attributable to members	Up54%	to	168,157	109,516
Net cash flows from operating activities(2)	Up 41%	to	45,465	32,252

(1) Results for 2006 have been restated due to a reclassification from capital repayments to distribution income following year end.

(2) Net cash flows from operating activities increased due to higher dividends, distributions and interest income being offset only marginally by a slight increase in operating expenses.

Refer to Section B for commentary on the results.

		Franked
		amount per	Tax-deferred
	Amount	security	amount per
Distributions(1)	per security	at 30% tax	security
Distributions for theyear ended 30 June 2007
Final distribution – 30 June 2007	8.00 cents	3.72 cents	0.47 cents
Interim Distribution – 31 December 2006	7.50 cents	3.14 cents	3.71 cents
Distributions for theyear ended 30 June 2006
Final distribution – 30 June 2006	7.50 cents	3.53 cents	2.41 cents
Interim Distribution – 31 December 2005	7.00 cents	2.96 cents	3.86 cents
Record date for determiningentitlements to the distribution			29 June 2007
Distributionpayment date			30 August 2007
Price of stapled securities to be issued under AIX’s distribution reinvestment plan (DRP)(2)			$3.17

(1) For tax purposes please refer to the end of year tax statement which will be distributed on 30 August 2007. This statement will provide a more detailed account of the tax components of the 2007 financial year distributions.

(2) The DRP issue price will apply to the distribution payable to AIX securityholders on 30 August 2007 for those investors who were registered as participants in the DRP at 29 June 2007.

	Change from
	previous
	corresponding	30 June	30 June
Key performance indicators	period	2007	2006
Net tangible asset backing	Up12%	265.22 cents	236.40 cents
Stapled security price	Up 58%	329.00 cents	208.00 cents

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Australian Infrastructure Fund Appendix 4E Report for the year ended 30 June 2007

B. Commentary on the results

AIX has today announced a record annual Net Profit after Tax of $168.2 million for the year to 30 June 2007. This represents an increase of 54 percent over the financial year ended 30 June 2006.

Total revenue increased by 42 percent to $185.9 million. Dividends, distributions and interest generated by the asset portfolio increased by 17 percent to $57.8 million, whilst unrealised gains in the portfolio increased by 59 percent to $130.1 million.

Net cash flows from operating activities increased by 41 percent to $45.5 million, and the book value (NTA) of the portfolio increased by 12 percent to $2.65.

AIX Chairman, Mr Paul Espie, noted “The Directors of AIX are delighted to have reported such a strong profit result today. It reflects the quality of the assets within the portfolio, and the benefits of AIX’s approach over recent years of continuing to invest in growth opportunities within the existing portfolio.

In line with the strong performance of the portfolio, Directors declared a distribution of 8.0 cents per stapled security. The distribution will be paid on 30 August 2007, bringing distributions to a total of 15.5 cents for the 2007 financial year, up from 14.5 cents for the 2006 financial year. Consistent with AIX’s distribution policy, these distributions were fully funded from portfolio cashflows, after payment of fund expenses.”

AIX Chief Operating Officer, Peter McGregor, added “AIX’s portfolio of assets performed strongly during 2007. The gross return generated by the portfolio for the year was 23.7 percent, comprising unrealised gains, cash flow and tax credits. This is above the long-term annualised return of 19.5 percent generated by the current portfolio of assets over the period of AIX ownership, highlighting the strong performance during the year.

The four core airport assets in the portfolio - Perth Airport, HOCHTIEF AirPort Capital (HTAC), APAC[1] and Queensland Airports (QAL) – were again the key contributors to portfolio performance, collectively accounting for 83.6 percent of total returns for the year.

During the year, a total of 115.1 million passengers passed through airports in which AIX holds an investment. This represents an increase of 7.1 percent over the previous corresponding period. This level of passenger growth exceeds the long-term growth industry trend both domestically and internationally, and highlights the benefits of quality and diversity within the portfolio.”

Key highlights for the year ended 30 June 2007

Strong total cash flow (including both operating cash flow and capital returns) from the asset portfolio of $74.8 million, an increase of 9.1 percent over the financial year ended 30 June 2006. Key contributors included HTAC ($17.6 million), QAL ($13.8 million), Perth Airport ($13.1 million) and APAC ($8.4 million).
Improved passenger numbers across the airport portfolio, with Perth (up 13.4 percent), NT Airports (up 12.2 percent) and Athens (up 9.2 percent) particularly strong.
Completion of a number of key development projects including the Gold Coast Airport runway extension, the Port of Portland mineral sands facility and the Darwin Airport Bunnings Warehouse project, together with a substantial pipeline of announced new growth initiatives within the portfolio.
Continued development of AIX portfolio companies’ substantial land holdings on behalf of commercial and industrial tenants.

Outlook

AIX remains well placed to continue to deliver growth and value to investors. Expectations of a positive environment for airport passenger movements, combined with a range of development options within the existing asset base, and a conservative capital structure (that will allow for further funding of growth initiatives and active capital management) should underpin longer term growth and value for investors.

1 APAC comprises Melbourne and Launceston Airports.

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Australian Infrastructure Fund Appendix 4E Report for the year ended 30 June 2007

B. Commentary on the results continued

Performance

The table below summarises the performance of the assets in the portfolio for the year and since inception.

	Gross cash flow	Gross cash flow
		contribution
Transport Value 30/06/07 ($’000) (1) Dividends, distributions and interest ($’000) Returns of capital/loan repayments ($’000) Franking credits ($’000) Revaluation during period ($’000) (2) Return for the year to 30/06/07 %pa (3) Return since inception %pa (4)
Airports
Perth Airport 233,400 3,062 10,069 - 31,400 22.43 19.82
HOCHTIEF AirPort Group 227,579 17,611 - - (4,596) 3.05 10.37
APAC 197,400 8,352 - 3,580 36,300 30.42 26.94
Queensland Airports 161,700 8,861 4,906 2,799 51,600 62.46 60.78
NT Airports 46,000 2,883 - 1,236 9,200 37.86 28.46
Total Airports 866,079 40,769 14,975 7,615 123,904 24.69 23.26
Seaports
Port of Portland Holdings(5)(6) 47,000 7,795 - 3,341 (2,100) 19.84 29.78
Port of Geelong (6) 19,800 3,310 - 129 100 19.96 28.72
DP World Adelaide(7) - 2,424 - 379 (2,604) 29.95 134.07
Total Seaports 66,800 13,529 - 3,849 (4,604) 20.17 32.48
Roads and Rail
Statewide Roads 20,700 2,598 - 1,113 600 22.12 10.16
Metro Light Rail and Monorail 2,600 129 19 49 (3,100) -53.76 -30.56
Total Roads and Rail 23,300 2,727 19 1,162 (2,500) 5.08 1.71
Cash and Other n/a 2,825 - n/a n/a n/a n/a
TOTAL PORTFOLIO(8) 956,179 59,850 14,994 12,626 116,800 23.73 19.46

(1) Investment value includes accrued interest as at 30 June 2007.

(2) The revaluation amount during the period for each asset reflects the underlying change in the asset’s value taking into account accrued interest, distribution and dividends, foreign exchange gains and losses and adjustments to separate out the effect of shareholder loan repayments and returns of capital which are shown separately.

(3) The internal rate of return (IRR) for the year to 30 June 2007 reflects the percentage return on investment for each asset over the year based on the gross return on assets including franking credits received by AIX.

(4) The IRR since inception reflects the annualised percentage return on investment for each asset based on the gross return on assets including franking credits received by AIX.

(5) Port of Portland Holdings comprises investments in Port of Portland Pty Ltd and Technical Services Agreements for Perth Airport.

(6) Investment value includes accrued distributions as at 30 June 2007.

(7) DP World Adelaide was divested from the AIX portfolio in February 2007.

(8) The total portfolio return and valuation as at 30 June 2007 is for the current portfolio of transport assets and does not include cash held on deposit or other assets previously held within the portfolio.

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Australian Infrastructure Fund Appendix 4E Report for the year ended 30 June 2007

C. Australian Infrastructure Fund financial report for the year ended 30 June 2007

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AUSTRALIAN INFRASTRUCTURE FUND LIMITED (A.B.N. 97 063 935 553)

AUSTRALIAN INFRASTRUCTURE FUND TRUST (A.R.S.N. 089 889 761)

ANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED 30 JUNE 2007

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AUSTRALIAN INFRASTRUCTURE FUND LIMITED

DIRECTORS’ REPORT

The directors of Australian Infrastructure Fund Limited (the Company or AIFL) submit their report for the year ended 30 June 2007.

STRUCTURE OF FINANCIAL REPORT

The ordinary shares issued by AIFL are stapled to the units issued by Australian Infrastructure Fund Trust (the Trust). The combined entity of the Company and the Trust is known as the Australian Infrastructure Fund (AIX). On 6 March 1997, the stapled securities of AIX were listed on the Australian Stock Exchange (ASX) (ASX code: AIX). For the purpose of preparing a consolidated financial report that combines the assets and liabilities of the Company and the Trust, AIFL is identified as the parent entity.

Hastings Funds Management Limited (Hastings) is the manager of the Company and Responsible Entity of the Trust.

The financial report includes:

Consolidated AIFL: Represents the entire AIX group, consisting of the Company and the consolidated Trust (AIX);
AIFL: Represents the stand alone financial statements of the Company;
Consolidated AIFT: Represents the consolidated financial statements of the Trust and its controlled entities; and
AIFT: Represents the stand alone financial statement of the Trust.

The above financial statements are presented in adjacent columns in a single financial report in accordance with the option available under ASIC Class Order 05/642.

DIRECTORS

The names of the directors of the Company in office during the year and at the date of this report are set out below.

Paul Espie Chairman John Harvey Robert Humphris Appointed 11 September 2006 Mike Hutchinson Peter McGregor Appointed 20 June 2007 Robert Tsenin

Particulars of the skills, experience, expertise and responsibilities of the directors at the date of this report, including all directorships of other ASX listed companies held by a director at any time in the past three years, are set out in the Annual Report.

Two directors held office during the year but who have since resigned from the Board are:

Barry Capp – retired 27 November 2006

Qualifications: BE, BCom, BA

Barry Capp was employed for many years in financial and commercial roles and has worked as a nonexecutive director on a number of public company boards. Previously Barry was Chairman of National Foods Limited and AIFL, a director of Melbourne University Private Ltd and Westpac Banking Corporation.

Tim Poole, Managing Director – resigned 15 June 2007

Qualifications: BCom, ACA

Tim Poole joined Hastings in November 1995 and was appointed Managing Director in July 2005. Prior to this he was a Director of the private equity group and was involved in sourcing, assessing and managing new investment opportunities for the Hastings Private Equity Fund. His work with Hastings also involved investing, managing and exiting investments in the Hastings infrastructure business. He was a director of several Hastings managed funds and investee companies including Australian Pacific Airports Corporation and Epic Energy. He was also responsible for the establishment and ASX listing of AIX in 1997. Tim was appointed Chairman of Asciano Limited on 15 June 2007.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED

DIRECTORS’ REPORT

COMPANY SECRETARIES

The names and details of the Company Secretaries of the Company in office during the financial year and until the date of this report are set out below. The Company Secretaries were in office for this entire period.

Claire Filson

Qualifications: LLB, MBA, Grad Dip CSP, FCIS, MAICD

Claire Filson joined Hastings in June 2005. She has worked for over 20 years’ in private and corporate legal practice, gaining considerable financial services and company secretarial experience. Prior to joining Hastings she was Company Secretary of AXA Asia Pacific Holdings Limited and Bonlac Foods Limited. At Hastings she is responsible for the company secretarial and compliance function.

Kim Rowe

Qualifications: BCom, ACA

Kim Rowe is a Chartered Accountant and has over 10 years’ experience in the financial services industry, initially as an auditor. On joining Hastings in 1999, she assumed compliance and company secretarial responsibilities. She has been Company Secretary of Hastings since August 2004.

REPORT ON THE BUSINESS

Principal activity

The principal activity of AIX during the year was to invest in infrastructure investments so as to maximise income and capital return to investors. There has been no change in the principal activity of AIX during the year.

Review of results and operations

A review of the operations of AIX for the financial year ended 30 June 2007 is set out in the Annual Report.

The profit after income tax attributable to securityholders of AIX for the year ended 30 June 2007 was $168,157,000 (2006 – $109,516,000).

Distributions and Dividends

A final AIX dividend and distribution of $29,983,000 (8.00 cents per stapled security) was declared for the six months ended 30 June 2007 and is payable on 30 August 2007 (six months to 30 June 2006 – 7.50 cents per stapled security).

An interim AIX dividend and distribution of $27,887,000 (7.50 cents per stapled security) was declared by AIX for the six months ended 31 December 2006 and was paid on 27 February 2007 (six months to 31 December 2005 – 7.00 cents per stapled security).

Significant changes in the state of affairs

In the opinion of the directors, during the year, there was no significant change in the state of affairs of AIX other than that referred to in the financial statements or notes thereto.

Events after the end of the financial year

There has not been any matter or circumstance, other than that referred to in the financial statements or notes thereto, that has arisen since the end of the year, that has significantly affected, or may significantly affect, the operations of AIX, the results of those operations, or the state of affairs of AIX in future financial years.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED

DIRECTORS’ REPORT

Likely developments and expected results

AIX expects the 2008 financial year and beyond, notwithstanding market competition, to continue to provide opportunities of which the fund is well positioned to take advantage.

The key focus of AIX to deliver growth and value to investors will include:

Ongoing management of portfolio assets , with a focus on maximising returns to AIX from existing operations. There are also significant opportunities to develop additional revenue streams across the airport portfolio, most notably in terms of retail, car parking and property development.
Active capital management , with a focus on reducing AIX’s cost of capital and providing funding for expansionary capital expenditure.
New acquisition opportunities for the fund. AIX will continue to seek value for securityholders through increased scale and diversity but these considerations will remain secondary to considerations of asset quality and transaction value. AIX’s pre-emptive rights and strategic industry partnerships are expected to provide significant sources of new opportunities within Australia and internationally.

Business strategies and prospects

Information on AIX’s business strategies and its prospects for future financial years is included in the AIX Annual Report. In the opinion of the directors, further information on AIX’s business strategies and its prospects for future financial years would, if included in this report, be likely to result in unreasonable prejudice to AIX and has accordingly been omitted.

DIRECTORS’ MEETINGS

The number of meetings of directors (including meetings of committees of directors) held during the year and the number of meetings attended by each director is shown in the table below.

	AIFL Board Meetings	AIFL Board Meetings	AIFL Board Meetings	AIFL Board Meetings	AIFL Audit Committee meetings	AIFL Audit Committee meetings
	Scheduled meetings		Extraordinary meetings ~~(1)~~
	Meetings held while a director	Number of meetings attended	Meetings held while a director	Number of meetings attended	Meetings held while a director	Number of meetings attended
Paul Espie	7	7	8	7	3	3
Barry Capp ~~(2)~~	3	2	5	4	*	*
John Harvey	7	7	8	6	3	3
Robert Humphris ~~(3)~~	4	3	6	6	*	*
Mike Hutchinson	7	7	8	8	3	3
Peter McGregor ~~(4)~~	0	7 ~~(4)~~	0	8 ~~(4)~~	*	3 ~~(4)~~
Tim Poole ~~(5)~~	6	6	8	8	*	*
Robert Tsenin	7	7	8	7	3	3

AUSTRALIAN INFRASTRUCTURE FUND LIMITED

DIRECTORS’ REPORT

	AIFL/HFML Joint Board Meetings	AIFL/HFML Joint Board Meetings	AIFL/HFML Joint Board Meetings	AIFL/HFML Joint Board Meetings	AIFL/HFML Joint Audit Committee meetings	AIFL/HFML Joint Audit Committee meetings
	Scheduled meetings		Extraordinary meetings ~~(1)~~
	Meetings held while a director	Number of meetings attended	Meetings held while a director	Number of meetings attended	Meetings held while a director	Number of meetings attended
Paul Espie	2	2	1	0	6	5
Barry Capp ~~(2)~~	1	0	1	0	*	*
John Harvey	2	2	1	1	6	6
Robert Humphris ~~(3)~~	1	1	1	1	*	*
Mike Hutchinson	2	2	1	1	6	6
Peter McGregor ~~(4)~~	0	2 ~~(4)~~	0	1 ~~(4)~~	0	6 ~~(4)~~
Tim Poole ~~(5)~~	2	2	1	1	*	*
Robert Tsenin	2	2	1	1	6	6

Not a member of the Committee

(1) Due to the nature of AIX’s business, extraordinary meetings may be called at short notice. Even though every effort is made to schedule a meeting for all directors to attend, sometimes this is not possible.

(2) Barry Capp retired on 27 November 2006.

(3) Robert Humphris was appointed a director on 11 September 2006.

(4) Peter McGregor was appointed a director on 20 June 2007. In his capacity as AIX Chief Operating Officer, Peter attended all Board meetings during the year.

(5) Tim Poole resigned on 15 June 2007.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED

DIRECTORS’ REPORT

DIRECTORS’ INTERESTS

At the date of this report the interests of each director in the shares of the Company and therefore the stapled securities of AIX is shown in the table below:

	Number of stapled	securities held in AIX
	Beneficial in own name	Beneficial other
Paul Espie		474,212
Barry Capp ~~(1)~~		35,191
John Harvey		50,000
Robert Humphris		100,000
Mike Hutchinson		44,349
Peter McGregor		17,500
Tim Poole ~~(2)~~		60,000
Robert Tsenin	10,994	56,379

~~(1)~~ Number of securities held when director retired on 27 November 2006.

(2) Number of securities held when director resigned on 15 June 2007.

ENVIRONMENTAL REGULATION

The operations of AIX are not subject to any particular significant environmental regulation under a law of the Commonwealth or of a State or Territory. There have been no known significant breaches of any other environmental requirements applicable to AIX. However, there may be environmental regulations that relate to each of the assets owned by AIX. Compliance with these regulations is the responsibility of the board of the investee rather than AIX.

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

During or since the financial year the Company has paid premiums in respect of a contract insuring all the directors and executive officers of the Company. The terms of the policy prohibit disclosure of the details of the insurance cover and premium paid.

An indemnity agreement has been entered into between the Company and each of its directors named earlier in this report. Under this agreement, the Company has agreed:

(a) to indemnify the directors against any claim or for any expense or costs which may arise as a result of work performed in their role as directors;
(b) to provide continued access to Board papers; and
(c) to provide continued access to directors’ and officers’ liability insurance.

PROCEEDINGS ON BEHALF OF THE COMPANY

No proceedings have been brought on behalf of the Company, nor has any application been made in respect of the Company under section 237 of the Corporations Act.

ROUNDING

The amounts contained in this report and in the financial report have been rounded to the nearest thousand where rounding is applicable, under the option available to AIX under ASIC Class Order 98/0100, dated 10 July 1998. AIX is an entity to which this Class Order applies.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED

DIRECTORS’ REPORT

NON-AUDIT SERVICES

PricewaterhouseCoopers was appointed auditor of the Company at the Annual General Meeting on 27 November 2006. The Company may decide to employ the auditor on assignments in addition to their statutory audit duties, where the auditor’s expertise and experience are important. However, since appointment, PricewaterhouseCoopers has not been engaged for any non-audit services.

The predecessor auditor, Ernst & Young, was engaged for non-audit services and details of the amounts paid to the auditor for audit and non-audit services provided are set out below for comparative purposes.

The directors have considered the position and, in accordance with the advice received from the Audit Committee, are satisfied that the provision of the non-audit services was compatible with the general standard of independence for auditors imposed by the Corporations Act. The directors are satisfied that the nature of scope of non-audit services by the auditors, as set out below, did not compromise the auditor’s independence requirements of the Corporations Act for the following reasons:

all non-audit services have been reviewed by either the Audit Committee or the Board to ensure that they do not impact the impartiality and objectivity of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in a management or a decision making capacity for AIX, acting as advocate for AIX or jointly sharing economic risk and rewards.

Amounts received or due and receivable by the current auditor, PricewaterhouseCoopers:

	AIX
	Consolidated AIFL	AIFL	Consolidated AIFT	AIFT
	2007 2006 $ $ 119,074 0 14,850 0 0 0 133,924 0	2007 2006 $ $ 0 0 0 0 0 0 0 0	2007 2006 $ $ 119,074 0 14,850 0 0 0 133,924 0	2007 2006 $ $
Amounts received or due and receivable by the current auditor, PricewaterhouseCoopers, for: - an audit or review of the financial reports - compliance plan audit - other non audit services				119,074 0 14,850 0 0 0
				133,924 0

Amounts received or due and receivable by the predecessor auditor, Ernst & Young:

	AIX
	Consolidated AIFL	AIFL	Consolidated AIFT	AIFT
	2007 2006 $ $ 0 121,685 0 23,113 0 7,818 137,434 153,918 0 19,152 138,175 68,420 9,511 27,500 285,120 421,606	2007 2006 $ $ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0	2007 2006 $ $ 0 121,685 0 23,113 0 7,818 137,434 153,918 0 19,152 138,175 68,420 9,511 27,500 285,120 421,606	2007 2006 $ $ 0 121,685 0 23,113 0 7,818 137,434 153,918 0 19,152 138,175 68,420 9,511 27,500
Amounts received or due and receivable by the predecessor auditor, Ernst and Young, for: - an audit or review of the financial reports - compliance plan audit - risk & compliance plan audit - other non audit services Taxation compliance Accounting advice and annual report review Asset acquisition advisory services Other advisory services
				285,120 421,606

AUSTRALIAN INFRASTRUCTURE FUND LIMITED

DIRECTORS’ REPORT

AUDITOR’S INDEPENDENCE DECLARATION

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act is set out on page 11.

REMUNERATION REPORT

The directors of the Company present the Remuneration Report prepared in accordance with section 300A of the Corporations Act for the year ended 30 June 2007. This remuneration report forms part of the Directors’ Report.

Non-executive directors’ remuneration

Board policy on remuneration

The Board of directors of AIFL is responsible for determining and reviewing compensation arrangements for the directors of the Company.

The fees paid to directors are set at levels that reflect both the responsibilities of, and the time commitments required from, the directors to discharge their duties. In order to maintain their independence and impartiality, the remuneration of the non-executive directors is not linked to the performance of either the Company or the Trust. In setting fee levels, the Board, takes into account:

independent professional advice;
fees paid by comparable companies;
the general time commitment required from directors and the risks associated with discharging the duties attaching to the role of director; and
the level of remuneration necessary to attract and retain directors of a suitable calibre.

The Board will continue to review its approach to non-executive director remuneration to ensure it remains in line with general industry practice and best practice principles of corporate governance.

Remuneration structure

Non-executive directors’ fees, including committee fees, are set by the Board within the maximum aggregate amount of $800,000 approved by securityholders in 2005. Directors’ fees paid for the financial year ended 30 June 2007 total $658,331. A retirement benefit of $187,211 was also paid to Barry Capp during the year following his retirement from the Board.

The Chairman, taking into account the time commitment required, received a fee of $225,000 for the financial year less an allowance of $24,525 for the value of his retirement benefit. This value was determined by a consulting actuary. The Board elected in April 2003 to phase out the retirement benefit and Directors who joined the Board after that date are not entitled to a retirement benefit. The non-executive directors received a fee of $90,000 for the financial year.

Directors who sit on the Board’s Audit Committee received a fee of $10,000 for the financial year and the Chairman of the Audit Committee received $20,000 for the financial year. The Chairman of the Board declined his fee for membership of the Audit Committee.

In addition, superannuation contributions are also made on behalf of the non-executive directors in accordance with the Company’s statutory superannuation obligations.

In accordance with rule 37 of the Constitution, directors are also permitted to be paid additional fees for special duties. Such fees are included in the aggregate remuneration cap approved by securityholders. Directors are also entitled to be reimbursed for all business related expenses, including travel on AIX business, as may be incurred in the discharge of their duties.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED

DIRECTORS’ REPORT

REMUNERATION REPORT

Remuneration paid

Details of non-executive directors’ remuneration for the financial year ended 30 June 2007 is set out in the following table. No bonuses, options or other emoluments are paid to the directors of the Company.

	*Short-term*	*Short-term*	*Post employment*	*Post employment*
		Committee	Super-	Retirement
	Board fees	fees	annuation	benefits(1)	Total
	$	$	$	$	$
Key management personnel	of AIFL
Paul Espie
2007	200,475	0	18,043	0	218,518
2006	200,475	0	18,043	0	218,518
Barry Capp	retired 27 November	2006
2007	33,843	0	0	187,211	221,054
2006	82,894	0	0	0	82,894
John Harvey
2007	90,000	20,000	9,900	0	119,900
2006	90,000	20,000	9,900	0	119,900
Robert Tsenin
2007	90,000	10,000	9,000	0	109,000
2006	73,500	5,349	7,096	0	85,946
Mike Hutchinson
2007	90,000	0	8,100	0	98,100
2006	72,226	0	6,500	0	78,726
Robert Humphris	appointed 11 September 2006
2007	72,450	0	6,520	0	78,970
2006	0	0	0	0	0
Ross Dunning	resigned 19 October	2005
2007	0	0	0	0	0
2006	19,983	3,633	0	0	23,616
Total compensation: Key management personnel of AIFL
2007	576,768	30,000	51,563	187,211	845,542
2006	539,078	28,982	41,540	0	609,600

(1) Retirement benefits exclude provision expensed.

Note:

Peter McGregor was appointed a director on 20 June 2007 and is not remunerated out of the property of AIFL or AIFT.

Tim Poole resigned on 15 June 2007 and was not remunerated out of the property of AIFL or AIFT.

Remuneration paid to other officeholders

Neither the Managing Director, the AIX Chief Operating Officer, nor the Company Secretaries were remunerated by the Company.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED

DIRECTORS’ REPORT

REMUNERATION REPORT

Relationship with the Manager – Hastings Funds Management Limited

As the Company has contracted with Hastings to manage its administration and investments, the Company employs no staff.

Hastings is paid a fee to provide a range of services and as part of that arrangement Hastings is required to provide appropriately qualified employees and resources to undertake those services, including the Hastings’ Managing Director and company secretarial service. Hastings determines the remuneration of its executives and the Company has no involvement in determining the remuneration of those executives.

Fees to the Responsible Entity

The Responsible Entity is entitled to a management fee calculated at the rate of one percent per annum of the net asset value of AIX. The Responsible Entity is also entitled to be reimbursed for expenses incurred for the management of AIX and a performance fee. No performance fee has been paid for the financial year. For the year ended 30 June 2007, Hastings was entitled to Responsible Entity fees in respect of AIX of $9,335,000 (2006 – $8,365,000). Hastings was also reimbursed $564,000 (2006 – $623,000) for costs incurred on behalf of AIX. These fees were paid by the Trust. Expenses incurred by the Company, including directors’ fees, are also paid by the Trust.

Company performance

Total income and after tax profit of AIX has grown considerably over the last five years. Total income increased over the period from $38.8 million in 2003 to $185.9 million in 2007. After tax profits increased over the period from $30.3 million in 2003 to $168.2 million in 2007. The remuneration of the directors of AIFL is not related to the performance of either AIFL or AIFT.

Distributions to securityholders have shown steady growth in recent years following the repositioning of the fund, which began in 2003.

	FY02/03	FY03/04	FY04/05	FY05/06	FY06/07
Security price at 1 July ($)	1.30	1.52	1.68	2.58	2.07
Security price at 30 June ($)	1.51	1.65	2.59	2.08	3.29
Distributions per security (cents)	11.0	11.5	13.0	14.5	15.5
Return to securityholders for period (%)	24.9	16.5	61.6	(13.8)	66.4
Earnings per security (cents)	17.4	18.3	40.0	30.0	45.2

Source: Bloomberg Note: Where applicable these figures are based on prices which have been adjusted for historical changes to AIX's capital structure, including rights issues and placements.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED

DIRECTORS’ REPORT

CORPORATE GOVERNANCE

In recognising the need for the highest standards of corporate behaviour and accountability, the directors support and have adhered to the principles of corporate governance as set out in the Corporate Governance Statement of the Annual Report.

Signed in accordance with a resolution of the directors, for and on behalf of the Company.

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Paul Espie Chairman

29 August 2007

PricewaterhouseCoopers ABN 52 780 433 757

Auditor’s Independence Declaration to the Directors of Australian Infrastructure Fund Limited

Freshwater Place 2 Southbank Boulevard SOUTHBANK VIC 3006 GPO Box 1331L MELBOURNE VIC 3001 DX 77 Website:www.pwc.com/au Telephone 61 3 8603 1000 Facsimile 61 3 8603 1999

As lead auditor for the audit of Australian Infrastructure Fund Limited for the year ended 30 June 2007, I declare that to the best of my knowledge and belief, there have been:

a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit .

This declaration is in respect of Australian Infrastructure Fund Limited and the entities it controlled during the period.

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PricewaterhouseCoopers

==> picture [111 x 30] intentionally omitted <==

JF Power Partner

Melbourne 29 August 2007

Liability limited by a scheme approved under Professional Standards Legislation

AUSTRALIAN INFRASTRUCTURE FUND TRUST

DIRECTORS’ REPORT

The directors of Hastings Funds Management Limited (Hastings) as Responsible Entity for Australian Infrastructure Fund Trust (the Trust) submit their report for the year ended 30 June 2007.

The consolidated financial statements incorporate the assets and liabilities of the entity controlled by the Trust, being Australian Infrastructure Fund International 1 Trust and its controlled entities as at 30 June 2007. The consolidated entity is known as Australian Infrastructure Fund Trust (AIFT) or the Trust.

The ordinary shares issued by Australian Infrastructure Fund Limited (AIFL of the Company) are stapled to the units issued by the Trust. The combined entity of the Company and the Trust is known as the Australian Infrastructure Fund (AIX).

DIRECTORS

The names of the directors of the Responsible Entity of the Trust in office from the beginning of the year until the date of this report unless otherwise stated are:

William Forde Director since 30 January 2006 and appointed Chairman on 26 October 2006 Sean McElduff Resigned as Chairman on 26 October 2006 and continues as director Mike Hutchinson Jim McDonald Appointed on 18 June 2007 with effect 1 July 2007 Tim Poole Resigned on 15 June 2007 Guy Strapp Resigned on 26 October 2006 Jim Tate

Steve Boulton was appointed the Hastings’ Chief Executive Officer on 18 June 2007 with effect from 3 September 2007. Alan Freer was appointed a director on 23 August 2007 with effect from 1 September 2007.

COMPANY SECRETARIES

The names of the Company Secretaries of the Responsible Entity in office during the year and until the date of this report are Claire Filson and Kim Rowe.

REPORT ON THE BUSINESS

Principal activity

The principal activity of the Trust during the year was to invest in infrastructure investments so as to maximise income and capital return to investors. During the year the Trust has continued to invest in infrastructure investments in accordance with the Constitution. There has been no change in the principal activity of the Trust during the year.

Trust information

The Trust is an Australian registered scheme and is incorporated and domiciled in Australia. The registered office of the Responsible Entity is located at Level 15, 90 Collins Street, Melbourne, Victoria, 3000.

At 30 June 2007 the Trust had no employees.

Review and results of operations

A review of the operations of the Trust for the financial year ended 30 June 2007 is set out in the Annual Report.

The profit after income tax attributable to securityholders of the Trust for the year ended 30 June 2007 was $146,469,000 (2006 – $101,192,000).

AUSTRALIAN INFRASTRUCTURE FUND TRUST

DIRECTORS’ REPORT

Distributions

A final AIX distribution of $29,983,000 (8.0 cents per stapled security) was declared for the six months ended 30 June 2007 and is payable on 30 August 2007. The Trust distribution represents $22,983,000 (2006 – $22,534,000) of the total amount paid. The AIX interim distribution of $27,887,000 (7.50 cents per stapled security) for the six months ended 31 December 2006 was paid on 27 February 2007. The Trust distribution represents $21,887,000 (2006 – $22,218,000) of the total amount paid.

Significant changes in the state of affairs

During the year, there was no significant change in the state of affairs of the Trust other than that referred to in the financial statements or notes thereto.

Events after the end of the financial year

There has not been any matter or circumstance, other than that referred to in the financial statements or notes thereto, that has arisen since the end of the financial year, that has significantly affected, or may significantly affect, the operations of the Trust, the results of those operations, or the state of affairs of the Trust in future financial years.

Likely developments and expected results

The Trust expects the 2008 financial year and beyond, notwithstanding market competition, to continue to provide opportunities which the Trust is well positioned to take advantage of.

The key focus of the Trust to deliver growth and value to investors will include:

Ongoing management of portfolio assets , with a focus on maximising returns to AIX from existing operations. There are also significant opportunities to develop additional revenue streams across the airport portfolio, most notably in terms of retail, car parking and property development.
Active capital management , with a focus on reducing the Trust’s cost of capital and providing funding for expansionary capital expenditure.
New acquisition opportunities for the Trust. The Trust will continue to seek value for securityholders through increased scale and diversity but these considerations will remain secondary to considerations of asset quality and transaction value. The Trust’s pre-emptive rights and strategic industry partnerships are expected to provide significant sources of new opportunities within Australia and internationally.

Environmental regulation

The operations of the Trust are not subject to any particular significant environmental regulation under a law of the Commonwealth or of a State or Territory. There have been no known significant breaches of any other environmental requirements applicable to the Trust. However, there may be environmental regulations that relate to each of the assets owned by the Trust. Compliance with these regulations is the responsibility of the investee Company Boards rather than the Trust.

AUSTRALIAN INFRASTRUCTURE FUND TRUST

DIRECTORS’ REPORT

INTERESTS IN THE UNITS OF THE TRUST

At 30 June 2007, the interests of the Responsible Entity in the units of the Trust were 333,319 units (2006 – 333,319).

At 30 June 2007 Westpac and its controlled entities (including the Responsible Entity) held 1,336,362 units in the Trust (2006 – 10,919,129).

The interests in the stapled securities issued by AIX held by the Responsible Entity, directors of the Responsible Entity and their director related entities at 30 June 2007 are set out below:

	Number of stapled	securities held in AIX
	Beneficial in own name	Beneficial other
William Forde	-	-
Mike Hutchinson	-	44,349
Sean McElduff	-	-
Tim Poole ~~(1)~~	-	60,000
Guy Strapp ~~(2)~~	-	-
Jim Tate	-	-

(1) Number of securities held when director retired on 15 June 2007.

(2) Resigned 26 October 2006.

FEES TO THE RESPONSIBLE ENTITY

TRUST ASSETS

At 30 June 2007, the Trust held assets to a total value of $895,463,000 (2006 – 773,382,000). The basis for valuation of the assets is disclosed in note 1 to the financial statements.

UNITS ON ISSUE

At 30 June 2007, 374,790,801 units of the Trust were on issue (2006 – 367,122,968). During the year 7,667,833 units were issued by the Trust.

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

No insurance premiums are paid for out of the assets of the Trust in regards to insurance cover provided to the Responsible Entity or Auditor of the Trust. So long as the Officers of the Responsible Entity act in accordance with the constitution and the Corporations Act 2001, both parties remain fully indemnified out of the assets of the Trust against any losses incurred while acting on behalf of the Trust. The Auditor of the Trust is in no way indemnified out of the assets of the Trust.

AUSTRALIAN INFRASTRUCTURE FUND TRUST

DIRECTORS’ REPORT

ROUNDING

The amounts contained in this report and in the financial report have been rounded to the nearest thousand where rounding is applicable, under the option available to the Trust under ASIC Class Order 98/0100, dated 10 July 1998. The Trust is an entity to which this Class Order applies.

AUDITOR’S INDEPENDENCE DECLARATION

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act is set out on page 16.

Signed in accordance with a resolution of the directors of Hastings Funds Management Limited as Responsible Entity of the Trust.

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William Forde Chairman

29 August 2007

PricewaterhouseCoopers ABN 52 780 433 757

Auditor’s Independence Declaration to the Directors of Hastings Funds Management Limited, as Responsible Entity for Australian Infrastructure Fund Trust

Freshwater Place 2 Southbank Boulevard SOUTHBANK VIC 3006 GPO Box 1331L MELBOURNE VIC 3001 DX 77

Website:www.pwc.com/au Telephone 61 3 8603 1000 Facsimile 61 3 8603 1999

As lead auditor for the audit of Australian Infrastructure Fund Trust for the year ended 30 June 2007, I declare that to the best of my knowledge and belief, there have been:

a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit .

This declaration is in respect of Australian Infrastructure Fund Trust and the entities it controlled during the period.

PricewaterhouseCoopers

==> picture [111 x 30] intentionally omitted <==

JF Power Partner

Melbourne 29 August 2007

Liability limited by a scheme approved under Professional Standards Legislation

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

INCOME STATEMENT

FOR THE YEAR ENDED 30 JUNE 2007

Note Income Gain/(loss) - unlisted securities - unrealised Gain/(loss) - subsidiaries - unrealised Gain/(loss) - unlisted securities - realised Gain/(loss) - other - unrealised Interest Dividends Distributions Other Total income 2 Expenses Management fees Securityholder & investor relations expenses Investment bid costs Investment costs Directors' fees Directors' retirement expense Board administration expenses Other prudential expenses Audit fees Taxation and other accounting fees Other expenses Finance costs 3 Total expenses Profit before income tax attributable to securityholders Income tax expense 5(a) Profit after income tax attributable to securityholders Other finance costs Distributions to securityholders 15 Change in net assets attributable to securityholder interests classified as debt Profit after income tax attributable to securityholder interests classified as equity Dividends to securityholders 15 Change in net assets attributable to securityholder interests classified as equity	2007 2006 $'000 $'000 130,057 82,012 0 0 (1,969) (51) (2) 5 15,798 15,862 28,748 27,455 12,995 5,577 226 453 185,853 131,313 9,335 8,365 710 881 1,101 773 427 772 661 655 189 74 132 154 605 862 135 144 141 162 78 78 795 515 14,309 13,435 171,544 117,878 3,387 8,362 168,157 109,516 44,870 44,752 101,599 56,440 21,688 8,324 13,000 8,254 8,688 70 AIX Consolidated AIFL	2007 2006 $'000 $'000 15,424 367 0 0 (2,006) 0 0 0 269 69 9,327 6,635 3,469 2,183 0 0 26,483 9,254 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 1 26,482 9,253 4,794 929 21,688 8,324 0 0 0 0 21,688 8,324 13,000 8,254 8,688 70 AIFL	2007 2006 $'000 $'000 114,633 81,644 0 0 37 (51) (2) 5 15,782 15,855 19,421 20,819 9,526 3,394 226 453 159,623 122,119 9,335 8,365 710 881 1,101 773 427 772 661 655 189 74 132 154 605 862 135 144 141 162 78 78 1,047 574 14,561 13,494 145,062 108,625 (1,407) 7,433 146,469 101,192 44,870 44,752 101,599 56,440 0 0 Consolidated AIFT	2007 2006 $'000 $'000 125,139 52,611 (10,585) 30,637 14 0 (2) 5 7,654 7,778 19,421 20,819 17,704 9,703 226 453 AIFT
				159,571 122,006
				9,335 8,365 710 881 1,101 773 427 772 661 655 189 74 132 154 605 862 135 145 141 163 80 78 1,047 574
				14,563 13,496
				145,008 108,510 0 0
				145,008 108,510 44,870 44,752 100,138 63,758
				0 0

*Refer to Note 1(m)

		AIFL
	2007		2006
Basic/diluted earnings per security (cents)	5.83		2.28

Refer to Note 22 for additional earnings per security calculations.

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

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

BALANCE SHEET

AS AT 30 JUNE 2007

Note Assets Cash and cash equivalents 6(b) Trade and other receivables 7 Other assets 8 Investment in subsidiaries 9 Unlisted securities 10 Deferred income tax asset 5(c) Total assets Liabilities Trade and other payables 11 Current income tax liability 5(e) Provisions 12 Interest bearing loans and borrowings 13 Deferred income tax liability 5(d) Total liabilities (excluding security holder interests classified as debt) Net assets attributable to securityholders 14 Comprising: Securityholder interests classified as debt Securityholder interests classified as equity Net assets attributable to securityholders	2007 2006 $'000 $'000 74,041 57,493 855 2,277 152 303 0 0 955,754 837,151 13,547 13,542 1,044,349 910,766 31,244 28,545 1,207 97 494 493 0 0 22,929 20,744 55,874 49,879 988,475 860,887 855,225 738,893 133,250 121,994 988,475 860,887 AIX Consolidated AIFL	2007 2006 $'000 $'000 427 180 10,229 5,572 0 0 0 0 134,489 121,436 13,547 13,542 158,692 140,730 7,000 5,000 869 93 0 0 0 0 17,573 13,643 25,442 18,736 133,250 121,994 0 0 133,250 121,994 133,250 121,994 AIFL	2007 2006 $'000 $'000 73,614 57,314 433 50 152 303 0 0 821,264 715,715 0 0 895,463 773,382 24,244 23,545 339 4 494 493 9,805 3,345 5,356 7,102 40,238 34,489 855,225 738,893 855,225 738,893 0 0 855,225 738,893 Consolidated AIFT	2007 2006 $'000 $'000 73,584 46,101 443 11,250 152 303 227,519 232,083 593,685 483,540 0 0 AIFT
				895,383 773,277
				24,319 23,545 0 0 494 493 9,805 3,345 0 0
				34,618 27,383
				860,765 745,894
				860,765 745,894 0 0
				860,765 745,894

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

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2007

AIX Consolidated AIFL At 1 July 2005 Ordinary securities issued during the year - pursuant to dividend reinvestment plan Profit for the year attributable to securityholder interests classified as equity Dividends to securityholders At 30 June 2006 At 1 July 2006 Ordinary securities issued during the year - pursuant to dividend reinvestment plan Profit for the year attributable to securityholder interests classified as equity Dividends to securityholders At 30 June 2007	Issued securities Undistributed profit Total $'000 $'000 $'000 108,848 10,928 119,776 2,148 0 2,148 0 8,324 8,324 0 (8,254) (8,254)
	110,996 10,998 121,994
	110,996 10,998 121,994 2,568 0 2,568 0 21,688 21,688 0 (13,000) (13,000)
	113,564 19,686 133,250

AIFL At 1 July 2005 Ordinary securities issued during the year - pursuant to dividend reinvestment plan Profit for the year attributable to securityholder interests classified as equity Dividends to securityholders At 30 June 2006 At 1 July 2006 Ordinary securities issued during the year - pursuant to dividend reinvestment plan Profit for the year attributable to securityholder interests classified as equity Dividends to securityholders At 30 June 2007	Issued securities Undistributed profit Total $'000 $'000 $'000 108,848 10,928 119,776 2,148 0 2,148 0 8,324 8,324 0 (8,254) (8,254)
	110,996 10,998 121,994
	110,996 10,998 121,994 2,568 0 2,568 0 21,688 21,688 0 (13,000) (13,000)
	113,564 19,686 133,250

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

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

STATEMENT OF CHANGES IN SECURITYHOLDER INTERESTS CLASSIFIED AS DEBT FOR THE YEAR ENDED 30 JUNE 2007

In accordance with AASB 132 Financial Instruments: Disclosure and Presentation , net assets attributable to unitholders represents the residual interest in the assets of Australian Infrastructure Fund Trust (the Trust) after deducting its liabilities and is not classified as equity due to the trust having a fixed or determinable life.

Refer to the Statement of Changes in Securityholder Interests Classified as Debt below for further information.

Consolidated AIFT

At 1 July 2005 Ordinary securities issued during the year - pursuant to distribution reinvestment plan Less: unit issue costs pursuant to market placement Profit for the year attributable to securityholder interests classified as debt Distributions to securityholders At 30 June 2006 At 1 July 2006 Ordinary securities issued during the year - pursuant to distribution reinvestment plan Profit for the year attributable to securityholder interests classified as debt Distributions to securityholders At 30 June 2007	Issued securities Undistributed profit Total $'000 $'000 $'000 596,275 73,895 670,170 12,258 0 12,258 25 0 25 0 101,192 101,192 0 (44,752) (44,752)
	608,558 130,335 738,893
	608,558 130,335 738,893 14,733 0 14,733 0 146,469 146,469 0 (44,870) (44,870)
	623,291 231,934 855,225

AIFT At 1 July 2005 Ordinary securities issued during the year - pursuant to distribution reinvestment plan Less: unit issue costs pursuant to market placement Profit for the year attributable to securityholder interests classified as debt Distributions to securityholders At 30 June 2006 At 1 July 2006 Ordinary securities issued during the year - pursuant to distribution reinvestment plan Profit for the year attributable to securityholder interests classified as debt Distributions to securityholders At 30 June 2007	Issued securities Undistributed profit Total $'000 $'000 $'000 596,275 73,578 669,853 12,258 0 12,258 25 0 25 0 108,510 108,510 0 (44,752) (44,752)
	608,558 137,336 745,894
	608,558 137,336 745,894 14,733 0 14,733 0 145,008 145,008 0 (44,870) (44,870)
	623,291 237,474 860,765

The above Statement of Changes in Securityholder Interests Classified as Debt should be read in conjunction with the accompanying notes.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

CASH FLOW STATEMENT

FOR THE YEAR ENDED 30 JUNE 2007

2007 2006 Inflows/ Inflows/ (outflows) (outflows) Note $'000 $'000 Cash flows from operating activities Dividends received 29,072 24,937 Interest received 16,066 15,969 Distributions received 14,472 4,003 Other income received 240 453 Finance costs paid (643) (718) Operating expenses paid (13,645) (12,688) Income tax refunded/(paid) (97) 296 Net cash flows from/(used in) operating activities 6(a) 45,465 32,252 Cash flows from investing activities Payments for purchase of unlisted securities (926) (3,582) Proceeds from unlisted security loan repayments 14,975 5,817 Proceeds from unlisted security capital repayments 19 17,419 Proceeds from sale of unlisted securities 365 0 Payments for unlisted security loan advances (5,228) 0 Proceeds from subsidiary loan advances 0 0 AIX Consolidated AIFL	2007 2006 Inflows/ Inflows/ (outflows) (outflows) Note $'000 $'000 Cash flows from operating activities Dividends received 29,072 24,937 Interest received 16,066 15,969 Distributions received 14,472 4,003 Other income received 240 453 Finance costs paid (643) (718) Operating expenses paid (13,645) (12,688) Income tax refunded/(paid) (97) 296 Net cash flows from/(used in) operating activities 6(a) 45,465 32,252 Cash flows from investing activities Payments for purchase of unlisted securities (926) (3,582) Proceeds from unlisted security loan repayments 14,975 5,817 Proceeds from unlisted security capital repayments 19 17,419 Proceeds from sale of unlisted securities 365 0 Payments for unlisted security loan advances (5,228) 0 Proceeds from subsidiary loan advances 0 0 AIX Consolidated AIFL	2007 2006 Inflows/ Inflows/ (outflows) (outflows) $'000 $'000 9,651 5,427 16 12 4,949 609 0 0 (2) (1) 0 0 (93) 296 14,521 6,343 0 0 0 0 0 0 365 0 0 0 0 0 AIFL	2007 2006 Inflows/ Inflows/ (outflows) (outflows) $'000 $'000 19,421 19,510 16,050 15,960 9,523 3,394 240 453 (641) (717) (13,646) (12,689) (4) 0 30,943 25,911 (926) (3,582) 14,975 5,817 19 17,419 0 0 (5,228) 0 0 0 Consolidated AIFT	2007 2006 Inflows/ Inflows/ (outflows) (outflows) $'000 $'000 19,421 19,510 7,789 7,886 28,889 200 240 453 (641) (717) (13,646) (12,688) 0 0 AIFT
				42,052 14,644
				(926) (4,196) 14,975 5,817 19 17,419 0 0 (5,228) 0 74 0
Net cash flows from/(used in) investing activities	9,205 19,654	365 0	8,840 19,654	8,914 19,040
Cash flows from financing activities Payments for security issue costs Proceeds from loan repayment - subsidiary Proceeds from borrowings - stapled entity Repayment of borrowings - stapled entity Distributions and dividends paid Net cash flows from/(used in) financing activities Net increase/(decrease) in cash & cash equivalents Effects of foreign exchange rate movements on cash and cash equivalents Cash & cash equivalents at the end of the year 6(b) Cash & cash equivalents at the beginning of the year	0 (726) 0 0 0 0 0 0 (38,120) (36,344) (38,120) (37,070) 16,550 14,836 57,493 42,652 (2) 5 74,041 57,493	0 0 0 0 0 0 (6,207) (1,693) (8,432) (4,635) (14,639) (6,328) 247 15 180 165 0 0 427 180	0 (726) 0 0 6,207 1,693 0 0 (29,688) (31,710) (23,481) (30,743) 16,302 14,822 57,314 42,487 (2) 5 73,614 57,314	0 (726) 0 668 6,207 1,693 0 0 (29,688) (31,710)
				(23,481) (30,075)
				27,485 3,609 46,101 42,487 (2) 5
				73,584 46,101

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

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Structure of financial report

The ordinary shares issued by Australian Infrastructure Fund Limited (AIFL) are stapled to the units issued by Australian Infrastructure Fund Trust (AIFT). The combined entity of AIFL and AIFT is known as the Australian Infrastructure Fund (AIX). On 6 March 1997, the stapled securities were listed on the Australian Stock Exchange (ASX) and have the ASX code AIX.

The units and shares will only be unstapled in accordance with the determination of the Responsible Entity of AIFT

and the Board of AIFL if:

the unitholders of AIFT have approved the unstapling by special resolution;
the members of AIFL have approved the unstapling by special resolution; and
the unstapling period commences within three months after the later of the dates on which the approval of unitholders and members is obtained.

Hastings Funds Management Limited (Hastings) is the manager of AIFL and the Responsible Entity of AIFT.

For the purpose of preparing a consolidated financial report that combines the assets and liabilities of AIFL and AIFT, AIFL is identified as the parent entity.

The financial report includes:

Consolidated AIFL or AIX: Represents the entire AIX group, being AIFL and the consolidated financial statements of AIFT.
AIFL: Represents the stand alone financial statements of AIFL;
Consolidated AIFT: Represents the consolidated financial statements of AIFT and its controlled entities; and
AIFT: Represents the stand alone financial statement of AIFT.

The above financial statements are presented in adjacent columns in a single financial report in accordance with the option available under ASIC Class Order 05/642.

(b) UIG Interpretation 1013 “Consolidated Financial Reports in Relation to Pre-Date-of-Transition Stapling Arrangements”

The stapling arrangement between AIFL and AIFT was effected prior to the date of transition to Australian equivalents to International Financial Reporting Standards (AIFRS), therefore UIG Interpretation 1013 applies. In accordance with this interpretation, for the purpose of preparing a consolidated financial report that combines the assets and liabilities of AIFL and AIFT, AIFL is identified as the parent entity.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(c) Basis of preparation

The financial report is a general purpose financial report which has been prepared in accordance with the requirements of AIFT’s Constitution, the requirements of the Corporations Act 2001 and Australian Accounting Standards. The financial report has been prepared on a historical cost basis, except for unlisted securities that have been measured at fair value.

The Balance Sheet is presented on a liquidity basis. Assets and liabilities are presented in decreasing order of liquidity and are not distinguished between current and non-current. Additional information regarding this are included in the relevant notes.

The financial report of AIX for the year ended 30 June 2007 was authorised for issuance in accordance with a resolution of directors on 28 August 2007.

The functional and presentation currency of AIX is Australian Dollars.

(d) Statement of compliance

The financial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS).

Certain Australian Accounting Standards have recently been issued or amended but are not yet effective and have not been adopted by AIX for the full year reporting period ended 30 June 2007. The assessment of the impact of these new standards and interpretations (to the extent relevant) is set out below:

(i) AASB 7 Financial Instruments: Disclosures and AASB 2005-10 Amendments to Australian Accounting Standards (AASB 132, AASB 101, AASB 114, AASB 117, AASB 133, AASB 139, AASB 1, AASB 4, AASB 1023 & AASB 1038)

AASB 7 and AASB 2005-10 are applicable to reporting periods commencing on or after 1 January 2007. AASB 7 introduces new disclosures to improve the information about financial instruments. It requires the disclosure of qualitative and quantitative information about exposure to risks arising from financial instruments, including specified minimum disclosures about credit risk, liquidity risk and market risk, including sensitivity analysis to market risk. It replaces AASB 130 Disclosures in the Financial Statements of Banks and Similar Financial Institutions and the disclosure requirements in AASB 132 Financial Instruments: Disclosure and Presentation . It is applicable to all reporting entities. The amendment to AASB 101 introduces disclosures about the level of an entity’s capital and how it manages capital. AIX has not adopted the standards early. Application of the standards will not affect any of the amounts recognized in the financial statements, but will impact the type of information disclosed in relation to the AIX’s financial instruments.

(ii) AASB 8 Operating Segments and AASB 2207-3 Amendments to Australian Accounting Standards arising from AASB 8

AASB 8 and AASB 2007-3 are effective for annual reporting periods commencing on or after 1 January 2009. AASB 8 requires adoption of a “management approach” to reporting on the financial performance. The information being reported will be based on what key decision-makers use internally for evaluating segment performance and deciding how to allocate resources to operating segments. Application of AASB 8 may result in different segments, segment results and different type of information being reported in the segment note. However, it will not affect any of the amounts recognized in the statements.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(d) Statement of compliance (continued)

(iii) Revised AASB 101 Presentation of Financial Statements

A revised AASB 101 was issued in October 2006 and is applicable to annual reporting periods beginning on or after 1 January 2007. AIX has not adopted the standard early. Application of the revised standard will not affect any of the amounts recognised in the financial statements, but will impact the type of information disclosed.

(iv) AASB 2007-4 Amendments to Australian Accounting Standards arising from ED 151 and Other Amendments

AASB 2007-4 is applicable to annual reporting periods beginning on or after 1 July 2007. The amendments introduce a number of options that existed under IFRS but had not been included in the original AIFRS and remove many of the additional Australian disclosure requirements. In particular, Australian entities are now permitted to use the proportionate consolidation method for interests in joint venture entities and the indirect method for presenting cash flow statements, to recognize government grants of non-monetary assets at nominal amounts and to present assets and expenses net of related government grants. Furthermore, some intermediate parent entities may no longer have to prepare consolidated financial reports. AIX will adopt the amendments arising from AASB 2007-4 for the financial year ended 30 June 2008. Application of the revised standards will not affect any of the amounts recognised in the financial statements, but it may remove some of the disclosures that are currently required.

(e) Principles of consolidation

The consolidated financial report of AIFL combines the assets and liabilities of AIFL and AIFT and the entity AIFT controls. These entities are referred to in the financial report as Consolidated AIFL or AIX. The effects of all transactions between entities in the AIFL consolidated group are eliminated in full.

The consolidated financial report of AIFT incorporates the assets and liabilities of AIFT and the entity it controls, being Australian Infrastructure Fund International 1 Trust and its controlled entities as at 30 June 2007. The effects of all transactions between entities in the AIFT consolidated group are eliminated in full.

Where control of an entity is obtained during the period, its results are included in the consolidated Income Statement from the date on which control commences. Where control of an entity ceases during a period its results are included for that part of the period during which control existed.

The financial reports of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist. All intercompany balances and transactions, including unrealised profits arising from intra-group transactions, have been eliminated in full.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(f) Significant accounting judgements, estimates and assumptions

In applying AIX’s accounting policies, management and directors continually evaluates judgements, estimates and assumptions based on experience and other factors, including expectations of future events that may have an impact on the entity. All judgements, estimates and assumptions made are believed to be reasonable based on the most current set of circumstances available to management. Actual results may differ from the judgements, estimates, and assumptions. Significant judgements, estimates, and assumptions are outlined below:

Valuation of unlisted securities

Fair values of unlisted securities are determined by an appropriately qualified independent valuer, KPMG Corporate Finance, by projecting future cash flows and then discounting these cash flows back to their present value using a post-tax risk adjusted discount rate. Where applicable, foreign currency discounted cash flows are translated back to the local functional currency using the spot foreign exchange rate. Further details are provided in note 1(j). The carrying amount of unlisted securities held by AIX at 30 June 2007 was $955,754,000 and the carrying amount of unlisted securities held by Consolidated AIFT at 30 June 2007 was $821,264,000.

Provision for directors’ retirement

Non-executive directors who were appointed prior to 16 April 2003 retain a contractual entitlement to a retirement benefit. Further details on the calculation of this provision are provided in note 1(l). Non-executive directors appointed after 16 April 2003 have no entitlement to a retirement benefit.

(g) Cash and cash equivalents

Cash and cash equivalents in the Balance Sheet comprise cash at bank and short term deposits with an original maturity of three months or less. For the purposes of the Cash Flow Statement, cash includes cash and cash equivalents as defined above, net of outstanding bank overdrafts.

(h) Trade and other receivables

Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are initially recognised at fair value and then carried at amortised cost using the effective interest method. Gains and losses are recognised in the income statement when the receivables are derecognised or impaired, as well as through the amortisation process.

(i) Investment in associates

Associates are entities over which AIX have significant influence but not control. Investments in associates have been accounted for in the financial statements using the fair value method in accordance with AASB 139 Financial Instruments: Recognition and Measurement detailed in note 1(j).

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(j) Unlisted securities

Movements in investments in unlisted securities, including investments in associates and investments in subsidiaries, are at fair value through the Income Statement. Gains or losses arising from movements in the fair value of unlisted securities are recognised through the Income Statement.

Unlisted securities comprise ordinary shares, ordinary units, preference shares, shareholder loans and accrued interest income.

All such unlisted securities are initially recognised at fair value, being the amount of consideration given between parties in an arm’s length transaction. After initial recognition, unlisted securities are measured at fair value consistent with AIX’s investment strategy. AIX’s strategy is to invest in unlisted securities with a view to profit from income return in the form of distribution and interest receipts and capital growth through the changes in the fair value of these assets over the period they are held.

Fair values of unlisted securities are determined by an appropriately qualified independent valuer, KPMG Corporate Finance, by projecting future cash flows and then discounting these cash flows back to their present value using a post-tax risk adjusted discount rate. Where applicable, the present value of foreign currency discounted cash flows are translated back to the local functional currency using the spot foreign exchange rate. Discount rates used are developed on an individual unlisted security basis as determined by the independent valuer.

The post-tax risk adjusted discount rate (otherwise known as the cost of equity or Ke) applied by KPMG Corporate Finance in determining the fair value of each unlisted security (with the exception Metro Transport Sydney which was valued using an alternative valuation methodology) as at 30 June 2007 is detailed below:

	Valuation	Ke	Valuation	Ke
Unlisted Security Name	2007	2007	2006	2006
	$'000	%	$'000	%
Perth Airport	233,400	13.55	202,000	14.00
Airport Development Group	46,000	15.40	36,800	15.50
Australia Pacific Airports Corporation	197,400	12.05	161,101	12.50
Metro Transport Sydney	2,600	n/a	5,700	14.50
Port of Portland	47,000	12.30	49,099	12.00
Queensland Airports	161,700	16.40	110,100	17.50
HOCHTIEF AirPort Capital Group	227,579	13.00	232,175	12.60
Port of Geelong Unit Trust & Infrastructure Investment Corporation	19,800	12.30	19,700	11.75
Statewide Roads	20,700	9.10	20,100	9.10
SPV1 Unit Trust(DP World Adelaide)	0	0.00	2,604	20.00

Purchases and sales of unlisted securities that require delivery of securities within the time frame generally established by regulation or convention in the market place are recognised on the trade date, i.e. the date that AIX commits to purchase or sell the securities.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(k) Interest-bearing loans and borrowings

All loans and borrowings are initially recognised at fair value being the consideration received net of issue costs associated with the borrowing.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs, and any discount or premium on settlement. Gains and losses are recognised in the Income Statement when the liabilities are derecognised as well as through the amortisation process.

(l) Provisions

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

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Provision for directors’ retirement

Non-executive directors who were appointed prior to 16 April 2003 retain their contractual entitlement to a retirement benefit. The benefit provided by the retirement plan (where the director has had three or more years of service) is a lump sum equal to:

A + [ A x ( B – 36 ) / 24 ]

where:

A is the average of the directors fees for the three years immediately prior to retirement (taken as the total fees of the three years divided by three); and
B is the number of whole months that the individual has been a director, up to a maximum of 84 months (7 years).

(m) Issued financial instruments

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement. Any transaction costs arising on the issue of such financial instruments are recognised as a reduction of the proceeds received.

As units issued by AIFT are classified as financial liabilities, any amounts payable to securityholders are recorded as an expense and presented in the Income Statement for the year as ‘other finance costs’.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(n) Foreign currency translation

(i) Functional and presentation currency

The functional and presentation currency of AIFL and AIFT and its subsidiaries is Australian dollars.

(ii) Transactions and balances

Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date.

All exchange differences in the financial report are taken to the Income Statement.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction.

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rate at the date when the fair value was determined.

(o) Distributions

AIFT’s Constitution requires that the Responsible Entity distribute to each securityholder an amount representing the distributable income entitlement of each securityholder in respect of a distribution period. Distributable income means either the taxable income of AIFT or the net accounting income of AIFT as determined by the Responsible Entity. Taxable income is fully distributed to securityholders. Distribution periods are 31 December and 30 June.

Where distribution income is determined by reference to the taxable income of AIFT, distributable income includes capital gains arising from the disposal of unlisted securities. Unrealised net gains or losses on unlisted securities are transferred to net assets attributable to securityholders and are not distributable and assessable until realised. Capital losses are not distributed to securityholders but are retained to be offset against any future realised capital gains.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(p) Income and expense recognition

Income is recognised to the extent that it is probable that the economic benefits will flow to AIX and the income can be reliably measured. The following specific recognition criteria must also be met before income or expenses are recognised:

Interest income

Income is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial asset.

Dividend and distribution income

Dividend and distribution income is recognised when there is control over the right to receive the dividend or distribution payment.

Gain/(loss) on unlisted securities - unrealised

Unrealised gains or losses arising from changes in the fair value of unlisted securities are calculated as the difference between the fair value at year end and the fair value at the previous valuation point.

Gain/(loss) on unlisted securities - realised

Realised gains or losses are recognised upon sale of unlisted securities and are calculated as the difference between the sale price or settlement and the fair value at the previous valuation point.

Other expenses

Expenses are recognised in the Income Statement when AIFL or AIFT has a present obligation (legal or constructive) as a result of a past event that can be reliably measured. Expenses are recognised in the Income Statement if expenditure does not produce future economic benefits that qualify for recognition in the Balance Sheet.

Other income

Other income includes director fees received from investments. Director fees are recognised as income on an accrual basis.

Responsible Entity Fee

For the year ended 30 June 2007, in accordance with the Constitution and the AIFL management agreement, the Responsible Entity received a total fee of 1% of the net asset value of AIX (2006 – 1%).

The Responsible Entity is entitled under the Constitution and the AIFL management agreement to be reimbursed for certain expenses incurred in administering AIX. The basis on which the expenses are reimbursed is defined in AIX’s Constitution.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(q) Income tax

AIFT

Under current legislation, AIFT is not subject to income tax provided the securityholders are presently entitled to the income of AIFT.

AIX, AIFL, AIFT Consolidated

Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date.

Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred income tax liabilities are recognised for all taxable temporary differences:

except where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, except where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses can be utilised:

except where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and
in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.

Income taxes relating to items recognised directly in reserves are recognised in reserves and not in the Income Statement.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(r) Other taxes

Goods and Services Tax (GST)

Income, expenses and assets are recognised net of the amount of GST except:

where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and
receivables and payables are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet. Reduced input tax credits recoverable by AIFL or AIFT from the Australian Taxation Office are recognised as receivables in the Balance Sheet.

Cash flows are included in the Cash Flow Statement on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

(s) Rounding

The amounts contained in the financial report have been rounded to the nearest thousand where rounding is applicable.

(t) Comparatives

Where necessary, comparatives have been reclassified and repositioned for consistency with current year disclosures.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

2. INCOME

AIX

Consolidated AIFL 2007

	Unrealised gain/(loss)	Realised gain/(loss)

	Unrealised non foreign exchange related gain/(loss) Unrealised foreign exchange related gain/(loss) Total unrealised gain/(loss)	Realised non foreign exchange related gain/(loss) Realised foreign exchange related gain/(loss) Total realised gain/(loss)	Interest Dividends Distributions Other	Total income
Unlisted securities	$'000 $'000 $'000	$'000 $'000 $'000	$'000 $'000 $'000 $'000	$'000
Perth Airport (Airstralia Development Group & PAPT Holdings) Airport Development Group Australia Pacific Airports Corporation Metro Transport Sydney Port of Portland Epic Energy Queensland Airports Limited HOCHTIEF AirPort Capital Group Port of Geelong Unit Trust & Infrastructure Investment Corporation Statewide Roads SPV1 Unit Trust (DP World Adelaide) Other Cash and cash equivalents Other	41,601 0 41,601	0 0 0	2,704 0 0 226	44,531
	9,200 0 9,200	0 0 0	0 2,883 0 0	12,083
	36,299 0 36,299	0 0 0	0 8,352 0 0	44,651
	(3,215) 0 (3,215)	0 0 0	0 129 0 0	(3,086)
	(2,105) 0 (2,105)	0 0 0	0 7,795 5 0	5,695
	0 0 0	0 0 0	0 0 0 0	0
	56,508 0 56,508	0 0 0	2,329 6,531 0 0	65,368
	2,931 (13,437) (10,506)	0 23 23	7,955 0 9,523 0	6,995
	1,675 0 1,675	0 0 0	0 460 1,275 0	3,410
	600 0 600	0 0 0	0 2,598 0 0	3,198
	0 0 0	(2,006) 0 (2,006)	0 0 2,192 0	186
	143,494 (13,437) 130,057	(2,006) 23 (1,983) 0 0 0 0 14 14	12,988 28,748 12,995 226 2,810 0 0 0 0 0 0 0 2,810 0 0 0 15,798 28,748 12,995 226	183,031


	0 (2) (2)			2,808
	0 0 0			14
	0 (2) (2) 143,494 (13,439) 130,055	0 14 14 (2,006) 37 (1,969)		2,822 185,853

Aggregate gain/(loss) on financial instruments designated at fair value through the Income Statement for AIX at 30 June 2007 were $128,074,000 (2006 - $81,961,000).

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

2. INCOME (continued)

==> picture [558 x 34] intentionally omitted <==

AIX Consolidated AIFL 2006

	Unrealised gain/(loss)	Realised gain/(loss)

	Unrealised non foreign exchange related gain/(loss) Unrealised foreign exchange related gain/(loss) Total unrealised gain/(loss)	Realised non foreign exchange related gain/(loss) Realised foreign exchange related gain/(loss) Total realised gain/(loss)	Interest Dividends Distributions Other	Total income
Unlisted securities	$'000 $'000 $'000	$'000 $'000 $'000	$'000 $'000 $'000 $'000	$'000
Perth Airport (Airstralia Development Group & PAPT Holdings) Airport Development Group Australia Pacific Airports Corporation Metro Transport Sydney Port of Portland Epic Energy Queensland Airports Limited HOCHTIEF AirPort Capital Group Port of Geelong Unit Trust & Infrastructure Investment Corporation Statewide Roads SPV1 Unit Trust (DP World Adelaide) Other Cash and cash equivalents Other	27,773 0 27,773	0 0 0	3,238 0 0 453	31,464
	3,700 0 3,700	0 0 0	0 4,039 0 0	7,739
	10,701 0 10,701	0 0 0	0 7,621 0 0	18,322
	(3,200) 0 (3,200)	0 0 0	0 0 0 0	(3,200)
	847 0 847	0 0 0	0 2,153 0 0	3,000
	152 0 152	0 0 0	0 0 0 0	152
	17,114 0 17,114	0 0 0	2,331 10,784 0 0	30,229
	12,370 16,663 29,033	0 (51) (51)	7,884 0 3,394 0	40,260
	185 0 185	0 0 0	0 525 1,950 0	2,660
	(6,300) 0 (6,300)	0 0 0	0 2,333 0 0	(3,967)
	2,007 0 2,007	0 0 0	0 0 233 0	2,240
	65,349 16,663 82,012 0 5 5 0 0 0 0 5 5 65,349 16,668 82,017	0 (51) (51) 0 0 0 0 0 0	13,453 27,455 5,577 453 2,405 0 0 0 4 0 0 0 2,409 0 0 0 15,862 27,455 5,577 453	128,899


				2,410
				4
		0 0 0 0 (51) (51)		2,414
				131,313

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

2. INCOME (continued)

AIFL 2007	Unrealised non foreign exchange related gain/(loss) Unrealised foreign exchange related gain/(loss) Total unrealised gain/(loss) Unrealised gain/(loss)	Realised non foreign exchange related gain/(loss) Realised foreign exchange related gain/(loss) Total realised gain/(loss) Realised gain/(loss)	Interest Dividends Distributions Other	Total income
Unlisted securities	$'000 $'000 $'000	$'000 $'000 $'000	$'000 $'000 $'000 $'000	$'000
Australia Pacific Airports Corporation Port of Portland Port of Geelong Unit Trust & Infrastructure Investment Corporation Statewide Roads SPV1 Unit Trust (DP World Adelaide) Other Cash and cash equivalents Other	13,974 0 13,974	0 0 0	0 3,215 0 0	17,189
	(825) 0 (825)	0 0 0	0 3,054 2 0	2,231
	1,675 0 1,675	0 0 0	0 460 1,275 0	3,410
	600 0 600	0 0 0	0 2,598 0 0	3,198
	0 0 0	(2,006) 0 (2,006)	0 0 2,192 0	186
	15,424 0 15,424 0 0 0 0 0 0 0 0 0 15,424 0 15,424	(2,006) 0 (2,006) 0 0 0 0 0 0 0 0 0 (2,006) 0 (2,006)	0 9,327 3,469 0 16 0 0 0 253 0 0 0 269 0 0 0 269 9,327 3,469 0	26,214


				16
				253
				269
				26,483

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

2. INCOME (continued)

AIFL 2006	Unrealised non foreign exchange related gain/(loss) Unrealised foreign exchange related gain/(loss) Total unrealised gain/(loss) Unrealised gain/(loss)	Realised non foreign exchange related gain/(loss) Realised foreign exchange related gain/(loss) Total realised gain/(loss) Realised gain/(loss)	Interest Dividends Distributions Other	Total income $'000 7,056 1,196 2,660 (3,967) 2,240 9,185
Unlisted securities	$'000 $'000 $'000	$'000 $'000 $'000	$'000 $'000 $'000 $'000
Australia Pacific Airports Corporation Port of Portland Port of Geelong Unit Trust & Infrastructure Investment Corporation Statewide Roads SPV1 Unit Trust (DP World Adelaide) Other Cash and cash equivalents Other	4,122 0 4,122	0 0 0	0 2,934 0 0
	353 0 353	0 0 0	0 843 0 0
	185 0 185	0 0 0	0 525 1,950 0
	(6,300) 0 (6,300)	0 0 0	0 2,333 0 0
	2,007 0 2,007	0 0 0	0 0 233 0
	367 0 367 0 0 0 0 0 0 0 0 0 367 0 367	0 0 0 0 0 0 0 0 0 0 0 0 0 0 0	0 6,635 2,183 0 6 0 0 0 63 0 0 0 69 0 0 0 69 6,635 2,183 0

				6
				63
				69
				9,254

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

2. INCOME (continued)

Consolidated AIFT 2007	Unrealised non foreign exchange related gain/(loss) Unrealised foreign exchange related gain/(loss) Total unrealised gain/(loss) Unrealised gain/(loss)	Realised non foreign exchange related gain/(loss) Realised foreign exchange related gain/(loss) Total realised gain/(loss) Realised gain/(loss)	Distributions Other Dividends Interest	Total income
Unlisted securities	$'000 $'000 $'000	$'000 $'000 $'000	$'000 $'000 $'000 $'000	$'000
Perth Airport (Airstralia Development Group & PAPT Holdings) Airport Development Group Australia Pacific Airports Corporation Metro Transport Sydney Port of Portland Epic Energy Queensland Airports Limited HOCHTIEF AirPort Capital Group Other Cash and cash equivalents Other	41,601 0 41,601	0 0 0	2,704 0 0 226	44,531
	9,200 0 9,200	0 0 0	0 2,883 0 0	12,083
	22,325 0 22,325	0 0 0	0 5,137 0 0	27,462
	(3,215) 0 (3,215)	0 0 0	0 129 0 0	(3,086)
	(1,280) 0 (1,280)	0 0 0	0 4,741 3 0	3,464
	0 0 0	0 0 0	0 0 0 0	0
	56,508 0 56,508	0 0 0	2,329 6,531 0 0	65,368
	2,931 (13,437) (10,506)	0 23 23	7,955 0 9,523 0	6,995
	128,070 (13,437) 114,633 0 (2) (2) 0 0 0 0 (2) (2) 128,070 (13,439) 114,631	0 23 23	12,988 19,421 9,526 226	156,817


		0 0 0	2,794 0 0 0	2,792
		0 14 14	0 0 0 0	14
		0 14 14 0 37 37	2,794 0 0 0 15,782 19,421 9,526 226	2,806
				159,623

Aggregate gain/(loss) on financial instruments designated at fair value through the Income Statement for Consolidated AIFT at 30 June 2007 were $114,656,000 (2006 - $81,593,000).

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

2. INCOME (continued)

Consolidated AIFT 2006	Unrealised gain/(loss)	Realised gain/(loss)
	Unrealised non foreign exchange related gain/(loss) Unrealised foreign exchange related gain/(loss) Total unrealised gain/(loss)	Realised non foreign exchange related gain/(loss) Realised foreign exchange related gain/(loss) Total realised gain/(loss)	Interest Dividends Distributions Other	Total income
	$'000 $'000 $'000	$'000 $'000 $'000	$'000 $'000 $'000 $'000	$'000
Unlisted securities
Perth Airport (Airstralia Development Group & PAPT Holdings) Airport Development Group Australia Pacific Airports Corporation Metro Transport Sydney Port of Portland Epic Energy Queensland Airports Limited HOCHTIEF AirPort Capital Group Other Cash and cash equivalents Other	27,773 0 27,773	0 0 0	3,238 0 0 453	31,464
	3,700 0 3,700	0 0 0	0 4,039 0 0	7,739
	6,578 0 6,578	0 0 0	0 4,687 0 0	11,265
	(3,200) 0 (3,200)	0 0 0	0 0 0 0	(3,200)
	494 0 494	0 0 0	0 1,309 0 0	1,803
	152 0 152	0 0 0	0 0 0 0	152
	17,114 0 17,114	0 0 0	2,331 10,784 0 0	30,229
	12,371 16,662 29,033	0 (51) (51)	7,884 0 3,394 0	40,260
	64,982 16,662 81,644 0 5 5 0 0 0 0 5 5 64,982 16,667 81,649	0 (51) (51)	13,453 20,819 3,394 453	119,712


		0 0 0	2,402 0 0 0	2,407
		0 0 0	0 0 0 0	0
		0 0 0 0 (51) (51)	2,402 0 0 0 15,855 20,819 3,394 453	2,407
				122,119

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

2. INCOME (continued)

AIFT 2007	Unrealised gain/(loss)	Realised gain/(loss)
Unlisted securities	Unrealised non foreign exchange related gain/(loss) Unrealised foreign exchange related gain/(loss) Total unrealised gain/(loss) $'000 $'000 $'000	Realised non foreign exchange related gain/(loss) Realised foreign exchange related gain/(loss) Total realised gain/(loss) $'000 $'000 $'000	$'000 $'000 $'000 $'000 Dividends Distributions Other Interest	$'000 Total income
Perth Airport (Airstralia Development Group & PAPT Holdings) Airport Development Group Australia Pacific Airports Corporation Metro Transport Sydney Port of Portland Epic Energy Queensland Airports Limited	41,601 0 41,601 9,200 0 9,200 22,325 0 22,325 (3,215) 0 (3,215) (1,280) 0 (1,280) 0 0 0 56,508 0 56,508 125,139 0 125,139 3,124 (13,709) (10,585) 3,124 (13,709) (10,585) 0 (2) (2) 0 0 0 0 (2) (2) 128,263 (13,711) 114,552	0 0 0	2,704 0 0 226	44,531
		0 0 0	0 2,883 0 0	12,083
		0 0 0	0 5,137 0 0	27,462
		0 0 0	0 129 0 0	(3,086)
		0 0 0	0 4,741 3 0	3,464
		0 0 0	0 0 0 0	0
		0 0 0	2,329 6,531 0 0	65,368
		0 0 0	5,033 19,421 3 226	149,822

Subsidiary
Australian Infrastructure Fund International 1 Trust Other Cash and cash equivalents Other		0 0 0	0 0 17,701 0	7,116
		0 0 0	0 0 17,701 0	7,116


		0 0 0	2,621 0 0 0	2,619
		0 14 14	0 0 0 0	14
		0 14 14 0 14 14	2,621 0 0 0 7,654 19,421 17,704 226	2,633
				159,571

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

2. INCOME (continued)

AIFT 2006	Unrealised gain/(loss)	Realised gain/(loss)
Unlisted securities	Unrealised non foreign exchange related gain/(loss) Unrealised foreign exchange related gain/(loss) Total unrealised gain/(loss) $'000 $'000 $'000	Realised non foreign exchange related gain/(loss) Realised foreign exchange related gain/(loss) Total realised gain/(loss) $'000 $'000 $'000	$'000 $'000 $'000 $'000 Interest Dividends Distributions Other	$'000 Total income
Perth Airport (Airstralia Development Group & PAPT Holdings) Airport Development Group Australia Pacific Airports Corporation Metro Transport Sydney Port of Portland Epic Energy Queensland Airports Limited	27,773 0 27,773 3,700 0 3,700 6,578 0 6,578 (3,200) 0 (3,200) 494 0 494 152 0 152 17,114 0 17,114 52,611 0 52,611 30,637 0 30,637 30,637 0 30,637 0 5 5 0 0 0 0 5 5 83,248 5 83,253	0 0 0	3,238 0 0 453	31,464
		0 0 0	0 4,039 0 0	7,739
		0 0 0	0 4,687 0 0	11,265
		0 0 0	0 0 0 0	(3,200)
		0 0 0	0 1,309 0 0	1,803
		0 0 0	0 0 0 0	152
		0 0 0	2,331 10,784 0 0	30,229
		0 0 0 0 0 0 0 0 0 0 0 0 0 0	5,569 20,819 0 453 0 0 9,703 0 0 0 9,703 0 2,209 0 0 0 0 0 0 0	79,452

Subsidiary
Australian Infrastructure Fund International 1 Trust Other Cash and cash equivalents Other				40,340
				40,340


				2,214
				0
		0 0 0 0 0 0	2,209 0 0 0 7,778 20,819 9,703 453	2,214
				122,006

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

3. FINANCE COSTS

	AIX Consolidated AIFL	AIFL	AIFT Consolidated AIFT
Interest expense Other borrowing costs Bank fees	2007 2006 $'000 $'000 0 0 784 502 11 13 795 515	2007 2006 $'000 $'000 0 0 0 0 1 1 1 1	2007 2006 2007 2006 $'000 $'000 $'000 $'000 253 60 253 60 784 502 784 502 10 12 10 12 1,047 574 1,047 574

4. AUDITOR’S REMUNERATION

	AIX
	Consolidated AIFL	AIFL	Consolidated AIFT	AIFT
	2007 2006 $ $ 119,074 0 14,850 0 0 0 133,924 0 0 121,685 0 23,113 0 7,818 137,434 153,918 0 19,152 138,175 68,420 9,511 27,500 285,120 421,606	2007 2006 $ $ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0	2007 2006 $ $ 119,074 0 14,850 0 0 0 133,924 0 0 121,685 0 23,113 0 7,818 137,434 153,918 0 19,152 138,175 68,420 9,511 27,500 285,120 421,606	2007 2006 $ $
Amounts received or due and receivable by the current auditor, PricewaterhouseCoopers, for: - an audit or review of the financial reports - compliance plan audit - other non audit services				119,074 0 14,850 0 0 0
				133,924 0
				0 121,685 0 23,113 0 7,818 137,434 153,918 0 19,152 138,175 68,420 9,511 27,500
Amounts received or due and receivable by the predecessor auditor, Ernst and Young, for: - an audit or review of the financial reports - compliance plan audit - risk & compliance plan audit - other non audit services Taxation compliance Accounting advice and annual report review Asset acquisition advisory services Other advisory services
				285,120 421,606

AIX Changed auditor during the current financial year from Ernst and Young to PricewaterhouseCoopers.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

5. INCOME TAX

	AIX Consolidated AIFL	AIFL	Consolidated AIFT	AIFT
	2007 2006 $'000 $'000	2007 2006 $'000 $'000	2007 2006 $'000 $'000	2007 2006 $'000 $'000
(a) Major components of income tax for the year Current income tax expense Deferred income tax expense (b) Reconciliation of prima facie tax to income tax expense for the year Profit before income tax attributable to securityholders	1,207 97 2,180 8,265 3,387 8,362 171,544 117,878	869 93 3,925 836 4,794 929 26,482 9,253	339 4 (1,746) 7,429 (1,407) 7,433 145,062 108,625	0 0 0 0
				0 0
				145,008 108,510

Prima facie tax at the Australian tax rate of 30% (2005 - 30%)	51,464 35,364	7,945 2,776	43,518 32,588	43,503 32,553
Tax effect of amounts either not deductible/(taxable), or are attributable income in nature, in calculating the taxable income:
(Profit) not assessable in hands of trusts Non assessable distribution income Derecognition of prior year deferred tax liability Assessable attributable income Franked dividend gross up Tax offset - franked dividends Other Prior year under/(over) provision Prior year unrecognised income tax losses Recognition of deferred tax balances not previously recognised Derecognition of deferred tax asset relating to net unrealised capital loss Recognition of deferred tax asset in relation to previously derecognised net unrealised capital loss	(41,386) (25,154) (2,857) 0 (1,018) 0 336 0 1,264 713 (4,213) (2,377) (2) 0 0 2 0 (420) 0 33 0 201 (201) 0	0 0 0 0 0 0 0 0 1,264 713 (4,213) (2,377) (1) 0 0 3 0 (420) 0 33 0 201 (201) 0	(41,386) (25,155) (2,857) 0 (1,018) 0 336 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0	(43,503) (32,553) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Income tax expense/(benefit)	3,387 8,362	4,794 929	(1,407) 7,433	0 0

(c) Deferred income tax asset Deferred income tax asset Comprising: Unrealised loss on unlisted securities Stapled security issue costs (d) Deferred income tax liability Deferred income tax liability Comprising: Unrealised gain on unlisted securities Dividend receivable	13,547 13,542 13,530 13,509 17 33 13,547 13,542 22,929 20,744 22,893 20,610 36 134 22,929 20,744	13,547 13,542 13,530 13,509 17 33 13,547 13,542 17,573 13,643 17,537 13,509 36 134 17,573 13,643	0 0 0 0 0 0 0 0 5,356 7,102 5,356 7,102 0 0 5,356 7,102	0 0
				0 0 0 0
				0 0
				0 0
				0 0 0 0
				0 0

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

5. INCOME TAX (continued)

	AIX Consolidated AIFL	AIFL	Consolidated AIFT	AIFT
	2007 2006 $'000 $'000	2007 2006 $'000 $'000	2007 2006 $'000 $'000	2007 2006 $'000 $'000
(e) Current income tax liability Current income tax liability	1,207 97 1,207 97	869 93 869 93	339 4 339 4	0 0
				0 0

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

6. CASH AND CASH EQUIVALENTS

	AIX
(a) Reconciliation of profit after income tax attributable to securityholders to the net cash flows from operating activities Profit after income tax attributable to securitytholders Adjustments for non-cash and non-operating items: (Gain)/loss - unlisted securities - unrealised (Gain)/loss - subsidiaries - unrealised (Gain)/loss - unlisted securities - realised (Gain)/loss - other - unrealised Non operating interest (income)/expense Changes in operating related assets and liabilities: (Increase)/decrease in income receivable (Increase)/decrease in other receivables (Increase)/decrease in prepayments (Increase)/decrease in accrued income (Increase)/decrease in deferred income tax asset Increase/(decrease) in trade and other payables Increase/(decrease) in unlisted security short term loan payable Increase/(decrease) in current income tax liability Increase/(decrease) in deferred income tax liability Increase/(decrease) in provisions Net cash flows from operating activities (b) Reconciliation of cash and cash equivalents Cash at bank Short term deposits	Consolidated AIFL	AIFL	Consolidated AIFT AIFT
	2007 2006 $'000 $'000 168,157 109,516 (130,057) (82,012) 0 0 2,006 0 2 (5) 0 0 1,388 (1,938) 39 (7) 151 179 238 155 (5) (12,482) 250 (215) 0 (2,153) 1,110 396 2,185 20,744 1 74 45,465 32,252 AIX	2007 2006 $'000 $'000 21,688 8,324 (15,424) (367) 0 0 2,006 0 0 0 (253) (60) 1,808 (1,938) 0 0 0 0 (5) 0 (5) (12,809) 0 0 0 (843) 776 392 3,930 13,644 0 0 14,521 6,343	2007 2006 2007 2006 $'000 $'000 $'000 $'000 146,469 101,192 145,008 108,510 (114,633) (81,644) (125,139) (52,611) 0 0 10,585 (30,637) 0 0 0 0 2 (5) 2 (5) 253 60 253 60 (420) 0 10,770 (9,504) 39 (7) 39 (6) 151 179 151 179 242 155 132 108 0 328 0 0 250 (218) 250 (215) 0 (1,309) 0 (1,309) 335 4 0 0 (1,746) 7,102 0 0 1 74 1 74 30,943 25,911 42,052 14,644
	Consolidated AIFL	AIFL	Consolidated AIFT AIFT
	2007 2006 $'000 $'000 29,825 12,950 44,216 44,543 74,041 57,493	2007 2006 $'000 $'000 427 180 0 0 427 180	2007 2006 2007 2006 $'000 $'000 $'000 $'000 29,398 12,770 29,369 9,254 44,216 44,544 44,215 36,847 73,614 57,314 73,584 46,101

Cash at bank earns interest at floating rates based on daily deposit rates. Short term deposits are made for varying periods of between one day and three months, depending on the immediate cash requirements of AIX and earn interest at the respective short term deposit rates.

The fair value of cash and cash equivalents for AIX at 30 June 2007 is $74,041,000 (2006 $57,493,000).

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

6. CASH AND CASH EQUIVALENTS (continued)

(c) Significant non-cash investing and financing activities

2007

During the 2007 year AIFT was issued the following securities by its subsidiary entity:

4,483,433 units valued at $4,483,433 by Australian Infrastructure Fund International 1 Trust to acquire an additional interest in IAI International Airport Investments GmbH & Co. KG.

2006

During the 2006 year AIFT was issued the following securities by its subsidiary entity:

6,132,072 units valued at $6,132,072 by Australian Infrastructure Fund International 1 Trust to extinguish the inter-entity receivable/payable balance between the two entities.

7. TRADE AND OTHER RECEIVABLES

Income receivable Other receivables

AIX
Consolidated AIFL	AIFL	AIFT Consolidated AIFT
2007 2006 $'000 $'000 425 2,227 430 50 855 2,277	2007 2006 $'000 $'000 422 2,227 9,807 3,345 10,229 5,572	2007 2006 2007 2006 $'000 $'000 $'000 $'000 3 0 15 11,200 430 50 428 50 433 50 443 11,250

8. OTHER ASSETS

Prepayments

AIX
Consolidated AIFL	AIFL	AIFT Consolidated AIFT
2007 2006 $'000 $'000 152 303 152 303	2007 2006 $'000 $'000 0 0 0 0	2007 2006 2007 2006 $'000 $'000 $'000 $'000 152 303 152 303 152 303 152 303

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

9. INVESTMENT IN SUBSIDIARIES

AIFT

Subsidiary name Country of incorporation Form of investment 2007 2006 Australian Infrastructure Fund International 1 Trust 100% 100% Australia Ordinary units Percentage ownership	Fair value at 30 June 2006 Acquisitions at fair value Movement in fair value upon revaluation Fair value at 30 June 2007 $'000 $'000 $'000 $'000 232,083 6,021 (10,585) 227,519
	232,083 6,021 (10,585) 227,519

The financial results of subsidiary entities have been included in the consolidated financial results of AIX and Consolidated AIFT.

Australian Infrastructure Fund International 1 Trust is an unlisted unit trust which has the following investment interests:

a 100% interest in its wholly owned subsidiary, Australian Infrastructure Fund International Pty Ltd (AIFIPL) which has an 80.04% interest in IAI International Airport Investments GmbH & Co KG which in turn has a 50% equity interest in HOCHTIEF AirPort Capital Group GmbH (HTAC). Although AIFIPL owns 80.04% of IAI International Airport Investments GmbH & Co KG, due to the contractual agreement between the owners of IAI International Airport Investments GmbH & Co KG, AIFIPL does not have a controlling interest in that entity;
a 50% interest in the general partner IAI International Airport Investments Verwaltungs GmbH; and
a 40.02% interest in HTAC shareholder loans.

HTAC has been independently valued by KPMG Corporate Finance at 30 June 2007.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

10. UNLISTED SECURITIES

AIX

Consolidated AIFL

Unlisted security name Operation Form of investment 2007 2006 Perth Airport (Airstralia Development Group & PAPT Holdings) 24.87% 24.87% Airport operator Ordinary shares and shareholder loans Airport Development Group 25.40% 25.40% Airport operator Ordinary and preference shares Australia Pacific Airports Corporation 8.13% 8.13% Airport operator Ordinary shares Metro Transport Sydney 38.89% 38.89% Light rail system owner and operator Ordinary shares and shareholder loans issued by Metro Transport Sydney Pty Ltd, shareholder loans and infrastructure bonds issued by Sydney Light Rail Company Limited Port of Portland 50.00% 50.00% Port operator Ordinary shares and ordinary units Epic Energy 4.00% 4.00% Non-operating Ordinary shares and shareholder loans issued by Isarose Pty Ltd, which in turn holds units in Epic Energy WA unit trust Queensland Airports Limited 49.07% 49.07% Airport operator Ordinary shares, preference shares and shareholder loans HOCHTIEF AirPort Capital Group 40.02% 40.02% Airport investor A 40.02% interest in HTAC shareholder loans, a 80.04% partnership interest in IAI International Airport Investments GmbH & Co KG which in turn has a 40.02% equity interest in HTAC and a 50% equity interest in the general partner IAI International Airport Investments Verwaltungs GmbH Port of Geelong Unit Trust & Infrastructure Investment Corporation 35.00% 35.00% Port operator Ordinary units and ordinary shares Statewide Roads 6.20% 6.20% Toll roads Ordinary and preference shares SPV1 Unit Trust (DP World Adelaide) 0.00% 30.41% Port operator Ordinary units Total unlisted securites Percentage ownership	Fair value at 30 June 2006 Acquisition at fair value Capital reductions & disposals Fair Value movement upon disposals & capital reductions Accrued income movement Movement in fair value upon revaluation Fair value at 30 June 2007 $'000 $'000 $'000 $'000 $'000 $'000 $'000 202,000 0 (10,069) 0 (132) 41,601 233,400 36,800 0 0 0 0 9,200 46,000 161,101 0 0 0 0 36,299 197,400 5,700 134 (19) 0 0 (3,215) 2,600 49,099 0 0 0 1 (2,105) 46,995 0 0 0 0 0 0 0 110,100 9,424 (14,330) 0 (2) 56,508 161,700 232,175 6,020 0 0 (110) (10,506) 227,579
	17,705 0 0 0 0 1,675 19,380 20,100 0 0 0 0 600 20,700
	2,371 0 (365) (2,006) 0 0 0
	837,151 15,578 (24,783) (2,006) (243) 130,057 955,754

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

10. UNLISTED SECURITIES (continued)

AIFL

Unlisted security name Operation Form of investment 2007 2006 Australia Pacific Airports Corporation 3.13% 3.13% Airport operator Ordinary shares Port of Portland 19.59% 19.59% Port operator Ordinary shares and ordinary units Port of Geelong Unit Trust & Infrastructure Investment Corporation 35.00% 35.00% Port operator Ordinary units and ordinary shares Statewide Roads 6.20% 6.20% Toll roads Ordinary and preference shares SPV1 Unit Trust (DP World Adelaide) 0.00% 30.41% Port operator Ordinary units Total unlisted securites Percentage ownership	Fair value at 30 June 2006 Acquisition at fair value Capital reductions & disposals Fair Value movement upon disposals & capital reductions Accrued income movement Movement in fair value upon revaluation Fair value at 30 June 2007 $'000 $'000 $'000 $'000 $'000 $'000 $'000 62,022 0 0 0 0 13,974 75,996 19,238 0 0 0 0 (825) 18,413 17,705 0 0 0 0 1,675 19,380 20,100 0 0 0 0 600 20,700 2,371 0 (365) (2,006) 0 0 0
	121,436 0 (365) (2,006) 0 15,424 134,489

Unlisted security name
Operation
Form of investment
2007
2006
Australia Pacific Airports Corporation
3.13%
3.13% Airport operator
Ordinary shares
Port of Portland
19.59% 19.59% Port operator
Ordinary shares and ordinary units
Port of Geelong Unit Trust &
Infrastructure Investment Corporation
35.00% 35.00% Port operator
Ordinary units and ordinary shares
Statewide Roads
6.20%
6.20% Toll roads
Ordinary and preference shares
SPV1 Unit Trust (DP World Adelaide)
0.00%
30.41% Port operator
Ordinary units
Total unlisted securites
Percentage
ownership

Fair value
at
30 June 2006
Acquisition
at
fair value
Capital
reductions
& disposals
Fair Value
movement
upon disposals
& capital
reductions
Accrued
income
movement
Movement in
fair value
upon
revaluation
Fair value
at
30 June 2007
$'000
$'000
$'000
$'000
$'000
$'000
$'000
62,022
0
0
0
0
13,974
75,996
19,238
0
0
0
0
(825)
18,413
17,705
0
0
0
0
1,675
19,380
20,100
0
0
0
0
600
20,700
2,371
0
(365)
(2,006)
0
0
0

121,436
0
(365)
(2,006)
0
15,424
134,489

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

10. UNLISTED SECURITIES (continued)

Consolidated AIFT

Unlisted security name Operation Form of investment 2007 2006 Perth Airport (Airstralia Development Group & PAPT Holdings) 24.87% 24.87% Airport operator Ordinary shares and shareholder loans Airport Development Group 25.40% 25.40% Airport operator Ordinary and preference shares Australia Pacific Airports Corporation 5.00% 5.00% Airport operator Ordinary shares Metro Transport Sydney 38.89% 38.89% Light rail system owner and operator Ordinary shares and shareholder loans issued by Metro Transport Sydney Pty Ltd, shareholder loans and infrastructure bonds issued by Sydney Light Rail Company Limited Port of Portland 30.41% 30.41% Port operator Ordinary shares and ordinary units Epic Energy 4.00% 4.00% Non-operating Ordinary shares and shareholder loans issued by Isarose Pty Ltd, which in turn holds units in Epic Energy WA unit trust Queensland Airports Limited 49.07% 49.07% Airport operator Ordinary shares, preference shares and shareholder loans HOCHTIEF AirPort Capital Group 40.02% 40.02% Airport investor A 40.02% interest in HTAC shareholder loans, a 80.04% partnership interest in IAI International Airport Investments GmbH & Co KG which in turn has a 40.02% equity interest in HTAC and a 50% equity interest in the general partner IAI International Airport Investments Verwaltungs GmbH Total unlisted securites Percentage ownership	Fair value at 30 June 2006 Acquisition at fair value Capital reductions & disposals Fair Value movement upon disposals & capital reductions Accrued income movement Movement in fair value upon revaluation Fair value at 30 June 2007 $'000 $'000 $'000 $'000 $'000 $'000 $'000 202,000 0 (10,069) 0 (132) 41,601 233,400 36,800 0 0 0 0 9,200 46,000 99,078 0 0 0 0 22,325 121,403 5,700 134 (19) 0 0 (3,215) 2,600 29,862 0 0 0 0 (1,280) 28,582 0 0 0 0 0 0 0 110,100 9,424 (14,330) 0 (2) 56,508 161,700 232,175 6,020 0 0 (110) (10,506) 227,579
	715,715 15,578 (24,418) 0 (244) 114,633 821,264

Unlisted security name
Operation
Form of investment
2007
2006
Perth Airport
(Airstralia Development Group & PAPT
Holdings)
24.87% 24.87% Airport operator
Ordinary shares and shareholder loans
Airport Development Group
25.40% 25.40% Airport operator
Ordinary and preference shares
Australia Pacific Airports
Corporation
5.00%
5.00% Airport operator
Ordinary shares
Metro Transport Sydney
38.89% 38.89% Light rail
system owner
and operator
Ordinary shares and shareholder loans
issued by Metro Transport Sydney Pty Ltd,
shareholder loans and infrastructure bonds
issued by Sydney Light Rail Company
Limited
Port of Portland
30.41% 30.41% Port operator
Ordinary shares and ordinary units
Epic Energy
4.00%
4.00% Non-operating
Ordinary shares and shareholder loans
issued by Isarose Pty Ltd, which in turn
holds units in Epic Energy WA unit trust
Queensland Airports Limited
49.07% 49.07% Airport operator
Ordinary shares, preference shares and
shareholder loans
HOCHTIEF AirPort Capital Group
40.02% 40.02% Airport investor
A 40.02% interest in HTAC shareholder
loans, a 80.04% partnership interest in IAI
International Airport Investments GmbH &
Co KG which in turn has a 40.02% equity
interest in HTAC and a 50% equity interest
in the general partner IAI International
Airport Investments Verwaltungs GmbH
Total unlisted securites
Percentage
ownership

Fair value
at
30 June 2006
Acquisition
at
fair value
Capital
reductions
& disposals
Fair Value
movement
upon disposals
& capital
reductions
Accrued
income
movement
Movement in
fair value
upon
revaluation
Fair value
at
30 June 2007
$'000
$'000
$'000
$'000
$'000
$'000
$'000
202,000
0
(10,069)
0
(132)
41,601
233,400
36,800
0
0
0
0
9,200
46,000
99,078
0
0
0
0
22,325
121,403

5,700
134
(19)
0
0
(3,215)
2,600
29,862
0
0
0
0
(1,280)
28,582
0
0
0
0
0
0
0
110,100
9,424
(14,330)
0
(2)
56,508
161,700

232,175
6,020
0
0
(110)
(10,506)
227,579

715,715
15,578
(24,418)
0
(244)
114,633
821,264

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

10. UNLISTED SECURITIES (continued)

AIFT

Unlisted security name Operation Form of investment 2007 2006 Perth Airport (Airstralia Development Group & PAPT Holdings) 24.87% 24.87% Airport operator Ordinary shares and shareholder loans Airport Development Group 25.40% 25.40% Airport operator Ordinary and preference shares Australia Pacific Airports Corporation 5.00% 5.00% Airport operator Ordinary shares Metro Transport Sydney 38.89% 38.89% Light rail system owner and operator Ordinary shares and shareholder loans issued by Metro Transport Sydney Pty Ltd, shareholder loans and infrastructure bonds issued by Sydney Light Rail Company Limited Port of Portland 30.41% 30.41% Port operator Ordinary shares and ordinary units Epic Energy 4.00% 4.00% Non-operating Ordinary shares and shareholder loans issued by Isarose Pty Ltd, which in turn holds units in Epic Energy WA unit trust Queensland Airports Limited 49.07% 49.07% Airport operator Ordinary shares, preference shares and shareholder loans Total unlisted securites Percentage ownership	Fair value at 30 June 2006 Acquisition at fair value Capital reductions & disposals Fair Value movement upon disposals & capital reductions Accrued income movement Movement in fair value upon revaluation Fair value at 30 June 2007 $'000 $'000 $'000 $'000 $'000 $'000 $'000 202,000 0 (10,069) 0 (132) 41,601 233,400 36,800 0 0 0 0 9,200 46,000 99,078 0 0 0 0 22,325 121,403 5,700 134 (19) 0 0 (3,215) 2,600 29,862 0 0 0 0 (1,280) 28,582 0 0 0 0 0 0 0 110,100 9,424 (14,330) 0 (2) 56,508 161,700
	483,540 9,558 (24,418) 0 (134) 125,139 593,685

Unlisted security name
Operation
Form of investment
2007
2006
Perth Airport
(Airstralia Development Group & PAPT
Holdings)
24.87% 24.87% Airport operator
Ordinary shares and shareholder loans
Airport Development Group
25.40% 25.40% Airport operator
Ordinary and preference shares
Australia Pacific Airports Corporation
5.00%
5.00% Airport operator
Ordinary shares
Metro Transport Sydney
38.89% 38.89% Light rail
system owner
and operator
Ordinary shares and shareholder loans
issued by Metro Transport Sydney Pty Ltd,
shareholder loans and infrastructure bonds
issued by Sydney Light Rail Company
Limited
Port of Portland
30.41% 30.41% Port operator
Ordinary shares and ordinary units
Epic Energy
4.00%
4.00% Non-operating
Ordinary shares and shareholder loans
issued by Isarose Pty Ltd, which in turn
holds units in Epic Energy WA unit trust
Queensland Airports Limited
49.07% 49.07% Airport operator
Ordinary shares, preference shares and
shareholder loans
Total unlisted securites
Percentage
ownership

Fair value
at
30 June 2006
Acquisition
at
fair value
Capital
reductions
& disposals
Fair Value
movement
upon disposals
& capital
reductions
Accrued
income
movement
Movement in
fair value
upon
revaluation
Fair value
at
30 June 2007
$'000
$'000
$'000
$'000
$'000
$'000
$'000
202,000
0
(10,069)
0
(132)
41,601
233,400
36,800
0
0
0
0
9,200
46,000
99,078
0
0
0
0
22,325
121,403

5,700
134
(19)
0
0
(3,215)
2,600
29,862
0
0
0
0
(1,280)
28,582
0
0
0
0
0
0
0
110,100
9,424
(14,330)
0
(2)
56,508
161,700

483,540
9,558
(24,418)
0
(134)
125,139
593,685

All unlisted securities have been independently valued by KPMG Corporate Finance at 30 June 2007.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

11. TRADE AND OTHER PAYABLES

Payable - the Responsible Entity Distribution and dividend payable Other payables	AIX
	Consolidated AIFL	AIFL	AIFT Consolidated AIFT
	2007 2006 $'000 $'000 875 766 29,983 27,534 386 245 31,244 28,545	2007 2006 $'000 $'000 0 0 7,000 5,000 0 0 7,000 5,000	2007 2006 2007 2006 $'000 $'000 $'000 $'000 875 766 875 766 22,983 22,534 22,983 22,534 386 245 461 245 24,244 23,545 24,319 23,545

Trade and other payables are non-interest bearing and generally on 30 day terms. For information regarding the distribution and dividend payable refer note 15.

Further details of related party payables are included in notes 19 and 20.

12. PROVISIONS

Provision for directors' retirement benefit Movement in the provision for directors' retirement benefit: Balance at the beginning of the year Provision raised during the year less: provisions paid during the year Balance at the end of the year	AIX
	Consolidated AIFL	AIFL	Consolidated AIFT AIFT
	2007 2006 $'000 $'000 494 493 494 493 493 419 188 74 (187) 0 494 493	2007 2006 $'000 $'000 0 0 0 0 0 0 0 0 0 0 0 0	2007 2006 2007 2006 $'000 $'000 $'000 $'000 494 493 494 493 494 493 494 493 493 419 493 419 188 74 188 74 (187) 0 (187) 0 494 493 494 493

The directors’ retirement benefit is available to non-executive directors of AIFL who were appointed prior to 16 April 2003. The directors’ retirement benefit is provided and paid on behalf of AIFL by AIFT. For more information refer note 1(l).

13. INTEREST BEARING LOANS AND BORROWINGS

Multi-option facility - cash advance Borrowings - AIFL	AIX
	Consolidated AIFL	AIFL	AIFT Consolidated AIFT
	2007 2006 $'000 $'000 0 0 0 0 0 0	2007 2006 $'000 $'000 0 0 0 0 0 0	2007 2006 2007 2006 $'000 $'000 $'000 $'000 0 0 0 0 9,805 3,345 9,805 3,345 9,805 3,345 9,805 3,345

Borrowings

The loan from AIFL is unsecured, at call and interest bearing. Interest is charged at the 30 day bank bill rate. Further details are included at note 18.

Multi-option facility

AIFT has a $200 million syndicated multi-option facility agreement with Westpac Banking Corporation and Australian and New Zealand Banking Group Limited which expires on 23 December 2007. Interest is charged under this facility at the base rate (BBSY) plus a margin. At 30 June 2007, $nil of this multi-option facility was drawn (2006 - $nil).

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

14. AMOUNTS ATTRIBUTABLE TO SECURITYHOLDERS

Amounts attributable to securityholders comprises: Issued securities Undistributed profit attributable to securityholders (a) Issued securities (number) Issued securities at the beginning of the year Securities issued during the year - pursuant to dividend reinvestment plan Issued securities at the end of the year (b) Issued securities (dollars) Issued securities at the beginning of the year Securities issued during the year - pursuant to dividend reinvestment plan Less: adjustment to security issue costs Issued securities at the end of the year (c) Undistributed profit attributable to securityholders Balance at the beginning of the year Profit after income tax attributable to securityholders	AIX
	Consolidated AIFL	AIFL	Consolidated AIFT	AIFT
	2007 2006 $'000 $'000 736,855 719,554 251,620 141,333 988,475 860,887 No. '000 No. '000 367,123 361,130 7,668 5,993 374,791 367,123 $'000 $'000 719,554 705,123 17,301 14,406 0 25 736,855 719,554 141,333 84,823 168,157 109,516 (57,870) (53,006) 251,620 141,333	2007 2006 $'000 $'000 113,564 110,996 19,686 10,998 133,250 121,994 No. '000 No. '000 367,123 361,130 7,668 5,993 374,791 367,123 $'000 $'000 110,996 108,848 2,568 2,148 0 0 113,564 110,996 10,998 10,928 21,688 8,324 (13,000) (8,254) 19,686 10,998	2007 2006 $'000 $'000 623,291 608,558 231,934 130,335 855,225 738,893 No. '000 No. '000 367,123 361,130 7,668 5,993 374,791 367,123 $'000 $'000 608,558 596,275 14,733 12,258 0 25 623,291 608,558 130,335 73,895 146,469 101,192 (44,870) (44,752) 231,934 130,335	2007 2006 $'000 $'000 623,291 608,558 237,474 137,336
				860,765 745,894
				No. '000 No. '000 367,123 361,130 7,668 5,993
				374,791 367,123
				$'000 $'000 608,558 596,275 14,733 12,258 0 25
				623,291 608,558
				137,336 73,578 145,008 108,510 (44,870) (44,752)
Dividends and distributions to securityholders Balance at the end of the year
				237,474 137,336

(d) Terms and conditions of issued securities

The securities are stapled securities being shares in AIFL and units in AIFT.

Stapled securityholders have various rights under AIFL’s and AIFT’s Constitutions, including the right to:

receive dividends and income distributions;
attend and vote at meetings of stapled securityholders; and
participate in the termination and winding up of AIFL and AIFT.

The rights, obligations and restrictions attached to each stapled security are identical in all respects.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

15. DISTRIBUTIONS AND DIVIDENDS

Distributions provided for or paid during the year Dividends provided for or paid during the year	2007 2006 $'000 $'000 44,870 44,752 13,000 8,254 57,870 53,006 AIX Consolidated AIFL	2007 2006 $'000 $'000 0 0 13,000 8,254 13,000 8,254 AIFL	2007 2006 2007 2006 $'000 $'000 $'000 $'000 44,870 44,752 44,870 44,752 0 0 0 0 44,870 44,752 44,870 44,752 AIFT Consolidated AIFT

Final dividend and distribution

A final dividend and distribution of $29,983,000 (8.00 cents per stapled security) was declared by AIX for the year ended 30 June 2007 (2006 – 7.50 cents per stapled security) and will be paid on 30 August 2007.

A final dividend of $7,000,000 (1.87 cents per security) was declared by AIFL for the year ended 30 June 2007 (2006 – 1.36 cents per security) and will be paid on 30 August 2007.

A final distribution of $22,983,000 (6.13 cents per security) was declared by AIFT for the year ended 30 June 2007 (2006 – 6.14 cents per security) and will be paid on 30 August 2007.

The final dividend was franked to 100% (2006 – 100%).

Interim dividend and distribution

An interim dividend and distribution of $27,887,000 (7.50 cents per stapled security) was declared by AIX for the half year ended 31 December 2006 (2005 – 7.00 cents per stapled security) and was paid on 27 February 2007.

An interim dividend of $6,000,000 (1.61 cents per security) was declared by AIFL for the half year ended 31 December 2006 (2005 – 0.89 cents per security) and was paid on 27 February 2007.

An interim distribution of $21,887,000 (5.89 cents per security) was declared by AIFT for the half year ended 31 December 2006 (2005 – 6.11 cents per security) and was paid on 27 February 2007.

The interim dividend was franked to 100% (2005 – 100%).

16. FRANKING CREDIT AVAILABILITY

Franking credits available for distribution at the beginning of the year Add: franking credits received during the year Less: franking credits distributed/distributable to stapled securityholders Add: franking credits received from payments of tax during the year Less: reduction of franking credits from refunds of tax during the year Franking credits available for distribution at the end of the year	2007 2006 $'000 $'000 7,227 7,969 12,530 9,092 (13,031) (9,538) 93 0 0 (296) 6,819 7,227 AIX Consolidated AIFL	2007 2006 $'000 $'000 7,227 7,969 4,213 2,461 (4,714) (2,907) 93 0 0 (296) 6,819 7,227 AIFL	2007 2006 2007 2006 $'000 $'000 $'000 $'000 0 0 0 0 8,317 6,631 8,317 6,631 (8,317) (6,631) (8,317) (6,631) 0 0 0 0 0 0 0 0 0 0 0 0 Consolidated AIFT AIFT

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

17. SEGMENT INFORMATION

Primary business segment

AIX and Consolidated AIFT operate in one business segment, being investment in infrastructure projects. The income, results, assets and liabilities are presented in the Income Statement, Balance Sheet and notes to the financial statements.

Secondary geographic segment

AIX and Consolidated AIFT operate from two geographic locations being Australia and Europe where their investing activities are managed. Details of geographic segment assets, income and asset acquisitions are set out below. Segment income includes dividends, distributions, interest, realised gains and losses on the sale of unlisted securities and gains and losses on changes in the fair value of unlisted securities.

AIX

Consolidated AIFL

AIX Consolidated AIFL
	2007 2006 Segment assets	2007 2006 Segment income	2007 2006 Acquisition of segment assets
Australia Europe
	$'000 $'000	$'000 $'000	$'000 $'000
		178,858 91,053 6,995 40,260 185,853 131,313	9,558 5 6,020 26
	816,770 678,591 227,579 232,175 1,044,349 910,766
			15,578 31

Consolidated AIFT

Consolidated AIFT
	2007 2006 Segment assets	2007 2006 2007 2006 Segment income Acquisition of segment assets
Australia Europe
	$'000 $'000	$'000 $'000 $'000 $'000
		152,628 81,859 9,558 5 6,995 40,260 6,020 26 159,623 122,119 15,578 31
	667,884 541,207 227,579 232,175 895,463 773,382

18. FINANCIAL INSTRUMENTS

(a) Financial risk management objectives and policies

AIX and Consolidated AIFT’s principal financial instruments comprise cash and short-term deposits, investments in unlisted securities and interest-bearing loans and borrowings. The main purpose of these financial instruments is to generate a return on the investment made by securityholders. AIX and Consolidated AIFT have various other financial instruments such as trade receivables and trade payables, which arise directly from their operations.

AIX and Consolidated AIFT do not enter into or trade financial instruments for speculative purposes.

The main risks arising from AIX’s and Consolidated AIFT’s financial instruments are interest rate risk, foreign currency risk and credit risk. The directors of AIFL and the directors of the Responsible Entity of AIFT review and agree policies for managing each of these risks.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

18. FINANCIAL INSTRUMENTS (continued)

(b) Credit risk

Credit risk represents the risk that the counterparty to the financial instrument will fail to discharge an obligation and cause AIX or Consolidated AIFT to incur a financial loss.

With respect to credit risk arising from the financial assets of AIX or Consolidated AIFT, the exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments.

Credit risk is minimised by AIX and Consolidated AIFT only undertaking transactions with major reputable counterparties or on recognised exchanges and the aggregate value of transactions are spread amongst those counterparties. In addition, receivable balances are monitored on an ongoing basis with the result that the AIX and Consolidated AIFT’s exposure to bad debts is not significant.

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets is the carrying amount of those financial assets, net of any allowances for doubtful debts, as disclosed in the Balance Sheet and notes to the financial statements.

Concentration of credit risk

AIX and Consolidated AIFT’s credit exposures are detailed in the following notes:

Trade and other receivables Note 7 Unlisted securities Note 10

(c) Interest rate risk

Interest rate risk is the risk that a financial instrument’s value may fluctuate as a result of changes in market interest rates on those financial assets and financial liabilities.

The following tables set out AIX’s, AIFL’s, Consolidated AIFT’s and AIFT’s exposure to interest rate risk, including the maturity dates and the effective weighted average interest rate by category of financial instrument.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

18. FINANCIAL INSTRUMENTS (continued)

(c) Interest rate risk (continued)

AIX

Consolidated AIFL 2007

	Vibl	Fixed interest rate maturing in: Weighted N
	Less than 1 year 1-2 years 2-3 years 3-4 years 4-5 years More than 5 years average effective arae interest rate on- interest bearin Total
	interest rate g
Financial assets Cash and cash equivalents Trade and other receivables Unlisted securities Total financial assets Financial liabilities Trade and other payables	$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 % p. a. 74,041 0 0 0 0 0 0 0 74,041 6.0% 0 0 0 0 0 0 0 855 855 n/a 19,062 0 0 0 0 18,407 99,734 818,551 955,754 8.5% 93,103 0 0 0 0 18,407 99,734 819,406 1,030,650 0 0 0 0 0 0 0 31,244 31,244 n/a
Interest bearing loans and borrowings	0 0 0 0 0 0 0 0 0 n/a
Securityholder interests classified as debt Total financial liabilities	0 0 0 0 0 0 0 855,225 855,225 n/a 0 0 0 0 0 0 0 886,469 886,469

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

18. FINANCIAL INSTRUMENTS (continued)

(c) Interest rate risk (continued)

AIX

Consolidated AIFL 2006

		Weighted Fixed interest rate maturing in:
	Less than 1 year 1-2 years 2-3 years 3-4 years 4-5 years More than 5 years average effective interest rate Variable interest rate Non- interest bearing Total
Financial assets Cash and cash equivalents Trade and other receivables Unlisted securities Total financial assets Financial liabilities Trade and other payables	$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 % p. a. 57,493 0 0 0 0 0 0 0 57,493 5.4% 0 0 0 0 0 0 0 2,277 2,277 n/a 29,131 0 0 0 0 0 124,045 683,975 837,151 8.6% 86,624 0 0 0 0 0 124,045 686,252 896,921 0 0 0 0 0 0 0 28,545 28,545 n/a
Interest bearing loans and borrowings	0 0 0 0 0 0 0 0 0 n/a
Securityholder interests classified as debt Total financial liabilities	0 0 0 0 0 0 0 738,893 738,893 n/a 0 0 0 0 0 0 0 767,438 767,438

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

18. FINANCIAL INSTRUMENTS (continued)

(c) Interest rate risk (continued)

AIFL 2007

		Fixed interest rate maturing in: Weighted
	Less than 1 year 1-2 years 2-3 years 3-4 years 4-5 years More than 5 years Variable interest rate Non- interest bearing Total average effective interest rate
Financial assets Cash and cash equivalents Trade and other receivables Unlisted securities Total financial assets Financial liabilities Trade and other payables	$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 % p. a. 427 0 0 0 0 0 0 0 427 5.8% 9,807 0 0 0 0 0 0 422 10,229 7.7% 0 0 0 0 0 0 0 134,489 134,489 n/a 10,234 0 0 0 0 0 0 134,911 145,145 0 0 0 0 0 0 0 7,000 7,000 n/a
Interest bearing loans and borrowings	0 0 0 0 0 0 0 0 0 n/a
Total financial liabilities	0 0 0 0 0 0 0 7,000 7,000

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

18. FINANCIAL INSTRUMENTS (continued)

(c) Interest rate risk (continued)

AIFL 2006

	Variable	Weighted Fixed interest rate maturing in: Non-
	Less than 1 year 1-2 years 2-3 years 3-4 years 4-5 years More than 5 years average effective interest rate interest rate interest bearing Total
Financial assets Cash and cash equivalents Trade and other receivables Unlisted securities Total financial assets Financial liabilities Trade and other payables	$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 % p. a. 180 0 0 0 0 0 0 0 180 5.3% 3,345 0 0 0 0 0 0 2,227 5,572 5.5% 0 0 0 0 0 0 0 121,436 121,436 n/a 3,525 0 0 0 0 0 0 123,663 127,188 0 0 0 0 0 0 0 5,000 5,000 n/a
Interest bearing loans and borrowings	0 0 0 0 0 0 0 0 0 n/a
Total financial liabilities	0 0 0 0 0 0 0 5,000 5,000

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

18. FINANCIAL INSTRUMENTS (continued)

(c) Interest rate risk (continued)

Consolidated AIFT 2007

	Variabl	Fixed interest rate maturing in: Weighted Non-
	Less than 1 year 1-2 years 2-3 years 3-4 years 4-5 years More than 5 years Total average effective interest rate interest rate interest bearing
Financial assets Cash and cash equivalents Trade and other receivables Unlisted securities Total financial assets Financial liabilities Trade and other payables	$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 % p. a. 73,614 0 0 0 0 0 0 0 73,614 6.0% 0 0 0 0 0 0 0 433 433 n/a 19,062 0 0 0 0 18,407 99,734 684,061 821,264 8.6% 92,676 0 0 0 0 18,407 99,734 684,494 895,311 0 0 0 0 0 0 0 24,244 24,244 n/a
Interest bearing loans and borrowings	9,805 0 0 0 0 0 0 0 9,805 7.7%
Securityholder interests classified as debt Total financial liabilities	0 0 0 0 0 0 0 855,225 855,225 n/a 9,805 0 0 0 0 0 0 879,469 889,274

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

18. FINANCIAL INSTRUMENTS (continued)

(c) Interest rate risk (continued)

Consolidated AIFT 2006
		Weighted Fixed interest rate maturing in:
	Less than 1 year 1-2 years 2-3 years 3-4 years 4-5 years More than 5 years average effective interest rate Total Variable interest rate Non- interest bearing
Financial assets Cash and cash equivalents Trade and other receivables Unlisted securities Total financial assets Financial liabilities Trade and other payables	$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 % p. a. 57,314 0 0 0 0 0 0 0 57,314 5.4% 0 0 0 0 0 0 0 50 50 n/a 29,131 0 0 0 0 0 124,045 562,539 715,715 8.6% 86,445 0 0 0 0 0 124,045 562,589 773,079 0 0 0 0 0 0 0 23,545 23,545 n/a
Interest bearing loans and borrowings	3,345 0 0 0 0 0 0 0 3,345 5.5%
Securityholder interests classified as debt Total financial liabilities	0 0 0 0 0 0 0 738,893 738,893 n/a 3,345 0 0 0 0 0 0 762,438 765,783

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

18. FINANCIAL INSTRUMENTS (continued)

(c) Interest rate risk (continued)

AIFT
2007		Weighted Fixed interest rate maturing in:
	Less than 1 year 1-2 years 2-3 years 3-4 years 4-5 years More than 5 years average effective interest rate Variable interest rate Non- interest bearing Total
Financial assets Cash and cash equivalents Trade and other receivables Unlisted securities	$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 % p. a. 73,584 0 0 0 0 0 0 0 73,584 6.0% 0 0 0 0 0 0 0 443 443 n/a 19,062 0 0 0 0 18,407 0 556,216 593,685 10.1%
Investment in subsidiaries	0 0 0 0 0 0 0 227,519 227,519 n/a
Total financial assets Financial liabilities Trade and other payables	92,646 0 0 0 0 18,407 0 784,178 895,231 0 0 0 0 0 0 0 24,319 24,319 n/a
Interest bearing loans and borrowings	9,805 0 0 0 0 0 0 0 9,805 7.7%
Securityholder interests classified as debt Total financial liabilities	0 0 0 0 0 0 0 860,765 860,765 n/a 9,805 0 0 0 0 0 0 885,084 894,889

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

18. FINANCIAL INSTRUMENTS (continued)

(c) Interest rate risk (continued)

AIFT 2006

	Vibl	N Weighted Fixed interest rate maturing in:
	Less than 1 year 1-2 years 2-3 years 3-4 years 4-5 years More than 5 years arae interest t on- interest bi Total average effective
	rae earng interest rate
	$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 % p. a.
Financial assets
Cash and cash equivalents Trade and other receivables Unlisted securities	46,101 0 0 0 0 0 0 0 46,101 5.4% 0 0 0 0 0 0 0 11,250 11,250 n/a 29,131 0 0 0 0 0 23,314 431,095 483,540 9.8%
Investment in subsidiaries	0 0 0 0 0 0 0 232,083 232,083 n/a
Total financial assets Financial liabilities Trade and other payables	75,232 0 0 0 0 0 23,314 674,428 772,974 0 0 0 0 0 0 0 23,545 23,545 n/a
Interest bearing loans and borrowings	3,345 0 0 0 0 0 0 0 3,345 5.5%
Securityholder interests classified as debt Total financial liabilities	0 0 0 0 0 0 0 745,894 745,894 n/a 3,345 0 0 0 0 0 0 769,439 772,784

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

18. FINANCIAL INSTRUMENTS (continued)

(d) Fair values

The carrying values of AIX’s and Consolidated AIFT’s financial assets and liabilities recognised in the Balance Sheet and notes to the financial statements approximate their fair values.

The following methods and assumptions are used to determine the fair values of assets and liabilities.

Cash, cash equivalents and short term investments

Carrying amounts approximate fair values because of their short term to maturity.

Receivables and payables

Carrying amounts approximate fair values because of their short term to cash receipt or payment.

Unlisted securities

For unlisted securities where there is no quoted market bid price, fair value is determined by an appropriately qualified independent valuer by projecting future cash flows and then discounting these cash flows back to their present value using a post-tax discount rate that reflects a risk adjusted discount rate. Where applicable, foreign currency discounted cash flows are translated back to the local functional currency using the spot foreign exchange rate.

(e) Foreign currency risk

Foreign currency risk arises when future commercial transactions and recognised assets and liabilities are denominated in a currency that is not AIX’s or Consolidated AIFT’s functional currency.

AIX and Consolidated AIFT have unlisted securities denominated in Euro. As a result, the Balance Sheet and Income Statement can be affected significantly by movements in the respective Euro/AUD foreign exchange rate.

The current policy of AIX and Consolidated AIFT is not to enter into derivatives or other currency cover to hedge foreign exchange risk post-completion of unlisted security acquisitions.

(f) Liquidity risk and cash flow interest rate risk

Liquidity risk is the risk that AIX and Consolidated AIFT will encounter difficulty in raising funds to meet commitments associated with financial instruments. Cash flow interest rate risk is the risk that future cash flows on a financial instrument will fluctuate because of changes in market interest rates.

To control liquidity and cash flow interest rate risk, AIX and Consolidated AIFT hold adequate liquid financial instruments. In addition, AIX and Consolidated AIFT invest within established limits to ensure there is no concentration of risk. Furthermore, due to the dynamic nature of the underlying businesses, AIX and Consolidated AIFT aim at maintaining flexibility in funding by keeping committed credit lines available.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

18. FINANCIAL INSTRUMENTS (continued)

(g) Derivative Securities

At 30 June 2007, AIX holds a call option for the right to purchase 100 percent of the units in a special purpose investment vehicle relating to State Highway 130, Segments 5 & 6, being a toll road project located in Texas, United States of America (US Toll Road Project). The option was acquired at arms length from other Hastings managed entities.

At 30 June 2007, the particulars of the option are as follows:

Derivative	Option Premium Paid USD $'000	Option Premium Paid AUD $'000
US Toll Road Project call option	695	862

Exercise price

The exercise price of the option will be calculated as the amount contributed per unit by the grantors of the option in the special purpose investment vehicle at the date of exercise, plus 11.5% p.a. (compounding annually) of the contributed amount, less the amount of any distributions or returns of capital reduced by 11.5% p.a. of the distributed amount.

Exercise period

The option is exercisable at AIX’s discretion during the period up to and including financial close of the US Toll Road Project. At 30 June 2007, the date of financial close of the project has not yet been established.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

19. RELATED PARTY DISCLOSURES – AIX AND AIFL

(a) Key management personnel

Disclosures in relation to key management personnel during the year are set out in note 21.

(b) Associate entities

Names of associate entities

Associate entities and AIX and AIFL’s interests in these entities are as follows:

Perth Airport (Airstralia Development Group & PAPT Holdings Pty Ltd) Airport Development Group Pty Ltd Metro Light Rail and Monorail Port of Portland Queensland Airports Limited HOCHTIEF AirPort Capital Group Port of Geelong Unit Trust & Infrastructure Investment Corporation SPV1 Unit Trust (DP World Adelaide)	AIX
	Consolidated AIFL AIFL
	2007 2006 2007 2006 Holding Holding Holding Holding 24.87% 24.87% 0.00% 0.00% 25.40% 25.40% 0.00% 0.00% 38.89% 38.89% 0.00% 0.00% 50.00% 50.00% 19.59% 19.59% 49.07% 49.07% 0.00% 0.00% 40.02% 40.02% 0.00% 0.00% 35.00% 35.00% 35.00% 35.00% 0.00% 30.41% 0.00% 30.41%

For further details in relation to holdings in associate entities refer to note 10 – Unlisted securities.

Transactions with associate entities

For details of AIX and AIFL’s income from associate entities refer to note 2 – Income.

Details of other transactions with associate entities are as follows:

Advancement/(repayment) of unlisted security shareholder loans
Perth Airport (Airstralia Development Group & PAPT Holdings Pty Ltd)
Queensland Airports Limited
HOCHTIEF AirPort Capital Group
(Advancement)/repayment of loans from
Port of Portland
Metro Light Rail and Monorail
Acquisition/(disposal) of shares or units in
SPV1 Unit Trust (DP World Adelaide)
Queensland Airports Limited
HOCHTIEF AirPort Capital Group

AIX

Consolidated AIFL
AIFL

2007
2006
2007
2006
$'000
$'000
$'000
$'000
(10,069)
(5,665)
0
0
(14,330)
0
0
0
5,094
0
0
0
0
2,152
0
844
115
0
0
0
(365)
0
(365)
0
9,424
(17,419)
0
0
926
0
0
0

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

19. RELATED PARTY DISCLOSURES – AIX AND AIFL (continued)

(b) Associate entities (continued)

Receivable and payable balances with associate entities

Receivable and payable balances outstanding between AIX and associate entities are as follows:

Income receivable Perth Airport (Airstralia Development Group & PAPT Holdings Pty Ltd) SPV1 Unit Trust (DP World Adelaide) Queensland Airports Limited HOCHTIEF AirPort Capital Group Port of Geelong Unit Trust & Infrastructure Investment Corporation Port of Portland	AIX
	Consolidated AIFL AIFL
	2007 2006 2007 2006 $'000 $'000 $'000 $'000 687 820 0 0 0 233 0 233 579 581 0 0 1,938 2,049 0 0 422 1,995 422 1,995 5 0 2 0

Receivable and payable balances are non-interest bearing and generally payable within 30 days.

(c) Other related parties – the Manager and Responsible Entity

Name of the Manager and Responsible Entity

The Manager of AIFL and the Responsible Entity of AIFT is Hastings Funds Management Limited (Hastings) and the immediate parent entity of Hastings is Westpac Institutional Holdings Pty Limited.

The ultimate parent entity of Westpac Institutional Holdings Pty Limited is Westpac Banking Corporation (Westpac) which throughout the year held 100 percent of the ordinary issued capital of Westpac Institutional Holdings Pty Limited.

The Manager and Responsible Entity and its related entities’ interests in the financial instruments issued by AIX

The number of stapled securities and the percentage ownership interest held by Hastings and its related entities in the financial instruments issued by AIX at the end of the year is detailed below:

	Securities held	Securities held	Ownership	interest
	2007	2006	2007	2006
	No.	No.	%	%
Hastings	333,319	333,319	0.09%	0.09%
Westpac and controlled entities (excluding Hastings)	1,003,043	10,585,810	0.27%	2.88%

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

19. RELATED PARTY DISCLOSURES – AIX AND AIFL (continued)

(c) Other related parties – the Manager and Responsible Entity (continued)

Transactions with the Manager and Responsible Entity and its related entities

Details of transactions with the Manager and Responsible Entity and its related entities are as follows:

Hastings
Reimbursement of expenses paid or payable on behalf of AIX
Hastings
Distributions and dividends paid or payable
Hastings
Westpac
Interest received or receivable
Westpac
Finance costs paid or payable
Westpac
Multi-option facility - line fees
Multi-option facility - agency fee
Multi-option facility - establishment fee
Bank guarantee fees
Bank fees
Management fees paid or payable

AIX

Consolidated AIFL
AIFL

2007
2006
2007
2006
$'000
$'000
$'000
$'000
9,335
8,365
0
0
564
623
0
0
77
72
77
72
1,841
2,486
1,841
2,486
2,764
2,374
0
0
600
360
0
0
14
14
0
0
0
127
0
0
4
1
0
0
10
12
0
0

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

19. RELATED PARTY DISCLOSURES – AIX AND AIFL (continued)

(c) Other related parties – the Manager and Responsible Entity (continued)

Outstanding balances with the Manager and Responsible Entity and its related entities

Receivable, payable and other balances outstanding with the Manager and Responsible Entity and its related entities are as follows:

Distribution and dividend payable Hastings Westpac Management fees payable Hastings Multi-option facility Westpac Total facility available Less: facility undrawn Facility drawn Banker's undertaking (guarantee) Westpac Total undertaking available Less: undertaking undrawn Undertaking drawn	AIX
	Consolidated AIFL AIFL
	2007 2006 2007 2006 $'000 $'000 $'000 $'000 27 25 27 25 80 794 80 794 875 766 0 0 200,000 100,000 0 0 (200,000) (100,000) 0 0 0 0 0 0 389 389 0 0 0 0 0 0 389 389 0 0

For details in relation to the multi-option facility refer note 13 – Interest Bearing Loans and Borrowings.

Banker’s undertaking fees of 1.00% per annum are being charged for the issuance of the banker’s undertaking. For further details in relation to the banker’s undertaking in place with Westpac refer note 23 – Contingencies.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

19. RELATED PARTY DISCLOSURES – AIX AND AIFL (continued)

(d) Other related parties – the stapled group

Name of the stapled entity

The shares in AIFL are stapled to units in AIFT with the stapled securities listed on the Australian Stock Exchange. The stapled group is known as AIX. All expenses incurred by AIX are recorded and paid by AIFT.

Transactions with AIFT

Details of transactions with AIFT are as follows:

Proceeds from loans received from AIFT Loans advanced to AIFT Interest income received or receivable from AIFT Interest expense paid or payable to AIFT	AIX
	Consolidated AIFL AIFL
	2007 2006 2007 2006 $'000 $'000 $'000 $'000 0 0 9,684 4,635 0 0 16,144 6,328 0 0 253 60 0 0 0 0

Outstanding balances with AIFT

Receivable, payable and other balances outstanding with AIFT are as follows:

Interest bearing loans and borrowings receivable from AIFT	AIX
	AIFL Consolidated AIFL
	2007 2006 2007 2006 $'000 $'000 $'000 $'000 0 0 9,805 3,345

Receivable balances incur interest at the 30 day bank bill rate (BBSW) and are payable at call.

All related party transactions occurred on normal commercial terms and conditions.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

20. RELATED PARTY DISCLOSURES – CONSOLIDATED AIFT AND AIFT

(a) Key management personnel

Disclosures in relation to key management personnel during the year are set out in note 21.

(b) Subsidiaries

Names of subsidiaries

The names and percentage ownership of AIFT’s holdings in subsidiary entities is detailed in note 9 – Investment in subsidiaries.

Transactions with subsidiaries

For details of AIFT’s income from subsidiary entities refer note 2 – Income.

Other transactions with subsidiaries are detailed below:

	Consolidated	AIFT
	2007	2006	2007	2006
	$'000	$'000	$'000	$'000
Acquisition of ordinary units in
Australian Infrastructure Fund International 1 Trust	0	0	6,021	6,131
Asset acquisition services supplied to
Australian Infrastructure Fund International 1 Trust	0	0	0	639
Amounts receivable, reimbursed by
Australian Infrastructure Fund International 1 Trust	0	0	0	6,800
Distributions received or receivable from
Australian Infrastructure Fund International 1 Trust	0	0	17,701	11,200

Administration and other costs paid by AIFT on behalf of subsidiaries are not recharged to subsidiaries.

Outstanding balances with subsidiaries

Outstanding balances with subsidiaries are as follows:

	Consolidated	AIFT
	2007	2006	2007	2006
	$'000	$'000	$'000	$'000
Other receivable from
Australian Infrastructure Fund International 1 Trust	0	0	0	0
Distribution receivable from
Australian Infrastructure Fund International 1 Trust	0	0	12	11,200

Receivable balances are non-interest bearing and at call.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

20. RELATED PARTY DISCLOSURES – CONSOLIDATED AIFT AND AIFT (continued)

(c) Associate entities

Names of associate entities

Associate entities and AIFT’s interests in these entities is as follows:

	Consolidated AIFT	Consolidated AIFT
	2007	2006	2007	2006
	Holding	Holding	Holding	Holding
Perth Airport (Airstralia Development Group & PAPT Holdings Pty Ltd)	24.87%	24.87%	24.87%	24.87%
Airport Development Group Pty Ltd	25.40%	25.40%	25.40%	25.40%
Metro Light Rail and Monorail	38.89%	38.89%	38.89%	38.89%
Port of Portland	30.41%	30.41%	30.41%	30.41%
Queensland Airports Limited	49.07%	49.07%	49.07%	49.07%
HOCHTIEF AirPort Capital Group	40.02%	40.02%	0.00%	0.00%

For further details in relation to holdings in associate entities refer to note 10 – Unlisted securities.

Transactions with associate entities

For details of AIFT’s income from associate entities refer to note 2 – Income.

Details of other transactions with associate entities are as follows:

	Consolidated AIFT	Consolidated AIFT
	2007	2006	2007	2006
	$'000	$'000	$'000	$'000
Advancement/(repayment) of unlisted security shareholder loans
Perth Airport (Airstralia Development Group & PAPT Holdings Pty Ltd)	(10,069)	(5,665)	(10,069)	(5,665)
Queensland Airports Limited	(14,330)	0	(14,330)	0
HOCHTIEF AirPort Capital Group	5,094	0	0	0
(Advancement)/repayment of loans from
Port of Portland	0	1,309	0	1,309
Metro Light Rail and Monorail	115	0	115	0
Acquisition/(disposal) of shares or units in
Queensland Airports Limited	9,424	(17,419)	9,424	(17,419)
HOCHTIEF AirPort Capital Group	926	0	0	0

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

20. RELATED PARTY DISCLOSURES – CONSOLIDATED AIFT AND AIFT

(c) Associate entities (continued)

Outstanding balances with associate entities

Outstanding balances with associate entities are as follows:

	Consolidated	AIFT
	2007	2006	2007	2006
	$'000	$'000	$'000	$'000
Income receivable
Perth Airport (Airstralia Development Group & PAPT Holdings Pty Ltd)	687	820	687	820
Queensland Airports Limited	579	581	579	581
HOCHTIEF AirPort Capital Group	1,938	2,049	0	0
Port of Portland	2	0	2	0

Receivable balances are non-interest bearing and at call.

(d) Other related parties – the Responsible Entity

Name of the Responsible Entity

The Responsible Entity of AIFT is Hastings Funds Management Limited (Hastings). The immediate parent entity of Hastings is Westpac Institutional Holdings Pty Limited.

The Responsible Entity’s and its related entities’ interests in the financial instruments issued by AIX

The number of stapled securities and the percentage ownership interest held by the Responsible Entity and its related entities in AIX at the end of the year is detailed below:

	Securities held	Securities held	Ownership	interest
	2007	2006	2007	2006
	No.	No.	%	%
Hastings	333,319	333,319	0.09%	0.09%
Westpac and controlled entities (excluding Hastings)	1,003,043	10,585,810	0.27%	2.88%

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

20. RELATED PARTY DISCLOSURES – CONSOLIDATED AIFT AND AIFT

(d) Other related parties – the Responsible Entity (continued)

Other transactions with the Responsible Entity and its related entities

Details of other transactions with the Responsible Entity and its related entities are as follows:

	Consolidated	AIFT
	2007	2006	2007	2006
	$'000	$'000	$'000	$'000
Management fees paid or payable
Hastings	9,335	8,365	9,335	8,365
Reimbursement of expenses paid or payable on behalf of AIX
Hastings	564	623	564	623
Distributions paid or payable
Hastings	77	72	77	72
Westpac	1,841	2,486	1,841	2,486
Interest received or receivable
Westpac	2,764	2,374	2,591	2,194
Finance costs paid or payable
Westpac
Multi-option facility - line fees	600	360	600	360
Multi-option facility - agency fee	14	28	14	28
Multi-option facility - establishment fee	0	0	0	0
Bank guarantee fees	4	1	4	1
Bank charges	10	12	10	12

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

20. RELATED PARTY DISCLOSURES – CONSOLIDATED AIFT AND AIFT

(d) Other related parties – the Responsible Entity (continued)

Outstanding balances with the Responsible Entity and its related entities

Outstanding balances with the Responsible Entity and its related entities are as follows:

Distribution payable Hastings Westpac Management fees payable Hastings Multi-option facility Westpac Total facility Available Less: facility undrawn Facility drawn Banker's undertaking (guarantee) Westpac Total undertaking available Less: undertaking undrawn Undertaking drawn	Consolidated AIFT AIFT
	2007 2006 2007 2006 $'000 $'000 $'000 $'000 27 25 27 25 80 794 80 794 875 766 875 765 200,000 100,000 200,000 100,000 (200,000) (100,000) (200,000) (100,000) 0 0 0 0 389 389 389 389 0 0 0 0 389 389 389 389

For details in relation to the multi-option facility refer note 13 – Interest-bearing loans and borrowings.

Banker’s undertaking fees of 1.0% per annum are being charged for the issuance of the banker’s undertaking. For further details in relation to the banker’s undertaking in place with Westpac refer note 23 – Contingencies.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

20. RELATED PARTY DISCLOSURES – CONSOLIDATED AIFT AND AIFT

(e) Other related parties – the stapled group

Name of the stapled entity

The units in AIFT are stapled to shares in AIFL with the stapled securities listed on the Australian Stock Exchange. The stapled group is known as AIX. All expenses incurred by AIX are recorded and paid by AIFT.

Transactions with AIFL

Details of transactions with AIFL are as follows:

	Consolidated	AIFT
	2007	2006	2007	2006
	$'000	$'000	$'000	$'000
Proceeds from loans received from
AIFL	9,684	6,328	9,684	6,328
Loans advanced to
AIFL	16,144	4,635	16,144	4,635
Interest income received or receivable from
AIFL	0	0	0	0
Interest expense paid or payable to
AIFL	253	60	253	60

Outstanding balances with AIFL

Receivable, payable and other balances outstanding with AIFL are as follows:

	Consolidated	AIFT
	2007	2006	2007	2006
	$'000	$'000	$'000	$'000
Interest bearing loans and borrowings payable to
AIFL	9,805	3,345	9,805	3,345

The loan from AIFL is unsecured, at call and interest bearing. Interest is charged at the 30 day bank bill rate.

All related party transactions occurred on normal commercial terms and conditions.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

21. KEY MANAGEMENT PERSONNEL

(a) Names of key management personnel

The key management personnel of AIFL and AIFT include persons who are directors of AIFL and directors and employees of the Responsible Entity of AIFT.

AIFL

The names of the key management personnel of AIFL during the year and until the date of this report are:

Paul Espie Chairman Barry Capp Retired on 27 November 2006 John Harvey Mike Hutchinson Tim Poole Resigned on 15 June 2007 Robert Tsenin Robert Humphris Appointed on 11 September 2006 Peter McGregor Appointed on 20 June 2007

Responsible Entity of AIFT and Manager of AIFL

The names of the key management personnel of the Responsible Entity of AIFT and manager of AIFL during the year and until the date of this report are:

William Forde Director since 30 January 2006 and appointed Chairman on 26 October 2006 Sean McElduff Resigned as Chairman on 26 October 2006 and continues as Director Mike Hutchinson Jim McDonald Appointed on 18 June 2007 with effect 1 July 2007 Tim Poole Resigned on 15 June 2007 Guy Strapp Resigned on 26 October 2006 Jim Tate Peter McGregor Chief Operating Officer of AIX

(b) Compensation policy for key management personnel

(i) Compensation policy for key management personnel of the Manager and Responsible Entity

Hastings is paid a fee to provide a range of services and as part of that arrangement, Hastings is required to provide appropriately qualified staff and resources to undertake those services. Hastings determines the compensation of its directors and employees and AIFL and AIFT have no involvement in determining the compensation of those key management personnel. The compensation details of Hastings as Responsible Entity of AIFT and manager of AIFL are detailed in note 19 – Related Party Disclosures – AIX and AIFL and note 20 – Related Party Disclosures – Consolidated AIFT and AIFT.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

21. KEY MANAGEMENT PERSONNEL (continued)

(b) Compensation policy for key management personnel (continued)

(ii) Compensation policy for key management personnel of AIFL

Non-executive directors’ remuneration

Board policy on remuneration

The Board of directors of AIFL is responsible for determining and reviewing compensation arrangements for the directors of AIFL.

The fees paid to directors are set at levels that reflect both the responsibilities of, and the time commitments required from, the directors to discharge their duties. In order to maintain their independence and impartiality, the remuneration of the non-executive directors is not linked to the performance of either AIFL or AIFT. In setting fee levels, the Board takes into account:

independent professional advice;
fees paid by comparable companies;
the general time commitment required from directors and the risks associated with discharging the duties attaching to the role of director; and
the level of remuneration necessary to attract and retain directors of a suitable calibre.

The Board will continue to review its approach to non-executive director remuneration to ensure it remains in line with general industry practice and best practice principles of corporate governance.

Remuneration structure

Non-executive directors’ fees, including committee fees, are set by the Board within the maximum aggregate amount of $800,000 approved by securityholders in 2005. Directors’ fees paid for the financial year ending 30 June 2007 total $658,331. A retirement payment of $187,211 to Barry Capp has also been included in Directors’ fees.

The Chairman, taking into account the time commitment required, received a fee of $225,000 for the financial year less an allowance of $24,525 for the value of his retirement benefit. This value was determined by a consulting actuary. The board elected at an earlier date to phase out the retirement benefit and Directors who joined the Board after April 2003 are therefore not entitled to the retirement benefit. The directors received a fee of $90,000 for the financial year.

In addition, directors who sit on the Board’s Audit Committee received a fee of $10,000 for the financial year and the Chairman of the Audit Committee received $20,000 for the financial year. The Chairman of the Board received no fee for his membership of the Audit Committee.

Superannuation contributions are also made on behalf of the non-executive directors in accordance with the AIFL’s statutory superannuation obligations.

In accordance with rule 37 of the AIFL Constitution, directors are also permitted to be paid additional fees for special duties. Such fees are included in the aggregate remuneration cap approved by securityholders. Directors are also entitled to be reimbursed for all business related expenses, including travel on AIX business, as may be incurred in the discharge of their duties.

Remuneration paid to other officeholders

Neither the Managing Director, the AIX Chief Operating Officer, nor the Company Secretaries were remunerated by AIX.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

21. KEY MANAGEMENT PERSONNEL (continued)

Remuneration paid

Executive directors are not remunerated out of the property of AIFL or AIFT. Details of non-executive directors’ remuneration for the financial year ended 30 June 2007 are set out in the following table. No bonuses, options or other emoluments are paid to the directors of AIX.

	*Short-term*	*Short-term*		*Post employment*	*Post employment*
		Committee		Super-	Retirement
	Board fees		fees	annuation	benefits(1)	Total
	$		$	$	$	$
Key management personnel	of AIFL
Paul Espie
2007	200,475		0	18,043	0	218,518
2006	200,475		0	18,043	0	218,518
Barry Capp	retired 27 November	2006
2007	33,843		0	0	187,211	221,054
2006	82,894		0	0	0	82,894
John Harvey
2007	90,000		20,000	9,900	0	119,900
2006	90,000		20,000	9,900	0	119,900
Robert Tsenin
2007	90,000		10,000	9,000	0	109,000
2006	73,500		5,349	7,096	0	85,946
Mike Hutchinson
2007	90,000		0	8,100	0	98,100
2006	72,226		0	6,500	0	78,726
Robert Humphris	appointed 11 September		2006
2007	72,450		0	6,520	0	78,970
2006	0		0	0	0	0
Ross Dunning	resigned 19 October	2005
2007	0		0	0	0	0
2006	19,983		3,633	0	0	23,616
Total compensation: Key management personnel of AIFL
2007	576,768		30,000	51,563	187,211	845,542
2006	539,078		28,982	41,540	0	609,600

(1) Retirement benefits exclude provision expensed.

Note:

Peter McGregor was appointed a director on 20 June 2007 and is not remunerated out of the property of AIFL or AIFT.

Tim Poole resigned on 15 June 2007 and was not remunerated out of the property of AIFL or AIFT.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

21. KEY MANAGEMENT PERSONNEL (continued)

(c) Key management personnel interests in financial instruments issued by AIX

Interests in the securities issued by AIX held by key management personnel and their related entities at balance date were as follows:

2007

2007
Name	Opening Holding	Acquisitions	DRP Issue	Disposals	Closing Holding
	1 July 2006				30 June 2007
	No.	No.	No.	No.	No.
Paul Espie	251,718	200,000	22,494	0	474,212
Barry Capp(1)	35,191	0	0	0	35,191
John Harvey	25,000	25,000	0	0	50,000
Tim Poole(2)	60,000	0	0	0	60,000
Robert Tsenin	20,307	45,000	2,066	0	67,373
Mike Hutchinson	14,349	30,000	0	0	44,349
Robert Humphris	50,000	50,000	0	0	100,000
Peter McGregor	0	17,500	0	0	17,500

(1) Interests held on 27 November 2006 when Barry Capp retired.

(2) Interests held on 15 June 2007 when Tim Poole resigned.

2006

Name	Opening Holding	Acquisitions	DRP Issue	Disposals	Closing Holding
	1 July 2005				30 June 2006
	No.	No.	No.	No.	No.
Paul Espie	143,267	100,000	8,451	0	251,718
Barry Capp	35,191	0	0	0	35,191
Ross Dunning(1)	19,535	0	1,152	0	20,687
Mike Fitzpatrick(2)	1,565,477	0	0	0	1,565,477
John Harvey	25,000	0	0	0	25,000
Tim Poole	0	60,000	0	0	60,000
Robert Tsenin	0	20,000	307	0	20,307
Mike Hutchinson	14,349	0	0	0	14,349
Ray Wilson(3)	264,421	0	0	(130,000)	134,421
Mitchell King(4)	12,264	0	724	0	12,988

(1) Interests held on 19 October 2005 when Ross Dunning resigned.

(2) Interests held on 4 November 2005 when Mike Fitzpatrick resigned.

(3) Interests held on 30 January 2006 when Ray Wilson resigned.

(4) Interests held on 18 January 2006 when Mitchell King resigned as COO.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2007

21. KEY MANAGEMENT PERSONNEL (continued)

(d) Distributions paid or payable by AIX to key management personnel and their related entities

Distributions paid or payable by AIX to key management personnel and their related entities during the year were as follows:

	2007	2006
Name	$	$
Paul Espie	91,396	39,211
Barry Capp(1)	8,094	7,566
Ross Dunning(2)	0	4,324
Mike Fitzpatrick(3)	0	336,578
John Harvey	1,875	5,375
Tim Poole(4)	11,215	4,500
Robert Tsenin	10,367	2,223
Mike Hutchinson	6,825	3,085
Robert Humphris	17,375	0
Ray Wilson(5)	0	47,101
Mitchell King(6)	0	2,715
Peter McGregor	1,400	0

(1) Retired 27 November 2006
(2) Resigned 19 October 2005
(3) Resigned 3 August 2005
(4) Resigned 15 June 2007
(5) Resigned 30 January 2006
(6) Resigned 18 January 2006

(e) Distributions payable by AIX to key management personnel and their related entities

Distributions payable to key management personnel at the end of the year were as follows:

	2007	2006
Name	$	$
Paul Espie	37,937	18,879
Barry Capp	2,815	2,639
Ross Dunning	0	1,552
Mike Fitzpatrick	0	117,411
John Harvey	4,000	1,875
Tim Poole	4,800	4,500
Robert Tsenin	5,390	1,523
Mike Hutchinson	3,548	1,076
Robert Humphris	8,000	0
Ray Wilson	0	10,082
Mitchell King	0	974
Peter McGregor	1,400	0

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

21. KEY MANAGEMENT PERSONNEL (continued)

(e) Distributions payable by AIX to key management personnel and their related entities (continued)

Key management personnel related entities

During the year up to the date of his resignation, Tim Poole was a director of:

Hastings Funds Management Limited;
Australia Pacific Airports Corporation;
Australian Infrastructure Fund International 1 Pty Ltd (Trustee for Australian Infrastructure Fund International 1 Trust);
Australian Infrastructure Fund International Pty Ltd; and
IAI International Airport Investments Verwaltungs GmbH.

Peter McGregor is a director of:

Airport Development Group Pty Ltd;
Australian Pacific Airports Corporation Pty Ltd;
Infrastructure Investments Corporation Pty Ltd;
Queensland Airports Limited

William Forde is a director of Westpac Funds Management Limited and Westpac Funds Management Administration Pty Ltd

Sean McElduff is a director of Westpac Institutional Holdings Pty Ltd, Westpac Private Equity Pty Ltd and other Westpac entities.

Jim Tate is a director of Westpac Institutional Holdings Pty Ltd, Westpac Custodian Nominees Pty Ltd and other Westpac entities.

Transactions and outstanding balances with key management personnel related entities

For details of transactions and outstanding balances between key management personnel related entities and AIFL and AIFT refer to note 19 – Related Party Disclosures – Consolidated AIFL and AIFL and note 20 – Related Party Disclosures – Consolidated AIFT and AIFT.

All transactions between key management personnel and AIX were done so on normal commercial terms. Interests acquired or disposed of in the financial instruments issued by AIX were within the allowable trading periods determined by the Board of Directors of Hastings and AIFL. No securities were granted to key management personnel during the period as compensation.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED AUSTRALIAN INFRASTRUCTURE FUND TRUST NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2007

22. EARNINGS PER SECURITY

Net assets attributable to securityholders are classified as equity in AIFL’s Balance Sheet. Consequently, earnings per security when calculated in accordance with AASB 133 Earnings per Share, is 5.82 cents per security (2006 – 2.28 cents) for AIX and AIFL .

Net assets attributable to securityholders are classified as liabilities in AIFT’s Balance Sheet. Consequently, earnings per security calculated in accordance with AASB 133 Earnings per Share, is nil cents per security (2006 – nil cents) for Consolidated AIFT and AIFT.

The directors believe it is useful to calculate and disclose earnings per security based on ‘profit after income tax attributable to securityholders’ and ‘number of issued securities’.

Basic earnings per security under this method is calculated as ‘profit after income tax attributable to securityholders’, divided by the weighted average number of securities on issue, adjusted for any bonus element.

Diluted ‘profit after income tax attributable to securityholders’ per security is not materially different from basic ‘profit after income tax attributable to securityholders’ per security.

Basic earnings per security (cents) Weighted average number of securities (000's) Profit after income tax attributable to securityholders	Jun Jun Jun Jun Jun Jun Jun Jun 2007 2006 2007 2006 2007 2006 2007 2006 45.20 30.03 5.83 2.28 39.37 27.74 38.98 29.75 372,024 364,747 372,024 364,747 372,024 364,747 372,024 364,747 168,157 109,516 21,688 8,324 146,469 101,192 145,008 108,510 AIFT AIX Consolidated AIFL AIFL Consolidated AIFT

23. CONTINGENT ASSETS, CONTINGENT LIABILITIES AND COMMITMENTS

Banker’s Undertaking

On 7 April 2006 AIFT entered into a Banker’s Undertaking with Westpac Banking Corporation in favour of the Supreme Court of New South Wales. The undertaking is for $388,900 and has been granted to cover AIFT’s prorate share (38.9%) of security costs in relation to arbitration process Metro Light Rail and Monorail is undertaking. The Banker’s Undertaking does not have an expiry date.

There are no other outstanding contingent assets, contingent liabilities or commitments at 30 June 2007.

24. SUBSEQUENT EVENTS

James McDonald was appointed as a director of the Responsible Entity on 18 June 2007 with effect from 1 July 2007.

Steve Boulton was appointed as Chief Executive Officer (CEO) of the Responsible Entity and as a director of the Responsible Entity on 18 June 2007 with effect from 3 September 2007.

Alan Freer was appointed as a Director of Responsible Entity on 23 August 2007 with effect from 1 September 2007.

Since 30 June 2007 there has not been any other matter or circumstance not otherwise dealt with in the financial report that has significantly affected or may significantly affect AIX or AIFT.

AUSTRALIAN INFRASTRUCTURE FUND LIMITED

DIRECTORS’ DECLARATION

In accordance with a resolution of the directors of Australian Infrastructure Fund Limited, I state that:

In the opinion of the directors:

(a) the consolidated financial statements and notes of Australian Infrastructure Fund Limited and its controlled entities are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the financial position as at 30 June 2007 and the performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001;
(b) there are reasonable grounds to believe that Australian Infrastructure Fund Limited and its controlled entities will be able to pay their debts as and when they become due and payable.

This declaration has been made after receiving the declarations required to be made to the directors in accordance with section 295A of the Corporations Act 2001 for the year ended 30 June 2007.

For and on behalf of the directors of Australian Infrastructure Fund Limited.

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Paul Espie Chairman

29 August 2007

AUSTRALIAN INFRASTRUCTURE FUND TRUST

DIRECTORS’ DECLARATION

In accordance with a resolution of the directors of Hastings Funds Management Limited as Responsible Entity for the Australian Infrastructure Fund Trust, I state that:

In the opinion of the directors:

(a) the consolidated financial statements and notes of the Australian Infrastructure Fund Trust and its controlled entities are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the financial position as at 30 June 2007 and the performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001;
(b) there are reasonable grounds to believe that the Australian Infrastructure Fund Trust and its controlled entities will be able to pay their debts as and when they become due and payable;
(c) the financial report is in accordance with the provisions of its Constitution.

This declaration has been made after receiving the declarations required to be made to the directors in accordance with section 295A of the Corporations Act 2001 for the year ended 30 June 2007.

For and on behalf of the directors of Hastings Funds Management Limited as Responsible Entity for the Australian Infrastructure Fund Trust.

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William Forde Chairman

29 August 2007

PricewaterhouseCoopers ABN 52 780 433 757

Independent auditor’s report to the stapled security holders, being the members of Australian Infrastructure Fund Limited and the unitholders of Australian Infrastructure Fund Trust

Freshwater Place 2 Southbank Boulevard SOUTHBANK VIC 3006 GPO Box 1331L MELBOURNE VIC 3001 DX 77

Website:www.pwc.com/au Telephone +61 3 8603 1000 Facsimile +61 3 8603 1999

Report on the financial report

We have audited the accompanying financial report of Australian Infrastructure Fund Limited and the controlled entities within its stapled group (AIFL) and Australian Infrastructure Fund Trust and its controlled entities (AIFT). The financial report comprises the balance sheet as at 30 June 2007, the income statement, statement of changes in equity (AIFL), statement of changes in securityholders’ interests classified as debt (AIFT) and cash flow statement for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declarations for AIFL and Hastings Funds Management Limited as the Responsible Entity for AIFT.

Directors’ responsibility for the financial report

The directors of AIFL and the directors of Hastings Funds Management Limited as Responsible Entity for AIFT are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 . This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements , that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

Auditor’s responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

Liability limited by a scheme approved under Professional Standards Legislation

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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

For further explanation of an audit, visit our website http://www.pwc.com/au/financialstatementaudit.

Our audit did not involve an analysis of the prudence of business decisions made by directors or management.

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

Matters relating to the electronic presentation of the audited financial report

This audit report relates to the financial report of Australian Infrastructure Fund Limited and the controlled entities within its stapled group (AIFL) and Australian Infrastructure Fund Trust and its controlled entities (AIFT) for the year ended 30 June 2007 included on Hastings Funds Management Limited’s (the responsible entity for AIFT) web site. The directors of Hastings Funds Management Limited are responsible for the integrity of the Hastings Funds Management Limited web site. We have not been engaged to report on the integrity of this web site. The audit report refers only to the financial report identified above. It does not provide an opinion on any other information which may have been hyperlinked to/from the financial report. If users of this report are concerned with the inherent risks arising from electronic data communications they are advised to refer to the hard copy of the audited financial report to confirm the information included in the audited financial report presented on this web site.

Independence

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

Auditor’s opinion on the financial report

In our opinion:

(a) the financial report of Australian Infrastructure Fund Limited and the controlled entities within its stapled group and Australian Infrastructure Fund Trust and its controlled entities is in accordance with the Corporation Act 2001 , including:
(i) giving a true and fair view of the Australian Infrastructure Fund Limited and the controlled entities within its stapled group and Australian Infrastructure Fund Trust and its controlled entities financial position as at 30 June 2007 and of their performance for the year ended on that date; and
(ii) complying with the Trust’s Constitution, Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001 ; and
(b) the consolidated financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

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PricewaterhouseCoopers

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JF Power Partner

Melbourne 29 August 2007

Australian Infrastructure Fund Appendix 4E Report for the year ended 30 June 2007

D. Audit information

The financial report has been audited and the report is attached. Refer to Section C.

M:\Marketing - Reporting\AIF\Announcements\Final ASX announcements for lodgement\AIF ASX Ann\2007\August\Results 29-08-2007\2007 08 28 AIX Appendix 4E_FINAL.doc

AI assistant

FUTURE GENERATION AUSTRALIA LIMITED — Annual Report 2007

64916_rns_2007-08-28_cbd9ee45-1b77-43e9-b743-c02416c072b4.pdf

Results announcement

Australian Infrastructure Fund (AIX)

29 August 2007

Appendix 4E – Report for the year ended 30 June 2007

For further enquiries, please contact:

Peter McGregor Chief Operating Officer

Simon Ondaatje

Head of Investor Relations

A. Results for announcement to the market

B. Commentary on the results

Key highlights for the year ended 30 June 2007

Outlook

B. Commentary on the results continued

Performance

ANNUAL FINANCIAL REPORT

DIRECTORS’ REPORT

STRUCTURE OF FINANCIAL REPORT

DIRECTORS

Barry Capp – retired 27 November 2006

Qualifications: BE, BCom, BA

Tim Poole, Managing Director – resigned 15 June 2007

Qualifications: BCom, ACA

DIRECTORS’ REPORT

COMPANY SECRETARIES

Claire Filson

Qualifications: LLB, MBA, Grad Dip CSP, FCIS, MAICD

Kim Rowe

Qualifications: BCom, ACA

REPORT ON THE BUSINESS

Principal activity

Company information

Review of results and operations

Distributions and Dividends

Significant changes in the state of affairs

Events after the end of the financial year

DIRECTORS’ REPORT

Likely developments and expected results

Business strategies and prospects

DIRECTORS’ MEETINGS

DIRECTORS’ REPORT

DIRECTORS’ REPORT

DIRECTORS’ INTERESTS

ENVIRONMENTAL REGULATION

INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS

PROCEEDINGS ON BEHALF OF THE COMPANY

ROUNDING

DIRECTORS’ REPORT

NON-AUDIT SERVICES

Amounts received or due and receivable by the current auditor, PricewaterhouseCoopers:

Amounts received or due and receivable by the predecessor auditor, Ernst & Young:

DIRECTORS’ REPORT

AUDITOR’S INDEPENDENCE DECLARATION

REMUNERATION REPORT

Non-executive directors’ remuneration

Board policy on remuneration

Remuneration structure

DIRECTORS’ REPORT

REMUNERATION REPORT

Remuneration paid

Note:

Remuneration paid to other officeholders

DIRECTORS’ REPORT

REMUNERATION REPORT

Relationship with the Manager – Hastings Funds Management Limited

Fees to the Responsible Entity

Company performance

DIRECTORS’ REPORT

CORPORATE GOVERNANCE

PricewaterhouseCoopers ABN 52 780 433 757

Auditor’s Independence Declaration to the Directors of Australian Infrastructure Fund Limited

DIRECTORS’ REPORT

DIRECTORS

COMPANY SECRETARIES

REPORT ON THE BUSINESS

Principal activity

Trust information

Review and results of operations

FUTURE GENERATION AUSTRALIA LIMITED Annual Report 2007