Hastings Funds Management Limited ABN 27 058 693 388 AFSL No. 238309 Australian Infrastructure Fund Limited ABN 97 063 935 553

Total pages: 68

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Level 16, 90 Collins Street Melbourne VIC 3000 Australia T +61 3 8650 3600 F +61 3 8650 3701 www.hfm.com.au Melbourne, London, San Antonio, Sydney

Australian Infrastructure Fund (AIX)

Results announcement

24 August 2011

Appendix 4E – Report for the year ended 30 June 2011

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 2011
D. Independent auditor’s report

For further enquiries, please contact:

Jeff Pollock Chief Executive Officer

Australian Infrastructure Fund Tel: +61 3 8650 3600 Fax: +61 3 8650 3701 Email: [email protected] Website: www.hfm.com.au/aix

Simon Ondaatje Head of Investor Relations

Hastings Funds Management Tel: +61 3 8650 3600 Fax: +61 3 8650 3701 Email: [email protected] Website: www.hfm.com.au/aix

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Jane Frawley Company Secretary

Australian Infrastructure Fund

Australian Infrastructure Fund Appendix 4E Report for the year ended 30 June 2011

A. Results for announcement to the market

	Change from
		Year to		Year to
	previous
		30 June 11		30 June 10
	corresponding
		($’000)		($’000)
	period

Revenue from ordinary activities(1)	Up 12%	to	238,462	213,266
Revenue from ordinary activities excluding gains and losses(2)	Down 2%	to	70,414	72,051
Profit from ordinary activities after tax attributable to securityholders	Up 11%	to	212,321	191,253
Net profit for the period attributable to securityholders	Up 11%	to	212,321	191,253
Net cash flows from operating activities(3)	Up 47%	to	72,223	49,134

(1) Revenue from ordinary activities largely comprises income (being distributions, dividends and interest on shareholder loans)

received by AIX from the assets in the portfolio and any unrealised gains and losses resulting from changes in the independent valuation of AIX assets.

(2) Revenue from ordinary activities excluding gains and losses largely represents distributions, dividends and interest on shareholder loans received by AIX from the assets in the portfolio.

(3) Net cash flows from operating activities comprise dividends, distributions, interest on shareholder loans and other income, net of finance costs paid, operating expenses paid and income tax refunded / (paid).

Refer to Section B for commentary on the results.

A	A	Franked
			Tax-deferred
	A
Distributions(1)	mount	amount per	amount per
	it	it
per secury	per secury	secury	security
		at 30% tax

Distributions for the year ended 30 June 2011
Final distribution – 30 June 2011	5.00 cents	2.36 cents	0.00 cents
Interim distribution – 31 December 2010	5.00 cents	3.59 cents	0.12 cents
Distributions for the year ended 30 June 2010
Final distribution – 30 June 2010	5.00 cents	2.38 cents	1.06 cents
Interim distribution – 31 December 2009	5.00 cents	3.90 cents	0.72 cents
Record date for determining entitlements to the distribution		30 June 2011
Distribution payment date		30 August 2011

(1) For tax purposes, please refer to the Annual Distribution Statement, which will be distributed with the 30 August 2011 distribution payment. This statement will provide more details of the tax components of the 2011 financial year distributions.

Note: AIX’s Distribution Reinvestment Plan (DRP) remains suspended until further notice. All eligible securityholders will receive their final distribution for the year ended 30 June 2011 by way of cash payment.

	Change from previous
Key performance indicators	corresponding period	30 June 2011	30 June 2010
Net tangible asset backing per security	Up 9%	285.43 cents	261.22 cents
Stapled security price	Up 13%	192.00 cents	170.00 cents

Australian Infrastructure Fund Appendix 4E Report for the year ended 30 June 2011

B. Commentary on the results

AIX today announced its results for the year to 30 June 2011. The AIX portfolio increased in value during the year to $1,759.9 million, an increase of 10.1 percent on the prior year, predominantly relating to increases in the value of assets in the portfolio (largely comprising unrealised gains). Net tangible assets (NTA) per security increased by 9.3 percent in FY2011, from $2.61 to $2.85, reflecting the increased value of portfolio assets.

Revenue from ordinary activities increased 11.8 percent on the prior year from $213.3 million to $238.5 million, largely driven by unrealised gains in the independent valuation of assets in the portfolio, that is unrealised gains in the value of unlisted securities. Net gains in the value of unlisted securities for the year to 30 June 2011 were $168.0 million, compared to $141.2 million in the prior year. The value of the assets in the portfolio is determined by discounting the projected future cashflows of the assets, with assumptions made about the future operations and development of each asset.

Revenue from ordinary activities excluding gains/losses was $70.4 million for the period, largely in-line with the $72.1 million achieved in the previous year. Sources of revenue excluding gains and losses are set out below:

	FY11	FY10
Asset ($’000)
	($’000)	($’000)


Perth Airport	21,380	19,501
APAC	16,684	15,166
QAL	14,016	13,184
NT Airports	3,016	4,085
HTAC	8,360	9,001
Port of Portland	2,390	2,372
Port of Geelong	733	1,232
StatewideRoads¹	1,698	5,229
Bank interest and other	2,137	2,281
Total revenue excluding gains/losses	70,414	72,051

(1) Reduction in Statewide Roads revenue expected following end of toll road concession in February 2010.

Net profit after tax was $212.3 million, up 11.0 percent from $191.3 million in the prior year. This was primarily due to the increase in revenue from unrealised gains noted above.

Net cashflow from operating activities was $72.2 million, an increase of 47.0 percent on the prior year, as set out below:

		FY11	FY10
Asset ($’000)
		($’000)	($’000)


Cashflow from assets	49%	92,088	61,685
Management expense		(11,943)	(9,729)
Otherexpenses		(4,234)	(3,185)
Netinterestreceived / (paid)		1,377	404
Operating cashflow	57%	77,288	49,175
Cashflow from assets in the form of capital returns		(5,065)	(41)
Net cashflows from operating activities	47%	72,223	49,134

Australian Infrastructure Fund Appendix 4E Report for the year ended 30 June 2011

The assets comprising the AIX portfolio contributed $92.1 million in cash flows to the fund during the year compared to $61.7 million in the prior year, an increase of 49.3 percent on the prior year. The cash was received in the form of distributions, dividends, interest on shareholder loans and capital returns as follows:

Asset	FY11	FY10
	($m)	($m)
Perth Airport	22.0	19.1
APAC	16.7	15.2
QAL	25.2	9.5
NT Airports¹	8.1	4.1
HTAC	14.4	6.0
Port of Portland	3.5	1.5
Port of Geelong	0.5	1.1
Statewide Roads	1.7	5.2
Cashflow from assets	92.1	61.7

(1) Includes $5.1m received from NT Airports in the form of capital return.

The significant increase in cash received from assets was partly due to an increase in cash received from HOCHTIEF AirPort Capital (HTAC), the vehicle through which AIX owns its interests in Dusseldorf, Hamburg, Athens and Sydney Airports. HTAC contributed $14.4 million to AIX cash flows in the year to 30 June 2011 compared with $6.0 million in the prior year, when HTAC utilised returns received from underlying investments in 2010 to repay in full its debt facilities, rather than pay a distribution to shareholders.

Cashflow received from Perth Airport, QAL and NT Airports increased compared to the prior year reflecting distribution growth from these assets. This was partly offset by a reduction in the amounts received from Statewide Roads, following the end of its toll road concession in February 2010. An increased distribution was also received from APAC, the owner of Melbourne Airport, reflecting a small increase in AIX’s ownership interest.

As in prior years there were also timing differences, the most significant of which was the receipt of $11.3 million in dividends in the year to 30 June 2011 from Queensland Airports Limited (QAL) relating to the prior financial year, as well as $13.9 million in dividends and loan note interest received in and relating to the financial year ended 30 June 2011. In effect, AIX received an additional dividend payment from QAL in the 2011 financial year as a result of this timing difference.

Operating expenses paid increased from $12.4 million to $15.1 million, an increase of 21.7% over the prior year. This increase predominantly related to an increase in management fees from $9.7 million to $12.0 million, which are calculated by reference to the AIX market capitalisation. Net interest received increased significantly from $0.4 million to $1.4 million due to reduced finance expenses from upfront costs incurred in FY10 on the fund level standby credit facility.

On 21 June 2011, AIX provided distribution guidance for the 6 months ending 30 June 2011 of 5 cents per stapled security ($31.0 million), with total distributions for the year ended 30 June 2011 being 10 cents per stapled security ($62.1 million). AIX will continue its strategy of paying sustainable distributions funded from operating cash flows, whilst retaining the flexibility to pursue expansionary capital investment opportunities.

AIX outperformed its listed market benchmark again in the 2011 financial year. In the year to 30 June 2011, the AIX security price increased 12.9 percent, from $1.70 to $1.92. The S&P/ASX 200 Industrials Index increased 3.6 percent over the same period. The AIX security price closed yesterday at $1.80, an increase of 5.9 percent since 30 June 2010. The performance of the AIX security price since the beginning of the financial year demonstrates the resilient and diversified composition of assets within the portfolio.

Australian Infrastructure Fund Appendix 4E Report for the year ended 30 June 2011

Other highlights

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Airports represent 94.4 percent of the total AIX portfolio by value and the portfolio recorded solid passenger growth for the year. Passenger growth at the Australian airports, which now represent 83.2 percent of the total portfolio by value, was exceptionally buoyant in the first half of the 2011 financial year, with the relatively strong Australian economy stimulating growth particularly at Perth and Melbourne Airports and the high Australian dollar stimulating international passenger numbers particularly at Perth, Melbourne and Darwin Airports. Growth was more subdued in the second half, as Australian airports were affected by a number of external shocks including the Queensland floods and cyclones, the earthquakes in Christchurch, the earthquake and subsequent tsunami in Japan and the Chilean ash cloud. Overall, despite the challenging second half, passenger numbers weighted by AIX’s interest still grew by 6.0 percent for the year ended 30 June 2011.
The European airports, Athens, Düsseldorf and Hamburg Airports, continued to be affected by the complex economic conditions in Europe. Greece faces a difficult economic environment, with austerity measures remaining in place. This was reflected in the performance of Athens Airport, which makes up 3.4 percent of the portfolio by value and recorded an 8.3 percent fall in passenger numbers for the twelve months ended 30 June 2011. Our German airport interests, however, provided strong growth with Dusseldorf and Hamburg recording increases in passenger numbers of 9.8 percent and 7.8 percent respectively for the twelve months ended 30 June 2011. The German airports appear to confirm the historical precedent of airports strongly reverting to growth trends after periods of low or negative growth.
NT Airports finalised aeronautical pricing agreements with its airline partners, paving the way for significant investment in airport facilities to support future growth. NT Airports plans to invest in excess of $100 million over the next ten years, including a $33.5 million terminal expansion. In November 2010, Perth airport released its $500 million three year redevelopment plan, which forms part of its broader long term growth plans. The planned redevelopment will comprise: a $270 million expansion of the international terminal, including a shared domestic/international pier to cater for larger twin aisled aircraft; the $120 million construction of a new terminal, Terminal WA, to cater for the increasing demand for intrastate services; a $50 million development of airfield aprons, taxiways and aircraft parking areas; and improved retail facilities, roads and car parking.
Port of Portland and Port of Geelong experienced material volume and revenue growth on the previous year partly due to easing drought conditions increasing demand for fertiliser. Port of Portland achieved total throughput and revenue growth on the prior year of 33.7% and 43.5% respectively. Port of Geelong experienced total throughput and revenue growth on the prior year of 16.6% and 27.3% respectively.
During the year, AIX made equity contributions of $8.0 million and $3.9 million to Perth Airport and QAL respectively to support organic growth at these assets. Perth Airport also refinanced and drew down $120m of existing capex facilities during the year, with the proceeds used to fully redeem convertible notes and the remainder applied towards funding capital requirements, including organic growth. The convertible note redemption occurred on 24 March 2011, with AIX’s receiving its $18.4 million share of the principal amount.
Melbourne Airport successfully completed a refinancing program, which commenced in August 2010 with $1.25 billion in bank debt and bonds and was completed in June 2011 with the successful issue of US$600 million in the US Private Placement market. The Port of Geelong also successfully completed its refinancing in March 2011 supported by a pro-rata equity contribution from AIX of $4.7m.
In August 2011, AIX successfully completed the refinancing of its fund debt facility for a two year term. The revised terms of the facility include an increase in its size from $30 million to $100 million, greater flexibility in the purposes to which the facility can be applied, and a reduction in fees and margins consistent with current market levels. The facility remains undrawn.

Australian Infrastructure Fund Appendix 4E Report for the year ended 30 June 2011

Outlook

The AIX portfolio is well placed going forward, with the diversified nature of the core airport portfolio being a particular strength in the continuing uncertain global economic environment. Overall passenger growth slowed in the second half of the financial year, due in part to external one off shocks, and domestic growth is likely to remain relatively subdued in the short term, except at Perth Airport which continues to benefit from the strong resource sector. International growth was particularly strong at Perth, Melbourne and Darwin Airports for the 2011 financial year, supported by the strong Australian dollar, the continued penetration by low cost carriers and airline competition in international markets. Depending on the external environment, we would expect this growth to continue, although likely to be more subdued than the growth experienced in the 2011 financial year. In the medium to long term, we expect continued growth in our airport portfolio, as has historically been the case, and further opportunity to invest in accretive organic growth projects.

In Europe, economic conditions remain difficult, with austerity measures in place in many European states. We expect passenger traffic through Athens Airport to remain subdued in the year ahead. Our German airports however experienced strong growth in the twelve months to 30 June 2011 after low growth in the corresponding period to 30 June 2010. History has shown that periods of depressed growth in passenger numbers are followed by a return to growth trends, and we remain confident of the value of these high-quality assets.

AIX will continue to encourage its asset managers to focus on deriving the maximum value from the organic growth opportunities that exist within the portfolio. Over the year ahead, AIX will continue to work towards improving the value of its security price against the independently assessed net asset value of the Fund and work diligently to highlight the underlying value of this unique portfolio of quality assets.

Australian Infrastructure Fund Appendix 4E Report for the year ended 30 June 2011

C. Financial report for the year ended 30 June 2011

Australian Infrastructure Fund Limited ABN 97 063 935 553 Australian Infrastructure Fund Trust ARSN 089 889 761 Consolidated Financial Statements for the year ended 30 June 2011

Australian Infrastructure Fund Limited Directors’ Report 30 June 2011

Directors’ Report

The directors of Australian Infrastructure Fund Limited submit their report together with the consolidated financial statements of Australian Infrastructure Fund Limited (AIFL or the Company) consisting of the Company and the entities it controlled at the end of, or during the year ended 30 June 2011.

Structure of consolidated financial statements

The ordinary shares issued by the Company are stapled to the securities issued by Australian Infrastructure Fund Trust (AIFT or the Trust). The combined entity of AIFL and AIFT and its controlled entities 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 of AIX.

The units and shares will only be unstapled in accordance with the determination of the Responsible Entity for AIFT and the Board of AIFL if:

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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 consolidated financial statements that combine the assets and liabilities of AIFL and AIFT, AIFL is identified as the parent entity.

The consolidated financial statements presented therefore comprise:

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Consolidated AIFL (AIX): Represents the entire AIX group, consisting of the Company and Consolidated AIFT; and

Consolidated AIFT: Represents AIFT and its controlled entities.

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

Directors

The following persons held office as directors of the Company during the year and up to the date of this report unless otherwise stated:

Paul Espie	Chairman
Steven Boulton	Director (retired 1 April 2011)
James Evans	Director
John Harvey	Director
Robert Humphris	Director
Michael Hutchinson	Director
Robert Tsenin	Director

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

Company secretaries

The names and details of the company secretaries of the Company in office during the year and until the date of this report are set out below.

Jane Frawley

Qualifications: BA, LLB, ACM

Jane Frawley has over 15 years of company secretarial and financial services legal experience and joined Hastings in May 2010. Jane was appointed Company Secretary of Hastings and the Company on 28 May 2010.

Kim Rowe

Qualifications: BCom, ACA

Kim Rowe is a Chartered Accountant and has over 15 years experience in the financial services industry, initially with audit experience. On joining Hastings in 1999, she assumed compliance and company secretarial responsibilities. Kim resigned on 31 December 2010.

Australian Infrastructure Fund Limited Directors’ Report 30 June 2011 (continued)

Directors’ Report (continued)

Company secretaries (continued)

Nick Burrell

Nick Burrell had over 10 years of fund and corporate law experience and was appointed Company Secretary of Hastings and the Company on 1 January 2011. Nick resigned on 1 April 2011.

Jefferson Petch

Qualifications: LLB(Hons), BCom(Hons), MCom(Hons), SA(Fin)

Jefferson Petch has over 6 years of legal and financial services experience and joined Hastings in June 2011. Jefferson was appointed Company Secretary of Hastings and the Company on 1 July 2011.

Principal activities

The principal activity of AIX during the year was to invest in infrastructure investments so as to optimise total shareholder return. There has been no change in the principal activity of AIX during the year.

Review and results of operations

The Company has continued to invest funds in accordance with its investment objectives and guidelines as set out in the current prospectus and in accordance with the provisions of the Company’s Constitution.

Results

The profit after income tax attributable to securityholders of AIX for the year ended 30 June 2011 was $212,321,000 (2010: $191,253,000).

Distributions and dividends

Final dividend and distribution

A final dividend and distribution of $31,037,000 (5.00 cents per stapled security) was declared by AIX for the year ended 30 June 2011 (2010: 5.00 cents per stapled security) and will be paid on 30 August 2011.

The final dividend and distribution comprised:

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a final dividend of $3,000,000 (0.5 cents per security) declared by AIFL for the year ended 30 June 2011 (2010: 0.7 cents per stapled security) franked to 100% (2010: 100%); and
a final distribution of $28,037,000 (4.5 cents per security) declared by AIFT for the year ended 30 June 2011 (2010: 4.3 cents per stapled security).

Interim dividend and distribution

An interim dividend and distribution of $31,037,000 (5.00 cents per stapled security) was declared by AIX for the half year ended 31 December 2010 which was paid on 25 February 2011 (2009: $28,839,000 and 5.00 cents per stapled security).

The interim dividend and distribution comprised:

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an interim dividend of $5,900,000 (0.95 cents per security) declared by AIFL for the half year ended 31 December 2010 (2009: $7,300,000 and 1.27 cents per stapled security) franked to 100% (2009: 100%); and
an interim distribution of $25,137,000 (4.05 cents per security) declared by AIFT for the half year ended 31 December 2010 (2009: $21,539,000 and 3.73 cents per stapled security).

Significant changes in state of affairs

In the opinion of the directors, there were no significant changes in the state of affairs of AIX that occurred during the year.

Australian Infrastructure Fund Limited Directors’ Report 30 June 2011 (continued)

Directors’ Report (continued)

Matters subsequent to the end of the year

No significant events have occurred since the end of the reporting period which would impact on the financial position of AIX disclosed in the Consolidated Statements of Financial Position as at 30 June 2011 or on the results and cash flows of AIX for the year ended on that date .

Rounding

AIX is an entity of the kind referred to in Class Order 98/0100 (as amended), issued by the Australian Securities and Investments Commission, relating to the ''rounding off'' of amounts in the financial report. Amounts in the Directors’ Report and consolidated financial statements have been rounded off to the nearest thousand dollars in accordance with that Class Order, unless otherwise indicated.

Likely developments and expected results

AIX will continue to encourage and support the growth of the airports in the portfolio, focusing on the significant organic growth opportunities within these assets.

Business strategies and prospects

Information on AIX’s business strategies and its prospects for future 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 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 directors’ meetings (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:

Director Name	AIFL/Hastings Joint Board Meetings	AIFL/Hastings Joint Board Meetings	AIFL/Hastings Joint Audit Committee Meetings	AIFL/Hastings Joint Audit Committee Meetings	AIFL Board Meetings	AIFL Board Meetings	AIFL Audit Committee Meetings	AIFL Audit Committee Meetings
	Meetings held while a director	Meetings attended	Meetings held while a member	Meetings attended	Meetings held while a director	Meetings attended	Meetings held while a member	Meetings attended
Paul Espie	2	2	5	5	11	11	1	1
Steven Boulton~~(1)~~	2	1	n/a	n/a	9	6	n/a	n/a
James Evans	2	2	5	5	11	10	n/a	n/a
John Harvey	2	2	5	5	11	11	1	1
Robert Humphris	2	2	n/a	n/a	11	10	n/a	1
Michael Hutchinson	2	2	n/a	n/a	11	10	n/a	n/a
Robert Tsenin	2	2	5	5	11	8	1	1

(1) Steven Boulton retired as a director of AIFL on 1 April 2011.

Australian Infrastructure Fund Limited Directors’ Report 30 June 2011 (continued)

Directors’ Report (continued)

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:

Director Name	Number of stapled securities held in AIX	Number of stapled securities held in AIX	Number of stapled securities held in AIX
	Beneficially held in own name	Beneficially held in the name of another	Total Holdings
Paul Espie	0	906,668	906,668
Steven Boulton~~(1)~~	262,500	0	262,500
James Evans	0	0	0
John Harvey	9,487	75,000	84,487
Robert Humphris	0	300,000	300,000
Michael Hutchinson	0	122,024	122,024
Robert Tsenin	18,173	138,887	157,060

(1) Holding as at 1 April 2011, being the date of retirement as a director of AIFL.

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 and management of the investee rather than AIX.

Indemnification and insurance of directors and officers

During or since the 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

The auditor of the Company is in no way indemnified out of the assets of the Company and AIX.

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 2001.

Australian Infrastructure Fund Limited Directors’ Report 30 June 2011 (continued)

Directors’ Report (continued)

Non audit services

PricewaterhouseCoopers is the auditor of the Company. 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 and there is no conflict compromising its independence.

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

Amounts paid and payable to the auditor, PricewaterhouseCoopers, excluding GST for: - Audit and review of the financial statements - Compliance plan audit - Other assurance services Total audit fees	2011 2010 $ $ 135,265 132,070 15,910 15,300 6,240 6,000 157,415 153,370 AIX Consolidated AIFL	2011 2010 $ $ 97,617 70,070 15,910 15,300 6,240 6,000 Consolidated AIFT
		119,767 91,370

Auditor’s independence declaration

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 9.

The directors are satisfied the assurance services that were provided did not impair the independence of the auditor.

Remuneration Report

The directors of the Company present the Remuneration Report prepared in accordance with section 300A of the Corporations Act 2001 for the year ended 30 June 2011. This remuneration report forms part of the Directors’ Report.

The information provided in this remuneration report has been audited as required by section 308 (3C) of the Corporations Act 2001.

Non-executive directors’ remuneration

Board policy on remuneration

The Board of directors of the Company 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:

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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

Directors’ fees expensed for the year ended 30 June 2011 totalled $826,983 (2010: $785,372) and comprised:

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Fees paid or payable in respect of the current year of $826,983 (2010: $760,847); and
Fees paid in respect of prior years of $0 (2010: $24,525).

Australian Infrastructure Fund Limited Directors’ Report 30 June 2011 (continued)

Directors’ Report (continued)

Remuneration structure (continued)

Non-executive directors’ fees, including committee fees, are set by the Board within the maximum aggregate amount of $1,200,000 per annum (effective from 1 January 2010 and previously $800,000 per annum) approved by securityholders in 2010. Committee fees also include ad hoc committees such as Due Diligence committees which may be required from time to time. The remuneration of directors was last revised on 1 March 2011.

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 retirement benefit, where applicable, is determined by a consulting actuary. The Chairman of the Board predates the retirement benefit phase out. No other directors are entitled to a retirement benefit.

The Chairman of the Board was entitled to a fee of $236,250 per annum until 28 February 2011 and $275,000 per annum from 1 March 2011. As the current Chairman continues to accrue retirement benefits in accordance with a resolution of the Board passed in 2003, he receives a lower fee than this to reflect this benefit. An appropriate deduction from his fees is made to take into account his retirement benefit under the plan as calculated by a consulting actuary.

Directors were entitled to a fee of $94,500 per annum until 28 February 2011 and $110,000 per annum from 1 March 2011.

The Chairman of the Audit Committee was entitled to a fee of $21,000 per annum until 28 February 2011 and $23,000 per annum from 1 March 2011. The ordinary members of the Audit Committee were entitled to a fee of $10,500 per annum until 28 February 2011 and $11,500 per annum from 1 March 2011. The Chairman of the Board declined his fee for membership of the Audit Committee.

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

Remuneration paid to other officeholders

Steven Boulton, Hastings' Chief Executive Officer and executive director of AIFL (retired 1 April 2011), Alan Freer, Hastings' Chief Executive Officer (appointed 1 April 2011), Jeff Pollock, the AIX Chief Executive Officer and the Company Secretaries were not remunerated out of the property of AIFL or AIFT. These individuals were remunerated by Hastings or its related entities out of its management fee.

Australian Infrastructure Fund Limited Directors’ Report 30 June 2011 (continued)

Directors’ Report (continued)

Remuneration paid to non-executive directors

Details of non-executive directors’ remuneration for the year ended 30 June 2011 are set out in the following table. No bonuses, options or other emoluments are paid to the directors of AIFL.

		*Short-term*	*Short-term*	*Post employment*	*Post employment*
	Board	fees	Committee fees	Superannuation	Retirement benefits		Total
	$		$	$	$		$
Key management personnel of AIFL
Paul Espie
2011	227,867		0	20,508		0	248,375
2010	236,250		0	23,470		0	259,720
James Evans
2011		99,667	0	8,970		0	108,637
2010		31,500	0	2,835		0	34,335
John Harvey
2011		99,667	21,667	10,920		0	132,253
2010		94,500	39,750 *	12,083		0	146,333
Robert Humphris
2011		99,667	0	8,970		0	108,637
2010		94,500	0	8,505		0	103,005
Michael Hutchinson
2011		99,667	0	8,970		0	108,637
2010		94,500	0	8,505		0	103,005
Robert Tsenin
2011		99,667	10,833	9,945		0	120,445
2010		94,500	10,500	9,450		0	114,450
Total compensation: Key management personnel			of AIFL
2011	726,200		32,500	68,283		0	826,983
2010	645,750		50,250	64,847		0	760,847

Includes a $18,750 due diligence committee fee.

Relationship with the Manager - Hastings Funds Management Limited

As the Company has contracted 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 AIX Chief Executive Officer and company secretarial service.

Fees to the Responsible Entity

Hastings as Responsible Entity of AIFT and manager of the Company is entitled to a management fee. The management fee is calculated at the rate of 1% per annum of AIX’s market capitalisation, based on the volume weighted average traded price over the 20 business days prior to the calculation date multiplied by the stapled securities outstanding.

For the year ended 30 June 2011, Hastings was paid management fees of $12,000,000 by AIX (2010: $10,179,000).

In accordance with the AIFL management agreement and the AIFT Constitution, Hastings as Manager and Responsible Entity is also entitled to a performance fee. The performance fee is calculated as 10% of any positive performance position. The net performance position is the amount by which the AIX total securityholder returns exceeds the benchmark return, being the S&P ASX 200 Industrials Accumulation Index, at the end of each year. If the calculation of the AIX total securityholder returns for a year is less than then benchmark return for that year, the deficit is carried forward and taken into account in calculating whether the AIX total securityholder returns exceeds the benchmark return in subsequent years.

At 30 June 2011 the net performance position stands at a carry forward shortfall (deficit) of $25,328,910 (2010: $114,284,752).

As a consequence no performance fee has been paid or is payable to Hastings for the year ended 30 June 2011(2010: $nil).

Australian Infrastructure Fund Limited Directors’ Report 30 June 2011 (continued)

Directors’ Report (continued)

Fees to the Responsible Entity (continued)

Hastings is entitled under the AIFT 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 the AIFT Constitution and AIFL management agreement.

For the year ended 30 June 2011, Hastings was reimbursed $207,000 (2010: $230,000) for costs incurred on behalf of AIX. These amounts were paid by the Trust.

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.

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

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Paul Espie Chairman 24 August 2011

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

As lead auditor for the audit of Australian Infrastructure Fund Limited for the year ended 30 June 2011, 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.

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JF Power PricewaterhouseCoopers

Melbourne 24 August 2011

PricewaterhouseCoopers, ABN 52 780 433 757 Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 DX 77 Melbourne, Australia

T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

Australian Infrastructure Fund Trust Directors’ Report 30 June 2011

Directors’ Report

The directors of Hastings Funds Management Limited (Hastings) as Responsible Entity for Australian Infrastructure Fund Trust submit their report together with the consolidated financial statements of AIFT (the Trust) and the entities it controlled at the end of, or during, the year ended 30 June 2011.

The ordinary shares issued by Australian Infrastructure Fund Limited (AIFL or 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 following persons held office as directors of the Responsible Entity during the year and up to the date of this report unless otherwise stated:

Alan Cameron	Chairman
Steven Boulton	Retired on 1 April 2011
James Evans
William Forde
Alan Freer	Appointed on 1 April 2011
Stephen Gibbs
James McDonald
Victoria Poole	Appointed on 20 April 2011
Leslie Vance	Retired on 1 April 2011

Responsible Entity

The registered office of the Responsible Entity is located at Level 16, 90 Collins Street, Melbourne, Victoria, 3000.

Company secretaries

The company secretaries of the Responsible Entity in office during the year and up to the date of this report are Nick Burrell (appointed 1 January 2011 and resigned 1 April 2011), Jane Frawley, Jefferson Petch (appointed 1 July 2011) and Kim Rowe (resigned 31 December 2010).

Principal activities

The principal activity of the Trust during the year was to invest in infrastructure investments so as to optimise total investor return. 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.

Review and results of operations

The Trust has continued to invest funds in accordance with its investment objectives and guidelines as set out in the current prospectus and in accordance with the provisions of the Trust’s Constitution.

Results

The profit after income tax attributable to securityholders of the Trust for the year ended 30 June 2011 was $194,697,000 (2010: $173,660,000).

Distributions

A final AIX distribution of $31,037,000 (5.00 cents per stapled security) was declared for the six months ended 30 June 2011 and is payable on 30 August 2011. The Trust distribution represents $28,037,000 (2010: $26,937,000) of the total amount payable. The AIX interim distribution of $31,037,000 (5.00 cents per stapled security) for the six months ended 31 December 2010 was paid on 25 February 2011. The Trust distribution represents $25,137,000 (2009: $21,539,000) of the total amount paid.

Significant changes in state of affairs

In the opinion of the directors, there were no significant changes in the state of affairs of AIX that occurred during the year.

Australian Infrastructure Fund Trust Directors’ Report 30 June 2011 (continued)

Directors’ Report (continued)

Matters subsequent to the end of the year

No significant events have occurred since the end of the reporting period which would impact on the financial position of Consolidated AIFT disclosed in the Consolidated Statements of Financial Position as at 30 June 2011 or on the results and cash flows of Consolidated AIFT for the year ended on that date.

Likely developments and expected results

The Trust will continue to encourage and support the growth of the airports in the portfolio, focusing on the significant organic growth opportunities within these assets.

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.

Interests in the units of the Trust

As at 30 June 2011, the Responsible Entity and its related entities held 18,012,204 units in the Trust (2010: 18,012,204).

The interests in the stapled securities issued by AIX held by the directors of the Responsible Entity and their director related entities at 30 June 2011 are set out below:

Director Name	Number of stapled securities held in AIX	Number of stapled securities held in AIX	Number of stapled securities held in AIX
	Beneficially held in own name	Beneficially held in the name of another	Total Holdings
Alan Cameron	0	0	0
William Forde	0	0	0
Steven Boulton~~(1)~~	262,500	0	262,500
James Evans	0	0	0
Alan Freer	0	40,913	40,913
Stephen Gibbs	139	0	139
James McDonald	0	15,000	15,000

(1) Holding as at 1 April 2011, being the date of retirement as a director of Hastings.

Fees to the Responsible Entity

The Responsible Entity is entitled to a management fee for providing services as manager of AIX. The management fee is calculated at the rate of 1% per annum of AIX’s market capitalisation, based on the volume weighted average traded price over the 20 business days prior to the calculation date multiplied by the stapled securities outstanding.

For the year ended 30 June 2011, AIX paid Hastings management fees of $12,000,000 (2010: $10,179,000).

In accordance with the AIFT Constitution and the AIFL management agreement, Hastings as Responsible Entity and Manager is also entitled to a performance fee. The performance fee is calculated as 10% of any positive performance position. The net performance position is the amount by which the AIX total securityholder returns exceeds the benchmark return, being the S&P ASX 200 Industrials Accumulation Index, at the end of each year. If the calculation of the AIX total securityholder returns for a year is less than then benchmark return for that year, the deficit is carried forward and taken into account in calculating whether the AIX total securityholder returns exceeds the benchmark return in subsequent years.

At 30 June 2011 the net performance position stands at a carry forward shortfall (deficit) of $25,328,910 (2010: $114,284,752).

As a consequence no performance fee has been paid or is payable to Hastings for the year ended 30 June 2011 (2010: $nil).

Australian Infrastructure Fund Trust Directors’ Report 30 June 2011 (continued)

Directors’ Report (continued)

Fees to the Responsible Entity (continued)

The Responsible Entity is entitled under the AIFT 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 AIFT Constitution and the AIFL management agreement.

For the year ended 30 June 2011, Hastings was reimbursed $207,000 (2010: $230,000) for costs incurred on behalf of AIX. These amounts were paid by the Trust.

Trust assets

As at 30 June 2011, the Trust held assets to a total value of $1,639,283,000 (2010: $1,504,916,000). The basis for valuation of the assets is disclosed in Note 2(j) of the consolidated financial statements.

Units on issue

As at 30 June 2011, 620,733,944 units of the Trust were on issue (2010: 620,733,944). During the year ended 30 June 2011, no new units were issued by the Trust (2010: 236,216,683).

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.

Rounding

The Trust is an entity of the kind referred to in Class Order 98/0100 (as amended), issued by the Australian Securities and Investments Commission, relating to the ''rounding off'' of amounts in the financial report. Amounts in the Directors’ Report and consolidated financial statements have been rounded off to the nearest thousand dollars in accordance with that Class Order, unless otherwise indicated.

Auditor’s independence declaration

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 13.

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

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Alan Cameron Chairman

24 August 2011

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

As lead auditor for the audit of Australian Infrastructure Fund Trust for the year ended 30 June 2011, 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.

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JF Power PricewaterhouseCoopers

Melbourne 24 August 2011

PricewaterhouseCoopers, ABN 52 780 433 757 Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 DX 77 Melbourne, Australia T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Consolidated Statements of Comprehensive Income For the year ended 30 June 2011

Consolidated Statements of Comprehensive Income

Note Income Interest income 3 Dividend income 4 Distribution income 5 Net gain/(loss) - securities 6 Net gain/(loss) - cash and cash equivalents Other income 7 Total income Expenses Manager and Responsible Entity fees 8 Securityholder and investor relations expenses Investment bid costs Investment costs Director fees Director retirement expense Board administration expenses Other prudential expenses Audit fees (internal and external) Taxation fees Finance costs 9 Other expenses Total expenses Net profit/(loss) before income tax for the year Income tax expense 11(a) Net profit/(loss) after income tax for the year Other comprehensive income/(loss) for the year, net of tax Total comprehensive income/(loss) for the year	2011 2010 $'000 $'000 16,221 15,782 52,085 53,945 1,623 1,854 168,048 141,217 0 (2) 485 470 238,462 213,266 12,000 10,179 491 480 564 312 101 172 841 785 49 66 70 43 633 531 177 176 154 124 974 1,831 84 44 16,138 14,743 222,324 198,523 10,003 7,270 212,321 191,253 0 0 212,321 191,253 AIX Consolidated AIFL	2011 2010 $'000 $'000 16,221 15,782 44,650 43,198 542 531 155,809 134,617 0 (2) 485 470 Consolidated AIFT
		217,707 194,596
		12,000 10,179 491 480 564 312 101 172 841 785 49 66 70 43 633 531 177 176 154 124 2,103 3,788 84 45
		17,267 16,701
		200,440 177,895 5,743 4,235
		194,697 173,660 0 0
		194,697 173,660

The above Consolidated Statements of Comprehensive Income should be read in conjunction with the accompanying notes.

Earnings per security Basic earnings per security (cents) Weighted average number of securities (000s) Net profit after income tax ($000's)	2011 2010 2011 2010 34.20 33.22 31.37 30.16 620,734 575,764 620,734 575,764 212,321 191,253 194,697 173,660 Consolidated AIFT AIX Consolidated AIFL

Diluted earning per security are no different from basic earning per security.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Consolidated Statements of Financial Position For the year ended 30 June 2011

Consolidated Statements of Financial Position

Note Assets Cash and cash equivalents 12 Receivables 13 Other assets 14 Securities 15 Total assets Liabilities Payables 16 Current income tax liability 11(d) Provisions 17 Borrowings 18 Deferred income tax liability 11(c) Total liabilities Net assets Equity Contributed equity 19 Retained earnings 20 Total equity	2011 2010 $'000 $'000 79,237 61,990 3,913 14,828 89 324 1,756,228 1,603,148 1,839,467 1,680,290 32,292 32,267 347 803 722 673 0 0 34,375 25,036 67,736 58,779 1,771,731 1,621,511 1,043,575 1,043,602 728,156 577,909 1,771,731 1,621,511 AIX Consolidated AIFL	2011 2010 $'000 $'000 71,158 61,990 2,699 13,381 89 325 1,565,337 1,429,220 Consolidated AIFT
		1,639,283 1,504,916
		29,292 28,167 (4) (4) 722 673 13,873 27,919 22,548 16,805
		66,431 73,560
		1,572,852 1,431,356
		883,554 883,582 689,298 547,774
		1,572,852 1,431,356

The above Consolidated Statements of Financial Position should be read in conjunction with the accompanying notes.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Consolidated Statements of Changes in Equity For the year ended 30 June 2011

Consolidated Statements of Changes in Equity

AIX Consolidated AIFL Note At 1 July 2009 Net profit/(loss) after income tax for the year Other comprehensive income/(loss) for the year, net of tax Total comprehensive income/(loss) for the year Transactions with owners in their capacity as owners: Ordinary stapled securities issued during the year: - pursuant to market placement Adjustment to security issue costs pursuant to market placement Dividends and distributions paid and payable to securityholders 21 As at 30 June 2010 At 1 July 2010 Net profit/(loss) after income tax for the year Other comprehensive income/(loss) for the year, net of tax Total comprehensive income/(loss) for the year Transactions with owners in their capacity as owners: Adjustment to security issue costs pursuant to market placement Dividends and distributions paid and payable to securityholders 21 As at 30 June 2011	Contributed equity Retained earnings Total $'000 $'000 $'000 761,520 446,532 1,208,052 0 191,253 191,253 0 0 0
	0 191,253 191,253 291,486 0 291,486 (9,404) 0 (9,404) 0 (59,876) (59,876)
	1,043,602 577,909 1,621,511
	1,043,602 577,909 1,621,511 0 212,321 212,321 0 0 0
	0 212,321 212,321 (27) 0 (27) 0 (62,074) (62,074)
	1,043,575 728,156 1,771,731

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

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Consolidated Statements of Changes in Equity For the year ended 30 June 2011 (continued)

Consolidated Statements of Changes in Equity (continued)

Consolidated AIFT Note At 1 July 2009 Net profit/(loss) after income tax for the year Other comprehensive income/(loss) for the year, net of tax Total comprehensive income/(loss) for the year Transactions with owners in their capacity as owners: Ordinary stapled securities issued during the year: - pursuant to market placement Adjustment to security issue costs pursuant to market placement Dividends and distributions paid and payable to securityholders 21 As at 30 June 2010 At 1 July 2010 Net profit/(loss) after income tax for the year Other comprehensive income/(loss) for the year, net of tax Total comprehensive income/(loss) for the year Transactions with owners in their capacity as owners: Adjustment to security issue costs pursuant to market placement Dividends and distributions paid and payable to securityholders 21 As at 30 June 2011	Contributed equity Retained earnings Total $'000 $'000 $'000 644,261 422,590 1,066,851 0 173,660 173,660 0 0 0
	0 173,660 173,660 248,725 0 248,725 (9,404) 0 (9,404) 0 (48,476) (48,476)
	883,582 547,774 1,431,356
	883,582 547,774 1,431,356 0 194,697 194,697 0 0 0
	0 194,697 194,697 (28) 0 (28) 0 (53,173) (53,173)
	883,554 689,298 1,572,852

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

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Consolidated Statements of Cash Flows For the year ended 30 June 2011

Consolidated Statements of Cash Flows

Note Cash flows from operating activities Interest received Dividends received Distributions received Other income received Finance costs paid Other expenses paid Income tax paid Net cash inflow/(outflow) from operating activities 12(a) Cash flows from investing activities Payments for purchase of unlisted securities Payments for unlisted security loan advances Payments for stapled entity loan advances Proceeds from repayment of unlisted loan securities Proceeds from unlisted security repayments of capital and buy backs Net cash inflow/(outflow) from investing activities Cash flows from financing activities Repayment of bank facilities Proceeds from issue of securities Payment for security issue costs Dividends and distributions paid Net cash inflow/(outflow) from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Effects of foreign exchange rate movements on cash and cash equivalents Cash and cash equivalents at the end of the year 12(b)	2011 2010 $'000 $'000 22,766 12,377 63,620 50,040 2,282 1,038 567 470 (753) (1,877) (15,139) (12,443) (1,120) (471) 72,223 49,134 (5,528) (90,826) (11,151) (7,226) 0 0 18,739 41 5,065 0 7,125 (98,011) 0 (159,500) 0 291,487 (27) (9,404) (62,074) (48,065) (62,101) 74,518 17,247 25,641 61,990 36,351 0 (2) 79,237 61,990 AIX Consolidated AIFL	2011 2010 $'000 $'000 22,766 12,377 55,936 39,518 1,217 0 567 470 (753) (1,877) (15,140) (12,442) 0 (5) Consolidated AIFT
		64,593 38,041
		(803) (65,324) (11,151) (7,226) (15,174) 12,353 18,739 41 5,065 0
		(3,324) (60,156)
		0 (159,500) 0 248,725 (28) (9,404) (52,073) (32,065)
		(52,101) 47,756
		9,168 25,641 61,990 36,351 0 (2)
		71,158 61,990

The above Consolidated Statements of Cash Flows should be read in conjunction with the accompanying notes.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011

1 General information

Australian Infrastructure Fund Limited (AIFL or the Company) was in incorporated Australia under the Constitution dated 14 November 2007.

Australian Infrastructure Fund Trust (AIFT or the Trust) was established in Australia under the Constitution dated 24 January 1997 (as amended). AIFT was registered as a managed investment scheme with ASIC on 4 November 1999.

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

The registered office of AIFL and Responsible Entity is located at Level 16, 90 Collins Street, Melbourne, Victoria, 3000.

As at 30 June 2011 AIFL and AIFT had nil employees, apart from the non-executive directors of AIFL (2010: nil employees).

Structure of consolidated financial statements

The ordinary shares issued by AIFL are stapled to the securities issued by AIFT. The combined entity of AIFL and AIFT and its subsidiaries 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 of AIX.

The units and shares will only be unstapled in accordance with the determination of the Responsible Entity for AIFT and the Board of AIFL if:

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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 consolidated financial statements that combine the assets and liabilities of AIFL and AIFT and its subsidiaries, AIFL is identified as the parent entity.

The consolidated financial statements presented therefore comprise:

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Consolidated AIFL (AIX): Represents the entire AIX group, consisting of the Company and Consolidated AIFT; and
Consolidated AIFT: Represents AIFT and its controlled entities.

2 Summary of significant accounting policies

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

(a) Basis of preparation

The consolidated financial statements are general purpose financial statements which have been prepared in accordance with the Australian Accounting Standards (including Interpretations) the Corporations Act 2001 and AIFL’s and AIFT’s Constitutions.

The consolidated financial statements comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

The consolidated financial statements have been prepared on a historical cost basis, except where otherwise stated.

The Consolidated Statements of Financial Position are presented on a liquidity basis. Assets and liabilities are presented in decreasing order of liquidity and are not distinguished between current and non-current.

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

The consolidated financial statements of AIX (Consolidated AIFL) for the year ended 30 June 2011 were authorised for issue in accordance with a resolution of directors of AIFL. The directors of AIFL have the power to amend and reissue the consolidated financial statements.

The consolidated financial statements of Consolidated AIFT for the year ended 30 June 2011 were authorised for issue in accordance with a resolution of directors of the Responsible Entity. The directors of the Responsible Entity have the power to amend and reissue the consolidated financial statements.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

2 Summary of significant accounting policies (continued)

(b) New accounting standards and interpretations

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2011 reporting period. The directors' assessment of the impact of these new standards (to the extent relevant to AIX) and interpretations is set out below:

(i) AASB 9 Financial Instruments , AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 and AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (effective from 1 January 2015)

AASB 9 Financial Instruments (AASB 9) addresses the classification and measurement of financial assets and financial liabilities.

AASB 9 Financial Instruments requires all financial assets to be:

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classified on the basis of the entity’s business model for managing its financial assets and the contractual cash flow characteristics of the financial asset;
initially measured at fair value plus, in the case of a financial asset not at fair value through profit or loss, particular transaction costs; and
subsequently measured at amortised cost or fair value.

The requirements for derecognition of financial assets and financial liabilities under AASB 9 remain the same as those of AASB 139 Financial Instruments: Recognition and Measurement.

AIX will apply the revised standard from 1 July 2015. AIX has yet to fully assess the impact of adopting the revised standard.

(ii) AASB 1053 Application of Tiers of Accounting Standards and AASB 2010-2 Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements (effective from 1 July 2013)

On 30 June 2010 the AASB officially introduced a revised differential reporting framework in Australia. Under this framework, a two-tier differential reporting regime applies to all entities that prepare general purpose financial statements. AIX is listed on the ASX and is not eligible to adopt the new Australian Accounting Standards - Reduced Disclosure requirements. The two standards will therefore have no impact on the consolidated financial statements of AIX.

(c) Basis of consolidation

In accordance with AASB 3 Business Combinations , for the purpose of preparing consolidated financial statements that combines the assets and liabilities of AIFL and AIFT and its subsidiaries, AIFL is identified as the parent entity.

The consolidated financial statements of AIFL incorporate the assets and liabilities of all subsidiaries of AIFL (or parent entity), being AIFT and its subsidiaries, as at 30 June 2011 and the results of all subsidiaries for the year ended 30 June 2011. AIFL and its subsidiaries together are referred to in these consolidated financial statements as Consolidated AIFL or AIX.

The consolidated financial statements of AIFT incorporate the assets and liabilities of all subsidiaries of AIFT, being Australian Infrastructure Fund International 1 Trust and its subsidiaries, as at 30 June 2011 and the results of all subsidiaries for the year ended 30 June 2011. AIFT and its subsidiaries together are referred to in these consolidated financial statements as Consolidated AIFT.

Subsidiaries are those entities (including special purpose entities) over which AIFL or AIFT has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether AIFL or AIFT controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to AIFL or AIFT. They are de-consolidated from the date the control ceases.

All transactions (including gains and losses) and balances between entities in AIX and Consolidated AIFT are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.

The financial statements of subsidiaries are prepared for the same reporting period as AIFT, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

2 Summary of significant accounting policies (continued)

(d) Parent entity financial information

The financial information for the parent entities AIFL and AIFT, disclosed in Note 30 has been prepared on the same basis as the consolidated financial statements, except as set out below:

Investments in subsidiaries

Investments in subsidiaries are recorded at fair value through profit or loss in the individual financial statements of the parent entities.

Income tax

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

(e) Significant accounting judgements, estimates and assumptions

In applying AIX’s accounting policies management continually evaluates estimates, judgements and assumptions based on experience and other factors, including expectations of future events that may have an impact on the entity. All estimates, judgements 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 estimates, judgements and assumptions. Significant estimates, judgements and assumptions are outlined below:

Valuation of unlisted securities

The 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.

The carrying amount of unlisted securities held by AIX as at 30 June 2011 was $1,756,228,000 (2010: $1,603,148,000).

Global capital markets continue to be volatile. The fair values of unlisted securities have been adjusted to reflect market conditions at the end of the reporting period. While this represents the best estimate of fair value at the end of the reporting period, if the unlisted securities were to be sold, the price achieved may differ from the fair value recorded at the end of the reporting period.

Further information in relation to unlisted securities is provided in Note 15.

(f) Foreign currency translation

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translations at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the profit or loss.

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.

(g) Segment reporting

From 1 July 2009, AIX has adopted the revised AASB 8 Operating Segments (AASB 8) which became operative for the annual reporting period commencing on 1 January 2009.

AASB 8 requires a 'management approach' to reporting on the financial performance.

Operating segments are now reported in a manner that is consistent with the internal reporting provided to the chief operating decision maker. In the case of AIX, two chief operating decision makers, being the Board of AIFL and the Board of Hastings have been identified for the purposes of AASB 8.

AIX has one reportable operating segment being the investment in unlisted infrastructure securities.

(h) Cash and cash equivalents

For Consolidated Statements of Cash Flows presentation purposes, cash and cash equivalents include cash on hand, deposits held at call with financial institutions, other short term, high liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings on the Consolidated Statements of Financial Position.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

2 Summary of significant accounting policies (continued)

(i) Receivables

Receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.

Receivables may include interest, dividends and trust distributions. Interest, dividends and trust distributions are accrued in accordance with the policy note set out in Note 2(n).

All receivables, unless otherwise stated, are non-interest bearing, unsecured and generally received within 30 days of being recorded as receivables.

Impairment allowance

Collectability of receivables is reviewed on an ongoing basis. Receivables which are known to be uncollectible are written off by reducing the carrying amount directly. An allowance account (provision for impairment of receivables) is used when there is objective evidence that AIX will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the receivable is impaired.

The amount of the impairment allowance is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial.

The amount of the impairment loss is recognised as expense in the profit or loss. When a receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are written back against the impairment allowance in the profit or loss.

(j) Securities

Securities comprise listed securities, unlisted securities and derivative securities.

Securities are recorded at fair value through the profit or loss upon initial recognition. Costs incidental to the acquisition of securities and subsidiaries are recognised in the profit or loss when incurred.

After initial recognition, securities are measured at fair value as they are managed and their performance evaluated on a fair value basis in accordance with AIX’s investment strategy.

Unrealised gains or losses on securities are recognised through profit or loss and represent:

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Movements in the fair value of securities which are held as at the end of the reporting period.

Unrealised gains or losses on securities which are held as at the end of the reporting period are calculated as the difference between the fair value at the end of current reporting period and the fair value at the end of previous reporting period or the date the securities are acquired.

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Reversal of any life-to-date unrealised gains or losses as at the previous reporting period in connection with any securities that have been sold, restructured, settled or terminated in the current reporting period.

Realised gains and losses on securities are recognised through profit or loss upon the sale, restructure, settlement or termination of securities and are calculated as the difference between the settlement amount and the fair value upon initial recognition.

In the prior year:

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Unrealised gains or losses arising from movements in the fair value of securities were calculated as the difference between the fair value at the end of current reporting period and the fair value of the end of previous reporting period.
Realised gains or losses were calculated as the difference between the settlement and the fair value at the end of the previous reporting period.

Purchases and sales of 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.

Listed securities

AIX did not hold any listed securities at 30 June 2011 (2010: nil).

Derivative securities

AIX did not hold any derivative securities at 30 June 2011 (2010: nil).

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

2 Summary of significant accounting policies (continued)

(j) Securities (continued)

Unlisted securities

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

The fair value of unlisted securities is determined by an appropriately qualified independent valuer, KPMG Corporate Finance (KPMG), primarily by projecting future cash flows and then discounting these cash flows back to their present value using a post-tax, risk adjusted discount rate. The independent valuations assume investments are not being sold and if they were to be realised then there may be potential capital gains tax implications for AIX or securityholders depending on the structure of any disposal. Discount rates used are developed on an individual unlisted security basis as determined by the independent valuer. KPMG calculates the relevant discount rate applied to the cash flows of each asset using the Capital Asset Pricing Model method, whereby a premium is added to the risk free rate. The premium takes into account the risk of comparable companies and also incorporates firm specific risk. KPMG uses a 10 year government bond rate in the relevant country as a proxy for the risk free rate. The Responsible Entity and the Company adopted KPMG’s valuations as at 30 June 2011.

Further information relating to unlisted securities is provided in Note 15.

The post-tax risk adjusted discount rates applied by KPMG Corporate Finance in determining the fair value of each unlisted security as at 30 June 2011 are detailed below:

Unlisted Security Name	Valuation 30-Jun-11 $'000	Post-tax risk adjusted discount rate 30-Jun-11 %	Valuation 30-Jun-10 $'000	Post-tax risk adjusted discount rate 30-Jun-10 %
Perth Airport	525,176	13.05	435,100	13.15
Australia Pacific Airports Corporation	451,839	11.60	410,140	11.20
HOCHTIEF AirPort Capital Group	313,463	13.20	305,288	12.80
Queensland Airports	271,687	15.00	270,812	15.10
Airport Development Group	99,403	14.80	83,476	14.90
Port of Portland	68,563	12.70	68,400	12.80
Port of GeelongUnit Trust & Infrastructure Investment Corporation	24,830	12.60	20,107	12.80
Statewide Roads	976	13.10	2,017	8.30
Metro Light Rail and Monorail	3,979	19.20	3,290	20.30

(k) Payables

Payables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method.

Payables include liabilities and accrued expenses owing by AIX which are unpaid as at the end of the reporting period.

The distribution amount payable to securityholders as at the end of each reporting period is recognised separately when securityholders are presently entitled to the distributable income under AIX’s Constitution.

All payables, unless otherwise stated, are non-interest bearing, unsecured and generally settled on 30 day terms.

(l) Borrowings

All borrowings are initially recognised at fair value being the consideration received.

After initial recognition, borrowings are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs or fees in relation to the establishment of borrowing facilities, and any discount or premium on settlement.

Fees paid on the establishment of borrowing facilities are initially capitalised as a prepayment for liquidity services and are subsequently amortised over the period of the facility to which it relates upon a draw down of funds.

Other borrowing costs are expensed through profit or loss.

Borrowings are derecognised when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised as other income or finance costs.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

2 Summary of significant accounting policies (continued)

(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.

(n) 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.

Expenses are recognised in the Consolidated Statements of Comprehensive Income when AIX has a present obligation (legal or constructive) as a result of a past event that can be reliably measured and where the expenses do not produce future economic benefits that qualify for recognition in the Consolidated Statements of Financial Position.

The following specific recognition criteria must also be met before income and expenses are recognised:

Interest income

Interest income is recognised as the interest accrues (using the effective interest method, which is the rate that 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.

Manager and Responsible Entity base management fees and performance fees

Information in relation to Manager and Responsible Entity base management fees and performance fees payable to Hastings is provided in Note 8.

Hastings is also entitled under the AIFT 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 the AIFT Constitution and the AIFL management agreement.

Finance and borrowing costs

Refer to Note 2(l) for the recognition and measurement of borrowing costs. Other finance costs and borrowing costs are recognised as an expense when incurred.

(o) Distributions

AIFT’s Constitution requires the Responsible Entity to distribute to each securityholder an amount representing the distributable income entitlement of each securityholder in respect of a distribution period at the Responsible Entity’s discretion. Distributable income is defined under AIFT’s constitution as the net income of AIFT as defined under section 95(1) of the Tax Act, less any amounts the Responsible Entity may in its absolute discretion determine to deduct.

The net income of AIFT includes capital gains arising from the disposal of unlisted securities. Unrealised net gains or losses on unlisted securities are not included in the determination of net income. Capital losses are not included in the determination of net income but are retained to be offset against any future realised capital gains.

The AIFT Constitution also allows the Responsible Entity, as it may determine, to distribute to each securityholder any part of the corpus of AIFT in the proportion to which the securityholder would have been entitled in a distribution of that sum, were it distributable income.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

2 Summary of significant accounting policies (continued)

(p) Income tax

AIFL and certain entities that are part of Consolidated AIFT are subject to income tax.

The income tax expense or revenue for the year is the tax payable or receivable on the current year’s taxable income based on the applicable income tax for each entity’s jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the entities operate and generate taxable income. Hastings periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided on all temporary differences at the end of the reporting period 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:

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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:

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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 the end of the reporting period 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 end of the reporting period.

Income taxes relating to items recognised directly in equity are recognised in equity and not in the Consolidated Statements of Comprehensive Income.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

2 Summary of significant accounting policies (continued)

(q) Goods and Services Tax (GST)

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

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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 Consolidated Statements of Financial Position. Reduced input tax credits recoverable by AIFL or AIFT from the Australian Taxation Office are recognised as receivables in the Consolidated Statements of Financial Position.

Cash flows are included in the Consolidated Statements of Cash Flows 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.

(r) Rounding of amounts

AIX is an entity of the kind referred to in Class Order 98/0100 (as amended), issued by the Australian Securities and Investments Commission, relating to the ''rounding off'' of amounts in the financial report. Amounts in the consolidated financial statements have been rounded off to the nearest thousand dollars in accordance with that Class Order, unless otherwise indicated.

(s) 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 Consolidated Financial Statements For the year ended 30 June 2011 (continued)

3 Interest income

Cash and cash equivalents Unlisted securities Total interest income	2011 2010 $'000 $'000 2,130 2,281 14,091 13,501 16,221 15,782 AIX Consolidated AIFL	2011 2010 $'000 $'000 2,130 2,281 14,091 13,501 Consolidated AIFT
		16,221 15,782

4 Dividend income

Unlisted securities Total dividend income	2011 2010 $'000 $'000 52,085 53,945 52,085 53,945 Consolidated AIFL AIX	2011 2010 $'000 $'000 44,650 43,198 Consolidated AIFT
		44,650 43,198

5 Distribution income

Unlisted securities Total distribution income	2011 2010 $'000 $'000 1,623 1,854 1,623 1,854 Consolidated AIFL AIX	2011 2010 $'000 $'000 542 531 Consolidated AIFT
		542 531

6 Net gain/(loss):securities

Net gain/(loss) - unlisted securities Net gain/(loss) - unrealised Net gain/(loss) - realised Total net gain/(loss) - unlisted securities Total net gain/(loss) - securities	2011 2010 $'000 $'000 215,746 141,318 (47,698) (101) 168,048 141,217 168,048 141,217 AIX Consolidated AIFL	2011 2010 $'000 $'000 158,007 134,718 (2,198) (101) Consolidated AIFT
		155,809 134,617
		155,809 134,617

Incorporated in the current year net realised loss is a $45,499,999 loss upon the redemption of the Class A redeemable preference share held by AIX in Statewide Roads. This loss had been fully recognised in prior financial years on an unrealised loss basis and has no impact on the 2011 income statements.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

7 Other income

7 Other income
Director fee income Consent fees Total other income	2011 2010 $'000 $'000 485 372 0 98 485 470 AIX Consolidated AIFL	2011 2010 $'000 $'000 485 372 0 98 Consolidated AIFT
		485 470

8 Manager and Responsible Entity fees

Base management fees Performance fees Total Manager and Responsible Entity fees	2011 2010 $'000 $'000 12,000 10,179 0 0 12,000 10,179 AIX Consolidated AIFL	2011 2010 $'000 $'000 12,000 10,179 0 0 Consolidated AIFT
		12,000 10,179

Base Management Fees

In accordance with the AIFL management agreement and the AIFT Constitution, Hastings as Manager and Responsible Entity is entitled to a base management fee.

The management fee is calculated at the rate of 1% per annum of AIX’s market capitalisation, based on the volume weighted average traded price over the 20 business days prior to the calculation date multiplied by the stapled securities outstanding. The management fee accrues daily and is payable monthly in arrears.

Performance Fees

At 30 June 2011 the net performance position stands at a carry forward shortfall (deficit) of $25,328,910 (2010: $114,284,752).

As a consequence no performance fee has been paid or is payable to Hastings for the year ended 30 June 2011 (2010: $nil).

9 Finance costs

9 Finance costs
Interest expense - stapled entity - AIFL Interest expense - multi-option facility Bank fees Other borrowing costs Total finance costs	2011 2010 $'000 $'000 0 0 0 474 11 6 963 1,351 974 1,831 AIX Consolidated AIFL	2011 2010 $'000 $'000 1,128 1,958 0 474 12 5 963 1,351 Consolidated AIFT
		2,103 3,788

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

10 Audit fees

Amounts paid and payable to the auditor, PricewaterhouseCoopers, excluding GST for: - Audit and review of the financial statements - Compliance plan audit - Other assurance services Total audit fees	2011 2010 2011 2010 $ $ $ $ 135,265 132,070 97,617 70,070 15,910 15,300 15,910 15,300 6,240 6,000 6,240 6,000 157,415 153,370 119,767 91,370 AIX Consolidated AIFL Consolidated AIFT

11 Income tax

(a) Income tax expense
Current tax expense
Deferred income tax expense/(benefit)
Total income tax expense
(b) Numerical reconciliation of income tax expense to
prima facie tax payable
Net profit/(loss) before income tax
Prima facie tax at the Australian tax rate of 30% (2010 - 30%)
Tax effect of amounts which are not
deductible/(assessable) in calculating
taxable income:
Profit not assessable in hands of the Trust
Franked dividend gross up
Tax offset for franked dividend
Income tax expense
(c) Deferred income tax liability
Deferred income tax liability
Comprising:
Net unrealised gain on unlisted securities
Dividend receivable

2011
2010
2011
2010
$'000
$'000
$'000
$'000
663
988
0
0
9,340
6,282
5,743
4,235
10,003
7,270
5,743
4,235
222,324
198,523
200,440
177,895
66,697
59,557
60,133
53,368
(54,390)
(49,134)
(54,390)
(49,133)
989
1,351
0
0
(3,293)
(4,504)
0
0
10,003
7,270
5,743
4,235
34,375
25,036
22,548
16,805
34,375
24,961
22,548
16,805
0
75
0
0
34,375
25,036
22,548
16,805
AIX
Consolidated AIFL
Consolidated AIFT

The movement in the deferred income tax liability balance has been charged through profit or loss.

(d) Current income tax liability

Current income tax liability	347 803 (4) (4) 347 803 (4) (4)

All deferred income tax balances are not expected to be realised within the next twelve months.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

12 Cash and cash equivalents

(a) Reconciliation of net profit/(loss) after income tax to the net cash flows from operating activities Net profit/(loss) after income tax Adjustments for non-cash and non-operating items: Net gain/(loss) - securities Net gain/(loss) - cash and cash equivalents Interest expense - stapled entity Changes in operating related assets and liabilities: (Increase)/decrease in income receivables (Increase)/decrease in other receivables (Increase)/decrease in prepayments (Increase)/decrease in accrued income Increase/(decrease) in payables Increase/(decrease) in accrued interest expense Increase/(decrease) in current income tax liability Increase/(decrease) in deferred income tax liability Increase/(decrease) in provisions Net cash inflow/(outflow) from operating activities (b) Components of cash and cash equivalents Cash at bank Total cash and cash equivalents	2011 2010 $'000 $'000 212,321 191,253 (168,048) (141,217) 0 2 0 0 12,193 (4,722) 20 (3,581) 236 324 6,546 113 25 270 0 (174) (457) 514 9,339 6,286 48 66 72,223 49,134 2011 2010 $'000 $'000 79,237 61,990 79,237 61,990 AIX AIX Consolidated AIFL Consolidated AIFL	2011 2010 $'000 $'000 194,697 173,660 (155,809) (134,617) 0 2 1,128 1,958 11,959 (4,211) 20 (3,581) 236 324 6,546 113 25 270 0 (173) 0 (8) 5,743 4,238 48 66 Consolidated AIFT
		64,593 38,041
		2011 2010 $'000 $'000 71,158 61,990 Consolidated AIFT
		71,158 61,990

Cash at bank earns interest at floating rates based on daily deposit rates.

(c) Significant non-cash investing and financing activities

There were no significant non-cash investing and financing activities during the year (2010: nil).

13 Receivables

Income receivable Security redemption proceeds receivable Other receivables Total receivables	2011 2010 $'000 $'000 2,388 14,582 1,299 0 226 246 3,913 14,828 AIX Consolidated AIFL	2011 2010 $'000 $'000 1,174 13,135 1,299 0 226 246 Consolidated AIFT
		2,699 13,381

None of the receivables are impaired or past due but not impaired.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

14 Other assets

Prepayments Total other assets	2011 2010 $'000 $'000 89 324 89 324 AIX Consolidated AIFL	2011 2010 $'000 $'000 89 325 Consolidated AIFT
		89 325

15 Securities

Unlisted securities Perth Airport (Airstralia Development Group & PAPT Holdings) Australia Pacific Airports Corporation Limited HOCHTIEF AirPort Capital Group Queensland Airports Limited Airport Development Group Pty Ltd Port of Portland Port of Geelong Unit Trust & Infrastructure Investment Corporation Statewide Roads Metro Light Rail and Monorail Total unlisted securities Total securities	2011 2010 $'000 $'000 525,176 454,200 451,839 410,140 313,463 305,288 271,687 259,526 98,104 83,476 66,632 65,360 24,372 19,851 976 2,017 3,979 3,290 1,756,228 1,603,148 1,756,228 1,603,148 AIX Consolidated AIFL	2011 2010 $'000 $'000 525,176 454,200 312,399 283,688 313,463 305,288 271,687 259,526 98,104 83,476 40,529 39,752 0 0 0 0 3,979 3,290 Consolidated AIFT
		1,565,337 1,429,220
		1,565,337 1,429,220

All unlisted securities have been independently valued by KPMG Corporate Finance at 30 June 2011 and 30 June 2010.

Percentage Ownership

Unlisted securities Perth Airport (Airstralia Development Group & PAPT Holdings) Australia Pacific Airports Corporation Limited HOCHTIEF AirPort Capital Group Queensland Airports Limited Airport Development Group Pty Ltd Port of Portland Port of Geelong Unit Trust & Infrastructure Investment Corporation Statewide Roads Metro Light Rail and Monorail	2011 2010 2011 2010 % % % % 29.74% 29.74% 29.74% 29.74% 12.39% 12.39% 8.57% 8.57% 40.02% 40.02% 40.02% 40.02% 49.07% 49.07% 49.07% 49.07% 28.23% 28.23% 28.23% 28.23% 50.00% 50.00% 30.41% 30.41% 35.00% 35.00% 0.00% 0.00% 6.25% 6.25% 0.00% 0.00% 38.89% 38.89% 38.89% 38.89% AIX Consolidated AIFL Consolidated AIFT

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

16 Payables

16 Payables
Payable - the Responsible Entity Distribution and dividend payable Other payables Total payables	2011 2010 $'000 $'000 962 905 31,037 31,037 293 325 32,292 32,267 Consolidated AIFL AIX	2011 2010 $'000 $'000 962 905 28,037 26,937 293 325 Consolidated AIFT
		29,292 28,167

For information regarding the distribution and dividend payable refer to Note 21.

Further details of related party payables are included in Notes 25 and 26.

17 Provisions

Provision for directors' retirement benefit Total provisions Movement in the provision for directors' retirement benefit: Opening balance Charged/(credited) to the profit or loss Closing balance	2011 2010 2011 2010 $'000 $'000 $'000 $'000 722 673 722 673 722 673 722 673 673 608 673 608 49 65 49 65 722 673 722 673 Consolidated AIFT AIX Consolidated AIFL

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.

18 Borrowings

Loan - stapled entity - AIFL Total borrowings	2011 2010 $'000 $'000 0 0 0 0 AIX Consolidated AIFL	2011 2010 $'000 $'000 13,873 27,919 Consolidated AIFT
		13,873 27,919

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

18 Borrowings (continued)

(a) Financing Arrangements

At the end of each reporting period the following financing facilities were available:

Facilities available: Standby debt facility Facilities drawn: Standby debt facility Facilities undrawn: Standby debt facility	2011 2010 2011 2010 $'000 $'000 $'000 $'000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 0 0 0 0 0 0 0 0 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 AIX Consolidated AIFL Consolidated AIFT

(b) Loan - stapled entity - AIFL

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

(c) Standby debt facility

On 21 August 2009 AIX established a $30 million standby debt facility with Westpac and ANZ as lenders with an expiry date of 21 August 2011.

Interest on cash advances drawn under the facility is charged at a base rate plus a margin.

On 11 August 2011 AIX entered into a $100 million standby debt facility with Westpac and ANZ as lenders with an expiry date of 21 August 2013.

19 Contributed equity

(a) Issued securities (number) Opening balance Ordinary stapled securities issued: - pursuant to market placement Closing balance (b) Issued securities (dollars) Opening balance Ordinary stapled securities issued: - pursuant to market placement Less: security issue costs Closing balance	2011 2010 No. '000 No. '000 620,734 384,517 0 236,217 620,734 620,734 $'000 $'000 1,043,602 761,519 0 291,487 (27) (9,404) 1,043,575 1,043,602 AIX Consolidated AIFL	2011 2010 No. '000 No. '000 620,734 384,517 0 236,217 Consolidated AIFT
		620,734 620,734
		$'000 $'000 883,582 644,261 0 248,725 (28) (9,404)
		883,554 883,582

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

19 Contributed equity (continued)

(c) Security issues

2011

There are no movements in the issued securities during the year.

2010

On 6 July 2009 AIX issued 100,662,039 stapled securities at a price of $1.10 per stapled security for a total consideration of $110,728,243 pursuant to a fully underwritten institutional placement. On 20 July 2009 AIX issued a further 91,598,600 stapled securities at a price of $1.10 per stapled security for a total consideration of $100,758,460 pursuant to a fully underwritten retail placement. Part of the proceeds of these offers was used to repay the multi-option facility which was drawn to $159.5 million.

On 14 May 2010 AIX issued 43,956,044 stapled securities at a price of $1.82 per stapled security for a total consideration of $80 million pursuant to a fully underwritten institutional placement. $75.1 million of the proceeds raised were used to fund a further acquisition of Australia Pacific Airports Corporation Limited with the balance of the proceeds used for transaction costs and general purposes.

(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:

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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.

20 Retained earnings

Opening balance Net profit after income tax for the year Dividends and distributions paid and payable to securityholders Closing balance	2011 2010 $'000 $'000 577,909 446,532 212,321 191,253 (62,074) (59,876) 728,156 577,909 AIX Consolidated AIFL	2011 2010 $'000 $'000 547,774 422,590 194,697 173,660 (53,174) (48,476) Consolidated AIFT
		689,298 547,774

21 Distributions and dividends paid and payable to securityholders

Interim distribution and dividend declared and paid Final distribution and dividend declared and payable Total distributions and dividends paid and payable to securityholders Comprising: Distributions declared during the year Dividends declared during the year	2011 2010 $'000 $'000 31,037 28,839 31,037 31,037 62,074 59,876 53,174 48,476 8,900 11,400 62,074 59,876 AIX Consolidated AIFL	2011 2010 $'000 $'000 25,137 21,539 28,037 26,937 Consolidated AIFT
		53,174 48,476
		53,174 48,476 0 0
		53,174 48,476

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

21 Distributions and dividends paid and payable to securityholders (continued)

Final dividend and distribution

The final dividend and distribution comprised:

==> picture [9 x 12] intentionally omitted <==

a final dividend of $3,000,000 (0.5 cents per security) declared by AIFL for the year ended 30 June 2011 (2010: 0.7 cents per stapled security) franked to 100% (2010: 100%); and
a final distribution of $28,037,000 (4.5 cents per security) declared by AIFT for the year ended 30 June 2011 (2010: 4.3 cents per stapled security).

Interim dividend and distribution

The interim dividend and distribution comprised:

==> picture [9 x 12] intentionally omitted <==

an interim dividend of $5,900,000 (0.95 cents per security) declared by AIFL for the half year ended 31 December 2010 (2009: $7,300,000 and 1.27 cents per stapled security) franked to 100% (2009: 100%); and
an interim distribution of $25,137,000 (4.05 cents per security) declared by AIFT for the half year ended 31 December 2010 (2009: $21,539,000 and 3.73 cents per stapled security).

22 Franking credit availability

Franking credits available for distribution at the end of the year	2011 2010 $'000 $'000 5,331 5,203 AIX Consolidated AIFL	2011 2010 $'000 $'000 0 0 Consolidated AIFT

23 Segment information

Operating segments are based on the reports reviewed by the Board of AIFL and the Board of Hastings that are, in conjunction with the input and guidance of the chief executive officer of AIX, used to make strategic decisions for AIX. The operating segments are aligned with the investment objectives and guidelines set out in AIX’s PDS and in accordance with the provisions of AIX’s Constitutions.

AIX has one reportable operating segment being the investment in unlisted infrastructure securities.

The AIFL and Hastings’ Boards takes a broad portfolio construction approach to its investment and divestment activities of infrastructure securities and to the management of AIX. Accordingly, all operating decisions are based upon analysis of AIX as one operating segment.

The segment information reported to the Boards is consistent with the Accounting Standards and therefore consistent with the information included within the consolidated financial statements.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

24 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 credit risk, interest rate risk, price risk, foreign currency risk, and liquidity risk.

The directors of AIFL and the directors of the Responsible Entity of AIFT review and agree policies for managing each of these risks.

Credit risk

Credit risk represents the risk that a counterparty will be unable to pay amounts in full when they fall due and AIX and Consolidated AIFT will incur a financial loss.

The main concentration of credit risk to which AIX and Consolidated AIFT are exposed arises from their exposure to unlisted securities that are debt securities such as shareholder loans. AIX and Consolidated AIFT are also exposed to counterparty credit risk on cash and cash equivalents and other receivables.

To manage credit risk, AIX and Consolidated AIFT deal only with high credit quality financial institutions for their cash transactions. At an asset level, AIX and Consolidated AIFT aim to achieve an appropriate risk adjusted return for each of their investments. This is achieved through appropriate investment due diligence on an asset by asset basis. With regard to credit risk at the portfolio level, AIX and Consolidated AIFT are diversified by sector, geography and stage of development.

Interest rate risk

Interest rate risk is the risk that a financial instrument’s value or the value of its cash flows may fluctuate as a result of changes in market interest rates. Financial instruments whose cashflows are determined by reference to variable interest rates include cash and cash equivalents, interest bearing receivables, interest bearing unlisted securities and interest bearing borrowings.

Movements in interest rates directly affect the value of AIX and Consolidated AIFT’s unlisted securities. As discussed in Note 2(j), the value of the unlisted securities is determined by discounting the projected future cashflows of the underlying entity. The discount rate utilised incorporates a risk free rate component as well as a market risk premium factor that reflects the excess return that a market portfolio of assets generates over the risk free rate. The market risk premium is generally determined with reference to market observations over a long period of time and therefore remains relatively stable.

Movements in interest rates directly affect cashflows generated by AIX and Consolidated AIFT’s cash and cash equivalents, interest bearing receivables, interest bearing unlisted securities and interest bearing borrowings.

As AIX’s investment strategy is long term, AIX and Consolidated AIFT do not hedge these interest rate exposures.

Price risk

Price risk is the risk that a financial instruments value may fluctuate as a result of changes in its price.

AIX and Consolidated AIFT are exposed to price risk on their unlisted security holdings.

AIX and Consolidated AIFT mitigate price risk by a thorough due diligence process and careful selection of investments. On an ongoing basis, investee companies are monitored throughout the year via board representation, management reporting and detailed discussions with the underlying investee company. The results of the monitoring completed by management are reported to the AIFL and Hastings Boards on a regular basis.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

24 Financial instruments (continued)

(a) Financial risk management objectives and policies (continued)

Price risk (continued)

Unlisted security prices are affected by the underlying cashflows of the unlisted security. The underlying cashflows used in valuing unlisted securities are provided by investee management in the form of a financial model, which is reviewed at least annually during the budgeting process and approved by representatives on the investee’s board. The key drivers of the financial model include expected volumes, agreed pricing and the cost and timing of capital expenditure projects at each asset. Forecast volumes and pricing negotiations are performed by investee management with the assistance of, as appropriate, external consultants who provide specialist advice and a further layer of objectivity. In pricing negotiations, the investee boards are often consulted on key issues and provided with regular updates throughout the process. Capital expenditure is planned by investee management and also requires investee board approval prior to project commencement.

Due to the long term view that is taken, AIX and Consolidated AIFT do not hedge against these short-term fluctuations.

Foreign exchange rate risk

Foreign exchange rate risk is the risk that a financial instrument’s value or the value of its cash flows may fluctuate as a result of changes in foreign exchange rates.

AIX and Consolidated AIFT invest in one offshore unlisted security, whose value and cashflows are denominated in Euro. As a result, AIX and Consolidated AIFT are exposed to movements in the Australian dollar/Euro foreign exchange rate.

It is AIX and Consolidated AIFT’s policy not to hedge the carrying value of foreign currency denominated unlisted securities or any foreign currency cash flows that these foreign currency denominated unlisted securities generate.

Liquidity risk

Liquidity risk is the risk that AIX and Consolidated AIFT may not be able to generate sufficient cash resources to settle their obligations in full as and when they fall due or can do so in forms that are materially disadvantageous.

To manage liquidity risk, AIX and Consolidated AIFT actively monitor cash balances and forecast operational cashflows and liabilities on a regular basis. In addition to available cash on hand, AIX and Consolidated AIFT have short term funding lines.

All AIX and Consolidated AIFT’s financial liabilities as at 30 June 2011 are at call and due within twelve months.

(b) Credit risk

There are no material amounts receivable past due or impaired.

Concentration of credit risk

Credit exposures at balance date are cash and cash equivalent balances (Note 12), receivables balances (Note 13) as well as the following unlisted security balances:

Name Instrument Type Perth Airport Shareholder Loans Perth Airport Convertible Loan Notes HOCHTIEF AirPort Capital Group Shareholder Loans Queensland Airports Limited Loan Notes Metro Light Rail and Monorail Shareholder Loans	2011 2010 $'000 $'000 20,781 13,780 0 18,773 98,727 135,837 22,332 18,865 27,774 27,774 169,614 215,029 AIX Consolidated AIFL	2011 2010 $'000 $'000 20,781 13,780 0 18,773 98,727 135,837 22,332 18,865 27,774 27,774 Consolidated AIFT
		169,614 215,029

The maximum exposure to credit risk of cash and cash equivalents, receivables and all securities aside from Metro Light Rail and Monorail, approximates their carrying amounts.

No collateral is held against receivables.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

24 Financial instruments (continued)

(c) Summarised sensitivity analysis

The following tables summarise the sensitivity of material financial assets and financial liabilities to movements in interest rates and foreign exchange rates.

Interest Rate Sensitivity

The effect of a +/- 0.5% shift in interest rates has been selected for interest rate sensitivity as it represents the approximate historic 12 month average movement in the yield of the 10 year Australian Government Bond Rate (the risk free rate). In any 12 month period the shift in interest rates could be more or less than 0.5%.

A change in interest rates affects the interest revenue and interest expense of AIX, affecting cash and cash equivalents, interest bearing receivables, unlisted securities and borrowings respectively.

The interest rate sensitivity assumes the discount rate used to determine the fair value of unlisted securities is changed by the stated amount, whilst holding all other variables constant. The effect of a +/- 0.5% shift in interest rates on unlisted securities has been approximated through valuation sensitivities performed at discount rates reflecting the selected range while all other valuation variables are held constant.

Foreign Exchange Rate Sensitivity

The effect of a +/- 10% movement in foreign exchange rates has been selected for foreign exchange rate sensitivity.

In the current year, the Australian Dollar (AUD) had appreciated 17.52% against the British Pound Sterling (GBP), appreciated 6.35% against the Euro (EUR), appreciated 4.81% against the New Zealand Dollar (NZD) and appreciated 25.61% against the US Dollar (USD).

The 10% sensitivity was selected as it represents foreign exchange movements over a 12 month period in the context of the longer term historical volatility.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

24 Financial instruments (continued)

(c) Summarised sensitivity analysis (continued)

AIX Consolidated AIFL 2011 Carrying Value $'000 Financial assets Cash and cash equivalents 79,237 Receivables 0 Securities 1,756,228 Financial liabilities Payables 32,292 Borrowings 0 Total increase/(decrease)	Profit Equity Profit Equity $'000 $'000 $'000 $'000 (396) (396) 396 396 0 0 0 0 (67,573) (67,573) 67,573 67,573 0 0 0 0 0 0 0 0 (67,969) (67,969) 67,969 67,969 Interest rate risk 0.5% -0.5%	Foreign exchange risk	Foreign exchange risk
	Profit Equity $'000 $'000 (396) (396) 0 0 (67,573) (67,573) 0 0 0 0 (67,969) (67,969) -0.5%	Profit Equity $'000 $'000 1,140 1,140 0 0 34,831 34,831 0 0 0 0 35,971 35,971 -10.0%	10.0%
			Profit Equity $'000 $'000
			(932) (932) 0 0 (28,496) (28,496) 0 0 0 0
			(29,428) (29,428)

AIX Consolidated AIFL 2010 Carrying Value $'000 Financial assets Cash and cash equivalents 61,990 Receivables 0 Securities 1,603,148 Financial liabilities Payables 32,267 Borrowings 0 Total increase/(decrease)	Profit Equity Profit Equity $'000 $'000 $'000 $'000 (310) (310) 310 310 0 0 0 0 (62,859) (62,859) 62,859 62,859 0 0 0 0 0 0 0 0 (63,169) (63,169) 63,169 63,169 -0.5% 0.5% Interest rate risk	Foreign exchange risk
	Profit Equity $'000 $'000 (310) (310) 0 0 (62,859) (62,859) 0 0 0 0 (63,169) (63,169) -0.5%	Profit Equity $'000 $'000 1 1 0 0 39,931 39,931 0 0 0 0 39,932 39,932 -10.0%	10.0%
			Profit Equity $'000 $'000
			(1) (1) 0 0 (22,836) (22,836) 0 0 0 0
			(22,837) (22,837)

Consolidated AIFT 2011 Carrying Value $'000 Financial assets Cash and cash equivalents 71,158 Receivables 0 Securities 1,565,337 Financial liabilities Payables 29,292 Borrowings 13,873 Total increase/(decrease)	Profit Equity Profit Equity $'000 $'000 $'000 $'000 (356) (356) 356 356 0 0 0 0 (59,531) (59,531) 59,531 59,531 0 0 0 0 69 69 (69) (69) (59,818) (59,818) 59,818 59,818 0.5% Interest rate risk -0.5%	Foreign exchange risk
	Profit Equity $'000 $'000 (356) (356) 0 0 (59,531) (59,531) 0 0 69 69 (59,818) (59,818) -0.5%	Profit Equity $'000 $'000 1,140 1,140 0 0 34,831 34,831 0 0 0 0 35,971 35,971 -10.0%	10.0%
			Profit Equity $'000 $'000
			(932) (932) 0 0 (28,496) (28,496) 0 0 0 0
			(29,428) (29,428)

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

24 Financial instruments (continued)

(c) Summarised sensitivity analysis (continued)

Profit Equity Profit Equity $'000 $'000 $'000 $'000 (310) (310) 310 310 0 0 0 0 (55,135) (55,135) 55,135 55,135 0 0 0 0 140 140 140 140 (55,305) (55,305) 55,585 55,585 0.5% Interest rate risk -0.5%	Foreign exchange risk	Foreign exchange risk
Profit Equity $'000 $'000 (310) (310) 0 0 (55,135) (55,135) 0 0 140 140 (55,305) (55,305) -0.5%	Profit Equity $'000 $'000 1 1 0 0 39,931 39,931 0 0 0 0 39,932 39,932 -10.0%	10.0%
		Profit Equity $'000 $'000
		(1) (1) 0 0 (22,836) (22,836) 0 0 0 0
		(22,837) (22,837)

(d) Fair values of financial instruments

The carrying amounts of AIX’s and Consolidated AIFT’s financial instruments and the methods and assumptions used to determine the fair values of instruments are summarised below.

Cash and cash equivalents

The carrying amounts of cash and cash equivalents approximate their fair values because of their short term to maturity.

Receivables and payables

The carrying amounts of receivables and payables approximate their fair values because of their short term to settlement.

Securities

Unlisted securities are measured at fair value through profit or loss.

The determination of the fair values of the unlisted securities is outlined in Note 2(j).

Borrowings

The carrying amount of borrowings approximates their fair value on the basis that the borrowings in place are floating rate borrowings.

The fair value of borrowings is determined 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 appropriate, fair value is calibrated to relevant market developments.

Fair value hierarchy of financial instruments measured at fair value through profit or loss

AASB 7 Financial Instruments: Disclosure requires financial instruments measured at fair value to be classified in the following fair value hierarchy:

(a) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);
(b) inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (Level 2); and
(c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).

The only financial instruments that are fair valued as at 30 June 2011 are unlisted securities.

Unlisted securities are included in Level 3 on the basis that the valuation techniques adopted are based on significant unobservable inputs.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

24 Financial instruments (continued)

Fair value hierarchy of financial instruments measured at fair value through profit or loss (continued)

The following table presents assets and liabilities measured and recognised at fair value.

AIX Consolidated AIFL Assets Financial assets held at fair value through profit or loss: Unlisted securities Total assets Consolidated AIFT Assets Financial assets held at fair value through profit or loss: Unlisted securities Total assets	2011 2010 $'000 $'000 0 0 0 0 2011 2010 $'000 $'000 0 0 0 0 Level 1 Level 1	2011 2010 $'000 $'000 0 0 0 0 2011 2010 $'000 $'000 0 0 0 0 Level 2 Level 2	2011 2010 $'000 $'000 1,756,228 1,603,148 1,756,228 1,603,148 2011 2010 $'000 $'000 1,565,337 1,429,220 1,565,337 1,429,220 Level 3 Level 3	2011 2010 $'000 $'000 1,756,228 1,603,148 Total
				1,756,228 1,603,148
				2011 2010 $'000 $'000 1,565,337 1,429,220 Total
				1,565,337 1,429,220

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

24 Financial instruments (continued)

Fair value hierarchy of financial instruments measured at fair value through profit or loss (continued)

The following table presents the movements in Level 3 instruments.

AIX Consolidated AIFL

Opening balance Acquisitions Loan advances Capital reductions and disposals Net gain/(loss) recognised in profit or loss Movement in accrued loan interest Closing balance Total net gain/(loss) recognised in profit or loss Total gain/(loss) for the year included in profit or loss that relates to assets held at the end of the reporting period. Consolidated AIFT Opening balance Acquisitions Loan advances Capital reductions and disposals Net gain/(loss) recognised in profit or loss Movement in accrued loan interest Closing balance Total net gain/(loss) recognised in profit or loss Total gain/(loss) for the year included in profit or loss that relates to assets held at the end of the reporting period.	2011 2010 $'000 $'000 1,603,148 1,360,516 5,528 94,203 11,151 7,226 (79,593) 0 215,746 141,318 248 (115) 1,756,228 1,603,148 168,048 141,217 215,746 141,318 2011 2010 $'000 $'000 1,429,220 1,218,691 803 68,698 11,151 7,226 (34,093) 0 158,007 134,718 249 (113) 1,565,337 1,429,220 155,809 134,617 158,007 134,718 Unlisted securities Unlisted securities	2011 2010 $'000 $'000 1,603,148 1,360,516 5,528 94,203 11,151 7,226 (79,593) 0 215,746 141,318 248 (115) Total
		1,756,228 1,603,148
		168,048 141,217
		215,746 141,318
		2011 2010 $'000 $'000 1,429,220 1,218,691 803 68,698 11,151 7,226 (34,093) 0 158,007 134,718 249 (113) Total
		1,565,337 1,429,220
		155,809 134,617
		158,007 134,718

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

24 Financial instruments (continued)

(e) Foreign currency risk

AIX and Consolidated AIFT have unlisted securities denominated in Euro. As a result, the Consolidated Statements of Financial Position and Consolidated Statements of Comprehensive Income can be materially affected by movements in the respective Euro/AUD foreign exchange rate.

Foreign currency exposures are summarised below:

Financial assets: Cash and cash equivalents Securities	2011 2010 AUD $'000 AUD $'000 10,257 7 313,463 305,288 323,720 305,295 AIX Consolidated AIFL in EURO Financial assets	2011 2010 AUD $'000 AUD $'000 10,257 7 313,463 305,288 Consolidated AIFT in EURO Financial assets
		323,720 305,295

Operating income generated from unlisted securities denominated in foreign currencies is summarised below:

Interest Net gain/(loss) - securities	2011 2010 2011 2010 AUD $'000 AUD $'000 AUD $'000 AUD $'000 8,361 9,001 8,361 9,001 14,235 (12,573) 14,235 (12,573) 22,596 (3,572) 22,596 (3,572) AIX Financial assets in EURO in EURO Consolidated AIFL Consolidated AIFT Financial assets

25 Related party transactions

(a) Associate entities

Names of associate entities

Associate entities and interests in these entities are as follows:

Perth Airport (Airstralia Development Group & PAPT Holdings Pty Ltd) HOCHTIEF AirPort Capital Group Queensland Airports Limited Airport Development Group Pty Ltd Port of Portland Port of Geelong Unit Trust & Infrastructure Investment Corporation Metro Light Rail and Monorail	2011 2010 2011 2010 Holding Holding Holding Holding 29.74% 29.74% 29.74% 29.74% 40.02% 40.02% 40.02% 40.02% 49.07% 49.07% 49.07% 49.07% 28.23% 28.23% 28.23% 28.23% 50.00% 50.00% 30.41% 30.41% 35.00% 35.00% 0.00% 0.00% 38.89% 38.89% 38.89% 38.89% AIX Consolidated AIFL Consolidated AIFT

For further details in relation to holdings in associate entities refer to Note 15 - Securities.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

25 Related party transactions (continued)

(b) Associate entities (continued)

Transactions with associate entities

Distribution income from
Port of Portland
Port of Geelong Unit Trust &
Infrastructure Investment Corporation
Dividend income from
Perth Airport
(Airstralia Development Group & PAPT Holdings)
Airport Development Group Pty Ltd
Port of Portland
Queensland Airports Limited
Port of Geelong Unit Trust &
Infrastructure Investment Corporation
Statewide Roads
Interest income from
Perth Airport
(Airstralia Development Group & PAPT Holdings)
Queensland Airports Limited
HOCHTIEF AirPort Capital Group
Advance/(repayment) of
unlisted security shareholder loans
Perth Airport
Queensland Airports Limited
HOCHTIEF AirPort Capital Group
Acquisition/(disposal) of
shares or units in
Perth Airport
Port of Portland
Port of Geelong Unit Trust &
Infrastructure Investment Corporation
Queensland Airports Limited
Acquisition/(disposal) of
convertible notes in
Perth Airport
Security redemption proceeds from
Airport Development Group Pty Ltd

2011
2010
2011
2010
$'000
$'000
$'000
$'000
890
872
542
531
733
982
0
0
17,248
16,474
17,248
16,474
2,926
4,040
2,926
4,040
1,500
1,500
912
912
12,022
11,286
12,022
11,286
0
250
0
0
1,698
5,229
0
0
3,795
2,659
3,795
2,659
1,937
1,841
1,937
1,841
8,360
9,001
8,360
9,001
7,226
7,226
7,226
7,226
3,925
0
3,925
0
(8,763)
3,376
(8,763)
3,376
803
803
803
803
0
4,750
0
2,889
4,725
0
0
0
0
0
0
0
(18,968)
8,667
(18,968)
8,667
6,362
0
6,362
0
AIX
Consolidated AIFL
Consolidated AIFT

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

25 Related party transactions (continued)

(b) Associate entities (continued)

Receivable and payable balances with associate entities

Income receivable Perth Airport Port of Portland Queensland Airports Limited HOCHTIEF AirPort Capital Group Port of Geelong Unit Trust & Infrastructure Investment Corporation Security redemption proceeds receivable Airport Development Group Pty Ltd	2011 2010 2011 2010 $'000 $'000 $'000 $'000 0 509 0 509 1,931 3,040 1,174 1,849 556 11,744 556 11,744 1,969 2,058 1,969 2,058 458 257 0 0 1,299 0 1,299 0 Consolidated AIFL AIX Consolidated AIFT

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

(c) 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.

Transactions between stapled entities

Proceeds from loans received from AIFL Loans advanced to AIFL Interest expense paid or payable to AIFL	2011 2010 2011 2010 $'000 $'000 $'000 $'000 0 0 1,419 56,280 0 0 15,464 41,968 0 0 1,128 1,958 AIX Consolidated AIFT Consolidated AIFL

All expenses incurred by AIFL are paid on its behalf by AIFT.

Outstanding balances between stapled entities

Borrowings payable to AIFL	2011 2010 2011 2010 $'000 $'000 $'000 $'000 0 0 13,873 27,919 AIX Consolidated AIFT Consolidated AIFL

The borrowing is at call and incurs interest at the 30 day bank bill rate (BBSW).

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

25 Related party transactions (continued)

(d) 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 Hastings Management Pty Limited (formerly Westpac Institutional Holdings Pty Limited).

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

Transactions with the Manager and Responsible Entity and its related entities

Cash and cash equivalents
Westpac
Base management fees paid or payable
Hastings
Reimbursement of expenses paid or payable on behalf of AIX
Hastings
Distributions paid or payable to
Westpac
Interest received or receivable
Westpac
Finance costs paid or payable
Westpac
Loan facilities - interest expense
Loan facilities - line fees
Loan facilities - agency fee
Loan facilities - establishment fee
Bank guarantee fees
Bank charges

2011
2010
2011
2010
$'000
$'000
$'000
$'000
79,237
61,946
71,158
61,946
12,000
10,179
12,000
10,179
207
230
207
230
1,801
1,737
1,801
1,737
2,130
2,277
2,130
2,277
0
237
0
237
357
78
357
78
32
37
32
37
217
435
217
435
0
2
0
2
11
3
11
3
AIX
Consolidated AIFL
Consolidated AIFT

For further details in relation to base management fees and performance fees paid to Hastings refer to Note 8 - Manager and Responsible Entity fees.

For further details in relation to expense reimbursements paid to the Manger refer Note 2(n) - Income and expense recognition.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

25 Related party transactions (continued)

(d) Other related parties - the Manager and Responsible Entity (continued)

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

Distribution payable Westpac Management fees payable Hastings Loan facility Westpac Total facility available Less: facility drawn Facility undrawn	2011 2010 $'000 $'000 901 901 962 905 15,000 15,000 0 0 15,000 15,000 AIX Consolidated AIFL	2011 2010 $'000 $'000 901 901 962 905 15,000 15,000 0 0 Consolidated AIFT
		15,000 15,000

For details in relation to the loan facilities refer Note 18 - Borrowings.

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 is detailed below:

		Securities	Ownership	interest
	2011	2010	2011	2010
	No.	No.	%	%
Hastings	0	0	0.00%	0.00%
Westpac entities (excluding Hastings)	18,012,204	18,012,204	2.90%	2.90%

26 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 up to the date of this report are:

Paul Espie Chairman Steven Boulton Director - Retired on 1 April 2011 James Evans Director John Harvey Director Robert Humphris Director Michael Hutchinson Director Robert Tsenin Director Jeff Pollock AIX Chief Executive Officer

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

26 Key management personnel (continued)

(a) Names of key management personnel (continued)

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:

Alan Cameron Chairman Steven Boulton Director - Retired on 1 April 2011 William Forde Director James Evans Director Alan Freer Director - Appointed on 1 April 2011 Stephen Gibbs Director James McDonald Director Victoria Poole Director - Appointed on 20 April 2011 Leslie Vance Director - Retired on 1 April 2011 Jeff Pollock AIX Chief Executive Officer

Key management personnel related entities

Steven Boulton, Alan Cameron, William Forde, James Evans, Alan Freer, Stephen Gibbs, James McDonald, Victoria Poole and Leslie Vance were directors of various Westpac subsidiary entities during the year.

John Harvey is a director of Australia Pacific Airports Corporation (appointed 2 May 2011).

Jeff Pollock is a director of Airport Development Group Pty Ltd and PAPT Holdings Ltd (Perth Airport), Airstralia Development Group Pty Limited and Queensland Airport Limited.

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 25 - Related Party Transactions.

(b) Compensation policy for key management personnel

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

Key management personnel of the Responsible Entity are paid by Hastings or its related entities in their roles as key management personnel of the Responsible Entity, not of AIX.

Key management personnel of the Responsible Entity are not remunerated by AIX. As such, disclosure of compensation paid to key management personnel of the Responsible Entity is not required.

The fees paid to Hastings as Responsible Entity of AIFT and manager of AIFL are detailed in Note 25 - Related Party Disclosures.

(ii) Compensation policy for key management personnel of AIFL

Non-executive directors’ remuneration

Board policy on remuneration

The Board of directors of AIFL (the Board) 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 nonexecutive directors is not linked to the performance of either the Company or the Trust.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

26 Key management personnel (continued)

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

(ii) Compensation policy for key management personnel of AIFL (continued)

Board policy on remuneration (continued)

In setting fee levels, the Board takes into account:

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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

Directors’ fees expensed for the year ended 30 June 2011 totalled $826,983 (2010: $785,372) and comprised:

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Fees paid or payable in respect of the current year of $826,983 (2010: $760,847); and
Fees paid in respect of prior years of $0 (2010: $24,525).

Directors were entitled to a fee of $94,500 per annum until 28 February 2011 and $110,000 per annum from 1 March 2011.

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

Remuneration paid to other officeholders

Steven Boulton, Hastings' Chief Executive Officer until 1 April 2011 and executive director of AIFL until 1 April 2011, Alan Freer, Hastings' Chief Executive Officer from 1 April 2011, Jeff Pollock, the AIX Chief Executive Officer and the Company Secretaries were not remunerated out of the property of AIFL or AIFT. These individuals were remunerated by Hastings or its related entities out of its management fee.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

26 Key management personnel (continued)

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

(ii) Compensation policy for key management personnel of AIFL (continued)

Remuneration paid to non-executive directors

Details of non-executive directors’ remuneration for the year ended 30 June 2011 are set out in the following table. No bonuses, options or other emoluments are paid to the directors of AIFL.

		*Short-term*	*Short-term*	*Post employment*	*Post employment*
	Board	fees	Committee fees	Superannuation	Retirement benefits		Total
	$		$	$	$		$
Key management personnel of AIFL
Paul Espie
2011	227,867		0	20,508		0	248,375
2010	236,250		0	23,470		0	259,720
James Evans
2011		99,667	0	8,970		0	108,637
2010		31,500	0	2,835		0	34,335
John Harvey
2011		99,667	21,667	10,920		0	132,253
2010		94,500	39,750 *	12,083		0	146,333
Robert Humphris
2011		99,667	0	8,970		0	108,637
2010		94,500	0	8,505		0	103,005
Michael Hutchinson
2011		99,667	0	8,970		0	108,637
2010		94,500	0	8,505		0	103,005
Robert Tsenin
2011		99,667	10,833	9,945		0	120,445
2010		94,500	10,500	9,450		0	114,450
Total compensation: Key management personnel			of AIFL
2011	726,200		32,500	68,283		0	826,983
2010	645,750		50,250	64,847		0	760,847

Includes $18,750 due diligence committee fee.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

26 Key management personnel (continued)

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

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 year as compensation.

Interests in the securities issued by AIX held by key management personnel and their related entities at the end of the reporting period were as follows:

		Opening		DRP		Closing
Name		Holding	Acquisitions	Issue	Disposals	Holding
		1 July				30 June
		No.	No.	No.	No.	No.
Paul Espie
	2011	906,668	0	0	0	906,668
	2010	604,445	302,223	0	0	906,668
Steven Boulton(1)
	2011	262,500	0	0	0	262,500
	2010	175,000	87,500	0	0	262,500
Alan Freer(2) (3)
	2011	40,913	0	0	0	40,913
	2010	27,275	13,638	0	0	40,913
Stephen Gibbs
	2011	139	0	0	0	139
	2010	139	0	0	0	139
John Harvey
	2011	75,000	9,487	0	0	84,487
	2010	50,000	25,000	0	0	75,000
Robert Humphris
	2011	300,000	0	0	0	300,000
	2010	200,000	100,000	0	0	300,000
Michael Hutchinson
	2011	122,024	0	0	0	122,024
	2010	81,349	40,675	0	0	122,024
James McDonald
	2011	0	15,000	0	0	15,000
	2010	0	0	0	0	0
Robert Tsenin
	2011	137,060	20,000	0	0	157,060
	2010	84,706	52,354	0	0	137,060

(1) Closing holding reflects holding as at the date of retirement from the AIFL and Hastings Boards, being 1 April 2011.

(2) Opening holding reflects holding from the date of appointment to the Hastings Board, being 1 April 2011.

(3) Prior year closing holding reflects holding as at the date of retirement from the Hastings Board, being 6 October 2009.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

26 Key management personnel (continued)

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

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

	Distributions	Declared	Distributions	Payable
	2011	2010	2011	2010
Name	$	$	$	$
Paul Espie	90,667	93,119	45,333	45,333
Steven Boulton(1)	26,250	27,125	13,125	13,125
Alan Freer(2) (3)	2,046	0	2,046	0
Stephen Gibbs	14	18	7	7
John Harvey	8,449	7,750	4,224	3,750
Robert Humphris	30,000	31,000	15,000	15,000
Michael Hutchinson	12,202	12,609	6,101	6,101
Robert Tsenin	15,706	13,328	7,853	6,853

(1) Reflects distributions up until the date of retirement from the AIFL and Hastings Boards, being 1 April 2011.

(2) Reflects distributions from the date of appointment to the Hastings Board, being 1 April 2011.

(3) Prior year disclosures reflect distributions up until the date of retirement from the Hastings Board, being 6 October 2009.

27 Earnings per security

Basic earnings per security (cents) Weighted average number of securities (000's) Net profit after income tax ($000's)	2011 2010 2011 2010 34.20 33.22 31.37 30.16 620,734 575,764 620,734 575,764 212,321 191,253 194,697 173,660 AIX Consolidated AIFL Consolidated AIFT

Diluted earnings per security equates to basic earnings per security.

28 Contingent assets and liabilities and commitments

Investment commitments

Undrawn investment commitments at balance date comprise the following:

2011

Unlisted security name Airstralia Development Group and PAPT Holdings (Perth Airport) Total undrawn investment commitments	At call Less than 1 year Between 1 to 5 years More than 5 years Total $'000 $'000 $'000 $'000 $'000 5,055 10,705 0 0 15,760
	5,055 10,705 0 0 15,760

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2011 (continued)

28 Contingent assets and liabilities and commitments (continued)

2010

Unlisted security name Airstralia Development Group and PAPT Holdings (Perth Airport) Total undrawn investment commitments	At call Less than 1 year Between 1 to 5 years More than 5 years Total $'000 $'000 $'000 $'000 $'000 13,084 10,705 0 0 23,789
	13,084 10,705 0 0 23,789

There are no other outstanding contingent assets, contingent liabilities or commitments at 30 June 2011.

29 Events after the end of reporting period

On 11 August 2011 AIX entered into a new $100 million standby debt facility with Westpac and ANZ as lenders with an expiry date of 21 August 2013.

No other significant events have occurred since the end of the reporting period which would impact on the financial position of AIX disclosed in the Consolidated Statements of Financial Position as at 30 June 2011 or on the results and cash flows of AIX for the year ended on that date .

30 Parent entity financial information

(a) Summary of financial information

Statements of Financial Position Total assets Total liabilities Equity Contributed equity Retained earnings Statements of Comprehensive Income Net profit/(loss) after income tax for the year Total comprehensive income/(loss) for the year	2011 2010 2011 2010 $'000 $'000 $'000 $'000 214,056 203,294 1,639,298 1,504,915 15,178 13,139 43,887 56,759 160,021 160,021 883,554 883,582 38,857 30,134 711,857 564,574 17,623 17,593 200,458 177,934 17,623 17,593 200,458 177,934 AIFL AIFT

(b) Contingent assets and liabilities and commitments

AIFL

There are no outstanding contingent assets, contingent liabilities or commitments at 30 June 2011 and at 30 June 2010.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Annual Financial Statements For the year ended 30 June 2011 (continued)

30 Parent entity financial information (continued)

(b) Contingent assets and liabilities and commitments (continued)

AIFT

Investment commitments

Undrawn investment commitments at balance date comprise the following:

2011

2011
Unlisted security name Airstralia Development Group and PAPT Holdings (Perth Airport) Total undrawn investment commitments	At call Less than 1 year Between 1 to 5 years More than 5 years Total $'000 $'000 $'000 $'000 $'000 5,055 10,705 0 0 15,760
	5,055 10,705 0 0 15,760

2010 Unlisted security name Airstralia Development Group and PAPT Holdings (Perth Airport) Total undrawn investment commitments	At call Less than 1 year Between 1 to 5 years More than 5 years Total $'000 $'000 $'000 $'000 $'000 13,084 10,705 0 0 23,789
	13,084 10,705 0 0 23,789

There are no other outstanding contingent assets, contingent liabilities or commitments at 30 June 2011 and at 30 June 2010.

Australian Infrastructure Fund Limited Directors Declaration 30 June 2011

Directors’ Declaration

In the opinion of the directors of Australian Infrastructure Fund Limited (AIFL):

(a) the consolidated financial statements and notes set out on pages 14 to 54 are in accordance with the Corporations Act 2001 , including:
(i) complying with the Australian Accounting Standards (including Interpretations) and other mandatory professional reporting requirements, the Corporations Regulations 2001 and are in accordance with AIFL’s Constitution; and
(ii) giving a true and fair view of AIFL and Consolidated AIFL’s (AIX’s) financial position as at 30 June 2011 and of their performance for the year ended on that date; and
(b) there are reasonable grounds to believe that AIFL will be able to pay its debts as and when they become due and payable.

Note 2(a) confirms that the financial statements do comply with International Financial Reporting Standards as issued by the International Accounting Standards Board.

This declaration is made after receiving the declarations requested to be made to the directors in accordance with section 295A of the Corporations Act 2001.

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

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Paul Espie Chairman

24 August 2011

Australian Infrastructure Fund Trust Directors’ Declaration 30 June 2011

Directors’ Declaration

In the opinion of the directors of the Responsible Entity:

(a) the consolidated financial statements and notes set out on pages 14 to 54 are in accordance with the Corporations Act 2001 , including:
(i) complying with the Australian Accounting Standards (including Interpretations) and other mandatory professional reporting requirements, the Corporations Regulations 2001 and are in accordance with AIFT’s Constitution; and
(ii) giving a true and fair view of AIFT and Consolidated AIFT’s financial position as at 30 June 2011 and of their performance for the year ended on that date; and
(b) there are reasonable grounds to believe that AIFT will be able to pay its debts as and when they become due and payable.

Note 2(a) confirms that the financial statements do comply with International Financial Reporting Standards as issued by the International Accounting Standards Board.

This declaration is made after receiving the declarations requested to be made to the directors in accordance with section 295A of the Corporations Act 2001.

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

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Alan Cameron Chairman

24 August 2011

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

Report on the financial report

We have audited the accompanying financial statements of Australian Infrastructure Limited and the controlled entities within its stapled group (AIFL) and Australian Infrastructure Fund Trust and its controlled entities (AIFT), which comprise the statements of financial position as at 30 June 2011, the statements of comprehensive income, statements of changes in equity and statements of cash flows for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration 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 controls 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 2, 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.

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.

PricewaterhouseCoopers, ABN 52 780 433 757

Liability limited by a scheme approved under Professional Standards Legislation.

Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 DX 77 Melbourne, Australia T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au

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

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.

Independence

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

Auditor’s opinion

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 Corporations 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 2011 and of their performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001 and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 2.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 4 to 7 of the directors’ report for AIFL for the year ended 30 June 2011. The directors of AIFL are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s opinion

In our opinion, the Remuneration Report of Australian Infrastructure Fund Limited for the year ended 30 June 2011, complies with section 300A of the Corporations Act 2001 .

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Matters relating to the electronic presentation of the audited financial report

This auditor’s report relates to the financial report and remuneration 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 2011 included on Hastings Funds Management Limited’s (the responsible entity of AIFT) web site. The directors of Hastings Funds Management Limited (HFML) are responsible for the integrity of the HFML web site. We have not been engaged to report on the integrity of this web site. The auditor’s report refers only to the financial report and remuneration report named above. It does not provide an opinion on any other information which may have been hyperlinked to/from these statements or the remuneration 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 and remuneration report to confirm the information included in the audited financial report and remuneration report presented on this web site.

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PricewaterhouseCoopers

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JF Power Partner

Melbourne 24 August 2011

3 of 3

Australian Infrastructure Fund Appendix 4E Report for the year ended 30 June 2011

D. Independent Auditor’s Report

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

AI assistant

FUTURE GENERATION AUSTRALIA LIMITED — Annual Report 2011

64916_rns_2011-08-23_fd39610e-3acf-4764-ad7d-f9dcecd3d116.pdf

Australian Infrastructure Fund (AIX)

24 August 2011

A. Results for announcement to the market

Refer to Section B for commentary on the results.

B. Commentary on the results

Other highlights

Outlook

C. Financial report for the year ended 30 June 2011

Australian Infrastructure Fund Limited ABN 97 063 935 553 Australian Infrastructure Fund Trust ARSN 089 889 761 Consolidated Financial Statements for the year ended 30 June 2011

Directors’ Report

Structure of consolidated financial statements

Directors

Company secretaries

Jane Frawley

Qualifications: BA, LLB, ACM

Kim Rowe

Qualifications: BCom, ACA

Directors’ Report (continued)

Company secretaries (continued)

Nick Burrell

Jefferson Petch

Qualifications: LLB(Hons), BCom(Hons), MCom(Hons), SA(Fin)

Principal activities

Company information

Review and results of operations

Results

Distributions and dividends

Final dividend and distribution

Interim dividend and distribution

Significant changes in state of affairs

Directors’ Report (continued)

Matters subsequent to the end of the year

Rounding

Likely developments and expected results

Business strategies and prospects

Directors meetings

Directors’ Report (continued)

Directors’ interests

Environmental regulation

Indemnification and insurance of directors and officers

Proceedings on behalf of the Company

Directors’ Report (continued)

Non audit services

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

Auditor’s independence declaration

Remuneration Report

Non-executive directors’ remuneration

Board policy on remuneration

Remuneration structure

Directors’ Report (continued)

Remuneration structure (continued)

Remuneration paid to other officeholders

Directors’ Report (continued)

Remuneration paid to non-executive directors

Relationship with the Manager - Hastings Funds Management Limited

Fees to the Responsible Entity

Directors’ Report (continued)

Fees to the Responsible Entity (continued)

Corporate governance

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

Directors’ Report

Directors

Responsible Entity

Company secretaries

Principal activities

Review and results of operations

Results

Distributions

Significant changes in state of affairs

Directors’ Report (continued)

Matters subsequent to the end of the year

Likely developments and expected results

Environmental regulation

Interests in the units of the Trust

Fees to the Responsible Entity

Directors’ Report (continued)

Fees to the Responsible Entity (continued)

FUTURE GENERATION AUSTRALIA LIMITED Annual Report 2011