Total pages: 73

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Hastings Funds Level 27, 35 Collins Street Management Limited Melbourne VIC 3000 Australia ABN 27 058 693 388 T +61 3 8650 3600 AFSL No. 238309 F +61 3 8650 3701 Australian Infrastructure www.hfm.com.au Fund Limited Melbourne, London, New York, Sydney ABN 97 063 935 553

Australian Infrastructure Fund (AIX)

Results announcement

24 August 2012

Appendix 4E – Report for the year ended 30 June 2012

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 2012
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

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

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Jane Frawley Company Secretary Australian Infrastructure Fund

Australian Infrastructure Fund Appendix 4E Report for the year ended 30 June 2012

A. Results for announcement to the market

	Change from
			Year to	Year to
	previous
			30 June 12	30 June 11
	corresponding
			($’000)	($’000)
	period

Revenue from ordinary activities(1)	(9%)	to	216,448	238,462
Revenue from ordinary activities excluding gains and losses(2)	9%	to	76,742	70,414
Profit from ordinary activities after tax attributable to securityholders	(8%)	to	195,974	212,321
Net profit for the period attributable to securityholders	(8%)	to	195,974	212,321
Net cash flows from operating activities(3)	(8%)	to	56,164 60,939
Operating cashflow plus capital returns and shareholder loan repayments(4)	5%	to	69,002	66,002

(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). Excludes dividend of $11.3m received from QAL in FY11 relating to FY10.

(4) Net cash flow including capital returns and S/H loan repayments comprises net cash flow from operating activities plus cash received from assets in the form of capital returns or repayments of shareholder loans. Excludes dividend of $11.3m received from QAL in FY11 relating to FY10.

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 2012
Final distribution – 30 June 2012	5.50 cents	0.64 cents	0.00 cents
Interim distribution – 31 December 2011	5.00 cents	2.33 cents	1.62 cents
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
Record date for determining entitlements to the distribution		29 June 2012
Distribution payment date		30 August 2012

(1) For tax purposes, please refer to the Annual Distribution Statement, which will be distributed with the 30 August 2012 distribution payment. This statement will provide more details of the tax components of the 2012 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 2012 by way of cash payment.

	Change from previous
Key performance indicators	corresponding period	30 June 2012	30 June 2011
Net tangible asset backing per security	Up 5%	300.78 cents	285.43 cents
Stapled security price	Up 25%	240.00 cents	192.00 cents

Australian Infrastructure Fund Appendix 4E Report for the year ended 30 June 2012

B. Commentary on the results

AIX today announced its results for the financial year to 30 June 2012. The AIX portfolio of unlisted securities increased in value during the year to $1,816.2 million, an increase of 3.4 percent on the prior year, predominantly relating to increases in the value of assets in the portfolio (largely comprising unrealised gains) and realised gains generated from sale of AIX’s non-core assets. Net tangible assets (NTA) per security increased by 5.4 percent in FY2012, from $2.85 to $3.01, reflecting the increased value of portfolio assets and cash on hand.

Revenue from ordinary activities decreased 9.2 percent on the prior year from $238.5 million to $216.5 million, largely driven by a reduction in unrealised gains in the independent valuation of assets in the portfolio compared to the prior year, that is unrealised gains in the value of unlisted securities. Net gains in the value of unlisted securities for the year to 30 June 2012 were $139.6 million, compared to $168.0 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 $76.7 million for the period, a 9.0 percent increase on the $70.4 million achieved in the previous year. Sources of revenue excluding gains and losses are set out below:

	FY12	FY11
Asset
	($’000)	($’000)

Perth Airport	22,238	21,380
APAC	17,562	16,684
QAL	17,757	14,016
NT Airports	7,443	3,016
HTAC	7,379	8,360
Port of Portland	(119)	2,390
Port ofGeelong	987	733
StatewideRoads¹	106	1,698
Bank interest and other	3,388	2,137
Total revenue excluding gains/losses~~2~~	76,742	70,414

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

(2) Totals manually calculated may differ from those shown due to rounding.

Net profit after tax was $196.0 million, down 7.7 percent from $212.3 million in the prior year. This was primarily due to the decrease in unrealised gains noted above.

Operating cashflow plus capital returns and shareholder loan repayments was $69.0 million, an increase of 4.5 percent on the prior year, as set out below:

		FY12	FY11
Asset
		($’000)	($’000)


Cashflow from assets (excluding capital returns and
	(3%)	73,489	75,7392
shareholder loan repayments)

Management expense		(12,572)	(11,943)
Otherexpenses		(5,237)	(4,233)
Netinterestreceived / (paid)		484	1,376
Operating cashflow	(8%)	56,164	60,939
Cashflow fromassetsintheformofcapital returns			5,0653
Cashflow from assets in the form of shareholder loan repayments		12,838~~1~~
Operating cashflow plus capital returns and shareholder loan
		69,002	66,002
repayments4

(1) Comprises shareholder loan repayments of $10.3m from HTAC and $2.5m from Perth. (2)[Excludes dividend of $11.3m received from QAL in FY11 relating to FY10. ]

(3) Comprises capital return from NT Airports.

(4) Totals manually calculated may differ from those shown due to rounding.

Australian Infrastructure Fund Appendix 4E Report for the year ended 30 June 2012

The assets comprising the AIX portfolio contributed $86.3 million in cash flows to the fund during the year compared to $80.8 million in the prior year, an increase of 6.8 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	FY12	FY11
	($m)	($m)
Perth Airport	22.21	22.0
APAC	17.6	16.7
QAL	17.8	13.93
NT Airports	7.4	8.14
HTAC	17.82	14.4
Port of Portland	1.3	3.5
Port of Geelong	1.4	0.5
Other	0.9	1.7
Cashflow from assets5	86.3	80.8

(1) Includes $2.5m received from Perth in the form of a repayment of shareholder loans.

(2) Includes $10.3m received from HTAC in the form of a repayment of shareholder loans.

(3) Excludes dividend of $11.3m received from QAL in FY11 relating to FY10.

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

(5) Totals manually calculated may differ from those shown due to rounding.

The increase in cash received on the prior year was largely due to increased cash received from Queensland Airports Limited (QAL) and HTAC.

The increase in cashflow received from QAL was partly due to interest cost savings resulting from improved debt margins and favourable swap pricing, a litigation settlement and tax refund received.

HTAC increased its distribution as a result of a higher distribution received from Athens when compared to the prior year. This higher distribution was due to cash retained in prior years being released to Shareholders.

Operating expenses paid increased from $15.1 million to $17.2 million, an increase of 14.0% over the prior year. This increase predominantly related to an increase in management fees from $11.9 million to $12.6 million, which are calculated by reference to the AIX market capitalisation, as well as $1.7 million in one-off costs incurred as part of AIX’s ongoing strategic review. Finance costs also increased significantly from $0.8 million to $2.1 million due to upfront costs incurred in FY12 on renegotiating the fund level standby credit facility, increasing its limit from $30m to $100m.

On 18 June 2012, AIX announced that it had increased its estimated distribution for the 6 months ending 30 June 2012 to 5.5 cents per stapled security ($34.1 million). This represented a 10 percent increase on the distribution paid for the prior six months to 31 December 2011, of 5.0 cents per security, with total distributions for the year ended 30 June 2012 being 10.5 cents per stapled security ($65.2 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 2012 financial year. In the year to 30 June 2012, the AIX security price increased 25.0 percent, from $1.92 to $2.40. The S&P/ASX 200 Industrials Index decreased 2.3 percent over the same period. The AIX security price closed yesterday at $2.65, an increase of 38.9 percent since 30 June 2011.

Australian Infrastructure Fund Appendix 4E Report for the year ended 30 June 2012

Other highlights

Pursuant to the previously announced strategy of the fund, AIX successfully completed the divestment of Metro Transport Sydney, Port of Geelong and Port of Portland during the 2012 financial year. Taken together, AIX received total consideration of $100.8m from the divestment of these non-core assets, which compared to the total value of $100.4m that was independently attributed to these assets at 31 December 2011. Following the divestment of these non-core assets, airports represent 99.9 percent of the total AIX portfolio by value, making it truly an airport focused fund.
The portfolio achieved moderate passenger growth for the 2012 financial year. With the exception of Perth Airport, passenger growth at the Australian airports, which now represent 91.2 percent of the total portfolio by value, was subdued in the first half of the 2012 financial year, partially due to the suspension of Tiger and the brief grounding of Qantas, as well as the residual effects of the various one-off shocks that occurred domestically and internationally in the 2011 financial year. However, a return to growth was evident in the second half, 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. Overall, despite the challenging first half passenger numbers weighted by AIX’s interest grew by 1.9 percent for the year ended 30 June 2012.
Dusseldorf and Hamburg airports performed well, with consolidated passenger growth of 3.6 percent for the 2012 financial year. While Athens Airport underperformed as a result of the continued economic uncertainty in Greece, this was offset by the German airport growth, resulting in consolidated passenger numbers through AIX’s European airports remaining consistent with the pcp.
Perth, QAL and NT airports successfully re-financed and increased their debt facilities during the financial year:
In November 2011 Perth airport secured $915 million of revolving facilities spread across four, six and seven year terms, along with a $300 million bank facility to backstop a future capital markets issue. An additional $15 million working capital facility was also put in place at this time. In July 2012, Perth Airport successfully issued $US 270 million and $AUD 30 million of senior secured notes in a Private Placement issue to US investors. As a consequence the $300 million ‘back stop’ debt facility negotiated in November 2011 is no longer required. The new facilities provide Perth Airport with improved diversification in its debt capital structure and substantial flexibility going forward and were achieved on attractive terms and pricing. The funds raised will be used as part of Perth Airport’s $750 million airport expansion plans.
QAL refinanced its existing $468 million of debt and secured an additional $64 million to fund further expansion and upgrade works at its three airports in Gold Coast, Townsville and Mount Isa. The funding is spread across three and five year terms.
NT Airports refinanced its existing $225 million debt facilities and obtained new capital expenditure facilities of $125 million on competitive terms. The facilities will assist to fund NT Airports’ planned aeronautical capital expenditure requirements, which are underpinned by long term pricing arrangements, and provides flexibility to invest in accretive car parking and retail opportunities as they arise.
In August 2011, AIX successfully completed the refinancing of its fund level 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.
During the year, AIX made equity contributions of $25.0 million and $2.5 million to Perth Airport and QAL respectively to support organic growth at these assets.
On 23 August 2011, Westralia Airports Corporation (“WAC”), the owner and operator of Perth Airport, announced that it had entered into a comprehensive seven year Pricing and Services Agreement (“PSA”) with the Qantas Group effective from 1 July 2011. Subsequently on 27 July 2012, Perth Airport announced that it had concluded comprehensive PSAs with airlines representing 97 percent of passenger movements. These agreements apply until 30 June 2018 and provide the commercial, infrastructure access and service level certainty needed to support the continued success of both Perth

Australian Infrastructure Fund Appendix 4E Report for the year ended 30 June 2012

Airport and airlines. The agreements also signify airline support for Perth Airport’s major investments in expanded infrastructure.

On 2 May 2012, AIX announced that the boards of Australian Infrastructure Fund Limited (AIFL) and Hastings Funds Management Limited (HFML), in its capacity as responsible entity of the Australian Infrastructure Fund, had reached a non-binding agreement in principle on key terms to internalise the management of AIX. Subsequently, on 24 August 2012, AIX announced that it has executed an MOU with the Future Fund. This is intended, subject to conditions precedent, to lead to the sale of all the assets of AIX.

Outlook

The AIX portfolio is now an airport fund, principally Australian airports, and is well positioned for organic growth, with the diversified nature of the underlying airport portfolio being a particular strength in the continuing uncertain global economic environment. While passenger growth was subdued in the first half, a return to growth was evident in the second half of the financial year. While 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, planned airline capacity increases at AIX’s core airports will facilitate domestic demand. International passenger growth was particularly strong at Perth, Melbourne and Darwin Airports again for the 2012 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, though more subdued than that experienced in the 2011 and 2012 financial years. In the medium to long term, we expect continued growth in the value of the AIX airport portfolio, as has historically been the case, with further opportunity to invest in value-adding projects.

In Europe, economic conditions remain difficult, with austerity measures still in place in many European countries. AIX’s outlook on Athens remains unchanged and we expect passenger traffic through Athens Airport to remain subdued in the year ahead. AIX’s German airports performed well in the twelve months to 30 June 2012, particularly after the strong growth recorded in the 2011 financial year. Despite the weakening in passenger numbers through Athens, this was compensated for by the growth at Dusseldorf and Hamburg, with positive consolidated passenger growth across all European airports for the 2012 financial year

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 2012

C. Financial report for the year ended 30 June 2012

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 2012

Australian Infrastructure Fund Limited Directors’ Report 30 June 2012

Directors’ Report

The directors of Australian Infrastructure Fund Limited present 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 2012.

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:

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 controlled entities, AIFL is identified as the parent entity.

The consolidated financial statements presented therefore comprise:

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 names of the directors of the Company in office during the year and up to the date of this report are:

Paul Espie	Chairman
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 16 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.

Jefferson Petch

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

Jefferson Petch has over 7 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.

Australian Infrastructure Fund Limited Directors’ Report 30 June 2012 (continued)

Directors’ Report (continued)

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 2012 was $195,974,000 (2011: $212,321,000).

Distributions and dividends

Final dividend and distribution

A final dividend and distribution of $34,141,000 (5.50 cents per stapled security) was declared by AIX for the year ended 30 June 2012 (2011: 5.00 cents per stapled security) and will be paid on 30 August 2012.

The final dividend and distribution comprised:

a final dividend of $4,000,000 (0.64 cents per security) declared by AIFL for the year ended 30 June 2012 (2011: 0.50 cents per stapled security) franked to 100% (2011: 100%); and
a final distribution of $30,141,000 (4.86 cents per security) declared by AIFT for the year ended 30 June 2012 (2011: 4.50 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 2011 and was paid on 27 February 2012 (2010: $31,037,000 and 5.00 cents per stapled security).

The interim dividend and distribution comprised:

an interim dividend of $4,500,000 (0.72 cents per security) declared by AIFL for the half year ended 31 December 2011 (2010: $5,900,000 and 0.95 cents per stapled security) franked to 100% (2010: 100%); and
an interim distribution of $26,537,000 (4.28 cents per security) declared by AIFT for the half year ended 31 December 2011 (2010: $25,137,000 and 4.05 cents per stapled security).

Business strategies and prospects

Information on AIX’s business strategies and its prospects for future years is included in the AIX Annual Report and further announcements to the ASX. In the opinion of the directors, further information on AIX’s business strategies and its prospects for future years may, if included in this report, be detrimental to AIX in pursuing these strategies and has accordingly been omitted.

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.

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 2012 or on the results and cash flows of AIX for the year ended on that date .

Australian Infrastructure Fund Limited Directors’ Report 30 June 2012 (continued)

Directors’ Report (continued)

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.

In accordance with its public announcement on 29 June 2012, AIX will also continue to develop a detailed implementation agreement to facilitate the internalisation of AIX’s management, following the in-principle agreement of key terms between the Boards of AIFL and Hastings. Any proposal to internalise the management of AIX will be considered by securityholders before being implemented.

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	4	4	9	9	3	3
James Evans	2	2	4	4	9	8	n/a	n/a
John Harvey	2	2	4	4	9	9	3	3
Robert Humphris	2	2	n/a	n/a	9	9	n/a	n/a
Michael Hutchinson	2	2	n/a	n/a	9	8	n/a	n/a
Robert Tsenin	2	2	4	4	9	8	3	3

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
John Harvey	9,487	75,000	84,487
Robert Humphris	0	300,000	300,000
Mike Hutchinson	0	122,024	122,024
Robert Tsenin	18,173	138,887	157,060

Indemnification and insurance of officers and auditors

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
(c) to provide continued access to directors’ and officers’ liability insurance.

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

Australian Infrastructure Fund Limited Directors’ Report 30 June 2012 (continued)

Directors’ Report (continued)

Non audit services

During the year the following fees were paid or payable for non-audit services provided by the auditor of the Company, its related practices and non-related audit firms:

Amounts paid and payable excluding GST, to PricewaterhouseCoopers, for: - Agreed upon procedures - Regulatory Guide 231 - Agreed upon procedures - annual report Total non-audit services	2012 2011 $ $ 46,750 0 6,365 6,240 53,115 6,240 AIX Consolidated AIFL	2012 2011 $ $ 23,375 0 6,365 6,240 Consolidated AIFT
		29,740 6,240

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.

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.

Rounding of amounts to the nearest thousand dollars

AIX is an entity of the kind referred to in Class Order 98/100 (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 9.

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

Australian Infrastructure Fund Limited Directors’ Report 30 June 2012 (continued)

Directors’ Report (continued)

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 2012. 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.

Board and Remuneration Committee Responsibility

The responsibility for the Company’s remuneration policy rests with the Board. The Remuneration Committee assists the Board in fulfilling its duties and responsibilities in relation to remuneration. The Remuneration Committee reviews and makes recommendations to the Board on the Company’s remuneration policy. The Remuneration Committee is comprised of AIFL’s non-executive directors, a majority of whom are independent.

Non-executive directors’ remuneration

Remuneration Policy

The Board of directors of the Company with the assistance of the Remuneration Committee is responsible for determining and reviewing compensation arrangements for the directors of the Company.

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

In setting fee levels, the Board, takes into account:

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

The Remuneration Committee and 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 2012 totalled $936,855 (2011: $826,983).

Non-executive directors’ fees, including committee fees, are set by the Board within the maximum aggregate amount of $1,200,000 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 appointment of 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 is entitled to a fee of $275,000 per annum.

Directors are entitled to a fee of $110,000 per annum.

The Chairman of the Audit Committee is entitled to a fee of $23,000 per annum. The ordinary members of the Audit Committee were entitled to a fee of $11,500 per annum. 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.

Australian Infrastructure Fund Limited Directors’ Report 30 June 2012 (continued)

Directors’ Report (continued)

Remuneration paid to non-executive directors

Details of non-executive directors’ remuneration for the year ended 30 June 2012 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
2012	275,000	0	24,750		0	299,750
2011	227,867	0	20,508		0	248,375
James Evans
2012	110,000	0	9,900		0	119,900
2011	99,667	0	8,970		0	108,637
John Harvey
2012	110,000	23,000	11,970		0	144,970
2011	99,667	21,667	10,920		0	132,253
Robert Humphris
2012	110,000	0	9,900		0	119,900
2011	99,667	0	8,970		0	108,637
Michael Hutchinson
2012	110,000	0	9,900		0	119,900
2011	99,667	0	8,970		0	108,637
Robert Tsenin
2012	110,000	11,500	10,935		0	132,435
2011	99,667	10,833	9,945		0	120,445
Total compensation: Key management personnel		of AIFL
2012	825,000	34,500	77,355		0	936,855
2011	726,200	32,500	68,283		0	826,983

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, the Hastings Chief Executive Officer and the AIFL Company Secretaries. These individuals were remunerated by Hastings or its related entities out of its management fee.

Australian Infrastructure Fund Limited Directors’ Report 30 June 2012 (continued)

Directors’ Report (continued)

Fees paid to the Manager

Base Management Fees

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 2012, Hastings earned management fees of $12,822,000 (2011: $12,000,000).

Performance Fees

Hastings as Responsible Entity of AIFT and manager of the Company is entitled to a performance fee at the conclusion of each year ended 30 June where there is a positive performance position relative to benchmark for the year ended 30 June after taking into account any previous shortfall.

Specifically, under the AIFL Management Agreement and the AIFT Consolidated Constitution, at the end of each year Hastings is entitled to a performance fee equal to 10% of the out-performance of AIX’s total return (growth in security price plus reinvested distributions) against the ASX 200 Industrials Accumulation Index return (Benchmark Return), after taking into account any carried forward performance deficit (previous shortfall). If the calculation of the AIX total return for a year is less than the benchmark return for that year, the shortfall is carried forward and taken into account in calculating whether the AIX total return exceeds the benchmark return in subsequent years. The AIFL Management Agreement and the AIFT Consolidated Constitution provides that any performance fee is payable within three months from 30 June.

The AIFL Management Agreement (section 5) and the AIFT Consolidated Constitution (sections 48 and 71) are silent as to the precise form in which the performance fees are to be settled. However the AIFT Consolidated Constitution (section 71) does provide AIFL the discretion to determine the form of settlement. At the 2010 AIX Annual General Meeting (AGM) held on 17 November 2010 securityholders approved the resolution that if performance fees are payable to Hastings then the AIFL Board would be entitled to require Hastings to be paid some or all of the performance fee in either cash or AIX securities. This approval is in place for a period of three years from the date of the AGM, that is, until 17 November 2013.

In accordance with AASB 2 Share Based Payments , the fair value of the performance fee obligation was assessed at the beginning of the financial year (1 July 2011). The fair value of the performance fee obligation that was assessed and recognised as an expense in the Income Statement was $Nil (2011: $Nil).

For the year ended 30 June 2012, the performance fee payable by AIX to Hastings after taking into account all carry forward performance deficit is $35,475,864 (2011:$Nil), comprising $3,780,835 payable by the Company and $31,695,029 payable by AIFT.

The AIFL Board has determined that the performance fee payable by AIX to Hastings be cash settled. As a consequence, the difference of $35,475,864 between the performance fee payable by AIX (inclusive of non-recoverable GST of $865,265) and the fair value of the performance fee obligation as assessed at 1 July 2011 of $Nil, has, in accordance with AASB2 Share Based Payments , been recognised as a charge against the security-based payment reserve, with a corresponding payable in AIX’s Statement of Financial Position.

AIFL and Hastings have agreed that payment of the performance fee for the year ended 30 June 2012 shall be deferred until the proposal to internalise the management of AIX proceeds, subject to that occurring by 31 December 2012.

Reimbursable expenses

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 2012, Hastings was reimbursed $600,000 (2011: $207,000) for costs incurred on behalf of AIX. These amounts were paid by the Trust.

Australian Infrastructure Fund Limited Directors’ Report 30 June 2012 (continued)

Directors’ Report (continued)

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 2012

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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 2012, 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 Trust Limited and the entities it controlled during the period.

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Simon Gray Partner PricewaterhouseCoopers

Melbourne 24 August 2012

PricewaterhouseCoopers, ABN 52 780 433 757 Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 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 2012

Directors’ Report

The directors of Hastings Funds Management Limited (Hastings) as the Responsible Entity for Australian Infrastructure Fund Trust present 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 2012.

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).

Responsible Entity

The Responsible Entity of AIFT is Hastings Funds Management Limited (ABN 27 058 693 388). The Responsible Entity’s registered office is located at Level 27, 35 Collins Street, Melbourne, Victoria, 3000.

Directors

The names of the directors of the Responsible Entity in office during the year and up to the date of this report are:

Alan Cameron Chairman Andrew Day (appointed on 18 October 2011) James Evans William Forde Alan Freer (retired on 18 October 2011) Stephen Gibbs James McDonald Victoria Poole

Company secretaries

The company secretaries of the Responsible Entity in office during the year and up to the date of this report are Jane Frawley and Jefferson Petch (appointed 1 July 2011).

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 2012 was $186,254,000 (2011: $194,697,000).

Distributions

A final AIX distribution of $34,141,000 (5.50 cents per stapled security) was declared for the year ended 30 June 2012 and will be paid on 30 August 2012. The Trust distribution represents $30,141,000, (2011: $28,037,000) of the total amount declared. The AIX interim distribution of $31,037,000 (5.00 cents per stapled security) was declared for the half year ended 31 December 2011 and paid on 27 February 2012. The Trust distribution represents $26,537,000 (2011: $25,137,000) of the total amount declared.

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.

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 2012 (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 2012 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.

Fees to and interests held in the Company by the Responsible Entity or its associates

Base Management Fees

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 2012, Consolidated AIFT earned Hastings management fees of $11,420,000 (2011: $12,000,000).

Performance Fees

AIX performance fees are payable at the conclusion of each year ended 30 June where there is a positive performance position relative to benchmark for the year ended 30 June after taking into account any previous shortfall.

For the year ended 30 June 2012, the performance fee payable by Consolidated AIFT to Hastings after taking into account all carry forward performance deficit is $31,695,029 (2011: $Nil).

The AIFL Board has determined that the performance fee payable by Consolidated AIFT to Hastings be cash settled. As a consequence, the difference of $31,695,029 between the performance fee payable by Consolidated AIFT (inclusive of nonrecoverable GST of $773,048) and the fair value of the performance fee obligation as assessed at 1 July 2011 of $Nil, has, in accordance with AASB2 Share Based Payments , been recognised as a charge against the security-based payment reserve, with a corresponding payable in Consolidated AIFT’s Statement of Financial Position.

Australian Infrastructure Fund Trust Directors’ Report 30 June 2012 (continued)

Directors’ Report (continued)

Reimbursable expenses

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 2012, Hastings was reimbursed $315,000 (2011: $207,000) for costs incurred on behalf of Consolidated AIFT.

Interests in the Scheme

The movement in AIFT securities during the year is disclosed in Note 20 of the consolidated financial statements.

The value of AIFT’s assets and liabilities is disclosed on the Consolidated Statement of Financial Position and derived using the basis set out in Note 2 of the consolidated financial statements.

Indemnification and insurance of officers and auditors

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.

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.

Rounding of amounts to the nearest thousand dollars

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 2012

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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 2012, 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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Simon Gray Partner PricewaterhouseCoopers

Melbourne 24 August 2012

PricewaterhouseCoopers, ABN 52 780 433 757

Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 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 2012

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 Net gain/(loss) - other 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 Strategic initiatives 10 Other expenses Total expenses Net profit/(loss) before income tax for the year Income tax expense/(benefit) 12(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	2012 2011 $'000 $'000 16,522 16,221 58,310 52,085 1,404 1,623 139,577 168,048 145 0 (16) 0 506 485 216,448 238,462 12,822 12,000 488 491 128 564 328 101 937 841 59 49 57 70 626 633 183 177 54 154 1,710 974 1,689 0 143 84 19,224 16,138 197,224 222,324 1,250 10,003 195,974 212,321 0 0 195,974 212,321 AIX Consolidated AIFL	2012 2011 $'000 $'000 15,872 16,221 52,542 44,650 705 542 132,256 155,809 145 0 (16) 0 506 485 Consolidated AIFT
		202,010 217,707
		11,420 12,000 252 491 128 564 298 101 0 841 (722) 49 2 70 360 633 123 177 40 154 2,165 2,103 435 0 78 84
		14,579 17,267
		187,431 200,440 1,177 5,743
		186,254 194,697 0 0
		186,254 194,697

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 (000's) Net profit after income tax ($000's)	2012 2011 2012 2011 31.57 34.20 30.01 31.37 620,734 620,734 620,734 620,734 195,974 212,321 186,254 194,697 Consolidated AIFT AIX Consolidated AIFL

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

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Consolidated Statements of Financial Position For the year ended 30 June 2012

Consolidated Statements of Financial Position

Note Assets Cash and cash equivalents 13 Receivables 14 Other assets 15 Current tax asset 12(d) Securities 16 Total assets Liabilities Payables 17 Current tax liability 12(e) Provisions 18 Borrowings 19 Deferred tax liability 12(c) Total liabilities Net assets Equity Contributed equity 20 Reserves 21 Retained earnings 22 Total equity	2012 2011 $'000 $'000 157,110 79,237 507 3,913 484 89 304 0 1,816,155 1,756,228 1,974,560 1,839,467 71,102 32,292 0 347 780 722 0 0 35,627 34,375 107,509 67,736 1,867,051 1,771,731 1,043,575 1,043,575 (35,476) 0 858,952 728,156 1,867,051 1,771,731 AIX Consolidated AIFL	2012 2011 $'000 $'000 100,201 71,158 495 2,699 428 89 4 4 1,667,793 1,565,337 Consolidated AIFT
		1,768,921 1,639,287
		63,105 29,292 0 0 0 722 11,358 13,873 23,725 22,548
		98,188 66,435
		1,670,733 1,572,852
		883,554 883,554 (31,695) 0 818,874 689,298
		1,670,733 1,572,852

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 2012

Consolidated Statements of Changes in Equity

AIX Consolidated AIFL Note 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 23 As at 30 June 2011 At 1 July 2011 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: Dividends and distributions paid and payable to securityholders 23 Security-based payment reserve 21 As at 30 June 2012	Contributed equity Reserves Retained earnings Total $'000 $'000 $'000 $'000 1,043,602 0 577,909 1,621,511 0 0 212,321 212,321 0 0 0 0
	0 0 212,321 212,321 (27) 0 0 (27) 0 0 (62,074) (62,074)
	1,043,575 0 728,156 1,771,731
	1,043,575 0 728,156 1,771,731 0 0 195,974 195,974 0 0 0 0
	0 0 195,974 195,974 0 0 (65,178) (65,178) 0 (35,476) 0 (35,476)
	1,043,575 (35,476) 858,952 1,867,051

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 2012 (continued)

Consolidated Statements of Changes in Equity (continued)	Consolidated Statements of Changes in Equity (continued)
Consolidated AIFT Note 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 23 As at 30 June 2011 At 1 July 2011 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: Dividends and distributions paid and payable to securityholders 23 Security-based payment reserve 21 As at 30 June 2012	Contributed equity Reserves Retained earnings Total $'000 $'000 $'000 $'000 883,582 0 547,775 1,431,357 0 0 194,697 194,697 0 0 0 0
	0 0 194,697 194,697 (28) 0 0 (28) 0 0 (53,174) (53,174)
	883,554 0 689,298 1,572,852
	883,554 0 689,298 1,572,852 0 0 186,254 186,254 0 0 0 0
	0 0 186,254 186,254 0 0 (56,678) (56,678) 0 (31,695) 0 (31,695)
	883,554 (31,695) 818,874 1,670,733

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 2012

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 13(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 sale of unlisted securities 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 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 13(b)	2012 2011 $'000 $'000 14,118 22,766 58,310 63,620 3,230 2,282 426 567 (2,111) (753) (17,158) (15,139) (651) (1,120) 56,164 72,223 (2,498) (5,528) (24,934) (11,151) 0 0 89,575 0 21,494 18,739 0 5,065 83,637 7,125 0 (27) (62,073) (62,074) (62,073) (62,101) 77,728 17,247 79,237 61,990 145 0 157,110 79,237 AIX Consolidated AIFL	2012 2011 $'000 $'000 13,468 22,766 52,542 55,936 1,538 1,217 426 567 (2,103) (753) (12,993) (15,140) 0 0 Consolidated AIFT
		52,878 64,593
		(2,498) (803) (24,934) (11,151) (2,974) (15,174) 39,505 0 21,494 18,739 0 5,065
		30,593 (3,324)
		0 (28) (54,573) (52,073)
		(54,573) (52,101)
		28,898 9,168 71,158 61,990 145 0
		100,201 71,158

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 2012

1 General information

Australian Infrastructure Fund Limited (AIFL or the Company) was 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 27, 35 Collins Street, Melbourne, Victoria, 3000.

As at 30 June 2012 AIFL and AIFT had nil employees, apart from the non-executive directors of AIFL (2011: 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 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:

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 controlled entities, AIFL is identified as the parent entity.

The consolidated financial statements presented therefore comprise:

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

• Consolidated AIFT: Represents AIFT and its controlled entities.

As a consequence of revisions to the AIX expense allocation protocol, effective 1 July 2011, fees, security expenses and administration costs in connection with AIFL’s security holdings and operations that were previously borne on AIFL’s behalf by AIFT are borne directly by AIFL. The revisions to the expense allocation protocol have no impact on the expenses incurred by AIX (Consolidated AIFL).

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 controlled entities is Australian dollars.

The consolidated financial statements of AIX (Consolidated AIFL) for the year ended 30 June 2012 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 2012 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 2012 (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 the 30 June 2012 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 and AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 and AASB 2010- 7 Amendments to Australian Accounting Standards arising 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:

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 new standard and amendments from 1 July 2015. AIX is yet to fully assess the impact of adopting the new standard and amendments.

(ii) AASB 10 Consolidated Financial Statements , AASB 11 Joint Arrangements , AASB 12 Disclosure of Interests in Other Entities and AASB 127 Separate Financial Statements and AASB 128 Investments in Associates and Joint Ventures and AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards (effective 1 January 2013)

In August 2011, the AASB issued a suite of five new and amended standards which address the accounting for joint arrangements, consolidated financial statements and associated disclosures.

AASB 10 Consolidated Financial Statements (AASB 10) replaces all of the guidance on control and consolidation in AASB 127 Consolidated and Separate Financial Statements, and Interpretation 12 Consolidation - Special Purpose Entities. The core principle that a consolidated entity presents a parent and its subsidiaries as if they are a single economic entity remains unchanged, as do the mechanics of consolidation. However the standard introduces a single definition of control that applies to all entities. It focuses on the need to have both power and rights or exposure to variable returns before control is present. Power is the current ability to direct the activities that significantly influence returns. Returns must vary and can be positive, negative or both. There is also new guidance on participating and protective rights and on agent/principal relationships. While AIX does not expect the new standard to have a significant impact on how it currently accounts for its investees, it has yet to perform a detailed analysis of the new guidance in the context of its various investees that may or may not be controlled under the new rules.

AASB 11 Joint Arrangements (AASB 11) replaces AASB 131 Interests in Joint Ventures and introduces a principles based approach to accounting for joint arrangements. The focus is no longer on the legal structure of joint arrangements, but rather on how rights and obligations are shared by the parties to the joint arrangement. Based on the assessment of rights and obligations, a joint arrangement will be classified as either a joint operation or joint venture. Joint ventures are accounted for using the equity method, and the choice to proportionately consolidate will no longer be permitted. Parties to a joint operation will account their share of revenues, expenses, assets and liabilities in much the same way as under the previous standard. AASB 11 also provides guidance for parties that participate in joint arrangements but do not share joint control. As AIX is not party to any joint arrangements, this standard will not have any impact on its consolidated financial statements.

AASB 12 Disclosure of Interests in Other Entities (AASB 12) sets out the required disclosures for entities reporting under the two new standards, AASB 10 and AASB 11, and replaces the disclosure requirements found in the superseded AASB 128 Investments in Associates . Application of this standard by AIX will not affect any of the amounts recognised in the consolidated financial statements, but will impact the type of information disclosed in relation to AIX’s investments.

AASB 127 Consolidated and Separate Financial Statements is renamed AASB 127 Separate Financial Statements (AASB 127) and is now a standard dealing solely with separate financial statements. Application of this standard by AIX will not affect any of the amounts recognised in the consolidated financial statements.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

2 Summary of significant accounting policies (continued)

(b) New accounting standards and interpretations (continued)

AASB 128 Investments in Associates is renamed AASB 128 Investments in Associates and Joint Ventures (AASB 128). Amendments to AASB 128 provide clarification that an entity continues to apply the equity method and does not remeasure its retained interest as part of ownership changes where a joint venture becomes an associate, and vice versa. The amendments also introduce a “partial disposal” concept. As AIX does not have any associates, this standard does not have any impact on its consolidated financial statements.

AIX will apply the new and revised standards and amendments from 1 July 2013.

(iii) AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13 (effective 1 January 2013)

AASB 13 Fair Value Measurement (AASB 13) was released in September 2011. It explains how to measure fair value and aims to enhance fair value disclosures. AIX has yet to determine which, if any, of its current measurement techniques will have to change as a result of the new guidance. It is therefore not possible to state the impact, if any, of the new rules on any of the amounts recognised in the consolidated financial statements. However, application of the new standard and amendments will impact the type of information disclosed in the notes to the consolidated financial statements. AIX will apply the new standard and amendments from 1 July 2013.

(iv) AASB 2011-9 Amendments to Australian Accounting Standards Presentation of Items of Other Comprehensive Income (effective 1 July 2012)

In September 2011, the AASB made an amendment to AASB 101 Presentation of Financial Statements which requires entities to separate items presented in other comprehensive income into two groups, based on whether they may be recycled to the profit or loss in the future. It will not affect the measurement of any of the items recognised in the Consolidated Statements of Financial Position or the profit or loss in the current reporting period. AIX will apply the amendments from 1 July 2012.

(v) AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements (effective 1 July 2013)

In July 2011 the AASB decided to remove the individual key management personnel (KMP) disclosure requirements from AASB 124 Related Party Disclosures, to achieve consistency with the international equivalent standard and remove a duplication of the requirements with the Corporations Act 2001 . While this will reduce the disclosures that are currently required in the notes to the financial statements, it will not affect any of the amounts recognised in the financial statements. The amendments apply from the reporting period beginning 1 July 2013 and cannot be adopted early. The Corporations Act 2001 requirements in relation to remuneration reports will remain unchanged for now, but these requirements are currently subject to review and may also be revised in the near future .

(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 2012 and the results of all subsidiaries for the year ended 30 June 2012. 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 2012 and the results of all subsidiaries for the year ended 30 June 2012. 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 2012 (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 32 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 taxable income of AIFT is fully distributed either by way of cash or reinvestment (i.e. unitholders 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 2012 was $1,816,155,000 (2011: $1,756,228,000).

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 16.

(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

Operating segments are reported in a manner that is consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker has been identified as the Board of Hastings (acting in its capacity as the Responsible Entity for AIFT), which makes strategic decisions.

(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 2012 (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:

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.
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.

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 2012 (2011: nil).

Derivative securities

AIX did not hold any derivative securities at 30 June 2012 (2011: nil).

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (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 2012.

Further information relating to unlisted securities is provided in Note 16.

The post-tax risk adjusted discount rates applied by KPMG Corporate Finance in determining the fair value of each unlisted security (inclusive of any declared but unpaid income) as at 30 June 2012 are detailed below:

Unlisted Security Name	Valuation 30-Jun-12 $'000	Post-tax risk adjusted discount rate 30-Jun-12 %	Valuation 30-Jun-11 $'000	Post-tax risk adjusted discount rate 30-Jun-11 %
Perth Airport	609,597	13.05	525,176	13.05
Australia Pacific Airports Corporation	477,354	11.95	451,839	11.60
HOCHTIEF AirPort Capital Group	297,902	12.90	313,463	13.20
Queensland Airports	315,148	15.60	271,687	15.00
Airport Development Group	115,106	16.20	99,403	14.80
Port of Portland	N/A	N/A	68,563	12.70
Port ofGeelong UnitTrust &InfrastructureInvestment Corporation	N/A	N/A	24,830	12.60
Statewide Roads	1,048	12.20	976	13.10
Metro Light Rail and Monorail	N/A	N/A	3,979	19.20

(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.

To the extent that it is probable that some or all of the facility will be drawn down, fees paid on the establishment of the borrowing facilities are deferred and offset against the carrying amounts of borrowings. Upon the draw down of funds from the facility, the fees are amortised over the period of the facility to which they relate.

To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, fees paid on the establishment of the borrowing facilities are initially capitalised as a prepayment for liquidity services and are subsequently amortised over the period of the facility to which the fees relate.

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 2012 (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

Information in relation to Manager and Responsible Entity base management 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.

Manager and Responsible Entity performance fees

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

The performance fee arrangement in place with Hastings is required to be accounted for under AASB 2 Share Based Payments as it is a share-based payment transaction in which the terms of the arrangement provide AIX and Consolidated AIFT with a choice of settlement in either cash or AIX stapled securities. Applying AASB 2, the fair value of the performance fee obligation is determined at the beginning of the financial year (1 July) and is recognised as a performance fee expense and an increase in a security-based payment reserve in AIX and Consolidated AIFT’s Statement of Financial Position on a progressive basis throughout the year.

In accordance with AASB 2 at the end of the financial year the following accounting takes place:

If no performance fee is ultimately levied, no further accounting entries are processed.
If a performance fee is levied and is to be settled by way of the issue of AIX stapled securities, no further accounting entries are processed, however, upon the issue of the AIX stapled securities, the performance fee entitlement amount that was charged to the security-based payment reserve is reallocated to contributed equity in AIX and Consolidated AIFT’s Statement of Financial Position.
If a performance fee is levied and is settled in cash, the differential between the cash settlement amount and the amount recognised as the performance fee expense for the year is charged against a security-based payment reserve, with a corresponding payable in AIX and Consolidated AIFT’s Statement of Financial Position.

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.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

2 Summary of significant accounting policies (continued)

(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.

(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 period’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 company’s subsidiaries and associates 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 in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss or 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 tax asset is determined using tax rates (and laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends to either settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

The carrying amount of deferred 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 tax asset to be utilised.

Unrecognised deferred 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.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (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:

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 to the nearest thousand dollars

AIX is an entity of the kind referred to in Class Order 98/100 (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.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

3 Interest income

3 Interest income		(continued
Cash and cash equivalents Unlisted securities Total interest income	2012 2011 $'000 $'000 2,577 2,130 13,945 14,091 16,522 16,221 AIX Consolidated AIFL	2012 2011 $'000 $'000 1,927 2,130 13,945 14,091 Consolidated AIFT
		15,872 16,221

4 Dividend income

4 Dividend income
Unlisted securities Total dividend income	2012 2011 $'000 $'000 58,310 52,085 58,310 52,085 AIX Consolidated AIFL	2012 2011 $'000 $'000 52,542 44,650 Consolidated AIFT
		52,542 44,650
5 Distribution income
Unlisted securities Total distribution income	2012 2011 $'000 $'000 1,404 1,623 1,404 1,623 AIX Consolidated AIFL	2012 2011 $'000 $'000 705 542 Consolidated AIFT
		705 542
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	2012 2011 $'000 $'000 105,752 215,746 33,825 (47,698) 139,577 168,048 139,577 168,048 AIX Consolidated AIFL	2012 2011 $'000 $'000 120,553 158,007 11,703 (2,198) Consolidated AIFT
		132,256 155,809
		132,256 155,809

5 Distribution income

6 Net gain/(loss) - securities

On 29 February 2012 AIX sold its interest in Port of Geelong Unit Trust and Infrastructure Investment Corporation. AIX received sale proceeds of $24,788,875 in consideration for its $11,984,267 investment holding. The sale resulted in a holding period gain on sale of $12,630,311 (net of divestment costs).

On 23 March 2012 AIX and Consolidated AIFT sold their interest in Metro Transport Sydney and Sydney Light Rail Company. AIX and Consolidated AIFT received sales proceeds of $7,676,098 in consideration for their $26,813,805 investment holding. The sale resulted in a holding period loss on sale of $19,615,734 (inclusive of divestment costs).

On 23 May 2012 AIX sold its interest in Port of Portland. AIX received sales proceeds of $66,500,000 in consideration for its $20,411,607 investment holding. The sale resulted in a holding period gain on sale of $45,027,011 (net of divestment costs).

On 23 May 2012 Consolidated AIFT sold its interest in Port of Portland. Consolidated AIFT received sales proceeds of $40,449,330 in consideration for its $4,447,575 investment holding. The sale resulted in a holding period gain on sale of $35,535,905 (net of divestment costs).

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

7 Other income

7 Other income		(continued
Director fee income Other income Total other income	2012 2011 $'000 $'000 487 485 19 0 506 485 AIX Consolidated AIFL	2012 2011 $'000 $'000 487 485 19 0 Consolidated AIFT
		506 485

8 Manager and Responsible Entity fees

8 Manager and Responsible Entity fees
Base management fees Performance fees Total Manager and Responsible Entity fees	2012 2011 $'000 $'000 12,822 12,000 0 0 12,822 12,000 AIX Consolidated AIFL	2012 2011 $'000 $'000 11,420 12,000 0 0 Consolidated AIFT
		11,420 12,000

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

The AIFL Management Agreement (section 5) and the AIFT Consolidated Constitution (sections 48 and 71) are silent as to the precise form in which the performance fees are to be settled. However the AIFT Consolidated Constitution (section 71) does provide AIFL the discretion to determine the form of settlement. At the 2010 AIX Annual General Meeting (AGM) held on 17 November 2010 securityholders approved the resolution that that if performance fees are payable to Hastings then the AIFL Board would be entitled to require Hastings to be paid some or all of the performance fee in either cash or AIX securities. This approval is in place for a period of three years from the date of the AGM, that is, until 17 November 2013.

For the year ended 30 June 2012, the performance fee payable by AIX to Hastings after taking into account all carry forward performance deficit was $35,475,864, comprising $3,780,835 payable by the Company and $31,695,029 payable by AIFT.

The AIFL Board has determined that the performance fee payable to Hastings be cash settled. As a consequence:

the difference of $35,475,864 between the performance fee payable by AIX (inclusive of non-recoverable GST of $865,265) and the fair value of the performance fee obligation as assessed at 1 July 2011 of $Nil, has, in accordance with AASB2 Share Based Payments , been recognised as a charge against the security-based payment reserve, with a corresponding payable in AIX’s Statement of Financial Position.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

8 Manager and Responsible Entity fees (continued)

the difference of $31,695,029 between the performance fee payable by Consolidated AIFT (inclusive of non-recoverable GST of $773,048) and the fair value of the performance fee obligation as assessed at 1 July 2011 of $Nil, has, in accordance with AASB2 Share Based Payments , been recognised as a charge against the security-based payment reserve, with a corresponding payable in Consolidated AIFT’s Statement of Financial Position.

9 Finance costs

9 Finance costs
Interest expense - stapled entity - AIFL Bank fees Other borrowing costs Total finance costs	2012 2011 $'000 $'000 0 0 11 11 1,699 963 1,710 974 AIX Consolidated AIFL	2012 2011 $'000 $'000 458 1,128 11 12 1,696 963 Consolidated AIFT
		2,165 2,103

10 Strategic initiatives

Strategic initiative costs Total strategic initiative costs	2012 2011 $'000 $'000 1,689 0 1,689 0 AIX Consolidated AIFL	2012 2011 $'000 $'000 435 0 Consolidated AIFT
		435 0

In accordance with its public announcement on 29 June 2012, the AIFL and Hastings Boards have reached a non-binding agreement on the key terms upon which the management of AIX could be internalised. It is intended for this in-principle agreement to be developed into a detailed implementation agreement following which, if appropriate terms are agreed, the approval of AIX securityholders will be sought. Prior to seeking this approval, AIX will seek all necessary regulatory approvals, waivers, consents and tax rulings, and an independent expert will have opined upon the terms of the proposed internalisation and concluded it is fair and reasonable and therefore in the best interests of AIX securityholders.

Strategic initiative costs reflect costs associated with internalisation, which have been incurred by AIFL and AIFT in reaching this non-binding agreement and developing the proposal for internalising the management of AIX in preparation for consideration by AIX securityholders.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

11 Audit fees

During the year, the following fees were paid or payable for services provided by the auditor:

(a) Audit services Amounts paid and payable excluding GST, to PricewaterhouseCoopers, for: - Audit and review of financial statements - Compliance plan audit Total audit fees (b) Non-audit services Amounts paid and payable excluding GST, to PricewaterhouseCoopers, for: - Agreed upon procedures - Regulatory Guide 231 - Agreed upon procedures - annual report Total non-audit services	2012 2011 $ $ 139,906 135,265 16,228 15,910 156,134 151,175 2012 2011 $ $ 46,750 0 6,365 6,240 53,115 6,240 Consolidated AIFL AIX Consolidated AIFL AIX	2012 2011 $ $ 87,133 97,617 16,228 15,910 Consolidated AIFT
		103,361 113,527
		2012 2011 $ $ 23,375 0 6,365 6,240 Consolidated AIFT
		29,740 6,240

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

12 Income tax

(a) Income tax expense/(benefit)
Current tax expense/(benefit)
Deferred tax expense/(benefit)
Total income tax expense/(benefit)
(b) Numerical reconciliation of income tax expense to
prima facie tax payable
Net profit/(loss) before income tax for the year
Tax at the applicable Australian tax rate of 30% (2011 - 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
Security-based payment reserve
Other
Derecognition of prior year temporary difference
Rerecognition of prior year capital losses
Income tax expense
(c) Deferred tax liability
Deferred tax liability
Comprising:
Net unrealised gain on unlisted securities
Provision for retirement benefit
Unutilised imputation credits - available for future offset
Other

2012
2011
2012
2011
$'000
$'000
$'000
$'000
0
663
0
0
1,250
9,340
1,177
5,743
1,250
10,003
1,177
5,743
197,224
222,324
187,431
200,440
59,167
66,697
56,229
60,133
(55,052)
(54,390)
(55,052)
(54,390)
742
989
0
0
(2,472)
(3,293)
0
0
(1,134)
0
0
0
231
0
0
0
(1,573)
0
0
0
1,341
0
0
0
1,250
10,003
1,177
5,743
35,627
34,375
23,725
22,548
37,749
34,375
23,725
22,548
(234)
0
0
0
(1,576)
0
0
0
(312)
0
0
0
35,627
34,375
23,725
22,548
AIX
Consolidated AIFL
Consolidated AIFT

(c) Deferred tax liability

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

(d) Current tax asset

Current tax asset (e) Current tax liability Current tax liability (f) Unrecognised capital losses. Unused capital losses for which no deferred income tax asset has been recognised Potential tax benefit @ 30% (g) Unrecognised income tax losses Unused income tax losses for which no deferred income tax asset has been recognised Potential tax benefit @ 30%	304 0 4 4 304 0 4 4 0 347 0 0 0 347 0 0 18,137 45,500 0 0 5,441 13,650 0 0 5,252 0 0 0 1,576 0 0 0

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

13 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 Net gain/(loss) - other Interest income 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 current tax liability Increase/(decrease) in deferred 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	2012 2011 $'000 $'000 195,974 212,321 (139,577) (168,048) (145) 0 16 0 (42) 0 0 0 1,826 12,193 (21) 20 (395) 236 (2,361) 6,546 231 25 (651) (457) 1,250 9,339 59 48 56,164 72,223 2012 2011 $'000 $'000 157,110 79,237 157,110 79,237 AIX AIX Consolidated AIFL Consolidated AIFL	2012 2011 $'000 $'000 186,254 194,697 (132,256) (155,809) (145) 0 16 0 (42) 0 458 1,128 833 11,959 (10) 20 (340) 236 (2,361) 6,546 15 25 0 0 1,178 5,743 (722) 48 Consolidated AIFT
		52,878 64,593
		2012 2011 $'000 $'000 100,201 71,158 Consolidated AIFT
		100,201 71,158

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

(c) Significant non-cash investing and financing activities

During the year, $18,406,765 of Queensland Airports Limited loan notes were repaid by way of the issue of $18,406,765 new Queensland Airports Limited loan notes issued under a separate Loan Note Deed Poll.

There were no other significant non-cash investing and financing activities during the year (2011: nil).

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

14 Receivables

14 Receivables		(continued
Income receivable Security redemption proceeds receivable Other receivables Total receivables	2012 2011 $'000 $'000 0 2,388 0 1,299 507 226 507 3,913 AIX Consolidated AIFL	2012 2011 $'000 $'000 0 1,174 0 1,299 495 226 Consolidated AIFT
		495 2,699

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

15 Other assets

15 Other assets
Prepayments Total other assets	2012 2011 $'000 $'000 484 89 484 89 AIX Consolidated AIFL	2012 2011 $'000 $'000 428 89 Consolidated AIFT
		428 89

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

16 Securities

16 Securities		(continu
Unlisted securities Perth Airport (Perth Airport 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	2012 2011 $'000 $'000 609,597 525,176 477,354 451,839 297,902 313,463 315,148 271,687 115,106 98,104 0 66,632 0 24,372 1,048 976 0 3,979 1,816,155 1,756,228 1,816,155 1,756,228 AIX Consolidated AIFL	2012 2011 $'000 $'000 609,597 525,176 330,040 312,399 297,902 313,463 315,148 271,687 115,106 98,104 0 40,529 0 0 0 0 0 3,979 Consolidated AIFT
		1,667,793 1,565,337
		1,667,793 1,565,337

All unlisted securities have been independently valued by KPMG Corporate Finance at 30 June 2012 and 30 June 2011.

Percentage Ownership

Unlisted securities Perth Airport (Perth Airport 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	2012 2011 2012 2011 % % % % 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% 0.00% 50.00% 0.00% 30.41% 0.00% 35.00% 0.00% 0.00% 6.25% 6.25% 0.00% 0.00% 0.00% 38.89% 0.00% 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 2012 (continued)

17 Payables

Payable - the Responsible Entity Distribution and dividend payable Other payables Total payables	2012 2011 $'000 $'000 36,688 962 34,141 31,037 273 293 71,102 32,292 Consolidated AIFL AIX	2012 2011 $'000 $'000 32,778 962 30,140 28,037 187 293 Consolidated AIFT
		63,105 29,292

For information regarding the distribution and dividend payable refer to Note 23.

Further details of related party payables are included in Notes 27 and 28.

The Responsible Entity payable balance includes $35,475,864 (inclusive of non recoverable GST) payable to the Responsible Entity in connection with performance fees for the year ended 30 June 2012. For further information refer to Note 8.

18 Provisions

18 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	2012 2011 $'000 $'000 780 722 780 722 722 673 58 49 780 722 AIX Consolidated AIFL	2012 2011 $'000 $'000 0 722 Consolidated AIFT
		0 722
		722 673 (722) 49
		0 722

As a consequence of revisions to the AIX expense allocation protocol, effective 1 July 2011 the directors’ retirement provision that was previously recognised as a liability by AIFT was derecognised by AIFT and recognised as a liability by AIFL.

The revisions to the AIX expense allocation protocol had no impact on the directors’ retirement expense or provision recognised by AIX (Consolidated AIFL), however it has resulted in the recognition of a deferred tax asset by AIX (Consolidated AIFL).

19 Borrowings

Loan - stapled entity - AIFL Total borrowings	2012 2011 $'000 $'000 0 0 0 0 AIX Consolidated AIFL	2012 2011 $'000 $'000 11,358 13,873 Consolidated AIFT
		11,358 13,873

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

19 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	2012 2011 $'000 $'000 100,000 30,000 100,000 30,000 0 0 0 0 100,000 30,000 100,000 30,000 AIX Consolidated AIFL	2012 2011 $'000 $'000 100,000 30,000 Consolidated AIFT
		100,000 30,000
		0 0
		0 0
		100,000 30,000
		100,000 30,000

(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 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. This facility replaced the $30 million standby debt facility with Westpac and ANZ as lenders.

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

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

20 Contributed equity

20 Contributed equity
Issued securities (a) Issued securities (number) Opening balance Closing balance (b) Issued securities (dollars) Opening balance Less: security issue costs Closing balance	2012 2011 $'000 $'000 1,043,575 1,043,575 1,043,575 1,043,575 No. '000 No. '000 620,734 620,734 620,734 620,734 $'000 $'000 1,043,575 1,043,602 0 (27) 1,043,575 1,043,575 AIX Consolidated AIFL	2012 2011 $'000 $'000 883,554 883,554 Consolidated AIFT
		883,554 883,554
		No. '000 No. '000 620,734 620,734
		620,734 620,734
		$'000 $'000 883,554 883,582 0 (28)
		883,554 883,554

(c) Terms and conditions of issued securities

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

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

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

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

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

21 Reserves

Security-based payment reserve Total reserves Movement in the security-based payment reserve: Opening balance Current period charge(1) Closing balance	2012 2011 2012 2011 $'000 $'000 $'000 $'000 (35,476) 0 (31,695) 0 (35,476) 0 (31,695) 0 0 0 0 0 (35,476) 0 (31,695) 0 (35,476) 0 (31,695) 0 AIX Consolidated AIFL Consolidated AIFT

(1) Represents difference between the performance fee payable at 30 June 2012 (inclusive of non-recoverable GST) and the fair value of the performance fee obligation assessed at the beginning of the financial year (1 July 2011) and recognised as an expense in the Income Statement. For further details refer to Note 8.

22 Retained earnings

Opening balance Net profit/(loss) after income tax Dividends and distributions paid and payable to securityholders Closing balance	2012 2011 $'000 $'000 728,156 577,909 195,974 212,321 (65,178) (62,074) 858,952 728,156 AIX Consolidated AIFL	2012 2011 $'000 $'000 689,298 547,775 186,254 194,697 (56,678) (53,174) Consolidated AIFT
		818,874 689,298

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

23 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	2012 2011 $'000 $'000 31,037 31,037 34,141 31,037 65,178 62,074 56,678 53,174 8,500 8,900 65,178 62,074 AIX Consolidated AIFL	2012 2011 $'000 $'000 26,537 25,137 30,141 28,037 Consolidated AIFT
		56,678 53,174
		56,678 53,174 0 0
		56,678 53,174

Final dividend and distribution

The final dividend and distribution comprised:

a final dividend of $4,000,000 (0.64 cents per security) declared by AIFL for the year ended 30 June 2012 (2011: 0.50 cents per stapled security) franked to 100% (2011: 100%); and
a final distribution of $30,141,000 (4.86 cents per security) declared by AIFT for the year ended 30 June 2012 (2011: 4.50 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 2011 which was paid on 27 February 2012 (2010: $31,037,000 and 5.00 cents per stapled security).

The interim dividend and distribution comprised:

an interim dividend of $4,500,000 (0.72 cents per security) declared by AIFL for the half year ended 31 December 2011 (2010: $5,900,000 and 0.95 cents per stapled security) franked to 100% (2010: 100%); and
an interim distribution of $26,537,000 (4.28 cents per security) declared by AIFT for the half year ended 31 December 2011 (2010: $25,137,000 and 4.05 cents per stapled security).

24 Franking credit availability

Franking credits available for distribution at the end of the year	2012 2011 2012 2011 $'000 $'000 $'000 $'000 5,240 5,331 0 0 Consolidated AIFT AIX Consolidated AIFL

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

25 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.

26 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.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

26 Financial instruments (continued)

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

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.

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 2012 are at call and due within twelve months.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

26 Financial instruments (continued)

(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 13), receivables balances (Note 14) as well as the following unlisted security balances:

Name Instrument Type Perth Airport Shareholder Loans HOCHTIEF AirPort Capital Group Shareholder Loans Queensland Airports Limited Loan Notes Metro Light Rail and Monorail Shareholder Loans	2012 2011 $'000 $'000 43,284 20,781 79,429 98,727 24,786 22,332 0 27,774 147,499 169,614 AIX Consolidated AIFL	2012 2011 $'000 $'000 43,284 20,781 79,429 98,727 24,786 22,332 0 27,774 Consolidated AIFT
		147,499 169,614

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.

(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 +/- 1% 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 1%.

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 +/- 1% 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 depreciated 2.3% against the British Pound Sterling (GBP), appreciated 8.8% against the Euro (EUR), depreciated 1.6% against the New Zealand Dollar (NZD) and depreciated 5.3% 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 2012 (continued)

26 Financial instruments (continued)

(c) Summarised sensitivity analysis (continued)

AIX Consolidated AIFL 2012 Carrying Value $'000 Financial assets Cash and cash equivalents 157,110 Receivables 0 Securities 1,816,155 Financial liabilities Payables 71,102 Borrowings 0 Total increase/(decrease)	Profit Equity Profit Equity $'000 $'000 $'000 $'000 (1,571) (1,571) 1,571 1,571 0 0 0 0 (137,145) (137,145) 137,145 137,145 0 0 0 0 0 0 0 0 (138,716) (138,716) 138,716 138,716 Interest rate risk 1.0% -1.0%	Foreign exchange risk	Foreign exchange risk
	Profit Equity $'000 $'000 (1,571) (1,571) 0 0 (137,145) (137,145) 0 0 0 0 (138,716) (138,716) -1.0%	Profit Equity $'000 $'000 24 24 0 0 33,099 33,099 0 0 0 0 33,123 33,123 -10.0%	10.0%
			Profit Equity $'000 $'000
			(19) (19) 0 0 (27,083) (27,083) 0 0 0 0
			(27,102) (27,102)

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 -0.5% 0.5% Interest rate 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)

Consolidated AIFT 2012 Carrying Value $'000 Financial assets Cash and cash equivalents 100,201 Receivables 0 Securities 1,667,793 Financial liabilities Payables 63,105 Borrowings 11,358 Total increase/(decrease)	Profit Equity Profit Equity $'000 $'000 $'000 $'000 (1,002) (1,002) 1,002 1,002 0 0 0 0 (124,731) (124,731) 124,731 124,731 0 0 0 0 114 114 (114) (114) (125,619) (125,619) 125,619 125,619 -1.0% 1.0% Interest rate risk	Foreign exchange risk
	Profit Equity $'000 $'000 (1,002) (1,002) 0 0 (124,731) (124,731) 0 0 114 114 (125,619) (125,619) -1.0%	Profit Equity $'000 $'000 24 24 0 0 33,099 33,099 0 0 0 0 33,123 33,123 -10.0%	10.0%
			Profit Equity $'000 $'000
			(19) (19) 0 0 (27,083) (27,083) 0 0 0 0
			(27,102) (27,102)

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

26 Financial instruments (continued)

(c) Summarised sensitivity analysis (continued)

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% 0.5% Interest rate risk	Foreign exchange risk	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)

(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 2012 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 2012 (continued)

26 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	2012 2011 $'000 $'000 0 0 0 0 2012 2011 $'000 $'000 0 0 0 0 Level 1 Level 1	2012 2011 $'000 $'000 0 0 0 0 2012 2011 $'000 $'000 0 0 0 0 Level 2 Level 2	2012 2011 2012 2011 $'000 $'000 $'000 $'000 1,816,155 1,756,228 1,816,155 1,756,228 1,816,155 1,756,228 1,816,155 1,756,228 2012 2011 2012 2011 $'000 $'000 $'000 $'000 1,667,793 1,565,337 1,667,793 1,565,337 1,667,793 1,565,337 1,667,793 1,565,337 Level 3 Total Level 3 Total

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

26 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.	2012 2011 2012 2011 $'000 $'000 $'000 $'000 1,756,228 1,603,148 1,756,228 1,603,148 27,522 5,528 27,522 5,528 2,453 11,151 2,453 11,151 (75,619) (79,593) (75,619) (79,593) 105,752 215,746 105,752 215,746 (181) 248 (181) 248 1,816,155 1,756,228 1,816,155 1,756,228 139,577 168,048 139,577 168,048 101,535 215,746 101,535 215,746 Unlisted securities Total

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.	2012 2011 2012 2011 $'000 $'000 $'000 $'000 1,565,337 1,429,220 1,565,337 1,429,220 27,522 803 27,522 803 2,453 11,151 2,453 11,151 (47,891) (34,093) (47,891) (34,093) 120,553 158,007 120,553 158,007 (181) 249 (181) 249 1,667,793 1,565,337 1,667,793 1,565,337 132,256 155,809 132,256 155,809 116,336 158,007 116,336 158,007 Unlisted securities Total

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

26 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	2012 2011 AUD $'000 AUD $'000 214 10,257 297,902 313,463 298,116 323,720 AIX Consolidated AIFL in EURO Financial assets	2012 2011 AUD $'000 AUD $'000 214 10,257 297,902 313,463 Financial assets Consolidated AIFT in EURO
		298,116 323,720

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

Interest Net gain/(loss) - securities	2012 2011 AUD $'000 AUD $'000 7,360 8,361 (4,823) 14,235 2,537 22,596 Financial assets in EURO Consolidated AIFL AIX	2012 2011 AUD $'000 AUD $'000 7,360 8,361 (4,823) 14,235 in EURO Consolidated AIFT Financial assets
		2,537 22,596

27 Related party transactions

(a) Associate entities

Names of associate entities

Associate entities and interests in these entities are as follows:

Perth Airport Development Group and PAPT Holdings (Perth Airport) 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	2012 2011 2012 2011 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% 0.00% 50.00% 0.00% 30.41% 0.00% 35.00% 0.00% 0.00% 0.00% 38.89% 0.00% 38.89% Consolidated AIFT Consolidated AIFL AIX

For further details in relation to holdings in associate entities refer to Note 16 - Securities.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

27 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
Queensland Airports Limited
Dividend income from:
Perth Airport Development Group and PAPT Holdings
(Perth Airport)
Airport Development Group Pty Ltd
Australia Pacific Airports Corporation Limited
Metro Light Rail and Monorail
Port of Portland
Queensland Airports Limited
Port of Geelong Unit Trust &
Infrastructure Investment Corporation
Statewide Roads
Interest income from:
Perth Airport Development Group and PAPT Holdings
(Perth Airport)
Queensland Airports Limited
HOCHTIEF AirPort Capital Group
Metro Light Rail and Monorail
Advance/(repayment) of
unlisted security shareholder loans/bonds:
Perth Airport Development Group and PAPT Holdings
(Perth Airport)
Queensland Airports Limited
HOCHTIEF AirPort Capital Group
Metro Light Rail and Monorail
Acquisition/(disposal) of
interests in:
Perth Airport Development Group and PAPT Holdings
(Perth Airport)
Port of Geelong Unit Trust &
Infrastructure Investment Corporation
Port of Portland
Metro Light Rail and Monorail
Security redemption proceeds receivable from:
Airport Development Group ty Ltd

2012
2011
2012
2011
$'000
$'000
$'000
$'000
(119)
890
(72)
542
745
733
0
0
778
0
778
0
18,437
17,248
18,437
17,248
7,283
2,926
7,283
2,926
17,562
0
12,142
0
0
0
0
0
0
1,500
0
912
14,679
12,022
14,679
12,022
242
0
0
0
106
1,698
0
0
3,531
3,795
3,531
3,795
2,243
1,937
2,243
1,937
7,360
8,360
7,360
8,360
811
0
811
0
22,504
(11,742)
22,504
(11,742)
2,453
3,925
2,453
3,925
(14,771)
(8,763)
(14,771)
(8,763)
(27,774)
0
(27,774)
0
2,498
803
2,498
803
(11,984)
4,725
0
0
(19,850)
0
(4,106)
0
(19)
0
(19)
0
(1,299)
6,362
(1,299)
6,362
Consolidated AIFT
Consolidated AIFL
AIX

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

27 Related party transactions (continued)

(b) Associate entities (continued)

Receivable and payable balances with associate entities

Income receivable 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	2012 2011 2012 2011 $'000 $'000 $'000 $'000 0 1,931 0 1,174 559 556 559 556 1,784 1,969 1,784 1,969 0 458 0 0 0 1,299 0 1299 Consolidated AIFT Consolidated AIFL AIX

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	2012 2011 2012 2011 $'000 $'000 $'000 $'000 0 0 484 1,419 0 0 3,000 15,464 0 0 458 1,128 Consolidated AIFL AIX Consolidated AIFT

In the prior financial year all expenses incurred by AIFL are paid on its behalf by AIFT.

Outstanding balances between stapled entities

Borrowings payable to AIFL	2012 2011 2012 2011 $'000 $'000 $'000 $'000 0 0 11,358 13,873 Consolidated AIFT Consolidated AIFL AIX

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 2012 (continued)

27 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

Base management fees expense Hastings Performance fees expense Hastings Reimbursement of expenses paid or payable on behalf of AIX Hastings Distributions declared to Westpac Interest received from Westpac Finance expenses Westpac Loan facilities - line fees Loan facilities - agency fee Loan facilities - establishment fee Bank charges	2012 2011 2012 2011 $'000 $'000 $'000 $'000 12,822 12,000 11,420 12,000 35,476 0 31,695 0 600 207 315 207 1,891 1,801 1,891 1,801 2,577 2,130 1,927 2,130 654 357 654 357 25 32 25 32 337 217 337 217 11 11 10 11 Consolidated AIFT AIX Consolidated AIFL

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 Manager 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 2012 (continued)

27 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

Cash and cash equivalents Westpac Distribution payable Westpac Base management fees payable Hastings Performance fees payable Hastings Loan facility Westpac Total facility available Less: facility drawn Facility undrawn	2012 2011 $'000 $'000 157,110 79,237 901 901 1,211 962 35,476 0 50,000 15,000 0 0 50,000 15,000 AIX Consolidated AIFL	2012 2011 $'000 $'000 100,201 71,158 901 901 1,083 962 31,695 0 50,000 15,000 0 0 Consolidated AIFT
		50,000 15,000

For details in relation to the loan facilities refer Note 19 - 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
	2012	2011	2012	2011
	No.	No.	%	%
Westpac entities (excluding Hastings)	18,012,204	18,012,204	2.90%	2.90%

All transactions with related parties were conducted under commercial terms and conditions.

28 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 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 2012 (continued)

28 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 Andrew Day Director - Appointed on 18 October 2011 James Evans Director William Forde Director Alan Freer Director - Retired on 18 October 2011 Stephen Gibbs Director James McDonald Director Victoria Poole Director Jeff Pollock AIX Chief Executive Officer

Key management personnel related entities

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

John Harvey is a director of Australia Pacific Airports Corporation Limited.

Jeff Pollock is a director of Airport Development Group and PAPT Holdings (Perth Airport), Perth Airport 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 27 - 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 27 - Related Party Disclosures.

(ii) Compensation policy for key management personnel of AIFL

Board and Remuneration Committee Responsibility

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

28 Key management personnel (continued)

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

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

Non-executive directors’ remuneration

Remuneration Policy

The Board of directors of AIFL (the Board) with the assistance of the Remuneration Committee 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.

In setting fee levels, the Board takes into account:

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

Directors’ fees expensed for the year ended 30 June 2012 totalled $936,855 (2011: $826,983).

The Chairman of the Board is entitled to a fee of $275,000 per annum.

Directors are entitled to a fee of $110,000 per annum.

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

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

28 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 2012 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
2012	275,000	0	24,750		0	299,750
2011	227,867	0	20,508		0	248,375
James Evans
2012	110,000	0	9,900		0	119,900
2011	99,667	0	8,970		0	108,637
John Harvey
2012	110,000	23,000	11,970		0	144,970
2011	99,667	21,667	10,920		0	132,253
Robert Humphris
2012	110,000	0	9,900		0	119,900
2011	99,667	0	8,970		0	108,637
Michael Hutchinson
2012	110,000	0	9,900		0	119,900
2011	99,667	0	8,970		0	108,637
Robert Tsenin
2012	110,000	11,500	10,935		0	132,435
2011	99,667	10,833	9,945		0	120,445
Total compensation: Key management personnel		of AIFL
2012	825,000	34,500	77,355		0	936,855
2011	726,200	32,500	68,283		0	826,983

Remuneration paid to the AIX Chief Executive Officer

Jeff Pollock, the AIX Chief Executive Officer was not remunerated out of the property of AIFL or AIFT. This individual was 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 2012 (continued)

28 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
	2012	906,668	0	0	0	906,668
	2011	906,668	0	0	0	906,668
Alan Freer(1)
	2012	40,913	0	0	0	40,913
	2011	40,913	0	0	0	40,913
Stephen Gibbs
	2012	139	0	0	0	139
	2011	139	0	0	0	139
John Harvey
	2012	84,487	0	0	0	84,487
	2011	75,000	9,487	0	0	84,487
Robert Humphris
	2012	300,000	0	0	0	300,000
	2011	300,000	0	0	0	300,000
Michael Hutchinson
	2012	122,024	0	0	0	122,024
	2011	122,024	0	0	0	122,024
James McDonald
	2012	15,000	0	0	0	15,000
	2011	0	15,000	0	0	15,000
Robert Tsenin
	2012	157,060	0	0	0	157,060
	2011	137,060	20,000	0	0	157,060

(1) Closing holding reflects holding as at the date of retirement from the Hastings Board, being 18 October 2011.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

28 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
	2012	2011	2012	2011
Name	$	$	$	$
Paul Espie	95,200	90,667	49,867	45,333
Alan Freer(1)	0	2,046	0	2,046
Stephen Gibbs	15	14	8	7
John Harvey	8,871	8,449	4,647	4,224
Robert Humphris	31,500	30,000	16,500	15,000
Michael Hutchinson	12,813	12,202	6,711	6,101
Jim McDonald	1,575	1,500	825	750
Robert Tsenin	16,491	15,706	8,638	7,853

(1) Reflects distributions up until the date of retirement from the Hastings Boards, being 18 October 2011.

29 Earnings per security

Basic earnings per security (cents) Weighted average number of securities (000's) Net profit after income tax ($000's)	2012 2011 2012 2011 31.57 34.20 30.01 31.37 620,734 620,734 620,734 620,734 195,974 212,321 186,254 194,697 AIX Consolidated AIFL Consolidated AIFT

Diluted earnings per security equates to basic earnings per security.

30 Contingent assets and liabilities and commitments

Investment commitments

Undrawn investment commitments at balance date comprise the following:

2012

Unlisted security name Perth Airport 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 0 0 0 0 0
	0 0 0 0 0

On 2 December 2011 undrawn Perth Airport investment commitments of $15,760,268 were cancelled and a new investment commitment of $24,978,541 was made. This entire committed amount had been drawn to 30 June 2012.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Consolidated Financial Statements For the year ended 30 June 2012 (continued)

30 Contingent assets and liabilities and commitments (continued)

2011

Unlisted security name Perth Airport 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

There are no other outstanding contingent assets, contingent liabilities or commitments at 30 June 2012.

31 Events after the end of reporting period

32 Parent entity financial information

(a) Summary of financial information

Statements of Financial Position Total assets Total liabilities Equity Contributed equity Reserves Retained earnings Statements of Comprehensive Income Net profit/(loss) after income tax for the year Total comprehensive income/(loss) for the year	2012 2011 2012 2011 $'000 $'000 $'000 $'000 216,998 214,056 1,768,903 1,639,298 20,679 15,178 74,463 43,887 160,021 160,021 883,554 883,554 (3,781) 0 (31,695) 0 40,079 38,857 842,581 711,857 9,723 17,623 187,402 200,458 9,723 17,623 187,402 200,458 AIFL AIFT

(b) Contingent assets and liabilities and commitments

AIFL

There are no outstanding contingent assets, contingent liabilities or commitments at 30 June 2012 and at 30 June 2011.

Australian Infrastructure Fund Limited Australian Infrastructure Fund Trust Notes to the Annual Financial Statements For the year ended 30 June 2012 (continued)

32 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:

2012

2012
Unlisted security name Perth Airport 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 0 0 0 0 0
	0 0 0 0 0

2011

Unlisted security name Perth Airport 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

There are no other outstanding contingent assets, contingent liabilities or commitments at 30 June 2012 and at 30 June 2011.

Australian Infrastructure Fund Limited Directors Declaration 30 June 2012

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 59 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 2012 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 2012

Australian Infrastructure Fund Trust Directors’ Declaration 30 June 2012

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 59 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 2012 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.

==> picture [133 x 68] intentionally omitted <==

Alan Cameron Chairman

24 August 2012

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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 report of Australian Infrastructure Fund Limited and the controlled entities within its stapled group (AIFL) and Australian Infrastructure Trust and its controlled entities (AIFT), which comprises the statements of financial position as at 30 June 2012, 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 of the financial report that gives a true and fair view in accordance with Australian Accounting Standards (including Australian Accounting Interpretations) and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 2, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements , that the financial statements comply with International Financial Reporting Standards.

Auditor’s responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. 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.

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

PricewaterhouseCoopers, ABN 52 780 433 757

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

Liability limited by a scheme approved under Professional Standards Legislation.

==> picture [78 x 59] intentionally omitted <==

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

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

Independence

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

Auditor’s opinion

In our opinion:

(a) the financial report of Australian Infrastructure Fund Limited and the controlled entities within its stapled group and the 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 Australian Infrastructure Fund Limited and the controlled entities within its stapled group and the Australian Infrastructure Fund Trust and its controlled entities financial position as at 30 June 2012 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 and notes also comply with International Financial Reporting Standards as disclosed in Note 2.

Report on the Remuneration Report

We have audited the remuneration report included in pages 5 to 6 of the directors’ report for AIFL the year ended 30 June 2012. 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 2012, 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 and the Australian Infrastructure Fund Trust and its controlled entities (AIFT) for the year ended 30 June 2012 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 the financial report 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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Simon Gray Partner

Melbourne 24 August 2012

Australian Infrastructure Fund Appendix 4E Report for the year ended 30 June 2012

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 2012

64916_rns_2012-08-23_1bd1b235-e588-4f52-a3bb-fbbe5781838c.pdf

Australian Infrastructure Fund (AIX)

24 August 2012

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 2012

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 2012

Directors’ Report

Structure of consolidated financial statements

Directors

Company secretaries

Jane Frawley

Qualifications: BA, LLB, ACM

Jefferson Petch

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

Directors’ Report (continued)

Principal activities

Company information

Review and results of operations

Results

Distributions and dividends

Final dividend and distribution

Interim dividend and distribution

Business strategies and prospects

Significant changes in state of affairs

Matters subsequent to the end of the year

Directors’ Report (continued)

Likely developments and expected results

Directors meetings

Directors’ interests

Indemnification and insurance of officers and auditors

Directors’ Report (continued)

Non audit services

Proceedings on behalf of the Company

Environmental regulation

Rounding of amounts to the nearest thousand dollars

Auditor’s independence declaration

Directors’ Report (continued)

Remuneration Report

Board and Remuneration Committee Responsibility

Non-executive directors’ remuneration

Remuneration Policy

Remuneration structure

Directors’ Report (continued)

Remuneration paid to non-executive directors

Relationship with the Manager - Hastings Funds Management Limited

Directors’ Report (continued)

Fees paid to the Manager

Base Management Fees

Performance Fees

Reimbursable expenses

Directors’ Report (continued)

Corporate governance

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

Directors’ Report

Responsible Entity

Directors

Company secretaries

Principal activities

Review and results of operations

Results

Distributions

Business strategies and prospects

Significant changes in state of affairs

Directors’ Report (continued)

Matters subsequent to the end of the year

Likely developments and expected results

Fees to and interests held in the Company by the Responsible Entity or its associates

Base Management Fees

Performance Fees

Directors’ Report (continued)

Reimbursable expenses

Interests in the Scheme

Indemnification and insurance of officers and auditors

Environmental regulation

FUTURE GENERATION AUSTRALIA LIMITED Annual Report 2012