FUTURE GENERATION AUSTRALIA LIMITED — Annual Report 2015

Aug 18, 2015

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Future Generation Investment Company Limited

A.B.N. 97 063 935 553

APPENDIX 4E ‐ PRELIMINARY FINAL REPORT

For the year ended 30 June 2015

RESULTS FOR ANNOUNCEMENT TO THE MARKET

All comparisons to the year ended 30 June 2014

	up/down	% mvmt	$’000
Revenue from ordinary activities*	Up	5,430.1%	16,922
Profit from ordinary activities after tax attributable to	Up	281.6%	11,372
members
Net profit from ordinary activities after tax attributable to	Up	281.6%	11,372
members

*Current year revenue from ordinary activities largely comprised of dividends, distributions and investment manager fee rebates. Prior year revenue from ordinary activities largely comprised interest income earned on bank accounts.

	Cents per	Franked amount	Tax rate for
Dividend information	share	per share	franking
2015 Final Dividend cents per share	2.0	2.0	30%
Final dividend dates
Ex dividend date			12 October 2015
Record date			14 October 2015
Last election date for the DRP			15 October 2015
Payment date			23 October 2015

Dividend Reinvestment Plan

The Dividend Reinvestment Plan (‘DRP’) is in operation and the recommended fully franked final dividend of 2.0 cents per share qualifies. Participating shareholders will be entitled to be allotted the number of shares (rounded to the nearest whole number) which the cash dividend would purchase at the relevant issue price. The relevant issue price will be the volume weighted average market price of shares sold on the ASX (on an ex-dividend basis) four trading days from the ex-dividend date inclusive of the ex-dividend date.

	30 June 2015**
Net Tangible Assets(‘NTA’)	cents
NTA (per share) before tax	110.75
NTA (per share) after tax and before tax on unrealised gains	109.82
NTA (per share) after tax	110.73

**Due to the changes in the Company’s shareholdings and the relevant consolidation during the year, the NTA for the comparative period is not presented.

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Future Generation Investment Company Limited

A.B.N. 97 063 935 553

Statement of Comprehensive Income For the year ended 30 June 2015

Notes Investment income from ordinary activities Interest Dividends and distributions Investment management and performance fee rebates 3 Expenses Board administrative expenses Directors' fees Director retirement expense Loss on disposal of subsidiary 4(a) Charity donation accrual 4(b) Strategic initiatives costs 4(c) ASX listing fees Chess fees Share registry fees Share registry out-of-pocket Audit fees Insurance Tax fees Amortisation expense Investment expenses Accounting fees Other Expenses Profit/(loss) before income tax Income tax expense Net profit/(loss) for the year Other comprehensive income/(loss) Items that will not be reclassified to profit or loss Net unrealised losses on investments taken to equity, net of tax Net realised losses on investments taken to equity, net of tax Other comprehensive loss for the year, net of tax Total comprehensive income/(loss) for the year Earnings/(loss) per share for profit attributable to the ordinary equity holders of the Company: Notes Basic earnings/(loss) per share 11 Diluted earnings/(loss) per share	Year ended 2015 2014 $’000 $’000 986 306 14,050 - 1,886 -
	16,922 306
	- (32) - (215) - (12) - (450) (1,644) - - (1,495) - (56) (60) - - (364) (73) - (39) (72) (17) (938) - (168) (3) - - (13) - (51) (65) (245)
	(1,901) (4,111)
	15,021 (3,805) (3,649) (2,456)
	11,372 (6,261)
	(6,763) - (3) -
	(6,766) -
	4,606 (6,261)
	Cents Cents 7.63 (1.01) 7.63 (1.01)

*Due to changes in the Company's shareholdings and the relevant consolidation during the year, the calculation of basic and diluted earnings/(loss) per share for all periods presented were adjusted for these changes.

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

2

Future Generation Investment Company Limited

A.B.N. 97 063 935 553

Statement of Financial Position For the year ended 30 June 2015

Notes ASSETS Current Assets Cash and cash equivalents Trade and other receivables Current tax assets Other current assets Total current assets Non-current assets Financial assets at fair value through other comprehensive income 5 Deferred tax assets Intangible assets Total non-current assets Total assets LIABILITIES Current liabilities Trade and other payables Charity donation accrual Current tax liabilities Total current liabilities Non-current liabilities Deferred tax liabilities Total non-current liabilities Total liabilities Net assets EQUITY Issued capital 6(a) Reserves Retained earnings Total Equity	2015 2014 $’000 $’000 23,340 3,330 9,733 6 - 68 5 8
	33,078 3,412
	172,170 - 4,417 203 10 -
	176,597 203
	209,675 3,615
	23 317 1,644 - 3,231 -
	4,898 317
	153 -
	153 -
	5,051 317
	204,624 3,298
	200,248 3,528 4,376 (3,781) - 3,551
	204,624 3,298

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

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Future Generation Investment Company Limited

A.B.N. 97 063 935 553

Statement of Changes in Equity For the year ended 30 June 2015

Notes Balance at 1 July 2013 Net profit for the year Other comprehensive income for the year Other comprehensive income, net of tax Total comprehensive loss for the year Transactions with owners in their capacity as owners: Loss of control in AIFT - deconsolidation of reserves and retained earnings Share restructure costs charged to equity Return of capital Dividends provided for/or paid 7(a) Balance at 30 June 2014 Balance at 1 July 2014 Net profit for the year Other comprehensive loss for the year Other comprehensive loss, net of tax Total comprehensive income/(loss) for the year Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs and tax Buy-back of ordinary shares Dividends provided for or paid Transfer to profits reserve Balance at 30 June 2015	Issued capital Investment reserves Other reserves Retained earnings Total Equity $'000 $'000 $'000 $'000 $'000 116,569 - (35,476) 46,404 127,497
	- - - (6,261) (6,261) - - - - -
	- - - (6,261) (6,261)
	- - 31,695 (31,695) - (52) - - - (52) (112,989) - - - (112,989) - - - (4,897) (4,897)
	(113,041) - 31,695 (36,592) (117,938)
	3,528 - (3,781) 3,551 3,298
	3,528 - (3,781) 3,551 3,298
	- - - 11,372 11,372 - (6,766) - - (6,766)
	- (6,766) - 11,372 4,606
	198,809 - - - 198,809 (2,089) - - - (2,089) - - - - - - - 14,923 (14,923) -
	196,720 - 14,923 (14,923) 196,720
	200,248 (6,766) 11,142 - 204,624

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

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Future Generation Investment Company Limited

A.B.N. 97 063 935 553

Statement of Cash Flows For the year ended 30 June 2015

Cash flows from operating activities Interest received Other income received Finance costs paid Income taxes paid Payments for other expenses Net cash inflow from operating activities Cash flows from investing activities Payments for intangible assets Loss on disposal of subsidiary - AIFT Payments for financial assets at fair value through other comprehensive income Proceeds from sale of financial assets at fair value through other comprehensive income Net cash (outflow) from investing activities Cash flows from financing activities Proceeds from issues of shares and options exercised Payments for shares bought back Share issue and buy-back transaction costs Payment of strategic initiatives costs Payment upon return of capital Dividends paid to the Company's shareholders 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 Cash and cash equivalents at the end of the year	Year ended 2015 2014 $’000 $’000 916 306 262 5,362 - (9) (386) (2,660) (501) (2,867)
	291 132
	(14) - - (450) (191,800) - 15,939 -
	(175,875) (450)
	201,433 - (2,089) - (3,750) (52) - (1,495) - (112,989) - (4,897)
	195,594 (119,433)
	20,010 (119,751) 3,330 123,081
	23,340 3,330

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

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Future Generation Investment Company Limited

A.B.N. 97 063 935 553

Notes to the Financial Statements For the year ended 30 June 2015

1. Summary of significant accounting policies

The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the entity Future Generation Investment Company Limited.

(a) Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and interpretations issued by the Australian Accounting Standards Board and the Corporations Act 2001 . Future Generation Investment Company Limited is a for-profit entity for the purpose of preparing the financial statements.

(i) Historical cost convention

These financial statements have been prepared under the accruals basis and are based on historical cost convention, as modified by the revaluation of financial assets and liabilities at fair value through profit or loss or through other comprehensive income.

2. Segment information

The Company has only one reportable segment as at 30 June 2015. The Company's previous reportable operating segment was in the cash and term deposits segment. As at 30 June 2015, the Company's reportable operating segment was investments in unlisted unit trusts and cash and/or cash equivalents.

3. Investment income from ordinary activities

The Company has invested in 17 unlisted unit trusts and where available, has invested in unit classes that have zero management and performance fees. The unit trusts with a zero fee unit class are the Bennelong Long Short Fund, the Discovery Australian Small Companies Fund, the Optimal Australia Absolute Trust and the LHC Capital Australia High Conviction Fund. The remaining investments are in unit classes that charge management and performance fees. These Fund Managers have rebated the fees charged. The aggregate management and performance fees rebated to the Company were $1.886 million for the year ended 30 June 2015 (2014: N/A).

4. Other expense items

(a) Loss on disposal of subsidiary

Loss on disposal of subsidiary

Year	ended
2015	2014
$’000	$’000
-	(450)

On 19 February 2014, an independent unrelated party acquired ownership of AIFT. As a result of this, a loss on disposal of AIFT of $450,000 was recognised.

(b) Charity donation accrual

The Company has a commitment to accrue and pay a 1.0% charity donation to support Australian charities with a focus on children at risk. The charity donation commitment is calculated and accrued monthly and paid annually in arrears and is based on the Company's net assets before tax. The accrual commenced at the end of September 2014, being the month the Company relisted following recapitalisation.

Charity donation accrual

Year	ended
2015	2014
$’000	$’000
1,644	-

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Future Generation Investment Company Limited

A.B.N. 97 063 935 553

Notes to the Financial Statements For the year ended 30 June 2015

4. Other expense items (continued)

(c) Expenses

Strategic initiatives costs Fund Holding Deed defence costs Recapitalisation costs Change in Responsible Entity expenses Restructure legal fees Total cost of sales and providing services and other expenses from ordinary activities	2015 2014 $’000 $’000 - 100 - 325 - 330 - 740
	- 1,495

5. Non-current assets - Financial assets at fair value through other comprehensive income

Financial assets at fair value through other comprehensive income

Year	ended
2015	2014
$’000	$’000
172,170	-

The Bennelong Alpha 200 Fund was closed during March 2015. The fair value of the full redemption from this fund made during the year was $15.94 million (2014: N/A). Proceeds from the full redemption were invested into the Bennelong Long Short Fund, the Tribeca Alpha Plus Fund and the Qato Capital Market Neutral Long Short Fund.

6. Issued capital

• (a) Share capital

a) Share capital
Ordinary shares - fully paid b) Other equity securities Options c) Movements in ordinary share capital Details Opening balance - 1 July 2013 Costs of raising capital Return of capital Closing balance - 30 June 2014	30 June 2015 Number ‘000 184,047	30 June 2014 Number ‘000 620,734	30 June 2015 $’000 200,248	30 June 2014 $’000 3,528
	30 June 2015 Number ‘000 181,425	30 June 2014 Number ‘000 -		30 June 2014 $’000 116,569 (52) (112,989)
		30 June 2014 Number ‘000 620,734 - -
		620,734		3,528

• (b) Other equity securities

• (c) Movements in ordinary share capital

7

Future Generation Investment Company Limited A.B.N. 97 063 935 553

Notes to the Financial Statements For the year ended 30 June 2015

6. Issued Capital (continued)

(c) Movements in ordinary share capital (continued)

Opening balance - 1 July 2014 Issue of shares - Wilson Foundation Pty Limited Share buyback - off market Cancellation of shares Issue of shares Exercise of options - proceeds received Costs of raising capital Closing balance - 30 June 2015	30 June 2015 Number ‘000 620,734 200,000 (417,750) (401,148) 1,836 181,818 393 - 184,047	30 June 2015 $000 3,528 1,000 (2,089) -
		2,439 200,000 434 (2,625)
		200,248

7. Dividends

a) Ordinary shares Interim dividend for the 2014 financial year Final dividend for the 2014 financial year b) Dividends not recognised at year end In addition to the above dividends, since the end of the year, the Directors have declared a 2.0 cent per share fully franked dividend which has not been recognised as a liability at the end of the financial year:	2015 2014 $’000 $’000 - 1,862 - 3,035
	- 4,897
	2015 $’000 2014 $’000 3,681 -

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Future Generation Investment Company Limited

A.B.N. 97 063 935 553

Notes to the Financial Statements For the year ended 30 June 2015

c) Dividend franking account

) Dividend franking account
Opening balance of franking account Franking credits on dividends received Tax paid during the year Franking credits paid on ordinary dividends paid Loss of franking credits under 45 day rule Closing balance of franking account Adjustments for tax payable/refundable in respect of the current year's profits and the receipt of dividends/distributions and dividends/distributions declared Adjusted franking account balance	2015 2014 $’000 $’000 538 - 756 1,535 386 1,102 - (2,099) - -
	1,680 538
	2,575 -
	4,255 538

The above amounts are calculated from the balance of the franking account as at the end of the reporting period, adjusted for franking credits and debits that will arise from the settlement of liabilities or receivables for income tax and dividends after the end of the year.

8. Contingencies

The Company had no contingent liabilities at 30 June 2015 (2014: transactions as per Implementation Deed completed on 19 February 2014).

9. Commitments

The Company has a commitment to accrue and pay a 1.0% charity donation to support Australian charities with a focus on children at risk. The charity donation commitment is calculated and accrued monthly and paid annually in arrears and is based on the Company's net assets before tax. The accrual commenced at the end of September 2014, being the month the Company relisted following recapitalisation.

10. Events occurring after the reporting period

Since year end, the Board declared a final dividend of 2.0 cents per share fully franked to be paid on 23 October 2015.

No other matter or circumstance has occurred subsequent to year end that has significantly affected, or may significantly affect, the operations of the Company, the results of those operations or the state of affairs of the Company in subsequent financial years.

11. Earnings per share

1. Earnings per share
Profit/(loss) after income tax used in the calculation of basic and diluted earnings per share Weighted average number of ordinary shares outstanding during the year used in calculating basic and diluted earnings per share	Year ended 2015 2014 $’000 $’000 11,372 (6,262)
	Number ‘000 Number ‘000 149,076 620,734

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