WAM ACTIVE LIMITED — Interim / Quarterly Report 2013

Feb 20, 2013

WAM ACTIVE LIMITED ABN 49 126 420 719 APPENDIX 4D HALF YEAR REPORT For the half year ended 31 December 2012

RESULTS FOR ANNOUNCEMENT TO THE MARKET

All comparisons to the half year ended 31 December 2011

	$	up/down	% mvmt
Revenue from ordinary activities	2,106,293	up	1,597.0%
Profit from operating activities before income tax expense	1,418,201	up	766.9%
Net profit from operating activities after income tax expense	1,109,373	up	2,584.9%

		Franked	Tax rate
Dividend Information	Cents per share	amount per share	for franking
2013 Interim dividend cents per share	4.75c	4.75c	30%
2012 Final dividend cents per share	4.5c	4.5c	30%
Interim dividend dates
Ex dividend date			8 April 2013
Record Date			12 April 2013
Payment Date			19 April 2013

Dividend Reinvestment Plan

The Dividend Reinvestment Plan is in operation and the recommended fully franked interim dividend of 4.75 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 at a 2.5% discount to the price (calculated as the weighted average market price of shares sold on the ASX on the books closing date (i.e. record date) for the relevant dividend and the 3 trading days preceding that date).

	31 Dec 12	31 Dec 11
Net tangible asset backing (after tax) cents per share	$1.08	$1.08

This report is based on the Half Year Financial Report which has been subject to independent review by the Auditors, Moore Stephens Sydney. All the documents comprise the information required by Listing Rule 4.2A. This information should be read in conjunction with the 30 June 2012 Annual Financial Report.

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WAM Active Limited ABN 49 126 420 719

Financial Report for the half year ending 31 December 2012

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Company Particulars

WAM Active Limited is a Listed Investment Company and is a reporting entity. It is primarily an investor in	WAM Active Limited is a Listed Investment Company and is a reporting entity. It is primarily an investor in
equities listed on the Australian securities market.
Directors:	G. Wilson (Chairman)
	M. Kidman
	J. Abernethy
Secretary:	K. Thorley
Investment Manager:	MAM Pty Limited
	Level 11, 139 Macquarie Street
	Sydney NSW 2000
Auditors:	Moore Stephens Sydney
Country of Incorporation:	Australia
Registered Office:	Level 11, 139 Macquarie Street
	Sydney NSW 2000
Contact Details:	Postal Address: GPO Box 4658, Sydney NSW 2001
	Telephone: (02) 9247 6755
	Fax: (02) 9247 6855
	Email:info@wamfunds.com.au
	Website:www.wamfunds.com.au
Share Registrar:	Boardroom Pty Limited
	Level 7, 207 Kent Street
	Sydney NSW 2000
	Telephone: (02) 9290 9600
	Fax: (02) 9279 0664
	For enquiries relating to shareholdings, dividends (including participation in the
	Dividend Reinvestment Plan) and related matters, please contact the share
	registrar.
Australian Securities	WAM Active Ordinary Shares (WAA)
Exchange:	WAM Active Options (WAAO) $1.08 expiry 12 December 2013

WAM ACTIVE LIMITED A.B.N. 49 126 420 719

DIRECTORS’ REPORT TO SHAREHOLDERS FOR THE HALF YEAR ENDED 31 DECEMBER 2012

The Directors present their report together with the financial report of WAM Active Limited (“the Company”) for the half year ended 31 December 2012.

Directors

The following persons were Directors of the Company during the financial period and up to the date of this report:

• Geoffrey Wilson (Chairman – Non-Independent)

• Matthew Kidman (Non-Executive Director – Non-Independent)

• John Abernethy (Non-Executive Director – Independent)

• Ronald Walker (Non-Executive Director – Non-Independent) (resigned 17 September 2012)

Principal Activity

The principal activity of the Company is making investments in listed companies. No change in this activity took place during the period or is likely in the future.

Investment Objectives

The Company’s investment objectives are to deliver a rising stream of fully franked dividends and to preserve capital in both the short term and long term.

Operating and Financial Review

Investment operations over the half year resulted in an operating profit before tax of $1,418,201 (2011: operating loss before tax of $212,670) and operating profit after tax of $1,109,373 (2011: operating loss after tax of $44,644). The increase in profit is a reflection of the investment portfolio returning 10.4% compared to 0.3% in the previous corresponding period.

Under Accounting Standards, realised gains and losses and dividend income are added to or reduced by changes in the market value of the Company’s investments. This can lead to large variations in reported profits. We believe a more appropriate measure of the results is the change in Net Tangible Asset (NTA), adjusted for dividends. The pre tax NTA, adjusted for dividends, increased 7.1% for the 6 months to 31 December 2012. The share price, adjusted for dividends rose 12.7% for the 6 months to 31 December 2012.

Net Tangible Asset backing for each ordinary share as at 31 December 2012 (calculated on market value less realisation costs and all applicable taxes and before provision for dividend) amounted to $1.08 per share (2011: $1.08). Net Tangible Assets after tax on realised gains but before tax on unrealised gains was $1.10 per share (2011: $1.09). This is after the payment of 9.0 cents in fully franked dividends over the 12 month period.

On 4 May 2012, the Board announced a 1 for 1 bonus issue of options to acquire ordinary shares in the capital of the Company. The options were allotted to shareholders on 25 June 2012. The options have an exercise price of $1.08 per share and can be exercised at any time on or before 12 December 2013. The options are currently trading on the ASX under the code WAAO.

As at 31 December 2012, a total of 3,283,164 options have been exercised for a total consideration of $3,545,817 with a remaining balance of outstanding options being 13,026,781.

A fully franked dividend of 4.5 cents per share was paid in the period to 31 December 2012 and an interim dividend of 4.75 cents per share fully franked has been declared by the Board and will be paid on 19 April 2013.

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WAM ACTIVE LIMITED

A. B .N. 49 12 6 420 719

DIRECTORS’ REPORT TO SHAREHOLDERS FOR THE HALF YEAR ENDED 31 DECEMBER 2012

Auditors’ Independence Declaration A copy o f the Audit o rs’ Indepen d ence Decl a ration as re q uired unde r Section 30 7 C of the C o rporations A ct 2001 is s et out on p a ge 3.

Signed i n accordan c e with a res o lution of th e Board of Directors.

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Geoffre y Wilson Chairm a n

Dated a t Sydney thi s 21[st] day of February 2 0 13

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Level 7, 20 Hunter Street Sydney NSW 2000

T +61 (0)2 8236 7700 F +61 (0)2 9233 4636

www.moorestephens.com.au

Auditor’s Independence Declaration to the Directors of WAM Active Limited

As lead auditor for the review of WAM Active Limited for the half-year ended 31 December 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 review; and

• b. no contraventions of any applicable code of professional conduct in relation to the review.

This declaration is in respect of WAM Active Limited during the period.

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Moore Stephens Sydney Chartered Accountants

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Scott Whiddett Partner

Dated in Sydney this 21[st] day of February 2013.

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Moore Stephens Sydney ABN 90 773 984 843. Liability limited by a scheme approved under Professional Standards Legislation Other than for the acts or omissions of financial services licensees. An independent member of Moore Stephens International Limited - members in principal cities throughout the world The Sydney Moore Stephens firm is not a partner or agent of any other Moore Stephens firm.

WAM ACTIVE LIMITED

A.B.N. 49 126 420 719

STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 31 DECEMBER 2012

Notes Proceeds from sale of investments Cost of investments sold Realised loss on financial assets Unrealised gains on financial assets Other revenue from ordinary activities 2 Performance fees Management fees Directors fees Custody fees ASX listing and chess fees Share registry fees Brokerage expense on share purchases Other expenses from ordinary activities Profit/(loss) before income tax Income tax expense/(benefit) Profit/(loss) attributable to members of the Company 6 Other comprehensive income Other comprehensive income for the period, net of tax Total comprehensive income/(loss) for the period Basic earnings per share Diluted earnings per share	December 2012 $ 29,217,433 (30,152,031) (934,598) 862,685 2,178,206 (318,779) (103,207) (26,897) (21,393) (29,853) (18,625) (110,331) (59,007) 1,418,201 308,828 1,109,373 - 1,109,373 6.15 cents 6.09 cents	December 2011 $ 30,581,785 (31,536,590)
		(954,805) 315,766 763,155 - (90,887) (35,500) (25,668) (27,539) (12,531) (83,146) (61,515)
		(212,670) (168,026)
		(44,644)
		-
		(44,644)
		(0.27) cents
		(0.27) cents

The accompanying notes form part of these financial statements

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WAM ACTIVE LIMITED

A.B.N. 49 126 420 719

STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2012

Notes Assets Cash and cash equivalents Trade and other receivables Financial assets Deferred tax assets Total Assets Liabilities Trade and other payables Financial liabilities Deferred tax liabilities Total Liabilities Net Assets Equity Issued capital 4 Reserves 5 Retained earnings 6 Total Equity	December 2012 $ 4,906,577 268,899 17,146,212 243,830 22,565,518 691,816 - 513,379 1,205,195 21,360,323 19,924,838 1,560,258 (124,773) 21,360,323	June 2012 $ 9,569,918 836,698 8,826,054 293,181
		19,525,851
		1,367,861 502,082 253,902
		2,123,845
		17,402,006
		16,195,624 1,331,155 (124,773)
		17,402,006

The accompanying notes form part of these financial statements

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WAM ACTIVE LIMITED

A.B.N. 49 126 420 719

STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 31 DECEMBER 2012

Notes Total Equity as at 1 July Profit/(loss) for the half year attributable to members of the Company 6 Total other comprehensive income for the period Shares issued via DRP 4(b) Shares issued via exercise of options 4(b) Unalloted option monies received 4(b) Dividends paid 3(a) Total Equity as at 31 December attributable to members of the Company	December 2012 $ 17,402,006 1,109,373 - 183,398 3,544,736 1,080 22,240,593 (880,270) 21,360,323	December 2011 $ 18,131,297 (44,644) - 107,057 - -
		18,193,710 (642,666)
		17,551,044

The accompanying notes form part of these financial statements

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WAM ACTIVE LIMITED

A.B.N. 49 126 420 719

STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 31 DECEMBER 2012

Cash Flows from Operating Activities Dividends received Interest received Other investment income received Net GST received from the ATO Management fees (inclusive of GST) Performance fees (inclusive of GST) Brokerage expense on share purchases (inclusive of GST) Payments for administration expenses (inclusive of GST) GST on brokerage expense on share sales Income tax paid Net Cash provided by Operating Activities Cash Flows from Investing Activities Proceeds from sale of investments Payments for purchases of investments Net Cash used in Investing Activities Cash Flows from Financing Activities Proceeds from option exercise Dividends paid – net of reinvestment Net Cash provided by/(used in) Financing Activities Net decrease in cash and cash equivalents held Cash and cash equivalents at the beginning of the half year Cash and cash equivalents at the end of the half year	December 2012 $ 1,902,567 224,374 120,057 29,276 (99,757) (125,542) (118,158) (223,411) (5,600) - 1,703,806 29,734,935 (38,951,026) (9,216,091) 3,545,816 (696,872) 2,848,944 (4,663,341) 9,569,918 4,906,577	December 2011 $ 457,538 293,996 73,581 46,879 (65,974) (320,726) (89,230) (161,478) (4,950) (23,419)
		206,217
		29,910,455 (31,130,490)
		(1,220,035)
		- (535,609)
		(535,609)
		(1,549,427) 10,732,711
		9,183,284

The accompanying notes form part of these financial statements

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WAM ACTIVE LIMITED

A.B.N. 49 126 420 719

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2012

1. Statement of Significant Accounting Policies

Basis of Preparation

The half year financial statements are a general purpose financial statement prepared in accordance with the requirements of the Corporations Act 2001 , Australian Accounting Standards AASB 134: Interim Financial Reporting, Australian Accounting Interpretations and other authoritative pronouncements of the Australian Accounting Standards Board.

The financial report was authorised for issue on 21[st] February 2013 by the Board of Directors.

It is recommended that the half year financial report be read in conjunction with the Annual Financial Report for the year ended 30 June 2012 and any public announcements made by WAM Active Limited (“the Company”) during the half year in accordance with continuous disclosure requirements arising under the Corporations Act 2001.

The financial statements have been prepared on an accruals basis and are based on historical cost with the exception of financial assets and certain other financial assets and liabilities which have been measured at fair value.

The half year report does not include full disclosures of the type normally included in an annual financial report.

The accounting policies have been consistently applied by the Company and are consistent with those applied in the 30 June 2012 Annual Financial Report.

Details of Reporting Period

The current reporting period is the half year ended 31 December 2012. For the Statement of Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flows, the previous corresponding period is the half year ended 31 December 2011. For the Statement of Financial Position, the previous corresponding date is 30 June 2012.

2. Other Revenue Australian sourced dividends Interest Trust distributions Underwriting fees	December 2012 $ 1,886,343 176,575 114,623 665 2,178,206	December 2011 $ 440,127 271,573 54,734 (3,279)
		763,155

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WAM ACTIVE LIMITED A.B.N. 49 126 420 719

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2012

3. Dividends a) Ordinary dividends paid during the period Final Dividend FY2012: 4.5 cents per share fully franked at 30% tax rate paid on 19 October 2012 (Final dividend FY2011: 4.0 cents per share fully franked). b) Dividends not recognised during the period Since the end of the period the Directors have declared an interim fully franked dividend 4.75 cents per share payable on 19 April 2013 (Interim dividend FY2012: 4.5 cents per share fully franked) 4. Issued Capital (a) Paid-up Capital 19,767,646 ordinary shares fully paid (2011: 16,309,945) (b) Movement in Issued Capital Balance at the beginning of the reporting period 175,537 ordinary shares issued on 19 October 2012 under a dividend reinvestment plan 3,282,164 ordinary shares issued from the exercise of options allotted July 2012 to December 2012 exercise price $1.08 Options exercised at $1.08, not yet allotted at December 2012 109,560 ordinary shares issued on 30 September 2011 under a dividend reinvestment plan 133,732 ordinary shares issued on 24 April 2012 under a dividend reinvestment plan At reporting date	December 2012 $ 880,270 970,619 December 2012 $ 19,924,838 16,195,624 183,398 3,544,736 1,080 - - 19,924,838	December 2011 $ 642,666 727,930 June 2012 $ 16,195,624
		15,948,854 - - - 107,057 139,713
		16,195,624

(c) Options

At 30 June 2012, the Company had 16,309,945 options on issue to acquire fully paid ordinary shares, exercisable at $1.08 per option. During the half year, 3,283,164 options were exercised. 13,026,781 options remain unexercised and are due to expire on 12 December 2013.

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WAM ACTIVE LIMITED

A.B.N. 49 126 420 719

NOTES TO THE FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 31 DECEMBER 2012

5. Reserves Profits Reserve Balance at the beginning of the reporting period Transfer from retained earnings Final dividend FY2012 paid (refer Note 3a) Interim dividend FY2012 paid (refer Note 3b) At reporting date	December 2012 $ 1,331,155 1,109,373 (880,270) - 1,560,258	June 2012 $ 2,009,070 692,681 (642,666) (727,930)
		1,331,155

6. Retained Earnings Balance at the beginning of the reporting period Profit for the period attributable to members of the Company Transfer to profits reserve At reporting date	December 2012 $ (124,773) 1,109,373 (1,109,373) (124,773)	June 2012 $ 173,373 394,535 (692,681)
		(124,773)

7. Segment Reporting

The Company currently operates only in the investment industry within Australia. It has no reportable business or geographic segments.

8. Contingent Liabilities

There are no outstanding contingent liabilities as at 31 December 2012 (June 2012: nil)

9. Capital Commitments

There are no outstanding capital commitments as at 31 December 2012 (June 2012: nil).

10. Events Subsequent to Reporting Date

Since the end of the half year, the Directors declared a interim dividend of 4.75 cents per share fully franked to be paid on 19 April 2013.

No other matters have arisen since the end of the period which significantly affected or may significantly affect the operations of the Company, the results of the operations, or the state of affairs of the Company in future financial years.

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WAM ACTIVE LIMITE

A. B .N. 49 12 6 420 719 DIRECTOR’S DECLARATION FOR THE HALF YEAR ENDED 31 DECEMBER 2012

The Dir e ctors of W A M Active Li m ited declar e that:

1. The financial statements a nd notes, a s set out on pages 4 to 10, ar e in accor d ance with t he Cor p orations A c t 2001, including: a) Complying w ith Accounting Standar d AASB 134: Interim Fin a ncial Repor t ing and the Corporation s Re g ulations 20 0 1; and b) Giving a tru e and fair vi e w of the fin a ncial positi o n of the Co m pany as a t 31 Decem b er 2012 an d of its p erformanc e for the half year ended o n that date .

2. In t h e Directors’ opinion there are reas o nable grou n ds to believ e that the C o mpany will be able to p ay its d ebts as and when they b ecome due and payabl e .

Signed i n accordan c e with a res o lution of th e Board of Directors.

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Geoffre y Wilson Chairm a n

Dated a t Sydney thi s 21[st] day of February 2 0 13

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Level 7, 20 Hunter Street Sydney NSW 2000

T +61 (0)2 8236 7700 F +61 (0)2 9233 4636

www.moorestephens.com.au

INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF WAM ACTIVE LIMITED

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of WAM Active Limited (the company), which comprises the statement of financial position as at 31 December 2012, the income statement, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, a statement of significant accounting policies, other selected explanatory notes and the directors’ declaration.

Directors’ Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation and fair presentation of the half-year financial report in accordance with Australian Accounting Standards (including the 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 fraud or error.

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410: “Review of a Financial Report Performed by the Independent Auditor of the Entity”, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the company’s financial position as at 31 December 2012 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134: “Interim Financial Reporting” and the Corporations Regulations 2001 . As the auditor of WAM Active Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for the financial and accounting matters, and applying analytical and other review procedures. It also includes reading the other information included with the financial report to determine whether it contains any material inconsistencies with the financial report. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

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Moore Stephens Sydney ABN 90 773 984 843. Liability limited by a scheme approved under Professional Standards Legislation Other than for the acts or omissions of financial services licensees. An independent member of Moore Stephens International Limited - members in principal cities throughout the world The Sydney Moore Stephens firm is not a partner or agent of any other Moore Stephens firm.

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Independence

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

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of WAM Active Limited is not in accordance with the Corporations Act 2001 , including:

• (i) giving a true and fair view of the company’s financial position as at 31 December 2012 and of its performance for the half-year ended on that date; and

• (ii) complying with Accounting Standard AASB 134: “Interim Financial Reporting” and the Corporations Regulations 2001.

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Moore Stephens Sydney Chartered Accountants

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Scott Whiddett Partner

Dated in Sydney, this 21[st] day of February 2013.

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