For personal use only - ASX · Final dividend (declared on 25 August 2014 and paid on 3 October 2014) $0.07 $0.07 3. Net tangible assets Net tangible assets As at 31 December 2014

Appendix 4D Half-year Report

1

Blue Sky Alternative Investments Limited ACN 136 866 236


for the half-year ended 31 December 2014

__________________________________________________________

1. Details of the reporting period and the prior corresponding period

Current period: 1 July 2014 to 31 December 2014

Prior corresponding period: 1 July 2013 to 31 December 2013

2. Results for announcement to the market

Key information

6 months to 31 December

2014 $’000

6 months to 31 December

2013 $’000

Variance

(%)

Revenue from ordinary activities 25,279 8,151 210

Profit/(loss) from ordinary activities after tax attributable to members

2,490 (1,160) 315

Net profit/(loss) for the period attributable to members

2,490 (1,160) 315

Details of Distributions

Dividends per ordinary share Amount per

security

Franked amount per

security

Final dividend (declared on 25 August 2014 and paid on 3 October 2014)

$0.07 $0.07

3. Net tangible assets

Net tangible assets As at

31 December 2014As at

31 December 2013

Net tangible asset per security1 $1.0063 $0.7089

1 Under the Listing Rules NTA backing must be determined by deducting from total tangible assets all claims on those assets ranking ahead of the ordinary securities (i.e. all liabilities, preference shares, outside equity interest etc).

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4. Details of entities over which control has been gained or lost during the period

Refer to 2015 consolidated half-year report attached:

4.1 Note 17 to the consolidated half-year financial statements.

5. Details of Associates and Joint Venture entities

Refer to 2015 consolidated half-year report attached:

5.1 Note 8 to the consolidated half-year financial statements.

6. Accounting standards used by foreign entities

Not applicable.

7. Audit

This report is based on accounts to which one of the following applies:

The accounts have been audited (refer attached financial statements)

√ The accounts have been subject toreview.(refer attached financial statements)

The accounts are in the process of being audited or subject to review.

The accounts have not yet been audited or reviewed.

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Blue Sky Alternative Investments Limited

ACN 136 866 236

Interim consolidated report for the half-year ended 31 December 2014

Level 46, 111 Eagle Street, Brisbane QLD 4000 Postal Address: PO Box 15515, Brisbane QLD 4002

Telephone: +61 7 3270 7500 Facsimile: +61 7 3270 7599

Website: www.blueskyfunds.com.au

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Directors’ Report

For the half-year ended 31 December 2014

1

The Directors present their report for Blue Sky Alternative Investments Limited (‘Company’, ‘Blue Sky’ or ‘parent entity’) and the entities it controlled (the ‘Group’) for the half-year ended 31 December 2014.

Directors

The names of the Company's directors in office during the half-year and until the date of this report are set out below. Directors were in office for this entire period unless otherwise stated.

John Kain (Chair) Mark Sowerby Tim Wilson Alexander McNab

Principal Activities

The principal activities of the Company during the period consisted of managing alternative assets across four major alternative asset classes – Private Equity, Private Real Estate, Hedge Funds and Real Assets.

Operating and Financial Review

Financial performance and financial position – Underlying Results

Underlying Results 1 Consolidated Group Results2

1H FY15 1H FY14 1H FY15 1H FY14

Revenue $16.5m $7.2m $26.0m $8.2m

Net profit/(loss) after tax3 $2.6m $0.3m $2.5m ($1.2m)

Net tangible assets $49.1m $44.0m $56.7m $39.7m

Blue Sky’s financial performance is summarised in the table above. The Directors are pleased to report that the Company earned an underlying net profit after tax for the period of $2.6 million, up from $0.3 million in the previous corresponding period. Underlying revenue more than doubled from $7.2 million in 1H FY14 to $16.5 million in 1H FY15 reflecting the combination of Blue Sky’s track record of investment performance combined with a long term, structural shift towards alternative assets.

Operating expenses increased from $6.7 million in 1H FY14 to $12.7 million in 1H FY15. This increase reflects additional costs as the business scales, costs associated with strategic investments the Company has made (for example, expanding our presence in New York and developing the Blue Sky ‘Your Fingerprint’ investor portal) as well as $1.5 million in fee rebates in relation to the Blue Sky Alternatives Access Fund (ASX: BAF) during the period. With this fund now fully deployed, these fee rebates are not expected to be as significant in subsequent periods.

1 The Underlying Results are non-IFRS financial information and are based on all investments held by Blue Sky in funds that it manages being accounted for at fair value using the same approach as outlined in AASB 13 Fair Value Measurement (rather than being consolidated or accounted for using the equity method). The non-IFRS financial information has been subject to review by Blue Sky’s auditor (Ernst & Young).

2 The Consolidated Group Results reflect Blue Sky’s statutory Financial Report. They include a range of Blue Sky managed funds that have been consolidated or equity accounted following the adoption of the revised AASB 10 Consolidated Financial Statements.

3 Excludes non-controlling interests.

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Directors’ Report


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Net operating underlying cash flows for the period were $3.4 million and the Group’s underlying net tangible assets at 31 December 2014 were $49.1 million, of which $11.7 million was cash and $40.0 million was investments held in funds managed by Blue Sky.

The Directors anticipate that the Group’s underlying NPAT for the full FY15 year will be between $8.0 million and $10.0 million.

Financial performance and financial position – Consolidated Results

As highlighted in previous Financial Reports, following the adoption of the revised AASB 10 Consolidated Financial Statements accounting standard (‘AASB 10’), a broad range of the funds managed by the Group in which the Group holds investments are required to be either consolidated or accounted for using the equity method. Six funds are consolidated into the Group’s 1H FY15 statutory Financial Report and a further 27 funds are accounted for using the equity method.

In order to provide shareholders with meaningful insight into the financial position and performance of the Group, comparative tables have been provided (starting at page 23) that reconcile Blue Sky’s statutory Financial Report with Blue Sky’s underlying results. These underlying results are those that would be produced if Blue Sky reported all of its investments using the same principles of fair value that are included in AASB 13 Fair Value Measurement. These underlying results are non-IFRS financial information and have been subject to review by Blue Sky’s auditor (Ernst & Young).

The Group earned statutory revenue of $26.0 million and a statutory net profit after tax in 1H FY15 of $2.5 million3. These figures include revenue and profit from several of the funds that Blue Sky manages (and that it has invested in), including:

$3.5 million in revenue from the sale of water, reflecting income earned by funds managed by Blue Sky thathave invested in water infrastructure;

$2.2 million in revenue from management and letting rights as well as $1.3 million in revenue from moteloperations, reflecting income earned by funds managed by Blue Sky that have invested in asset backed,income generating property assets; and

$2.4 million in revenue from apartment sales, reflecting the sale of apartments from a fund managed by BlueSky that is managing a residential real estate development in Queensland.

Other than through Blue Sky’s proportionate ownership of units in these funds, this income is not attributable to the owners of the Group.

The Group’s statutory net tangible assets at 31 December 2014 were $56.7 million. As with the Group’s consolidated Income Statement, the Group’s Consolidated Statement of Financial Position reflects the assets and liabilities of several funds that Blue Sky manages and that it has invested in. For example, it includes:

$28.0 million in property, plant and equipment, which includes water infrastructure, land and buildings, andother property that is not owned directly by Blue Sky;

$18.8 million in intangible assets, which in part reflects the value of the management rights invested in byfunds that Blue Sky manages as well as customer contracts associated with the water infrastructure owned by funds managed by Blue Sky;

$14.1 million in current borrowings, which includes borrowings made by funds managed by Blue Sky that issecured against the assets in those funds and that is non-recourse to Blue Sky.

The Trend Towards Alternatives

Blue Sky’s strategy of building Australia’s leading diversified manager of alternative assets is underpinned by the size and growth of Australia’s funds management industry, as well as a long term trend towards increased allocations to alternative assets. Australia’s funds management industry now has $1.9 trillion under management and has grown at 9.6% per annum over the last 10 years.4 Within this market, Rainmaker estimates that allocations to the alternatives segment represent approximately $340 billion or 19% of the broader market. Over the last 12 months, allocations to alternatives have increased by approximately 35%. The data from Rainmaker on the following page reflects that this recent growth is part of a much longer term trend, with allocations to alternative assets in Australia having risen from

4 Rainmaker Information, December 2014

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approximately 5% in the late 1990s. The overall market, and particularly the alternatives segment, is anticipated to continue to grow over the next two decades underpinned by government mandated superannuation flows.

Figure 1: Australian asset class segment shares 1997 – 2034 (Source: Rainmaker Information, December 2014)

Capital Raising Activities

As previously reported, assets under management increased by approximately $340 million through the course of FY14 to over $700 million, reflecting Blue Sky’s increased deal flow activity, increased demand from private investors and further penetration of international markets, institutional investors and family offices. Our FY15 target was to increase assets under management to over $1 billion by 30 June 2015. The board remains confident we will meet or exceed this target in the coming months.

Investment performance

Investment returns across all asset classes since inception to the end of June 2014 were 14.8% per annum compounding net of fees. This eight year track record is a critical source of value to Blue Sky and its shareholders, and is a significant barrier to entry to new entrants looking to capitalise on the growth in alternative assets. The Group will release its updated investment performance in March 2015.

Blue Sky Alternatives Access Fund

The listing of Blue Sky Alternatives Access Fund Limited (ASX: BAF) in June 2014 was a critical achievement for the Company, as it provides a platform for retail and wholesale investors to gain a diversified exposure to our alternative asset investment opportunities. While it is still relatively early, the funds raised at IPO were deployed quickly (the fund was fully deployed at December 2014) and we are confident that the investment performance of the assets held by BAF will provide a strong source of both returns and diversification to shareholders in BAF.

Our strategy with BAF remains focused on producing strong investor returns and growing this fund so that it becomes the alternative asset ‘fund of choice’, especially for financial planners, private wealth advisors and self-managed super funds.F

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Rounding The amounts contained in this report and in the financial report have been rounded to the nearest $1,000 (unless otherwise stated) under the option available to the Company under ASIC Class Order 98/100. The Company is an entity to which the class order applies. Auditor’s independence declaration A copy of the auditor's independence declaration as required under section 307C of the Act is set out on the following page. This report is made in accordance with a resolution of Directors. On behalf of the Directors

___________________________ John Kain Chair 23 February 2015 Brisbane

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A member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards Legislation

Ernst & Young111 Eagle StreetBrisbane QLD 4000 AustraliaGPO Box 7878 Brisbane QLD 4001

Tel: +61 7 3011 3333Fax: +61 7 3011 3100ey.com/au

Auditor’s independence declaration to the directors of Blue Sky AlternativeInvestments Limited

In relation to our review of the financial report of Blue Sky Alternative Investments Limited for the half-year ended 31 December 2014, to the best of my knowledge and belief, there have been nocontraventions of the auditor independence requirements of the Corporations Act 2001 or anyapplicable code of professional conduct.

Ernst & Young

Paula McLuskiePartner23 February 2015

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Interim Report of Blue Sky Alternative Investments Limited


6

Page

Interim financial statements

Consolidated Statement of Comprehensive Income 7

Consolidated Statement of Financial Position 8

Consolidated Statement of Changes in Equity 9

Consolidated Statement of Cash Flows 10

Notes to the Consolidated Financial Statements 11

Directors' Declaration 20

Independent Auditor's Review Report to the shareholders 21

Appendix A to the Directors’ Report: Reconciliation of Statutory Profit to Underlying Earnings 23 General information The financial report covers Blue Sky Alternative Investments Limited (‘Company’ or ‘parent entity’) as a consolidated entity consisting of the Company and the entities it controlled (the ‘Group’). The interim financial statements are presented in Australian dollars, which is the Company’s functional and presentation currency. The interim financial statements consist of the financial statements and notes to the financial statements. The Company is a publicly listed company limited by shares, incorporated and domiciled in Australia. Its registered office and principal place of business is: Level 46, 111 Eagle Street Brisbane QLD 4000 The financial report was authorised for issue, in accordance with a resolution of Directors, on the date that the Directors’ Declaration was signed. The Directors have the power to amend and reissue the financial report.

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Interim Consolidated Statement of Comprehensive Income


7

Half-year ended

31 December

2014 31 December

2013

Notes $’000 $’000

Revenue

Operating revenue 3 25,279 8,151

Share of profit/(loss) of associates accounted for using the equity method

373 85

Other Income 374 -

Expenses

Employee benefits expense (6,937) (3,722)

Depreciation and amortisation expense (1,121) (681)

Consultancy (205) (438)

External service providers (1,400) (1,312)

Distribution (773) (339)

Marketing (538) (215)

Occupancy (592) (283)

Administrative (801) (470)

Travel & entertainment (951) (340)

Other expenses 4 (8,880) (3,128)

Finance costs (364) (269)

Profit/(loss) before income tax 3,464 (2,961)

Income tax (expense)/benefit 5 (1,225) 65

Profit/(loss) after income tax for the half-year 2,239 (2,896)

Other comprehensive income

Items that may be reclassified subsequently to the profit or loss

Other comprehensive income - net of tax - -

Total comprehensive income/(loss) for the half-year 2,239 (2,896)

Profit/(loss) for the half-year is attributable to:

Non-controlling interest (251) (1,736)

Owners of Blue Sky Alternative Investments Limited 2,490 (1,160)

2,239 (2,896)

Total Comprehensive income/(loss) for the half-year is attributable to:

Non-controlling interest (251) (1,736)

Owners of Blue Sky Alternative Investments Limited 2,490 (1,160)

2,239 (2,896)

Earnings per share Cents Cents

Basic earnings per share (profit/(loss) per share) 16 4.42 (3.00)

Diluted earnings per share (profit/(loss) per share) 16 4.38 (3.00)

The above statement of comprehensive income should be read in conjunction with the accompanying notes.

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Interim Consolidated Statement of Financial Position

As at 31 December 2014

8

As at

31 December2014

30 June2014

Notes $’000 $’000

Assets

Current assets

Cash and cash equivalents 12,344 16,278

Trade and other receivables 6 18,854 13,377

Inventory 7 5,639 3,052

Other assets 1,498 1,543

Total current assets 38,335 34,250

Non-current assets

Receivables 3,338 4,086

Inventory 7 1,569 1,531

Investments accounted for using the equity method 8 26,518 25,210

Financial assets at fair value through profit and loss 9 175 180

Property, plant and equipment 10 28,047 28,038

Intangible assets 11 18,840 18,943

Deferred tax assets 170 40

Total non-current assets 78,657 78,028

Total assets 116,992 112,278

Liabilities

Current liabilities

Trade and other payables 7,450 4,553

Current borrowings 12 14,130 10,870

Deferred revenue 13 2,863 2,208

Income tax 1,968 1,369

Employee benefits 2,450 1,069

Total current liabilities 28,861 20,069

Non-current liabilities

Deferred revenue 13 2,021 2,201

Provisions 236 105

Non-current borrowings 12 3,329 3,334

Other non-current liabilities 502 502

Deferred tax liabilities 6,539 7,034

Total non-current liabilities 12,627 13,176

Total liabilities 41,488 33,245

Net assets 75,504 79,033

Equity

Contributed equity 53,087 53,087

Reserves 14 (6,948) (7,048)

Accumulated profits/(losses) 15 3,735 5,187

Equity attributable to the owners of Blue Sky Alternative Investments Limited

49,874 51,226

Non-controlling interests 25,630 27,807

Total equity 75,504 79,033

The above statement of financial position should be read in conjunction with the accompanying notes.

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Interim Consolidated Statement of Changes in Equity


9

Contributed equity Reserves Accumulated

profits/(losses) Non-controlling

interests Total equity

$’000 $’000 $’000 $’000 $’000

Balance at 1 July 2014 53,087 (7,048) 5,187 27,807 79,033

Profit/(loss) after income tax for the half-year - - 2,490 (251) 2,239

Other comprehensive income for the half-year, net of tax - - - - -

Total comprehensive income/(loss) for the half- year - - 2,490 (251) 2,239

Transactions with owners in their capacity as owners:

Contributions of equity, net of transaction costs - - - - -

Share based payments - 100 - - 100

Increase/(decrease) in NCI - - - (1,805) (1,805)

Dividends - - (3,942) (121) (4,063)

Balance at 31 December 2014 53,087 (6,948) 3,735 25,630 75,504

Balance at 1 July 2013 18,677 (7,104) 3,174 2,222 16,969

Profit/(loss) after income tax for the half-year - - (1,160) (1,736) (2,896)

Other comprehensive income for the half-year, net of tax - - - - -

Total comprehensive income/(loss) for the half-year - - (1,160) (1,736) (2,896)

Transactions with owners in their capacity as owners:

Contributions of equity, net of transaction costs 33,795 - - - 33,795

Increase/(decrease) in NCI - - - 26,464 26,464

Dividends - - (2,339) (120) (2,459)

Balance at 31 December 2013 52,472 (7,104) (325) 26,830 71,873

The above statement of changes in equity should be read in conjunction with the accompanying notes.

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Interim Consolidated Statement of Cash Flows


10

Half-year ended

31 December

2014 31 December

2013

$’000 $’000

Cash flows from operating activities

Receipts from customers (inclusive of GST) 21,535 8,580

Payments to suppliers and employees (inclusive of GST) (21,887) (13,965)

(352) (5,385)

Interest received 60 110

Interest and other finance costs paid (214) (238)

Income taxes paid (1,176) (880)

Net cash used in operating activities (1,682) (6,393)

Cash flows from investing activities

Payment for acquisition of controlled entity, net of cash acquired - (25,905)

Cash acquired on purchase of controlled entity, net of cash payment for acquisition

- 1,557

Cash disposed on de-consolidation of a controlled entity (1,261) -

Payments for investments (916) (7,711)

Payments for property, plant and equipment (561) (2,864)

Payments for intangible assets (143) (5,085)

Loans from/(to) related and other parties (1,396) -

Net cash used in investing activities (4,277) (40,008)

Cash flows from financing activities

Proceeds from issue of shares - 31,369

Share issue transaction costs - (72)

Proceeds from issue of units to non-controlling interests 1,188 23,582

Proceeds from borrowings 8,835 15,105

Repayment of borrowings (3,936) (1,420)

Payment of finance lease and hire purchase liabilities - (30)

Dividends paid (4,062) (2,339)

Distributions paid to non-controlling interests in controlled entities - (120)

Net cash from financing activities 2,025 66,075

Net increase/(decrease) in cash and cash equivalents

(3,934) 19,674

Cash and cash equivalents at the beginning of the half-year 16,278 6,556

Cash and cash equivalents at the end of the half-year 12,344 26,230

The above statement of cash flows should be read in conjunction with the accompanying notes.

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Notes to the Consolidated Financial Statements


11

Note 1. Significant accounting policies

These interim financial statements for the half-year ended 31 December 2014 have been prepared in accordance with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001. These interim financial statements do not include all the information and disclosures required in the annual financial statements. Accordingly, these financial statements are to be read in conjunction with the annual report for the year ended 30 June 2014 and any public announcements made by the Company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001. The accounting policies applied in these interim financial statements are the same as those applied in the Company’s annual financial statements as at and for the year ended 30 June 2014.The Company has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective. New standards and amendments to standards that are mandatory for the first time for the new financial year beginning 1 July 2014 have not affected any of the amounts recognised in the current period or any prior period, are not likely to affect future periods. Note 2. Operating segments Identification of reportable operating segments The Group has one core operating segment: Alternative Asset Management. This operating segment is based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers (‘CODM‘)) in assessing performance and in determining the allocation of resources. There is no aggregation of operating segments. The CODM review both adjusted earnings before interest, tax, depreciation and amortisation (segment result) and net profit after income tax (segment result). The information reported to the CODM is on at least a monthly basis. Following the application of AASB 10 Consolidated Financial Statements, the Group has consolidated the various funds where control exists. These funds are the non-core segments. The management and performance of these entities is currently not being reviewed at an operating segment level by the CODM in the same manner at which the core operating segment is reviewed. However, the management and performance of these entities is reviewed regularly by the appropriate Investment Manager. Types of products and services The principal products and services of the core operating segment is Alternative Asset Management. Half-year ended 31 December 2014

Core segment Non-core segment Adjustments and Eliminations

Consolidated

$’000 $’000 $’000 $’000

Revenue 16,517 10,148 (639) 26,026

Profit/(loss) after income tax 2,576 142 (479) 2,239

Half-year ended 31 December 2013


Consolidated

$’000 $’000 $’000 $’000

Revenue 7,190 3,167 (2,121) 8,236

Profit/(loss) after income tax 323 (1,933) (1,286) (2,896)

As at 31 December 2014


Consolidated

$’000 $’000 $’000 $’000

Total assets 78,590 60,908 (22,506) 116,992

Total liabilities 23,896 22,709 (5,117) 41,488

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Notes to the Consolidated Financial Statements (cont’d)


12

Note 2. Operating segments (cont’d) As at 30 June 2014


Consolidated

$’000 $’000 $’000 $’000

Total assets 74,522 57,741 (19,985) 112,278

Total liabilities 18,564 19,080 (4,399) 33,245

Note 3. Operating revenue

Half-year ended

31 December 2014

31 December2013

$’000 $’000

Management fees 10,900 3,684

Administration fees 23 22

Responsible entity and trustee fees 767 360

Performance fees 1,872 636

Sales commissions 621 137

Apartment sales revenue 2,373 -

Supply of water 3,538 1,045

Management and letting rights revenue 2,176 2,062

Revenue from motel operations 1,271 -

Interest revenue 669 112

Other revenue 1,069 93

Total operating revenue 25,279 8,151

Total revenue from related parties for the half-year ended 31 December 2014 was $15,733,317 (31 December 2013: $4,935,799).

Note 4. Other expenses

Half-year ended

31 December 2014

31 December2013

$’000 $’000

Costs associated with supply of water (802) (339)

Costs associated with apartment sales (2,352) -

Management and letting rights expenses (2,165) (1,858)

Rebates of transaction costs and establishment fees - BSAAF Ltd (1,562) -

Insurance (137) (92)

Fund establishment expenses (1,499) (671)

Expenses from motel operations (277) -

Other (86) (168)

Total other expenses (8,880) (3,128)

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Note 5. Income tax (expense) / benefit The Group calculates the income tax expense using the tax rate that would be applicable to expected total annual earnings i.e. the estimated average annual effective income tax rate applied to the pre-tax income of the current period. The major components of income tax expense in the interim consolidated statement of comprehensive income for the period are detailed below.

Half-year ended

31 December 2014

31 December 2013

$’000 $’000

Income tax (expense)/benefit

Current tax (1,249) 59

Deferred tax 24 6

Aggregate income tax (expense)/benefit (1,225) 65

Note 6. Trade and other receivables

As at

31 December 2014

30 June 2014

$’000 $’000

Trade receivables 2,627 1,276

Other receivables 3,278 4,830

Performance fee receivable 2,960 971

Related party receivable1 9,989 6,300

Total current trade and other receivables 18,854 13,377

1 A significant portion of this balance relates to bridging finance provided to Blue Sky managed funds. Note 7. Inventory As at

31 December 2014

30 June 2014

$’000 $’000

Current

Cost of land acquisition 668 812

Development and other costs 4,662 1,959

Interest capitalised 309 281

Total current inventory 5,639 3,052

Non-current

Cost of land acquisition 598 598

Development and other costs 765 759

Interest capitalised 206 174

Total non-current inventory 1,569 1,531

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Note 8. Investments accounted for using the equity method

As at

31 December 2014

30 June 2014

$’000 $’000

Blue Sky Private Equity Retirement Village Fund 5,641 5,669

Blue Sky Private Equity Software Services Fund 5,358 5,065

Blue Sky Water Fund 5,048 4,987

Blue Sky Alternatives Access Fund Limited 5,030 4,959

Other investments accounted for using the equity method 5,441 4,530

Total investments accounted for using the equity method 26,518 25,210

Note 9. Financial assets at fair value through profit and loss

Fair value of financial instruments The Group classifies the fair value measurements of financial assets and financial liabilities using the three level fair value hierarchy set out below, to reflect the source of valuation inputs when determining the fair value: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2: 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 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs). Fair value of unquoted available-for-sale financial assets is estimated using appropriate valuation techniques. The table below presents the fair value measurement hierarchy of the Group’s financial assets:

As at 31 December 2014 Level 1 Level 2 Level 3 Total

$’000 $’000 $’000 $’000

Assets

Options in listed securities - 175 - 175

Total assets - 175 - 175

As at

31 December 2014

30 June 2014

$’000 $’000

Blue Sky Alternatives Access Fund Limited (Options) 175 180

Total financial assets at fair value through profit and loss 175 180

As at 30 June 2014

Level 1 Level 2 Level 3 Total

$’000 $’000 $’000 $’000

Assets

Options in listed securities - 180 - 180

Total assets - 180 - 180

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Note 9. Financial assets at fair value through profit and loss (cont’d)

Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. The carrying amounts of trade and other receivables and trade and other payables are assumed to approximate their fair value given the short term nature. Note 10. Property, plant and equipment As at

31 December 2014

30 June 2014

$’000 $’000

Land and buildings – at cost 1,913 1,913

Less: Accumulated depreciation (91) (63)

1,822 1,850

Plant and equipment – at cost 27,607 26,872

Less: Accumulated depreciation (2,012) (1,131)

25,595 25,741

Motor vehicles – at cost 120 71


111 36

Motor vehicles – under lease 50 50


12 14

Office equipment – at cost 791 632


490 377

Office equipment – under lease 119 119


17 20

Total property, plant and equipment 28,047 28,038

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Note 11. Intangible assets As at

31 December 2014

30 June 2014

$’000 $’000

Goodwill - at cost 13,020 13,020

Less: Impairment (190) (190)

12,830 12,830

Licenses and trademarks 11 11

Less: Accumulated amortisation - -

11 11

Management rights – at cost 5,985 5,985

Less: Accumulated amortisation (245) (138)

5,740 5,847

Borrowing – at cost 18 18


9 12

Website – at cost 83 41


40 3

Software – at cost 1,068 288


210 240

Total intangible assets 18,840 18,943

Note 12. Borrowings As at

31 December 2014

30 June 2014

$’000 $’000

Current

Bank loans 11,336 7,015

Other borrowings 2,778 3,833

Lease liability 16 22

Total current borrowings 14,130 10,870

Non-current

Bank loans 3,323 3,321

Other borrowings - 13

Lease liability 6 -

Total non-current borrowings 3,329 3,334

Borrowings include debt in relation to the Blue Sky Private Real Estate Riverside Gardens Trust and the Blue Sky RAMS Management Rights Income Fund 2. This debt is non-recourse and is guaranteed by the respective trusts, with no recourse to Blue Sky Alternative Investments Limited or its 100% controlled subsidiaries. Further, the above amounts are reflective of the fair value of the borrowings.

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17

Note 13. Deferred revenue As at

31 December 2014

30 June 2014

$’000 $’000

Current

Unearned income 2,555 2,208

Payments in advance for sale of water 308 -

2,863 2,208

Non-current

Unearned income 1,441 961

Payments in advance for sale of water 580 1,240

2,021 2,201

Note 14. Equity - reserves

As at

31 December 2014

30 June 2014

$’000 $’000

Capital reserve (7,436) (7,436)

Share-based payments reserve 332 332

Employee share options reserve 156 56

(6,948) (7,048)

Note 15. Retained profits

As at

31 December 2014

30 June 2014

$’000 $’000

Retained profits/(accumulated losses) at the beginning of the financial year 5,187 3,663

Profit/(loss) after income tax for the period 2,490 3,863

Dividend (3,942) (2,339)

Retained profits/(accumulated losses) at the end of the period 3,735 5,187

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18

Note 16. Earnings per share

Half-year ended

31 December 2014

31 December2013

$’000 $’000

Profit/(loss) after income tax 2,239 (2,896)

Non-controlling interest 251 1,736

Total earnings 2,490 (1,160)

Number Number

Weighted average number of ordinary shares used in calculating basic earnings per share

56,308,360 38,685,347

Weighted average number of ordinary shares and ordinary shares under option used in calculating diluted earnings per share

56,809,602 38,685,347

Cents Cents

Basic earnings per share 4.42 (3.00)

Diluted earnings per share 4.38 (3.00)

Note 17. Information relating to subsidiaries The consolidated interim half-year financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described in Note 1. Equity holding

Name of entity Principal place of business

31 December 2014

30 June 2014

% %

Blue Sky Private Equity Ltd Australia 100% 100%

BSPE Pty Ltd Australia 100% 100%

Blue Sky Private Real Estate Pty Ltd Australia 100% 100%

Blue Sky Residential Asset Managers Pty Ltd Australia 100% 100%

Blue Sky Apeiron Pty Ltd Australia 100% 100%

Blue Sky Water Partners Pty Ltd Australia 100% 100%

BSAI International Pty Ltd Australia 100% 100%

BSVC Pty Ltd Australia 100% 100%

Blue Sky VC GP Pty Ltd Australia 100% 100%

Blue Sky Alternative Investment LLC USA 100% 100%

Blue Sky Investment Science Pty Ltd Australia 100% 100%

Blue Sky Investment Science Asset Management Pty Ltd Australia 100% 100%

Blue Sky SRA Alliance Pty Ltd Australia 100% 100%

BSPE SPV 1 Pty Ltd Australia 100% -

BSPE SPV 2 Pty Ltd Australia 100% -

Blue Sky Commercial Asset Managers Pty Ltd Australia 100% -

Blue Sky Residential Development Managers Pty Ltd Australia 100% -

BSPRE Investment Management Pty Ltd Australia 100% -

Mackay Opco Pty Ltd Australia 100% -

Riverside Gardens Trust Australia 48% 48%

Water Utilities Australia Fund Australia 50% 50%

Water Utilities Australia Fund 2 Australia 23% 40%

Blue Sky RAMS Management Rights Income Fund 2 Australia 33% 33%

Blue Sky Mezzanine Fund 4 Australia 37% 37%

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19

Note 17. Information relating to subsidiaries (cont’d) During the half-year ended 31 December 2014, the Group incorporated six 100% owned subsidiaries, five of which are either Trustee companies or new investment management companies. In relation to Mackay Opco Pty Ltd, this was incorporated for the purpose of acquiring and operating a motel business which operates on the freehold land and buildings owned by a related party of the Group, the Residential Asset Income Fund 1. In relation to Water Utilities Australia Fund 2, the Group was considered to have lost control of the fund during the half-year as a result of an investment into the fund by a related party of the Group, the Blue Sky Alternatives Access Fund Limited. As such, the Water Utilities Australia Fund 2 was deconsolidated during the half-year, and is held as an investment accounted for using the equity method at 31 December 2014. Note 18. Events occurring after the reporting date There are no subsequent events after the reporting date.

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Directors’ Declaration


20

In accordance with a resolution of the Directors of the Company, the Directors declare that: 1. the financial statements and notes, as set out on pages 6 to 19:

a. comply with the Corporations Act 2001, Australian Accounting Standard AASB 134 Interim Financial Reporting, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

b. give a true and fair view of the consolidated entity’s financial position as at 31 December 2014 and of the performance for the half-year ended on that date;

2. in the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

On behalf of the Directors

__________________________________ John Kain Chair 23 February 2015 Brisbane

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Ernst & Young111 Eagle StreetBrisbane QLD 4000 AustraliaGPO Box 7878 Brisbane QLD 4001

Tel: +61 7 3011 3333Fax: +61 7 3011 3100ey.com/au

To the members of Blue Sky Alternative Investments Limited

Report on the half-year financial reportWe have reviewed the accompanying half-year financial report of Blue Sky Alternative InvestmentsLimited, which comprises the statement of financial position as at 31 December 2014, the statementof comprehensive income, statement of changes in equity and statement of cash flows for the half-yearended on that date, notes comprising a summary of significant accounting policies and otherexplanatory information, and the directors’ declaration of the consolidated entity comprising thecompany and the entities it controlled at the half-year end or from time to time during the half-year.

Directors’ responsibility for the half-year financial reportThe directors of the company are responsible for the preparation of the half-year financial report thatgives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act2001 and for such internal controls as the directors determine are necessary to enable the preparationof the half-year financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s responsibilityOur responsibility is to express a conclusion on the half-year financial report based on our review. Weconducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to statewhether, on the basis of the procedures described, we have become aware of any matter that makes usbelieve that the financial report is not in accordance with the Corporations Act 2001 including: giving atrue and fair view of the consolidated entity’s financial position as at 31 December 2014 and itsperformance for the half-year ended on that date; and complying with Accounting Standard AASB 134Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Blue SkyAlternative Investments Limited and the entities it controlled during the half-year, ASRE 2410 requiresthat 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 responsiblefor financial and accounting matters, and applying analytical and other review procedures. A review issubstantially less in scope than an audit conducted in accordance with Australian Auditing Standardsand consequently does not enable us to obtain assurance that we would become aware of all significantmatters that might be identified in an audit. Accordingly, we do not express an audit opinion.

IndependenceIn conducting our review, we have complied with the independence requirements of the CorporationsAct 2001. We have given to the directors of the company a written Auditor’s IndependenceDeclaration, a copy of which is included in the Directors’ Report.

ConclusionBased on our review, which is not an audit, we have not become aware of any matter that makes usbelieve that the half-year financial report of Blue Sky Alternative Investments Limited is not inaccordance with the Corporations Act 2001, including:F

or p

erso

nal u

se o

nly


a) Giving a true and fair view of the consolidated entity’s financial position as at 31 December 2014and of its performance for the half-year ended on that date; and

b) Complying with Accounting Standard AASB 134 Interim Financial Reporting and the CorporationsRegulations 2001.

Ernst & Young

Paula McLuskiePartnerBrisbane23 February 2015

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Appendix A

23

1H FY15: Reconciliation of Consolidated Statement of Comprehensive Income with Underlying Results

In AUD $Ms

Consolidated Statement of Comprehensive Income

(‘Statutory Profit’)

Impact where investments are

consolidated or equity accounted rather than reported at fair value

Underlying Results

Revenue

Operating Revenue $25.2m -$9.8m $15.4m

Share of gain/(loss) of associates accounted for using the equity method $0.4m -$0.4m -

Other income $0.4m $0.7m $1.1m

Total revenue $26.0m -$9.5m $16.5m

Expenses

Employee benefits expense -$6.9m $1.9m -$5.0m

Fee rebates to BSAAF Limited -$1.5m - -$1.5m

Depreciation and amortisation expense -$1.1m $1.0m -$0.1m

Finance costs -$0.4m $0.1m -$0.3m

Other expenses -$12.7m $6.9m -$5.8m

Total expenses -$22.6m $9.9m -$12.7m

Profit/(loss) before income tax $3.4m $0.4m $3.8m

Income tax (expense)/benefit -$1.2m - -$1.2m

Profit/(loss) after income tax for the period $2.2m $0.4m $2.6m

Total comprehensive income/(loss) for the period $2.2m $0.4m $2.6m

Profit/(loss) attributable to:

Non-controlling interests -$0.3m $0.3m -

Owners of Blue Sky Alternative Investments Limited $2.5m $0.1m $2.6m For

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Appendix A

24

1H FY15: Reconciliation of Consolidated Statement of Financial Position with Underlying Results

In AUD $Ms Consolidated

Statement of Financial Position



Underlying Results

Current Assets

Cash and cash equivalents $12.3m -$0.6m $11.7m

Trade and other receivables $18.9m -$2.4m $16.5m

Inventory $5.6m -$5.6m -

Other assets $1.5m -$0.5m $1.0m

Total current assets $38.3m -$9.1m $29.2m

Non-current assets -

Receivables $3.3m -$0.3m $3.0m


Investments accounted for using the equity method $26.6m -$26.6m -

Financial assets at fair value through profit and loss $0.2m $39.8m $40.0m

Property, plant and equipment $28.0m -$27.4m $0.6m

Intangible assets $18.8m -$13.2m $5.6m

Deferred tax assets $0.2m - $0.2m

Total non-current assets $78.7m -$29.3m $49.4m

Total assets $117.0m -$38.4m $78.6m

-

Current Liabilities -

Trade and other payables $7.4m -$1.2m $6.2m

Borrowings $14.1m -$7.0m $7.1m

Deferred revenue $2.9m -$0.3m $2.6m

Income tax $2.0m -$0.7m $1.3m

Employee benefits $2.5m -$0.4m $2.1m

Total current liabilities $28.9m -$9.6m $19.3m

Non-current liabilities -

Provisions $0.3m -$0.1m $0.2m



Other non-current liabilities $0.5m $0.6m $1.1m

Deferred tax liabilities $6.5m -$4.7m $1.8m

Total non-current liabilities $12.6m -$8.0m $4.6m

Total liabilities $41.5m -$17.6m $23.9m

-

Net assets $75.5m -$20.8m $54.7m

-

Equity -

Contributed equity $53.1m - $53.1m

Reserves ($6.9m) - ($6.9m)

Accumulated profits/(losses) $3.7m $4.8m $8.5m

Non-controlling interests $25.6m -$25.6m -

Total equity attributable to the owners of Blue Sky $75.5m -$20.8m $54.7m

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Appendix A

25

1H FY15: Reconciliation of Consolidated Statement of Cash Flow with Underlying Results In AUD $Ms

Consolidated Statement of Cash

Flow


consolidated rather than reported at fair

value

Underlying Results


Receipts from customers (inclusive of GST) $21.5m -$5.4m $16.1m

Payments to suppliers and employees (inclusive of GST) -$21.9m $10.2m -$11.7m

Interest received $0.1m - $0.1m

Interest and other finance costs paid -$0.2m $0.1m -$0.1m

Income taxes paid -$1.2m $0.2m -$1.0m

Net cash used in operating activities -$1.7m $5.1m $3.4m

Cash flow from investing activities

Payment for acquisition of controlled entity, net of cash acquired - - -

Cash disposed on de-consolidation of a controlled entity -$1.3m $1.3m -

Payment for investments -$0.9m - -$0.9m

Payment for property, plant and equipment -$0.6m $0.3m -$0.3m

Payments for intangible assets -$0.1m - -$0.1m

Proceeds from disposal of subsidiary, net of cash transferred - - -

Loans from/(to) related and other parties -$1.4m $0.3m -$1.1m

Net cash used in investing activities -$4.3m $1.9m -$2.4m

Cash flow from financing activities

Proceeds from issue of shares - - -

Share issue transaction costs - - -

Proceeds from issue of units to non-controlling interests $1.2m -$1.2m -

Proceeds from borrowings $8.8m -$5.1m $3.7m

Loans (to)/from related parties -$3.9m - -$3.9m

Payment of finance lease and hire purchase liabilities - - -

Dividends paid -$4.0m $0.1m -$3.9m

Distributions paid to non-controlling interests in controlled entities - - -

Net cash from financing activities $2.1m -$6.2m -$4.1m

Net increase/(decrease) in cash and cash equivalents -$3.9m $0.8m -$3.1m

Cash and cash equivalents at the beginning of the half-year $16.2m -$1.4m $14.8m

Cash and cash equivalents at the end of the half-year $12.3m -$0.6m $11.7m

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Appendix A

26

1H FY14: Reconciliation of Consolidated Statement of Comprehensive Income with Underlying Results

In AUD $Ms

Consolidated Statement of Comprehensive Income

(‘Statutory Profit’)

Impact where investments are consolidated or equity

accounted rather than reported at fair value

Underlying Results

Revenue

Operating Revenue $8.1m -$1.6m $6.5m

Share of gain/(loss) of associates accounted for using the equity method $0.1m -$0.1m -

Other income - $0.7m $0.7m

Total revenue $8.2m -$1.0m $7.2m

Expenses

Employee benefits expense -$3.7m $0.9m -$2.8m

Fee rebates to BSAAF Limited - - -

Depreciation and amortisation expense -$0.7m $0.5m -$0.2m

Finance costs -$0.3m $0.1m -$0.2m

Other expenses -$6.5m $3.0m -$3.5m

Total expenses -$11.2m $4.5m -$6.7m

Profit/(loss) before income tax -$3.0m $3.5m $0.5m

Income tax (expense)/benefit 0.1m -$0.3m -$0.2m

Profit/(loss) after income tax for the period -$2.9m $3.2m $0.3m

Total comprehensive income/(loss) for the period -$2.9m $3.2m $0.3m

Profit/(loss) attributable to:

Non-controlling interests -$1.7m $1.7m -

Owners of Blue Sky Alternative Investments Limited -$1.2m $1.5m $0.3m

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Appendix A

27

Full year FY14: Reconciliation of Consolidated Statement of Financial Position with Underlying Results

In AUD $Ms

Consolidated Statement of Financial

Position



Underlying Results

Current Assets

Cash and cash equivalents $16.3m -$1.5m $14.8m

Trade and other receivables $13.4m -$5.2m $8.2m


Other assets $1.5m -$0.7m $0.8m

Total current assets $34.3m -$10.5m $23.8m

Non-current assets

Receivables $4.1m $1.5m $5.6m


Investments accounted for using the equity method $25.2m -$25.2m -

Financial assets at fair value through profit and loss $0.2m $38.9m $39.1m

Property, plant and equipment $28.0m -$27.6m $0.4m

Intangible assets $18.9m -$13.3m $5.6m

Deferred tax assets $0.1m -$0.1m -

Total non-current assets $78.0m -$27.3m $50.7m

Total assets $112.3m -$37.8m $74.5m

Current Liabilities

Trade and other payables $4.6m -$1.2m $3.4m


Deferred revenue $2.2m - $2.2m

Income tax $1.4m -$0.4m $1.0m

Employee benefits $1.1m -$0.1m $1.0m

Total current liabilities $20.2m -$5.6m $14.6m

Non-current liabilities


Provisions $0.1m - $0.1m

Borrowings $3.3m -$3.3m -

Other non-current liabilities $0.5m $0.6m $1.1m

Deferred tax liabilities $7.0m -$5.2m $1.8m

Total non-current liabilities $13.1m -$9.1m $4.0m

Total liabilities $33.3m -$14.7m $18.6m

Net assets $79.0m -$23.1m $55.9m

Equity

Contributed equity $53.1m - $53.1m

Reserves -$7.1m - -$7.1m

Accumulated profits/(losses) $5.2m $4.7m $9.9m

Total equity attributable to the owners of Blue Sky $51.2m $4.7m $55.9m

Non-controlling interest $27.8m -$27.8m -

Total Equity $79.0m -$23.1m $55.9m

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Appendix A

28

1H FY14: Reconciliation of Consolidated Statement of Cash Flow with Underlying Results

In AUD $ Ms

Consolidated Statement of Cash

Flow


consolidated rather than reported at fair

value

Underlying Results


Receipts from customers (inclusive of GST) $8.6m -$2.1m $6.5m

Payments to suppliers and employees (inclusive of GST) -$14.0m $8.0m -$6.0m

Interest received $0.1m - $0.1m

Interest and other finance costs paid -$0.2m $0.1m -$0.1m

Income taxes paid -$0.9m - -$0.9m

Net cash used in operating activities -$6.4m $6.0m -$0.4m

Cash flow from investing activities

Payment for acquisition of controlled entity, net of cash acquired -$25.9m $25.9m -

Cash acquired on purchased of controlled entity, net of cash payment for acquisition

$1.6m -$1.5m $0.1m

Payment for investments -$7.7m -$5.6m -$13.3m

Payment for property, plant and equipment -$2.9m $2.5m -$0.4m

Payments for intangible assets -$5.1m $5.0m -$0.1m

Proceeds from disposal of subsidiary, net of cash transferred - - -

Loans from/(to) related and other parties - - -

Net cash used in investing activities -$40.0m $26.3m -$13.7m

Cash flow from financing activities

Proceeds from issue of shares $31.4m - $31.4m

Share issue transaction costs - - -

Proceeds from issue of units to non-controlling interests $23.5m -$23.5m -

Proceeds from borrowings $15.1m -$8.1m $7.0m

Loans (to)/from related parties -$1.4 m -$1.0m -$2.4m

Payment of finance lease and hire purchase liabilities - - -

Dividends paid -$2.4m - -$2.4m

Distributions paid to non-controlling interests in controlled entities -$0.1m $0.1m -

Net cash from financing activities $66.1m -$32.5m $33.6m

Net increase/(decrease) in cash and cash equivalents $19.7m -$0.2m $19.5m

Cash and cash equivalents at the beginning of the half-year $6.5m -$1.0m $5.5m

Cash and cash equivalents at the end of the half-year $26.2m -$1.2m $25.0m

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Documents

For personal use only - ASX · Final dividend (declared on 25 August 2014 and paid on 3 October 2014) $0.07 $0.07 3. Net tangible assets Net tangible assets As at 31 December 2014