Balmain _MMT_ Mortgage Trust

Document Sample
Balmain _MMT_ Mortgage Trust Powered By Docstoc
					??




Balmain (MMT) Mortgage Trust
Annual Financial Report
Year Ended 30 June 2009




Balmain (MMT) Mortgage Trust
(formerly known as Mariner Mortgage Trust)
ARSN 107 891 967
Contents
Message from the CEO                                                                                        3
Chairman’s Address                                                                                          5
Directors’ report                                                                                           6
Lead auditor’s independence declaration                                                                   12
Income Statement                                                                                          13
Statement of changes in equity                                                                            13
Balance Sheet                                                                                             14
Statement of cash flows                                                                                   15
Notes to the financial statements                                                                         16
Directors’ declaration                                                                                    33
Independent audit report                                                                                  34




Level 14, 60 Castlereagh Street, Sydney NSW 2000
GPO Box 3570, Sydney NSW 2001
tel 02 9232 8888
fax 02 9232 8588
free 1800 225 624
www.balmainfunds.com.au

Balmain Fund Administration Limited ABN 98 134 526 604
Australian Financial Services Licence No: 333213
Responsible Entity for the Balmain (MMT) Mortgage Trust (ARSN 107 891 967)




                                                                          Balmain (MMT) Mortgage Trust
                                                   (formerly known as Mariner Mortgage Trust) ARSN 107 891 967
2                                                                             Annual Financial Report 2009
Message from the CEO
Dear Investor,

I am pleased to present the sixth annual report for the Balmain (MMT) Mortgage Trust (the
Trust), formerly the Mariner Mortgage Trust, for the financial year ending 30 June 2009.

The 2008/09 financial year has been a difficult year for the Australian economy and
the effects of the financial crisis have been magnified particularly in the banking, funds
management and commercial property arenas. More recently, however, there is evidence
that consumer and business confidence is slowly starting to return and we are hopeful this
will be sustained.

In October 2008 as a direct result of the global financial crisis, the Federal Government
introduced an unlimited guarantee on all deposits with Australian banks as well as approved
deposit taking institutions (the latter of which are predominately building societies and
credit unions). All other forms of investments were excluded from the guarantee, including
mortgage trust investments. Consequently there was heightened anxiety from investors
whose investments were not covered by the Government guarantee, which was followed
by a marked increase in redemption requests. This resulted in most of the major mortgage
trusts freezing redemptions. The Trust froze redemptions on 27 October 2008, and that
freeze is still in place.

On 9 January 2009 Balmain NB Corporation Limited (Balmain) agreed with Mariner
Securities Limited (Mariner), the responsible entity of the Trust, that, subject to a unitholders
vote, Balmain Fund Administration Limited (BFAL) would become the new responsible entity
of the Trust. At the same time Balmain entered into a contract with Mariner to purchase
the management rights in respect of the Trust and the Mariner Wholesale Mortgage Trust
(MWMT). Pursuant to this agreement, Balmain (MT) Pty Limited (BMT) was appointed as
the new Investment Manager for the Trust and the MWMT in lieu of the former manager,
Mariner Mortgage Management Limited. Balmain offered employment to all of MMML’s
staff, so that there was continuity in the management of the Trust.

On 22 January 2009 unit holders in both the Trust and the MWMT voted in favour of BFAL
becoming the new Responsible Entity (RE) of both trusts, subject to BFAL receiving its
Australian Financial Services License from ASIC. This occurred on 22 May 2009, on which
date BFAL became the new RE for the Trust.

Both BFAL and BMT have been working hard since January 2009 to reopen the Trust to new
investments, as well as provide a better outcome for existing unit holders. It is expected
that the Trust will be re-launched in November 2009, and unit holders will be provided with
full details surrounding the re-launch and the options available to them with regard to their
existing investment.

During the year, funds under management decreased from $179 million to $144 million
(a decrease of $35 million or 19%). The loan book decreased from $140 million to $115
million (a decrease of $25 million or 17%).

In December 2008 and March 2009 the Trust provided redemptions to investors totaling
$20.7 million through its redemption pool (note a further $6 million was provided for the
June 2009 redemption cycle which was paid in early July 2009).




Balmain (MMT) Mortgage Trust
(formerly known as Mariner Mortgage Trust) ARSN 107 891 967
Annual Financial Report 2009                                                                    3
Message from the CEO (continued)

The average loan to valuation ratio in the Trust as at 30 June 2009 was 60% p.a. During the
year loan arrears increased to 7% p.a. These delinquent accounts are a small number of
loans only and the Trust is actively managing the collection of these arrears. The Trust has in
place a provision for bad and doubtful debts, which is expected to cover any shortfall in loan
repayments by borrowers. The Trust’s liquidity holding was 19% (prior to funding the June
2009 redemptions).

I am delighted to advise that notwithstanding the current difficult times, the Trust has
performed very well in its fifth full year of operation against the larger, conservatively
managed mortgage trusts. Most importantly we have maintained our $1.00 unit price
thereby preserving investor’s capital. The Trust provided an effective retail return (assuming
reinvestment of income) for the 12 months to 30 June 2009 of 6.47% p.a.

As the interest rate policy for the Trust is to only write variable whole rate loans, the Trust was
not affected by the significant reduction in benchmark interest rates, most particularly bank
bills, and so this policy has resulted in our competitive rates of return. With market indicators
suggesting that interest rates may begin to move up over the coming 12 months, the Trust
is well positioned to pass on any increases to borrowers, and therefore maximise the rate of
return to investors.

Notwithstanding that the economic outlook for the financial year to 30 June 2010 is tough, I
am confident that the Trust’s success in terms of its performance will continue, and you may
rest assured that the entire BFAL and BMT teams are working hard to achieve this goal.

I look forward to seeing positive growth in both unit holder funds and the outstanding loan
book to 30 June 2010.

Yours sincerely




John M. Thomas
Chief Executive Officer

Balmain (MT) Pty Limited




                                                                      Balmain (MMT) Mortgage Trust
                                               (formerly known as Mariner Mortgage Trust) ARSN 107 891 967
4                                                                         Annual Financial Report 2009
Chairman’s Address
I am very pleased to confirm that Balmain Fund Administration Limited (Balmain) became
the new Responsible Entity of the Mariner Mortgage Trust (now the Balmain (MMT)
Mortgage Trust) (the Trust) and the Mariner Wholesale Mortgage Trust (now the Balmain
(MWMT) Mortgage Trust) on 22 May 2009. We were very pleased to be able to have the
staff and management of the Trust, of whom we have high opinion and with whom we have
enjoyed a long term business relationship, transfer across to Balmain’s operations.

It is now approaching one year since the Federal Government introduced the guarantee on
bank deposits, which was followed by the freezing of redemptions in all major mortgage
funds. With over $20 billion of investor’s funds invested in this sector this situation is clearly
untenable.

Balmain is currently preparing to communicate to unitholders a plan to reopen the Trust. We
believe this plan is innovative and we feel that it is essential for the mortgage trust industry
to align the terms under which unit holders invest in mortgage trusts with the underlying
maturity of the investments (commercial mortgage loans) in those trusts.

The current environment is very much a lender’s market where higher margins on loans
can be achieved coupled with lower levels of gearing than has been seen at any time in
the past 20 years. We believe that the Trust should be re-opened and take advantage of
this market. Our initiatives are designed to allow investors that wish to take advantage
of this opportunity do so while at the same time allowing investors that wish to exit their
investment in the Trust to do so in an orderly fashion.

Balmain is very pleased to be the new manager of the Trust and the Balmain (MWMT)
Mortgage Trust. As a long term and major industry participant we feel that our unique skill
set which encompasses asset management, asset administration and asset gathering brings
an unparalleled ability to the sector and will enable the Trusts to prosper in the future.
We thank you for this opportunity and reconfirm our commitment to you, the investors, to
optimally manage your investment.




Michael Holm
Chairman

Balmain Fund Administration Limited




Balmain (MMT) Mortgage Trust
(formerly known as Mariner Mortgage Trust) ARSN 107 891 967
Annual Financial Report 2009                                                                         5
Directors’ report
The directors of Balmain Fund Administration Limited (“the Responsible Entity”), the
responsible entity of the Balmain (MMT) Mortgage Trust (“the Trust”) (formerly known as
Mariner Mortgage Trust) present their report together with the financial report of the Trust,
for the year ended 30 June 2009 and the auditor’s report thereon.

Balmain (MMT) Mortgage Trust (formerly known as Mariner Mortgage Trust) became a
registered scheme under the Corporations Act 2001 on 16 February 2004. Mariner Securities
Limited became its responsible entity on that date. On 22 May 2009, unitholders voted to
appoint Balmain Fund Administration Limited as the Responsible Entity. On this date the
name Mariner Mortgage Trust was changed to Balmain (MMT) Mortgage Trust.

Responsible entity
The registered office and principal place of business of the Responsible Entity and the Trust
is Level 14, 60 Castlereagh Street, Sydney NSW 2000.

The directors of Balmain Fund Administration Limited at any time during the period
commencing 22 May 2009 or since the end of the financial year are:

Michael Holm - Director
Mr. Michael Holm is the founder of Balmain NB Corporation Limited (Balmain Corporation).
Starting the business in 1979, Michael has helped Balmain Corporation to grow from a
one man start up to the largest commercial loan origination and loan servicer in Australia.
Michael also serves as Chairman or as a Board of Director in Balmain Corporation’s fund
management, capital markets and loan servicing businesses. With over 30 years experience
in commercial property financing, Michael’s contacts and feels for the market are a
competitive advantage to Balmain Corporation.

Appointed 22 May 2009.

Andrew Griffin - Director
Mr Andrew Griffin commenced his career in property development in 1987 when he joined
the Trafalgar Property Group holding a number of positions, and was appointed Managing
Director in 1992. Andrew commenced trading as Principal of the Griffin Property Group in
1997, and successfully undertook a number of landmark developments in the Sydney region.
Andrew joined the Balmain Group as Chief Executive Officer in 2004 establishing a number
of strategic investments, and has continued to be involved in both the property and finance
markets for over 20 years at the highest level.

Date of appointment: 22 May 2009

Victoria Pickles - Director
Mrs Victoria Pickles joined Balmain in October 2005. Prior to this, and for the past 12 years,
she has held several HR management and consulting roles in addition to line management,
Sales, Marketing and Training roles in various Insurance, Funds Management and Banking
organisations in both Australia and NZ.

Victoria’s qualifications include Bachelor of Business (Marketing & Finance) from the
University of Technology, Sydney and Post Graduate Qualifications in Human Resources,
Adult Education and Training. She is a fellow of the Australian Human Resources Institute
and an active member of the HR community.

Date of appointment: 30 June 2009


                                                                     Balmain (MMT) Mortgage Trust
                                              (formerly known as Mariner Mortgage Trust) ARSN 107 891 967
6                                                                        Annual Financial Report 2009
Melanie Stone - Director
B Com Monash University VIC
MBA Charles Sturt University NSW
MFAA

Mrs Melanie Stone (nee Dennison) joined Balmain in January 2005. Prior to this, Melanie
was a risk professional with KPMG and a professional athlete (sailing). She works both within
Balmain Corporation in the Risk Management role and also as a loan originator for Balmain
Commercial.

Date of appointment: 22 May 2009

The directors of Mariner Securities Limited at any time during the period ended 22 May
2009 were:

Bill Ireland - Director
Bill Ireland has a background in the stockbroking industry and the property industry. He
worked with various Australian broking houses during the 1970s.

In the early 1980’s he moved into the property industry before establishing the Challenger
group in 1986. As Managing Director and principal shareholder, he was instrumental in
developing the foundations of the group, which listed on the Australian Stock Exchange in
October 1987. After 16 years heading up Challenger, Mr Ireland stepped down as Managing
Director in 2003 (he was Managing Director from 1987 to 2003) and established the Mariner
Financial Group.

Mr Ireland is the Managing Director of Mariner Financial Limited (since 2003, ASX: MFI) and
Mariner Retirement Solutions Limited on 1 May, 2006 and Chairman of Mariner Retirement
Solutions Ltd on 9 May 2006. He also sat on the board of Mariner Wealth Management
Limited (from 1999 to 2006) and he was Chairman of Bio Tech Capital Limited (from 2000
until November 2005 ASX: BTC).

His leadership provides the direction and innovation required to develop and grow Mariner
Financial Limited.

Date of appointment: 7 May 2003

David Heaney - Non-Executive Director
David Heaney has more than 39 years experience in banking and corporate finance gained
with the National Australia Bank Limited and subsidiary companies. David held several
senior management positions in Australia and the United States, the most recent position
being General Manager, Corporate Banking Victoria, prior to his retirement in August 1999.

He is currently an executive director of Thompson Partners Pty Limited, a consulting
company, and a non-executive director of Colorpak Limited (since 2004, ASX: CKL). He
brings strong banking and finance skills, together with corporate governance experience to
the Company.

Date of appointment: 20 June 2006




Balmain (MMT) Mortgage Trust
(formerly known as Mariner Mortgage Trust) ARSN 107 891 967
Annual Financial Report 2009                                                                  7
Directors’ report (continued)

Brent Cubis - Director
B Comm., Accounting, Finance and Systems (UNSW), MICA
Alumni Leader, (UNSW) Faculty of Business

Prior to his appointment in April 2007, Brent was the CFO for Nine Network Australia for
four years and before that he worked at PBL’s sister company, ACP Magazines for two
years. Brent has over 20 years experience in senior financial roles across a broad range
of industries, where he has managed finance teams that have assisted the earnings drive
and business growth for the following leading Australian companies and industries: Media
(Publishing and Broadcasting Limited); Funds Management (Bankers Trust); Property
(Westfield Holdings); Hospitality (Sheraton Hotels). Brent qualified as a chartered accountant
with Deloitte Haskins and Sells, Sydney after a transfer to their New York and Michigan
offices.

Date of appointment: 23 January 2008

Date of resignation: 20 February 2009

Principal activities
The principal activity of the Trust is to invest in accordance with its investment objectives and
guidelines as set out in the current Product Disclosure Statement and in accordance with the
provisions of the Constitution.

The Trust did not have any employees during the year or prior years and is domiciled in
Australia. There have been no significant changes in the activities of the Trust during the
financial year.

Review and results of operations
During the financial year, the Trust completed its sixth full year of operation. The loan book
of the Trust reduced to (net) $115.7 million, a decrease of 17%. Funds under management
decreased from $179 million to $144 million, a decrease of 19.5%.

This was to be expected, due to the fall out from the US sub prime mortgage collapse and
the continuing global credit squeeze.

Distributions
Distributions paid or payable by the Trust in respect of the financial year were:

                                                              2009                               2008
                                             $’000     Cents/unit              $’000      Cents/unit
 Interim distribution paid                   9,835             6.23           10,922              6.50
 Final distribution payable                    618             0.43            1,150              0.65
                                            10,453             6.66           12,072              7.15




                                                                      Balmain (MMT) Mortgage Trust
                                              (formerly known as Mariner Mortgage Trust) ARSN 107 891 967
8                                                                        Annual Financial Report 2009
Performance
Returns from the Balmain (MMT) Mortgage Trust for the year, assuming monthly
reinvestments, averaged 6.47% (2008: 7.06%) p.a. for retail investments and 7.00% (2008:
7.59%) p.a. for wholesale investments.

The Trust has net assets of $143,796,000 as at 30 June 2009 (2008: $179,070,000).

The following table shows the effective annual returns of the Trust for operations for the year
ended 30 June 2009, using rolling monthly nominal rates, assuming monthly reinvestment of
distributions and taking into account all management fees but excluding entry and exit fees.
Nominal rates are the actual income earned by the Trust assuming there is no reinvestment
of income distributions. Effective rates assume the reinvestment of income distributions
(therefore returns reflect the compounding effect of reinvestment of income) and that
interest rates remain constant. Calculations are in accordance with IFSA Standard No 6.00
Product Performance – Calculation and Presentation of Returns.

The directors assess the performance of the Trust by comparing the Trust’s total return with
short term investments such as cash management trusts. Calculation of performance is
after all management fees, excluding exit fees, have been deducted and assumes that all
distributions are reinvested during the year.

The comparison for the year to 30 June 2009 is shown below:

                                                              2009                       2008
 Balmain (MMT) Mortgage Trust                                   %                          %
 Retail - nominal                                             6.28                       6.84
 Retail - effective                                           6.47                       7.06
 Wholesale - nominal                                          6.78                       7.34
 Wholesale - effective                                        7.00                       7.59

Consistent with our statements in the current Product Disclosure Statement, future
performance is not guaranteed. Investors should exercise care in using past performance as
a predictor of future performance.

Ongoing Fee Measure
                                                              2009                       2008
                                              Per $10,000            Per $10,000
                                              investment        %    investment             %
 Ongoing Fee Measure                                  $150    1.5%         $150          1.5%

The Ongoing Fee Measure (OGFM) represents the direct and indirect expenses incurred by
Balmain (MMT) Mortgage Trust and is expressed in dollar terms for each $10,000 investment
and as a percentage of average funds under management. The OGFM is calculated in
accordance with IFSA Standard No 4.00 Ongoing Fee Measure. The OGFM is a measure of
the fees payable (including administration and investment fees) and certain expenses that
an investor indirectly incurs through investment in the Trust. The OGFM does not include
initial fees or discretionary fees.




Balmain (MMT) Mortgage Trust
(formerly known as Mariner Mortgage Trust) ARSN 107 891 967
Annual Financial Report 2009                                                                   9
Directors’ report (continued)

Unit redemption price
The redemption price (ex-distribution) per unit is $1.00 as at 30 June 2009 (2008: $1.00).

Units on issue
The movement in units on issue in the Trust during the year was as follows:

                                                               2009                               2008
                                                   No. of units ’000                  No. of units ’000
 Units on issue                                              179,070                             151,002
 Units issued                                                  16,999                            106,711
 Units redeemed                                              (52,273)                            (78,643)
 Units on issue as at 30 June                                143,796                             179,070

Value of the assets
                                                                2009                                2008
                                                                $’000                               $’000
 Value of the Trust assets                                   143,796                             179,070

The value of the Trust’s assets is derived using the basis set out in Note 3 to the financial
statements.

Responsible entity’s remuneration
Fees paid to the Responsible Entity and its associates out of the Trust property during the
year are disclosed in Note 15 to the financial statements.

No fees were paid out of the Trust property to the directors of the Responsible Entity during
the year.

Interests of the responsible entity
The number of units held in the Trust by the Responsible Entity or its associates during the
financial year is disclosed in Note 15 to the financial statements.

State of affairs
There were no significant changes in the state of affairs of the Trust that occurred during the
financial year under review.

Events subsequent to balance sheet date
There has not arisen in the interval between the end of the financial year and the date of this
report any item, transaction or event of a material and unusual nature likely, in the opinion of
the directors of the Responsible Entity, to affect significantly the operations of the Trust, the
results of those operations, or the state of affairs of the Trust, in future financial years.

Environmental regulation
The Trust’s operations are not subject to significant environmental regulations under either
Commonwealth, State or Territory legislation, in respect of its activities during the year
covered by this report.




                                                                        Balmain (MMT) Mortgage Trust
                                                 (formerly known as Mariner Mortgage Trust) ARSN 107 891 967
10                                                                          Annual Financial Report 2009
Indemnification and insurance of officers and auditors
Indemnification
Under the Trust Constitution the Responsible Entity, including its officers and employees, is
indemnified out of the Trust’s assets for any loss, damage, expense or other liability incurred
by it in properly performing or exercising any of its powers, duties or rights in relation to the
Trust.

The Trust has not indemnified or made a relevant agreement for indemnifying against a
liability any person who is or has been an auditor of the Trust.

Insurance Premiums
No insurance premiums are paid out of the Trust’s assets in relation to insurance cover
for the Responsible Entity, its officers and employees, the Compliance Committee or the
auditors of the Trust.

Lead auditor’s independence declaration
The lead auditor’s independence declaration is set out on page 12 and forms part of the
directors’ report for the year ended 30 June 2009.

Rounding off
The Trust is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998 (updated by
CO 05/641 effective 28 July 2005 and CO 06/51 effective 31 January 2006) and in accordance
with that Class Order, amounts in the financial report and the directors’ report have been
rounded off to the nearest thousand dollars unless otherwise stated.

Dated at Sydney this 28th day of September 2009.

Signed in accordance with a resolution of the Directors of the Responsible Entity:




Andrew Griffin
Director




Balmain (MMT) Mortgage Trust
(formerly known as Mariner Mortgage Trust) ARSN 107 891 967
Annual Financial Report 2009                                                                   11
Lead Auditor’s Independence Declaration under Section 307C of
the Corporations Act 2001
To: the directors of Balmain Fund Administration Limited

I declare that, to the best of my knowledge and belief, in relation to the audit for the
financial year ended 30 June 2009 there have been:

(i) no contraventions of the auditor independence requirements as set out in the
     Corporations Act 2001 in relation to the audit; and
(ii) no contraventions of any applicable code of proffesional conduct in relation to the audit.




KPMG




Malcolm Kafer
Partner

Sydney

28 September 2009




                                                                     Balmain (MMT) Mortgage Trust
                                              (formerly known as Mariner Mortgage Trust) ARSN 107 891 967
12                                                                       Annual Financial Report 2009
Income Statement
AS AT 30 JUNE 2009

                                                                         2009           2008
                                                              Note       $’000          $’000


 Income
 Interest Income                                                 4      13,403         14,686
 Total operating Income                                                 13,403         14,686


 Operating expenses
 Management fees                                                15      (1,868)        (2,060)
 Impairment losses                                                        (594)                -
 Other expenses from ordinary activities                                  (489)         (554)
 Total expenses before finance costs                                    (2,951)        (2,614)


 Operating profit for the year before finance costs                     10,453         12,072


 Finance costs
 Distributions to Unitholders                                   11    (10,453)       (12,072)
 Total finance costs                                                  (10,453)       (12,072)


 Change in net assets attributable to unit holders                            -                -


Statement of Changes in Equity
As the Trust has no equity, the Trust has not included any changes in equity for the current
year and comparative years.




Balmain (MMT) Mortgage Trust
(formerly known as Mariner Mortgage Trust) ARSN 107 891 967
Annual Financial Report 2009                                                                   13
Balance Sheet
AS AT 30 JUNE 2009

                                                                               2009              2008
                                                              Note             $’000             $’000


Current assets
Cash and cash equivalents                                          7         27,609            40,385
Trade and other receivables                                        9           1,929               411
Mortgage loans                                                     8         62,626            73,410
Total current assets                                                         92,164           114,206


Non current assets
Mortgage loans                                                     8         52,502            66,476
Total non-current assets                                                     52,502            66,476


Total assets                                                                144,666           180,682


Current liabilities
Payables                                                         10              252               462
Distribution payable                                             11              618             1,150
Total current liabilities                                                        870             1,612


Total liabilities (excluding net assets
attributable to unitholders)                                                     870             1,612


Net assets attributable to unitholders – liability               12         143,796           179,070


Represented by:
Net assets attributable to unitholders at
redemption price ($1/unit)                                       12         143,796           179,070




                                                                       Balmain (MMT) Mortgage Trust
                                              (formerly known as Mariner Mortgage Trust) ARSN 107 891 967
14                                                                        Annual Financial Report 2009
Statement of Cash Flows
AS AT 30 JUNE 2009

                                                                        2009       2008
                                                              Note      $’000      $’000


 Cash flows from operating activities
 Cash receipts in the course of operations                             12,677     15,214
 Cash payments in the course of operations                             (3,355)    (2,852)
 Net cash provided by operating activities                    13(a)     9,321     12,362


 Cash flows from investing activities
 Proceeds from discharge of mortgage loans                             34,219     43,711
 Proceeds/(payments) from investment in
 discount securities                                                         -    15,687
 Payments for issue of mortgage loans                                 (10,055)   (92,506)
 Net cash provided by/(used in) investing
 activities                                                            24,164    (33,108)


 Cash flows from financing activities
 Applications received                                                 14,905    106,711
 Redemptions paid                                                     (52,273)   (78,643)
 Distributions paid                                                    (8,893)   (11,711)
 Net cash provided by/(used in) financing
 activities                                                           (46,261)    16,357


 Net (decrease) in cash and cash equivalents                          (12,776)    (4,389)


 Cash and cash equivalents at the beginning of
 the financial year                                                    40,385     44,774


 Cash and cash equivalents at the end of the
 financial year                                                  7     27,609     40,385




Balmain (MMT) Mortgage Trust
(formerly known as Mariner Mortgage Trust) ARSN 107 891 967
Annual Financial Report 2009                                                           15
Notes to the Financial Statements
AS AT 30 JUNE 2009

1 Reporting entities
     Balmain (MMT) Mortgage Trust (the “Trust”) is a registered managed investment
     scheme under the Corporations Act 2001. The financial report of the Trust is for the year
     ended 30 June 2009.

2 Basis of preparation
     (a) Statement of compliance
        The financial report is a general purpose financial report which has been prepared
        in accordance with Australian Accounting Standards (AASBs) (including Australian
        Interpretations) adopted by the Australian Accounting Standards Board (AASB)
        and the Corporations Act 2001. The financial report of the Trust complies with
        International Financial Reporting Standards (IFRSs) and interpretations adopted by
        the International Accounting Standards Board (IASB).

        The financial statements were approved by the Board of Directors of the
        Responsible Entity on 28 September 2009.

     (b) Basis of measurement
        The financial statements have been prepared on the historical cost basis except
        where otherwise stated.

     (c) Functional and presentation currency
        These financial statements are presented in Australian dollars, which is the Trust’s
        functional currency.

        The Trust is of a kind referred to in ASIC Class Order 98/100 dated 10 July 1998
        (updated by CO 05/641 effective 28 July 2005 and CO 06/51 effective 31 January
        2006) and in accordance with that Class Order, all financial information presented
        in Australian dollars has been rounded to the nearest thousand dollars unless
        otherwise stated.

     (d) Use of estimates and judgements
        The preparation of financial statements requires management to make adjustments,
        estimates and assumptions that affect the application of accounting policies and the
        reported amounts of assets, liabilities, income and expenses.

        Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions
        to accounting estimates are recognised in the period in which the estimate is revised
        and in any future period affected. Refer to Note 16 for judgments over impairment
        of loans.




                                                                     Balmain (MMT) Mortgage Trust
                                              (formerly known as Mariner Mortgage Trust) ARSN 107 891 967
16                                                                       Annual Financial Report 2009
3 Significant accounting policies
    The accounting policies set out below have been applied consistently to all periods
    presented in these financial statements.

    (a) Expenses
         Expenses are brought to account on an accruals basis.

    (b) Taxation
         Under current legislation, the Trust is not subject to income tax as its taxable income
         (including assessable realised capital gains) is distributed in full to the unit holders.

         The Trust fully distributes its distributable income, calculated in accordance with
         the Trust Constitution and applicable taxation legislation, to unit holders who are
         presently entitled to the income under the constitution.

    (c) Goods and services tax
         Responsible Entity fees, custody fees and other expenses are recognised net of the
         amount of goods and services tax (GST) recoverable from the Australian Taxation
         Office (ATO) as a reduced input tax credit (RITC).

         Payables are stated with the amount of GST included.

         The net amount of GST recoverable from the ATO is included in receivables in the
         Balance Sheet.

         GST is included in the statement of cash flows on a gross basis.

    (d) Financial instruments
         (i) Classification

              Financial instruments comprise:

              •    Cash and cash equivalents;
              •    Financial assets that are classified as loans and receivables;
              •    Financial liabilities that are not at fair value through profit or loss.

         (ii) Recognition

              The Trust recognises financial assets and financial liabilities on the date it
              becomes a party to the contractual provisions of the instrument.

              Financial instruments are recognised using trade date accounting. From this
              date any gains and losses arising from changes in fair value of the financial assets
              or financial liabilities are recorded.

              Financial liabilities are not recognised unless one of the parties has performed or
              the contract is a derivative contract not exempted from the scope of AASB 139
              Financial Instruments: Recognition and Measurement.




Balmain (MMT) Mortgage Trust
(formerly known as Mariner Mortgage Trust) ARSN 107 891 967
Annual Financial Report 2009                                                                         17
Notes to the Financial Statements (continued)

     (iii) Measurement

        Financial instruments are measured initially at fair value (transaction price) plus,
        in the case of a financial asset or financial liability not at fair value through profit
        or loss, transaction costs that are directly attributable to the acquisition or issue
        of the financial asset or financial liability. Transaction costs on financial assets and
        financial liabilities at fair value through profit or loss are expensed immediately,
        while on other financial instruments they are amortised.

        Subsequent to initial recognition, all instruments classified at fair value
        through profit or loss are measured at fair value with changes in their fair value
        recognised in the profit or loss.

        Mortgage loans are carried at amortised cost using the effective interest rate
        method.

        Financial liabilities, other than those at fair value through profit or loss, are
        measured at amortised cost using the effective interest rate.

        Financial liabilities arising from the redeemable units issued by the Trust are
        carried at the redemption amount representing the investors’ right to a residual
        interest in the Trust’s assets, effectively fair value at reporting date.

     (iv) Interest income and expense

        Interest income and expense is recognised in the income statement as it
        accrues, using the effective interest method of the instrument calculated at
        the acquisition or origination date. Interest income and expense includes the
        amortisation of any discount or premium, transaction costs or other differences
        between the initial carrying amount of an interest-bearing instrument and its
        amount at maturity calculated on an effective interest basis.

        Interest income on cash and cash equivalents is accrued using the effective
        interest method and classified to the Interest income line item within the income
        statement. Interest income is recognised on a gross basis, including withholding
        tax, if any.

     (v) Derecognition

        The Trust derecognises a financial asset when the contractual rights to the cash
        flows from the financial asset expire or it transfers the financial asset and the
        transfer qualifies for derecognition in accordance with AASB 139.

        The Trust uses the weighted average method to determine realised gains and
        losses on derecognition of financial assets not at fair value.

        A financial liability is derecognised when the obligation specified in the contract
        is discharged, cancelled or expired.




                                                                   Balmain (MMT) Mortgage Trust
                                            (formerly known as Mariner Mortgage Trust) ARSN 107 891 967
18                                                                     Annual Financial Report 2009
         (vi) Impairment

              Financial assets that are stated at cost or amortised cost are reviewed at
              each balance sheet date to determine whether there is objective evidence of
              impairment. If any such indication exists, impairment testing is carried out and
              an impairment loss is recognised in the income statement as the difference
              between the asset’s carrying amount and the present value of estimated future
              cash flows discounted at the financial asset’s original effective interest rate.

              If in a subsequent period the amount of an impairment loss recognised on a
              financial asset carried at amortised cost decreases and the decrease can be
              linked objectively to an event occurring after the write-down, the write-down is
              reversed through the income statement.

    (e) Cash and cash equivalents
         Cash comprises current deposits with banks. Cash equivalents are short-term highly
         liquid investments that are readily convertible to known amounts of cash, are subject
         to an insignificant risk of changes in value, and are held for the purpose of meeting
         short-term cash commitments rather than for investment or other purposes.

    (f) Redeemable units
         All redeemable units issued by the Trust provide the investors with the right to
         require redemption at the end of the Trust’s fixed life and give rise to a financial
         liability. In accordance with the product disclosure document the Trust is
         contractually obliged to redeem units at redemption price, which includes an
         allowance for transaction costs that would be incurred by the Trust on disposal of its
         assets required to fund the redemptions.

    (g) Unit prices
         The unit price is based on unit price accounting outlined in the Trust ’s Constitution
         and product disclosure statement.




Balmain (MMT) Mortgage Trust
(formerly known as Mariner Mortgage Trust) ARSN 107 891 967
Annual Financial Report 2009                                                                     19
Notes to the Financial Statements (continued)

     (h) Finance costs
        Distributions paid and payable on units are recognised in the income statement as
        finance costs and as a liability where not paid. Distributions paid are included in
        cash flows from financing activities in the statement of cash flows.

     (i) New standards and interpretations not yet adopted
            The following standards, amendments to standards and interpretations have
            been identified as those which may impact the entity in the period of initial
            application. They are available for early adoption as at 30 June 2009, but have
            not been applied in preparing this financial report.

            •   AASB 8 Operating Segments introduces the “management approach”
                to segment reporting. AASB 8, which becomes mandatory for the Trust’s
                30 June 2010 financial statements, will require the disclosure of segment
                information based on the internal reports regularly reviewed by the
                Trust’s Chief Operating Decision Maker in order to assess each segment’s
                performance and to allocate resources to them. Currently the Trust presents
                segment information in respect of its business and geographical segments
                (see note 14).

            •   Revised AASB 101 Presentation of Financial Statements introduces as
                a financial statement (formerly “primary” statement) the “statement of
                comprehensive income”. The revised standard does not change the
                recognition, measurement or disclosure of transactions and events that are
                required by other AASBs. The revised AASB 101 will become mandatory
                for the Trust’s 30 June 2010 financial statements. The Trust has not yet
                determined the potential effect of the revised standard on the Trust’s
                disclosures.

            •   AASB 2008-02 Amendments to Accounting Standards.- Puttable Financial
                instruments and Obligations arising on Liquidation. AASB 2008-02 changes
                the definition of a financial liability requiring puttable instruments that
                meet certain conditions to be classified as entity. AASB 2008-02 is effective
                for years beginning on or after 1 January 2009. The Scheme has not yet
                determined the potential effect of the revised standard on the Scheme’s
                disclosures.




                                                                      Balmain (MMT) Mortgage Trust
                                               (formerly known as Mariner Mortgage Trust) ARSN 107 891 967
20                                                                        Annual Financial Report 2009
4 Interest income
                                                                          2009            2008
                                                                          $’000           $’000
      Cash at bank                                                        1,658           3,826
      Discount securities                                                      -           484
      Mortgage loans                                                     11,745          10,376
                                                                         13,403          14,686

5 Ongoing fee measure (OGFM)
    The OGFM calculation includes fees charged to the Trust during the financial year,
    including those charged by the Responsible Entity directly for the management of the
    assets, plus investment manager, registry and custodial fees.

    Expenses excluded from the OGFM calculation are those that would have ordinarily
    been incurred by a direct investor in the underlying assets of the Trust, such as
    brokerage, transaction costs and government expenses.

                                                                          2009            2008
                                                                          $’000           $’000
      OGFM related expenses incurred directly                             2,336           2,566
      Total OGFM related expenses                                         2,336           2,566
      Average unitholders’ funds                                       155,730          171,068
      OGFM                                                                1.5%            1.5%

6 Auditor’s remuneration
      Audit Services:                                                     2009            2008
      Auditors of the Trust - KPMG                                           $               $
      Audit and review of the financial reports                          36,500          21,500
      Other regulatory audit services                                          -          5,700
                                                                         36,500          27,200

7 Cash and cash equivalents
                                                                          2009            2008
                                                                          $’000           $’000
      Cash at bank                                                        2,859           6,385
      Short term deposits                                                24,750          34,000
                                                                         27,609          40,385




Balmain (MMT) Mortgage Trust
(formerly known as Mariner Mortgage Trust) ARSN 107 891 967
Annual Financial Report 2009                                                                 21
Notes to the Financial Statements (continued)

8 Mortgage loans
                                                                                2009              2008
      Maturity analysis:                                                        $’000             $’000
      Matured loans                                                           34,857              7,932
      Not longer than three months                                            12,170            15,265
      Impairment allowance for mortgage loans                                    (594)                 -
      Longer than three months but not longer than 12 months                  16,193            50,213
      Longer than one year but not longer than five years                     52,502            66,476
      Carrying amount                                                        115,128           139,886

     Refer to note 16 for details on the movement in impairment allowance.

     The fair value of the collateral held against matured loans as at 30 June 2009 is
     $53,382,000 (2008: $12,005,000)

9 Trade and other receivables
                                                                                2009              2008
                                                                                $’000

      Accrued interest                                                            347               176
      Other receivables                                                         1,581               235
                                                                                1,928               411

10 Payables
                                                                                2009              2008
                                                                                $’000             $’000
      Fees payable to the Responsible Entity                                      177               220
      Other payables                                                                75              242
                                                                                  252               462

11 Distributions
                                                               2009                               2008
      The distributions were paid/
      payable as follows:                     $’000      cents/unit             $’000       cents/unit
      Interim distribution paid               9,835             6.23           10,922              6.50
      Final distribution payable                618             0.43            1,150              0.65
                                            10,453              6.66           12,072              7.15

     The final distribution was paid on 1st July 2009.

     Distribution paid includes distribution reinvestment amount of $2,094,713
     (2008: $3,005,724).




                                                                       Balmain (MMT) Mortgage Trust
                                               (formerly known as Mariner Mortgage Trust) ARSN 107 891 967
22                                                                        Annual Financial Report 2009
12 Capital Management
    The Trust considers its capital to be Unitholders’ Funds. The Trust manages its net
    assets attributable to unitholders as capital, notwithstanding net assets attributable to
    unitholders are classified as liability.

    The objective of the Trust is to provide unitholders with returns in accordance with the
    Product Disclosure Statement (“PDS”). The Trust aims to deliver this objective mainly
    through investing in mortgage loans. The Trust strives to invest in products that meet the
    Trust’s investment objectives while maintaining sufficient liquidity to meet unitholders’
    redemptions.

                                                              30 June 2009                  30 June 2008
                                              No. of units           $’000   No. of units          $’000
      Opening balance                             179,070         179,070       151,002         151,002
      Applications                                 16,999          16,999       106,711         106,711
      Redemptions                                 (52,273)        (52,273)      (78,643)         (78,643)
      Change in net assets
      attainable to unit holders                  143,796         143,796       179,070         179,070

    From 7 September 2009 the redemption process for the Balmain (MWMT) Mortgage
    Trust has changed. For the foreseeable future investors may claim a maximum of
    4% each quarter. This decision has been taken to protect the holdings of all current
    investors, and is in response to accelerated redemption activity across the sector.

    Work on re-opening the fund still continues and it is expected that an announcement
    of when the Fund will re-open will be made in the later part of October 2009. The
    Responsible Entity believed that re-opening the Fund to new investments will be of
    great benefit to existing investors. Existing investors will have a choice of remaining
    where they are and receiving 4% of their capital back each quarter, with the possibility of
    a supplementary capital repayment twice yearly; or alternatively converting to a new 3
    year fixed term investment with the option of redeeming 10% of outstanding capital in
    years 1, 2 and 3.

13 Notes to the statement of cash flows
    (a) Reconciliation of cash flows from operating activities
                                                                                  2009             2008
                                                                                  $’000            $’000
          Operating profit before finance costs                                  10,453           12,072
          Adjustment for:
          Impairment allowance for Mortgage loans                                   594                 -
          Change in assets and liabilities during the financial year:
             Decrease/(Increase) in Trade and other receivables                  (1,516)              28
             Increase/(decrease) in payables                                       (210)             262
          Net cash provided by operating activities                               9,321           12,362




Balmain (MMT) Mortgage Trust
(formerly known as Mariner Mortgage Trust) ARSN 107 891 967
Annual Financial Report 2009                                                                           23
Notes to the Financial Statements (continued)

     (b) Non–cash investing and unitholder activities
            The following non-cash investing and unitholder activities occurred during the year.

                                                                   2009                               2008
                                            No. of units                     No. of units
                                                   ’000           $’000             ’000               ’000
             Units created in the Trust
             under the distribution
             reinvestment plan                   2,095            2,095             3,006             3,006

14 Segment reporting
     The primary business in Balmain (MMT) Mortgage Trust is to invest mainly in a portfolio
     of registered first mortgages over a diversified selection of properties in Australian
     capital cities and regional centres.

15 Related party disclosures
     Responsible entity
     On 22 May 2009 the Responsible Entity of the Balmain (MMT) Mortgage Trust (formerly
     Mariner Mortgage Trust) changed from Mariner Securities Limited (ABN 87 002 163
     180) to Balmain Fund Administration Limited (ABN 98 134 526 604), a wholly owned
     subsidiary of Balmain NB Corporation Limited (ABN 86 107 505 760), which is the
     ultimate holding company.

     Balmain (MT) Pty Limited (ABN 36 134 652 707) is the investment manager for the
     mortgage assets of the Trust and is a related party to the ultimate parent company
     Balmain NB Corporation Limited.

     Key management personnel
     The Trust does not employ personnel in its own right. However it is required to have an
     incorporated Responsible Entity to manage the activities of the Trust. The directors of
     the Responsible Entity are key management personnel of that entity and their names
     are:

      Name                                                  Appointed
      Michael Holm (Director)                              22 May 2009
      Andrew Griffin (Director)                            22 May 2009
      Melanie Stone (Director)                             22 May 2009

     Prior to the change in Responsible Entity, the Responsible Entity was Mariner Securities
     Limited. The directors of the Responsible Entity were the key management personnel of
     that entity and their names are:

      Name                                                  Appointed                           Resigned
      Bill Ireland (Director)                               7 May 2003                                     -
      David Heaney                                         20 June 2006                                    -
      (Non-Executive Director)
      Brent Cubis (Director)                          23 January 2008                  20 February 2009




                                                                          Balmain (MMT) Mortgage Trust
                                                   (formerly known as Mariner Mortgage Trust) ARSN 107 891 967
24                                                                            Annual Financial Report 2009
    Remuneration of directors of the Responsible Entity
    From 22 May 2009, remuneration of the directors is paid directly by Balmain Fund
    Administration Limited. The Directors are not provided with any remuneration by the
    Trust itself, and there are no agreements in place between the directors and the Trust to
    this effect.

    The Responsible Entity determines remuneration levels and ensures they are
    competitively set to attract and retain appropriately qualified and experienced directors.

    Prior to 22 May 2009, remuneration of the directors was paid directly by Mariner
    Securities Limited. The Directors were not provided with any remuneration by the Trust
    itself, and there were no agreements in place between the directors and the Trust to this
    effect.

    The Responsible Entity determined remuneration levels and ensured they were
    competitively set to attract and retain appropriately qualified and experienced directors.

    Management fees and other transactions
    The fees paid or payable by the Trust to the Responsible Entity during the year:

                                                                           2009          2008
                                                                              $             $
      Management fees                                                  2,358,395    2,560,001
      The following amounts are included in payables as owed
      to the Management fees at balance sheet date                      177,281        219,619

    In prior years, the management fees were paid to Mariner Securities Ltd as responsible
    entity fees. In the current year, management fees are paid to the Responsible Entity.

    Responsible entity’s holdings of units
    Balmain NB Corporation Limited and the directors of Balmain NB Corporation Limited
    have no direct holdings of units. Balmain Fund Administration Limited as Responsible
    Entity of Balmain (MWMT) Mortgage Trust indirectly holds units in Balmain (MMT)
    Mortgage Trust. As at 30 June 2009 no key management personnel held units in the Trust.

    Related party transactions
    The terms and conditions of the transactions with directors and their director related
    entities were no more favourable than those available, or which might reasonably be
    expected to be available, on similar transactions to non-director related entities on an
    arm’s length basis.

    Related party investments held by the Trust
    The Trust has no investment in Balmain NB Corporation Limited or its associates.

    Other transactions within the Trust
    Apart from those details disclosed in this note, no director has entered into a material
    contract with the Trust since the end of the previous year and there were no material
    contracts involving directors’ interests subsisting at year end.




Balmain (MMT) Mortgage Trust
(formerly known as Mariner Mortgage Trust) ARSN 107 891 967
Annual Financial Report 2009                                                                   25
Notes to the Financial Statements (continued)

     Units in the Trust held by related parties
     Details of holdings in the Trust by Balmain Fund Administration Limited and its affiliates
     are set out below:

     AS AT 30 JUNE 2009

                                           Interest          Units                        Distributions
                                              held      purchased                         paid/payable
                             Units held          %     /reinvested        Units sold                  $
      Balmain (MWMT)
      Mortgage Trust        69,079,000        48.04     10,555,000       26,685,000            5,316,000

     AS AT 30 JUNE 2009
                                           Interest          Units                        Distributions
                                              held      purchased                         paid/payable
                             Units held          %     /reinvested        Units sold                  $
      Balmain (MWMT)
      Mortgage Trust        85,571,000        47.79     64,407,000       25,222,000            5,344,000

16 Financial Instruments
     The Trust’s investing activities expose it to the following risks from its use of financial
     instruments:

     •     market risk
     •     credit risk
     •     liquidity risk

     The nature and extent of the financial instruments employed by the trust are discussed
     below. This note presents information about the Trust’s exposure to each of the above
     risks, the Trust’s objectives, policies and processes for measuring and managing risk.

     The Responsible Entity has overall responsibility for the establishment and oversight of
     the Trust’s risk management framework.

     This note presents information about the Trust’s exposure to each of the above risks, the
     Trust’s objectives, policies and processes for measuring and managing risk.

     Market risk
     Market risk is the risk that changes in market prices such as foreign exchange rates,
     interest rates and equity prices will affect the Trust’s income or value of its holdings
     of financial instruments. The objective of market risk management is to manage and
     control market risk exposures within acceptable parameters.

     The trust’s strategy on the management of the investment risk is driven by the trust’s
     investment objective. This investment objective stipulates that the Trust is to invest
     primarily in a diversified portfolio of loans initially on the east coast of Australia, secured
     by registered first mortgages with some exposure to short dated securities and deposits
     with banks and other financial institutions, the purpose of which are to enhance liquidity.




                                                                        Balmain (MMT) Mortgage Trust
                                                 (formerly known as Mariner Mortgage Trust) ARSN 107 891 967
26                                                                          Annual Financial Report 2009
    Interest rate risk
    Interest rate risk consists of cash flow interest rate risk (the risk that future cash flows of
    a financial instrument will vary due to changes in market interest rates) and fair value
    interest rate risk (the risk that the value of a financial instrument will vary due to changes
    in market interest rates).

    Management of interest rate risk
    The Trust’s interest bearing financial assets mature or reprice in the short-term, no longer
    than twelve months. As a result, the Trust is subject to limited exposure to fair value
    interest rate risk due to the fluctuations in the prevailing levels of market interest rates.
    Any excess cash and cash equivalents of the Trust are invested in short-term commercial
    papers with the term to maturity of up to three or six months.

    Exposure to interest rate risk
    As at the reporting date the interest rate profile of the Trust’s interest bearing
    instruments was:

                                                                                  2009             2008
      Variable rate instruments                                                   $’000            $’000
      Cash and cash equivalents                                                   2,859            6,385
      Mortgage loans (current)                                                   62,626           73,410
      Mortgage loans (non current)                                               52,502           66,476
      Bank Deposits                                                              24,750           34,000
                                                                                142,737          180,271

    Cash flow Sensitivity analysis
    A change of 100 basis points in interest rates at the reporting date would have
    increased/ (decreased) profit or loss by the amounts shown below. The analysis is
    performed on the same basis for 2008.

                                                              30 June 2009                 30 June 2008
      Effect in thousands of AUD                               Profit or loss               Profit or loss
                                                    100bp           100bp         100bp          100bp
      Variable rate instruments                   increase        decrease      increase       decrease
      Cash and cash equivalent                           29             (29)         64              (64)
      Mortgage loans (current)                         632             (632)        734             (734)
      Mortgage loans (non current)                     525             (525)        665             (665)
      Bank Deposits                                    248             (248)        340             (340)
      Cash flow sensitivity (net)                    1,434           (1,434)      1,803           (1,803)

    As Balmain (MMT) Mortgage Trust does not hold any equity investment or assets and
    liabilities in foreign currencies, the Trust does not consider that it has exposure to market
    price risk and currency risk.




Balmain (MMT) Mortgage Trust
(formerly known as Mariner Mortgage Trust) ARSN 107 891 967
Annual Financial Report 2009                                                                            27
Notes to the Financial Statements (continued)

     Credit Risk
     Credit risk is the risk of financial loss to the Trust if a customer or counterparty to a
     financial instrument fails to meet its contractual obligations.

     Management of credit risk
     The Trust minimises concentrations of credit risk by undertaking transactions with a large
     number of customers, and by ensuring that the counterparties have acceptable credit
     ratings determined by recognised ratings agencies where applicable. The investment
     policy of the Trust is to invest primarily in a diversified portfolio of loans initially on
     the east coast of Australia, secured by registered first mortgages with some exposure
     to short-dated securities and deposits with banks and other financial institutions, the
     purpose of which is to enhance liquidity.

     The Trust is required to implement credit policies, procedures and lending guidelines
     set out by the board of directors of the mortgage management company, Balmain MT
     Pty Limited (“BMT”) with credit approval authorities delegated to the Chief Executive
     Officer.

     The directors of Balmain Fund Administration Limited are responsible for the quality and
     performance of the Trust’s credit portfolios and for monitoring and controlling all credit
     risks in the Trust’s portfolios. This includes managing the risk concentrations by market
     sector, geography and product. A lending system is in place to enable the Trust to
     control and monitor credit risk exposures.

     Credit exposure
     The carrying amount of the Trust’s financial assets represents the maximum credit
     exposure before taking into account of any collateral held or other credit enhancements
     unless such credit enhancements meet the offsetting requirements. The Trust’s
     maximum exposure to credit risk at the reporting date was:

                                                                 Credit            2009              2008
                                                                 rating            $’000             $’000
      Cash and cash equivalents                                      AA          27,609            40,385
      Trade and other receivables                                   n/a            1,335               411
      Mortgage loans (Current assets)                               n/a          62,626            73,410
      Mortgage loans (Non current assets)                           n/a          52,502            66,476
                                                                                144,072           180,682




                                                                          Balmain (MMT) Mortgage Trust
                                                  (formerly known as Mariner Mortgage Trust) ARSN 107 891 967
28                                                                           Annual Financial Report 2009
    The Trust’s maximum exposure to credit at the reporting date by type of sector was:

                                                                                 2009         2008
                                                                                 $’000        $’000
      Commercial                                                                41,798       46,404
      Industrial                                                                27,339       30,970
      Residential                                                               35,358       50,783
      Retail                                                                     7,745       11,729
      Vacant Land                                                                3,482             -
      Banking                                                                   27,609       40,385
      Other                                                                      1,335          411
      less: Provision for impairment                                             (594)             -
      Total gross credit risks                                                 144,072      180,682

    Loan sizes are limited to alleviate a concentration of assets. The maximum individual
    loan represented 4.08% of total assets (2008: 3.68%). The average loan size was $741,810
    (2008: $794,809). Loans were spread geographically as shown in the table below:

                                                                                 2009          2008
      States                                                                       %             %
      Australian Capital Territory                                                0.44         0.36
      New South Wales                                                            53.76        52.62
      Northern Territory                                                             -         1.10
      Queensland                                                                 21.29        23.12
      South Australia                                                             2.61         2.36
      Tasmania                                                                    0.58         2.40
      Victoria                                                                   10.23         8.73
      Western Australia                                                          11.09        10.31
                                                                                100.00       100.00

    Credit quality
    The aging of the Trust’s receivables and mortgage loans at the reporting was:

                                                                       2009                    2008
                                                     Gross        Impairment     Gross   Impairment
      In thousands of AUD                            $’000             $’000     $’000         $’000
      Not in arrears                              101,775                  -   137,016             -
      In arrears 0-30 days                                    -            -         -             -
      In arrears 31-60 days                            255                 -     2,330             -
      In arrears 61-90 days                          5,220                 -      540              -
      In arrears more than 90 days                   8,472             (594)         -             -
      Receivables                                    1,334                 -         -             -
                                                  117,056              (594)   139,886             -




Balmain (MMT) Mortgage Trust
(formerly known as Mariner Mortgage Trust) ARSN 107 891 967
Annual Financial Report 2009                                                                      29
Notes to the Financial Statements (continued)

     Movement in allowance for specific impairment:

                                                                                                  2009
                                                                                                  $’000
      Opening balance                                                                                   -
      Allowance for the period – specific provisions                                               (594)
                                                                                                   (594)

     Impairment provisions were assessed for loans overdue at 30 June 2009. The assessment
     takes into account the estimated future cash flows from the loans including estimated
     realisable value of collateral discounted at appropriate rates. The difference between
     discounted cash flows and the carrying amount of the loan is provided as an allowance
     for impairment. Further, an assessment of the portfolio is made to consider if there are
     impairment losses existing within the portfolio which have not yet emerged. Based
     on the historic nil default rate and collateral held (average loan valuation ratio of the
     portfolio as at 30 June 2009 is 60.36% (30 June 2008: 60.73%)), management believes
     that no collective impairment is necessary in respect of loans not past due and not
     currently impaired.

     Collateral and other credit enhancements
     The Trust’s loan assessment policy is fundamentally based on collateral, debt repayment
     capacity and credit standing. Collateral can be an important mitigant of credit risk
     and the majority of the loan to valuation ratio (“LVR”) is up to 70% at acceptance and
     confirmed via compliance sign off prior to settlement of any advances.

     The Trust is required to implement guidelines on the acceptability of specific classes of
     collateral or credit risk mitigation, and determine suitable valuation parameters. Such
     parameters are expected to be conservative, reviewed regularly and supported by
     empirical evidence. Security structures and legal covenants are required to be subject to
     regular review to ensure that they continue to fulfil their intended purpose and remain in
     line with local market practice. The total collateral held for the mortgaged loans given
     by the Trust is $191,709,723 (2008: $230,349,000).

     The fair value of the collateral held against loans in arrears as at 30 June 2009 is
     $17,425,000 (2008: $4,455,000).




                                                                       Balmain (MMT) Mortgage Trust
                                                (formerly known as Mariner Mortgage Trust) ARSN 107 891 967
30                                                                         Annual Financial Report 2009
                                               30 June 2009                              30 June 2008
      LVR           Total no.      Total %        Outstanding    Total no.    Total %     Outstanding
      Profile        of loans     portfolio            loans $    of loans   portfolio         loans $
      0.00% -                1       0.01%             12,870           0      0.00%                 -
      10.00%
      10.00% -               3       0.86%            989,435           6      1.02%        1,433,385
      20.00%
      20.01% -               3       0.38%            442,336           3      0.25%         344,262
      30.00%
      30.01% -               1       0.12%            140,000           3      1.08%        1,516,140
      40.00%
      40.01% -             15        6.78%         7,850,906           13      8.12%       11,365,222
      50.00%
      50.01%               21       17.85%        20,658,521           22     13.50%       18,887,210
      -60.00%
      60.01% -            104       71.06%        82,232,346          109     64.61%       90,375,221
      70.00%
      70.01% -               7       2.48%         2,864,246           20     11.41%       15,965,010
      80.00%
      80.01% -               1       0.46%            531,772            -     0.00%                 -
      100.00%
                          154         100%       115,722,432          176       100%      139,886,451

    Liquidity risk
    Liquidity risk is the risk that the Trust will not be able to meet their financial obligations
    as they fall due.

    Management of liquidity risk
    In ordinary circumstances the Trust expects to have sufficient liquidity to pay monthly
    distributions and fund withdrawal requests. Balmain (MMT) Mortgage Trust also believes
    that there will be a market for the Trust’s assets and that they could be sold if additional
    liquidity is required.




Balmain (MMT) Mortgage Trust
(formerly known as Mariner Mortgage Trust) ARSN 107 891 967
Annual Financial Report 2009                                                                         31
Notes to the Financial Statements (continued)

     Exposure to liquidity risk
     The table below presents cash flows payable by the Trust by remaining contractual
     maturities at the balance sheet date. The amounts disclosed are the contractual,
     undiscounted cash flows:

                                      Carrying      Contractual                       0-6             6
                                      amount         cash flows         At call    months        months
      2009                    Note       $’000            $’000          $’000      $’000         $’000
      Financial liabilities
      Payables                  10         252                252             -         252              -
      Distributions
      payable                   11         618                618             -         618              -
      Net asset
      attributable to
      unit holders              12     143,796           143,796      143,796               -            -
                                       144,666           144,666      143,796           870              -



                                      Carrying      Contractual                       0-6             6
                                      amount         cash flows         At call    months        months
      2008                    Note       $’000            $’000          $’000      $’000         $’000
      Financial liabilities
      Payables                  10         462                462             -         462              -
      Distributions
      payable                   11       1,150              1,150             -       1,150              -
      Net asset
      attributable to
      unit holders              12     179,070           179,070      179,070               -            -
                                       180,682           180,682      179,070         1,612              -

17 Contingencies
     There are no contingent assets and contingent liabilities as at 30 June 2009.

18 Events subsequent to reporting date
     There have been no events subsequent to the balance date which would have a material
     effect on the Trust’s financial statements as at 30 June 2009.

19 Trust details
     Balmain (MMT) Mortgage Trust, registered and domiciled in Australia, is a registered
     managed investment scheme.

     The address of the registered office is:

     Level 14
     60 Castlereagh Street
     Sydney NSW 2000
     AUSTRALIA

     The Responsible Entity had no employees at the end of the year.




                                                                        Balmain (MMT) Mortgage Trust
                                                 (formerly known as Mariner Mortgage Trust) ARSN 107 891 967
32                                                                          Annual Financial Report 2009
Directors’ Declaration
1   In the opinion of the directors of Balmain Fund Administration Limited, the responsible
    entity of Balmain (MMT) Mortgage Trust (“the Trust”):
    (a) the financial statements and notes, set out on pages 13 to 32 are in accordance with
         the Corporations Act 2001, including:
         (i) giving a true and fair view of the financial position of the Trust as at 30 June 2009
              and of its performance, as represented by the results of its operations and its
              cash flows, for the year ended 30 June 2009; and
         (ii) complying with Accounting Standards and the Corporations Regulations 2001;
              and
    (b) there are reasonable grounds to believe that the Trust will be able to pay its debts as
         and when they become due and payable.
    (c) The financial report also complies with International Financial Reporting Standards
         as disclosed in note 2(a);
Dated at Sydney this 28th day of September 2009.

Signed in accordance with a resolution of the Directors of Balmain Fund Administration
Limited:




Andrew Griffin
Director




Balmain (MMT) Mortgage Trust
(formerly known as Mariner Mortgage Trust) ARSN 107 891 967
Annual Financial Report 2009                                                                    33
Independent auditor’s report
to the unitholders of
Balmain (MMT) Mortgage Trust
Report on the financial report
We have audited the financial report of Balmain (MMT) Mortgage Trust (the Trust), which
comprises the balance sheet as at 30 June 2009, and the income statement, statement
of changes in equity and cash flow statement for the year ended on that date, significant
accounting policies and other explanatory notes 1 to 19 and the directors’ declaration set
out on pages 6 to 33.

Directors’ responsibility for the financial report
The directors of Balmain Fund Administration Limited (‘the Responsible Entity’) are
responsible for the preparation and fair presentation of the financial report in accordance
with Australian Accounting Standards (including the Australian Accounting Interpretations)
and the Corporations Act 2001. This responsibility includes establishing and maintaining
internal control relevant to the preparation and fair presentation of the financial report that
is free from material misstatement, whether due to fraud or error; selecting and applying
appropriate accounting policies; and making accounting estimates that are reasonable in
the circumstances. In note 2, the directors of the Responsible Entity also state, in accordance
with Australian Accounting Standard AASB 101 Presentation of Financial Statements,
that the financial report, comprising the financial statements and notes, complies with
International Financial Reporting Standards.

Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. These Auditing
Standards require that we comply with relevant ethical requirements relating to audit
engagements and plan and perform the audit to obtain reasonable assurance whether the
financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts
and disclosures in the financial report. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstatement of the financial
report, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Scheme’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 Scheme’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the
directors of the Responsible Entity, as well as evaluating the overall presentation of the
financial report.

We performed the procedures to assess whether in all material respects the financial report
presents fairly, in accordance with the Corporations Act 2001 and Australian Accounting
Standards (including the Australian Accounting Interpretations), a view which is consistent
with our understanding of the Trust’s financial position, and of its performance.

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




                                                                      Balmain (MMT) Mortgage Trust
                                               (formerly known as Mariner Mortgage Trust) ARSN 107 891 967
34                                                                        Annual Financial Report 2009
Independence
In conducting our audit, we have complied with the independence requirements of
the Corporations Act 2001. We confirm that the independence declaration required by
Corporations Act 2001, provided to the directors of Balmain (MMT) Mortgage Trust on
28 September 2009, would be unchanged if provided to the directors as at the date of this
auditor’s report.

Auditor’s opinion
In our opinion:

(a) the financial report of Balmain (MMT) Mortgage Trust is in accordance with the
    Corporations Act 2001, including:
    (i) giving a true and fair view of the Trust’s financial position as at 30 June 2009 and of
          its performance for the ended on that date; and

    (ii) complying with Australian Accounting Standards (including the Australian
          Accounting Interpretations) and the Corporations Regulations 2001.

(b) the financial report also complies with International Financial Reporting Standards as
    disclosed in note 2.




KPMG




Malcolm Kafer
Partner

Sydney

30th day of September 2009.




Balmain (MMT) Mortgage Trust
(formerly known as Mariner Mortgage Trust) ARSN 107 891 967
Annual Financial Report 2009                                                                      35
To find out more about the Balmain (MMT) Mortgage Trust,
contact your Financial Adviser or call our Client Services
Department on 1800 225 624. Alternatively, visit our website at
www.balmainfunds.com.au




The information contained in this annual report is for existing investors only and does not constitute an offer of, or an
inducement to acquire any units in the Balmain (MMT) Mortgage Trust. Any opinion expressed as to any future matter is
a guide only and represents the opinion held by Balmain as to that fact but cannot be relied upon by any person and is
not guaranteed by any member of the Balmain group.
Balmain (MMT) Mortgage Trust ARSN 107 891 967
Responsible Entity and Issuer: Balmain Fund Administration Limited ABN 98 134 526 604, AFSL 333213
BMT 4007

				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:40
posted:6/25/2011
language:English
pages:36