In respect of the year ended 30 June 2008, the directors of Macquarie Infrastructure Investment Management Limited (MIIML or the Responsible Entity) submit the following report on the consolidated financial report of Macquarie Infrastructure Trust (II) (MIT(II)). UIG 1013: Consolidated Financial Reports in relation to Pre-Date-of-Transition Stapling Arrangements requires one of the stapled entities of an existing stapled structure to be identified as the parent entity for the purpose of preparing consolidated financial reports. In accordance with this requirement, MIT(II) has been identified as the parent of the consolidated group comprising MIT(II) and its controlled entities, Macquarie Infrastructure Trust (I) (MIT(I)) and its controlled entities and Macquarie Infrastructure Group International Limited (MIGIL) and its controlled entities, together acting as Macquarie Infrastructure Group (MIG or the Group).
Principal activities
The principal activity of MIG is the development and operation of toll roads, bridges and tunnels and investment in entities in the same industry sector. There were no significant changes in the nature of the Group’s activities during the year.
Distributions
The total distribution for MIG for the year ended
30 June 2008 was 20.0000 cents per stapled security (2007: 20.0000 cents per stapled security and an in specie distribution of 38.3333 cents per stapled security). An interim distribution of 10.0000 cents per stapled security (2007: 10.0000 cents per stapled security) was paid by MIGIL on 14 February 2008. A final distribution of 10.0000 cents per stapled security (2007: 10.0000 cents per stapled security) was paid by MIGIL on 14 August 2008.
Directors
The following persons were directors of the Responsible Entity during the whole of the year and up to the date of this report (unless otherwise stated):
- Mark Roderick Granger Johnson (Chairman)
- Michael Bernard Easson
(Resigned 28/08/2007) - Eric Paul McClintock
- Nicholas William Moore
(Resigned 11/04/2008) - David Allen Mortimer
- David Anthony Walsh
- Michael Carapiet
(Appointed 11/04/2008) - John Stuart Hugh Roberts
(Resigned 28/08/2007, appointed alternate Director for Mark Roderick Granger Johnson and Nicholas William Moore 28/08/2007, appointed alternate Director for Michael Carapiet 11/04/2008)
The following persons were directors of MIGIL during the whole of the year and up to the date of this report:
- Robert Andrew Mulderig
(Chairman) - Jeffrey Gerald Conyers
- Dr Peter Dyer
- Mark Roderick Granger Johnson
Interests in the Group held by the directors of the Responsible Entity and MIGIL during the year are disclosed in note 26 to the MIG full financial statements.
Review and results of operations
The performance of the Group for the year, as represented by the results of its operations, was as follows:
| Consolidated 30 June 2008 $’000 |
Consolidated 30 June 2007 $’000 |
|
 |
||
|
||
|
||
| Revenue and other income from continuing activities | 1,400,841 | 2,740,365 |
| Profit attributable to MIG security holders | 767,269 | 1,702,253 |
| Cents | Cents | |
|
||
|
||
|
||
| Basic earnings per stapled security | 31.46 | 66.57 |
|
||
|
Security buy-back
On 14 January 2008 MIG completed its A$1.00 billion on market buy-back, resulting in the total buy-back and cancellation of 292,218,706 MIG securities.
Establishment of the MIG Westlink Funding Trust
On 1 April 2008, the MIG Westlink Funding Trust was established as a wholly owned subsidiary of MIT(I). A A$200 million facility, being a securitisation of part of the future distributions from Westlink M7, has been extended to the MIG Westlink Funding Trust. This facility remains undrawn at 30 June 2008.
Significant changes in state of affairs
In the opinion of the directors there were no significant changes in the state of affairs of the Group other than those disclosed in the Review and Results of Operations that occurred during the year under review.
Events occurring after balance sheet date
Distribution and Dividend Reinvestment Plan (DRP)
A final distribution of 10.0000 cents per stapled security (2007: 10.0000 cents per stapled security) was paid on 14 August 2008. The distribution consisted of 10.0000 cents paid by MIGIL.
A portion of stapled security holders participated in MIG’s DRP for the final distribution paid on 14 August 2008. Of the distribution declared, $79.2 million was reinvested in MIG. MIG sourced the securities allocated to the participants under the DRP from on-market purchases of existing securities.
Likely developments and expected results of operations
Further information on likely developments relating to the operations of the Group in future years and the expected results of those operations has not been included in this report because the directors of the Responsible Entity believe it would be likely to result in unreasonable prejudice to the Group.
Indemnification and insurance of officers and Auditors
No insurance premiums are paid for out of the assets of the Group in regard to insurance cover provided to either the Responsible Entity or auditors of the Group. So long as the officers of the Responsible Entity act in accordance with the Trust Constitutions and the Corporations Act 2001, the officers remain indemnified out of the assets of the Group against any losses incurred while acting on behalf of the Group. The auditors of the Group are in no way indemnified out of the assets of the Group.
Fees paid to the Responsible Entity and Adviser
Fees paid to the Responsible Entity and Macquarie Capital Funds (Europe) Limited (MCFEL or the Adviser) out of the Group’s property during the year are disclosed in note 26 to the MIG full financial statements.
No fees were paid out of the Group’s property to the directors of either the Responsible Entity or the Adviser during the year.
Interests in the Group held by the Responsible Entity and its associates during the year are disclosed in note 26 to the MIG full financial statements.
Interests in the Group issued during the financial year
The movement in securities on issue in the Group during the year is as set out below:
| MIG | Consolidated 30 June 2008 ’000 |
Consolidated 30 June 2007 ’000 |
|
||
|
||
|
||
| Securities on issue at the beginning of the year | 2,516,791 | 2,475,499 |
| Securities issued during the year | – | 220,554 |
| Securities cancelled during the year | (112,957) | (179,262) |
|
||
|
||
|
||
| Securities on issue at the end of the year | 2,403,834 | 2,516,791 |
|
||
|
For further details please refer note 20 to the MIG full financial statements. For further details on securities held by related parties, refer to note 26 to the MIG full financial statements.
| Value of assets | ||
| MIG | Consolidated 30 June 2008 ’000 |
Consolidated 30 June 2007 ’000 |
|
||
|
||
|
||
| Value of Group assets at 30 June | 9,747,056 | 10,331,517 |
|
||
|
||
|
The value of the Group’s assets is derived using the basis set out in note 1 to the financial statements.
Environmental regulation
The operations of the underlying assets in which the Group invest are subject to environmental regulations particular to the countries in which they are located.
The following environmental regulations apply to MIG’s controlled assets:
United Kingdom
Midland Expressway Limited constructed the M6 Toll road under a series of Orders made in 1998 by the Secretary of State for Transport pursuant to his powers under the Highways Act 1980 and the New Roads and Street Works Act 1991. Prior to that, the M6 Toll had been the subject of a full Environmental Impact Assessment that was considered in detail at a Public Inquiry held in 1994 and 1995. The Public Inquiry produced a list of specific environmental commitments and undertakings. There have been no significant breaches of the environmental legislation, commitments or undertakings.
Auditor’s Independence Declaration
A copy of the auditor’s independence declaration, as required under section 307C of the Corporations Act 2001 is set out on page 51.
Rounding of amounts in the directors’ report and the financial report
The Group is of a kind referred to in Class Order 98/0100 (as amended), issued by the Australian Securities & Investments Commission relating to the “rounding off” of amounts in the Directors’ Report and Financial Report. Amounts in the Directors’ Report and Financial Report have been rounded to the nearest thousand dollars in accordance with that Class Order, unless otherwise indicated.
 |
 |
| Mark Johnson Sydney 20 August 2008 |
John Roberts Sydney 20 August 2008 |