Fund Overview
	Fund Assets
	Fund Benefits
	Performance & Financial Information
	Unit Prices
	Distributions
	Redemptions

 

RiverBank Fund Update - 28 April 2010

RiverBank has been successfully recapitalised as part of a recently completed series of transactions. RFM expects to recommence distribution payments in May. RiverBank has benefited from the completion of a leasing transaction which will result in Select Harvests Ltd leasing the majority of RFM RiverBank’s almond orchards for the next 20 years, effectively replacing RFM RiverBank’s previous lessee.

RFM considers the new leasing arrangements as a very positive development as it removes farming operational risk and provides the opportunity for RiverBank to revert to its original objective of owning and leasing land and water assets.

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RiverBank Capital Raising

Units under the RiverBank Capital Raising were allotted to investors on 21 April following the completion of the Conditions Precedent set out in the RiverBank Product Disclosure (PDS) dated 19 October 2009 and Supplementary PDS dated 17 February 2010.

RiverBank currently remains open for investment in the short term. Please click on Offer Documents under Key Documents to download a copy of the PDS and Supplementary PDS along with related research and marketing materials.

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Fund Overview

RFM RiverBank (RBK) aims to provide investors with competitive risk-adjusted returns through select investments in land, infrastructure and water assets. An investment in RBK seeks to provide a reliable tax efficient income stream and the potential for capital growth through the acquisition and long term leasing of land and water assets. Irrigation entitlements are a specific focus of the RBK investment philosophy. RBK was established in February 2005 to acquire land and water assets in rural and regional Australia and lease these assets to selected counterparties.

Returns generated by RBK are a combination of regular lease payments and capital growth resulting from increases in asset values.

Table 1: RBK Summary

¹ The Indirect Cost Ratio is expressed as a percentage of the net asset value of the Fund. This includes GST reduced by the estimated Reduced Input Tax Credits. Refer to the Product Disclosure Statement for details of fees and costs.

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Fund Assets

RBK is a unit trust which primarily invests in horticultural land, water and infrastructure. RBK generally does not undertake farming activities on its own accord; rather it leases assets to third parties. Consequently, although the nature of the assets owned by RBK is agricultural, the income generated by RBK for its investors is dependent upon lease payments rather than agricultural commodity cycles.

RBK's main assets are almond orchards situated on two properties near Hillston, 100 kilometres north of Griffith, NSW. One property is owned by RBK, whilst the other is secured under a long term lease arrangement and is currently planned for acquisition by RBK (detailed in the PDS). These assets include the land, almond trees, and irrigation infrastructure and extraction rights to bore water from the Lower Lachlan Aquifer.

The majority of RBK's almond orchards are leased to Select Harvests Limited, a listed Australian agribusiness company, for a period of 20 years. The leases require rent to be paid quarterly in advance and a six month security "bond" lodged with RBK, insuring RBK against any interruption to rental payments. The remaining almond orchards are leased to tax effective managed investment schemes, also managed by RFM. This provides RBK with a diversified counterparty arrangement.

RBK is unique: whilst it owns assets that are primarily agribusiness in nature, due to the nature of its business, it is not directly exposed to the various risks inherent in managing an agricultural enterprise.

RBK intends to continue acquiring water entitlements in the future, as and when suitable counterparties are identified. RBK will also look at acquiring additional combined land and water packages to be leased to appropriate third parties.

Table 2: RBK Assets

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Fund Benefits

• Capital Growth: Land and water assets have the potential to appreciate in value, particularly when coupled with quality developments.
  
  
• Unique asset class: Investing in RBK provides exposure to the newly developing water market. The importance and value of water is set to increase as the market expands and matures.
  
  
• Lease term: Almond trees have a productive life of up to 35 years. Following the expiration of the leases in 2027 and 2028, the proceeds from the almond crop reverts to RBK Unitholders.

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Performance & Financial Information

RBK has delivered consistent, positive returns to Unit Holders over the past three years despite widespread drought in southern Australia.

Table 3: RBK Financial Year Returns

Returns inclusive of Franking Credits.
Past performance is not a reliable indicator of future performance.

 

Table 4: RBK Rolling Annual Returns

* Annualised figures.
¹ Effective return including Franking Credits distributed to Unitholders.

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Unit Prices

Unit prices are quoted in Australian dollars and are calculated on the 15th day of the month or the following Business Day, if the 15th is not a Business Day. They are based on the NAV calculated using the preceding month’s financial results.

Click here for historical unit price information

Table 5: RBK Unit Price History

Following the completion of the transactions to recapitalise RiverBank, RFM expects to publish units prices at the next Unit Price Set Date on 15 May 2010.

Reinvested units and units purchased via rebated trail will be issued at the most recently published unit price.

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Distributions

The historical composition of RBK's distributions since its inception is shown in the table below.

Table 6: RBK Distribution Summary since inception

¹ Figures rounded to nearest percentage.
² Represents tax paid by RBK, or funds in which RBK has invested, which may be available to Unit Holders as a tax offset.
³ The tax deferred proportion is the percentage of the distribution which is generally not included in the Unit Holder's assessable income in the year of the distribution. These amounts may have capital gains tax implications for Unit Holders.

 

RBK distribution payments are paid quarterly. Please note that distributions are taxable in the year of receipt.

Distributable income is allocated to Unit Holders on a per-Unit basis according to the number of Units held at the end of the distribution period.

Reinvested distributions will be reinvested using the NAV Price calculated on the next Unit Price set date following the distribution period.

Cash distributions will be paid to Unit Holders by the 14th of the month following the Reinvestment Date.

Table 7: RBK Distribution History

Following the completion of the transactions to recapitalise RBK, RFM recommenced distributions with the first distribution having a record date of 30 April 2010 and Payment Date of 14 May 2010.

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Redemptions

RFM intends, subject to available funds, to make a Redemption Offer for the RBK, on an annual basis from November 2011 in accordance with the RBK Constitution and the provisions of the Corporations Act regulating offers for non-liquid managed investment schemes.

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• Offer Documents
• Newsletters
• Investor Letter

  Management Fee Changes

  14 July 2010

• Unitholder Meeting Minutes

  25 March 2010

• RFM Adviser Brief

  Select Harvests Ltd (SHV) Heads of Agreement on Yilgah

  17 March 2010

• Half Year Report

  31 December 2009

• Frequently Asked Questions

  22 October 2009

• Adviser Edge Research (3¾ stars)

  October 2009

• AAG Research (3¾ stars)

  October 2009

• Annual Report

  30 June 2009