Media Release



ASX/Media Release


24 February 2016


INTERIM FINANCIAL REPORT OF STAPLED COMPANY


Astro Japan Property Group (ASX: AJA) earlier today announced its half year results to 31 December 2015 and released the Appendix 4D (Half Year Report) and the Interim Financial Report covering the operations of the Astro Group as a whole.


In accordance with the Corporations Act 2001 (Cth), the Astro Group prepares two interim financial reports for release to the ASX: one report which covers the operations of the Astro Group as a whole (released earlier today); and another smaller report which covers the listed stapled company, Astro Japan Property Group Limited and its controlled entity.


Please find attached the Interim Financial Report for Astro Japan Property Group Limited for the period ended 31 December 2015 covering the operations of only the stapled company and its controlled entity. This Report should be read together with the Interim Financial Report of the Astro Group released earlier today.


ENDS


Investor & Media Enquiries:

Eric Lucas John Pettigrew

Senior Advisor Chief Financial Officer

Phone: +61 2 8987 3900 (Australia) Phone: +61 2 8987 3902

+81 3 3238 1671 (Japan)


About Astro Japan Property Group (AJA)

Astro Japan Property Group is a listed property group which invests in the Japan real estate market. It currently holds interests in a portfolio comprising 30 retail, office and residential properties. Asset management services in Japan are generally undertaken by Spring Investment Co., Ltd.


AJA is a stapled entity comprising Astro Japan Property Trust (ARSN 112 799 854) and Astro Japan Property Group Limited (ABN 25 135 381 663). For further information please visit our website: www.astrojapanproperty.com.



Astro Japan Property Group Limited

(ABN 25 135 381 663)


Interim Financial Report 31 December 2015



Important: These financial statements should be read in conjunction with the consolidated financial statements of the Astro Group for the half year ended 31 December 2015, which were released to the ASX on 24 February 2016


This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual financial report for the year ended 30 June 2015 and any public announcements made by Astro Japan Property Group during the interim reporting period in accordance with the continuous disclosure requirements of the ASX Listing Rules and the Corporations Act 2001 (Cth).


Through our website, we have ensured that our corporate reporting is timely, complete and available globally at minimum cost to the Astro Group. All press releases, financial reports and other information are available on our website: www.astrojapanproperty.com



CONTENTS


Directors' Report 1

Auditor's Independence Declaration 3

Consolidated Statement of Profit or Loss and Other Comprehensive Income 4

Consolidated Statement of Financial Position 5

Consolidated Statement of Cash Flows 6

Consolidated Statement of Changes in Equity 7

Notes to the Financial Statements 8

  1. Statement of significant accounting policies 8

  2. Losses per security 9

  3. Financial assets carried at fair value through profit or loss (FVTPL) 9

  4. Contributed equity 9

  5. Fair value measurement of financial instruments 9

  6. Contingent assets and liabilities 10

  7. Lease commitments 10

  8. Segment reporting 10

  9. Events occurring after the end of the reporting period 10

Directors' Declaration 11

Independent Auditor's Review Report 12

DIRECTORS' REPORT

for the half year ended 31 December 2015



The Directors of Astro Japan Property Group Limited (ABN 25 135 381 663) ("AJCo") present their report together with the consolidated financial statements of AJCo and its controlled entity ("AJCo Group") for the half year ended 31 December 2015.


The Astro Japan Property Group


The Astro Japan Property Group ("Astro Group") comprises Astro Japan Property Trust (ARSN 112 799 854) ("AJT"), AJCo and its controlled entity. The shares in AJCo are stapled to the units in AJT on a 'one for one' basis and together are referred to as "stapled securities". AJCo and AJT are separate legal entities under the Corporations Act 2001 (Cth) so are therefore required to separately comply with the reporting and disclosure requirements under the Corporations Act 2001 (Cth), Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board and Urgent Issues Group Interpretations. This report is in respect of the AJCo Group.


The registered office and principal place of business of AJCo is Suite 4 Level 10, 56 Pitt Street, Sydney NSW 2000.


Principal activities


The principal activities of AJCo are:

  • ownership of Astro Japan Property Management Limited ("Responsible Entity"), the Responsible Entity of AJT; and

  • ownership of a 25% economic interest in Spring Investment Co., Ltd, ("Japan Asset Manager" or "Spring"), which is the manager of the Astro Group's Japanese property interests.


Financial and operating review


AJCo Group made a loss after income tax of $738,053 for the half year ended 31 December 2015 (31 December 2014: loss of $189,684).


Change to the AJCo/Spring profit share arrangement


The success of the Astro Group is closely linked to the performance of the asset manager, Spring Investment Co. Ltd., founded, majority- owned and headed by Mr Eric Lucas who has more than 30 years' experience doing business in Japan. For some time, the Board has been focused on key-man risk concerning Mr Lucas, who also acts as Senior Advisor to the Astro Group and is its largest shareholder, and the Board has been in a constructive dialogue with Mr Lucas as to how best to ameliorate this risk.


Therefore the Board is pleased that earlier this year a new CEO, Mr Osamu Ebinuma, was appointed to Spring, with Mr Lucas remaining engaged as Spring's Executive Chairman and Senior Advisor to the Astro Group. The appointment of the new CEO is not only intended to alleviate the key-man risk concerning Mr Lucas, but also to bolster prospects for expansion of the activities of Spring.


After careful consideration, the Board has agreed to changes to the terms under which AJCo holds the 25% economic interest in Spring which entitles it to a share of the profit of Spring.


The changes recognise increased employee remuneration costs in Spring arising from the appointment of the new Spring CEO and an increased allowance for bonuses payable to Spring employees. These changes will, all other things being equal, result in reductions in the six monthly cash distribution from Spring which AJCo receives through that interest.


The effect of these changes if applied to Spring's budgeted profit for 2016 would be a reduction in AJCo's share in the profit of Spring by approximately $210,000. In addition, the changes have impacted the value of AJCo's 25% economic interest in Spring as at 31 December 2015 by reducing the value by $1.35 million.


The Board believes that it is in the best interests of all parties for AJCo to contribute to the increased remuneration costs in Spring as growth in business for Spring will benefit AJCo as a holder of a 25% economic interest in Spring.


Dividends


The Directors have not declared any dividends for the half year ended 31 December 2015 (31 December 2014: nil).


Significant changes in the state of affairs


In the opinion of the Directors, other than the items already noted in the Directors' Report, there were no changes in the state of affairs of AJCo that occurred during the half year under review.


Matters subsequent to the end of the half year


The Directors are not aware of any other matter or circumstance occurring since 31 December 2015 not otherwise dealt with in the half year financial report that has significantly or may significantly affect the operations of the AJCo Group, the results of those operations, or the state of affairs of the AJCo Group in subsequent financial years.



Page 1 ASTRO JAPAN PROPERTY GROUP LIMITED

Astro Japan Property Group issued this content on 24 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 24 February 2016 15:00:11 UTC

Original Document: http://www.astrojapanproperty.com/wp-content/uploads/2016/02/240216-Interim-Financial-Report-of-Stapled-Company.pdf