Disclosures

The Responsible Entity maintains a number of written policies that various aspects of the Fund’s operations. To view the relevant policy, please click on the links below.

Product Disclosure Statement

You can find a copy of the Product Disclosure Statement by clicking here.

Forms

The following forms are available for investors:

Distribution Reinvestment Form (DRAF)
Use this form to make or change your preference for the reinvestment of future US Fund distributions into the Strategic Opportunities (Growth & Income) Fund. Once complete, please scan it and email it to admin@sogif.au.

Change of Details (non-banking)
Please change all non-banking details via the Investor Portal.

Change of Details Form (banking)
To change your nominated bank account for distributions and redemptions, please download, print, sign the Change of Details form and mail it to Plantation Capital Ltd, PO Box 532, Canterbury Vic 3126. Please also send a scanned copy of the form to: admin@passiveincomefund.com

Transfer of Units Form
Use this form if you are transferring units from one investor to another. Please follow the instructions on it. Email completed forms to admin@passiveincomefund.com

Financial Reports

Interested parties are able to download the following financial reports:

Distributions

The following distributions have been paid:

  • A 6 cent distribution per unit was declared on 13 May 2024
  • A 20 cent distribution per unit was declared on 31 December 2023
  • A 30 cent distribution per unit was declared on 31 October 2023
  • A 20 cent distribution per unit was declared on 31 July 2023
  • A 25 cent distribution per unit was declared on 30 June 2023
  • A 13 cent distribution per unit was declared on 31 December 2022
  • A 5 cent distribution per unit was declared on 30 September 2022
  • A 10 cent distribution per unit was declared on 30 June 2022
  • A 10 cent distribution per unit was declared on 31 December 2021
  • A 6 cent distribution per unit was declared on 30 June 2021
  • An 8 cent distribution per unit was declared on 31 December 2020
  • A 6.25 cent distribution per unit was declared on 30 September 2020
  • A 7.5 cent distribution per unit was declared on 30 April 2020
  • A 5 cent distribution per unit was declared on 31 December 2019
  • A 5 cent distribution per unit was declared on 30 June 2019
  • A 5 cent distribution per unit was declared on 31 December 2018
  • A 5 cent distribution per unit was declared on 30 June 2018
  • A 5 cent distribution per unit was declared on 31 December 2017
  • A 5 cent distribution per unit was declared on 30 June 2017
  • A 4.8 cent distribution per unit was declared on 31 December 2016
  • A 4.8 cent distribution per unit was declared on 30 June 2016
  • A 4 cent distribution per unit was declared on 31 December 2015
  • A 4 cent distribution per unit was declared on 30 June 2015
  • A 4 cent distribution per unit was declared on 31st December 2014
  • A 4 cent distribution per unit was declared on 1 July 2014
  • A 4 cent distribution per unit was declared on 1 January 2014
  • A special distribution of $103,279 was declared on 31 October 2012

The Fund’s distributable income will primarily be sourced from income it receives from its interests in the REIT, which in turn will primarily be sourced from the rental income the REIT receives on its property assets. At times the distribution may include captial gains and return of capital.

When the REIT sells a property asset, some capital may not be returned by the REIT to the Fund. This will be determined by the REIT at the relevant time. For at least the first three years of the Fund’s life, it is the Responsible Entity’s intention that any capital gains made by the REIT will be reinvested in further property assets.

Portfolio Diversification Disclosures

Performance Disclosures

Click here to view the performance disclosures.

Policy Disclosures

The Responsible Entity maintains a number of written policies…

Gearing Policy

LAST REVIEW: FEBRUARY 2023

Gearing magnifies the effect of gains and losses on an investment. The gearing ratio indicates the extent to which a scheme’s assets are funded by external liabilities. A higher gearing ratio means greater magnification of gains and losses and generally greater volatility compared to a lower gearing ratio. The gearing ratio is calculated as follows:

Gearing ratio = Total interest bearing liabilities / Total assets

The gearing ratio is based on liabilities disclosed in the Fund’s audited financial statements.

The Fund does not directly own property, and therefore, does not borrow for the purposes of financing the acquisition of a property. Neither does it borrow for the purposes of gearing its investment in the REIT.

When undertaking property acquisitions, the Responsible Entity permits the REIT structure to borrow up to a maximum of 60% of a property’s value (including the value of any improvements, capital costs and/or market appreciation) to finance (or refinance) the acquisition, provided that the portfolio’s gearing ratio will not exceed 40% of the portfolio’s total fair market value.

The maximum portfolio gearing ratio of 40% does not include any money advanced by the Fund to the REIT characterised as debt.

Due to the Fund’s significant exposure to off-balance sheet financing (i.e. financing within the REIT structure), the Responsible Entity also calculates a look-through gearing ratio for the Fund using the formula:

Look through gearing ratio =
Total interest bearing liabilities + proportionate share of interest bearing liabilities of the Fund’s underlying investments
/ Total Fund assets (excluding investments) + proportionate share of assets of the Fund’s underlying investments

As at 31 December 2022:

› the Fund’s gearing ratio is 0.00%;

› the REIT structure’s gearing ratio is 8.53%;

› the Fund’s look-through gearing ratio is XX.XX%.

For more information on borrowing please see the Fund’s latest audited financial statements, which are available under the heading ‘Financial Reports’ above.

Interest Cover Policy

LAST REVIEW: FEBRUARY 2023

The fund seeks to maintain an interest cover ratio of at least 2, however this may be lower during the Fund’s wind up or wind down.

The interest cover ratio indicates an unlisted property scheme’s ability to meet interest payments from earnings, where:

Interest cover ratio = (EBITDA* – unrealised gains + unrealised losses) / Interest expense
* EBITDA (earnings before interest, tax, depreciation and amortisation)

The EBITDA (earnings before interest expense, tax, depreciation and amortisation) and interest expense figures used to calculate the interest cover ratio should be consistent with those disclosed in the scheme’s latest financial statements. The latest financial statements will usually be the latest audited or reviewed financial statements, except when the Responsible Entity is aware of material changes since those statements.

The interest cover ratio is a measure of the risk associated with the Fund’s borrowings and the sustainability of borrowings. A fund with a low interest cover ratio only needs a small reduction in earnings (or a small increase in interest rates or other expenses) to be unable to meet its interest payments. Interest cover is also useful for investors when comparing a fund’s relative risks and returns.

As the Fund does not intend to borrow directly, the interest cover ratio will be measured at the REIT’s level, by assessing the REIT’s ability to meet its interest payments out of earnings.

The current interest coverage ratio across the portfolio is disclosed here: https://www.passiveincomefund.com/performance/

Interest Capitalisation Policy

LAST REVIEW: FEBRUARY 2023

The Fund does not capitalise interest expense. The Responsible Entity will ensure that any interest payments due on any borrowings within the REIT will not be capitalised and will be paid out of free cash flow or cash reserves.

Unit Pricing Policy

LAST REVIEW: NOVEMBER 2023

This is an abridged version of the Fund’s unit pricing policy. A full copy is available upon request.

Under the constitution (Constitution) of (the Fund), PCL may issue units in the Fund at any time at an issue price per unit equal to the “Issue Price”. Similarly, if PCL permits a member to redeem its units, the redemption price specified in the Constitution is the “Redemption Price”.

Determination of Issue Price and Redemption Price involves the quantification of a number of amounts. Some of these amounts require PCL to exercise a discretion, in that it must use its independent judgement of the value of certain things.

This document explains how Issue Price and Redemption Price is determined and, where PCL must exercise a discretion in assigning a value to an amount which goes to determining Net Asset Value, explains PCL’s policy as to how its discretion will be exercised.

Issue Price

The Issue Price is defined as:

(Net Asset Value ÷ Number of Units on Issue) + any relevant Transaction Charge

Redemption Price

The Redemption Price is defined as:

(Net Asset Value ÷ Number of Units on Issue) – any relevant Transaction Charge

The number of Units on issue is a known amount which does not involve an exercise of discretion by PCL. However, Net Asset Value does in part require PCL to exercise its discretion. The nature of these discretionary judgements and the policies that PCL will apply in exercising them are described below.

Determination of Net Asset Value

The Constitution defines Net Asset Value to be the value of the Fund’s consolidated assets calculated according to Australian Accounting Standards, less the liabilities of the Fund and any Distributable Amount payable but not paid to Unit Holders on the day on which the Net Asset Value is determined.

Determining Net Asset Value therefore involves an exercise of discretion by PCL, both in order to determine the value of the Fund’s assets and to assign a value to those liabilities which are of an uncertain amount at the time of calculation.
PCL’s policy as to how these discretions will be exercised is set out below.

Valuing the Fund’s property

The Fund’s assets will be valued according to its valuation policy.

Determining the Value of Uncertain Liabilities

From time to time, certain of the Trust’s liabilities may be incapable of being given certain values and therefore PCL must exercise discretion in assigning a value to them for the purpose of determining Net Asset Value.

Where this is the case, PCL will use the amount of such liabilities shown in the most recent published accounts of the Trust, unless such amount is not shown in such account or PCL reasonably believes that it does not represent the true value of the relevant liability. In these circumstances will determine the amount of such liability in accordance with usual market practice.

Transaction Costs

PCL is permitted to take into account transaction charges in determining the Unit Price for units, which will generally be what PCL determines is a fair estimate of the expenses incurred, or that will be incurred, in the purchase or sale of underlying assets upon which the issue and redemption unit prices are based. The amount of the transaction charges for a particular Scheme is an amount which PCL considers a fair allowance for transaction costs.

The amount of transaction charges will be determined by PCL based on an amount which PCL considers to be a fair allowance for the costs (if any) of acquiring and / or disposing of the assets of the relevant Scheme. The amount which is considered to be a fair allowance will be determined by considering the actual costs which will be incurred in buying and selling the relevant Scheme assets.

PCL considers that its policy in relation to the calculation of transaction charges is reasonable because:

(a) purchase transaction costs can be fairly apportioned across all investors, not just those who were investors in the scheme when the asset was acquired;

(b) sale transaction costs should be borne by all members, and the redemption price for those who redeem before an asset is sold should reflect the likely sale costs as if that asset had been sold so as to fund their redemption; and

(c) PCL treats all members holding the same class of units equally.

Documentation of Exercise of Discretion

On each occasion on which PCL determines Net Asset Value, it will prepare and retain a document showing how Net Asset Value was determined, including the value assigned to each asset and liability of the Fund and, if the determination of such value involved an exercise of discretion by PCL, how that value was determined.

Valuation Policy

LAST REVIEW: JANUARY 2023

Outline

In accordance with the requirements of RG 46.45, the responsible entity maintains and complies with a written valuation policy that requires:

  1. A valuer to:
    1. be registered or licensed in the relevant state, territory or overseas jurisdiction in which the property is located (where a registration or licensing regime exists), or otherwise be a member of an appropriate professional body in that jurisdiction; and
    2. be independent;
  2. To follow procedures for dealing with any conflicts of interest
  3. Rotation and diversity of valuers;
  4. Valuations to be obtained in accordance with a set timetable; and
  5. For each property, an independent valuation to be obtained:
    1. before the property is purchased:
      1.  for a development property, on an ‘as is’ and ‘as if complete’ basis; and
      2. for all other property, on an ‘as is’ basis; and
    2. within two months after the directors form a view that there is a likelihood that there has been a material change in the value of the property.

Clarification

Unless otherwise stated, the term Responsible Entity includes Plantation Capital Ltd, any fund that it manages (including fund subsidiaries), directors and employees.

Policy

The Responsible Entity has adopted the following valuation policy:

Registration & Qualification

Ref: RG46.45(a)(i)

The person or firm engaged to complete the valuation (i.e. the valuer or appraiser) must be registered or licensed in the relevant jurisdiction in which the property is located (where a registration or licensing regime exists), or otherwise be a member of an appropriate professional body in that jurisdiction and must have the experience and expertise in the location and type of property being valued

Evidence Requirement

Evidence of current registration must be obtained to placed on file that confirms the registration particulars and qualifications of the valuer.

Independence

Ref: RG46.45 (a)(ii)

The person or firm engaged to complete the valuation (i.e. the valuer or appraiser) shall both be, and perceived to be, independent from the responsible entity, including any subsidiary of the responsible entity.

Evidence Requirement

Evidence of independence in the form a declaration to accompany the valuation or appraisal stating words to the effect of the valuer / appraiser:

  1. does not influence the operations or financial policies of the responsible entity
  2. does not participate, or appear to participate, in the business or professional activities of the responsible entity
  3. has no financial arrangement with to receive from the responsible entity, or pay to the responsible entity, a commission or similar payment in relation to any business matter other than the agreed fixed price quote to complete the appraisal
  4. has reached his/her own conclusions about the appraised value without any coercion or undue influence from the responsible entity
  5. is not a shareholder or investor in the responsible entity

Conflicts Of Interest

Ref: RG46.45(b)

Should a situation where a conflict of interest arise between the responsible entity and the appraiser then the conflict of interest shall be disclosed in writing and shall be referred to the Compliance and Risk Monitoring Team to decide how best to act.

Valuation Timetable

Ref: RG46.45(e)(i)(B) & (ii)

  1. An independent appraisal shall be obtained prior to the property being purchased by the Fund’s wholly owned US Real Estate Investment Trust (REIT); and
  2. After the purchase, the REIT’s properties shall be valued at their carrying value, subject to those values being re-assessed as follows:
    1. a full re-appraisal shall be completed at least every three years; or
    2. within two months after the directors form a view that there is a likelihood that there has been a material change in the value of a property.
  3. In circumstances where the occurrence of an event causes the directors to reasonably believe that there has been a material adverse change in the value of the REIT’s entire portfolio, but revaluation of the entire portfolio is not likely to be in the best interests of members of the scheme given the costs involved in such a valuation and the volatility in the market, the Responsible Entity reserves the right to refrain from seeking a full re-appraisal of all of the REIT’s properties as outlined under 2(b) above, and instead elect to:
    1. complete an immediate internal re-appraisal of the REIT’s property portfolio based on relevant information the directors have to support the change in value; and
    2. within two months of the re-appraisal conducted under 3(a) above, commission an independent re-appraisal of a smaller sample of individual properties, the value of which the directors reasonably believe to be most materially impacted by the occurrence of the relevant event; and
    3. apply the average percentage change in value of that sample of individual properties to the other properties of the same class within the REIT’s property portfolio.
  4. Where the appraised value determined as per 3(b) of the smaller sample of individual properties is materially lower than the decrease in the value reasonably expected by the directors following the internal re-appraisal conducted in accordance with 3(a), and where such a valuation would have a material adverse impact on the interests of scheme members, an independent re-appraisal of all properties owned by the REIT that are not under contract or negotiation for sale shall be commissioned prior to the end of the Fund’s next reporting period.

Rotation & Diversity

Ref: RG46.45(c)

The appraiser shall be rotated on a basis deemed appropriate in the circumstances to ensure a robust, professional and independent appraisal is obtained. No appraiser should conduct more than two consecutive full re-appraisals on the three-year rotation cycle.

Valuation Basis

Ref: AASB13

Properties are to be valued on the basis of Fair Market Value pursuant to the meaning attributed under AASB 13.

Related Party Transactions Policy

LAST REVIEW: JANUARY 2023

Requirements Under the Applicable Law

ASIC Regulatory Guide 181 (“RG 181”) provides guidelines for adequately managing conflicts of interest, on controlling and avoiding conflicts of interest and on disclosing conflicts of interest.

RG 181.28 provides that to control conflicts of interest a licensee must:

  • successfully identify the conflicts of interest relating to their business;
  • assess and evaluate those conflicts; and
  • decide upon, and implement, an appropriate response to those conflicts.

RG 181 outlines a number of strategies to deal with any conflict should it arise and stresses that for conflicts management arrangements to be adequate, they must be well documented in the form of a policy (which may form part of the licensee’s compliance procedures or manual).

Part 5C.7 of the Corporations Act 2001 (the “Act”) seeks to apply Chapter 2E (Related Party Transactions) to a Registered Scheme. This section of the Act is designed to protect the interest of the scheme’s members as a whole, by requiring member approval for giving financial benefits to the Responsible Entity or its related parties that come out of scheme property or that could endanger those interests.

PCL’s Approach to Related Party Transactions

Conflict of interests may arise if related party transactions are not properly identified, assessed and managed.

PCL maintains a ‘Related Parties Transactions Register’ that identifies parties that are considered ‘related’ for this purpose and are therefore not to enter into transactions together without appropriate approvals, if such approvals apply in the particular instance.

All related party contracts or agreements must clearly state the capacity of all contracting parties. Any material contract entered into with related parties requires prior Board approval.

Where a related party transaction takes place with the appropriate approvals, its details must be entered into a Related Party Transactions Register, to be maintained by the Compliance Manager.

Where a related party transaction takes place without the appropriate approvals, a report is to be prepared for the Compliance Committee and the Board to consider and take appropriate action.

All audited financial statements shall disclose related party transactions.

Details of any related party transactions can be found in the financial reports section by clicking here.

PCL believes that the financial benefits provided to its related parties from scheme property will generally not require member approval under the exception afforded under section 210 of Part2 E.1 of the Act provided the nature of the benefits being provided to the related parties are disclosed in the Fund’s Product Disclosure Statement and the transaction is on an arm’s length basis at commercial rates.

Distribution Policy

LAST REVIEW: FEBRUARY 2023

Distributions

The Fund makes distributions throughout the year, usually each six months ending June and December, however this is expected to increase to quarterly from June 2023 as the Fund executes its wind up process.

The Responsible Entity will determine the Fund’s distributable income for relevant distribution period.

Investors on the register as at the last day of the relevant distribution period will be entitled to the distribution for that period. Provided it is available (at the discretion of the Responsible Entity), investors may also reinvest all of their distributions to acquire additional Units in the Fund via the unit pricing offered pursuant to the Fund’s Distribution Reinvestment Policy (DRP).

Distributions will be calculated pro-rata to the number of fully paid Units held by investors for the relevant distribution period.

Distributions are expected to be paid within 30 days of the end of each relevant distribution period.

Cash distributions will be made electronically to the bank account investors nominate. When making their application, if an Investor does not provide clear instructions on their preference for receiving distributions or does not provide valid bank account details to receive their distribution, their full distribution entitlement will be automatically reinvested as additional Units in the Fund (if available).

Distributions owing to investors who have not provided valid bank account information will be processed according to the State Government’s (SRO) Unclaimed Money regime.

The Fund’s distributable income will primarily be sourced from the net rental and net capital gains income it receives from dividends paid by its US REIT. A portion of capital may also be returned as assets are sold and funds distributed back to investors.

Distribution Statements

Distribution statements are accessible at any time via the Investor Portal

After logging in select ‘DISTRIBUTIONS’ from the top menu.

Next select the required date range and press ‘Apply Filter’

The results will be shown to the screen, and can then be exported to PDF or MS Excel.

Annual Tax Statements

The Fund’s tax year is from 1 January to 31 December. Accordingly, annual tax statements are for that period and will be provided by the following 31 March.

Each tax statement will itemise data that the Fund is obliged to report to the ATO for each investor. Investors are directed to use the information contained on their annual tax statement when preparing their Australian income tax returns.

Privacy Policy

LAST REVIEW: JANUARY 2023

Rights to privacy

Plantation Capital Limited (PCL) ABN 65 133 678 029 understands the importance of protecting an individual’s right to privacy. This statement sets out how Plantation Capital Limited aims to protect the privacy of your personal information, your rights in relation to your personal information managed by PCL and the way PCL collects, uses and discloses your personal information.

In handling your personal information, PCL will comply with the Privacy Act 1988 (Cth) (“Privacy Act”) and with the ten National Privacy Principles in the Privacy Act. This policy statement may be updated from time to time.

What kinds of personal information does PCL collect?

Personal information is information that identifies an individual. During the provision of PCL’s services, PCL may collect your personal information.

Generally, the kinds of personal information PCL collects are your name, address, telephone number, email address, and where relevant, driver’s licence details, date of birth, passport details, tax file number, bank account details as well as any other information that may be required under Australian anti-money laundering legislation for identification and other purposes. In some circumstances, PCL may also hold other personal information provided by you.

How does PCL collect personal information?

Generally, PCL collects your personal information directly from you, by requesting that you provide your personal information when you fill out an application form. There may be other occasions when PCL collects your personal information from you or from other sources such as from an information services provider or a publicly maintained record.

Why does PCL need your personal information?

PCL collects your personal information for the purposes of:

  • providing services associated with PCL’s managed investment scheme;
  • accounting, billing and other internal administrative purposes;
  • identifying and informing you of products and services that may be of interest to you;
  • to comply with its legal requirements under the Anti-Money Laundering Legislation; and
  • any other legal requirements.

You are under no obligation to provide your personal information to PCL. However, without certain information from you, PCL may not be able to provide its services to you.

Who does PCL disclose your personal information to?

PCL discloses your personal information for the purpose for which PCL collects it. That is, generally, PCL will only disclose your personal information for a purpose related to its retail services or its services associated with PCL’s management investment scheme. This may include disclosing your personal information to third parties engaged to perform administrative or other services. Such disclosure is always on a confidential basis. PCL may also disclose your personal information with your consent or if disclosure is required by law.

Security of your personal information

PCL takes all reasonable steps to ensure that the personal information it holds is protected against misuse, loss, unauthorised access, modification or disclosure. PCL holds personal information in both hard copy and electronic forms in secure databases on secure premises, accessible only by authorised staff.

Can you access the personal information that PCL holds about you?

Under the Privacy Act, you have a right to access your personal information that is collected and held by PCL. If at any time you would like to access or change the personal information PCL holds about you, or you would like more information on PCL’s approach to privacy, please tell PCL.

To obtain access to your personal information, you will have to provide proof of identity. This is necessary to ensure that personal information is provided only to the correct individuals and that the privacy of others is protected.

PCL will take all reasonable steps to provide access to your personal information within 30 days from your request. In less complex cases PCL will attempt to provide information within 14 days.

If providing you with such access requires a detailed retrieval of your personal information, a fee may be charged for the cost of such retrieval and supply of information.

Complaints

LAST REVIEW: JANUARY 2023

The Responsible Entity has a procedure to receive, consider, investigate and respond to complaints by Unit Holders and other parties who are dissatisfied with the Fund’s management or administration. If Unit Holders or other parties wish to make a complaint they should write to:

The Chairman
Plantation Capital Limited
PO Box 532
Canterbury VIC 3126

The Responsible Entity must acknowledge any complaint immediately, or where immediate acknowledgement is not possible, as soon as practicable, and must within 30 business days investigate, properly consider and decide what action (if any) to take or offer regarding the complaint and to communicate its decision to the complainant.

If the Responsible Entity has not made a decision, or if you are not satisfied with the Responsible Entity’s response, you may escalate the complaint to:

The Australian Financial Complaints Authority
www.afca.org.au
Email: info@afca.org.au
Phone: 1800 931 678
GPO Box 3
Melbourne VIC 3001

How to contact us

For further information or enquiries regarding your personal information, please contact PCL’s Compliance Manager at admin@passiveincomefund.com or on +61 3 8592 0270 during business hours.

Privacy complaints

Please direct all privacy complaints to PCL’s Compliance Manager. At all times, privacy complaints:

  • will be treated seriously;
  • will be dealt with promptly;
  • will be dealt with in a confidential manner; and
  • will not effect your existing obligations or effect the commercial arrangements between you and PCL.

The Compliance Manager will commence an investigation into your complaint. You will be informed of the outcome of your complaint following the completion of the investigation. In the event you are dissatisfied with the outcome of your complaint, you may refer the complaint to the Office of the Australian Information Commissioner.

Frequently Asked Questions

Click here to find a list of frequently asked questions.

General Advice Warning: This information is of a general nature only and does not take into account your objectives, financial situation or needs. You should consider the Product Disclosure Statement (dated 4 July 2018) issued by Plantation Capital Limited ACN 133 678 029 AFSL 339481 in deciding whether to acquire an interest in the Passive Income (USA Commercial Property) Fund. PropertyInvesting.com Pty Ltd is an authorised representative of Plantation Capital Limited ABN 98 096 059 353, AFSL 339481. Past performance is not a guarantee of future performance.