Mayne should have cash flow estimates for the Trust for the next three months and ensure that at all times the Trust has cash or cash equivalents sufficient to meet its projected cash needs over the next three months.  It should also disclose its policy on balancing the maturity of its assets and liabilities.

Yes

Mayne prepares 3 monthly cash flow estimates for the Trust and ensures that at all times the Trust has cash or cash equivalents sufficient to meet its projected cash needs over the next 3 months.  These cash flows assist Mayne in determining the projected cash requirements of the Trust and anticipated withdrawals from the Trust.  Mayne does not take into account finance facilities when forecasting cash flow requirements.

Section 3.9

Mayne considers in the circumstances the Trust would be considered a non-liquid managed investment scheme and for the immediate future any withdrawals will be offered on a periodic basis and in accordance with the Corporations Act.

Mayne’s policy on managing the liquidity of the Trust is outlined in section 3.9 - Liquidity Management.

If the Trust has borrowed funds or if Mayne expects it to, it should disclose the amount owing under those loans and whether they rank ahead of an investor’s interests in the Trust, as well as the purpose for which the funds have or will be borrowed.  If the loan facilities are due to mature within 12 months, Mayne should disclose the prospect of refinancing or possible alternative actions.  Mayne should also explain any risks associated with the debt and credit facility maturity profile.

Yes

The Trust has no current borrowings and Mayne does not currently expect the Trust to borrow funds.  If Mayne decided the Trust required borrowings at some time in the future, a disclosure would be made to Unitholders at that time of amount owed under those loans, the maturity timeframes, whether loans rank ahead of an Unitholder’s interests in the Trust and the purpose for which the funds have or will be borrowed.

Mayne should disclose the current nature of the Trust’s investment portfolio, including, by number and value:

Yes

Mayne discloses the current nature of the Trust’s investment portfolio on its website at www.mayneinvest.com.au.

Section 3.6

• loans by class of activity;
• loans by geographic region;
• proportion of loans in default or arrears;
• nature of the security for loans;
• what proportion of the total loan moneys have been lent to the largest borrower and the ten largest borrowers;
• loans that have been approved that have funds that have yet to be advanced;
• the maturity profile of all loans in increments of not more than 12 months;
• loan‑to‑valuation ratios;
• interest rates on loans;
• use of any derivatives;
• loans where interest has been capitalised; and
• a clear description of the non‑loan assets of the scheme including the value of such assets.

Section 3.6 provides the loan assessment criteria undertaken by Mayne outlining the maximum loan percentage per borrower, the method of assessing borrowers’ capacity to service loans.
Mayne’s policy on valuing and revaluing secured property is outlined in section 3.8 – Valuation practices.
The Trust does not invest in other unlisted mortgage schemes.
Loans that have been approved that have funds that have yet to be advanced and loans where interest has been capitalised are disclosed to Unitholders in the Trust Performance tables on the Mayne Internet site www.mayneinvest.com.au.

Section 3.7

Section 3.8

Section 3.6

Mayne should also disclose its policy on the above matters and how it will deal with funds generally, such as the maximum loan amount for any one borrower, the method of assessing borrowers’ capacity to service loans, Mayne’s policy on revaluing security properties when a loan is rolled over and Mayne’s approach to taking security in relation to lending by other schemes.

Section 3.5

Mayne should also disclose its policy on investing in unlisted mortgage schemes.

Sections 3.5 and 3.7

Any related party transaction should be disclosed, as well as Mayne’s policy on related party transactions and how the process and arrangements are monitored to ensure that policy is followed.

Yes

Mayne has a strict policy of not lending money from the Trust to any related parties of Mayne or its Directors or officers.
Mayne, its Directors, officers and other related parties may hold units in the Trust from time to time.  Where this occurs the investment is treated on the same terms as any other Unitholder in the Trust.

Section 9.1

Section 9.2

Entities associated with the Directors do from time to time provide services to Mayne and the Trust.  The arrangements for these services are reviewed annually to ensure they remain on commercial arm’s length terms.

See sections 9.1 and 9.2 for further details on management of related party transactions.

Mayne should have a clear policy on how often valuations will be obtained.

Yes

Mayne’s key valuation considerations are:

• at the time of approving a loan the security property is subject to a valuation not more than 3 months old.  Valuations are obtained on all security properties;

Section 3.6

• valuations are conducted by a registered independent valuer on a panel approved by the Directors and who certify the valuation complies with all relevant industry codes and standards;

• Mayne may accept an assignment of a valuation provided it may be relied upon by Mayne, is not less than 3 months old (at the time of the loan advance) and Mayne is satisfied the valuation report complies with Mayne’s valuation criteria for its panel valuers;

• updated valuations or appraisals are obtained where a loan is extended, market conditions change or when the Directors form the opinion that the current valuation should be updated;

Sections 3.7 and 3.8

• Mayne ensures that no one valuer conducts more than one third of the valuation work for the Trust; and

• where loans over property are for construction and development the secured property is valued on both an ‘as is’ estimate of market value of the property in its current state and an ‘as if complete’ estimate of market value assuming specified improvements are made.

Mayne should maintain the following loan to valuation ratios:

• for loans made by the Trust where the loan relates to property development not more than 70% on the latest market valuation; and
• in all other cases not more than 80% on the latest market valuation.

Yes

Mayne’s lending guidelines as set out in section 3.5 ‘Investment Policies and Strategies’ authorise lending of up to 65% of the value of the security property at the time of the loan.  This includes property development loans.
In certain circumstances where the loan is not under development, Mayne may approve a loan with a maximum loan to valuation ratio (LVR) of 75%.  Circumstances would include where Mayne is satisfied that the LVR will reduce to 65% within 12 months.

Section 3.5

Prior to advancing construction funding Mayne provides all plans, specifications and building contracts to a quantity surveyor who approximates the cost to complete the development.  This ensures the borrower has allowed appropriate development costs.  Funds are then advanced progressively on a ‘cost to complete’ basis.  The quantity surveyor appointed by Mayne inspects the development at set stages of construction prior to further loan advances and certifies to Mayne the cost of completing the development at each stage in writing.

Mayne withholds the amount of loan funds necessary to complete the development in accordance with the advice received from the quantity surveyor.  If the borrower becomes unable to complete the development, Mayne based on the advice of the quantity surveyor should have sufficient loan funds to complete the development.

Mayne should disclose the expected source for each distribution, as well as details of circumstances in which a lower return may be payable, together with details of how that lower return will be determined.

Yes

Distribution rates for the Trust are variable and dependent upon the income the Trust generates from loans and cash on deposit less management fees and expenses.
Historical distributions are set out in section 2.5.  Past performance is not indicative of future performance.
Section 3.3 ‘The Benefits of Investment’ outlines the distribution payment dates for the Trust.

Section 2.5

Section 3.3

Mayne should provide details of whether investors will have the ability to withdraw from the scheme.

Yes

Under normal operating conditions the Trust Constitution allows Mayne up to 180 days to pay a withdrawal request.

Sections 2.7 and 3.9

The Trust is currently operating as a non-liquid managed investment scheme and for the immediate future any withdrawals will be offered on a periodic basis and in accordance with the Corporations Act.

Mayne’s capacity to meet withdrawal requests will depend on the availability of cash to the Trust.
Further details of Withdrawals can be found in section 2.7.

Unit pricing
The Unit price in the Trust has historically remained at $1.00 per Unit.   The unit price is calculated as the net assets of the Trust divided by the number of Units on issue.  In the event the investments of the Trust suffered a capital loss which was not able to be otherwise compensated the value of a Unit would fall below $1.00.  Mayne is currently not aware of any circumstances which would give rise to a drop in the Unit price.