23 August 2011

Report To Investors

As foreshadowed in my report of 8thJuly, 2011, the significant issues facing the property market, particularly in our local area, have continued to affect profits of the Trust for the quarter ending 31st August, 2011. Loans to a major borrower have recently fallen into default, resulting in the need to provide for possible future losses, as property is sold to repay capital and meet ongoing interest charges.

An amount of $8.7m has been provided in this quarter’s financial statements to cover a possible shortfall on the eventual sale of properties held as security on loans that are in default.
As a result, Directors now advise that there will be no profit distribution for this quarter.
It is likely that future distributions may be affected for some time to come. Because all Mayne loans are secured by real estate assets, the future financial viability of the fund is heavily reliant on a recovery in the property market.

To provide members with some cash funds, Directors have decided to make another 7% return of capital to ALL members. Payment will be made on 2nd September to the same financial institution previously nominated by members. If you wish to change these details, please contact Mayne’s staff as soon as possible.

Further returns of capital are planned for the future, as and when Directors consider it prudent to do so.

The world economy continues to experience turbulent times, and our own national and local economies are not unaffected. Directors closely monitor and manage the Fund’s operations and continue to have, as their top priority, the protection of members’ capital.

To provide investors with a full and frank assessment of the position of the Fund, we will hold a members’ information evening on Wednesday, 7th September, commencing at 5pm. The venue is the Star Court theatre in Lismore. If you have a specific question you would like answered, it would be helpful, but not essential, to have details of same prior to the meeting.
 
Barry Wappett

Chairman of Directors