Superannuation Fund. Annual Report 2012

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1 Superannuation Annual Report

2 Contents Independent Auditor s Report 1 Statutory Information 2 Trustee Report 3 Summary Income Statement 4 Summary Statement of Changes in Equity 4 Summary Balance Sheet 6 Summary Statement of Cash Flows 8 Notes to the Summary Financial Statements 10 Directory 12

3 Independent Auditor s Report on the Summary Financial Statements To the members of New Zealand Fixed Interest Trans-Tasman Select Fixed Interest Australian Asian Property Balanced Mortgage Aggressive Balanced Global Opportunities European Platinum Diversified Trading Cash (the s which comprise the Private Portfolio Service Superannuation (the Scheme ). The financial statements include the consolidated results for the Mortgage and its controlled entity (the Group ). The accompanying summary financial statements on pages 4 to 11, which comprise the summary balance sheet as at 27 July, the summary income statements, summary statements of changes in equity and cash flows for the year then ended and notes, are derived from the audited financial statements of the s, Scheme and Group. We expressed an unmodified audit opinion on those financial statements in our report dated 12 October. The summary financial statements do not contain all the disclosures required for full financial statements under generally accepted accounting practice in New Zealand. Reading the summary financial statements, therefore, is not a substitute for reading the audited financial statements. Trustee and Manager s responsibility for the financial statements The Trustee and Manager are responsible for the preparation of a summary of the audited financial statements, in accordance with FRS-43 Summary Financial Statements. Auditor s responsibility Our responsibility is to express an opinion on the summary financial statements based on our procedures, which were conducted in accordance with Standards on Auditing (New Zealand) (ISA (NZ)) 810 Engagements to Report on Summary Financial Statements. Subject to certain restrictions partners and employees of our firm may also deal with the s on normal terms within the ordinary course of trading activities of the business of the s. These matters have not impaired our independence as auditor of the s, Scheme or Group. The firm has no other relationship with, or interest in, the s, Scheme or Group. Opinion In our opinion, the summary financial statements have been correctly extracted from the audited financial statements of the s, Scheme and Group for the year ended 27 July, and the information reported in the summary financial statements is consistent, in all material respects, with the audited financial statements in accordance with FRS-43 Summary Financial Statements. Emphasis of matter Going concern In our audit report dated 12 October, we included an emphasis of matter paragraph stating that the going concern basis of preparing the financial statements has not been used. The Manager resolved (in consultation with the Trustee) to wind-up the Scheme effective 27 July. The financial statements have been prepared on a wind-up basis. Our audit opinion is not qualified in respect of this matter. Valuation of investments Diversified Trading ( DTF ) In our audit report dated 12 October, we included an emphasis of matter paragraph stating that there is uncertainty in the valuation of investments in DTF used by the Manager due to the absence of an active, liquid market including the uncertainty inherent in the valuation method. As a result of this uncertainty, the amounts realised on disposal of these investments in the future may be materially higher or lower than the amounts estimated in these summary financial statements. Our opinion is not qualified in respect of this matter. 12 October Auckland 1

4 Statutory Information Statement of Numerical Changes in Membership The membership movements for the year ended 27 July are shown below: Number of Members Members as at 27 July 1,940 New members * Withdrawals: Withdrawal (1,413) (132,888) Total full withdrawals (1,413) (132,888) Members as at 27 July 527 * There were no new members during the year as the Scheme is already in wind-up. 2

5 Trustee Report In accordance with the reporting provisions of the Superannuation Schemes Act 1989, the Trustee of Private Portfolio Service ( PPS ) Superannuation (the Scheme ), The New Zealand Guardian Trust Company Limited, declares the following with respect to the Scheme: PPS Superannuation (AS/1294) The Trustee certifies that: 1 All contributions required to be made to the Scheme during the year ended 27 July, have been made in accordance with the terms of the PPS Superannuation Trust Deed ( Trust Deed ). 2 All benefits required to be paid from the Scheme have been paid in accordance with the terms of the Trust Deed. 3 The market value of the assets of the Scheme at the close of the period is equal to the total value of benefits that would have been payable had all members of the Scheme ceased to be members as at that date and had provision been made for the continued payment of all benefits being paid to members and other beneficiaries as at that date ( 27 July ). 4 There were no amendments to the Trust Deed from the last balance date. 5 The most recent prospectus for the Scheme is dated 30 December 2010 and was registered with the Companies Office on 5 January. Signed for and on behalf of The New Zealand Guardian Trust Company Limited Timothy James Shaw Director John Richard Avery Director 3

6 Summary Income Statement for the year ended 27 July New Zealand Fixed Interest Trans-Tasman Select Fixed Interest Australian Asian Property Income Net investment income 435 2,581 (337) 2, ,660 (962) 1,010 (811) 1,472 (183) 57 (947) 4,140 Less: Total expenses Net profit/(loss) 408 2,581 (353) 2, ,660 (994) 1,010 (836) 1,472 (193) 57 (973) 4,140 Net profit/(loss) attributable to: Members of the fund 408 2,581 (353) 2, ,660 (994) 1,010 (836) 1,472 (193) 57 (973) 4,140 Minority interests 408 2,581 (353) 2, ,660 (994) 1,010 (836) 1,472 (193) 57 (973) 4,140 Summary Statement of Changes in Equity for the year ended 27 July New Zealand Fixed Interest Trans-Tasman Select Fixed Interest Australian Asian Property Members funds at the beginning of the year 16,102 47,955 8,209 22,225 13,494 41,052 18,324 49,644 10,163 13,548 3,539 4,213 12,048 19,290 Net profit/(loss) of the members of the fund 408 2,581 (353) 2, ,660 (994) 1,010 (836) 1,472 (193) 57 (973) 4,140 Net profit/(loss) of the minority interest holders Contributions from members and minority interest holders 5 5, , , , , ,831 Contributions for PIE tax received Withdrawals by members and minority interest holders (16,302) (38,905) (7,834) (17,727) (13,613) (32,828) (17,397) (37,416) (9,271) (6,624) (3,349) (1,012) (10,937) (12,963) Withdrawals for PIE tax paid (213) (871) (23) (27) (94) (658) (57) (88) (140) (251) Members funds at the end of the year 16,102 8,209 13,494 18,324 10,163 3,539 12,048 Attributable to: Members of the fund 16,102 8,209 13,494 18,324 10,163 3,539 12,048 Minority interests 16,102 8,209 13,494 18,324 10,163 3,539 12,048 1 The underlying investment fund was restructured on 1 May The financial statements include the Mortgage s investment in the underlying investment fund s A Sub- and B Sub-. During the year, units in the B Sub- were cancelled. Refer to Other material matters for further information. 2 The Diversified Trading was already in wind-up prior to the Scheme being wound-up (refer to Other material matters for further information). 4

7 Balanced Mortgage 1 Aggressive Balanced Global Opportunities European Platinum Diversified Trading 2 Cash Private Portfolio Service Superannuation Mortgage Group (1,097) 3, ,292 (481) 1,354 (199) (53) (124) 98 (644) (1,002) 2 (12) (4,213) 19,102 1,666 2, (1,201) 3, ,292 (505) 1,354 (202) (53) (126) 98 (673) (1,002) 2 (12) (4,539) 19,001 1,125 1,687 (1,201) 3, ,292 (505) 1,354 (202) (53) (126) 98 (673) (1,002) 2 (12) (4,539) 19, , (1,201) 3, ,292 (505) 1,354 (202) (53) (126) 98 (673) (1,002) 2 (12) (4,539) 19,001 1,125 1,687 Balanced Mortgage 1 Aggressive Balanced Global Opportunities European Platinum Diversified Trading 2 Cash Private Portfolio Service Superannuation Mortgage Group 38,169 40,452 35,607 42,202 10,422 12,665 1,080 2, ,127 13, ,329 10, , ,490 46,446 55,426 (1,201) 3, ,292 (505) 1,354 (202) (53) (126) 98 (673) (1,002) 2 (12) (4,539) 19, , , , , , ,002 3, (36,729) (14,595) (229) (7,730) (9,892) (6,032) (868) (1,197) (808) (172) (9,347) (3,631) (150) (12,347) (14,097)(148,923) (195,079) (3,988) (10,565) (239) (145) (233) (232) (60) (34) (10) (14) (2) (109) (83) (1) (1) (27) (89) (1,208) (2,493) (282) (281) 38,169 36,010 35,607 10,422 1, , ,329 36, ,692 46,917 46,446 38,169 36,010 35,607 10,422 1, , ,329 36, ,692 36,056 35,685 10,861 10,761 38,169 36,010 35,607 10,422 1, , ,329 36, ,692 46,917 46,446 5

8 Summary Balance Sheet as at 27 July New Zealand Fixed Interest Trans-Tasman Select Fixed Interest Australian Asian Property Assets Cash and cash equivalents Investment assets 16,285 8,226 13,603 18,270 10,178 3,537 12,141 Balances due from brokers Other receivables Total assets 16,302 8,236 13,614 18,325 10,189 3,540 12,154 Total liabilities Net assets attributable to members 16,102 8,209 13,494 18,324 10,163 3,539 12,048 Total members funds 16,102 8,209 13,494 18,324 10,163 3,539 12,048 Attributable to: Members of the fund 16,102 8,209 13,494 18,324 10,163 3,539 12,048 Minority interests 16,102 8,209 13,494 18,324 10,163 3,539 12,048 1 The underlying investment fund was restructured on 1 May The financial statements include the Mortgage s investment in the underlying investment fund s A Sub- and B Sub-. During the year, units in the B Sub- were cancelled. Refer to Other material matters for further information. 2 The Diversified Trading was already in wind-up prior to the Scheme being wound-up (refer to Other material matters for further information). For and on behalf of The New Zealand Guardian Trust Company Limited as Trustee who authorised the issue of these summary financial statements on 12 October : Timothy James Shaw Director The New Zealand Guardian Trust Company Limited John Richard Avery Director The New Zealand Guardian Trust Company Limited 6

9 Balanced Mortgage 1 Aggressive Balanced Global Opportunities European Platinum Diversified Trading 2 Cash Private Portfolio Service Superannuation Mortgage Group , , ,203 36,204 35,685 10,442 1, , , ,829 46,899 35,442 11, ,205 36,211 35,685 10,446 1, , ,354 36, ,338 46,961 46, ,169 36,010 35,607 10,422 1, , ,329 36, ,692 46,917 46,446 38,169 36,010 35,607 10,422 1, , ,329 36, ,692 46,917 46,446 38,169 36,010 35,607 10,422 1, , ,329 36, ,692 36,056 35,685 10,861 10,761 38,169 36,010 35,607 10,422 1, , ,329 36, ,692 46,917 46,446 7

10 Summary Statement of Cash Flows for the year ended 27 July New Zealand Fixed Interest Trans-Tasman Select Fixed Interest Australian Asian Property Net cash flows from operating activities 16,692 34,186 7,873 16,191 13,807 29,047 17,275 32,304 9,342 4,821 3, ,168 11,259 Net cash flows from financing activities (16,709) (34,235) (7,882) (16,216) (13,818) (29,098) (17,276) (32,383) (9,353) (4,832) (3,346) (731) (11,181) (11,276) Net (decrease)/increase in cash and cash equivalents (17) (49) (9) (25) (11) (51) (1) (79) (11) (11) (2) (6) (13) (17) Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year The underlying investment fund was restructured on 1 May The financial statements include the Mortgage s investment in the underlying investment fund s A Sub- and B Sub-. During the year, units in the B Sub- were cancelled. Refer to Other material matters for further information. 2 The Diversified Trading was already in wind-up prior to the Scheme being wound-up (refer to Other material matters for further information). 8

11 Balanced Mortgage 1 Aggressive Balanced Global Opportunities European Platinum Diversified Trading 2 Cash Private Portfolio Service Superannuation Mortgage Group 37,001 5, ,711 9,937 3, , ,446 2, , , ,429 (37,003) (6,033) (262) (7,887) (9,941) (3,573) (878) (1,117) (810) (132) (9,456) (2,113) (1) (151) (12,368) 1,463 (150,284) (148,314) (655) (10,666) (2) (218) 84 (176) (4) (46) (1) (2) (10) (10) (43) (12,331) 1,866 (12,330) 1,135 4 (237) (77) ,331 10,465 12,353 11, (77) , ,

12 Notes to the Summary Financial Statements for the year ended 27 July The information contained in the summary financial statements on pages 4 to 9 of this Annual Report has been extracted from the Private Portfolio Service Superannuation s full financial statements for the year ended 27 July. These summary financial statements are for the Private Portfolio Service Superannuation (the Scheme ), which comprises the following funds (the s ): New Zealand Fixed Interest Mortgage Trans-Tasman Select Aggressive Balanced Fixed Interest Global Opportunities European Australian Platinum Asian Diversified Trading Property Cash Balanced These summary financial statements also include the consolidated results, position and cash flows for the Mortgage Group and its controlled entity (the Group ) in relation to the Mortgage. The Scheme is registered under the Superannuation Schemes Act 1989 under the registration number AS/1294. The summary financial statements have been prepared in accordance with FRS-43 Summary Financial Statements. The results, position and cash flows reported for the Scheme are an aggregation of the results, position and cash flows of the s that make up the Scheme. The summary financial statements for the Scheme have been prepared on a wind-up basis rather than as a going concern basis. Please refer to the Other material matters section of the notes to the summary financial statements for more information regarding this matter. The accounting period for the comparative figures is audited and covered the period from 1 July 2010 to 27 July. The current accounting period covers 28 July to 27 July. The presentation currency for the summary financial statements is New Zealand dollars and has been rounded to thousands of dollars (). The Scheme is a Portfolio Investment Entity (PIE) for tax purposes. Under the PIE regime, income attributed to each member is taxed at the member s Prescribed Investor Rate (PIR). Please refer to the full financial statements for more information regarding this matter. Due to their summary nature, these summary financial statements cannot provide a full understanding of the Income Statement, Statement of Changes in Equity, Balance Sheet and the Statement of Cash Flows. This understanding can only be obtained by reference to the full financial statements of the Scheme. The full financial statements for the year ended 27 July were authorised for issue by the directors of the Trustee on 12 October and an unmodified audit report was issued at that date. The full financial statements have been prepared by OnePath (NZ) Limited (the Manager ) in accordance with the Trust Deed, the Financial Reporting Act 1993, the Superannuation Schemes Act 1989 and the New Zealand Generally Accepted Accounting Practice ( NZ GAAP ). They comply with the New Zealand equivalents to Financial Reporting Standards ( NZ IFRS ), and other applicable Financial Reporting Standards, as appropriate for profit-oriented entities. The financial statements also comply with the Financial Reporting Standards ( IFRS ). A copy of the Scheme s full financial statements and the audit report can be obtained at no cost by contacting the Manager on Other material matters PPS Superannuation The Manager resolved (in consultation with the Trustee) to wind-up the Scheme effective 27 July. From that date, all member withdrawals from the Scheme were suspended. The investment valuations that form part of the basis of the Scheme s summary financial statements are based on the assumption that the Scheme is able to realise the assets and discharge liabilities in the normal course of business over the wind-up period. The value realised on the sale of assets could be more or less than the fair value presented in these summary financial statements. Accordingly, the summary financial statements have been prepared on a wind-up basis rather than on a going concern basis. On 18 November, a final wind-up payment was made for all funds with the exception of the Diversified Trading and Mortgage. Diversified Trading The Diversified Trading was closed to member contributions and all redemptions were suspended from 10 February At that time, the Manager also gave the Trustee notice of termination of the fund. The wind-up of the fund commenced on 18 May For members of the Diversified Trading, there are no changes to the wind-up process already in place. No wind-up payments have been made to members of the Diversified Trading since the last balance date (: $149,746). As at balance date the unit price of the fund is $ A copy of historical prices and the fund s performance can be requested at no cost by contacting the Manager on

13 Mortgage The Mortgage invests in the PPS Unit Trust Mortgage ( PPS Mortgage ). On 1 May 2009, the PPS Mortgage s investment assets were split into A units ( A Sub- ) and B units ( B Sub- ). The B Sub- represented the PPS Mortgage s investment in the LM Currency Protected Australian Income (the LM ). On 1 July, the PPS Mortgage agreed to sell its investment in the LM to AUT Investments Limited, a related company of the Manager. The transaction was settled on 1 August. Following this sale of the LM investment, the Mortgage s investment in the PPS Mortgage s B Sub- was converted into A units of the PPS Mortgage on 8 August. The Manager in consultation with the Trustee resolved that effective 27 July, the PPS Mortgage be suspended and then subsequently placed in wind-up on 31 October. As disclosed above, the Mortgage invests in the PPS Mortgage. The PPS Mortgage makes mortgage advances to Portfolio Mortgage Company Limited ( PMC ) under a loan facility. Under this loan facility, PMC has the ability to request up to $50M loan advances. The facility does not expire until 22 February With this loan facility still current, the Trustee instructed the Manager that the PPS Mortgage must retain liquid assets to meet its outstanding obligations under the loan facility. For members of the Mortgage, this means that the wind-up of the PPS Mortgage and consequently the Mortgage will be completed as soon as PMC has repaid all its loans to the PPS Mortgage and the PPS Mortgage is wound-up. The Mortgage received a loan from PPS Mortgage. This loan is to permit the Mortgage to pay PIE tax on behalf of its members. The PIE tax loan to the Mortgage is only repayable out of the PPS Mortgage s wind-up payments. The loan balance including accrued interest at balance date is $201,325. As at balance date the unit price of the fund is $ A copy of historical prices and the fund s performance can be requested at no cost by contacting the Manager on Please refer to the full financial statements for more information regarding these matters. 11

14 Directory Investment and Administration Manager OnePath (NZ) Limited Level 27, ASB Bank Centre 135 Albert Street PO Box 7149, Wellesley Street Auckland 1141 Trustee The New Zealand Guardian Trust Company Limited Level 7, Vero Centre 48 Shortland Street PO Box 1934 Auckland 1140 Directors of the Trustee John Richard Avery John Atkin John James Anthony Botica (resigned 30 July ) Christopher Robert Darlow Michael Privett Reed Timothy James Shaw As at the date of this Annual Report, David Roko Grbin of Sydney is an alternate director for John Atkin Correspondence Requests from members for additional information should be directed to: Vanja Thomas Senior Relationship Manager The New Zealand Guardian Trust Company Limited Level 7, Vero Centre 48 Shortland Street PO Box 1934 Auckland 1140 Auditor KPMG KPMG Centre 18 Viaduct Harbour Avenue PO Box 1584 Auckland 1140 Solicitor Bell Gully Vero Centre 48 Shortland Street PO Box 4199 Auckland

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