Integrity Australian Share Fund (ARSN ) Responsible Entity Integrity Investment Management Australia Limited (ABN ) (AFSL

Transcription

1 Integrity Australian Share Fund Product Disclosure Statement Issue Number: 2 12th June 2008

2 Integrity Australian Share Fund (ARSN ) Responsible Entity Integrity Investment Management Australia Limited (ABN ) (AFSL )

3 Contents Before you start 2 About the Integrity Group 3 Background 3 Investment Management Team 3 Investment Philosophy 4 About the Fund 6 Who may invest? 8 Benefits and risks of investing 9 What are the risks of investing? 9 Fees and other costs 11 Additional explanation of fees and costs 14 Applications and withdrawals 16 Making an investment 16 Cooling-off right 16 Withdrawing your investment 17 Additional information 19 Unit prices 19 Anti-Money Laundering 19 Distributions 19 Taxation considerations 20 Complaints 21 Privacy and personal information 22 Tax File Numbers and Australian Business Numbers 22 Legal relationships 22 Termination 23 Unitholder meetings 23 Compliance plan and compliance committee 23 Audit 23 Other parties 23 Related parties 23 Change of Responsible Entity 23 Completing the application form 24 Application form - Integrity Australian Share Fund 31

4 Before you start About this Product Disclosure Statement (PDS) PDS dated 12th June 2008 This document provides information to help investors and their advisers assess the merits of investing in units in the Integrity Australian Share Fund (Fund). It should be used to compare this Fund with other investment opportunities on offer. We strongly encourage you to read this document in full before making an investment decision. In preparing this PDS we did not take into account your particular investment objectives, financial situation or needs. As investors' needs and aspirations differ, you should consider whether investing in the Fund is appropriate for you in light of your particular needs, objectives and financial circumstances. You may also wish to obtain independent advice, particularly about such individual matters as taxation, retirement planning and investment risk tolerance. Nothing in this PDS is to be taken as personal financial product advice. Updated information The information in this PDS is up to date at the time of preparation. However, some information and terms (see below) can change from time to time. If a change is considered materially adverse to unitholders we will issue a supplementary or replacement PDS. For updated or other information about the Fund, please consult your IDPS operator (as defined on page 8), your financial adviser or visit our website, Important notices The Fund is managed by Integrity Investment Management Australia Limited (Integrity). Integrity is the responsible entity of the Fund and issuer of this PDS. Integrity's ultimate parent is Integrity Investment Management Pty Limited (Integrity Group). Integrity authorises the use of this PDS as disclosure to investors and potential investors who wish to access the Fund through an IDPS operator (indirect investors). This PDS may also be used for direct investment by IDPS operators (direct investors or unitholders) and by retail and wholesale investors. Neither Integrity, nor any other member of the Integrity Group or the custodian of the Fund, Australia and New Zealand Banking Group Limited ABN ( ANZ ), guarantees the repayment of your capital or the performance of your investment. By investing in the Fund you confirm you have received a copy of the current PDS to which this investment relates, that you have read it and agree to the terms contained in it, and that you agree to be bound by the terms of the current PDS and current constitution (each as amended from time to time). The investment of investors in the Fund, do not represent deposits or other liabilities of ANZ. Investments can be subject to investment risk including possible delays in repayment and loss of income and principal invested. The offer or invitation to subscribe for units in the Fund under this PDS is only available to persons receiving this PDS in Australia and is subject to the terms and conditions described in this PDS. Integrity reserves the right to change these terms and conditions with, in the case of an increase in fees, 30 days notice, otherwise notice will be provided before or as soon as practicable after the change occurs. We reserve the right to withdraw the offer or invitation to subscribe for units and withdraw this PDS. We accept no responsibility for any aspect of any IDPS or for failure on the part of any IDPS in respect of, without limitation, its administration, distributions, payment, fees charged or the efficiency or viability of any IDPS. Our agreement to permit the Fund to be named in any document issued by any IDPS does not signify endorsement or support of the IDPS by Integrity. All fees and costs quoted in this PDS, unless otherwise stated, are quoted inclusive of the net effects of GST. Contact details For any enquiries, please contact your financial adviser or IDPS operator if you have invested through these channels. Our contact details are listed on the inside back cover of this PDS. 2

5 About the Integrity Group Background Integrity is a specialist Australian shares manager. The firm was founded in 2007 by Paul Fiani, formerly Managing Director and Head of Australian Equities at UBS Global Asset Management. After founding the firm, Paul was joined by his deputy Shawn Burns and other senior investment colleagues. Integrity is an independent investment firm which is 100% owned by staff and directors. Investment Management Team Most members of the Integrity team have worked together and implemented a valuation based investment process for several years. Profiles of the key investment staff are provided below: Paul Fiani is Managing Director and Head of Equities of Integrity and has overall responsibility for the firm and for client portfolios. He founded Integrity after more than 10 years with UBS, where he was instrumental in the development of the Australian Equities business. Most recently Paul spent almost 7 years as Head of Australian Equities with overall responsibility for the $12 billion Australian Equities business. Paul has a Bachelor of Economics from Sydney University and an MBA from the Australian Graduate School of Management. He also has a Graduate Diploma in Applied Finance from FINSIA. Shawn Burns is a Director and Portfolio Manager for Integrity. Shawn joined Integrity from UBS where he was an analyst and portfolio manager. Prior to UBS Shawn spent 8.5 years with Deutsche Asset Management and its predecessor firms as a portfolio manager and analyst. He has held similar roles previously working for Prudential Portfolio Managers and Commonwealth Funds Management. Shawn has a Bachelor of Economics from Sydney University, is a member of the Australian Society of Accountants and a CFA Charterholder. He also has a Graduate Diploma in Applied Finance from FINSIA. Marcus Truman is a Portfolio Manager for Integrity. He joined the firm from UBS, where he was an Investment Analyst responsible for Financial Services and Telecommunications research. Marcus has a Bachelor of Science from Sydney University and an MBA from the AGSM. He also has a Graduate Diploma in Applied Finance from FINSIA. John Moran is Head of Research for Integrity and is responsible for ensuring the consistency and quality of the research process. John joined Integrity from UBS where he was Head of Research. He has a Bachelor of Commerce from UNSW and a Masters of Commerce from UNSW. 3

6 Investment Philosophy The Integrity Australian Share Fund invests in equities listed on the Australian Securities Exchange. The four key aspects of the Integrity investment process are illustrated in the diagram below. IN-HOUSE RESEARCH POST TAX OPTIMISATION INTEGRITY VALUATION PROCESS VALUATION DISCIPLINE SHAREHOLDER ACTIVISM Post tax returns The Integrity process is designed to enhance the post tax performance of the Fund and hence the ultimate value of our client's investment. We do this by explicitly taking into account the value of franked income in our valuation. Our long term approach to investment means that the majority of the gains the fund realises through time are usually subject to discounted capital gains tax rates (depending on the tax status of the entity that holds units in the Fund). By valuing franked income and minimising the capital gains tax payable, we maximise the value of our client's investment. It is important to note that whilst our focus on post tax returns generally leads to more wealth for our clients, it can and usually will lead to lower stated pre tax performance. This is because the value of franking that we capture is only realised when our clients pay tax (and their tax burden is reduced by the distributed franking credits). The value is not recognised prior to the taxation stage and hence when comparing funds, it is important to compare post tax returns, rather than the commonly presented pre tax returns. 4

7 PDSFinal.qxp:integrity dps text_6.xpr 16/6/08 8:58 AM Page 5 Shareholder activism The Portfolio Managers of the Fund are known for their activism in the market. Most recently both Paul Fiani and Shawn Burns were heavily involved in the rejection of the Airline Partners Australia takeover bid for Qantas. We see our activism as an integral part of the process in both increasing portfolio returns and protecting our clients' interests. In house research Integrity invests in companies that our experienced in house research team believe will offer superior returns. The team conducts several hundred meetings each year in order to better understand the value inherent in companies listed on the stock exchange. Our research team is incentivised on fund performance and hence our goals are consistent with those of our clients. Valuation discipline Our analysts judgements about future cash flows are incorporated into models in order to derive valuations for the companies we review. We value all components of the expected future investment return including income, franking and capital gains. These valuations then form the basis for our investments. 5

8 About the Fund The model portfolio for the Fund is invested in a diversified portfolio of stocks to protect clients from having too much exposure to one single stock or sector. Below is a snap shot of the model portfolio as at April Integrity Australian Share Fund Materials 19.94% Healthcare 3.70% Industrials 8.58% Energy 4.43% Financials ex Real Estate 32.16% Consumer Staples 11.70% Cash 4.79% Utilities 1.79% Telecommunications 5.31% Real Estate 0.70% Consumer Discretionary 6.90% 6

9 Other important attributes of the fund are detailed below Suggested investment timeframe Investment manager Benchmark Investment objective Long Term 5+ years. Integrity Investment Management Australia Limited S&P/ASX 300 Accumulation Index. Portfolio construction See pages 4-6 Asset allocation ranges Securities % Cash 0-10% Benefits and risks of investing in the Fund See pages 9-10 Minimum transaction and balance requirements $40,000 Fees and other costs 1 See pages Contribution fee Management fee Withdrawal fee The Fund aims to outperform its benchmark through the full investment cycle Nil 0.90% p.a. of the Fund's net asset value. Nil Performance fee Nil Normal operating expenses The constitution of the Fund provides for all operating expenses to be met by the Fund. Integrity will ensure that during the currency of this PDS the amount of the expenses met by the Fund does not exceed 0.09% p.a. of the Fund's net asset value, and meets any excess normal operating costs from its own resources. Transaction costs (buy/sell spread) +0.30% on entry and -0.30% on exit. These amounts may change if the estimate of the underlying transaction costs changes (see page 14). Adviser Fees Optional - To be negotiated with your Financial Adviser Distribution payments See page Frequency Half yearly usually after 31 December and 30 June Payment methods Distributions will be paid to you or your IDPS operator as soon as practicable after the end of the accrual period. Valuations and pricing See page 19 Valuing the Fund's assets Unit pricing The Fund's assets are usually valued each NSW business day. Unit prices are usually calculated each NSW business day. 1 For certain Wholesale clients (as defined in the Corporations Act) we may, at our discretion, negotiate, rebate or waive all or part of our fees. 7

10 Who may invest? Wholesale and retail clients can invest directly, or through IDPS operators in the Fund through this PDS. In this PDS we refer to investors who invest in the Fund through an investor-directed portfolio service (IDPS), an IDPS-like scheme, master trust or wrap account service IDPS as indirect investors and we refer to the operators of these products and services as IDPS operators and the documents relating to the IDPS as the IDPS disclosure documents. Indirect investors who wish to invest must complete the documentation which your IDPS operator requires. In addition to reading this PDS, you should read the disclosure document that explains your IDPS. Usually, IDPS operators pool their investors' money and make a single investment in the Fund that is held in the name of a custodian. Accordingly, it is the IDPS operator or custodian, not the indirect investor, who acquires the unitholder rights and it is the IDPS operator or custodian, not the indirect investor, to whom we have reporting obligations. Fund reports and other information will be sent directly to your IDPS operator, who will use this information to provide you with reporting. Direct investors, whether retail or wholesale clients, and IDPS operators must submit the forms annexed to this PDS directly to us. Your enquiries should be directed to us. We will send fund reports and other information directly to you. Making investments directly or indirectly The Fund may make investments directly, or indirectly by investing in other funds that have investment objectives and authorised investments that are consistent with the Fund. This structure helps to minimise transaction costs and can enhance diversification. Investment manager Integrity is the responsible entity and investment manager of the Fund. Benchmark The S&P/ASX 300 Accumulation Index is a widely used measure of the performance of the broader Australian share market. Returns from indices do not include the costs of buying or selling securities or other ongoing expenses incurred when investments are actually made. Labour standards or environmental, social or ethical considerations In buying, retaining or selling underlying investments the investment manager does not take into account labour standards or environmental, social or ethical considerations. However if these matters affect the value or performance of an underlying investment, our investment decisions would be influenced by the financial effects of such issues. Borrowings Although the Fund's constitution allows for borrowing, we will generally not borrow on behalf of the Fund, except from time to time to cover short-term cash flows where warranted. Derivatives The term 'derivative' is used to describe any financial product that has a value that is derived from another security, liability or index. The Fund's constitution permits it to use derivatives, such as futures or options, to reduce risk or gain exposure to other types of investments. We do not intend to gear the Fund through the use of derivatives. Changes to investment policy The Fund's constitution permits a wide range of investments and gives us broad investment powers. Although unlikely, we may vary the investment objectives, strategies and processes set out in this PDS. We will give unitholders written notice of any material variation from the information in this PDS. Fund information You can obtain up-to-date information for the Fund by contacting your IDPS operator, financial planner or visiting our website, 8

11 Benefits and risks of investing What are the benefits of investing in the Fund? The significant benefits of investing in the Fund are as follows: We aim to provide the Fund's investors with returns that exceed the performance of the S&P/ASX 300 Accumulation Index, through the full investment cycle. The Fund has the potential to generate regular franked income and capital growth over the long term from an investment in a diversified portfolio of securities listed on the Australian Securities Exchange. Your money is managed by investment professionals which allows access to investment opportunities, markets and diversity that individual investors usually can't achieve on their own. The Fund provides investors with access to Integrity's investment expertise. Investors in the Fund have the right to receive distributions. These are usually paid following the end of June and December and will usually carry franking credits. What are the risks of investing? A degree of risk applies to all types of investments - including investments in the Fund. As investing in the Fund involves exposing your investment to a range of risks it is important that you understand: the risks involved in investing in the Fund; how these risks compare with the risks of other investments; how comfortable you are with your exposure to the risks; and the extent to which the Fund fits into your overall financial plan. Risk can mean different things to different people. It can mean the risk that your investment may fail to achieve the returns that you expect. This includes situations in which your investment may suffer substantial declines in value from time to time. It also includes situations in which your investment goals will not be met because the type of investments you chose did not provide the potential for adequate returns. Risk is also often defined to mean investment volatility. That means the extent to which an investment varies in value over a given period. Often investments offering higher levels of return also exhibit higher levels of short-term volatility. When making your investment decision, you should consider that investments in growth assets, such as shares and property, provide the potential for higher returns in the longer term than investments in income-producing assets such as fixed interest and cash. However, growth types of investments could produce more variability of returns in the short term. Diversifying your investments across different asset classes can help you to smooth your returns. Ensuring you select an investment that matches your investment timeframe can also help you manage risk. Your financial adviser can help you with these considerations and in understanding and managing the risks of investing. Types of risks To help you consider the risks of investing, some of the significant risks associated with investing in the Fund are as follows. (Whilst the Investment Manager attempts to manage or reduce risk, some of these risks cannot be managed or reduced by the Investment Manager) - Market risk Investment returns are influenced by market factors. These factors include changes in the economic (e.g. changes in interest rates), legislative and political environment, as well as changes in investor sentiment. 9

12 Equity risk The risk that shares will fall in value over short or extended periods of time. Historically, shares have outperformed other traditional asset classes over the long term. Share markets tend to move in cycles and individual share prices may fluctuate and underperform other asset classes over extended periods of time. Regulatory risk The risk that the value of some investments may be adversely affected by changes in government policies, regulations and laws. Investment manager risk The investment style of an investment manager can have a substantial impact on the investment returns of a fund. No single investment style performs better than all other investment styles in all market conditions. Investment performance will also depend on the skill of the investment manager in selecting, combining and implementing investment decisions. Changes in the personnel of the investment manager may also have an impact on investment returns of a fund. Company risk Factors such as, changes in management, actions of competitors and regulators in regard to the company, changes in technology and market trends can all affect the value of your investment. Sector risk Companies in the same or similar industries are said to be in the same market 'sector'. The values of securities in companies in the same market sector may be similarly affected by market or economic events. Liquidity risk If a security is not actively traded it may not be readily bought or sold without some adverse impact on the price paid or obtained. Derivative risk Risks associated with using derivatives might include the value of the derivative failing to move in line with that of the underlying asset, potential illiquidity of the derivative, and counterparty risk (where the counterparty to the derivative contract cannot meet its obligations under the contract). Fund risk There is a risk that investing in the Fund may give different results from holding the underlying assets directly because of: income or capital gains accrued in the Fund at the time of investing; and the consequences of investment and withdrawal decisions made by other investors in the Fund, for example, a large level of withdrawals from the Fund may lead to the need to sell underlying assets which would potentially realise capital gains. Interest rate risk Changes in interest rates can have a positive or negative impact directly or indirectly on investment values or returns. You should be aware of these risks when investing. Not all risks can be foreseen. Therefore, no matter how strong the Fund has performed in the past, there is always a risk that you could receive back less than you invested. Investment returns are volatile and can go up and down. The future performance of the Fund is not guaranteed and past performance is not a guide to future performance. 10

13 Fees and other costs Consumer advisory warning Did you know? Small differences in both investment performance and fees and costs can have a substantial impact on your long term returns. For example, total annual fees and costs of 2% of your fund balance rather than 1% could reduce your final return by up to 20% over a 30 year period, (for example, reduce it from $100,000 to $80,000). You should consider whether features such as superior investment performance or the provision of better member services justify higher fees and costs. You may be able to negotiate to pay lower contribution fees and management costs where applicable. Ask us or your financial adviser. To find out more If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities and Investments Commission (ASIC) website ( gov.au) has a managed investment fee calculator to help you check out different fee options. If you are an indirect investor in this Fund (e.g. via an IDPS), you will need to consider the fees and other costs of the IDPS (or any other similar arrangement) when calculating the total cost of your investment. Fees and other costs This document shows fees and other costs that you may be charged. These fees and costs may be deducted from your money, from the returns on your investment or from the Fund assets as a whole. Taxes are set out in another part of this document, see page 20. You should read all the information about fees and costs because it is important to understand their impact on your investment. 11

14 Type of fee or cost 1 Amount How and when paid Fees when your money moves in or out of the fund Establishment fee The fee to open your investment. Nil 2 Not applicable Contribution fee The fee on each amount contributed to your investment. Nil Not applicable Withdrawal fee The fee on each amount you take out of your investment Nil Not applicable Termination fee The fee to close your investment Nil Not applicable Management costs The fees and costs for managing Management The management fee is expressed as a percentage your investment fee of total net assets of the Fund. 0.90%p.a. The management fee is deducted from the Fund's assets, accrued daily and is paid monthly in arrears. Normal The operating expenses of the Fund are met by the operating Fund (see normal operating expenses Page 14). expenses These are capped at 0.09% p.a. and the manager will meet any additional normal operating expenses 0.02% - if required. If the Fund grows, normal operating 0.09%p.a. expenses should reduce towards the lower end of the stated range. Total 0.92% % p.a. Service fee 3 Investment Switching Fee The fee for changing investment options Nil 1 For certain Wholesale clients (as defined in the Corporations Act) we may, at our discretion, negotiate, rebate or waive all of part of our fees. See 'Can fees change?' on page The Fund's constitution allows Integrity to charge an Establishment Fee of up to 2% of the Application Price. Integrity has no intention to charge an Establishment Fee at this point in time. 3 There are other service fees including adviser service fees. Please refer to Additional explanation of fees and costs on page

15 Example of annual fees and costs for the Fund This table gives an example of how fees and costs for the Fund can affect your investment over a one-year period. You should use this table to compare this product with other managed investment products. Example - Integrity Australian Share Fund Balance of $50,000 with a contribution of $5,000 during year 1 Contribution fees 0% Nil Plus Management costs 0.92% % p.a. 2 And, for every $50,000 you have in the Fund you will be charged between $460 and $495 each year. Equals Cost of Fund If you had an investment of $50,000 at the beginning of the year and you put in an additional $5,000 during that year, you would be charged fees ranging from $460 to $ If you decide to pay your financial adviser a fee, what it costs you will depend on the fee you negotiate with your financial adviser. 1 Minimum additional contribution is $10,000 for the Fund. However, for comparative purposes we are required by law to provide an example of fees and costs referable to a $5,000 contribution. 2 The Management costs include normal operating expenses which range from 0.02% p.a. to 0.09% p.a. (please see normal operating expenses on page 14). 3 An allowance for transaction costs will apply for contributions and withdrawals from the Fund (please see 'Transaction costs-buy/sell spread' on page 14). Please note that this is just an example and assumes the value of your investment remains constant throughout the year. In practice, your actual investment value will vary daily. 13

16 Additional explanation of fees and costs Management costs Management costs comprise the additional fees or costs that an investor incurs by investing in the Fund rather than investing directly in the underlying assets. Management costs include the management fee, normal operating expenses, and abnormal expenses. They do not include transaction costs or other costs that an investor would ordinarily incur when investing directly in the underlying assets. Management costs are payable from the Fund's assets and are not paid directly from your account. Management fee This is the fee we charge for managing the investments, overseeing the Fund's operations and providing access to the Fund. The management fee is calculated daily as a percentage of the net asset value (NAV) of the Fund and payable monthly in arrears. The management fee is 0.90% p.a. of the Fund's net asset value. Management fee example: If the NAV is $10,000,000 the management fee is $90,000 p.a. Normal operating expenses The constitution of the Fund provides for all operating expenses to be met by the Fund. Integrity will ensure that during the currency of this PDS the amount of the expenses met by the Fund does not exceed 0.09% p.a. of the Fund's net asset value, and meets any excess from its own funds (other than any abnormal expenses, see below). Normal operating expense example: If the NAV is $10,000,000 the maximum operating expenses met by the Fund would be $9,000 p.a. Abnormal expenses We are allowed by the constitution to recover abnormal expenses (such as costs of unitholder meetings, changes to the constitution and defending or pursuing legal proceedings) from the Fund. Whilst it is not possible to estimate such expenses with certainty, we anticipate that the events that give rise to such expenses will not occur regularly. In circumstances where such events do occur, we may decide not to recover these abnormal expenses from the Fund. Investment expenses We currently pay the standard ongoing investment management costs of the Fund from our management fee. Transaction costs-buy/sell spread The buy/sell spread is the difference between the investment price and the withdrawal price of units. Investment prices and withdrawal prices reflect a spread (adjustment) of +0.30% and -0.30% respectively around the unit price. The buy/sell spread reflects our estimate of the transaction costs expected to be incurred in buying and selling the securities as a result of investments, withdrawals and switches made by investors. A different buy/sell spread may apply if we change our estimate. Please note that the buy/sell spread is not a fee paid to us. It is paid to the Fund and is reflected in the unit price. The buy/sell spread, however, is an additional cost to you. We will notify unitholders if the buy/sell spread increases. Types of transaction costs can include brokerage, and government taxes or charges. The purpose of the buy/sell spread is to ensure that only those investors transacting in the Fund's units at a particular time bear the Fund's costs of buying and selling the Fund's assets as a consequence of their transaction. Our estimate of transaction costs may take into account factors such as (but not limited to) historical transaction costs and anticipated levels of investments and withdrawals. It is expected that brokerage will make up the vast majority of transaction costs. Transaction costs example: If you make a $50,000 investment or withdrawal from the Fund, you will pay +/- 0.30% included in the unit price which is equal to a transaction cost of $150. Where we invest through underlying funds The Fund may gain investment exposure through other unlisted funds operated by Integrity or entities outside the Integrity Group. If we do this no further direct fees will be charged to you but the fund may incur some additional fees. Can fees change? We have no plans to increase our fees, however, we are allowed to change our fees under the fund's constitution. The reasons for fee changes might include changing economic conditions and changes in regulation. We will give unitholders 30 days written notice of any proposed increase. We cannot charge more than the Fund's constitution allows and the maximum fees allowed for in 14

17 the Constitution are : Management Fee 3% p.a. of the Funds net assets and Performance Fee 20% of the out performance against the benchmark. The management fee is currently 0.90% of the Funds net assets and we do not charge a performance fee. We currently have no plans to increase any fees charged or to introduce new fees. The current fees are set out on page 12 The constitution of the Fund allows for the normal operating expenses (such as registry, audit, taxation advice, investment management and offer documents) to be paid directly from the Fund. The constitution does not place any limit on the amount of the normal operating expenses that can be paid from the Fund. However, Integrity will ensure that during the currency of this PDS the amount of the normal operating expenses paid by the Fund does not exceed 0.09% of the Fund's net asset value and will meet any excess from its owns funds. Receipt of soft dollar benefits We may receive soft dollar benefits from brokers with whom investment transactions are ordinarily carried out. However, we will only use brokers where we are satisfied that the broker's services are consistent with that available in the market and the brokerage rate paid will not exceed the usual rate paid for those brokerage services. We will only receive soft dollar benefits where we believe the Fund will benefit from these arrangements. Units in lieu We may elect to receive units in lieu of all or part of any management fee (plus any applicable GST) for the Fund. Any such units will be issued at the applicable application price. Can fees be different for different investors? Yes, we may negotiate, rebate or waive fees for wholesale clients (as defined by the Corporations Act). We do not negotiate fees with retail investors. Government charges and GST Government taxes such as GST may be applied as appropriate. All fees and costs quoted are inclusive of any GST after taking into account expected reduced input tax credit entitlements. Please refer to the section on 'Taxation considerations' on page 20. Additional adviser fees A financial adviser who introduces a prospective investor to the Fund, and whose details appear on the Application Form, may be paid an Adviser Service Fee at your discretion and instruction. This is an arrangement between the investor and their financial adviser that we will facilitate on behalf of the investor, provided that the investor indicates their agreement by marking the relevant box in the Application Form accompanying this PDS. If you do not select to make a payment to your adviser we will not pay anything on your behalf. We will not be involved in your discussions with your adviser. This fee is not paid to us. You can negotiate this with your adviser. The two available fees are a one off, up front fee or an ongoing monthly fee. Adviser fee example: If you elect to pay your adviser an upfront fee of 2.5% of your investment amount in the Fund, and you invested $100,000, you will be required to pay your adviser $2,500. If you elect to pay your adviser an ongoing monthly fee of 0.5% p.a. of the value of your investment, and the value of your investment is $100,000 you will be required to pay your adviser $500 p.a. Commissions and other payments We may pay fees from our own management fees to some IDPS operators because they offer the Fund on their investment menus. These fees may be rebated to you or retained by your IDPS operator. These fees are not an additional cost to the Fund or its investors. We may pay fees or provide other financial assistance (for seminars, client mailings, co-operative advertising, postage, etc) to other financial services intermediaries. If we do, we will make these payments from our management fees so that they are not an additional cost to the Fund or its investors. We comply with the Industry Code of Practice on Alternative Forms of Remuneration. 15

18 Applications and withdrawals Making an investment Indirect investors must complete the documentation which your IDPS operator requires. Retail investors must complete the application form annexed to this PDS and send it directly to our registry team together with your cheque to: Integrity Australian Share Fund C/- Registries Limited GPO Box 3993, Sydney, NSW 2001 Cheques should be made payable to ANZ ACF Integrity Australian Share Fund - Applications Account. The minimum initial investment is $40,000. We reserve the right to accept lesser amounts in our absolute discretion. The minimum additional investment is $10,000. If a completed application form (for initial or additional investments) is received and accepted by Integrity before 1pm Australian Eastern Standard Time on a New South Wales business day, the application will be processed at the application price based on the net asset value of the Fund calculated as at the close of business on that day. Otherwise the application will be processed at the application price based on the net asset value of the Fund as at the close of business on the following New South Wales business day. The net asset value of the Fund is usually calculated on a daily basis. Cooling-off right Indirect investors should seek advice from your IDPS operator about the cooling-off rights (if any) that apply to your investment in or through your IDPS. If you have any questions about cooling-off rights, please contact your financial planner or IDPS operator. Under the Corporations Act cooling-off rights are available to retail investors who invest directly in the Trust. These rights allow the investor to change their investment decision and ask for the initial investment to be returned after adjusting for transaction costs and any market movement since the initial investment. Transaction costs include, but are not limited to, brokerage, taxes and other charges and expenses from buying or selling Trust investments, If a retail investor wishes to exercise their cooling off rights they must instruct us before the end of the cooling off period. This is a 14 day period which begins from the earlier of the day the investor received our transaction confirmation and the fifth Business Day after the units were issued. Should you choose to cancel your investment during this period, the amount returned to you will be adjusted to take account of any movements in investment values since the day on which you acquired the investment and reasonable transaction costs. The cancellation of your investment will be processed at the withdrawal price on the date your request is received. If a distribution has occurred between acceptance of your application and receipt of your cooling-off period notification, there may be taxation implications for you. We suggest that you seek professional advice in these circumstances. If you wish to cancel your investment during the cooling-off period, please inform us in writing of your intention to exercise this right before the end of the cooling-off period (and before exercising any rights or powers you have in respect of your investment in the Funds). The cooling-off period does not apply where the Fund is not liquid, that is, where liquid assets of the Fund (money, bank accepted bills, marketable securities and other prescribed property) do not constitute at least 80% of the assets of the Fund. Indirect investors may only access cooling-off rights against their IDPS operator, and not against the Fund. 16

19 Withdrawing your investment Indirect investors Indirect investors may make a withdrawal by completing the documentation which your IDPS operator requires. Generally, you can withdraw some or all of your investment at any time, if requirements set by your IDPS operator are satisfied. Withdrawals are normally processed within five business days of receiving a request from your IDPS operator. Retail investors The minimum withdrawal is $10,000. When withdrawing funds a minimum balance of $40,000 must be maintained in the Fund, or you must withdraw your investment in full. Withdrawal requests can be made by writing to the below address and providing the following information: Integrity Australian Share Fund C/- Registries Limited GPO Box 3993, Sydney, NSW 2001 your investment account number; your account name; the amount to be withdrawn (in dollars or units); details of the bank for depositing the amount - including bank account name, bank account number and BSB; the signature of relevant investor(s)/ authorised signatories; and if making a company/trust withdrawal include the Company Seal or, if not signing under seal, include your title (e.g. Director, Sole Director or Company Secretary). The amount withdrawn will be remitted directly into your nominated account by electronic funds transfer. A cheque can be sent to you (the investor) upon request; although this process usually takes longer than direct crediting (We do not issue third party direction cheques). Following receipt of a request for withdrawal, Integrity has up to 60 days to pay you however; we will endeavour to pay any amount withdrawn within 5 Business Days of receiving your request. Occasionally longer periods may apply. If a withdrawal request is received and accepted before 1pm Australian Eastern Standard Time on a New South Wales business day, the withdrawal will be processed at the withdrawal price based on the net asset value of the Fund as at the close of business on that day. Otherwise, the withdrawal will be processed at the withdrawal price based on the net asset value of the Fund as at the close of business on the next New South Wales business day. In extraordinary circumstances, Integrity reserves the right to suspend or refuse withdrawals from the Fund, if in the reasonable opinion of Integrity; it is in the best interests of the investors as a whole to do so. Integrity s rights in relation to withdrawal We can change the withdrawal cut-off time. A withdrawal request, either in whole or in part, once received by us may not be withdrawn without our agreement. Where we give 30 days notice to affected unitholders we can compulsorily redeem investor units. Suspending withdrawal requests We may suspend withdrawal requests for up to 60 days where we consider it impracticable for us to calculate the net asset value (and hence unit prices), where we estimate that we must sell 5% or more of the Fund's assets to meet withdrawals, where we believe that the size of withdrawal requests is such that it would require us to realise a significant amount of the Fund rapidly and this may either place a disproportionate capital gains tax burden on remaining investors or impact negatively on the price we could achieve in selling Fund assets, where we reasonably consider it is in the interests of investors to do so, or where the law otherwise permits. Any withdrawal requests received during a period of suspension, or for which a unit price has not been calculated or confirmed prior to the commencement of a period of suspension, will be deemed to have been received immediately after the end of the suspension period. 17

20 If the Fund becomes illiquid If the Fund becomes illiquid (as defined by the Corporations Act), unitholders will only be able to withdraw from the Fund if we make an offer of withdrawal. If we do make such an offer, unitholders may only be able to withdraw part of their investment. There is no obligation for us to make such an offer. Under the Corporations Act, the Fund is regarded as liquid if liquid assets account for at least 80% of the value of the assets of the Fund. Liquid assets generally include money in an account or on deposit with a bank, bank-accepted bills, marketable securities and property of the kind prescribed under the Corporations Act. We do not expect the Fund to become illiquid. Monitoring your investment For indirect investors, fund reports and other information will be sent directly to your IDPS operator, who will use this information to provide you with regular reporting. You should consult your IDPS operator for any investor queries or complaints. Retail investors will receive fund reports and other information directly from us. Information on the Fund can be found on our website. If the Fund is a 'disclosing entity' for purposes of the Corporations Act 2001 it will be subject to regular reporting and disclosure obligations. Unitholders may obtain from, or inspect at ASIC, copies of documents lodged by the Fund for which fees will apply. They can also ask us for a copy of the Fund's most recent annual financial report lodged with ASIC, any subsequent continuous disclosure notices given before the date of this PDS and any half-yearly financial report lodged with ASIC before the date of this PDS. 18

21 Additional information Unit prices The calculation of both the investment unit price and the withdrawal unit price is based on the Net Asset Value (NAV) adjusted by the buy/sell spread (see page 14 for details). The NAV is the value of all the Fund's assets attributed to the units less the value of all the Fund's liabilities attributed to the units at the valuation time. When calculating the NAV we must use the most recent valuations of the Fund's assets and the most recent determination of its liabilities. Generally, listed securities are valued using the last sale price quoted on the relevant exchange and liabilities are valued at fair value. Other assets are generally valued at fair value. Where we receive a transaction request before the relevant cut-off time, then the unit price will be generally determined at the next valuation time after that cut-off time. The Fund's assets are usually valued and unit prices calculated each NSW business day. The Fund's constitution permits us to select the periods for valuing the Fund for the purposes of determining the Application Price and the Redemption Price for Units. However, whilst the Fund is a registered scheme within the meaning of the Corporations Act the constitution requires that the valuation methodology must be market value. The constitution also gives us discretions as to the valuation methodologies to be applied in determining the market value of the assets of the Fund. We have adopted the following unit pricing policies. The Fund is valued and priced on every NSW business day. Listed securities are generally valued at the latest available closing price. Application and Redemption cut off time for same day processing is 1pm. You may obtain a document outlining our unit pricing policies free of charge by contacting us. Anti-Money Laundering In 2006 the Federal Government enacted the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act.) Integrity is a reporting entity pursuant to the AML/CTF Act and as such must meet investor identification and verification requirements. Please see page 24 for further details on the information and documentation that we require in order to comply with the AML/CTF Act. Distributions Distributions will generally be paid as soon as practicable after the end of the half yearly accrual period (i.e. after 30 June and 31 December). There may be periods in which no distributions are made or we may make interim distributions. Indirect investors should check with your IDPS operator to see when they will pay distributions to you. The amount of each distribution may vary. A unitholder's share of any distribution depends on how many units are held at the end of the accrual period as a proportion of the total number of units on issue at that time and the amount of net income of the Fund referable to those investors. For example, if the Fund distributes $10,000,000 and there are 10,000 units, each unitholder will receive $1000 in respect of each unit held by them. The amount of income distributed each period will be generally based on our estimate of the income received by the Fund (excluding net capital gains) in that distribution period. In addition, the 30 June distribution will generally include any realised capital gains, however, we may also include net realised capital gains in other distributions. As distributable amounts are a component of the unit price, unit prices normally fall by the distribution amount following a distribution. If you invest just prior to a distribution, you may receive some of your investment back immediately as income. Conversely, if you withdraw from the Fund just before a distribution, you might turn income into a capital gain or reduce your capital losses. We have the discretion to transfer assets of the Fund to unitholders (instead of cash) in payment (partly or fully) for a distribution amount. If you have invested directly in the Fund, you have two 19

22 options regarding your distribution payments: reinvestment; and direct deposit to your nominated bank account. If you do not indicate a distribution payment option and provide bank account details on your application form, all your income distributions will automatically be reinvested as additional units. All investments will be based on the NAV per unit applicable at the end of the distribution period, adjusted for the distribution payable (if any) in relation to that period. If any distribution payment to you is returned to us (for example, because your bank details are incorrect or out of date), we will hold the amount returned (less any bank charges ) for one month during which time you may give us new or corrected account details or otherwise indicate that the funds will be accepted by the bank. If you do not do those things within that period or if the amount is again returned to us, we may reinvest the amount returned (less any bank charges) using the higher of the NAV per unit on the date of the distribution and on the date of the reinvestment. In that situation, we may also alter your distribution method so that future distributions are reinvested rather than paid to your bank account. Under the constitution we have the power to make reinvestment of distributions compulsory. At the date of this PDS, we have no intention of introducing compulsory distribution reinvestment. Taxation considerations Any investment can have a substantial impact on your tax position from year to year. Indirect investors should refer to tax information in their IDPS disclosure document. Tax statements will be sent by us to your IDPS operator after the end of the financial year. The following information is a general summary of current legislation and is not intended to be tax advice. We recommend that you obtain your own professional advice regarding your position as tax and social security laws are complex and subject to change, and investors' individual circumstances vary. The Fund will generally not be liable for income tax provided investors are presently entitled to the net income of the Fund and are not under any legal disability. Tax losses of the Fund are quarantined in the Fund and can be carried forward to offset taxable income in future years (subject to the satisfaction of certain loss integrity tests). Distributions from the Fund Australian resident investors will have to include in their taxable income for the year, the share of taxable income of the Fund (including any net capital gains) to which they are presently entitled at the end of that year, even if they reinvest distributions or if payment is not received in that year. In the case of non-resident investors, Australian tax may be deducted from distributions. To the extent that distributions from the Fund are distributions of a capital gain made on the realisation of long term investments, this may entitle resident investors to a discount on the capital gain (see below). Other distributions will be ordinary income for tax purposes. Capital Gains Tax ( CGT ) Where an Australian resident investor holds units in the Fund on capital account, the cost base of their units will generally include the amount paid to acquire the units and any incidental costs. The cost base of their units may be affected to the extent that the fund distributes any nonassessable non-exempt income (or tax deferred income ). Generally, tax deferred income is not taxable in the year it is received, but may increase the capital gain or reduce the capital loss upon disposal of an investor's units, however this will depend upon the amount of tax deferred income being distributed. 20

23 A capital gain or loss may be crystallised when units in the Fund are disposed of by a resident investor. Where units are redeemed, it may be that a distribution is made at the time of redemption. Only the payment in respect of the redemption will be used in calculating any resultant capital gain or loss of an investor. Capital losses can only be offset against capital gains and not ordinary income. Where a resident investor is an individual, trust or complying superannuation fund, they may be entitled to discount a capital gain arising from dealings with their units in circumstances where the relevant investor has held their units in the Fund for a period of 12 months or longer. The CGT discount is 50% for individuals and trusts and 33.3% for complying superannuation funds. Where a resident beneficiary is an individual, trust or complying superannuation fund, discounted capital gains distributed by the Fund will also be able to be passed through to the investor. The CGT discount will not be available to companies. A non-resident investor will be taxable under the CGT provisions in respect of dealings with their units in the Trust when the units are considered taxable Australian real property. Generally, this will be where the non-resident has at least a 10% interest in the Fund and the majority of the value of the relevant investor's units is attributable to indirect interests in Australian real property (based on the model portfolio set out above, we do not expect that this requirement will be satisfied, however the position of the Fund will need to be monitored to determine whether or not this is in fact the case at the time that the relevant investor deals with their units). The imposition of Australian tax on a non-resident investor may be affected by a double tax agreement between the non-resident's country of residence and Australia. Where an Australian investor holds units in the Fund on revenue account, they will need to include amounts received in respect of dealings with their units in their assessable income. The CGT discount will not be available to investors in these circumstances. Where a non-resident investor holds their units in the Fund on revenue account and deals with their units, their Australian tax liability may be affected by a double tax agreement between the nonresident's country of residence and Australia. There are other relevant tax considerations that may be applicable to the Fund's investments and your tax position. For example, the foreign investment funds regime and taxation of foreign source income. Franking Credits The taxable income of the Fund will usually include franked dividends and related franking credits. A rebate or credit for these amounts may be available in calculating unitholders' tax liabilities, depending on their specific circumstances and subject to various anti-avoidance rules, including the holding period rule. Excess franking credits may be refundable to resident individuals and complying superannuation entities and in certain cases may generate tax losses for corporate entities. Under current law, franking benefits may be denied where the Trust has not held the shares at risk for a continuous period of 45 days (ignoring the day of acquisition and the day of disposal). In determining whether the 45 day rule period is satisfied a "last in first out" basis is adopted. Foreign Tax Credits Where foreign tax has been paid by the Fund in respect of overseas investments, the Fund will generally pass on to investors the corresponding foreign tax credits. Investors may be able to utilise these credits to offset against the Australian tax payable on the foreign component of their distributions. In order to claim the foreign tax credits, investors must first include the amount of the foreign tax in their assessable income. GST GST is not payable on the issue, withdrawal or transfer of units in the Fund, as these are input-taxed financial supplies for GST purposes. However, GST will generally be incurred on various acquisitions made by the Fund, including the investment management services supplied by the responsible entity. All fees and costs quoted in this PDS, unless otherwise stated, are quoted inclusive of the net effects of GST. Complaints For indirect investors, your first point of contact should be your IDPS operator. If any issues remain unresolved, then you can contact the complaints scheme of which they are a member. Retail and IDPS operators should follow the 21

24 following complaints handling procedure. If a unitholder makes or submits a complaint then we must make all attempts to resolve the complaint within 45 days from the date of receipt of complaint. Any unresolved issue(s) or appeal against our decision can be referred to the Financial Industry Complaints Service Limited ( FICS ) (of which we are a member) if the complaint is not resolved within 45 days of our receipt of the complaint. FICS toll free number is Please note that from 1 July 2008 FICS will be joining with other schemes to form the Financial Ombudsman Service ( FOS ). Privacy and personal information Under the Commonwealth Privacy Act 1988, privacy rules now cover almost all personal information held by organisations in Australia. Integrity collects your personal information so it can provide you with and administer the financial products you have requested. In order to do that, Integrity may need to disclose some of your personal information to related entities within the Integrity Group of companies and to organisations that carry out administrative functions on behalf of Integrity e.g. auditors, mailing houses or IT service providers. If any part of the requested information is not provided, Integrity may not be able to provide you with your requested products. If the requested personal information is not provided on the application form and other relevant forms, it may not be possible to process or administer your application. Collection of some of this information is required under the Corporations Act and The Financial Transaction Reports Act We may also be allowed or obliged to disclose information by law and to report on prudential or risk management matters. We will deal with any personal information we receive in accordance with our privacy policy. A copy of our privacy policy is available by visiting our website, or on request from our Investor Services team. Tax File Numbers ("TFN") and Australian Business Numbers ("ABN") Unitholders may quote their TFN or ABN in relation to their investment in the Trust. It is not an offence to fail to quote a TFN or ABN, but if we are not notified of a TFN, ABN or exemption, tax must be withheld from distributions at the highest marginal rate plus Medicare Levy. Legal relationships The Fund is a registered managed investment scheme that is an unlisted Australian unit trust and is governed by a constitution. Interests in unit trusts, which are called units, represent a share in the trust's collective asset pool. Certain rights are attached to units and these rights are exercisable by the investors who own these units. Subject to the law, the Fund's constitution and the terms on which units are held, whilst the Fund is liquid unitholders can apply to redeem their units at any time (except in the event that the Fund is not liquid; see page 18). The constitution together with the Corporations Act and some other laws govern the way in which the Fund operates and the rights and responsibilities and duties of the responsible entity and unitholders. The constitution contains the rules relating to a number of issues including: unitholder rights; the process by which units are issued and redeemed; the calculation and distribution of income; the investment powers of the responsible entity; the responsible entity's right to claim indemnity from the Fund and charge fees and expenses to the Fund; and the termination of the Fund. It is generally thought that unitholders' liabilities are limited to the value of their holding in the Fund. It is not expected that a unitholder would be under any obligation if a deficiency in the value of the Fund were to occur. However, this view has not been fully tested at law. 22

25 Unitholders can inspect a copy of the constitution at our head office. We may alter the constitution at our discretion if we reasonably consider the amendments will not adversely affect unitholders' rights. Otherwise (subject to any exemption under the law) we must obtain unitholder approval at a meeting of unitholders. We may retire or be required to retire as responsible entity (if unitholders vote for our removal) or as required by ASIC. Termination The constitution of the Fund, together with the Corporations Act, governs how and when the Fund may be terminated. We may terminate the Fund at any time by written notice to unitholders. On termination a unitholder is entitled to a share of the net proceeds resulting from our realisation of the assets in proportion to the number of units they hold in that class. Unitholder meetings The conduct of unitholder meetings and unitholders' rights to requisition, attend and vote at those meetings are subject to the Corporations Act and (to the extent applicable) the Fund's constitution. Compliance plan and compliance committee We have lodged the Fund's compliance plan with ASIC and established a compliance committee with a majority of external members. The Fund's compliance plan sets out how we will ensure compliance with both the Corporations Act and the Fund's constitution. The compliance committee's role is to monitor compliance with the compliance plan. It must also regularly assess the adequacy of the compliance plan and report any breaches of the Corporations Act or the Fund's constitution to us. If we do not take appropriate action to deal with the breach, the compliance committee must report the breach to ASIC. Audit The Fund and the compliance plan are required to be audited annually. Other parties The Fund has a registered company auditor. The auditor's role is to provide an audit of the financial statements of the Fund each year as well as performing a half-yearly review (if required), and to provide an opinion on the financial statements. Deacons has been engaged for a fee to undertake a legal review of this PDS. Related parties We may enter into transactions with, and use the services of, any member of the Integrity Group. Such arrangements will be based on arm's length commercial terms. We or any member of the Integrity Group or any director or officer of any of them may invest in the Fund. Change of Responsible Entity A unitholder or ASIC may apply to the court for Integrity to be replaced as responsible entity ( RE ) of the Trust if Integrity ceases to be a public company or ceases to hold a licence authorising it to operate a managed investment scheme. If the RE wishes to resign and has chosen a replacement responsible entity, then the RE must call a meeting of unitholders to explain its reasons for wanting to retire and to allow unitholders to vote on an extraordinary resolution to choose that replacement or another company to be the responsible entity. An extraordinary resolution is a resolution passed by at least 50% of the total votes that may be cast by unitholders entitled to vote on the resolution (including members who are not present in person or by proxy). If the unitholders do not pass the extraordinary resolution the RE must stay (unless it gets a court order appointing a temporary responsible entity or for winding up the Trust). Unitholders can call a meeting and resolve by extraordinary resolution to remove the RE and by a separate extraordinary resolution appoint a replacement responsible entity. 23

26 Completing the Application Form Anti-Money Laundering and Counter-Terrorism Financing Application Guide Background 1.0 Anti-money laundering and counter-terrorism financing In 2006 the Federal Government enacted the Anti- Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act). The purpose of this legislation is to enable Australia's financial sector to maintain international business relationships, detect and prevent money laundering and terrorism financing by meeting the needs of law enforcement agencies and to bring Australia into line with international standards. 1.1 Why does this legislation affect Integrity Investment Management? Integrity is a 'reporting entity' pursuant to the AML/CTF Act and as such must meet investor identification and verification requirements. This means that prior to units in the Fund being issued, we must be 'reasonably satisfied' that you exist and you are who you claim to be. 1.2 What do you need to do? What you need to do for AML/CTF purposes depends on whether you are investing in the Fund through an Investor Directed Portfolio Service (IDPS) or investing in the Fund directly. a If you are investing in the Fund through an IDPS, then that entity will request and collect any verification materials in accordance with Section 2. b If you are investing in the Fund directly, then you need to provide us with the identification information required pursuant to the AML/CTF Act as set out in AML/CTF identification and verification documentation at Section 2 along with the completed Application Form. We may request additional information from you where we reasonably consider it necessary to satisfy our obligations under the AML/CTF Act. 2.0 AML/CTF identification and verification procedure documentation If you are a: Individual (see section 2A) Domestic Company (see section 2B) Partnership (see section 2C) Trust Investment (see section 2D) Associations (see section 2E) Co-operatives (see section 2F) Foreign Company (see section 2G) Superannuation Fund (see 2D and section 2A or 2B as relevant) Joint Applicants (see section 2A) 24

27 2A Individual Please provide: A certified* copy of ONE of the following: A current drivers licence that contains a photograph of the licence/permit holder A current passport or other document of identity for the purpose of international travel which contains a photograph and signature of the licence holder A current national identification card that contains a photograph and signature of the card holder Please note if you do not have one of the above options please contact Registries Limited for further options. 2B Domestic Company Please provide: A current full company search of the ASIC databases showing: The full name of the company The Australian Company Number (ACN) Whether the company is public or proprietary In addition for proprietary companies: Provide the full names of each Director of the company 2C Partnership Please provide required information for the most suitable column below: Regulated Partnership by relevant professional association A certified* copy or certified* extract of the partnership agreement or partnership meeting minutes The full name of the partnership For one partner the documentation required for an individual (see section 2A) and Membership details independently sourced from the current membership directory of the relevant association *Please see section 3.0 for a list of approved certifiers. Unregulated Partnership A certified* copy or certified* extract of the partnership agreement or partnership meeting minutes The full name of the partnership and a list of the name and address of each partner in the partnership For one partner the documentation required for an individual (see section 2A) 25

28 2D Trust/Superannuation Funds Please provide required information for the most suitable column below: Registered managed investment scheme, regulated trust (e.g. SMSF) or a Government Superannuation Fund An ASIC search confirming the registration of the scheme, or An extract from relevant legislation confirming the establishment of the Government Superannuation Fund, or An extract from the regulator s website confirming confirmation that the trust is registered and subject to the regulatory oversight of a Commonwealth statutory regulator Managed Investment Scheme not registered by ASIC A certified* copy or certified* extract of the trust deed or an independent document relating to the trust that confirms that the scheme only has wholesale clients and does not make small scale offerings to which section 1012E of the Corporations Act 2001 applies Superannuation funds and other Trusts (Including charities, family trusts) A certified* copy or certified* extract of the trust deed confirming the full name of the trust The name of each beneficiary or class of beneficiary If the Trustee(s) is an individual, please provide documentation required for all individuals (section 2A) If the Trustee is a company, please provide documentation required for companies (section 2B) 2E Associations Please provide either: A certified* copy or certified* extract of the rules of the association, the constitution or minutes of an association meeting detailing: The full name of the association Any unique identifying number If the applicant is a customer in his or her capacity as a member of an unincorporated association, provide the documentation required for an individual (see section 2A) *Please see section 3.0 for a list of approved certifiers. 26

29 2F Registered Co-operatives Please provide either: A certified* copy or certified* extract of meeting minutes or any register maintained by the co-operative The full name of the co-operative Any unique identifying number 2G Foreign Company Please provide required information for the most suitable column below: Registered foreign company A current full company search of the ASIC databases or a public document showing: The full name of the company The Australian Registered Body Number (ARBN) In addition: Confirm whether the company is registered by the relevant foreign regulatory body and if so whether it is registered as public or private If private provide the names of each Director of the company Unregistered foreign company, regulated by relevant foreign regulatory body A public document showing: The full name of the company The country of incorporation The foreign regulatory body company identification number Whether the company is public or private and if the company is private the names of each Director of the company Unregistered and not regulated by a foreign regulatory body A public document showing: The full name of the company The country of incorporation The full principal place of business address in country of incorporation The name and address of each beneficial owner Whether the company is public or private and if the company is private the names of each Director of the company *Please see section 3.0 for a list of approved certifiers. 27

30 3.0 Who can certify documents or extracts? The following people can certify documents or extracts: 1. A lawyer who is enrolled on the roll of the Supreme Court of a State or Territory, or High Court of Australia. 2. A judge of a court. 3. A magistrate. 4. A chief executive officer of a Commonwealth court. 5. A registrar or deputy registrar of a court. 6. A Justice of the Peace. 7. A notary public (for the purposes of the Statutory Declaration Regulations 1993). 8. A police officer. 9. An agent of the Australian Postal Corporation who is in charge of an office supplying postal services to the public. 10. A permanent employee of the Australian Postal Corporation with 2 or more years of continuous service who is employed in an office supplying postal services to the public. 11. An Australian consular officer or an Australian diplomatic officer (within the meaning of the Consular Fees Act 1995). 12. An officer with 2 or more continuous years of service with one or more financial institutions (for the purposes of the Statutory Declaration Regulations 1993). 13. A finance company officer with 2 or more continuous years of service with one or more financial companies (for the purposes of the Statutory Declaration Regulations 1993). 14. An officer with, or authorised representative of, a holder of an Australian financial services licence, having 2 or more continuous years of service with one or more licensees. 15. A member of the Institute of Chartered Accountants in Australia, CPA Australia or the National Institute of Accountants with 2 or more years of continuous membership. 28

31 Correct form of registrable title Note that ONLY legal entities can hold units in the Fund. The Application must be in the name of a natural person(s), companies or other legal entities acceptable to Integrity Investment Management. At least one full name and surname is required for each natural person. Examples of the correct form of registrable title are set out on page 30. Please print in CAPITAL letters. The minimum application amount is $40,000 and, thereafter, in multiples of $10,000. Write your full name. Initials are not acceptable. Applications and redemptions must be received prior to 1pm (AEST) to receive that day's closing unit price. Enter your Australian tax file number (TFN). If you do not enter your TFN your application WILL be accepted but tax will be withheld from your distribution at the top marginal rate plus medicare levy. If you make a mistake cross it out and initial your changes. Lodgement: Mail your completed Application Form with cheque(s) attached to the following address: Mailing Address Integrity Australian Share Fund C/- Registries Limited GPO Box 3993, Sydney, NSW 2001 Delivery Address Integrity Australian Share Fund C/- Registries Limited Level 7, 207 Kent Street, Sydney NSW

32 Please select the most appropriate investor type and complete the relevant section in the application form as detailed below: Type of Investor Investor details example Individual 3A Mr John David Smith Complete Section 3A with given names in full, not initials Adult(s) investing for a child under 18 3A Claire Smith (Investor 1) 3A <Mary Smith> (Investor 2) Complete Section 3A with the name of (responsible adult) (minor) the responsible adult and the minor Company 3B ABC Pty Limited Complete Section 3B with full company name ACN XXX XXX XXX Partnership 3C <Smith Brothers> 3A John David Smith Complete Section 3C AND Section 3A (partnership details) (individual partner details) for one partner Trusts 3D Smith Family Trust 3A John David Smith or Complete Section 3D with the name of <trust details> 3B ABC Pty Ltd the trust, AND complete Section 3A or ACN XXX XXX XXX 3B with the name(s) of the trustee(s) (trustee details) Superannuation Funds 3D <Smith Superannuation Fund> 3A John David Smith or Complete Section 3D with the name of the (superannuation fund details) 3B ABC Pty Ltd superannuation fund AND complete Section 3A ACN XXX XXX XXX or Section 3B with the name(s) of the trustee(s) (trustee details) 30

33 Application form Integrity Australian Share Fund ARSN PDS Dated: 12th June 2008 PLEASE USE CAPITALS 1. Application type (please select) if existing investor, please quote investor no. Initial Investment or Existing Investor Number U 2. Investment amount (please insert amount in Australian Dollars) I/We wish to invest: $ 3. Investor Details (please select and complete appropriate section below) Individual Joint Applicants Company Partnership (Complete Section 3A) (including minors) (Complete Section 3B) (Complete Section 3C) (Complete Section 3A) Association/Co-operative Trust/Superannuation Fund (Complete Section 3D AND (Complete Section 3E) if trustee is a person Section 3A OR if trustee is a company Section 3B) A Individuals, Joint Applicants, Sole Trader, Individual Trustee Investor 1 or responsible adult Title Given Name(s) Surname Date of Birth TFN/ABN or reason for exemption Tax Residence (for non-residents) Full Name of Business (Sole Trader only) Residential Address (must not be a PO Box) State Post code Investor 2 or minor Title Given Name(s) Surname Date of Birth TFN/ABN or reason for exemption Tax Residence (for non-residents) Full Name of Business (Sole Trader only) Residential Address (must not be a PO Box) State Post code 1

34 B Company/Corporate Trustee Full Name of Company/Corporate Trustee (as registered with ASIC): ABN/ACN/ARBN TFN or reason for exemption Registered Office Address State Post code Principal place of business address or local agent address in Australia (foreign companies only) if different to above State Post code Public Proprietary/Private Country of Incorporation C Partnership (In addition one partner must complete section A) Partnership Name Business Name (if applicable) Country where partnership was established D Trust/Superannuation Fund (Trustee to complete these details AND either A or B as relevant) Full Name of the Trust/Superannuation Fund TFN/ABN or reason for exemption Country where Trust is established Full Business Name (if any) of Trustee ARSN (if registered managed investment scheme) Type of trust (i.e. Unit Trust) 2

35 E Association/Co-operative (If an unincorporated association, applicant to complete these details AND section A) Full name Full principal place of business address or registered office address State Post code Identification number Full name of the Chairman or equivalent Full name of the Secretary or equivalent Full name of the Treasurer or equivalent 4. Investor Contact Details Please enter all relevant contact details, including your daytime telephone number in case we need to contact you in relation to your application. Financial Adviser details are not acceptable unless your Financial Adviser holds power of attorney, a copy of which must be provided. All administration in relation to this investment will be sent to the nominated mailing address. Contact person for this investment Address - by entering your address you agree to communication relevant to your investment Mailing address (may be a PO Box address) State Post code Daytime Phone Number After hours Phone Number Fax Number Mobile Number 5. Cheque details - enter details of cheque accompanying this application Cheques should be made payable to: ANZ ACF - Integrity Australian Share Fund - Applications Account drawn from an Australian bank and marked Not Negotiable Cheque No. BSB No. Account No. Drawer Cheque Amount A$ 3

36 6. Distributions - please advise how you would like your distributions paid (If you do not make a selection or provide bank account details your distribution will automatically be reinvested in the fund) The options are: Reinvestment in additional units Credited to my bank a/c (details below) BSB Number Account No. Account Name Bank Name 7. Anti-Money Laundering and Counter Terrorism certification confirmation Direct Applicants I have attached the required certified documents to this application form (see page 24 28). IDPS I confirm I have completed the AML/CTF identification & verification requirements for this investor as required under the AML/CTF act and outlined on pages and will keep a record of the verified information for 7 years or such time the act may specify. Signature Print Name Date 8. Declarations and Signature(s) By submitting this Application form: I/We have read and understood the PDS and agree to be bound by the provisions of the constitution and the terms and conditions of the offer as set out in the PDS I/We declare that all information provided in the Application Form is true and correct I/We acknowledge that neither Integrity Investment Management, nor its related entities, directors or officers, nor the Custodian, nor the Responsible Entity guarantees the success of the fund, the repayment of capital, income payments or any particular rate of income or capital return. Investments can be subject to investment risk including possible delays in repayment and loss of income and principal invested. By signing this application form, the applicant/s agree/s that Integrity Investment Management may accept application moneys for additional units after the initial application form without an application form from the current PDS. I/We confirm that I/we are not a person(s) under the age of 18 years. Signature Print Name Date Signature Print Name Date Office Use Only Checked for AML/CTF identification and verification requirements Date application received Units allotted 4

37 9. Financial Adviser and Adviser service fee election (optional) If you use a Financial Adviser, please have them sign and stamp this section. By stamping this application the Financial Adviser is confirming that they hold a current AFS Licence and are authorised to deal in and/or advise on managed investment products. Adviser Name Phone Number Adviser Firm AFSL Dealer Group Adviser Stamp Adviser Postal Address State Post code Adviser fee election This fee is paid directly to your financial adviser One-Off upfront service fee Please nominate a percentage (up to 4%) that you would like your financial adviser to receive: Ongoing service fee Please nominate whether you would like your financial adviser to receive ongoing service fees. 0% p.a. 0.25% p.a. 0.50% p.a. 1.00% p.a. Important Notice: The Corporations Act prohibits any person from passing on to another person the Application Form which was attached to this Product Disclosure Statement for the issue of units, unless the Application Form is attached to or accompanying a complete and unaltered copy of the Product Disclosure Statement. A person who gives another person access to the Application Form must at the same time and by the same means give the other person access to the Product Disclosure Statement. Applications for units will only be accepted if made on an Application Form issued together with this Product Disclosure Statement. Privacy Statement: Registries Limited advises that Chapter 2C of the Corporations Act 2001 (Cth) requires information about you as a security holder (including your name, address and details of the securities you hold) to be included in the public register of the entity in which you hold securities. Information is collected to administer your security holding and if some or all of the information is not collected then it might not be possible to administer your security holding. Your personal information may be disclosed to the entity in which you hold securities. You can obtain access to your personal information by contacting Registries Limited at the address or telephone number shown on the Application Form. Registries Limited privacy policy is available on their website: Further enquiries should be directed to Integrity Australian Share Fund: Registries Limited by Tel: (02) or registries@registries.com.au 5

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39 Contact details For application or redemption requests, distribution queries or change of details please contact our investor services team at Registries Limited By By Telephone +61 (0) By Mail Registries Limited GPO Box 3993 Sydney, NSW 2001 Australia By Fax +61 (0) Auditor of the fund Custodian of the fund Investment Manager (Issuer) Legal Adviser KPMG 10 Shelly Street Sydney NSW 2000 Australia and New Zealand Banking Group Limited ABN AFS Licence No Level Queen Street Melbourne VIC 3000 Integrity Investment Management Level 33, Aurora Place 88 Phillip Street Sydney NSW Deacons Grosvenor Place 225 George Street Sydney NSW 2000

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