FIDUCIAN SUPERANNUATION SERVICE

Transcription

1 FIDUCIAN SUPERANNUATION SERVICE Registration Number: R Annual Report 2017 Trustee: Fiducian Portfolio Services Limited ABN AFSL RSE L Level 4, 1 York Street, Sydney NSW 2000 Australia. GPO Box 4175, Sydney NSW 2001 Australia. T: +61 (2) F: +61 (2) Fiducian Online:

2 Contents From the Trustee 1 Economic overview 3 Financial markets overview 6 Superannuation news 2016/ Investments and investment returns 14 Fiducian collection 17 Asset allocation at 30 June Asset allocation at 30 June Long term return objectives 31 Investment managers 33 Fiducian portfolios 34 Statement of fund policy on the use of derivative securities 35 Financial accounts 36 Statutory information 41 In this Report: Trust Deed means the Fiducian Superannuation Service Trust Deed adopted on 23 September We, us and our, means Fiducian Portfolio Services Limited ABN the Trustee of the Fiducian Superannuation Service. You and your is a reference to a member of Fiducian Superannuation Service. Client Services Client Services info@fiducian.com.au Fiducian Online iii

3 FROM THE TRUSTEE Dear Member, On behalf of the Trustee Directors of the Fiducian Superannuation Service (the Fund), we are pleased to present the Fund s Annual Report for the year ended 30 June This Report provides you with information about the following key aspects of the Fund: Investment Options and Performance Economic Outlook Superannuation News Regulatory and Compliance Update The Trustee aims to ensure that there is a wide range of investment options sufficient to enable diversification across a range of asset sectors. Each investment offered through the Fund has, and will continue to be, analysed and selected in accordance with the Fund s formal investment strategy. As always, you should continue to seek quality professional advice from your Financial Planner, who is best placed to tailor a financial plan for your individual circumstances. The results of the Fund s investment process can be seen in the performance of two of the investment options, representing a large proportion of the Fund s assets, for periods ending 30 June 2017: been developed in a clear and accessible style, to review full details of the Trustee Board, corporate structure and Fund benefits. The Fund website details can be viewed at fiducian.com.au/content/superannuationservice.aspx. As always, we remain fully committed to providing you, our members, with service excellence, and thank you for your continued support. Kind regards Drew Vaughan Chairman Fiducian Portfolio Services Limited Trustee of the Fiducian Superannuation Service 1 year to 30 June years to 30 June years to 30 June 2017 Fiducian Growth Fund Fiducian Balanced Fund Return 11.3% pa. 9.9% pa. Ranking* 20 out of out of 197 Return 9.8% pa. 8.8% pa. Ranking* 1 out of out of 189 Return 12.8% pa. 11.4% pa. Ranking* 2 out of out of 179 * Morningstar While past performance in investment markets is no guarantee of future success, we believe that these excellent results are testimony to the strength of the investment process at Fiducian. The Trustee Directors also invite you to visit our website which has 1 2

4 ECONOMIC OVERVIEW 3 Global Economy The global economy has been gaining some momentum this year. According to the International Monetary Fund (IMF), in its latest report (Economic Outlook, October 2017), the world economy is forecast to grow by 3.6% in 2017 and 3.7% in 2018, well up from last year s growth rate of 3.2%. While this forecast pickup is expected to be larger for the developing world than for the advanced economies, even the latter are showing signs of improvement. The IMF notes that there has been a strengthening in activity this year and this has been emphasised by recent data. In the case of the US, growth was 3.1% at an annualised rate for the June quarter and 3.0% for the September quarter (up from 1.2% in the March quarter), while the Euro zone enjoyed growth of 0.6% for the June quarter alone (up from growth of 0.5% in the March quarter) and Japan also grew by 0.6% for the June quarter (up from 0.3%). Overall, the developed world is forecast to grow by 2.2% this year and 2.0% in 2018, up from 1.7% in 2016, although this could prove to be too conservative a forecast, given the improving data of recent months. In the case of the developing world, growth is forecast to lift from 4.3% in 2016 to 4.6% this year and an even higher 4.9% next year. The IMF though, does caution that prospects for medium-term growth are more subdued, as demographic factors and weak productivity weigh on potential growth. In other words, beyond 2018, the IMF is hedging its bets about the economic outlook and is waiting to see whether governments and financial authorities, including central banks, can take advantage of the current welcome cyclical pickup in global activity that provides an ideal window of opportunity to tackle the key policy challenges that face the world. As the IMF noted in its previous report, many advanced economies need well-sequenced and tailored structural reforms to boost productivity and investment. What is needed now is innovative fiscal policy, as well as less burdensome regulatory policies, as these are best suited to address adverse structural trends. In the case of the US, this year s improvement in economic activity has been boosting confidence for both businesses and individuals and has lifted the stock market significantly. In particular, what is being termed the Trump effect has seen confidence rise on the expectation that the new Trump Administration in the US would move to enact strongly probusiness policies, notably including significant de-regulation and tax cuts. Whether proposed major cuts to the US corporate tax rate can pass through the US Congress remains to be seen, although if a substantial tax cut is introduced over coming months it could be expected to provide a strong boost for business investment and for the economy more generally. While the US central bank, the Fed, has been cautious in reducing its expansionary policies, it has indicated that if the economy continues to strengthen, it intends to continue to slowly lift interest rates back towards what it deems the neutral rate (what it regards as a sustainable long-term interest rate). However, as the IMF recently emphasised (24 July 2017), a faster-than-expected monetary policy normalisation in the US could tighten global financial conditions and lead to negative economic effects around the world, including triggering reversals in capital flows to emerging economies. The European Central Bank (ECB) was slow to follow the lead of other central banks, including the Fed in implementing quantitative easing ( QE ) but it has been proceeding down this road since March 2015, with purchases at first of 80 billion Euros of asset-backed securities per month. This program is steadily being scaled back but the ECB will continue to purchase securities at the rate of 30 billion Euros per month into In addition, the ECB is continuing to hold official interest rates at around zero per cent. The aims of this policy are to lift inflation to at least 2% (most recently the rate was 1.5% for the year to 30 September) and to stimulate stronger economic growth. In Asia, growth has generally been robust and this is likely to remain the case for the foreseeable future, with growth for developing Asia forecast to be 6.5% in both 2017 and 2018 (IMF data). Chinese growth remains strong, despite government efforts to cool the property market and rein in debt, while Japan has seen some recent success with its own program of monetary expansion. 4

5 5 ECONOMIC OVERVIEW (CONT) Australian Economy The Australian economy appeared to gain some momentum towards the end of the financial year, so that GDP was up 1.8% for the year. Effectively, household consumption contributed all of this growth, while declining private capital formation (investment) actually detracted from growth. Household spending was boosted over the year by population increase, which was mostly due to the country s high rate of immigration (a forecast net addition of at least 190,000 for ). On a per capita basis, growth was a meagre 0.2% for the year. However, it is also useful to look beyond GDP data to what the Australian Bureau of Statistics calls a broader measure of change in national economic well-being, known as real net national disposable income, which takes account of the effect on national purchasing power of movements in the terms of trade (the ratio of our export prices to our import prices). This measure rose by 4.0% for the year, due to a rise of 15% in the terms of trade, reflecting rising prices in particular for iron ore, our largest merchandise export item (up 11%) and thermal coal (up 52%). The Australian dollar (up 3.3% against the $US over the year) remains linked to commodity price movements. A strong currency, however, has been hindering the country s international competitiveness and the Reserve Bank (RBA) could reduce pressure on the currency by at least avoiding rate rises above the current 1.50% as the Fed lifts US official interest rates further next year. Over the longer-term, Australia faces growing international competitiveness hurdles, with relatively high corporate tax rates, escalating electricity prices that are close to, if not the highest in the world (with an increasingly unreliable base load supply in some states due to policy mismanagement by Federal and State Governments), high minimum wage rates and over-regulation of the labour market and business more generally. FINANCIAL MARKETS OVERVIEW Australian Shares The Australian share market s performance over the financial year was a tale of two distinct periods. From the start of the year to 8 November the market was basically flat and then from 8 November to 30 June 2017, the market was up strongly, along with most other major markets around the world which responded positively to the election of President Trump and his pro-business agenda in the US. Over the full year, the Australian market was up 14% (ASX 200 Accumulation index). The Resources sector was the best performer (up 23%), followed closely by the Financials (up 18%), while the Industrials were up 13% and listed property stocks were down 6%. The out-performance of resources was its second in a row following five successive years of being out of favour, with the turnaround reflecting stronger demand from China. The Financials sector held up despite some concerns about the outlook for residential property, especially in Sydney and Melbourne. However, household finances remain in good condition, with total household interest payments historically low as a proportion of household disposable income and household net wealth at a record high relative to income. By 31 October, the overall share market was still looking fairly valued, with an estimated price-to-earnings ratio (PER) of a little under 16 times trailing earnings (slightly above its longterm average), with an average dividend yield of around 4.2% (around its long-term average) (RBA data). International Shares International share markets mostly performed well over the year, with many markets in or close to bull market territory (up by over 20% in a year). The broad US market (S&P500 index) was up 15%, while the technology-focused Nasdaq index was up 27%. Other out-performing markets included Germany (up 27%) and Japan (up 29%), while the UK was up a more modest 12% and the Chinese market was up 9%. For most markets, most of the upsurge occurred in the second half of the year, following the US Presidential election, so that from 8 November to 30 June 2017, the broad US market rose 13%, the Nasdaq rose 17% and the German and Japanese markets were up 18% and 17% respectively. 6

6 FINANCIAL MARKETS OVERVIEW (CONT) Since the end of the financial year, the trend has remained strongly positive for most major global markets, so that over the 1-year period to 8 November 2017, the broad US market rose 21%, the Nasdaq 29%, the German market 28% and the Japanese market 33%, while the UK and Chinese markets were up by 10% and 9% respectively. Despite these impressive increases, however, the overall market outlook remains positive and markets could continue to respond well to quantitative easing being implemented by both the European Central Bank and the Bank of Japan and by other forms of expansionary monetary policy in place in the major economies, including historically low interest rates. In terms of valuations, by end-october, the price-to-earnings ratio (PER) for the major world markets as a whole (represented by the MSCI World index) was around 16 times estimated forward earnings, slightly above its longer-term average of around 15 times earnings. Assuming that earnings growth can match forward projections (currently 14% growth per annum), in general terms most market valuations were still looking fairly priced, relative to historical norms and relative to other investment opportunities, such as bonds. Property The domestic listed property sector significantly underperformed all other domestic sectors over the financial year, providing a negative index return (-6%). In the following period from 30 June to 31 October 2017, performance was better, with the index up 4% (ASX200 A-REIT Accumulation index). The sector has been less attractive than previously and has appeared to be fully valued for some time but it does continue to offer investors a solid yield (dividend return). The listed property sector, which includes exposure to commercial (office) property, retail shopping centres and industrial property, has changed in structure in recent years and is now more robustly structured than it was, with lower gearing ratios and more stable earnings streams. The sector could be expected to benefit from a recovery in retail spending and from any tightening in vacancy rates for high quality office accommodation. By 30 September, the sector s PER was over 16 times forward earnings and it offered an earnings yield ( earnings) of around 6.0%, although few securities were still trading at discounts to net asset value. Australian Bonds For the year ended 30 June 2017, Australian bonds (Bloomberg Composite Bond All Maturities index) returned 0.2% to investors. This was well below the 14% index return experienced by investors in the domestic share market and also slightly below the index return provided by international bonds over the same period. The sector has been attractive to those seeking supposedly safe havens but the sector has under-performed since the advent of economic recovery after the global financial crisis and since investors appetites for the share market have improved. The sector experienced solid returns last year (up 7%), but has struggled over the past year in an environment of growing expectation that the general level of interest rates could rise as major central banks around the world begin to tighten monetary policy (even if only very slowly). While risks of a low growth world remain and while some central banks continue to target very low bond yields (notably the European Central Bank and the Bank of Japan), the general outlook has certainly strengthened over the past year. Stronger global growth implies less need for very low official bond yields and reduces the attraction of bond markets in general. As such, there appears to be little current attraction in the domestic bond market as the sector appears expensive relative to historical norms and relative to other investment options, including most share markets. International Bonds International bonds as a sector under-performed over the financial year, returning 0.5% (Barclays Capital Global Aggregate index, hedged to the $A), although the sector did well over the previous year, returning over 9%. Overall, however, the sector has tended to lag most equity markets in recent years. The sector did a little better over the September 2017 quarter (up 0.9%). 7 8

7 FINANCIAL MARKETS OVERVIEW (CONT) However, overall, the sector continues to appear expensive relative to shares and there remains some potential for a further shift by investors from bonds into supposedly riskier share and property markets, assuming that economic recovery continues to take hold in the major advanced economies, generating greater investor confidence. In other words, bond yields could be expected to rise (and prices fall) further over the medium-term, assuming that the global economy continues to gain momentum. The potential for central banks in Europe and Japan to follow the US lead in time and cease their purchases of both government bonds and asset-backed securities (end their QE programs) could also eventually reduce the attraction of bond markets for investors and lead to low or even negative returns in this sector for a time. SUPERANNUATION NEWS 2016/2017 There were a number of superannuation developments during the 2016/17 financial year. Introduction of the Transfer Balance Cap Effective 1 July 2017, the amount of assets that can be held in a tax protected Retirement Income Stream environment has been capped at 1.6 million dollars. Change in taxation treatment of Transition to Retirement Income Streams Effective 1 July 2017, Transition to Retirement Income Streams (TRIS) are no longer tax free, and investment income will be taxed at 15%, in the same manner as superannuation accumulation assets are. Reduction in contribution caps Effective 1 July 2017, the amount that members can contribute to superannuation have also been restricted. Members can now only make, or have, concessional contributions of up to $25,000 made to superannuation on their behalf. Contributions beyond this amount will be treated as income and taxed accordingly. Whilst some exemptions remain for constitutionally protected funds, these exemptions have also been restricted further. Similarly, member non concessional contributions have been restricted to $100,000, limiting potential bring forward levels to $300,000. There are also further restrictions for members approaching or in excess of the transfer balance cap of $1.6 million. Segregated Current Pension Assets (SMSF) 9 Super fund assets are considered segregated current pension assets when those assets are held solely for the purpose of fulfilling the liabilities of certain types of income stream. This arrangement means the fund does not need to obtain actuary s certificates to verify the assets are segregated current pension assets. This exemption to the actuary s certificate requirement is useful for SMSFs that only run income streams. The regulations will ensure the exemption only applies where 10

8 SUPERANNUATION NEWS 2016/2017 (CONT) all the income streams are in Retirement Phase. It is important to note that income streams in excess of a client s Transfer Balance Cap and Transition to Retirement (TTR) income streams are NOT considered to be in Retirement Phase. Thus clients with these sorts of income streams will no longer benefit from this exemption. Death Benefits Paid as Income Streams When a member dies the trustee of their super fund is required to pay their death benefit as soon possible as one or more income streams, up to two lump sums or a combination of both. The Government s super changes ensure death benefit pensions count against the Transfer Balance Cap of the recipient (subject to conditions - particularly for child beneficiaries). The regulations will now only allow income streams that are in Retirement Phase to be payable. This will mean that beneficiaries will only be able to receive the death benefit as an income stream if it does not cause them to breach their Transfer Balance Cap. Rolling Over Death Benefits for Immediate Cashing The Government s super changes ensured that superannuation death benefits cannot be rolled over except where it is to commence the immediate payment of a death benefit income stream (for those eligible to receive such income streams). The regulations allow a rollover to be made to facilitate the immediate payment of a death benefit income stream to any dependant eligible to receive a death benefit income stream. Previously only spouses of the deceased could make such a rollover. Key Budget 2017 Proposals On the evening of May 9, Treasurer Scott Morrison delivered his second Federal Budget. While it did not include the jawdropping changes of his first Budget, it still contained plenty to interest financial planners and their clients. The measures announced in this Budget reflected a mix of idealism, pressure to bring the Budget back to surplus and pragmatism in dealing with a parliament where the crossbenchers are influential. The budget included the following proposals that will potentially impact Superannuation in Australia. First Home Super Saver Scheme Downsizer contribution New external dispute resolution body Non arm s-length arrangements First Home Super Saver Scheme One of the more significant opportunities for clients was the announcement of the First Home Super Saver Scheme (FHSSS). Under this scheme, from July 1, 2017, first-home buyers will be able to make voluntary contributions to super and withdraw them, along with associated earnings, to purchase their first home. Status A bill has passed the House of Representatives and is now before the Senate. Downsizing and contributing to super From July 1, 2018, the government has proposed that clients aged 65 and older will be able to contribute proceeds from the sale of their home to super. Status A bill has passed the House of Representatives and is now before the Senate

9 SUPERANNUATION NEWS 2016/2017 (CONT) New External Dispute Resolution (EDR) body A new dispute resolution body, the Australian Financial Complaints Authority (AFCA), has been proposed from July 1, This body would replace the Financial Ombudsman Service, the Credit and Investments Ombudsman and the Superannuation Complaints Tribunal. The AFCA would be funded by industry and its decisions would be binding. Status Initial bills introduced to the Senate. Non-arm s length arrangements Stronger provisions are proposed to ensure that transactions between a member of a super fund and a related party are kept to an arm s-length basis. The provision, to apply from July 1, 2018, will ensure expenses that would normally apply to the transaction are considered when determining if it is at arm s length. Status Proposal INVESTMENTS AND INVESTMENT RETURNS As at 30 June 2017, the following investments have a value in excess of 5% of the total assets of the Fund: Funds % of Fund Fiducian Aust. Smaller Co Shares Fund 5.8% Fiducian Australian Shares Fund 10.8% Fiducian Balanced Fund 15.2% Fiducian Capital Safe Fund 7.4% Fiducian Capital Stable Fund 12.2% Fiducian Growth Fund 6.5% Fiducian Ultra Growth Fund 10.0% Fiducian International Shares Fund 8.0% 13 14

10 INVESTMENTS AND INVESTMENT RETURNS (CONT) Fiducian Funds Fiducian Funds were first offered on 16 January Fiducian Funds 1 Fund was not offered in 1997 but has been available for over 5 years. 30/06/13 30/06/14 30/06/15 30/06/16 30/06/17 Compound Return p.a. Fiducian Capital Safe Fund 4.1% 2.9% 2.4% 1.9% 2.0% 2.6% Fiducian Capital Stable Fund 8.8% 8.2% 7.5% 4.2% 4.7% 6.7% Fiducian Balanced Fund 17.2% 13.7% 11.8% 4.9% 9.9% 11.4% Fiducian Growth Fund 19.9% 15.3% 13.2% 5.1% 11.3% 12.8% Fiducian Australian Shares Fund 19.9% 17.6% 7.3% 5.3% 15.0% 12.9% Fiducian Aust. Smaller Co Shares Fund 17.8% 28.3% 9.7% 14.2% 5.3% 14.8% Fiducian International Shares Fund 27.6% 18.7% 24.4% -1.5% 17.6% 16.9% Fiducian Geared Australian Shares Fund 36.2% 24.3% 10.2% -3.4% 21.2% 16.9% Fiducian Global Smaller Company & Emerging Markets Fund % 16.2% 20.5% -3.7% 17.4% 14.2% Fiducian India Fund % 43.0% 41.0% 2.4% 23.8% 25.9% Fiducian Property Securities Fund 23.9% 11.7% 18.9% 22.9% -2.2% 14.6% Fiducian Technology Fund % 28.6% 41.2% 1.1% 32.4% 26.9% Fiducian Ultra Growth Fund % 21.4% 17.0% 6.9% 10.9% 15.2% Fiducian Diversified Social Aspirations Fund 10.9% 10.9% Fiducian Personal Managed Share portfolios The returns in the following table are notional and are based on the assumptions of portfolios with equal weighting to each share at the commencement of the portfolio and after every stock change. The actual returns for an individual portfolio will differ depending on when the member invested. Personal Managed Share Portfolios 30/06/13 30/06/14 30/06/15 30/06/16 30/06/17 Compound Return p.a. Imputation Portfolio 21.8% 21.9% 8.7% 3.0% 12.1% 13.3% Emerging Leaders Portfolio 11.5% 5.4% 0.4% 21.4% 35.8% 14.2% Growth Portfolio 10.0% 6.0% 7.8% 7.6% 25.2% 11.1% Property Securities Portfolio 28.6% 16.7% 18.1% 22.2% -1.8% 16.3% Notes to tables on pages 16-17: 1. The returns shown are net earnings i.e. after deduction of investment management fees. The returns are also before income tax. 2. The value of Members Accounts will vary with the market value of the investments selected. Account values may, therefore, rise and fall. Past performance should not be taken as an indication of future performance

11 FIDUCIAN COLLECTION Asset Name 30/06/13 30/06/14 30/06/15 30/06/16 30/06/17 Compound Return p.a. Capital Safe Aberdeen Australian Floating Rate Income Fund 4.3% 2.8% 2.1% 2.5% 2.4% 2.8% AMP Capital Managed Treasury Fund 3.7% 2.8% 2.6% 2.3% 2.0% 2.7% UBS Cash Fund 3.4% 2.6% 2.5% 2.1% 1.8% 2.5% UBS Cash Plus Fund 3.9% 3.3% 2.9% 2.4% 2.5% 3.0% Capital Stable BT Wholesale Conservative Outlook Fund 7.4% 8.0% 7.9% 4.8% 2.7% 6.1% INVESCO Wholesale Protected Growth Fund 3.5% 3.1% 4.0% 1.7% 8.4% 4.1% Macquarie Master Capital Stable Fund 10.2% 7.6% 4.9% 1.2% 6.1% 6.0% Onepath Wholesale Capital Stable Trust 7.3% 6.6% 4.2% 3.5% 1.8% 4.7% Balanced BT Wholesale Balanced Returns Fund 13.7% 11.6% 10.6% 2.9% 6.6% 9.0% Colonial First State W'sale Diversified Fund 18.2% 14.2% 8.9% 3.8% 7.1% 10.3% Legg Mason Diversified Trust 25.1% 17.5% 11.7% 2.9% 12.8% 13.8% Macquarie Master Balanced Fund 14.8% 12.5% 8.5% 2.1% 11.6% 9.8% Onepath Tax Effective Income Trust - Wholesale Class 19.9% 11.0% 6.7% 4.2% 3.6% 8.9% Schroder Balanced Fund Wholesale Class 17.4% 13.0% 7.8% 0.3% 12.1% 10.0% Growth Aberdeen Multi-Asset Real Return Fund 10.0% 7.1% 8.8% 3.6% 11.1% 8.1% Onepath Wholesale Managed Growth Trust 14.8% 12.6% 9.5% 1.6% 9.0% 9.4% Australian Shares AMP Capital Equity Fund 26.0% 17.0% 7.1% -1.3% 9.0% 11.2% Antares Professional High Growth Shares Fund 25.0% 13.9% 8.4% 1.7% 17.1% 13.0% Ausbil Australian Active Equity Fund 24.7% 20.7% 4.2% 1.2% 14.0% 12.6% BT Wholesale Core Australian Share Fund 24.3% 17.6% 8.5% -2.2% 15.8% 12.4% Colonial First State Wholesale Australian Share Fund 27.1% 18.6% 7.4% 3.9% 3.9% 11.8% Colonial First State Wholesale Imputation Fund 25.4% 16.6% 6.0% 0.2% 7.3% 10.7% Hyperion Australian Growth Companies Fund 33.6% 22.6% 5.9% 15.7% 5.4% 16.2% Investors Mutual Australian Shares Fund 27.3% 14.0% 10.0% 5.1% 12.5% 13.5% Perpetual's W/S Industrial Fund 31.1% 18.8% 7.6% -1.6% 13.8% 13.4% Perpetual Wholesale Ethical SRI Fund 35.9% 18.5% 10.4% 5.9% 13.9% 16.4% Sandhurst IML Industrial Share Fund 31.0% 14.7% 11.5% 4.3% 13.9% 14.8% Schroder Wholesale Australian Equity Fund 25.6% 16.1% 2.8% -6.7% 20.1% 10.9% Niko AM-Tyndall Australian Share Wholesale Fund 24.6% 17.6% 8.0% -1.5% 23.4% 13.9% Vanguard Wholesale Australian Shares Index Fund 21.7% 17.1% 5.4% 0.6% 13.7% 11.4% Australian Smaller Company Shares BT Wholesale Smaller Companies Fund 17.8% 16.6% 5.9% 15.0% 5.5% 12.1% Investors Mutual Aust. Smaller Cos Fund 21.9% 14.1% 18.6% 13.1% 13.7% 16.2% International Shares Abeerdeen Actively Hedged International Equities Fund 25.6% 16.5% 12.0% -1.6% 12.1% 12.6% Aberdeen EmergingOpportunities Fund 17.3% 6.2% 13.0% -1.6% 13.2% 9.4% Arrowstreet Global Equity Fund (Hedged) 27.0% 30.4% 15.1% -2.2% 20.4% 17.5% AMP Capital Wholesale Global Equity - Growth Fund 25.3% 18.9% 27.9% -6.3% 19.9% 16.4% AMP Capital Wholesale Global Equity - Value Fund 38.1% 23.6% 26.0% -7.2% 15.7% 18.2% 17 18

12 FIDUCIAN COLLECTION (CONT) Asset Name 30/06/13 30/06/14 30/06/15 30/06/16 30/06/17 Compound Return p.a. International Shares (cont) BT Wholesale Asian Share Fund 20.4% 8.0% 28.2% -5.4% 15.3% 12.7% BT Wholesale International Share Fund 35.1% 20.2% 25.8% -2.9% 16.0% 18.1% Colonial First State Wholesale Global Resources Fund -8.4% 26.3% -15.1% -1.3% 3.9% 0.1% Magellan Global Fund 39.7% 11.7% 29.5% -0.1% 15.4% 18.4% Magellan Infrastructure Fund 17.7% 22.0% 12.3% 17.8% 8.6% 15.6% Platinum Asia Fund 28.6% 17.4% 29.9% -10.3% 19.7% 16.0% Platinum International Fund 37.3% 17.3% 20.2% -6.3% 21.4% 17.1% PM Capital Global Companies Fund 62.5% 12.5% 38.7% -17.7% 34.7% 23.0% Premium China Fund 21.2% 10.9% 57.5% -29.8% 29.9% 14.1% Templeton Global Equity Fund 42.0% 23.3% 17.5% -11.2% 19.9% 17.0% Vanguard Wholesale International Shares Index Fund 33.1% 20.6% 25.2% 0.7% 14.7% 18.4% Vanguard Wholesale International Shares Index Fund (Hedged) 24.6% 24.7% 11.0% -1.3% 20.6% 15.5% Property Securities APN Property for Income Fund No % 11.6% 18.4% 23.6% -3.0% 14.1% BT Wholesale Property Investment Fund 22.6% 10.0% 19.7% 23.7% -4.8% 13.7% Ironbark Paladin Property Securities Fund 24.8% 10.3% 18.3% 24.1% -4.6% 14.0% Legg Mason Martin Currie Property Securities Trust 33.2% 13.4% 20.3% 21.0% -4.9% 15.9% SG Hiscock Wholesale Property Securities Fund 22.3% 13.6% 16.6% 18.5% -1.2% 13.6% Vanguard Wholesale Property Securities Index Fund 23.8% 10.9% 20.0% 24.4% -5.5% 14.1% Geared Funds Colonial First State Wholesale Geared Share Fund 62.0% 32.3% 13.0% -2.1% 24.1% 24.1% Fixed Income Aberdeen Income-Focused Bond Fund 2.6% 6.0% 5.5% 6.7% 0.2% 4.2% AUI Strategic Fixed Income Trust - Wholesale Units 2.1% 5.6% 3.1% 4.7% 1.5% 3.4% Henderson Tactical Income Trust 6.9% 5.7% 2.8% 3.8% 2.7% 4.4% Vanguard International Fixed Index Fund (Hedged) 4.1% 6.9% 6.0% 10.5% -1.3% 5.2% Perpetual Wholesale Diversified Income Fund 7.7% 5.7% 3.5% 2.7% 5.3% 5.0% Schroder Fixed Income Wholesale Class 4.3% 5.7% 3.9% 5.0% 0.7% 3.9% Vanguard Australian Fixed Index Fund 2.6% 5.9% 5.4% 6.8% 0.1% 4.1% 19 20

13 ASSET ALLOCATION AT 30 JUNE 2017 Asset Name Cash Aus. Fixed Int. Fixed CPI Fixed Aus. Shares Int. Shares Listed Property Fiducian Funds Fiducian Capital Safe Fund 62.4% 37.6% Fiducian Capital Stable Fund 31.7% 19.6% 10.4% 5.0% 15.8% 12.9% 4.6% Fiducian Balanced Fund 8.1% 10.3% 5.5% 2.6% 38.8% 26.1% 8.6% Fiducian Growth Fund 4.1% 6.1% 3.2% 1.6% 43.7% 31.0% 10.3% Fiducian Australian Shares Fund 0.6% 99.4% Fiducian Aust. Smaller Co Shares Fund 4.6% 95.4% Fiducian International Shares Fund 1.5% 98.5% Fiducian Geared Australian Shares Fund 2.9% 97.1% Fiducian Global Smaller Company & Emerging Markets Fund 1.6% 98.4% Fiducian India Fund 4.2% 95.8% Fiducian Property Securities Fund 1.9% 98.1% Fiducian Technology Fund 1.1% 98.9% Fiducian Ultra Growth Fund 1.4% 44.8% 45.1% 8.7% Fiducian Diversified Social Aspirations Fund 2.5% 53.0% 44.5% Mortgages or Others ASSET ALLOCATION AT 30 JUNE 2016 Asset Name Cash Aus. Fixed Int. Fixed CPI Fixed Aus. Shares Int. Shares Listed Property Fiducian Funds Fiducian Capital Safe Fund 65.8% 34.2% Fiducian Capital Stable Fund 39.6% 13.0% 9.0% 4.9% 16.0% 11.9% 5.6% Fiducian Balanced Fund 12.4% 7.5% 5.2% 2.8% 37.7% 24.7% 9.6% Fiducian Growth Fund 6.7% 4.6% 3.2% 1.7% 42.5% 28.8% 12.4% Fiducian Australian Shares Fund 1.5% 98.5% Fiducian Aust. Smaller Co Shares Fund 1.3% 98.7% Fiducian International Shares Fund 3.2% 96.8% Fiducian Geared Australian Shares Fund 4.2% 95.8% Fiducian Global Smaller Company & Emerging Markets Fund 2.4% 97.6% Fiducian India Fund 1.8% 98.2% Fiducian Property Securities Fund 1.8% 98.2% Fiducian Technology Fund 2.1% 97.9% Fiducian Ultra Growth Fund 1.8% 46.0% 42.7% 9.5% Fiducian Diversified Social Aspirations Fund 61.4% 1.9% 36.7% Mortgages or Others 21 22

14 ASSET ALLOCATION AT 30 JUNE 2017 Note: The Trustee is required to advise asset allocation at both the latest and previous 30 June. (See 2016 on pages 27-30). Asset Name Cash Aus. Fixed Int. Fixed CPI Fixed Aus. Shares Int. Shares Listed Property Mortgages or Others Capital Safe Aberdeen Australian Floating Rate Income Fund 27.0% 73.0% AMP Capital Managed Treasury Fund 13.3% 86.7% UBS Cash Fund 90.2% 9.8% UBS Cash Plus Fund 49.2% 50.8% Capital Stable BT Wholesale Conservative Outlook Fund 19.1% 24.2% 18.4% 11.5% 8.9% 5.2% 12.7% INVESCO Wholesale Protected Growth Fund 3.7% 96.3% Macquarie Master Capital Stable Fund 38.9% 21.7% 13.1% 14.5% 7.9% 3.9% Onepath Wholesale Capital Stable Trust 34.8% 29.4% 17.7% 7.3% 1.9% 3.8% 5.1% Balanced BT Wholesale Balanced Returns Fund 3.3% 16.1% 10.9% 26.5% 23.4% 7.1% 12.7% Colonial First State W'sale Diversified Fund 5.3% 19.0% 6.5% 32.1% 31.7% 5.4% Legg Mason Diversified Trust 2.3% 18.1% 7.2% 40.5% 21.9% 10.0% Macquarie Master Balanced Fund 24.4% 7.3% 17.0% 29.2% 17.6% 4.5% Onepath Tax Effective Income Trust - Wholesale Class 4.9% 28.1% 38.5% 28.5% Schroder Balanced Fund Wholesale Class 13.3% 11.1% 7.0% 1.6% 33.1% 22.8% 11.1% Growth Aberdeen Multi-Asset Real Return Fund 4.4% 4.6% 39.3% 21.6% 19.2% 3.0% 7.9% Onepath Wholesale Managed Growth Trust 5.2% 7.1% 9.3% 24.9% 27.9% 5.2% 20.4% Australian Shares AMP Capital Equity Fund 5.3% 92.9% 1.8% Antares Professional High Growth Shares Fund 0.9% 99.1% Ausbil Australian Active Equity Fund 1.6% 98.4% BT Wholesale Core Australian Share Fund 4.8% 95.2% Colonial First State Wholesale Australian Share Fund 2.6% 97.4% Colonial First State Wholesale Imputation Fund 1.9% 98.1% Hyperion Australian Growth Companies Fund 4.8% 95.2% Investors Mutual Australian Shares Fund 9.1% 86.2% 4.7% Perpetual's W/S Industrial Fund 5.4% 86.0% 4.1% 4.5% Perpetual Wholesale Ethical SRI Fund 9.1% 87.7% 3.2% Sandhurst IML Industrial Share Fund 0.2% 99.8% Schroder Wholesale Australian Equity Fund 3.6% 96.4% Niko AM-Tyndall Australian Share Wholesale Fund 4.2% 95.1% 0.7% Vanguard Wholesale Australian Shares Index Fund 100.0% Australian Smaller Company Shares BT Wholesale Smaller Companies Fund 6.9% 93.1% Investors Mutual Aust. Smaller Cos Fund 14.7% 79.4% 5.9% 23 24

15 ASSET ALLOCATION AT 30 JUNE 2017 (CONT) Asset Name Cash Aus. Fixed International Shares Int. Fixed CPI Fixed Aus. Shares Int. Shares Listed Property Mortgages or Others Abeerdeen Actively Hedged International Equities Fund 1.3% 98.7% Aberdeen EmergingOpportunities Fund 1.8% 98.2% Arrowstreet Global Equity Fund (Hedged) 1.2% 98.6% 0.2% AMP Capital Wholesale Global Equity - Growth Fund 6.3% 93.7% AMP Capital Wholesale Global Equity - Value Fund 1.7% 98.3% BT Wholesale Asian Share Fund 1.4% 98.6% BT Wholesale International Share Fund 2.8% 97.2% Colonial First State Wholesale Global Resources Fund 1.8% 18.9% 79.3% Magellan Global Fund 15.0% 85.0% Magellan Infrastructure Fund 10.4% 15.3% 74.3% Platinum Asia Fund 12.0% 88.0% Platinum International Fund 11.7% 88.3% PM Capital Global Companies Fund -1.3% 2.3% 7.9% 0.5% 90.6% Premium China Fund 3.0% 97.0% Templeton Global Equity Fund 2.4% 97.6% Vanguard Wholesale International Shares Index Fund 100.0% Vanguard Wholesale International Shares Index Fund (Hedged) 100.0% Property Securities APN Property for Income Fund No % 87.0% 10.2% BT Wholesale Property Investment Fund 2.5% 97.5% Ironbark Paladin Property Securities Fund 3.6% 96.4% Legg Mason Martin Currie Property Securities Trust 0.5% 99.5% SG Hiscock Wholesale Property Securities Fund 2.9% 97.1% Vanguard Wholesale Property Securities Index Fund 100.0% Geared Funds Colonial First State Wholesale Geared Share Fund 8.7% 91.3% Fixed Income Aberdeen Income-Focused Bond Fund 0.6% 99.4% AUI Strategic Fixed Income Trust - Wholesale Units 1.4% 98.6% Henderson Tactical Income Trust 23.3% 76.7% Vanguard International Fixed Index Fund (Hedged) 1.5% 98.5% Perpetual Wholesale Diversified Income Fund 10.9% 61.2% 27.9% Schroder Fixed Income Wholesale Class 14.9% 83.5% 0.2% 1.4% Vanguard Australian Fixed Index Fund 100.0% 25 26

16 ASSET ALLOCATION AT 30 JUNE 2016 Asset Name Cash Aus. Fixed Int. Fixed CPI Fixed Aus. Shares Int. Shares Listed Property Mortgages or Others Capital Safe Aberdeen Australian Floating Rate Income Fund 34.1% 65.9% AMP Capital - Managed Treasury Fund 10.5% 88.0% 1.5% UBS Cash Fund 97.7% 2.4% UBS - Cash Plus Fund 57.0% 43.0% Capital Stable INVESCO Wholesale Protected Growth Fund 0.4% 99.6% Macquarie Master Capital Stable Fund 31.3% 10.8% 24.5% 12.6% 19.7% 1.1% OnePath Wholesale Capital Stable Trust 35.2% 31.9% 16.7% 6.5% 1.2% 3.8% 4.7% Balanced BT Wholesale Balanced Returns Fund 2.8% 14.3% 14.8% 25.7% 16.6% 9.2% 16.6% Colonial First State Wholesale Diversified Fund 7.1% 17.5% 5.7% 32.0% 32.5% 5.3% Legg Mason Diversified Trust 1.9% 14.1% 7.7% 42.4% 21.6% 12.3% Macquarie Master Balanced Fund 21.6% 8.0% 11.2% 26.1% 31.0% 2.2% Onepath Tax Effective Income Trust - Wholesale Class 5.5% 27.4% 36.8% 30.3% Schroder Balanced Fund Wholesale Class 8.8% 9.4% 5.9% 1.7% 33.4% 24.2% 16.7% Growth Aberdeen Multi-Asset Real Return 6.0% 6.7% 35.7% 21.0% 13.0% 1.6% 16.0% OnePath Wholesale Managed Growth Trust 4.3% 7.9% 9.4% 22.8% 28.6% 5.9% 21.1% Australian Shares AMP Capital Equity Fund 7.1% 92.9% Antares Professional High Growth Shares Fund 3.9% 96.1% Ausbil Australian Active Equity Fund 2.0% 98.0% BT Wholesale Core Australian Share Fund 4.9% 95.1% Colonial First State Wholesale Australian Share Fund 3.0% 97.0% Colonial First State Wholesale Imputation Fund 3.4% 96.6% Hyperion Australian Growth Companies Fund 3.5% 96.5% Investors Mutual Australian Shares Fund 8.0% 86.1% 5.9% Perpetual s W/S Industrial Fund 8.1% 90.4% 1.0% 0.4% Perpetual Wholesale Ethical SRI Fund 5.9% 91.1% 3.1% Sandhurst IML Industrial Share Fund 100.0% Schroder Wholesale Australian Equity Fund 3.6% 96.4% Niko AM-Tyndall Australian Share Wholesale Fund 1.2% 98.8% Vanguard Wholesale Australian Shares Index Fund 91.1% 8.9% Australian Smaller Company Shares BT Wholesale Smaller Companies Fund 5.3% 94.7% Investors Mutual Australian Smaller Companies Fund 11.0% 79.9% Australian Smaller Company Shares BT Wholesale Smaller Companies Fund 6.9% 93.1% Investors Mutual Aust. Smaller Cos Fund 14.7% 79.4% 5.9% 27 28

17 ASSET ALLOCATION AT 30 JUNE 2016 (CONT) Asset Name Cash Aus. Fixed International Shares Int. Fixed CPI Fixed Aus. Shares Int. Shares Listed Property Mortgages or Others Aberdeen Actively Hedged International Equities Fund 3.2% 96.8% Aberdeen Emerging Opportunities Fund 1.8% 98.2% Arrowstreet Global Equity Fund (Hedged) 1.2% 0.2% 96.6% 2.0% AMP Capital Wholesale Global Equity - Growth Fund 3.4% 96.6% AMP Capital Wholesale Global Equity - Value Fund 1.1% 98.9% BT Wholesale Asian Share Fund 0.3% 99.7% BT Wholesale International Share Fund 98.9% 1.1% Colonial First State Wholesale Global Resources Fund 2.1% 97.9% GVI Aubrey Global Growth & Income Fund - Hedge 3.8% 96.2% Magellan Global Fund 16.4% 2.1% 81.5% Platinum Asia Fund 13.8% 86.2% Platinum International Fund 11.8% 1.0% 87.2% PM Capital Absolute Performance Fund -17.5% 2.3% 13.5% 2.3% 99.4% Premium China Fund 1.0% 81.0% 18.0% Templeton Global Equity Fund 0.7% 99.3% Vanguard Wholesale International Shares Index Fund 96.5% 3.5% Vanguard Wholesale International Shares Index Fund (Hedged) 96.5% 3.5% Property Securities APN Property for Income Fund No % 86.6% 10.3% BT Wholesale Property Investment Fund 4.0% 96.0% Ironbark RREEF Paladin Property Securities Fund 1.8% 98.2% Legg Mason Martin Currie Property Securities Trust 0.9% 99.1% Principal Property Securities Fund 1.7% 98.3% SG Hiscock Wholesale Property Securities Fund 2.3% 97.7% Geared Funds Colonial First State Wholesale Geared Share Fund 10.0% 90.0% Fixed Income Aberdeen Income-Focused Bond Fund 0.3% 99.8% AUI Strategic Fixed Income Trust - Wholesale Units 0.9% 99.1% Henderson Tactical Income Trust 21.0% 79.0% Vanguard International Fixed Index Fund (Hedged) 1.4% 98.7% Perpetual Wholesale Diversified Income Fund 13.4% 67.6% 19.0% Schroder Fixed Income Wholesale Class 22.1% 77.8% 0.2% Vanguard Australian Fixed Index Fund 100.0% Mortgage Securities AMP Capital Wholesale Australian Income Fund 42.2% 57.8% AMP Capital Wholesale Australian Monthly Income Fund 20.6% 79.4% 29 30

18 LONG TERM RETURN OBJECTIVES The following table indicates the choices currently available through the Trustee s investment strategy, the asset ranges within investment options, long term expected returns and the likelihood of negative returns over a 20 year period: Categories Maximum Asset Ranges Growth Defensive Long-term Return Objective over 7+ years Estimated Number of Negative Returns over a 20-year period Risk Label Diversified Funds Capital Stable 35% 80% CPI + 3.5% 1 to 2 Low to medium Balanced 75% 50% CPI + 5.5% 2 to 3 Medium Growth 95% 25% CPI + 6.5% 3 to 4 Medium to high High Growth / Ultra Growth 100% 5% CPI + 8.5% 6 or greater Very high Asset Sector Funds Australian Shares 100% 10% CPI + 7.5% 4 to 6 High International Shares 100% 10% CPI + 7.0% 4 to 6 High Australian Smaller Company Shares 100% 10% CPI + 8.5% 6 or greater Very high Emerging Markets 100% 10% CPI % 6 or greater Very high Listed Property Securities 100% 10% CPI + 6.5% 3 to 4 Medium to high Specialist Funds Cash or Capital Safe - 100% CPI + 1.0% 1 Very low Geared Shares 100% 10% CPI % 6 or greater Very high Technology 100% 10% CPI % 6 or greater Very high Debt / Income / Mortgage Securities - 100% CPI + 4.5% 2 to 3 Medium Resources 100% 10% CPI + 8.0% 4 to 6 High India / China 100% 25% CPI % 6 or greater Very high 31 32

19 INVESTMENT MANAGERS FIDUCIAN PORTFOLIOS The investment managers appointed, as at 30 June 2017, for the Fiducian Collection and the Fiducian Funds were: Aberdeen Asset Management Limited Adam Smith Asset Management Pty Ltd AMP Capital Investors Ltd Ausbil Investment Management Ltd Australian Unity Funds Management Ltd Bennelong Australian Equity Partners Pty Ltd BlackRock Asset Management Australia Ltd BT Funds Management Ltd Colonial First State Investment Managers (Australia) Ltd DFA Australia Ltd FIL Ltd Fidante Partners Limited Fiducian Investment Management Services Limited Franklin Templeton Investments Australia Limited HDFC Asset Managemnet Company Ltd Investors Mutual Limited L1 Capital Pty Ltd Legg Mason Asset Management Australia Ltd Maple-Brown Abbott Limited NovaPort Capital Pty Limited OnePath Funds Management Ltd Pareto Australia Pty Ltd Perpetual Investment Management Ltd Phoenix Portfolios Pty Ltd Platinum Asset Management Ltd Premium China Funds Management Pty Ltd Principal Global Investors (Australia) Ltd Sandhurst Trustees Limited SBI Funds Management Private Limited Schroder Investment Management (Australia) Limited SG Hiscock & Company Limited Solaris Investment Management Limited State Street Global Advisors, Australia, Ltd Sundaram Asset Management Company Ltd Tata Asset Management Ltd UBS Global Asset Management (Australia) Ltd Vanguard Investments Australia Ltd Wellington Management Company, LLP The shares held in the four Fiducian Portfolios at 30 June 2017 were: Imputation Portfolio Adelaide Brighton Ltd AGL Energy Ltd Aurizon Holdings Ltd Automotive Holdings Group Ltd Coca-Cola Amatil Ltd Commonwealth Bank of Australia IOOF Ltd JB Hi-Fi Ltd Medibank Private Ltd NIB Holdings Ltd Suncorp Group Ltd Telstra Corporation Ltd Westpac Banking Corporation Woodside Petroleum Ltd Growth Portfolio BT Investment Management Ltd Caltex Australia Ltd Carsales.com Ltd Challenger Ltd CSL Ltd Domino s Pizza Enterprises Ltd Macquarie Group Ltd Ramsay Health Care Ltd REA Group Ltd Rio Tinto Ltd Seek Ltd Sydney Airport Westpac Banking Corporation WorleyParsons Ltd Property Securities Portfolio Charter Hall Group GPT Group Lend Lease Group Mirvac Group Scentre Group Stockland Sydney Airport Westfield Corporation 33 34

20 FIDUCIAN PORTFOLIOS (CONT) FINANCIAL ACCOUNTS emerging leaders portfolio Altium Ltd Appen Ltd BWX Ltd Compumedics Ltd Corporate Travel Management Ltd Credit Corp Group Ltd Freedom Insurance Group Ltd Gentrack Group Ltd Northern Star Resources Ltd Pioneer Credit Ltd Praemium Ltd Red River Resources Ltd Shriro Holdings Ltd Vocus Communications Ltd STATEMENT OF FUND POLICY ON THE USE OF DERIVATIVE SECURITIES The Fund does not currently use derivative securities. In future, if it is decided to use such products, the Trustee will be required to modify the Risk Management Statement (RMS). Any such approved RMS must specify procedures for approval of actions and include detailed responsibilities and authorities as well as reporting and review procedures. FIDUCIAN SUPERANNUATION SERVICE INCOME STATEMENT For the year ended 30 June $000 $000 Superannuation Activities income Trust distributions 40,257 29,841 Dividend income 1,047 1,032 Net Changes in assets measured at fair value 59, Total Income from Superannuation activities 101,359 32,234 General administration expenses Administration and other service provider expenses (18,767) (18,019) Total expenses (18,767) (18,019) Results from superannuation activities before Income tax 82,592 14,215 Income tax benefit 7,664 5,094 Results from superannuation activities after Income tax 90,256 19,309 Net benefits allocated to defined contribution members (90,256) (19,309) Operating result after income tax - - Notes: 1. The financial information shown above has been extracted from the audited financial statements of the Fund. 2. The audited financial statements of Fiducian Superannuation Service for the year ended 30 June 2017 are available on request

21 FINANCIAL ACCOUNTS (CONT) FINANCIAL ACCOUNTS (CONT) FIDUCIAN SUPERANNUATION SERVICE Statement of Financial Position As at 30 June $000 $000 Assets Cash and cash equivalents 46,076 40,761 Distributions receivable 31,344 21,406 Income tax receivable 3,062 2,268 Deferred tax assets 7,838 7,172 Outstanding settlements 1,159 1,382 Financial Assets at fair value through profit and loss 1,067, ,048 Total assets 1,156, ,037 Liabilities Administration and other service provider fees 1,840 1,533 Other accounts payable Total liabilities excluding member benefits 1,896 1,580 Net assets available to pay member benefits 1,155, ,457 Member Benefits Allocated to members 1,149, ,408 Total member benefits 1,149, ,408 Net Assets 5,753 5,049 Equity Reserves 5,753 5,049 Total Equity 5,753 5,049 Notes: 1. The financial information shown above has been extracted from the audited financial statements of the Fund. 2. The audited financial statements of Fiducian Superannuation Service for the year ended 30 June 2017 are available on request. FIDUCIAN SUPERANNUATION SERVICE Statement of changes in member benefits For the year ended 30 June $000 $000 Opening balance of member benefits 978, ,113 Contributions received: Employer 15,571 13,537 Members 63,245 45,639 Transfers from other funds 110, ,811 Government co-contributions Income Tax on contributions (3,797) (3,835) Net after tax contributions 185, ,187 Benefits to members: Benefit Payments (78,657) (55,073) Transfers to other funds (25,759) (26,234) Insurance Premiums charged to members accounts (735) (966) Net Transfer from Reserve: Expense Reserve (53) 1,072 Benefits allocated to members accounts: Net Invesment Income 101,359 32,234 Net Administration and other service provider expenses (18,767) (18,019) Tax benefit 7,664 5,094 (14,948) (61,892) Closing balance of member benefits 1,149, ,408 Notes: 1. The financial information shown above has been extracted from the audited financial statements of the Fund. 2. The audited financial statements of Fiducian Superannuation Service for the year ended 30 June 2017 are available on request

22 FINANCIAL ACCOUNTS (CONT) FINANCIAL ACCOUNTS (CONT) FIDUCIAN SUPERANNUATION SERVICE Statement of Changes in Equity For the year ended 30 June 2017 Expense Reserve Operational Risk Reserve Total Equity $000 $000 $000 Opening balance as at 1 July ,401 1,883 4,284 Transfer to/from members (1,073) 1, Balance as at 30 June ,328 3,721 5,049 Transfer to/from members Balance as at 30 June ,381 4,372 5,753 Notes: 1. The financial information shown above has been extracted from the audited financial statements of the Fund. 2. The audited financial statements of Fiducian Superannuation Service for the year ended 30 June 2017 are available on request. FIDUCIAN SUPERANNUATION SERVICE Statement of Cash Flows For the year ended 30 June $000 $000 Cash flows from operating activities received Trust distributions received 30,319 23,378 Dividends received 1,047 1,032 Other income received Administration and other service provider fees paid (19,912) (16,391) Income taxes received 7,656 7,945 Net cash flows from operating activities 20,041 16,712 Cash flows from investing activities Proceeds from sale of unit trusts 170, ,520 Proceeds from sale of shares in listed companies 7,392 1,693 Proceeds from sale of fixed interest securities Units in unit trusts purchased (265,046) (202,191) Fixed interest securities purchased (522) (734) Shares in listed companies purchased (7,710) (1,822) Net cash flow from / (used in) investing activities (94,736) (93,751) 39 40

23 FINANCIAL ACCOUNTS (CONT) FIDUCIAN SUPERANNUATION SERVICE Statement of Cash Flows (CONT) For the year ended 30 June $000 $000 Cash flows from financing activities Contributions received: Employer 15,571 13,537 Members 63,245 45,639 Transfers from other funds 110, ,811 Government co-contributions Contributions tax paid (3,797) (3,835) Net Transfer from Reserve 53 (1,072) Premiums on term insurance policies paid (1,442) (1,261) Benefits paid (104,415) (81,308) Net cash flow from / (used in) financing activities 80,010 78,546 This page is left blank intentionally Net increase in cash and cash equivalents 5,315 1,507 Cash and cash equivalents at the beginning of the year 40,761 39,254 Cash and cash equivalents at the end of the year 46,076 40,761 Notes: 1. The financial information shown above has been extracted from the audited financial statements of the Fund. 2. The audited financial statements of Fiducian Superannuation Service for the year ended 30 June 2017 are available on request