Canadian Scholarship Trust Individual Savings Plan

Transcription

1 C.S.T. Consultants Inc. Canadian Scholarship Trust Plan Sponsor Canadian Scholarship Trust Foundation 2235 Sheppard Avenue East, Suite 1600 Toronto, Ontario M2J 5B RESP (7377) Investment Fund Manager and Distributor C.S.T. Consultants Inc Sheppard Avenue East, Suite 1600 Toronto, Ontario M2J 5B8 Trustee RBC Investor Services Trust 155 Wellington Street West, 2nd Floor Toronto, Ontario M5V 3L3 Auditor Deloitte LLP Bay Adelaide East 22 Adelaide Street West, Suite 200 Toronto, Ontario M5H 0A9 Bank Royal Bank of Canada Royal Bank Plaza South Tower 200 Bay Street, 10th Floor Toronto, Ontario M5J 2J5 Canadian Scholarship Trust Individual Savings Plan Semi-Annual Financial Statements Unaudited For updates on your Plan account, login to Online Services at In Quebec, Canadian Scholarship Trust Plan is distributed by C.S.T. Consultants Inc. Scholarship Plan Brokerage Firm. April 30, 2016 F.P.O 2002 M2-E ( ) CST Financl_Semi-Stmnt_Cvr_ENG_Final pv_01_12_15.indd :23 AM

2 Contents Statements of Financial Position 1 Statements of Comprehensive Income 2 Statements of Changes in Net Assets Attributable to Subscribers and Beneficiaries 2 Statements of Cash Flows 3 Schedule I Statement of Investment Portfolio 4 Notes to the Financial Statements 5 Government Grants (Appendix I to Schedule I) 9 Unaudited semi-annual financial statements The accompanying semi-annual financial statements have not been reviewed by the external auditors of the Plan in accordance with assurance standards applicable to a review of interim financial statement.

3 Statements of Financial Position As at April 30, 2016 and October 31, 2015 (in thousands of Canadian dollars) Apr 30, 2016 Oct 31, 2015 (Audited) Assets Cash and cash equivalents $ 243 $ 163 Receivables for securities sold 4 42 Investments, at fair value (Note 4 and Schedule I) 8,965 8,547 Accrued interest and other receivables 3,461 3,407 Government grants receivable ,691 12,192 Liabilities Payables for securities purchased 8 22 Accounts payable, accrued liabilities and unclaimed subscribers funds Net Assets Attributable to Subscribers and Beneficiaries 12, ,138 Represented by: Non-Discretionary Funds Accumulated income held for future education assistance payments 1,722 1,825 Subscribers deposits (Note 6) 8,100 7,624 Government grants 2,260 2,227 Income on Government grants Unrealized Gains (Losses) 23 $ 12,607 9 $ 12,138 1 Individual Savings Plan

4 Statements of Comprehensive Income For the six months ended April 30, 2016 and 2015 (in thousands of Canadian dollars) Apr 30, 2016 Apr 30, 2015 Income Interest for allocation to subscriber accounts $ 126 $ 134 Realized gains (losses) on sale of investments (19) (8) Change in unrealized gains (losses) Dividends Expenses Administration and account maintenance fees (Note 3(a)) Portfolio management fees 6 6 Custodian and trustee fees 3 3 Increase in Net Assets from Operations Attributable to Subscribers and Beneficiaries $ $ 158 Statements of Changes in Net Assets Attributable to Subscribers and Beneficiaries For the six months ended April 30, 2016 and 2015 (in thousands of Canadian dollars) Apr 30, 2016 Net Assets Attributable to Subscribers and Beneficiaries, Beginning of Period $ 12,138 Apr 30, 2015 $ 12,070 Increase in Net Assets from Operations Attributable to Subscribers and Beneficiaries Transfers from internal and external plans Receipts Net increase in Subscribers deposits (Note 6) Government grants received (net of repayments) Disbursements Payments to beneficiaries Education assistance payments (341) (278) Government grants (154) (151) Return of interest (26) (6) Total payments to beneficiaries (521) Receipts less Disbursements (29) Change in Net Assets Attributable to Subscribers and Beneficiaries 469 Net Assets Attributable to Subscribers and Beneficiaries, End of Period $ 12,607 (435) $ 12,705 Individual Savings Plan 2

5 Statements of Cash Flows For the six months ended April 30, 2016 and 2015 (in thousands of Canadian dollars) Apr 30, 2016 Apr 30, 2015 Operating Activities Increase in Net Assets from Operations Attributable to Subscribers and Beneficiaries $ 51 $ 158 Net disbursements from investment transactions (399) (52) Items not affecting cash Realized (gains) losses on sale of investments 19 8 Change in unrealized (gains) losses (14) (104) Change in non-cash operating working capital Increase in Accrued interest and other receivables (54) (124) Increase (decrease) in Government grants receivable 15 (8) (Decrease) increase in Accounts payable, accrued liabilities and unclaimed subscribers funds 44 (79) Cash flow used in Operating Activities (338) (201) Financing Activities Transfers from internal and external plans Government grants received (net of repayments) Net increase in Subscribers deposits (Note 6) Payments to beneficiaries (521) (435) Cash flow from Financing Activities Net decrease in Cash and cash equivalents Cash and cash equivalents, Beginning of Period Cash Cash equivalents Cash and cash equivalents, End of Period Cash Cash equivalents Cash and cash equivalents, End of Period $ 243 $ 632 Supplemental cash flow information: Withholding Taxes $ 1 $ Interest Income Received Individual Savings Plan

6 Schedule I Statement of Investment Portfolio As at April 30, 2016 (in thousands of Canadian dollars) Interest Maturity Par Fair Average Interest Maturity Par Fair Average Security Rate Date Value ($) Value ($) Cost ($) Security Rate Date Value ($) Value ($) Cost ($) Bonds Bonds (continued) Federal 28.8% Canada Housing Trust Jun Corporate 24.2% (continued) HSBC Bank Canada Oct Canada Housing Trust Dec HSBC Bank Canada Nov Canada Housing Trust Jun HSBC Bank Canada May Canada Housing Trust Dec HSBC Bank Canada Sep Canada Housing Trust Mar Mercedes Benz Canada Inc Aug Canada Housing Trust Jun National Bank of Canada Aug Canada Housing Trust Dec National Bank of Canada Mar Omers Realty Corporation Nov ,789 1,783 Royal Bank of Canada Jul Municipal and Provincial 43.3% Royal Bank of Canada Dec Province of Alberta Dec Royal Bank of Canada Mar Province of British Columbia Dec Royal Bank of Canada Jun Province of Manitoba Sep Royal Bank of Canada Jan Province of Manitoba Sep Toronto Dominion Bank Apr Province of New Brunswick Jun Toronto Dominion Bank Jun Province of Ontario Mar Toronto Dominion Bank Sep Province of Ontario Mar Toronto Dominion Bank Dec Province of Ontario Jun Toronto Dominion Bank Dec Province of Ontario Jun Toyota Credit Canada Inc Jul Province of Quebec Dec Toyota Credit Canada Inc Nov Province of Quebec Dec Toyota Credit Canada Inc Feb Province of Quebec Dec VW Credit Canada Inc Nov Province of Quebec Dec VW Credit Canada Inc Aug Province of Quebec Dec VW Credit Canada Inc Oct Province of Saskatchewan Mar VW Credit Canada Inc Jun Wells Fargo Financial 2,694 2,744 Corporation Canada Nov Corporate 24.2% Bank of Montreal Mar Wells Fargo Financial Corporation Canada Jul Bank of Montreal Sep ,511 1,512 Bank of Montreal Dec Bank of Nova Scotia Aug Cash and cash equivalents 3.7% Bank of Nova Scotia Mar Total Fixed Income Investments 100.0% 6,225 6,270 Bank of Nova Scotia Jun Investments Allocation (Note 4) Bank of Nova Scotia Sep Government Grants (Appendix I) 2,972 2,904 Bank of Nova Scotia Aug Cash and cash equivalents (Appendix I) Bank of Nova Scotia Dec bcimc Realty Corporation Aug Total Investment Fund 9,208 9,185 Bell Canada Jun Represented by: BMW Canada Inc Sep Cash and cash equivalents 243 BMW Canada Inc Nov Investments, at fair value 8,965 Caisse Centrale Desjardins Nov Caisse Centrale Desjardins Jul ,208 Canadian Imperial Bank of Commerce Jan Caterpillar Financial Service Limited Jun CIBC Capital Trust Jun Ford Credit Canada Limited Jun Ford Credit Canada Limited Sep Health Care REIT Inc Nov Honda Canada Finance Inc Jun Honda Canada Finance Inc Aug Honda Canada Finance Inc Feb Individual Savings Plan 4

7 Notes to the Financial Statements Six months ended April 30, 2016 and 2015 (Unaudited, in thousands of Canadian dollars) Note 1. Nature of Operations prepared in accordance with International Accounting Standard ( IAS ) 34, Interim Financial Reporting. The Canadian Scholarship Trust Individual Savings Plan These financial statements were approved by the Board of (the Individual Savings Plan or the Plan ) is a self-determined the Foundation on June 9, Education Savings Plan that was established on October 1, (b) Basis of measurement The objective of the Plan is to assist parents and others to save for the These financial statements have been prepared on the historical post-secondary education of children. The Plan is managed and cost basis except for financial instruments classified as at fair distributed by C.S.T. Consultants Inc. ( C.S.T.C. ), a wholly-owned value through profit or loss ( FVTPL ), which are measured at subsidiary of the Canadian Scholarship Trust Foundation fair value. (the Foundation ). The Plan s registered place of business is Sheppard Avenue East, Toronto, Ontario, Canada. (c) Future accounting standard Payments are made by a subscriber to an account maintained by The following new accounting standard has been issued by the the Plan s trustee on behalf of a beneficiary. Payments of sales charges International Accounting Standards Board ( IASB ). This new are made from the subscriber s initial contribution. The principal standard is not yet effective and the Plan has not completed its accumulated over the term of the subscriber s education savings plan assessment of the impact on its financial statements. agreement (the Agreement ) is returned in whole or in part at any IFRS 9 Financial Instruments ( IFRS 9 ) time at the request of the subscriber. A beneficiary is deemed to be a IFRS 9 was issued in November 2009 to replace IAS 39 qualified student upon receipt by the Foundation of evidence of Financial Instruments: Recognition and Measurement ( IAS 39 ). enrolment in a qualifying educational program at an eligible IFRS 9 will be effective for the Plan s financial statements institution. Education assistance payments ( EAPs ) paid to a during its fiscal 2019 year. beneficiary from the Plan are determined by the subscriber and are IFRS 9 introduces new requirements for the classification paid from the income earned on the subscriber s principal. and measurement of financial assets, reducing the number of There are a number of government grants that may be available classifications from those in IAS 39. The approach in IFRS 9 is to beneficiaries including the Canada Education Savings Grant based on how an entity manages its financial instruments in the Program ( CESG ), the Canada Learning Bond ( CLB ), the context of its business model and the contractual cash flow Alberta Centennial Education Savings Grant ( ACES ), the Quebec characteristics of the financial assets. Education Savings Incentive ( QESI ), the Saskatchewan Advantage (d) Financial instruments Grant for Education Savings ( SAGES ) and the British Columbia The Plan recognizes financial assets and financial liabilities when Training and Education Savings Grant ( BCTESG ) (collectively, it becomes a party to a contract. Financial assets and financial Government Grants ). The Alberta government announced that no liabilities, with the exception of those classified as FVTPL, are new grants will be made under the ACES program after measured at fair value plus transaction costs on initial July 31, recognition. Financial assets and financial liabilities classified as The Plan collects Government Grants, which are credited FVTPL are measured at fair value on initial recognition and directly into subscribers Agreements and invests these funds in transaction costs are expensed when incurred. Investments, at accordance with the Plan s investment policies. The Government fair value have been designated as FVTPL. Grants, along with investment income earned thereon, are paid to Measurement in subsequent periods depends on the qualified students. classification of the financial instrument. The financial assets Agreements are registered with appropriate government and financial liabilities of the Plan are classified as follows: authorities if all required information is provided, and once registered are subject to the rules for Registered Education Savings Plans ( RESP ) under the Income Tax Act (Canada). The current tax Financial asset or financial liability Classification legislation provides that income credited on subscribers principal is Investments, at fair value FVTPL (i) not taxable income of the subscriber unless withdrawn as an Cash and cash equivalents Loans and receivables (ii) Accumulated Income Payment subject to certain eligibility Accrued interest and other receivables Loans and receivables (ii) requirements. The deposits are not deductible for income tax Receivables for securities sold Loans and receivables (ii) purposes and are not taxable when returned to the subscriber. Accounts payable, accrued liabilities and Payments made to a beneficiary, including EAPs, Government unclaimed subscriber funds Other financial liabilities (iii) Grants and investment income earned on Government Grants will Payables for securities purchased Other financial liabilities (iii) constitute taxable income of that beneficiary in the year that the payments are made. Note 2. Significant Accounting Policies (a) Statement of Compliance These financial statements have been prepared in accordance with International Financial Reporting Standards ( IFRS ) on a basis consistent with accounting policies as described in Note 2 of the audited annual financial statements for the year ended October 31, These interim financial statements were 5 Individual Savings Plan (i) Financial assets are designated as FVTPL when acquired principally for the purpose of trading. Financial assets classified as FVTPL are measured at fair value, with changes recognized in Net Income and Comprehensive Income Attributable to Subscribers and Beneficiaries. (ii) Loans and receivables are non-derivative financial assets that have fixed or determinable payments and are not quoted in an active market. Subsequent to initial recognition, loans and receivables are carried at amortized cost using the effective interest method. Loans and receivables are considered for impairment when they are past due or when other objective evidence is received that a specific counterparty will default. (iii) Other financial liabilities are liabilities that are not derivative liabilities or classified as FVTPL. Subsequent to initial recognition, other financial liabilities are carried at amortized cost using the effective interest method.

8 Notes to the Financial Statements (continued) Six months ended April 30, 2016 and 2015 (Unaudited, in thousands of Canadian dollars) Note 2. Significant Accounting Policies (continued) (d) Financial instruments (continued) The effective interest method is a method of calculating the amortized cost of a financial instrument and allocating interest over the relevant period. The effective interest rate is the rate that discounts estimated future cash flows (including all transaction costs and other premiums or discounts) through the expected life of the financial instrument to the net carrying amount on initial recognition. (f) Investment transactions and income recognition Investment transactions are accounted for on a trade-date basis. Interest for allocation to subscriber accounts represents the coupon interest received by the Plan accounted for on an accrual basis. The Plan does not amortize premiums paid or discounts received on the purchase of fixed income securities. Dividends and distributions are accrued as of the ex-dividend date and ex-distribution date, respectively. Realized gains (losses) on the sale of investments and Change in unrealized gains (losses) are calculated with reference to the average cost of the related investments and are recognized in the period that such gains (losses) occur. (g) Subscribers deposits and sales charges Subscribers deposits reflect amounts received from subscribers and do not include future amounts receivable on outstanding Agreements. A sales charge is required as part of the initial contribution under each Agreement. Sales charges collected during the reporting period are paid to C.S.T.C. (h) Income taxes The Plan is exempt from income taxes under Section of the Income Tax Act (Canada). (i) Cash and cash equivalents Cash and cash equivalents include deposit balances with banks and securities with a purchase date to maturity of 90 days or less and includes term deposits, treasury bills and bankers acceptances. (e) Investment valuation Investments, at fair value include the following types of securities: bonds, money market securities, and exchange- traded funds ( ETF ). The fair value of fixed income securities that are not publicly traded is measured by using either the average bid price from multiple dealers, or by the present value of contractual cash flows, discounted at current market rates. Interest accrued at the reporting date is included in Accrued interest and other receivables. The fair value of securities that are publicly traded in an active market is measured using bid prices at the reporting date. Note 7 provides further guidance on fair value measurements. (j) Foreign currency The functional and presentation currency of the Plan is the Canadian Dollar. To the extent applicable in any period, foreign currency purchases and sales of investments and foreign currency dividend and interest income are translated into Canadian dollars at the rate of exchange prevailing at the time of the transactions. Realized and unrealized foreign currency gains or losses on investments are included in the Statements of Comprehensive Income in Realized gains (losses) on sale of investments and Change in unrealized gains (losses), respectively. (k) Critical accounting estimates and judgments When preparing the financial statements, C.S.T.C management makes estimates and judgments that affect the reported amounts recognized and disclosed in the financial statements. These estimates and judgments have a direct effect on the measurement of transactions and balances recognized in the financial statements. By their nature, these estimates and judgments are subject to measurement uncertainty and actual results could differ. Note 3. Related Party Transactions Related party transactions are measured at the exchange amount, which is the amount agreed between the parties. (a) Distribution and Administration of the Plan The Foundation, as the Plan sponsor, has appointed C.S.T.C. as the Investment Fund Manager and Scholarship Plan Dealer to administer and distribute, respectively, the Plan. The agreements are renewable annually on November 1. Administration and account maintenance fees are paid to the Foundation. Administration fees are annual fees of 1% of the total amount of principal, Government Grants and income earned thereon. During the six months ended April 30, 2016, $68 was recognized as an expense for Administration and account maintenance fees (2015 $68). Administration and account maintenance fees included in Accounts payable, accrued liabilities and unclaimed subscribers funds at April 30, 2016 was $5 (October 31, 2015 $5). Sales charges paid by subscribers from their initial contributions are paid to C.S.T.C. as compensation for the sale and distribution of savings plans. During the six months ended April 30, 2016, $7 was paid to C.S.T.C. from sales charges collected (2015 $8). Related amounts included in Accounts payable, at April 30, 2016 were $12 (October 31, 2015 $12). (b) Fees paid to monitor and manage the portfolio managers Included in Portfolio management fees on the Statements of Comprehensive Income is $1 (2015 $1) charged by C.S.T.C. for expenses incurred to monitor and manage the portfolio managers. No amount is included in Accounts payable, accrued liabilities and unclaimed subscribers funds owing to C.S.T.C. at April 30, 2016 and October 31, 2015 relating to these expenses. Individual Savings Plan 6

9 Notes to the Financial Statements (continued) Six months ended April 30, 2016 and 2015 (Unaudited, in thousands of Canadian dollars) Note 4. Investment Holdings The investment holdings are disclosed in Schedule I Statement of Investment Portfolio and the related Appendix I to the schedule, which is explained below. The Government Grants are invested collectively in a separate fund with Government Grants of other RESP plans administered by C.S.T.C. The Government Grant principal received and income earned thereon are separately tracked for each subscriber s Agreement. The portfolio holdings are allocated across all plans based on the proportion of principal and income attributable to Agreements within each plan (see Appendix I to Schedule I). Note 5. Risks Associated with Financial Instruments In the normal course of business, the Plan may be exposed to a variety of risks arising from financial instruments. The Plan s exposures to such risks are concentrated in its investment holdings and are related to interest rate risk, credit risk and liquidity risk. The Plan s risk management process includes monitoring compliance with the Plan s investment policy. The Plan manages the effects of these financial risks to the Plan portfolio performance by retaining and overseeing professional external investment managers. The investment managers regularly monitor the Plan s positions, market events and manage the investment portfolio within the constraints of the investment policy and mandate. interest rates had decreased by 1%, the fair value of the Total Investment Fund would have increased by $500 (October 31, 2015 $400). This 1% change assumes a parallel shift in the yield curve with all other variables held constant. In practice, actual results may differ materially. ii. Other price risk Other price risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market prices, other than those arising from interest rate risk. Factors specific to an individual investment, its issuer or other factors affecting all instruments traded in a market or market segment affect other price risk. The asset class that is most impacted by other price risk is the ETFs of the Government Grant asset pool, which represents 6% (October 31, %) of the Total Investment Fund as at April 30, As at April 30, 2016, if equity and underlying indices prices had increased or decreased by 1%, with all other variables held constant, the fair value of the Total Investment Fund as per Schedule I Statement of Investment Portfolio would have increased or decreased by approximately $6 (October 31, 2015 $5). In practice, actual results may differ materially. (b) Credit risk Credit risk refers to the ability of the issuer of debt securities to make interest payments and repay principal. The Plan s portfolio is comprised of bonds issued or guaranteed by federal or provincial governments along with corporate debt instruments with a minimum approved credit rating as set by Canadian Securities Administrators. The Plan has a concentration of investments in government and government guaranteed bonds, which are considered to be high credit quality investments thereby moderating credit risk. The Plan s credit risk exposure is summarized below. (a) Market risk i. Interest rate risk Interest rate risk is the risk of a change in the fair value or cash flows of the Plan s investments in interest-bearing financial instruments as a result of fluctuations in market interest rates. There is an inverse relationship between changes in interest rates and changes in the fair value of bonds. This risk is actively managed using duration, yield April 30, 2016 October 31, 2015 curve analysis, sector and credit selection. There is reduced % of Total % of Total risk to interest rate changes for cash and cash equivalents due Investment Amount Investment Amount to their short-term nature. Credit rating Fund (in thousands) Fund (in thousands) The Plan s holdings of debt instruments by maturity are AAA 28% $ 2,581 29% $ 2,536 as follows: AA/AAH/AAL 35% 3,236 39% 3,314 Debt Instruments by Maturity Date % of Total Investment Fund A/AH/AL 26% 2,364 22% 1,950 Apr 30, Oct 31, BBB 2% 203 0% R-1 1% 70 1% 72 Less than 1 year 4% 2% Short-term unrated 2% 178 3% years 41% 48% Total debt instruments 94% $ 8,632 94% $ 8, years 27% 24% Greater than 5 years 22% 20% The Dominion Bond Rating Service ( DBRS ) was the Total debt instruments 94% 94% primary source for obtaining credit ratings. Secondary sources used include Standard & Poor s Financial Services LLC and As at April 30, 2016, if prevailing interest rates had Moody s Investors Service, Inc. increased by 1%, the fair value of the Total Investment Fund (c) Liquidity risk of $9,208 (October 31, 2015 $8,710) as per the Liquidity risk is the risk that the Plan may not be able to meet Schedule I Statement of Investment Portfolio would have its financial obligations as they come due. The Plan s exposure decreased by $400 (October 31, 2015 $300). If prevailing to liquidity risk is concentrated in principal repayments to 7 Individual Savings Plan

10 Notes to the Financial Statements (continued) Six months ended April 30, 2016 and 2015 (Unaudited, in thousands of Canadian dollars) Note 5. Risks Associated with Financial Instruments (continued) Assets Measured at Fair Value as of April 30, 2016 Level 1 Level 2 Level 3 Total Fixed income securities $ $ 8,389 $ $ 8,389 (c) Liquidity risk (continued) Equity Securities subscribers and EAPs to beneficiaries. The Plan primarily invests in securities that are traded in active markets and can be Total Investment Fund $ 576 $ 8,389 $ $ 8,965 readily sold. The Plan retains sufficient cash and cash equivalents positions to meet liquidity requirements by utilizing cash Assets Measured at Fair Value as of October 31, 2015 forecasting models that reflect the maturity distribution of Level 1 Level 2 Level 3 Total subscribers deposits and accumulated income. All other Fixed income securities $ $ 8,033 $ $ 8,033 financial liabilities are short term and due within one year. Equity Securities (d) Currency risk Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The Total Investment Fund $ 514 $ 8,033 $ $ 8,547 Plan holds ETFs that invest in U.S. equities and are hedged to For the six-month period ended April 30, 2016 and year ended Canadian dollars by the ETF provider. October 31, 2015, there were no transfers between Levels 1 or 2. Note 6. Subscribers Deposits The changes in Subscribers deposits for the six-month period ended April 30, 2016 and 2015 are as follows: Apr 30, 2016 Apr 30, 2015 Payments from subscribers $ 888 $ 934 Inter-plan principal transfers Return of principal (1,071) (902) Net increase in Subscribers deposits Balance, Beginning of Period 7,624 7,610 Balance, End of Period $ 8,100 $ 8,048 Note 7. Fair Value Measurements and Disclosures Estimates of fair value used for measurement and disclosure are designed to approximate amounts that would be received to sell an asset, or paid to discharge a liability, in an orderly transaction between market participants. The carrying values of other financial instruments such as Cash and cash equivalents, Accrued interest and other receivables, Receivables for securities sold, Government grants receivable, Accounts payable, accrued liabilities and unclaimed subscribers funds and Payables for securities purchased approximate their fair values as these financial instruments are short term in nature. The following table presents the level in the fair value hierarchy into which the Plan s financial instruments that are carried at fair value in the Statements of Financial Position are categorized: i. Level 1 financial instruments are valued using quoted market prices. ii. Level 2 financial instruments are valued using directly or indirectly observable inputs. iii. Level 3 financial instruments are valued using unobservable inputs (including the use of assumptions based on the best information available). Individual Savings Plan 8

11 Government Grants Appendix I to Schedule I Statement of Investment Portfolio As at April 30, 2016 (in thousands of Canadian dollars) Interest Maturity Par Fair Average Interest Maturity Par Fair Average Security Rate Date Value ($) Value ($) Cost ($) Security Rate Date Value ($) Value ($) Cost ($) Bonds Bonds (continued) Federal 19.8% Provincial 29.9% (continued) Canada Housing Trust Jun ,700 3,754 3,788 Province of British Columbia Jun ,800 4,048 3,990 Canada Housing Trust Jun ,220 1,242 1,227 Province of British Columbia Jun ,920 6,274 6,017 Canada Housing Trust Jun ,079 10,326 10,321 Province of British Columbia Jun ,700 4,953 4,777 Canada Housing Trust Nov Province of British Columbia Jun ,030 11,184 10,388 Canada Housing Trust Jun ,500 5,654 5,646 Province of British Columbia Jun ,000 1, Canada Housing Trust Aug Province of Manitoba Nov ,000 1,108 1,154 Canada Housing Trust Dec ,475 1,272 1,277 Province of Manitoba Dec ,000 1,115 1,088 Canada Housing Trust Feb ,776 3,216 3,243 Province of Manitoba Sep ,800 3,248 3,148 Canada Housing Trust Mar ,685 4,049 4,090 Province of Manitoba Mar ,400 6,196 6,101 Canada Housing Trust Apr Province of Manitoba Mar ,300 1,324 1,298 Canada Housing Trust Jun Province of Manitoba Sep ,325 9,611 9,903 Canada Housing Trust Dec ,103 9,594 9,512 Province of Manitoba Nov Canada Housing Trust Jun ,860 8,517 8,440 Province of New Brunswick Mar Canada Housing Trust Dec ,000 7,983 7,895 Province of New Brunswick Jun ,400 1,533 1,556 Canada Post Corporation Jul Province of New Brunswick Jun Government of Canada Sep Province of New Brunswick Jun Government of Canada Sep ,660 1,655 1,655 Province of New Brunswick Nov ,569 6,959 6,908 Government of Canada May ,025 1,021 1,022 Province of New Brunswick Dec ,195 1,534 1,466 Government of Canada Aug Province of New Brunswick Oct Government of Canada Sep ,091 5,146 5,134 Province of New Brunswick Jan ,075 2,698 2,441 Government of Canada Feb ,975 4,014 4,035 Province of New Brunswick Sep Government of Canada Jun Province of New Brunswick Mar ,700 2,000 1,986 Government of Canada Sep Province of New Brunswick Sep ,200 1,468 1,494 Government of Canada Sep ,150 2,222 2,230 Province of New Brunswick Jun ,000 2,047 2,016 Government of Canada Mar ,050 2,106 2,113 Province of Newfoundland and Government of Canada Jun ,775 6,399 6,479 Labrador Jun ,100 1,059 1,095 Government of Canada Sep ,200 3,191 3,179 Province of Newfoundland and Government of Canada Mar ,950 3,928 3,900 Labrador Jun ,200 1,214 1,199 Government of Canada Jun ,150 4,634 4,666 Province of Newfoundland and Government of Canada Jun ,500 1,650 1,649 Labrador Apr Government of Canada Jun ,925 2,983 2,822 Province of Newfoundland and Government of Canada Jun ,000 1,090 1,091 Labrador Oct ,350 1,571 1,593 Government of Canada Jun ,844 6,256 6,276 Province of Nova Scotia Jun ,775 3,745 3,481 Government of Canada Jun ,619 5,616 5,600 Province of Nova Scotia Jun ,600 1,910 1,813 Government of Canada Jun ,925 6,466 6,547 Province of Nova Scotia Jun ,700 1,754 1,708 Government of Canada Jun ,775 12,831 12,910 Province of Nova Scotia Jun Government of Canada Jun ,700 11,890 11,841 Province of Ontario Sep Government of Canada Jun ,922 25,377 23,489 Province of Ontario Mar ,099 4,340 4,479 Government of Canada Jun ,995 19,177 18,287 Province of Ontario Sep ,460 2,519 2,546 Government of Canada Dec ,900 22,202 21,706 Province of Ontario Jun ,000 4,388 4,386 Government of Canada Dec ,200 9,469 9,118 Province of Ontario Jun ,000 2,225 2,155 Government of Canada Dec ,800 4,614 4,386 Province of Ontario Jun ,315 7,077 6,824 Kreditanstalt Fur Province of Ontario Jun ,675 1,812 1,734 Wiederaufbau Global Feb ,211 1,463 1,493 Province of Ontario Aug ,000 1,417 1,422 Muskrat Falls Funding Trust Jun ,500 5,193 5,005 Province of Ontario Jun ,700 4,979 4,580 Muskrat Falls Funding Trust Dec ,082 1,116 Province of Ontario Jun ,690 5,162 4, , ,203 Province of Ontario Jun ,650 3,748 3,707 Province of Ontario Jun Provincial 29.9% Province of Ontario Jun ,095 3,128 3,009 Province of Alberta Dec Province of Ontario Mar ,250 4,590 4,536 Province of Alberta Jun ,902 1,890 1,883 Province of Ontario Jun ,500 2,115 2,090 Province of Alberta Jun , Province of Ontario Mar ,425 8,914 8,767 Province of Alberta Dec ,785 2,079 2,052 Province of Ontario Oct Province of Alberta Dec ,972 2,179 2,120 Province of Ontario Jun ,200 4,410 3,855 Province of Alberta Dec ,895 1,959 1,962 Province of Ontario Jun ,145 8,983 8,190 Province of British Columbia Dec ,975 4,213 4,379 Province of Ontario Jun ,340 7,936 7,415 Province of British Columbia Apr ,500 1,495 1,498 Province of Ontario Jun ,515 18,502 17,519 Province of British Columbia Dec ,275 2,495 2,358 Province of Ontario Jun ,700 6,132 6,064 Province of British Columbia Jun ,000 2,684 2,675 Province of Ontario Jun ,100 24,789 23,727 9 Individual Savings Plan

12 Government Grants (continued) Appendix I to Schedule I Statement of Investment Portfolio As at April 30, 2016 (in thousands of Canadian dollars) Interest Maturity Par Fair Average Interest Maturity Par Fair Average Security Rate Date Value ($) Value ($) Cost ($) Security Rate Date Value ($) Value ($) Cost ($) Bonds (continued) Bonds (continued) Provincial 29.9% (continued) Municipal 1.1% (continued) Province of Ontario Dec ,500 6,301 5,962 Municipal Finance Authority of Province of Quebec Dec ,550 2,694 2,808 British Columbia Apr Province of Quebec Dec ,000 1,087 1,116 Region of Peel Jun Province of Quebec Dec ,550 1,725 1,711 Region of Peel Oct Province of Quebec Aug ,000 4,195 4,332 Province of Quebec Dec ,000 1,136 1,057 13,806 13,706 Province of Quebec Sep ,000 3,210 3,201 Corporate 29.5% Province of Quebec Sep East Development Group Dec Province of Quebec Sep ,775 7,599 7, East Development Group Jul ,272 1,699 1,549 Province of Quebec Sep Arrow Lakes Power Province of Quebec Oct ,000 2,728 2,693 Corporation Apr Province of Quebec Jun ,575 5,097 5,002 Bank of Montreal Jun Province of Quebec Dec Bank of Montreal Mar ,662 7,705 7,662 Province of Quebec Jun ,000 3,897 3,800 Bank of Montreal Oct ,462 2,497 2,462 Province of Quebec Feb ,000 1,496 1,463 Bank of Montreal Mar ,781 1,784 1,783 Province of Quebec Dec ,690 3,790 3,348 Bank of Montreal Sep ,650 10,199 10,011 Province of Quebec Dec ,940 3,848 3,045 Bank of Nova Scotia Jun Province of Quebec Feb ,000 11,897 11,489 Bank of Nova Scotia Jun ,870 6,051 6,129 Province of Quebec Dec ,400 15,194 14,524 Bank of Nova Scotia Mar ,090 9,229 9,236 Province of Quebec Dec ,500 5,445 5,175 Bank of Nova Scotia May ,035 1,032 1,028 Province of Quebec Feb ,450 1,974 1,901 Bank of Nova Scotia Mar ,303 17,741 17,721 Province of Quebec Dec ,000 10,786 10,111 Bank of Nova Scotia Oct ,593 8,807 8,793 Province of Quebec Dec ,000 2,176 2,043 Bank of Nova Scotia Sep ,723 2,754 2,753 Province of Quebec Feb ,500 2,103 2,014 Bank of Nova Scotia Jan ,968 7,404 7,407 Province of Saskatchewan Jun Bankers Hall L.P Nov ,507 2,681 2,507 Province of Saskatchewan Sep ,037 5,723 5,700 Caisse Centrale Desjardins Nov ,893 6,078 6,097 Province of Saskatchewan Jun ,400 1,757 1,727 Canadian Imperial Bank of Province of Saskatchewan Jun ,700 4,171 4,093 Commerce Jun Province of Saskatchewan Dec ,000 1,824 1,753 Canadian Imperial Bank of Commerce Oct ,680 6,780 6, , ,600 Canadian Imperial Bank of Commerce Oct ,394 2,410 2,393 Municipal 1.1% Canadian Imperial Bank of City of Montreal Dec Commerce Apr City of Montreal Sep Canadian Pacific Railway City of Montreal Dec Company Oct City of Montreal Jun Capital Desjardins Inc May ,790 8,696 8,711 City of Ottawa Jul Capital Desjardins Inc Dec ,333 3,759 3,731 City of Toronto Dec CBC Monetization Trust May ,527 2,934 2,729 City of Toronto Dec Central 1 Credit Union Nov ,352 1,353 1,353 City of Toronto Sep ,200 1,333 1,329 Cogeco Cable Inc May ,469 1,536 1,528 City of Toronto Apr CSS Partnership Jul ,173 2,949 2,782 City of Toronto Jun ,309 1,323 1,304 Dutch Municipal Bank, BNG Mar City of Toronto Jun Enbridge Inc Mar City of Toronto Jun Enbridge Inc Mar City of Toronto Dec EUROFIMA Maple Bond Mar ,039 1,022 City of Toronto Mar GE Capital Canada Funding City of York Dec ,900 1,894 1,853 Company Feb ,966 1,915 1,803 City of York May GE Capital Canada Funding City of York May Company Feb ,071 3,120 3,071 Municipal Finance Authority of Greater Toronto Airport British Columbia Dec Authority Jul ,632 2,067 2,006 Municipal Finance Authority of Heathrow Funding Limited May British Columbia Nov HSBC Bank Canada Nov ,025 11,080 11,091 Municipal Finance Authority of HSBC Bank Canada Jan ,266 1,277 1,265 British Columbia Jun ,000 1,020 1,024 HSBC Bank Canada Sep ,220 12,570 12,429 Municipal Finance Authority of Kraft Canada Inc Jul ,800 3,792 3,800 British Columbia Jun Labrador Island Link Funding Municipal Finance Authority of Trust Jun British Columbia Sep Individual Savings Plan 10

13 Government Grants (continued) Appendix I to Schedule I Statement of Investment Portfolio As at April 30, 2016 (in thousands of Canadian dollars) Interest Maturity Par Fair Average Interest Maturity Par Fair Average Security Rate Date Value ($) Value ($) Cost ($) Security Rate Date Value ($) Value ($) Cost ($) Bonds (continued) Bonds (continued) Corporate 29.5% (continued) Corporate 29.5% (continued) Labrador Island Link Funding Wells Fargo Financial Trust Dec ,600 3,106 3,131 Corporation Canada Jan Labrador Island Link Funding Wells Fargo Financial Trust Dec ,008 Corporation Canada Jan Loblaw Companies Limited Jan ,827 2,281 2,268 WTH Car Rental Aug ,960 2,977 2,960 Loblaw Companies Limited Feb Manufacturers Life Insurance 340, ,141 Company Feb ,569 1,585 1,605 Total Fixed Income Investments 80.3% 931, ,650 Manufacturers Life Insurance Company Jan ,569 1,578 1,592 Number of Fair Average Manufacturers Life Insurance Security Securities Value ($) Cost ($) Company Jun ,589 1,557 1,570 Equities 5.8% Manufacturers Life Insurance Agrium Inc. 15 1,570 1,716 Company Jan ,728 4,655 4,696 Aimia Inc Manufacturers Life Insurance Company Nov ,253 4,277 4,256 ATCO Ltd. 30 1,214 1,124 Manulife Financial Corporation Dec ,146 8,243 8,423 AutoCanada Inc Maritimes and Northeast Bank of Nova Scotia 69 4,568 3,966 Pipelines Limited Partnership Nov ,099 2,134 2,169 Birchcliff Energy Ltd Maritimes and Northeast Boardwalk Real Estate Investment Trust Pipelines Limited Partnership Nov Brookfield Asset Management Inc. 30 1,259 1,232 Master Asset Vehicle Jul CAE Inc ,856 1,771 Master Asset Vehicle Jul Milit-Air Inc Jun ,953 2,088 2,140 Canadian National Railway Company 28 2,149 2,074 National Bank of Canada Aug ,060 12,271 12,334 Canadian Natural Resources Ltd. 41 1,542 1,081 NAV Canada Mar ,157 4,084 3,974 Canadian Pacific Railway Company 9 1,566 1,555 North Battleford Power L.P Dec ,111 1,015 Canadian Western Bank 39 1, Ontrea Inc Apr ,969 2,073 2,018 Celestica Inc Ornge Issuer Trust Jun ,365 3,943 3,821 Colliers International Group Inc Pearson International Fuel Dollarama Inc Facilities Corporation Mar ,160 2,345 2,315 Dream Unlimited Corporation Public Sector Pension Investment Board Jun ,804 2,890 2,804 Empire Company Ltd Rogers Communications Inc Nov Enbridge Inc. 25 1,315 1,219 Royal Bank of Canada Jun Enerflex Ltd ,392 1,431 Royal Bank of Canada Sep ,390 5,468 5,478 Enerplus Corporation Royal Bank of Canada Mar ,590 2,630 2,630 Ensign Energy Services Inc Royal Bank of Canada Jul ,029 3,116 3,132 Fairfax Financial Holdings Limited Royal Bank of Canada Dec ,570 28,464 28,514 Finning International Inc. 67 1,496 1,275 Royal Bank of Canada Feb FirstService Corporation Royal Bank of Canada Mar ,878 5,844 5,878 Franco-Nevada Corporation Royal Bank of Canada Mar ,168 2,185 2,169 Royal Bank of Canada Mar Freehold Royalties Ltd. 84 1, Shaw Communications Inc Nov ,894 2,341 2,311 GMP Capital Inc SP1 Limited Partnership Jun ,026 2,865 2,804 Granite REIT St. Clair Holding ULC Aug Great Canadian Gaming Corporation Strait Crossing Great-West Lifeco Inc Development Inc Sep Home Capital Group Inc. 43 1,607 1,320 Sun Life Financial Inc Jun ,905 4,862 5,082 IGM Financial Inc Toronto Dominion Bank Apr ,943 8,162 8,171 Imperial Oil Limited 33 1,353 1,341 Toronto Dominion Bank Mar Intact Financial Corporation 26 2,423 2,392 Toronto Dominion Bank Jul ,670 13,479 13,251 Toronto Dominion Bank Sep ,134 6,106 6,134 Jean Coutu Group (PJC) Inc Toronto Dominion Bank Mar ,305 2,444 2,305 Laurentian Bank of Canada Toronto Dominion Bank Dec ,049 9,203 9,393 Loblaw Companies Limited 15 1,066 1,046 TransCanada Pipelines Limited Nov ,994 2,766 3,033 Magna International Inc. 28 1,497 1,637 TransCanada Pipelines Limited Feb ,553 2,304 2,492 Metro Inc UniCredit Group May ,401 2,426 2,451 Methanex Corporation 28 1,219 1,208 University Health Network Dec ,876 6,601 6,740 Morguard Corporation Individual Savings Plan

14 Government Grants (continued) Appendix I to Schedule I Statement of Investment Portfolio As at April 30, 2016 (in thousands of Canadian dollars) Number of Fair Average Security Securities Value ($) Cost ($) Equities 5.8% (continued) Mullen Group Ltd Onex Corporation Open Text Corporation Pason System Inc. 69 1,259 1,291 Potash Corporation of Saskatchewan Inc. 63 1,399 1,647 Power Corporation of Canada 35 1, PrairieSky Royalty Ltd. 57 1,509 1,323 Quebecor World Inc Ritchie Brothers Auctioneers ShawCor Ltd. 30 1, SNC-Lavalin Group Inc Suncor Energy Inc ,758 3,275 Teck Resources Limited 77 1, TELUS Corporation 67 2,663 2,778 Toronmont Industries Ltd. 28 1, Toronto Dominion Bank 77 4,293 3,950 Total Energy Services Inc Wajax Corporation West Fraser Timber Co. Ltd Westshore Terminals Investment Corporation 84 1,537 1,796 Total Equities 67,861 63,956 Exchange-traded Funds 13.5% BMO S&P 500 Hedged to CAD Index ETF 2,503 79,016 76,431 ishares Core S&P 500 Hedged to CAD Index ETF 3,264 77,355 74, , ,704 Total Equities and ETFs 19.3% Cash and cash equivalents 0.4% Total Portfolio Assets 100.0% 224, ,660 4,394 4,394 1,160,468 1,133,704 Government Grant Investment Allocation Group Savings Plan , ,103 Family Savings Plan 79,615 77,848 Individual Savings Plan 2,972 2,904 Group Savings Plan 169, ,663 Plan II Founders Plan 21,609 20,962 1,156,074 1,129,310 Cash and Short-term Investments Allocation Group Savings Plan ,354 3,354 Family Savings Plan Individual Savings Plan Group Savings Plan Plan II 3 3 Founders Plan ,394 4,394 Individual Savings Plan 12

15 C.S.T. Consultants Inc. Canadian Scholarship Trust Plan Sponsor Canadian Scholarship Trust Foundation 2235 Sheppard Avenue East, Suite 1600 Toronto, Ontario M2J 5B RESP (7377) Investment Fund Manager and Distributor C.S.T. Consultants Inc Sheppard Avenue East, Suite 1600 Toronto, Ontario M2J 5B8 Trustee RBC Investor Services Trust 155 Wellington Street West, 2nd Floor Toronto, Ontario M5V 3L3 Auditor Deloitte LLP Bay Adelaide East 22 Adelaide Street West, Suite 200 Toronto, Ontario M5H 0A9 Bank Royal Bank of Canada Royal Bank Plaza South Tower 200 Bay Street, 10th Floor Toronto, Ontario M5J 2J5 Canadian Scholarship Trust Individual Savings Plan Semi-Annual Financial Statements Unaudited For updates on your Plan account, login to Online Services at In Quebec, Canadian Scholarship Trust Plan is distributed by C.S.T. Consultants Inc. Scholarship Plan Brokerage Firm. April 30, 2016 F.P.O 2002 M2-E ( ) CST Financl_Semi-Stmnt_Cvr_ENG_Final pv_01_12_15.indd :23 AM