annual report 2013 SUPEREASY KIWISAVER SUPERANNUATION SCHEME for the year ended 31 March 2013

Transcription

1 annual report SUPEREASY KIWISAVER SUPERANNUATION SCHEME for the year ended 31 March

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3 annual Report SuperEasy KiwiSaver Superannuation Scheme INTRODUCTION 1 The Trustees are pleased to present the Annual Report of the Scheme for the year ended 31 March. This Report includes information about the Scheme s management, operation and financial performance for the year. The Report has been prepared in accordance with the Superannuation Schemes Act 1989 and the KiwiSaver Act The Acts require that every member of the Scheme receive a copy of the Report. If you require any further information regarding this report on the Scheme please contact Mr Roger Gyles, Trustee Secretary, phone (04)

4 2 annual RepoRt SupereaSy KiwiSaver Superannuation Scheme MeMBeRShIP SupeReaSY KIWISaVeR MeMBeRSHIp SuMMaRY number of members at 31 March 6,101 add: new members who joined the scheme during the year 904 members who transferred in from other schemes 22 members who transferred in from other KiwiSaver schemes 96 Less Late opt-out (9) Sub-total 1019 Deduct: retirement 61 death 7 Serious illness 1 permanent emigration 23 transfers out to other KiwiSaver schemes 326 Sub-total 418 number of members at 31 March 6696 MeMBeR InFoRMatIon Categories of income and expenditure and the numbers of members credited with each type during the year are: total Members total Contributions member contributions ,978,097 voluntary member contributions ,911 employer contributions ,883,605 crown contributions: Kick Start ,000 member tax credits ,127,914 Late opt-out 9 (16,253) Fees Charged ,007 Withdrawals transfers to other KiwiSaver Schemes 326 2,882,813 Significant Financial hardship ,391 Serious illness 1 2,358 death 7 89,218 permanent emigration ,472 First home withdrawal ,825 retirement 61 1,450,824 Members accumulation ,457,887 prospectus the most recent prospectus for the Scheme was registered on 24 September. CReDItInG RateS the crediting rates used for those members withdrawing from the Scheme are determined by the performance of the investment markets at the time of the member s withdrawal. a graph of the performance of each fund over the period indicates the crediting rates applied to benefit payments. it is important to note that past performance is not necessarily indicative of future performance. the crediting rates for the year ended 31 march for each of the investment funds are shown on pages 4 and 5 of this report. ReGIStRatIon the Scheme is registered under the Superannuation Schemes act 1989, reference number KSS/ privacy act 1993 your personal information may be held by and, when necessary, passed between the trustees and the Scheme s professional advisors for the purposes of the Scheme. if you wish to check or amend the information please contact the Scheme s trustee Secretary. DISpute ReSolutIon in accordance with industry best practices the trustees have established a formal disputes resolution process should you have a dispute. it should in the first instance be addressed to the Scheme s trustee Secretary who will attempt to resolve it directly with you. in the event that satisfactory resolution is not achieved in a reasonable time frame the complaint will be submitted to a sub-committee of the trustees for final resolution.

5 annual RepoRt SupereaSy KiwiSaver Superannuation Scheme INVeSTMeNT COMMeNTARY 3 MaRKet ReVIeW the year under review began with negative investor sentiment as events in europe dominated headlines. there were continued struggles for europe throughout the year and it appears to be getting left behind when it comes to economic growth as the us and china both continue to post some promising numbers. the theme of the year to march was investors with a renewed sense of optimism primarily due to central bank and government support. the first quarter saw ongoing further political uncertainty in Greece simply heightening the possibility of a Greek exit from the eurozone. an escalating bank crisis and a large budget deficit in Spain resulted in Spain becoming the fourth euro member to require a bail out. investors received some encouragement late in the quarter as the Greek election result was seen favourably and the us Federal reserve announced further stimulus through extending its operation twist (bond maturity extension) programme with its aim being to keep longer term bond yields low and increase business activity. By September investor confidence turned positive with upward market momentum being sustained as investors anticipated further accommodative policies from central banks. Slowing growth prospects in the us and china, and the ongoing lack of resolution to the sovereign debt and banking crisis in the eurozone, prompted calls for governments and central banks to consider further stimulus measures. investors weren t disappointed as the european central Bank (ecb) and the Federal reserve (Fed) announced further quantitative easing policies in September. the ecb announced an unlimited bond buying plan through outright monetary transactions which will target government bonds. the Fed committed to buy mortgage backed securities through the rest of and until the labour market improves substantially. the chinese government also approved plans for us156 billion in infrastructure investment to actively combat the slowdown in growth. towards the end of action by major central banks appeared to be reducing the sense of anxiety within markets. policy makers remained focused on lowering borrowing costs for governments. in the us the Fed announced further quantitative easing at a rate of 85 billion a month for an extended period of time. in europe the new involvement of the european central Bank in bond purchases and in supervision of the banking system promised to bring greater stability to the region. a perceived reduction in downside risk in early has buoyed markets and driven investors into growth asset classes. this suggests that a new return environment is starting to emerge as growth assets (shares, property) have outperformed safe haven assets (cash, bonds) over the last 12 months. this positive momentum remains dependant however on a considerable degree of ongoing central bank support and government intervention. encouragingly fears of imminent collapse of the eurozone have been allayed by the european central Bank s outright monetary transactions initiative while the us is past its fiscal cliff. political risks however continue to cause market volatility. in new Zealand economic conditions remained tough throughout the year but produced steady improvements. Factors affecting the growth include a high new Zealand dollar, tight fiscal policy and a soft labour market which were joined by the impacts of the drought during the first quarter of offset by the strong housing market (particularly the canterbury reconstruction) and stimulatory monetary conditions.

6 4 annual RepoRt SupereaSy KiwiSaver Superannuation Scheme INVeSTMeNT COMMeNTARY automatic FunD the annual returns for sample ages to 31 march, before fees, tax and expenses are as follows: Year age 20 age 30 age 40 age 50 age 60 age 70 age 80 31/03/ 11.94% 11.65% 11.15% 10.75% 10.01% 8.04% 6.16% this Fund is jointly managed by amp capital investors (new Zealand Ltd) and asb Group investment Limited. the objective of this Fund is to achieve the optimum long-term outcome by accepting a higher investment risk in the early stages of a member s working life as a trade for higher returns. So when a member is young the automatic Fund provides greater exposure to investments with the potential for growth such as overseas and new Zealand equities. each month as the member gets older the automatic Fund will automatically and smoothly change their investments to a more conservative mix by increasing the member s exposure to income assets such as fixed interest securities and cash. this option is suitable to members who do not wish to have to continually reassess their retirement investment strategy. the graph of the performance of this Fund over the year indicates the crediting rates applied to benefits paid to members withdrawing from the Fund during the year. GRoWtH FunD the return for the year was 12.21% before fees, tax and expenses. this Fund is jointly managed by amp capital investors (new Zealand Ltd) and asb Group investment Limited. the objective of this Fund is to achieve a high level of real returns over the medium to long-term through substantial investment in equities, accepting that the returns may be subject to significant short-term variations. this option is suitable for members willing to take a reasonable risk for potentially higher returns over the long-term through selected actively managed domestic and international asset classes with special perceived growth potential. the graph of the performance of this Fund over the year indicates the crediting rates applied to benefits paid to members withdrawing from the Fund during the year. automatic Fund Growth Fund crediting rates 14% 12% 10% 8% 6% 4% 2% age age 20 age 30 age 40 age 50 age 60 age 70 crediting rate 14% 12% 10% 8% 6% 4% 2% 0% age 80 0% -2% -2% -4% mar apr may Jun Jul aug Sep oct nov dec Jan Feb mar % mar apr may Jun Jul aug Sep oct nov dec Jan Feb mar

7 annual RepoRt SupereaSy KiwiSaver Superannuation Scheme INVeSTMeNT COMMeNTARY 5 BalanCeD FunD the return for the year was 11.42% before fees, tax and expenses. this Fund is jointly managed by amp capital investors (new Zealand Ltd) and asb Group investment Limited. the objective of this Fund is to achieve positive real returns through investment in growth assets, while controlling volatility through full diversification of the Fund s assets. this option is suited to members seeking long-term growth with risk limited by broad diversification. the graph of the performance of this Fund over the year indicates the crediting rates applied to benefits paid to members withdrawing from the Fund during the year. InCoMe FunD the return for the year was 9.58% before fees, tax and expenses. this Fund is jointly managed by amp capital investors (new Zealand Ltd) and asb Group investment Limited. the objective of this Fund is to reduce the chance of negative returns over the short to medium term through higher proportions of investment in defensive assets, such as cash and bonds, while still providing an opportunity for positive real returns over the long-term by investing a proportion of the Fund in growth assets such as equities and property. the graph of the performance of this Fund over the year indicates the crediting rates applied to benefits paid to members withdrawing from the Fund during the year. ConSeRVatIVe FunD the return for the year was 6.71% before fees, tax and expenses. this Fund is jointly managed by amp capital investors (new Zealand Ltd) and asb Group investment Limited. the objective of this Fund is to reduce the chance of negative returns over the short-term through higher proportions of investment in defensive assets, such as cash and bonds, while still providing an opportunity for positive real returns over the long-term by investing a proportion of the Fund in growth assets such as equities and property. the graph of the performance of this Fund over the year indicates the crediting rates applied to benefits paid to members withdrawing from the Fund during the year. 14% BaLanced Fund income Fund conservative Fund 12% 8% 12% 10% 7% crediting rate 10% 8% 6% 4% 2% crediting rate 8% 6% 4% 2% crediting rate 6% 5% 4% 3% 2% 0% 0% 1% -2% mar apr may Jun Jul aug Sep oct nov dec Jan Feb mar % mar apr may Jun Jul aug Sep oct nov dec Jan Feb mar % mar apr may Jun Jul aug Sep oct nov dec Jan Feb mar

8 6 annual Report SuperEasy KiwiSaver Superannuation Scheme Statement of Changes in Net AssetS For the YEAR Ended 31 March INVESTMENT ACTIVITIES Notes Growth Fund Balanced Fund Income Fund Conservative Fund Automatic Fund TOTAL Investment Income Gain/(Loss) on Assets 7 390,621 (30,153) 625,932 72, ,563 82, ,187 65,289 7,761,311 1,555,901 9,248,614 1,745,854 Interest 1, ,196 2, ,356 17,513 13,053 21,241 17, ,692 (29,596) 627,128 74, ,276 83, ,935 66,644 7,778,824 1,568,955 9,269,855 1,763,489 Investment Expenses Investment Management Fees 13 (8,056) (6,335) (10,198) (7,719) (5,428) (4,474) (3,685) (2,448) (241,905) (180,358) (269,272) (201,334) Net Investment Income 383,636 (35,931) 616,930 66, ,848 78, ,250 64,197 7,536,919 1,388,597 9,000,583 1,562,155 OTHER EXPENSES Administration Fees 13 10,183 9,967 16,090 15,056 10,881 11,075 8,617 7, , , , ,399 Total Other Expenses 10,183 9,967 16,090 15,056 10,881 11,075 8,617 7, , , , ,399 Change in Net Assets before Taxation and Membership Activities 373,453 (45,898) 600,840 51, ,967 67, ,633 56,781 7,237,954 1,121,712 8,655,848 1,251,756 MEMBERSHIP ACTIVITIES Contributions 5 Member Contributions 345, , , , , , , ,731 7,771,316 7,161,143 9,250,008 8,638,163 Employer Contributions 169, , , , , , , ,874 4,121,196 4,839,500 4,883,605 5,793,425 Crown Contributions 83, , , ,509 85, ,353 78, ,993 2,708,284 4,315,634 3,099,005 5,047,711 Late Opt-Out (16,253) (11,748) (16,253) (11,748) Transfers In from Other KiwiSaver Schemes 70,336 16, ,327 73,683 29,018 15,736 98,898 82, , , , ,253 Transfers In from Other Superannuation Schemes 10,695-42,931 25, ,849 47, ,543 31, , ,415 Transfers Between Funds (11,538) (82,987) (21,919) 71,237 11,182 (20,230) 50,908 99,037 (28,631) (67,057) - - Total Contributions 667, ,540 1,108,990 1,399, , , , ,253 15,188,682 16,542,123 18,208,189 20,033,219 Benefits Paid Benefits Paid 6 51,514 43, ,785 14, ,153 62, ,549 8,022 2,144, ,636 2,813, ,653 Transfers Out to Other KiwiSaver Schemes 106, , , , ,921 75,276 64,265 55,468 2,446,636 1,695,668 2,882,813 2,059,154 Total Benefits Paid 157, , , , , , ,814 63,490 4,590,724 2,209,304 5,695,902 2,701,807 Net Membership Activities 509, , ,583 1,254, , , , ,763 10,597,958 14,332,819 12,512,287 17,331,412 Change in Net Assets Before Taxation 883, ,575 1,375,423 1,306, , , , ,544 17,835,912 15,454,531 21,168,135 18,583,168 PIE Tax Expense 9 28,816 19,720 57,719 49,185 38,592 36,139 21,240 18, , , , ,549 Net Increase in Net Assets During Year 854, ,854 1,317,703 1,256, , , , ,537 17,155,686 14,940,032 20,341,542 17,945,619 Net Assets Available for Benefits at Beginning of Year 2,800,593 2,382,739 4,860,497 3,603,568 3,269,514 2,637,247 1,830,523 1,131,986 57,355,218 42,415,186 70,116,345 52,170,726 Net Assets Available for Benefits at End of Year 3,654,915 2,800,593 6,178,200 4,860,497 3,753,180 3,269,514 2,360,688 1,830,523 74,510,904 57,355,218 90,457,887 70,116,345 This statement is to be read in conjunction with the notes on pages 9 to 17.

9 annual Report SuperEasy KiwiSaver Superannuation Scheme Statement of Net Assets AS AT 31 MARCH 7 CURRENT ASSETS Notes Growth Fund Balanced Fund Income Fund Conservative Fund Automatic Fund TOTAL Cash & Cash Equivalents 21,522 12,568 22,769 18,404 23,401 13,338 22,607 15, , ,990 1,078, ,899 Total Current Assets 21,522 12,568 22,769 18,404 23,401 13,338 22,607 15, , ,990 1,078, ,899 FINANCIAL ASSETS AMP Superannuation Funds 1,182, , , , ,556 97,671 25,158 18,327 47,515,595 36,955,140 49,640,062 38,658,521 ASB Superannuation Master Trust 2,483,770 1,874,816 5,419,008 4,252,519 3,654,269 3,197,489 2,343,244 1,816,510 26,859,081 20,743,359 40,759,372 31,884,694 Total Investments 3,666,749 2,818,599 6,218,782 4,896,119 3,770,825 3,295,159 2,368,402 1,834,836 74,374,676 57,698,499 90,399,434 70,543,215 TOTAL ASSETS 3,688,271 2,831,167 6,241,551 4,914,524 3,794,226 3,308,496 2,391,009 1,850,435 75,363,312 58,022,489 91,478,369 70,927,114 Less CURRENT LIABILITIES Benefits Payable - 7, ,449-46,279 39,965 53,728 47,095 PIE Tax Payable 9 28,459 18,908 56,486 47,704 36,484 34,868 19,700 17, , , , ,436 Other Payables 4,897 4,536 6,865 6,323 4,562 4,116 3,172 2, , , , ,238 Total Liabilities 33,356 30,574 63,351 54,026 41,046 38,982 30,321 19, , ,271 1,020, ,769 NET ASSETS AVAILABLE FOR BENEFITS 3,654,915 2,800,593 6,178,200 4,860,497 3,753,180 3,269,514 2,360,688 1,830,523 74,510,904 57,355,218 90,457,887 70,116,345 LIABILITY FOR ACCRUED BENEFITS Represented By: Member Accounts 3 & 4 3,654,915 2,800,593 6,178,200 4,860,497 3,753,180 3,269,514 2,360,688 1,830,523 74,510,904 57,355,218 90,457,887 70,116,345 3,654,915 2,800,593 6,178,200 4,860,497 3,753,180 3,269,514 2,360,688 1,830,523 74,510,904 57,355,218 90,457,887 70,116,345 Signed on behalf of the Trustees, Local Government Superannuation Trustee Limited and the Independent Trustee, G. R. Mitchell, who authorised the issue of these financial statements on 23 May. Chairman Independent Trustee This statement is to be read in conjunction with the notes on pages 9 to 17.

10 8 annual Report SuperEasy KiwiSaver Superannuation Scheme CASH FLOW STATEMENT For the YEAR Ended 31 March CASH FLOWS FROM OPERATING ACTIVITIES Note Growth Fund Balanced Fund Income Fund Conservative Fund Automatic Fund TOTAL Cash provided from Member Contributions 345, , , , , , , ,731 7,769,685 7,161,142 9,248,879 8,638,163 Employer Contributions 168, , , , , , , ,874 4,121,595 4,841,322 4,883,352 5,795,939 Crown Contributions 83, , , ,509 85, ,353 78, ,993 2,709,284 4,315,634 3,100,005 5,047,711 Transfers In from Other Schemes 81,031 16, ,258 98,742 29,018 15, , , , , , ,668 Transfers Between Funds (11,538) (82,987) (21,919) 71,237 11,182 (20,230) 50,908 99,037 (28,631) (67,057) - - Interest Received 1, ,196 2, ,356 17,513 13,053 21,241 17, , ,402 1,109,889 1,401, , , , ,609 15,222,216 16,568,746 18,245,301 20,065,116 Cash applied to Benefits Paid (58,644) (36,516) (199,785) (14,462) (284,153) (62,887) (126,100) - (2,137,773) (473,671) (2,806,456) (587,536) Transfers Out to Other KiwiSaver Schemes (106,369) (102,422) (134,622) (130,320) (130,921) (75,276) (64,265) (63,490) (2,446,636) (1,695,668) (2,882,812) (2,067,176) KiwiSaver Late Opt-Outs (16,253) (11,748) (16,253) (11,748) Other Expenses (10,095) (9,934) (15,885) (14,756) (11,040) (10,927) (8,387) (7,054) (291,209) (257,494) (336,616) (300,165) Withholding Tax Paid (321) (167) (359) (624) (214) (176) (225) (407) (5,254) (3,916) (6,372) (5,290) PIE Tax Paid (18,944) (11,195) (48,578) (23,266) (36,762) (21,646) (18,537) (8,816) (519,584) (282,909) (642,405) (347,832) (194,373) (160,234) (399,229) (183,428) (463,090) (170,912) (217,514) (79,767) (5,416,709) (2,725,406) (6,690,914) (3,319,747) Net Cash Flows from Operating Activities 8 474, , ,660 1,218, , , , ,842 9,805,507 13,843,340 11,554,387 16,745,369 CASH FLOWS FROM INVESTING ACTIVITIES Cash applied to Investment purchases (Net of investment fees) (465,068) (479,010) (706,295) (1,228,943) (151,318) (575,308) (395,812) (642,179) (9,140,859) (13,945,718) (10,859,353) (16,871,158) Net Cash Flows from Investing Activities (465,068) (479,010) (706,295) (1,228,943) (151,318) (575,308) (395,812) (642,179) (9,140,859) (13,945,718) (10,859,353) (16,871,158) Net Decrease in Cash Held 8,954 (8,842) 4,365 (10,411) 10,063 (6,821) 7,008 2, ,646 (102,378) 695,034 (125,789) Cash & Cash Equivalents at Beginning of the Year 12,568 21,410 18,404 28,815 13,338 20,159 15,599 12, , , , ,688 Cash & Cash Equivalents at End of the Year 21,522 12,568 22,769 18,404 23,401 13,338 22,607 15, , ,990 1,078, ,899 This statement is to be read in conjunction with the notes on pages 9 to 17.

11 annual RepoRt SupereaSy KiwiSaver Superannuation Scheme NOTeS TO The financial STATeMeNTS For the year ended 31 march 9 1. nature of BuSIneSS Scheme description the Supereasy KiwiSaver Superannuation Scheme (the Scheme ) was established under an umbrella trust with the Local Government Superannuation Scheme in accordance with Section 148 of the KiwiSaver act the Scheme is a superannuation scheme with the principal purpose of providing members with benefits on retirement. it also provides benefits payable on death and other permitted withdrawals in accordance with the KiwiSaver act the Scheme was registered in new Zealand under the Superannuation Schemes act 1989 (reference KSS/10029) on 15 June 2007 and opened to members on 1 July under the KiwiSaver act 2006, the Scheme is required to have a 31 march balance date. the Scheme invests in the following funds: Growth Fund, which invests mainly in a diversified selection of international and local shares with some investments in fixed interest securities. Balanced Fund, which invests in selected nz and international shares together with nz property investments, cash and fixed interest securities and global bonds. Income Fund, which invests mainly in short term and fixed interest securities. Conservative Fund, opened on 1 april 2008, which invests mainly in short term and fixed interest securities. Automatic Fund, which invests in nz and international fixed interest investments and shares. effective from 24 September, the Scheme is a restricted KiwiSaver scheme. the Scheme is open to employees of new Zealand local authorities and certain other persons as described in the sections 9 23, 33 36, 53 and 116(a) 2-3 of the KiwiSaver act 2006, and in clause of the trust deed. there is only one class of member. there were no members receiving benefits other than those paid on transfer to another KiwiSaver scheme and other permitted withdrawals. Funding arrangements the Scheme is a defined contribution scheme. under the trust deed each member and their employer shall pay contributions at a rate expressed as a percentage of salary, or at the amount specified in the KiwiSaver act contributions in the form of the Kick Start payment and member tax credits are received from the crown via inland revenue, the amounts and timing of which are specified in the KiwiSaver act Retirement benefits the retirement benefits are determined by contributions to the Scheme together with investment earnings on these contributions over the period of membership. the timing of the retirement benefits are determined by the requirements of the KiwiSaver act termination terms the trust deed sets out the basis on which the Scheme can be terminated. Changes in the trust Deed on 29 april 2011 a total replacement trust deed was issued. on 5 december the trust deed was amended to make the Scheme a restricted entry scheme effective from 24 September. Investment policies the Automatic Fund, for investment purposes, is jointly managed by amp capital investors (new Zealand Ltd) and asb Group investment Limited. the objective of this Fund is to achieve the optimum long-term outcome by accepting a higher investment risk in the early stages of a member s working life as a trade for higher returns. So when a member is young the automatic Fund provides greater exposure to investments with the potential for growth such as overseas and new Zealand equities. each month as the member gets older the automatic Fund will automatically and smoothly change their investments to a more conservative mix by increasing the member s exposure to income assets such as fixed interest securities and cash. the Growth Fund, for investment purposes, is jointly managed by amp capital investors (new Zealand Ltd) and asb Group investment Limited. the objective of this Fund is to achieve a high level of real returns over the medium to long-term through substantial investment in equities, accepting that the returns may be subject to significant short-term variations. the Balanced Fund, for investment purposes, is jointly managed by amp capital investors (new Zealand Ltd) and asb Group investment Limited. the objective of this Fund is to achieve positive real returns through investment in growth assets, while controlling volatility through full diversification of the Fund s assets. the Income Fund, for investment purposes, is jointly managed by amp capital investors (new Zealand Ltd) and asb Group investment Limited. the objective of this Fund is to reduce the chance of negative returns over the short to medium term through higher proportions of investment in defensive assets, such as cash and bonds, while still providing an opportunity for positive real returns over the long-term by investing a proportion of the Fund in growth assets such as equities and property. the Conservative Fund, for investment purposes, is jointly managed by amp capital investors (new Zealand Ltd) and asb Group investment Limited. the objective of this Fund is to reduce the chance of negative returns over the short-term through higher proportions of investment in defensive assets, such as cash and bonds, while still providing an opportunity for positive real returns over the long-term by investing a proportion of the Fund in growth assets such as equities and property.

12 10 annual RepoRt SupereaSy KiwiSaver Superannuation Scheme NOTeS TO The financial STATeMeNTS For the year ended 31 march 2. SuMMaRY of SIGnIFICant accounting policies Basis of preparation the financial statements have been prepared in accordance with generally accepted accounting practice in new Zealand and the requirements of the Financial reporting act 1993, the KiwiSaver act 2006 and the Superannuation Schemes act Statement of compliance the financial statements comply with new Zealand equivalents to international Financial reporting Standards (nz ifrs) and other applicable Financial reporting Standards, as appropriate for profit-oriented entities. the financial statements also comply with international Financial reporting Standards (ifrs). the accounting policies set out below have been applied consistently to all periods presented in these financial statements. Measurement base the measurement base adopted is that of historical cost modified by the revaluation of assets which are measured at fair values at balance date. presentational currency these financial statements are presented in new Zealand dollars because that is the currency of the economic environment in which the Scheme operates. Classification of assets and liabilities the Supereasy KiwiSaver Superannuation Scheme operates as a superannuation scheme. as such, the assets and liabilities are disclosed in the Statement of net assets in an order that reflects their relative liquidity. Critical accounting estimates and judgements the preparation of financial statements requires the trustees to make estimates and judgements regarding the future. the trustees have applied their judgement in selecting the accounting policy to designate financial assets at fair value through profit or loss. the resulting accounting estimates will have a significant impact on the amounts disclosed in the financial statements. it is possible to determine the fair value of these investments as market prices are readily available. therefore there are no material assumptions or major sources of estimation uncertainty that have a significant risk of causing material misstatement to the carrying amounts of the Scheme s investments at balance date. as with all investments, values are subject to ongoing variation due to market fluctuations. accounting policies the following are the significant accounting policies which have been adopted in the preparation of the financial statements: (a) Investment Income interest, dividends and distributions from unitised investments are taken to income on a due and receivable basis. net realised and unrealised gains and losses are recognised in the Statement of changes in net assets in the period in which they occur. (b) expenses all expenses are accounted for on an accruals basis. investment management fees are charged by the investment manager based on the underlying funds under management. (c) taxation the pie tax expense represents the sum of the tax paid and payable. the Scheme is a portfolio investment entity (pie) under the income tax act under current legislation regarding the taxation of pies, the Scheme pays tax on behalf of members. as such, no income tax expense or deferred tax balances are recognised in the financial statements. pie tax payable to inland revenue on behalf of members is recognised as a liability and is measured based on prescribed investor rates (pir) applicable to the individual members that have been enacted or substantively enacted during the year and by the balance date. tax losses are not recognised in the financial statements. however, these amounts are tracked and may be applied by members against tax payable in relation to their pie investment income. deductible expenditure incurred by the Scheme can be transferred to master Superannuation trusts in accordance with section dv 2 of the income tax act this results in tax credits to the Scheme which is disclosed in the Statement of changes in net assets. (d) Financial Instruments Financial assets and financial liabilities are recognised on the Scheme s Statement of net assets when the Scheme becomes a party to the contractual provisions of the instrument. the Scheme shall offset financial assets and financial liabilities if the Scheme has a legally enforceable right to set off the recognised amounts and interests and intends to settle on a net basis. the Scheme does not use financial derivatives in any part of its investment management procedures. (e) Financial assets Financial assets at fair value through profit or loss investments are recognised and derecognised on the trade date where a purchase or sale is under a contract whose terms require delivery within the timeframe established by the market concerned, and are initially measured at fair value.

13 annual RepoRt SupereaSy KiwiSaver Superannuation Scheme NOTeS TO The financial STATeMeNTS For the year ended 31 march 11 accounting policies continued (f) other Receivables other receivables are stated at amortised cost. as these do not carry any interest and are short-term in nature, amortised cost equals their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts. (j) accrued Benefits the liability for accrued benefits is the Scheme s present obligation to pay benefits to members and beneficiaries. (e) Financial assets continued all investments are through master Superannuation trusts and are classified at fair value through profit or loss. as the Scheme s business is investing in financial assets with a view to profiting from their total return in the form of interest, dividends or increases in fair value, listed equities and fixed income securities are designated as fair value through profit or loss on initial recognition. Financial assets designated as at fair value through profit or loss are measured at subsequent reporting dates at fair value, which is the bid (exit) price of the exchange on which the investment is quoted. (g) (h) other payables other payables are not interest-bearing and are stated at amortised cost. Goods and Services tax (GSt) the Scheme is not registered for GSt and consequently all components of the financial statements are stated inclusive of GSt where appropriate. (k) (l) it has been calculated as the difference between the carrying amounts of the assets and the carrying amounts of the liabilities as at balance date. accrued benefits include amounts allocated to members accounts and reserves. Contributions contributions are accounted for on a cash basis when received from the employer, member or the crown. Benefits Benefits are accounted for on an accruals basis. Categories of Financial Instruments (i) Cash Flow Statement the cash flows of the Scheme do not include those of the fund managers. the following are definitions of the terms used in the cash Flow Statement: Financial instruments are categorised into 3 levels: Level 1 fair value measurements are those derived from quoted market prices (unadjusted) in active markets for identical assets and liabilities; Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and Cash & Cash Equivalents comprises cash balances held with banks in new Zealand. Investing Activities comprise acquisition and disposal of investments. investments include securities not falling within the definition of cash. Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs). Operating Activities include all transactions and other events that are not investing activities. all financial instruments disclosed in these Financial Statements are categorised as Level 1 as they are valued using publicly available prices. there have been no transfers between levels.

14 12 annual Report SuperEasy KiwiSaver Superannuation Scheme Notes to the Financial Statements For the YEAR Ended 31 March 3. LIABILITY FOR ACCRUED BENEFITS Liability for accrued benefits as at 31 March: Members Account Growth Fund Balanced Fund Income Fund Conservative Fund Automatic Fund TOTAL Opening Balance 2,800,593 2,382,739 4,860,497 3,603,568 3,269,514 2,637,247 1,830,523 1,131,986 57,355,218 42,415,185 70,116,345 52,170,725 Contributions 667, ,540 1,108,990 1,399, , , , ,253 15,188,682 16,542,122 18,208,191 20,033,218 Benefits Paid and Transfers Out (157,883) (146,068) (334,407) (144,782) (415,074) (138,163) (197,814) (63,490) (4,590,724) (2,209,302) (5,695,902) (2,701,805) Change in net assets before tax 373,453 (45,898) 600,840 51, ,967 67, ,633 56,781 7,237,954 1,121,711 8,655,847 1,251,756 PIE tax expense (28,816) (19,720) (57,720) (49,185) (38,592) (36,139) (21,240) (18,007) (680,226) (514,498) (826,594) (637,549) Balance 31 March 3,654,915 2,800,593 6,178,200 4,860,497 3,753,180 3,269,514 2,360,688 1,830,523 74,510,904 57,355,218 90,457,887 70,116,345 Reserve Account Guaranteed Benefits The Scheme s reserve account balance is nil as there have been no transfers to or from the Reserve during the year (: nil). No guarantees have been made in respect of any part of the liability for accrued benefits (: nil). 4. VESTED BENEFITS Vested Benefits are benefits payable to members or beneficiaries under the conditions of the Trust Deed, on the basis of all members ceasing to be members of the Scheme at balance date. The Vested Benefits as at 31 March were 90,457,887 (31 March : 70,116,345). 5. CONTRIBUTIONS Contributions by type Member Contributions 307, , , , , , , ,596 7,563,525 6,945,388 8,978,097 8,328,966 Voluntary Member Contributions 37,955 11,959 6,127 56,326 9,121 14,024 10,915 11, , , , ,197 Employer Contributions 169, , , , , , , ,874 4,121,196 4,839,500 4,883,605 5,793,425 Crown Contributions: Kick Start 9,700 9,050 16,960 20,900 6,540 10,850 13,300 18, , , , ,000 Fee Subsidy IRD Interest 934 1,244 1,616 2, , ,808 29,224 28,092 35,058 Member Tax Credits 72, , , ,308 77, ,077 64, ,130 1,787,976 3,355,210 2,127,914 4,022,653 Late Opt-Out (16,253) (11,748) (16,253) (11,748) Transfers In from Other KiwiSaver Schemes 70,336 16, ,327 73,683 29,018 15,736 98,898 82, , , , ,253 Transfers In from Other Superannuation Schemes 10,695-42,931 25, ,849 47, ,543 31, , ,415 Transfers Between Funds (11,538) (82,987) (21,919) 71,237 11,182 (20,230) 50,908 99,037 (28,631) (67,057) - - Total Contributions Received 667, ,540 1,108,990 1,399, , , , ,253 15,188,682 16,542,123 18,208,189 20,033,219

15 annual Report SuperEasy KiwiSaver Superannuation Scheme Notes to the Financial Statements For the YEAR Ended 31 March CONTRIBUTIONS (continued) Contributions from members and employers who were: Growth Fund Balanced Fund Income Fund Conservative Fund Automatic Fund TOTAL Existing members 588, ,579 1,012,623 1,281, , , , ,392 14,109,606 14,868,048 16,847,315 18,066,080 Members who joined the Scheme during the year 79,504 36,961 96, ,823 21,700 36,070 82,135 98,818 1,078,026 1,673,025 1,357,732 1,962,697 Lump sum contributions - 2, ,050-1,043 1,043 1,050 1,050 3,143 4,443 Total Contributions Received 667, ,540 1,108,990 1,399, , , , ,253 15,188,682 16,542,123 18,208,190 20,033, BENEFITS Retirement 5, , ,952-74,436-1,000,370-1,450,824 - Home Loan Withdrawal 22,642 32,321 27,980 13,629 15,261 61,627 47,049 7, , , , ,827 Serious Illness Withdrawal ,358 36,696 2,358 36,696 Significant Financial Hardship Withdrawal 3,617 4,211 35, ,149 1, , , , ,614 Permanent Emigration - - 4,332-18, , , , ,114 Death 19,715 7,114 5,131-5,324-11,753-47,294 31,288 89,218 38,402 Total Benefits Paid 51,514 43, ,785 14, ,153 62, ,549 8,022 2,144, ,636 2,813, , GAIN/(loss) AT FAIR VALUE THROUGH PROFIT or LOSS AMP Superannuation Funds 99,596 (27,404) 72,588 (10,419) 13,509 (771) 2, ,659,205 1,383,789 4,847,874 1,345,288 ASB Superannuation Master Trust 291,023 (2,749) 553,344 82, ,056 83, ,211 65,196 3,102, ,112 4,400, ,566 Total Gain/(Loss) on Financial Assets at Fair Value Through Profit or Loss 8. RECONCILIATION OF NET CASH FLOWS FROM OPERATING ACTIVITIES TO INCREASE IN NET ASSETS 390,621 (30,153) 625,932 72, ,563 82, ,187 65,289 7,761,311 1,555,901 9,248,614 1,745,854 Increase in net assets during the year 854, ,854 1,317,703 1,256, , , , ,537 17,155,686 14,940,032 20,341,542 17,945,618 Less non cash and investing items: Changes in fair value of financial assets through profit or loss after investment expenses (383,082) 36,488 (616,367) (64,290) (324,346) (78,334) (137,753) (62,840) (7,535,318) (1,375,543) (8,996,866) (1,544,520) Movements in other working capital items: Increase/(decrease) in benefits payables (7,130) 7, ,314 39,965 (817) 47,095 Increase/(decrease) in other payables , ,435 11,212 32,712 12,747 Increase/(decrease) in PIE tax payable 9,551 8,358 8,782 25,295 1,615 14,317 2,478 8, , , , ,428 Net Cash Inflow from Operating Activities 474, , ,660 1,218, , , , ,842 9,805,507 13,843,340 11,554,387 16,745,369

16 14 annual Report SuperEasy KiwiSaver Superannuation Scheme Notes to the Financial Statements For the YEAR Ended 31 March 9. PIE TAX The Scheme calculates and pays tax on members behalf at the members Prescribed Investor Rate (PIR) as follows: From 1 April 2010 to 30 September 2010, members PIR were either 12.5%, 21% or 30%; From 1 October 2010 onwards, members PIR were either 10.5%, 17.5% or 28% respectively. Growth Fund Balanced Fund Income Fund Conservative Fund Automatic Fund TOTAL Changes in net assets before tax and membership activities 373,453 (45,898) 600,840 51, ,967 67, ,633 56,781 7,237,954 1,121,711 8,655,846 1,251,756 Less Temporary differences: Non taxable income 235,691 (150,435) 335,653 (189,528) 151,433 (103,048) 38,848 (26,375) 3,970,734 (1,497,509) 4,732,358 (1,966,895) Other Taxable income 137, , , , , ,894 90,785 83,156 3,267,220 2,619,220 3,923,488 3,218,651 Tax thereon at members PIR 34,812 26,417 65,211 59,466 41,459 43,836 22,183 20, , , , ,819 Tax effect of allocated PIE credits (5,996) (6,697) (7,492) (10,281) (2,867) (7,697) (943) (2,110) (151,385) (150,485) (168,682) (177,270) Prior year adjustments Total tax expense 28,816 19,720 57,719 49,185 38,592 36,139 21,240 18, , , , ,549 Current tax Opening balance 18,908 10,550 47,704 22,409 34,868 20,551 17,222 8, , , , ,008 PIE Tax refund/ (paid) in respect of prior year (18,908) (10,550) (47,704) (22,409) (34,868) (20,551) (17,222) (8,438) (504,257) (276,583) (622,959) (338,531) PIE tax in respect of current year 28,816 19,720 57,719 49,185 38,592 36,139 21,240 18, , , , ,549 PIE tax expense paid on members behalf (36) (645) (874) (857) (1,894) (1,095) (1,315) (378) (15,326) (6,325) (19,445) (9,300) Withholding tax paid (321) (167) (359) (624) (214) (176) (225) (407) (5,254) (3,916) (6,373) (5,290) Prior period Adjustment PIE Tax Payable 28,459 18,908 56,486 47,704 36,484 34,868 19,700 17, , , , ,436

17 annual RepoRt SupereaSy KiwiSaver Superannuation Scheme NOTeS TO The financial STATeMeNTS For the year ended 31 march ReSeRVe account pursuant to the trust deed, the trustees shall establish a reserve account which shall be credited with the following:- i. any amount not paid to a member upon ceasing employment with the employer; ii. any part of an employer s account Balance remaining after the Benefit has been paid in respect of a member who has ceased to be an employee or ceased to be a member; iii. any unclaimed benefit; iv. the reserve account s share of the Scheme s profit or loss; v. any credits in respect of taxation allocated by the Scheme s investment manager and not otherwise allocated to members accounts. the trustees may, at their discretion, apply any part or the whole of the reserve account to:- i. meeting all or part of the contributions of all members associated with the participating employer on an equitable basis determined by the trustees; ii. meeting all or part of the participating employer s contributions to the Scheme; iii. increasing the employer s account in respect of all members associated with the participating employer on an equitable basis determined by the trustees; iv. providing personal Benefits for members associated with the participating employer or their dependants in cases of hardship; v. the paying of trustee s remuneration and the Scheme s outgoings; vi. in such other manner as is permitted from time to time under the trust deed. 11. FInanCIal InStRuMentS the Scheme is involved with a number of financial instruments in the course of its normal investing activities. details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which revenues and expenses are recognised, in respect of each class of financial asset and financial liability are disclosed in the accounting policies. the trustees have established the investment portfolio objectives and target asset allocations. performance against these targets is reviewed regularly by the trustees and asset reallocations undertaken as required. (a) Fair Value the carrying amount of financial assets and financial liabilities recorded in the financial statements represents their respective fair values, determined in accordance with the Scheme s accounting policies. (b) Capital Management the Scheme s capital is represented by net assets attributable to members and is reflected in the Statement of net assets as net assets available for Benefits. the Scheme invests contributions received in appropriate investments in order to provide returns to its members and to maximise the Scheme s members value whilst maintaining sufficient liquidity to meet any withdrawal requests. the Scheme s management review the Scheme s performance on a regular basis to monitor the capital management. (c) Market Risks (i) Liquidity Risk all financial assets at fair value through profit and loss can be realised within 12 months. other than the liability for accrued benefits, there are no significant financial liabilities. to manage liquidity risk the Scheme invests in financial instruments which are highly liquid. the Scheme also invests within established limits to ensure there is no concentration of risk. due to the nature of a KiwiSaver scheme, it is unlikely that a significant number of members would exit at the same time. Financial liabilities of the Scheme consist of net assets available for Benefits and payables. net assets available for Benefits are payable on demand, provided certain KiwiSaver withdrawal requirements are met, and payables are typically paid within 30 days. (ii) Credit Risk Financial instruments which potentially expose the Scheme to credit risk consist of cash and cash equivalents, fixed interest securities and receivables and, indirectly, investments in unitised products which invest in cash and fixed interest investments. the Scheme does not require collateral or other security to support instruments with credit risk and as such, no collateral exists for any of the investments held by the Scheme. the maximum credit exposure is the carrying amount of the individual investments. all investments entered into are required to meet the credit rating parameters as set forth by the trustees.

18 16 annual RepoRt SupereaSy KiwiSaver Superannuation Scheme NOTeS TO The financial STATeMeNTS For the year ended 31 march 11. FInanCIal InStRuMentS continued (c) Market Risks continued (ii) Credit Risk continued the significant counterparties of the Scheme are its fund managers amp capital investors (new Zealand Ltd), asb Group investment Limited. the investments are held in trust by the trustees for the benefit of the Scheme. the managers maintain diversified investment portfolios in accordance with the portfolio mix adopted by the trustees. there are no specific industry related concentrations of credit risk. (iii) Currency Risk the Scheme is indirectly exposed to currency risk in that future currency movements will affect the valuation of investments in unitised products which invest in foreign currency denominated investments. each of the five Funds may include investments in australasian Shares, Global Shares, Global Fixed interest and Global property Shares asset classes. to reduce the impact of currency movements, the fund managers may currency hedge to new Zealand dollars from time to time in respect of the international investments. the Scheme has no exposure to currency risk in respect of directly held investments as none are denominated in a foreign currency. risk management activities are undertaken by the Scheme s investment managers to operate within the guidelines provided by the trustees. (iv) Interest Rate Risk the Scheme is exposed to interest rate risk in that future interest rate movements will affect cash flows and fair values of fixed interest assets and, indirectly, the valuation of investments in unitised products which invest in cash and fixed interest investments. as at balance date the Scheme s direct exposure to interest rate risk was in respect of the cash and cash equivalent balances of each Fund. the average interest rate for the year was 2.75% (: 3.25%). interest rate risk management activities are undertaken by the investment manager in accordance with the investment mandate set by the trustees. (v) Market Price Risk market price risk is the risk that the value of a financial instrument will fluctuate as a result of changes in market prices, whether those changes are caused by factors specific to the individual instrument or its issuer, or factors affecting all instruments of a specific type traded in the market. market price risk is controlled by ensuring a diverse range of investments, limits on counterparty exposure and restrictions on types of instruments. had the market price of the underlying instruments increased or decreased by 10% with all other variables held constant, the increase or decrease respectively in income and the net assets attributable to members would amount to the following: Growth Fund 366,674 (: 281,859) Balanced Fund 621,878 (: 489,612) income Fund 377,082 (: 329,515) conservative Fund 236,840 (: 183,483) automatic Fund 7,437,467 (: 5,769,849) total 9,039,941 (: 7,054,318) a variable of 10% was selected for market price risk sensitivity as this is a reasonably expected movement based on historic rate trends. 12. CoMMItMentS and ContInGent liabilities there were no commitments or contingent liabilities outstanding as at 31 march (: nil). 13. RelateD parties new Zealand Local Government insurance corporation Limited, trading as civic assurance, has been appointed the administration and investment manager of the Scheme by the Scheme s trustees, Local Government Superannuation trustee Limited and the independent trustee. the Scheme holds no investments in any of the employer companies or any of its related parties. during the year civic assurance charged the Scheme administration and investment management fees of 614,008 (: 511,733). civic assurance paid audit fees 29,700 (: 43,881) and trustees remuneration 20,687 (: 19,750) for both Supereasy KiwiSaver and Supereasy out of the