ANNUAL FINANCIAL STATEMENTS NAME OF RETIREMENT FUND: UNIVERSITY OF CAPE TOWN RETIREMENT FUND

Transcription

1 ANNUAL FINANCIAL STATEMENTS NAME OF ETIEMENT FUND: FINANCIAL SEVICES BOAD EGISTATION NUMBE: 12/8/31582/2 FO THE PEIOD: 1 July 2014 to 30 June 2015 CONTENTS Schedule Page Schedule Page A egulatory Information * 1-5 HA Notes to the financial statements B C D Statement of responsibility by the Board of Fund * Statement of responsibility by the Principal Officer * eport of the independent auditors HB I IA eport of the Valuator * eport of the independent auditors to the egistrar of Pension Funds Investment schedule pertaining to the annual financial statements * E F G eport of the Board of Fund * Statement of net assets and funds Statement of changes in net assets and funds IB Assets held in compliance with egulation 28 eport of the independent auditors on compliance with egulation 28 to the egistrar of Pension Funds * Not subject to any engagement by an auditor

2 SCHEDULE A EGULATOY INFOMATION for the year ended 30 June 2015 EGISTEED OFFICE OF THE FUND Postal address: Physical address: Private Bag X3 ondebosch 7701 Bremner Building, Lovers' Walk ondebosch 7700 FINANCIAL EPOTING PEIODS Current year: 1 July 2014 to 30 June 2015 Prior year: 1 July 2013 to 30 June 2014 Period 1 January 2014 to 31 December 2015 Full name Address Capacity Date appointed or Date resigned re-appointed Mr H.T. Amoore hugh.amoore@uct.ac.za E & C(1) 1 January 2014 N/A Mr S. Abrahams smartdryck.abrahams@uct.ac.za E 1 January 2014 N/A Dr P. de Jager phillip.dejager@uct.ac.za E & C(2) 1 January 2014 N/A Ms L. Haddow lesley.haddow@uct.ac.za E 1 January 2014 N/A Dr H. aubenheimer heidiraub@telkomsa.net; E 1 January 2014 N/A Emeritus Professor J. Simpson john.simpson@uct.ac.za E 1 January 2014 N/A Ms J. du Toit judith.dutoit@uct.ac.za M & DC 1 January 2014 N/A Ms K. Lehmann karin.lehmann@uct.ac.za M 1 January 2014 N/A Mr D. Munene daniel.munene@uct.ac.za M 1 January 2014 N/A Professor S. ichardson steve.richardson@uct.ac.za M 1 January 2014 N/A Mr C. Tobler chris.tobler@uct.ac.za / M 1 January 2014 N/A chrisjtobler@gmail.com Mr D. Strugnell dave.strugnell@uct.ac.za M 1 January 2014 N/A Ms M. Tainton margie.tainton@uct.ac.za E/A 1 January 2014 N/A Professor J. Glazewski jan.glazewski@uct.ac.za M/A 1 January 2014 N/A - 'M' denotes member elected - 'E' denotes employer appointed - 'A' denotes alternate - 'C(1) ' denotes chairperson - 'DC' denotes deputy chairperson - 'C(2) ' denotes sponsor/trustee elected Governance note: schedule of meetings* held by the Board of Fund in terms of the ules of the Fund Meeting date Place of meeting Quorum 26 September 2014 Mafeje oom, Bremner Building, UCT, ondebosch Yes 2 December 2014 Mafeje oom, Bremner Building, UCT, ondebosch Yes 23 March 2015 Kramer Building, UCT, ondebosch No ** 19 June 2015 Mafeje oom, Bremner Building, UCT, ondebosch Yes * Only meetings held by the Board of Fund and does not include meetings held by the sub-committees. ** All decisions taken were subsequently ratified by the Board of Fund

3 SCHEDULE A EGULATOY INFOMATION (continued) BOAD OF FUND Attendance register: Full Name 26 September December March June 2015 Employer Trustees Mr H.T. Amoore (Chair) Present Present Present Present Mr S. Abrahams Present Apology Apology Present Dr P. De Jager Present Present Apology Present Ms L. Haddow Present Present Present Apology Dr H. aubenheimer Apology Present Present Present Emeritus Professor J. Simpson Apology Apology Apology Apology Ms M. Tainton (Alternate) Present Present Present Present Employee Trustees Ms J. Du Toit (Deputy Chair) Present Present Apology Present Ms K. Lehmann Present Present Present Present Mr D. Munene Present Present Apology Present Professor S. ichardson Present Present Present Present Mr C. Tobler Present Present Apology Present Mr D. Strugnell Apology Present Apology Present Professor J. Glazewski (Alternate) Present Apology Present Present ADMINISTATION, AUDIT AND ULES COMMITTEE ADMINISTATION, AUDIT AND ULES COMMITTEE is responsible for reviewing the benefit structure and ules of the Fund and recommend changes where appropriate to the Board of Fund and to ensure the implementation of any Board of Fund approved ule change including the necessary regulatory approval process such as practice notes required for the operation of the Fund. The Committee monitor benefit payments, Fund operations, risk management and financial management. Attendance register: Full Name 19 August November February May 2015 Dr P. De Jager (Chair) Present Present Present Present Mr H.T. Amoore Apology Apology Present Present Ms J. Du Toit Present Present Present Present Ms L. Haddow Present Present Present Present Ms M. Tainton (Alternate) Present Present Present Present INVESTMENT COMMITTEE INVESTMENT COMMITTEE is responsible for reviewing the Fund s Investment Policy Statement (IPS) on an annual basis (or more frequently on the events set out in the IPS) and if necessary recommend changes to the IPS to the trustee and to report to the Board of Fund on the Fund s compliance with the IPS. Another key performance area is to make recommendations to the Board of Fund regarding the appointment and/or replacement of investment managers. Attendance register: Full Name 12 May September February April 2015 Professor S ichardson (Chair) Present Present Present Present Mr H.T. Amoore Present Present Present Present Mr D. Cleland Present Present Present Present Dr P. De Jager Present Present Present Present Associate Professor G. Holman Apology Present Apology Apology Mr D. Munene Present Apology Apology Present Emeritus Professor J. Simpson Present Apology Present Apology Mr D. Strugnell Present Apology Present Present - 2 -

4 SCHEDULE A EGULATOY INFOMATION (continued) DEATH BENEFIT 37C COMMITTEE DEATH BENEFIT 37C COMMITTEE makes proposals, according to a process approved by the Board of Fund for allocation of death benefits in accordance with Section 37C of the Pension Fund Act. Attendance register: Full Name 9 September November March September 2015 Ms K. Lehmann (Chair) Present Present Present Present Ms J. Du Toit Present Present Apology Present Ms L. Haddow Present Present Present Apology Mr C. Tobler Apology Apology Present Apology COMMUNICATIONS COMMITTEE COMMUNICATIONS COMMITTEE recommends to the Board of Fund and thereafter implements (without prior reference to the Board of Fund) a communications policy and annual cycle of communication for the Fund covering verbal, electronic and written media including: University of Cape Town etirement Fund (UCTF) website, member booklets, new member induction, retirement counseling, member road shows, death benefit multiple and investment choice exercises, annual member benefit statement: The comittee ensure that the Fund meets the minimum statutory requirements in respect of member communication as laid down in the Pension Funds Act (Sections 18, 22, 35 and egulation 24(d) and PF Circulars 86 and 90). Attendance register: Full Name 7 August November February May 2015 Emeritus Professor J. Simpson (Chair) Apology Apology Present Present Mr S. Abrahams Present Apology Present Apology Mr D. Strugnell Present Present Present Present Ms M. Tainton Apology Present Present Apology Mr C. Tobler Present Present Present Present Ms K. Chernotsky N/A Present N/A N/A ETIEMENT AND EXIT BENEFITS COMMITTEE ETIEMENT AND EXIT BENEFITS COMMITTEE is to recommend to the Board of Fund and thereafter implement (without prior reference to the Board of Fund) policies and avenues for members to deal with exit benefits including but not limited to default options to be made available to members, the living annuity option offered by the Fund, including limitations on drawdown rate to be imposed and periodic communication of life annuity options to living annuitants, the life annuity options available to members on retirement from the Fund, other preservation options available to members on exiting the Fund and the process of communication to members regarding exit benefits and post-retirement options available. To ensure that retiring members, and those setting investment strategy in planning for retirement and to oversee the annual processes, managed by the Principal Officer together with the Fund s consultants, of offering life and living annuity quotes to retiring members and of communication to UCTF living annuitants, including the Living Annuitant Certificate and Annual Drawdown Form. Attendance register: Full Name 24 July October March June 2015 Mr D. Strugnell (Chair) Present Present Present Present Mr H.T. Amoore Present Present Apology Apology Mr C. Tobler Present Present Present Apology FINANCIAL STATEMENTS SUB-COMMITTEE Attendance register: Full Name 27 October November November 2014 Dr P. De Jager (Chair) Present Present Present Mr H.T. Amoore Present Present Present Ms L. Haddow Present Present Present - 3 -

5 SCHEDULE A EGULATOY INFOMATION (continued) FUND OFFICES Principal Officer Full name Postal address Physical address Ms Olivia van der Hoven Private Bag X3, ondebosch, 7701 Ms Margie Tainton Private Bag X3, ondebosch, 7701 Ms Penny Fabre Private Bag X3, ondebosch, 7701 Bremner Building, Lovers' Walk, ondebosch, 7700 Bremner Building, Lovers' Walk, ondebosch, 7700 Bremner Building, Lovers' Walk, ondebosch, 7700 Telephone number address Appointed esigned (021) olivia.vanderhoven@uct.ac.za 1 May Apr 2015 (021) margie.tainton@uct.ac.za 1 May Nov 15 (021) penny.fabre@uct.ac.za 1 Dec 15 N/A Deputy Principal Officer Full name Postal address Physical address Mr William Nkutha Private Bag X3, ondebosch, 7701 Monitoring person* Bremner Building, Lovers' Walk, ondebosch, 7700 Full name Postal address Physical address Ms Margie Tainton Private Bag X3, ondebosch, 7701 Ms Penny Fabre Private Bag X3, ondebosch, 7701 *(In terms of Section 13A of the Pension Funds Act) Bremner Building, Lovers' Walk, ondebosch, 7700 Bremner Building, Lovers' Walk, ondebosch, 7700 Telephone number address Appointed (021) william.nkutha@uct.ac.za 1 May 2015 Telephone number address Appointed esi (021) margie.tainton@uct.ac.za 1 May No (021) penny.fabre@uct.ac.za 1 Dec 15 N/A POFESSIONAL SEVICE POVIDES Actuary/Valuator Full name Postal address Physical address Dr Erich Potgieter Private Bag X30, ondebosch, 7701 Auditor Great Westerford Building, 240 Main oad, ondebosch, 7700 Full name Postal address Physical address PricewaterhouseCoopers Inc. P.O.Box 2799, Cape Town, Waterhouse Place, Century City, Cape Town, 7441 Telephone number address e-appointed (021) erich.potgieter@towerswatson. com 1 Jul 2015 Telephone number address e-appointed (021) paul.liedeman@za.pwc.com 1 Jul 2013 Benefit administrator Full name Postal address Physical address Sanlam Employee Benefits (Division of Sanlam Life Insurance Limited) P.O.Box 1, Sanlamhof, 7532 Telephone number e-appointed 2 Strand oad, Bellville, 7530 (021) Sep /85 Benefit administrator's registration number in terms of section 13B - 4 -

6 SCHEDULE A EGULATOY INFOMATION (continued) Investment administrator Full name Postal address Physical address ABAX Investments (Pty) Limited P.O.Box 23851, Claremont, 7735 Allan Gray Investment Services Limited P.O.Box 21318, Waterfront, Cape Town, 8002 Catalyst Fund Managers SA P.O.Box 44845, Claremont, 7735 Coris Capital Collective Investment Managers Limited Investec Asset Management (Pty) Limited Private Bag X14, Highveld Park, 0169 P.O.Box 1655, Cape Town, 8000 MMI Group Limited P.O.Box 2212, Bellville, 7535 PIMCO Europe Limited 11 Baker Street, London, W1U3AH Prescient Investment P.O.Box 31142, Management (Pty) Limited Tokai, 7966 Prescient Life Limited P.O.Box 31142, Tokai, 7966 Ground Floor Coronation House The Oval, 1 Oakdale oad, Newlands, 7700 Granger Bay Court, Beach oad, V&A Waterfront, 8001 Sanlam Life Insurance Limited P.O.Box 1, Sanlamhof, 7532 Stanlib Asset Management P.O.Box 202, Melrose 17 Melrose, Boulevard Melrose Limited Arch, 2076 Arch, 2196 Stone Harbor Investment 31 West 52ND Street, 16TH Partners LP Floor, New York, Investment advisor 31 West 52ND Street, 16TH Floor, New York, Full name Postal address Physical address Towers Watson (Pty) Limited Private Bag X30, ondebosch, 7700 Telephone number Appointed Termination Date (021) May 2014 N/A 856 (021) Feb 2004 N/A c/o Catalyst Fund Managers, 27th floor Thibault Square, Cape Town, 8001 (021) Jun 2012 N/A 723 Lords Office Estate, 276 West (012) May 2009 N/A 581 Street, Centurion, th Floor, Norwich on St (021) Jun 2004 N/A 587 George's Mall, Cape Town, 8001 Metlife Centre, 7 Coen Steytler (021) Sep 1995 N/A 3780 Avenue, Cape Town, Baker Street, London, (044) Feb Jun W1U3AH Prescient House The Terraces, (021) Feb 2001 N/A 612 Steenberg Boulevard, Steenberg Office Park, 7945 Prescient House, Westlake (021) Mar 2010 N/A Business Park, Otto Close, Westlake, Strand oad, Bellville, 7530 (021) May 2009 N/A 579 Great Westerford Building, 240 Main oad, ondebosch, 7701 (011) Jul 2015 N/A 719 (212) Apr Jun Telephone number e-appointed (021) Jul Investment administrator's FAIS registration number Investment advisor's FAIS registration number isk insurer Full name Postal address Physical address Capital Alliance Custodian and/or nominee P.O.Box 1655, Cape Town, nd Floor, Mariendahl House, Cnr Main & Campground, Newlands, 7700 Full name Postal address Physical address Nedbank Limited P.O.Box 1144, Johannesburg, rd Floor, Braampark Forum IV, 33 Hoofd Street, Braamfontein, 2001 Telephone number e-appointed FSP approval no (021) Mar Telephone number Appointed FSP approval no (011) Dec PATICIPATING EMPLOYES The following employers participates in the Fund in terms of the ules of the Fund: University of Cape Town Cape Higher Education Consortium NPC (Non Profit Organisation Number: NPO) - 5 -

7

8

9

10

11 SCHEDULE E EPOT OF THE BOAD OF FUND As at 30 June DESCIPTION OF FUND 1.1. Type of Fund The Fund is a Defined Contribution Provident Fund Benefits The Fund provides retirement, death and withdrawal benefits. Members on the permanent staff of the employer may elect, under certain conditions, to reduce the multiple of death cover provided, in which case the employer contributions towards retirement benefits are increased for those members, in line with the consequential reduction of death-in-cover costs. The death benefit (group life assurance cover) for permanent staff under the Fund, unless reduced, is six times annual deemed pensionable amount. It is part of the approved scheme. This means that payment of tax is deferred until a benefit is paid. There is a separate, unapproved group life assurance scheme, outside of the UNIVESITY OF CAPE TOWN ETIEMENT FUND, providing a compulsory single multiple of the annual deemed pensionable amount for death and permanent disability cover for members on the permanent staff of the employer, and a compulsory three times multiple for members who are fixedterm contract staff of the employer. As this is unapproved, it is a member contributed scheme; the employer pays the premium on the members' behalf and deducts the tax on behalf of the member in respect of the premium paid. Members may in certain circumstances elect to increase the multiple of this cover, and if permitted to do so must meet the premiums for the additional multiples. Any benefit paid out under this scheme is not subject to tax. There is also a separate unapproved disability income continuation scheme for members who are permanent staff of the employer, outside of the Unclaimed benefits The Board of Fund and Principal Officer endeavour to trace those former members with outstanding benefits in order to pay such benefits. Procedures between the employer and the Fund for exiting staff are regularly monitored. In respect of unclaimed benefits, complete records, as prescribed, are maintained since inception Contributions Member contributions According to ule 8.1 of the Fund a member will not be required to contribute to the Fund, unless the member is granted leave of absence with less than full normal remuneration. If the employer does not contribute to the Fund in respect of the member during such absence, the member must contribute 6.5% of his/her normal pensionable salary to cover the contributions to the separate unapproved schemes and the balance to the Fund. Such member does, however, have the option to contribute 22.5% of his/her normal pensionable salary to the Fund during such absence. Such contributions would be member contributions. The costs of the Fund regarding the member and the cost of deathin-service benefits are first deducted from the contributions referred to above and the balance is credited to his/her member's accumulated credit in accordance with the determination for employer contributions. Member contribution rates for permanent staff on leave without pay (limited contributions): Period 2015/03/ /06/ /03/ /02/28 Total member contribution Separate unapproved schemes isks & costs etirement savings Discretionary retirement savings 6.500% 0.799% 1.501% 0.000% 4.200% 6.500% 0.859% 1.491% 0.000% 4.150%

12 SCHEDULE E EPOT OF THE BOAD OF FUND (continued) Member contribution rates for fixed term contract staff on leave without pay (limited contributions) Period 2015/03/ /06/ /03/ /02/28 Total member contribution Separate unapproved schemes isks & costs etirement savings Discretionary retirement savings 6.500% 0.777% 0.495% 0.000% 5.228% 6.500% 0.777% 0.495% 0.000% 5.228% Member contribution rates for permanent staff on leave without pay (full contributions): Period 2015/03/ /06/ /03/ /02/28 Total member contribution Separate unapproved schemes isks & costs etirement savings Discretionary retirement savings % 0.799% 1.501% % 4.200% % 0.859% 1.491% % 4.150% Member contribution rates for fixed term contract staff on leave without pay (full contributions): Period 2015/03/ /06/ /03/ /02/28 Total member contribution Separate unapproved schemes isks & costs etirement savings Discretionary retirement savings % 0.777% 0.495% % 5.228% % 0.777% 0.495% % 5.228% Employer contributions The employer contributed to the Fund based on the rates set out in the table below. Employer contribution rates for permanent staff: Period 2015/03/ /06/ /03/ /02/28 Total employer contribution Separate unapproved schemes isks & costs etirement savings Discretionary retirement savings % 0.799% 1.501% % 4.200% % 0.859% 1.491% % 4.150% Employer contribution rates for fixed term contract staff: Period 2015/03/ /06/ /03/ /02/28 Total employer contribution Separate unapproved schemes isks & costs etirement savings Discretionary retirement savings % 0.777% 0.495% % 3.640% % 0.777% 0.495% % 3.640%

13 SCHEDULE E EPOT OF THE BOAD OF FUND (continued) Employer contribution rates for permanent staff on leave without pay (limited contributions): Period 2015/03/ /06/ /03/ /02/28 Total employer contribution Separate unapproved schemes isks & costs etirement savings Discretionary retirement savings 6.500% 0.799% 1.501% 0.000% 4.200% 6.500% 0.859% 1.491% 0.00% 4.150% Employer contribution rates for members on leave without pay (full contributions): Period 2015/03/ /06/ /03/ /02/28 Total employer contribution Separate unapproved schemes isks & costs etirement savings Discretionary retirement savings % 0.799% 1.501% % 4.200% % 0.859% 1.491% % 4.150% Employer contribution rates for disability members (disability lump sums paid out): Period 2015/03/ /06/ /03/ /02/28 Total employer contribution Separate unapproved schemes isks & costs etirement savings Discretionary retirement savings % 0.000% 1.501% % 4.200% % 0.000% 1.491% % 4.150% Employer contribution rates for disability members: Period 2015/03/ /06/ /03/ /02/28 Total employer contribution Separate unapproved schemes isks & costs etirement savings Discretionary retirement savings % 0.259% 1.501% % 4.200% % 0.259% 1.491% % 4.150%

14 SCHEDULE E EPOT OF THE BOAD OF FUND (continued) 1.4. ule amendments ule amendment No. 4. Paragraph 1, 10 and Paragraph 2 and 3 4. Paragraph 4 4. Paragraph 5 4. Paragraph 6 4. Paragraph 7 4. Paragraph 8 and 9 4. Paragraph Paragraph Paragraph 14 Description and motivation The requirement to give the FSB written notice of the appointment of a new Principal Officer in accordance with prescribed requirements has been extended to valuators and auditors as well. The ules have been amended to provide for this change. The definitions of pension preservation fund and provident preservation fund have been updated in accordance with the changes to the Pension Funds Act. Date of Board of Fund resolution 26 September September 2014 Effective date Date registered by the Financial Services Board 1 July December July December 2014 The ules are amended in order to make the 26 September 1 July December 2014 amount available for commutation at retirement 2014 subject to income tax legislation due to coming amendments to income tax legislation. The ules now empower the Board of Fund to 26 September 1 July December 2014 direct that the benefit of a Member or Beneficiary be 2014 paid to a third party if the Member or Beneficiary is able to submit sufficient proof that he/she is unable to open a bank account. The ules now provide for the deduction of 26 September 1 July December 2014 amounts awarded to non-member spouses not only 2014 in terms of divorce orders in terms of section 7(8) of the Divorce Act, but also in terms of other applicable legislation. The definition of unclaimed benefit was amended 26 September 1 July December 2014 to include a benefit due to a non-member spouse 2014 not paid within 24 months from the date of election or expiry of the election period (120 days). The ules have been amended to provide for this change. Provision has been made for the Board of Fund to appoint a deputy Principal Officer who may act as Principal Officer if the Principal Officer is unable to discharge any duty or may be delegated some of the duties of the Principal Officer. 26 September July December 2014 The ules now require the Board of Fund to request 26 September 1 July December 2014 Employers participating in the Fund to notify it in 2014 writing of the identity of the persons who are personally liable for the payment of contributions to the Fund. ule 13.9(7) has been rectified, as it contradicts 26 September 1 July December 2014 ule 11.5(2) with regard to the way unclaimed 2014 benefits are to be dealt with in the case of Section 28 or 29 dissolutions. Appendix I has been amended to provide for the 26 September 1 July December 2014 recent changes to Section 37C of the Act All ule amendments are available for inspection at the Fund s registered office

15 SCHEDULE E EPOT OF THE BOAD OF FUND (continued) 1.5. eserves and specified accounts established in terms of the ules of the Fund General eserve Account: The "General eserve Account" was established to provide for contingencies and obligations of the Fund not covered by the Accumulation Account, the isk eserve Account, Data eserve, Surplus Apportionment Cost eserve, Processing Error eserve or the Living Annuity Balance Account. These obligations include the fees of the valuator, the administrator and auditors. isk eserve Account: The "isk eserve Account" is no longer being built up to minimize fluctuations arising from death and disability benefits to members as the Fund fully insures its risk benefits. Data eserve: The "Data eserve" is to account for the quality of the data submitted for valuation of the Fund. Processing Error eserve: The "Processing Error eserve" was established to provide for mismatching and for timing differences in the actual investment of monies from the time when they are deemed to have occurred in the calculation of benefits or the accrual of investment returns. Surplus Apportionment Cost eserve: The "Surplus Apportionment Cost eserve" was established to provide for: - Fund costs in respect of surplus apportionment exercises; and - Fund costs related to ad hoc bonuses to members as determined by the Board of Fund in consultation with the Fund actuary based upon distributable valuation surpluses. 2. INVESTMENTS 2.1 Investment strategy The Board of Fund has formulated an investment strategy and produced an Investment Policy Statement. The investments are managed according to mandates set in terms of these principles. The investment strategy complies with the provisions of egulation 28 under the Pension Funds Act 24 of 1956 in South Africa. The Board of Fund reviewed and revised the Investment Policy Statement during March General The Board of Fund is advised by an investment consultant (Towers Watson (Pty) Ltd) and supported by an investment committee. For the Balanced Fund (Portfolio C) the Board of Fund have adopted a specialist investment manager approach. The investment managers for the SA and global equity parts of this portfolio must adopt the intrinsic value investment approach in terms of the Investment Policy Statement Individual member choice The members have the option of electing the Life Stage Model of investment choice or making their own investment choices across the current Fund portfolios (Income Fund, Smoothed Bonus Fund, Balanced Fund and Shari'ah Fund). They may exercise this choice twice a year on 31 March and 30 September. The living annuitants have the option of making their own investment choices across the current Fund portfolios (Income Fund, Smoothed Bonus Fund, Balanced Fund and Shari'ah Fund). They may exercise this choice twice a year on 31 March and 30 September Life Stage Model The Board of Fund has decided that, from 1 April 2015 onwards, a blend of the Smoothed Bonus Fund and the Income Fund will be used as the pre-retirement portfolio and members who opt for the Life Stage Model will be transitioned accordingly Unclaimed benefits The Board of Fund and Principal Officer with the help of the employer, endeavour to trace former members with outstanding benefits. Unclaimed benefits are held in the Fund s near cash portfolio as defined by the ules of the Fund. This provides capital protection and liquidity as the Fund is in the process of making these payments. The Fund charges an administration fee against unclaimed benefits which is the charge levied by the administrator for administering the member record

16 SCHEDULE E EPOT OF THE BOAD OF FUND (continued) Surplus apportionment allocations The 2001 and 2010 Surplus amounts payable to former members are invested by the Fund are held in the Fund's near cash portfolio as defined by the ules of the Fund. Such 2001 and 2010 surplus amounts that have not yet been paid, were transferred to unclaimed benefits on 31 May 2015 with a value of 75,934. This provides capital protection and liquidity as the Fund is in the process of making these payments. In terms of Fund policy the return on distributable surplus awaiting distribution accrues to the surplus beneficiary concerned. The surplus allocations to active members, deferred pensioners and living annuitants were allocated to their respective accounts in the Fund. The Board of Fund have approved a proposal to allocate the surplus of 4,506,600 as at 30 June 2012, to current members who was still active at the time the surplus was allocated. The balance was transferred to the unclaimed member category eserve accounts These funds are invested in terms of the investment strategy of the Fund in the Income Fund. This provides capital protection and liquidity. 2.2 Management of investments The Board of Fund monitor the management and performance of the investments regularly. The Fund had investment policies with Sanlam Life Insurance Limited, MMI Group Limited and Prescient Life Limited as well as directly held assets managed by Allan Gray Investment Services Limited, Prescient Investment Management Limited, Investec Asset Management Limited, Catalyst Fund Managers SA and Stanlib Asset Management Limited. Collective investment schemes investing in a diverse mix of assets are held with Abax Investments (Pty) Limited for the period ended 30 June The Stone Harbor and PIMCO investments were terminated in June 2015 and were replaced by a new global fixed-income investment managed by Brandywine, accessed through a Stanlib offshore unit trust at a fee of 0.75% p.a. The net returns of these portfolios by the Fund for the period 1 July 2014 to 30 June 2015 were: Asset Manager Analysis (12 months to 30 June 2015) Gross Income % Fees % Net Income % Portfolio A Prescient Income Fund 6.90% 0.17% 6.73% Portfolio B Momentum Smooth Bonus 20.04% 1.59% 18.45% Portfolio C 4.46% 0.30% 4.16% Abax Equity Fund 10.70% 0.33% 10.37% Allan Gray - Domestic Equities 3.29% 0.35% 2.94% Allan Gray Global Equities 9.78% (0.59%) 10.37% Catalyst Listed Property 31.61% 0.51% 31.10% Investec Domestic Equities (14.37%) 0.74% (15.11%) PIMCO Global Corporate Bonds 10.51% 0.54% 9.97% Prescient - Bonds 8.94% 0.31% 8.63% Stone Harbor Global EM Bonds 3.74% 0.63% 3.12% Portfolio D 27four Shari'ah Balanced Fund 5.40% 0.73% 4.67% The fair value of the Fund's investment, administered by the investment administrators at the end of the year was: 30 June June 2014 Abax Investments (Pty) Limited 239,109, ,065,670 Allan Gray Investment South Africa Pty Ltd - Offshore 503,114, ,032,790 Allan Gray Investment South Africa Pty Ltd - SA Equity 676,773, ,419,089 Catalyst Fund Managers SA 106,093,019 80,892,080 Investec Asset Management (Pty) Limited 341,760, ,429,267 MMI Group Limited 1,178,506, ,315,001 PIMCO Europe Limited - 87,408,474 Prescient Investment Management (Pty) Limited 707,532, ,606,540 Prescient Life Limited (27four) 74,842,527 71,435,339 Sanlam Life Insurance Limited 4,228,064 2,596,851 Stanlib Asset Management Limited 129,336,500 - Stone Harbor Investment Partners LP - 79,712,680 Total value of investments managed 3,961,296,795 3,607,913,

17 SCHEDULE E EPOT OF THE BOAD OF FUND (continued) 3. MEMBESHIP 3.1. Members, deferred pensioners, living annuitants and beneficiaries Active Deferred Living Beneficiaries members pensioners Annuitants Number at the beginning of year 3, Opening balance corrections (2) (2) - - Additions Transfers in N/A Withdrawals (179) (2) - N/A etirements (42) (3) - N/A Deaths (2) - (4) (1) Transfers to deferred pensioners (13) Transfers to Living Annuities (50) Number at the end of the year 3, Local at the end of the year 3, Foreign at the end of the year Additions refer to new members of the Fund (excluding transfers in). Transfers in reflect members transferring into the Fund from other funds (see note 6). Transfers out refer to section 14 transfers to other funds. Transfers to deferred pensioners reflect resigning members who have elected to preserve their benefits. Transfers from deferred pensioners reflect members that previously preserved their benefits in the Fund and have now been re-employed by the participating employer. Transfers to Living Annuities reflect those retiring members electing to draw a pension from the Fund in the form of a Living Annuity. Withdrawals, retirements and deaths reflect departures from active members, deferred pensioners or living annuitants, as the case may be, not considered in any other category above. All active members, deferred pensioners and living annuitants are South African citizens or permanent residents. Although we would not necessarily know details of domicile, we have no record of any deferred pensioner who has domicile outside of South Africa. All active members and all living annuitants are domiciled in South Africa Corrections The opening balance correction under the Active members column is as follows: 2 Members that were shown as active members in the prior year had exit dates pertaining to the prior reporting period. The opening balance correction under the Deferred pensioners column is as follows: 2 Members that were shown as active members in the prior year had exit dates pertaining to the prior reporting period. 4. ACTUAIAL VALUATION In accordance with the ules of the Fund, the financial position of the Fund is examined and reported upon by the valuator at intervals not exceeding three years. For good governance, the Board of Fund requires an annual valuation to be performed. The last statutory valuation was performed as at 30 June The actuary recommended that the Processing Error eserve should be set at a level of 0.25% of the market value of assets for Portfolio C and Portfolio D only and that the Data eserve should be set at a level of 0.5% of the market value of total assets.the Board accepted the recommended actions.t The valuation report reflected a surplus of The Board of Fund approved a proposal to allocate this surplus to current members as at 30 June 2012 who were still active at the time the surplus was allocated. An interim valuation was completed as at 30 June 2014 in which was found that the Fund was in a financally sound position, and that no surplus beyond agreed reserve levels had accrued

18 SCHEDULE E EPOT OF THE BOAD OF FUND (continued) 5. SUPLUS APPOTIONMENT The actuary and valuator of the Fund completed the valuation for the period 01 January 2008 to 30 June 2010 in 2011 and in doing so determined that there was a distributable surplus in the Fund as at 30 June The Board of Fund accepted the recommendations of the actuary / valuator that this surplus be distributed to members and former members and determined the distribution method. The surplus was allocated to accumulated credits on 12 April 2012 for all categories of members in respect of whom the Fund held accumulated credits at any time after 31 December 2007 to 30 June Surplus payments are due to former members in respect of whom the Fund held accumulated credits at anytime after 31 December 2007 to 30 June At financial year end distributable surpluses (including allocated investment return on such surpluses) totalling 75,594 (2014 : 99,150) remained to be paid to 31 former members (2014 : 42 ). The Board of Fund have approved a proposal to allocate the surplus, as at 30 June 2012, to the current members. The surplus was apportioned pro rata to the accumulated credits of the members of the Fund (including pensioners and deferred members) as at 30 June HOUSING LOAN FACILITIES The Fund ules do not allow loans for any purpose from the Fund. The Fund ules allow members to pledge a portion of their net withdrawal benefit as security for loans for housing from approved financial institutions. This is subject to the provisions of the Pension Funds Act 24 of 1956 and the provisions of the National Credit Act 34 of The total outstanding borrowing at 30 June 2015 against which pledges had been made in prior years was 5,964,935 (2014 : 4,512,895); the number of members involved was 69 (2014 : 65). efer to note 5 of the financial statements. 7. INVESTMENTS IN PATICIPATING EMPLOYES The Fund holds no investments in the participating employers. 8. SIGNIFICANT MATTES The Board of Fund have agreed to propose an important rule amendment to given affect to a member's right to become a "phased retiree", retiring from the Fund or a date subsequent to retiring from service of the employer. The purpose of ule amendment no 5 is to provide for: Membership is now redefined to being entitled to a benefit from the Fund. The default position with regard to a Member who makes no election when he/she retires from service. The way etirement benefits are described (Part 4) as the ules must now provide for postponement of payment of the benefit. The way the Member s benefit is dealt with during the period of postponement and how costs are recovered. The way the Member s benefit is dealt with during the period of postponement. The moment at which a surety furnished by the Fund for a housing loan lapses as it should lapse when the Member retires from Service and not when the etirement benefit is paid should payment be postponed. ule 2.3(1) is also amended to provide clarity with regard to the day on which the Member s benefit must be switched to the money market portfolio and to do away with the reference to the seven day period. The inclusion of this in the ules poses the risk that the Fund's administration could become non-compliant with its ules if the Administrator fails to comply with this provision. Also any such instance must be reported in the Fund s financial statements. This limitation is therefore removed in order to protect the Fund in this regard and also because the service levels in this regard are already contained in the Fund s service level agreement with the Administrator. The ules are amended to allow the Fund to receive transfers from Preservation Funds. The ules are amended to provide that the default position to apply when a Member makes no election with regard to the payment of his/her withdrawal benefit when he/she leaves service is that the benefit must be preserved in the Fund until the Member does make an election in this regard, and to provide a proper notice period when the Deferred Pensioner wants to transfer his/her benefit. The ules are amended to remove the restrictions with regard to the way additional voluntary contributions may be made to the Fund. To afford a Member more time to make an election with regard to the investment of his/her benefits and contributions before these are invested in the default investment portfolio selected by the Fund

19 SCHEDULE F STATEMENT OF NET ASSETS AND FUNDS As at 30 June 2015 ASSETS Note 30 June June 2014 Non-current assets 3,965,178,662 3,611,796,032 Investments 2 3,961,296,795 3,607,913,781 Investments supporting unclaimed benefits 3 3,881,867 3,882,251 Current assets Cash and money market funds 4 14,494,492 9,051,094 Total assets 3,979,673,154 3,620,847,126 FUNDS AND LIABILITIES Members funds and surplus account 3,391,604,475 3,170,677,181 Members individual accounts 19 3,386,953,138 3,167,437,417 Amounts to be allocated , ,913 Beneficiaries' term annuity policies 16 4,228,063 2,596,851 eserves 547,209, ,733,172 Living annuities ,430, ,207,474 eserve accounts 20 21,779,145 19,525,698 Total funds and reserves 3,938,813,778 3,557,410,353 Non-current liabilities Unclaimed benefits 9 3,881,867 5,162,234 Current liabilities 36,977,509 58,274,539 Transfers payable 7-426,340 Benefits payable 8 36,419,325 57,339,290 Accounts payable , ,909 Total funds and liabilities 3,979,673,154 3,620,847,

20 SCHEDULE G STATEMENT OF CHANGES IN NET ASSETS AND FUNDS Members' funds and surplus account eserve accounts efer note 20 Total Current year 2015 Total Previous year 2014 Notes Contributions received and accrued ,095,873 71,034, ,130, ,913,213 Contributions transferred from reserve 20 52,875,927 (52,875,927) - - accounts Contributions transferred from surplus ,006 (844,006) - - account einsurance proceeds - 3,152,227 3,152,227 8,611,941 Net investment income ,583,419 49,441, ,024, ,600,151 Allocated to unclaimed benefits 9 (242,157) - (242,157) (394,711) Other income , ,243 - Less: einsurance premiums - (10,914,443) (10,914,443) (9,960,746) Administration expenses 14 (88,383) (6,473,500) (6,561,883) (5,817,241) Net income before transfers and 512,946,928 52,520, ,466, ,952,607 benefits Transfers and benefits (291,165,473) 107,101,904 (184,063,569) (191,459,150) Transfer from other funds 6 1,359, ,699, ,058,823 79,734,004 Transfer to other funds (1,670,497) Benefits 8 (292,525,279) (28,597,113) (321,122,392) (269,522,657) Net income after transfers and benefits 221,781, ,621, ,403, ,493,457 Funds and reserves Balance at the beginning of the year 3,170,677, ,733,172 3,557,410,353 2,810,652,383 Prior period adjustments (10,735,487) Transfers between reserve accounts 20 (854,161) 854, Balance at the end of the year 3,391,604, ,209,303 3,938,813,778 3,557,410,

21 SCHEDULE HA NOTES TO THE ANNUAL FINANCIAL STATEMENTS 1. PINCIPAL ACCOUNTING POLICIES The following are the principal accounting policies used by the Fund. These policies have been applied consistently to all years presented, unless otherwise specifically stated PUPOSE AND BASIS OF PEPAATION OF ANNUAL FINANCIAL STATEMENTS The annual financial statements are prepared in accordance with the egulatory eporting equirements for etirement Funds in South Africa, the ules of the Fund and the provisions of the Pension Funds Act. The annual financial statements are prepared on the historical cost and going concern basis, except where specifically indicated otherwise in the accounting policies below: 1.2. FINANCIAL INSTUMENTS Measurement A financial instrument is any contract that gives rise to both a financial asset of one entity and a financial liability or equity instrument of any other entity. A financial asset or a financial liability is recognised when its contractual arrangements become binding and is derecognised when the contractual rights to the cash flows of the instrument expire or when such rights are transferred in a transaction in which substantially all risks and rewards of ownership of the instrument are transferred. Financial instruments carried on the statement of net assets and funds, include cash and bank balances, investments receivables and accounts payable. Financial instruments are recognised on acquisition using trade date accounting, which includes transaction costs. Upon initial recognition financial instruments are designated at fair value through the statement of changes in net assets and funds as the assets or liabilities are managed, evaluated and reported internally on a fair value basis and/or the designation eliminates or significantly reduces an accounting mismatch which would otherwise arise. Subsequent to initial recognition, these instruments are measured as set out below INVESTMENTS Investments are classified at fair value through the statement of changes in net assets and funds and are measured at fair value. Debentures Debentures comprise investments in listed and unlisted debentures. Listed debentures The fair value of listed debentures traded on active liquid markets is based on regulated exchange quoted ruling closing prices at the close of business on the last trading day on or before the statements of net assets and funds date. Bills and bonds Bills and bonds comprise investments in government or provincial administration, local authorities, and corporate bonds. Listed bills and bonds The fair value of listed bills and bonds traded on active liquid markets is based on regulated exchange quoted ruling closing prices at the close of business on the last trading day on or before the statements of net assets and funds date. Equities Equity instruments consist of equities with primary listing on the JSE, equities with secondary listing on the JSE, foreign listed equities and unlisted equities. Equity instruments designated as fair value through the statement of changes in net assets and funds by the fund are initially recognised at fair value on trade date

22 SCHEDULE HA NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued) Listed equities Equity instruments are subsequently measured at fair value and the fair value adjustments are recognised in the statement of changes in net assets and funds. The fair value of equity instruments with standard terms and conditions and traded on active liquid markets is based on regulated exchange quoted ruling closing prices at the close of business on the last trading day on or before the statements of net assets and funds date. Preference shares Listed preference shares The fair value of listed preference shares traded on active liquid markets is based on regulated exchanged quoted ruling closing prices at the close of business on the last trading day on or before the statement of net assets and funds date. Insurance policies Non - linked insurance policies Non - linked insurance policies with insurers are valued on the basis of the policyholder s retrospective contribution to assets (i.e. accumulation at the actual investment return achieved on gross premiums.) Linked or market-related policies If the policy is unitised, the value is equal to the market value of the underlying units. Other linked or market-related policies are valued at the market value of the underlying assets for each policy, in line with the insurer s valuation practices. Beneficiaries' term annuity policies Beneficiaries' term annuity policies purchased in the name of the Fund with the insurer are disclosed as an asset of the Fund and included under investments. The corresponding liabilities are included under funds and reserves. These term annuity policies are valued as equivalent to the financial soundness valuation as certified by the insurer. Collective investment scheme Investments in collective investment schemes are valued at fair value which is the quoted unit values, as derived by the collective investment scheme manager with reference to the rules of each particular collective investment scheme, multiplied by the number of units ACCOUNTS ECEIVABLE Accounts receivable are financial assets measured initially at fair value and subsequently measured at amortised cost using the effective interest rate method, less any allowance for impairment CASH AND CASH EQUIVALENTS Cash and equivalents comprise cash in hand, deposits held at call with banks, and other short-term highly liquid investments with original maturities of three months or less. Cash and cash equivalents are measured at fair value ACCOUNTS PAYABLE Accounts payable are financial liabilities measured initially at fair value, net of transaction costs that are directly attributable to the liability and subsequently measured at amortised cost using the effective interest rate method ESEVES eserve accounts comprise particular amounts of designated income and expenses as set out in the ules of the Fund and are recognised in the year in which such income and expenses accrue to the Fund

23 SCHEDULE HA NOTES TO THE ANNUAL FINANCIAL STATEMENTS (continued) 1.4. IMPAIMENT Financial assets carried at amortised cost The Fund assesses at each statement of net assets and funds date whether or not there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that have occurred after the initial recognition of the asset (a loss event) and that loss event has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. The Fund first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant. If the Fund determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. If there is objective evidence that an impairment loss has been incurred on loans and receivables or held to maturity investments carried at amortised cost, the amount of the loss is measured as the difference between the asset s carrying amount and the present value of the estimated future cash flow (excluding future credit losses that have been incurred) discounted at the financial asset s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the statement of changes in net assets and funds. If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under contract. As a practical expedient, the Fund may measure impairment on the basis of an instrument s fair value using an observable market price. If, in a subsequent year, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as improved credit rating), the previously recognised impairment loss is reversed in the statement of changes in net assets and funds. Impairment of non-financial assets Assets that have an indefinite useful life, for example land, are not subject to amortization and are tested annually for impairment. Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset s net carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset s fair value less costs to sell and value in use. For this purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows. Impairment of loans and receivables A provision for impairment of loans and receivables is established when there is objective evidence that the fund will not be able to collect all amounts due according to their original terms POVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS Provisions Provisions are recognised when the Fund has a present legal or constructive obligation as a result of past events, for which it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate of the amount of the obligation can be made. Where the effect of discounting to present value is material, provisions are adjusted to reflect the time value of money. Contingent liabilities A contingent liability is not recognised in the statement of net assets and funds, but disclosed in the notes to the financial statements, unless the possibility of an outflow of resources embodying economic benefits is remote. Contingent assets A contingent asset is not recognised in the statement of net assets and funds, but disclosed in the notes to the financial statements when an inflow of economic benefits is probable