Westpac Active Series (formerly known as the Westpac Multi-Sector Unit Trusts)

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3 Westpac Active Series (formerly known as the Westpac Multi-Sector Unit Trusts) PROSPECTUS Number 16 In relation to the Westpac Active Conservative Trust (formerly known as the Westpac Income Plus Trust), the Westpac Active Balanced Trust (formerly known as the Westpac Diversified Trust) and the Westpac Active Growth Trust (formerly known as the Westpac Growth Trust) 16 September 2011 (as amended on 3 February 2012)

4 Westpac Active Series (formerly known as the Westpac Multi-Sector Unit Trusts) Prospectus Number 16 This prospectus is issued under the Securities Act 1978 and is dated 16 September 2011 (as amended on 3 February 2012). This prospectus is prepared in accordance with Schedule 4 of the Securities Regulations Listing of the Securities is not being sought on any registered exchange. CONTENTS: (following the order of Schedule 4 of the Securities Regulations 2009) Page 1. Description of Unit Trust 2 2. Managers and Promoters Registrar, Custodian, Auditors, Advisers, and Experts 5 4. Independence of Unit Trustee and any Custodians Unit Trustee Description of Unit Trust and its Development 6 7. Unit Holder Liability Summary of Financial Statements Minimum Subscription Guarantors Acquisitions of Business or Equity Securities Options and Units Paid up Otherwise than in Cash Interested Persons Material Contracts Pending Proceedings Issue Expenses Other Terms of Offer and Units Financial Statements and Auditor s Report 565 and Appendix Places of Inspection of Documents Other Material Matters Manager s Statement Unit Trustee s Statement 5960 Auditor's Report

5 Capitalised terms not otherwise defined in this prospectus shall have the meaning given to them in the Trust Deed (as defined below). Any New Zealand legislation referred to in this prospectus may be viewed online at 1. Description of Unit Trust BT Funds Management (NZ) Limited offers a range of unit trusts known as the Westpac Active Series. The individual names of the unit trusts (the Trusts ) covered by this prospectus are: Westpac Active Conservative Trust (formerly known as the Westpac Income Plus Trust) Westpac Active Balanced Trust (formerly known as the Westpac Diversified Trust) Westpac Active Growth Trust (formerly known as the Westpac Growth Trust). The Trusts were formerly known as Westpac Multi-Sector Unit Trusts. The Trusts are governed by a consolidated trust deed (the Trust Deed ) dated 13 March As at the date this prospectus was amended, tthe Trust Deed also governs: two further unit trusts offered within the Westpac Active Series, the Westpac Active Income Strategies Trust and the Westpac Active Moderate Trust and units in those trusts are offered under a separate prospectus; and the Westpac Cash Plus Trust and units in that trust are offered under a separate prospectusthe Westpac Cash Plus Trust Prospectus. An investment statement has been prepared in relation to the offer of Units in the Trusts and other unit trusts comprising the Westpac Active Series. The Westpac Active ConservativeIncome Plus Trust and Westpac Active BalancedDiversified Trust were established on 31 July The Westpac Active Growth Trust was established on 30 November The Trusts were all established in Wellington, New Zealand. The Trusts will terminate on the earlier of: a) the date appointed by the Manager by notice in writing given to the Trustee; or b) the date on which the Trust is otherwise terminated under the Trust Deed or by operation of law. Each Trust consists of Authorised Investments and Assets for the time being held by, or for, the Trustee on behalf of that Trust. The beneficial interest in a Trust is divided into Units. Units in each of the Trusts are on offer under this prospectus. Each Unit in a Trust gives the holder an equal interest in that Trust. A Unit in a Trust does not confer any interest in a particular part of the Trust or a particular asset of the Trust. No Unitholder of a Trust is entitled to require the transfer to the Unitholder of any assets of the Trust. Further information on the nature of the Units in a Trust is set out in the Trust Deed. There is no maximum number or amount of Units in any of the Trusts. 2

6 The minimum initial lump sum investment in a Trust is normally $5,000. Subsequent lump sum investments for each Trust must be at least $500. If, however, a Unitholder makes regular investments to a Trust (payable at such frequencies as the Manager may determine from time to time and set out in the investment statement) the minimum initial and subsequent lump sum investment thresholds do not apply in respect of that Trust and instead an aggregate annual investment of at least $1,200 applies. If a Unitholder fails to make a regular investment payment, no Units will be issued to the Unitholder in respect of that non-payment. The price per Unit of a Trust is the Allocation Price applicable as at the date of issue. The Allocation Price for a Trust at any particular time is the net value of the assets (less liabilities (excluding any PIE tax liability, where the Manager considers it appropriate to do so) and accrued expenses) of the relevant Trust at the time divided by the number of Units then on issue, and may include an allowance for the expenses involved (such as brokerage) in purchasing assets. The Allocation Price applicable to any day may be obtained, on request, from the Manager (see section for further details). Costs incurred in the issue of Units of a Trust are reflected in the Allocation Price. Similarly, the Release Price for Units in a Trust (which is the price per Unit applicable to the sale of Units) may include an allowance for the expenses involved in disposing of assets (see section for further details) of the relevant Trust. Further details on fees and charges are set out in section These allowances, if any, are retained within the applicable Trust until payment is required. The allowances are not retained by the Manager. An Initial Service Fee is deducted from each lump sum investment and each regular investment into a Trust with the balance used to issue Units at the Allocation Price. Full details of fees involved can be found in section of this prospectus. The Initial Service Fee does not apply to regular investments. The assets of any unit trust established under the Trust Deed may not be used to satisfy the liabilities of any other unit trust. This offer is open only to persons who are in New Zealand. A Unitholder must notify the Manager if the Unitholder changes address or leaves New Zealand permanently, or if the Unitholder's tax residency is not, or is no longer, in New Zealand. Each Trust became a portfolio investment entity ( PIE ) on 1 October While a Trust is operating as a PIE there are restrictions on certain Unitholders holding more than 20% of the Units of a Trust, and the Trust Deed contains a power to adjust distribution entitlements for Unitholders or a Unitholder s Units to reflect tax paid by a Trust on certain Unitholders share of Trust income, and various Unit repurchase rights where a Trust s eligibility for PIE status is threatened. More information on taxation and PIEs is set out in section 17 of this prospectus. Where a Unitholder invests through an investor-directed portfolio service or nominee or custodial service which is a proxy for an investor in a PIE ( PIE Investor Proxy ), the PIE Investor Proxy will be responsible for the payment of tax, and the attribution of income, losses, tax credits and refunds for tax purposes, on the Unitholder s behalf. The Manager and the Trustee shall not be liable for the attribution of income, losses or refunds nor the payment of tax in respect of Units held by Unitholders through PIE Investor Proxies. 2. Managers and Promoters 3

7 The Manager and issuer of the Trusts is BT Funds Management (NZ) Limited. The directors of the Manager, as at the date of this prospectus was amended, are: Ian Nicholas New of Wellington, New Zealand George Frazis of Auckland, New Zealand Mark John Smith of Sydney, Australia Richard Warren Jamieson of Sydney, Australia David Alexander McLean of Auckland, New Zealand Leigh James Bartlett of Auckland, New Zealand Leigh James Bartlett was appointed a director of the Manager on 1 November The directors of the manager may change from time to time without notice to investors. A list of directors is available online at The registered office of the Manager is Westpac on Takutai Square, 16 Takutai Square, Auckland, 1010, New Zealand. The contact address of the Manager and each director of the Manager is Westpac on Takutai Square, 53 Galway St, Auckland 1010, New Zealand. Phone: The ultimate holding company of the Manager is Westpac Banking Corporation, ABN ( Westpac ), which is incorporated in Australia. As at the date of the memorandum of amendments to this prospectus, Tthe Manager also manages the following unit trusts: Westpac Active Income Strategies Trust, Westpac Active Moderate Trust, Westpac Term PIE Fund, Westpac Cash Plus Trust, Westpac Wholesale Multi Manager International Share Trust, Westpac Wholesale International Fixed Interest Trust, Westpac NZ Bonds 2002 Wholesale Trust, Westpac NZ Shares 2002 Wholesale Trust, Westpac Home Loan Trust, BT Private Selection, BT Institutional Alternative Investment Fund, BT Institutional Dividend Share Fund, BT Institutional Focus Share Fund, BT Institutional Strategy Share Fund, Westpac Wholesale Alternative Investment Trust, Westpac Wholesale New Zealand Diversified Bond Trust and Westpac Wholesale Australasian Diversified Share Trust. The Manager is responsible under the Trust Deed for the management of the Trusts. Promoters The Manager is a Promoter of the Trusts. Westpac New Zealand Limited ( Westpac NZ ) and its directors are also Promoters of the Trust with the exception of George Frazis who is also a director of the Manager. The directors of Westpac NZ, as at the date of this prospectus, are: Philip Matthew Coffey of Sydney, Australia George Frazis of Auckland, New Zealand Christopher John David Moller of Lower Hutt, New Zealand Janice Amelia Dawson of Auckland, New Zealand. Ralph Graham Waters of Sydney, Australia Peter David Wilson of Wellington, New Zealand 4

8 The directors of Westpac NZ may change from time to time without notice to investors. A list of directors of Westpac NZ is available online at The registered office of Westpac NZ is Westpac on Takutai Square, 16 Takutai Square, Auckland, 1010, New Zealand. The contact address of Westpac NZ and each director of Westpac NZ is Westpac on Takutai Square, 53 Galway Street, Auckland 1010, New Zealand. Phone: Exposure to Authorised Investments and Assets may be gained, where appropriate, by investing in units in other funds ( Other Funds ). Investment management functions for any such Other Funds may be provided by investment managers of those Other Funds and such investment managers may include related companies of the Manager. The underlying investment managers are regularly reviewed and monitored and may change without notice to Investors. Details of specialist underlying investment managers can be obtained by calling the Manager or by visiting The Manager has also contracted some of the administration functions of the Trusts to The Hongkong and Shanghai Banking Corporation Limited, Trustees Executors Limited and MMc Limited and they are each therefore classed, for the purposes of the Securities Regulations 2009, as an Administration Manager for the Trusts. The Administration Managers will be regularly monitored and reviewed. Accordingly, they may be removed or added without prior notice to investors. As a result, the identity and number of Administration Managers for a Trust may vary from time to time. Details of Administration Managers can be obtained by calling the Manager None of the Manager, Administration Managers or Promoters or any director of them have during the 5 years prior to registration of this prospectus been: a) adjudged bankrupt or insolvent; or b) convicted of any crime involving dishonesty; or c) prohibited from acting as a director of a company; or d) placed in statutory management, voluntary administration, liquidation or receivership. 3. Registrars, Custodians, Auditors, Advisers and Experts Under the Trust Deed, the Registrar of the Trusts is the Manager. The Manager has appointed Trustees Executors Limited to provide unit registry services. The Auditors of the Trusts are PricewaterhouseCoopers. The Solicitors involved in the preparation of this prospectus are Minter Ellison Rudd Watts. Assets of the Trusts may be registered in the name of the Custodian, Guardian Nominees Limited, a subsidiary of The New Zealand Guardian Trust Company Limited. 4. Independence of Unit Trustee and any Custodians The Trustee and the Custodian are independent of the Manager, Promoters and Administration Managers. 5

9 5. Unit Trustee The Trustee of the Trusts is: The New Zealand Guardian Trust Company Limited Level 7, Vero Centre 48 Shortland Street Auckland 1010 PO Box 1934 Auckland 1140 The directors of the Trustee are: John James Anthony Botica of Wellington, New Zealand John Atkin of Sydney, Australia Michael Privett Reed of Auckland, New Zealand John Richard Avery of Auckland, New Zealand Christopher Robert Darlow of Auckland, New Zealand Timothy James Shaw of Auckland, New Zealand The contact address for each of the directors is the address of the Trustee. These directors may change from time to time without notice to investors. A list of directors of the Trustee is available online at The New Zealand Guardian Trust Company Limited was incorporated in New Zealand under the Companies Act 1955 on 7 September It is also governed by the provisions of The New Zealand Guardian Trust Company Act On 23 April 1997 it was re-registered under the Companies Act The registration number is Its trustee origins date back to The ultimate holding company of the Trustee is The Trust Company Limited (ABN ) a trustee company incorporated in Australia and listed on the Australian Securities Exchange ( ASX ). Under the Trust Deed, the Trustee is indemnified out of each Trust s funds for any expense or liability incurred in prosecuting or defending any action or suit in respect of the provisions of the Trust Deed or the Conditions of Establishment of any Trust or the terms of any prospectus issued, and liability arising from authorised investments, or any loss, liability or expense arising where the Trust or any investment in which the Trust invests is not or ceases to be a PIE, and have no liability for actions or omissions of the Manager or the Trustee, except to the extent that any such expense or liability is attributable to the Trustee s own wilful neglect or bad faith. Neither the Trustee, the Trustee s nominee companies nor any member of the Trustee s group of companies nor any other person guarantees the repayment of the Units, the payment of any earnings on the Units, the repayment of capital or the performance or returns of any of the Trusts. 6. Description of Unit Trust and its Development The Trusts are governed by the consolidated Trust Deed dated 13 March Summary of Principal Terms of Trust Deed, Material Features of the Trusts and the Conditions of Establishment Set out below is a summary of the current principal terms of the Trust Deed, the Conditions of Establishment and the material features of the Trusts. 6

10 6.1.1 Switching A Unitholder may at any time apply to switch Units between any unit trust offered within the Westpac Active Seriesvary the allocation of investments held in any of the Trusts by switching Units from one Trust to another. There is currently no fee payable when switching to another Trust. The number of Units switched must normally be at least 5001,000, or $5001,000 in value, whichever is less. Minimum holding requirements must be satisfied in both the unit Ttrust switched into and a unit Ttrust from which a switch has been made (see section (3)(iv)). Requests to switch Units should be in writing. A switch form is available on request from the Manager. The Manager reserves the right to refuse a request to switch Units. A switch is treated as a redemption of Units in the relevant unit trust offered within the Westpac Active Series one Trust and an immediate issue of Units in another unit trust offered within the Westpac Active Series, and accordingly may be subject to such restrictions (as referred to in this prospectus or the Trust Deed) associated with the issue or withdrawal of Units. The Manager may refuse a switch request where necessary to preserve a Trust s eligibility for PIE status. The tax related consequences of switching Units are set out in further detail in section Unit Prices Unit prices are normally calculated on each Business Day but provision is made for the Manager to value more frequently if required. Unit prices applicable to a Business Day will, in normal circumstances, apply to applications or release requests received from 4pm (or such later time as the Manager may in its discretion accept)5pm on the previous Business Day to 4pm (or such later time as the Manager may in its discretion accept) 5pm on the relevant Business Day and will be rounded down to four decimal places Allocation Prices The Allocation Price for Units in a Trust is obtained by aggregating the current market value of the Trust s assets and deducting all liabilities (excluding any PIE tax liability, where the Manager considers it appropriate to do so), provisions, fees and expenses, and dividing the result by the number of Units on issue for that Trust to determine the mid-price for that Trust. For the purpose of calculating the Allocation Price liabilities do not include any amounts resulting from treating Units as liabilities. An allowance may then be added representing all, or a proportion of, the estimated average acquisition costs for the investments of that Trust (such as brokerage and any taxes). This allowance, which is currently nil for all of the Trusts, is determined by the Manager and is reviewed regularly and may therefore vary from time to time. Further information about Allocation Prices is set out in the Trust Deed Release Prices The Release Price for Units in a Trust is obtained by aggregating the current market value of the Trust s assets and deducting all liabilities (excluding any PIE tax liability, where the Manager considers it appropriate to do so), provisions, fees and expenses, and dividing the result by the number of Units on issue for that Trust to determine the 7

11 mid-price for that Trust. For the purpose of calculating the Release Price liabilities do not include any amounts resulting from treating Units as liabilities. This mid-price may then be reduced by an allowance representing all, or a proportion of, the estimated average disposal costs for the investments of that Trust (such as brokerage and any taxes). This allowance, which is currently nil for all of the Trusts, is determined by the Manager and is reviewed regularly and may therefore vary from time to time. Further information about Release Prices is set out in the Trust Deed Fees and Charges Fees and charges are payable to the Manager and to the Trustee and may be varied from time to time. Fees and charges currently payable to the Manager are: An Initial Service Fee of 0.50% of the investment amount $100 is deducted by the Manager from each lump sum investment made by a Unitholder. An Initial Service Fee of 0.50% of the investment amountno Initial Service Fee will also be charged in respect of each regular investments. A regular investment means any payment which is to be made by a Unitholder to a Trust at regular intervals (at such frequencies as the Manager may determine from time to time and set out in the investment statement), by way of a direct debit or automatic payment authority. The Manager may waive or reduce the amount of any Initial Service Fee payable at its discretion. An annual administration fee ( Administration Fee ) may be charged by the Manager. No such fee is currently charged.is currently calculated at the rate of $1.95 per week (plus any GST applicable) and deducted from each Unitholder s Unit holding by redeeming Units at the end of each month (or at other times that the Manager and Trustee agree). The Administration Fee may be increased annually as at 1 July in line with increases in the Consumer Price Index to the previous 31 March. The Administration Fee will be waived in respect of those Unitholders who are making regular investments to the Trusts by way of a direct debit or automatic payment authority while the total value of their Unit holdings is less than $5,000, unless a payment is dishonoured, or payments are suspended or discontinued or the Unitholder redeems any of their Unit holding. The Administration Fee does not apply to any Unitholder where the Unit holding commenced prior to 1 April 2000 and the investor has continued to be a Unitholder since that date. An annual management fee ( Management Fee ) (plus any GST applicable) is calculated daily and payable from each Trust monthly in arrears as follows: Trust Westpac Active Conservative Trust Westpac Active Balanced Trust Westpac Income Plus Trust Westpac Diversified Trust Westpac Active Growth Trust Management Fee (excluding GST) 1.10% p.a. of Gross Fund Value 1.40% p.a. of Gross Fund Value 1.55% p.a. of Gross Fund Value 8

12 Each Trust offers an investment incentive scheme ( Investment Incentive Scheme ), which has the potential to reduce Management Fees and to produce significant benefits for larger investments. Details are shown under section The total aggregate annual Administration Fee and Management Fee payable to the Manager in respect of a Trust (exclusive of GST) is subject to a maximum of 2.5% per annum of the Gross Fund Value of the relevant Trust. Any applicable GST is payable in addition. The provisions of the Trust Deed entitle the Manager to receive and retain for its own benefit such part of the estimated average acquisition or disposal costs, if any, which are not actually used in the acquisition or disposal of assets. The Manager currently does not retain such part of the estimated average acquisition or disposal costs, if any, which are not actually used, in respect to those Units issued or redeemed by the Trusts. A Release Fee may be charged by the Manager in respect of the repurchase or redemption of Units. No such fee is currently charged. A Switching Fee may be charged by the Manager in respect of switching Units, as set out under section No such fee is currently charged. Investment management functions for Other Funds will be provided by investment managers which may include the Manager and its related entities. The Manager s current policy is to make certain adjustments to ensure that investors do not bear the cost of management fees charged by the investment managers in the Other Funds. In addition, where the Manager or a related entity of the Manager is the investment manager or manager of such Other Funds, the Manager s current policy is to achieve the above by means of adjustments referred to under section 6.2. However, Other Funds may charge fees and expenses (such as performance fees and transaction costs) which will, if applicable, affect the value of such Other Funds and consequently affect returns to investors. The Trustee has the power under the Trust Deed to charge an annual fee to each Trust to a maximum of 0.50% (plus any applicable GST) per annum of the Gross Fund Value of each Trust. The Trustee fee is currently up to 0.075% (plus any applicable GST) per annum of the Gross Fund Value of each Trust. The Trustee fee is currently paid by the Manager and is not deducted from the Trusts. The Trustee may charge its fee to the relevant Trust if the Manager does not pay its fee. Fees payable to the Trustee are: An annual fee (plus any applicable GST) is calculated daily and payable from each Trust to the Trustee monthly in arrears as follows: Trust Westpac Income Plus Trust Westpac Diversified Trust Westpac Growth Trust Trustee Fee (excluding GST) 0.075% p.a. of the Gross Fund Value The Trustee fee (exclusive of GST) is subject to a maximum of 0.5% per annum of the Gross Fund Value of each Trust. 9

13 When the aggregate Gross Fund Value of all the Trusts and certain other trusts managed by the Manager reach a certain level, the Trustee fee may be reduced. Upon termination of any Trust, a fee may be payable to the Trustee. Under clause 30.2 of the Trust Deed, the maximum fee payable to the Trustee on termination is 0.2% of the Gross Fund Value of the relevant Trust at the date of termination (plus any applicable GST). As at the date of this prospectus the Manager does not intend to charge a termination fee. The Manager and Trustee are entitled, and reserve the right, to be reimbursed from the Trusts for all expenses, costs or liabilities incurred by them acting as Manager and Trustee respectively. Generally the amount of these expenses, costs or liabilities cannot be ascertained until they are incurred and will vary from time to time. These reimbursable expenses may include, but are not limited to: costs and expenses incurred by the Trustee and Manager, including fees charged by auditors, solicitors, valuers, advisers and other service providers including those related to any amendments to the Trust Deed and any offer documents; interest on any borrowing; GST and any other taxes; costs involved in buying, selling, registering, other dealings with, and custody of assets; costs involved in holding meetings for Unitholders; banking service charges, including any payable to Westpac NZ or Westpac; and costs for administration services, including Unit registry, asset registry, Unit pricing, and investment accounting costs, and costs associated with the provision of certain financial information relating to the Trusts. These costs, together with Manager and Trustee fees, are taken into account when the Trusts net income is calculated and will affect returns to Unitholders. The Manager may from time to time choose in its absolute discretion not to seek reimbursement for any such of the above fees and expenses, costs or liabilities from time to time. In its discretion, the Manager has currently elected to pay from the Management Fee it receives all the limit the total of the following expenses, costs and liabilities (where they are incurred by the Manager on a normal day-to-day basis in relation to the operation and administration of the Trusts.) recovered from each Trust to 0.15% per annum of the Gross Fund Value of that Trust Any other expenses, costs or liabilities properly and reasonably incurred by the Manager or the Trustee in carrying out their respective duties (including but not limited to expenses, costs or liabilities in relation to taxes in relation to a Trust, any legal or regulatory compliance in relation to a Trust, litigation or other claim in relation to a Trust, any variation of a Trust or any Unitholder meeting of a Trust) will continue to be recovered directly from the Trusts.: costs and expenses incurred by the Trustee and the Manager in carrying out their respective duties, including the fees charged by solicitors, valuers and other advisers; bank account charges applicable to the Trusts; and costs for administration services, including Unit registry, asset registry, Unit pricing and investment accounting costs and costs associated with the provision of certain financial information related to the Trusts. Where such expenses are not recovered from the Trusts, they are borne by the Manager out of its own money To the extent any expenses, costs or liabilities (including Trustee fees) are not met by the Manager and are charged to or reimbursed directly from the Trusts, they will be taken into account when the Trusts net income is calculated and will affect returns to Unitholders. All expenses, costs or liabilities paid by the Trusts are shown in the Trusts financial statements. 10

14 The Manager may, at its discretion, pay amounts (including non-monetary benefits) from the fees it receives, to investment advisers or other persons approved by the Manager. These payments are not an additional cost to Unitholders. Investment advisers are in all respects acting as a Unitholder s agent, and not as agent for the Manager or the Trustee. Neither the Manager nor the Trustee is responsible for the advice given by these advisers. Fees and charges may be varied at any time by agreement between the Manager and the Trustee, subject to limits imposed by the Conditions of Establishment and the Trust Deed. The Initial Service Fee and Release Fee are unlimited Investment Incentive Scheme The Manager may, at its discretion offer an investment incentive scheme, effectively reducing the Management Fee referred to in section by the issue of bonus Units (the Investment Incentive Scheme ). The Manager does not currently offer an Investment Incentive Scheme. Investment Incentive Scheme applicable to Unitholders whose current Unit holding commenced prior to 1 April 2000 and who have held Units continuously since that date The Investment Incentive Scheme in respect of these Unitholders applies to all investments over $25,000. It effectively reduces the Management Fee referred to in section 6.1.5, by way of bonus issue of units, to the levels shown in the following table (plus any applicable GST): Management Fee charged after application of the Investment Incentive Scheme On the first $25,000 On funds between $25,000 and $100,000 On funds in excess of $100, % p.a. of Gross Fund Value of the relevant Trust(s) 1.575% p.a. of Gross Fund Value of the relevant Trust(s) 0.875% p.a. of Gross Fund Value of the relevant Trust(s) Investment Incentive Scheme applicable to Unitholders whose current Unit holding commenced on or after 1 April 2000 The Investment Incentive Scheme in respect of these Unitholders applies to all investments over $100,000. It effectively reduces the Management Fee to the levels shown in the following table (plus any applicable GST): Management Fee charged after application of the Investment Incentive Scheme On the first $100,000 On funds between $100,000 and $500,000 On funds in excess of $500, % p.a. of Gross Fund Value of the relevant Trust(s) 1.50% p.a. of Gross Fund Value of the relevant Trust(s) 1.25% p.a. of Gross Fund Value of the relevant Trust(s) For the purpose of the Investment Incentive Scheme the levels of investment means all investments held in the Trusts in that Unitholder s sole name, and, in the case of joint Unitholders, all investments held in the Trusts in the names of those joint Unitholders together. Where Unitholders have both individual and joint investments, those investments will be treated separately for the purposes of calculating the levels of investment for the Investment Incentive Scheme. 11

15 A Unitholder s investment in a Trust is determined by dividing the Gross Fund Value of the Trust by the number of Units on issue and multiplying the result by the number of Units held by that Unitholder. The levels of investment will fluctuate daily with the Gross Fund Value of the Trusts in which the investment is held. The Manager reserves the right to amend or alter the conditions of the Investment Incentive Scheme Withdrawing Units In order to withdraw Units, a written release request should be completed and delivered to the Manager. This requests the Manager to release the Units owned by the Unitholder. A request shall be irrevocable once given, unless the Manager and the Trustee agree otherwise. Withdrawals will be effected by direct redemption (unless the Unitholder requests a Manager repurchase). Under direct redemption the Trust redeems a Unitholder s Units directly and under a Manager repurchase the Manager buys the Units from the Unitholder. For each Trust the Manager will ascertain a Unitholder s withdrawal amountpayment by multiplying the number of Units to be released by the Release Price determined as at the Release Date. The Release Date is the date a Release Request is received by the Manager (unless that request is not received on a Business Day in which case the Release Date will be the next Business Day following receipt). The Release Price shall be calculated as set out in section A Unitholder may withdraw an investment in a Trust in whole or part. The minimum withdrawal amount is normally $5001,000 or 5001,000 Units, whichever is the lesser value, and provided the minimum holding requirements of that Trust are met. Regular withdrawals of a minimum of $1,200 per year (payable at such frequencies as the Manager may determine from time to time and set out in the investment statement) are also permitted, provided the minimum holding requirements of that Trust are met. On the date of each regular withdrawal for a Unitholder, that Unitholder shall be deemed to have given, and the Manager shall be deemed to have received, a Release Request. The minimum holding for all Trusts is normally 5,000 Units or $5,000, whichever is the lesser value. The minimum holding threshold does not apply to a Unitholder in a Trust who is making regular investments by direct debit or automatic payment to that Trust. If a Release Request is for a number of Units that would leave the Unitholder with less than the applicable minimum holding then the Release Request may be deemed to be for the entire holding in that Trust. Following receipt of a Release Request, the Manager shall request that the Trustee redeem Units (or repurchase Units itself, if requested by the Unitholder) and pay the Release Price to the Unitholder within 30 Business Days of the relevant Release Date. Notwithstanding anything contained elsewhere in this prospectus where: (a) (b) (c) a holding of a Unitholder in a Trust is less than the minimum holding set out in section ; the Manager gives to that Unitholder thirty days notice in writing that the Manager intends at the expiration of that period to require repurchase or redemption of all of the Units in that Trust to which that Unitholder is entitled; and at the expiration of that period the Unitholder holds less than the minimum holding set out in section , 12

16 the Manager shall be entitled within seven days from the expiration of that period to repurchase or cause redemption of that Unitholder's holding in that Trust at the expiration of that period as if a Release Request had then been received from the Unitholder. The Trust Deed allows the Manager to suspend all Release Requests tendered by Unitholders if the Manager determines in good faith that it is desirable for the protection of the Trust Fund or in the interests of Unitholders. The maximum suspension period is as specified in the Conditions of Establishment (currently 30 days) or such further unlimited period as determined by the Manager with the consent of the Trustee for all the Trusts. Any Release Request received during that suspension period will be deemed received immediately following the expiry of the suspension period. If a single Unitholder s Release Request is for 5% or more of the total number of Units on issue of a Trust then the Manager may spread the repurchase or redemption of those Units over a period not exceeding five Business Days in accordance with the Trust Deed. If the Release Requests from multiple Unitholders over a period of five consecutive Business Days is for more than 10% of the total number of Units on issue of a Trust, then the Manager with the approval of the Trustee may delay the repurchase or redemption of those Units in excess of 10% of the total on issue for a period not exceeding 30 Business Days in accordance with the Trust Deed. Further information on the redemption or repurchase of Units is set out in the Trust Deed. The Manager may make adjustments to a Unitholder s Units or deductions from any distributions or withdrawal proceeds of an amount equal to any tax paid by the Trust on the income attributed to the Unitholder, and may (and intends to) redeem or repurchase Units when necessary to preserve a Trust s PIE status. The Manager may refuse a Release Request where necessary to preserve a Trust s eligibility for PIE status. The tax related consequences of withdrawing Units are set out in further detail in section Transferring Unit entitlement Unitholders may apply to transfer their Units in a Trust to another person at any time. The form of transfer is available from the Manager. On completion, the transfer form must be returned to the Manager for verification and processing. A partial transfer may not be processed where the resulting balance of Units (held by the transferor or the transferee) is less than the minimum holding for that Trust. The minimum holding threshold does not apply to a Unitholder in a Trust who is making regular investments by direct debit or automatic payment into that Trust. No transfer shall be made to a person known to the Manager to be a person prohibited by law from holding Units. The Manager or the Trustee may refuse to register a transfer when duties or taxes, or other fees or charges relating to the transferor remain unpaid, or where the Trust is a PIE and registration of the transfer would cause that Trust to breach the requirements of the PIE definition in the Income Tax Act Under the Trust Deed, the Manager may elect to effect a transfer request either by registering a transfer of Units from the transferor to the transferee, or by cancelling (without payment to the transferor) the number of Units sought to be transferred (together with any Units otherwise cancelled within the terms of the Trust Deed (including for tax reasons)) and issuing the same number of Units as are cancelled to the transferee (less any uunits cancelled within the terms of the Trust Deed (including for tax reasons)). The register of each Trust will be closed to transfers up to 14 days prior to the determination of, and distribution of, capital or income for that Trust. 13

17 The tax related consequences of a transfer of Units are set out in further detail in section 17. Further information on the transfer of Units, and the transmission of Units upon the death of a Unitholder, are set out in the Trust Deed Duties and powers of Trustee The Trust Deed, the Conditions of Establishment (see section below) and this prospectus set out the terms of the investment and the rights and obligations of the Unitholders, the Trustee and the Manager. Under the Trust Deed the Trustee: receives and holds all the cash and investments of each Trust; receives and distributes the income of each Trust; oversees compliance by the Manager (including the administration of the Trusts); and may delegate certain activities and actions (including to the Manager) in accordance with the terms of the Trust Deed. Further information on the duties and powers of the Trustee are set out in the Trust Deed Borrowing powers The Trust Deed permits, and on request of the Manager requires, the Trustee to borrow and to make other funding arrangements on behalf of each Trust, provided the total of such liabilities does not exceed 50% of the Net Fund Value of the Trust at the date of making such arrangements. The Manager may, but does not currently intend to,have any present intention of borrowing for any Trust, other than for the purpose of effecting settlements. It is therefore possible that from time to time a Trust may, for the purposes of effecting such settlements, become indebted to another person (including a related company of the Manager). The Trusts may use financial instruments known as derivatives (see section 6.4). It is possible (although not intended) that the use of derivatives may result in the Trusts becoming geared. Further information on the borrowing powers in relation to the Trusts are set out in the Trust Deed Power to amend Trust Deed The Trustee and the Manager may amend the provisions of the Trust Deed or the Conditions of Establishment if: in the opinion of the Trustee, the amendment is made to correct a manifest error or is of a formal or technical nature; in the opinion of the Trustee, the amendment is necessary or desirable for the more convenient, economical or advantageous working management or administration of the Trusts or for safeguarding or enhancing the interests of the Trusts or Unitholders and the amendment is not or is not likely to become prejudicial to the interests of the Unitholders generally; the amendment is authorised by an Extraordinary Resolution of Unitholders; or the amendment is required by or in consequence of any amendment to the Unit Trusts Act

18 The Conditions of Establishment will be varied if the Manager notifies the relevant Unitholders of the variations and either Unitholders holding not less than 10% of the number of Units on issue who object to the amendment call a meeting of Unitholders at which the proposal is not rejected by Extraordinary Resolution (or they fail to call such a meeting altogether) or Unitholders who oppose the proposal are given the opportunity to withdraw their Units at the then current Release Price. Further information on the power to amend the Trust Deed and/or Conditions of Establishment are set out in the Trust Deed Appointment and removal of the Trustee The Trustee may retire upon giving ninety (90) days notice in writing to the Manager, subject to the appointment of a new trustee and the transfer to such new trustee of all authorised investments and all other property or assets of the Trusts funds. The Trustee may be removed from office by the High Court on the application of the Manager or the Minister responsible for administering the Unit Trusts Act The power of appointing a new trustee is vested in the Manager but if the Manager fails or refuses to exercise this power, a new trustee may be appointed by an Extraordinary Resolution of Unitholders. The Manager has no unilateral power to remove the Trustee. A new trustee must be a trustee corporation within the meaning of the Trustee Act 1956 or a company or bank approved by the Minister responsible for administration of the Unit Trusts Act When the Securities Trustees and Statutory Supervisors Act 2011 comes into effect, expected to be on 1 October 2011, aany Trustee must hold a licence under the Securities Trustees and Statutory Supervisors Act 2011that Act that covers the Trusts Appointment and removal of the Manager The Manager may retire, subject to the appointment of a new manager in accordance with the Trust Deed, by giving ninety (90) days notice in writing to the Trustee or such shorter period of notice as may be agreed between the Manager and the Trustee. The Manager may be removed from office by the High Court on the application of the Trustee, any Unitholder, or the Financial Markets Authority. The Manager shall also cease to hold office if: the Trustee certifies that it is in the interests of Unitholders that the Manager should cease to hold office; the Unitholders direct that the Manager should cease to hold office pursuant to the Unit Trusts Act 1960; or a receiver is appointed or an order made or resolution passed for the liquidation or winding up of the Manager. The power of appointing a new temporary manager is vested in the Trustee who must then call a meeting of Unitholders and take such steps as the Unitholders require to secure the appointment of a new manager. If the Trustee fails or refuses to exercise this power, or a meeting of Unitholders wishes to appoint an alternative manager, a new manager may be appointed by a Section 18 Resolution (a resolution of Unitholders in accordance with section 18 of the Unit Trusts Act 1960) of Unitholders. Further information on the appointment and removal of the Manager is set out in the Trust Deed. 15

19 Meeting of Unitholders The Manager may at any time of its own volition convene a meeting of Unitholders of a Trust or the Trusts in such place and to be run in accordance with such procedures as the Manager determines. The Manager shall, upon the request in writing of: (a) (b) the Trustee; or 10% in number of the Unitholders or Unitholders holding not less than 10% of the number of Units on issue in a Trust at the date of request, convene a meeting of Unitholders of that Trust. The Manager must give a minimum of 14 days notice of the meeting, in writing and addressed to all Unitholders of that Trust and the Trustee at their registered address. The meeting shall be under the chairmanship of a nominee of the Trustee. The quorum for meetings will be Unitholders present in person or by proxy or by attorney or by authorised representatives holding not less than 10% of the number of Units on issue in a Trust. Resolutions will be determined by a show of hands unless a poll is demanded. On a poll every Unitholder has one vote for each Unit held. On a show of hands, all those entitled to vote have one vote only. The Manager is required under the Unit Trusts Act 1960 to lay before a meeting of Unitholders, copies of the last statements filed in accordance with section 20(2) of that Act. Further information relating to Unitholder meetings, including terms and conditions relating to adjournment of meetings, proxies and powers of attorney and voting, are set out in the Trust Deed Creation of Trusts New unit trusts may be established under the Trust Deed from time to time with the agreement of the Manager and the Trustee. Each new unit trust will be governed by the Trust Deed and its own Conditions of Establishment Change of name of Trusts The Manager may, with the consent of the Trustee, change the name of any Trust at any time Issue of new Units New Units in each Trust may be issued at any time. All new Units will rank equally with existing Units. There is no limit on the number of Units that may be issued in any Trust. All Units in a Trust must be issued for the relevant Allocation Price. New Units may be issued for cash or in return for the transfer of Authorised Investments to the relevant Trust. Every person wishing to apply for or acquire Units in a Trust shall, in the first instance, complete and lodge with the Manager by such method and at such place or places as the Manager may from time to time determine an application for Units and shall pay to the Manager the total application moneys. All application moneys must, within 7 days of receipt, be paid by the Manager to the credit of the Trustee s (or its nominee s) bank account for the relevant Trust. 16

20 The Manager may in its absolute discretion accept or refuse to accept in whole or in part any application (including one made by virtue of a Standing Application) or postpone the processing of the application pending receipt of cleared funds and the Manager shall not be required to assign any reason or ground for such refusal or postponement. If the Manager accepts an application then: (a) (b) where the Manager receives an application for Units on a Business Day then, if the Manager accepts such application the Units shall be deemed to be sold or issued at the time of the Manager's acceptance; or where the Manager receives an application for Units not on a Business Day then, if the Manager accepts such application the Units shall be deemed to be sold or issued at the commencement of the next Business Day. Where the Manager has accepted an application for Units but the Manager has not or does not receive cleared funds from the applicant in satisfaction of the purchase or subscription price payable within five Business Days or such further period approved by the Manager from the date the application for Units is received by the Manager then the application shall be cancelled by the Manager and the Units shall be deemed never to have been sold or issued without prejudice to the rights and remedies of the Manager or the Trustee against the applicant in respect of any losses, costs, expenses or damages suffered by either of them or by the Trust arising out of or in connection with the failure to ensure due provision of cleared funds Register of Unitholders The Manager is required to maintain, or cause to be maintained, a register of Unitholders. The Trustee and the Manager are entitled to rely on the Register as being a correct record of Unitholders, if based on a reasonable belief that the register is genuine. The Register is audited on an annual basis and is available for inspection by Unitholders during normal business hours at the registered office of the Manager. The Register may be closed for up to 30 days in each year as the Manager thinks fit. The Manager shall issue certificates to a Unitholder (showing that Unitholder s Unit holding in a Trust) as necessary to meet the requirements of the Securities Act 1978, or of any applicable exemption notice under the Act Joint Unitholders Where two or more persons are registered as the Unitholders of any Unit, they will be liable both jointly and severally for any amount payable in respect of each Unit. Only the person whose name stands first in the register of Units shall be delivered any statements of holding or any payments in respect of the Units. At meetings of Unitholders, joint Unitholders are entitled to exercise only one vote per Unit held Distributions The Manager does not currently intend to pay regular distributions to Unitholders in the Trusts. However, the Manager may vary the distribution policy from time to time. If the Manager decides to pay distributions from a Trust, the amount of distributions (if any) will be so much of the income of the Trust as the Manager determines and so much of the capital of the Trust as the Manager, with the approval of the Trustee, determines to be appropriate from time to time. 17