Integrity Australian Share Fund

Integrity Australian Share Fund Product Disclosure Statement (PDS) Issued 21 June 2012 Contents 1 About Integrity Investment Management Australia Limited 2 How the Integrity Australian Share Fund works 3 Benefits of investing in the Integrity Australian Share Fund 4 Risks of managed investment schemes 5 How we invest your money 6 Fees and costs 7 How managed investment schemes are taxed 8 How to apply 9 Other information This document provides a summary of significant information to help investors and their advisers assess the merits of investing in the Integrity Australian Share Fund (ARSN 127 314 078) (Fund). It also includes references to additional information which form part of this PDS. This is important information you should read together with the PDS before making a decision to invest in the Fund. You can access the Additional Information to the Product Disclosure Statement on our website or request a free of charge paper copy by calling us. The information in this PDS is general information only and does not take into account your personal financial situation or needs. As investors needs and aspirations differ, you should consider whether investing in the Fund is appropriate for you in light of your particular circumstances. You should consult a financial adviser to obtain financial advice that is tailored to suit your personal circumstances. Nothing in this PDS is to be taken as personal financial product advice. The offer or invitation to subscribe for units in the Fund under this PDS is only available to persons receiving this PDS in Australia and is subject to the terms Contact Details Registry Integrity Australian Share Fund C/O Boardroom Pty Limited GPO Box 3993 Sydney NSW 2001 Tel +61 (0)2 9290 9600 Fax +61 (0)2 9252 1987 Responsible Entity Integrity Investment Management Australia Limited Level 23 1 O Connell Street Sydney NSW 2000 Email info@integrityim.com Tel +61 (0)2 8987 5400 Fax +61 (0)2 8987 5499 Web www.integrityim.com and conditions described in this PDS. Integrity reserves the right to change these terms and conditions, withdraw the offer or invitation to subscribe for units and withdraw this PDS. The information in this PDS is up to date at the time of preparation. However some information may change from time to time. Any updates to information which are not considered materially adverse will be provided on our website at www.integrityim.com. Please check our website or call Integrity Investment Management Australia Limited or your financial adviser or IDPS operator for any updates prior to investing. Upon request a paper copy of this PDS and any updates will be provided free of charge. Integrity Investment Management Australia Limited ABN 21 126 291 889, AFSL 315146 (Integrity, Responsible Entity or we) is the investment manager, responsible entity of, and issuer of units in, the Fund offered under this PDS and has prepared this PDS. Integrity Australian Share Fund 1

1. About Integrity Investment Management Australia Limited Integrity Investment Management Australia Limited (Integrity) is an independent Australian shares manager that was founded in 2007. It is 100% owned by staff and directors. Integrity is the responsible entity of the Fund and employs an experienced investment team who are responsible for selecting and managing the assets of the Fund. Integrity is responsible for overseeing the operations of the Fund and ensuring the Fund is operated in accordance with the Fund Constitution and applicable laws. 2. How the Integrity Australian Share Fund works When you invest in the Integrity Australian Share Fund, your money is pooled together with other investors money. Integrity s investment team uses this pool of money to buy selected equities listed on the Australian Securities Exchange on behalf of all investors in the Fund. We have engaged a custodian to hold the assets of the Fund. The Fund is divided into units which are issued to individual investors in the Fund. The number of units issued represents your beneficial interest in the assets of the Fund as a whole. The Fund s assets are usually valued and unit prices calculated each NSW business day. The calculation of both the application unit price and the redemption unit price is based on the total net asset value of the Fund s assets, with an adjustment for transaction costs (see below). The Fund s assets are valued in accordance with the Fund s Constitution. Unit prices will vary as the market value of the Fund s assets rise or fall. When you invest in the Fund you will be issued units based on the application price. When you withdraw from the Fund your units will be redeemed at the applicable redemption price. The buy-sell spread is built into the unit price and reflects our estimate of the transaction costs expected to be incurred when buying and selling the underlying assets of the Fund as a result of investments and withdrawals made by investors. Application and redemption prices for each NSW business day will be posted on www.integrityim.com. Minimum initial investment The minimum initial investment is $40,000. We reserve the right to accept lower amounts and to reject an application or accept only part of an application at our discretion. Refer to Section 8 on how to apply. Additional investments The minimum additional investment is $10,000. For additional investments we require written instructions signed by all beneficial owners with your payment, there is no need to complete another application form. How to withdraw You can redeem some or all of your investment by either mailing or faxing us a written instruction signed by all beneficial owners of your investment in the Fund. The minimum withdrawal is $10,000 and a minimum balance of $40,000 must be maintained in the Fund. Withdrawals will generally be paid to your nominated bank account within 5 business days. Occasionally longer periods may apply. You should read the important information about How to withdraw before making a decision. Go to the Additional information to the Product Disclosure Statement at www. integrityim.com. The material relating to How to withdraw may change between the time when you read this PDS and the day when you sign the application form. Restrictions on withdrawals In extraordinary circumstances, Integrity reserves the right to suspend or refuse withdrawals from the Fund, if in the reasonable opinion of Integrity; it is in the best interest of the investors as a whole to do so. If the Fund becomes illiquid (as defined in the Corporations Act) unitholders will only be able to withdraw from the Fund if we make an offer of withdrawal. If we do make such an offer, unitholders may only be able to withdraw part of their investment. There is no obligation for us to make such an offer. Under the Corporations Act, the Fund is regarded as illiquid if liquid assets (generally cash and marketable securities) do not account for at least 80% of the value of the assets in the Fund. With the consent of investors, we may transfer assets of the Fund in lieu of a cash payment of the withdrawal entitlement. Processing If we receive and accept an application or withdrawal request by 1:00pm (Australian Eastern Standard Time) on a NSW business day, the transaction will be processed using the unit price as at close of business on that day. Requests received on or after the cut-off time of 1:00pm (Australian Eastern Standard Time) on a NSW business day, or on a non NSW business day, will generally be treated as having been received before the cut-off time on the next NSW business day. If we receive an invalid or incomplete application or withdrawal request, the transaction request will be processed using the unit price applying as at close of business on the day that we receive the correct documentation, and the above rules about cut-off times apply. 2 Integrity Australian Share Fund

Distributions Distributions will generally be paid as soon as practicable after the end of the half yearly accrual period (i.e. after 30 June and 31 December), usually within the following 30 business days. There may be periods in which no distributions are made or we may make interim distributions. Indirect investors should check with your IDPS operator to see when they will pay distributions to you. Distributions you receive are generally assessable income and can be made up of both income and realised capital gains. Distributions are generally calculated based on the Fund s net income at the end of the distribution period divided by the number of units on issue. In certain circumstances, some income and/or net realised capital gains may be held back until the final distribution after the end of June to allow for market volatility. You can choose to have your distributions reinvested into additional units in the Fund or paid directly into your nominated bank account. If you do not make a choice we will automatically select reinvestment. If your funds are returned (for example because your bank details are incorrect), we may reinvest your distribution in additional units. There is no buy-sell spread on distributions that are reinvested. The reinvestment of distributions will normally be effective the first day following the end of the distribution period. 3. Benefits of investing in the Integrity Australian Share Fund Significant features The Integrity Australian Share Fund invests in equities listed on the Australian Securities Exchange. Investment philosophy The Integrity team follows a disciplined valuation process. There are four key aspects of the Integrity investment process: Post tax returns The Integrity process is designed to enhance the post tax performance of the Fund and hence the ultimate value of our clients investments. In house research Integrity invests in companies that our experienced investment team believe will offer superior returns after conducting in house research. Valuation discipline Our experienced investment team value all components of the expected future investment return of companies including income, franking and capital gains. These valuations then form the basis for our investments. Shareholder activism Integrity believes activism is an integral part of the investment process in both increasing portfolio returns and protecting our clients interests. Indirect investors We authorise the use of the PDS for investors who wish to invest in the Fund indirectly through an Investor Directed Portfolio Service (IDPS), IDPS-like scheme or a nominee or custody service. Indirect investors must complete the documentation required by the IDPS operator. In addition to reading this PDS, you should read the disclosure document that explains the IDPS. Usually, IDPS operators pool their investors money and make a single investment in the Fund that is held in the name of a custodian. Accordingly the IDPS operator or custodian, not the indirect investor acquires the unitholder rights and may exercise these rights as they see fit and it is the IDPS operator or custodian, not the indirect investor, to whom we have reporting obligations. Fund reports and other information will be sent directly to your IDPS operator. Please note that the IDPS operator or custodian may apply different conditions to those outlined in this PDS including different cut-off and processing times for applications and withdrawals and different timeframes for payment of distributions and sending reports and notices to you. We do not directly send you statements regarding your investment in the Fund (e.g. distribution statements, annual reports). We accept no responsibility for any aspect of any IDPS or for failure on the part of any IDPS. Our agreement to permit the Fund to be named in any document issued by any IDPS operator does not signify endorsement or support of the IDPS by Integrity. Significant benefits Benefits of investing in the Fund include: Your money is managed by investment professionals which allows access to investment opportunities, markets and diversity that individual investors usually can t achieve on their own; The Fund provides investors with access to Integrity s investment expertise; The potential to generate regular franked income and capital growth over the long term from an investment in a diversified portfolio of securities listed on the Australian Securities Exchange; Access to regular investment statements (including transaction statements, distribution statements and audited financial reports of the Fund) and an annual tax statement to keep you up-to-date on your investment; and Online access to up-to-date information about your investment. Integrity Australian Share Fund 3

4. Risks of managed investment schemes All investments carry risk. Different strategies may carry different levels of risk, depending on the assets that make up the strategy. In general, assets with the highest potential for long-term returns may also carry the highest level of risk. To help you consider the risks of investing we have highlighted some of the significant risks for the Fund: Market risk: The risk that investment returns are influenced by market factors. These factors include but are not limited to changes in economic conditions, government regulations, market sentiment and local and international political events. Equity risk: The risk that shares will fall in value over short or extended periods of time. Share markets tend to move in cycles and individual share prices may fluctuate and underperform other asset classes over an extended period of time. Investment manager risk: The investment style of an investment manager can have a substantial impact on the investment returns of a fund. No single investment style performs better than all other investment styles in all market conditions. Investment performance will also depend on the skill of the investment manager selecting, combining and implementing investment decisions. Fund risk: There is a risk that investing in the Fund may give different results from holding the underlying assets directly because of income or capital accrued in the Fund at the time of investing and the consequences of investment and withdrawal decisions made by other investors in the Fund. Interest rate risk: Changes in interest rates can have a positive or negative impact directly or indirectly on investment values or returns. Whilst Integrity aims to manage or reduce risks, some risks cannot be managed or reduced. It is important to understand that: The value of your investment will go up and down; Investment returns will vary and future returns may be different from past returns; Returns are not guaranteed and there is always a chance that you may lose money on any investment you make; and Laws affecting registered managed investment schemes and your investment in these schemes may change over time. The level of risk you are willing to accept will depend on a range of factors including your age, investment time frame, where other parts of your wealth are invested and your overall tolerance to risk. Company risk: Factors such as, changes in management, actions of competitors and regulators in regard to the company, changes in technology and market trends can all affect the value of your investment. Sector risk: Companies in the same or similar industries are said to be in the same market sector. The values of securities in companies in the same market sector may be similarly affected by market or economic events. Liquidity risk: If a security is not actively traded it may not be readily bought or sold without some adverse impact on the price paid or obtained. Derivative risk: Derivatives may be used by the Fund to gain exposure to an investment market or protect against changes in the values of investments. Risks associated with using derivatives might include the value of the derivative failing to move in line with that of the underlying asset, potential illiquidity of the derivative, and counterparty risk (where the counterparty to the derivative contract cannot meet its obligations under the contract). 4 Integrity Australian Share Fund

5. How we invest your money You should consider the likely investment return, risk and your investment time frame when choosing to invest into the Fund. Integrity Australian Share Fund (APIR ITG0001AU) Description of the Fund Asset classes and asset allocation ranges Investment return objective Suggested minimum investment time frame for investors Benchmark Risk level Labour, environmental, social and ethical considerations Changes to investment policy Fund information The Fund is a managed investment scheme that primarily invests in shares listed on the Australian Securities Exchange. It is designed for investors looking for long-term returns (capital growth and tax effective income) from a diversified portfolio of Australian Shares which is actively managed by a professional investment team who seek to identify companies that will offer superior returns. The Integrity team follows a disciplined valuation process that takes into account, post tax returns, shareholder activism, in house research and valuation based analysis. Derivatives may be used to reduce risk or gain exposure to other types of investments, however the Fund s investment strategy does not permit derivatives to be used for speculative or gearing purposes. Australian Shares 90 100% Cash 0 10% The Fund aims to outperform its benchmark through the full investment cycle. 5+ Years S&P/ASX 300 Accumulation Index The likelihood of the value of your investment going up or down over the short term is relatively high compared to investments in funds investing in other types of assets such as fixed interest or cash. However the Fund has the potential to produce higher or lower returns over the longer term. See Section 4 for more information on risks of managed investment schemes. In buying, retaining or selling underlying investments we do not take into account labour standard or environmental, social or ethical considerations. However, if these matters affect the value or performance of an underlying investment, our investment decisions would be influenced by the financial effects of such issues. The Fund s Constitution permits a wide range of investments and gives us broad investment powers. Although unlikely, we may vary the investment objectives, strategies and processes set out in this PDS. We will give unitholders written notice of any material variation from the information in this PDS. You can obtain up-to-date information for the Fund by contacting your IDPS operator, financial planner or visiting our website, www.integrityim.com. 6. Fees and costs DID YOU KNOW? Small differences in both investment performance and fees and costs can have a substantial impact on your long term returns. For example, total annual fees and costs of 2% of your fund balance rather than 1% could reduce your final return by up to 20% over a 30 year period (for example, reduce it from $100,000 to $80,000). You should consider whether features such as superior investment performance or the provision of better member services justify higher fees and costs. You may be able to negotiate to pay lower contribution fees and management costs where applicable. Ask the Fund or your financial adviser. TO FIND OUT MORE If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities and Investments Commission (ASIC) website (www.moneysmart.gov.au) has a managed investment fee calculator to help you check out different fee options. The calculator can be used to calculate the effect of fees and costs on your investment. Integrity Australian Share Fund 5

This section shows the fees and costs you may be charged when you invest in the Fund. These fees and costs may be deducted directly from your investment, from the returns on your investment or from the Fund assets as a whole. You should read all the information about fees and costs because it is important to understand their impact on your investment. You can also use this information to compare the fees and costs between different managed investment schemes. Type of fee or cost 1 Amount Fees when your money moves in or out of the fund Establishment fee The fee to open your investment Contribution fee The fee on each amount contributed to your investment Withdrawal fee The fee on each amount you take out of your investment Termination fee The fee to close your investment Management costs The fees and costs for managing your investment 0.90%p.a. Management fee 0.02% - 0.09% p.a. Normal operating expenses 0.92% - 0.99%p.a. Total management fee and Fund expenses (multiplied by the Fund s asset value) 2 1 For certain Wholesale clients (as defined in the Corporations Act) we may, at our discretion, negotiate, rebate, or waive all or part of our fees. 2 An allowance for transaction costs (buy-sell spread) will apply for contributions and withdrawals from the Fund. Example of annual fees and costs for the Fund This table gives an example of how the fees and costs for the Fund can affect your investment over a one-year period. You should use this table to compare this Fund with other managed investment products. Example (Integrity Australian Share Fund) Contribution fees Plus Balance of $50,000 with a contribution of $5,000 during the year 1 For every additional $5,000 you invest you will not be charged any contribution fee. Management costs Equals Cost of the fund 0.92 0.99% p.a. 2 * And, for every $50,000 you have in the Fund you will be charged between $460 and $495 each year. If you had an investment of $50,000 at the beginning of the year and you put in an additional $5,000 during the year, you would be charged fees ranging from $460 to $544.50 3 If you decide to pay your financial adviser a fee, what it costs will depend on the fee you negotiate with your financial adviser. 1 Minimum additional contribution is $10,000 for the Fund. However, for comparative purposes we are required by law to provide an example of fees and costs referable to a $5,000 contribution. 2 The Management costs include normal operating expenses which range from 0.02% - 0.09% p.a. 3 An allowance for transaction costs (buy-sell spread) will apply for contributions and withdrawals from the Fund. 6 Integrity Australian Share Fund

Additional explanation of fees and costs Management fee This is the fee we charge for managing the investments, overseeing the Fund s operations and providing access to the Fund. The management fee is calculated and accrued daily as a percentage of the net asset value (NAV) of the Fund and payable monthly. Normal operating expenses The Constitution of the Fund provides for all operating expenses to be met by the Fund. Integrity will ensure that during the currency of this PDS the amount of the expenses met by the Fund does not exceed 0.09% p.a. of the Fund s NAV, and meets any excess from its own resources. Buy-sell spread The buy-sell spread is the difference between the application price and the redemption price of units. The buy-sell spread represents a contribution to the transaction costs incurred by the Fund such as brokerage and government taxes, when the Fund is purchasing and selling assets. It is not a fee that is paid to us. It is paid to the Fund and is reflected in the unit price. The buy/sell spread, however, is an additional cost to you. There is no buy-sell spread on distributions that are reinvested. The current buy-sell spread is 0.30% of the amount that you invest, represented as the difference between the application and redemption price. For example, if you make a $50,000 investment or withdrawal from the Fund, you will pay +/- 0.30% included in the unit price which is equal to a transaction cost of $150. We may vary the buy-sell spread from time to time and prior notice will not ordinarily be provided. Updated information on the buy-sell spread will be posted on our website www.integrityim.com. Changes to fees and costs Fees can change for various reasons including because of changing economic conditions and changes in regulation. We can change these fees and costs without your consent, but we will provide you with 30 days written notice of any proposed increase in fees. We cannot charge more than the Fund s Constitution allows. If we wish to raise fees above the amount allowed for in the Fund s Constitution, we would need the approval of a special resolution of unitholders. We also reserve the right to waive or reduce any of the fees and costs described in this PDS without prior notice. You should read the important information about Additional information about fees and costs before making a decision. Go to the Additional information to the Product Disclosure Statement at www.integrityim.com. The material relating to Additional information about fees and costs may change between the time when you read this PDS and the day when you sign the application form. 7. How registered managed investment schemes are taxed Investing in registered managed investment schemes is likely to have tax consequences. In general registered managed investment schemes do not pay tax on behalf of Australian resident investors. Investors are assessed for tax on their share of the income and capital gains generated by the registered managed investment scheme. As the Australian taxation system is complex and different investors have different circumstances, you are strongly advised to seek professional tax advice before investing in the registered managed investment scheme. 8. How to apply Read this PDS together with the Additional Information to the Product Disclosure Statement available from www.integrityim.com. Direct investors should read the information in the Application Booklet and ensure they complete the application form in full and provide the necessary verification documents. The Application Booklet is available from www.integrityim.com or by calling +61 (0)2 8987 5400. We are required by law to verify your identity before accepting your application. If your application is incomplete and we are unable to verify your identity, we will contact you to provide further information prior to accepting your application. Payment details are available with the application form. The offer made in this PDS is only available to persons receiving this PDS (electronically or otherwise) within Australia. Applications from outside Australia will not be accepted. If you are investing through an IDPS operator or custodian you are not required to complete the application form for the Fund. Instead you should follow the instructions provided to you by the IDPS operator or custodian. Cooling-off period Under the Corporations Act cooling-off rights are available to retail investors who invest directly in the Fund. These rights allow the investor to change their investment decision and ask for the initial investment to be returned after adjusting for transaction costs and any market movement within a 14 day cooling off period. If you exercise your cooling-off rights, we will return your money to you and no fees will apply. However, the amount you receive will reflect any movement (either up or down) in the unit price of the Fund and transaction costs which means that there may be tax implications for you. The 14 day cooling-off period commences on the earlier of the day you receive our transaction confirmation and the fifth business day after the units were issued. The cooling-off period does not apply where the Fund is not liquid, that is, where liquid assets of the Fund do not constitute at least 80% of the assets of the Fund. Integrity Australian Share Fund 7

Indirect investors may only access cooling-off rights (if available) against their IDPS operator, and not against the Fund. Complaints If you have any concerns or complaints, firstly please contact us and we will do our best to resolve your concern quickly and fairly. Our contact details are on Page 1 of this PDS. If your issue is not resolved within 45 days, you can contact the Financial Ombudsman Service (FOS) by calling 1300 780 808 or writing to Financial Ombudsman Service Limited, GPO Box 3, Melbourne VIC 3001 or email info@fos.org.au. 9. Other information Keeping track of your investment To help you keep track of your investment we will provide you with the following information: Confirmation of your investments and withdrawals, usually within five business days of receipt of your request; A distribution statement, following each distribution; A tax statement and annual statement following the end of each financial year; Access to the Funds Financial Statements at www.integrityim.com; and Online access to up-to-date information about your investment. Fund s Constitution The Fund is governed by a Constitution. The Fund s Constitution contains rules relating to a number of issues including: unitholder rights; the process by which units are issued and redeemed. We can accept or reject investments into the Fund at any time and are not required to give any reason or grounds for such refusal; the calculation and distribution of income; the investment powers of the responsible entity; the responsible entity s right to claim indemnity from the Fund and charge fees and expenses to the Fund; the creation of other classes of units; the termination of the Fund; retirement and removal of the Responsible Entity (including details of any relevant unitholder approval required); and unitholders liabilities (which are generally limited to the value of their investment). It is unlikely unitholders would be subject to any obligation arising from a decrease in the value of the Fund however this view has not been fully tested at law. Together with the Corporations Act, the Constitution sets out the rules and procedures under which the Fund operates and our rights, responsibilities and duties as responsible entity, as well as those of investors. We may alter the Fund s Constitution if we reasonably consider the amendments will not adversely affect unitholders rights. Otherwise (subject to any applicable exemption under law), we must obtain unitholder approval by a special resolution of the unitholders of the Fund. A copy of the Fund s Constitution can be inspected at our office or provided free of charge upon request. Fund performance For up-to-date information on the performance of the Fund, including performance history, please visit www.integrityim.com and click on Fund Information and select Quarterly Fund Information. Additional disclosure The Fund is subject to regular reporting and continuous disclosure obligations under the Corporations Act. Copies of the following documents can also be obtained free of charge from us upon request (if applicable): The Fund s most recently lodged Annual Report; The Fund s most recently lodged half year financial report; A copy of our Unit Pricing Policy. Copies of documents lodged with the Australian Securities and Investment Commission (ASIC) may be obtained from, or inspected at, an ASIC office. You should read the important information about Other information before making a decision. Go to the Additional information to the Product Disclosure Statement at www. integrityim.com. The material relating to Other information may change between the time when you read this PDS and the day when you sign the application form. 8 Integrity Australian Share Fund