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UNIT TRUST OF FIJI (MANAGEMENT) LIMITED Unit Trust of Fiji (Management) Limited Annual Report 2016 OUR VISION 'The Leading Investment Fund for Your Financial Goals' OUR MISSION Creating and growing investors’ wealth by providing sustainable and competitive returns from a balanced investment portfolio OUR VALUES I - Integrity N - Nobility V - Visionary E - Excellence S - Simplicity T - Transparency Unit Trust of Fiji (Management) Limited Annual Report 2016 CONTENTS .......................................................................................... Chairperson’s Statement 4 .......................................................................................... Chief Executive Officer’s Report 5 - 7 .......................................................................................... FINANCIAL STATEMENTS 31 DECEMBER 2016 .......................................................................................... Directors’ Report 10 - 11 ..........................................................................................
Statement by Directors 12 ..........................................................................................

Independent Audit Report 13 - 14 ..........................................................................................

Statement of Comprehensive Income 15 ..........................................................................................

Statement of Changes in Equity 16 ..........................................................................................
Statement of Financial Position 17 .......................................................................................... 18 Statement of Cash Flow .......................................................................................... Notes to and forming Part of the Financial Statements 19 - 29 ..........................................................................................
Detailed Statement of Profit & Loss 30 .......................................................................................... 3 Unit trust of Fiji (Management) Limited Annual Report 2016 Chairperson's Statement 2016 was another successful year whereby UTOF recorded a better growth and return compared to previous years.

In consultation with key stakeholders the Board embarked on a journey of excellence from 2009, which has enabled the Fund to deploy specific strategies for growth and development.
As a result, the Fund recorded an investment portfolio growth of 8.73%, valued at $137.96 million.

With the continuous re-balancing of asset classes, we distributed a record dividend to unit holders of 6.10 cents per unit under Income & Growth Fund.

This resulted in a dividend yield of 4.02% and a positive capital growth of 7.01%.

The total return to unit holders under this Fund was 11.03%.
A strong performance was also recorded for Income Fund providing unit holders with an annualized dividend rate of 3.54%.

Hence, the total tax-free dividend for both Funds amounting to $5 million was paid out to 17,309 unit holders.

to (CIP) The Employee Investment Scheme (EIS) concept and Children Investment Plan significantly have contributed the growth and performance of the Fund.

Under EIS, we have registered 21 employers, thus providing investment opportunities to more than 5,000 employees.
For CIP, we registered an additional 432 children investors, a testament to the growing interests being generated from our student investors under the MOU with the Ministry of Education.

We believe the children investment facility will nurture and inculcate savings and investment for our young investors.

We strongly encourage parents and schools to capitalize from the incentives being offered under this facility.
The UTOF Team will continue to deliver unit holder expectations in terms of the return on investment and enhancement of our services.

We are indeed looking forward to the next financial year, to roll out various strategies for the overall development of UTOF.

The Board would like to commend the UTOF Team for their hard work and dedication throughout the year.
We would also like to express our sincerest gratitude to our Trustee Directors, Reserve Bank of Fiji and our shareholders, Ministry of Public Enterprises and the Ministry of Economy, for their support and guidance.

Importantly, to our unit holders, we are indeed grateful for your confidence and support throughout the year.

We look forward to another fruitful year of investment!
Vinaka vakalevu, ............................................ Mrs. Shaenaz Voss 4 Unit Trust of Fiji (Management) Limited Annual Report 2016 Chief Executive Officer's Report It gives me great pleasure to report on UTOF’s financial performance and its key achievement for the year ended 31 December 2016.

Fund’s asset and sectorial allocation is provided at the end of this report whilst, the performance of respective funds is detailed below.
Income & Growth Fund The positive movement in the value of investments attributed to an increase of 14.9%, which is equivalent to $16.2 million (refer to Chart 3).

Contributing to the significant growth in the IGF portfolio was from the performance of investee companies, such as South Sea Towage Limited, HFC Bank, Amalgamation Telecommunication Holding Limited and the newly South Pacific Stock Exchange listed company, Vision Investments Limited (VIL).
UTOF during the year invested $7 million in VIL and an additional $6.25 million in HFC Bank.

A total of $4.6 million was paid out to unit holders, equivalent to 6.10 cents per unit in tax-free dividends.

The dividends to unit holders increased by 3.4% from 5.90 cents per unit to 6.10 cents per unit.

The 5-year dividend payout is shown in Table 1.

Over the last 5 years, UTOF paid out a total tax-free dividend of $19.1 million, an average of $3.8 million per annum.
The dividend payout of 6.10 cents per unit, provided a dividend yield of 4.02%.

The value growth in the investment portfolio enabled the Fund to realise a capital growth of 7.01% for its unit holders, thus providing a total return of 11.03%.
The notable achievement was CHART 1: NUMBER OF UNIT HOLDERS 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 1 8 6 , 1 1 6 8 1 , 2 1 1 9 3 , 2 1 8 8 4 , 2 1 6 1 6 , 2 1 1 6 3 , 4 1 6 1 5 , 3 1 1 1 1 , 6 1 2 1 5 , 5 1 9 0 3 , YEAR CHART 2: FUNDS UNDER MANAGEMENT $140,000,000 $120,000,000 $100,000,000 $80,000,000 $60,000,000 $40,000,000 $20,000,000 $0 4 7 6 , 3 2 1 , 0 8 $ 7 6 2 , 3 1 0 , 3 9 $ 2012 2013 3 9 9 , 4 1 3 , 1 1 1 $ 2014 YEAR 3 3 3 , 5 8 8 , 6 2 1 $ 3 4 2 , 1 6 9 , 7 3 1 $ 2015 2016 5 Our operating environment during the year continued to create unique challenges and opportunities for the fund.
The refining of our strategic intent and goals provided a stronger platform for sustainable growth to optimize our return and value to the unit holders.

The Employee Investment Scheme (EIS) has gained prominence since its launch in 2015 and has continued to provide investment opportunities to the Fijian workforce for their financial wellbeing.
INVESTOR CONFIDENCE UTOF’s success is predominantly driven by investor confidence and competitive tax-free return which has led to an increase in total number of unit holders (investors).

As illustrated in Chart 1, the investor base has increased from 16,111 to 17,309, an increase of 7.4%.

There has also been a growing interest from our student investors under the Children Investment Plan (CIP).
This plan was successfully rolled out to schools in 2013 in consultation with the Ministry of Education for the Invest Smart Program.

FUNDS UNDER MANAGEMENT The Funds under Management grew by 8.7% from $126.9 million in 2015 to $137.9 million, as reflected in Chart 2.

The growth has been driven further by the increase in unit sales and value of investments.
Unit Trust of Fiji (Management) Limited Annual Report 2016 unit trust of fiji annual report 2016 CHART 3: INCOME & GROWTH FUND INVESTMENT PORTFOLIO $140,000,000 $120,000,000 $100,000,000 $80,000,000 $60,000,000 $40,000,000 $20,000,000 $0 9 7 2 , 9 7 5 , 8 7 $ 3 0 3 , 6 4 5 , 5 8 $ 2012 2013 5 6 2 , 6 2 4 , 5 9 $ 2014 YEAR 2 1 3 , 8 0 4 , 9 0 1 $ 8 2 8 , 6 5 6 , 5 2 1 $ 2015 2016 TABLE 1: INCOME & GROWTH FUND DIVIDEND PAYOUT Indicators 2012 2013 2014 2015 2016 Interim Dividend (cents per unit) Final Dividend (cents per unit) Total Dividend (cents per unit) 2.30 3.50 5.80 2.30 3.50 5.80 2.30 3.50 5.80 2.35 3.55 5.90 2.40 3.70 6.10 Dividend distributed per annum (million) $3.29 $3.50 $3.72 $4.06 $4.56 Dividend Yield Capital Growth Total Return 4.49% 4.28% 4.26% 4.16% 4.02% 3.85% 1.18% 4.63% 6.84% 7.01% 8.34% 5.46% 8.89% 11.00% 11.03% CHART 4: INCOME FUND INVESTMENT PORTFOLIO $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 5 9 3 , 4 4 5 , 1 $ 4 6 9 , 6 6 4 , 7 $ 2012 2013 7 2 7 , 8 8 8 , 5 1 $ 2014 YEAR 1 2 0 , 7 7 4 , 7 1 $ 5 1 4 , 4 0 3 , 2 1 $ 2015 2016 TABLE 2: INCOME FUND DIVIDEND PAYOUT Year 2012 2013 2014 2015 2016 Interim $4,329 $25,947 $166,551 $197,254 $235,341 Dividend Distributed Final $20,643 $53,339 $237,766 $260,141 $201,439 Total $24,972 $79,286 $404,317 $457,395 $436,780 Annualized Dividend Rate 3.35% 3.16% 3.17% 3.28% 3.54% TABLE 3: MANAGEMENT COMPANY PERFORMANCE Management Performance 2012 2013 2014 2015 2016 Profitability (NPAT) $227,148 $239,052 $263,323 $471,442 $585,503 Dividend to Share- holders - Fijian Government $113,574 $119,526 $131,662 $235,721 $292,752 Shareholders’ Equity $1,024,542 $1,150,019 $1,293,816 $1,765,258 $1,983,378 that the Fund exceeded its expected return to the unit holders.
Income Fund The decline in the value of the Income Fund investment portfolio was due to withdrawal of units during the year, as illustrated in Chart 4.

Despite the decline in the portfolio, we achieved an annualized dividend rate of 3.54% from the investment portfolio.

The 2016 payout is IF’s highest payout since inception (refer to Table 2).

IF investment portfolio mostly comprises of fixed income instruments.
MANAGEMENT COMPANY PERFORMANCE The Management Company recorded a Net Profit after Tax (NPAT) of $585,503, highest profitability in the last 5 years (refer to Table 3).

In comparison with 2015 financial performance, profitability increased by 24% which was achieved from sales revenue, management fee and having better cost management strategies.
As a result, the company was able to increase Return on Equity by 3% from 27% in 2015 to 30% enabling the Board of Directors to declare a dividend of $292,752, payable to the Government of Fiji as per the Dividend Policy.

The dividend declared was an increase of 24% from the 2015 dividend payout of $235,721.
to maximize Furthermore, the Return on Assets increased by 4% to 25% from 21% in 2015, a testament of the company’s ability its available resources in managing UTOF and creating awareness for ordinary Fijians to save and invest.

The Company to manage UTOF’s will continue investment portfolio to provide better values to the shareholders.

OUTLOOK In the year ahead, we will continue to strive for better performance and return to unit holders.
immensely The unit holders’ loyalty and confidence acknowledged are and appreciated.

The continuing support and stewardship from key stakeholders, our Board of Directors, Trustee Directors, Ministry of Public Enterprises, Ministry of Economy and Reserve Bank of Fiji are profoundly valued for the overall growth and development of UTOF.
$2.27 $2.39 $2.63 $4.71 $5.86 Vinaka vakalevu, 21% 17% 80% 20% 16% 79% 27% 21% 68% 30% 25% 67% ……………… Vilash Chand Dividend per share (DPS) Return on equity (ROE) Return on assets (ROA) 22% 19% Cost to Income Ratio 79% 6 Unit Trust of Fiji (Management) Limited Annual Report 2016 Fund's Asset & Sectorial Allocation ASSET ALLOCATION EQUITY PORTFOLIO BY SECTOR Property 1% Cash & Cash Equivalents 15% Fixed Income 17% Private Equity 31% Public Equity 36% Media 0.08% Export 0.09% Construction 2.56% Insurance 4.11% Shipping 4.19% Telecommunication 26.40% Consumer Goods 29.55% Financial 33.01% UTOF’s investment portfolio continues to be driven largely by equity investment, which is 67% of the portfolio.
Income & Growth Fund (IGF), equity investments are spread across several sectors of the economy, with major sectors being Financial, Telecommunications & Consumer Goods.

No.
Equity Investment HFC Bank TOP 10 EQUITY INVESTMENTS Sector Financial Amalgamated Telecom Holdings Ltd Telecommunication Vision Investments Ltd Fiji Gas Ltd Consumer Goods Consumer Goods South Sea Towage Ltd Shipping FMF Foods Ltd R B Patel Group Ltd Marsh Limited Consumer Goods Consumer Goods Insurance Rice Company of Fiji Ltd Consumer Goods 10 Communications Fiji Ltd Media % of Investment Portfolio 20.11% 18.03% 6.59% 5.05% 3.10% 3.01% 2.58% 2.57% 1.36% 1.23% Table above lists the top 10 equity investment under Income & Growth Fund in UTOF's investment portfolio.
The Fund invested $7 million in Vision Investment Ltd and an additional $6.25 million in HFC Bank.
7 Unit Trust of Fiji (Management) Limited Annual Report 2016 UNIT TRUST OF FIJI (MANAGEMENT) LIMITED FINANCIAL STATEMENTS YEAR ENDED 31 DECEMBER 2016 Directors’ Report ............................................................................... 10 - 11 Statement by directors ...................................................................... 12 Independent audit report .................................................................. 13 - 14 Statement of comprehensive income ................................................ 15 Statement of changes in equity ......................................................... 16 Statement of financial position .......................................................... 17 Statement of cash flow ...................................................................... 18 Notes to and forming part of the financial statements ...................... 19 - 29 Detailed statement of profit and loss ................................................. 30 9 9 UNIT TRUST OF FIJI (MANAGEMENT) LIMITED DIRECTORS' REPORT FINANCIAL STATEMENTS 31 DECEMBER 2016 Unit Trust of Fiji (Management) Limited Annual Report 2016 The directors present their report together with the financial statements of the company for the 12 months financial period ended 31 December 2016 and the auditor’s report thereon: 1.
THE NAMES OF THE DIRECTORS IN OFFICE DURING THE FINANCIAL PERIOD AND UP TO THE DATE OF THIS REPORT ARE: Shaenaz Voss - Chairperson Maciu Lumelume - Director 2.
STATE OF AFFAIRS In the opinion of the directors, the accompanying statement of financial position gives a true and fair view of the state of affairs of the company as at 31 December 2016, and the accompanying statement of comprehensive income, statement of changes in equity and statement of cash flows give a true and fair view of the result of the company, its changes in equity and its cash flows for the period then ended.

3.
3.

PRINCIPAL ACTIVITY The principal activity of the company is to make investment decisions and to administer the Unit Trust of Fiji.

4.

OPERATING RESULTS The net profit for the financial year ended 31 December 2016 was $585,503 (year ended 31 December 2015: net profit $471,442).

5.

PROVISIONS There were no material movements in provisions.

6.
6.

DIVIDENDS The directors declared a dividend of $131,662 and $235,721 for the 12 months’ financial period 01 January 2014 to 31 December 2014 and 01 January 2015 to 31 December 2015 respectively.

(2013 - $119,526).

7.

RESERVES The directors recommend that no amounts be transferred to or from reserves in respect of the year ended 31 December 2016.

8.
8.

BAD AND DOUBTFUL DEBTS The directors took reasonable steps to ascertain that all known bad debts were written off and adequate allowance was made for doubtful debts.

At the date of this report, the directors were not aware of any circumstances which would render the amount written off for bad debts, or the amount of the allowance for doubtful debts, inadequate to any substantial extent.

9.
9.

CURRENT ASSETS The directors took reasonable steps before the financial statements were made out, to ascertain that the current assets of the company were shown in the accounting records at a value equal to or below the value that would be expected to be realized in the ordinary course of business.

At the date of this report, the directors are not aware of any circumstances which would render the values attributable to the current assets in the financial statements misleading.

10.
10.

EVENTS SUBSEQUENT TO BALANCE DATE The company via its subsidiary company Fiji Wai Limited (FWL) has been liaising with potential Joint Venture partners to extract, bottle and operate the water bottling facility at Rakiraki.

A sum of $665,831 is payable to iTaukei Land Trust Board as lease and rental for the two 99 years’ native leases issued to FWL.
10 Unit Trust of Fiji (Management) Limited Annual Report 2016 UNIT TRUST OF FIJI (MANAGEMENT) LIMITED DIRECTORS' REPORT - continued FINANCIAL STATEMENTS 31 DECEMBER 2016 11.

BASIS OF ACCOUNTING The directors believe the basis of the preparation of financial statements is appropriate and the company will be able to continue in operation for at least 12 months from the date of this statement.
Accordingly, the directors believe the classification and carrying amounts of assets and liabilities as stated in these financial statements to be appropriate.

12.

OTHER CIRCUMSTANCES At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or financial statements which render any amounts stated in the financial statements misleading.

13.
13.

UNUSUAL TRANSACTIONS The results of the company’s operations during the financial year have not in the opinion of the directors been substantially affected by any item, transaction or event of a material and unusual nature other than those disclosed in the financial statements.

14.
14.

DIRECTORS’ INTERESTS No director of the company has, since the end of the previous financial year, received or become entitled to receive a benefit (other than a benefit included in the total amount of emoluments received or due and receivable by directors shown in the company accounts) by reason of a contract made with the company or a related corporation with the director or with a firm of which he is a member, or in a company in which he has a substantial financial interest.
For and on behalf of the Board of Directors by authority of a resolution of the Directors.

Dated at Suva this day of 2017.
___________________________ Director Director ___________________________ 11 UNIT TRUST OF FIJI (MANAGEMENT) LIMITED STATEMENT BY DIRECTORS FINANCIAL STATEMENTS 31 DECEMBER 2016 Unit Trust of Fiji (Management) Limited Annual Report 2016 In the opinion of the Directors: (a) (b) (c) (d) the accompanying statement of comprehensive income is drawn up so as to give a true and fair view of the results of the company for the year ended 31 December 2016; the accompanying statement of financial position is drawn up so as to give a true and fair view of the state of the company’s affairs as at 31 December 2016; the accompanying statement of cash flows is drawn up so as to give a true and fair view of the cash flows of the company for the year ended 31 December 2016; and the accompanying statement of changes in equity for the year ended 31 December 2016 is drawn up so as to give a true and fair view of the movement in shareholders’ funds.
For and on behalf of the Board of Directors by authority of a resolution of the Directors.

Dated at Suva this day of 2017.
___________________________ Director Director ___________________________ 12 13 14 UNIT TRUST OF FIJI (MANAGEMENT) LIMITED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2016 Unit Trust of Fiji (Management) Limited Annual Report 2016 Revenue Fee income Other income Total revenue Less expenses Personnel expenses Other operating expenses Depreciation and amortization expense Total expenses Profit before tax Income tax expense Profit for the year Other comprehensive income Total comprehensive income for the year Notes 3 4 5 6 11&12 7(a) 2016 $ 2015 $ 2,145,032 78,669 2,223,701 (582,110) (823,190) (78,827) 1,484,127 1,832,749 57,891 1,890,640 (518,815) (681,741) (87,823) 1,288,379 739,574 602,261 (154,071) 585,503 - 585,503 (130,819) 471,442 - 471,442 The statement of comprehensive income should be read in conjunction with the notes to the financial statements set out on pages 19 to 29.
15 UNIT TRUST OF FIJI (MANAGEMENT) LIMITED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2016 Unit Trust of Fiji (Management) Limited Annual Report 2016 Share Capital $ Retained Earnings $ Total $ 2015 Balance at 01 January 2015 50,000 1,243,816 1,293,816 Total comprehensive income for the period Profit for the period - 471,442 471,442 Other comprehensive income - - - Total comprehensive income for the period 50,000 1,715,258 1,765,258 Transactions with owners, recorded directly in shareholders’ equity Contribution by and distribution to owners - Return of dividends paid in respect of 2013 year ($2.39 per share) Total contribution by and distribution to owners - - - - - - - - Balance at 31 December 2015 50,000 1,715,258 1,765,258 2016 Balance at 01 January 2016 50,000 1,715,258 1,765,258 Total comprehensive income for the period Profit for the period - 585,503 585,503 Other comprehensive income - - - Total comprehensive income for the period 50,000 2,300,761 2,350,761 Transactions with owners, recorded directly in shareholders’ equity Contribution by and distribution to owners - - - Dividends paid during the financial year 31.12.2014 and 31.12.2015 ($2.60 per share and $4.70 per share respectively) - (367,383) (367,383) Total contribution by and distribution to owners - - - Balance at 31 December 2016 50,000 1,933,378 1,983,378 The statement of changes in equity should be read in conjunction with the notes to the financial statements set out on pages 19 to 29.
16 UNIT TRUST OF FIJI (MANAGEMENT) LIMITED STATEMENT OF FINANCIAL POSITION FOR THE YEAR ENDED 31 DECEMBER 2016 Current Assets Cash at bank and on hand Investment- held to maturity Receivables Future income tax benefit Total Current Assets Non-Current Assets Plant and equipment Intangible assets Total Non- Current Assets Total Assets Current Liabilities Creditors and accruals Provision Provision for income tax Total Current Liabilities Non-Current Liabilities Deferred income tax liability Total Non-Current Liabilities Total Liabilities Net Assets Shareholder’s Equity Share capital Retained earnings Unit Trust of Fiji (Management) Limited Annual Report 2016 Notes 8 9 10 7(d) 11 12 13 14 7(b) 7(c) 2016 $ 1,820,141 59,045 282,899 1,726 2015 $ 1,730,290 59,045 180,807 - 2,163,811 1,970,142 209,788 - 209,788 244,892 41 244,933 2,373,599 2,215,075 274,643 85,977 29,601 390,221 - - 308,251 79,501 60,410 448,162 1,655 1,655 390,221 449,817 1,983,378 1,765,258 15 50,000 1,933,378 1,983,378 50,000 1,715,258 1,765,258 For and on behalf of the Board and in accordance with a resolution of the directors.
Dated at Suva this day of 2017.

___________________________ Director Director ___________________________ The statement of financial position should be read in conjunction with the notes to the financial statements set out on pages 19 to 29.
17 UNIT TRUST OF FIJI (MANAGEMENT) LIMITED STATEMENT OF CASH FLOW FOR THE YEAR ENDED 31 DECEMBER 2016 Cash flows from operating activities Fees received from sale of units Managers remuneration Other income received Unit Trust of Fiji (Management) Limited Annual Report 2016 Note 2016 $ 2015 $ 354,760 1,790,273 76,118 280,771 1,551,978 23,409 Net (payments)/receipts from repurchases and creations (102,092) 176,600 Payments to suppliers and employees Income tax paid Net cash from operating activities Cash flows from investing activities Proceeds from term deposit Proceeds from sale of plant & equipment Net payments for plant & equipment (1,432,432) (1,158,663) (188,261) 498,366 (79,911) 794,184 - 2,551 (3,180) 34,482 (43,683) (140,600) Net cash (used in) investing activities (41,132) (109,298) Cash flows from financing activities Dividends paid Net cash (used in) financing activities Net increase in cash held Cash at the beginning of the financial year (367,383) (367,383) 89,851 1,730,290 - - 684,886 1,045,404 Cash at the end of financial year 17 1,820,141 1,730,290 The statement of cash flow should be read in conjunction with the accompanying notes set out on pages 19 to 29.
18 Unit Trust of Fiji (Management) Limited Annual Report 2016 UNIT TRUST OF FIJI (MANAGEMENT) LIMITED NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2016 1.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES Unit Trust of Fiji (Management) Limited is a public company domiciled and incorporated in the Republic of Fiji.

The Company was incorporated on 31 December 1976.

The address of the Company’s registered office is Level 2, Provident Plaza One, Ellery Street, Suva, Fiji.
The financial statements were authorized for issue by the directors on 7th April 2017 .

The significant policies which have been adopted in the preparation of this financial statement are: (a) Statement of compliance The financial statements of the Company have been drawn up in accordance with the provisions of Interna- tional Financial Reporting Standards (“IFRS”), the requirements of the Companies Act 2015.
(b) Basis of accounting The financial statements are presented in Fiji dollars, rounded to the nearest dollar.

They are prepared on the historical cost basis.

The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.
(c) New standards and interpretations not adopted A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2015, and have not been applied in preparing these financial statements.

None of these is expected to have a significant effect on the financial statements of the Company.
(d) Use of estimates and judgments The preparation of the financial statements requires management to make judgments, estimates and as- sumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.

Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting esti- mates are recognized in the period in which the estimates are revised and in any future periods affected.
In particular, information about significant areas of estimation, uncertainty and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial state- ments including the following notes: Note 1 (e) plant and equipment – depreciation and impairment Note 1 (h) impairment losses Note 1 (o) trade receivables – impairment losses (e) Plant and equipment Items of plant and equipment are recorded at cost less accumulated depreciation and impairment losses.
Depreciation Depreciation is calculated on a straight-line basis so as to write off the net cost of each item of plant and equipment during its expected useful life.

The principal annual rates in use are: Furniture and fittings Office equipment Computer equipment Motor vehicles 10% 15% 30% 20% 19 UNIT TRUST OF FIJI (MANAGEMENT) LIMITED NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 DECEMBER 2016 Unit Trust of Fiji (Management) Limited Annual Report 2016 1.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES - continued (f) Employee entitlements Liabilities for wages and salaries, incentive payments and annual leave are recognized and are measured as the amount unpaid at the reporting date at current pay rates in respect of employees’ services up to that date.

(g) Investments – held to maturity The classification of investments is dependent on the purpose for which the investments were acquired.
Management determines the classification of its investments at the time of the purchase and re-evaluates such designation on a regular basis.

Investments that management has the intent and ability to hold to maturity are classified as held-to-maturity.

Held-to-maturity investments are measured at amortized cost.

(h) Impairment The carrying amounts of the company’s assets are reviewed at balance sheet date to determine if whether there is any indication of impairment.
If any such indication exists, the asset’s recoverable amount is esti- mated.

An impairment loss is recognized whenever the carrying amount of an asset or is cash-generating unit exceeds its recoverable amount.

Impairment losses are recognized in profit and loss.

(i) Trade and other payables Trade and other payables are stated at amortized cost.
(j) Provisions A provision is recognized in the balance sheet when the company has a legal or constructive obligation as result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation.

(k) Revenue recognition Preliminary charges Unit holders of the Unit Trust of Fiji pay an entry fee at a rate of 2% (2015:2%) of application monies.
Entry fee income is recognized in profit and loss when the units are created and issued to the unit holders by the Unit Trust of Fiji.

Although, this is not charged separately, it is included in the unit selling price.

Manager’s rounding Managers’ rounding is the gain from rounding upwards or downwards the unit entry price to the lesser of 1.25 cents or 1% per unit (2015:1%) and is provided for in the Trust Deed.
Manager’s rounding is recog- nized in profit and loss when the units are created and issued to unit-holders of the Unit Trust Fund of Fiji.

Management fees The company is entitled to a management fee of 1.5% (2015:1.5%) of the total value of all Unit Trust of Fiji deposited property.

This is payable fortnightly and is calculated on the total value of deposited property of the Unit Trust of Fiji at the beginning of the fortnight and recognized in profit or loss.
(l) Taxation Income tax expense comprises of current and deferred tax.

Income tax expense is recognized in the in- come statement except to the extent that it relates to items recognized directly in equity in which case it is recognized in equity.

Current tax is the expected tax payable on the taxable income account for the year using tax rates enacted or substantively enacted at the reporting date and any adjustments to tax payable in respect of previous years.
Deferred tax is recognized using the balance sheet method providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.

Deferred tax is not recognized for the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit.
20 UNIT TRUST OF FIJI (MANAGEMENT) LIMITED NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 DECEMBER 2016 Unit Trust of Fiji (Management) Limited Annual Report 2016 1.

STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES - continued (m) Operating Lease While the company is a lessee, the lease rentals payable on operating leases are recognized in profit or loss on straight line basis over the term of the lease.
(n) Cash and cash equivalents For the purpose of the statement of cash flows, cash includes cash on hand and in banks, net of bank overdrafts.

(o) Trade receivables Trade receivables are measured at amortized cost less impairment losses.

The collectability of the debts is assessed at balance date and impairment losses are recognized in profit or loss.

(p) Comparative figures Comparative information has been restated where necessary to conform to the current year presentation.

2.
2.

PRINCIPAL ACTIVITIES The principal activities of the Company during the period were to make investment decisions and to administer the Unit Trust of Fiji.

3.

FEE INCOME Manager’s remuneration Preliminary charges Manager’s rounding 4.

OTHER INCOME Transaction fees Gain on sale of fixed assets Other income 5.
PERSONNEL EXPENSES Directors’ emoluments FNPF contributions Salaries and wages TPAF levy Note 2016 $ 2015 $ 1,790,272 264,007 90,753 2,145,032 1,551,978 204,706 76,065 1,832,749 140 2,551 75,978 78,669 23,000 50,171 503,760 5,179 582,110 16(b) 174 34,482 23,235 57,891 23,000 45,789 445,215 4,811 518,815 21 UNIT TRUST OF FIJI (MANAGEMENT) LIMITED NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 DECEMBER 2016 Unit Trust of Fiji (Management) Limited Annual Report 2016 6.
OTHER OPERATING EXPENSES Advertising and publicity Audit fees- Management company Audit fees- Unit Trust of Fiji Business promotion and development Commission to Fiji Development Bank Insurance Motor vehicle expense Printing, postage and stationery Professional fees Rental Telephone Trustee’s remuneration Travelling and accommodation Other operating expenses 7.
INCOME TAX (a) Income Tax Expense/(Benefit) Note 2016 $ 2015 $ 16(c) The income tax expense charged against operating profit differs from the prima facie tax payable and is reconciled as follows: Operating profit before income tax 2016 $ 739,574 2015 $ 602,261 Prima facie tax thereon at 20% / (2015:20%) 147,915 120,452 Tax effect of non-deductible items: Non-deductible expenses Effect of change in tax rate Restatement of DTL Under/(over) provision from prior year caused by Variation in temporary differences Transitional tax at 1% Income tax expense / (benefit) Income tax expense comprises of: Current tax expense Deferred tax expense 6,156 5,667 - - 154,071 157,452 (3,381) 154,071 (3,287) 7,987 130,819 136,275 (5,456) 130,819 22 UNIT TRUST OF FIJI (MANAGEMENT) LIMITED NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 DECEMBER 2016 Unit Trust of Fiji (Management) Limited Annual Report 2016 7.
INCOME TAX - continued (b) Income tax payable/(refundable) Balance as at 1 January 2016 2016 $ 60,410 2015 $ 4,047 Current tax expense 157,452 136,275 Advance tax payments made to FRCA (188,261) (79,912) Balance as at 31 December 2016 29,601 60,410 (c) Deferred income tax liability The deferred income tax liability is the liability for the estimated amount of income tax expense to be as- sessed in the future as a result of reversal of the following timing difference: - Depreciation - 1,655 (d) Future Income Tax Benefit The future income tax benefit is the benefit of an estimated amount of income tax expense to be assessed in the future as a result of reversal of the following timing difference: Depreciation 1,726 - 8.
CASH AT BANK AND ON HAND Cash at bank Petty cash 9.

INVESTMENT – HELD TO MATURITY 2016 $ 2015 $ 1,820,071 1,730,220 70 70 1,820,141 1,730,290 At call account with Australia and New Zealand Banking Corporation Limited.

59,045 59,045 The term deposit is security for the bank guarantee referred to in Note 20(i).

10.
10.

RECEIVABLES Manager’s remuneration Repurchases reimbursement Receivables - Agency sales Prepayments Other receivables 134,031 67,789 5,387 7,447 68,245 106,840 36,708 6,730 8,340 22,189 282,899 180,807 23 UNIT TRUST OF FIJI (MANAGEMENT) LIMITED NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 DECEMBER 2016 Unit Trust of Fiji (Management) Limited Annual Report 2016 11.
PLANT AND EQUIPMENT Furniture and fittings Office equipment Computer equipment $ $ $ Motor vehicles $ Total $ COST Balance as at 1 January 2015 292,621 121,133 183,972 181,500 779,226 Additions Disposals 1,850 2,335 16,183 138,000 158,368 - - - (109,000) (109,000) Balance as at 31 December 2015 294,471 123,468 200,155 210,500 828,594 Additions Disposals Balance as at 31 December 2016 1,500 1,220 7,963 62,000 72,683 - - - (72,500) (72,500) 295,971 124,688 208,118 200,000 828,777 DEPRECIATION AND IMPAIRMENT Balance as at 1 January 2015 238,780 92,848 155,528 106,528 593,684 Depreciation charge for the year 17,315 7,664 15,246 41,026 81,251 Disposals - - - (91,232) (91,232) Balance as at 31 December 2015 256,095 100,512 170,774 56,322 583,703 Depreciation charges for the year 13,585 6,915 16,886 41,400 78,786 Disposal - - - (43,500) (43,500) Balance as at 31 December 2016 269,680 107,427 187,660 54,222 618,989 CARRYING AMOUNT At 31 December 2015 38,376 22,956 29,382 154,178 244,892 At 31 December 2016 26,291 17,261 20,458 145,778 209,788 24 UNIT TRUST OF FIJI (MANAGEMENT) LIMITED NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 DECEMBER 2016 Unit Trust of Fiji (Management) Limited Annual Report 2016 12.
INTANGIBLE ASSETS Computer Software COST Balance as at 1 January 2015 Additions Disposals Balance as at 31 December 2015 Additions Disposals Balance as at 31 December 2016 AMORTIZATION AND IMPAIRMENT Balance as at 1 January 2015 Amortization charge for the year Disposals Balance as at 31 December 2015 Depreciation charges for the year Disposals Balance as at 31 December 2016 CARRYING AMOUNT At 31 December 2015 At 31 December 2016 $ 168,310 - - 168,310 - - 168,310 161,697 6,572 - 168,269 41 - 168,310 41 - 13.
CREDITORS AND ACCRUALS Trade creditors and accruals 2016 $ 274,643 2015 $ 308,251 25 UNIT TRUST OF FIJI (MANAGEMENT) LIMITED NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 DECEMBER 2016 Unit Trust of Fiji (Management) Limited Annual Report 2016 14.

PROVISIONS Employee entitlement represents annual leave accrued as at 31 December 2016.

Opening balance Accrued in the year Utilized in the Year Closing Balance 15.
SHARE CAPITAL Authorized capital: 2016 $ 79,501 40,569 (34,093) 85,977 2015 $ 67,378 22,597 (10,474) 79,501 50,000 ordinary shares of $1 each 50,000 50,000 Issued and paid up capital: 50,000 ordinary shares of $1 each 50,000 50,000 16.

RELATED PARTIES (a) Identity of related parties The Company has a related party relationship with the Government of Fiji, Unit Trust of Fiji, its directors and executive officers.
UTOFMGT is 100% owned by the Government of Fiji and operates under the umbrella of the Ministry of Public Enterprise and the Ministry of Economy.

During the year, dividend of $131,662 and $235,721 was declared and paid from the net profit for the years ended 31 December 2014 and 2015 respectively.

There were no other transactions with the Government of Fiji.
The names of the directors during the year and up to the date of approval of these financial statements were: Shaenaz Voss – Chairperson Maciu Lumelume - Director During the year, the following persons were the executives identified as key management personnel, with the greatest authority and responsibility for planning, directing and controlling the activities of the Company: Mr. Vilash Chand (Chief Executive Officer), Mr. Gyanesh Rueben (Manager Finance & Operations), Mr. Sakiusa Bolaira (Manager Business Development) and Ms. Elenoa Kaloumaira (Manager Investment).
(b) Directors’ fees and emoluments Directors’ fees (c) Other 2016 $ 23,000 2015 $ 23,000 Mr. Anil Tikaram and Mr. Iowane Naiveli were Trustees of the Unit Trust of Fiji for the year ended 31 Decem- ber 2016.

Remuneration totaling $113,470 (2015 – $102,862) was paid to the Trustees during this period.
The following are details of the fees paid to them: Mr. Anil Tikaram - $56,735 (2015: $51,431) Mr. Iowane Naiveli - $56,735 (2015: $51,431) 26 UNIT TRUST OF FIJI (MANAGEMENT) LIMITED NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 DECEMBER 2016 Unit Trust of Fiji (Management) Limited Annual Report 2016 16.
RELATED PARTIES - continued (d) Amounts owing to and from related parties Owing to the Unit Trust of Fiji Bank charges Manager’s remuneration Owing by the Unit Trust of Fiji Manager’s remuneration Reimbursement of repurchases Rounding Preliminary Charges 2016 $ 372 - 372 134,031 67,789 12,394 33,129 247,343 2015 $ 1,144 19,009 20,153 106,840 36,708 1,092 3,674 148,314 (e) Key management personnel compensation The aggregate compensation of the key management personnel comprises only short-term benefits as set out below: Short-term benefits 275,700 238,212 17.
CASH AND CASH ON HAND For the purposes of the cash flow statement, cash and cash on hand include the following: Cash at bank and on hand 1,820,141 1,730,290 18.
COMMITMENTS AND CONTINGENT LIABILITIES (a) Lease as lessee Non-cancellable operating lease rentals are payable as follows: Not later than one year Later than one year and not later than five years 90,647 128,416 86,073 - 219,063 86,073 (b) Operating lease The company has leased office premises in the Downtown Boulevard from the Fiji National Provident Fund.

$90,647 payable each year (lease period 01.06.2016 – 31.05.2019).
(c) Capital commitments There were nil capital commitments as at balance date (2015: $nil).

(d) Contingent Liabilities A bank guarantee of $40,000 was given to the Government of Fiji, under s 5 (2) of the Unit Trust Act 1978, secured by a term deposit.

19.
19.

EMPLOYEE NUMBERS Number of employees at the end of the financial year 2016 14 2015 13 27 UNIT TRUST OF FIJI (MANAGEMENT) LIMITED NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 DECEMBER 2016 Unit Trust of Fiji (Management) Limited Annual Report 2016 20.
RISK MANAGEMENT POLICIES The Company is exposed to the risks as mentioned below: § Market risk § Liquidity risk § Operational risk This note presents information about the Company’s exposure to each of the above risks, its objectives, policies and processes for measuring and managing risk.

Market Risk I.

Interest Risk The Company does not have any borrowings so is not exposed to changes in interest rates on borrowings.
The only impact from changes in interest rates are the Company cash balances and term deposits and is not expected to have a material impact on the Company.

Through its investment policy the company aims to balance its portfolio through short term deposits.
At the reporting date the interest profile of the Company’s interest bearing financial instruments was: Fixed rate instrument Term Deposits Carrying Amount 2016 $ 59,045 2015 $ 59,045 Fair value sensitivity analysis for fixed instruments The Company does not account for any fixed rate financial assets and liabilities at fair value through profit and loss.

Therefore, change interest rates at reporting date would not affect the income.

II.
II.

Credit Risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligation, and arises principally from the Company’s receivables.

The carrying amount of financial assets represents the maximum credit exposure.
The maximum exposure to credit risk at reporting date was: Cash at bank Trade and other receivables Investments – held to maturity Liquidity Risk 2016 $ 1,820,141 282,899 59,045 2,162,085 2015 $ 1,730,290 180,807 59,045 1,970,142 This is the risk that the Company will not be able to fulfill its short-medium term commitments.

Management intends to constantly monitor the flow of funds to meet its day to day operational costs and also to meet normal unit holders’ redemption requests.
The Company does not have any interest bearing liabilities.

Trade creditors and accruals are paid in the 30 days’ term.

28 UNIT TRUST OF FIJI (MANAGEMENT) LIMITED NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS - continued FOR THE YEAR ENDED 31 DECEMBER 2016 Unit Trust of Fiji (Management) Limited Annual Report 2016 20.

RISK MANAGEMENT POLICIES - continued Operational Risk I.
Data Risk The Manager, at all times, ensures data confidentiality and security of all unit holders’ information and other relevant information.

However, to minimize the risk of losing any important information, a Disaster Recovery Plan is developed in addition with frequent backups of electronic data.

II.

Legal Risk Legal risk is defined as being legally non-compliant due to changes in Government and Regulators current policies and regulations.
Management monitors changes to regulations for compliance and implementation of market best practices.

In addition, the Company’s three-year strategic plan also ensures that all the operational processes comply with the relevant regulatory requirements.

III.

Operational Risk The above risk arises during the implementation of strategies by management to enhance growth.
The Company has developed an operations manual, a three-year strategic plan and annual key performance indicators to ensure all operational processes are in line with necessary future plans and expectations.

21.

PRINCIPAL BUSINESS ACTIVITY The principal business activity of the company is to make investment decisions and the administration of the Unit Trust of Fiji.

22.
REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS The registered office and principal place of business for Unit Trust of Fiji (Management) Limited is: Level 2, Provident Plaza One, Ellery Street, Suva, Fiji The company is a limited liability company incorporated in the Republic of Fiji 29 UNIT TRUST OF FIJI (MANAGEMENT) LIMITED DETAILED STATEMENT OF PROFIT AND LOSS FOR THE YEAR ENDED 31 DECEMBER 2016 Unit Trust of Fiji (Management) Limited Annual Report 2016 INCOME Manager’s remuneration Preliminary charges Rounding Gain on sale of plant and equipment Other EXPENDITURE Advertising and publicity Audit fees – Management Company Audit fees – Trust Company Bank charges Business promotion & development Cleaning Directors’ emoluments Depreciation Electricity Commission FDB Fees FNPF Insurance License Motor vehicle expense Printing, postage and stationery Professional fees Repairs & maintenance Rental Salaries & wages Sundry Staff Training Staff amenities Telephone TPAF Levy Trustee’s remuneration Traveling & accommodation 2016 $ 2015 $ Profit before tax $739,574 $602,261 1,484,127 1,288,379 30 Corporate Directory The Fund Unit Trust of Fiji The Manager Unit Trust of Fiji (Management) Limited Registered Office Level 2, Provident Plaza 1, 33 Ellery Street, Suva, Fiji Postal Address GPO Box 14451, Suva, Fiji Customer Care Centre Level 2, Provident Plaza 1, Ellery Street, Suva, Fiji Tel: (679) 3301 052, 3309 698, 3314 544 Fax: (679) 3315376 Website www.unittrustfiji.com.fj Email info@unittrustfiji.com Board of Directors Mrs Shaenaz Voss (Chairperson) Mr Maciusela N
 Lumelume Chief Executive Officer Mr Vilash Chand Auditor Office of the Auditor General 8th Floor, Ratu Sukuna House, MacArthur Street, Suva, Fiji The Trustee Unit Trust of Fiji (Trustee Company) Limited Registered Office Level 2, Provident Plaza 1, Ellery Street, Suva, Fiji Postal Address G P O Box 14451, Suva, Fiji Board of Directors Mr Iowane Naiveli Mr Anil K Tikaram Auditor BDO Level 10, FNPF Place, 343 Victoria Parade, Suva, Fiji Solicitors Mitchell & Keil 10 Gorrie Street, Suva, Fiji R Patel & Co 360 Victoria Parade, Suva, Fiji Bankers HFC Bank, ANZ, WBC, BSP your investment fund Invest Online - www.unittrustfiji.com.fj Level 2, Provident Plaza 1, 33 Ellery Street, GPO Box 14451, Suva, Fiji T (679) 3301 052, 3309 698, 3314 544 F (679) 3315 376 E info@unittrustfiji.com W www.unittrustfiji.com.fj