DISCLOSURE STATEMENT

Bay Brokers Limited

PO Box 880 , Tauranga 3140

Phone: 07-578 7453 or 021 762 440

The Investment Adviser is self employed, trading under the name of Bay Brokers Limited. The Investment Adviser makes the following investment adviser disclosure to you pursuant to section 41A of the Securities Markets Act 1988.

Bay Brokers Limited (in respect of itself and its principal officers) makes the following investment broker disclosure to you as required by section 41G of the Securities Markets Act 1988.

The Investment Adviser has the following qualifications that are relevant to giving investment advice:

The Investment Adviser keeps the knowledge obtained from those qualifications up to date by reading relevant industry publications and attending external seminars and workshops.

The Investment Adviser has operated an Investment Advisory and Licensed Sharebroking business since February 1994. Bay Brokers Limited is an experienced and well qualified financial advisor. As part of its advisory business, Bay Brokers Limited may provide investment advice about securities. Bay Brokers Limited keeps abreast of relevant issues by attending relevant seminars and workshops where appropriate. Bay Brokers Limited subscribes to relevant industry publications and, where appropriate, its investment advisers will monitor the financial markets.

Bay Brokers Limited has an internal complaints process in place. This process has been established so that your complaint is dealt with efficiently and fairly. Complaints are monitored in an endeavour to improve the quality of our products and services. If any dispute arises between you and Bay Brokers Limited both parties must try to resolve the dispute through good faith negotiations. If the parties are unable to resolve the dispute through good faith negotiations within five business days of the dispute arising, the matter may be referred by either party (by written notice to the other party) to and determined by the arbitration of a single arbitrator, if the parties can agree upon one within 14 days of the decision to refer the matter to an arbitrator, or failing such agreement, by two arbitrators (one to be appointed by us and one by you) and otherwise the arbitration will be conducted in accordance with the Arbitration Act 1996.

In the five years before the relevant investment advice is given none of the Investment Adviser, Bay Brokers Limited (in its capacity as an investment adviser and where applicable as an investment broker) or any principal of Bay Brokers Limited has been:

• convicted of an offence under the Securities Markets Act 1988, or the Securities Act 1978 or of a crime involving dishonesty (as defined in section 2(1) of the Crimes act 1961);

• a principal officer of a body corporate when that body corporate committed an offence or crimes involving dishonesty as described above;

• prohibited by an Act or by a court from taking part in the management of a company or a business;

• subject of an adverse finding by a court in any proceeding that has been taken against them in their professional capacity;

• expelled from or has been prohibited from being a member of a professional body; or

If you are a retail customer of Bay Brokers Limited utilising the services of Bay Brokers Limited , Bay Brokers Limited is entitled to charge a portfolio management fee of up to 1% of the portfolio.

The Investment Adviser may receive payments or other benefits from Bay Brokers Limited in addition to his or her salary that are linked to various internal performance criteria, including the provision of investment advice and the sale of securities. Accordingly, by giving investment advice to you, the Investment Adviser may increase the likelihood of his or her receiving, and/or the amount of, such payments. It is not practicable to calculate the amounts or rates of such payments. Other than the Investment Adviser’s employment with Bay Brokers Limited and the remuneration received by the Investment Adviser from Bay Brokers Limited, neither the Investment Adviser nor an associated person of the Investment Adviser has, or will or may have, any interest or relationship that a reasonable person would find reasonably likely to influence the Investment Adviser in providing the investment advice.

When a security is sold or placed by the Investment Adviser, Bay Brokers Limited may receive a commission, either from the issuer of a security or from an associated person of Bay Brokers Limited. Whether that commission is received and if received its value depends on the security sold or placed. Up front commissions received by Bay Brokers Limited are up to 4% of the value of the security subscribed for. Bay Brokers Limited may also receive ongoing commission of up to 1% on the value of the security sold. At the time of providing this disclosure statement it is not practicable to provide a detailed list of each security advised upon, the name of the issuer of that security and the rate of the commission received by Bay Brokers Limited. However, this information will be disclosed to you in the form of a supplementary disclosure statement if required by law when the Investment Adviser advises you on a specific investment.

The Investment Adviser and Bay Brokers Limited provide investment advice on the following types of securities:

• Debt securities including call deposits, Government stock, Local Authority stock, State-Owned Enterprise bonds, Kiwi bonds and corporate bonds and notes;

• Equity securities such as listed and unlisted shares; Portfolio investment entities;

Each security (including the principal, interest or other returns of any security) the subject of investment advice given to the investor by the Investment Adviser or Bay Brokers Limited or otherwise, is not guaranteed, secured or underwritten in any way by the Investment Adviser, Bay Brokers Limited or any associated or related party except to the extent expressly agreed in the terms of the relevant security.

Bay Brokers Limited does not provide investment advice tailored to an investor’s personal circumstances. It is the investor’s responsibility to understand the nature of the security subscribed for, and the risks associated with that security. To the maximum extent permitted by law, the Investment Adviser and Bay Brokers Limited exclude liability for, and shall not be responsible for, any loss suffered by the investor resulting from Bay Brokers Limited’s or the Investment Adviser’s investment advice.