Carbon Fund — Fund Information / Factsheet 2018

Nov 7, 2018

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CarbonFund

Salt Listed Funds

Product Disclosure Statement Offer of units in the Carbon Fund Dated 12 October 2018

Issued by Salt Investment Funds Limited

This document gives you important information about this investment to help you decide whether you want to invest. There is other useful information about this offer on www.disclose-register.companiesofce.govt.nz. Salt Investment Funds Limited has prepared this document in accordance with the Financial Markets Conduct Act 2013. You can also seek advice from a financial adviser to help you to make an investment decision.

1. Key information summary

What is this?

This is a managed investment scheme. Your money will be pooled with other investors’ money and invested in various investments. Salt Investment Funds Limited will invest your money and charge you a fee for its services. The returns you receive are dependent on the investment decisions of Salt Investment Funds Limited and of its investment manager and the performance of the investments. The value of those investments may go up or down. The types of investments and the fees you will be charged are described in this document.

What will your money be invested in?

Units in the Carbon Fund (referred to as the Fund ), which we intend to quote on the NZX Main Board, are offered under this Product Disclosure Statement ( PDS ).

Set out in the table below is a summary of the Fund. More information about the Fund’s investment target and strategy is provided at Section 3, ‘Description of your investment option’.

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Estimated total annual
Brief description of the Carbon Fund and its investment objective Risk indicator fund charges (of net asset
value)
The Fund’s investment objective is to provide investors
with a total return exposure to movements in the
price of carbon credits. The Fund has the ability to buy
carbon credits in emissions trading schemes in New
Zealand and offshore. As a result, the Fund may also
provide exposure to the price of carbon offshore. 0.95%
The unique features of the Fund means that it will
not be appropriate for all investors. See Section
2, ‘How does this investment work?’ for more
information.
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• The historical price of carbon credits in New Zealand for the five years to 30 September 2018 has been used to calculate the risk indicator because the Fund has not yet been in existence for a period of five years (the Fund was established on 12 October 2018). The resulting risk indicator may be impacted by a Government policy shift that resulted in international carbon units becoming ineligible for use within the New Zealand Emissions Trading Scheme (NZ ETS) during that period. As a result, the risk indicator may provide a less reliable indicator of the potential future volatility of the Fund.

See Section 4, ‘What are the risks of investing?’ for an explanation of the risk indicator and for information about other risks that are not included in the risk indicator. To help clarify your own atti ude to risk, you can seek financial advice or work out your risk profile at www.sorted.org.nz/tools/investor-kickstarter.

Who manages the Carbon Fund?

Salt Investment Funds Limited ( we, our, or us ) is the manager of the Carbon Fund. See Section 7, ‘Who is involved?’ for more information.

How can you get your money out?

We intend to quote these units in the Fund on the NZX Main Board so you can sell your investment if there are interested buyers. The amount you get may be less than the amount that you invested.

Investments in the Fund are not generally redeemable for cash. If redemptions are permitted, conditions will apply (including minimum amounts), and we will be able to suspend, defer, or partially restrict withdrawals in certain circumstances.

See Section 2, ‘How does this investment work?’ for more information about how you can get your money out.

How will your investment be taxed?

The Fund is a listed portfolio investment entity ( PIE ). As a listed PIE, the Fund will pay tax at the rate of 28%. See Section 6 of the PDS, ‘What taxes will you pay?’ on page 9 for more information.

Where can you find more key information?

We are required to publish quarterly updates for the Fund. The updates show the returns, and the total fees actually charged to investors, during the previous year. The latest fund updates will be available at www.carbonfund.co.nz. The manager will also give you copies of those documents on request.

1 Carbon Fund Product Disclosure Statement

Table of contents

Table of contents
1. Key informaton summary	1
2. How does this investment work?	2
3. Descripton of your investment opton 4. What are the risks of investng?	5 6
5. What are the fees?	8
6. What taxes will you pay?	9
7. Who is involved?	9
8. How to complain	10
9. Where you can fnd more informaton	10
10. How to apply	11

2. How does this investment work?

This PDS contains an offer of units in the Fund. The Fund has been established within the registered managed investment scheme known as the Salt Listed Funds ( Scheme ). We intend to quote the units in the Fund on the NZX Main Board (under code CO2). We, Salt Investment Funds Limited, are the manager of the Fund. We are a wholly-owned subsidiary of Salt Funds Management Limited ( Salt ), a boutique investment management firm.

The New Zealand Guardian Trust Company Limited is the supervisor of the Fund ( Supervisor ). We have appointed Link Market Services Limited to provide registry services, and MMC Limited to provide other administration services, for the Fund. Salt is the investment manager for the Fund.

Structure of the Salt Listed Funds

The Scheme is structured as a master trust with one Fund established within it. The Scheme is governed by a master trust deed, and an establishment deed for the Fund, entered into between us and the Supervisor. The Fund is a separate trust fund – which means that the assets of the Fund cannot be used to satisfy the liabilities of any other fund established within the Scheme.

Any investment directly into the Fund is converted into units in the Fund. By purchasing units in the Fund, you are pooling your money with other investors, which Salt then invests in underlying investments. All units in the Fund have equal value.

Your units represent your proportionate holding of the Fund’s net assets (its assets less fees and expenses), although they do not give you legal ownership of, or any direct right to, those underlying assets. Because unit values (unit value) are based on the Fund’s net asset value (net asset value), those unit values will fluctuate in line with the changing value of the Fund’s underlying investments. The price at which units trade on the NZX Main Board will also fluctuate, based on a number of factors.

Returns from investing in the Fund are reflected in changes in the unit value, and the price you receive when you sell your units (or redeem them, if we permit). Although we do not currently intend to make distributions, we may do so in the future, from the income or capital of the Fund. In that case, part of your return would be reflected in those distributions.

Significant benefits

Investing in the Fund offers a range of benefits, including:

• Market access: The Fund provides access to investments that might otherwise be difficult to achieve on your own.

• Transparency and ability to trade on-market: Once quoted, units in the Fund can be bought and sold on the NZX Main Board like shares in a company.

• Experienced investment managers: The Fund utilises the investment expertise of highly experienced managers who have a multi-decade perspective on investment opportunities and investment risk.

Investment strategy of the Fund

The Fund is intended to provide investors with a total return exposure to movements in the price of carbon credits. The Fund has the ability to buy carbon credits in emissions trading schemes in New Zealand and offshore.

Carbon Fund Product Disclosure Statement

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What is the New The NZ ETS is the primary tool that New Zealand has developed to facilitate efforts to reduce
Zealand Emissions greenhouse gas emissions.
Trading Scheme (NZ
ETS)? The price of carbon in New Zealand is standardised by New Zealand Units (NZU). An NZU represents
one metric tonne of carbon dioxide equivalent. Emitters in the NZ ETS are obligated to surrender to the
government a tradable emission unit (one NZU) for each tonne of emissions for which they are liable.
NZUs are created by the Government, and can be earned by greenhouse gas absorbers, such as forestry.
How does the NZ ETS The NZ ETS commenced operating in 2008. The market works by having a tradable price on a NZU.
market work? Having a price on carbon sends price signals to producers, consumers, and investors which enables and
encourages a change in behaviour with respect to greenhouse gasses.
In general, participants can acquire emission units by:
1) Receiving them for free.
2) Buying them from other participants.
3) Buying them at auction.
4) Earning them by ETS removal activities.
How does emissions NZU trading is done primarily on an over-the-counter (OTC) basis. An OTC market means a market
trading work within the where financial instruments (in this case NZUs), are traded directly between two parties and without the
NZ ETS? facilitation of a physical exchange such as the New Zealand Stock Exchange. Participants in the market
(such as OMF or Carbon Match), can act as intermediaries between parties to the transaction.
There is no limit on the price that NZUs can trade at on the open market. There is, however, a Fixed
Price Option (FPO) currently set at $25 per NZU available to emitters. Prices for NZUs may be found on
financial service platforms such as; Bloomberg, CommTrade Carbon, and Carbon Match.
Changes to the ETS In the 2008 NZ ETS market design, NZ participants had both buy and sell linkages with the international
which may have Kyoto market. There was no restriction on the number of units that could be purchased from the
affected prices Kyoto market and surrendered in the NZ ETS to cover emissions obligations. This created a large supply
demand imbalance and strong downward pressure on the price of NZUs as participants “banked” their
allocation of NZUs and fulfilled domestic surrender obligations via Kyoto market units.
The NZ ETS “de-linked” from the Kyoto markets during 2015. From 2015 NZUs were primarily used to
satisfy NZ ETS participants emission obligations and NZUs experienced strong price appreciation.
Proposed changes to It is widely accepted that the current market settings of the NZ ETS are not fit-for-purpose for New
the NZ ETS Zealand achieving its Paris Agreement emission reductions commitments.
In August 2018, the Ministry for the Environment released a consultation document highlighting
proposals to improve the NZ ETS and support New Zealand’s wider climate change policy targets. The
key proposals arising are to:
• introduce an annual process for setting and announcing NZ ETS unit supply volumes over a five-year
rolling period.
• replace the current $25 FPO, with a different mechanism called a ‘cost containment reserve’.
• limit the number of international units NZ ETS participants can use if the scheme reopens to
international carbon markets.
• phase-down free industrial allocations.
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Historically, the value of carbon credits has fluctuated significantly, and has been affected by regulatory and political changes to a greater extent than other asset classes. These unique features mean that the Fund will not be appropriate for all investors. To find out more about the NZ ETS please see the OMI document on the offer register at www.disclose-register.companiesofce.govt.nz.

Further information is set out in Section 3, ‘Description of your investment option’ and Section 4, ‘What are the risks of investing?’.

Carbon Fund Product Disclosure Statement

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Making investments

Initial offer period

Units in the Fund will first be offered during an initial offer period. The purpose of the initial offer period is to ensure that there are units available for quotation on the Fund’s listing date.

The timetable for the initial offer period is expected to be as follows:

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Opening date for initial offer period Tuesday 23 October 2018
Closing date for initial offer period Monday 5 November 2018
Issue and allotment date Wednesday 7 November 2018
Date on which the Fund lists on the NZX Main Board, units are quoted, and Thursday 8 November 2018
trading commences
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The above dates are indicative only and are subject to change. We may vary the timetable in our discretion (including changing the dates that the initial offer period opens and closes) and accept late applications. We also reserve the right to cancel the offer and the issue of units. If we cancel the offer, any application monies received will be refunded (without interest) as soon as practicable, and within no more than 10 business days of cancellation.

During the initial offer period you can invest in the Fund directly (via www.carbonfund.co.nz), through an administration service, financial adviser or NZX Participant (such as a broker). All units purchased during the initial offer period will be issued at a fixed unit price of $1.00.

Investing after the initial offer period

Units in the Fund will continue to be issued after the initial offer period has closed and will be available for purchase on market through an NZX Participant.

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Purchase of units in the Fund
Investing directly You can invest in the Fund via www.carbonfund.co.nz by making lump sum investments, either by
cheque or direct credit. We can reject an application at our discretion, and are not required to give
reasons. We may stop accepting direct investments at any time and only permit investments via an
administration service, financial adviser or NZX Participant.
Once you have made an initial investment, there is no obligation to make further payments. If
permitted, investments of any amount can usually be made, provided the following minimums are met:
Type of contribution Minimum
Initial investment $5,000
Additional lump sum investment $1,000
We can waive these minimums generally or in a particular case. We can also change these minimums
from time to time. We can, at our discretion, accept consideration for units in a form other than cash,
including existing investments. Please contact us if you would like to discuss this option.
Investing through an Certain administration services and financial advisers have arrangements for investing in the Fund
administration service through us or through an NZX Participant. Any investment made through an administration service will
or financial adviser be held by the administration service’s custodian on your behalf and different minimum investment
levels may apply to the particular service that you use. You will need to make payments to the provider
of that service by following the process it has. The provider will be able to provide you with details.
If you purchase units in the Fund they will be issued at the unit price. The unit price is calculated by
Issue of units dividing the Fund’s net asset value by the number of units on issue. Valuation Days currently occur
every Friday. When a Wednesday or a Friday fall on a public holiday processing of applications and
Valuation Days will defer to the next Business Day. Generally, if we receive a valid application (and
accept that application) before 1.00pm on the Wednesday immediately before a Valuation Day, we
will issue units at the price set using the Fund’s net asset value for that Valuation Day. If we receive
the application on or after 1.00pm, we will issue units at the price set using the next Valuation Day’s
values. You can access the net asset value of the Fund on the website www.carbonfund.co.nz. We also
may defer processing applications if we consider it necessary or desirable.
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Carbon Fund Product Disclosure Statement

4

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Purchasing units on market
Investing through an Once quoted on the NZX Main Board, units will be able to be purchased on market at the quoted price
NZX Participant through an NZX Participant (such as a broker). See www.nzx.com/services/market-partcipants for a
list of current NZX Participants. The quoted price on the NZX Main Board may differ from the unit price
provided by the Fund and may be traded at a discount or premium to the unit price. The quoted price
is published on the NZX Main Board. You can elect whether to purchase on market and at what price.
You may use the published net asset value of the Fund (on the website at www.carbonfund.co.nz) used
to set the unit price as a reference.
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If you invest through an administration service, financial adviser or NZX Participant, they may charge you a fee for their services. See the Other Material Information (OMI) document on the offer register at www.disclose-register.companiesofce.govt.nz for more information about making investments.

Withdrawing your investments

We intend to quote the units in the Fund on the NZX Main Board, so you can sell your investment through an NZX Participant (such as a broker) or financial adviser if there are interested buyers. In very limited circumstances, we can restrict transfers of units. For example, where the transfer would result in an investor holding less than the required minimum holding or could result in the Fund losing PIE status. In order to trade quoted units, you will need to have a Common Shareholder Number (CSN), an Authorisation Code (FIN) and a relationship with an NZX Participant. Opening an account with an NZX Participant can take a number of days depending on the Participant’s new client procedures.

Investments in the Fund are generally not redeemable for cash. If we allow redemptions, conditions will apply (including minimum amounts) and we will be able to suspend, defer or partially restrict withdrawals in certain circumstances.

See the OMI document on the offer register at www.disclose-register.companiesofce.govt.nz for more information about withdrawals.

3. Description of your investment option

The table below shows details of the Fund:

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Carbon Fund
Minimum
Summary of investment objectives and Target Risk suggested
Suitability
strategy investment mix category investment
time frame
The Fund’s aim is to provide investors with a Cash and cash 7 5 years The historical carbon price has
total return exposure to the price of carbon equivalents 2% been quite volatile relative to
credits. The Fund has the ability to buy carbon traditional asset classes such as
credits in emissions trading schemes in New Commodities shares and bonds. Price fluctuation
Zealand and offshore. (carbon) 98% plays a significant role in the
carbon market and carbon dioxide
The Fund gains its exposure to the price emissions reduction. Many factors
of carbon credits in the NZ ETS through influence the price of carbon
purchasing and holding carbon credits on credits including political decisions,
the NZ ETS. We may also use swaps or other regulation, fuel prices, and even
derivatives to gain exposure to the NZ ETS. global weather and climate
change.
The Fund will also have the ability to buy
carbon credits in international emission These unique features mean that
trading schemes, as well as futures, swaps the Fund will not be appropriate
or other derivatives that provide exposure to for all investors. Please read the
international schemes. As a result, the Fund next section ‘What are the risks
may also provide exposure to the price of of investing?’ before considering
carbon offshore. See Section 2, ‘How does this an investment in the Fund.
investment work?’ for more information. Please speak to your authorised
financial adviser before investing
in the Fund.
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• The historical price of carbon credits in New Zealand for the five years to 30 September 2018 has been used to calculate the risk indicator because the Fund has not yet been in existence for a period of five years (the Fund was established on 12 October 2018). The resulting risk indicator may be impacted by a Government policy shift that resulted in international carbon units becoming

5 Carbon Fund Product Disclosure Statement

ineligible for use within the NZ ETS during that period. As a result, the risk indicator may provide a less reliable indicator of the potential future volatility of the Fund. Please see the section on risks in the OMI document on the offer register at www.disclose-register.companiesofce.govt.nz.

We can change the statement of investment policy and objectives (SIPO) for the Fund, which outlines how the Fund invests, after giving notice to the Supervisor. We will give you at least one month’s prior notice of any material changes to the SIPO. The most current version of the SIPO is available on the schemes register at www.disclose-register.companiesofce.govt.nz. A description of any material changes to the SIPO will be included in the Fund’s annual report.

Further information about the assets in the Fund can be found in the fund updates (once available) at www.carbonfund.co.nz.

4. What are the risks of investing?

Understanding the risk indicator

Managed funds in New Zealand must have a standard risk indicator. The risk indicator is designed to help investors understand the uncertainties both for loss and growth that may affect their investment. You can compare funds using the risk indicator.

Set out on the right is an example (blank) risk indicator. See the table on page 1 for the filled-in risk indicator for the Fund.

The risk indicator is rated from 1 (low) to 7 (high). The rating reflects how much the value of the fund’s assets goes up and down (volatility). A higher risk generally means higher potential returns over time, but more ups and downs along the way.

To help you clarify your own at ude to risk, you can seek financial advice or work out your risk profile at www.sorted.org.nz/tools/ investor-kickstarter.

Note that even the lowest category does not mean a risk-free investment, and there are other risks (described under the heading ‘Other specific risks’) that are not captured by this rating.

This risk indicator is not a guarantee of a fund’s future performance. The risk indicator is based on the returns data for the five years to 30 September 2018. While risk indicators are usually relatively stable, they do shift from time to time. You can see the most recent risk indicator in the latest fund update for this Fund (once available).

General investment risks

Some of the things that may cause the Fund’s value to move up and down, which affect the risk indicator, are investment return risk, asset-specific risk, market risk, credit risk, liquidity risk, derivative risk, and currency risk.

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Risk Description
Investment return Investment risk is the risk that returns from the Fund’s investments will be negative or lower than expected,
risk affecting the value of your investment in the Fund. Different asset classes have different levels of risk.
For example, the carbon asset class is generally considered higher risk and potentially more volatile than
equity and property investments. The price of carbon credits is affected by many factors including weather
conditions, development of fuel switching and storage possibilities and public sentiment.
Asset-specific risk Asset-specific risk is the risk associated with exposure to a single asset class. Risk associated with investing
in one specific asset can be eliminated by diversification of your investment across more asset classes,
especially those that behave differently in similar market conditions.
Market risk Investments generally are affected by movements in market demand and supply, economic conditions,
market sentiment, political events, natural disasters, and consumer demand. The demand and supply for
carbon credits on the NZ ETS affects the Fund’s value.
Credit risk Credit risk is the risk that a party to a contract with the Fund defaults, fails to complete a transaction, or
otherwise becomes unable to meet its financial obligations. If the Fund enters into a contract with a third
party that defaults, this could affect the unit value.
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Carbon Fund Product Disclosure Statement

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Risk Description
Liquidity risk Liquidity risk is the risk that investments cannot be sold without loss of capital and minimum delay, due to
either limited market depth for the trading of the investment in the secondary market (refer to ‘NZX waiver’
on page 8 below for more information) or disruptions in the market place for the investment. If the demand
for carbon credits on the emissions trading scheme in which the Fund trades diminishes, this could have
an impact on the unit value. For example, if there are fewer buyers than sellers on the emissions trading
scheme the unit value may drop.
Derivative risk As the Fund may use a range of derivatives including forwards, futures and options, its investment
movements may be more volatile than a fund with no derivative exposure. The Fund is permitted to hold
derivatives that provide exposure to the price of carbon. The performance of derivatives can be more
volatile than holding carbon credits directly and this could affect the unit value.
Currency risk The Fund is permitted to hold carbon credits on overseas emissions trading schemes. Currency fluctuations
in the exchange rate between the overseas market currency and the New Zealand dollar may impact the unit
value. However, the Fund will generally be 100% hedged to any overseas currency exposure.
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Other specific risks

The other specific risks set out below also apply to the Fund but are not reflected in the risk indicator. We have processes in place to mitigate, to the extent practicable, these risks.

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Risk Description
Key person risk As we and Salt are boutique fund managers, the Fund is dependent on the continued involvement and
commitment of key investment personnel. The loss of any of them could have an adverse effect on our and
Salt’s ability to make investment decisions in respect of the Fund, and therefore on the Fund’s returns.
Regulatory and Your investment could be affected by changes in the laws, regulations or rules regulating the New Zealand
political risk Emissions Trading Scheme or any international emission trading scheme where the Fund is invested. For
example, the Government could change the rules around the fixed price option (the cap on the amount
which carbon emitters must pay per tonne of carbon emissions). A change in current political settings
towards the New Zealand Emissions Trading Scheme may also affect the price of New Zealand Units. For
example, the Government may include other gas emissions like methane or nitrous oxide into the New
Zealand emissions trading scheme. This could have an impact on the unit value.
Economic risk A slowing in economic growth may reduce an emissions-intensive operator’s output. This may in turn lower
the demand for offsetting carbon credits. Conversely, accelerating economic growth may increase emissions
and increase demand for carbon credits by emitters. This will have an impact on the unit value. For example,
greater consumption of goods by a growing population may lead to more trucks on the roads which leads to
greater greenhouse gas emissions and higher demand from trucking companies to acquire carbon credits to
offset their higher emissions.
Trading risk There is a risk that you may become unable to buy or sell units in the Fund on the NZX Main Board, or that
the quoted price for your units is less than the unit price. This could occur if there is an imbalance of supply
and demand for units in the Fund.
In addition, there is a risk that, in certain circumstances, trading of the Fund’s units may be suspended, or
the Fund’s units removed from quotation, on the NZX Main Board.
The Fund’s underlying carbon credits may also cease to be able to be traded on the emissions trading
schemes currently used for buying and selling those assets. For example, the Government may change its
priorities and decide to terminate the emissions trading scheme on which carbon credits are traded. This
would have an impact of the unit value.
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See the OMI document on the offer register at www.disclose-register.companiesofce.govt.nz for more information about risks.

7 Carbon Fund Product Disclosure Statement

Non-standard designation/ NZX Waivers

NZX Regulation (NZXR) has granted a number of waivers in respect of the Fund, including waivers from the requirements of NZX Main Board Listing Rules (Rules) 3.1.1(a), 3.1.1(b), 3.3.1(a), 3.3.1(c), 3.3.2 to 3.3.4, 3.3.5 to 3.3.15, 3.4.1 to 3.4.3, 3.5.1, 3.5.2, 3.6, Section 4, 5.2.3, 7.3, 7.4, 7.5, 7.6.1 to 7.6.3, 7.11.1, 7.12.1, 9.2, 10.3.2, 10.4.1(b), 10.4.2, and 10.6.1(a), and approval under Rule 11.1.5. As a consequence of these waivers, the Fund will bear a ‘non-standard’ designation of the NZX Main Board.

One of the waivers granted in the NZXR decision granted us, as manager of the Fund, a 12 month waiver (‘Waiver’) from Rule 5.2.3 to the extent that Rule requires units to be held by at least 500 members of the public (each holding at least a minimum holding). The Waiver is subject to the following conditions:

• The Fund discloses liquidity as a risk in the PDS for the offer of Units during the period of the Waiver;

• The Fund clearly and prominently discloses the Waiver, its conditions, and its implications in the PDS for the offer of units during the period of the Waiver;

• The Fund clearly and prominently discloses the Waiver, its conditions, and its implications in the Fund’s half year and annual report for each year the Waiver is relied on;

• We ensure that the total number of members of the pubic holding units and the percentage of units held by members of the public holding at least a minimum holding are monitored at the end of each quarter;

• We provide NZXR with a written quarterly update of the total number of members of the public holding units holding at least a minimum holding and the percentage of units held by members of the public holding at least a minimum holding. The quarterly updates are from the date the Waiver is granted, for the period of the Waiver. The updates are to be provided to NZXR within ten business days of the end of each quarter;

• The nature of the Fund’s business and operations do not materially change from those described in this PDS.

The implication of the Waiver is that, at least initially, units in the Fund are not expected to be widely held and there may be reduced liquidity in the Fund as a result (refer to ‘Liquidity risk’ on page 7 of the PDS for information).

5. What are the fees?

You will be charged fees for investing in the Carbon Fund. Fees are deducted from your investment and will reduce your returns. The fees you pay will be charged in two ways:

• regular charges (for example, annual fund charges). Small differences in these fees can have a big impact on your investment over the long term

• one-off fees (although none are currently charged).

Annual fund charges

The Fund’s annual fund charges are as follows:

Estimated total annual fund charges (of net asset value) 0.95%

What the fund charges cover

The annual fund charges are made up of our management fee, which we are paid for acting as manager of the Fund. Out of this fee we pay the fees and costs charged by the Supervisor, custodians, investment manager, administration manager, and unit registrar, as well as other expenses incurred in operating the Fund (other than transaction costs).

The management fee is deducted from, and reflected in, the value of the Fund. It is calculated and accrued daily as a percentage of the daily gross asset value of the Fund (which essentially means its net assets but ignoring any accruals for fees and expenses). As a result, the fund charges have been estimated as a percentage of net asset value in the above table. The management fee is paid monthly in arrears from the Fund.

The fund charges are disclosed on a before-tax basis. GST will be added to the fund charges, where relevant.

Carbon Fund Product Disclosure Statement

8

In addition, transaction costs are reflected in the Fund’s unit price and could therefore affect returns.

If you invest through an administration service, financial adviser or NZX Participant, they may charge you a fee for their services.

Individual action fees

There are currently no individual action fees charged. However, if you buy or sell units in the Fund through an NZX Participant (such as a broker) they may charge you a fee for their services.

You may be charged other fees on an individual basis for investor-specific decisions or actions in the future. See the OMI document on the offer register at www.disclose-register.companiesofce.govt.nz.

Example of how fees apply to an investor

Julia invests $10,000 in the Fund.

She is charged management and administration fees, which work out to about $95 (0.95% of $10,000). These fees might be more or less if her account balance has increased or decreased over the year.

Estimated total fees for the first year

Fund charges: $95

See the latest fund update (once available) for an example of the actual returns and fees investors were charged over the past year.

The fees can be changed

We can change the fees set out above or introduce new fees in the future, subject to the maximum fees set out in the master trust deed for the Scheme. The maximum management fee that can be charged is 2% of the Fund’s gross asset value plus any GST, and the maximum Supervisor’s fee is the greater of $20,000 or 0.075% of the Fund’s gross asset value plus any GST. We are also entitled to be reimbursed from the Fund for expenses we incur.

Where fees are increased we will give affected investors one month’s prior notice. We will also give affected investors one month’s prior notice if we decide to recover expenses from the Fund. Although we do not currently intend to do so, we can introduce contribution, withdrawal, or switching fees by two months’ prior notice. We can also waive our fees, and begin incorporating buy / sell spreads into the Fund’s unit price.

We must publish a fund update for the Fund showing the fees actually charged during the most recent year. Fund updates (once available), including past updates, are available at www.carbonfund.co.nz.

6. What taxes will you pay?

The Fund is a listed portfolio investment entity. The amount of tax that the Fund pays is calculated at the rate of 28%. As a result, even if the rate of tax payable by the Fund is higher than your marginal rate, you will not get a refund of any of the tax paid by the Fund.

See the OMI document on the offer register at www.disclose-register.companiesofce.govt.nz for more information about the tax consequences of an investment in the Fund.

7. Who is involved?

About Salt Investment Funds Limited

The manager of the Fund is Salt Investment Funds Limited. We are responsible for managing and administering the Fund and the Scheme. We are a wholly-owned subsidiary of Salt (the Fund’s investment manager), a boutique investment management firm. You can contact us by calling 09 967 7276, emailing info@saltfunds.co.nz, or writing to PO Box 106-587, Auckland, 1143.

9 Carbon Fund Product Disclosure Statement

Who else is involved?

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----- Start of picture text -----

Title Name Role
Supervisor The New Zealand Guardian Trust Company Limited Supervisor of the Fund and the Scheme under the
Financial Markets Conduct Act and responsible for
supervising us as manager.
Custodian The New Zealand Guardian Trust Company Holds the assets of the Fund.
Limited (acting through its nominee company Salt
Investment Nominees Limited)
Administration MMC Limited Provides unit pricing and other administration
manager services.
Unit registrar Link Market Services Limited Provides registry services.
Investment manager Salt Funds Management Limited Decides which assets the Fund will invest in.
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8. How to complain

You can lodge a complaint with us:

Call: 09 967 7276 during normal business hours Email: info@saltfunds.co.nz Write to: Salt Investment Funds Limited, PO Box 106-587, Auckland, 1143

You can lodge a complaint with the Supervisor:

Call: 09 909 5100 or 0800 87 87 82 during normal business hours Write to: Level 14, 191 Queen Street, Auckland

You can lodge a complaint with our independent dispute resolution scheme:

We and the Supervisor are each a member of an approved dispute resolution scheme operated by Financial Services Complaints Limited ( FSCL ). If you have complained to us and you have reached the end of our internal complaints process without your complaint being resolved to your satisfaction, FSCL may be able to consider your complaint. FSCL will not charge a fee to any complainant to investigate or resolve a complaint.

Call: 0800 347 257 during normal business hours Email: complaints@fscl.org.nz Write to: Financial Services Complaints Limited, PO Box 5967, Wellington 6145

9. Where you can find more information

On the Disclose website and from us

Further information relating to the Scheme and the Fund, including financial statements, annual reports, quarterly fund updates, master trust deed, establishment deed, and the SIPO, is (or will be) available on the offer register and the scheme register at www.disclose-register.companiesofce.govt.nz. A copy of the information on the offer register or scheme register is available on request from the Registrar of Financial Service Providers.

This information is also available at www.carbonfund.co.nz or on request from us (see page 9 for our contact details).

Carbon Fund Product Disclosure Statement

10

You can also obtain:

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----- Start of picture text -----

Type of information How to obtain
Fund updates Once available, fund updates will be available from our website and on request from us.
Fund information You can inspect documents we hold that are relevant to you, and other documents legally required to be
relevant to you provided to you, at our offices during normal business hours, or request an extract of those documents,
by written request to us. Direct investors in the Fund can also obtain details of your investment in the
same way and on our website.
----- End of picture text -----

You can find general information about us, Salt, the Fund, and the investment management team on our website: www.carbonfund.co.nz.

Information available through NZX

Once the units are quoted on the NZX Main Board, we will be subject to a disclosure obligation in relation to the Fund and the units. That obligation will require us to notify certain material information relating to the Fund to NZX so that information can be made available to the market. These notifications can be found on the Fund’s page on the NZX website at www.nzx.com (search the ticker code ‘CO2’). In addition, notices to investors will be able to be given by making an announcement on NZX.

All of the above information is available free of charge.

10. How to apply

Investing directly

To invest directly in the Fund, please complete, and follow the steps set out in, the online application form, which is available at www.carbonfund.co.nz.

Investing through an NZX Participant

You can buy units in the Fund through an NZX Participant (such as a broker). Go to www.nzx.com/services/market-partcipants for a list of NZX Participants.

Investing through an administration service or financial adviser

Certain administration services and financial advisers have arrangements for investing through us or through an NZX Participant. Ask your financial adviser whether they offer access to the Fund. You can contact us for a list of eligible administration services at any time.

Carbon Fund Product Disclosure Statement

11

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Salt Listed Funds Product Disclosure Statement Carbon Fund Product Disclosure Statement 13