EASTERN AND CENTRAL COMMUNITY TRUST INC

The Investment Portfolio

The Trust manages its Investment Portfolio in terms of its SIPO. The SIPO is monitored on a regular basis by the Board of Trustees and amended as necessary. The Portfolio’s strategic asset allocation is reviewed annually. The strategic asset allocation was last reviewed in November 2011. MCA NZ Limited assists both management and the Trustees with investment advice and the portfolio management.

Portfolio Characteristics

The Trust has its investments in seven different portfolios and the performance of each asset is measured against an appropriate index:

NZ & Australia Equities

The NZ & Australia Equity portfolio is managed by Forsyth Barr. The Investment mandate allows the Fund Manager to invest between 2.5% and 7.5% of the portfolio in companies listed on the NZ and Australia Stock Exchanges. The actual exposure at year end was 7.8% (2011:6.1%). This portfolio is measured against the NZSX40 (net Dividend) Index.

NZ Listed Property

The NZ Listed Property portfolio is managed by Forsyth Barr. The Investment mandate allows the Fund Manager to invest between 1.25% and 3.75% of the portfolio in property companies listed on the NZ Stock Exchange. The actual exposure at year end was 1.4% (2011:0.5%). This portfolio is measured against the NZX Property Sector (net Dividend) Index.

NZ Bonds

The NZ Bond portfolio is managed by Forsyth Barr Esam Cushing Limited. The Investment mandate allows the Fund Manager to invest between 20% and 35% of the portfolio in bonds. The mandate places limits on the underlying investment categories, along with credit and duration restrictions. The actual exposure at year end was 29.5% (2011:35.5%). This portfolio is measured against the NZX Corporate A Grade Index.

Off Shore Equities

The Off Shore portfolio is managed by State Street Global Advisors. The investment is in a pooled fund. The investment mandate allows the Fund Manager to invest between 40% and 60% of the portfolio in off shore equities. The actual exposure at year end was 45.1% (2011:44.7%). This portfolio is measured against the MSCI Gross ($NZ) Index and the strategic policy is to be 50% hedged back to NZ dollars.

Australian Listed Property

The Australian Listed Property portfolio is managed by State Street Global Advisors. The investment is in a pooled index trust. The investment mandate allows the Fund Manager to invest between 1.25% and 3.75% of the portfolio in Australian listed property equities. The actual exposure at year end was 1.2% (2011:0.5%). This portfolio is measured against the S&P/ASX200 Property Accumulation index and the strategic policy is to be 50% hedged back to NZ dollars.

Off Shore Bond Securities

The Off Shore Bond Securities portfolio is managed by Vanguard. The investment is in a pooled hedged index fund. The investment mandate allows the Fund Manager to invest between 5% and 10% of the portfolio in bonds. The actual exposure at year end was 9.1% (2011:8.9%). This portfolio is measured against the Citigroup WGBI Index and is fully hedged to Australian dollars. The strategic policy is to be 100% hedged back to NZ dollars.

Cash

The Cash Portfolio is managed by the Trust Manager. The mandate places limits on the underlying investment categories, along with credit and duration restrictions. The investment mandate allows the Trust Manager to invest between 2% and 10% of the portfolio in cash. The actual exposure at year end was 5.9% (2011:3.7%). The portfolio is measured against the NZX 90 day bank bill index.

Performance against Policy

The following table shows the actual performance, the benchmark performance and value added for all asset classes held by the Trust for the year ended 31st March 2012.