2009/2010 Financial Year members Interest declared

DECLARATION OF INTEREST TO MEMBERS IN RESPECT TO THE FINANCIAL YEAR ENDING 30 JUNE 2010

Today, I am happy to announce the declaration of interest rate to members in respect of the Fund’s financial year ending 30^th June 2010. Before doing so, I will make a brief statement on issues that have impact on the Fund’s financial performances and outcomes during the financial year.

The 2010 Financial Year of the Fund has been difficult for business and investment both locally and offshore. The global financial crisis has battered a wide range of industry sectors around the world, tightening the global flow of money and also putting intense pressure on investment markets. The aftermath effects of the crisis still continue thus leading to a few countries experiencing serious debt crisis and dip recession. This has led to lower asset prices, falling stock markets and lower investment returns to investors.

In spite of the difficult investment conditions faced, the Fund’s total income was $72.2 million. These incomes were derived from the Fund’s investments, largely attributed by interest earnings, property rentals and dividend payments received. To the contrary however, there are substantial unrealized loses in relation to exchange rate differences arising from drop in value of currencies and international shares which the Fund has invested in.

On expenditure front, the Fund has expended $30.7 million to facilitate its overall ongoing operational costs. Deducting the operational expenses from the earned incomes, the gross surplus achieved was $41.5 million.

As result of the financial improvements during the hard times, it is pleasing to note that the Fund has increased its total assets to an unprecedented level of $1.1 billion from the 2009 level of $971 million. This represents a growth of about 12%.

The members’ contribution funds also continued to experience upward growth during financial year 2010. The total contributions at the end of financial year has reached over $959 million notwithstanding the highest ever withdrawals by members of $61 million. The total members’ contribution funds have increased by 8.7% from 2009 financial year amount of $875 million.

In light of those developments mentioned, I now have the opportunity to announce that the Board of Solomon Islands National Provident Fund has resolved to award an interest rate 5 % to its members in respect of their contribution balances in 2009 with the Fund. This is an increase from 2009 interest rate of 2.7% been declared. In monetary term, an amount of about $40 million will be credited to the members’ account with the Fund with immediate effect. On the special death benefit (SDB), the Board has also resolved to increase the amount to $6,000 from last financial year level of $5,000 to be paid to the beneficiaries of a deceased member. The total death benefit balance with the Fund now stands at $3 million from $2.7 million in 2009 financial year.

At this opportune time, let me remind the members with confidence that our Provident Fund will continue to sustain financial strength, stability and growth in years ahead. The Board and Management will continue to exercise good corporate governance practice and taking a careful and prudent approach to managing members’ money have long been the priorities and they will continue to be priorities of the Board and Management in future.

On behalf of all Fund members, I would like to take this great opportunity to thank the Board for their wise counsel and support throughout the financial year. I also extend my thanks to the dedicated management and staff for their hard work and energetic commitments to the Fund and its members during 2010 financial year. I would also like to thank the Fund’s valuable employers for their commitments in paying members’ contributions in timely manner and I would urge them to continue with that good relationship for the benefit our valuable members in future.

Thank you ALL.