Nomura Funds Ireland PLC€¦ · Brown Brothers Harriman Trustee Services (Ireland) Limited 19th...

NOMURA FUNDS IRELAND PLC

Audited Financial Statements for the period from

13th April, 2006 (date of incorporation) to 31st December, 2006

Company Registration No. 418598


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TABLE OF CONTENTS

Page

MANAGEMENT AND ADMINISTRATION 2 GENERAL INFORMATION 3 DIRECTORS’ REPORT 4 CUSTODIAN’S REPORT 6 INVESTMENT MANAGER’S REPORT 7 INDEPENDENT AUDITORS’ REPORT 9 BALANCE SHEET 11

INCOME STATEMENT 12

STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE PARTICIPATING SHARES

13

CASH FLOW STATEMENT 14

NOTES TO THE FINANCIAL STATEMENTS 15 STATEMENT OF INVESTMENTS 28 STATEMENT OF CHANGES IN THE PORTFOLIO 42


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MANAGEMENT AND ADMINISTRATION

DIRECTORS David Dillon –Irish (appointed 30th June 2006)* Shiro Fujitsu – Japanese (appointed 21st August 2006) Takashi Kawazoe – Japanese (appointed 1st March 2007) Toshihiko Matsunaga – Japanese (appointed 21st August 2006) Mark Roxburgh – British (appointed 21st August 2006) John Walley – Irish (appointed 21st August 2006)* Brian Kelleher – Irish (appointed 13th April 2006, resigned 21st August 2006)* Donnacha O’Connor – Irish (appointed 13th April 2006, resigned 21st August 2006)* Hiroshi Terasaki – Japanese (appointed 21st August 2006, resigned 21st May 2007)

REGISTERED OFFICE OF THE COMPANY 33 Sir John Rogerson’s Quay Dublin 2 Ireland

* Independent non executive Directors

ADMINISTRATOR Brown Brothers Harriman Fund Administration Services (Ireland) Limited Styne House Upper Hatch Street Dublin 2 Ireland

COMPANY SECRETARY Tudor Trust Limited 33 Sir John Rogerson’s Quay Dublin 2 Ireland

CUSTODIAN Brown Brothers Harriman Trustee Services (Ireland) Limited Styne House Upper Hatch Street Dublin 2 Ireland

DISTRIBUTOR Nomura Asset Management U.K. Limited Nomura House 1 St. Martin’s–le-Grand London EC1A 4NT England

AUDITORS Ernst & Young Block 1 Harcourt Centre Harcourt Street Dublin 2 Ireland

LEGAL ADVISERS Dillon Eustace 33 Sir John Rogerson’s Quay Dublin 2 Ireland

INVESTMENT MANAGER Nomura Asset Management U.K. Limited Nomura House 1 St. Martin’s–le-Grand London EC1A 4NT England

SUB INVESTMENT MANAGER Charlemagne Capital (IOM) Limited Regent House 16-18 Ridgeway Street Douglas Isle of Man IM1 1EN

SUB INVESTMENT MANAGER Gartmore Investment Limited Gartmore House 8 Fenchurch Place London EC3M 4PB England

SUB INVESTMENT MANAGER Nomura Asset Management Singapore Limited 6 Battery Road # 34-02 Singapore 049909


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GENERAL INFORMATION

Nomura Funds Ireland Plc (the “Company”) is structured as an open-ended umbrella investment company with variable capital, incorporated under the laws of Ireland on 13th April, 2006 as a public limited company pursuant to the Companies Acts, 1963 to 2006. The Company has been authorised by the Financial Regulator as Undertaking for Collective Investment in Transferable Securities (“UCITS”) pursuant to the provisions of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003 (as amended) (the “UCITS Regulations”.) The Company commenced operations on 18th December, 2006. At 31st December, 2006, the Company had one Sub-Fund in existence; Global Emerging Markets Fund (“the Sub-Fund”). The Sub-Fund commenced operations on 18th December, 2006 when US Dollar Class B Shares were issued at a launch price of US$100 per share. Global Emerging Markets Fund The investment objective of the Sub-Fund is to achieve long-term capital growth through investment in an actively managed portfolio of global emerging market securities. The Sub-Fund shall invest, under normal market conditions, primarily in equity and equity related securities (which includes but is not limited to equities, depositary receipts, convertible securities, preferred shares and structured notes) listed or traded on a recognised exchange in the countries covered by the MSCI Emerging Markets Index (the “Index Countries”). The Sub-Fund may invest in equity and equity related securities listed or traded on any recognised exchange in non-Index Countries provided that the business activities of the issuers of such securities are in the Index Countries or in other emerging countries. The Sub-Fund may also hold exposure to the Index Countries through investment in such instruments as American Depositary Receipts (ADRs), Global Depositary Receipts (GDRs) or Non-Voting Depositary Receipts (NVDRs) and which may be listed on any recognised exchange in a non-Index Country. The Sub-Fund will invest across the entire range of capitalisations (from small cap to large cap). Investment in equity and equity related securities in Russia is not expected to exceed twice the percentage weighting of Russian securities held by the MSCI Emerging Markets Index. The performance of the Sub-Fund’s portfolio of investments will be measured against the MSCI Emerging Markets Index which is a free float adjusted market capitalisation index that is designed to measure equity market performance in the global emerging markets. The Investment Manager is, however, entitled at any time to change the Index where, for reasons outside the Investment Manager's control, the Index has been replaced by another index or where another index may reasonably be considered by the Investment Manager to have become the industry standard for the relevant exposure.


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DIRECTORS’ REPORT

The Directors present, herewith, their annual report and audited financial statements for Nomura Funds Ireland plc (the “Company”) for the period from 13th April, 2006 (date of incorporation) to 31st December, 2006. Statement of Directors’ Responsibilities The Directors are responsible for preparing the Annual Report and the audited financial statements in accordance with applicable Irish law and Generally Accepted Accounting Practice in Ireland including the accounting standards issued by the Accounting Standards Board and published by the Institute of Chartered Accountants in Ireland. Irish company law requires the Directors to prepare financial statements for each financial period which give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. In preparing the financial statements, the Directors are required to: • select suitable accounting policies and then apply them consistently; • make judgements and estimates that are reasonable and prudent; • prepare the financial statements on a going concern basis unless it is inappropriate to presume that the Company

will continue in business. The Directors confirm that they have complied with the above requirements in preparing the financial statements. The Directors are responsible for keeping proper books of account, which disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements are prepared in accordance with accounting standards generally accepted in Ireland and comply with Irish statute comprising the Companies Acts, 1963 to 2006, the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003 (as amended). They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Principal Activities The Company is an investment company with variable capital organised under the laws of Ireland. The Company was incorporated on 13th April, 2006 and was authorised as an Undertaking for Collective Investment in Transferable Securities (“UCITS”) by the Financial Regulator. The Company is an umbrella fund. As of the date of this report, the Company has one Sub-Fund, in respect of which one class of share, in the Sub-Fund, has been offered for investment. Review of Business Activities and Future Developments The increase in the Net Asset Value of the Sub-Fund, for the period, which the Directors believe is a key indicator as to the performance of the Company, as well as a detailed review of the business and future developments, is given in the relevant Investment Manager’s Report on pages 7 and 8. Risk Management Objectives and Policies The Company’s objective is to achieve long-term capital growth through investment in an actively managed portfolio of global emerging market securities. Investment in a Sub-Fund of the Company carries with it a degree of risk including, but not limited to, the risks referred to in Note 13 of these financial statements. Results for the Period and State of Affairs as at 31st December, 2006 The Balance Sheet and the Income Statement, of the Company, are set out on pages 11 and 12 respectively.


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DIRECTORS’ REPORT (CONTINUED)

Dividends No dividends have been paid or declared at the period-end or during the period ended 31st December, 2006. Events Since Period End Two new sub-funds were launched since the period end. The India Equity Fund launched on 12th January, 2007 and the Asia Pacific Ex-Japan Equity Fund launched on 28th June, 2007. Directors The following Directors who held office on 31st December, 2006, under the Memorandum and Articles of Association, are not required to retire by rotation: Toshihiko Matsunaga Japanese Mark Roxburgh British Hiroshi Terasaki Japanese Shiro Fujitsu Japanese David Dillon Irish John Walley Irish Details of Directors’ fees and expenses are given in Note 12 Directors' and Secretary's Interests in Shares and Contracts None of the Directors or the Company Secretary, at the date of this report, holds or held, on the date of their appointment or at 31st December, 2006, any beneficial interest in the shares of the Company. Books of Account The Directors are responsible for ensuring that proper books and accounting records, as outlined in Section 202 of the Companies Act, 1990, are kept by the Company. To achieve this, the Directors have appointed appropriate accounting personnel in order to ensure that those requirements are complied with. Those books and accounting records are maintained at the office of the Administrator at Styne House, Upper Hatch Street, Dublin 2, Ireland. Auditors The auditors, Ernst & Young, Chartered Accountants, will continue in office in accordance with Section 160(2) of the Companies Act, 1963. On behalf of the Board John Walley Toshihiko Matsunaga Director Director 19th November, 2007 19th November, 2007


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CUSTODIAN’S REPORT

We have enquired into the conduct of Nomura Funds Ireland plc (the “Company”) for the period from 13th April, 2006 (date of incorporation) to 31st December, 2006 in our capacity as Custodian to the Company. In our opinion, the Company has been managed in all material respects for the period

1. in accordance with the limitations imposed on the investment and borrowing powers of the Company by the Memorandum and Articles of Association, the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003 as amended, (“the UCITS Regulations”); and

2. otherwise in accordance with the provisions of the Memorandum and Articles of Association and the

UCITS Regulations.

For and on Behalf of Brown Brothers Harriman Trustee Services (Ireland) Limited 19th November, 2007


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GLOBAL EMERGING MARKETS FUND INVESTMENT MANAGER’S REPORT For the period from 13th April, 2006 (date of incorporation) to 31st December, 2006 The Sub-Fund launched on the 18th December and the three sub managers, Nomura Asset Management Singapore, responsible for emerging Asia, Charlemagne Capital, responsible for EMEA, and Gartmore Investment Management responsible for Latin America, were able to fully invest their respective regional portfolios by the 31st December. This was despite market volatility which affected mainly emerging Asia. Over the first two weeks the Sub-Fund delivered an absolute performance of 2.2%, outperforming the benchmark by 20 bps. Nomura Asset Management Singapore -Emerging Asia

The Asian sub-portfolio was successfully invested by the end of December, 2006. Nomura Asset Management Singapore (“NAM Singapore”) maintains a generally positive outlook on Emerging Asian equity markets. The economic growth in the region remains robust, led by China. Interest rates have stabilized in most countries at relatively low levels while asset prices and bank lending are accelerating throughout the region. Despite this, some markets (like Korea) have been slightly disappointing due to the appreciation of most Asian currencies versus the US dollar. NAM Singapore had anticipated this event, readjusting our positions towards stocks that benefit from rising domestic demand. NAM Singapore also maintains a positive view and overweight in China while reducing the exposure of the Sub-Fund in Thailand. The proceeds from Thailand will flow into Malaysia and the Philippines where they have a more positive view. Finally, 1% of the portfolio weight will move from Korea to Taiwan where NAM Singapore expects the technology sector to outperform. NAM Singapore believes that the Korean company Samsung Electronics is experiencing intense competition from Japan in the semiconductors business and is facing downward pricing pressure in LCD panels. Taiwan allows for more nimble niche technology stocks. From a macroeconomic point of view, the economic growth appears intact but some leading indicators are now pointing towards tepid growth ahead. This is in contrast with the earlier expectations of overall robust growth. Charlemagne Capital -EMEA

Charlemagne Capital (“Charlemagne”) fully invested the EMEA sub-portfolio by the end of December, 2006. The EMEA sub-portfolio is heavily exposed to consumer growth stories and the initial period’s gains are, we hope, only the beginning of a trend that re-rates these companies according to their growth potential. Charlemagne’s outlook is positive, with the IPO calendar relatively busy in the next few months and recent research trips to South Africa and Egypt uncovering new opportunities which are now being considered for investment. Overall, flows into emerging markets funds resumed their record-breaking pace, but several key trends differentiated fourth-quarter investing habits from the flows of the first half of the year. Investors preferred emerging market companies which were directly exposed to local economic growth – still significantly higher in most countries than in the U.S. or Western Europe. While this trend was evident through most of the fourth quarter, it came sharply into focus in late December, when investors ramped up the shares of many emerging market banks. Investors also began to reconsider the commodity price-driven elements of their portfolios. With oil and copper prices falling more than 10% in the quarter, and steel and coal prices showing no further signs of rising, they began to reduce their exposure to miners, materials processors and energy producers. Further price falls may test the extent of investors’ resolve: although commodity prices have fallen, relative to their history they remain high. If price declines become more pronounced (driving prices below historic averages) old doubts about the sustainability of emerging market economies may resurface. Charlemagne believes that the foundations of long-term emerging market growth are intact. Domestic growth remains well above developed world averages and this growth is increasingly being translated into listed investment opportunities. Management quality and shareholder treatment in emerging markets continues to improve and new listings continue to bolster the quality and variety of investing opportunities on offer. Finally, tight bond yields and income surpluses continue to push growth-seeking investors out of emerging market bonds and into equities.


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GLOBAL EMERGING MARKETS FUND INVESTMENT MANAGER’S REPORT (CONTINUED) For the period from 13th April, 2006 (date of incorporation) to 31st December, 2006 Gartmore Investment Management -Latin America

Gartmore Investment Management (“Gartmore”) had no issues in fully investing the Latin America sub-portfolio by the end of December, 2006. Gartmore take a positive view of the Latin region, where strong economic data and positive corporate earnings results have been supporting markets. They are particularly encouraged by the prospects for Mexican equities as we expect government spending on infrastructure to benefit numerous areas of the economy (such as industrial stocks, homebuilders etc), while the benign inflation environment suggests that interest rates will remain at their current relatively low levels. Mexican stocks ended the year on an all-time high, having gained nearly 50% over the year, with ongoing market strength underpinned by President Felipe Calderon taking office (following the troubled election process), reasonable economic growth and stable interest rate and inflation expectations. They have allocated their largest overweight to Mexico. Latin America performed strongly in December, rounding off a good year for the region. Another drop in interest rates at the end of November supported Brazilian stocks, with investors betting that monetary policy will ease further in 2007. In the Brazilian market, economic reform and political liberalisation has fostered greater macroeconomic stability. This improved fundamental backdrop puts Brazil in a very strong position, giving it scope to further cut interest rates and boost economic growth. Robust commodity prices helped to drive Argentine stocks higher, while strong economic data and corporate earnings that generally beat expectations helped to support other markets in the region. Gartmore continues to take a positive view of markets across the region, and expect government spending on infrastructure to benefit certain areas of the economy, while the benign inflation environment suggests that interest rates will remain at current relatively low levels.


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INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF NOMURA FUNDS IRELAND PLC

We have audited the financial statements of Nomura Funds Ireland plc (the “Company”) for the period ended 31 December 2006 which comprise the Income Statement, Balance Sheet, Statement of Changes in Net Assets attributable to holders of Redeemable Participating Shares, Cash Flow Statement and the relates notes 1 to 18. These financial statements have been prepared under the accounting policies set out therein. This report is made solely to the company's members, as a body, in accordance with Section 193 of the Companies Act, 1990. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed Respective responsibilities of directors and auditors The directors are responsible for the preparation of the financial statements in accordance with applicable Irish law and International Financial Reporting Standards (IFRSs) as adopted by the European Union as set out in the Statement of Directors' Responsibilities. The directors are also responsible for preparing a Schedule of Investments in accordance with the requirements of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2003 (as amended) Notices (the “UCITS Notices”) issued by the Irish Financial Services Regulatory Authority (the “Financial Regulator”). Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). We report to you our opinion as to whether the financial statements give a true and fair view and have been properly prepared in accordance with the Companies Act, 1963 to 2006 and the UCITS Notices. We also report to you our opinion as to whether proper books of account have been kept by the company; and whether the information given in the Directors’ Report is consistent with the financial statements. In addition, we state whether we have obtained all the information and explanations necessary for the purposes of our audit and whether the financial statements are in agreement with the books of account. We also report to you if, in our opinion, any information specified by law regarding directors' remuneration and other transactions is not disclosed and, where practicable, include such information in our report. We review whether the Schedule of Investments has been prepared in accordance with the requirements of the UCITS Notices issued by the Irish Financial Services Regulatory Authority (the “Financial Regulator”) and we report if it does not. We read other information contained in the Annual Report and consider whether it is consistent with the audited financial statements. This other information comprises only the Directors' Report and the Investment Manager’s Report. We consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements. Our responsibilities do not extend to any other information. Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the company's circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements.


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INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF NOMURA FUNDS IRELAND PLC

Opinion In our opinion the financial statements give a true and fair view, in accordance with IFRSs as adopted by the European Union, of the state of affairs of the company as at 31 December 2006 and of its profit for the period then ended and have been properly prepared in accordance with the provisions of the Companies Acts, 1963 to 2006, and the UCITS Notices. We have obtained all the information and explanations we consider necessary for the purposes of our audit. In our opinion proper books of account have been kept by the company. The financial statements are in agreement with the books of account. In our opinion the information given in the Directors’ Report is consistent with the financial statements. Ernst & Young Registered Auditors Dublin 19th November, 2007


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BALANCE SHEET As at 31st December, 2006 Global Emerging Notes Markets Fund Assets USD Cash and Cash Equivalents 2 6,585,752 Debtors and Other Receivables 3 979,360 Financial Assets at fair value through profit or loss 4 64,824,384 Total Assets 72,389,496 Current Liabilities (Amounts falling due within one year) Creditors 5 (6,458,369) Net Assets attributable to holders of Redeemable Participating Shares (bid market prices) 6 65,931,127 Redeemable Participating Shares Issued and Outstanding 7 645,000

Class B USD 102.218 Approved by the Directors on behalf of the Board

John Walley Toshihiko Matsunaga Director Director 19th November, 2007 19th November, 2007

The accompanying notes on pages 15 to 27 form an integral part of these financial statements.


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INCOME STATEMENT For the period from 13th April, 2006 (date of incorporation) to 31st December, 2006 Global Emerging Markets Fund USD Notes Operating Income 8 21,688 Net gains on Financial Assets at Fair Value through Profit or Loss 4 1,440,020 Total Income 1,461,708 Operating Expenses 9 (27,570) Profit for the financial period 1,434,138

Withholding taxes on dividends (3,011) Increase in Net Assets attributable to holders of Redeemable Participating Shares from Operations 1,431,127 Income and expenses arise solely from continuing operations. There were no recognised gains and losses other than those dealt with in the Income Statement. Approved by the Directors on behalf of the Board

John Walley Toshihiko Matsunaga Director Director 19th November, 2007 19th November, 2007 The accompanying notes on pages 15 to 27 form an integral part of these financial statements.


13

STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE PARTICIPATING SHARES For the period from 13th April, 2006 (date of incorporation) to 31st December, 2006 Global Emerging Markets Fund USD

Net Assets attributable to holders of Redeemable Participating Shares at the beginning of the period - Increase in Net Assets attributable to holders of Redeemable Participating Shares from operations 1,431,127

Capital transactions Net Proceeds from Redeemable Participating Shares issued 64,500,000 Net increase in Net Assets resulting from share transactions 64,500,000 Total Increase in Net Assets attributable to holders of Redeemable Participating Shares 65,931,127 Net Assets attributable to holders of Redeemable Participating Shares at the end of the period 65,931,127



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CASH FLOW STATEMENT For the period from 13th April, 2006 (date of incorporation) to 31st December, 2006 Global Emerging Markets Fund USD Cashflows from operating activities Interest income received 1,608 Net cash provided by operating activities 1,608 Cashflows from investing activities Purchases of Financial Assets at fair value through profit and loss (63,338,708)Payable for Purchases of Financial Assets at fair value through profit and loss 5,471,216Proceeds from sale of Financial Assets at fair value through profit and loss (42,585)Receivable for Proceeds from sale of Financial Assets at fair value through profit and loss (5,779) Net cash used in investing activities (57,915,856)

Cashflows from financing activities

Net proceeds from redeemable participating shares issued 64,500,000

Net cash provided by financing activities 64,500,000 Net increase in cash and cash equivalents 6,585,752Cash and cash equivalents at beginning of the period - Cash and cash equivalents at end of period 6,585,752



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NOTES TO THE FINANCIAL STATEMENTS For the period from 13th April, 2006 (date of incorporation) to 31st December, 2006 1. Summary of Significant Accounting Policies

The principal accounting policies applied in the preparation of these financial statements are set out below. Basis of Preparation The financial statements of Nomura Funds Ireland Plc have been prepared in accordance with International Financial Reporting Standards (IFRS) and Irish statute comprising the Companies Acts, 1963 to 2006, and the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2003 (as amended). The financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities at fair value through profit or loss. The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires the Board of Directors to exercise its judgement in the process of applying the Company’s accounting policies. Financial Assets and Financial Liabilities at Fair Value through Profit or Loss (a) Classification The Company classifies its investments as financial assets or financial liabilities at fair value through profit or loss. These financial assets and financial liabilities are classified as held for trading or designated by the Board of Directors at fair value through profit or loss at inception. Financial assets or financial liabilities held for trading are those acquired or incurred principally for the purposes of selling or repurchasing in the short term. (b) Recognition/Derecognition Purchases and sales of financial assets at fair value through profit or loss are recognised on the trade date – the date on which the Sub-Fund commits to purchase or sell the investment. Financial assets at fair value through profit or loss are derecognised when the rights to receive cash flows from the Financial assets at fair value through profit or loss have expired or the Sub-Fund has transferred substantially all risks and rewards of ownership. (c) Measurement Financial assets and financial liabilities at fair value through profit or loss are initially recognised at fair value. Transaction costs are expensed in the Income Statement. Subsequent to initial recognition, all financial assets and financial liabilities at fair value through profit or loss are measured at fair value. Gains and losses arising from changes in the fair value of the ‘financial assets or financial liabilities at fair value through profit or loss’ category are presented in the Income Statement in the period in which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in the Income Statement within operating income when the Company’s right to receive payments is established. (d) Fair Value Estimation The fair value of financial instruments traded in active markets (such as trading securities) is based on quoted market prices at the balance sheet date. For the purpose of these financial statements, the quoted market price used for financial assets held by the Sub-Funds is the current bid price; the appropriate quoted market price for financial liabilities is the current asking price. The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. The Sub-Fund uses a variety of methods and makes assumptions that are based on market conditions existing at each balance sheet date. Valuation techniques used include the use of comparable recent arm’s length transactions, discounted cash flow analysis and other valuation techniques commonly used by market participants. There were no investments priced in this manner during the period from 13th April, 2006 (date of incorporation) to 31st December, 2006.


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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the period from 13th April, 2006 (date of incorporation) to 31st December, 2006 1. Summary of Significant Accounting Policies (continued)

Foreign Currency Translation Functional and Presentation Currency Items included in the Sub-Fund’s financial statements are measured using the currency of the primary economic environment in which it operates (‘the functional currency’). The Board of Directors considers the US Dollar as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions of the Sub-Fund. Transactions and Balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Income Statement. Translation differences on non-monetary financial assets and liabilities such as equities at fair value through profit or loss are recognised in the Income Statement within the fair value net gain or loss. Offsetting Financial Instruments Financial assets and liabilities are offset and the net amount reported in the Balance Sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously. Due From and Due to Brokers Amounts due from and to brokers represents receivables for securities sold and payables for securities purchased that have been contracted for but not yet settled or delivered on the balance sheet date, respectively. Cash and Cash Equivalents Cash and cash equivalents includes cash in hand, deposits held on call with banks, other short-term highly liquid investments with original maturities of three months or less.. Redeemable Participating Shares The Company issues Redeemable Participating Shares, which are redeemable at the holder’s option and are classified as financial liabilities. Redeemable Participating shares can be put back to the Company at any time for cash equal to a proportionate share of the Sub-Fund’s net asset value. The Redeemable Participating Share is carried at the redemption amount that is payable at the balance sheet date if the holder exercises the right to put the share back to the Company. Redeemable Participating Shares are issued and redeemed at the holder’s option at prices based on the Sub-Fund’s net assets value per share at the time of issue or redemption. The Sub-Fund’s net asset value per share is calculated by dividing the net assets attributable to the holders of Redeemable Participating Shares with the total number of outstanding Redeemable Participating Shares. In accordance with the provisions of the Company’s regulations, investment positions are valued based on the last traded market price for the purpose of determining the net asset value per share for subscriptions and redemptions. Dividend Income Dividends are credited to the Income Statement on the dates on which the relevant securities are listed as “ex-dividend”. Dividend Income is accounted for gross of any non reclaimable/irrecoverable withholding taxes and net of any tax credits. The withholding tax is shown separately in the Income Statement. Realised fair value gains and losses on investment transactions are calculated using the average cost method. Share Capital The Company is structured as an umbrella fund and may comprise several portfolios of assets. The share capital of the Company ("Shares") may be divided into different Sub-Funds each representing a separate portfolio of assets, and further sub-divided, to denote differing characteristics attributable to particular Shares, into "Classes".


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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the period from 13th April, 2006 (date of incorporation) to 31st December, 2006 1. Summary of Significant Accounting Policies (continued)

Brokerage Commissions Brokerage commissions include additional fees on top of the asking price of the security. The bid-asking spread is not disclosed as part of a brokerage commission. This spread is included in the Income Statement within the fair value net gain or loss.

Distributions Payable to Holders of Redeemable Participating Shares The Global Emerging Markets Fund is an accumulating Sub-Fund and therefore it is not currently intended to distribute dividends to the holders of Redeemable Participating Shares. The income and earnings of this Sub-Fund will be accumulated and reinvested on behalf of the holders of Redeemable Participating Shares. Taxation Under current law and practice, the Company qualifies as an investment undertaking as defined in Section 739B of the Taxes Consolidation Act, 1997, as amended. On that basis, it is not chargeable to Irish Tax on its income or capital gains. However, Irish tax can arise on the happening of a “chargeable event”. A chargeable event includes any distribution payments to Shareholders or any encashment, redemption or transfer of shares. No Irish tax will arise on the Company in respect of chargeable events in respect of:

• a Shareholder who is neither Irish resident nor ordinarily resident in Ireland for tax purposes, at the time of

the chargeable event, provided appropriate valid declarations in accordance with the provisions of the Taxes Consolidated Act, 1997 as amended, are held by the Company; and

• certain exempted Irish tax resident Shareholders who have provided the Company with the necessary signed statutory declarations.

There was no chargeable event during the period under review. Capital gains, dividends, and interest received (if any) by the Company may be subject to withholding taxes imposed by the country from which the investment income/gains are received and such taxes may not be recoverable by the Company or its Shareholders.


18

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the period from 13th April, 2006 (date of incorporation) to 31st December, 2006 2. Cash at Bank Global Emerging Markets Fund USD USD: Citibank, New York 3,607,786 TWD: Standard Chartered, Taiwan 63,651 INR: HSBC, Mumbai 2 CAD: Royal Bank of Canada, Toronto 41,309 HKD: HSBC, Hong Kong 2,278 PEN: Citibank (Peru), Lima 564 ZAR: Nedbank, Johannesburg 2,870,162 6,585,752 3. Debtors Global Emerging Markets Fund USD Spot receivable 866,177 Forward receivable 90,336 Dividends receivable 17,068 Due from brokers 5,779 979,360


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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the period from 13th April, 2006 (date of incorporation) to 31st December, 2006

Global Emerging Markets Fund

4. Financial Assets and Liabilities at Fair Value Through Profit or Loss

USD Equities 64,824,384 64,824,384

Net gain on Financial Assets and Liabilities at Fair Value through Profit or Loss Equities 1,440,020 1,440,020

Net Gain on Financial Assets and Liabilities at Fair Value through Profit or Loss Realised loss on Financial Assets and Liabilities at Fair Value through Profit or Loss (67,358) Unrealised gain on Financial Assets and Liabilities at Fair Value through Profit or Loss 1,507,378

1,440,020


20

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the period from 13th April, 2006 (date of incorporation) to 31st December, 2006 5. Creditors - Amounts falling due within one year Global Emerging Markets Fund USD Due to brokers 5,471,216 Spot payable 869,347 Forward payable 90,236 Management expenses payable (Note 10) 21,219 Fund administration payable (Note 11) 1,061 Custody expense payable (Note 11) 1,061 Organisational expenses payable 843 Audit expenses payable 843 Transaction expense payable 592 Director expenses payable (Note 12) 541 Legal expenses 447 Trustee expense payable (Note 11) 424 Transfer agent expense payable 329 Other expense 210 6,458,369 6. Net Asset Value per Redeemable Participating Share Reconciliation

The net asset value per Redeemable Participating Share is calculated by dividing the total Net Assets (as calculated for pricing purposes) of the Sub-Fund by the number of Redeemable Participating Shares in issue. The net asset value per Redeemable Participating Share reported in the Balance Sheet is that used for financial statement purposes.

Class B USD

Net asset value for financial statement purposes

65,931,127

Shares outstanding 645,000

Net asset value per share for financial statement purposes

102.218

Less: FRS 26 valuation adjustment 253,966 Total NAV Share Base 66,185,093 Shares outstanding 645,000

Net asset value per share for shareholder dealing

102.612


21

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the period from 13th April, 2006 (date of incorporation) to 31st December, 2006 7. Share Capital

Authorised The authorised share capital of the Company is Euro 300,000 divided into 300,000 redeemable non-participating shares of Euro 1 each and 500,000,000,000 participating shares of no par value. The redeemable non-participating shares, each of which has been paid up and are beneficially owned by the Manager, do not entitle the holders thereof to any dividend and on a winding up entitle the holders thereof to receive the amount paid up thereon but do not otherwise entitle them to participate in the Net Asset Value of the Company. They are thus disclosed in the financial statements by way of this note only. For the period ended 31st December, 2006 Issued and fully paid Global Emerging

Markets Fund Shares Class B Shares

Redeemable Participating Shares At the beginning of the period -Issued during the period 645,000

At the end of the period 645,000

8. Operating Income Global Emerging Markets Fund USD Dividend income 20,080 Call account interest income 1,608 21,688

9. Operating Expenses

Global Emerging Markets Fund USD Management Expense (Note 10) 21,219 Fund administration Expense (Note 11) 1,061 Custody Expense (Note 11) 1,061 Organisational Expense 843 Audit Expense 843 Transaction Expense 592 Legal Expense 447 Trustee Expense (Note 11) 424 Director Expense (Note 12) 541 Transfer Agent Expense 329 Other Expense 210 27,570


22

NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) For the period from 13th April, 2006 (date of incorporation) to 31st December, 2006 10. Investment Manager Fee and Incentive Fee

Nomura Asset Management (U.K.) Limited, the Investment Manager earned a fee of USD 21,219 during the period from 13th April, 2006 (date of incorporation) to 31st December, 2006, all of which was outstanding at the period end. Global Emerging Markets Fund The Investment Manager is entitled to receive out of the Assets of the Sub-fund an annual fee equal to the following percentage of the Net Asset Value of the Sub-fund; Class A 0.80% (not launched) Class B 1.00% Class C 0.80% (not launched) The Investment Management Fee is calculated and accrued daily and payable quarterly in arrears. The Investment Manager shall be entitled to be reimbursed by the Sub-fund for reasonable out of pocket expenses incurred by it and any VAT on fees and expenses payable to or by it. The Investment Manager may from time to time, at its sole discretion, and out of its own resources, rebate to affiliated entities/intermediaries and/or shareholders, part or all of the Investment Management Fee and/or the Incentive Fee.

The Investment Manager may also be entitled to a performance related investment management fee on the A Share Class (the "Incentive Fee") payable in arrears in respect of each Performance Period capped at 2% in total including the Investment Management Fee. The Performance Periods of the Sub-Fund are each financial year of the Sub-Fund. The first Performance Period commenced on 18th December, 2006 and will terminate on 31st December, 2007. In the event of any under-performance of the Sub-Fund, a Performance Period will be extended to include subsequent Financial Year periods until such under-performance is recovered. Where the Directors believe, due to specific conditions existing in a Sub-Fund, that to extend a Performance Period to include a subsequent twelve month period would prejudice current Shareholders in the Sub-Fund, the Directors may terminate the Performance Period at the end of the current financial year. In those circumstances, a new Performance Period will commence immediately following the conclusion of the current Performance Period and the opening Net Asset Value will be equal to the higher of the audited Net Asset Value of the relevant Sub-Fund as at the date at which the last Incentive Fee crystallised and became payable and the Closing Net Asset Value at the end of the terminated period. If the Investment Management Agreement terminates for any reason other than on the last day of a Performance Period, the date of such termination shall be deemed to be the last day of the Performance Period then current. An Incentive Fee is payable in respect of a Performance Period if the Sub-Fund outperforms the Benchmark index being the MSCI Emerging Markets Index (Total Return with Net Dividends Reinvested). The Incentive Fee payable is a maximum of 10% of the excess of the percentage change in the Net Asset Value per Share (adjusted for reinvestment of dividends paid out by the Sub-Fund) minus the percentage change in the Benchmark index multiplied by the Average Net Asset Value (as defined below) of the Performance Period. As the Benchmark index is on a total return basis, dividends paid by the Sub-Fund will be treated as reinvested in the Sub-Fund at the time of their payment, with the Net Asset Value adjusted accordingly.

11. Administration and Custodian Fees

The Company shall pay to the Administrator, out of the assets of each Sub-Fund, an annual fee, accrued at each Valuation Point and payable monthly in arrears, at a rate which shall not exceed 0.05% per annum of the Net Asset Value of each Sub-Fund subject to a minimum annual fee of USD 48,000 per Sub-Fund (plus VAT, if any thereon). The Administrator has agreed to waive 50% of the minimum fee for the first twelve months following the launch of the fund. The Administrator shall also be entitled to receive a monthly fee of USD 500 per Share Class of a Sub-fund launched (such fee will not be applied to the first two Share Classes of a Sub-Fund launched by the Fund).


23


11. Administration and Custodian Fees (continued)

The Administrator will be entitled to receive a register fee per Sub-Fund of USD 10,000 per annum and shall also receive registration fees, and transaction charges as agreed at normal commercial rates and shall also be entitled to be repaid out of the assets of the Sub-Fund all of its reasonable out-of-pocket expenses incurred on behalf of the sub-Fund which shall include legal fees, couriers’ fees and telecommunication costs and expenses together with VAT, if any, thereon. Each Sub-Fund will bear its proportion of the fees and expenses of the Administrator Brown Brothers Harriman Fund Administration Services (Ireland) Limited as Administrator earned a fee of USD 1,061 for the period from 13th April, 2006 (date of incorporation) to 31st December, 2006 all of which was outstanding at the period end. The Custodian shall be entitled to receive, out of the assets of each Sub-Fund, a trustee fee, accrued at each Valuation Point and payable monthly in arrears, of 0.02% per annum of the Net Asset Value of each Sub-Fund. The Custodian shall also be entitled to receive, out of the assets of each Sub-Fund, a custody fee, accrued at each Valuation Point and payable monthly in arrears, which shall not exceed 0.4% per annum, calculated by reference to the fair value of the investments that the Sub-Fund may make in each relevant market, subject to a minimum annual fee of USD 12,000 per annum.

The Custodian is also entitled to agreed upon transaction charges and to recover properly vouched out-of-pocket expenses out of the assets of the relevant Sub-Fund (plus VAT thereon, if any), including legal fees, couriers' fees and telecommunication costs and expenses and the fees, transaction charges and expenses of any sub-custodian appointed by it which shall be at normal commercial rates together with VAT, if any, thereon. Each Sub-Fund will bear its proportion of the fees and expenses of the Custodian. During the period from 13th April, 2006 (date of incorporation) to 31st December, 2006 Brown Brothers Harriman Trustee Services (Ireland) Limited earned a fee of USD 1,485 for custodial and trustee services all of which was outstanding at the period end.

12. Directors’ Fees

Each Director is entitled to charge a fee for their services at a rate determined by the Directors up to a maximum fee per Director of €10,000 per annum (plus VAT) and may be entitled to special remuneration if called upon to perform any special or extra services to the Company. All Directors will be entitled to reimbursement by the company of expenses properly incurred in connection with the business of the Company or the discharge of their duties. The aggregate emoluments of the Directors (including expenses) for the period ended 31st December, 2006 was USD 541, all of which was outstanding at the period end.

13. Financial Risk Management

Strategy in using Financial Instruments The Sub-Fund’s activities expose it to a variety of financial risks: market risk (including currency risk and price risk), credit risk and liquidity risk. The Company's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Sub-Fund’s financial performance. The Sub-Fund may employ derivative financial instruments to moderate certain risk exposures.


24


13. Financial Risk Management (continued)

Market Price Risk The Sub-Fund may trade in financial instruments, taking positions in traded instruments to take advantage of short-term market movements in the equity markets. All securities investments present a risk of loss of capital. The Investment Manager moderates this risk through a careful selection of securities within specified limits. The maximum risk resulting from financial instruments is determined by the fair value of the financial instruments. The Sub-Fund’s overall market positions are monitored on a daily basis by the Sub-Fund’s Investment Manager and are reviewed on a quarterly basis by the Board of Directors.

The Sub-Fund’s equity securities are susceptible to market price risk arising from uncertainties about future prices of the instruments.

The Sub-Fund’s market price risk is managed through diversification of the investment portfolio ratios by exposures. Between 92% and 98% of the net assets attributable to Redeemable Participating Shares is invested in individual equity securities. The equity securities are selected from a variety of regulated stock exchanges as detailed in the Prospectus. At 31st December, 2006 the overall market exposures were as follows: Global Emerging Markets Fund Fair Value % of Net Assets Valued at Bid PriceSecurities designated at fair value through profit or loss 64,824,384 98.32%

Interest Rate Risk The majority of the Sub-Fund’s financial assets and liabilities are non-interest bearing. As a result, the Company is not subject to significant amounts of risk due to fluctuations in the prevailing levels of market interest rates. Any excess cash and cash equivalents are invested at short-term market interest rates.

Credit Risk The majority of the Sub-Fund’s financial assets are non-interest bearing equity securities. As a result, the Company is not subject to significant amounts of credit risk. All transactions in listed securities are settled/paid for upon delivery using approved brokers. The risk of default is considered minimal, as delivery of securities sold is only made once the broker has received payment. Payment is made on a purchase once the securities have been received by the broker. The trade will fail if either party fails to meet its obligation. In accordance with the Sub-Fund’s policies, the Investment Manager monitors the Sub-Fund’s credit position on a daily basis, and the Board of Directors reviews it on a quarterly basis. Liquidity Risk The Sub-Fund is exposed to daily cash redemptions of redeemable shares. The Sub-Fund’s therefore invests the majority of their assets in investments that are traded in an active market and can be readily disposed of; they invest only a limited proportion of their assets in investments not actively traded on a stock exchange. The Sub-Fund’s listed securities are considered readily realisable, as they are listed on the regulated Stock Exchanges as detailed in the Prospectus. The Sub-Fund has the ability to borrow up to 10% of the Net Asset Value of each Sub-Fund in the short term to ensure settlement. No such borrowings have arisen during the period.

In accordance with the Sub-Fund’s policies, the Investment Manager monitors the Sub-Fund’s liquidity position on a daily basis, and the Board of Directors reviews it on a quarterly basis. The table below analyses the Sub-Fund’s financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances, as the impact of discounting is not significant.


25


13. Financial Risk Management (continued)

Global Emerging Markets Fund

Less than 1 month 1-12 months maturity Not Stated At 31st December, 2006 Accrued Expenses - 991,535 - Due to brokers 5,466,834 - - Redeemable Participating Shares 66,185,093 - -

Total financial liabilities 71,651,927 991,535 - Redeemable shares are redeemed on demand at the holder’s option. Currency Risk The Sub-Fund holds assets denominated in currencies other than the functional currency of the Sub-Fund. The Sub-Fund is therefore exposed to currency risk, as the value of the securities denominated in other currencies will fluctuate due to changes in exchange rates. The tables below summarises the Sub-Fund’s exposure to currency risks. Financial Assets The Company’s financial assets comprise equity investments, convertible bonds, short-term trade receivables and cash balances. Global Emerging Markets Fund (‘000’s) 31st December, 2006 KRW HKD TWD ZAR INR BRL Other CurrenciesNon-current Financial Assets at fair value through profit or loss

9,957

8,647

7,349

4,486

3,823

2,048

9,809

Short term trade receivables - - - 6 - 4 - Cash at bank - 2 64 2,870 - - 42

Financial Liabilities The Company finances its investment activities through the Company’s ordinary share capital and reserves. The Company’s financial liabilities comprise bank overdraft and short term trade payables. Global Emerging Markets Fund (‘000’s) 31st December, 2006 EUR MXN ZAR Short term trade payables 224 106 2,926 At 31st December, 2006, had the exchange rate between the US Dollar and the Korean Won increased or decreased by 5% with all other variables held constant, the increase or decrease respectively in net assets attributable to holders of redeemable participating shares of the Sub-Fund would amount to approximately USD 498,000. At 31st December, 2006, had the exchange rate between the US Dollar and the Hong Kong Dollar increased or decreased by 5% with all other variables held constant, the increase or decrease respectively in net assets attributable to holders of redeemable participating shares of the Sub-Fund would amount to approximately USD 432,000. At 31st December, 2006, had the exchange rate between the US Dollar and the Taiwan Dollar increased or decreased by 5% with all other variables held constant, the increase or decrease respectively in net assets attributable to holders of redeemable participating shares of the Sub-Fund would amount to approximately USD 369,000. In accordance with the Company’s policy, the Investment Manager monitors the Company’s currency position on a daily basis, and the Board of Directors reviews it on a quarterly basis.


26


14. Related Party Transactions

Parties are considered to be related if one party has the ability to control the other party or exercise significant influence over the other party in making financial or operational decisions. • Two of the Directors of the Company, Mr Toshihiko Matsunaga and Mr Mark Roxburgh are

employees of the promoter of the Company. • One of the Directors of the Company, Mr Hiroshi Terasaki is an employee of an affiliate of the

promoter. • One of the Directors of the Company, Mr Fujitsu, is an employee of Nomura Asset Management

Tokyo, the Investment Manager of the Company. The Investment Manager earned a fee of USD 21,219 during the period from 13th April, 2006 (date of incorporation) to 31st December, 2006, all of which was outstanding at the period end.

• One of the Directors of the Company, Mr David Dillon is a partner in Dillon Eustace, which acts as

Irish Legal adviser to the Company. Dillon Eustace earned a fee of USD 17,717 during the period from 13th April, 2006 (date of incorporation) to 31st December, 2006, all of which was outstanding at the period end.

The Board of Directors are not aware of any transactions with related parties, during the period from 13th April, 2006 (date of incorporation) to 31st December, 2006, other than those disclosed in the financial statements.

15. Efficient Portfolio Management

The Company may employ techniques and instruments relating to transferable securities and/or other financial instruments in which it invests for investment purposes or hedging. Where a Sub-Fund invests in financial derivative instruments for such purposes, a risk management process will be submitted to the Financial Regulator by the Company, prior to the Sub-Fund engaging in such transactions in accordance with the Financial Regulator’s requirements as set out in Guidance Note 3/03.

The Investment Manager did not use any derivative instruments for the purpose of efficient portfolio management during the period.

16. Soft Commissions

The Investment Manager or its delegate may effect transactions with or through the agency of another person with whom it or its delegates (or an affiliated entity) has arrangements under which that person will, from time to time, provide to or procure for the Investment Manager or its delegate (and/or an affiliated party) goods, services or other benefits such as research and advisory services, specialised computer hardware or software. No direct payment may be made for such goods or services but the Investment Manager or its delegate may undertake to place business with that person provided that person has agreed to provide best execution with respect to such business and the services provided must be of a type which assist in the provision of investment services to the Company. There were no soft commission arrangements entered into by the Investment Manager or its delegate, on behalf of the Company during the period.


27


17. Events after the Balance Sheet Date

Two new sub-funds launched since the period end. The India Equity Fund launched on 12th January, 2007 and the Asia Pacific Ex-Equity Fund launched on the 28th June, 2007.

Other then the above, there were no post Balance Sheet events.

18. Approval of Financial Statements The financial statements were authorised for issue by the Directors on 19th November, 2007.


28

GLOBAL EMERGING MARKETS FUND STATEMENT OF INVESTMENTS As at 31st December, 2006

Fair value % of Security Description Holding USD Sub-Fund AUSTRALIA - 0.13% Basic Materials - 0.13% Mintails Ltd 341,687 84,964 0.13% 84,964 0.13% TOTAL AUSTRALIA 84,964 0.13% AUSTRIA - 0.34% Financial - 0.34% Erste Bank der Oesterreichischen Sparkassen AG 2,905 222,807 0.34% 222,807 0.34% TOTAL AUSTRIA 222,807 0.34% BRAZIL - 10.20% Basic Materials - 2.35% Cia Siderurgica Nacional SA 7,465 223,726 0.34% Cia Vale do Rio Doce 36,649 1,088,109 1.65% Votorantim Celulose e Papel SA 12,111 237,012 0.36% 1,548,847 2.35% Beverages - 0.36% Cia de Bebidas das Americas 4,807 234,197 0.36% 234,197 0.36% Commercial Services - 0.48% Cia de Concessoes Rodoviarias 23,377 314,575 0.48% 314,575 0.48% Communications - 0.56% Telecomunicacoes de Sao Paulo SA 5,956 151,759 0.23% Tim Participacoes SA 6,367 220,362 0.33% 372,121 0.56% Energy - 1.72% Petroleo Brasileiro SA 11,021 1,133,510 1.72% 1,133,510 1.72% Financial- 1.42% Banco Bradesco SA 7,057 284,044 0.43% Banco Itau Holding Financeira SA 8,100 291,681 0.44% Unibanco - Uniao de Bancos Brasileiros SA 3,900 362,505 0.55% 938,230 1.42% Food - 0.19% Sadia SA 3,757 128,076 0.19%

128,076 0.19%


29

GLOBAL EMERGING MARKETS FUND STATEMENT OF INVESTMENTS (CONTINUED) As at 31st December, 2006

Fair value % of Security Description Holding USD Sub-Fund BRAZIL - 10.20% (continued) Healthcare-Services - 0.16% Medial Saude SA 9,200 103,347 0.16% 103,347 0.16% Home Builders - 0.56% Company SA 21,500 251,580 0.38% Klabin Segall SA 14,099 117,794 0.18% 369,374 0.56% Industrial - 0.35% Confab Industrial SA 97,000 228,369 0.35% 228,369 0.35% Retail - 0.83% Lojas Renner SA 32,300 464,128 0.70% Positivo Informatica SA 7,761 83,259 0.13% 547,387 0.83% Technology - 0.20% Totvs SA 5,900 130,593 0.20% 130,593 0.20% Utilities - 1.02% AES Tiete SA 7,302,000 212,925 0.32% Cia de Saneamento Basico do Estado de Sao Paulo 1,030,000 141,254 0.22% Cia Energetica de Minas Gerais 2,242 108,020 0.16% CPFL Energia SA 5,200 212,316 0.32% 674,515 1.02% TOTAL BRAZIL 6,723,141 10.20% CANADA - 0.18% Basic Materials - 0.12% AUR Resources Inc 3,686 76,692 0.12% 76,692 0.12% Energy - 0.07% Coalcorp Mining Inc 84,000 43,945 0.07% 43,945 0.07% TOTAL CANADA 120,637 0.19%


30


Fair value % ofSecurity Description Holding USD Sub-Fund CHILE - 0.94% Airlines - 0.41% Lan Airlines SA 4,900 268,716 0.41% 268,716 0.41% Financial - 0.20% Banco Santander Chile SA 2,716 130,585 0.20% 130,585 0.20% Utilities - 0.33% Enersis SA 13,564 216,346 0.33% 216,346 0.33% TOTAL CHILE 615,647 0.94% CHINA - 8.54% Basic Materials - 0.06% Zijin Mining Group Co Ltd 56,000 39,021 0.06% 39,021 0.06% Communications - 0.64% China Telecom Corp Ltd 768,000 420,616 0.64% 420,616 0.64% Energy - 2.95% China Oilfield Services Ltd 108,000 74,978 0.11% China Petroleum & Chemical Corp 454,000 420,246 0.64% China Shenhua Energy Co Ltd 161,000 387,478 0.59% PetroChina Co Ltd 752,000 1,065,405 1.61% 1,948,107 2.95% Financial - 4.15% Bank of Communications Co Ltd 843,000 1,014,422 1.54% China Life Insurance Co Ltd 357,000 1,211,679 1.84% China Merchants Bank Co Ltd 14,000 29,662 0.04% Industrial & Commercial Bank of China 773,000 480,995 0.73% 2,736,758 4.15% Industrial - 0.74% China Communications Construction Co Ltd 76,000 74,942 0.11% China Shipping Development Co Ltd 224,000 342,697 0.52% Jiangxi Copper Co Ltd 69,000 70,168 0.11% 487,807 0.74% TOTAL CHINA 5,632,309 8.54%


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Fair value % ofSecurity Description Holding USD Sub-Fund COLOMBIA - 0.54% Financial - 0.54% BanColombia SA 11,332 352,425 0.54% 352,425 0.54% TOTAL COLOMBIA 352,425 0.54% CYPRUS - 0.27% Financial - 0.27% Mirland Development Corp Plc 18,970 179,452 0.27% 179,452 0.27% TOTAL CYPRUS 179,452 0.27% CZECH REPUBLIC -1.03% Utilities - 1.03% CEZ 14,850 681,448 1.03% 681,448 1.03% TOTAL CZECH REPUBLIC 681,448 1.03% EGYPT - 0.69% Communications - 0.69% Orascom Telecom Holding SAE 6,850 452,100 0.69% 452,100 0.69% TOTAL EGYPT 452,100 0.69% HONG KONG - 4.57% Communications - 2.33% China Mobile Ltd 177,500 1,536,920 2.33% 1,536,920 2.33% Diversified - 0.83% China Merchants Holdings International Co Ltd 52,000 213,260 0.32% China Resources Enterprise 64,000 183,485 0.28% Guangdong Investment Ltd 340,000 152,990 0.23% 549,735 0.83% Energy - 0.56% CNOOC Ltd 388,000 368,132 0.56% 368,132 0.56% Financial - 0.27% China Overseas Land & Investment Ltd 134,000 178,821 0.27% 178,821 0.27%


32


Fair value % of Security Description Holding USD Sub-Fund HONG KONG - 4.57% (continued) Healthcare-Products - 0.16% Hengan International Group Co Ltd 44,000 107,478 0.16% 107,478 0.16% Utilities - 0.42% China Resources Power Holdings Co 180,000 273,993 0.42% 273,993 0.42% TOTAL HONG KONG 3,015,079 4.57% HUNGARY - 0.49% Financial - 0.49% OTP Bank Nyrt 7,106 324,852 0.49% 324,852 0.49% TOTAL HUNGARY 324,852 0.49% INDIA - 6.30% Agriculture - 0.42% ITC Ltd 70,455 281,005 0.42% 281,005 0.42% Auto Manufacturers - 0.29% Tata Motors Ltd 9,567 193,259 0.29% 193,259 0.29% Communications - 0.41% Bharti Airtel Ltd 19,130 272,694 0.41% 272,694 0.41% Energy - 0.70% Reliance Industries Ltd 15,951 459,204 0.70% 459,204 0.70% Financial - 1.57% Housing Development Finance Corp 9,436 346,960 0.53% ICICI Bank Ltd 17,584 352,756 0.54% State Bank of India Ltd 4,454 331,378 0.50% 1,031,094 1.57% Industrial - 1.07% ABB Ltd India 1,923 161,787 0.24% Ambuja Cements Ltd 92,476 296,200 0.45% Bharat Heavy Electricals Ltd 3,804 198,017 0.30% Larsen & Toubro Ltd 1,583 51,778 0.08% 707,782 1.07%


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Fair value % ofSecurity Description Holding USD Sub-Fund INDIA - 6.30 % (continued) Pharmaceuticals - 0.44% Cipla Ltd 50,654 287,860 0.44% 287,860 0.44% Technology - 1.40% Infosys Technologies Ltd 11,095 563,364 0.86% Satyam Computer Services Ltd 32,731 358,360 0.54% 921,724 1.40% TOTAL INDIA 4,154,622 6.30% INDONESIA - 1.44% Communications - 0.49% Indosat Tbk PT 339,000 252,549 0.38% Mobile-8 Telecom Tbk 2,048,500 72,888 0.11% 325,437 0.49% Financial - 0.38% Bank Danamon Indonesia Tbk PT 329,500 247,304 0.38% 247,304 0.38% Industrial - 0.34% Indocement Tunggal Prakarsa Tbk PT 354,000 224,362 0.34% 224,362 0.34% Retail - 0.23% PT Astra International Tbk 88,000 153,622 0.23% 153,622 0.23% TOTAL INDONESIA 950,725 1.44% IRELAND - 0.28% Energy - 0.28% Dragon Oil Plc 56,215 187,445 0.28% 187,445 0.28% TOTAL IRELAND 187,445 0.28% ISRAEL - 1.59% Basic Materials - 0.27% Makhteshim-Agan Industries Ltd 31,596 179,306 0.27% 179,306 0.27% Communications - 0.27% ECI Telecom Ltd 20,200 174,932 0.27% 174,932 0.27%


34


Fair value % ofSecurity Description Holding USD Sub-Fund ISRAEL - 1.59% (continued) Pharmaceuticals - 1.05% Teva Pharmaceutical Industries Ltd 22,300 692,415 1.05% 692,415 1.05% TOTAL ISRAEL 1,046,653 1.59% JERSEY - 0.51% Basic Materials - 0.51% KazakhGold Group Ltd 17,697 336,243 0.51% 336,243 0.51% TOTAL JERSEY 336,243 0.51% KAZAKHSTAN - 0.54% Financial - 0.54% Kazkommertsbank 15,497 357,981 0.54% 357,981 0.54% TOTAL KAZAKHSTAN 357,981 0.54% LUXEMBOURG - 0.81% Basic Materials - 0.81% Tenaris SA 7,228 359,810 0.55% Ternium SA 5,800 171,158 0.26% 530,968 0.81% TOTAL LUXEMBOURG 530,968 0.81% MALAYSIA - 2.83% Agriculture - 0.82%

IOI Corp Bhd 51,500 265,524 0.40% Kuala Lumpur Kepong Bhd 73,200 277,870 0.42% 543,394 0.82% Auto Parts & Equipment - 0.20% UMW Holdings Bhd 61,100 131,547 0.20% 131,547 0.20% Communications - 0.03% Digi.Com Bhd 4,800 20,669 0.03% 20,669 0.03%


35


Fair value % ofSecurity Description Holding USD Sub-Fund MALAYSIA - 2.83% (continued) Entertainment - 0.35% Resorts World Berhad 28,000 115,014 0.17% Tanjong Plc 28,400 115,853 0.18% 230,867 0.35% Financial – 0.99% IGB Corp Bhd 155,600 77,580 0.12% Malayan Banking Bhd 93,000 308,244 0.47% Public Bank Bhd 61,000 134,788 0.20% RHB Capital Bhd 141,100 135,904 0.20% 656,516 0.99% Industrial - 0.23% Lafarge Malayan Cement Berhad 143,300 56,021 0.10% MISC Bhd 35,100 87,004 0.13% 143,025 0.23% Lodging - 0.21% Genting Bhd 14,900 138,237 0.21% 138,237 0.21% TOTAL MALAYSIA 1,864,255 2.83% MEXICO - 6.37% Basic Materials - 0.67% Grupo Mexico SAB de CV 67,738 247,979 0.38% Industrias Penoles SA de CV 20,652 189,249 0.29% 437,228 0.67% Beverages - 0.28% Fomento Economico Mexicano SAB de CV 1,595 184,510 0.28% 184,510 0.28% Communications - 2.41% America Movil SAB de CV 24,414 1,102,048 1.67% Grupo Televisa SA 8,018 216,486 0.33% Telefonos de Mexico SAB de CV 9,721 274,521 0.41% 1,593,055 2.41% Diversified - 0.49% Alfa SAB de CV 27,954 183,738 0.28% Impulsora Del Desarrollo Y El Empleo en America 111,192 141,106 0.21% 324,844 0.49%


36


Fair value % of Security Description Holding USD Sub-Fund MEXICO - 6.37% (continued) Financial - 0.66% Grupo Financiero Banorte SAB de CV 112,530 437,579 0.66% 437,579 0.66% Home Builders - 0.29% Corp GEO SAB de CV 37,657 188,224 0.29% 188,224 0.29% Industrial - 0.97% Carso Infraestructura y Construccion SA de CV 80,000 75,679 0.12% Cemex SAB de CV 12,429 420,349 0.64% Grupo Aeroportuario del Centro Norte SAB de CV 1,800 39,960 0.06% Grupo Aeroportuario del Sureste SAB de CV 23,864 100,903 0.15% 636,891 0.97% Retail - 0.60% Wal-Mart de Mexico SAB de CV 90,000 395,955 0.60% 395,955 0.60% TOTAL MEXICO 4,198,286 6.37% NETHERLANDS - 0.25% Financial - 0.25% Plaza Centers NV 44,849 167,333 0.25% 167,333 0.25% TOTAL NETHERLAND 167,333 0.25% PERU - 0.45% Basic Materials - 0.45% Cia Minera Atacocha SA 80,939 296,341 0.45% 296,341 0.45% TOTAL PERU 296,341 0.45% PHILIPPINES - 0.50% Communications - 0.20% Philippine Long Distance Telephone Co 2,480 128,930 0.20% 128,930 0.20% Diversified - 0.27% Ayala Corp 15,170 179,380 0.27% 179,380 0.27%


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Fair value % ofSecurity Description Holding USD Sub-Fund PHILIPPINES - 0.50% (continued) Energy - 0.03% PNOC Energy Development Corp 206,000 20,159 0.03% 20,159 0.03% TOTAL PHILIPPINES 328,469 0.50% POLAND - 0.51% Basic Materials - 0.24% KGHM Polska Miedz SA 5,181 158,822 0.24% 158,822 0.24% Financial - 0.27% Getin Holding SA 41,235 179,665 0.27% 179,665 0.27% TOTAL POLAND 338,487 0.51% RUSSIA - 11.78% Basic Materials - 1.29% MMC Norilsk Nickel 5,331 852,960 1.29% 852,960 1.29% Communications - 1.13% Mobile Telesystems OJSC 5,500 275,880 0.42% Sistema JSFC 6,009 191,988 0.29% Vimpel-Communications 3,500 276,150 0.42% 744,018 1.13% Energy - 7.00% Gazprom OAO 75,286 3,448,099 5.23% LUKOIL 11,122 970,150 1.47% Surgutneftegaz 176,724 196,164 0.30% 4,614,413 7.00% Financial - 2.02% Sberbank 338 1,149,200 1.74% Sistema-Hals 13,959 182,863 0.28% 1,332,063 2.02% Industrial - 0.34% TMK OAO 6,821 225,093 0.34% 225,093 0.34% TOTAL RUSSIA 7,768,547 11.78%


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Fair value % ofSecurity Description Holding USD Sub-Fund SOUTH AFRICA - 6.80% Basic Materials - 1.62% Gold Fields Ltd 10,023 189,258 0.29% Impala Platinum Holdings Ltd 33,781 878,036 1.33% 1,067,294 1.62% Communications - 1.58% MTN Group Ltd 19,616 237,990 0.36% Naspers Ltd 22,499 530,682 0.80% Telkom SA Ltd 13,836 278,478 0.42% 1,047,150 1.58% Energy - 1.43% Sasol Ltd 25,718 945,245 1.43% 945,245 1.43% Financial - 1.23% African Bank Investments Ltd 65,677 268,108 0.41% Discovery Holdings Ltd 47,645 180,896 0.27% Growthpoint Properties Ltd 103,362 177,778 0.27% Metropolitan Holdings Ltd 86,718 182,571 0.28% 809,353 1.23% Industrial - 0.27% Aeci Ltd 18,434 178,920 0.27% 178,920 0.27% Retail - 0.67% Ellerine Holdings Ltd 39,506 438,423 0.67% 438,423 0.67% TOTAL SOUTH AFRICA 4,486,385 6.80% SOUTH KOREA - 15.10% Agriculture - 0.81% KT&G Corp 8,810 535,231 0.81% 535,231 0.81% Auto Manufacturers - 0.44% Hyundai Motor Co 3,950 286,269 0.44% 286,269 0.44% Auto Parts & Equipment - 0.46% Hyundai Mobis 3,270 302,035 0.46% 302,035 0.46%


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Fair value % ofSecurity Description Holding USD Sub-Fund SOUTH KOREA - 15.10% (continued) Basic Materials - 1.37% POSCO 2,710 900,419 1.37% 900,419 1.37% Beverages - 0.70% Hite Brewery Co Ltd 3,600 462,581 0.70% 462,581 0.70% Communications - 0.58% LG Dacom Corp 18,120 380,910 0.58% 380,910 0.58% Financial - 3.49% Daewoo Securities Co Ltd 26,700 538,306 0.82% Hana Financial Group Inc 12,430 649,568 0.98% Samsung Fire & Marine Insurance Co Ltd 2,890 498,758 0.76% Shinhan Financial Group Co Ltd 12,070 615,830 0.93% 2,302,462 3.49% Industrial - 1.63% GS Engineering & Construction Corp 7,060 630,086 0.95% Hyundai Mipo Dockyard 3,520 450,409 0.68% 1,080,495 1.63% Retail - 0.75% Shinsegae Co Ltd 800 495,484 0.75% 495,484 0.75% Technology - 4.87% Samsung Electronics Co Ltd 4,880 3,211,355 4.87% 3,211,355 4.87% TOTAL SOUTH KOREA 9,957,241 15.10% TAIWAN - 11.15% Lodging - 1.15% China Steel Corp 478,000 506,092 0.77% Formosa Plastics Corp 151,000 250,701 0.38% 756,793 1.15% Commercial Services - 0.77% Taiwan Secom Co Ltd 117,000 211,128 0.32% D-Link Corp 176,000 230,364 0.35% Far EasTone Telecommunications Co Ltd 57,000 64,636 0.10% 506,128 0.77%


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Fair value % ofSecurity Description Holding USD Sub-Fund TAIWAN - 11.15% (continued) Financial - 2.21% Cathay Financial Holding Co Ltd 417,000 945,720 1.43% Chinatrust Financial Holding Co Ltd 617,000 515,035 0.78% 1,460,755 2.21% Industrial - 4.39% Asustek Computer Inc 157,000 429,299 0.65% Catcher Technology Co Ltd 10,000 97,744 0.15% Delta Electronics Inc 240,000 769,679 1.17% HON HAI Precision Industry Co Ltd 224,000 1,598,281 2.42% 2,895,003 4.39% Retail - 0.32% President Chain Store Corp 88,000 211,999 0.32% 211,999 0.32% Technology - 2.31% Acer Inc 47,000 98,082 0.15% Advantech Co Ltd 75,000 268,145 0.41% Chicony Electronics Co Ltd 34,000 51,076 0.08% Taiwan Semiconductor Manufacturing Co Ltd 534,000 1,101,267 1.67% 1,518,570 2.31% TOTAL TAIWAN 7,349,248 11.15% THAILAND - 1.66% Energy - 0.40% PTT Exploration & Production PCL 97,200 264,592 0.40% 264,592 0.40% Financial - 0.87% Bangkok Bank PCL 94,800 291,487 0.44% Kasikornbank PCL 162,200 281,391 0.43% 572,878 0.87% Healthcare-Services - 0.20% Bumrungrad Hospital PCL 131,000 136,728 0.20% 136,728 0.20% Industrial- 0.19% Siam Cement PCL 19,100 129,308 0.19% 129,308 0.19% TOTAL THAILAND 1,103,506 1.66%


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Fair value % ofSecurity Description Holding USD Sub-Fund TURKEY - 1.18% Financial - 1.18% Turkiye Garanti Bankasi AS 133,150 438,345 0.66% Turkiye Sinai Kalkinma Bankasi AS 90,098 162,946 0.25% Turkiye Vakiflar Bankasi Tao 37,354 174,167 0.27% 775,458 1.18%

TOTAL TURKEY 775,458 1.18% UNITED STATES - 0.34% Basic Materials - 0.07% Jaguar Mining Inc 7,459 43,370 0.07% 43,370 0.07% Distribution/Wholesale - 0.27% Central European Distribution Corp 6,000 177,960 0.27% 177,960 0.27% TOTAL UNITED STATES 221,330 0.34% Financial Assets designated at Fair Value through Profit and Loss 64,824,384 98.32% Net Cash at Bank 6,585,752 9.99% Other Assets 979,360 1.49% Less other Liabilities (6,458,369) (9.80%) Net Assets attributable to Redeemable Participating Shares 65,931,127 100.00% All investments held at the period end are transferable securities listed on an official stock exchange


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GLOBAL EMERGING MARKETS FUND STATEMENT OF CHANGES IN THE PORTFOLIO For the period from 13th April, 2006 (date of incorporation) to 31st December, 2006

Major Purchases Nominal Cost USD Gazprom OAO 75,286 3,473,402 Samsung Electronics Co Ltd 4,880 3,218,885 HON HAI Precision Industry Co Ltd 224,000 1,584,931 China Mobile Ltd 177,500 1,431,877 Taiwan Semiconductor Manufacturing Co Ltd 534,000 1,067,446Cia Vale do Rio Doce 36,649 1,065,445 America Movil SAB de CV 24,414 1,064,224 Petroleo Brasileiro SA 11,021 1,060,244 Sberbank 338 1,041,040 China Life Insurance Co Ltd 357,000 1,018,614 PetroChina Co Ltd 752,000 1,007,918 LUKOIL 11,122 977,488 POSCO 2,710 927,057 Cathay Financial Holding Co Ltd 417,000 925,410 Sasol Ltd 25,718 917,308 Impala Platinum Holdings Ltd 33,781 855,936 MMC Norilsk Nickel 5,331 844,474 Bank of Communications Co Ltd 843,000 805,787 Delta Electronics Inc 240,000 777,176 CEZ 14,850 711,330 Total Sales Nominal Proceeds USD Naspers Ltd 249 5,779

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