MACQUARIE FUND SOLUTIONS Société d’Investissement à Capital Variable (SICAV), Luxembourg
AUDITED ANNUAL REPORT AS AT SEPTEMBER 30, 2010
R.C.S. Luxembourg: B 143.751 No subscription can be accepted on the basis of the financial reports. Subscriptions are only valid if they are made on the basis of the latest published prospectus accompanied by the latest annual report and the most recent semi-annual report, if published thereafter.
MACQUARIE FUND SOLUTIONS
CONTENTS
PAGE Directory
3
Information to Shareholders
6
Report of the Board of Directors
7
Audit Report
8
Statement of Net Assets as at September 30, 2010
10
Statement of Operations and Changes in Net Assets for the Year ended September 30, 2010
11
Changes in the Number of Shares for the Year ended September 30, 2010
13
Statistics as at September 30, 2010
14
Statement of Investments as at September 30, 2010 Macquarie Fund Solutions – Macquarie Emerging Markets Infrastructure Fund
15
Macquarie Fund Solutions – Macquarie Emerging Markets Opportunities Fund
18
Notes to the Financial Statements as at September 30, 2010
2
21
MACQUARIE FUND SOLUTIONS
DIRECTORY
Registered Office of the Company 69, route d'Esch, L-1470 Luxembourg, Grand Duchy of Luxembourg Directors of the Company Philipp Graf (Chairman), Associate Director, Macquarie Funds Group, Macquarie Bank International Limited, London Jacques Elvinger Partner, Elvinger Hoss & Prussen, Luxembourg Leigh Harrison Division Director, Macquarie Capital Funds, Macquarie Capital Funds (Europe) Limited, London (since May 27, 2010) Ian Learmonth Executive Director, Macquarie Capital Funds, Macquarie Capital Funds (Europe) Limited, London (until May 27, 2010) Klaus Thalheimer Division Director, Macquarie Capital Advisers, Macquarie Capital GmbH, Frankfurt Management Company RBS (Luxembourg) S.A. 33, rue de Gasperich, L-5826 Hesperange, Grand Duchy of Luxembourg Directors of the Management Company Scott Barton Chairman, CEO Large Corporate Banking The Royal Bank of Scotland, London (since January 7, 2010) Antonio Thomas Managing Director RBS (Luxembourg) S.A., Luxembourg Lorna Cassidy Director, Head of Finance RBS (Luxembourg) S.A., Luxembourg
3
MACQUARIE FUND SOLUTIONS
DIRECTORY (continued)
Directors of the Management Company (continued) Oezguel Guelbey Director, Head of Legal and Compliance RBS (Luxembourg) S.A., Luxembourg Mario Zardoni Director, Head of Risk RBS (Luxembourg) S.A., Luxembourg Henry Kelly Director (Non-Executive Director) Managing Director KellyConsult S.à r.l., Luxembourg Peter Craft Director, Head of Trustee and Depositary Services The Royal Bank of Scotland, Edinburgh (until July 30, 2010) Ian Henley Chairman, Managing Director, Corporate & Institutional Banking, UK Corporate Banking The Royal Bank of Scotland, London (until December 21, 2009) Custodian and Central Administration Agent RBC Dexia Investor Services Bank S.A. 14 Porte de France, L-4360 Esch-sur-Alzette, Grand Duchy of Luxembourg Distributor Macquarie Bank International Limited (authorised and regulated by the Financial Services Authority) Level 25 CityPoint, 1 Ropemaker Street, London, EC2Y 9HD, United Kingdom Auditor PricewaterhouseCoopers S.à r.l. 400, Route d’Esch, L-1471 Luxembourg, Grand Duchy of Luxembourg Legal Advisers in Luxembourg Elvinger, Hoss & Prussen 2, place Winston Churchill, L-2014 Luxembourg, Grand Duchy of Luxembourg
4
MACQUARIE FUND SOLUTIONS
DIRECTORY (continued)
Switzerland Representative ACOLIN Fund Services AG Stadelhoferstrasse 18 CH-8001 Zürich Switzerland Paying Agent RBC Dexia Investor Services Bank S.A., Esch-sur-Alzette, Zürich Branch Badenerstrasse 567 P.O. Box 101 CH-8066 Zürich Germany Paying and Information Agent Deutsche Bank Aktiengesellschaft Theodor Heuss Allee 70 D-60486 Frankfurt am Main Germany Austrian Paying Agent and Tax Representative Erste Bank der Oesterreichischen Sparkassen AG Graben 21 A-1010 Vienna Austria Swedish Paying Agent Skandinaviska Enskilda Banken AB Custody Services, SEB Merchant Banking Sergels Torg 2, SE-10640 Stockholm Sweden United Kingdom Facilities Agent Macquarie Bank International Limited Level 25, Citypoint 1 Ropemaker St EC2Y 9HD London United Kingdom
5
MACQUARIE FUND SOLUTIONS
INFORMATION TO SHAREHOLDERS
Publication of Prices The Net Asset Value per Share of each Class, as well as the Issue Price and Redemption Price, may be obtained from the registered office of the Company, from the Paying Agent in each jurisdiction and any newspaper or website the Directors may determine from time to time. Reports The financial year of the Company ends on September 30 in each year. The first financial year of the Company ended on September 30, 2009. The audited annual reports and the unaudited semi-annual reports comprise of consolidated financial statements of the Company expressed in Euro, being the Reference Currency of the Company, and financial information on each Sub-Fund expressed in the Reference Currency of each Sub-Fund. Meetings The annual general meeting of Shareholders is held at the registered office of the Company in Luxembourg (or any other place indicated in the convening notice) on the last Wednesday of the month of February of each year at 2pm (Luxembourg time) or, if any such day is not a Business Day, on the immediately preceding Business Day. The first annual general meeting of Shareholders was held in February 2010. Notices of all general meetings are published in the Mémorial to the extent required by Luxembourg law and in such other newspapers as the Directors shall determine. Such notices include the agenda and specify the time and place of the meeting and the conditions of admission, and will refer to the requirements of Luxembourg law with regard to the necessary quorum and majorities required for the meeting. The requirements as to attendance, quorum and majorities at all general meetings will be those laid down in the law of August 10, 1915 (as amended) of the Grand Duchy of Luxembourg and in the Articles. Documents available for inspection Copies of the following documents are available for inspection during business hours on each Business Day at the registered office of the Company in Luxembourg: - the Articles; - the material contracts referred to in the current Prospectus. Copies of the Articles, the current Prospectus, the current Simplified Prospectus, and the latest financial report can be obtained free of charge at the registered office of the Company, the Paying Agent in each jurisdiction and from the Swiss Representative. RBS (Luxembourg) S.A. acts as a Management Company for other investment funds. A list of these may be obtained, by request, at the Registered Office of the Management Company. Portfolio movements A detailed schedule of portfolio movements is available free of charge upon request at the registered office of the Company.
6
MACQUARIE FUND SOLUTIONS
REPORT OF THE BOARD OF DIRECTORS Dear Shareholders of MACQUARIE FUND SOLUTIONS, The Directors present below their Report for the year ended September 30, 2010. Principal activities The Company was established on December 16, 2008 as an open-ended investment company with limited liability incorporated in the Grand Duchy of Luxembourg as a Société d’Investissement à Capital Variable. The Company is organized as a company registered under Part I of the Luxembourg Law of December 20, 2002 relating to undertakings for collective investment (the “Law”). The Company is an umbrella fund that has been established for the purpose of offering investors access to a range of investment strategies. Investors can invest in segregated portfolios of securities managed in accordance with specific investment objectives (each a “Sub-Fund”). The Company offers to investors a choice of one or more classes of Shares in these various Sub-Funds. The Company has sought and will continue to seek authorization to offer the Shares for sale in a number of jurisdictions. As at September 30, 2010, there are two active Sub-Funds. The base currency of the Company is Euro (EUR). The life of the Company is unlimited. Review of business and future developments During the year, the Company pursued its objective of establishing a range of Sub-Funds to offer to investors. The Investment Manager, Macquarie Investment Management Limited (“MIML”), and the Company’s appointed global distributor, Macquarie Bank International Limited (“MBIL”) continued registration and marketing for two Sub-Funds in various jurisdictions in Europe. The third sub-fund was liquidated in September 2010 due to economic considerations. As at September 30, 2010, the Directors are pleased to announce that the Company is publicly offering Shares in the following Sub-Funds: Macquarie Emerging Markets Infrastructure Fund in Luxembourg, Switzerland, Austria, Sweden, United Kingdom and Germany; and Macquarie Emerging Markets Opportunities Fund in Luxembourg, Switzerland, Austria Sweden, United Kingdom and Germany. Results and dividends The results for the year are set out in the statement of operations and changes in net assets on page 11. The Directors have not declared a dividend for the year ended September 30, 2010. Directors The Directors of the Company as at September 30, 2010 are: Philipp Graf, Jacques Elvinger, Leigh Harrison and Klaus Thalheimer.
BOARD OF DIRECTORS MACQUARIE FUND SOLUTIONS February 15, 2011
Note: The information in this report is provided for information purposes and is no way indicative of future performances.
7
PricewaterhouseCoopers Société à responsabilité limitée 400, Route d’Esch B.P. 1443 L-1014 Luxembourg Telephone +352 494848-1 Facsimile +352 494848-2900 www.pwc.com/lu
[email protected]
AUDIT REPORT
To the Shareholders of MACQUARIE FUND SOLUTIONS
Following our appointment by the General Meeting of the Shareholders of the SICAV dated February 24, 2010, we have audited the accompanying financial statements of MACQUARIE FUND SOLUTIONS and of each of its sub-funds (the "SICAV"), which comprise the statement of net assets and the statement of investments as at September 30, 2010 and the statement of operations and changes in net assets for the year then ended, and a summary of significant accounting policies and other explanatory notes to the financial statements. Board of Directors of the SICAV’s responsibility for the financial statements The Board of Directors of the SICAV is responsible for the preparation and fair presentation of these financial statements in accordance with Luxembourg legal and regulatory requirements relating to the preparation of the financial statements. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Responsibility of the "Réviseur d’entreprises agréé" Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing as adopted for Luxembourg by the ‘‘Commission de Surveillance du Secteur Financier’’. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the judgment of the "Réviseur d’entreprises agréé", including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the "Réviseur d’entreprises agréé" considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors of the SICAV, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Cabinet de révision agréé Expert comptable (autorisation gouvernementale n˚95992) R.C.S. Luxembourg B 65 477 - Capital social EUR 516 950 - TVA LU17564447
8
Opinion In our opinion, these financial statements give a true and fair view of the financial position of MACQUARIE FUND SOLUTIONS and of each of its sub-funds as of September 30, 2010, and of the results of their operations and changes in their net assets for the year then ended in accordance with Luxembourg legal and regulatory requirements relating to the preparation of the financial statements. Other matters Supplementary information included in the annual report has been reviewed in the context of our mandate but has not been subject to specific audit procedures carried out in accordance with the standards described above. Consequently, we express no opinion on such information. However, we have no observation to make concerning such information in the context of the financial statements taken as a whole.
PricewaterhouseCoopers S.à r.l. Represented by
Luxembourg, February 15, 2011
Amaury Evrard
9
MACQUARIE FUND SOLUTIONS
STATEMENT OF NET ASSETS AS AT SEPTEMBER 30, 2010 Macquarie Fund Solutions – Macquarie Emerging Markets Infrastructure Fund USD
Macquarie Fund Solutions – Macquarie Emerging Markets Opportunities Fund USD
Combined EUR
3,382,758 148,538
4,621,471 302,226
5,890,440 331,724
43,946 8,267 – 58,006
– 2,390 1,415,018 50,217
32,341 7,843 1,041,334 79,643
3,641,515
6,391,322
7,383,325
27,170 4,301 13,083 227
124,170 6,510 14,814 –
111,374 7,956 20,530 167
44,781
145,494
140,027
3,596,734
6,245,828
7,243,298
Number of shares outstanding Class A (USD) Class A (EUR) Class A (CHF) Class C (USD)
301,127.920 16,451.990 1,001.020 –
402,659.968 11,029.850 – 174,979.080
Net asset value per share Class A (USD) Class A (EUR) Class A (CHF) Class C (USD)
USD11.1251 EUR10.5179 CHF10.1781 –
USD10.5608 EUR10.6491 – USD10.4759
Note
ASSETS Investment portfolio at market value Cash at bank Amounts receivable on sale of investments Interest and dividends receivable, net Swaps at market value Other assets
(2)
(2, 3)
Total assets LIABILITIES Amounts payable on purchase of investments Management fees payable Taxes and expenses payable Other liabilities
(4) (6)
Total liabilities Total net assets
The accompanying notes form an integral part of these financial statements.
10
MACQUARIE FUND SOLUTIONS
STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEAR ENDED SEPTEMBER 30, 2010 Macquarie Fund Solutions – Macquarie and RogersTM China Agriculture Fund(*) USD
Macquarie Fund Solutions – Macquarie Emerging Markets Infrastructure Fund USD
–
–
– 15,785 119,707
80,163 – 58,006
135,492
138,169
(4)
24,392
31,892
(4)
56,811 4,511 771 5 17,464 60,591
40,041 6,416 1,228 35 14,780 18,652
Total expenses
164,545
113,044
Net income/(loss) from investments
(29,053)
25,125
Net realised loss on sales of investments Net realised gain/(loss) on swaps Net realised gain/(loss) on foreign exchange
(12,553) 223,653 (920)
(16,825) – (4,238)
Net realised gain/(loss) Change in net unrealised appreciation/ (depreciation): on investments on swaps Net increase/(decrease) in net assets as a result of operations
210,180
(21,063)
– –
364,146 –
181,127
368,208
2,333,010 (2,514,137)
3,236,158 (7,632)
–
3,596,734
Note
Net assets at the beginning of the year Income Dividends, net Interest on bonds, net Other income
(2) (2) (7)
Total income Expenses Management fees Domiciliation, administration and transfer agent fees Audit, printing and publication expenses Subscription tax Interest paid Amortisation of formation expenses Other expenses
(5) (4)
Evolution of the capital Subscriptions of shares Redemptions of shares Net assets at the end of the year (*)
Sub-Fund closed on September 1, 2010.
The accompanying notes form an integral part of these financial statements.
11
MACQUARIE FUND SOLUTIONS
STATEMENT OF OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEAR ENDED SEPTEMBER 30, 2010 (continued) Macquarie Fund Solutions – Macquarie Emerging Markets Opportunities Fund USD
Combined EUR
–
–
36,829 – 50,217
86,096 11,617 167,737
87,046
265,450
(4)
50,587
78,648
(4)
41,147 11,556 1,724 10 6,887 26,895
101,556 16,546 2,740 37 28,797 78,109
Total expenses
138,806
306,433
Net income/(loss) from investments
(51,760)
(40,983)
Net realised loss on sales of investments Net realised gain/(loss) on swaps Net realised gain/(loss) on foreign exchange
(228,208) – 44,468
(189,562) 164,590 28,929
Net realised gain/(loss) Change in net unrealised appreciation/ (depreciation): on investments on swaps Net increase/(decrease) in net assets as a result of operations
(183,740)
3,957
415,307 159,064
573,612 117,058
338,871
653,644
Evolution of the capital Subscriptions of shares Redemptions of shares
6,688,834 (781,877)
9,020,860 (2,431,206)
Net assets at the end of the year
6,245,828
7,243,298
Note
Net assets at the beginning of the year Income Dividends, net Interest on bonds, net Other income
(2) (2) (7)
Total income Expenses Management fees Domiciliation, administration and transfer agent fees Audit, printing and publication expenses Subscription tax Interest paid Amortisation of formation expenses Other expenses
(5) (4)
The accompanying notes form an integral part of these financial statements.
12
MACQUARIE FUND SOLUTIONS
CHANGES IN THE NUMBER OF SHARES FOR THE YEAR ENDED SEPTEMBER 30, 2010 Macquarie Fund Solutions – Macquarie and RogersTM China Agriculture Fund(*)
Macquarie Fund Solutions – Macquarie Emerging Markets Infrastructure Fund
Macquarie Fund Solutions – Macquarie Emerging Markets Opportunities Fund
Class A (USD) Number of shares outstanding at the beginning of the year Number of shares issued Number of shares redeemed Number of shares outstanding at the end of the year
– 220,699.880 (220,699.880)
– 301,894.890 (766.970)
– 402,659.968 –
–
301,127.920
402,659.968
Class A (EUR) Number of shares outstanding at the beginning of the year Number of shares issued Number of shares redeemed Number of shares outstanding at the end of the year
– 6,302.400 (6,302.400)
– 16,451.990 –
– 11,029.850 –
–
16,451.990
11,029.850
Class A (CHF) Number of shares outstanding at the beginning of the year Number of shares issued Number of shares redeemed Number of shares outstanding at the end of the year
– 1,000.200 (1,000.200)
– 1,012.870 (11.850)
– – –
–
1,001.020
–
Class C (USD) Number of shares outstanding at the beginning of the year Number of shares issued Number of shares redeemed Number of shares outstanding at the end of the year
– – –
– – –
– 252,134.830 (77,155.750)
–
–
174,979.080
(*)
Sub-Fund closed on September 1, 2010.
The accompanying notes form an integral part of these financial statements.
13
MACQUARIE FUND SOLUTIONS
STATISTICS Macquarie Fund Solutions – Macquarie and RogersTM China Agriculture Fund(*) USD
Macquarie Fund Solutions – Macquarie Emerging Markets Infrastructure Fund USD
Macquarie Fund Solutions – Macquarie Emerging Markets Opportunities Fund USD
– –
3,596,734 –
6,245,828 –
30 September 2010 Class A (USD) Class A (EUR) Class A (CHF) Class C (USD)
– – – –
USD11.1251 EUR10.5179 CHF10.1781 –
USD10.5608 EUR10.6491 – USD10.4759
30 September 2009 Class A (USD) Class A (EUR) Class C (USD)
– – –
– – –
– – –
USD10.0000 – –
USD10.0000 EUR10.0000 USD10.0000
USD10.0000 EUR10.0000 USD10.0000
Total Net Asset value September 30, 2010 September 30, 2009 NAV per share as at:
Launch date (see Note 1, for further details) Class A (USD) Class A (EUR) Class C (USD) (*)
Sub-Fund closed on September 1, 2010.
The accompanying notes form an integral part of these financial statements.
14
MACQUARIE FUND SOLUTIONS
Macquarie Fund Solutions – Macquarie Emerging Markets Infrastructure Fund STATEMENT OF INVESTMENTS AS AT SEPTEMBER 30, 2010 (expressed in USD)
Description
Quantity
Currency
Acquisition cost
Market Value
% net assets
Transferable securities admitted to an official stock exchange listing Shares BERMUDA China Resources Gas Group Ltd Cosco Pacific Ltd
36,000 108,000
HKD HKD
52,120 135,405 187,525
52,958 162,490 215,448
1.47 4.52 5.99
BRAZIL All America Latina / unit *ope* Cia de Concessoes Rodoviarias Ecorodovias EDP Energias do Brasil SA Eletrob.el.brasil. / pref. "B" Llx Logistica SA Odontoprev SA Ultrapar Participacoes / pref.
5,200 9,700 8,432 4,200 8,600 20,200 6,600 3,000
BRL BRL BRL BRL BRL BRL BRL BRL
43,071 211,273 45,053 79,710 147,058 88,279 51,394 132,414 798,252
52,516 249,914 55,742 90,733 128,934 110,407 77,484 180,262 945,992
1.46 6.95 1.55 2.52 3.58 3.07 2.15 5.01 26.29
CHINA Bbmg "H" Beijing Cap.intl Airport "H" China Lg Pwr "H" China Telecom Corp Ltd "H" Jiangsu Expressway Co "H" Zhejiang Expressway Co Ltd "H"
51,000 94,000 47,000 108,000 102,000 102,000
HKD HKD HKD HKD HKD HKD
56,378 53,126 50,879 45,192 92,743 90,357 388,675
71,607 49,402 46,617 59,264 106,820 96,177 429,887
1.99 1.37 1.30 1.65 2.97 2.67 11.95
3,323
CZK
161,245
149,202
4.15
4,750 16,000
USD USD
91,549 84,988 176,537
100,843 82,400 183,243
2.80 2.29 5.09
CZECH REPUBLIC Cez,ceske Energeticke Zavody
FEDERATION OF RUSSIA Mobile Telesystems / SADR Rushydro Ojsc / SADR
The accompanying notes form an integral part of these financial statements.
15
MACQUARIE FUND SOLUTIONS
Macquarie Fund Solutions – Macquarie Emerging Markets Infrastructure Fund STATEMENT OF INVESTMENTS AS AT SEPTEMBER 30, 2010 (continued) (expressed in USD)
Description
Quantity
Currency
Acquisition cost
Market Value
% net assets
Transferable securities admitted to an official stock exchange listing Shares HONG KONG Beijing Enterprises Hld Ltd China Merchants Holdings China Mobile Ltd China Unico (HK)
11,500 50,887 11,500 24,000
HKD HKD HKD HKD
77,681 173,069 111,294 31,981 394,025
81,771 184,848 117,693 35,120 419,432
2.27 5.14 3.27 0.98 11.66
INDIA Indraprastha Gas Ltd
7,798
INR
55,416
52,998
1.47
INDONESIA PT Telekom.indonesia / sp.ADR
2,300
USD
92,175
94,967
2.64
MALAYSIA Malaysia Airports Holdings Plus Expressways Bhd
21,800 57,500
MYR MYR
29,400 55,599 84,999
40,606 77,673 118,279
1.13 2.16 3.29
MEXICO America Movil Sab de CV "L" Grupo Aeroport.del Pacifico "B" Grupo Aeroport.del Sures / SADR Impulsora-b-1 Shs "B1" Urbi Desarrollos Urbanos Sab
99,300 23,500 780 34,045 16,600
MXN MXN USD MXN MXN
225,098 74,451 35,477 46,646 35,082 416,754
266,888 81,614 37,034 41,567 34,959 462,062
7.42 2.27 1.03 1.16 0.97 12.85
PHILIPPINES Intl Container Terminal Serv.
58,400
PHP
26,437
51,101
1.42
The accompanying notes form an integral part of these financial statements.
16
MACQUARIE FUND SOLUTIONS
Macquarie Fund Solutions – Macquarie Emerging Markets Infrastructure Fund STATEMENT OF INVESTMENTS AS AT SEPTEMBER 30, 2010 (continued) (expressed in USD)
Description
Quantity
Currency
Acquisition cost
Market Value
% net assets
Transferable securities admitted to an official stock exchange listing Shares SOUTH AFRICA Mtn Group Ltd
3,149
ZAR
44,347
56,891
1.58
SOUTH KOREA Hyundai Engineering+constr. Co Korea Electric Power Corp. Samsung Engineering Co Ltd
640 4,030 440
KRW KRW KRW
34,916 108,058 49,251 192,225
40,693 103,909 58,654 203,256
1.13 2.89 1.63 5.65
Total shares
3,018,612
3,382,758
94.03
Total transferable securities admitted to an official stock exchange listing
3,018,612
3,382,758
94.03
Total investments
3,018,612
3,382,758
94.03
The accompanying notes form an integral part of these financial statements.
17
MACQUARIE FUND SOLUTIONS
Macquarie Fund Solutions – Macquarie Emerging Markets Opportunities Fund STATEMENT OF INVESTMENTS AS AT SEPTEMBER 30, 2010 (expressed in USD)
Description
Quantity
Currency
Acquisition cost
Market Value
% net assets
Transferable securities admitted to an official stock exchange listing Shares BRAZIL Banco Bradesco / SADR Cia Sider.nac / SADR (rep.1sh) Gerdau SA / SADR Pfd Shs Itau Unibanco Hldg / Ppfd SADR Petroleo Brasileiro / SADR Vale / SADR
CHINA China Life Insurance / SADR Petrochina / SADR
FEDERATION OF RUSSIA Gazprom Oao / SADR Reg.s Jsc Surgutneftegaz / SADR Lukoil / SADR Rep.1 Shs. Mmc Norilsk Nickel / SADR Mobile Telesystems / SADR Rosneft Oil Co Ojsc / SGDR Severstal Cherepovets Met / SGDR Vneshtorgbank SGDR
HONG KONG China Mobile Limited / SADR Cnooc / sp-ADR "H"
4,420 3,220 1,310 3,500 4,450 2,300
USD USD USD USD USD USD
81,098 53,738 17,487 73,585 155,129 60,109 441,146
90,080 56,897 17,829 84,630 161,402 71,921 482,759
1.44 0.91 0.29 1.35 2.58 1.15 7.72
380 310
USD USD
24,284 33,866 58,150
22,602 36,090 58,692
0.36 0.58 0.94
5,000 1,970 2,380 1,400 900 3,100
USD USD USD USD USD USD
104,839 18,247 129,765 23,141 19,273 19,631
104,950 18,873 135,184 23,870 19,107 20,677
1.68 0.30 2.14 0.38 0.31 0.34
1,190 2,975
USD USD
13,745 15,638 344,279
17,612 17,122 357,395
0.28 0.28 5.71
1,575 400
USD USD
78,997 69,339 148,336
80,530 77,720 158,250
1.29 1.24 2.53
The accompanying notes form an integral part of these financial statements.
18
MACQUARIE FUND SOLUTIONS
Macquarie Fund Solutions – Macquarie Emerging Markets Opportunities Fund STATEMENT OF INVESTMENTS AS AT SEPTEMBER 30, 2010 (continued) (expressed in USD)
Description
Quantity
Currency
Acquisition cost
Market Value
% net assets
Transferable securities admitted to an official stock exchange listing Shares MEXICO America Movil Sab / ADR "L" Cemex / ADR Fomento Economico Mexicano / ADR Grupo Televisa / GDS Telef.de Mexi.sab de CV / ADR "L"
2,390 2,506
USD USD
115,239 24,927
127,459 21,301
2.04 0.34
480 1,195
USD USD
22,068 23,235
24,350 22,609
0.39 0.36
680
USD
10,623 196,092
10,152 205,871
0.16 3.29
1,188,003
1,262,967
20.19
522,257
613,656
9.83
522,257
613,656
9.83
295,308 221,915 161,195 189,813 868,231
307,439 236,630 163,771 200,543 908,383
4.92 3.79 2.62 3.21 14.54
Total shares
Certificates GREAT BRITAIN Barclays – iPath MSCI India Index
8,100
USD
Total certificates
Investment funds IRELAND Ishares Msci Brazil Ishares Msci Korea Ishares Msci Taiwan Ishares Plc/ftse/Xinhua Ch25
5,100 7,100 4,900 1,650
GBP GBP GBP GBP
The accompanying notes form an integral part of these financial statements.
19
MACQUARIE FUND SOLUTIONS
Macquarie Fund Solutions – Macquarie Emerging Markets Opportunities Fund STATEMENT OF INVESTMENTS AS AT SEPTEMBER 30, 2010 (continued) (expressed in USD) Market Value
% net assets
137,527 49,301 99,891 118,201 40,839 119,386 213,741 282,347 55,250 280,705 135,388 95,097 1,627,673
151,245 54,200 124,120 122,133 49,021 128,460 250,023 322,203 58,289 310,028 166,811 99,932 1,836,465
2.42 0.87 1.99 1.96 0.78 2.06 4.00 5.16 0.93 4.96 2.67 1.60 29.40
Total investment funds
2,495,904
2,744,848
43.94
Total transferable securities admitted to an official stock exchange listing
4,206,164
4,621,471
73.96
Total investments
4,206,164
4,621,471
73.96
Description
Quantity
Currency
Acquisition cost
Transferable securities admitted to an official stock exchange listing Investment funds UNITED STATES (U.S.A.) Ishares /msci Sth. Africa Ishares Inc/msci Taiwan Index Ishares Mcsi Thail Invstb Ishares Msci Chile Inv Mkt Idx Ishares Msci Turkey Invmk Dis Ishares Shs/ftse/xin Chin25 Ishares/msci Brazil /index Fd Ishares/msci Malaysia Index Fd Ishares/msci Mex.inv.mkt.ind. Ishares/msci South Korea Ind Market Vectors Etf Trust Mkt Vect Benef Int Russia Etf
2,250 4,000 2,000 1,650 700 3,000 3,250 23,450 1,100 5,796 1,926 3,072
USD USD USD USD USD USD USD USD USD USD USD USD
The accompanying notes form an integral part of these financial statements.
20
MACQUARIE FUND SOLUTIONS
NOTES TO THE FINANCIAL STATEMENTS AS AT SEPTEMBER 30, 2010
Note 1 – General MACQUARIE FUND SOLUTIONS (the "Company") was incorporated as an open-ended investment company (Société d’Investissement à Capital Variable – SICAV) registered under Part I of the amended Luxembourg Law of December 20, 2002 relating to undertakings for collective investment with multiple compartments on December 16, 2008 and offers investors a choice between several classes of shares (each a "Class") in a number of sub funds (each a "Sub-Fund"). The duration of the Company is indefinite. The duration of the Sub-Funds may be limited. The initial capital on incorporation was EUR 31,000. On incorporation all the Shares representing the initial capital were subscribed for and were fully paid. The capital of EUR 1,250,000 was reached within a period of six months following the authorisation of the Company. The Company has appointed a management company authorised in accordance with chapter 13 of the Law of 2002. The Company is registered with the Registre de Commerce et des Sociétés of Luxembourg under the number B 143.751. The Articles were published in the Mémorial C, Recueil des Sociétés et Associations (the "Mémorial") on January 23, 2009. The capital of the Company will always be equal to the value of its net assets. The Shares are of no par value and must be issued fully paid. The Shares carry no preferential or pre-emption rights and each Share is entitled to one vote at all meetings of Shareholders. The Board of Directors may authorise the creation of additional sub-funds / share classes in the future. The Company offers investors, within the same investment vehicle, a choice between several Sub-Funds, which are managed separately and are distinguished principally by their specific investment policy and/or by the currency in which they are denominated. As at September 30, 2010, the following sub-funds have been launched: Macquarie Fund Solutions – Macquarie Emerging Markets Infrastructure Fund (launched January 28, 2010); and Macquarie Fund Solutions – Macquarie Emerging Markets Opportunities Fund (launched January 21, 2010). Effective September 1, 2010, the Macquarie Fund Solutions – Macquarie and RogersTM China Agriculture Fund was liquidated. In each sub-fund, the Company may issue shares in the following categories: – Class A Shares: available to all investors; – Class B Shares: available to sophisticated investors; – Class C Shares: available to professional or institutional investors; – Class E Shares: available exclusively to sub-distributors in distribution markets appointed specially for the purpose of distributing Class E Shares and only in respect of those Sub-Funds for which distribution arrangements have been made with such sub-distributors; – Class J Shares : available to, and can only be acquired by Japanese Fund of Funds, which are institutional investors.
21
MACQUARIE FUND SOLUTIONS
NOTES TO THE FINANCIAL STATEMENTS AS AT SEPTEMBER 30, 2010 (continued)
Note 2 – Significant Accounting Policies The financial statements of the Company are prepared in accordance with Luxembourg regulations relating to undertakings for collective investment. Calculation of Net Asset Value The Net Asset Value per Share of each Class will be determined and made available in the Reference Currency of the relevant Class by the Central Administration Agent as of each Valuation Day in respect of the relevant Sub-Fund. The Net Asset Value per Share as of any Valuation Day will be calculated to four decimal places in the Reference Currency of the relevant Class by dividing the Net Asset Value of the Class by the number of Shares in issue in such Class as of that Valuation Day. The Net Asset Value of each Sub-Fund will be determined by deducting from the total value of the assets attributable to the relevant Sub-Fund, all accrued debts and liabilities attributable to that Sub-Fund, without prejudice to the fact that as a result of certain currency hedging techniques and instruments which may be used in relation to certain Classes within a Sub-Fund, the Net Asset Value of such Classes will take into account the impact of the use of such techniques and instruments. To the extent feasible, all known and recurring expenses, fees and income will be accrued as of each Valuation Day. Assets and liabilities of the Sub-Funds will be valued as of each Valuation Day in accordance with the following principles: a) Securities or money market instruments quoted or traded on an official stock exchange or any other Regulated Market are valued on the basis of: (i) the closing price of the relevant stock exchange or Regulated Market on the Valuation Day; (ii) if the securities or money market instruments are listed on several stock exchanges or Regulated Markets, the closing price of the stock exchange or Regulated Market on the Valuation Day which is the principal market for the security or money market instrument in question; or (iii) if the closing price of securities or money market instruments quoted or traded on an official stock exchange or any other Regulated Market in Asia or Oceania on the Valuation Day is not representative, their last known price at the time the Net Asset Value is determined in relation to such Valuation Day. b) For securities or money market instruments not quoted or traded on an official stock exchange or any other Regulated Market, and for quoted securities or money market instruments, but for which the last known price is not representative, valuation is based on the probable sales price estimated prudently and in good faith by the Directors. c) Units/shares issued by open-ended investment funds shall be valued at their last available net asset value. d) The liquidating value of futures, forward or options contracts or other financial derivatives traded on exchanges or on other Regulated Markets shall be based upon the last available settlement prices of these contracts on exchanges and Regulated Markets on which the particular futures, forward or options contracts or other financial derivatives are traded; provided that if a futures, forward or options contract or other financial derivative could not be liquidated on such Valuation Day with respect to which a Net Asset Value is being determined, then the basis for determining the liquidating value of such contract or other financial derivative shall be such value as the Directors may, in good faith and pursuant to verifiable valuation procedures, deem fair and reasonable. The liquidating value of futures, forward or options contracts or other financial derivatives that are not traded on exchanges or on other Regulated Markets shall be determined pursuant to the policies established in good faith by the Directors, on a basis consistently applied.
22
MACQUARIE FUND SOLUTIONS
NOTES TO THE FINANCIAL STATEMENTS AS AT SEPTEMBER 30, 2010 (continued)
Note 2 – Significant Accounting Policies (continued) Calculation of Net Asset Value (continued) e) Liquid assets and money market instruments with a maturity of less than 12 months may be valued at nominal value plus any accrued interest or using an amortised cost method (it being understood that the method which is more likely, in the opinion of the Directors, to represent the fair market value will be retained). This amortised cost method may result in periods during which the value deviates from the price the relevant Sub-Fund would receive if it sold the investment. The Management Company may, from time to time, assess this method of valuation and recommend changes, where necessary, to ensure that such assets will be valued at their fair value as determined in good faith pursuant to procedures established by the Directors. If the Directors believe that a deviation from the amortised cost per Share may result in material dilution or other unfair results to Shareholders, the Directors shall take such corrective action, if any, as they deem appropriate, to eliminate or reduce, to the extent reasonably practicable, the dilution or unfair results. f)
Swap transactions will be consistently valued based on a calculation of the net present value of their expected cash flows. For certain Sub-Funds using OTC derivatives as part of their main investment policy and insofar the valuation of such OTC derivatives shall diverge from the foregoing, the valuation method of the OTC derivative will be further specified in the description of the relevant Sub-Fund.
g) Accrued interest on securities shall be included if it is not reflected in the share price of the relevant securities. h) Cash shall be valued at nominal value, plus accrued interest. i)
All assets denominated in a currency other than the Reference Currency of the respective SubFund shall be converted at the mid-market conversion rate between such Reference Currency and the currency of denomination. The following exchange rates are used to convert the investments and other assets and liabilities denominated in currencies other than the Reference Currency of the Sub-Fund at September 30, 2010: 1 USD 1 USD 1 USD 1 USD 1 USD 1 USD
j)
= = = = = =
1.700501 0.976954 18.100858 0.735916 0.630994 7.760481
BRL CHF CZK EUR GBP HKD
1 USD 1 USD 1 USD 1 USD 1 USD 1 USD
= = = = = =
44.569238 1,140.250855 12.525835 3.087001 43.919364 6.979439
INR KRW MXN MYR PHP ZAR
All other securities and other permissible assets as well as any of the above mentioned assets for which the valuation in accordance with the above sub-paragraphs would not be possible or practicable, or would not be representative of their fair value, in each case, in the opinion of the Directors, will be valued in such a manner, as is determined in good faith pursuant to procedures established by the Directors.
k) The combined figures of the SICAV are expressed in euro (“EUR”) and include the total of the financial statements of the different sub-funds. For the Statement of Net Assets and the Statement of Operations and Changes in Net Assets, the exchange rate prevailing on September 30, 2010 is: 1 USD = 0.735916 EUR. These figures are presented for information purposes only.
23
MACQUARIE FUND SOLUTIONS
NOTES TO THE FINANCIAL STATEMENTS AS AT SEPTEMBER 30, 2010 (continued)
Note 2 – Significant Accounting Policies (continued) Calculation of Net Asset Value (continued) If a Sub-Fund is primarily invested in markets which are closed for business at the time the Sub-Fund is valued, the Directors may, during periods of market volatility, and by derogation from the provisions above, allow for the Net Asset Value per Share to be adjusted to reflect more accurately the fair value of the SubFund’s investments at the relevant point of valuation. The Management Company has delegated to the Central Administration Agent the determination of the Net Asset Value and the Net Asset Value per Share. Income from Investments Dividends are shown net of withholding tax deducted at source, and are recorded as income on the exdividend date. Interest income is accrued on a daily basis. Realised Gains and Losses on Sales of Investments in Securities Investments in securities are accounted for on a trade date basis. Realised gains and losses on sales of investments in securities are usually determined on the average cost basis and include transaction costs.
Note 3 – Net Unrealised Gain/(Loss) on Swaps As at September 30, 2010, the Sub-Fund Macquarie Fund Solutions – Macquarie Emerging Markets Opportunities Fund has the following Swap contracts outstanding:
Notional Amount USD 250,441 USD 250,755 USD 250,466 USD 251,181 USD 253,111
Description Price Return Index Swap on MSCI South Africa Net Price Return Index Swap on MSCI China Net Price Return Index Swap on MSCI China Net Price Return Index Swap on MSCI Korea Net Price Return Index Swap on MSCI Taiwan Net
Total
Maturity Date
Market Value USD
Unrealised Gain USD
18/7/2011
294,814
44,373
18/7/2011 19/7/2011 19/7/2011 20/7/2011
276,456 277,795 285,672 280,281
25,701 27,329 34,491 27,170
1,415,018
159,064
Note 4 – Fees and Expenses Management Fees In payment for carrying out its duties and responsibilities, the Management Company is entitled to receive an annual fee out of the net assets of each Sub-Fund. In payment for providing investment management services, an Investment Manager is entitled to receive an annual fee out of the net assets of the Sub-Fund for which it acts as investment manager. The fees paid to the Management Company and the Investment Manager in respect of a Sub- Fund shall, when combined, not exceed the level set out in the description of the relevant Sub-Fund.
24
MACQUARIE FUND SOLUTIONS
The Management Company and each Investment Manager may be reimbursed for reasonable out-ofpocket expenses relating to the services it provides. An Investment Manager may pay part of its fee to authorized intermediaries or other service providers acting on behalf of the Company. The Management Fees, the Service Fee and the Custodian and Central Administration Agent Fee are expressed as a percentage per annum of Net Asset Value of the relevant share Class. The Management Fees are accrued on a daily basis and are payable monthly in arrears. For the year ended September 30, 2010 the Management fees per share are up to the documented rates: A Share Class
C Share Class
Macquarie Fund Solutions – Macquarie and RogersTM China Agriculture Fund
1.25%
0.85%
Macquarie Fund Solutions – Macquarie Emerging Markets Infrastructure Fund
1.50%
0.90%
Macquarie Fund Solutions – Macquarie Emerging Markets Opportunities Fund
1.50%
0.90%
Service Fee In consideration for its ongoing distribution and marketing services in relation to investors and intermediaries, the Distributor is entitled to receive an annual fee out of the net assets of each Sub-Fund (the “Service Fee"). The Service Fee paid to the Distributor in respect of a Sub-Fund shall not exceed the level set out in the description of the relevant Sub-Fund. The Distributor may be reimbursed for reasonable out-of-pocket expenses relating to the services it provides. The Service Fee is accrued on a daily basis and is payable monthly in arrears. A Share Class
C Share Class
0.15%
0.05%
Macquarie Fund Solutions – Macquarie Emerging Markets Infrastructure Fund
0.30%
0.00%
Macquarie Fund Solutions – Macquarie Emerging Markets Opportunities Fund
0.30%
0.00%
Macquarie Fund Solutions – Macquarie and Rogers Agriculture Fund
TM
China
Custodian and Central Administration Agent Fee In payment for carrying out its duties and responsibilities as custodian of the assets of the Company and as a service provider to the Company, the Custodian and Central Administration Agent is entitled to receive an annual fee out of the net assets of each Sub-Fund. The fee paid to the Custodian and the Central Administration Agent in respect of a Sub-Fund shall not exceed the level set out in the description of the relevant Sub-Fund. The Custodian and Central Administration Agent will be reimbursed for reasonable out-of pocket expenses relating to the services it provides to the Company. The Custodian and Central Administration Agent Fees are accrued on a daily basis and are payable monthly in arrears and the fee should not exceed 0.40% per annum.
25
MACQUARIE FUND SOLUTIONS
NOTES TO THE FINANCIAL STATEMENTS AS AT SEPTEMBER 30, 2010 (continued)
Note 4 – Fees and Expenses (continued) Other costs and expenses The other costs charged to the Company or to the different Sub-Funds or Classes include: •
The costs of establishing the Company and the Sub-Funds. The costs and expenses of establishing the Company and creating Sub-Funds may be capitalised and amortised over a period not exceeding 5 years. In practice, these costs and expenses have not been capitalised, but have instead been fully amortised and have been borne by the Macquarie Group.
•
The fees and remuneration of Directors, auditors and legal advisors, the costs of preparing, printing and distributing all prospectuses, memoranda, reports and other necessary documents concerning the Company, any fees and expenses involved in registering and maintaining the registration of the Company with any governmental agency and stock exchange, the costs of publishing prices and the operational expenses, the reimbursement of any costs to the Management Company, the Custodian and other third parties and the cost of holding directors or shareholders' meetings. The remuneration payable to each Director shall not exceed EUR 10,000 p.a. and shall correspond for each Director to the amount and method of payment, as determined by the annual general meeting of Shareholders. The reimbursement of any costs to the Management Company, the Custodian and other third parties shall be limited to any out-of-pocket expenses arising in the performance of the agreements entered into by the Company with the relevant service provider.
Note 5 – Taxation Under current law and practice, the Company is not liable to any Luxembourg income tax, nor are dividends (if any) paid by the Company liable to any Luxembourg withholding tax. However, each Sub-Fund is liable in Luxembourg to a taxe d’abonnement of 0.05% per annum of its net assets, such tax being payable quarterly and calculated on the Net Asset Value of the Sub-Fund at the end of the relevant quarter. The reduced taxe d’abonnement rate of 0.01% per annum will be applicable to Classes of Shares which are reserved for Institutional Investors. To the extent that the assets of the Company are invested in investment funds which are established in Luxembourg, no such tax is payable. No stamp duty or other tax is payable in Luxembourg on the issue of Shares except a once and for all tax of EUR 1,250 which was paid upon incorporation. Under current law and practice, no Luxembourg capital gains tax will be payable on the realised or unrealised capital appreciation of the assets of the Company.
26
MACQUARIE FUND SOLUTIONS
NOTES TO THE FINANCIAL STATEMENTS AS AT SEPTEMBER 30, 2010 (continued) Note 6 – Taxes and Expenses Payable Macquarie Fund Solutions Macquarie Emerging Markets Infrastructure Fund USD
Macquarie Fund Solutions Macquarie Emerging Markets Opportunities Fund USD
450
594
10,493
10,337
–
–
2,140
3,883
13,083
14,814
Subscription tax (note 5) Depositary bank commission, domiciliation, administration and transfer agent fees Audit fees, printing and publishing expenses Other charges and expenses Total
Note 7 – Other Income Other income is represented by an annual expense budget adjustment of the overall accrued fees as discussed with the Promoter and the Administrator. Macquarie Bank International Limited has agreed to bear any normal operational charges and expenses above 0.80% (on Macquarie and RogersTM China Agriculture Fund) and 0.65% (on Macquarie Emerging Markets Infrastructure Fund and Macquarie Emerging Markets Opportunities Fund) per annum of the average net asset value of each sub-fund on the basis that such excess costs will be met by Macquarie Bank International Limited and will not be reflected in the net asset value of the relevant sub-funds.
Note 8 – Portfolio Turnover Rate (PTR) The Portfolio Turnover Rates (PTR) are calculated in accordance with the Swiss Funds Association Circular on Guidelines on the calculation and disclosure of PTR, dated May 16, 2008. The Portfolio Turnover Rates of the sub funds are as follows (annualised): Macquarie Fund Solutions – Macquarie and RogersTM China Agriculture Fund Macquarie Fund Solutions – Macquarie Emerging Markets Infrastructure Fund Macquarie Fund Solutions – Macquarie Emerging Markets Opportunities Fund
503.80% 78.89% 279.27%
The formula used is the following: Portfolio Turnover Rate = [(Total 1 – Total 2)/M] X 100 Where: Total 1 = total securities transactions during the period or X + Y where X = purchases of securities and Y = sales of securities. Total 2 = total transactions of shares during the period or S + T where S = total subscriptions of shares and T = total redemptions of shares. M = average net assets.
27
MACQUARIE FUND SOLUTIONS
NOTES TO THE FINANCIAL STATEMENTS AS AT SEPTEMBER 30, 2010 (continued)
Note 9 – Total Expense Ratio (TER) The Total Expense Ratio (TER) is calculated in accordance with the CSSF Circular 2003/122 issued on December 19, 2003. The Total Expense Ratios for the 12-months period ended September 30, 2010 are as follows (all the data are expressed without performance fees since none of the Share Classes had performance fees for the period ending): Macquarie Fund Solutions – Macquarie and RogersTM China Agriculture Fund A (EUR) TM Macquarie Fund Solutions – Macquarie and Rogers China Agriculture Fund A (USD) Macquarie Fund Solutions – Macquarie and RogersTM China Agriculture Fund A (CHF) Macquarie Fund Solutions – Macquarie Emerging Markets Infrastructure Fund A (EUR) Macquarie Fund Solutions – Macquarie Emerging Markets Infrastructure Fund A (CHF) Macquarie Fund Solutions – Macquarie Emerging Markets Infrastructure Fund A (USD) Macquarie Fund Solutions – Macquarie Emerging Markets Opportunities Fund A (EUR) Macquarie Fund Solutions – Macquarie Emerging Markets Opportunities Fund A (USD) Macquarie Fund Solutions – Macquarie Emerging Markets Opportunities Fund C (USD)
1.65% 2.29% 1.82% 2.15% 1.88% 2.47% 2.23% 2.51% 1.34%
The formula applied is the following: The TER expresses the sum of all costs and commissions charged on an ongoing basis to each class of shares (operating expenses) taken retrospectively as a percentage of their net assets, and is in principle calculated using the following formula: TER % = Total operating expenses x 100 Average net assets
Note 10 – Performances The performances since launch are as follows:
Class A (USD) Class A (EUR) Class A (CHF) Class C (USD)
Macquarie Fund Solutions – Macquarie Emerging Markets Infrastructure Fund
Macquarie Fund Solutions – Macquarie Emerging Markets Opportunities Fund
11.25% 5.18% 1.78% –
5.61% 6.49% – 4.76%
Past performance is no indication of current or future performance. These performance data do not take account of the commissions and costs incurred on the issue and redemption of shares.
28
