INFINITY INVESTMENT SERIES

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1 For the financial year ended 31 December 2017 ANNUAL REPORT INFINITY INVESTMENT SERIES A member of the OCBC Group Lion Global Investors Ltd 65 Chulia Street #18-01 OCBC Centre, Singapore T : F : Co Reg No: D For more information, visit: lionglobalinvestors.com or ContactUs@lionglobalinvestors.com Lion Global Investors Limited. All rights reserved.

2 DIRECTORY Manager Lion Global Investors Limited 65 Chulia Street #18-01 OCBC Centre Singapore Directors of Lion Global Investors Limited Mr Khor Hock Seng (Chairman) Mr Ching Wei Hong (Deputy Chairman) Mr Gerard Lee How Cheng (CEO) Mr Norman Ip Ka Cheung Mr Tan Siew Peng Mr Ronnie Tan Yew Chye Ms Wee Ai Ning Trustee/Registrar HSBC Institutional Trust Services (Singapore) Limited 21 Collyer Quay #13-02 HSBC Building Singapore Custodian The Hongkong and Shanghai Banking Corporation Limited 1 Queen s Road Central, Hong Kong Independent Auditor PricewaterhouseCoopers LLP 7 Straits View, Marina One East Tower, Level 12 Singapore

3 CONTENTS PAGE PERFORMANCE OF THE FUNDS INFINITY U.S. 500 STOCK INDEX FUND... 2 INFINITY EUROPEAN STOCK INDEX FUND... 4 INFINITY GLOBAL STOCK INDEX FUND... 6 DISCLOSURES ON THE FUNDS INFINITY U.S. 500 STOCK INDEX FUND... 9 INFINITY EUROPEAN STOCK INDEX FUND INFINITY GLOBAL STOCK INDEX FUND REPORT OF THE TRUSTEE STATEMENT BY THE MANAGER INDEPENDENT AUDITOR S REPORT TO THE UNITHOLDERS OF THE STATEMENTS OF TOTAL RETURN INFINITY U.S. 500 STOCK INDEX FUND INFINITY EUROPEAN STOCK INDEX FUND INFINITY GLOBAL STOCK INDEX FUND STATEMENTS OF FINANCIAL POSITION INFINITY U.S. 500 STOCK INDEX FUND INFINITY EUROPEAN STOCK INDEX FUND INFINITY GLOBAL STOCK INDEX FUND STATEMENTS OF MOVEMENTS OF UNITHOLDERS FUNDS INFINITY U.S. 500 STOCK INDEX FUND INFINITY EUROPEAN STOCK INDEX FUND INFINITY GLOBAL STOCK INDEX FUND STATEMENTS OF PORTFOLIO INFINITY U.S. 500 STOCK INDEX FUND INFINITY EUROPEAN STOCK INDEX FUND INFINITY GLOBAL STOCK INDEX FUND NOTES TO THE FINANCIAL STATEMENTS

4 PERFORMANCE OF THE FUND For the year ended 31 December 2017 INFINITY U.S. 500 STOCK INDEX FUND Past performance is not necessarily indicative of future performance. Returns for the Fund are calculated up to 31 December 2017 in SGD terms, on a single pricing basis with dividends reinvested net of all charges payable upon reinvestment. Time Period Fund Returns (%) Infinity U.S. 500 Stock Index Fund - SGD Class Benchmark Returns (%) (S&P 500 Composite Stock Price Index) 3 months months year years* years* years* Since Inception* (31 May 2000) Past performance is not necessarily indicative of future performance. Returns for the Fund are calculated up to 31 December 2017 in USD terms, on a single pricing basis with dividends reinvested net of all charges payable upon reinvestment. Time Period Fund Returns (%) Infinity U.S. 500 Stock Index Fund - USD Class Benchmark Returns (%) (S&P 500 Composite Stock Price Index) 3 months months year years* years* years* Since Inception* (17 October 2003) Source: Morningstar/Lion Global Investors Ltd. * Returns of more than 1 year are annualised. 2

5 REVIEW For the year ended 31 December 2017, the Fund returned 11.2%, against the benchmark which returned 12.0%, in SGD terms. We saw a synchronized broad-based recovery in the global economy in 2017, which translated into robust earnings growth and lent support to equity prices. Contrary to market expectations, the US Dollar index fell 10% despite three interest rate hikes by the Federal Reserve(Fed), and the US 10-year Treasury bond yields ended 2017 slightly lower than where it started at 2.4%. This led to a so-called Goldilocks market environment, where we saw stronger economic growth while liquidity conditions remain accommodative in the absence of inflationary pressures, which encouraged fund inflows into equities, pushing the benchmark to end the year near the high. Market corrections were short-lived as earnings and liquidity remained supportive of risk assets. Disappointment of Donald Trump s reflation story and moderation in economic momentum, particularly in the US, led to a brief market correction in the 2nd quarter, while geopolitical tensions with North Korea led to brief spells of risk off sentiment from the middle of the year. Economic activity continued to improve despite hurricane related disruptions as business spending picked up. The tax reform package announced in December further boosted sentiment and is expected to lift GDP by 1.5% over the span. Core inflation remained below Fed s target, allowing the central bank to tighten gradually. The Fed began its balance sheet reduction in October, and increased interest rates a 3rd time by 25 basis point(bps) in December. In SGD terms, Information Technology (+27.7%) was the best performing sector, followed by Materials (+13.7%). On the other hand, Telecommunication Services (-10.1%) and Energy (-9.3%) were the worst performing sectors. The underlying fund in the Vanguard Investment Series PLC has met the objectives of performing in-line with its benchmark before accounting for operating and transaction costs. STRATEGY AND OUTLOOK The Fund will continue to pursue its objective of tracking the S&P 500 Composite Stock Price Index closely. 3

6 PERFORMANCE OF THE FUND For the year ended 31 December 2017 Infinity European Past performance is not necessarily indicative of future performance. Returns for the Fund are calculated up to 31 December 2017 in SGD terms, on a single pricing basis with dividends reinvested net of all charges payable upon reinvestment. Time Period Fund Returns (%) Infinity European Stock Index Fund - SGD Class Benchmark Returns (%) (MSCI Europe Index) 3 months months year years* years* years* Since Inception* (31 May 2000) Past performance is not necessarily indicative of future performance. Returns for the Fund are calculated up to 31 December 2017 in USD terms, on a single pricing basis with dividends reinvested net of all charges payable upon reinvestment. Time Period Fund Returns (%) Infinity European Stock Index Fund - USD Class Benchmark Returns (%) (MSCI Europe Index) 3 months months year years* years* years* Since Inception* (17 October 2003) Source: Morningstar/Lion Global Investors Ltd. * Returns of more than 1 year are annualised. 4

7 REVIEW For the year ended 31 December 2017, the Fund returned 15.4%, against the benchmark which returned 16.1%, in SGD terms. We saw a synchronized broad-based recovery in the global economy in 2017, which translated into robust earnings growth and lent support to equity prices. Contrary to market expectations, the US Dollar index fell 10% despite three interest rate hikes by the Federal Reserve(Fed), and the US 10-year Treasury bond yields ended 2017 slightly lower than where it started at 2.4%. This led to a so-called Goldilocks market environment, where we saw stronger economic growth while liquidity conditions remain accommodative in the absence of inflationary pressures, which encouraged fund inflows into equities. However, in contrast to the rest of the world, political uncertainty in Europe created an overhang on the market despite improving economic fundamentals. Markets were worried about elections in France which eventually saw pro-euro candidate Emmanuel Macron winning a resounding victory over far-right rival Marine Le Pen. In the UK, Theresa May s decision to call an election weakened the stability of her government as it embarks on Brexit negotiations. Chancellor Angela Merkel clinched a historic fourth term in Germany s election but was unable to form a new government for months. Otherwise, improving employment helped to drive consumption higher and growth convergence among the underlying European countries continued to underpin economic recovery. Mario Draghi suggested in June that the European Central Bank(ECB) could soon begin reducing its Quantitative Easing purchases as the economy continued to recover. Both equities and bonds sold off. The ECB eventually announced in October a tapering decision in line with market expectations to extend Quantitative Easing by nine months until September 2018, but at a reduced pace of EUR30bn/month (from EUR60bn/month), with no explicit target date for the eventual exit, and clear guidance that will keep interest rates unchanged until well past the end of net asset purchases. The Euro appreciated 14% against the USD over the review period. In SGD terms, Information Technology (+26.0%) was the best performing sector, followed by Materials (+25.0%). On the other hand, Healthcare (+8.3%) and Telecommunication Services (+7.1%) were the worst performing sectors. The underlying fund in the Vanguard Investment Series PLC has met the objectives of performing in-line with its benchmark before accounting for operating and transaction costs. STRATEGY AND OUTLOOK The Fund will continue to pursue its objective of tracking the MSCI Europe Index closely. 5

8 PERFORMANCE OF THE FUND For the year ended 31 December 2017 Infinity Global Past performance is not necessarily indicative of future performance. Returns for the Fund are calculated up to 31 December 2017 in SGD terms, on a single pricing basis with dividends reinvested net of all charges payable upon reinvestment. Time Period Fund Returns (%) Infinity Global Stock Index Fund - SGD Class Benchmark Returns (%) (MSCI World Free Index) 3 months months year years* years* years* Since Inception* (31 May 2000) Past performance is not necessarily indicative of future performance. Returns for the Fund are calculated up to 31 December 2017 in USD terms, on a single pricing basis with dividends reinvested net of all charges payable upon reinvestment. Time Period Fund Returns (%) Infinity Global Stock Index Fund - USD Class Benchmark Returns (%) (MSCI World Free Index) 3 months months year years* years* years* Since Inception* (17 October 2003) Source: Morningstar/Lion Global Investors Ltd. * Returns of more than 1 year are annualised. 6

9 REVIEW For the year ended 31 December 2017, the Fund returned 12.3%, underperforming the benchmark which returned 13.2%, in SGD terms. We saw a synchronized broad-based recovery in the global economy in 2017, which translated into robust earnings growth and lent support to equity prices. Contrary to market expectations, the US Dollar index fell 10% despite three interest rate hikes by the Fed, and the US 10-year Treasury bond yields ended 2017 slightly lower than where it started at 2.4%. This led to a so-called Goldilocks market environment, where we saw stronger economic growth while liquidity conditions remain accommodative in the absence of inflationary pressures, which encouraged fund inflows into equities, pushing the benchmark to end the year near the high. Market corrections were short-lived as earnings and liquidity remained supportive of risk assets. Disappointment of Donald Trump s reflation story and moderation in economic momentum, particularly in the US, led to a brief market correction in the 2nd quarter, while geopolitical tensions with North Korea led to brief spells of risk off sentiment from the middle of the year. In the US, economic activity continued to improve despite hurricane related disruptions as business spending picked up. The US tax reform package announced in December further boosted sentiment and is expected to lift GDP by 1.5% over the span. In Eurozone, improving employment drove consumption higher and growth convergence among the underlying countries continued to underpin economic recovery. China s economy grew faster than expected in the fourth quarter of 2017, as an export recovery helped the country post its first annual acceleration in growth since 2010, defying concerns that intensifying curbs on credit would hurt expansion. Core inflation remained below central banks target, allowing central banks to tighten gradually. The Federal Reserve(Fed) began its balance sheet reduction in October, and increased interest rates a 3rd time by 25 basis point(bps) in December. The European Central Bank(ECB) extended Quantitative Easing by nine months until September In SGD terms, Information Technology (+31.1%) was the best performing sector, followed by Materials (+19.9%). On the other hand, Telecommunication Services (-0.4%) and Energy (-1.2%) were the worst performing sectors. The underlying fund in the Vanguard Investment Series PLC has met the objectives of performing in-line with its benchmark before accounting for operating and transaction costs. STRATEGY AND OUTLOOK The Fund will continue to pursue its objective of tracking the MSCI World Index closely. 7

10 Standard & Poor s, S&P, S&P 500, Standard & Poor s 500 and 500 are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the Managers. The Infinity U.S. 500 is not sponsored, endorsed, sold or promoted by Standard & Poor s and Standard & Poor s makes no representation regarding the advisability of investing in the Infinity U.S The Infinity U.S. 500 is not sponsored, endorsed, sold or promoted by Standard & Poor s, a division of The McGraw-Hill Companies, Inc. ( S&P ). S&P makes no representation or warranty, express or implied, to the owners of the Infinity U.S. 500 Stock Index Fund or any member of the public regarding the advisability of investing in securities generally or in the Infinity U.S. 500 particularly or the ability of the S&P 500 Index to track general stock market performance. S&P s only relationship to the Managers is the licensing of certain trademarks and trade names of S&P and of the S&P 500 Index, which is determined, composed and calculated by S&P without regard to the Managers or the Infinity U.S S&P has no obligation to take the needs of the Managers or the owners of the Infinity U.S. 500 into consideration in determining, composing or calculating the S&P 500 Index. S&P is not responsible for and has not participated in the determination of the timing of, prices at, or quantities of the Infinity U.S. 500 to be issued or in the determination or calculation of the equation by which the Infinity U.S. 500 is to be converted into cash. S&P has no obligation or liability in connection with the administration, marketing or trading of the Infinity U.S S&P does not guarantee the accuracy and/or the completeness of the S&P 500 index or any data included therein and S&P shall have no liability for any errors, omissions, or interruptions therein. S&P makes no warranty, express or implied, as to results to be obtained by the managers, owners of the infinity U.S. 500 stock index fund, or any other person or entity from the use of the S&P 500 index or any data included therein. S&P makes no express or implied warranties, and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to the S&P 500 index or any data included therein. Without limiting any of the foregoing, in no event shall S&P have any liability for any special, punitive, indirect, or consequential damages (including lost profits), even if notified of the possibility of such damages. 8

11 DISCLOSURES ON THE FUND 1 For the financial year ended 31 December 2017 INFINITY U.S. 500 STOCK INDEX FUND 1. DISTRIBUTION OF INVESTMENTS AS AT 31 DECEMBER 2017 Percentage of total net assets attributable to Fair Value unitholders $ % a) By Asset Class Fund 38,557, Cash and other net assets 605, Net assets attributable to unitholders 39,163, b) By Credit Rating of Debt Securities Not applicable c) By Derivative Type The total net realised losses from financial derivatives at the end of the year was $5, TOP 10 HOLDINGS As at 31 December 2017 Percentage of total net assets attributable to Fair Value unitholders $ % Vanguard U.S ,557, As at 31 December 2016 Percentage of total net assets attributable to Fair Value unitholders $ % Vanguard U.S ,255, As required by the Code on Collective Investment Schemes. 9

12 3. GLOBAL EXPOSURE The global exposure relating to derivative instruments is calculated using the commitment approach by converting the derivative positions into equivalent positions in the underlying assets embedded in those derivatives. The global exposure of the Fund to financial derivative instruments or embedded financial derivative instruments will not exceed 100% of the net asset value of the Fund at any time. 4. COLLATERAL Nil 5. SECURITIES LENDING OR REPURCHASE TRANSACTIONS Nil 6. INVESTMENT IN OTHER UNIT TRUSTS, MUTUAL FUNDS AND COLLECTIVE INVESTMENT SCHEMES As per top holdings as at 31 December 2017 listed in point BORROWINGS Nil 8. SOFT DOLLAR COMMISSION RECEIVED BY THE MANAGERS The soft dollar commissions from various brokers for the year were utilised on research and advisory services, economic and political analyses, portfolio analyses, market analyses, data and quotation analyses and computer hardware and software used for and in support of the investment process of fund managers. Goods and services received were for the benefit of the scheme and there was no churning of trades. These brokers also execute trades for other funds managed by the managers. The trades are conducted on best available terms and in accordance with best practices. 9. OTHER MATERIAL INFORMATION There is no other material information that will adversely impact the valuation of the Fund. 10

13 10. SUPPLEMENTAL INFORMATION ON UNDERLYING SUB-FUNDS a) Ratio of expenses to average net assets 0.10% 0.10% b) Turnover ratios 11% 10% c) Top 10 holdings As at 31 December 2017 Fair Value US$ million Percentage of total assets % Apple Inc Microsoft Corp Alphabet Inc Amazon.com Inc Facebook Inc Berkshire Hathaway Inc Johnson & Johnson JPMorgan Chase & Co Exxon Mobil Corp Bank of America Corp As at 31 December 2016 Market Value (US$ Million) Percentage of total assets % Apple Inc Microsoft Corp Alphabet Inc Exxon Mobil Corp Johnson & Johnson Berkshire Hathaway Inc JPMorgan Chase & Co Amazon.com Inc General Electric Co Facebook Inc Based on latest available information provided by the underlying sub-fund managers. 11

14 DISCLOSURES ON THE FUND 1 For the financial year ended 31 December 2017 INFINITY EUROPEAN STOCK INDEX FUND 1. DISTRIBUTION OF INVESTMENTS AS AT 31 DECEMBER 2017 Percentage of total net assets attributable to Fair Value unitholders $ % a) By Asset Class Fund 8,242, Cash and other net assets 97, Net assets attributable to unitholders 8,339, b) By Credit Rating of Debt Securities Not applicable c) By Derivative Type The total net realised gains from financial derivatives at the end of the year was $ TOP 10 HOLDINGS As at 31 December 2017 Percentage of total net assets attributable to Fair Value unitholders $ % Vanguard European 8,242, As at 31 December 2016 Percentage of total net assets attributable to Fair Value unitholders $ % Vanguard European 6,746, As required by the Code on Collective Investment Schemes. 12

15 3. GLOBAL EXPOSURE The global exposure relating to derivative instruments is calculated using the commitment approach by converting the derivative positions into equivalent positions in the underlying assets embedded in those derivatives. The global exposure of the Fund to financial derivative instruments or embedded financial derivative instruments will not exceed 100% of the net asset value of the Fund at any time. 4. COLLATERAL Nil 5. SECURITIES LENDING OR REPURCHASE TRANSACTIONS Nil 6. INVESTMENT IN OTHER UNIT TRUSTS, MUTUAL FUNDS AND COLLECTIVE INVESTMENT SCHEMES As per top holdings as at 31 December 2017 listed in point BORROWINGS Nil 8. SOFT DOLLAR COMMISSION RECEIVED BY THE MANAGERS The soft dollar commissions from various brokers for the year were utilised on research and advisory services, economic and political analyses, portfolio analyses, market analyses, data and quotation analyses and computer hardware and software used for and in support of the investment process of fund managers. Goods and services received were for the benefit of the scheme and there was no churning of trades. These brokers also execute trades for other funds managed by the managers. The trades are conducted on best available terms and in accordance with best practices. 9. OTHER MATERIAL INFORMATION There is no other material information that will adversely impact the valuation of the Fund. 13

16 10. SUPPLEMENTAL INFORMATION ON UNDERLYING SUB-FUNDS a) Ratio of expenses to average net assets 0.30% 0.30% b) Turnover ratios 10% 19% c) Top 10 holdings As at 31 December 2017 Fair Value US$ Million Percentage of total assets % Royal Dutch Shell plc Nestle SA HSBC Holdings plc Novartis AG Roche Holding AG Unilever British American Tobacco plc BP plc TOTAL SA SAP SE As at 31 December 2016 Market Value (US$ Million) Percentage of total assets % Royal Dutch Shell plc Nestle SA Novartis AG HSBC Holdings plc Roche Holding AG Unilever BP plc TOTAL SA British American Tobacco plc Siemens AG Based on latest available information provided by the underlying sub-fund managers. 14

17 DISCLOSURES ON THE FUND 1 For the financial year ended 31 December 2017 INFINITY GLOBAL STOCK INDEX FUND 1. DISTRIBUTION OF INVESTMENTS AS AT 31 DECEMBER 2017 Percentage of total net assets attributable to Fair Value unitholders $ % a) By Asset Class Fund 59,810, Cash and other net assets 794, Net assets attributable to unitholders 60,604, b) By Credit Rating of Debt Securities Not applicable c) By Derivative Type The total net realised gains from financial derivatives at the end of the year was $5, TOP 10 HOLDINGS As at 31 December 2017 Percentage of total net assets attributable to Fair Value unitholders $ % Vanguard Global 59,810, As at 31 December 2016 Percentage of total net assets attributable to Fair Value unitholders $ % Vanguard Global 58,424, As required by the Code on Collective Investment Schemes. 15

18 3. GLOBAL EXPOSURE The global exposure relating to derivative instruments is calculated using the commitment approach by converting the derivative positions into equivalent positions in the underlying assets embedded in those derivatives. The global exposure of the Fund to financial derivative instruments or embedded financial derivative instruments will not exceed 100% of the net asset value of the Fund at any time. 4. COLLATERAL Nil 5. SECURITIES LENDING OR REPURCHASE TRANSACTIONS Nil 6. INVESTMENT IN OTHER UNIT TRUSTS, MUTUAL FUNDS AND COLLECTIVE INVESTMENT SCHEMES As per top holdings as at 31 December 2017 listed in point BORROWINGS Nil 8. SOFT DOLLAR COMMISSION RECEIVED BY THE MANAGERS The soft dollar commissions from various brokers for the year were utilised on research and advisory services, economic and political analyses, portfolio analyses, market analyses, data and quotation analyses and computer hardware and software used for and in support of the investment process of fund managers. Goods and services received were for the benefit of the scheme and there was no churning of trades. These brokers also execute trades for other funds managed by the managers. The trades are conducted on best available terms and in accordance with best practices. 9. OTHER MATERIAL INFORMATION There is no other material information that will adversely impact the valuation of the Fund. 16

19 10. SUPPLEMENTAL INFORMATION ON UNDERLYING SUB-FUNDS a) Ratio of expenses to average net assets 0.25% 0.25% b) Turnover ratios 15% 21% c) Top 10 holdings As at 31 December 2017 Fair Value US$ Million Percentage of total assets % Apple Inc Alphabet Inc Microsoft Corp Amazon.com Inc Facebook Inc JPMorgan Chase & Co Johnson & Johnson Exxon Mobil Corp Bank of America Corp Wells Fargo & Co As at 31 December 2016 Market Value (US$ Million) Percentage of total assets % Apple Inc Alphabet Inc Microsoft Corp Exxon Mobil Corp Johnson & Johnson JPMorgan Chase & Co Amazon.com Inc General Electric Co Facebook Inc Wells Fargo & Co Based on latest available information provided by the underlying sub-fund managers. 17

20 REPORT OF THE TRUSTEE For the financial year ended 31 December 2017 The Trustee is under a duty to take into custody and to hold the assets of the sub-funds of Infinity Investment Series, namely Infinity U.S. 500, Infinity European and Infinity Global (collectively referred to as the Sub- Funds ) in trust for the unitholders. In accordance with the Securities and Futures Act (Cap. 289), its subsidiary legislation and the Code on Collective Investment Schemes, the Trustee shall monitor the activities of the Manager for compliance with the limitations imposed on the investment and borrowing powers as set out in the Trust Deed in each annual accounting year and report thereon to unitholders in an annual report. To the best knowledge of the Trustee, the Manager has, in all material respects, managed the Sub-Funds during the financial year covered by these financial statements, set out on pages 5 to 37, in accordance with the limitations imposed on the investment and borrowing powers set out in the Trust Deed. For and on behalf of the Trustee HSBC INSTITUTIONAL TRUST SERVICES (SINGAPORE) LIMITED Authorised signatory 26 March

21 STATEMENT BY THE MANAGER For the financial year ended 31 December 2017 In the opinion of Lion Global Investors Limited, the accompanying financial statements set out on pages 5 to 37, comprising the Statements of Total Return, Statements of Financial Position, Statements of Movements of Unitholders Funds, Statements of Portfolio and Notes to the Financial Statements are drawn up so as to present fairly, in all material respects, the financial positions and the portfolio holdings of the sub-funds of Infinity Investment Series, namely Infinity U.S. 500, Infinity European and Infinity Global (collectively referred to as the Sub-Funds ) as at 31 December 2017, and the financial performance and movements in unitholders funds for the year then ended in accordance with the recommendations of Statement of Recommended Accounting Practice 7 Reporting Framework for Unit Trusts issued by the Institute of Singapore Chartered Accountants. At the date of this statement, there are reasonable grounds to believe that the Sub-Funds will be able to meet its financial obligations as and when they materialise. For and on behalf of LION GLOBAL INVESTORS LIMITED GERARD LEE HOW CHENG CEO 26 March

22 INDEPENDENT AUDITOR S REPORT TO THE UNITHOLDERS OF THE (Constituted under a Trust Deed in the Republic of Singapore) Our Opinion In our opinion, the accompanying financial statements of the sub-funds of Infinity Investment Series, namely Infinity U.S. 500, Infinity European and Infinity Global (collectively known as the Sub-Funds ) are properly drawn up in accordance with the recommendations of Statement of Recommended Accounting Practice 7 Reporting Framework for Unit Trusts issued by the Institute of Singapore Chartered Accountants, so as to present fairly, in all material respects, the financial position and portfolio holdings of the Sub-Funds as at 31 December 2017, and of the financial performance and movements of unitholders funds for the financial year ended on that date. What we have audited The financial statements of the Sub-Funds comprise: the Statements of Total Return for the financial year ended 31 December 2017; the Statements of Financial Position as at 31 December 2017; the Statements of Movements of Unitholders Funds for the financial year ended 31 December 2017; the Statements of Portfolio as at 31 December 2017; and the notes to the financial statements, including a summary of significant accounting policies. Basis for Opinion We conducted our audit in accordance with Singapore Standards on Auditing ( SSAs ). Our responsibilities under those standards are further described in the Auditor s Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence We are independent of the Sub-Funds in accordance with the Accounting and Corporate Regulatory Authority Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities ( ACRA Code ) together with the ethical requirements that are relevant to our audit of the financial statements in Singapore, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code. 20

23 INDEPENDENT AUDITOR S REPORT TO THE UNITHOLDERS OF THE (Constituted under a Trust Deed in the Republic of Singapore) Other Information The Sub-Funds Manager (the Manager ) is responsible for the other information. The other information comprises all sections of the annual report but does not include the financial statements and our auditor s report thereon. Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Manager for the Financial Statements The Manager is responsible for the preparation and fair presentation of these financial statements in accordance with the recommendations of Statement of Recommended Accounting Practice 7 Reporting Framework for Unit Trusts issued by the Institute of Singapore Chartered Accountants and for such internal control as the Manager determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Manager is responsible for assessing the Sub- Funds ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Manager either intends to terminate the Sub-Funds or to cease the Sub-Funds operations, or has no realistic alternative but to do so. The Manager s responsibilities include overseeing the Sub-Funds financial reporting process. Auditor s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. 21

24 INDEPENDENT AUDITOR S REPORT TO THE UNITHOLDERS OF THE (Constituted under a Trust Deed in the Republic of Singapore) As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit 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 Sub-Funds internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Manager. Conclude on the appropriateness of the Manager s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Sub-Funds ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor s report. However, future events or conditions may cause the Sub-Funds to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with the Manager regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. PricewaterhouseCoopers LLP Public Accountants and Chartered Accountants Singapore, 26 March

25 STATEMENTS OF TOTAL RETURN For the financial year ended 31 December 2017 Infinity U.S Note $ $ Expenses Audit fee 12,656 12,651 Management fee , ,873 Professional fees 11,365 8,593 Registration fee 12 19,170 16,848 Transaction costs Miscellaneous expenses 11,392 9, , ,546 Net expenses (226,723) (186,546) Net gains or losses on value of investments and financial derivatives Net gains on investments 4,103,092 3,885,834 Net losses on foreign exchange spot contracts (5,385) (876) Net foreign exchange gains 12,789 2,393 4,110,496 3,887,351 Total return for the year before income tax 3,883,773 3,700,805 Less: Income tax Total return for the year 3,883,773 3,700,805 The accompanying notes form an integral part of these financial statements. 23

26 STATEMENTS OF TOTAL RETURN For the financial year ended 31 December 2017 Infinity European Note $ $ Expenses Audit fee 10,529 9,429 Management fee 12 36,593 32,123 Professional fees 10,178 4,541 Registration fee 12 15,873 14,904 Transaction costs Miscellaneous expenses 5,346 (1,907) 78,694 59,290 Net expenses (78,694) (59,290) Net gains or losses on value of investments and financial derivatives Net gains on investments 1,128,022 56,280 Net gains/(losses) on foreign exchange spot contracts 604 (655) Net foreign exchange gains 11,830 2,508 1,140,456 58,133 Total return/(deficit) for the year before income tax 1,061,762 (1,157) Less: Income tax Total return/(deficit) for the year 1,061,762 (1,157) The accompanying notes form an integral part of these financial statements. 24

27 STATEMENTS OF TOTAL RETURN For the financial year ended 31 December 2017 Infinity Global Note $ $ Expenses Audit fee 12,656 13,444 Management fee , ,381 Professional fees 11,458 14,388 Registration fee 12 17,547 16,531 Transaction costs Miscellaneous expenses 7,980 4, , ,654 Net expenses (324,168) (341,654) Net gains or losses on value of investments and financial derivatives Net gains on investments 7,077,326 5,058,312 Net gains/(losses) on foreign exchange spot contracts 5,067 (3,138) Net foreign exchange (losses)/gains (13,406) 42,347 7,068,987 5,097,521 Total return for the year before income tax 6,744,819 4,755,867 Less: Income tax Total return for the year 6,744,819 4,755,867 The accompanying notes form an integral part of these financial statements. 25

28 STATEMENTS OF FINANCIAL POSITION As at 31 December 2017 Infinity U.S Note $ $ ASSETS Portfolio of investment 38,557,922 33,255,458 Receivables 5 110, ,620 Cash and bank balances 7 654, ,791 Total assets 39,323,377 33,961,869 LIABILITIES Payables 8 159, ,189 Due to brokers 6-231,152 Financial derivatives at fair value 9-86 Total liabilities 159, ,427 EQUITY Net assets attributable to unitholders 10 39,163,742 33,511,442 The accompanying notes form an integral part of these financial statements. 26

29 STATEMENTS OF FINANCIAL POSITION As at 31 December 2017 Infinity European Note $ $ ASSETS Portfolio of investment 8,242,045 6,746,089 Receivables 5 11,937 2,267 Cash and bank balances 7 123, ,012 Total assets 8,377,185 6,872,368 LIABILITIES Payables 8 38,041 43,065 Due to brokers 6-43,341 Financial derivatives at fair value 9-26 Total liabilities 38,041 86,432 EQUITY Net assets attributable to unitholders 10 8,339,144 6,785,936 The accompanying notes form an integral part of these financial statements. 27

30 STATEMENTS OF FINANCIAL POSITION As at 31 December 2017 Infinity Global Note $ $ ASSETS Portfolio of investment 59,810,315 58,424,473 Receivables 5 36, ,172 Cash and bank balances 7 904, ,950 Total assets 60,751,690 59,447,595 LIABILITIES Payables 8 147, ,104 Due to brokers 6-433,410 Financial derivatives at fair value Total liabilities 147, ,676 EQUITY Net assets attributable to unitholders 10 60,604,327 58,828,919 The accompanying notes form an integral part of these financial statements. 28

31 STATEMENTS OF MOVEMENTS OF UNITHOLDERS FUNDS For the financial year ended 31 December 2017 Infinity U.S. 500 Note $ $ Net assets attributable to unitholders at the beginning of the financial year 33,511,442 28,270,242 Operations Change in net assets attributable to unitholders resulting from operations 3,883,773 3,700,805 Unitholders' contributions/(withdrawals) Creation of units 11,827,987 8,248,645 Cancellation of units (10,059,460) (6,708,250) Change in net assets attributable to unitholders resulting from net creation and cancellation of units 1,768,527 1,540,395 Distribution Total increase in net assets attributable to unitholders 5,652,300 5,241,200 Net assets attributable to unitholders at the end of the financial year 10 39,163,742 33,511,442 The accompanying notes form an integral part of these financial statements. 29

32 STATEMENTS OF MOVEMENTS OF UNITHOLDERS FUNDS For the financial year ended 31 December 2017 Infinity European Note $ $ Net assets attributable to unitholders at the beginning of the financial year 6,785,936 7,455,080 Operations Change in net assets attributable to unitholders resulting from operations 1,061,762 (1,157) Unitholders' contributions/(withdrawals) Creation of units 2,240, ,228 Cancellation of units (1,748,588) (1,658,215) Change in net assets attributable to unitholders resulting from net creation and cancellation of units 491,446 (667,987) Distribution Total increase/(decrease) in net assets attributable to unitholders 1,553,208 (669,144) Net assets attributable to unitholders at the end of the financial year 10 8,339,144 6,785,936 The accompanying notes form an integral part of these financial statements. 30

33 STATEMENTS OF MOVEMENTS OF UNITHOLDERS FUNDS For the financial year ended 31 December 2017 Infinity Global Note $ $ Net assets attributable to unitholders at the beginning of the financial year 58,828,919 68,538,093 Operations Change in net assets attributable to unitholders resulting from operations 6,744,819 4,755,867 Unitholders' contributions/(withdrawals) Creation of units 16,430,069 13,549,900 Cancellation of units (21,399,480) (28,014,941) Change in net assets attributable to unitholders resulting from net creation and cancellation of units (4,969,411) (14,465,041) Distribution Total increase/(decrease) in net assets attributable to unitholders 1,775,408 (9,709,174) Net assets attributable to unitholders at the end of the financial year 10 60,604,327 58,828,919 The accompanying notes form an integral part of these financial statements. 31

34 STATEMENTS OF PORTFOLIO As at 31 December 2017 INFINITY U.S. 500 STOCK INDEX FUND QUOTED FUND Holdings at 31 December 2017 Fair value at 31 December 2017 Percentage of total net assets attributable to unitholders at 31 December 2017 Percentage of total net assets attributable to unitholders at 31 December 2016 $ % % Vanguard U.S ,363 38,557, Portfolio of investment 38,557, Other net assets 605, Net assets attributable to unitholders 39,163, Information on investment portfolio by industry and geographical segments is not presented as the sub-fund is a feeder into another investment fund, which invests primarily in United States stocks. The accompanying notes form an integral part of these financial statements. 32

35 STATEMENTS OF PORTFOLIO As at 31 December 2017 INFINITY EUROPEAN STOCK INDEX FUND QUOTED FUND Holdings at 31 December 2017 Fair value at 31 December 2017 Percentage of total net assets attributable to unitholders at 31 December 2017 Percentage of total net assets attributable to unitholders at 31 December 2016 $ % % Vanguard European 255,302 8,242, Portfolio of investment 8,242, Other net assets 97, Net assets attributable to unitholders 8,339, Information on investment portfolio by industry and geographical segments is not presented as the sub-fund is a feeder into another investment fund, which invests primarily in European stocks. The accompanying notes form an integral part of these financial statements. 33

36 STATEMENTS OF PORTFOLIO As at 31 December 2017 INFINITY GLOBAL STOCK INDEX FUND QUOTED FUND Holdings at 31 December 2017 Fair value at 31 December 2017 Percentage of total net assets attributable to unitholders at 31 December 2017 Percentage of total net assets attributable to unitholders at 31 December 2016 $ % % Vanguard Global 1,630,049 59,810, Portfolio of investment 59,810, Other net assets 794, Net assets attributable to unitholders 60,604, Information on investment portfolio by industry and geographical segments is not presented as the sub-fund is a feeder into another investment fund, which invests primarily in global stocks. The accompanying notes form an integral part of these financial statements. 34

37 NOTES TO THE FINANCIAL STATEMENTS For the financial year ended 31 December 2017 These notes form an integral part of and should be read in conjunction with the accompanying financial statements. 1. GENERAL Infinity Investment Series (the Fund ) is a Singapore domiciled umbrella fund constituted by a Deed of Trust dated 23 May 2000 together with several Supplemental Deeds thereon (thereafter referred to as Trust Deed ) between Lion Global Investors Limited (the Manager ) and HSBC Institutional Trust Services (Singapore) Limited (the Trustee ). The Trust Deed is governed by the laws of the Republic of Singapore. The Fund comprises a collection of sub-funds, each of which has a separate investment objective. The sub-funds are established as feeder funds investing into various master funds. The Fund currently comprises three sub-funds: - Infinity U.S. 500 ( IUSI ); - Infinity European ( IESI ); and - Infinity Global ( IGSI ) (collectively referred to as the Sub- Funds ). IUSI feeds into the Vanguard U.S. 500, IESI feeds into the Vanguard European, and IGSI feeds into the Vanguard Global. Subscriptions and redemptions of the Sub-Funds are denominated in Singapore Dollar and United States Dollar. Investors may subscribe in United States Dollar at the applicable rate of exchange from Singapore Dollar. 2. SIGNIFICANT ACCOUNTING POLICIES (a) Basis of preparation The financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets at fair value through profit or loss and in accordance with the recommendations of Statement of Recommended Accounting Practice 7 Reporting Framework for Unit Trusts issued by the Institute of Singapore Chartered Accountants in March 2017 for the financial year beginning on or after 1 July

38 2. SIGNIFICANT ACCOUNTING POLICIES (continued) (a) Basis of preparation (continued) The Fund has adopted the following Singapore Financial Reporting Standards ( FRS ) and related amendments in accordance with the recommendations of the RAP7: (i) Consolidation and disclosure of interests in other entities FRS 110 Consolidated financial statements FRS 112 Disclosure of interests in other entities Amendments to FRS 110, FRS 112 and FRS 27 Investment entities FRS 110 and the amendments define an investment entity and introduce an exception from the consolidation requirements for investment entities. FRS 112 and the amendments require entities to disclose significant judgements and assumptions made in determining whether the entity controls, jointly controls, significantly influences or has some interests in other entities. Entities are also required to provide disclosure around certain structured entities. The amendments to FRS 112 introduce new disclosure requirements related to investment entities. (ii) Offsetting financial assets and liabilities disclosures Amendments to FRS 32 Financial instruments: Presentation Offsetting financial assets and financial liabilities Amendments to FRS 107 Disclosures Offsetting financial assets and financial liabilities The amendments to FRS 32 provide clarification on the offsetting criteria in FRS 32 and address inconsistencies in their application. The amendments to FRS 107 require additional disclosures to enable users of financial statements to evaluate the effect or the potential effects of netting arrangements, including rights of set-off associated with an entity s recognised financial assets and recognised financial liabilities, on the entity s financial position. The adoption of these new or amended FRS impacted the Fund s level of disclosures in certain of the above noted areas, but did not result in substantial changes to the accounting policies of the Fund and had no material effect on the amounts reported for the current or prior financial years. 36

39 2. SIGNIFICANT ACCOUNTING POLICIES (continued) (b) Recognition of income Dividend income is recognised when the right to receive payment is established. Interest income is recognised on a time proportion basis using the effective interest method. (c) Financial derivatives Financial derivatives are entered into for the purposes of efficient portfolio management, tactical asset allocation or specific hedging of financial assets held as determined by the Manager and in accordance with the provisions of the Trust Deed. Financial derivatives outstanding at the end of the financial year are measured at their fair values using the marked-to-market method, and the resultant gains and losses are taken up in the Statements of Total Return. (d) Distribution The Manager has the absolute discretion to determine whether a distribution is to be made. In such an event, an appropriate amount will be transferred to a distribution account, to be paid out on the distribution date. The amount shall not be treated as part of the property of the Sub-Funds. Distributions are accrued for at the reporting date if the necessary approvals have been obtained and a legal or constructive obligation has been created. (e) Investments Investments are classified as financial assets at fair value through profit or loss. (i) Initial recognition Purchases of investments are recognised on the trade date. Investments are recorded at fair value on initial recognition. (ii) Subsequent measurement Investments are subsequently carried at fair value. Net change in the fair value of investments are included in the Statements of Total Return in the year in which they arise. (iii) Derecognition Investments are derecognised on the trade date of disposal. The resultant realised gains and losses on the sale of investments are computed on the basis of the difference between the weighted average cost and selling price gross of transaction costs, and are taken up in the Statements of Total Return. 37

40 2. SIGNIFICANT ACCOUNTING POLICIES (continued) (f) Basis of valuation of investments The fair value of investments held in underlying funds is the quoted net asset value of the underlying fund as determined by the underlying funds administrator. Net changes in fair value of investments are included in the Statements of Total Return in the year which they arise. (g) Receivables Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Receivables are initially recognised at their fair value and subsequently carried at amortised cost using the effective interest method. (h) Foreign currencies (i) Functional and presentation currency Subscriptions and redemptions of the units in the Fund are denominated in Singapore dollars and United States dollars. The performance is measured and reported to the investors in Singapore dollars. In addition, the activities are substantially based in Singapore and expenses are predominantly in Singapore dollars. Therefore, the Manager considers the Singapore Dollar as the currency which most faithfully represents the economic effects of the underlying transactions, events and conditions. The functional and presentation currency is the Singapore Dollar. (ii) 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 of monetary assets and liabilities denominated in foreign currencies at the closing rates at the reporting date are recognised in the Statements of Total Return. Translation differences on non-monetary financial assets and liabilities such as equities are also recognised in the Statements of Total Return within the net gain or loss on investments. 38