CIFM (HK) RMB Diversified Income Fund

Transcription

1 A Sub-Fund of CIFM Funds UNAUDITED INTERIM FINANCIAL STATEMENTS FOR THE PERIOD FROM 1 OCTOBER 2014 TO 31 MARCH 2015

2 Contents REPORT OF THE MANAGER MANAGEMENT AND ADMINISTRATION STATEMENT OF FINANCIAL POSITION STATEMENT OF COMPREHENSIVE INCOME STATEMENT OF CHANGE IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS OF REDEEMABLE UNITS NOTES TO THE FINANCIAL STATEMENTS STATEMENT OF MOVEMENTS IN INVESTMENT PORTFOLIO INVESTMENT PORTFOLIO PERFORMANCE TABLE

3 Report of the Manager Introduction CIFM (HK) Diversified Income Fund (the Sub-Fund ) is a sub-fund of CIFM Funds, an umbrella unit trust established under the laws of Hong Kong by the trust. Through the Renminbi Qualified Foreign Institutional Investor ( RQFII ) quota of 800 million obtained by the Manager, the Sub-Fund primarily (i.e. not less than 80% of its net assets) invest in (A) denominated and settled debt securities (including but are not limited to fixed rate or floating rate bonds, convertible bonds, commercial papers, central bank bills, short-term financing bills and certificates of deposits) issued and distributed within mainland China, and (B) fixed income funds which are authorised by the China Securities Regulatory Commission ( CSRC ) for offer to the retail public in the PRC. Market Review The macro economic data released during the period revealed that China s economy remains weak. Yet, the weak economic data, low inflation environment coupled with more stimulus measures launched by the government give support to the bond market. Meanwhile, we saw some profit taking in the bond market following the rate cut in March 2015 given that the bond yield was at relatively low level at that time. On the other hand, China s A-share market also continued its rally during the period. We believe the relatively loose liquidity environment, together with the government s move on opening up the market, have boost market sentiment. Market Outlook Looking forward, we expect the government would continue to step up its stimulus measures if necessary to maintain a stable economic growth. We expect a mild bullish trend for the bond market to continue on expectations of mild inflation and relatively loose market liquidity. More recently, the reported debt swap plan of 1 trillion for replacing the existing local government debt has improved the market sentiment. Besides, we also maintain our positive view on the stock market although we expect market volatility will remain high following the strong rally over the recent months. In addition to the loose liquidity environment, the government s measures on economic reform and opening up the market are expected to support the bullish trend of the stock market. Overall, we remain positive towards stable returns and capital appreciation for China investments in the long-term. Portfolio Strategy Since February 2015, we have lowered our bond weighting while increased our weightings in equity portfolio. For the bond portfolio, we increased our weighting on credit bonds during the period as we see better investment value. Looking forward, we will increase our weighting in bonds as when we see the market correction end. We continue to prefer credit bonds with higher credit rating, as we aim to enhance the yield while maintaining our portfolio at reasonable quality. For the equity portfolio, we continue to be positive on undervalued blue chip stocks, SOE with good reform potentials and reasonably priced quality growth stocks. We will also continue to focus on industries benefit from China s economic reform and policy support. Yet, as we expect A-share market will remain volatile, we will continue to look for profit taking opportunities while accumulate quality counters with reasonable valuations. Overall, our portfolio strategy aims to add alpha and generate absolute returns. 2

4 Management and Administration Manager CIFM Asset Management (Hong Kong) Limited Unit , Tower 2 Lippo Centre, 89 Queensway, Hong Kong Directors of the Manager Chang She-Lin Jing Xiaoyun Ho Ming-Fu Chen Xingde Wu Chi Keung Investment Adviser China International Fund Management Co., Ltd. 20th Floor, Aurora Building, No. 99 Fu Cheng Road, Pudong Shanghai, P.R.C Solicitors to the Manager Deacons 5th Floor, Alexandra House 18 Chater Road Central Hong Kong Trustee and Registrar State Street Trust (HK) Limited 68th Floor, Two International Finance Centre 8 Finance Street Central Hong Kong Administrator State Street Trust (HK) Limited 68th Floor, Two International Finance Centre 8 Finance Street Central Hong Kong Auditor PricewaterhouseCoopers 21st Floor, Edinburgh Tower 15 Queen s Road Central Hong Kong RQFII Custodian China Construction Bank Corporation 25 Financial Avenue Xi Cheng District, Beijing P.R.C

5 Statement of financial position As at 31 March 2015 (Unaudited) Note 31 March September 2014 Assets Non-Current Assets Deposit reserve 35,090 33,743 Current Assets Cash and cash equivalents 10,984,036 9,742,145 Subscription receivable 429,422 3,934,241 Investments 145,562, ,011,565 Interest receivables 4,496,253 3,410, ,472, ,098,392 Total assets 161,507, ,132,135 Liabilities Non-Current Liabilities Deferred tax liability 133, ,321 Current Liabilities Distribution payable 1,293, ,415 Redemption payable 2,995,189 1,055,026 Formation expenses payable 395,326 Withholding tax provision 719, ,386 Other accounts payable 346, ,206 Amounts due to brokers 1,516,850 5,354,998 4,488,209 Total liabilities (excluding net assets attributable to unitholders of redeemable units) 5,488,132 4,608,530 The notes on pages 9 to 18 form an integral part of these unaudited interim financial statements. 4

6 Note 31 March September 2014 Net assets attributable to unitholders of redeemable units (before fair value adjustment) 156,019, ,523,605 Fair value adjustment of units of the Sub-Fund 3 329, ,387 Net assets attributable to unitholders of redeemable units (after fair value adjustment) 156,349, ,804,992 The notes on pages 9 to 18 form an integral part of these unaudited interim financial statements. 5

7 Statement of comprehensive income For the period from 1 October (Unaudited) Note Period from 1 October Period from 6 December 2013 (date of commencement of operations) 2014 Income Interest income 3,096, ,046 Net changes in fair value on investments 6,736, ,239 Net foreign exchange loss (17,059) (80,874) Other income 9,019 Total net income 9,825,456 1,284,411 Expenses Administration fee 13,873 4,756 Audit fee 76,505 12,241 Formation expenses 147, ,007 Management fee 805, ,955 Transaction cost 87,412 90,185 Trustee fee 97,109 33,290 Other operating expenses 71, Total operating expenses 1,300, ,334 Operating profit 8,525, ,077 Finance cost Distribution to unitholders of redeemable units (2,394,051) Profit after distribution and before tax 6,130, ,077 The notes on pages 9 to 18 form an integral part of these unaudited interim financial statements. 6

8 Note Period from 1 October Period from 6 December 2013 (date of commencement of operations) 2014 Taxation 4 (495,445) (332,267) 5,635, ,810 Change in cumulative difference arising from the fair value adjustment of units of the Sub-Fund 48, ,908 Increase in net assets attributable to holders of redeemable units and total comprehensive income 5,684, ,718 The notes on pages 9 to 18 form an integral part of these unaudited interim financial statements. 7

9 Statement of changes in net assets attributable to unitholders of redeemable units For the period from 1 October (Unaudited) Period from 1 October Period from 6 December 2013 (date of commencement of operations) 2014 Net assets attributable to unitholders of redeemable units at the beginning of the period 131,804,992 Subscription of units 59,947,262 89,989,975 Redemption of units (41,086,815) (1,782,657) Net increase from unit transactions 150,665,439 88,207,318 Increase in net assets attributable to holders of redeemable units and total comprehensive income 5,684, ,718 Net assets attributable to unitholders of redeemable units at the end of the period 156,349,457 88,701,036 The notes on pages 9 to 18 form an integral part of these unaudited interim financial statements. 8

10 1 The Sub-Fund Notes to the Financial Statements CIFM Funds (the Trust ) is an umbrella unit trust authorised under section 104 of the Securities and Futures Ordinance and is established under the terms of the Trust Deed dated 25 September 2013, as amended and governed by the laws of Hong Kong. The Trust currently offers one Sub-Fund, CIFM (HK) Diversified Income Fund (the Sub-Fund ) which is authorised by the Securities and Futures Commission of Hong Kong. The date of commencement of operations of the Sub-Fund was 6 December The investment objective of the Sub-Fund is to achieve long term capital appreciation by investing in debt securities and equity securities which are denominated and settled in and are issued or listed in China through the RQFII quota of the Manager. All unitholders of redeemable units rights with regard to the convening, voting or otherwise acting at any meeting of unitholders of redeemable units are the same. 2 Summary of principal accounting policies (a) Accounting policies of interim financial statements The principal accounting policies applied in the preparation of these unaudited condensed interim financial statements are consistent with those used in the annual financial statements for the year ended 30 September (b) Investments Classification The Sub-Fund classifies its investments as financial assets or financial liabilities at fair value through profit or loss. These financial assets or financial liabilities are held-for-trading as they are acquired or incurred principally for the purpose of selling or repurchasing in the near term or short-term profit taking. Recognition, derecognition and measurement Purchases and sales of investments are accounted for on the trade date basis. Investments are initially recognised at fair value and are subsequently re-measured at fair value. Realised and unrealised gains and losses on investments are recognised in the statement of comprehensive income in the period which they arise. Investments are derecognised when the rights to receive cash flows from the investments have expired or the Sub-Fund has transferred substantially all risks and rewards of ownership. Fair value estimation Investments that are listed or traded on an exchange and investments with prices quoted in over-thecounter markets or by market makers, are fair valued based on quoted last traded. When trading in the securities of an investee company is suspended, the investment is valued at the Manager s estimate of its fair value. 9

11 Investments which are traded in the interbank markets (for example, unlisted debt securities) are valued by using valuation provided by China Central Depository & Clearing Co., Ltd., a company jointly established by People s Bank of China and Ministry of Finance to undertake the function of centralised depository and settlement to the interbank bond market. (c) Income and expense Interest income is recognised in the statement of comprehensive income on a time-proportionate basis using the effective interest method. The effective interest method is a method of calculating the amortised cost of an interest bearing asset and of allocating the interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts throughout the expected life of the financial instrument, or a shorter period where appropriate, to the net carrying amount of the financial instrument. When calculating the effective interest rate, the Sub-Fund estimate cash flows considering all contractual terms of the financial instrument (for example, prepayment options) but does not consider future credit losses. The calculation includes all fees and points received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts. Dividend income is recorded on the ex-dividend date with the corresponding foreign withholding taxes recorded as an expense. Expenses are accounted for on an accrual basis. (d) Foreign currency translation Functional and presentation currency Items included in the financial statements are measured using the currency of the primary economic environment in which the Sub-Fund operates (the functional currency ). The Sub-Fund invests in mainly debt securities in the PRC and the performance of the Sub-Fund is measured and reported to the unitholders of redeemable units in. The Manager considers as the currency that most faithfully represents the economic effects of the underlying transactions, events and conditions. The financial statements are presented in, which is the Sub-Fund s functional and presentation currency. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign currency assets and liabilities are translated into the functional currency using the exchange rate prevailing at the reporting date. Foreign exchange gains and losses arising from translation are included in the statement of comprehensive income. Foreign exchange gains and losses relating to the financial assets and liabilities carried at fair value through profit or loss are presented in the statement of comprehensive Income within net changes in fair value on investments. 10

12 (e) Cash and cash equivalents Cash and cash equivalents include cash in hand, demand deposits, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. (f) Other receivables and payables Other receivables and payables are recognised initially at fair value and subsequently stated at amortised cost using the effective interest method. (g) Distribution payable to unitholders of redeemable units Distribution payable to unitholders of redeemable units are recognised in the statement of comprehensive income when they are approved by the Manager. (h) Transaction costs Transaction costs are costs incurred to acquire financial assets at fair value through profit or loss. They include the fees and commissions paid to agents, advisers, brokers and dealers. Transaction costs are expensed as incurred in the statement of comprehensive income. (i) Formation expenses Formation expenses are recognised as an expense in the period in which they are incurred. (j) Taxation The Sub-Fund currently incurs withholding taxes imposed by the PRC on investment income. Such income is recorded gross of withholding taxes in the statement of comprehensive income. Withholding taxes and capital gains tax are included as taxation in the statement of comprehensive income. The Sub-Fund also makes tax provisions on the gain arising from PRC investments which the Manager expects such amount may have to be paid to the tax authorities. Deferred income tax is provided, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the statement of financial position date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred income tax assets are recognised to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority or either the taxable entity or different taxable entities when there is an intention to settle the balances on a net basis. 11

13 (k) Proceeds and payments on allotment and redemption of units The net asset value per unit is computed for each dealing day. The price at which units are allotted or redeemed is calculated by reference to the net asset value per unit as at the close of business on the relevant dealing day in accordance with the provisions of the Trust Deed dated 25 September 2013, as amended, which may be different from the accounting policies stated in the financial statements. (l) Redeemable units Units of the Sub-Fund are redeemable at the holders option, represent puttable financial instruments of the Sub-Fund. The Sub-Fund classifies their puttable financial instruments as liabilities as the Sub- Fund issue more than one class of redeemable shares, which are redeemable at the unitholders of the redeemable units option and do not have identical rights. Units are issued and redeemed at the holders option at prices based on the Sub-Fund s net asset value per unit at the time of issue or redemption. 3 Number of units in issue and net assets attributable to unitholders of redeemable units per unit As at 31 March 2015, the Sub-Fund issued 11 classes of units Class A, X, I, H, PA, PX, PI, PH, PY, U and Y. Class A, X, PA, PX, PY and Y units are available for sale to the retail public in Hong Kong. Class I, H, PI, PH and U units are offered to institutional investors. Period from 1 October 2014 to 31 March 2015 Class A units Class X units Class PA units Class PX units Number of units in issue: At the beginning of the period 209, , , , Units issued 101, , , Units redeemed (50, ) (197, ) (138, ) (63, ) At the end of the period 260, , , , HKD HKD Net assets attributable to unitholders of redeemable units (after fair value adjustment) 28,476,533 1,457,247 70,906,587 14,362,944 Net assets attributable to unitholders of redeemable units (per unit)

14 Period from 1 October 2014 to 31 March 2015 Class I units Class H units Class PI units Class PH units Number of units in issue: At the beginning of the period , , Units issued 67, , , Units redeemed ( ) ( ) ( ) ( ) At the end of the period 67, , , HKD HKD Net assets attributable to unitholders of redeemable units (after fair value adjustment) 7,294,867 25,258,094 12,118,065 Net assets attributable to unitholders of redeemable units (per unit) Period from 1 October 2014 to 31 March 2015 Class PY units Class Y units Number of units in issue: At the beginning of the period Units issued 5, Units redeemed At the end of the period 5, USD USD Net assets attributable to unitholders of redeemable units (after fair value adjustment) 522,748 47,394 Net assets attributable to unitholders of redeemable units (per unit)

15 In accordance with the explanatory memorandum, the formation costs incurred in the formation of the Sub-Fund are borne by the Sub-Fund. Such expenses will be amortised over 3 years. As at 31 March 2015, the unamortised formation expenses of the Sub-Fund of 329,866 (2014: 281,387) were expensed in the financial statements as Fair value adjustment of units of the Sub-Fund. Net assets attributable to unitholders of redeemable units represent a liability in the statement of financial position, carried at the redemption amount that would be payable at the statement of financial position date if the unitholders of redeemable units exercised the right to redeem the shares. Consequently, for the period from 1 October , the difference described above of 48,479 (2014: 108,908) is recognised in the statement of comprehensive income and the statement of financial position. 4 Taxation Hong Kong Profits Tax No provision for Hong Kong profits tax has been made for the Sub-Fund as it was authorised as collective investment schemes under Section 104 of the Hong Kong Securities and Futures Ordinance and is therefore exempt from profits tax under Section 26A(1A) of the Hong Kong Inland Revenue Ordinance. PRC Withholding Tax For the period from 1 October , the Sub-Fund had invested in A-shares and denominated debt securities in PRC. 14

16 The taxation of the Sub-Fund for the period from 1 October represents: Period from 1 October Period from 6 December 2013 (date of commencement of operations) 2014 Capital gain tax on realised gains on investments 67,401 91,356 Deferred tax charged on change in unrealised gains on investments 12,813 61,897 80, ,253 Withholding tax on interest income 415, ,014 Withholding tax on dividend income 415, ,014 Taxation 495, ,267 The movement in deferred tax liabilities arising from change in unrealised gains on investments during the period from 1 October is as follows: Period from 1 October Period from 6 December 2013 (date of commencement of operations) 2014 Deferred tax charged to the statement of comprehensive income 12,813 61,897 At the end of the period 12,813 61,897 15

17 The movement in provision for taxation during the period is as follows: Period from 1 October Period from 6 December 2013 (date of commencement of operations) 2014 Taxation charged to the statement of comprehensive income 482, ,370 Tax paid 236,665 (26,916) At the end of the period 719, ,454 During the period from 1 October , the Sub-Fund invests in A Shares and debt securities ( PRC Investments ) in PRC through the RQFII program. Under the PRC Corporate Income Tax Law ( PRC CIT Law ), the non-prc residents with the gains derived from the sale of PRC securities will be subject to 10% PRC capital gains tax. In addition, the non-prc residents with interest income derived from the debt securities will be subject to 10% withholding interest income tax. Pursuant to the PRC CIT Law, debt securities issuers in the PRC are obligated to withhold the 10% interest income tax for those debt securities holders who are subject to the interest income tax in the PRC. However, interest income derived from government bonds is exempted from withholding interest income tax under the PRC CIT Law. On 14 November 2014, the Ministry of Finance, China Securities Regulatory Commission and SAT jointly issued the Notice on the issues of temporary exemption from imposition of capital gains tax arising from gains from the transfer of equity investment assets such as PRC domestic stocks by QFII and RQFII Caishui (2014) No.79 ( Notice 79 ) to provide clarification on withholding tax policy for capital gains in relation to QFIIs and RQFIIs schemes. Under Notice 79, QFIIs and RQFIIs are temporarily exempt from withholding tax on gains derived from the trading of equity investment assets, such as A Shares, effective from 17 November In addition, it was also stipulated in Notice 79 that QFIIs and RQFIIs shall be subject to withholding tax on their capital gains derived from the trading of equity investment assets, such as A Shares, before 17 November As a result of the development of QFII and RQFII regime; the Manager has reassessed the withholding tax provisioning approach after the period end and determined that, with effect from 17 November 2014 (the Effective Date ): (i) No withholding provision will be made on the gross unrealised and realised capital gains from trading of A Shares; 16

18 (ii) (iii) a 10% provision for withholding tax will continue to be made on the gross realised capital gains derived by the Sub-Fund from trading of A Shares prior to 17 November 2014; and a 10% provision for withholding tax will continue to be made on the gross unrealised and realised capital gains from trading of PRC debt securities. As a result, the Sub-Fund reversed the withholding provision as of 14 November 2014 on the Effective Date, which was made on the gross unrealised capital gains derived from trading of A Shares. The Manager considers that the enforcement of PRC tax on gains derived from the PRC investments is uncertain as at the date of approval of these financial statements and has exercised its judgment when assessing the amount of potential tax liability as at the financial period end. However, significant uncertainties exist and estimation of the Manager may substantially differ from the actual events. The Manager considers that the capital gains tax provision amount for gross realised capital gains derived by the Sub-Fund from trading of PRC debt and equity securities prior to 17 November 2014 may differ significantly from the amounts that may have to be ultimately borne by the Sub-Fund. In the event a capital gains tax is levied at an amount that is different from what was provided by the Sub-Fund, the Sub-Fund may incur a liability that is different from the existing tax provision, which could significantly impact the net assets attributable to unitholders of redeemable units and consequently, the price per unit of the Sub-Fund based on the calculation of the net assets attributable to unitholders of redeemable units when distributing to the unitholders of redeemable units at such relevant time. When the SAT issues clarifications on the enforcement of withholding tax on such gains, this might ultimately result in either an increase or a decrease in the amount provided. The Manager will always act in the best interest of unitholders of redeemable units and will continually assess the tax provision on an on-going basis. The Manager reviews the relevant PRC tax rules on the PRC Investments from time to time, including the likelihood of the Sub-Fund benefiting from double tax treaty agreements between Hong Kong and the PRC for Hong Kong tax residents. Any change in taxation imposed on RQFIIs is likely to have a subsequent impact on the required provision and accordingly the net assets attributable to unitholders of redeemable units of the Sub-Fund. 17

19 5 Distribution 18 For the period from 1 October Class PA Shares Distribution of 1.03 per share on 686,610 shares ex 31 December 2014 (707,209) Distribution of 1.16 per share on 678,490 shares ex 31 March 2015 (787,048) Class PX HKD Shares Distribution of HKD 1.00 per share on 169,237 shares ex 31 December 2014 (135,420) Distribution of HKD 1.14 per share on 141,486 shares ex 31 March 2015 (128,976) Class PI Shares Distribution of 0.87 per share on 188,183 shares ex 31 December 2014 (163,719) Distribution of 1.06 per share on 240,437 shares ex 31 March 2015 (254,864) Class PH HKD Shares Distribution of HKD 1.00 per share on 117,020 shares ex 31 December 2014 (93,637) Distribution of HKD 1.14 per share on 117,805 shares ex 31 March 2015 (107,389) Class PY USD Shares Distribution of USD 0.5 per share on 5,094 shares ex 31 March 2015 (15,789) The amount of undistribution income carried forward includes both distribution classes and nondistribution classes. The amount of undistributed income carried to for distribution classes and for non-distribution classes amounted to 440,895 and 902,860 respectively as of 31 March Soft commission arrangements The Manager and any Connected Persons of the Manager may effect transactions for the account of the Sub-Fund through the agency of another person with whom the Manager and any of its Connected Persons have an arrangement under which such other person agrees to pay in whole or in part for the provision of goods to and/or the supply of services to the Manager or Connected Persons of the Manager in consideration of the Manager or a Connected Person of the Manager procuring that such other person (or person connected thereto) executes transactions to be entered into for the account of the Sub-Fund. The Manager shall procure that no such contractual arrangements are entered into unless the goods and services to be provided pursuant thereto are of demonstrable benefit to unitholders of redeemable units whether by assisting the Manager in its ability to manage the Sub-Fund, or by contributing to an improvement in the Sub-Fund s performance or otherwise.

20 Statement of movements in investment portfolio From the period ended 31 March 2015 (Unaudited) Listed/Quoted Investments Percentage of total net assets at 31 March 2015 Equity Securities China Debt Securities China Other net assets 6.90 Net assets attributable to unitholders of redeemable units

21 InvesTment portfolio (unaudited) As at 31 March 2015 Listed/Quoted Investments Holding Fair Value % of Net assets % Equity Securities China (11.14%) AVIC ELECTROMECHANICAL SY A 16, , BAOSHAN IRON + STEEL CO A 52, , BEIJING E HUALU INFO TECH A 4, , BEIJING GEHUA CATV NETWORK A 20, , BEIJING ORIGINWATER TECHNO A 5, , BEIJING SPC ENVIRONMENTAL A 11, , BLUEFOCUS COMMUNICATION GR A 8, , CHINA CYTS TOURS HLDG CO A 12, , CHINA EASTERN AIRLINES CO A 76, , CHINA VANKE CO LTD A 30, , CHINA YANGTZE POWER CO LTD A 18, , CITIC SECURITIES CO A 19, , CSR CORP LTD A 54, , GOERTEK INC A 16, , GUANGZHOU HAIGE COMMUNICAT A 16, , GUIZHOU XINBANG PHARMACEUT A 9, , HANGZHOU TIGERMED CONSULTI A 7, , IND + COMM BK OF CHINA A 80, , INNER MONGOLIA YILI INDUS A 12, , JIANGSU HENGRUI MEDICINE C A 10, , LUXSHARE PRECISION INDUSTR A 6, , MIRACLE AUTOMATION ENGINEE A 18, , NARI TECHNOLOGY DEVELOPMEN A 12, , NEW CHINA LIFE INSURANCE C A 4, , ORG PACKAGING CO LTD A 23, , PING AN INSURANCE GROUP CO A 11, , POLY REAL ESTATE GROUP CO A 40, , SHANGHAI EAST CHINA COMPUT A 5, , SHANGHAI INTERNATIONAL AIR A 22, , SHANGHAI PHARMACEUTICALS A 22, , SHANGHAI PUDONG DEVEL BANK A 26, , SHANGHAI YANHUA SMARTECH G A 13, , SHENZHEN GAS CORP LTD A 23, , SINOTRANS AIR TRANSPORT A 24, , WEICHAI HEAVY MACHINERY CO A 16, ,

22 Listed/Quoted Investments Holding Fair Value % of Net assets % WEIFU HIGH TECHNOLOGY GRP A 11, , XJ ELECTRIC CO LTD A 7, , YANTAI JEREH OILFIELD A 9, , ZHEJIANG HUAHAI PHARMACEUT A 24, , ZHEJIANG WEIXING NEW BUILD A 22, , ZHENGZHOU YUTONG BUS CO A 16, , ZTE CORP A 10, , Total Equity Securities 17,412, Debt Securities China (81.96%) CHINA DATANG CORP RENE 11/ ,100,000 4,153, ADVANCED TECHNOLOGY MATE 11/ ,000,000 3,050, ANHUI CONCH CEMENT CO LT COMPANY 05/ ,294,000 4,341, ANHUI SHANYING PAPER 08/19 VAR 4,285,000 4,482, BEIJING HUALIAN HYPERMAR COMPANY 11/15 VAR 1,500,000 1,515, CHANGXING TRANS CONSTRUC FRN 01/16 1 1,584,000 1,607, CHINA FIRST HEAVY INDUSTRIES 12/ ,074,000 5,114, CHINA PETROLEUM + CHEM COMPANY 06/ ,480,000 2,480, CHINA YANGTZE POWER CO BANK GUARANT 09/ ,614,000 1,646, CHONGQING CHANGAN AUTOMOBILE 04/ ,502,000 3,550, CQ XINGRONG ST ASSET 8.35 SER 04/19 ZCP 1,570,000 1,604, GD POWER DEVELOPMENT CO / ,961,000 3,941, GUANGDONG HEC TECHNOLOGY 06/16 VAR 4,000,000 4,080, HUAXIN CEMENT CO FRN SER B 05/ ,490,000 2,529, HUAXIN CEMENT CO 05/17 VAR 2,000,000 2,012, HUBEI YIHUA CHEMICAL IND COMPANY 12/19 VAR 1,000, , HUMON SMELTING CO FRN 10/ ,081,000 2,079, HUZHOU COMMUNICATIONS IN FRN 05/ ,140,000 1,143, JIANGSU SHUANGLIANG 11/17 VAR 3,487,000 3,521, JIANGZHONG PHARMACEUTICAL LTD 12/ ,445,000 2,451, JIZHONG ENERGY RESOURCES COMPANY 05/16 VAR 3,800,000 3,838, KAILUAN ENERGY CHEMICAL CO LTD 10/19 FIXED 5.4 4,650,000 4,714, KANGMEI PHARMACEUTICAL 06/18 VAR 3,501,000 3,620, LONGHU DEVELOPMENT FRN 05 MAY 05/16 FIXED 6.7 3,150,000 3,203,

23 Listed/Quoted Investments Holding Fair Value % of Net assets % LUXI CHEMICAL GROUP CO 07/ ,196,000 3,291, SAILUN GROUP CO LTD NOV 2015 VAR 2,000,000 2,000, SHANDONG CHENMING PAPER HLDGS 07/16 FIXED ,771,000 4,833, SHANGHAI FOSUN PHARMACEU 04/ ,918,000 3,980, SHANGHAI INTL PORT GROUP 07/16 VAR 2,990,000 3,013, SHANGHAI TUNNEL ENGINEER COMPANY 10/16 VAR 3,800,000 3,845, SHANXI LANHUA SCI TECH SS 11/17 1 4,400,000 4,395, SHENZHEN EXPRESSWAY CO 07/16 VAR 4,480,000 4,568, SHUANGYASHAN DADI CONTR FRN 12/ ,457,000 2,531, SICHUAN CHANGHONG ELECTR COMPANY 07/ ,964,000 4,897, SICHUAN HEBANG CORP 04/20 VAR 1,301,000 1,302, SUNING COMMERCE GRP CO 12/ ,438,000 2,451, WANXIANG QIANCHAO CO LTD FRN 04/17 6 5,800,000 5,916, ZJ CHINT ELECTRICS CO LT COMPANY 07/16 VAR 3,156,000 3,206, ZOOMLION HEAVY INDUSTRY 04/ ,500,000 1,522, ZTE CORP JUN 2015 (SZ) 06/15 FIXED 4.2 4,714,000 4,711, Total Debt Securities 128,150, Total Listed/Quoted Investments 145,562, Other net assets 10,786, Net assets attributable to unitholders of redeemable units 156,349, Total Investments, at cost 140,460,021 22

24 Performance table Net asset value As at 31 March 2015 Class Currency Net Asset Value per unit Total Net Asset Value Class A ,476,533 Class X HKD ,457,247 Class PA ,906,587 Class PX HKD ,362,944 Class I Class H HKD ,294,867 Class PI ,258,094 Class PH HKD ,118,065 Class PY USD ,748 Class Y USD ,394 Highest/lowest net asset value per unit From 1 October Class Currency Highest net asset value per unit Lowest net asset value per unit Class A Class X HKD Class PA Class PX HKD Class I Class H HKD Class PI Class PH HKD Class PY USD Class Y USD