MACQUARIE UNIT TRUST SERIES (formerly the MQ UNIT TRUST SERIES) REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010

Transcription

1 omacquarie MACQUARIE UNIT TRUST SERIES (formerly the MQ UNIT TRUST SERIES) REPORTS AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010 Investments in the Macquarie Unit Trust Series (formerly the MQ Unit Trust Series) are not deposits with or liabilities of Macquarie Bank Limited ABN (UMacquarieU) or any Macquarie Group company and are subjectto investments risk, including possible delays in repayment and loss of income and capital invested. None of Macquarie or any other Macquarie Group company guarantees the performance of the Macquarie Unit Trust Series, the repayment of capital from the Macquarie Unit Trust Series or any particular rate of return.

2 TABLE OF CONTENTS MANAGEMENT AND ADMINISTRATION...1 STATEMENT OF RESPONSIBILITIES OF THE MANAGER AND THE TRUSTEE... 2 REPORT OF THE TRUSTEE TO THE UNITHOLDERS... 3 INDEPENDENT AUDITOR'S REPORT...4 STATEMENTS OF COMPREHENSIVE INCOME...6 STATEMENTS OF FINANCIAL POSITION...8 STATEMENTS OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS...10 STATEMENTS OF CASH FLOWS...12 NOTES TO THE FINANCIAL STATEMENTS The Fund and the Sub-Funds Summary of significant accounting policies Net assets attributable to unitholders Financial risk management Critical judgments in applying accounting policies Cash and cash equivalents Financial assets held at fair value through profit or loss Net gains/(iosses) on financial instruments held at fair value through profit or loss Related party transactions/transactions with the Trustee, the Manager and their connected persons30 10 Taxation Soft commission arrangements Units Contingent assets and liabilities and commitments Events occurring after year end Approval of financial statements INVESTMENT PORTFOLIO (UN-AUDITED) STATEMENT OF MOVEMENTS IN INVESTMENT PORTFOLIO (UN-AUDITED) PERFORMANCE RECORD (UN-AUDITED)... 7;l

3 MANAGEMENT AND ADMINISTRATION Directors of the Manager John Charles Bugg Paul Wai Hung Li Robert Hector John Spence Damon Richard Hambly (appointed 25 August 2009) Trustee and Registrar HSBC Trustee (Cayman) Limited P.O. Box 484 HSBC House 68 West Bay Road Grand Cayman KY Cayman Islands Manager Macquarie Funds Management Hong Kong Limited Level 18, One International Finance Centre 1 Harbour View Road Central, Hong Kong Service Provider to the Trustee HSBC Institutional Trust Services (Asia) Limited No 1 Queen's Road Central Hong Kong Sub-Manager MQ Portfolio Management Limited (ABN ) Mezzanine Level, No. 1 Martin Place Sydney, NSW 2000 Australia Auditor Ernst & Young Limited 62 Forum Lane, Camana Bay P.O. Box 510 Grand Cayman, KY Cayman Islands Legal Advisors As to matters of Cayman Islands law Maples and Calder 1504, One International Finance Centre 1 Harbour View Street Hong Kong As to matters of Hong Kong law Deacons 5th, Floor, Alexandra House Chater Road Central Hong Kong

4 STATEMENT OF RESPONSIBILITIES OF THE MANAGER AND THE TRUSTEE Manager's responsibilities The Manager of the Macquarie PO China Concentrated Core Fund (formerly the MQ PO China Concentrated Core Fund), Macquarie IPO China Gateway Fund (formerly the MQ IPO China Gateway Fund), Macquarie Asia New Stars Fund (formerly the MQ China New Stars Fund), MQ Infrastructure Strategies Fund, China Agriculture Commodity Index Fund and the Macquarie Global Thematic Resources Fund (each a sub-fund of Macquarie Unit Trust Series (collectively the "Fund" and individually the "Sub-Funds")) is required by the Code on Unit Trusts and Mutual Funds established by the Securities and Futures Commission of Hong Kong (the "SFC Code") and the Trust Deed dated 23 January 2007 (the "Trust Deed") to prepare financial statements for each annual accounting period which give a true and fair view of the financial position of each of the Sub-Funds at the end of that period and of the transactions forthe period then ended. In respect of these financial statements the Manager is required to:. select suitable accounting policies and then apply them consistently;. make judgments and estimates that are prudent and reasonable; and. prepare or arrange for the preparation of the financial statements on the basis that each of the Sub- Funds will continue in operation unless it is inappropriate to presume this. The Manager is also required to manage the Fund in accordance with the Trust Deed and take reasonable steps for the prevention and detection of fraud and other irregularities. The Fund is an umbrella unit trust governed by its Trust Deed. As at 30 June 2010, the Fund has established the following Sub-Funds that are authorized by the Securities and Futures Commission of Hong Kong:. Macquarie IPO China Concentrated Core Fund. Macquarie IPO China Gateway Fund. Macquarie Asia New Stars Fund. MQ Infrastructure Strategies Fund (ceased operations on 30 September 2009) As at 30 June 2010, the Fund has established the following Sub-Funds that are not authorized by the Securities and Futures Commission of Hong Kong and are.not available to Hong Kong residents:. China Agriculture Commodity Index Fund. Macquarie Global Thematic Resources Fund This financial report presents the Sub-Funds authorized by the Securities and Futures Commission of Hong Kong. The Sub-Funds not authorized by the Securities and Futures Commission of Hong Kong prepare separate financial reports. Trustee's responsibilities _._-. The Trustee of the Fund and the Sub-Funds is required to:. ensure that the Fund and the Sub-Funds are managed by the Manager in accordance with the Trust Deed and that the investment and borrowing powers are complied with;. satisfy itself that suffcient accounting and other records have been maintained;?ê!eguardjhe propertygfthefundancj the Sub-Fund? andrights attaching thereto; and.. report to the unitholders for each annual accounting year/period on the conduct of the Manager in the management of the Fund and the Sub-Funds. 2

5 REPORT OF THE TRUSTEE TO THE UNITHOLDERS We hereby confirm that, in our opinion, the Manager of the Macquarie IPO China Concentrated Core Fund. Macquarie PO China Gateway Fund, Macauarie Asia New Stars Fund and MQ Infrastructure Strategies Fund (each a sub-fund of Macquarie Unit Trust Series (collectively the "Fund" and individually the "Sub- Funds")) has, in all material respects, managed the Fund and each of the Sub-Funds in accordance with the provisions of the Trust Deed dated, 23 January 2007, for the year from 1 July 2009 to 30 June For and on behalf of ~(CZ5~ë)Jusiee 3

6 1IIIIIIIIIIIIIIIIIIiiililllilll,,'''P i! ERNST & YOUNG Ernst & Young Ltd. 62 Forum Lane Camana Bay P.O. Box 510 Grand Cayman KY Cayman Islands Tel: Fax: ww.ey.com Independent Auditors' Report The Trustee Macquarie Unit Trust Series - Macquarie IPO China Concentrated Core Fund Macquarie Unit Trust Series - Macquarie IPO China Gateway Fund Macquarie Unit Trust Series - Macquarie Asia New Stars Fund Macquarie Unit Trust Series - MQ Infrastructure Strategies Fund We have audited the accompanying financial statements of Macquarie Unit Trust Series - Macquarie IPO China Concentrated Core Fund, Macquarie Unit Trust Series - Macquarie IPO China Gateway Fund, Macquarie Unit Trust Series - Macquarie Asia New Stars Fund and Macquarie Unit Trust Series - MQ Infrastructure Strategies Fund (the "Funds") which comprise the statement of financial position as at June 30, 20 i 0, and the statement of comprehensive income, statement of changes in net assets attributable to unitholders and statement of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes. This report is made solely to the trustee, as a body. Our audit work has been undertaken so that we might state to the trustee those matters we are required to state to them in an auditors' report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Fund and the trustee as a body, for our audit work, for this report, or for the opinions we have formed. Management's Responsibilty for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards. This responsibilty 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. Auditors' Responsibilty Our responsibilty is to express an opinion on these financial statements based on our audit. We conducted our "~---audit~inaccordancewithinternational Standards- on Auditing.. 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. A member firm of Ernst & Young Global Limited

7 iiiiiiiiiiiiiiiiiiiiiiiiiiiiiiii""'ã! ERNST & YOUNG Independent Auditors' Report (continued) Auditors' Responsibilty (continued) An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, 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 auditor 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 management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position Macquarie Unit Trust Series - Macquarie IPO China Concentrated Core Fund, Macquarie Unit Trust Series - Macquarie IPO China Gateway Fund, Macquarie Unit Trust Series - Macquarie Asia New Stars Fund and Macquarie Unit Trust Series - MQ Infrastructure Strategies Funds as of June 30, 2010, and of their financial performance and their cash flows for the year then ended in accordance with International Financial Reporting Standards. ~TM/.-& September 27,2010

8 STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2010 MACQUARIE IPO MQ CHINA MACQUARIE IPO MACQUARIE INFRASTRUCTURE CONCENTRATED CHINA GATEWAY ASIA NEW STARS STRATEGIES CORE FUND FUND FUND FUND* Year ended 30 Year Ended 30 Year Ended 30 Year Ended 30 June 2010 June 2010 June 2010 June 2010 Note Income Interest income 992 1, Dividend income 1,094,410 1,802, ,124 14,278 Net gains on financial assets at fair value through profit or loss 8 8,823,537 18,716,626 3,958, ,039 Net foreign exchange gains/(iosses) 8 2,798 (10,557) (23,835) 12,147 Other income 2,372 2, Total income 9,924,109 20,512,303 4,180, ,595 Expenses Management fee 9(a) 1,322,042 1,903, ,641 12,494 Performance fee 9(b) 4,616 13,280 3,281 Administration fee 9(c) 220, ,179 28,607 2,082 Transaction handling fee 9(d) 24,125 28,955 24,259 3,473 Transaction costs 1,299,760 1,607, ,799 10,824 Audit fee 20,899 20,904 16,504 15,774 Legal and professional fees 9,568 11,814 2,614 Bank charges 7,623 1, Interest expense Other expenses 103,971 70,717 17,000 41,455 Total expenses 3,012,944 3,974, ,448 86,243 Operating profit 6,911,165 16,537,408 3,716,325 51,352 Finance costs attributable to unitholders I ncrease in net assets attributable to unitholders from operations 6,911,165 16,537,408 3,716,325 51,352 Other comprehensive income Total comprehensive income * MQ Infrastructure Strategies Fund was terminated on 30 September 2009 The notes on pages 14 to 33 are an integral part of these financial statements. 6

9 STATEMENTS OF COMPREHENSIVE INCOME (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2009 Note MACQUARIE IPO CHINA CONCENTRATED CORE FUND Year ended 30 June 2009 MACQUARIE IPO CHINA GATEWAY FUND Year Ended 30 June 2009 MACQUARIE ASIA NEW STARS FUND Year Ended 30 June 2009 MQ INFRASTRUCTURE STRATEGIES FUND Year Ended 30 June 2009 Income Interest income Dividend income Net losses on financial assets at fair value through profit or loss 8 Net foreign exchange losses 8 loss Total Expenses Management fee 9(a) Administration fee 9(c) Transaction handling fee 9(d) Transaction costs Interest expense Audit fee Legal and professional fees Bank charges Other expenses Total expenses Operating Loss Finance costs attributable to ì.nitholders Decrease in net assets attributable to unitholders from operations 100,043 73,762 3,299 6,289 2,309,409 2,750, , ,389 (25,101,759) (19,191,747) (2,685,322) (1,781,891) (107,629) (235,698) (20,488) (56,492) (22,799,936) (16,602,981 ) (2,444,482) (1,566,705) 1,444,588 1,158, ,717 98, , ,060 18,286 16,388 23,975 37,786 13,775 6, , ,910 35,573 9, ,300 24,300 20,300 19,300 24,435 24,359 5,656 4,611 7, , ,379 11,643 7,601 2,653,568 2,252, , ,587 (25,453,504) (18,855,700) (2,659,496) (1,728,292) (25,453,504) (18,855,700) (2,659,496) (1,728,292) Other comprehensive income Total comprehensive income The notes on pages 14 to 33 are an integral part of these financial statements. 7

10 STATEMENTS OF FINANCIAL POSITION AS AT 30 JUNE 2010 MACQUARIE IPO CHINA MACQUARIE IPO MACQUARIE MQ CONCENTRATED CHINA GATEWAY ASIA NEW INFRASTRUCTURE CORE FUND FUND STARS FUND STRATEGIES FUND' 30 June June June June 2010 Note USS USS USS USS Assets Cash and cash equivalents 5 2,336,581 1,107, ,394 41,081 Amounts due from brokers 1,070,511 1,176,961 87,463 Financial assets' held at fair value through profit or loss 6 71,986, ,592,622 14,470,917 Dividends receivable 208, ,562 24,738 Amounts receivable on subscnption 4,500 Other receivables ,791 Total assets 75,602, ,148,901 15,066,303 41,081 liabilties Management fee payable 8(a) 299, ,756 52,655 Performance fee payable 8(b) 4,616 13,280 3,281 Administration fee payable 8(c) 49,892 75,793 8,776 Amounts payable on redemption 49, ,564 Amounts due to brokers 234,164 1,148, ,668 Other payables 15,421 18, ,400 41,081 Total liabilties (excluding net assets attributable to unitholders) 653,228 2,038, ,780 41,081 Net assets attributable to unitholders 74,949, ,110,164 14,627,523 Represented by: Net assets attributable to unitholders (at last traded market prices) 75,294, ,716,664 14,705,580 Adjustment from bid market prices to last traded market prices 3 (345,352) (606,500) (78,057) Number of units in issue - Class A 1 16,270,282 15,829,841 1,197,281 Number of units In issue - Class A2 263, , ,967 Number of units in issue - Class I 1,628 Net assets attributable to unitholders per unit (at last traded market prices) - Class At Net assets attributable to unitholders per unit (at last traded market prices) - ClassA Net assets attributable to unit holders per unit (at last traded market prices) - Class i MQ Infrastructure Strategies Fund was terminated on 30 September 2009 For and on behalf of Macquarie Funds Management Hong Kong Limited, the Manager Director For and on behalf of ~~~~:.n) Limited, lle Trustee The notes on pages 14 to 34 are an integral part of these financial statements. 8

11 STATEMENTS OF FINANCIAL POSITION (CONTINUED) AS AT 30 JUNE 2009 MACQUARIE IPO MACQUARIE MQ CHINA IPO CHINA MACQUARIE INFRASTRUCTURE CONCENTRATED GATEWAY ASIA NEW STRATEGIES CORE FUND FUND STARS FUND FUND 30 June June June June 2009 Note Assets Cash and cash equivalents 6 9,530,832 5,922, ,426 1,091,179 Amounts due from brokers 585, ,612 Financial assets held at fair value through profit or loss 7 79,550, ,932,860 8,185,803 4,894,489 Dividends receivable 309, ,861 27,349 24,815 Amounts receivable on subscription 354, ,574 6,322 Other receivables Total assets 90,331, ,548,327 8,575,906 6,010,504 Liabilties Management fee payable 9(a) 300, ,895 28,522 21,546 Administration fee payable 9(c) 50,071 61,149 4,753 3,591 Amounts payable on redemption 200, ,252 5,588 Other payables 25,766 24,032 21,983 19,900 Total liabilties (excluding net assets attributable to unitholders) 576, ,328 55,258 50,625 Net assets attributable to unitholders 3 89,754, ,956,999 8,520,648 5,959,879 Represented by: Net assets attributable to unitholders (at last traded market prices) 89,852, ,121,036 8,559,430 5,968,774 Adjustment from bid market prices to last traded market prices 3 (98,320) (164,037) (38,782) (8,895) Number of units in issue 21,437,180 18,455,723 1,410, ,024 Net assets attributable to unitholders per unit (at last traded market prices) The notes on pages 14 to 33 are an integral part of these financial statements. 9

12 STATEMENTS OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS FOR THE YEAR ENDED 30 JUNE 2010 MACQUARIE IPO CHINA CONCENTRATED CORE FUND Year ended 30 June 2010 MACQUARIE IPO CHINA GATEWAY FUND Year Ended 30 June 2010 MACQUARIE ASIA NEW STARS FUND Year Ended 30 June 2010 MQ INFRASTRU. CTURE STRATEGI- ES FUND Year Ended 30 June 2010 Net assets attributable to unitholders at the beginning of the year 89,754, ,956,999 8,520,648 5,959,879 Proceeds on units issued 5,703,786 9,823,628 4,958,073 Redemption of units (27,420,462) (25,207,871 ) (2,567,523) Net decrease from unit transactions (21,716,676) (15,384,243) 2,390,550 Increase in net assets attributable to unitholders from operations 6,911,165 16,537,408 3,716,325 (6,011,231) (6,011,231 ) 51,352 Net assets attributable to unitholders at the end of the year 74,949, ,110,164 14,627,523 Units in issue at the beginning of the year 21,437,180 18,455,723 1,410, ,024 Units issued 619,027 1,090, ,902 Units redeemed (5,522,595) (3,323,917) (284,891) (758,024) Units in issue at the end of the year 16,533,612 16,222,227 1,520,876 MQ Infrastructure Strategies Fund was terminated on 30 September 2009 The notes on pages 14 to 33 are an integral part of these financial statements. 10

13 STATEMENTS OF CHANGES IN NET ASSETS ATTRIBUTABLE TO UNITHOLDERS (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2009 MACQUARIE IPO CHINA CONCENTRATED CORE FUND Year ended 30 June 2009 MACQUARIE IPO CHINA GATEWAY FUND Year Ended 30 June 2009 MACQUARIE ASIA NEW STARS FUND Year Ended 30 June 2009 MQ INFRASTRUCTURE STRATEGIES FUND Year Ended 30 June 2009 Net assets attributable to unitholders at the beginning of the year 169,008,791 Proceeds on units issued 1,037,862 Redemption of units (54,838,638) 163,087,029 12,993,339 9,223, , , ,447 (33,270,553) (1,953,244) (2,005,805) Net increase from unit transactions (53,800,776) (32,274,330) (1,813,195) (1,535,358) Decrease in net assets attributable to unitholders from operations Net assets attributable to unitholdersat the end of the year Units in issue at the beginning of the year Units issued Units redeemed Units in issue at the end of the year (25,453,504) (18,855,700) (2,659,496) (1,728,292) 89,754, ,956,999 8,520,648 5,959,879 18,281,860 23,663,965 1,846, ,121 21,631,357 2,310,224 26,053 55,723 (18,476,037) (7,518,466) (461,933) (248,820) 21,437,180 18,455,723 1,410, ,024 The notes on pages 14 to 33 are an integral part of these financial statements. 11

14 STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2010 MACQUARIE IPO CHINA CONCENTRATED CORE FUND Year ended 30 June 2010 Note MACQUARIE IPO CHINA GATEWAY FUND Year Ended 30 June 2010 MACQUARIE ASIA NEW STARS FUND Year Ended 30 June 2010 MQ INFRASTRUCTURE STRATEGIES FUND Year Ended 30 June 2010 Cash flow from operating activities Payment on purchase of financial assets at fair value through profit or loss Proceeds from sales of financial assets at fair value through profit or loss Increase in amounts due from brokers Increase in amounts due to brokers Interest received Dividend received Net operating expenses paid Net cash from operating activities (165,985,447) 182,373,314 (484,946) 234,164 1,111 1,195,181 (3,014,795) 14,318,582 (213,242,342) (28,995,656) 225,299,205 26,668,767 (770,348) (87,463) 1,148, ,668 1, ,717, ,735 (3,872,920) (463,080) 10,280,621 (2,376,904) (75,183) 5,080, ,094 (78,00) 4,966,721 Cash flows from financing activities Proceeds from issue of units Payment on redemption of units Net cash used in financing activities 6,058,288 (27,571,121) (21,512,833) 9,922,702 4,964,395 (25,018,559) (2,567,523) (15,095,857) 2,396,872 (6,016,819) (6,016,819) Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of year (7,194,251) 9,530,832 (4,815,236) 19,968 5,922, ,426 (1,050,098) 1,091,179 Cash and cash equivalents at end of year, represented by bank balances 6 2,336,581 * MQ Infrastructure Strategies Fund was terminated on 30 September ,107, ,394 41,081 The notes on pages 14 to 33 are an integral part of these financial statements. 12

15 STATEMENTS OF CASH FLOWS (CONTINUED) FOR THE YEAR ENDED 30 JUNE 2009 MACQUARIE IPO CHINA MACQUARIE IPO MACQUARIE ASIA MQ CONCENTRATED CHINA GATEWAY NEW STARS INFRASTRUCTURE CORE FUND FUND FUND STRATEGIES FUND Year ended 30 Year ended 30 Year ended 30 Year ended 30 June 2009 June 2009 June 2009 June 2009 Note Cash flow from operating activities Payment on purchase of financial assets at fair value through profit or loss (66,576,408) (113,683,542) (3,382,233) (2,694,158) Proceeds from sales of financial assets at fair value through profit or loss 129,356, ,416,025 4,711,867 4,123,184 Decrease/(increase) in amounts due from brokers 742,723 (312,529) Decrease in amounts due to brokers (6,650,221 ) (725,123) Interest received 114,224 88,611 4,817 8,200 Dividend received 2,519,956 2,719, , ,379 Net operating expenses paid (6,702,764) (3,503,607) (271,615) (238,77) Net cash from operating activities 52,803,737 25,999,385 1,320,238 1,458,928 Cash flows from financing activities Proceeds from issue of units 747, , , ,990 Payment on redemption of units (55,173,796) (33,463,845) (2,115,382) (2,012,481) Net cash used in financing activities (54,426,435) (32,564,696) (1,968,656) (1,529,491 ) Net decrease in cash and cash equivalents (1,622,698) (6,565,311 ) (648,418) (70,563) Cash and cash equivalents at the beginning of year 11,153,530 12,487,703 1,004,844 1,161,742 Cash and cash equivalents at end of year, represented by bank balances 6 9,530,832 5,922, ,426 1,091,179 The notes on pages 14 to 33 are an integral part of these financial statements. 13

16 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE The Fund and the Sub-Funds Macquarie Unit Trust Series (formally the MQ Unit Trust Series) (the "Fund") is a Cayman Islands based umbrella trust. The Fund was established as an exempted trust under the laws of the Cayman Islands by a trust deed (the "Trust Deed") dated 23 January 2007, as amended, made between MQ Portfolio Management Limited as manager and HSBC Trustee (Cayman) Limited as trustee (the "Trustee"). Effective from 1 July 2008, Macquarie Funds Management Hong Kong Limited ("MFMHKL") was appointed as the manager of the Fund (the "Manager"). MQ Portfolio Management Limited ("MQPML") retired as the manager of the Fund on this date. MFMHKL appointed MQPML as the sub-manager (the Sub-Manager) in respect of the Fund pursuant to a sub-management agreement. Macquarie IPO China Concentrated Core Fund (formally the MQ IPO China Concentrated Core Fund,) commenced operations on 8 March 2007, Macquarie IPO China Gateway Fund (formally the MQ IPO China Gateway Fund) commenced operations on 8 August 2007, Macquarie Asia New Stars Fund (formally the MQ China New Stars Fund) commenced operations on 5 December 2007, MQ Infrastructure Strategies Fund commenced operations on 29 February 2008, China Agriculture Commodity Index Fund commenced operations on 28 August 2009 and Macquarie Global Thematic Resources Fund commenced operations on 30 October 2009 (individually known as the "Sub-Fund") and were established and constituted respectively by a deed supplemental to the Trust Deed (the "Supplemental Deeds"). The Private Placing Memorandum notes that all of the assets of the Fund may, in certain circumstances, be available to meet all the liabilities of the Sub-Funds regardless of the Sub-Fund to which such assets and liabilities are attributable. Generally, such cross liability is only likely to arise in circumstances where the assets of a Sub-Fund are insufficient to meet its liabilities and the claims of creditors are not expressly limited to the assets of the Sub-Fund concerned. The Macquarie Unit Trust Series, Macquarie IPO China Concentrated Core Fund, Macquarie IPO China Gateway Fund, Macquarie Asia New Stars Fund and MQ Infrastructure Strategies Fund are authorised by the Securities and Futures Commission of Hong Kong under Section 104(1) of the Hong Kong Securities and Futures Ordinance and are required to comply with the Code on Unit Trusts and Mutual Funds established by the Securities and Futures Commission of Hong Kong (the "SFC Code"). The China Agriculture Commodity Index Fund and the Macquarie Global Thematic Resources Fund are not presented in this report as they are not registered with the Securities and Futures Commission of Hong Kong, and consequently are not available to Hong Kong residents. These Sub-Funds prepare separate financial statements. According to the explanatory memorandum (the "Explanatory Memorandum") of each of the Sub-Funds, the Sub-Funds may be terminated by the Manager, if on any date, the net asset value of any of the Sub- Funds is less than 10,000,000. Under a resolution passed on 22 May 2009, management resolved to terminate the MQ Infrastructure Strategies Fund on 30 September Summary of significant accounting policies The principal accounting policies adopted in the preparation of these financial statements are set out below. a) Basis of preparation Concentrated Core Fund, the Macquarie IPO China Gateway Fund and the Macquarie Asia New Stars Fund have been prepared in accordance with International Financial Reporting Standards (IFRS). The financial statements have been prepared under the historical cost convention, as modified by the revaluation of financial assets and financial liabilities (including derivative financial instruments) at fair value through profit or loss. O~'ThefinancialstatementsoftheMacquarie IPO China The financial statements of MQ Infrastructure Strategies Fund have been prepared in accordance with IFRS. MQ Infrastructure Strategies Fund historically and presently measures its assets at carrying values which are either fair value or approximate fair value, as permitted by IFRS. The financial statements of the Sub-Funds are presented under a multi-column format. Each column represents a separate and individual reporting entity, namely Macquarie IPO China Concentrated Core Fund, Macquarie IPO China Gateway Fund, Macquarie Asia New Stars Fund and the MQ Infrastructure Strategies Fund. The Fund is not a reporting entity. 14

17 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE Summary of significant accounting policies (continued) a) Basis of preparation (continued) The preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires the Manager and the Trustee to exercise their judgment in the process of applying the accounting policies of each of the Sub-Funds. The term net assets refers to net assets attributable and redeemable by unitholders unless otherwise stated. New standards and amendments to standards that are not yet effective and have not been early adopted by the Sub-Funds Accounting standards and interpretations that have been issued or amended but are not yet effective have not been adopted by the Fund for the annual reporting period ended 30 June, The directors of the Fund are yet to assess the impact of these standards and interpretations but those likely to impact the Fund are: IFRS 9 - IFRS 9 was issued by the lass in November 2009 and introduces new requirements for the classification and measurement of financial assets effective from January 1, 2013, with early adoption permitted. Standards and interpretations that are not expected to have a material impact on the Fund have not been included. b) Foreign currency translation i) Functional and presentation currency In view of the international nature of the operations of each of the Sub-Funds, the amounts shown in these financial statements are presented in United States dollars ("") which are the Sub-Funds functional and presentation currency. The Manager considers the United States dollar to be the functional currency of the Macquarie IPO China Concentrated Core Fund, the Macquarie IPO China Gateway Fund, the Macquarie Asia New Stars Fund and the MQ Infrastructure Strategies fund due to units issued to unitholders, and the performance of each of these Sub-Funds being reported to unitholders in United States dollars. iij Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income. Translation differences on non-monetary financial assets such as financial assets at fair value through profit or loss are recognised on the statement of comprehensive income within the fair value net gains or losses. c) Financial assets at fair value through profit or loss i) Classification Each of the Sub-Funds classifies its investments in listed equity securities and collective investment schemes as financial assets at fair value through profit or loss. These financial assets are designated by the Manager at fair value through profit or loss upon inception. Financial assets designated as held at fair value through profit or loss upon inception are those that are managed and their performance evaluated on a fair value basis in accordance with the documented investment strategy of each of the Sub-Funds. The Manager evaluates the information about these financial assets on a fair value basis together with other related financial information. 15

18 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE Summary of significant accounting policies (Continued) c) Financial assets at fair value through profit or loss (continued) ii) Recognition/derecognition Regular-way purchases and sales of investments are recognised on the trade date - the date on which each of the Sub-Funds commits to purchase or sell the investment. Investments are derecognised when the rights to receive cash flows from the investments have expired or each of the Sub-Funds has transferred substantially all risks and rewards of ownership. ii) Measurement Financial assets held at fair value through profit or loss are initially recognised at fair value. Transaction costs are expensed in the statements of comprehensive income. Subsequent to initial recognition, all financial assets held at fair value through profit or loss are measured at fair value. Gains and losses arising from changes in the fair value of the "financial assets held at fair value through profit or loss" category are presented in the statements of comprehensive income in the year in which they arise. ivy Fair value estimation The fair value of financial instruments traded in active markets (such as trading securities) is based on quoted market prices at the year end date. The quoted market price used for listed equity securities held by each of the Sub-Funds is the current bid price for long positions and current ask price for short positions. The investments in the collective investment schemes are fair valued at the last published net asset value issued by the respective fund administrator. d) Income and expense Dividend income is recognised in the statements of comprehensive income when the right to receive payment by each of the Sub-Funds is established. Interest income is recognised in the statements of comprehensive income on a time-proportion basis using the effective interest method. Expenses are accounted for on an accruals basis and charged to the statements of comprehensive income as incurred. e) Payables Payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. f) Receivables Receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost using the effective interest method, less provision for impairment. g) Cash and cash equivalents Cash and cash equivalents include cash on hand and deposits held at call with financial institutions with.'.~original maturities ofthr8e months or less. 16

19 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE Summary of significant accounting policies (Continued) h) Amounts due from and due to brokers Amounts due from and due to brokers represent receivables for listed equity securities sold and payables for listed equity securities purchased that have been contracted for but not yet setted or delivered on the year end date, respectively. These amounts are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment for amounts due from brokers. A provision for impairment of amounts due from brokers is established when there is objective evidence that each of the Sub-Funds will not be able to collect all amounts due from the relevant broker. Significant financial difficulties of the broker, probability that the broker will enter bankruptcy or financial reorganisation, and default in payments are considered indicators that the amounts due from brokers are impaired. Once a financial asset or a group of similar financial assets has been written down as a result of an impairment loss, interest income is recognised using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating the interest income or interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts throughout the expected life of the financial instrument, or, when appropriate, a shorter period, to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, each of the Sub- Funds estimates cash flows considering all contractual terms of the financial instrument but does not consider future credit losses. The calculation includes all fees and points paid or received between parties to the contract that are an integral part of the effective interest rate, transaction costs and all other premiums or discounts. i) Units Units of each of the Sub-Funds are redeemable at the option of the unitholders and are classified as financial liabilities. The units can be put back to the respective Sub-Fund for cash equal to a proportionate share of the respective Sub-Fund's net asset value. The unit is carried at the redemption amount that is payable at the year end date if the unitholder exercises the right to put the units back to the respective Sub- Fund. Units are issued and redeemed at the holder's option at prices based on the Sub-Fund's net asset value per unit at the time of issue or redemption. The respective Sub-Fund's net asset value per unit is calculated by dividing the net assets attributable to the unitholders with the total number of outstanding units. In accordance with the provisions of the Explanatory Memorandum of each of the Sub-Funds, investment positions are valued based on the last traded market price for the purpose of determining the net asset value per unit for subscriptions and redemptions. However, as stated in note 2c), for the purpose of compliance with IFRS, investment positions are valued at bid/ask price. Consequently, the differences described above adjust the carrying amount of the net assets attributable to unitholders and are discussed in note 3. j) Proceeds and payments on subscriptions and redemption of units ~Tnenetassetvalue of each of the Sub-Funds. is computed daily. Prices for subscriptions and redemptions are based on the net asset value per unit calculated as at the close of business on the relevant valuation day in accordance with each of the Sub-Fund's Explanatory Memorandum. Proceeds and payments for units subscribed and redeemed are shown as movements in the statements of changes in net assets attributable to unitholders. k) Transaction costs Transaction costs are costs incurred to acquire financial assets or liabilities at fair value through profit or loss. They include fees and commissions paid to agents, advisors, brokers and dealers. Transaction costs, when incurred, are immediately recognised in the statements of comprehensive income as other expenses. 17

20 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE Summary of significant accounting policies (Continued) I) Taxation There is currently no taxation imposed on income of capital gains by the Government of the Cayman Islands. The only taxes payable by the Fund are withholding taxes of other countries applicable to certain investment income. As a result, no income tax liability or expense has been recorded in the financial statements. m) Reclassification of comparative balances Where necessary, prior year amounts have been amended to conform to new accounting standards adopted during the year and presentation in the current year. 3 Net assets attributable to unitholders In accordance with the provisions in the Explanatory Memorandum of each of the Sub-Funds, listed investments are stated at the last traded price on the valuation day for the purpose of determining net asset value per unit for subscriptions and redemptions and for various fee calculations. However, as stated in note 2c), the accounting policy of each of the Sub-Funds for the purpose of compliance with las 39 and for reporting purposes is to value its listed investments at the relevant bid/ask market prices on the year end date. As at 30 June 2010, the difference between the valuation of listed investments stated in the financial statements and the valuation methodology indicated in the Explanatory Memorandum of each of the Sub- Funds, results in an increase in the value of investments by: MACQUARIEIPO CHINA CONCENTRATED CORE FUND MACQUARIE IPO CHINA GATEWAY FUND MACQUARIE ASIA NEW STARS FUND MQ INFRASTRUCTURE STRATEGIES FUND , ,500 78, , ,037 38,782 8,895 The amounts of the adjustment recognised in the statements of comprehensive income during the year for the respective Sub-Funds are as follows: MACQUARIE IPO CHINA CONCENTRATED CORE FUND MACQUARIE IPO CHINA GATEWAY FUND MACQUARIE ASIA NEW STARS FUND MQ INFRASTRUCTURE STRATEGIES FUND , ,463 39,275 (8,895) 2009 (212,308) (686,298) (83,487) (18,956) Net assets attributable to unitholders at last traded market prices represent a liability in the statements of financial position, carried at the redemption amount that would be payable at the year end date if the unitholders exercised the right to redeem the units in the respective Sub-Funds. 4 Financial risk management a) Strategies in using financial instruments Each of the Sub-Funds' activities expose them to a variety of financial risks: market risk (including price risk, currency risk, and interest rate risk), credit risk and liquidity risk. The overall risk management programme of each of the Sub-Funds focuses on ensuring compliance with the respective Sub-Funds investment objective and seeks to maximise the returns derived for the level of risk to which the respective Sub-Funds is exposed. Financial risk management is carried out by the Manager. Each of the Sub-Funds uses different methods to manage different types of financial risks to which it is exposed. These methods are discussed further below. The Manager adopts the following investment objectives, policies and processes for managing the financial risk exposed. 18

21 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE Financial risk management (continued) a) Strategies in using financial instruments (continued) Macquarie PO China Concentrated Core Fund Investment objective The Sub-Fund invests in listed equities with a focus on PRe-related IPO Securities principally those listed in Hong Kong, US and Singapore. Policies and processes The Manager constructs an investment portfolio consisting of newly listed stocks that meet the Sub-Fund's quantitative and qualitative criteria based on independent research and investment techniques. When the Manager determines that new IPO Securities are suitable for the investment portfolio, the Manager may remove an IPO Security and re-balance the portfolio. In circumstances where the Manager makes an application for a security that will be listed and the Manager's allocation through the primary market is scaled back, secondary market purchases may be made. The Manager will determine the weightings it considers appropriate from time to time in its discretion. Cash and money market instruments will also be held to manage the liquidity within the Sub- Fund's portfolio. The number of IPO Securities to be held within the investment portfolio will be determined by the Manager from time to time. Macquarie PO China Gateway Fund Investment objective The Macquarie IPO China Gateway Fund's investment objective is to provide unitholders exposure to returns from initial public offerings and secondary market trading of equity securities of companies which have been recently listed. This is achieved:. directly by investing in equity securities or other related financial instruments which are or will be listed predominantly on stock exchanges in Hong Kong, Singapore, Taiwan or the United States of America (the "Direct Portfolio") and;. indirectly by investing in the Macquarie IPO China Concentrated Core Fund (the "Indirect Portfolio"). The exposure of the Sub-Fund is maintained by investing 70% to 100% in the Direct Portfolio and 0% to 30% in the Indirect Portfolio. Policies and processes In pursuit of this objective the Sub-Fund's Direct Portfolio will acquire a portfolio of recent IPO Securities. The IPO Securities to be included in the Direct Portfolio will be chosen by the Manager in accordance with the Manager's quantitative and qualitative investment criteria (this is described further below). The Manager will generally seek to acquire new IPO Securities for the Direct Portfolio through the initial public offering of the relevant IPO Securities or on the market after listing. The eligible universe of the Direct o~rortfolio includesolisted equities with a focus on IPO Securities listed in Hong Kong, Singapore, Taiwan and the United States. In the case of IPO Securities not listed in Hong Kong, Singapore or Taiwan, the IPO Securities must relate to companies which derive or are expected to derive a significant portion of their revenues from Greater China or Singapore. The Sub-Fund intends to invest no more than 30 per cent. of its Net Asset Value in IPO Securities which are listed in markets other than Hong Kong or Taiwan and which are not expected to derive a significant portion of their revenues from the PRC. Equity exposure in the secondary market may be achieved through investment in shares, depositary receipts, participation rights and potentially through other instruments which are linked to the performance of eligible.ipo securities such as participation notes, equity swaps and equity linked notes, provided that exposure via investments in such instruments (excluding ADRs and GDRs) shall not exceed 15% of the net assets of the Sub-Fund. The Manager will determine the investment portfolio by applying a variety of quantitative and qualitative 19

22 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2010 criteria. Examples include:. market capitalisation - the Sub-Fund will generally invest in those companies with a large market capitalisation (as a guide, this will generally be in excess of USD500 million); liquidity - the Manager may have regard to a company's actual or anticipated trading liquidity relative to the size of the Sub-Fund;. size of "free float" - the Manager may have regard to a company's free float relative to the size of the Sub-Fund. The Manager may exclude from the eligible universe stocks which would otherwise lead to an allocation by the Sub-Fund which comprises a significant portion of the free float; and. market diversification - the Manager may, if it considers appropriate, consider the level of concentration of recent IPOs in particular with respect to geographic region, market or industry sector or other factors that may lead to an undesirable level of concentration of investment risk, in determining whether to exclude stocks which may otherwise have been included in the eligible universe.. fundamental value- the Manager may consider valuation, qualitative and risk attributes in considering the inclusion of the IPO Securities in the portfolio. The Manager will determine an appropriate number of positions to best serve the investment objectives of the Sub-Fund having regard to the relative size of allocations that the Sub-Fund would need to make to individual positions compared to the available liquidity and likely market impact and transaction costs of trading those positions. The number and relative size of the positions may be adjusted from time to time. The Direct Portfolio may also comprise cash. Investment Strategy - Indirect Portfolio The Sub-Fund may invest up to 30% of its net assets in the Macquarie IPO China Concentrated Core Fund, i.e. the Indirect Portfolio. The Direct Portfolio may also acquire IPO Securities that are within the eligible universe of the Macquarie IPO China Concentrated Core Fund and the investments in the Direct and Indirect Portfolio will in aggregate comply with investment restrictions applicable to the Sub-Fund. The Manager, in its capacity as the manager of the Macquarie IPO China Concentrated Core Fund, will not be entitled to any preliminary charge, management fee, administration fee and performance fee (if any) payable in respect of any component of the Sub-Fund that is invested in the Macquarie IPO China Concentrated Core Fund. The Sub-Fund's investments in the Macquarie IPO China Concentrated Core Fund shall be the only investment by the Sub-Fund in other collective investment schemes. 20

23 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE Financial risk management (continued) a) Strategies in using financial instruments (continued) Macquarie Asia New Stars Fund Investment objective The investment objective of the Macquarie Asia New Stars Fund is to provide unitholders with exposure returns from:. Small market capitalisation equity securities with exposure to anyone or more countries within Asia.. Initial public offerings and newly listed small market capitalisation equity securities with exposure to any one or more countries within Asia. Policies and processes The investment portfolio includes small market capitalisation equity securities as defined by the Manager. The Manager selects the equity securities based on both quantitative and qualitative investment techniques. In respect of the investments in initial public offerings or those recently listed, if allocations from initial public offerings are limited, the Manager will purchase the shortfall of the targeted equity securities from the stock exchanges after listing. The Manager intends to hold up to 30 recently listed equity securities, comprising up to 30% of the total investment balance, whereby each equity security may have a weighting up to 2% of the total investment balance. The Manager may utilize several risk management filters to manage the market risk by limiting up to 147 investment positions in equity securities each with a maximum weighting of 2% of the total investment balance. The Manager may diversify the level of concentration in investments in equity securities in terms of geographic region and market sector. MQ Infrastructure Strategies Fund Under a resolution passed on 22 May 2009, management resolved to terminate the MQ Infrastructure Strategies Fund on 30 September b) Market risk Market risk comprises of three main components: price risk, currency risk and interest rate risk. i) Price risk Market price risk is the risk that the value of the investments held by the respective Sub-Funds will fluctuate as a result of changes in market prices (other than those arising from currency risk or interest rate risk). Price risk is monitored by the Manager on an ongoing basis and is managed through diversification of the investment portfolio and following the policies to minimise exposure to price risk as follows: l~nverail portfolio exposure- managed by ensuring Jhat the. overall exposure of the portfolio is in compliance with the investment objective of the respective Sub-Funds;. Stocks limits - manage exposure to any single stock and ensure diversification; and. Country limits - manage exposure to any single country and ensure diversification across allowable countries. Details in terms of how the price risk is managed by the Manager for each of the Sub-Funds are discussed in note 4a) above. 21