Introduction. Organisation. Message from the Fund management company. Management report for the financial year Statement of net assets

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1 ANNUAL REPORT 2016

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3 CONTENTS Introduction 2 Organisation 3 Message from the Fund management company 4 Management report for the financial year Statement of net assets 6 Statement of income 7 Mortgages and mortgage-backed liabilities 8 Compensation rates 9 List of purchases and sales of assets during the financial year 10 Inventory of properties 11 Indices calculated according to SFAMA guidelines 12 Valuation principles and basis for the calculation of the net asset value 13 Presentation of the properties 14 Changes to the Fund contract 18 Other Information 18 Report of the audit company 20 VSRF Annual Report

4 INTRODUCTION The Valres Swiss Residential Fund (VSRF) has been established, under Swiss law, as a contractual investment fund of the "real estate investment fund" category in accordance with the Swiss Federal Act on Collective Investment Schemes of 23 June, The fund contract has been established by Valres Fund Management SA, as the fund management company, with the approval of Bank J. Safra SA in Basel, as the custodian bank, and subject to the Federal Financial Market Supervisory Authority (FINMA) as authorised by the latter for the first time on 15 October The real estate investment fund is based on a collective investment scheme (the fund contract) under which the fund management company undertakes to have the investors participate in the real estate investment fund on a pro rata basis in relation to the units they have acquired, autonomously and in their own name. The custodian bank is a party to the fund contract, in accordance with the tasks entrusted to it by law and by the fund contract. Investor eligibility is restricted to qualified investors within the meaning of Art. 10 paragraphs 3 and 4 CISA, in conjunction with Art. 6 paragraph 1 CISO. The real estate investment fund is not divided into unit classes. VSRF's objective is to preserve the capital on the longer term and to ensure the distribution of an appropriate income. The fund management company of the real estate investment fund shall invest the assets of the investment fund in real estate securities in Switzerland and shall ensure that 80% of the fund's assets at least are invested in French-speaking Switzerland. This real estate fund invests mainly in residential buildings and properties used for commercial purposes, as well as other in permitted assets pursuant to the fund contract. The fund management company of the real estate investment fund ensures that the major part of the fund's assets is invested in residential or mixed-use properties where the residential element is dominant. As at , all the properties of the investment fund are owned directly or indirectly. Direction Valres Fund Management SA Rue de la Croix d Or Geneva Custodian bank Bank J. Safra Sarasin SA Elisabethenstrasse Basel 2 VSRF Annual Report 2016

5 ORGANISATION Direction Valres Fund Management SA Rue de la Croix-d'Or Geneva Custodian bank Bank J. Safra Sarasin SA, Basel Audit company PricewaterhouseCoopers S.A., Geneva Board of Directors Raffaele Rossetti Philippe Beckers Ralph Kattan Paul-André Roux President Vice-president Delegated Administrator Administrator Direction Ralph Kattan Philippe Frossard Boris Vetsch CEO / Delegated Administrator Real Estate Manager Director / CFRO Gabriel Hamou Executive Director (until 15 July 2016) Permanent Experts Yves Cach le Lausanne Martin-Paul Broennimann Geneva François Thorens Victorine van Zanten Neuchâtel Fribourg Real estate agencies Naef Immobilier Genève SA Geneva Petignat & Amor immobilier SA Genf RS Servim Sàrl Vaud Rosset SA et Régie Rosset & Cie Fribourg / Geneva Bernard Nicod SA Vaud Privera SA Fribourg VSRF Annual Report

6 MESSAGE FROM THE FUND MANAGEMENT COMPANY At the end of a second financial year full of new opportunities, it is with great pleasure that we present the second annual report of the investment fund Valres Swiss Residential Fund (VSRF). We thank all our investors for the trust they have shown us and all the partners who have supported us. Building on the successes achieved in 2015, the Valres team developed in 2016 and relies more than ever on both financial and real estate skills. Through the integration of real estate profiles in the management of work sites, the administration and monitoring of agents, Valres has succeeded in strengthening the quality of its know-how and expertise. In 2016, the investment fund VSRF saw its total assets grow by 430% following two capital increases in May and December. These capital increases have allowed us to broaden the base of our investors and ensure greater diversification of our unit holders. During the year, the portfolio was expanded by seventeen new buildings, which meet our selection criteria and our Responsible Values. These new acquisitions will allow us to consolidate our strategy of creating value in the years to come. The sustainability of this strategy has already been confirmed in the past year. The conclusion of some of our construction sites and the constant cooperation with our tenants have ensured excellent returns. Based on a quality portfolio and following the two capital increases, the dividend paid by the investment fund increased from CHF 3 in 2015 to CHF 3.20 in Valres Fund Management SA, a fund management company entirely dedicated to real estate, acts independently and transparently in the interests of investors. Its identity is based on the notion of [VAL]UES [RES]PONSIBLE, based on the following management principles: The search for a long-term sustainable return and the preservation of the underlying assets' value; A responsible approach socially, by integrating the relationship with the tenants in a long term logic; A responsible approach environmentally, based on a systematic quest to optimise the energy efficiency of the assets. For the years to come, the objective will remain the creation of a portfolio of properties with high potential while keeping with the values of the company. The whole Valres team thanks you for your confidence and wish you a good reading of this report. Ralph Kattan, CEO Valres Fund Management SA 4 VSRF Annual Report 2016

7 MANAGEMENT REPORT FOR THE FINANCIAL YEAR 2016 Results As of 31 December 2016, the total amount of revenue amounted to CHF 8,299, for a total real estate net asset of CHF 150,091,616. The net income achieved by the investment fund reached CHF 4'495'951,41. This result allows the fund to distribute a dividend of CHF 3.20 per unit (CHF 2.45 net of tax and CHF 0.75 subject to the withholding tax). The investment fund's main indicators include an EBIT margin of 73.16% for the year 2016, a return on equity (ROE) of 4.04% and a return on investment of 6.71%. Return to the previous financial year The purchases During this second financial year, the investment fund selectively acquired seventeen properties for a total amount of CHF 110,890,750. Seven acquisitions were carried out in the Canton of Vaud. In Lausanne, Place Grand-St-Jean 2, Chemin de Renens and Place du Tunnel In Montreux, chemin de Réchon 7. In Payerne, rue de Chaumont 3-5. In Lonay, chemin des Mouettes 1 and in Prangins, route de l aérodrome Six acquisitions were carried out in the Canton of Geneva. In Geneva, boulevard des Philosophes 7, avenue Rothschild 21, av. Théodore-Weber 9, avenue de Lyon 71 and boulevard des Tranchées 4. In Meyrin, route du Mandement 17. Four acquisitions were carried out in the Canton of Fribourg. In Bulle, route de la Gruyères 56, in La Tour de Trême, route des Agges 1, in Granges-Paccot, route de Chamblioux 37 and in Fribourg, route des Arsenaux 9/ rue du Simplon 9. All these properties were selectively acquired in accordance with our criteria: situation, return and potential of development as well as value creation for the unit holders. Value creation In Fribourg, the works for the construction of an apartment in the attic and for the renovation of two studios were completed during this financial year. In Vevey, the construction of six apartments and business spaces started in autumn. In La Plaine, the project for the creation of six "townhouses" is pending authorisation and will be implemented in Densification projects are also at the preliminary studies stage for properties in Prangins, avenue de Lyon 71 in Geneva and route du Mandement 17 in Meyrin. During the financial year, three apartments were constructed (use of the attic and transformation of commercial spaces into apartments), seventeen apartments were renovated to meet our tenants' requirements, illustrating the VALues RESponsible so dear to our company. All of these renovations are designed to ensure a sustainable return on our properties. Prospects for the future During the third financial year, the investment fund will continue to develop its portfolio with well-located properties in the centre of the major cities of the French-speaking part of Switzerland, at the heart of infrastructure and rental demand. It will also seek to diversify geographically its portfolio by acquiring properties mainly in all French-speaking Cantons. VSRF Annual Report

8 STATEMENT OF NET ASSETS CHF Assets Cash holdings, balances on postal and bank accounts at sight Properties Development land, properties under construction Residential properties Commercial properties Mixed-use properties Total properties Other assets Total assets Liabilities Short-term liabilities Short-term interest-bearing mortgages and other mortgage-backed liabilities Other short-term liabilities Long-term liabilities Long-term interest-bearing mortgages and other mortgage-backed liabilities Other long-term liabilities Total liabilities Fund s net assets before estimated liquidation taxes Estimated liquidation taxes Net assets of the fund Change in the net assets Fund s net assets at beginning of the financial year Distribution Balance from sales and purchases of units Total income of the financial year Fund s net assets at end of the financial year Change in the number of units (redeemed and issued) Statement at beginning of the financial year Units issued Units redeemed Number of units in circulation Net asset value per unit Additional information (annex 3 Art. 95 CISO-FINMA) Value of properties depreciation account Value of reserves account for future repairs Balance on account of earnings retained for reinvestment Number of units due to be redeemed at end of next financial year 6 VSRF Annual Report 2016

9 STATEMENT OF INCOME CHF Income Revenue from postal and bank accounts Rental income (gross income generated) Interim interest capitalised Other income Current income paid in by new subscribers Total income Expenses Mortgage interest and interest on mortgage-backed liabilities Other interest due Maintenance and repairs Management of properties: Property-related costs Management expenses Valuation and auditing expenses Direct taxes Banking fees of publishing, printing, other Remuneration as per fund regulations for the fund management company Remuneration as per fund regulations for the custodian bank Other expenses Total expenses Net income Realised capital gains and losses Realised income Unrealised capital gains and losses, including liquidation taxes Total income Appropriation of the net income Realised income Capital gain carried forward from the previous financial year Ordinary income carried forward from the previous financial year Net income available for distribution Capital distribution VSRF Annual Report

10 MORTGAGES AND MORTGAGE-BACKED LIABILITIES Detail of the mortgages and mortgage-backed liabilities Type CHF Rate Maturity Short-term debt Variable % Variable % Variable % Libor 1 month % Libor 3 months % Libor 3 months % Fixed % Fixed % Fixed % Libor 1 month % Total short-term debt Long-term debt Fixed % Fixed % Fixed % Fixed % Fixed % Fixed % Fixed % Fixed % Fixed % Fixed % Fixed % Fixed % Total long-term debt from 1 to 5 years Fixed % Fixed % Fixed % Fixed % Fixed % Fixed % Total long-term debt 5 years and longer Total long-term debt Total % Weighted average rate 8 VSRF Annual Report 2016

11 COMPENSATION RATES Information on rates applied in accordance with the fund contract Maximum rate per year as per sales prospectus Applied rate Payments to the Fund management company Management fee 1.00 % 0.50 % Issuing commission 5.00 % 1.65 %and 2.00 % Compensation for activities involving the purchase or the sale of properties 2.00 % 2.00 % Fee for activities when carrying out feasibility studies and acting on behalf of the Project owner 3.00 % 3.00 % Fee for activities when carrying out the project development and monitoring fee usually applied by the architects (SIA) 5.00 % Compensation for the management of properties 6.00 % 4.00 %and 6.00 % Payments to the Custodian bank Fee for the administration, the handling of payment transactions, the supervision of the fund management company 0.06 % 0.06 % Commission for the distribution of income (on the amount paid) 0.50 % 0.50 % Transparency of the management fees The fund management company may pay to distributors, from the management fee, commissions as reimbursements in respect of distribution activities, for the sale and the intermediation of fund's units (Fund Contract 20). The fund management company does not grant rebates within the meaning of SFAMA's transparency guidelines dated 12 June VSRF Annual Report

12 LIST OF PURCHASES AND SALES OF ASSETS DURING THE FINANCIAL YEAR Purchases Canton Commune Address Type Date of purchase Purchase price CHF VD Lausanne Place Grand St-Jean 2 Commercial GE Geneva Bvd des Philosophes 7 ¹ Mixed VD Montreux Chemin du Réchon 7 ¹ Residential GE Geneva Rue Rothschild 21 ¹ Residential GE Geneva Av. Théodore-Weber 9 ¹ Residential FR Bulle Rue de Gruyères 56 Mixed GE Geneva Rue de Lyon 71 ¹ Residential VD Lausanne Ch. Renens 55/57- Av. Morges 92 ¹ Mixed VD Payerne Rue du Chaumont 3-5 ¹ Residential VD Lausanne Place du Tunnel ¹ Commercial VD Lonay Ch. Des Mouettes 1 ¹ Commercial Floor property FR Bulle Rue des Agges/Rte des Granges ¹ Mixed FR Granges-Paccot Route de Chamblioux 37 ¹ Residential VD Prangins Route de l'aérodrome Commercial FR Fribourg Route des Arsenaux 9 Rue du Simplon 13 Commercial GE Meyrin Route du Mandement 17 Residential GE Geneva Bvd des Tranchées 4 Mixed Total purchases Indirect acquisition Sales No transaction during the period from 1 January to 31 December VSRF Annual Report 2016

13 INVENTORY OF PROPERTIES Canton Commune Address Type Rental income GE Meyrin Route du Mandement 17 Residential GE Geneva Place du Bourg-de-Four 33 Mixed GE Geneva Bvd des Philosophes 7 ¹ Mixed GE Geneva Rue de Lyon 71 ¹ Residential GE Geneva Bvd des Tranchées 4 Mixed GE Chêne-Bougeries Rue de Chêne-Bougeries 17 Mixed GE Chêne-Bougeries Rue de Chêne-Bougeries 19/ Chemin de la Fontaine 3-5 Mixed GE Chêne-Bougeries Chemin du Pont-de-Ville 18 Commercial GE Geneva Rue Rothschild 21 ¹ Residential GE Geneva Av. Théodore-Weber 9 ¹ Residential GE La Plaine/Dardagny Route de Challex 4-6 Residential VD Vevey Rue des Bosquets Mixed VD Lausanne Place Grand St-Jean 2 Commercial VD Montreux Chemin du Réchon 7 ¹ Residential VD Lausanne Ch. Renens 55/57- Av. Morges 92 ¹ Mixed VD Prangins Route de l'aérodrome Commercial VD Payerne Rue du Chaumont 3-5 ¹ Residential VD Lausanne Place du Tunnel ¹ Commercial VD Lonay Ch. Des Mouettes 1 ¹ Commercial Floor property FR Bulle Rue de Gruyères 56 Mixed FR Bulle Rue des Agges/Rte des Granges ¹ Mixed FR Granges-Paccot Route de Chamblioux 37 ¹ Residential FR Fribourg Rue Romont 3 Commercial FR Fribourg Route des Arsenaux 9 Rue du Simplon 13 Commercial Total Indirect holding Recap Type Rental income Development land and constructions Residential properties Residential properties with a distinct and permanent right (DDP) Commercial properties in condominium ownership Mixed-use properties ² Commercial properties Total Commercial 29% / Residential 71% In accordance with Article 84 paragraph 2 CISO-FINMA, the investment fund's properties are classified in the valuation category of investments whose value cannot be based on market-observed parameters and are valued using appropriate valuation models, taking account of the current market circumstances. VSRF Annual Report

14 INDICES CALCULATED ACCORDING TO SFAMA GUIDELINES Rent default rate 6.00 % 0.90 % Borrowing ratio % % Operating profit margin (EBIT margin) ¹ % % Operating expense ratio (TER REF GAV) ² 0.80 % ³ 0.43 % Operating expense ratio (TER REF MV) ² 1.51 % ³ 0.57 % Return on Equity (ROE) 4.04 % 4.90 % Return on Invested Capital (ROIC) 3.20 % 4.32 % Distribution yield 2.81 % 2.86 % Payout ratio % % Agio/Disagio 4.58 % n/a Return on investment 6.71 % 5.16 % Fund performance Valres Swiss Residential Fund 7.05 % 5.00 % SXI Real Estate Funds TR 6.85 % 4.17 % 1. Exceptional expenses incurred by the real estate companies before their acquisition by the Investment fund were not deducted when determining EBIT margin. If those expenses had been taken into account, EBIT margin would have been 65.39%. 2. Exceptional expenses incurred by the real estate companies before their acquisition by the Investment fund are not included. If those expenses had been taken into account, TER REF GAV and TER REF MV would have been 1.14% and 2.16% respectively. 3. annualized (FY 2015 over 13 months) Reference to past performance and results is not necessarily a reliable indicator of current of future performance and results. Performance and return data do not take account of the commissions and fees incurred on the issue and redemption of units and are calculated considering that gross dividend has been reinvested immediately in the investment fund. 12 VSRF Annual Report 2016

15 VALUATION PRINCIPLES AND BASIS FOR THE CALCULATION OF THE NET ASSET VALUE Valuation principles and basis for the calculation of the net asset value In accordance with applicable provisions of the legislation and with the guidelines of the Swiss Funds & Asset Management Association (SFAMA) on real estate investment funds dated 2 April 2016, the fund properties (including development land and properties under construction) were valued by independent valuation experts using the "Discounted Cash Flow" (DCF) method. This valuation was based on the potential of return for each property and consists in projected future income and expense on a given period. The net cash flows, calculated in this way, are discounted and the sum of these amounts and the residual value of the property make it possible to obtain the market value. This is the fair market value of the property at the time of valuation. Each expert appreciates the evolution of the properties independently, models the DCF calculation according to parameters that are specific to it and determines the discount rate. The net asset value of the Investment fund is calculated annually and at each issue of units. The net asset value of a unit is determined by the market value of the fund s assets, minus all the investment fund s liabilities, divided by the number of units in circulation. The properties are valued at their market value. This value is the amount that could be obtained when a property is sold under normal market conditions. On a case by case basis, especially when buying and selling properties, potential opportunities are exploited at best in the interest of the Investment fund. It can therefore result in differences from evaluations. The statement of net assets and the statement of income are established in accordance with Article 95 CISO-FINMA as well as with applicable self-regulatory rules. Mr. Martin-Paul Broennimann's method This valuation was based on the potential of return for each property and consists in projected future income and expense on a 10-year period, with a final value in year 11. The net income determined according to this method is reduced by provisions for future work estimated applying the formula of Ross. In the formula of Ross, the amount of future work is the cumulative depreciation of a property, established according to the economic age, and is determined according to a kind of "calculation of the speed of falling". The initial speed of depreciation of a property increases gradually over its useful life. Thereafter, the net cash flows are discounted and the sum of these amounts and the residual value of the property make it possible to obtain the market value. The abovementioned provisions for future work being calculated on the basis of the economic age of the property, these are generally higher than the provisions established according to other dynamic methods valuing performance. As abovementioned specifics are taken into account when determining the discount rate, net discount rates determined using the method described above are generally lower than those established according to other dynamic methods valuing performance. The weighted average net discount rate for the year under review is 3.56% and the discount rates used to value the properties vary from 3.45% to 3.76%. Mr. Yves Cach le's method The method used is a DCF method applied over 10 years with a final value in year 11. The discount rates of both periods are determined by the Investment fund. The rental statement is categorised according to the use type (apartments/commercial/parking) and represents the latest rental statement determined from the property's accounts. The growth rates applied correspond to the level of rents and to their potential compared with the local market. The increase in rents as a result of the implementation of works is recorded only once in year n+11. This item is estimated using the Fracheboud method. The expenses of the property are the average of current maintenance positions as they are shown in the property's accounts of the past 3 years. The obsolescence is estimated based on the EPIQR method when the assignment of the object allows this. These works are fully integrated in year 10, adding the increase of obsolescence observed between year n (= estimate EPIQR) and year n+9, and deducting any emergency work accounted for in previous years. The weighted average net discount rate for the year under review is 4.10% and the discount rates used to value the properties vary from 4.02% to 4.28%. VSRF Annual Report

16 PROPERTY OVERVIEW Rue de Chêne-Bougeries 17 19, Ch. de la Fontaine 3-5, Ch. du Pont-de-Ville Chêne-Bougeries, GE 1050 m² 680 m² % Route de Challex La Plaine/Dardagny, GE 1422 m² 0 m² % Place du Bourg-de-Four Geneva, GE 175 m² 90 m² % Bvd des Philosophes Geneva, GE 934 m² 569 m² % Rue Rothschild Geneva, GE 980 m² 0 m² % Av. Théodore-Weber Geneva, GE 1807 m² 80 m² % 14 VSRF Annual Report 2016

17 Rue de Lyon Geneva, GE 2050 m² 26 m² % Bvd des Tranchées Geneva, GE 583 m² 440 m² % Route du Mandement Meyrin, GE 1102 m² 685 m² % Route de l'aérodrome Prangins, VD 224 m² 864 m² % Rue des Bosquets Vevey, VD 300 m² 300 m² % Place Grand St-Jean Lausanne, VD 509 m² 1053 m² % VSRF Annual Report

18 Chemin du Réchon Montreux, VD 540 m² 0 m² % Ch. Renens 55/57 Av. Morges Lausanne, VD 616 m² 310 m² % Place du Tunnel Lausanne, VD 595 m² 1076 m² % Rue du Chaumont Payerne, VD 831 m² 0 m² % Ch. Des Mouettes Lonay, VD 0 m² 1214 m² % Rue de Gruyères Bulle, FR 454 m² 210 m² % 16 VSRF Annual Report 2016

19 Rue des Agges/ Rte des Granges 1630 Bulle, FR 680 m² 200 m² % Route de Chamblioux Granges-Paccot, FR 816 m² 0 m² % Rue de Romont Fribourg, FR 212 m² 230 m² % Route des Arsenaux 9 Rue du Simplon Fribourg, FR 630 m² 5354 m² % List of contractual payment obligations for property purchase, construction orders and investments in property. No contractual payment obligation at the closing date as at VSRF Annual Report

20 CHANGES TO THE FUND CONTRACT The Fund contract in force as at 15 October, 2014 underwent changes, which have been published in the journal of the Feuille officielle suisse du commerce on 15 September, These changes have been notified to the Federal Financial Market Supervisory Authority (FINMA) and approved by the latter on 31 October, 2016, with entry into force of the fund contract on 1 November, Most of the changes was the change of custodian bank of the Investment fund. FURTHER INFORMATION Art. 67 CISO on compliance with investment regulations stipulates that real estate investment funds must comply with the investment restrictions within two years of launch. In the case of the investment fund VSRF, the date is set for List of tenants representing more 5% of the rental income No tenant has a rental income equal to or greater than 5% of the total rental income. Information on derivatives: The investment fund does not include derivative financial instruments. Real estate companies in the investment fund Different real estate companies are wholly owned by the Investment fund. These companies are globally integrated in the Investment fund's accounts and close their accounts on 31 December. List of the real estate companies and their property ownership Société Immobilière Philosophes-Résidence SA, Geneva Property Rue des Philosophes 7, Geneva Montreux-Lorraine SA, Clarens Property Rue de Réchont 7 in Montreux Société Immobilière des Buis SA, Geneva Property Rue de Rothschild 21, Geneva SI TRITON SA, Geneva Property Avenue Théodore-Weber 9, Geneva Capital Real Estate SA, Schwytz Property Rue de Lyon 71, Geneva Property Avenue de Morges 92/Chemin de Renens 55/57, Lausanne Property Rue de Chaumont 3-5, Payerne Property Place du Tunnel 13-14, Lausanne Property Chemin des Mouettes 1, Lonay Property Route des Granges/Rue des Agges, Bulle Property Route de Chamblioux, Granges-Paccot 18 VSRF Annual Report 2016

21 DISTRIBUTION OF BUILDINGS Geographical location of buildings Region distribution of buildings Acquisition type Distribution by Type Geneva 11 Vaud 8 Fribourg 5 Direct 13 Indirect 11 Residential 8 Commercial 7 Mixed 9 VSRF Annual Report

22 REPORT OF THE AUDIT COMPANY Summary report of the audit company under the Swiss Collective Investment Schemes Act concerning Valres Swiss Residential Fund's annual accounts As audit company under the Federal Act on Collective Investment Schemes, we have audited the accompanying annual accounts of the investment fund Valres Swiss Residential Fund which comprises the statement of net assets and the statement of income, the statement of the appropriation of available earnings and the disclosure of the total costs as well as the supplemental disclosures in accordance with Art. 89 paragraph 1 lit. b h and Art. 90 of the Swiss Collective Investment Schemes Act (CISA), for the period from 1 January 2016 to 31 December Responsibility of the Board of Directors of the Fund Management Company The Board of Directors of the Fund Management Company is responsible for the preparation of the annual accounts in accordance with the requirements of the Swiss Collective Investment Schemes Act, the related ordinances as well as the fund contract and the sales prospectus. This responsibility includes designing, implementing and maintaining an internal control system relevant to the preparation of annual accounts that are free from material misstatement, whether due to fraud or error. The Board of Directors of the fund management company is further responsible for selecting and applying appropriate accounting policies and making reasonable accounting estimates. auditor considers the internal control system relevant to the preparation of the annual accounts in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the existence and effectiveness of the internal control system. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of accounting estimates made, as well as evaluating the overall presentation of the annual accounts. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Audit Opinion In our opinion, the financial statements for the period from 1 January 2016 to 31 December 2016 comply with the Swiss Collective Investment Schemes Act, the related ordinances as well as the fund contract and the sales prospectus. Report on other legal requirements We confirm that we meet the legal requirements on licensing according to the Auditor Oversight Act (AOA) as well as the legal requirements on independence (Art. 11 AOA) and that there are no circumstances incompatible with our independence. Responsibility of the audit company according to the Swiss Collective Investment Schemes Act Our responsibility is to express an opinion on these annual accounts based on our audit. We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the annual accounts. The procedures selected depend on the auditor s judgement, including the assessment of the risks of material misstatement of the annual accounts, whether due to fraud or error. In making those risk assessments, the PricewaterhouseCoopers SA Jean-Se bastien Lassonde Thibault Hepp Expert Auditor Expert Auditor Lead Auditor Geneva, 28 April 2017 The audit company audited the French version of the annual report. Therefore the summary annual report exclusively refers to this version. 20 VSRF Annual Report 2016

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24 Valres Fund Management SA Rue de la Croix d Or Geneva T F info@valres.ch Member