MCB Unit Trust Interim report and accounts For the period ended September 30, 2018

Transcription

1 MCB Unit Trust Interim report and accounts For the period ended September 30, 2018 MCB Unit Trust 1

2 2 MCB Unit Trust

3 MCB Unit Trust Interim report and accounts For the period ended September 30, 2018 TABLE OF CONTENTS Directory 4 The Trust 5 Manager s Report 7 14 Investment Objectives & Policy Financial Statements Statement of Financial Highlights MCB Unit Trust 3

4 MCB Unit Trust Directory Trustee Manager Custodian Registrar Auditors Multiconsult Trustees Ltd c/o CIM Trustees Mauritius Ltd Les Cascades Building 33 Edith Cavell Street, Port Louis Republic of Mauritius Tel: MCB Investment Management Co Ltd Level 9, MCB Centre Sir William Newton Street, Port Louis Republic of Mauritius Tel: The Mauritius Commercial Bank Ltd 9-11 Sir William Newton Street Port Louis Republic of Mauritius Tel: MCB Registry & Securities Ltd Level 9, MCB Centre Sir William Newton Street, Port Louis Republic of Mauritius Tel: BDO & Co. 10, Frère Félix de Valois Street Port Louis Republic of Mauritius Tel: Principal Distributor MCB Stockbrokers Ltd Level 2, MCB Centre Sir William Newton Street, Port Louis Republic of Mauritius Tel: Collective Investment Scheme under Mauritian Law 4 MCB Unit Trust

5 The Trust The Trust The MCB Unit Trust (the Trust ) was initially established in Mauritius on 19 August 1994 by way of a Trust Deed. The Trust and its sub-funds (collectively the Funds ) are authorised as Collective Investment Scheme under the Securities Act As an authorised Collective Investment Scheme, the Funds comply with the Securities Act 2005 and the Securities Act (Collective Investment Schemes and Closed-End Funds) Regulations The Funds have not been registered for distribution in any other jurisdiction than Mauritius. The Trust consisted of the following 10 sub-funds as at September 30, 2018: MCB General Fund MCB Tracker Fund MCB Yield Fund MCB Domestic Equities Fund MCB Overseas Fund MCB Bond & Currency Fund MCB 2025 Target Date Fund MCB 2030 Target Date Fund MCB 2035 Target Date Fund MCB 2040 Target Date Fund MCB Unit Trust 5

6 Members of the CIS Committee The members of the CIS Committee are as follows: Jeremy Paulson-Ellis Jeremy Paulson-Ellis was one of the founding directors of the Genesis Group, a specialist institutional investment manager in Emerging Markets and was the Chairman from its formation in January 1989 until his retirement in June Prior to that he was Chairman of Vickers da Costa following its takeover by Citicorp in Vickers da Costa was an international Londonbased stockbroker with substantial international operations particularly in the Asia Pacific region. Earlier in his career for Vickers he was involved in the management of the first offshore fund formed to invest in Japan and participated in the development and launch of the first country funds for South Korea and Taiwan, and the second for Thailand while also working on the development of local Stock Markets. This exposure to the development of Stock Markets and the direction of an institutional investment manager brings to the Board extensive experience which complements the existing knowledge base within the Mauritian marketplace. Michaël Naameh Mr Michael Naameh is an economist and specialist in sovereign asset and liability management, emerging markets and financial sector development. He had a long career with Crown Agents for Overseas Governments and Administrations where he served as director of investment management and advisory services. Prior to joining Crown Agents, Michael was a senior consultant with an international firm of actuaries. He has published widely on central bank reserve management, pension fund management, risk management and financial sector development. Michael holds a BA (Hons) in Business Studies and an MSc in International and Monetary Economics and is a member of the Institute of Chartered Financial Analyst (CFA). Bernard d Hotman de Villiers Mr. Bernard d Hotman de Villiers is a holder of a Licence en Droit delivered by the Faculté de droit de l Université de la Réunion and is practicing as a notary since Furthermore, he has also been the Chairman of the Chamber of Notaries in 2003 and MCB Unit Trust

7 Manager s Report Quarter ended 30 th September 2018 Domestic Equities Market Review Domestic indices were marginally up +0 3%. Turnover stood at Rs835m, with 55.5% of the trades being driven by Banks, Insurance and Finance cluster. The forthcoming amalgamation news of ENL Commercial, ENL Finance Ltd, ENL Land Ltd and ENL Limited, with and into La Sablonniere Ltd. Explains the double digit rise in the counter. ENL Land Ltd has also redeemed its preference shares on the 17 th October 2018 at Rs40. The Board of Belle Mare Holding Ltd. proposed the adoption of a new constitution, the creation of restricted redeemable shares, the distribution of Rs60.4m as special dividend, a right issue of Rs725m in the ratio 3:10 at Rs40.00 and a change of name to BMH Ltd. Following the acquisition of 19.9% stake in Hotelest and crossing the threshold of 50%, BMH will proceed with a mandatory offer to the remaining shareholders at Rs Given Hotelest is the majority shareholder of Constance Hotel Services Ltd (CHSL), BMH is making a mandatory offer to shareholders of CHSL at Rs The Board of Directors of Mauritius Chemical and Fertilizer Industry Limited (MCFI) also announced that it intends to acquire Bychemex at Rs7.03 and the remaining 93.47% of the share capital of Chemco, not held by it, at Rs This acquisition will bring synergistic opportunities, allowing MCFI to benefit from competencies of the two companies. MCB Unit Trust 7

8 Top Gainers and Losers 1. Semdex 2. Demex Les Gaz Industriels Ltd Southern Cross Tourist Compagnie Immobiliere Ltée Medical & Surgical Centre Ltd Livestock Feed Ltd 22.1% 19.0% 18.5% 17.7% 16.3% ABC Banking Corporation Ltd RHT Holding Ltd MFD Group Ltd Ciel Textile Ltd -6.3% -6.9% -7.5% -10.8% Morning Light -29.6% Domestic indices were marginally up +0 3%. Turnover stood at Rs835m, with 55.5% of the trades being driven by Banks, Insurance and Finance cluster. The forthcoming amalgamation news of ENL Commercial, ENL Finance Ltd, ENL Land Ltd and ENL Limited, with and into La Sablonniere Ltd. explains the double digit rise in the counter. ENL Land Ltd has also redeemed its preference shares on the 17 th October 2018 at Rs40. The Board of Belle Mare Holding Ltd. proposed the adoption of a new constitution, the creation of restricted redeemable shares, the distribution of Rs60.4m as special dividend, a right issue of Rs725m in the ratio 3:10 at Rs40.00 and a change of name to BMH Ltd. Following the acquisition of 19.9% stake in Hotelest and crossing the threshold of 50%, BMH will proceed with a mandatory offer to the remaining shareholders at Rs Given Hotelest is the majority shareholder of Constance Hotel Services Ltd (CHSL), BMH is making a mandatory offer to shareholders of CHSL at Rs The Board of Directors of Mauritius Chemical and Fertilizer Industry Limited (MCFI) also announced that it intends to acquire Bychemex at Rs7.03 and the remaining 93.47% of the share capital of Chemco, not held by it, at Rs This acquisition will bring synergistic opportunities, allowing MCFI to benefit from competencies of the two companies. 8 MCB Unit Trust

9 Foreign equity review Global equity markets witnessed mixed performance during the third quarter (Q3). Developed markets marked gains, while political uncertainty and trade concerns weighed on emerging markets. US equities advanced in Q3 to significantly outperform other major regions. Economic growth and earnings data remained robust, and this ultimately overshadowed simmering concerns around the escalating US-China trade war. The US initially targeted USD 34 billion of Chinese products with a 25% tariff in early July. Tariffs on another USD 16 billion began in late August, before a 10% tariff was implemented on a further USD 200 billion of Chinese goods in September (set to rise to 25% in January). Despite these measures, the US equity bull market became the longest in history on 22 August. Over the quarter, the information technology and healthcare sectors were boosted by a slew of robust earnings. Materials companies struggled with potentially weaker demand associated with the trade war and some company-specific developments. Eurozone equities posted a modest gain in the third quarter. Energy and industrials stocks were among the leading gainers. By contrast, real estate, telecommunications and consumer staples were the main laggards. Worries over trade wars and potential US tariffs on cars were a feature of the period. Fears over direct impact on Europe were partly assuaged following a meeting in July between US President Trump and EU President Juncker. This resulted in an agreement to work towards zero tariffs on non-auto industrial goods, while new car tariffs will be put on hold while longer-term talks take place. Although trade tensions continued to escalate during the quarter, the Japanese stock market ended September above its recent range to show a total return of 5.9% for the quarter. The Japanese yen weakened against the US dollar during the period, which tended to improve sentiment in the equity market. Also, company profits have continued to improve and the most recent quarterly results season was broadly in line with expectations. Moreover, by September, it became clear that Mr Abe would easily succeed in his bid to be re-elected as leader of the LDP and therefore retain his position as prime minister. The improved visibility on policy for the next three years has been positively received, especially by foreign investors. At the other end of the spectrum, emerging markets equities lost value in what was a volatile third quarter, with US dollar strength and the US-China trade dispute weighing on risk appetite. China underperformed as the US implemented tariffs on a total of $250 billion of Chinese goods. There was little progress in bilateral trade negotiations and China responded with tariffs on $110 billion of US goods. Turkey was the weakest index market amid a sharp sell-off in the Lira. The currency fell as geopolitical tensions with the US exacerbated ongoing concerns over its wide current account deficit, above-target inflation and central bank independence. MCB Unit Trust 9

10 Local fixed income review The Monetary Policy Committee of the Bank of Mauritius has maintained the Key Repo Rate unchanged at 3.5% at its August 2018 meeting. In line with the Government s budget, issues of sovereign bonds were more pronounced relative to the previous fiscal year. The issue of golden jubilee bonds and government securities, helped to bring down Rupee liquidity to Rs10.5 billion. Subsequently, yields were on the rise shifting upwards as depicted by the yield curve in the figure below. The pick-up in yields encouraged banks to review their savings rate to the upside in September 2018, rising from 1.64% to 1.71%. In the corporate bond market, issues remained scarce for the quarter. With government yields picking up fast, we remain hopeful that new corporate bond issues will follow suit. However, proper analysis of credit risk remains key to picking the right corporate bonds for our funds. 5.0% 4.0% 3.0% SEP SEP % 1.0% 0.0% MCB Savings Rate 91D 182D 364D 3Y 5Y Sep-17 Sep-18 Foreign fixed income review The two main global market trends of 2018 continues U.S. with 3% 4% GDP growth rate and the USD leap. The Federal Reserve FOMC bites again with increasing interest rates by 25 bps, though in-line with expectations, but not substantially impacting the treasury market. U.S. high yield remains a favourite as companies still enjoy top line growth, cost discipline and increasing earnings. Eurozone inflation data for end of September 2018 favoured longer duration fixed income assets while the annualised inflation rate decreased from 2.3% to 2.2%, backing the long term bonds. The 30-year Germany DBR 1.25% 2048 was traded nearly 1% higher due to a decrease in its yield to maturity from to 1.10%. Most European bonds as well as UK and Japanese ones stayed range bound during the quarter. The UK economy continued to slow and looks towards more downside risks from Brexit. As the end of 2018 draws to a close, diverging views persist: interest rates, trade wars, monetary policies and politics. Grabbing these issues into material analysis, fund managers have to decide how to distribute their investments. The difference this time: Quantitative Easing (QE) is moving towards Quantitative Tightening (QT), slowly washing away the cash that was injected since 2008, with the Fed walking towards normalization. Europe and China growth have slightly slowed, and their central banks are treading cautiously. The European Central Bank (ECB) has showed that it will keep the rate at -0.40% and the possibility of raising it only in a year s time while the People s Bank of China (PBoC) has cut rates to let the yuan slide lower to offset some of the consequences of the US tariffs. This has created a strong dollar and walking into 2019, we believe that there might be a dollar correction. 10 MCB Unit Trust

11 However, as of now, the EM got entangled in the trade wars and strong dollar, going through a sore correction. EM continues to take it on the chin with FX underperforming equities, which underperformed Eurobonds and local currency bonds. Turkey and Argentina remained vulnerable with both currencies falling ~25% during August Percent (%) M 6 M 1 Y 2 Y 3 Y 5 Y 7 Y 10 Y 30 Y US Generic Government 10 Year Yield MCB GENERAL PERFORMANCE STATISTICS Annualised return to September 30, % 6.5% 4.5% 1Y 5Y Inception Figure 1 For the quarter ended 30 September 2018, the NAV per unit of the MCB General Fund edged marginally higher by 0.9% to reach Rs The fund size stood at Rs691.4 Million at the end of the period. Returns from the local markets were modest. SEMDEX posted a return of 0.3% over the quarter, mainly pulled back by foreign investors continued sale of local stocks. Global equities endured a rough quarter owing to a spate of financial market turmoil and by the threat to global growth from the trade clash between the US and China. Positions were also initiated in Global X Longevity Thematic ETF and Global X Millennials Thematic ETF to build the Fund s exposure to Thematic assets, MCB Unit Trust 11

12 namely to the demography theme. On the local and foreign fixed income side, the fund manager maintained a balanced approach amid the choice of rising short-term rates and flattish long-term yields. At 30th September 2018, the fund was constituted as follows: Domestic quoted equities (39.5%), domestic fixed income (23.2%), foreign equities (32.0%), foreign fixed income (3.2%) and cash (2.1%). MCB TRACKER PERFORMANCE STATISTICS Annualised return to September 30, % 4.2% 0.1% 1Y 5Y Inception Figure 2 Over the quarter, the Net Asset Value of MCB Tracker Fund rose by 0.9% from Rs33.36 to Rs33.67 against 0.3% for the SEM- 10 index. The dividend yield stood at 1.57% as at September There has been no change in the SEM-10 constituents at the last index committee meeting. The current constituents are MCB Group, IBL Ltd, SBM Holdings, ENL Land Ltd, New Mauritius Hotels Ltd, Grit Real Estate Income Group, Ciel Ltd, LUX Island Resorts Ltd, Sun Ltd and Rogers & Co Ltd. The Fund Manager will continue to replicate the performance of SEM-10 index and minimise tracking error. 12 MCB Unit Trust

13 MCB YIELD PERFORMANCE STATISTICS Annualised return to September 30, % 4.2% 2.5% 1 Year 5 Years Inception Figure 3 MCB Yield Fund posted a return of 1.83% for the quarter ended 30 September 2018 on a NAV to NAV basis (adjusted for dividend). The fund size rose by 6% over the quarter to Rs 1,165.9M and NAV per share stood at Rs The fund is reducing its exposure to corporate bonds to the benefit of government bonds. With yields increasing on the short end, the fund increased its exposure in 5 10 year bonds over the quarter. Yields on treasury bills stay attractive compared to savings rate (3%+ vs 1.8%). Cash is being managed by investing in Treasury bills. The fund was invested as follows; 10.8% in Bank deposits, 70.3% in Corporate and Government bonds, 14.1% in local equities and 4.8% in cash. MCB DOMESTIC EQUITIES PERFORMANCE STATISTICS Annualised return to September 30, % 6.4% 2.2% 1Y 5Y Inception Figure 4 MCB Unit Trust 13

14 For the quarter ended 30 September 2018, the Fund edged marginally higher by 0.7% to close at a NAV of Rs The fund size as at that date stood at Rs million. Over the quarter under review, the fund outperformed the benchmark SEMDEX by 40 bps. Notable movements by the fund manager included fine-tuning holdings in financial, hospitality, and selected conglomerates. Recent announcements made by ENL Group s proposed merger and LUX s restructuring exercise is expected to unlock further value for shareholders. Although earnings remained strong this quarter, volatility is expected to pick up amid various uncertainties in the market. MCB OVERSEAS PERFORMANCE STATISTICS Annualised return September 30, % 7.2% 6.6% 5.8% 4.2% 4.1% 7.2% 8.5% 5.3% 5.1% 6.5% 6.6% 1Y 5Y Inception MUR USD EUR GBP Figure 5 For the quarter ended 30 th September 2018, the NAV per unit of the Fund increased by 0.1% to reach Rs The fund size stood at Rs506 Million. As of 30 th September 2018, the Fund was invested as follows: Global Equities (15.2%), Foreign Fixed Income (14.7%), USA (13.7%), Emerging Markets (24.8%), Europe (16.1%), Japan (4.4%), Commodities (4.6%) and Cash (6.4%). During the quarter, the Manager increased the Fund s exposure to Alternative Assets by introducing ishares Listed Private Equity UCITS ETF. Positions were also initiated in Global X Longevity Thematic ETF and Global X Millennials Thematic ETF to build the Fund s exposure to Thematic assets, namely to the demography theme. 14 MCB Unit Trust

15 MCB BOND AND CURRENCY PERFORMANCE STATISTICS 1.00% Annualised return to September 28, % 1Y 5Y Inception Figure 6 As of 28 th September 2018, the annualised performance of the fund is 0.9% year over year and 0.4% since inception, with an indicative bond portfolio yield of 6.82%. Over the quarter, the AUM has moved from USD6.17M (29-Jun-2018) to USD6.33M (28-). The allocation to cash is 2.5%, 69.2% to Investment Grade and 28.3% to High Yield USD bonds. MCB TARGET DATE S PERFORMANCE STATISTICS Annualised return to September 30, % 6.0% 5.2% 5.2% 3.9% 3.9% 4.0% 3.9% -0.1% -1.2% -1.0% -1.2% MCB 2025 TDF MCB 2030 TDF MCB 2035 TDF MCB 2040 TDF 1Y 5Y Inception Figure 7 For the quarter ended 30 th September 2018, the NAV per unit of TDF 2025, TDF 2030, TDF 2035 and TDF 2040 were down -0.7%, -0.9%, -0.9% and -0.8% respectively. The total Net Asset Value for each respective fund was as follows: Rs126.5m, Rs90.4m, Rs93.7m and Rs139.4m. For TDF2030, TDF2035 and TDF2040, the Fund Manager reinforced position in blue chips and high yielding stocks over the quarter following flows in the fund. For TDF2025, the Manager is gradually shifting towards fixed income instruments according to its glide path. MCB Unit Trust 15

16 INVESTMENT OBJECTIVES AND POLICY MCB General Fund MCB General Fund adopts an active management approach within a medium risk strategy with the primary aim of achieving long-term capital appreciation through investment in a diversified portfolio of both local and overseas securities whilst ensuring the distribution of regular short-term income to its unit holders. In order to achieve its object, the Fund invests in securities quoted on the official list of the Stock Exchange of Mauritius as well as those listed on the Development and Enterprise Market. The Fund equally invests in overseas equities market via globally established and reputable investment houses as well as in foreign fixed income securities, money market instruments and Government securities. The Fund can invest up to 60% of its net asset value in locally listed equities and 40% in overseas equities and foreign currency deposits. It may not invest more than 15% of its assets in any single security or allocate over 10% of its assets in unquoted or illiquid securities. The Fund is not allowed to make any direct investments in commodities including precious metals or involve in the trading of derivative instruments. The units of the Fund are entitled to dividends. MCB Tracker Fund MCB Tracker Fund follows a tracking strategy with the primary objective of replicating the performance of Sem-10 Index while offering long-term capital appreciation to its investors. Although the Fund invests principally in the constituents of Sem-10 index, it can also invest (up to 15%) in companies on the reserve list of the index. The Fund may not invest in any company which is neither included in Sem-10 index nor on its reserve list. It may not equally invest more than 10% of its net asset value in any illiquid security or engage in the trading of derivatives and commodities. The units of the Fund are entitled to dividends. MCB Yield Fund The MCB Yield Fund has, as its primary objective, the generation of a yield which is at least 1% above the average savings rate offered by commercial banks in Mauritius over any given financial year. The fund invests a significant portion of its assets in fixed income securities that make regular interest payments on set dates in the object of offering regular income to its unit holders. It also pursues an active and conservative approach within a low risk strategy to credit assessment and establishes specific limits for each financial institution with which deposits are made. The Fund may also invest in high yielding equities or debt securities issued by unlisted Mauritian Companies or overseas governments (and their agencies) as long as those securities are deemed appropriate by the Manager. However, the Fund may not invest more than 15% of its net asset value in a single banking and financial institution or more than 20% of its assets in overseas investments (or foreign currencies). It may not equally invest more than 10% of its net asset value in any illiquid security or involve in the trading of derivatives and commodities. The units of the Fund are entitled to dividends. MCB Domestic Equities Fund The MCB Domestic Equities Fund aims to provide long-term capital appreciation to its investors through investment in a diversified and actively managed portfolio consisting of shares quoted on the Stock Exchange of Mauritius, including securities listed on the Development Enterprise Market (DEM). The stock selection process is research and fundamentally driven, taking into account both macroeconomic developments and stock specific factors. The Fund may not invest in companies outside Mauritius or invest more than 10% of its net asset value in any illiquid security. The Fund may neither purchase a security for the purpose of exercising control on the issuer nor involve in the trading of derivatives and commodities. The units of the Fund are entitled to dividends. 16 MCB Unit Trust

17 MCB Overseas Fund MCB Overseas Fund aims to provide long-term capital growth through investment in a diversified and actively managed portfolio via overseas collective investment schemes. It adopts an active management approach within a medium to high risk strategy to invest (through overseas investment houses) in overseas quoted equity securities, foreign fixed income securities, alternative investments (such as hedge funds) with the object of providing exposure to global stock and bond markets and enabling access to a worldwide balanced portfolio. The Fund has a blend of investments and is unrestricted in its choice of investment houses either by size or industry, or the geographical make-up of the portfolio. Nonetheless it may not invest more than 5% of its net asset value in the units of any single overseas collective investment scheme, make direct investment in real estate/mortgage or involve in the direct trading of derivatives and commodities including precious metals. The units of the Fund are not entitled to dividends. MCB Bond and Currency Fund The MCB Bond & Currency Fund will invest in interest bearing securities and focus on generating a return for investors from coupon income, capital appreciation and currency appreciation. The Investment Manager intends to invest in mostly USD denominated assets and may take controlled non-usd risk whenever it deems fit. Exposure to bond and currency markets will be routinely monitored and assessed as new information arises to ensure that the portfolio is structured in line with the Investment Manager s views. The Fund intends to maintain a high degree of liquidity to enable it to take advantage of attractive investment opportunities as they arise. A minimum of 70% of the portfolio will consist of investment-grade instruments, i.e., instruments whose second best rating with Fitch and S&P rating is at least BBB- or with a Moody s rating of at least Baa3. The fund is not allowed to invest more than 30% of its assets in non-investment grade bonds or to invest in equities, commodities and real estates. The units of the Fund are not entitled to dividends. MCB Target Date Funds Depending on its proximity to the Target Date, the Fund adopts an active management strategy with the primary objective of achieving long term capital growth, income as well as capital conservation by investing in a mix of local and foreign securities in different combinations and weightings. As the Fund approaches and passes the Target Date, it will increasingly emphasise on income and conservation of capital by investing a greater portion of its assets in bonds or other fixed income securities and high-yielding equities. In this endeavour the Fund seeks to balance the total return and stability over time in light of the Target Date. The planned asset mix will begin with a more aggressive allocation and gradually move to a more conservative allocation, following an asset allocation glide path. In early investing years, the glide path allocates more to asset classes like stocks to maximise wealth accumulation potential. In later investing years, the glide path increases allocation to fixed income and cash securities to add stability and generate income within the Fund. The Manager may periodically rebalance or modify the asset mix of the Fund and change the underlying investments. The Fund may not directly invest more than 30% in foreign securities and currencies or invest more than 25% of its net asset value in a single local stock. The units of the Target Date Funds are not entitled to dividends. Additional Information Please refer to the Appendix for Financial Highlights of each sub-fund. The schedule of investments forming part of the notes to the Financial Statements provides detailed portfolio holdings with comparative numbers. MCB Unit Trust 17

18 CONDENSED STATEMENT OF FINANCIAL POSITION AS AT SEPTEMBER 30, 2018 Jun-2018 Notes ASSETS MCB GENERAL MCB TRACKER Non-current assets 3,402,370 Investment in financial assets 1. 3,503, , ,954 81,600 Held-to-maturity investments 2 41,000 5,000-3,483,970 3,544, , ,954 Current assets 53,802 Held-to-maturity investments 2 94,684 1,048-2,383 Trade and other receivables Current tax asset ,992 Cash and cash equivalents 9(b) 125,291 18,053 5, , ,899 19,275 5,546 3,637,208 assets 3,765, , ,500 3,604,145 NET ASSETS Net assets attributable to holders of redeemable units 3,744, , ,999 Current liabilities 6,659 Trade and other payables 4 18,953 4,040 1, Current tax liabilities 5 2, ,625 Distribution to unitholders payable 6-33,063 liabilities 21,464 4,350 1,501 net assets attributable to holders of 3,637,208 redeemable units and liabilities 3,765, , ,500 - Net asset value per unit 8 MUR MUR These financial statements have been approved by the Manager and the Trustee on: 13 November 2018 Statement of Financial Position continued over The notes on pages 30 to 77 form an integral part of these financial statements. 18 MCB Unit Trust

19 CONDENSED STATEMENT OF FINANCIAL POSITION AS AT SEPTEMBER 30, 2018 ASSETS Notes Non-current assets Investment in financial assets 1. Held-to-maturity investments 2 MCB YIELD MCB DOMESTIC EQUITIES MCB OVERSEAS MCB BOND & CURRENCY USD' , , ,719 6,225 36,000-1,029, , ,719 6,225 Current assets Held-to-maturity investments 2 Trade and other receivables 3 Current tax asset 5 Cash and cash equivalents 9(b) 93, ,268 9,069 10, ,040 9,212 10, assets 1,174, , ,704 6,382 NET ASSETS Net assets attributable to holders of redeemable units 1,166, , ,999 6,342 Current liabilities Trade and other payables 4 Current tax liabilities 5 Distribution to unitholders payable 6 liabilities net assets attributable to holders of redeemable units and liabilities Net asset value per unit 8 These financial statements have been approved by the Manager and the Trustee on: 13 November ,211 1,409 2, , ,063 1,409 2, ,174, , ,704 6,382 MUR MUR MUR USD Statement of Financial Position continued over The notes on pages 30 to 77 form an integral part of these financial statements. MCB Unit Trust 19

20 CONDENSED STATEMENT OF FINANCIAL POSITION AS AT SEPTEMBER 30, 2018 ASSETS Notes Non-current assets Investment in financial assets 1. Held-to-maturity investments 2 MCB 2025 TARGET DATE MCB 2030 TARGET DATE MCB 2035 TARGET DATE MCB 2040 TARGET DATE 117,292 88,082 88, , ,292 88,082 88, ,520 Current assets Held-to-maturity investments 2 Trade and other receivables 3 Current tax asset 5 Cash and cash equivalents 9(b) ,067 2,899 5,469 7,705 10,126 2,947 5,522 7,826 assets 127,418 91,029 94, ,346 NET ASSETS Net assets attributable to holders of redeemable units 126,557 90,413 93, ,415 Current liabilities Trade and other payables 4 Current tax liabilities 5 Distribution to unitholders payable 6 liabilities net assets attributable to holders of redeemable units and liabilities Net asset value per unit 8 These financial statements have been approved by the Manager and the Trustee on: 13 November ,418 91,029 94, ,346 MUR MUR MUR MUR End of Statement of Financial Position The notes on pages 30 to 77 form an integral part of these financial statements. 20 MCB Unit Trust

21 CONDENSED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME 3 Months to 3 Months to Sep-2017 Notes MCB GENERAL MCB TRACKER Income 11,963 Dividends 14,269 3,475 3,017 11,668 Income on fixed income securities 20,080 2, Interest income ,061 34,363 5,930 3,017 Expenses 7,149 Manager's fees 9,360 1, ,567 Registrar's fees 2, Trustee's fees Custodian's fees Professional fees Other direct expenses ,452 13,816 2,925 1,040 94,229 Fair value (losses)/ gains on financial assets (1,296) 4,794 1,159 (838) Foreign exchange (losses)/ gains (786) (294) - (Losses)/ Gains on disposal of financial 818 assets (203) (30) (337) 94,209 (2,285) 4, ,817 Net income / (expense) before taxation 18,262 7,475 2,799 (1,232) Taxation 5 (1,912) (207) 1 106,585 Net income / (expense) after taxation 16,350 7,268 2,800 Equalisation 1,351 Income received on units created (89) Income paid on units liquidated (134) (9) (65) 1, (34) 107,847 comprehensive income for the period 17,105 7,362 2,766 Statement of Comprehensive Income continued over The notes on pages 30 to 77 form an integral part of these financial statements. MCB Unit Trust 21

22 CONDENSED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME Notes MCB YIELD MCB DOMESTIC EQUITIES MCB OVERSEAS MCB BOND & CURRENCY USD'000 Income Dividends Income on fixed income securities Interest income 1,241 2, ,921-1, ,162 2,762 1, Expenses Manager's fees Registrar's fees Trustee's fees Custodian's fees Professional fees 7 Other direct expenses 2, , ,815 1,012 1, Fair value (losses)/ gains on financial assets Foreign exchange (losses) / gains (Losses)/ Gains on disposal of financial assets (3,891) (26) (467) (8) 4 (3,854) (26) Net income / (expense) before taxation Taxation 5 Net income / (expense) after taxation 6,493 1,724 (197) 101 (1,247) - (75) (11) 5,246 1,724 (272) 90 Equalisation Income received on units created Income paid on units liquidated (21) (5) comprehensive income for the period 5,439 1,778 (272) 90 Statement of Comprehensive Income continued over The notes on pages 30 to 77 form an integral part of these financial statements. 22 MCB Unit Trust

23 CONDENSED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME Notes MCB 2025 TARGET DATE MCB 2030 TARGET DATE MCB 2035 TARGET DATE MCB 2040 TARGET DATE Income Dividends Income on fixed income securities Interest income , , ,129 Expenses Manager's fees Registrar's fees Trustee's fees Custodian's fees Professional fees 7 Other direct expenses Fair value (losses)/ gains on financial assets Foreign exchange (losses) / gains (Losses)/ Gains on disposal of financial assets (1,254) (1,114) (1,071) (1,495) (2) (7) (6) (10) - (4) (1,256) (1,125) (1,077) (1,505) Net income / (expense) before taxation Taxation 5 Net income / (expense) after taxation (826) (813) (815) (1,088) (5) (1) (1) (1) (831) (814) (816) (1,089) Equalisation Income received on units created Income paid on units liquidated (4) (12) (4) (14) comprehensive income for the period (709) (748) (712) (933) End of Statement of Comprehensive Income The notes on pages 30 to 77 form an integral part of these financial statements. MCB Unit Trust 23

24 CONDENSED STATEMENT OF NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS 3 Months to 3 Months to Sep-2017 Notes MCB GENERAL MCB TRACKER 2,779,181 Net assets attributable to holders of redeemable units at July 1, 3,604, , , ,834 Proceeds from redeemable units created 180,681 35,312 4,750 (19,206) Liquidation of redeemable units (54,959) (2,442) (9,065) 227,628 Net proceeds on units created and liquidated 125,722 32,870 (4,315) 107,847 Profit / (loss) for the year 17,105 7,362 2,766 (16,787) Distribution to unitholders 6 - (171,633) Exchange difference on retranslation (2,796) 2,926,236 Net assets attributable to holders of redeemable units at September 30, 3,744, , ,999 - Statement of Net Assets continued over The notes on pages 30 to 77 form an integral part of these financial statements. 24 MCB Unit Trust

25 CONDENSED STATEMENT OF NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS Notes MCB YIELD MCB DOMESTIC EQUITIES MCB OVERSEAS MCB BOND & CURRENCY USD'000 Net assets attributable to holders of redeemable units at July 1, 1,087, , ,016 6,166 Proceeds from redeemable units created Liquidation of redeemable units Net proceeds on units created and liquidated 78,965 8,751 20, (5,365) (690) (35,442) - 73,600 8,061 (14,745) 86 Profit / (loss) for the year Distribution to unitholders 6 5,439 1,778 (272) 90 Exchange difference on retranslation Net assets attributable to holders of redeemable units at September 30, 1,166, , ,999 6,342 Statement of Net Assets continued over The notes on pages 30 to 77 form an integral part of these financial statements. MCB Unit Trust 25

26 CONDENSED STATEMENT OF NET ASSETS ATTRIBUTABLE TO HOLDERS OF REDEEMABLE UNITS Notes MCB 2025 TARGET DATE MCB 2030 TARGET DATE MCB 2035 TARGET DATE MCB 2040 TARGET DATE Net assets attributable to holders of redeemable units at July 1, 121,750 87,029 86, ,254 Proceeds from redeemable units created Liquidation of redeemable units Net proceeds on units created and liquidated 5,691 4,838 7,808 10,911 (175) (706) (257) (817) 5,516 4,132 7,551 10,094 Profit / (loss) for the year Distribution to unitholders 6 (709) (748) (712) (933) Exchange difference on retranslation Net assets attributable to holders of redeemable units at September 30, 126,557 90,413 93, ,415 End of Statement of Net Assets The notes on pages 30 to 77 form an integral part of these financial statements. 26 MCB Unit Trust

27 CONDENSED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED SEPTEMBER 30, Months to 3 Months to Sep-2017 Notes Cash flows from operating activities MCB GENERAL MCB TRACKER (4,972) Cash generated from / (used in) operations 9(a) 14,316 3,636 3,229 2,483 Interest received 18,283 2,047 - (380,857) Purchase of financial assets (285,977) (140,130) (13,758) 148,524 Disposal of financial assets 179,956 76,366 18,659 (38) Tax paid (146) (71) - (234,860) Net cash (used in) / from operating activities (73,568) (58,152) 8,130 Cash flows from financing activities 227,628 Net proceeds from units created and liquidated 125,722 32,870 (4,315) 1,262 Net income on units created and liquidated (34) (16,787) Distribution to unitholders (25,625) (6,056) - 212,103 Net cash from / (used in) financing activities 100,852 26,908 (4,349) (22,757) Net increase /(decrease) in cash and cash equivalents 27,284 (31,244) 3,781 Movement in cash and cash equivalents 156,662 At July 1, 96,992 49,591 1,738 (22,757) Increase/ (Decrease) 27,284 (31,244) 3,781 (838) Foreign exchange difference (786) (294) - (8,758) Exchange difference on retranslation 1, ,309 At September 30, 9(b) 125,291 18,053 5,519 - Statement of Cash Flows continued over The notes on pages 30 to 77 form an integral part of these financial statements. MCB Unit Trust 27

28 CONDENSED STATEMENT OF CASH FLOWS Cash flows from operating activities Cash generated from /(used in) operations Interest received Purchase of financial assets Disposal of financial assets Tax paid Net cash (used in) / from operating activities Notes 9(a) MCB YIELD MCB DOMESTIC EQUITIES MCB OVERSEAS MCB BOND & CURRENCY USD'000 2,274 1, ,778-1, (62,782) (7,025) (16,175) (551) 37,859-19, (75) - (8,871) (5,461) 4, Cash flows from financing activities Net proceeds from units created and liquidated Net income on units created and liquidated Distribution to unitholders Net cash from / (used in) financing activities Net increase / (decrease) in cash and cash equivalents 73,600 8,061 (14,745) (19,569) - 54,224 8,115 (14,745) 86 45,353 2,654 (10,222) 138 Movement in cash and cash equivalents At July 1, Increase/ (Decrease) Foreign exchange difference Exchange difference on retranslation At September 30, 9(b) 4,915 6,415 21, ,353 2,654 (10,222) 138 (467) - 50,268 9,069 10, Statement of Cash Flows continued over The notes on pages 30 to 77 form an integral part of these financial statements. 28 MCB Unit Trust

29 CONDENSED STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED SEPTEMBER 30, 2018 Cash flows from operating activities Cash generated from /(used in) operations Interest received Purchase of financial assets Disposal of financial assets Tax paid Net cash (used in) / from operating activities Notes 9(a) MCB 2025 TARGET DATE MCB 2030 TARGET DATE MCB 2035 TARGET DATE MCB 2040 TARGET DATE 1, , (9,657) (2,672) (5,350) (9,479) 7, ,997 (1,376) (1,332) (4,623) (6,405) Cash flows from financing activities Net proceeds from units created and liquidated Net income on units created and liquidated Distribution to unitholders Net cash from / (used in) financing activities Net increase / (decrease) in cash and cash equivalents 5,516 4,132 7,551 10, ,638 4,198 7,655 10,250 4,262 2,866 3,032 3,845 Movement in cash and cash equivalents At July 1, Increase/ (Decrease) Foreign exchange difference Exchange difference on retranslation At September 30, 9(b) 5, ,443 3,870 4,262 2,866 3,032 3,845 (2) (7) (6) (10) 10,067 2,899 5,469 7,705 End of Statement of Cash Flows The notes on pages 30 to 77 form an integral part of these financial statements. MCB Unit Trust 29

30 The condensed interim financial statements are unaudited and have been prepared using the same accounting policies as those adopted in the financial statements for the year ended June 30, 2018 and comply with IAS 34. These unaudited condensed interim financial statements were approved for issue by the Board of Directors on November 13, MCB Unit Trust

31 Jun INVESTMENTS IN FINANCIAL ASSETS The movements in investments in financial assets may be summarised as follows: Designated at fair value through profit or loss 2,442,006 Opening balance 3,383, , ,033 1,413,921 Additions 285, ,130 13,758 (567,075) Disposals (177,529) (76,305) (18,865) 115,552 Fair value (losses)/ gains on financial assets (1,301) 4,794 1,159 (26,814) Fair value release on disposal (2,625) (91) (131) 4,800 Reclassification from HTM Exchange difference on retranslation (2,720) 3,383,013 3,484, , ,954 19,357 Interest receivable on financial assets 18,926 2,937-3,402,370 Closing balance 3,503, , ,954 Note 1. continued over 2. HELD TO MATURITY INVESTMENTS The movement in held-to-maturity investments may be summarised as follows: MCB GENERAL MCB TRACKER 185,785 Opening balance 135,402 6,209-17,000 Addition - (61,365) Redemption - (4,800) Reclassification to Financial Assets - 7,472 Interest Accrual for the year 1, (8,690) Interest Received (1,300) (232) - 135,402 Closing balance 135,684 6,048 - Split as follows: 81,600 Non-current assets 98,636 5,000-53,802 Current assets 37,048 1, , ,684 6, TRADE & OTHER RECEIVABLES Note 2 continued over 2,213 Dividends Receivable Other Receivable , The carrying amounts of trade and other receivables approximate their fair value. Note 3 continued over MCB Unit Trust 31

32 Jun-2018 MCB YIELD MCB DOMESTIC EQUITIES 1. INVESTMENTS IN FINANCIAL ASSETS The movements in investments in financial assets may be summarised as follows: Designated at fair value through profit or loss 2,442,006 Opening balance 3,383,013 1,413,921 Additions 285,977 (567,075) Disposals (177,529) 115,552 Fair value (losses)/ gains on financial assets (1,301) (26,814) Fair value release on disposal (2,625) 4,800 Reclassification from HTM Exchange difference on retranslation (2,720) 3,383,013 3,484,815 19,357 Interest receivable on financial assets 18,926 3,402,370 Closing balance 3,503, , ,078 62,782 7,025 (37,881) - (3,891) (26) , ,077 10, , ,077 Note 1. continued over 2. HELD TO MATURITY INVESTMENTS The movement in held-to-maturity investments may be summarised as follows: 185,785 Opening balance 135,402 17,000 Addition - (61,365) Redemption - (4,800) Reclassification to Financial Assets - 7,472 Interest Accrual for the year 1,582 (8,690) Interest Received (1,300) 135,402 Closing balance 135,684 Split as follows: 81,600 Non-current assets 98,636 53,802 Current assets 37, , , TRADE & OTHER RECEIVABLES 2,213 Dividends Receivable Other Receivable 589 2, The carrying amounts of trade and other receivables approximate their fair value. 129,193-1,511 - (1,068) - 129,636-93,636-36, ,636 - Note 2 continued over Note 3 continued over 32 MCB Unit Trust

33 Jun-2018 MCB OVERSEAS MCB BOND & CURRENCY USD' INVESTMENTS IN FINANCIAL ASSETS The movements in investments in financial assets may be summarised as follows: Designated at fair value through profit or loss 2,442,006 Opening balance 3,383,013 1,413,921 Additions 285,977 (567,075) Disposals (177,529) 115,552 Fair value (losses)/ gains on financial assets (1,301) (26,814) Fair value release on disposal (2,625) 4,800 Reclassification from HTM Exchange difference on retranslation (2,720) 3,383,013 3,484,815 19,357 Interest receivable on financial assets 18,926 3,402,370 Closing balance 3,503, ,250 6,042 16, (16,723) (524) (2,994) ,686 6,104 1, ,719 6,225 Note 1. continued over 2. HELD TO MATURITY INVESTMENTS The movement in held-to-maturity investments may be summarised as follows: 185,785 Opening balance 135,402 17,000 Addition - (61,365) Redemption - (4,800) Reclassification to Financial Assets - 7,472 Interest Accrual for the year 1,582 (8,690) Interest Received (1,300) 135,402 Closing balance 135,684 Split as follows: 81,600 Non-current assets 98,636 53,802 Current assets 37, , , TRADE & OTHER RECEIVABLES 2,213 Dividends Receivable Other Receivable 589 2, The carrying amounts of trade and other receivables approximate their fair value. Note 2 continued over Note 3 continued over MCB Unit Trust 33

34 Jun-2018 MCB 2025 TARGET DATE MCB 2030 TARGET DATE 1. INVESTMENTS IN FINANCIAL ASSETS The movements in investments in financial assets may be summarised as follows: Designated at fair value through profit or loss 2,442,006 Opening balance 3,383,013 1,413,921 Additions 285,977 (567,075) Disposals (177,529) 115,552 Fair value (losses)/ gains on financial assets (1,301) (26,814) Fair value release on disposal (2,625) 4,800 Reclassification from HTM Exchange difference on retranslation (2,720) 3,383,013 3,484,815 19,357 Interest receivable on financial assets 18,926 3,402,370 Closing balance 3,503, ,033 87,068 9,657 2,672 (7,226) (500) (1,255) (1,114) - (83) 117,209 88, ,292 88,082 Note 1. continued over 2. HELD TO MATURITY INVESTMENTS The movement in held-to-maturity investments may be summarised as follows: 185,785 Opening balance 135,402 17,000 Addition - (61,365) Redemption - (4,800) Reclassification to Financial Assets - 7,472 Interest Accrual for the year 1,582 (8,690) Interest Received (1,300) 135,402 Closing balance 135,684 Split as follows: 81,600 Non-current assets 98,636 53,802 Current assets 37, , , TRADE & OTHER RECEIVABLES 2,213 Dividends Receivable Other Receivable 589 2, The carrying amounts of trade and other receivables approximate their fair value. Note 2 continued over Note 3 continued over 34 MCB Unit Trust

35 Jun-2018 MCB 2035 TARGET DATE MCB 2040 TARGET DATE 1. INVESTMENTS IN FINANCIAL ASSETS The movements in investments in financial assets may be summarised as follows: Designated at fair value through profit or loss 2,442,006 Opening balance 3,383,013 1,413,921 Additions 285,977 (567,075) Disposals (177,529) 115,552 Fair value (losses)/ gains on financial assets (1,301) (26,814) Fair value release on disposal (2,625) 4,800 Reclassification from HTM Exchange difference on retranslation (2,720) 3,383,013 3,484,815 19,357 Interest receivable on financial assets 18,926 3,402,370 Closing balance 3,503,741 84, ,492 5,350 9,479 - (1,997) (1,071) (1,495) 88, , , ,520 End of Note HELD TO MATURITY INVESTMENTS The movement in held-to-maturity investments may be summarised as follows: 185,785 Opening balance 135,402 17,000 Addition - (61,365) Redemption - (4,800) Reclassification to Financial Assets - 7,472 Interest Accrual for the year 1,582 (8,690) Interest Received (1,300) 135,402 Closing balance 135,684 Split as follows: 81,600 Non-current assets 98,636 53,802 Current assets 37, , , TRADE & OTHER RECEIVABLES 2,213 Dividends Receivable Other Receivable 589 2, The carrying amounts of trade and other receivables approximate their fair value. End of Note End of Note 3 MCB Unit Trust 35

36 Jun-2018 MCB GENERAL MCB TRACKER 4. TRADE & OTHER PAYABLES 113 Deposit on Units Payable ,305 Trade payables - 1,001 Professional fees 1, ,036 Manager's fees 12,358 2, Trustee's fees 1, Registrar's fees 2, Custodian's fees 1, ,659 18,953 4,040 1,501 - The carrying amounts of payables approximate their fair value. Note 4 continued over 5. TAXATION 6,900 Income tax on the adjusted profit for the year at 15% 1, (1) Income Tax is charged on the net income of the Funds, adjusted for tax purposes, at the rate of 15%. The tax on the Fund's net income before taxation differs from the theoretical amount that would arise using the basic tax rate of the Fund as follows: 176,412 Net income / (expense) before taxation 18,262 7,475 2,799 26,461 Tax calculation at 15% 2,740 1, (568) Tax loss brought forward - (23,427) Income not subject to tax (1,839) (1,200) (576) 4,360 Expenses not deductible for tax purposes 1, (979) Relief on consolidated tax computation (202) (14) - 1,053 Unrelieved foreign tax suffered Exchange difference on retranslation - 6,900 Tax charge 1, (1) The movement in current tax liabilities is as follows: 1,380 Opening balance (10) 6,900 Charged for the year 1, (1) (7,599) Paid (146) (71) - 8 Tax refund - 29 Exchange difference on retranslation (1) 718 Closing balance 2, (11) Split as follows: (61) Current tax asset (28) - (11) 779 Current tax liabilities 2, , (11) Note 5 continued over 36 MCB Unit Trust

37 Jun-2018 MCB YIELD MCB DOMESTIC EQUITIES 4. TRADE & OTHER PAYABLES 113 Deposit on Units Payable 129 1,305 Trade payables - 1,001 Professional fees 1,253 3,036 Manager's fees 12, Trustee's fees 1, Registrar's fees 2, Custodian's fees 1,225 6,659 18,953 - The carrying amounts of payables approximate their fair value. 5. TAXATION 6,900 Income tax on the adjusted profit for the year at 15% 1,912 Income Tax is charged on the net income of the Funds, adjusted for tax purposes, at the rate of 15%. The tax on the Fund's net income before taxation differs from the theoretical amount that would arise using the basic tax rate of the Fund as follows: 176,412 Net income / (expense) before taxation 18,262 26,461 Tax calculation at 15% 2,740 (568) Tax loss brought forward - (23,427) Income not subject to tax (1,839) 4,360 Expenses not deductible for tax purposes 1,081 (979) Relief on consolidated tax computation (202) 1,053 Unrelieved foreign tax suffered Exchange difference on retranslation - 6,900 Tax charge 1,912 The movement in current tax liabilities is as follows: 1,380 Opening balance 718 6,900 Charged for the year 1,912 (7,599) Paid (146) 8 Tax refund - 29 Exchange difference on retranslation (1) 718 Closing balance 2,483 Split as follows: (61) Current tax asset (28) 779 Current tax liabilities 2, , , ,211 1,409 Note 4 continued over 1,247-6,493 1, (411) (119) - 1, (12) 1,247-1,852 (12) - (12) 1,852-1,852 (12) Note 5 continued over MCB Unit Trust 37