responsability Micro and SME Finance Fund (former responsability Global Microfinance Fund)

Transcription

1 responsability Micro and SME Finance Fund (former responsability Global Microfinance Fund) Registered in Switzerland for public sale as a foreign investment fund involving special risks Investment Fund under Luxembourg Law The responsability Micro and SME Finance Fund invests its assets in securities with which financial service companies in less developed countries are financed and/or refinanced. Investors are expressly made aware of the risks described in the prospectus and the lower liquidity and greater difficulty in determining the value of the Fund s investments (which are generally unlisted and not traded), and must also be prepared to accept substantial price losses including the entire loss of their investment. The risks inherent in the Fund cannot be compared with other funds which invest in debt instruments of issuers in developed countries. Units in the responsability Micro and SME Finance Fund should therefore account for only a small portion of an investor s portfolio and should be held as part of a broadly diversified portfolio. The AIFM and the Portfoliomanager, however, will seek to minimize the risks by a strict selection of investments and appropriate diversification. Audited Annual Report as at

2 Table of Contents Page 2 Report of the "Réviseur d'entreprises agréé" 3 Management and Administration 7 Notes 8 Manager's Report 10 Report by Subfund 11 Unaudited information 28

3 Report of the "Réviseur d'entreprises agréé" Page 3 KPMG Luxembourg, Société coopérative 39, Avenue John F. Kennedy L-1855 Luxembourg An die Anteilinhaber des responsability Micro and SME Finance Fund , boulevard de la Pétrusse L-2330 Luxemburg BERICHT DES REVISEUR D ENTREPRISES AGREE Bericht über die Jahresabschlussprüfung Prüfungsurteil Wir haben den beigefügten Jahresabschluss des responsability Micro and SME Finance Fund, bestehend aus der Aufstellung des Nettofondsvermögens, des Wertpapierbestands und der sonstigen Nettovermögenswerte zum 31. März 2018, der Ertrags- und Aufwandsrechnung und der Entwicklung des Nettofondsvermögens für das an diesem Datum endende Geschäftsjahr sowie dem Anhang mit einer Zusammenfassung bedeutsamer Rechnungslegungsmethoden, geprüft. Nach unserer Beurteilung vermittelt der beigefügte Jahresabschluss in Übereinstimmung mit den in Luxemburg geltenden gesetzlichen Bestimmungen und Verordnungen betreffend die Aufstellung und Darstellung des Jahresabschlusses ein den tatsächlichen Verhältnissen entsprechendes Bild der Vermögens- und Finanzlage des Fonds zum 31. März 2018 sowie der Ertragslage und der Entwicklung des Nettofondsvermögens für das an diesem Datum endende Geschäftsjahr. Grundlage für das Prüfungsurteil Wir führten unsere Abschlussprüfung in Übereinstimmung mit dem Gesetz über die Prüfungstätigkeit ( Gesetz vom 23. Juli 2016 ) und nach den für Luxemburg von der Commission de Surveillance du Secteur Financier ( CSSF ) angenommenen internationalen Prüfungsstandards ( ISA ) durch. Unsere Verantwortung gemäss diesem Gesetz und diesen Standards wird im Abschnitt Verantwortung des Réviseur d Entreprises agréé für die Jahresabschlussprüfung weitergehend beschrieben. Wir sind unabhängig von dem Fonds in Übereinstimmung mit dem für Luxemburg von der CSSF angenommenen International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants ( IESBA Code ) zusammen mit den beruflichen Verhaltensanforderungen, welche wir im Rahmen der Jahresabschlussprüfung einzuhalten haben und haben alle sonstigen Berufspflichten in Übereinstimmung mit diesen Verhaltensanforderungen erfüllt. Wir sind der Auffassung, dass die von uns erlangten Prüfungsnachweise ausreichend und geeignet sind, um als Grundlage für unser Prüfungsurteil zu dienen. Sonstige Informationen Der Verwaltungsrat der Verwaltungsgesellschaft ist verantwortlich für die sonstigen Informationen. Die sonstigen Informationen beinhalten die Informationen, welche im Jahresbericht enthalten sind, jedoch beinhalten sie nicht den Jahresabschluss oder unseren Bericht des Réviseur d Entreprises agréé zu diesem Jahresabschluss. Unser Prüfungsurteil zum Jahresabschluss deckt nicht die sonstigen Informationen ab und wir geben keinerlei Sicherheit jedweder Art auf diese Informationen. Im Zusammenhang mit der Prüfung des Jahresabschlusses besteht unsere Verantwortung darin, die sonstigen Informationen zu lesen und dabei zu beurteilen, ob eine wesentliche Unstimmigkeit zwischen diesen und dem Jahresabschluss oder mit den bei der Abschlussprüfung gewonnenen Erkenntnissen besteht oder auch ansonsten die sonstigen Informationen wesentlich falsch dargestellt erscheinen. Sollten wir auf Basis der von uns durchgeführten Arbeiten schlussfolgern, dass sonstige Informationen wesentliche falsche Darstellungen enthalten, sind wir verpflichtet, diesen Sachverhalt zu berichten. Wir haben diesbezüglich nichts zu berichten. Verantwortung des Verwaltungsrats der Verwaltungsgesellschaft für den Jahresabschluss Der Verwaltungsrat der Verwaltungsgesellschaft ist verantwortlich für die Aufstellung und sachgerechte Gesamtdarstellung des Jahresabschlusses in Übereinstimmung mit den in Luxemburg geltenden gesetzlichen Bestimmungen und Verordnungen zur Aufstellung des Jahresabschlusses und für die internen Kontrollen, die der Verwaltungsrat als notwendig erachtet, um die Aufstellung und Darstellung des Jahresabschlusses zu ermöglichen, der frei von wesentlichen, beabsichtigten oder unbeabsichtigten, falschen Darstellungen ist. Bei der Aufstellung des Jahresabschlusses ist der Verwaltungsrat der Verwaltungsgesellschaft verantwortlich, für die Beurteilung der Fähigkeit des Fonds zur Fortführung der Unternehmenstätigkeit und, sofern einschlägig, Angaben zu Sachverhalten zu machen, die im Zusammenhang mit der Fortführung der Unternehmenstätigkeit stehen, und die Annahme der Unternehmensfortführung als Rechnungslegungsgrundsatz zu nutzen, sofern nicht der Verwaltungsrat der Verwaltungsgesellschaft beabsichtigt den Fonds zu liquidieren, die Geschäftstätigkeit einzustellen oder keine andere realistische Alternative mehr hat, als so zu handeln. Verantwortung des Réviseur d Entreprises agréé für die Jahresabschlussprüfung Unsere Zielsetzung ist es eine hinreichende Sicherheit zu erlangen, ob der Jahresabschluss als Ganzes frei von wesentlichen, beabsichtigten oder unbeabsichtigten, falschen Darstellungen ist und darüber einen Bericht des Réviseur d Entreprises agréé, welcher unser Prüfungsurteil enthält, zu erteilen. Hinreichende Sicherheit entspricht einem hohen Grad an Sicherheit, ist aber keine Garantie dafür, dass eine Prüfung in Übereinstimmung mit dem Gesetz vom 23. Juli 2016 und nach den für Luxemburg von der CSSF angenommenen ISAs stets eine wesentliche falsche Darstellung, falls vorhanden, aufdeckt. Falsche Darstellungen können entweder aus Unrichtigkeiten oder aus Verstößen resultieren und werden als wesentlich angesehen, wenn vernünftigerweise davon ausgegangen werden kann, dass diese individuell oder insgesamt, die auf der Grundlage dieses Jahresabschlusses getroffenen wirtschaftlichen Entscheidungen von Adressaten beeinflussen. Im Rahmen einer Abschlussprüfung in Übereinstimmung mit dem Gesetz vom 23. Juli 2016 und nach den für Luxemburg von der CSSF angenommenen ISAs üben wir unser pflichtgemäßes Ermessen aus und bewahren eine kritische Grundhaltung. Darüber hinaus: - Identifizieren und beurteilen wir das Risiko von wesentlichen falschen Darstellungen im Jahresabschluss aus Unrichtigkeiten oder Verstößen, planen und führen Prüfungshandlungen durch als Antwort auf diese Risiken und erlangen Prüfungsnachweise, die ausreichend und angemessen sind, um als Grundlage für das Prüfungsurteil zu dienen. Das Risiko, dass wesentliche falsche Darstellungen nicht aufgedeckt werden, ist bei Verstößen höher als bei Unrichtigkeiten, da Verstöße betrügerisches Zusammenwirken, Fälschungen, beabsichtigte Unvollständigkeiten, irreführende Angaben bzw. das Außerkraftsetzen interner Kontrollen beinhalten können. - Gewinnen wir ein Verständnis von dem für die Abschlussprüfung relevanten internen Kontrollsystem, um Prüfungshandlungen zu planen, die unter den gegebenen Umständen angemessen sind, jedoch nicht mit dem Ziel, ein Prüfungsurteil zur Wirksamkeit des internen Kontrollsystems des Fonds abzugeben. - Beurteilen wir die Angemessenheit der von dem Verwaltungsrat der Verwaltungsgesellschaft angewandten Bilanzierungsmethoden, der rechnungslegungsrelevanten Schätzungen und den entsprechenden Anhangangaben.

4 Report of the "Réviseur d'entreprises agréé" Page 4 - Schlussfolgern wir über die Angemessenheit der Anwendung des Rechnungslegungsgrundsatzes der Fortführung der Unternehmenstätigkeit durch den Verwaltungsrat der Verwaltungsgesellschaft sowie auf der Grundlage der erlangten Prüfungsnachweise, ob eine wesentliche Unsicherheit im Zusammenhang mit Ereignissen oder Gegebenheiten besteht, die bedeutsame Zweifel an der Fähigkeit des Fonds zur Fortführung der Unternehmenstätigkeit aufwerfen könnten. Sollten wir schlussfolgern, dass eine wesentliche Unsicherheit besteht, sind wir verpflichtet im Bericht des Réviseur d Entreprises agréé auf die dazugehörigen Anhangangaben zum Jahresabschluss hinzuweisen oder, falls die Angaben unangemessen sind, das Prüfungsurteil zu modifizieren. Diese Schlussfolgerungen basieren auf der Grundlage der bis zum Datum des Berichts des Réviseur d Entreprises agréé erlangten Prüfungsnachweise. Zukünftige Ereignisse oder Gegebenheiten können jedoch dazu führen, dass der Fonds seine Unternehmenstätigkeit nicht mehr fortführen kann. - Beurteilen wir die Gesamtdarstellung, den Aufbau und den Inhalt des Jahresabschlusses, einschließlich der Anhangangaben, und beurteilen ob dieser die zugrundeliegenden Geschäftsvorfälle und Ereignisse sachgerecht darstellt. Wir kommunizieren mit den für die Überwachung Verantwortlichen, unter anderem den geplanten Prüfungsumfang und Zeitraum sowie wesentliche Prüfungsfeststellungen einschließlich wesentlicher Schwächen im internen Kontrollsystem, welche wir im Rahmen der Prüfung identifizieren. Luxemburg, den 25. Juli 2018 KPMG Luxembourg Société coopérative Cabinet de révision agréé 39, Avenue John F. Kennedy L-1855 Luxemburg Pia Schanz Réviseur d Entreprises agréé Lediglich die deutsche Version des Jahresberichtes war Bestandteil der Prüfung durch den Réviseur d'entreprises agréé. Daher bezieht sich auch der Bericht des Réviseur d'entreprises agréé nur auf die deutsche Version. Sämtliche anderssprachigen Versionen wurden unter Verantwortung des Verwaltungsrates der Verwaltungsgesellschaft erstellt.

5 Report of the "Réviseur d'entreprises agréé" Page 5 KPMG Luxembourg, Société coopérative 39, Avenue John F. Kennedy L-1855 Luxembourg To the Unitholders of responsability Micro and SME Finance Fund , Boulevard de la Pétrusse L-2330 Luxembourg REPORT OF THE REVISEUR D ENTREPRISES AGREE Report on the audit of the financial statements Opinion We have audited the accompanying financial statements of responsability Micro and SME Finance Fund, which comprise the statement of net assets and the statement of investments in securities and other net assets as at 31 March 2018 and the statement of operations / changes in net assets for the year then ended, and notes to the financial statements including a summary of significant accounting policies. In our opinion, the accompanying financial statements give a true and fair view of the financial position as of 31 March 2018, and of the results of their operations and changes in their net assets for the year then ended in accordance with Luxembourg legal and regulatory requirements relating to the preparation of the financial statements. Basis for opinion We conducted our audit in accordance with the Law of 23 July 2016 on the audit profession ( Law of 23 July 2016 ) and with International Standards on Auditing ( ISAs ) as adopted for Luxembourg by the Commission de Surveillance du Secteur Financier ( CSSF ). Our responsibilities under those Law and standards are further described in the «Responsibilities of Réviseur d Entreprises agréé for the Audit of the Financial Statements» section of our report. We are also independent of the Fund in accordance with the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants ( IESBA Code ) as adopted for Luxembourg by the CSSF together with the ethical requirements that are relevant to our audit of the financial statements, and have fulfilled our other ethical responsibilities under those ethical requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Other information The Board of Directors of the Management Company is responsible for the other information. The other information comprises the information included in the annual report but does not include the financial statements and our report of Réviseur d Entreprises agréé thereon. Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report this fact. We have nothing to report in this regard. Responsibilities of Board of Directors of the Management Company for the financial statements The Board of Directors of the Management Company is responsible for the preparation and fair presentation of these financial statements in accordance with Luxembourg legal and regulatory requirements relating to the preparation and presentation of the financial statements, and for such internal control as the Board of Directors of the Management Company determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the Board of Directors of the Management Company is responsible for assessing the Company s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors of the Company either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. Responsibilities of the Réviseur d Entreprises agréé for the audit of the financial statements The objectives of our audit are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a report of Réviseur d Entreprises agréé that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As part of an audit in accordance with the Law of 23 July 2016 and with ISAs as adopted for Luxembourg by the CSSF, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: - Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. - Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund s internal control. - Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Board of Directors of the Management Company. - Conclude on the appropriateness of Board of Directors of the Management Company s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Fund s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report of Réviseur d Entreprises agréé to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion.

6 Report of the "Réviseur d'entreprises agréé" Page 6 Our conclusions are based on the audit evidence obtained up to the date of our report of Réviseur d Entreprises agréé. However, future events or conditions may cause the Fund to cease to continue as a going concern. - Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Luxembourg, July 25, 2018 KPMG Luxembourg Société coopérative Cabinet de révision agréé 39, Avenue John F. Kennedy L-1855 Luxembourg Pia Schanz Réviseur d Entreprises agréé The German version of the Annual Report has been reviewed by the Réviseur d Entreprises agréé. Consequently, the report of the Réviseur d Entreprises agréé only refers to the German version of the report; other versions result from a translation made under the responsibility of the Board of Directors of the Management Company.

7 Management and Administration Page 7 AIFM and Management Company responsability Management Company S.A , Boulevard de la Pétrusse, L-2330 Luxembourg R.C.S. Luxembourg B Board of Directors Jean-Paul Gennari, Member of the Board Luxembourg Robert Archbold, Member of the Board Director, Credit Suisse Fund Services (Ireland) Ltd., Dublin Johann Will, Member of the Board (until ) Director, responsability Management Company S.A. Hans-Jürgen Böhm, Member of the Board (since ) Director, responsability Management Company S.A. Markus Beeler, Member of the Board Head of Product Management and Markets, responsability Investments AG, Zurich Stefan Petter, Member of the Board Head of Finance, responsability Investments AG, Zurich Custodian Bank Credit Suisse (Luxembourg) S.A. 5, rue Jean Monnet, L-2180 Luxembourg Cabinet de révision agréé KPMG Luxembourg, Société Coopérative 39, avenue John F. Kennedy, L-1855 Luxembourg Representative in Switzerland Credit Suisse Funds AG Uetlibergstrasse 231, CH-8070 Zurich Paying Agent in Switzerland Credit Suisse AG Paradeplatz 8, CH-8001 Zurich Representative in the Principality of Liechtenstein LGT Bank in Liechtenstein AG Herrengasse 12, FL-9490 Vaduz Paying Agent in the Principality of Liechtenstein LGT Bank in Liechtenstein AG Herrengasse 12, FL-9490 Vaduz Distribution Agent Credit Suisse Fund Services (Luxembourg) S.A. 5, rue Jean Monnet, L-2180 Luxembourg Portfoliomanager responsability Investments AG Josefstrasse 59, CH-8005 Zurich Central Administration Credit Suisse Fund Services (Luxembourg) S.A. 5, rue Jean Monnet, L-2180 Luxembourg No subscription may be accepted on the basis of the financial reports. Subscriptions are accepted only on the basis of the current sales prospectus accompanied by the Key Investor Information Documents (KIID), by the latest annual report and the latest semi-annual report if more recent. The issue and redemption prices are published in Luxembourg at the registered office of the Management Company. Unitholders may obtain the Sales Prospectus, the key investor information document, the latest annual and semi-annual reports, the changes in the composition of the securities portfolio during the reporting period and copies of the Management Regulations free of charge from the registered office of the Management Company or the local representatives in the countries where the Fund is registered.

8 Notes Page 8 General The responsability Micro and SME Finance Fund (the Fund ) (former responsability Global Microfinance Fund) was established as an unincorporated, open-ended investment fund under Luxembourg law in Luxembourg by the Luxembourg-based joint stock company Credit Suisse Microfinance Fund Management Company in association with Credit Suisse Asset Management International Holding, Zurich, a wholly owned subsidiary of Credit Suisse, Zurich, and Credit Suisse Asset Management Fund Holding (Luxembourg) S.A., Luxembourg. The Fund has been registered as an undertaking for collective investment in Luxembourg, in accordance with part 2 of the law of As per responsability Global Microfinance Fund was renamed in responsability Micro and SME Finance Fund. Summary of significant accounting policies a) Computation of the net asset value The net asset value per unit in each class is expressed in the reference currency of the respective class and determined by the AIFM on the last bank working day of each month (valuation date). The financial statements reflect the net asset value as calculated on based on the market prices of the investments as of b) of investment securities Debt instruments, and especially promissory notes, not listed on a stock exchange or another regulated market will be valued at their nominal value plus accrued interest. This valuation will be adapted, in the event of major fluctuations in interest rates in the relevant markets or in the event of other material market developments, if such circumstances affect the value of the investments. In the event of default or another critical situation that could lead to default, or in the case of the elimination or improvement of such a situation, the AIFM shall decide on the basis of information to be submitted to the Investment Advisor as to whether and to what extent an adjustment should be made to the valuation of debt instruments. Securities which are listed on a stock exchange or which are regularly traded on such stock exchange shall be valued at the last known purchase price. If such a price is not available for a particular exchange session, but a closing mid-price (the mean of the quoted closing bid and ask prices) or a closing bid price is available, then the closing mid-price, or alternatively the closing bid price, may be taken as a basis for the valuation. If a security is traded on several stock exchanges, the valuation shall be made by reference to the exchange on which it is chiefly traded. In the case of securities for which trading on a stock exchange is not significant but which are bought and sold on a secondary market with regulated trading among securities dealers (with the effect that the price is set on a market basis), the AIFM may decide to base the valuation on this secondary market. Securities traded on a regulated market shall be valued in the same way as securities listed on a stock exchange. Securities that are not listed on a stock exchange and are not traded on a regulated market shall be valued at their last available market price. If no such price is available, the AIFM shall value the securities in accordance with other criteria to be established by the AIFM and on the basis of the probable sales price, which shall be estimated with due care and in good faith. Fixed-term deposits and similar assets shall be valued at their nominal value plus accrued interest. The valuation price of a money market instrument shall be progressively adjusted to the redemption price, based on the net acquisition price and keeping the resultant investment yield constant. In the event of a significant change in market conditions, the basis for the valuation of individual investments shall be brought into line with the new market yields. Units in undertakings for collective investment will be valued at their last-stated net asset value. Other valuation methods may be used to adjust the price of these units if, in the opinion of the AIFM, there have been changes in the value since the net asset value was last calculated. If a valuation in accordance with the above rules is rendered impossible or incorrect owing to special or changed circumstances, the AIFM shall be entitled to use the generally recognised valuation principles in order to value the assets. c) Cash at banks and at brokers Cash at banks and at brokers includes cash in hand, margin calls and deposits held at call with banks and other short-term investments in an active market with original maturities of three months or less and bank overdrafts. of the average acquisition cost. e) Foreign exchange conversion Cash at banks, other net assets and the value of portfolio securities in currencies other than reference currency are converted into the reference currency at the foreign exchange rate prevailing on the date of valuation. Income and expenses in currencies other than reference currency are converted into the reference currency at the foreign exchange rate applicable at the date they accrue to the subfund. Realised gains or losses on foreign currencies are accounted for in the statement of operations. The acquisition cost of securities in currencies other than the reference currency is converted into the reference currency at the foreign exchange rate valid at the date of acquisition. f) Transactions on investments in securities The transactions on investments in securities are booked on a trade date basis. g) of forward foreign exchange contracts Unmatured forward foreign exchange contracts are valued at valuation date at forward exchange rates prevailing at this date and resulting unrealised gains or losses are posted to the statement of operations and are shown in the statement of net assets. h) of swaps On each valuation day, swap agreements are valued at the net present value of the future cash flows, using the relevant interest rate yield curve on valuation day (for MFX Solutions and Standard Chartered T-3 is used). Asset swaps and the securities linked to the asset swaps are not revalued as the security and the asset swap are considered for the purpose of the valuation as a single instrument. i) Income recognition Dividends are recorded on ex-dividend date, net of withholding tax. Interests are accrued on a daily basis. Management fee (see detail at subfund level) As remuneration for its services and reimbursement of its expenses, the AIFM is entitled to a yearly management fee, payable at the end of each month and may not exceed 2.60% of the average total net assets of the Fund per year. Fees for the partner of the Investment Adviser The fees for the Investment Advisor s partners incurred in relation to the investments referred by these partners. This remuneration may not exceed 1.25% per year of the Fund s average total net assets. Since the current remuneration fee of 1.25% per year is included in the new management fee of 2.60%. Private Equity transactions in the securities portfolio The cost of underlying investments is comprised of capital contributions which reduce the total unfunded commitment. Late entry fees are not recorded as part of the cost and are expensed immediately as they are not part of the total commitments. Late entry fees are penalty fees to pay in case of investments in existing funds. There were no late entry fees during the year until "Taxe d'abonnement" Under the prevailing laws and regulations, the Fund is subject in Luxembourg, on the basis of its investments, to a "Taxe d'abonnement" at the annual rate of 0.05%, payable quarterly and calculated on the basis of the net assets at the end of each quarter. The Fund s assets are exempt from the tax normally payable quarterly by undertakings for collective investment in the Grand Duchy of Luxembourg ( taxe d abonnement ) as of , as the main purpose of the Fund is investment in MFIs. d) Net realised gain/loss on sales of investments The realised gains or losses on the sales of securities are calculated on the basis

9 Notes Page 9 Total Expense Ratio (TER) (see detail at subfund level) The TER expresses the sum of all costs and commissions charged on an ongoing basis, taken retrospectively as a percentage of these assets. If a Subfund invests at least 10% of its net assets as a fund of fund in target funds, a composite TER of the fund of funds is to be calculated as follows: The prorated TER of the individual target funds including a performance related remuneration, weighted according to the share they represent in the overall assets of the fund of funds as of the closing date and the TER of the fund of funds minus the retroceded commissions received from the target funds during the reporting year. The TER is calculated following the SFAMA guideline. No TER is disclosed for share classes launched less than 6 months before closing. Changes in the composition of the securities portfolio Changes in the composition of the securities portfolio during the reporting year are available to unitholders free of charge at the registered office of the AIFM or the local representatives in the countries where the Fund is registered. Fund performance (see detail at subfund level) The performance of the year Y is based on the net asset values as calculated on the first business day of the year Y respectively Y-1. Those net asset values reflect the market prices of the investments as of the last business day of the year Y-1 respectively Y. The YTD (year-to-date) Performance includes the period from until Historical performance is no indicator of current or future performance. The performance data given does not take into account commissions and costs incurred in the purchase or redemption of Company s shares. For shares launched more than 3 years ago no performance since inception is disclosed. Provisions Provisions include amongst others the provisions done for investments which are classified as critical (late payments, political disturbance). Transaction costs Transactions costs include brokerage fees, stamp duty, local taxes and other foreign charges if incurred during the year. Transaction costs are included in the cost of securities purchased and sold. For the year ended on , the Fund incurred transaction costs relating to purchase or sale of investments in securities and similar transactions, (including derivatives instruments or other eligible assets). Not all transaction costs are separately identifiable. For fixed income investments, forward foreign exchange contracts and for some other derivative contracts, transaction costs will be included in the purchase and sales price of the investment. Whilst not separately identifiable these transaction costs will be captured within the performance of each Subfund.

10 Manager's Report Page 10 In the reporting period from to the total fund volume decreased from USD 1,081.7 million to USD 1,025.0 million. In the same period, the USD net asset value per share increased from USD to USD The fund has generated a positive return in 151 of 172 months since inception. The one-year returns of the (main) tranches as at the end of March 2018 were 2.67% in USD, 0,02% in CHF, 0.45% in EUR and 1.64% in NOK. The returns are thus higher than in the previous year. During the reporting period, the fund concluded 156 transactions. As at the end of March 2018, it was invested in 292 (of which 177 direct) institutions in 84 countries (of which 64 direct) in the broadly diversified portfolio. The fund is represented in all major target regions worldwide, including Latin America, Eastern Europe, Asia and Africa. 79.6% of fund volume is invested in interestbearing investments and 10.7% in equities. As at , 71.6% of the outstanding investment transactions were in USD, the fund currency. Transactions not concluded in the fund currency are usually hedged through currency forwards, so that the fund contains no substantial currency risks. At the end of March, the liquidity ratio of the fund was 13.5% of the net asset value. The total of the provisions is equivalent to USD 46.7 million, or around 4.60% of the net asset value. One year ago, the provisions amounted to around 2.90% of the net asset value. Provisions in the debt portfolio had a negative impact on the fund s annual return of 1.49%. The main reason for this was negative developments in connection with a Kenyan investee, as previously established provisions for this investee and one of its subsidiaries had to be increased significantly in October. This was partly offset by the net reversal of provisions in the remaining debt portfolio, which led to a positive contribution from debt valuations in November and December. have led to various subgroups of emerging markets evolving. Commodity-dependent countries: Recovery From 2014 to 2016, growth in the most commodity-dependent countries (e.g. Kazakhstan, Nigeria, Russia) remained well below the historic average. Due to the upturn in global growth and rising commodities prices, this group of countries is expected to present a much stronger economic performance in 2018 and beyond. Other MSME financial markets: stable Meanwhile, MSME financial markets outside this category benefited from 2014 to 2016 from stronger currencies, a higher rate of growth and better outlooks in terms of fiscal policy. This positive operating environment was also evident primarily in a stable financial sector. On average, this group should benefit from ongoing improvement in global growth and trade. This category also includes many net commodities importers such as Pakistan and Georgia. As commodities prices have not changed dramatically and are still well below their ten-year high, economic performance should also remain stable here. Regulatory risk Some markets that are not necessarily vulnerable to global shocks nevertheless had domestic challenges, often due to regulatory measures. For example, Kenya has imposed an interest rate ceiling for banks from which only microfinance institutions (MFIs) involved in lending activities are exempt. Cambodia has introduced a ceiling for microfinance institutions but not for banks. In both markets, this should result in fewer loans being granted to clients that are regarded as very risky or less profitable, as a general rule SMEs. Value adjustments on positions in the equity portfolio made a positive contribution of 1.43% to the fund s annual performance, which was primarily due to a significant increase in value of two investments in Kazakhstan and Pakistan. In both cases, similar companies in the respective markets were valued higher and the current valuation of these companies in the equity portfolio reflects their positive performance and favourable outlook, with both companies having exceeded growth and profitability expectations. The rise in the market value of a listed portfolio company at the end of December contributed to an increase in the value of this position. Thanks to positive market developments in the region, fund investments in India continued to perform well. Investment policy The fund has a well filled investment pipeline for the coming quarters. On the basis of expected inflows and outflows of investment monies, we believe that the fund s liquidity will be able to remain low and within the desired levels. The fund is also broadly diversified across regions, countries and currencies. Thanks to these two factors low liquidity and broadly diversified risk exposure we will be able to continue to focus on the selection of the most attractive investment opportunities. This means that we should be able to make new investments that either offer a higher yield premium for a similar level of risk or reduce portfolio risk by a similar amount. The information and returns stated relate to the reporting period and are not indicative of future returns. Outlook After worldwide economic growth reached its lowest level in seven years in 2016, acceleration to 3.7% is expected in even though growth in developed countries is likely to slow down to 2%. Global growth will be driven by emerging markets, a trend that should continue until (and probably after) 2022, with the IMF predicting annual growth of 5% for this group. The GDP outlook varies considerably from one region to another. Latin America and Sub-Saharan Africa present recovery after Brazil, Nigeria and South Africa have overcome recessions. This trend should continue in 2018, although at a much slower pace than in the Asia-Pacific region, which is continuing to boom despite a moderate slowdown in growth in China. Commodities prices are continuing to have a major influence on growth in some developing countries and emerging markets. Although the moderate price recovery initiated in 2017 should persist in 2018, prices will remain far off the cyclical peaks seen in Over the last few years, the varying effects of global economic developments 1 IWF World Economic Outlook, October 2017

11 Page 11 Technical Data and Notes Technical Data Valoren ISIN Management Fee Total Expense Ratio B - Capitalisation USD LU % 2.42% USD LU % 2.06% H - Capitalisation CHF LU % 2.42% CHF LU % 2.06% H - Capitalisation EUR LU % 2.42% EUR LU % 2.05% N - Capitalisation EUR LU % 2.04% H - Capitalisation NOK LU % 2.40% NOK LU % 2.04% Fund Performance YTD Since Inception B - Capitalisation USD 0.58% / 2.27% -0.17% 1.53% USD 0.64% / 2.64% 0.18% 1.90% H - Capitalisation CHF -0.19% / -0.13% -1.90% 0.17% CHF -0.12% / 0.24% -1.55% 0.50% H - Capitalisation EUR -0.07% / 0.33% -1.31% 0.91% EUR 0.00% / 0.70% -0.97% 1.26% N - Capitalisation EUR 0.00% 1.04% 0.71% -0.97% / H - Capitalisation NOK 0.19% 1.88% 1.56% / / NOK 0.26% 2.63% 1.93% / / Forward foreign exchange contracts Purchases Counterparty USD 195,075 EUR -150, , USD 2,625,980 INR -198,707, , CREDIT SUISSE (SCHWEIZ) AG USD 323,458 COP -917,972, , USD 2,891,258 INR -216,439, , CREDIT SUISSE (SCHWEIZ) AG INR 13,037,238 USD -175, , USD 5,237,635 INR -391,971, , CREDIT SUISSE (SCHWEIZ) AG USD 6,840,513 INR -515,774, , CREDIT SUISSE (SCHWEIZ) AG USD 1,218,749 INR -96,707, , EUR 74,139 XOF -54,116, , INR 18,361,384 USD -236, , Sales Maturity

12 Page 12 Technical Data and Notes Forward foreign exchange contracts Purchases Counterparty INR 24,182,494 USD -311, , USD 846,232 CNH -5,702, , USD 1,596,451 CNH -10,796, , CREDIT SUISSE (SCHWEIZ) AG USD 6,410,789 INR -491,899, , CREDIT SUISSE (SCHWEIZ) AG USD 4,137,827 INR -324,653, , USD 110,559 ZMW -2,603, , USD 2,052,174 INR -162,326, , CREDIT SUISSE (SCHWEIZ) AG USD 351,212 NGN -119,412, , USD 123,977 ZMW -3,388, , USD 1,650,437 THB -62,370, , USD 451,196 MNT -1,533,615, , USD 470,962 THB -17,581, , USD 43,011 MXN -840, USD 25,806 MXN -480, USD 47,128 MXN -960, , USD 38,035 MXN -720, USD 41,937 MXN -840, USD 37,403 MXN -720, USD 46,332 MXN -960, , USD 10,884,211 INR -806,520, ,431, USD 1,281,390 KZT -552,535, , USD 1,211,232 KZT -569,279, , USD 2,047,607 PEN -7,530, , CREDIT SUISSE (SCHWEIZ) AG USD 710,664 THB -26,422, , USD 727,692 THB -26,422, , USD 4,216,993 INR -334,491, , USD 4,194,256 INR -334,491, , Sales Maturity

13 Page 13 Technical Data and Notes Forward foreign exchange contracts Purchases Counterparty USD 1,359,939 THB -49,284, , USD 1,319,877 THB -49,284, , USD 4,269,201 INR -334,491, , CREDIT SUISSE (SCHWEIZ) AG USD 2,508,413 INR -196,759, , CREDIT SUISSE (SCHWEIZ) AG USD 266,848 COP -886,470, , USD 228,079 MXN -4,500, , USD 152,018 KZT -67,964, , USD 167,193 KZT -67,964, , USD 478,680 THB -17,333, , USD 290,017 THB -10,484, , USD 284,894 THB -10,484, , USD 9,855,801 INR -762,444, ,278, CREDIT SUISSE (SCHWEIZ) AG USD 293,014 MXN -6,300, , USD 1,150,643 INR -88,541, , USD 794,975 PEN -3,045, , USD 1,213,368 PEN -4,567, , USD 781,409 PEN -3,045, , USD 1,234,187 PEN -4,567, , USD 1,795,580 INR -130,000, , USD 888,546 KES -101,720, , USD 3,946,071 EUR -3,545, , USD 6,215,746 EUR -5,598, , USD 473,454 COP -1,643,832, , USD 1,899,227 INR -147,569, , USD 776,656 PEN -3,065, , USD 789,455 PEN -3,065, , USD 1,223,078 PEN -4,598, , Sales Maturity

14 Page 14 Technical Data and Notes Forward foreign exchange contracts Purchases Counterparty USD 1,203,553 PEN -4,598, , USD 8,657,951 INR -664,064, , USD 117,495 PEN -420, , USD 1,366,629 CNY -10,348, , USD 1,400,000 CNY -10,348, , USD 115,684 PEN -420, , USD 180,636 RON -750, , USD 180,679 RON -750, , USD 2,264,583 INR -172,164, , USD 1,933,822 INR -147,569, , USD 1,925,377 THB -69,121, , USD 1,888,553 THB -69,121, , USD 976,459 THB -34,967, , USD 958,263 THB -34,967, , USD 909,445 PEN -3,293, , USD 901,602 PEN -3,293, , USD 87,952 RON -377, , USD 88,014 RON -377, , USD 774,510 THB -27,255, , USD 769,046 THB -27,255, , USD 531,789 RON -2,250, , USD 531,915 RON -2,250, , USD 918,869 PEN -3,250, , USD 548,418 EUR -500, , USD 658,618 EUR -600, , USD 1,277,476 EUR -1,150, , USD 310,802 EUR -280, , Sales Maturity

15 Page 15 Technical Data and Notes Forward foreign exchange contracts Purchases Counterparty USD 721,143 EUR -650, , USD 185,816 EUR -166, , USD 1,331,095 EUR -1,200, , USD 396,608 EUR -350, , USD 7,970,172 EUR -7,000, , USD 387,265 IDR -5,704,413, , USD 408,041 IDR -5,704,413, , USD 378,568 IDR -5,877,274, , USD 222,127 PLN -833, , USD 177,830 PLN -666, , USD 294,031 PLN -1,100, , USD 293,247 PLN -1,100, , USD 222,157 PLN -833, , USD 222,127 PLN -833, , USD 293,247 PLN -1,100, , USD 584,269 EUR -510, , USD 226,124 GEL -722, , USD 804,953 EUR -700, , USD 177,825 PLN -666, , USD 569,443 EUR -500, , NGN 119,412,000 USD -291, , USD 1,826,030 EUR -1,600, , USD 515,730 MXN -10,000, , USD 492,126 MXN -10,000, , USD 989,670 EUR -850, , USD 3,382,149 INR -245,949, , USD 2,026,503 INR -147,569, , Sales Maturity

16 Page 16 Technical Data and Notes Forward foreign exchange contracts Purchases Counterparty USD 429,527 MXN -8,280, , USD 717,473 EUR -600, , USD 6,777,346 INR -491,899, , USD 180,267 EUR -150, , USD 6,854,791 INR -491,899, , USD 798,763 EUR -666, , USD 407,150 MXN -8,280, , USD 355,100 MXN -6,913, , USD 362,413 MXN -6,893, , USD 4,423,865 INR -319,734, , USD 215,049 EUR -175, , USD 210,575 EUR -175, , USD 2,219,764 INR -159,867, , INR 11,349,723 USD -158, , INR 37,832,410 USD -526, , INR 24,969,433 USD -372, INR 18,916,205 USD -264, , INR 6,809,845 USD -98, INR 13,241,366 USD -188, , INR 58,640,335 USD -846, , INR 25,731,288 USD -389, INR 25,726,082 USD -375, INR 25,726,082 USD -375, INR 12,484,715 USD -185, INR 11,349,723 USD -160, , INR 36,886,600 USD -512, , INR 51,073,841 USD -729, , Sales Maturity

17 Page 17 Technical Data and Notes Forward foreign exchange contracts Purchases Counterparty INR 11,349,742 USD -162, , INR 15,132,990 USD -219, , INR 11,570,122 USD -173, INR 37,832,410 USD -527, , INR 22,206,434 USD -337, INR 37,832,470 USD -564, , INR 25,726,082 USD -375, INR 28,518,866 USD -432, , INR 37,524,824 USD -566, USD 391,503 EUR -300, , USD 384,120 EUR -300, , USD 376,384 EUR -300, , USD 610,492 EUR -500, , USD 1,221,691 EUR -1,000, , USD 6,317,159 INR -454,014, , USD 611,228 EUR -500, , USD 607,571 EUR -500, , USD 1,223,473 EUR -1,000, , USD 216,309 EUR -175, , USD 211,292 EUR -175, , USD 4,237,230 EUR -3,550, , USD 7,055,824 CNY -49,704, , USD 1,213,798 EUR -1,000, , USD 3,000,000 PKR -368,880, , USD 4,137,729 EUR -3,458, , USD 1,192,460 EUR -1,000, , USD 82,404 EUR -66, , Sales Maturity

18 Page 18 Technical Data and Notes Forward foreign exchange contracts Purchases Counterparty USD 80,393 EUR -66, , USD 84,395 EUR -66, , USD 120,566 EUR -100, , USD 123,539 EUR -100, , USD 301,775 EUR -250, , USD 792,655 THB -26,466, , USD 1,782,205 EUR -1,500, , USD 790,288 THB -26,466, , USD 758,017 GEL -2,408, , USD 763,534 GEL -2,421, , USD 1,202,662 EUR -1,000, , USD 119,931 PEN -404, , USD 122,378 PEN -404, , USD 123,592 PEN -404, , USD 121,151 PEN -404, , USD 4,000,000 PKR -496,400, , USD 1,192,850 EUR -1,000, , USD 1,022,462 EUR -850, , USD 920,707 EUR -766, , USD 1,335,553 EUR -1,100, , USD 820,393 EUR -660, , USD 856,062 EUR -680, , USD 809,934 EUR -660, , USD 905,909 EUR -750, , USD 2,146,118 EUR -1,800, , USD 237,094 EUR -200, , INR 454,067,398 USD -6,912, , Sales Maturity

19 Page 19 Technical Data and Notes Forward foreign exchange contracts Purchases Counterparty INR 181,626,959 USD -2,671, , USD 810,447 EUR -670, , USD 413,318 MXN -9,000, , USD 425,130 MXN -9,000, , USD 438,276 MXN -9,000, , USD 402,055 MXN -9,000, , USD 4,617,324 EUR -3,850, , USD 1,279,885 EUR -1,046, , INR 163,464,264 USD -2,534, , USD 315,329 EUR -262, , USD 216,726 EUR -175, , USD 637,297 EUR -500, , USD 1,119,431 INR -76,121, , USD 708,666 INR -49,110, , USD 129,998 INR -8,839, , USD 316,832 INR -20,626, , USD 355,873 INR -24,555, , USD 574,215 INR -37,323, , USD 706,626 INR -49,110, , USD 491,850 INR -32,412, , USD 702,339 INR -49,163, , USD 245,553 INR -16,206, , USD 213,524 INR -14,733, , USD 747,497 INR -49,110, , USD 213,524 INR -14,733, , USD 250,564 INR -17,188, , USD 216,664 INR -14,733, , Sales Maturity